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A. How is agency defined
Ratio: The PURPOSE of agency is to EXTEND the personality of the principal through the facility of the agent. The agent by legal fiction becomes the principal authorized to perform all acts which the latter would have him do. Such a relationship can only be effected “with the CONSENT or AUTHORITY” of the principal which CANNOT, in any way, be COMPELLED by any law or any court. UY V CA Uy and Roxas were agents to sell 8 parcels land. The property was offered to NHA. NHA Board approved the acquisition but thereafter cancelled the acquisition of 3 parcels of land. Agents filed a case against NHA to recover their unearned income. CA ruled that as agents they were not real parties in interest, hence it is indispensable that the lot owners be included as party plaintiffs. Ratio: Agents do something or render some service in representation or on behalf of the principal. The rendering of service does not make them parties to a contract. A contract may be violated only by the parties thereto as against each other. 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) CONSENT may be 1. Express o Through words or deeds 2. Implied o Action: acts of principal o Inaction (knowledge is important here): (1) silence/lack of action (2) failure to repudiate actions done on his behalf and without authority o E.g. a. Payment of commission of agent b. Receipt of benefits (every time it’s received without objection, it’s implied consent and ratification) MACKE V CAMPS Macke and Chandler sold to one Ricardo Flores, managing agent of Washington Café, various goods which were only partially paid pending the return of his principal (Camps). Principal refused to pay on the ground that Flores was not his agent. Written contract shows that defendant was sub lessee of a property with Flores as managing agent of the café Ratio: Authority to buy such reasonable quantities of supplies as might from time to time be necessary in carrying on the business may be fairly presumed that such agent is clothed with a general authority, especially in view of the fact that the principal appears to have left the agent in charge during more or less prolonged periods of absence. PRUDENTIAL BANK V CA Aurora Cruz invested 200k in CB bills with Prudential. Upon maturity, she renewed the investment and was requested to sign a Withdrawal Slip, allegedly a new requirement of the bank. After some time, she sought to withdraw her 200k but she was informed that the investment appeared to have been withdrawn. It appears that the bank’s employee Quimbo perpetuated the fraud and caused the withdrawal of the amount. Bank ignored repeated follow-ups of Cruz. Annie, Eds, Jam, Anj F., Kae, Lou, Chi, Pat
Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. RALLOS V. FELIX GO CHAN Sisters authorized their brother to SELL their undivided shares in a parcel of land. One of the sisters DIED. Subsequently the brother sold the parcel of land. Administrator went to court and prayed that the sale be declared unenforceable. Ratio: There’s a relationship of Agency when 1 party called the principal (mandante) authorized another called the agent (mandatario) for and in his behalf with transactions to third persons. The essential elements of agency (CORA): 1. Consent, express or implied 2. Object is the execution of a juridical act in favor of third persons 3. Agent acts as a Representative 4. Agent acts within the scope of his Authority. Agency is basically 1, personal 2. representative, and 3. derivative in nature. The authority of the agent to act emanates from the powers granted to him by his principal; his act is the act of the principal if done within the scope of authority “Qui facit per alium facit per se”, meaning, “He who acts through another acts for himself”. By the very nature of the relationship between the agent and the principal, agency is extinguished by death of the principal or the agent. De Leon: Characteristics of a contract of agency 1. Consensual 2. Principal 3. Nominate 4. Unilateral (if gratuitous); bilateral (if for a compensation) 5. Preparatory 1. Consent
Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. ORIENT AIR SERVICES V CA By virtue of a General Sales Agency Agreement, American airlines authorized Orient Air Services as its exclusive general agent within the Philippines. Orient Air failed to promptly remit net proceeds of sales. As a result American Air terminated the agreement. RTC and CA ordered reinstatement of Orient as a general sales agent of American Air in the Philippines.
Under Professor Dio (2nd Sem, AU 2009-2010). By Annie, Eds, Jam, Anj F, Kae, Lou, Chi, Pat (Batch 2012). Compiled by Eds.
She then filed a complaint for breach of contract. TC = for plaintiff, CA affirmed. Ratio: A bank is liable for the wrongful acts of its officers done in the interest of the bank or in the course of dealings of the officers in their representative capacity but not for acts outside the scope of their authority. The bank is still liable to innocent third persons where the representation is made in the course of business by an agent acting within the general scope of his authority even though the agent is secretly abusing his/her authority and attempting to perpetuate fraud upon his principal or some other person for his ultimate benefit. LINTONJUA V ETERNIT 90% of EC’s stocks were owned by ESAC, with Glanville as President and Delsaux as Regional Director. ESAC in 1986 instructed Adams, member of ESAC Board of Directors, to dispose the 8 parcels of land without written authority from EC. Adams engaged the services of Lauro Marquez as broker, who in turn offered it to Litonjua. EC cancelled the sale of 8 parcels of land to Litonjua siblings due to the end of political instability. Litonjua filed a complaint for specific performance and damages against EC. TC = EC, CA affirmed. Ratio: Requisites of agency by estoppel: 1. Principal manifested a representation of the agent’s authority / knowingly allowed agent to assume such authority 2. Third person in Good Faith relied upon such representation rd 3. 3 person has changed its position to its detriment. 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) * ACCEPTANCE signifies the AGENT’S CONSENT to establish the relationship of agency * Implied acceptance of agency by agent: silence when the principal delivers the POA without objection. 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) * Principal personally delivers POA. * What is the duty of the agent? To read the POA. So there’s presumption that agents can read. * When do you know someone is present? When you can physically sense each other. 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 did not reply to the letter or telegram. (n) *Principal only transmits POA Art. 1898. If the agent contracts in the name of the principal, exceeding the scope of his authority, and the principal does not ratify
the contract, it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. In this case, however, the agent is liable if he undertook to secure the principal's ratification. (n) Art. 1901. A third person cannot set up the fact that the agent has exceeded his powers, if the principal has ratified, or has signified his willingness to ratify the agent's acts. (n) * Only the principal can ratify * A principal can ratify a transaction by receiving the benefits thereof, in accord with the principle that the principal may not accept the benefits of a transaction and repudiate its burdens. Cf. Macke v Camps Art. 1910. The principal must comply with all the obligations which the agent may have contracted within the scope of his authority. * The duties and liabilities of the principal are primarily based upon the contract and the validity of the contract between them. Art. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him. A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party. (1259a) Art. 1403. The following contracts are unenforceable, unless they are ratified: (1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; 2. Object
* Sir Dio: What may be the object of a contract of agency? GENERALLY: every juridical act may be the object of agency EXCEPTION (remember this, because you won’t hear it from others) 1. If it will result to crime, torts or any illegal act 2. If it requires exercise of discretion 3. If it requires personal performance by the principal 3. Consideration
Art. 1875. Agency is presumed to be for a compensation, unless there is proof to the contrary. (n) * Sir Dio: Do not confuse COMPENSATION with CONSIDERATION. Consideration is essential to the validity of the contract of agency, compensation is not. B. Who are the parties to the contract of agency
(1) Principal - person represented (2) Agent - who acts for and represent another (3) Third party - the party to whom the business is transacted
Annie, Eds, Jam, Anj F., Kae, Lou, Chi, Pat
between rd rd AGENT and 3 Person. by laws 3. Every general authority is not an unlimited one. Jam. V. COSMIC LUMBER V CA III. Anj F. but was unable to withdraw the scrap materials/unserviceable rails. The written authorization need not contain the particular description of the property which the agent is permitted to sell. An authority cannot be established by mere rumor or generational reputation. Principal must be capacitated. . CITY LITE REALTY CORPORATION V CA Broker was the one who negotiated and agreed to sell the property. otherwise. Eds.Persons dealing with an assumed agency. . Rodriquez paid to Montelibano. Agent already paid PNR. Must the parties be capacitated Ratio: The authority granted is explicit and exclusionary. are bound at their peril. no form or method of execution is required. 5. WHAT IS THE FORM OF THE CONTRACT OF AGENCY? Art. resolve in favor of 3 person AGENT and PRINCIPAL. (1710a) Art. powers added by custom and usage DE LOS REYES V CA A verbal agreement between principal and agent involving a sale of land registered in the name of principal’s deceased father. SAN JUAN STRUCTURAL STEEL V CA A corporate treasurer by herself without any authorization from the board of directors sold a parcel of land owned by the corporation. or to decline to enter into relations with him. to be shipped from Manila to Iloilo. even though in the form of a private document will operate with effect. Ratio: A void contract under 1874 can be ratified. resolve in favor of principal There are at least two contracts involved: (1) Contract of agency (2) Commercial transaction – cause of first one C. The law indulges no bare presumptions that an agency exists. if they would hold the P to ascertain not only the fact of the agency but the nature and extent of the authority and in case either is controverted. the agent must be competent to bind himself. Chi. RODRIGUEZ . Ratio: A written authority to find a buyer is different from a written authority to sell. the burden of proof is upon them to establish it. the authority of the latter shall be in writing. capacity of the agent depends on the capacity of the principal Agent does not have to possess full capacity in so far as third persons are concerned but in so far as his obligation to his principal is concerned. 2. It must be proved/presumed from facts. knowing that another person is acting on his behalf without authority. if he knows or has good reason Annie. the sale shall be void. who claimed to be Keeler’s agent.Keeler sold to Rodriquez an electric plant.Principal authorized agent to enter into a compromise agreement.. Agency may be oral. In case of conflict. 743: Fundamental principles: 1. SC: Montelibano not Keeler’s agent. articles of incorporation 2. WHO HAS THE OBLIGATION TO DETERMINE EXISTENCE AND SCOPE OF AGENCY? KEELER ELECTRIC CO. unless the law requires a specific form. The A cannot establish his own authority either by his representations or his assuming to exercise it. agent agreed to sell the property to the 3rd party PRINCIPAL AGENT 3RD PERSON Relative weight of interests. from his silence or lack of action. or his failure to repudiate the agency. relevant provisions of law 4. Ratio: A void contract CANNOT be ratified by clear mandate in 1409 (7) of the civil code. It is entirely within TP’s p ower to satisfy himself that the A has the authority he assumed to exercise. 3. Lou. In the compromise agreement.Mechem on Agency Sec. Pat . AF REALTY V DIESELMAN Quick Facts: A member of the board of directors authorized a broker to sell a parcel of land owned by the company. Kae. or implied from the acts of the principal. . A letter is sufficient to constitute a power of attorney JIMENEZ V RABOT Principal wrote to his sister requesting that the latter sell any of his parcels of land located in Pangasinan Ratio: Power of attorney to convey such property. (n) ANGELES V PNR Principal authorized through a letter explicitly stating that the agent was his lawful representative to withdraw PNR’s scrap/unserviceable rails. When a sale of a piece of land or any interest therein is through an agent.Against the A. powers that may be implied or incidental to the power intentionally conferred upon the officer. the TP has the oblig’n to determine existence and scope of agency. TP must also act with ordinary prudence and reasonable diligence. board resolution 5. Ratio: Power of Attorney – in the absence of statute. 1869. Agency may be express. 1874. 4. Every authority must find its ultimate sources in some act/omission from the P. II. Ratio: The general principles of agency govern the relations between a corporation and its officers subject to: 1. The power to enter into a compromise agreement does not include the power to sell.
