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Civil Law

Kinds of Agency
1992 Bar Exam Question No. 8
A as principal appointed B as his agent granting him
general and unlimited management over As properties,
stating that A withholds no power from B and that the
agent may execute such acts as he may consider
appropriate.
Accordingly, B leased As parcel of land in Manila to C for
four (4) years at P60,000.00 per year, payable annually in
advance.
B leased another parcel of land of A in Caloocan City to D
without a fixed term at P3,000.00 per month payable
monthly.

AGENCY
Prof. Crisostomo A. Uribe

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All those contracts were executed by B while A was

confined due to illness in the Makati Medical Center.
Rule on the validity and binding effect of each of the
above contracts upon A the principal.
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Kinds of Agency
1992 Bar Exam Question No. 8
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Rights and Obligations of

the Agent

b.

Modes of Extinguishment

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c.

d.

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Prime Realty Corporation appointed Nestor the

exclusive agent in the sale of lots of its newly
developed subdivision. Prime Realty told Nestor
that he could not collect or receive payments
from the buyers. Nestor was able to sell ten lots
to Jesus and to collect the down payments for
said lots. He did not turn over the collections to
Prime Realty. Who shall bear the loss for Nestors
defalcation, Prime Realty or Jesus?
a. Prime Realty because a principal is bound to
contracts entered into by its exclusive agent.
b. Prime Realty if Jesus was not aware that
Nestor has no authority to collect down
payments.

Jo-Ann asked her close friend, Aissa, to buy some

groceries for her in the supermarket. Was there a
nominate contract entered into between Jo-Ann
and Aissa?
a. None, because no legal relationship may be
created between friends.
b. Yes, a contract of sale was entered into.
c. Yes, a contract of sale will be entered into if
Aissa will actually buy the groceries.
d. Yes, if Aissa agreed, a contract of agency was
entered into.

Obligations of the Agent : To act within the Scope of his authority

1994 Bar Exam Question No. 18

Definition
2003 Bar Exam Question No. V (5%)

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the lease to C is valid and binding because B was

granted a general and unlimited management of As
properties while the lease to D is void because of the
failure to fix the term of the lease.
the lease to C is unenforceable because of the absence
of a special power of attorney while the lease to D is
valid and binding.
the lease to C is void because of the absence of a
special power of attorney while the lease to D is
valid and binding as this is merely an act of
administration.
both contracts are unenforceable under the Statute of
Frauds because they are not in writing.

a.

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Agency

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Obligations of the Agent : To be responsible for the acts of the substitute

Obligations of the Agent : To act within the Scope of his authority

1994 Bar Exam Question No. 18

c.

(a) X appoints Y as his agent to sell his

products in Cebu City. Can Y appoint a subagent and if he does, what are the effects
of such appointment?

Jesus because he did not inquire as to the

limitations imposed by Prime Realty upon
Nestor.
Jesus if a Special Power of Attorney was
given to Nestor wherein it is stated that he
could not collect or receive payments but
Jesus did not demand for the presentation of
the power of attorney.

a. No, because he was not given the

power to appoint a sub-agent.
b. Yes, but the agent will be considered to
have withdrawn from the agency.

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d.

1999 Bar Exam Question No. XV(a) (5%)

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Obligations of the Agent : To act in representation of his principal

Obligations of the Agent : To be responsible for the acts of the substitute

1999 Bar Exam Question No. XV(a) (5%)

c. Yes, because the agent may appoint a

substitute or sub-agent if the principal
has not prohibited him from doing so.
d. Yes, because by appointing a subagent, an agent is not considered to
have dissociated himself from the
agency.

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a.
b.
c.
d.

Yes, because he authorized DY to secure a

loan from any bank.
Yes, he authorized the mortgage on his
property to secure the loan contracted by DY.
No, because the object of the contract of loan
belongs to the principal.
No, because the bank has no cause of action
against CX.

Not Prohibited
(shall be responsible for the acts of the substitute)
Not given power to appoint

Liable if
Not liable if the
Designated
substitute
substitute
Not liable,
acted
acted within
unless he knew
outside the
the scope of
that the
scope of
authority and
designated
authority
in
person is
OR there is
representation
notoriously
bad faith or
of the
incompetent
negligence
principal and
or already
on the part
acted with
insolvent.
of the
due diligence
(Art. 1888)
substitute.
and in good
faith.
(The agent is not
an insurer of
the success of
the business
of the
principal.)

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Is CX liable for the bank loan?

Liable.
All acts of the
substitute
appointed
against the
prohibition of
the principal
shall be void.

Prohibited

2004 Bar Exam Question No. 4(B) (5%)

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Obligations of the Agent :

Effects of appointment of Substitute /
Liability in case of damage to principal - Art. 1892

Obligations of the Agent : To act in representation of his principal

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B. CX executed a special power of

attorney authorizing DY to secure a
loan from any bank and to mortgage
his property covered by the owners
certificate of title. In securing a loan
from MBank, DY did not specify that
he was acting for CX in the
transaction with said bank.

