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By: Jacqueline Ann Quinto

SEVERINO vs. SEVERINO  The relations of an agent to his principal are fiduciary and in regard to the property forming the subject-matter of the agency, he is stopped from acquiring or asserting a title adverse to that of the principal.  An action in personam will lie against an agent to compel him to return or transfer to his principal, or the latter's estate, the real properly committed to his custody as such agent and also it execute the necessary documents of conveyance to effect such retransfer.  an agent is not only estopped from denying hi principal's title to the property, but he is also disable from acquiring interests therein adverse to those of his principal during the term of the agency THOMAS vs. PINEDA  A receiver, trustee, attorney, agent, or any other person occupying fiduciary relations respecting property or persons, is utterly disabled from acquiring for his own benefit the property committed to his custody for management. This rule is entirely independent of the fact whether any fraud has intervened. No fraud in fact need be shown, and no excuse will be heard from the trustee. I PALMA vs. CRISTOBAL  The relations of an agent to his principal are fiduciary and in regard to property forming the subject matter of the agency, he is estopped from acquiring or asserting a title adverse to that of the principal. His position is analogous to that of a trustee and he cannot consistently, with the principles of good faith, be allowed to create in himself an interest in opposition to that of his principal or cestui que trust.  A trustee cannot acquire by prescription the ownership of a property entrusted to him. The position of a trustee is of representative nature. It is logical that all benefits derived by the possession and acts of the agent, as such agent, should accrue to the benefit of his principal. RAMOS vs. CAOIBES  Where an agent makes use of his power of attorney after the death of his principal, the agent has the obligation to deliver the amount collected by him by virtue of said power to the administratrix of the estate of his principal.  Where a donation of personal property was made in writing but has not been accepted in the same form, the donation is not valid. Nor can it be considered a donation upon valuable consideration where no services or valuable consideration were involved. The mere fact that the agent collected the principal's claim from the War Damage Commission is not such a service as to require compensation.  the contract of agency is presumed to be gratuitous, unless the agent is a professional agent. PEOPLE vs. BULU CHOWDURY  An employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. It has been held that the existence of the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally causes the corporation to commit a crime. The corporation obviously acts, and can act, only by and through its human agents, and it is their conduct which the law must deter. The employee or agent of a corporation engaged in unlawful business naturally aids and abets in the carrying on of such business and will be prosecuted as principal if, with knowledge of the business, its purpose and effect, he consciously contributes his efforts to its conduct and promotion, however slight his contribution may be. The law of agency, as applied in civil cases, has no application in criminal cases, and no man can escape punishment when he participates in the commission of a crime upon the ground that he simply acted as an agent of any party. The culpability of the employee therefore hinges on his knowledge of the offense and his active participation in its commission. Where it is shown that the employee was merely acting under the direction of his superiors and was unaware that his acts constituted a crime, he may not be held criminally liable for an act done for and in behalf of his employer.  Agents or representatives appointed by a licensed recruitment agency whose appointments are not previously approved by the POEA are considered "nonlicensee" or "non-holder of authority" and therefore not authorized to engage in recruitment activity.  The obligation to register its personnel with the POEA belongs to the officers of the agency. A mere employee of the agency cannot be expected to know the legal requirements for its operation. EDUARDO B. OLAGUER, petitioner, vs. EMILIO PURUGGANAN, JR. AND RAUL LOCSIN  It is a general rule that a power of attorney must be strictly construed; the instrument will be held to grant only those powers that are specified, and the agent may

V.  — As a general rule. whether in performance or in violation of his duties. BAMBERGER  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. the principal may recover back the commission paid. candor and fairness on the part of the agent. 40 The prohibition against agents purchasing property in their hands for sale or management is. DOMINGO vs. In re H. Consequently. the vendor. he loses his right to compensation on the ground that he has taken a position wholly inconsistent with that of agent for his employer. with full knowledge of every detail known to the agent which might affect the transaction.By: Jacqueline Ann Quinto neither go beyond nor deviate from the power of attorney. If the agent does not conduct himself with entire fidelity towards his principal. indeed. as to make a profit out of it for himself in excess of his lawful compensation. it is a breach of good faith and loyalty to his principal for an agent. honesty. while the agency exists. It does not apply where the principal consents to the sale of the property in the hands of the agent or administrator. not absolute. even if the principal does not suffer any injury by reason of such breach of fidelity. the real estate broker in this case. but is guilty of taking a secret profit or commission in regard the matter in which he is employed.  Where a principal has paid an agent or broker a commission while ignorant of the fact that the latter has been unfaithful. the rule is not absolute and should not be applied to the extent of destroying the very purpose of the power. rights. the right to treat him so far as compensation.  By taking such profit or bonus or gift or propina from the vendee. The aforecited provisions demand the utmost good faith. and if he does so he may be held as a trustee and may be compelled to account to his principal for all profits. at least. to his principal. However.  An agent who takes a secret profit in the nature of a bonus. or that he obtained better results or that the agency is a gratuitous one. and be required 2 . upon discovering it. not to remedy or repair an actual damage. so much so that the law as amended does not countenance any stipulation exempting the agent from such an obligation and considers such an exemption as void. because the rule is to prevent the possibility of any wrong. Clauses in a power of attorney that are repugnant to each other should be reconciled so as to give effect to the instrument in accordance with its general intent or predominant purpose. the vendor. fidelity. is concerned as if no agency had existed. or privileges acquired by him in such dealings. but the agent has only himself to blame for that result. the agent thereby assumes a position wholly inconsistent with that of being an agent for his principal. an agent is likewise liable for estafa for failure to deliver to his principal the total amount collected by him in behalf of his principal and cannot retain the commission pertaining to him by subtracting the same from his collections. insofar as his commission is concerned. The duly of an agent is likened to that of a trustee. DOMINGO  The duties and liabilities of a broker to his employer are essentially those which an agent owes to his principal. without revealing the same to his principal. 31  It is. the instrument should always be deemed to give such powers as essential or usual in effectuating the express powers. gratuity or personal benefit from the vendee. the construction that should be adopted is that which will carry out instead of defeat the purpose of the appointment. since an agent or broker who has been unfaithful is not entitled to any compensation. so to deal with the subject matter thereof. advantages. is guilty of a breach of his loyalty to the principal and forfeits his right to collect the commission from his principal. however. This is not a technical or arbitrary rule but a rule founded on the highest and truest principle of morality as well as of the strictest justice. clearly. as if no agency had existed. a familiar and universally recognized doctrine that a person who undertakes to act as agent for another cannot be permitted to deal in the agency matter on his own account and for his own benefit without the consent of his principal. The law imposes upon the agent the absolute obligation to make a full disclosure or complete account to his principal of all his transactions and other material facts relevant to the agency. and which gives his employer. If the language will permit. or that usage or custom allows it. who has a right to treat him. the decisive legal provisions are found in Articles 1891 and 1909 of the New Civil Code. The fact that the principal may have been benefited by the valuable services of the said agent does not exculpate the agent who has only himself to blame for such a result by reason of his treachery or perfidy. This may operate to give to the principal the benefit of valuable services rendered by the agent. or with information acquired during the course of the agency. freely given. Furthermore.  Because of his responsibility under the aforecited Article 1720.