Employee-employee IV. but also the nature and extent of the authority granted. Annie. one in whom confidence is reposed as regards property for the benefit of another person is known as the trustee.. 1690. Jam. food. closed shop. Verify nature and extent c. The cost of such education shall be a part of the house helper's compensation. . HOW IS AGENCY DISTINGUISHED FROM OTHER CONTRACTS/RELATIONSHIPS? A. Art. 1695. notice may be given on any day that the service shall end at the close of the following day. except for a just cause. Lease of service Art. the head of the family shall give an opportunity to the house helper for at least elementary education. it should not be from admission of agent but must be traced from act/omission from principal Art. The head of the family shall furnish. 1689. Every authority’s ultimate source is P’s act/omission 2. However. unless there is a stipulation to the contrary. from agency: representation C. House helper shall not be required to work more than ten hours a day. The house helper's clothes shall be subject to stipulation. on the fifth day of the month. the head of the family or the house helper may give notice to put an end to the service relation. Against the A. Diff. A must prove agency YU ENG CHO V. Art. If the house helper is under the age of eighteen years. or also furnish the material. for not exceeding fifteen days. and medical attendance. suitable and sanitary quarters as well as adequate food and medical attendance. at the latest on the first business day of the week. 1691. 1694. Diff. Eds. 1699. that the service shall cease at the end of the month. Household service shall always be reasonably compensated. Art. To prove fact of agency. 1644.to believe that the A is exceeding his authority. Trust Art. Independent contractor Art. having the burden to ascertain not only the fact of agency. No contract for household service shall last for more than two years. the house helper may demand from the head of the family a written statement on the nature and duration of the service and the efficiency and conduct of the house helper. he shall forfeit any salary due him and unpaid. Verify fact of agency b. In the lease of work or service. Art. according to the following rules: (1) If the compensation is paid by the day. Art. 1440. one of the parties binds himself to execute a piece of work or to render to the other some service for a price certain. Lou. They are so impressed with public interest that labor contracts must yield to the common good. In case of death of the house helper. Chi. such contract may be renewed from year to year. The head of the family shall treat the house helper in a just and humane manner. In no case shall physical violence be used upon the house helper. Every house helper shall be allowed four days' vacation each month. Art. 1698. with pay. the TP has oblig’n to determine the existence and scope of agency. If the house helper leaves without justifiable reason. to the house helper. If the period for household service is fixed neither the head of the family nor the house helper may terminate the contract before the expiration of the term. B. and is bound at his peril. working conditions. Any stipulation that household service is without compensation shall be void. 1692. Art. 1693. Such compensation shall be in addition to the house helper's lodging. fiduciary rel’p D. Master-servant Art. If the house helper is unjustly dismissed. However. Upon the extinguishment of the service relation. Art. Damages sought from PanAm. Art. free of charge. 1713. Anj F. collective bargaining. that the service shall be terminated at the end of the seventh day from the beginning of the week. 1700. from agency: representation. and Tagunicar was a broker/independent travel agent who represented herself as agent of TWSI. strikes and lockouts. Business agreement didn’t push through. hours of labor and similar subjects. notice may be given. By the contract for a piece of work the contractor binds himself to execute a piece of work for the employer. If the duration of the household service is not determined either by stipulation or by the nature of the service. (2) If the compensation is paid by the week. he can’t claim protection. from agency: limited control E. Diff. TP dealing with assumed A are bound to: a. wages. TWSI. in consideration of a certain price or compensation. A person who establishes a trust is called the trustor. such contracts are subject to the special laws on labor unions. The relations between capital and labor are not merely contractual. The contractor may either employ only his labor or skill. Pat . PAN AMERICAN Tokyo-SanFrancisco wasn’t confirmed yet plaintiffs pushed through with the flight. notice may be given. at the latest. any contract for household service shall be void if thereby the house helper cannot afford to acquire suitable clothing. he shall be paid the compensation already earned plus that for fifteen days by way of indemnity. 1697. 1696. but the relation of principal and agent does not exist between them.Notes: 1. Kae. (3) If the compensation is paid by the month. Art. and the person for whose benefit the trust has been created is referred to as the beneficiary. In case any is controverted by P. Therefore. with sufficient means therefor. the head of the family shall bear the funeral expenses if the house helper has no relatives in the place where the head of the family lives.
This juridical relation does not arise in either of these instances: (1) When the property or business is not neglected or abandoned. objective: preserve/administer business/property. Broker Brings parties together. agent for a limited value. because he wasn’t hired to represent defendant in its dealings with third persons. is obliged to continue the same until the termination of the affair and its incidents. Person was really an agent. however. no representation. and the other to pay therefor a price certain in money or its equivalent. relationship Diff. By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing. hence. a property rel’p. Quasi-contract due to acts executed by manager . objective: representation/execution of juridical act I.. but an only an agent only in the sense of performing material acts for an employer. LEPANTO CONSOLIDATED Mining operations suspended during the Japanese occupation and resumed a little later after the war. 2144. Shell not liable. but consent is needed. The officious manager shall perform his duties with all the diligence of a good father of a family. mgt contract unilaterally terminated by Lepanto AGENCY LEASE OF SERVICES One of the parties binds himself to render some service to the other party Based on representation Based on employment Agent is destined to execute juridical Contemplates only material acts (creation. he was an employee hired to perform specific duty. hence. no contribution to a common fund H. from agency: also has representation. NORTHERN THEATRICAL ENTERPRISES Guard sues employer for recovery of expenses incurred in his homicide cases. SC denied. 1. and received commission. but objective: juridical act F. or to require the person concerned to substitute him. property. Chi. Since he was found negligent. Shell found liable. Lou. The courts may.Incident fiduciary rel’p. Right of control test: where the person for whom the services are performed reserves the right to control not only the end to be achieved but means to be used in reaching such end 2. but just acting only as an intermediary. but no bond J. who solicited fares in behalf of TWC. Should have obtained a ready. can represent both parties if authorized by both. to create. By the contract of partnership two or more persons bind themselves to contribute money. Eds. objective: preservation of thing Diff. Car fell from hydraulic lifter at carwash. increase or moderate the indemnity according to the circumstances of each case. plaintiff sued Shell for sum of money on negligence. Must be the efficient procuring cause 2. PARSONS HARDWARE Parsons agreed with Quiroga for exclusive sale of Quiroga beds. but was really its agent and not its employee nor partner Tests for determination of er-ee rel’p: 1. FIREMEN’S INSURANCE CO. or (non-juridical) acts extinction of relations with third parties) The management contract is a lease of service and not a contract of agency. A contract of sale may be absolute or conditional. Pat . able. from agency: no sharing of losses. Diff. And since there was mutual interest of both A and P. but Neilson couldn’t make any purchase or sell minerals without prior approval of Lepanto. for compensation. Quiroga claims Parsons was his agent. the rules on agency in Title X of this Book shall be applicable. As the act of the A or his employees acting within the scope of his authority is the act of the P. from agency: also has control (P can terminate anytime). Negotiorum gestio/quasi-contract Art. the provisions of Articles 1317. and pay the damages which through his fault or negligence may be suffered by the owner of the property or business under management. Judicial administrator Court-appointed. or industry to a common fund. from agency: also has representation. Existing economic conditions prevailing between parties It was an agency with plaintiff as agent. or extinguish business relations between Lepanto and third persons. officious: acting out of desire to help another. if the owner is in a position to do so. V. NIELSON & CO. Neilson’s principal undertaking or operating the mine and mill wasn’t executing juridical acts for Lepanto . Annie. (2) If in fact the manager has been tacitly authorized by the owner. Neilson’s incidental capacity as purchasing agent of supplies and enter into contracts regarding the sale of mineral. the agency here cannot be revoked at will by the P. from agency: representation. In the second case. SHELL V. breach of the undertaking by A is one for which P is responsible. Neilson was not an agent as interpreted in the law of agency. and 1404 regarding unauthorized contracts shall govern. QUIROGA V. Shell claimed the person responsible was an independent contractor. In the first case. A entitled to damages. A never acquires ownership G. implied agency Diff. control. 1458. 1767. No. Kae. with the intention of dividing the profits among themselves. bond required. Two or more persons may also form a partnership for the exercise of a profession. Anj F. distribution of profits Diff. willing buyer SEVILLA V. 2145. Partnership Art. compensation: commission upon consummation of contract 2 test (City Lite): 1. Mutual agency. no relation to the thing. may be agent. DELA CRUZ V. 1403. CA Plaintiff was “branch manager” of TWC. Whoever voluntarily takes charge of the agency or management of the business or property of another. modify. Sale Art. modification. without any power from the latter. Jam. these are not considered juridical acts either. (1888a) Art.
but as the property of the principal. HAHN V. because in agency. fix price and terms. LINGAD Rubber products distributor. There was no transfer of ownership and the agreement clearly considered Lim as an A with obligation to return any unsold tobacco. broker. Broker: earns merely by bringing buyer and seller together. Arco seeks reimbursement. The word ‘agency’ only meant Parsons was the only one who could sell Quiroga beds in Visayas. Whatever unforeseen events might’ve taken place unfavorable to Arco. if he were an A. Relationship not only with P.. not merely an agent who accounts for the proceeds of a resale. might still legally hold Arco for the fixed price. because Quiroga supplies the beds. which isn’t the case here. even if no sale is eventually made. Broker: no relation to the thing. A is exempted from all liability in discharge of his commission provided that A acts within scope of authority and P must indemnify A for all damages which A may incur in carrying out the agency without A’s fault. is placed in his possession and at his disposal. and return unsold beds. Annie. but also to property. LIM V. includes commission merchants. tax. SC denied. estafa. merely intermediary. who remains the owner and has the right to control sales. doesn’t acquire possession over the property. which. Lou. Anj F. Pat . Discounted price of sound equipment not disclosed. PACIFIC COMMERCIAL V. commercial broker National Internal Revenue Code: commercial broker: sell merchandise for other persons or bring buyers and sellers together. GONZALO PUYAT & SONS V. This is incompatible to the claimed agency. ARCO AMUSEMENT CO. vendor’s agent. Essence of agency to sell: delivery to an agent.SC: it was a sale. Jam. KER V. The words ‘commission on sales’ simply means discount on the price. not as his property. YATCO Sugar. transferee is in the position of an owner. Eds. demand and receive the proceeds less the A’s commission upon the sales. for this purpose. not an agency. Kae. receipt letter Since Lim was a businesswoman and took efforts collecting tobacco leaves from Ayroso’s house. Chi. Gonzalo. Essence of sale: transfer of title for a price paid. Besides. PEOPLE Tobacco. commission merchant. and Parsons pays their price. he’d have to deliver price to Quiroga for the beds sold. more likely acting as A. it is out of the ordinary for one to be the A of both the vendor and the vendee. CA BMW distributor found by SC as agent of BMW Agent: receives commission upon successful conclusion of a sale. ex-ship Commission merchant: engaged in purchase/sale for another of personal property. P exercises control over A (as BMW has over Hahn).
C. Chi.. SOME CLASSES OF AGENTS A.V. Eds. A Treatise on the Law of Agency Annie. Attorneys-at-law Auctioneers Brokers Factors. Lou. Jam. commission merchants Mechem. Kae. D. Pat . Anj F. B.
