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Agency and Trusts PDF
Agency and Trusts PDF
XPNS:
1. Disclosed principal. — if at the time of the
1. Personal Acts
transaction contracted by the agent, the other
2. Criminal Acts or Acts not allowed by law
party thereto has known that the agent is acting
for a principal and of the principal’s identity.
GR: Knowledge of agent imputed to principal.
2. Partially disclosed principal. — if the other
XPN:
party knows or has reason to know that the agent
1. There are at least three exceptions to the rule
is or may be acting for a principal but is unaware
imputing knowledge of agent to the principal:
of the principal’s identity. The partially disclosed
2. Where the agent’s interests are adverse to
principal may enforce against the third person
those of the principal;
the contract of the agent like any disclosed
3. Where the agent’s duty is not to disclose the
principal.
information, as where he is informed by way
of confidential information; and
3. Undisclosed principal. — if the party has no 1. To comply with all the obligations which the
notice of the fact that the agent is acting as such agent may have contracted within the scope of
for a principal. his authority and in the name of the principal;
2. To advance to the agent, should the latter so
request, the sums necessary for the execution of
GENERAL OBLIGATION OF THE AGENT TO THE the agency (Art. 1912.);
PRINCIPAL 3. To reimburse the agent for all advances made by
him, provided the agent is free from fault (Ibid.);
1. Good faith and loyalty to his trust, agent’s 4. To indemnify the agent for all the damages which
first duty. the execution of the agency may have caused
2. Obedience to principal’s instruction. the latter without fault or negligence on his part
3. Exercise of reasonable care. (Art. 1913.); and
5. To pay the agent the compensation agreed
SPECIFIC OBLIGATIONS OF AGENT TO upon, or if no compensation was specified, the
PRINCIPAL. reasonable value of the agent’s services
1. To carry out the agency which he has accepted; CONDITIONS FOR RATIFICATION
2. To answer for damages 1. The principal must have the capacity and
3. To finish the business already begun on the power to ratify;
death of the principal 2. He must have had knowledge or had reason
4. To observe the diligence of a good father of a to know of material or essential facts about
family in the custody and preservation of the the transaction;
goods 3. He must ratify the acts in its entirety;
5. To advance the necessary funds 4. The act must be capable of ratification; and
6. To act in accordance with the instructions of the 5. The act must be done in behalf of the
principal principal.
7. Not to carry out the agency if its execution would
manifestly result in loss or damage to the ACTS THAT MAY BE RATIFIED
principal 1. Valid/void acts.
8. To answer for damages if there being a conflict 2. Voidable acts.
between his interests and those of the principal 3. Unrevoked acts.
9. Not to loan to himself 4. Criminal acts.
10. To render an account of his transactions; 5. Tortious acts.
11. To distinguish goods by countermarks and
designate the merchandise respectively
belonging to each principal ART. 1919. AGENCY IS EXTINGUISHED:
12. To be responsible in certain cases 1. By its revocation;
13. To pay interest 2. By the withdrawal of the agent;
14. To inform the principal, where an authorized 3. By the death, civil interdiction, insanity or
sale of credit has been made, of such sale insolvency of the principal or of the agent;
15. To bear the risk of collection 4. By the dissolution of the firm or corporation
16. To indemnify the principal for damages which entrusted or accepted the agency;
17. To be responsible for fraud or negligence. 5. By the accomplishment of the object or purpose
of the agency;
6. By the expiration of the period for which the
SPECIFIC OBLIGATIONS OF PRINCIPAL TO agency was constituted.
AGENT.
MODES OF EXTINGUISHING AN AGENCY
1. by agreement (Nos. 5, 6.); or
2. by the subsequent acts of the parties which
may be either:
a. by the act of both parties or by mutual
consent; or
b. by the unilateral act of one of them
(Nos. 1, 2.); or
3. by operation of law. (Nos. 3, 4.)
OTHER CAUSES:
1. Termination by mutual consent
2. Novation
3. Loss of subject matter of the agency
4. Outbreak of war.
XPNS:
(1) when the agency is created not only for the
interest of the principal but also for the interest
of third persons; and
(2) when the agency is created for the mutual
interest of both the principal and the agent.