. and it is not liable for the accidental destruction thereof by fire. contrary to its principal's prior cabled instructions that the sale should be subject to availability of a steamer. . after the expiration of the agency. This also applies to checks drawn on local banks and bankers and their branches as well as on this bank. whether or not such item is returned. however. unauthorized overdraft or any other reason.  It is undeniable that in order to completely exonerate the debtor for reason of a fortuitous event. NATIONAL MERCHANDISING CORP. . The Court. in addition to the casus itself. it would only be sufficient to establish that the unforeseeable event. such debtor must. for at that time criminality had not by far reached the levels attained in the present day. assuming no responsibility beyond care in selecting correspondents. it agreed that non3 the events. or unless with such knowledge he has allowed the agent so as to change his condition that he cannot be put in status quo. Abad. further reduced the solidary liability of defendants-appellants for liquidated damages. which are unpaid due to insufficiency of funds. it is not necessary that the persons responsible for the occurrence should be found or punished. from the day on which he did so. not on the agents or factors responsible for them. in 1961. the robbery in this case. in returning alone to her house in the evening. NAPOCOR vs. carrying jewelry of considerable value. would be to demand proof beyond reasonable doubt to prove a fact in a civil case. forgery. or had accrued. unless the principal has consented to or ratified the transaction knowing that benefit or profit would accrue. to the agent. the conduct of respondent Maria G. which reads as follows: . as subagent of the plaintiff in the exhibition of the film "Monte Carlo Madness". and this can be done by preponderant evidence. nor is it affected by the fact that there is a usage or custom to the contrary. It is clear that under the circumstances prevailing at present in the City of Manila and its suburbs. was not obliged to insure it against fire. or that the agency is a gratuitous one. "The doctrine of estoppel applicable to petitioners here is not only that which prohibits a party from assuming inconsistent positions. Namerco. did take place without any concurrent fault on the debtor's part. not having received any express mandate to that effect. and upon those which he still owes. but that which precludes him from repudiating an obligation voluntarily assumed after having accepted benefits therefrom. from the time of his default. LYRIC FILMS  The defendant company. or that he in fact obtained better results. INTL FILMS vs. with their high incidence of crimes against persons and property. providing that: . when the robbery in question did take place. LIM  the Baloloys have ratified the contract of sale when they accepted and enjoyed its benefits. To require in the present action for recovery the prior conviction of the culprits in the criminal case. however. be free of any concurrent or contributory fault or negligence. in order to establish the robbery as a fact. GOITIA  an agent shall be liable for interest upon any sums he may have applied to his own use. based on the principle of election. would be negligent per se. that renders travel after nightfall a matter to be sedulously avoided without suitable precaution and protection. It may be noted therefrom that the emphasis of the provision is on  — In the present case. METROBANK vs CA  the bank obligates itself only as the depositor's collecting agent. and would put a premium on fraud or misrepresentation. This is apparent from Article 1170 of the Civil Code of the Philippines. We are not persuaded. ESCUETA vs. that the same rule should obtain ten years previously. AUSTRIA vs. the right is reserved to charge back to the depositor's account any amount previously credited. entered into a contract of sale with the National Power Corporation without disclosing to the NPC the limits of its powers and.By: Jacqueline Ann Quinto to transfer them to his principal upon being reimbursed for his expenditures for the same.  the agent who exceeds the limits of his authority without giving the party with whom he contracts sufficient notice of his powers is personally liable to such party. and until such time as actual payment shall have come into possession of this bank. The application of this rule is not affected by the fact that the principal did not suffer any injury by reason of the agent's dealings. the agent of a New Yorkbased principal. CA  The point at issue in this proceeding is how the fact of robbery is to be established in order that a person may avail of the exempting provision of Article 1174 of the new Civil Code." MENDEZONA vs. To countenance such repudiation would be contrary to equity. To avail of the exemption granted in the law. and would not exempt her from responsibility in the case of a robbery.