(n) Art. (1734) Art. (1718) Art. 1900. The former comprises all the business of the principal. 1908. 1922. (n) Art. Kae. with a statement of the names of the buyers. one or more specific transactions. B. if it has been constituted in the common interest of the latter and of the agent. If the agent had general powers. So far as third persons are concerned. Express agency. without the express or implied consent of the principal. Durable agency Art. A general power permits the power to do all acts for which the law does not require a special power. (n) Art. (n) Art. which may result from such sale. Should he do so. revocation of the agency does not prejudice third persons who acted in good faith and without knowledge of the revocation. from his silence or lack of action. 1911. if it has been constituted in the common interest of the latter and of the agent. If the agency has been entrusted for the purpose of contracting with specified persons. he shall so inform the principal. or in the interest of a third person who has accepted the stipulation in his favor. The commission agent who does not collect the credits of his principal at the time when they become due and demandable shall be liable for damages. WHAT ARE THE CLASSIFICATION OF AGENCY CONTRACTS? A. Agency may be oral. and is liable for the damages which. 1904. Should the commission agent receive on a sale. CA (Special vs. couched in general terms. (n) Art. Jam. 1869. (n) C. knowing that another person is acting on his behalf without authority. 1907. The commission agent who handles goods of the same kind and mark. The commission agent cannot. Special agent – one authorized to do some particular act or act upon some particular occasion. 1930. as long as he is capacitated at time of making condition SIASAT VS. 1921. general and special Art. Agency may be express. (n) Is this valid: 1. 1930. the contents reveal that what was really constituted was a general agency. Pat VI. no consent Art. permanent state of unconsciousness (coma) given to agents and caregivers? o Hypothetically yes. such as those acts Annie. 1876 and 1877 state that a general agency is one which comprises all the business of the principal but. (n) Art. Universal. through his nonperformance. Universal agent – one who is authorized to do all acts for his principal which can lawfully be delegated to an agent 2. even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent. An agency is either general or special. or implied from the acts of the principal. The latter. Chi. despite the use of the word “special”. 1931. but the commission agent shall be entitled to any interest or benefit. (1710a) o . unless the law requires a specific form. unless upon receiving them he should make a written statement of the damage and deterioration suffered by the same. (1738) D. he shall bear the risk of collection and shall pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser. Even when the agent has exceeded his authority. IAC (Sale of flags to DepEd) Kinds of Agents 1. (n) Art. 1884. The agency shall remain in full force and effect even after the death of the principal. is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith. an act is deemed to have been performed within the scope of the agent's authority. Lou. the principal may demand from him payment in cash. shall distinguish them by countermarks. the sale shall be deemed to have been made for cash insofar as the principal is concerned. unless he proves that he exercised due diligence for that purpose. and designate the merchandise respectively belonging to each principal. He acts usually in accordance with specific instructions DOMINION INSURANCE CORPORATION VS. it is limited only to acts of administration. 1876. its revocation shall not prejudice the latter if they were not given notice thereof. Anything done by the agent. o Arts. General agent – one authorized to do all acts pertaining to a business of a certain kind or at a particular place. sell on credit. which belong to different owners. He must also finish the business already begun on the death of the principal. Should the commission agent. Agency by operation of law Art. “Living will” i. general agency) A perusal of the Special Power of Attorney would show that Dominion and Guevarra intended to enter into a principal-agent relationship and. (1712) E. the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. The agency shall remain in full force and effect even after the death of the principal. with authority of the principal. as written.. in addition to the ordinary commission. implied agency Agency by estoppel. if such act is within the terms of the power of attorney.e. sell on credit. the principal may suffer. another called a guarantee commission. 1905. Anj F. or all acts pertaining to a business of a particular class or series 3. 1903. The commission agent shall be responsible for the goods received by him in the terms and conditions and as described in the consignment. without knowledge of the death of the principal or of any other cause which extinguishes the agency.Art. or in the interest of a third person who has accepted the stipulation in his favor. Eds. (n) Art. Your agency shall survive my death for 5 years? o Valid in the US 2. Should he fail to do so. or his failure to repudiate the agency. 1906. The agent is bound by his acceptance to carry out the agency. should delay entail any danger. (n) Art. Notice of the revocation in a newspaper of general circulation is a sufficient warning to third persons.
” There are only three instances whereby the principal is held bound by the third party’s assumption of the authority of the agent: (1) Where his acts have contributed to deceive a third person in good faith. (n) Art. the payment of claims is not an act of administration and Art. even if the principal should state that he withholds no power or that the agent may execute such acts as he may consider appropriate. except customary ones for charity or those made to employees in the business managed by the agent. 2. And in applying part of the funds to pay his personal obligations. not to contract for any loans in their names and behalf. Lou. An agency couched in general terms comprises only acts of administration. A special power to sell excludes the power to mortgage. (13) To accept or repudiate an inheritance. TAI CHING CO (Letters indicating acknowledgment of agency) Annie. MARIA [6 brothers and sisters executed PA in favor of Maximo Sta. The mortgaged property is owned by Gabriela and since the note is void as to her. Chi. 1713 (Old Civil Code): “An agency stated in general terms only includes acts of administration. must answer for them. he exceeded his authority. (5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. Maximo. (1713a) 1. (6) To make gifts. (11) To obligate the principal as a guarantor or surety. Kae. and (3) Where he has placed in the hands of the agent instruments signed in blank. to submit questions to arbitration. The agent was obliged to turn over the money to the principals or. capital stocks. sale. Anj F. It is fundamental rule of construction that in an instrument that defines and specifies powers and duties. unless the latter act be urgent and indispensable for the preservation of the things which are under administration. 1878 includes such payment in its enumeration of instances when a special power of attorney is required. besides the abovementioned document. such would be limited and confined to those which are specified and defined and that all other powers and duties are excluded. Hence. which according to Art. KATIGBAK VS. place it at their disposal 3. to renounce the right to appeal from a judgment. The mortgage is also void. (7) To loan or borrow money. (2) Where the limitations upon the power created by him could not have been known by a third person. Loan / borrow HODGES VS. (14) To ratify or recognize obligations contracted before the agency. particularly when it does not appear that such was the intention of the principals. at least. couched in specific terms Art. (10) To bind the principal in a contract of partnership. then it follows that the mortgage is also void for want of power to execute it. Jam. with Valeriana who authorized him to borrow money. power to mortgage does not include power to loan] Disinclination of courts to enlarge an authority granted beyond the powers expressly given and those incidentally flowing therefrom as being usual or reasonably necessary and proper for the performance of such express powers. 1880. other defendants-appellants' only liability is that the real estate authorized by them to be mortgaged would be subject to foreclosure and sale to respond for the obligations contracted by Maximo. Strong was a general agent. A special power to compromise does not authorize submission to arbitration. BPI VS. The authority granted by defendants-appellants (except Valeriana) unto their brother. (3) To compromise. (12) To create or convey real rights over immovable property.. In order to compromise. (n) Art. 1879. alienate mortgage. or to execute any other act of strict ownership an express mandate is required. Special powers of attorney are necessary in the following cases: (1) To make such payments as are not usually considered as acts of administration. (2) To effect novations which put an end to obligations already in existence at the time the agency was constituted. (4) To waive any obligation gratuitously. (8) To lease any real property to another person for more than one year. Mortgage the property jointly owned by them. STA.enumerated in the Special Power of Attorney. 1877. F. Pat PNB VS. SALAS [Applied proceeds of mortgage to personal debt] The provision cannot be interpreted as also authorizing Yulo to dispose of the money as he pleases. or even though the agency should authorize a general and unlimited management. 1878. was merely to mortgage . and a special power to mortgage does not include the power to sell. to waive objections to the venue of an action or to abandon a prescription already acquired. But they cannot be held personally liable. (15) Any other act of strict dominion. Eds. There is no provision authorizing him to sign anything or to do anything which would make his wife liable as a surety of a pre-existing debt. Sell STRONG V GUTIERREZ REPIDE [Agent Jones. (n) Art. However. Couched in general terms. Maximo alone. Maria. DE COSTER [Wife was in Paris when husband mortgaged her property] It is very apparent from the face of the instrument that the whole purpose and intent of the power of attorney was to empower and authorize the husband to look after and protect the interest of his wife. (9) To bind the principal to render some service without compensation. general agent] Jones did not have the authority to sell in behalf of Mrs Strong. it follows that since the husband was not authorized then the note in question is void for want of power to execute it.
INSULAR DRUG VS. the agent must be armed with a special power of attorney. Anj F. Inc. (1713a) Compromise – avoid litigation by making reciprocal/mutual concessions Why power to arbitrate & power to compromise different? Because power to compromise requires another SPA Can General Agent appoint Principal as agent of another? YES. scope of authority includes written in PoA instructions Art. VII. A salesman with authority to collect money belonging to his principal does not have the implied authority to indorse checks received in payment. As a general rule an officer or agent of the corporation has no power to compromise or settle a claim by or against the corporation. Attorneys cannot compromise their client’s litigation. and a special power to mortgage does not include the power to sell. The limits of the agent's authority shall not be considered exceeded should it have been performed in a manner more advantageous to the principal than that specified by him. He may do such acts as may be conducive to the accomplishment of the purpose of the agency. Act within scope of authority VDA. VICENTE VS. has even less force. Pat . P instructs A to sell in MM only. LOPENA [Attorney entered into compromise agreement] The client. mining.. In the execution of the agency. 1887. but it went farther and permitted Foerster's wife and clerk to indorse the checks. 4. Chi. (n) Reason for 1879 o Power to sell – payment of price o Power to mortgage – purpose as collateral Art. It is merely unenforceable (1403 CC). 1879. WHAT ARE THE OBLIGATIONS AND LIABILITIES OF AGENTS TO THEIR PRINCIPALS? A. Kae. It is neither accurate nor correct to conclude that the absence of an SOA where one is required by law renders the contract void. IAC [General agent executed lease contract for 5years] Where the lease contract entered into by an agent is for more than one year.. on becoming aware of the compromise and the judgment thereon. A special power to compromise does not authorize submission to arbitration. fails to repudiate promptly the action of his attorney. To ratify the unauthorized contract of an agent and make it binding on the corporation. Not only did the bank permit Foerster to indorse checks and then place them to his personal account. 5. Special powers of attorney are necessary to compromise and to renounce the right to appeal from a judgment. It is not disputed that the lawyers of Hi Cement had not submitted to the Court any written authority from their client to enter into a compromise. The record contains many indications that Tecsi was aware of the sale (letters complaining of the demands of Gabino to send him rents of the land. and must be with full knowledge. Juridical persons may compromise only in the form and with the requisites which may be necessary to alienate their property. Eds. it must be shown that the governing body or officer authorized to ratify had full and complete knowledge of all the material facts connected with the transaction to which it relates. Any person taking checks made payable to a corporation. 1882. can refer to oral instructions Are instructions part of PoA? o Yes if general agency o No between A & P. Compromise Art. bind the principal to acknowledge acts performed by his attorney-in-fact regarding said property. except to the extent that such power is given to him either expressly or by reasonable implication from the circumstances. he will not afterwards be heard to contest its validity. NATIONAL BANK [Former salesman had anomalous transactions. st DUNGO VS. however. Other acts of strict dominion 2. but only if for a compensation – 1878 (9) SPA needed of w/o compensation Art. 6. (1714a) 1 sentence – states duty & limitation nd 2 sentence – qualifies limitation = conducive to the accomplishment of the purpose of the agency Art. 1880. the agent shall act in accordance with the instructions of the principal. Jam.While it is true that a power of attorney not recorded in the registry of deeds is ineffective in order that an agent may validly perform acts in the name of the principal. promises to send. remittance) and these were a tacit acknowledgement that he occupied the land no longer as an owner but only as a lessee. The right of an agent to indorse Annie.. it does. 3. cement. 1881. which can act only by agent does so at his peril. A special power to sell excludes the power to mortgage. VP of company refused to sign compromise agreement] 1. but A can “offer” to sell anywhere outside MM like in internet (e-bay) Instructions – words said/written by P to A to guide latter simultaneous w/ or after delivery of written PoA. DE CHUA VS. (1715) Discusses manner of performance of the agent If more advantageous Principal controlling actions of agent Ex. GERALDEZ [Placer lease contract. Lease commercial paper is a very responsible power and will not be lightly inferred. The agent must act within the scope of his authority. Ratification must be by the officer or governing body having authority to make such contract. and must same by the consequences if the agent who indorses the same is without authority. committed suicide] Foerster had implied authority to indorse all checks made out in the name of the Insular Drug Co. Lou.
