Agency Case Doctrines

Week 1
Case Doctrines:
(a) Orient Air Services v. Court of Appeals, 197 SCRA 645
 In determining whether a contract is a contract of agency, in the interpretation of a contract, the
entirety thereof must be taken into consideration to ascertain the meaning of its provisions. The
various stipulations in the contract must be read together to give effect to all
(b) Bordador v. Luz, 283 SCRA 374
 The basis for agency is representation.
(c) Doles v. Angeles, 492 SCRA 607
 Petitoners were represented by Doles in all transactions, hence, she is an agent.
(d) Puyat & Sons, Inc. v. Arco Amusement Co., 72 Phil 402
 In agency, the agent is exempted from all liability in the discharge of his commission provided
that he acts in accordance with the instructions received from his principal and the principal
must indemnify the agent for all damages which the latter may incur in carrying out the agency
without fault or imprudence on his part.
 It is out of the ordinary for one to be the agent of both the vendor and the vendee.
(e) Chua Ngo v. Universal Trading Co., Inc., 87 Phil 331
 The fact that UTC may resell the goods implies that the contract was an outright sale and not an
agency.
(f) Victorias Milling Co., Inc. v. Court of Appeals, 333 SCRA 663
 It is clear from Article 1868 that the basis of agency is representation. One factor which most
clearly distinguishes agency from other legal concepts is control; one person - the agent - agrees
to act under the control or direction of another - the principal.
(g) De La Cruz v. Northern Theatrical Enterprises, 95 Phil 739
 Plaintiff wasn’t hired to represent defendant in its dealings with third persons; he was an
employee hired to perform specific duty and not an agent.
(h) Tan v. Gullas, 393 SCRA 334
 "An agent receives a commission upon the successful conclusion of a sale. On the other hand, a
broker earns his pay merely by bringing the buyer and the seller together, even if no sale is
eventually made."
(i) Hahn v. Court of Appeals, 266 SCRA 537
 BMW exercised control over Hahn’s activities=agent
 Hahn receives commission upon a successful conclusion of a sale=agent
(j) Collector of Internal Revenue v. Tan Eng Hong, 18 SCRA 431
 The essential feature of a broker is that he acts not for himself but for a third person.

X. What are the obligations and liabilities of principals to agents?

Macondray v. Sellner
- purchaser has a perfect right to examine the documents; it was understood that the purchaser
should have a reasonable time; also, time does not appear to be of the essence to the contract
- company’s letter demanding immediate payment under penalty of cancellation of the
agreement was an unreasonable attempt to deny purchaser reasonable opportunity to inspect
docs.
- Real estate agent already earned commissions and could not be deprived thereof
- Company could not lawfully terminate negotiations at the time it attempted to do so
Prats v. CA, 81 SCRA 360
- Offer to sell was accepted after the authority had already expired
- Agent was not the procuring cause in bringing about the sale ; therefore, not entitled to
commission
- However, the court took into consideration that the agent was responsible for bringing the buyer
and seller back together (after a previous failed negotiation) and finally consummating the
transaction; it is therefore entitled to P100,000 based on equity
-
XIII. How is agency extinguished?
Rallos v. Yangco, 20 Phil. 269
- Having given special notice to 3rd party of agency and inviting them to deal with such agent, it is
the principal’s duty to give due and timely notice to such 3 rd party upon termination of the
agency
- Failing to do so, principal responsible to them for whatever goods may have been in good faith
and without negligence sent to the agent