and is not liable. B. expressly or impliedly. 20 and 21 of the Civil Code of the Philippines come into play. as principal or agent. PRIMATERIA SOCIETE ANONYME POUR LE COMMERCE EXTERIEUR: PRIMATERIA (PHILIPPINES) INC. PHILIPPINE PRODUCTS COMPANY vs. Barnes & Co.   A resident agent of a foreign insurance company doing business in the Philippine Islands is not liable. that is sought to be held liable on the contract of sale which was expressly repudiated by the principal because the agent took chances.. on insurance contracts issued in the name of the company. The principal. — The defendant in the instant case is "Warner. & Co. on the other hand. express or implied. There is no showing that Dans knew of the limitation on DBP's authority to solicit applications for MRI. or concealing the authority under which he assumes to act. (ii) the object is the execution of a juridical act in relation to a third person. or in affirming.. then the latter is liable for damages to him  The rule that the agent is liable when he acts without authority is founded upon the supposition that there has been some wrong or omission on his part either in misrepresenting. DPB vs. The said rule is not applicable in the instant case since it is the agent. E. either as agent or principal. RIGHT OF CONTRACTING PARTY TO RECOVER FROM BOTH PRINCIPAL AND AGENT. & Co. — Art. the ignorance of a person dealing with an agent as to the scope of the latter's authority is no excuse to such person and the fault cannot be thrown upon the principal. and (iv) the agent acts within the scope of his authority. either as agent or principal.  The rule that every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent would apply only in cases where the principal is sought to be held liable on the contract entered into by the agent. may act on the presumption that third persons dealing with his agent will not be negligent in failing to ascertain the extent of his authority as well as the existence of his agency. of the parties to establish the relationship. 39 If he does not make such an inquiry. W. Inasmuch as the non-disclosure of the limits of the agency carries with it the implication that a deception was perpetrated on the unsuspecting client. Only the principal can ratify. & Co. . the liability of the agent of a foreign corporation doing business. WARNER BROS. but not licensed in the Philippines.  — In the absence of express legislation. he cannot at the same time deny responsibility for such misrepresentation By the contract of agency. CA  The liability of an agent who exceeds the scope of his authority depends upon whether the third person is aware of the limits of the agent's powers. did not make any contract with plaintiff. He cannot charge the principal by relying upon the agent's assumption of authority that proves to be unfounded. the acts of an agent beyond the scope of his authority do not bind the principal. therefore. both the agent and the principal are liable to the other contracting party. 1897 of the New Civil Code does not hold that in case of excess of authority. — There is no breach of contract by W.  WHEN AGENT OF FOREIGN CORPORATION PERSONALLY LIABLE. 41 A person dealing with an agent assumes the risk of lack of authority in the agent. not the principal. in effect. in its capacity as agents of" insurance companies. MACIAS vs. a person binds himself to render some service or to do something in representation or on behalf of another.  IN THE ABSENCE OF CONTRACT AGENT NOT LIABLE. Namerco. B. the elements of agency are (i) consent. MANILA MEMORIAL PARK CEMETERY vs LINSANGAN  if an agent misrepresents to a purchaser and the principal accepts the benefits of such misrepresentation. is premised on the inability to sue the principal or non-liability thereof. it acted in its own name. he is chargeable with knowledge of the agent's authority and his ignorance of that authority will not be any excuse. The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. (iii) the agent acts as a representative and not for himself. B. for the very simple reason that W.  NO BREACH OF CONTRACT. is liable for damages. the agent cannot ratify his own unauthorized 4    . it exceeded its authority and. unless he ratifies them. never made any insurance contract. either as principal or agent. the provisions of Articles 19. 33 Thus.  If the third person dealing with an agent is unaware of the limits of the authority conferred by the principal on the agent and he (third person) has been deceived by the non-disclosure thereof by the agent. with the consent or authority of the latter.By: Jacqueline Ann Quinto availability of a steamer was not a justification for nonpayment of the liquidated damages.

one party called the principal authorizes another called the agent to act for and in his behalf in transactions with third persons. Vs.. INC. the acts of the agent beyond the scope of his authority do not bind the principal unless the latter ratifies the same. and the authority conferred upon the latter includes the power to enter into a construction contract to build houses such as the Deed of Agreement between Santos and De Guzman's Jigscon Construction. or that the principal chooses to act in ignorance of the facts. Thus. there can be no valid ratification and this regardless of the purpose or lack thereof in concealing such facts and regardless of the parties between whom the question of ratification may arise.     SAFIC ALCAN & CIE vs.  TOYOTA SHAW. he is chargeable with knowledge of the agent's authority. INC.By: Jacqueline Ann Quinto acts. CA  A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. to ascertain not only the fact of the agency but also the nature and extent of the authority. Persons dealing with an assumed agent. third persons need not concern themselves with instructions given by the principal to his agent outside of the written power of attorney.  By the relationship of agency. Third persons cannot be adversely affected by an understanding between the principal and his agent as to the limits of the latter's authority. By this legal fiction of representation. The scope of the agent's authority is what appears in the written terms of the power of attorney. ratification cannot be implied as against the principal who is ignorant of the facts. CA 5 . the principal cannot be held liable for the acts of the agent. The authority of the agent to act emanates from the powers granted to him by his principal. Vs. are bound at their peril. if material facts were suppressed or unknown. the inescapable conclusion is that Siredy is bound by the contract through the representation of its agent Santos. if such act is within the terms of the power of attorney. BACALTOS COAL MINES vs. "He who acts through another acts himself. the principal must have full knowledge at the time of ratification of all the material facts and circumstances relating to the unauthorized act of the person who assumed to act as agent. 45 Nevertheless. Hence. Ordinarily." We find that a valid agency was created between Siredy and Santos. the actual or legal absence of the principal is converted into his legal or juridical presence. 46 However. if they would hold the principal. The basis of agency is representation. Moreover. the agent acts for and in behalf of the principal on matters within the scope of his authority (Art. It also bears emphasis that when the third person knows that the agent was acting beyond his power or authority. unless the latter undertook to secure the principal's ratification. 1881) and said acts have the same legal effect as if they were personally done by the principal. In the same way. this principle does not apply if the principal's ignorance of the material facts and circumstances was willful. as written. Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. INC.. amounting to a substitute for a prior authority. he is to blame and is not entitled to recover damages from the agent. If he does not make such inquiry. an act is deemed to have been performed within the scope of the agent's authority. While third persons are bound to inquire into the extent or scope of the agent's authority. whether the assumed agency be a general or special one. his act is the act of the principal if done within the scope of the authority. the burden of proof is upon them to establish it.  The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority. that is. they are not required to go beyond the terms of the written power of attorney. in the absence of circumstances putting a reasonably prudent man on inquiry. even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent. CA SIREDY ENTERPRISES. the principal must have knowledge of the acts he is to ratify. and in case either is controverted. Article 1900 of the Civil Code provides: Art. 1900. The substance of the doctrine is confirmation after conduct. If the said third person was aware of such limits of authority. IMPERIAL VEGETABLE OIL CO. To repeat. So far as third persons are concerned. and his ignorance of that authority will not be any excuse.

