ART. 1868 – Agency
Personal acts – right to vote,
- Implies power in an agent to contract w/
3rd parties on behalf of principal
- XPT: employer-employee relationship,
master-servant, independent contractor
CHARACTERISTICS of Contract of Agency
1. Consensual – perfected by mere consent
2. Principal – can stand by itself
3. Nominate – has its own name
4. Unilateral – obligations for only one of
the parties (agent) OR
Bilateral – (compensation) gives rise to
reciprocal rights and obligations
5. Preparatory – means to an end
ESSENTIAL ELEMENTS of Agency
1. Consent, express or implied of the
parties
2. Object is the execution of a juridical act
3. Agent acts as representative
4. Agent acts w/in the scope of his
authority
Nature, Basis, PURPOSE
1. Contract – consent, object, cause
2. Representative relation – on behalf. As
if it was done by principal. Absence of P
is transformed to legal, juridical
presence
3. Purpose – extend personality of
principal. Perform juridical acts thru
another when his physical presence is
impossible
TWO (2) PARTIES involved
1. Principal – the agent represents
2. Agent – represents another
CAPACITY of parties
1. Capacitated person may be a principal
2. Agent doesn’t have to possess full
capacity to act XPN: absolutely
incapacitated. Agents must be
competent
Acts DELEGATED to Agents
1. General – a man may do in person,
he may do thru another
2. XPN:
a.
making of will, statements
under oath, art. 1491
b. Criminal acts/acts not allowed
by law – attempt to delegate is
void, aliens cannot purchase
land
Distinction from other contracts
1. Loan – borrower must return won
business is successful
Agent – funds given by P to advance P’s
business
2. Lease of service – employments,
ordinarily performs ministerial functions
Agent – representation, discretionary
powers
3. Independent contract – only for a piece
of work, undertakes to accomplish
certain result according to his own
method XPT the result
Agent – subject to control and discretion
of the principal
4. Partnership – also acts as principal
5. Negotiorium Gestio – not only w/o the
authority of owner but is w/o his
knowledge (quasi-contract)
Agent – expressly conferred
6. Brokerage – acts as mere intermediary
b/w seller – buyer
Agent – object placed in his possession
and at his disposal
7. Sale – agency to sell is different from
agency to sale
ART. 1869 – Kinds of Agency (express –
implied)
1. Manner of its creation
a. Express – agent has been actually
authorized by the principal orally or
in writing
b. Implied – implied from the acts of P
from his silence or lack of action
OR his failure to reject the agency
knowing that another person is
 acting on his behalf w/o authority
OR acts of agent which carry out the
agency, OR from his silence or
inaction. An implied agency is an
actual agency as much as an express
agency
2. As to its character
a. Gratuitous – agent receives no
compensation for his services
b. Compensated or Onerous – agent
receives compensation
3. As to extent of business covered
a. General – comprises all the
businesses of the principal
b. Special – comprises one or more
specific transactions
4. As to authority conferred
a. Couched in general terms – deemed
to comprise only acts of
administration
b. Couched in specific terms –
authorizing only the performance of
specific acts
5. As to its nature and effects
a. Ostensible or Representative – agent
acts in the name and representation
of P
b. Simple or Commission – agent acts
for the account of P but in his own
name
Form of Agency
- in general, no formal requirements on
appointing of agent
- agents authority may be oral or written
- instance when law requires specific
form of agency is ART. 1874
- agency may be implied (ART. 1869)
ART. 1870 – Acceptance by agent
- may also be express or implied w/c
carry out the agency OR from his
silence or inaction
Form of acceptance by agent
- agency is a contract, there must be a
consent
- express or implied
ART. 1871 – Implied acceptance
- acceptance may be implied if P delivers
his power of attorney to agent and latter
doesn’t object
Acceptance b/w persons present
- implied acceptance by agent, the law
distinguishes between cases like:
1. persons are present
2. persons are absent
- agency is impliedly accepted if agent
receives power of attorney from P
himself personally w/o objection
- presumption of acceptance may be
rebutted by contrary proof
- power of attorney is a written
authorization to an agent to perform
specified acts in behalf of his principal
which acts, when performed, shall have
binding effect on P
ART. 1872 – When acceptance cannot be
implied from silence of agent, except
1. P transmits his power of attorney to
agent, who receives w/o objection
2. P entrusts to him by letter or telegram
a power of attorney w/ respect to the
business in w/c he is habitually
engaged as an agent and he did not
reply
Acceptance b/w persons absent
- If both P and A are absent, acceptance
by the agent is not implied from his
silence/inaction
- Since agent is not bound to accept, he
can ignore the offer
- In those 2 cases, acceptance is implied
- When he begins to act under the
authority conferred upon him
- Note:
 1. 1871 – P personally delivers power
of attorney to A
2. 1872 – P transmits power of
attorney to A
ART. 1873 – P informs another OR by public
advertisement that he has giver power of
attorney. Power shall continue to be in full
force until notice is rescind in the same
manner in w/c it was given
Communication of existence of agency
- 2 ways of giving notice w/ diff effects
1. Special information – agent
appointed is considered such w/
respect to the person to whom it was
given
2. Public advertisement – agent is
considered as such with regard to
any person e.g. newspaper, radio,
posters, billboards
- In either use, agency is deemed to exist
won there’s actually an agency
- Note: ART. 1874 speaks only of an
agency for “sale of a piece of land or
any interest therein”
ART. 1875 – Agency is presumed to be for a
compensation unless there is proof to the
contrary
Presumption as to compensation of agent
- P must pay A the compensation agreed
upon, OR the reasonable value of A’s
services if no compensation was
specified
- Agent should’ve complied w/ his
obligations
- Circumstance that A was for
compensation or not shall be considered
by court in determining the extent of
liability of A for fraud/negligence
- Presumption that A is for compensation
may be contradicted by evidence.

Manner of revocation of agency

- Power of attorney must be revoked in
the same manner in which it was given
- 3rd parties must be given notice
- Revocation made in any manner is
effective where the person dealing with
the agent has actual knowledge thereof;
otherwise, bad faith and fraud would be
committed

ART. 1874 – Sale of a piece of land or any

interest therein is through an agent, authority
of latter shall be in writing; otherwise sale
shall be VOID
Sale of land through agent
- Sale of a piece of land or any interest
thereon like usufruct, mortgage etc. is
void UNLESS authority of the agent is
in writing
- Letter containing the authority to sell is
sufficient