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2004 Bar Exam Question No. 4(B) (5%)

Given power to appoint

Not designated
Agent shall be
Not liable as agent
responsible
shall NOT be
for the acts of
responsible
the substitute
for the acts of
if the
the substitute
substitute is
if the
notoriously
substitute is
incompetent
NOT
or insolvent.
notoriously
incompetent
nor insolvent.

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Modes of Extinguishment
1988 Bar Exam Question No. 8(a)

Guarantee Commission Agent

2004 Bar Exam Question No. 6(B) (5%)

a)
B. As an agent, AL was given a guarantee
commission, in addition to his regular commission,
after he sold 20 units of refrigerators to a customer,
HT Hotel. The customer, however, failed to pay for
the units sold. ALs principal, DRBI, demanded from
AL payment for the customers accountability. AL
objected on the ground that his job was only to sell
and not to collect payment for units bought by the
customer.

I will decide in favor of Edgar because the

defense raised is not one of the grounds
enumerated for the extinguishment of a contract
of agency under Article 1919.
I will decide in favor of Edgar because there
must be a prior conviction of robbery before such
defense can be availed of.
I will decide in favor of Mario because the
principal, being the owner, bears the loss,
regardless of the cause of the loss.
I will decide in favor of Mario because a prior
conviction of robbery is not required before such
defense can be availed of as long as there was
no negligence on his part .

b.
c.

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d.

Is ALs objection valid? Can DRBI collect from him

or not? Reason.

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Modes of Extinguishment
1997 Bar Exam Question No. 17(c)

c.

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b) In 1950, in a telephone conversation, A

authorized B to sell a parcel of land consisting of
more than 14 hectares. A died in 1954. In 1956, his
four children sold the land to C. In 1957, B sold the
same land to D. It appears that C did not register
the sale executed by the children. D, who was not
aware of the previous sale, registered the sale
executed by B, whose authority to sell was annotated
at the back of the Original Certificate of Title.

a) Mario received from Edgar a pendant with

diamonds valued at P5,000.00 to be sold on
commission basis or to be returned on demand. In
the evening of August 31, 1987, while he was walking
home, two men snatched his clutch bag containing
the pendant and ran away. Subsequently, the
snatchers were apprehended and charged. During
the pendency of the criminal case, Edgar brought an
action against Mario for the recovery of the pendant
or its value and damages. Mario interposed the
defense of fortuitous event but Edgar contends--

Modes of Extinguishment
1997 Bar Exam Question No. 13(a)

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Modes of Extinguishment
1988 Bar Exam Question No. 8(a)

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d.

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b.

No, if the agency was constituted for the benefit

of both the principal and the agent.
No, if the agency was constituted for the benefit
of a third person who accepted the benefit.
Yes, if notice is given by his heirs to the
principal.
Yes, because agency is representative in
character.

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a.

Stating briefly the thesis to support your answer to

each of the following cases, will the death
(c) of an agent end an agency?

Is ALs objection valid? Can DRBI collect from him

or not? Reason.
a. Yes, ALs objection is valid because as a
commission agent his obligation is only to sell.
b. No, DRBI cannot collect from him because an
agent is not the insurer of the success of the
business of the principal.
c. No, ALs objection is not valid because the
agency is one coupled with interest.
d. Yes, DRBI can collect from him because as a
guarantee commission agent, he bears the risk
of collection.

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Guarantee Commission Agent

2004 Bar Exam Question No. 6(B) (5%)

1. That the defense of fortuitous event is untenable

because there was negligence on the part of the
defendant; and;
2. That if the defense is tenable, there must be a
prior conviction of robbery before it can be availed of.
Decide the case.

Assuming that B still had the authority to sell the

landwho has a better right over the said land, C or
D?

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Modes of Extinguishment
1997 Bar Exam Question No. 13(a)

Good Luck!

a. C, because the sale to D is void.

b. C, because he is the first buyer
and he bought the land from the
heirs of the principal.
c. D, because he was the only one
who registered the sale.
d. D, because he bought the land in
good faith.

www.chanroblesbar.com.ph

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Modes of Extinguishment : Agency coupled with interest

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c.

d.

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b.

Yes, because the principal can revoke the

authority of the agent at will.
Yes, because revocation may be express of
implied. When the principal took over the sale
of the subdivision lots himself, there was an
implied revocation.
No, because there can be no valid revocation
before the expiration of the period agreed
upon.
No, because the agency is one coupled with
interest.

a.

2001 Bar Exam Question No. XV(5%)

Modes of Extinguishment : Agency coupled with interest

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Richard sold a large parcel of land in Cebu to Leo

for P100 million payable in annual installments
over a period of ten years, but title will remain
with Richard until the purchase price is fully paid.
To enable Leo to pay the price, Richard gave him
a power-of-attorney authorizing him to subdivide
the land, sell the individual lots, and deliver the
proceeds to Richard, to be applied to the
purchase price. Five years later, Richard revoked
the power of attorney and took over the sale of
the subdivision lots himself. Is the revocation
valid or not? Why?

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2001 Bar Exam Question No. XV(5%)

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