American jurisprudence summarizes the rule in dealing with an agent as follows: A third person dealing with a known agent may not act negligently with regard to the extent of the agent's authority or blindly trust the agent's statements in such respect. since the agency of Savellon is based on a written document. if they would hold the principal. It fails to note that the broadest scope of Savellon's authority is limited to the use of the coal operating contract and the clause cannot contemplate any other power not included in the enumeration or which are unrelated either to the power to use the coal operating contract or to those already enumerated. and his ignorance of that authority will not be any excuse. he is chargeable with knowledge of the agent's authority. went further by hastily making a sweeping conclusion that "a company such as a coal mining company is not prohibited to engage in entering into a Trip Charter Party contract. by the exercise of the reasonable diligence and prudence. to use the coal operating contract for any legitimate purpose it may serve. . It pertinently states as follows: I. The trial court also failed to note that the Authorization is not a general power of attorney. do hereby authorize RENE R. as would suffice to put an ordinarily prudent man upon his guard. In short. The principal. Keller Electric Co. is seriously flawed. of which I am the proprietor. or if the character assumed by the agent is of such a suspicious or unreasonable nature. whether the assumed agency be a general or special one. he must use reasonable diligence and prudence to ascertain whether the agent is acting and dealing with him within the scope of his powers. There is only one express power granted to Savellon. Obviously. but the nature and extent of the authority . on the other hand. In other words. Namely. it can comprehend only additional prerogatives falling within the primary power and within the same class as those enumerated . or if the authority which he seeks to exercise is of such an unusual or improbable character. the party dealing with him may not shut his eyes to the real state of the case. It is a special power of attorney for it refers to a clear mandate specifically authorizing the performance of a specific power and of express acts subsumed therein.   PREROGATIVE GIVEN TO AGENT MUST RELATE OR BE GERMANE TO THE EXPRESS POWER In the instant case. to ascertain not only the fact of the agency but also the nature and extent of the authority..By: Jacqueline Ann Quinto  — Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. SAVELLON . GERMAN A. In short. Rather. and even if it owned any such vessels. ." But what the trial court failed to consider was that there is no evidence at all that Bacaltos Coal Mines as a coal mining company owns and operates vessels. the extent and scope of his powers must be determined on the basis thereof. if he knows or has good reason to believe that the agent is exceeding his authority. for any legitimate purpose that it may serve. (44 Phil. or should ascertain from the principal the true condition of affairs. The conclusion then of the Court of Appeals that the Authorization includes the power to enter into the Trip Charter Party because the "five prerogatives" are prefaced by such clause. but not by the way of limitation. If he does not make such inquiry. both courts below unreasonably expanded the express terms of or otherwise gave 6 . Person dealing with an assumed agent. that it was allowed to charter or lease them. while the clause allows some room for flexibility. the Authorization of 1 March 1988. as follows: . vs. the burden of the proof is upon them to establish it. and in case either is controverted. 19 [1922]) quoting Mechem on Agency: The person dealing with the agent must also act with ordinary prudence and reasonable diligence. The enumerated "five prerogatives " — to employ the term used by the Court of Appeals — are nothing but the specific prerogatives subsumed under or classified as part of or as examples of the power to use the coal operating contract. The mere opinion of an agent as to the extent of his powers. BACALTOS . whether the agency is general or special. Rodriguez. The clause "but not by the way of limitation" which precedes the enumeration could only refer to or contemplate other prerogatives which must exclusively pertain or relate or be germane to the power to use the coal operating contract. So if the suggestions of probable limitations be of such a clear and reasonable quality. or his mere assumption of authority without foundation. The trial court. the existence or non-existence of the agent's authority to act in the premises. however. and a third person dealing with a known agent must bear the burden of determining for himself. Or. are bound at their peril. but should either refuse to deal with the agent at all. he cannot claim protection. as stated in Harry E. . may act on the presumption that third persons dealing with his agent will not be negligent in failing to ascertain the extent of his authority as well as the existence of his agency. The language of the Authorization is clear. . viz. . to use the 'coal operating contract' of BACALTOS COAL MINES. the third person is bound to ascertain not only the fact of agency. will not bind the principal.