In the execution of the agency. he should prefer his own. 1885. the principal may suffer. there being a conflict between his interests and those of the principal. If he has been authorized to lend money at interest. (4) Public officers and employees. Eds. the agent shall act in accordance with the instructions of the principal. 1890. SC: prior conviction not necessary. this prohibition includes the act of acquiring by assignment and shall apply to lawyers. ATACO assigned rt. consignment of goods for sale. even at a public or judicial auction. The agent may withdraw from the agency by giving due notice to the principal. he may himself be the lender at the current rate of interest. If the latter should suffer any damage by reason of the withdrawal. agent has interest in property of P = compensation Principal has interest on subject = interest (6) Any others specially disqualified by law. Not to carry out the agency Art. fortuitous event = focus on “events” not on agents PNB V MANILA SURETY P279K delivered by PNB to ATACO. The agent. must continue to act until the principal has had reasonable opportunity to take the necessary steps to meet the situation. he shall do all that a good father of a family would do. which shall be judged with more or less rigor by the courts. guaranteed by Manila Surety under trust receipt up to P50K. (1726) * Agent liable for fraud & negligence. the property of the State or of any subdivision thereof. the property of the estate under administration. unless the consent of the principal has been given. (1719) B. and is liable for the damages which. To return things to P C. and other officers and employees connected with the administration of justice. to collect from BPW(public works). or of any government-owned or controlled corporation. the administration of which has been intrusted to them. He must also finish the business already begun on the death of the principal. Art. Lou. through his nonperformance. 1889. Diligence Art. In default thereof. judges. exonerated surety. 1929. 1491. Principal can’t revoke agency E. Anj F. only w/ respect to the property under litigation Generally. with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. SC: bank negligent in stopping collection. bound by his acceptance Agent – not required to perform acts 8 hrs/day Art. An agent shall not carry out an agency if its execution would manifestly result in loss or damage to the principal. the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions.. (1459a) AUSTRIA V CA Pendant w/ diamonds worth 4. The agent is bound by his acceptance to carry out the agency. he shall do all that a good father of a family would do.In default thereof. clerks of superior and inferior courts. on her way home 2 men snatched her purse w/ pendant inside. Lawyers – relative prohibition. the agent must indemnify him therefor. 1928. (5) Justices. 1887. (n) Art. Maria didn’t pay – robbery extinguished her obligation. in any manner whatsoever. the property of the person or persons who may be under his guardianship. The agent is responsible not only for fraud. he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or take charge of the goods. Kae. 1909. to whom? PRINCIPAL Annie. as required by the nature of the business. this provision shall apply to judges and government experts who. either in person or through the mediation of another: (1) The guardian. take part in the sale. prosecuting attorneys. (n) D. If the agent has been empowered to borrow money. Chi. (1718) Notes: Acceptance – agent signifies consent to agency. he cannot borrow it without the consent of the principal. unless the agent should base his withdrawal upon the impossibility of continuing the performance of the agency without grave detriment to himself. (2) Agents. The agent shall be liable for damages if. or institution. the property whose administration or sale may have been entrusted to them. (1737a) Reasonable time & manner – depends on circumstances Sufficient time – ex. Loyalty Art. Bank ceased to collect. even if he should withdraw from the agency for a valid reason. Irrevocable agency by stipulation of the parties. according to whether the agency was or was not for a compensation. The following persons cannot acquire by purchase. In case a person declines an agency. as required by the nature of the business. 1884. Pat . Carry out the agency * Agent – relative limitation only o Valid if w/ consent (3) Executors and administrators.5K. 1888. (n) * Damages if conflict of interest Art. (1719) Art. should delay entail any danger. (1736a) To withdraw – with due notice to P Withdrawal – by terms of the contract Repudiation – breach of contract Art. but also for negligence. (n) Art. Jam.
but without designating the person. (n) Art. Anj F. Lou. 1908. shall distinguish them by countermarks. Account/deliver J. The commission agent who handles goods of the same kind and mark. Solidary liability Art. 1904. unless upon receiving them he should make a written statement of the damage and deterioration suffered by the same. with a statement of the names of the buyers. 1909. Every stipulation exempting the agent from the obligation to render an account shall be void. unless he proves that he exercised due diligence for that purpose. and for the fault or negligence of his fellow agents. 1K earnest money and 1k gift/propina to Oscar. and designate the merchandise respectively belonging to each principal. Highest loyalty required= utmost good faith. 1894. each of the agents is responsible for the non-fulfillment of agency. The responsibility of two or more agents. and the person appointed was notoriously incompetent or insolvent. Demand is not necessary for interest to apply. Should he do so.. absolute obligation to make full disclosure = 1891.F. the sale shall be deemed to have been made for cash insofar as the principal is concerned. The agent owes interest on the sums he has applied to his own use from the day on which he did so. negligence VIII. (n) Art. 1892. without the express or implied consent of the principal. he shall bear the risk of collection and shall pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser. and on those which he still owes after the extinguishment of the agency. The commission agent cannot. H. 1903. sell on credit. Soriano by virtue of a judgment as payment of professional services rendered by him to widow and co-heirs Art. in addition to the ordinary commission. (n) Art. Encargado = administrator – to preserve property. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency. according to whether the agency was or was not for a compensation. 2 kinds of interests here o For misappropriation – “applied to his own use” o For monies left with him after accomplishment of agency – “still owes after extinguishment” I. Fraud.2 or more agency acting together Solidary agency (and/or) – there are 2 or more agents & they’re required to act independently SEVERINO V SEVERINO Fabiola wants to be recognized as sole heir of Melecio & take land from Guillermo. which belong to different owners. All acts of the substitute appointed against the prohibition of the principal shall be void. (n) Art. 1891. (1724a) Exception to the general rule that interest only accrues after demand. but he shall be responsible for the acts of the substitute: (1) When he was not given the power to appoint one. but also for negligence. if solidarity has not been expressly stipulated. even though it may not be owing to the principal. but the commission agent shall be entitled to any interest or benefit. Specific obligations of commission agents Art. (2) When he was given such power. (1720a) Render an account of his transactions & deliver o Even though it may not be owing to the P Agent may contract w/ other persons but the moment he receives something not from the P. 1895. except in the latter case when the fellow agents acted beyond the scope of their authority. def is estopped from owning/asserting adverse title to the subject of agency. The commission agent who does not collect the credits of his principal at the time when they become due and demandable shall be liable for damages. (n) Art. Chi. 1896. sell on credit. The agent may appoint a substitute if the principal has not prohibited him from doing so. RESPONSIBILITY FOR ACTS OF SUBSTITUTES Art. which may result from such sale. the principal may demand from him payment in cash. Should the commission agent receive on a sale. another called a guarantee commission. is not solidary. Kae. If solidarity has been agreed upon. Pat . nature is one of agency. even though they have been appointed simultaneously. The commission agent shall be responsible for the goods received by him in the terms and conditions and as described in the consignment. (1721) Substitute agent – appointed by original agent to do same things originally mandated/tasked by the Principal on behalf of the P Art. Pay interest Art. Should he fail to do so. Jam. he shall so inform the principal. Sir: no duty when 1) broker & 2) plus disclosed & no obligation G. Should the commission agent. 1907. The agent is responsible not only for fraud. he must turn it over for the P DOMINGO V DOMINGO Exclusive agency to sell. (n) Joint agency (and) . (1723) Art. Eds. SC: defendant is agent of Melecio. with authority of the principal. which shall be judged with more or less rigor by the courts. non-exclusive distributor. 1906. looked like a sale because of 1) discounts & 2) payment due 60 days MUNICIPAL COUNCIL OF ILOILO V EVANGELISTA Claim of MC as alleged assignee of rights of Atty. (n) GREEN VALLEY POULTRY V IAC Sale v Agency. 1905. (1726) Annie.