it must be expressed and cannot be extended beyond its specified limits   EUGENIO vs. or relevant provisions of law Generally. the principal is not bound except when he ratifies it expressly or tacitly. CANNOT BY ITSELF SERVE AS PROOF OF HIS AUTHORITY TO ACT AS AGENT. as written.  WOODCHILD HOLDINGS vs. The rule is clear that an agent who exceeds his authority is personally liable for damages It has been held that a power of attorney or authority of an agent should not be inferred from the use of vague or general words. by-laws. even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and his agent. or is estopped from denying them: As for any obligation wherein the agent has exceeded his power. whether the assumed agency be a general or special one are bound at their peril. However.000. We cannot agree with respondent's contention that the phrase "contingent commitment" set forth in the memorandum means guarantees. SPECIAL CONTRACTS. CA  CIVIL LAW. if they would hold the principal liable. the burden is on respondent bank to satisfactorily prove that the credit administrator with whom they transacted acted within the authority given to him by his principal. Unfortunately. subject to the articles of incorporation. 19). CA  The substantive law is that payment shall be made to the person in whose favor the obligation has been constituted. under Article 1910 of the New Civil Code. Hence. — Although Wong was clearly authorized to approve loans even up to P350. 7    . PERSONS DEALING WITH AN ASSUMED AGENT. The representation of one who acts as agent cannot by itself serve as proof of his authority to act as agent or of the extent of his authority as agent AGENT WHO EXCEEDS HIS AUTHORITY. when authorized either by its by-laws or by its board resolution. the burden of proof is upon them to establish it (Harry Keeler v. — The sole allegation of the credit administrator in the absence of any other proof that he is authorized to bind petitioner in a contract of guaranty with third persons should not be given weight. The suggestion of the Court of Appeals that there is obscurity in the Authorization which must be construed against German Bacaltos because he prepared the Authorization has no leg to stand on inasmuch as there is no obscurity or ambiguity in the instrument. — It is a settled rule that persons dealing with an assumed agent. then there will be more reason to place SMC on guard and for it to exercise due diligence in seeking clarification or enlightenment thereon.00 without any security requirement. AUTHORITY OF AN AGENT SHOULD NOT BE INFERRED FROM THE USE OF VAGUE OR GENERAL WORDS. an act is deemed to have been performed within the scope of the agent's authority. and in case either is controverted. He would naturally take steps to save himself from personal liability for damages to respondent bank considering that he had exceeded his authority. it did not. Rodriguez. the acts of the corporate officers within the scope of their authority are binding on the corporation. 39 As far as third persons are concerned. through its officers or agents in the normal course of business. Guaranty is not presumed. AGENCY. acts done by such officers beyond the scope of their authority cannot bind the corporation unless it has ratified such acts expressly or tacitly. BOUND AT THEIR PERIL. CASE AT BAR.000. The actuation of Wong in claiming and testifying that he has the authority is understandable. — Wong's testimony that he had entered into similar transactions of guaranty in the past for and in behalf of the petitioner. or his successor-in-interest or any person authorized to receive it. 4 Phil. REPRESENTATION OF A PERSON WHO ACTS AS AGENT. BA FINANCE CORPORATION vs. ROXAS ELECTRIC  a corporation may act only through its board of directors or. The general principles of agency govern the relation between the corporation and its officers or agents.00. to ascertain not only the fact of agency but also the nature and extent of authority. It has been held that a power of attorney or authority of an agent should not be inferred from the use of vague or general words. for that was part of its duty to discover upon its peril the nature and extent of Savellon's written agency. lacks credence due to his failure to show documents or records of the alleged past transactions. nothing in the said memorandum expressly vests on the credit administrator power to issue guarantees. If any obscurity or ambiguity indeed existed. PERSONALLY LIABLE FOR DAMAGES. if such is within the terms of the power of attorney.By: Jacqueline Ann Quinto unrestricted meaning to a clause which was precisely intended to prevent unwarranted and unlimited expansion of the powers entrusted to Savellon. which is far above the amount subject of the guaranty in the amount of P60.

— If the plaintiffs had any doubt about the capacity in which Bedia was acting. — In any case. 1984. Our conclusion is that since it has not been found that Bedia was acting beyond the scope of her authority when she entered into the Participation Contract on behalf of Hontiveros. if the agent acts in his own name. and. 37 Since the respondent had not ratified the unauthorized acts of Roxas. (c) reliance thereon by the petitioner consistent with ordinary care and prudence. It bears stressing that apparent authority is based on estoppel and can arise from two instances: first. Under Article 1910 of the Civil Code. the private respondents cannot now hold Bedia liable for the acts performed by her for. For an act of the principal to be considered as an implied ratification of an unauthorized act of an agent. FORFEITS WHATEVER CLAIMS AGAINST THE AGENT. Rather. what they should have done was verify the matter with Hontiveros. and the agent can neither go beyond it. — The plaintiffs' position became all the more untenable when they moved on June 5. CASE AT BAR.       PNB vs. ratification of that act must also be in writing. the parent-subsidiary relationship between PNB and PNB-IFL is not the significant legal relationship involved in this case since the petitioner was not sued because it is the parent company of PNB-IFL. IS NOT A SUIT AGAINST THE PRINCIPAL. they simply accepted Bedia's representation that she was an agent of Hontiveros and dealt with her as such. NOT LIABLE FOR ACTS PERFORMED BY HER FOR AND IMPUTABLE TO THE PRINCIPAL. Roberto Roxas. for the dismissal of the complaint against Hontiveros. second. By moving to dismiss the complaint against Hontiveros. by the respondent’s retention of the amount. the petitioner was sued because it 8 . "the principal must comply with all the obligations which the agent may have contracted within the scope of his authority.By: Jacqueline Ann Quinto  Thus. Ratification cannot be inferred from acts that a principal has a right to do independently of the unauthorized act of the agent. 38 Hence. it cannot thereby be implied that it had ratified the unauthorized acts of its agent. BEDIA vs WHITE  AGENT. WAIVER OF CLAIMS AGAINST THE PRINCIPAL. nor beside it. contracts entered into by corporate officers beyond the scope of authority are unenforceable against the corporation unless ratified by the corporation Powers of attorney are generally construed strictly and courts will not infer or presume broad powers from deeds which do not sufficiently include property or subject under which the agent is to deal. such act must be inconsistent with any other hypothesis than that he approved and intended to adopt what had been done in his name. The apparent power of an agent is to be determined by the acts of the principal and not by the acts of the agent. if a writing is required to grant an authority to do a particular act. 36 Ratification is based on waiver — the intentional relinquishment of a known right. they cannot now assert them against the agent. RITRATTO GROUP INC  A SUIT AGAINST AN AGENT. Instead. the principal may so clothe the agent with the indicia of authority as to lead a reasonably prudent person to believe that he actually has such authority. Hontiveros had admitted as early as when it filed its answer that Bedia was acting as its agent. The effect of the motion was to leave the plaintiffs without a cause of action against Bedia for the obligation. the principal becomes estopped to claim that the agent does not have such authority. the plaintiffs virtually disarmed themselves and forfeited whatever claims they might have proved against the latter under the contract signed for it by Bedia. 32 There can be no apparent authority of an agent without acts or conduct on the part of the principal and such acts or conduct of the principal must have been known and relied upon in good faith and as a result of the exercise of reasonable prudence by a third person as claimant and such must have produced a change of position to its detriment. It should be obvious that having waived these claims against the principal. the principal may knowingly permit the agent to so hold himself out as having such authority. and imputable to. The act done must be legally identical with that authorized to be done. ABSENT COMPELLING REASONS. the principal has no right of action against the persons with whom the agent had contracted. leaving Bedia as the sole defendant. Hontiveros as her principal. of Hontiveros. it is the latter that should be held answerable for any obligation arising from that agreement. 29 The general rule is that the power of attorney must be pursued within legal strictures. For the principle of apparent authority to apply. if any. They did not. Moreover. the same are unenforceable. the petitioner was burdened to prove the following: (a) the acts of the respondent justifying belief in the agency by the petitioner." Hence. and in this way. (b) knowledge thereof by the respondent which is sought to be held.

negate this solidary responsibility. and constitutes the law between the parties. Under the Rules of Court. In any event. a second sale was effected. made the plaintiff one of its instruments for the collection of copra." In the case at bar. Article 1216 of the Civil Code provides that a creditor may sue any of the solidary debtors. . If the undertaking is one in which several are interested. and reliance is placed upon article 1729 of the Civil Code which requires the principal to indemnify the agent for damages incurred in carrying out the agency. the Rules require that "parties-in-interest without whom no final determination can be had. The solidarity arises from the common interest of the principals. each obligor may be compelled to pay the entire obligation. . FORTIS vs HERMANOS  In an action by an agent to recover the amount of certain disbursements and not compensation for service. but only some create the agency. and not article 1711. — A contract of agency which is not contrary to law. . not the principal. AGENT MAY RECOVER THE WHOLE COMPENSATION FROM ANY ONE OF THE CO-PRINCIPALS. — The solidary liability of the four co-owners. provided that they are for the same transaction. the article of the Civil Code applicable to the case is article 1728. RECEIPT OF PARTIAL PAYMENT OF COMMISSION BY AN AGENT NEITHER AMOUNTS TO A WAIVER OF THE BALANCE NOR PUTS HIM IN 9 CIA. created the relation of principal and agent between the parties. CONTRACT OF AGENCY IS THE LAW BETWEEN PARTIES.. only the latter are solidarily liable. The solidarity does not disappear by the mere partition effected by the principals after the accomplishment of the agency. an action shall be joined either as plaintiffs or defendants. only those interested in each transaction shall be liable for it." When the law expressly provides for solidarity of the obligation. In any event. as in this case. vs. S. PAYMENT.  DE CASTRO vs CA  The mere fact that "other agents" intervened in the consummation of the sale and were paid their respective commissions cannot vary the terms of the contract of agency. militates against the De Castros' theory that the other co-owners should be impleaded as indispensable parties. public order. The parties. Indeed. en C. The contract of agency entered into by Constante with Artigo is the law between them and both are bound to comply with its terms and conditions in good faith. however.. 5% REAL ESTATE BROKER'S COMMISSION IS WITHIN THE STANDARD PRACTICE IN THE REAL ESTATE INDUSTRY. morals or good custom is a valid contract. we find that the 5 percent real estate broker's commission is reasonable and within the standard practice in the real estate industry for transactions of this nature. the agent can recover from any principal the whole compensation and indemnity owing to him by the others. Attentive perusal of the contract is. every action must be prosecuted of defended in the name of the real party-in-interest. pursuant to that agreement. The agent may recover the whole compensation from any one of the co-principals. without prejudice to the effects of negotiorum gestio with respect to the others. The PHILIPPINE REFINING CO  In the appellant's brief contention is advanced that the contract between the plaintiff and the Visayan Refining Co. convincing to the effect that the relation between the parties was not that of principal and agent in so far as relates to the purchase of copra by the plaintiff. It is true that the Visayan Refining Co. however. the injunction suit is directed only against the agent.   . by express agreement. And if the power granted includes various transactions some of which are common and others are not. public policy. however. the Court found that the 5% real estate broker's commission was reasonable and within the standard practice in the real estate industry for transactions of this nature. and not from the act of constituting the agency. By virtue of this solidarity.By: Jacqueline Ann Quinto acted as an attorney-in-fact of PNB-IFL in initiating the foreclosure proceedings. as in the liability of co-principals in a contract of agency. may. In mandatory terms. The mere fact that "other agents" intervened in the consummation of the sale and were paid their respective commissions cannot vary the terms of the contract of agency granting Artigo a 5 percent commission based on the selling price. A noted commentator explained Article 1915 thus — "The rule in this article applies even when the appointments were made by the principals in separate acts. As suit against an agent cannot without compelling reasons be considered as a suit against the principal. but it is clear that in making its purchases from the producers the plaintiff was buying upon its own account and that when it turned over the copra to the Visayan Refining Co. unless otherwise authorized by law or these Rules.