In the cases mentioned in Nos. Aragon hired spouses Del Rosario as manager of central agency in Legaspi. In such case the agent is the one directly bound in favor of the person with whom he has contracted. Yet that rule doesn’t apply here. Agent acting within scope of authority Art. the obligation so contracted by him is personal and does not bind the principal. VS. and the principal does not ratify the contract. Anj F. never raised it. (1722a) Joint liability Art. Spouses were agents. as if the transaction were his own. One who has intervened in the making of a contract in the character of agent can’t Annie. Since. It did not deny liability on the ground of excess of authority. The provisions of this article shall be understood to be without prejudice to the actions between the principal and agent. A third person cannot set up the fact that the agent has exceeded his powers. the agent is liable if he undertook to secure the principal's ratification. (n) B. 1911 Art. WELCH. the court held that there is no proof that the agents exceeded the limits of their authority. broad power of Aragon. Jam. V PRIMATERIA SOCIETE ANONYME POUR LE COMMERCE EXTERIUR: PRIMATERA (PHIL). Aragon as Gen Agent in Albay. giving as security therefore real estate belonging to the latter. 1911. The agent who acts as such is not personally liable to the party with whom he contracts. 1898. Eds. [Benito Juarez ship] True. Without notice to third parties DEL ROSARIO V LA BADENIA Extensive selling campaign. . NATIONAL BANK V. With notice to third parties Art. If an agent acts in his own name. (n) 2. FAIRCHILD & CO. however. The agent who acts as such is not personally liable to the party with whom he contracts. 1893. the latter cannot set up the ignorance of the agent as to circumstances whereof he himself was. an agent who acts for a revealed principal in the making of a contract does not become personally bound to the other party in the sense that an action can ordinarily be maintained upon such contract directly against agent.NPC was unaware of the limitations on the powers granted by the New York firm to Namerco. . according to Aragon’s book =it was sps account. the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. If a duly authorized agent acts in accordance with the orders of the principal. neither have such persons against the principal. to be continuous agency Art. vault burned down. verbal agreement re: sub agency and keeping the film in vault. better not to designate a substitute agent o Purpose to give flexibility to agent. Pat IX. 1899. it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. Even when the agent has exceeded his authority. except when the contract involves things belonging to the principal. the principal has no right of action against the persons with whom the agent has contracted. unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. (1725) Art. unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. the principal (Primateria Zurich) who should have raised the point. PHIL PRODUCTS CO. 1897. 1901. 1883.. With regard to Art 1897 of the CC which provides “that the agent who acts as such is not personally liable to the party with whom he contracts. . Agent acting outside of authority – 1897. NATIONAL POWER CORP. a judgement was already given against the Primateria Zurich for the whole amount. or ought to have been. (n) 1. 1898. unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers”. Lou. if the principal has ratified. NATIONAL MERCHANDISING CORP. no evidence that they acted beyond limit INTERNATIONAL FILMS V LYRIC FILM IFC leased “Monte Carlo madness” film. If the agent contracts in the name of the principal. (n) Art. INC. In this case. WHAT ARE THE OBLIGATIONS AND LIABILITIES OF AGENTS TO 3RD PARTIES? A.Namerco never disclosed to the NPC the cabled or written instructions of its principal. or has signified his willingness to ratify the agent's acts. 1 and 2 of the preceding article. In fact. are our exclusive representatives in the Philippines. 1897. In addition. Chi. AGUDELO When an agent negotiates a loan in his personal capacity and executes a promissory note under his own signature without express authority from his principal. no mandate to insure against fire PHILIPPINE NATIONAL BANK VS. also in his own name and not in the name and representation of the said principal. the article does not hold that in cases of excess of authority.Sub-agent – agent appointed by original agent to do same thing but on behalf of the agent Can agent appoint his own agent? YES you are a principal for your own self General Rule: Agent may appoint substitute Problem w/ substitution: o No recourse against agent. and PPC did not appeal from such judgment then Art 1897 would not apply. aware.The New York corporation in its letter said: We hereby certify that National Merchandising Corporation . . (1717) Art. exceeding the scope of his authority. . Kae. both the agent and its principal are liable. the principal may furthermore bring an action against the substitute with respect to the obligations which the latter has contracted under the substitution. new agent Joseph agreed to subagency. (1725) . SC: defendant not obliged to fulfill more than what’s mandated.
Eds. Theatrical – case of the special guard SY-JUCO v SY-JUCO The effects of agency must be sought: Art 1717 (when an agent acts in his own name. 1912. Chi. If an agent acts in his own name. (1728) Art. and did not represent that he was under commission to represent Manila Oil (Art. (3) When the agent incurred them with knowledge that an unfavorable result would ensue. CA Art. without fault or negligence on his part. the principal cannot be held liable for the acts of the agent person with whom agent has contracted EXCEPT cases involving things belonging to the principal Effects of this rule: Agent is bound to the principal although he does not assume the character of such agent and appears acting in his own name. if the principal was not aware thereof. as if the transaction were his own. Anj F. the acts of an agent beyond the scope of his authority do not bind the principal. the contract must be considered as entered into between the principal and the third person and consequently. BELL & CO. This much is what ordinary good faith requires. The reimbursement shall include interest on the sums advanced. RURAL BANK OF BOMBON VS. The principal must also indemnify the agent for all the damages which the execution of the agency may have caused the latter. 1913. from the day on which the advance was made. Kae. 1717 of the Old Civil Code. the principal has no right of action against the persons with whom the agent has contracted. exception – 1883 Art. and thereby make performance by the principal impossible. if the obligations belong to the former [principal]. v SOTELO MATTI Manila Oil doesn’t seem to have taken part in the contracts. Indemnify – 1913 Dela Cruz v. TUASON VS. Mr Vicente Sotelo signed the contracts in his individual capacity and under his own name. The provisions of this article shall be understood to be without prejudice to the actions between the principal and agent. In such case the agent is the one directly bound in favor of the person with whom he has contracted. Pat . and therefore directly liable. provided the former acted. Lou. unless the latter should wish to avail himself of the benefits derived from the contract. provided the agent is free from all fault. 1918. so the Court in its disposition only directed the acceptance and payment of the ordered goods under Mr Vicente Sotelo’s name. in transferring the mining claims to Gold Star (without disclosing that Jimena was a co-owner although Gold Star had knowledge of this fact as shown by the proofs) acted as Jimena's agent with respect to Jimena's share of the claims X. INC. he cannot use what the PAL agents did to his advantage Citing Art. even if the business or undertaking was not successful. NFA VS. The agent may retain in pledge the things which are the object of the agency until the principal effects the reimbursement and pays the indemnity set forth in the two preceding articles. to him alone must also belong the rights arising from the contract. or that the latter would be allowed only a certain sum. v MARTA LIM-JIMENA Pursuant to Article 1883 Jimena may sue Gold Star because Lincallo. the sums necessary for the execution of the agency. without prejudice to actions he could invoke against his principal. The individual liability of the agent constitutes a further security and does not affect the liability of the principal. If Mr Vicente Sotelo was agent. 1883 in the NCC). 1883. should the latter so request. Agent’s apparent representation yields to the principal’s true representation and that. No. Should the agent have advanced them. 1914. The agent must be precluded from doing any positive act that could prevent performance on the part of his principal. the principal must reimburse him therefor. 1918 C. OROZCO A debt thus incurred by the agent is binding directly upon the principal. CERVANTES vs. unless the latter ratifies the same expressly or impliedly When the third person knows that the agent was acting beyond the scope of his power or authority. The fact that the agent has also bound himself to pay the debt does not relieve from liability the principal for whose benefit the debt was incurred. Advance/reimburse – 1912. Art. WHAT ARE THE OBLIGATIONS AND LIABILITIES OF PRINCIPALS TO AGENTS? A. neither have such persons against the principal. The principal must advance to the agent. (1730) Art. 1914. The principal is not liable for the expenses incurred by the agent in the following cases: (1) If the agent acted in contravention of the principal's instructions. principal has no right of action against Art. in reality and in effect. (4) When it was stipulated that the expenses would be borne by the agent. 1898 of the Civil Code. The Code of Commerce holds Mr Vicente Sotelo since he transacted the business under his own name. Jam. (2) When the expenses were due to the fault of the agent. (1717) SMITH. IAC GOLD STAR MINING CO. he is still liable since he entered the contract under his own name. Agent acting in his own name. within the scope of his authority. as in the present case.be permitted to intercept and appropriate the thing which is the principal is bound to deliver.. (1729) Annie. except when the contract involves things belonging to the principal.. Intervenor has no right of action. CA Plaintiff knew that a written request to the legal counsel was necessary for extension. (n) B.
no negotiations yet. In such case the agent is the one directly bound in favor of the person with whom he has contracted. (1730) MACONDRAY vs. even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent. If the agent acted in bad faith. Until all that is done. vendor spouses) There is no merit in the contention of the husband that misrepresentations of his wife cannot be charged against him. an act is deemed to have been performed within the scope of the agent's authority. PRATS (Sale did not transpire due to disagreement on proviso on the need for banking security) The duty assumed by the broker is to bring the minds of the buyer and seller to an agreement for a sale. Chi. In the case referred to in the preceding article. DBP (Agent without authority. There was no participation in the critical events leading to the sale – negotiations. the broker had already earned his commissions agreed upon. unless there is proof to the contrary. 1875. (1717) Art. without prejudice to the provisions of Article 1544. if such act is within the terms of the power of attorney. Relationship of agency is founded on mutual consent. (1731) D. SELLER (Real estate broker. may be compensated for the diligent steps taken to bring the parties together. The principal must comply with all the obligations which the agent may have contracted within the scope of his authority. and no board resolution to authorize the purchase ROCHA vs. and the two contracts are incompatible with each other. (n) Art. Exception. Art. CUNANAN (Principal terminated agency after referral of a buyer. if the agent has acted in good faith. as if the transaction were his own. HABERES (Misrepresentation in the deed of sale. XI. and in bad faith. Art. one of them with the agent and the other with the principal. terminated the agency to avoid payment of commission. 1914. Agent’s lien – 1914 Art. The company was willing to go into negotiations. because in negotiating for the sale.C. he alone shall be responsible. The provisions of this article shall be understood to be without prejudice to the actions between the principal and agent. able and willing to buy) Broker has not yet performed all acts under the contract to recover commission because what he has accomplished is merely to find a person who might have bought the factory. but introduced potential buyers nonetheless. but subsequently transacted directly with the proposed buyer) Agents entitled to commission. Agent acting within the scope of his authority Art. except when the contract involves things belonging to the principal. Agent acting outside scope of his authority Art. the principal shall be liable in damages to the third person whose contract must be rejected. that of prior date shall be preferred. subsequent grant of exclusive agency. CA (Agent referred Stanford Microsystems as buyer. The agent may retain in pledge the things which are the object of the agency until the principal effects the reimbursement and pays the indemnity set forth in the two preceding articles. Annie. Jam. sale was eventually consummated with Stanford about 1 year 5 months after cessation of agency) Agent not entitled to commission because it was not the efficient procuring cause in bringing about the sale. etc. (n) Art. 5% commission if sale is consummated or if the broker finds a purchaser ready. Solidary liability – 1915 Art. 1900. the principal has no right of action against the persons with whom the agent has contracted. (n) GONZALES vs. allegation of implied agency) Implied agency does not apply because it has been clear that only accredited brokers may look for a buyer. drafting of the deed. So far as third persons are concerned. allegedly because of change of mind. sale is eventually consummated between principal and SSS) An agent who is not the efficient procuring cause in bringing about the sale as his exclusive authority has expired is not entitled to compensation. 1916. INFANTE vs. neither have such persons against the principal. DANON vs. WHAT ARE THE OBLIGATIONS OF PRINCIPALS TO 3RD PARTIES? A. Applied Prats Case to award compensation for efforts. If an agent acts in his own name. 1915. but was not yet ready to buy. after termination. (Factory. Even when the agent has exceeded his authority. they shall be solidarily liable to the agent for all the consequences of the agency. finalization of terms and conditions. 1917. INLAND REALTY vs. as a matter of equity. Agency is presumed to be for a compensation. 1910. When two persons contract with regard to the same thing. arbitrary 5pm deadline) There is no valid revocation because at the time fixed by the manager for the deadline and termination of negotiations. 1883. If two or more persons have appointed an agent for a common transaction or undertaking. he acted as agent and representative of his wife. Compensation – 1875 PRATS vs. CA (Initial negotiations by principal with SSS. Eds. the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. BRIM & CO. Pat . (n) B. initial price too low. as written. 1911. processing of documents. right to commission does not accrue. and could be deprived thereof by the arbitrary action of the principal. (n) E. UNILAND RESOURCES vs.. Lou. the principal took advantage of the services of the agents. Kae. Anj F. and the price and the terms on which it is to be made.
If a person specially informs another or states by public advertisement that he has given a power of attorney to a third person. The power shall continue to be in full force until the notice is rescinded in the same manner in which it was given. . Eds. A general power of attorney is revoked by a special one granted to another agent. 1927. Notice of the revocation in a newspaper of general circulation is a sufficient warning to third persons. Private or secret orders and instructions of the principal do not prejudice third persons who have relied upon the power of attorney or instructions shown them. (n) Art.g. The agency is revoked if the principal directly manages the business entrusted to the agent. MARIA Sta. If the agency has been entrusted for the purpose of contracting with specified persons. Sta. Barretto is the agent for the company in the Philippines. Even though a period is stipulated during which the agent or employee is to hold his position in the service of the owner or head of a mercantile establishment. Agency is extinguished: (1) By its revocation. dealing directly with third persons. Maria allegedly containing his resignation. Barretto wrote a letter to Sta. (3) By the death.Sale of land in Nueva Ecija where the entire area of which was occupied by adverse claimants and the title disputed. any one of them may revoke the same without the consent of the others. its revocation shall not prejudice the latter if they were not given notice thereof. for any of the special Annie. 1926. 1873. Sta. (n) Art. insanity or insolvency of the principal or of the agent. 1922. 1924. as regards the special matter involved in the latter. a resident of Spain and owner of La Insular Cigar & Cigarettes factory. (6) By the expiration of the period for which the agency was constituted. issuance of certification etc) or REPUDIATES (e. (4) By the dissolution of the firm or corporation which entrusted or accepted the agency. Lou. or the instructions as regards the agency. indemnifications for damages) 7 if happy with the transaction (agency essential ends by accomplishment of the object) if not happy he either ACCEPTS (e. Ratio: When the time during which the agent may hold his position is indefinite or undetermined when no period has been fixed in his commission and so long as the confidence reposed in him by the principal exists. (1733a) Art. The plaintiff brought the action to recover the unpaid sum for the land. HOW IS AGENCY EXTINGUISHED? A. in the former case with respect to the person who received the special information. Anj F. or if it is the means of fulfilling an obligation already contracted. agency coupled with interest Art. civil interdiction. (1732a) Art. Maria. STA. (n) Art. He transacted with a Uy Yuan who bought company products but later on became insolvent. The appointment of a new agent for the same business or transaction revokes the previous agency from the day on which notice thereof was given to the former agent. and compel the agent to return the document evidencing the agency. Chi. Revocation. (n) Art. Maria did not immediately reply because he was being cautious. 1921. disown the transaction) XIII. 1925. An agency cannot be revoked if a bilateral contract depends upon it. Ratio: Where the sale of land is effected on the strength of misrepresentations of the agent of the vendor.. yet the latter may. 1919.g. revocation of the agency does not prejudice third persons who acted in good faith and without knowledge of the revocation. or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. and in the latter case with regard to any person. 1923. Such revocation may be express or implied. Jam. (1735a) Art. (n) Art. Kae. When two or more principals have granted a power of attorney for a common transaction. without prejudice to the provisions of the two preceding articles. If the agent had general powers.Ascertain the FACT and SCOPE of agency . Defendant’s defense is that plaintiff through false representation led him to believe that the plaintiff is in possession of the land. 1902. The principal may revoke the agency at will. (1734) Art. (n) BARRETTO VS. (2) By the withdrawal of the agent. Maria did not replied only after 11 months and accepted Barretto’s resignation and replaced him with another agent. (5) By the accomplishment of the object or purpose of the agency. But as soon as this confidence disappears the principal has a right to revoke the power he conferred upon the agent especially when the latter has resigned his position for good reason. DUTY OF 3RD PARTIES DEALING WITH AGENT Art. Pat XII. (n) Sir Dio’s discussion on the chain of duties PRINCIPAL 1 appoint an agent AGENT 2 disclose representation (if no disclosure: agent deals in his name) THIRD PARTIES 3 inquire . 1920. the latter cannot accept the benefit of such representations and at the same time deny the responsibility for them.How? Demand copy of POA and INSTRUCTIONS as written 5 comply with the terms of transaction or obligation (his participation essentially ends here) 4 carry out/perform agency within scope of his authority (now 3P knows what’s within the scope of agent’s authority) 6 accounting of expense (less a. reimbursements and b. the latter thereby becomes a duly authorized agent. A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney.
company or corporation who has furnished labor or materials in the construction or repair of any public building or public work. But even supposing that they are. severance of the agency without notice to the third person transacting with the agent Since Yangco advertised the fact the Collantes was his agent. The court held that the making and accepting of a new POA (whether it enlarges or decreases the power of the agent) must be held to supplant and revoke the latter when the two are inconsistent. the execution of the second POA would be a mere futile gesture. is Act No. but to intervene in the civil case above-mentioned as an unpaid supplier of materials to the contractor. of the termination of such relationship. and any person. Anj F. . which states that “Those who put their labor upon or furnish materials for a piece of work undertaken by the contractor have an action against the owner up to the amount owing from the latter to the contractor at the time the claim is made. al that the validity of the sale should be upheld because there is a previous POA given in 1920 which is a general power of attorney is untenable. And since it is also alleged that. those transactions with lesions or there is economic disadvantage+ other contracts declared by law to be rescissible). there being no privity of contract between them. gave special notice to Rallos of this fact. as stated in the contract of agency.. (in short. In what does such interest consist must be stated in the PoA IN THIS CASE. The deed of sale in favor of Teng did not divest Ong Guan Can of his title therefore. et. GARCIA VS. it is not disputed that defendant Republic has already instituted a suit against the contractor for the forfeiture of the latter's bond posted to secure the faithful performance of stipulations in the construction contract with regards to one of the two school buildings. They are obligatory only on the principal who executed the agency. 3688 Section one of Public Act No. RALLOS VS. still their alleged irrevocability cannot affect defendant who is not a party thereto. RP Two schools Section 1 of Public Act No. as expressly provided in its last paragraph. the powers of attorney in question made plaintiff the contractor's agent in the collection of whatever amounts may be due the contractor from the defendant. 3688. shall have the right to intervene and be made a party to any action instituted by the Government…” In the case at bar. dismissed such agent or employee even before the termination of such period. the fact that Tiburcio mortgaged the improvements on the land in favor of Primitivo.” This article. after the execution of the powers of attorney. Yangco is responsible to Rallos for whatever goods may have been in good faith and without negligence sent to the agent without knowledge. as already seen. and gave a special invitation to Rallos to deal with Collantes as an agent. "is subject to the provisions of special law. Lou. The contractor has a similar bond with respect to the other school building. not to bring suit against the Government. In fact. 3688. the same should have been lodged with the Auditor General. his properties are subject to attachment and execution. entitled "An Act for the protection of persons furnishing material and labor for the construction of public works". Failing to do so. DE MANZANO Father gave first POA to son and then second POA to wife. YANGCO Tobacco leaf. states that a person entering into a contract with the Republic must first execute a penal bond. actual or constructive. Since the agreement is a valid contract. “with good and sufficient sureties. . DY BUNCIO VS. The claim of Tong. POA. it was Yangco’s duty on the termination of the agency to give due and timely notice to Rallos. Chi." The special law governing in the present case. NOTE: the case talked about the RESCISSION of the contract of agency Ratio: The authority to sell is not extinguished until all the lots have been disposed of. Jam. or file an action in the name of the Republic against said contractor on the latter's other bond. NEW MANILA LUMBER COMPANY VS. with the additional obligation that such contractor or his or its sub-contractors shall promptly make payments to all persons supplying him or them with labor and materials in the prosecution of the work provided for in such contract. At any rate. The state cannot be sued without its consent. a. Reasoning: If the new appointment with limited powers does not revoke the gen. son sold half interest in the boat A second POA (of wife) revokes the first one only after notice is given to the first agent (son). the agency apparently has already been revoked. Plaintiff's action being a claim for sum of money arising from an alleged implied contract between it and the Republic of the Philippines. the mortgage has nothing to do with the PoA as it can be foreclosed by Primitivo UPON DEFAULT of Tiburcio Annie. (Articles 1920 and 1924 CC) The point is made by plaintiff that the powers of attorney executed by the contractor in its favor are irrevocable and are coupled with interest. There is another reason for upholding the order of dismissal complained of. DIOLOSA VS.reasons specified in the Art 300 of the Code of Commerce. ONG GUAN Rice mill and camarin The POA given to the agent was not a general POA but a limited one that did not include the power to alienate the properties in question. under the facts alleged in the complaint. CA Broker’s authority was revoked because principal intend to reserve the lots for the benefit of her grandchildren. Pat . however. Pursuant to Act 3688. Kae. and payment for which has not been made. The Power of Attorney executed by Tiburcio does not create an agency coupled with an interest nor does it clothe the agency with an irrevocable character The rule is that a mere statement in the PoA that it is coupled with an interest is not enough. Plaintiff also cites Article 1729 of the new Civil Code. it can only be rescinded on the grounds specified in Art 1381 to 1382 of the CC. Eds. the contractor (principal) demanded and collected from defendant the money the collection of which he entrusted to plaintiff. does not constitute an interest that could render irrevocable the PoA executed by Primitivo. . plaintiff's legal remedy is.
(1732a) Art. in the articles of copartnership are irrevocable without just or lawful cause. (3) By the death. civil interdiction.- AS SUCH. and that any waiver of action for future fraud is void. Agency is extinguished: (1) By its revocation. or in the interest of a third person who has accepted the stipulation in his favor. Kae. Principal ratifies the sale by the agent but does not want to recognize the obligation of the agent. It is also on this principle that the Civil Code. for that would amount to holding that a power. he executed an irrevocable SPOA coupled with interest in favor of the mortgagee authorizing him to sell the land. but coupled with interest or not. CALEONGCO VS. expressly provides the contrary in prescribing that responsibility arising from fraud is demandable in all obligations. (1736a) Art. Primitivo could no longer validly convey the land than such a partner in so far as irrevocability of the power is concerned. (2) By the withdrawal of the agent. Jam. ABAD Within the prohibited period of 5 years. Anything done by the agent. ASSUMING ARGUENDO that the irrevocable PoA was valid. is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith. or betrayal of trust. Agency is extinguished: (1) By its revocation. and an agent with power coupled with an interest cannot stand on better ground Annie. What the interest consists of must be shown. as happened in this case. in Article 1172. 1928. insanity or insolvency of the principal or of the agent. VELASCO . 1929. It is not open to serious doubt that the irrevocability of the power of attorney may not be used to shield the perpetration of acts in bad faith. unless the agent should base his withdrawal upon the impossibility of continuing the performance of the agency without grave detriment to himself. the homesteader mortaged the improvements of the homestead. Anj F. in its Article 1800. and his rendering of a final account of his operations. CONSEQUENTLY. After the lapse of the prohibitive period. (2) By the withdrawal of the agent. (3) By the death. Our new Civil Code. declares that the powers of a partner. must continue to act until the principal has had reasonable opportunity to take the necessary steps to meet the situation. and did not call for the execution of any power of attorney in favor of Coleongco. the agent must indemnify him therefor. (5) By the accomplishment of the object or purpose of the agency. Lou. 1931. The agent may withdraw from the agency by giving due notice to the principal. insanity or insolvency of the principal or of the agent. (1737a) VALERA VS. coupled with an interest authorizes the agent to commit frauds against the principal. and that (2) in fact he sold the land in 1947 HOWEVER. the mortgagor died leaving his debts unpaid. appointed as manager. 1919. even if he should withdraw from the agency for a valid reason.The filing of the complaint by an agent against the principal for the collection of a balance in his favor resulting from a liquidation of the agency accounts between them. Filing of the complaint by agent against the principal is equivalent to an express renunciation as if the agent explicitly said “I renounce the agency” C. (6) By the expiration of the period for which the agency was constituted. (1732a) Art. Chi. Pat . breach of confidence. Agency coupled with an interest Art. the agency was terminated upon the death of Tiburcio in 1945. DIABA The agent sold some goods to third party and bought some goods as well. such as when the attorney. Death. At the same time. A mere statement in the POA that it is coupled with interest is not enough. without knowledge of the death of the principal or of any other cause which extinguishes the agency. (1738) COMPANIA GENERAL DE TOBACOS V. The agent. Eds. are equivalent to an express renunciation of the agency and terminate the juridical relation between them. (6) By the expiration of the period for which the agency was constituted. If the latter should suffer any damage by reason of the withdrawal. it must not be forgotten that a power of attorney can be made irrevocable by contract only in the sense that the principal may not recall it at his pleasure. DEL ROSARIO VS. CLAPAROLS Sabotage of the nail factory The financing agreement itself already contained clauses for the protection of appellant's interest. the act of Primitivo would subject the land to an encumbrance. 1930. The principal is liable to the transactions conducted by the agent because he failed to notify the agent of the termination of the agency. (4) By the dissolution of the firm or corporation which entrusted or accepted the agency. if it has been constituted in the common interest of the latter and of the agent. by the agent. (5) By the accomplishment of the object or purpose of the agency. Mortagagee used the SPOA to sell the land. which is prohibited by law (see footnote 1) Note that the homestead was issued in 1936 while the PoA was executed in 1937 It was contended by Primitivo that (1) the PoA was to be availed of by the agent after the lapse of the prohibition period of five years. (4) By the dissolution of the firm or corporation which entrusted or accepted the agency. The agency shall remain in full force and effect even after the death of the principal. (n) Art. the authority certainly can be revoked for a just cause. 1919. But granting appellant's view. B. this argument cannot be sustained since nothing to that effect is found in the PoA Art. civil interdiction.. Withdrawal b.in-fact betrays the interest of the principal.
Re donation: The donation made was of personal property and in writing thus the acceptance must also be made in writing (A632 OCC). Equipment used by the operator belonged to the company and were just loaned to the operator and the company took charge of their repair and maintenance 5. and in the meantime adopt such measures as the circumstances may demand in the interest of the latter. The death of the principal does not render the act of an agent unenforceable.Art. RAVINA -The power of sale given in a mortgage is a power coupled with an interest which survives the death of the grantor RAMOS VS. unless the agent is a professional agent. his principal was already dead. it is the principal and not the agent who must have such special capacity. FORM AND KINDS OF AGENCY Art 1868 ELEMENTS OF AGENCY 1. after her death. Consolacion. Service station belonged to the company and bore its tradename 3. AGENT’S CAPACITY No particular capacity is required. there is no agency. Consent – express or implied 2. Chi. Why? Because it is he who will receive the benefits and incur the obligations or losses arising therefrom. A1732 – agency is terminated. Employee of the company supervised the operator and conducted periodic inspection of the company’s gasoline and service station 6. Accomplishment of the object or purpose Key distinction: idea of representation in agency AGENT LESSOR OF SERVICES Executes juridical act on behalf Performs a material act for the of another benefit of another AGENCY v INDEPENDENT CONTRACTOR Shell Company of the Philippines v Firemen’s Insurance The operator is an agent of the company and not an independent contractor. RALLOS VS. But with respect to his obligations and responsibilities towards the principal. or. Kae. Eds. (1739) PASNO VS. settled and liquidated E.” ACTS SUSCEPTIBLE OF AGENCY General rule: admissible in all contracts or acts Exception: o Marriage contract o Making of wills and testaments o Presence of accused during the trial of a criminal case CREATION OF AGENCY Testimony of person who drafted the contract does not determine its nature. FELIX GO CHAN (supra) D. Agent – acts within scope of his authority AGENCY v LEASE OF SERVICES . Juan is not acting in “another’s name” but “under another name. CAPACITY OF PARTIES Both parties must have the capacity to give consent. Operator of gasoline and service station owed his position to the company and the latter could remove him or terminate his services at will 2. Natividad presented no proof and there is no indication in the record that the agent. If the agent dies. Pat F. to the administratrix of her estate. he must have the capacity to bind himself. PRINCIPAL’S CAPACITY If any special capacity is required for the act entrusted to the agent. Civil interdiction. There is no such proof that respondent is such. Price of the products sold by the operator was fixed by the company and not by the operator 7. who thinks he is contracting actually with Pedro. Expiration of the period G. Evidence presented: 1. not as the parties stipulated it. Object – execution of a juridical act in relation to a third person 3. The elements of representation is absent. Annie. so long as he has sufficient intelligence and freedom of will. Agent – (1) acts as a representative AND (2) not for himself 4. by the death of the principal or of the agent. A contract must be considered. LUY KIM GUAN There was no proof of the death of the principal Assuming that the principal died. Consequently. Operator sold only the products of the company 4. A1711 CC – the contract of agency is presumed to be gratuitous. insolvency TOLENTINO ANNOTATIONS Chapter 1 NATURE. his negligence as such agent is imputable to his principal and the latter is answerable to third persons. Jam. 1932. among other causes. Receipts signed by the operator indicated he was a mere agent IMPERSONATION No agency if Juan pretends to be Pedro and enters into a contract with Jose. where the latter had no knowledge of such extinguishment of the agency. but as they performed it.. CAOIBES The first document is only a power of attorney. Lou. When Caoibes made use of the power of attorney. was aware of the death of his principal. HERRERA VS. Caoibes as an agent had the obligation to deliver the amount collected by virtue of the said power to the principal. Dissolution of the firm/corporation likened to the death of a natural person SEC issues certificate of dissolution when all the assets and liabilities are partitioned. Luy. Anj F. his heirs must notify the principal thereof. insanity.
not having quite succeeded in bringing the minds of buyer and seller to an agreement in regard to the terms of the sale. and later. he is entitled to commission. while absent. Eds.g. by virtue of a quasi-contract. A broker. the principal is also deemed in bad faith o Notice to agent is also notice to principal Art 1869 IMPLIED AGENCY Created from the: o silence or lack of action o failure to repudiate the representation E.Agent is the rep of his principal. and so that he may not incur any responsibilities. Par 2: acceptance is implied from “failure to reply to the letter or telegram”. either express or implied. o When the principal had broken negotiations with the buyer for the purpose of later making a direct contract with the latter Art 1876. Pat .Only prima facie and may be defeated by proof to the contrary Art 1872 ACCEPTANCE . more than mere failure is required for cases falling outside of Par 2 Art 1873. is not entitled to commission (Rocha v Prats ). Reason: zit’s considered a fraudulent act which the law does not sanction. The efficient-and-procuring-cause principle is synonymous with the ready-willing-and-able rule and these words provide off hand the test in determining whether the agent was the procuring cause of the sale. when a person takes charge of the administration of property without express authorization and without a power of attorney executed by the owner. but a fiction or presumption of consent because of the benefit received RECEIPT WITHOUT OBJECTION Par 1: mere fact of non-refusal does not mean acceptance. BINDING EFFECT . but with the knowledge of the latter and performed for nine years the duties of his office without opposition or absolute prohibition on the owner’s part. OFFICIOUS MANAGEMENT Derived only from a “quasicontract” No simultaneous consent.This is not compulsory. able and willing to buy or lease the property.. ERGO.Incapacitated agent: o may set up his incapacity against principal o such agent would be liable to the principal only in cases of illicit acts and unjust enrichment. Pothier says: Retention of POA is not as clear a proof of acceptance as when it is delivered personally. Art 1877 ACTS OF ADMINISTRATION General power permits the agent to do all acts for which the law does not require a special power. ERGO: o Agent acts in bad faith. he must act immediately so that his silence may not be interpreted as an acceptance. it has been held that the letter containing the authority to sell was sufficient (Jimenez v Rabot) Art 1875 RIGHT TO COMPENSATION When an agent employed to sell/lease property has complied with the terms of his contract by furnishing a purchaser or lessee ready. nor if his exclusive authority to such has expired ( Prats v CA) When does a broker earn his commission? o It is not sufficient that he only find a buyer but also one who will actually buy the property on the terms and conditions imposed by the owner. Kae. Art 1871 PRESUMPTION . RELATION OF PRINCIPAL AND AGENT Relation of an agent to his principal fiduciary In regard to property forming the subject-matter of agency agent is estopped from acquiring or asserting a title adverse to that of principal (Severino v Severino) Agent cannot represent both himself and his principal in a transaction involving the shifting to another person of the agent’s liability for a debt to the principal ( Aboitiz v de Silva) When a person undertakes to act as agent for another Reciprocal relations are created. wrote to sell one parcel of land which she did. Anj F. Even if the owner of business/property has not given his consent thereto. Chi. o cannot invoke capacity to refuse delivery of things received for the principal. Art 1874 LETTER SUFFICIENT AUTHORITY Where the owner of certain parcels of land left them in the care of his sister as his agent. Jam. Lou. Examples of mere acts of administration o Commence suits to collect debts owing to the principal o Appoint servant or employees of a firm Art 1878 SPECIAL POWERS PoA should expressly mention the act for which it is drawn (Strong v Rapide) Such special power can be included in a general power of attorney o by giving authority for all acts of a particular character o by specifying therein the act or transaction for which a special power is needed Annie. Compared with “officious management” (or managemen t of another’s business) IMPLIED AGENCY Comes from a contract Founded on the lack of contradiction or opposition. but if the agent wants to refuse it. which constitutes simultaneous agreement on the part of the presumed principal to the execution of the contract Art 1870.