in the event of eviction. is untenable. 1931. AGENT'S HEIRS MUST NOTIFY PRINCIPAL OF AGENT'S DEATH. (Art. CARLOS IMPERIO  SALES. the sale made by the latter of the land in question after the death of the principal is null and void. — Unless a contrary intention appears. Under Article 1919 (3) of the Civil Code. In case of double sale of land registered under the Land Registration Act. 1979. and for that reason the sale made by the agent is valid and effective with respect to third persons who have contracted wiht him in good faith. — Although a revocation of a power of attorney to be effective must be communicated to the parties concerned. or in the interest of a third person who has accepted the stipulation in his favor. Thus. the vendee shall be entitled to the return of the value which the thing sold had at the time of the eviction. and (2) when the agent performed an act for the principal without knowledge of the principal's death and the third person who contracted with him acted in good faith. be it greater or less than the price of the sale. on April 5. CASE AT BAR.  RALLOS vs GO CHAN  DEATH AS MODE OF EXTINGUISHMENT. (Art. Old Civil Code. New Civil Code). and such could not be revived by the mere fact that Philtrust continued to act as her agent when. The only exception where the agency shall remain in full force and effect even after the death of the principal is when if it has been constituted in the common interest of the latter and of the agent. relationship between principal and agent. DE GABRIEL vs CIR  The first point to be considered is that the relationship between the decedent and Philtrust was one of agency. ACTS DONE BY AN AGENT AFTER DEATH OF PRINCIPAL WITHOUT HIS KNOWLEDGE OF SUCH DEATH.   SARSABA vs VDA DE TE  Agency is extinguished by the death of the [51] principal. 1723. but the heirs of the principal are not duty-bound to give notice of the principal's death to the agent. it filed her Income Tax Return for the year 1978. the mere receipt of a partial payment is not equivalent to the required acceptance of performance as would extinguish the whole obligation. there is no estoppel to speak of ROMANA vs. In this case. death of the agent or principal automatically terminates the agency. as used in Article 1235 of the Civil Code.By: Jacqueline Ann Quinto ESTOPPEL. 1931) REVOCATION BY PRINCIPAL DISTINGUISHED FROM REVOCATION BY OPERATION OF LAW. In this instance. they had a right to rely on the face of the certificate of title of the registered owners and of the authority conferred by them upon the agent with a power of attorney recorded on the back of the certificate. except as explicitly provided for in the New Civil Code: (1) when the agency is coupled with an interest (Art. 1930). the death of the decedent on April 3. as a rule. or agree to an incomplete or irregular performance. 1979 automatically severed the legal relationship between her and Philtrust. Hence. — The contention that as the death of the principal ended the authority of the agent. — Artigo's acceptance of partial payment of his commission neither amounts to a waiver of the balance nor puts him in estoppel. and. which is a personal relationship between agent and principal. instantaneously effective inasmuch as "by legal fiction the agent's exercise of authority is regarded as an execution of the principal's continuing will. he who records the sale in the Registry of Deeds has a better right than he who did not. EXCEPTIONS. agency is extinguished by the death of the principal or of the agent and any act of an agent after the death of his principal is void ab initio. such as death of the principal is. — The heirs of the agent who dies must notify the principal of his death and in the meantime adopt such measures as circumstances may demand in the interest of the latter. RETURN OF VALUE OF THE THING SOLD." With death. BUASON vs PANUYAS  — If it does not appear that the second purchasers had actual knowledge of the previous sale to the appellants. WARRANTY AGAINST EVICTION." There is thus a clear distinction between acceptance and mere receipt. 10 VDA. it is evident that Artigo merely received the partial payment without waiving the balance. yet a revocation by operation of law. This is the import of Article 1235 which was explained in this wise: "The word accept. means to take as satisfactory or sufficient. the principal's will ceases or is terminated. the vendor warrants his title to the thing sold. AGENCY. it not having been shown that the agent knew of his principal's demise. the source of authority is extinguished. — By reason of the very nature of the .

and the agent could no longer validly convey the land. POWER OF ATTORNEY WHEN COUPLED WITH INTEREST. CASE AT BAR. Hence. as accorded by article 302 of the Code of Commerce. for good reasons and because of the express written resignation by the employee or agent of the position he was holding. and such revocation may be express. Thereafter. since damages are generally not awarded to the agent for the revocation of the agency. unless it is shown that such was done in order to evade the payment of agent's commission. for any of the special reasons specified in article 300 of the Code of Commerce. the homesteader mortgaged the improvements of the homestead in favor of defendant P. the execution of the second power of attorney would be a mere futile gesture. — 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. and may be availed of even if the period fixed in the contract of agency has not yet expired. A. the sale was null and void. 279. REVOCATION OF AGENT'S AUTHORITY. the mortgagor died leaving the mortgage debt unpaid. As the principal has this absolute right to revoke the agency. it would be improper to award him damages. the latter is no longer entitled to its commission from the proceeds of such sale and is not entitled to retain whatever moneys it may have received as its commission for said transactions. 