. In order to avoid liability: He must disclose the limits of his authority (NAPOCOR v NAMERCO) When an attorney-in-fact is not authorized under his PoA to sell the business or establishment of his principal. exceeds his authority Contract not void. Maria) Art 1880. the person dealing with such an agent ( BPI v de Coster) Agent alone cannot enlarge or extend his authority. Pat . entering into contract on behalf of his principal. the form or the object of the agency” Not exceeding authority if: agent acts in a more advantageous manner such that if principal were the one acting. EFFECT OF UNAUTHORIZED ACTS When agent. the agent is considered as empowered to mortgage the property. for which she was not previously liable. 1884-1887 Interpretation of Instructions – should be done in accordance with the principal’s presumed will and the usages of trade. Responsibility of Agent – An agent cannot be held responsible for the failure of the principal to accomplish the object of the agency if Annie. it means that he has exceeded the authority conferred upon him. Art 1881 LIMITATION ON AUTHORITY Power and duties of an agent are confined and limited to those which are specified and defined in his power of attorney. which limitation is a notice to and is binding upon. Chi. LIABILITY OF THE PRINCIPAL If the things involved are those belonging to the principal. o NAPOCOR v NAMERCO – Principal said that agent should not sign contract unless it wished to assume sole responsibility for the shipment. nor can be alone remove the limitations or waive conditions imposed by the principal. in no way binds the real party in interest. Effect of Instructions – They shall form part of the agency. Art 1882 SCOPE OF ARTICLE Condition of agency can be improved but not made worse Refers to an “advantage which can be obtained without modifying the conditions. and a debtor pays him. 2. exceeds the limits of its authority in subsequently signing the contract. driver of an ordinary vehicle for hire). The principal may sue the person with whom the agent dealt with his own name. Kae. It should be understood that the agent is obliged to turn over the money to the principals or at least. When agent acts beyond the scope of his authority. A special power to mortgage does not include the power to contract loans for the principal (PNB v Sta. he exceeds his authority. and for acts in violation of the terms of the written authority. Anj F. by his own acts or statements. nor the latter against them. place it at their disposal. the price indicated must be construed as the minimum while in an agency to buy. said persons not having any right of action against the principal. the maximum.Art 1879 POWER TO SELL Must be understood as for cash and not on credit. but only voidable at the instance of the party who has been improperly represented Only the principal is prejudiced and only he can impugn the agent’s act Agent becomes personally liable for damages. the instructions are only binding to the principal and the agent. not to third persons.g. If an agent departs from the instructions. and such payment is not a valid defense as against the principal. Jam. the principal’ consent or concurrence must be shown (Keeler Electirc v Rodriguez ) Illustrations: o BPI v de Coster – Authority given by wife does not carry with it or imply that husband has a legal right to sign her name to a promissory note which would make her liable for the payment of a pre-existing debt of the husband or that of his firm. such debtor pays at his own risk. However. rd Chapter 2 OBLIGATIONS OF THE AGENT Art. Lou. it shall be deemed that the contract is made on behalf of the principal (Syjuco v Syjuco). o Hodges v Salas – PoA of special character to borrow any amount of money does not authorize agent to use the money as he pleased. when the transaction involves things belonging to the principal ( Gold Star Mining v LimJimenez) JUDGMENT AGAINST THE AGENT A judgment. In an agency to sell. When an agent transacts business in his own name. In case of doubt. he would have followed the more advantageous course Art 1883 SCOPE OF ARTICLE rd Applicable only to cases where it is material to the 3 person to know with whom he is contracting. for or against an agent. unless the latter is expressly authorized. it shall not be necessary for him to state the name of his principal and he shall be directly liable as if the business were for his own account. the sale and conveyance thereof in favor of 3 person is unenforceable and the latter acquires no title thereto. to the persons with whom he transacts the same. to charge the principal in such case. it is inapplicable. relying upon his representations as to his authority to make such collections and receipt for the money. In applying the money borrowed to pay his personal obligations. PERSONAL LIABILITY OF AGENT When does agent incur personal liability? 1. Eds. POWER TO RAISE MONEY If a power to raise a sum of money for which purpose the agent is authorized to sell a particular real property. or to mortgage her property to secure such debt. Otherwise (when immaterial e. they constitute the means or the orders carrying out the power granted. it is allowed tp deposit in a bank the money realized from the agency. or to avail himself of any other means. o Keeler v Rodriguez – Where an agent has no authority to collect payments for his principal.
Moreover. Same goes when an agent is authorized to lend money with interest to a person and he lends it with interest. It is insufficient that there is only possible loss or damage. All must act towards the same end to bind the principal. Chi. deceit or fraud. Art. Art. Jam. and can bind the principal without the intervention of the others. 1890. there being several agents for the same purpose. without the permission of the principal. he is to blame and he is not entitled to recover damages from the agent. Art. If a debtor pays to the agent more than what is owing to the principal by mistake. Pat . and they should not be held liable for it. Art. Exceptions: 1. the principal can demand the entire price paid. When a person appoints two agents independently. If he knows such limits. Lawyers are bound to promptly account for money or property received by them on behalf of their clients and failure to do so constitutes professional misconduct. Same goes when an agent is authorized to lend money with interest to a person and he lends it with interest. An agent will become liable to the principal for the damages the latter may suffer if it is proven that he knows of considerable defects at the time he was carrying out the agency. Obligation to Account – The duty of the agent to account does not only involve the money and property which may have come into his hands during and by virtue of the agency but also those which comes into the agent’s hands as the result of his agency (Asiatic Petroleum vs. it means that he tacitly ratified such act. or sell what he has been commissioned to buy. or executes a simulated contract Annie. They are considered as a single unit regardless of whether they act together or separately. An order requiring an agency to render a detailed account of the business of the agency to the principal is simply a consequence of the rescission of a contract of agency. the general rule is that the principal is not bound by the illicit act of the agent. The prohibition ceases upon the agency’s termination. 1891 Delivery of What is Received – If the agent is authorized to sell a parcel of land at a certain price and he sells it for a higher amount. or makes a fraudulent alienation. The present article really governs a joint agency where the agents act collectively as a unit in relation to third persons. If the principal benefits from an act done by the agent. unless that appears positively to have been the principal’s intention. then he alone bears the entire responsibility for the injury caused. directly or indirectly buy for himself what he was commissioned to sell. the agent cannot ratify his own unauthorized acts.when the act committed by the agent because of the defective instructions from the principal. Art. 1889 Applies to All Agents – without distinction between gratuitous or renumerated agency. 1896. since every agent must give an account of his transactions. Acts Beyond Powers – an act of one agent beyond the scope of the agency does not concern the other agents as they have no power to prevent it. 1898 Excess of Authority – The agent is liable depending on whether or not the third person knows the limits of the agent’s power. the knowledge of a fact by one of them is considered as knowledge of all. This is not the same case if the liability pertains to the non-performance of the agency itself. If the agents are charged with a joint undertaking. Eds. Ratification – The acts of an agent beyond the scope of his authority does not bind the principal unless he ratifies it expressly or impliedly. or (2) acted with negligence. Liability is Personal – Each agent is liable only for his own acts or omissions if there is no solidarity. Art. provided the renunciation is not fo the purpose of personally profiting from the transaction.. 1899-1909 Breach of Trust – An agent may not. If each one can act separately. each acts independently of the others. but where it is stipulated that they shall be solidarily liable to the principal. Quey Sim Poo) The obligation of an agent to account and the right of the principal to an accounting are transmissible through their respective heirs. Chapter 3 OBLIGATIONS OF THE PRINCIPAL Art. Art. And the principal must have knowledge of the acts he is to ratify.he carried out the instructions of the principal and (1) does not appear to exceed his authority. 1893. the principal can demand the interest. Lou. Fault or Negligence – includes fraud or dolo. Art. 1910 Liability for agent’s illicit acts The fault of the agent is attributable to the principal (culpa contractual) when the agent is in the performance of an obligation of the principal. Principal’s own negligence . the consent of one will not be required to validate the acts of the other. 1894 Joint Agency – there are several agents that act collectively. Art. 1892 Use of Employees – If the agent is authorized to sell a parcel of land at a certain price and he sells it for a higher amount. so that one cannot act without the others. the principal can demand the entire price paid. or due to the lack of necessary vigilance/supervision on his part 2. This does not apply to overpayment made by mistake. and the agency is not performed due to the omission of the agent. the principal can demand the interest. Kae. It is best for the agent to renounce the agency if he wishes to prefer his own interests when a conflict arises. unless the latter undertook to secure the principal’s ratification. then he is liable for his own omission. Only the principal can ratify. But where the fault/crime committed by agent is not in the performance of an obligation of the principal. 1888 Result in Loss – necessary that the transaction is undoubtedly prejudicial to anyone. He should have suspended action first and waited for further actions from the principal. agent may keep the mistake but he is the one directly liable to the payor if the latter decides to sue to collect the overpayment. 1897 Liability of the Agent – An agent cannot be held personally liable on the contract if he acts in the name of the principal within the scope of the agency. Agent secures a contract through fraud. Anj F. Art. 1895 Solidary Agency – one in which.
Art. but this is what Tolentino said) A mere obligation of the principal not to revoke Art. This stipulation is limited with respect to the transaction or with respect to time. it extends the agency even against the will of the principal.3. or o When the principal makes known to the first agent that his powers have ceased by the appointment of a new agent Where there is no incompatibility. so long as the agreement is according to the purpose of the agency and not contrary to morals. If it were not so. 1927 Stipulation of irrevocability An irrevocable agency cannot be perpetual. In this case the principal is deprived of the right to appoint a new agent for the same transaction. but becomes criminal only because of the manner in which the agent has performed it Art. 1919 Death of principal Even if the agency is for a definite period and the period has not yet expired 1930 and 1931 are exceptions to the general rule provided in this article on the revocation by death Art. 1922 Refers to the agency in which the person with whom the agent is to contract. Anj F. Crime consists of an act which is within the powers of the agent. 1920 Power to revoke Constitutes an exception to the general rules of contract Basis: Representation and confidence being the bases of the contract. 1928 Relationship may also be terminated in case of an impossibility of continuing the agency without serious injury to himself. in the sense that acts of the agent will bind the principal notwithstanding the untimely revocation Art. in bad faith and as a means to avoid paying compensation to the agent. Permanent revocability is an essential characteristic of agency. If the third person has knowledge of the revocation. Revocation by operation of law (example: death of principal) Chapter 4 MODES OF EXTINGUISHMENT OF AGENCY Art. either jointly or by revocation. it is usual to stipulate that the agency shall be exclusive. it is the will of the person represented that may put an end to the representation. 1923 Incompatibility of powers A new agency revokes an existing one only when: o The two are incompatible with each other. and not from the act constituting the agency. is not specified Annie. 1914 Applies even when the appointments were made by the principals in separate acts. Art. Jam. The solidarity arises from the common interest of the principals. because public order is against indefinite/irrevocable obligations Effect of irrevocable agency: o Does not insure an indemnity to agent/third persons prejudiced by revocation. 1913 Reasonable compensation for professional services rendered by third persons in the execution of agency Art. Lou. 1924 Direct intervention by the principal Will revoke only when such intervention is incompatible with the agency Under Argentine Code even where there is incompatibility. Pat . this is equivalent to notification. 1911 Basis of liability – principal’s failure to adopt the necessary measures to prevent third persons from being deceived by the apparent authority of the agent Art.. It must be limited to a particular transaction or to a determinate period. Stipulation on irrevocability Agency is essentially revocable. Art. otherwise it will be contrary to the revocability of the agency Art. the representation would be converted into a true alienation of the personality. Parties may validly stipulate that agency shall be irrevocable for a certain period. 1926 Subsequent general power – law does not provide for the reverse situation but under Argentine Code the special power is not revoked by a subsequent general power given to another agent unless the latter also refers to the act authorized under the special power Art. o Except when otherwise stipulated. the new agency may only mean a division of the agency and the two agencies can coexist Notice to first agent Without notice to first agent. the agency will subsist if the principal expressly manifests that he has no intention of revoking the agency Art. 1921 It is the duty of the principal to give due and timely notice to third persons to whom he has given special invitation to deal with his agent and failure to do so renders him liable to them for whatever goods may have been in good faith and without negligence sent to the agent without knowledge of the termination of the agency. Forms of agreement: o Waiver – renunciation of the right to revoke o (Sir says there is another ground. Chi. Rule on damages: Principal is not liable for damages for having made use of this power to revoke the agency. Kae. 1931 Revocation by an act of principal vis. Exception: When this was done in abuse of right. Eds. it must be considered that the latter acted under a valid POA which had not been legally revoked on the date of transaction Exclusive agency Where agency is for a compensation and the compensation depends upon the success of the transaction.