1733. vs. ONG GUAN CAN  PRINCIPAL AND AGENT. he executed an "irrevocable special power of attorney coupled with interest" in favor of the mortgagee authorizing him to sell the land. — Within the prohibitive period of five years. it was terminated upon the death of the principal. AGENT NOT ENTITLED TO A COMMISSION NOR DAMAGES THEREFOR.By: Jacqueline Ann Quinto BARETTO VS STA MARINA * PRINCIPAL AND AGENT. Neither would DRACOR be entitled to collect damages from CMS. REVOCATION OF POWER OF ATTORNEY. DEL ROSARIO VS ABAD  AGENCY. (Art. yet the latter may.) * RIGHT OF PRINCIPAL TO DISMISS AGENT. or implied. As the agency was not coupled with an interest. At the same time. whether it enlarges or decreases the power of the agent under a prior power of attorney. INC VS CA  AGENCY. The mortgage has nothing to do with the power of attorney and may be foreclosed by the mortgagee upon failure of the mortgagor to comply with his obligation. INC. Held: The power of attorney executed by the homesteader in favor of defendant did not create an agency with interest nor did it clothe the agency with irrevocable character. TERMINATION OF. — Since the contract of agency was revoked by CMS when it sold its logs to Japanese firms without the intervention of DRACOR. which is to evade the payment of the agent's commission. must be held to supplant and revoke the latter when the two are inconsistent. The making and accepting of a new power of attorney. — The principal may revoke a contract of agency at will. PRINCIPAL WITH ABSOLUTE RIGHT TO REVOKE AGENCY. — Article 1732 of the Civil Code is silent over the partial termination of an agency. In what does such interest consist must be stated in the power of attorney.  LIM VS SABAN 11 . After the lapse of the prohibitive period. Civil Code. * DAMAGES. except his right to collect the salary due for one month prior to quitting the position. A mere statement in the power of attorney that it is coupled with interest is not enough. — 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. dismiss such agent or employee even before the termination of the period. the mortgagee sold the land. acting on the power of attorney. Code of Commerce. — No period having been stipulated and the principal owner of the business having acted within his powers in relieving his agent and appointing another person in his stead. TERMINATION OF POWER OF ATTORNEY. neither may he claim damages arising from such revocation. PALICIO VS DE MANZANO  PRINCIPAL AND AGENT. but as soon as this confidence disappears the principal has a right to revoke the power he conferred upon the agent. DY BUNCIO & COMPANY. especially when the latter has resigned his position for good reasons. If the new appointment with limited powers does not revoke the general power of attorney. which were not proven. CMS LOGGING. — A second power of attorney revokes the first one only after notice given to first agent. the agent can not object thereto. art. and the case at bar is not one falling under the exception mentioned.

and it cannot be revoked by the principal so long as the interest of the agent or of a third person subsists. EFFECT. But. or if it is the means of fulfilling an obligation already contracted. * AGENCY.000. NASUTRA/SRA executed promissory notes in favor of PNB every time it availed of the credit line. In an agency coupled with an interest. — As to the issue of whether the award of P588. When an agent's interest is confined to earning his agreed compensation. — The doctrine of estoppel precludes BISTRANCO from repudiating an obligation voluntarily assumed by it. the agent's interest must be in the subject matter of the power conferred and not merely an interest in the exercise of the power because it entitles him to compensation. in order that he might recover what he invested and eventually maximize his profits. PROPER IN CASE AT BAR. as shown by the statements of commissions prepared by BISTRANCO itself. (Article 1315 of the Civil Code) * CANNOT BE REVOKED IF A BILATERAL CONTRACT DEPENDS UPON IT. after having accepted benefits therefrom. — [T]he relationship between NASUTRA/SRA and PNB when the former constituted the latter as its attorney-in-fact is not a simple agency. before the breach by BISTRANCO of said agency Contracts. NASUTRA/SRA has assigned and practically surrendered its rights in favor of PNB for a substantial consideration. To countenance such repudiation would be contrary to equity and would put a premium on fraud or misrepresentation. in effect. OPENING OF A BRANCH DURING EFFECTIVITY OF CONTRACT. the answer is also in the affirmative. Article 1927 of the Civil Code. Stated differently.By: Jacqueline Ann Quinto  an agency cannot be revoked if a bilateral contract depends upon it. such as when the attorney-in-fact betrays the interest of the principal as happened in the case at bar. was already earning an average monthly commission of P32. the agency is not one coupled with an interest. POWER OF ATTORNEY COUPLED WITH INTEREST REVOCABLE FOR CAUSE. In effect. which this Court will not sanction. The agency established between the parties is one coupled with interest which cannot be revoked or cancelled at will by any of the parties. — The opening of a branch office which. To reiterate. the opening of a branch office in Butuan City was a violation of the Contracts of Agency. AWARD FOR UNEARNED COMMISSIONS AND DAMAGES. or if it is the means of fulfilling an obligation already contracted" * DAMAGES. BISAYA LAND TRANSPORTATION VS SANCHEZ  ESTOPPEL. since an agent's interest in obtaining his compensation as such agent is an ordinary incident of the agency relationship. among others. was a revocation of the contracts of agency is not sanctioned by law because the agency was the means by which Sanchez could fulfill his obligations under Exhibits "F" and "G". The opening by BISTRANCO of a branch in Butuan City virtually resulted in consequences to Sanchez worse than if another agent had been appointed. NATIONAL SUGAR TRADING VS PNB  AGENCY. PARTY PRECLUDED FROM REPUDIATING AN OBLIGATION VOLUNTARILY ASSUMED AFTER HAVING ACCEPTED BENEFITS THEREFROM. — A power of attorney although coupled with interest in a partnership can be revoked for a just cause. or for the interest of the principal and of third persons.00 to Sanchez for unearned commissions and damages is justified. not to employ or appoint another agent in Butuan City was to prevent competition against Sanchez' agency. CANNOT BE REVOKED OR CANCELLED AT WILL BY ANY OF THE PARTIES IF THE AGENCY ESTABLISHED BETWEEN THE PARTIES IS ONE COUPLED WITH INTEREST. provides: "An agency cannot be revoked if a bilateral contract depends upon it.00. CASE AT BAR. the very reason why BISTRANCO agreed 12 .000. an agency is deemed as one coupled with an interest where it is established for the mutual benefit of the principal and of the agent. COLEONGCO VS CLAPAROLS  PARTNERSHIP. — It may be true that there is no express prohibition for BISTRANCO to open its branch in Butuan City. considering that BISTRANCO violated the Contracts of agency and that Sanchez. or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable.