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AGENCY PARAS  IMPORTANCE = enables a man to increase

its range of activity with others


764 1868 – by the contract of AGENCY, a person
binds himself to render some service or to do  Now, civil or commercial purposes, it is still
something in representation of another, w/ the called a civil agency.
consent or auth of the latter.
 CHARACTERISTICS:
 Defective definition sabi ni PARAS. Dahil
very broad. Kasi iniinclude niya relationship 1. PRINCIPAL, nominate, bilateral,
of master servant, er-ee, lessor and preparatory, commutative, onerous.
independent contractor, BUT what agent 2. Representative relation, not inherent nor
really does for the principal is a juridical permanent
act. Agent exercises discretionary powers, 3. FIDUCIARY, based on trust and confidence.
not ministerial like lessee of services.
Case:
 AGENT enters into judicial relations with or / Mandamus can be issued to order a corporation
without representation of the principal. to allow inspection thru its agent. Thus, cannot
invoke as a defense na personal act ang inspection.
KINDS: GN PAGE 387
GR“what a man may do in person, he may do thru
ELEMENTS: another”
1. CONSENT
2. OBJECT (execution of juridical act in XPN: making of will. other strictly personal act.
relation to 3rd persons) Matrimonial oblis, vote, criminal acts,
3. Agent acts as rep, not for himself
4. Acts within scope of auth.  PARTIES:
/ principal – whom the agent represents and
 NATURE: fiduciary: thus agent cannot derives auth, PRIMARILY concerned with the
acquire interest adverse to that of his P. contract

/ agent – representing, acts under specific


Cases: command. Acts in behalf of another. If pretending
/ designate himself as the seller and not agent, lang to be another, not agent.
then he alone is liable.
Case:
/ own money used, does not necessarily mean na / trustee may include atty prosecuting the case
hindi siya agent. As long as the principal had
exercised control over the agent’s activities. Agent note:
earns commission, while a broker brings buyer and PRINCIPAL must be capacitated to act himself and
seller together and earns even if no sale is made. give consent.

 Pwedeng gratuitous / may be natural or juridical. BUT Actually, corps or


 As long as one party manifests his consent PAT can only act thru agents.
that the other shall act in behalf of the
principal and under his control. / MINOR? Can be a principal daw.

“mandante” = principal and “mandatario” = agent. / Conveyance of CP, is voidable without consent of
other spouse.
AGENT – able to bind himself, only ins'ofar as his /agent v broker. 780.
obli to his principal is concerned, but enough daw if
PRINCIPAL is capcitated, so kahit MINOR agent. 781 1869 – AGENCY may be express or implied
from the act of P, his silence, or failure to
 Can a JURIDICAL person be an agent? YES. repudiate agency, knowing that another person is
acting on his behalf w/o auth.
Case:
/ P appoints A as agent. A sells property to B. Now May be ORAL, unless the law requires a specific
P wants recover the property on the ground that form.
sale is void because A is minor. Ruling: P cannot
avoid the contract. As long as P is capacitated.  KINDS – as to manner of constitution
/express
AGENCY VS PAT – agent act for P, partner acts for /implied - acts of P, silence, inaction, failure to
himself, firm and other parts. repudiate.
 Sa implied, P knows that another is acting
Borrower, not an agent. Thus, cannot the on his behalf w/o his auth.
nagpautang cannot be sued.
Case:
Charts in 771. Vs Guardianship, vs judicial admin. / Principal did not repudiate the turning over of the
Cases: admin to another. IMPLIED agency.
/ son lend father’s land. Father cannot be held
liable as principal. Merely lessor lessee / if insurance agent was allowed by applicant to fill
relationship. in the details of the policy. There is agency.

/ X = free board from hotel, duty to run the hotel, AS TO FORM: ORAL OR WRITTEN. EXAMPLE WHEN
authorize to hire bookkeeper, but cannot incur SPECIFIC FORM REQUIRED: “1874, WHEN SALE OF
debt In behalf of the hotel w/o permission. X is LAND OR INTEREST THEREIN, agent’s auth must be
agent based from facts. Agent subject to the in writing., otherwise VOID”
boards’ control.
783 1870 - ACCEPTANCE by agent, may also be
/ agency v lease page 774 EXPRESS or implied. (acts, silence, inaction)

NOTE: agency may be terminated at the will of the 783 1871 – between persons PRESENT, If P
P or A. delivers his Power of ATTY to the Agent and the
agent accepts w/o objection, THERE IS IMPLIED
AGENCY v NEGOTIORIUM GESTIO. No meeting in AGENCY.
nego, quasi contract eh. In nego, not controlled by
the principal directly. Created by law. NOTE HERE: “BOTH MUST BE PRESENT”
ACCORDING sa provision mismo. “face to face” or
Vs trust page 776 thru communication thru phone ganun. Sufficient.

NOTE: contract is what law defines it not according 783 1872 – IF absent, acceptance of agency cannot
to its DESIGNATION by the parties. be implied. UNLESS:

Case: 1. P transmits power of atty and agent


/ if there is agreement to return all unsold goods, receives w/o objection
w/ no obli to pay, this is AGENCY to SELL, or 2. P entrusts to Agent by letter or telegram the
consignment. power of atty, with repsect to business in
which agent is habitually engaged as an As to 3rd persons, In estoppel, if agent is the cause,
agent, and agent did not reply. it is only the agent who is liable. In implied, agent
never personally liable.
“HERE ABSENT”
786 1874 – SALE of piece of land or interest, thru
In #1: kapag di nagreply does not necessarily mean an agent. Authority of the agent SHALL be in
nagACCEPT. So dapat at least I ack ni agent. WRITING, otherwise, SALE is Void.

So sa #2: ung letter sinasabi lang na ineentrust  “sale of piece of land or interest therein”
sakanila, not sending the SPA itself. example: usufruct, easement etc. does not
include buildings. Thus, selling building not
Or when the Agent, begins to act. Thus implied need agency in writing. Daw.
acceptance.  VOID if article violated. Thus cannot be
ratified. If ratified, no retro effect.
784 1873 – DULY AUTHORIZED AGENT - If a  NOTE also, if policy ng isang party na may
person informs another OR states by a PUBLIC AD from, example sa bank, ganun etc.
that he has given a power of atty to a 3rd person.
Case:
In the former, who received the special info. And in / brother wrote his sister to sell land. But sister did
the latter, with regard to any person. not forward the proceeds. Here there is agency,
land cannot be recovered. Since there is agency
Power shall be in full force UNTIL the notice is and in writing. Letter is sufficient.
rescinded in the same manner in which it was
given. / Under the law president is auth to acquire private
lands and resale them at reasonable prices to
 “INFORMING OTHER OF EXISTENCE OF tenants and occupants. Sec of Agri and Natres in
AGENCY” 1. SPECIAL INFO 2. PUBLIC AD. making sale acts as presdinet’s agent. Thus
 TO forestall fraud, it must be added daw na; presumed to be acts of president himself.
“revocation effective against person having
actual knowledge thereof” 787 1875 – AGENCY, presumed to be for a
COMPENSATION, unless there is proof to the
Case: contrary.
/ customers continued to deal with the AGENT
even after revocation of auth of agent. Thus, “presumed to be onerous” pero old CC presumed
Compnay still liable beec customers was in GF not grat.
having been informed.
 Compensation may be in any form:
/ AGENCY by ESTOPPEL. P leads other to believe gratuitous use of real estate, cash. Etc
that A is his agent kahit hindi. Can no longer deny.  In the absence of stip, agent is entitled to
compensation only after he has completely
ESTOPPEL vs. IMPLIED AGENCY. or substantially completed his obligation as
Implied, agent is true agent. Estoppel, agent is not, agent. (may be contingent sa profit)
has no right. Case:
/ if the condition for compensation is “until such
 Agency by estoppel requisites: time the company made a profit on the contract”
mere signing of the contract does not entitle agent
1. ????????????????????? for compensation. There was still no profit kahit
binding na ang contract.
Broker: negotiator between parties, middleman. 1. “I make U my agent for all my properties, I
Agent of both? Daw. Although agent, but not withhold no power from you. You may do as
within the meaning of CC, only an independent you please. Unlimited management chenes”
contractor. Broker, not entitled to recover here, ONLY acts of ADMIN. Notwithstanding
expenses made during negotiations for the sale, the stipulation. Why? Acts of strict
own risk daw. dominion need SPA. (like sell or mot land,
accept repudiate inheritance, enter into
Case: compromise)
/ case. A auth B to sell his land. B found C, but C is 2. EXAMPLE of acts of admin:
willing to pay less than what A wants. So A denied. / sue for collection of debts, employ
A revoked B’s authority to sell. Howver, A and C workers, engage counsel to preserve
dealt with each other personally and made a ownership or P’s property, lease RP to
contract. B now contends that he is entitled for another for 1 year or less and not
commission. Ruling: NOT entitled. Sale was made registered, borrow money for urgent and
without her intervention. As long as A did not act indispensable purposes.
in BF! To avoid paying commission. 3. Thus, selling, needs SPA. Strict dominion
kasi.
case/ another case, if with BF, then nireject for the
principal to deal personally. Then Agent is still 794 1878 – SPA necessary in:
entitled commission. Broker ata dito. But NOTE: 1. Payments for NOT acts of admin
not entitled if the person brought by the broker is 2. Effect novations which ends oblis already
NOT: willing, able or ready to pay. Not entitled if existing AT THE TIME OF agency
subsequently na sold pa din sa buyer na un. constitution
3. Compromise, arbitration, renounce right to
792 1876 – Agency is either GENERAL or SPECIAL. appeal from judgment, waive objections to
venue, abandon a prescription already
FORMER = comprises all business of the principal. acquired
LATTER = one or more specific transactions. 4. Waive any obli gratuitously
5. Enter into contract by which ownership of
 Kind as to “extent of business covered” an RP is transmitted or acquire either grat
or not.
case: 6. Gifts, except customary ones for charity or
/ Absent substantial evidence to show a special’s those made to employees in the business
agent’s auth to give consent to the creation of managed by the agent.
tenancy relationship, cannot give rise to implied 7. Loan, unless for indispensable or urgent for
tenancy. preservation of the things under his admin
8. Lease RP for more than 1 year
792 1877 – Agency couched in GENERAL TERMS 9. Bind the principal to render some service
comprises only acts of administration, even if the w/o compensation
principal should state that he withholds no power 10. Bind principal in a contract of PAT
or that the agent may execute acts as he may 11. Obligate P as gurantor or surety
consider appropriate, or even though the agency 12. Create or convey real rights over RPs
should authorize a general and unlimited 13. Accept/ repudiate inheritance
management. 14. Ratify or recognize oblis contracted before
the agency
 General term, 1877 15. Other acts of strict dominion
 Specific term 1878
 Acts mentioned can be reduced to 3:
Example: 1. Acts of strict dominion
2. Gratuitous contracts Par 9: reason: contract is grat.
3. Contracts where personal trust or
confidence is of the essence of the Par 10: reason: principal has to personally have
agreement. trust and confidence in parts.

Case: Par 11: cannot be inferred in general words.


/ Payment made to agent. Must prove: 1. existence
of SPA and 2. Nature and extent of the power and Wife’s grant of SP does not auth husband to
auth granted to him. contract for husband’s benefit.

 SPA meaning: express or implied daw, Par12: ex: mortgage, create easement. Etc
specifically authorizing the performance of
the act, and not just an agency couched in Cases:
general terms. Unless the general power / SPA cannot be basis of a valid mortgage contract
mentions or includes a special power. Ex “I
auth you to sell ALL my properties” here no / SPA granted for finding a money lender, does not
need for SPA since SP has already been auth to procure mort.
given.
 MUST be notarized ba SPA?
Note: if payment is usually considered as mere GR no. as long as writing. XPN: If required by law.
ACT of ADMIN, then no SPA needed.
802 1879 – A special power to sell, excludes the
Note: some acts of admin, carry with them exercise power to MORT, and special power to MORT does
of acts of dom like sale by an admin of fertile land not include power to sell.
or products of land.
 Power to sell: carries with it power:
Case: 1. Find buyer or sell directly
/ payment of claim of insured not acts of admin, 2. Deliver
thus, needs a special power di pwedeng mere 3. Usual representation and warranty
general agency, kahit may nakalagay na “special” sa 4. Execute necessary transfer dox, like
document. contract of sale itself
5. Fix terms of sale, time place, mode of
Par 2: obli existing at the time constitution of delivery, price and mode of payment
agency 6. Sell only for cash (cannot sell on credit w/o
consent)
Par 3: power given for 1, does not auth power for 7. Receive the price, unless not auth
all mentioned.
NOT carry with it:
Par 4: similar to donation or remission. 1. Barter / exchange
2. Mort / pledge
Par 5: refers to RP, but sale of PP is under the catch
all phrase in par15. Power to MORT not include: 1. Sell, execute
second mort, mort for personal benefit or other’s
Par 6: custom gift, act of admin benefit

Par 7: XPN refers to “borrow” only Cases:


/ power to mort does include power to agree to a
Par 8: lease of RP not PP. stipulation in the mort that bank could extra jud
forclose the property. Yata. See case in page 804
Examples in 808.
805 1880 – a special power to compromise does #2: “agent sells the thing in its own name,
not authorize submission to arbitration wihout disclosing name of P, ordinarily buyer
only has recourse against agent and vice versa.
 And vice versa? Under 1883. XPN: when the thing belongs to P,
 Reason for article: kasi sa arbitration, an then P have recourse against buyer and buyer
arbitrator shall decide. But in compromise, against P. second par in 1883.
it shall be in the hands of the agent, which P
may trust. Or if P auth A to find singer for a singing
 If empowers to submit in arbit, then P is engagement. A acts, in his own, applies for the
bound to the arbitral award. Note: tignan job. Here A and the opera house would be
kung authorized to submit to any bound to each other. This clearly illustrates
ARBITRATOR, or if may specified arbitrator 1883 frst par.
lang.
#3 example:
806 1881 – AGENT must act within scope of his Agent sold thing owned by P, wihout auth. Thus
auth. He may do acts as may be conducive to the unauth and unenforc insofar as P is concerned.
accomplishment of the purpose of the agency. P not bound.

Note: #4 example:
1. Within scope of auth / Agent, wihout auth, and representing as owner
2. Act in behalf of his principal / of car, sold it. Thus, A is liable for innocent
purchaser. Read provision.
Thus 4 instances may arise:
1. Acts w/ auth in behalf of P  AUTHORITY: right of agent to effect legal
2. w/ auth, in behalf of himself relations of his P.
3. w/o auth, in behalf of P  Kinds: express, implied, general, special,
4. w/o auth, in his own behalf. Page 807 apparent (principal’s conduct leads that
In 3 and 4, agent is not really agent. agent is really authorized)
 Implied ex: auth to collect debt usually auth
 Effects: din to bring suit for enforcement of
payment.
1. w/ auth: P’s behalf: valid ofc. P is bound,  NO IMPLIED AUTH IN:
agent not personally liable unless he bound
himself. / auth to borrow for business, no auth to pay own
2. w/ auth, A’s behalf: apply 1883: generally personal debts.
not binding on P; except regarding things
belonging to P. / novation, even if auth to collect debt, no power
3. w/o auth, P’s behalf. UNAUTHORIZED & to indorse check
UNENFORCEABLE. But may be ratified, thus
retroacts and validated from the beginning. / auth to borrow, not auth to pay at maturity.
4. w/o auth, A’s behalf: valid. WON the SM
belongs to the P, provided that at the time /auth collect, not auth to receive partial payment,
of delivery is to be made, the agent can nor to accept commercial paper as payment.
transfer legally the ownership of the thing. Unless engaged in business of acceptance of checks
Otherwise, he will be liable for breach of or notes.
warranty against eviction. ?????????????
1883 not apply. /note in pre trial, need spa for client ng atty.
 AUTH V. POWER: auth is cause, power is
Cases: effect. Daw. Auth emanates from P and
/ auth to collect money and exact payment by agent given power.
“legal means” carries auth to bring court action for  SPA is auth given in writing.
collection. Note: notice to counsel is notice to party. But
notice to party is not notice in law.
/ auth to look for buyer of land of the company, not
carry with it auth to sell. Thus broker na hinire ni  Auth v. instruction 817
agent, not entitled for commission.
817 1882 – limit of agent’s auth shall not be
/ auth to administer interest I possess within this considered exceeded should it have been
municipality, purchase, sell, collect and pay, as well performed in a manner more advantageous to the
as sue and be sued, appear before courts” thus P than that specified by him.
may sell. Words of document should prevail.
 Deemed still auth, or justified if beneficial.
/ auth to collect, not include release sureties. Financial gain or other gain. Offset ganun.
 Ex. A was asked to sell on installment for
/ FORGED power of atty. Thus, agent mort land and 100k. but able to sell whole. Deemed not
able to register the land. Effect?? MORT and exceeded auth.
registration are null and void. Cannot affect rights  Cannot sell at lower price if fixed. But may
of the registered owners. sell higher price? Unless prohibited
specifically.
/ payment to an UNAUTH agent does not exting the  What if sell to cash daw, pero sell to credit
obli.. payment not valid. is more beneficial? CANNOT! Not auth to do
so. 1905?
/ agents acting in BF, is presumed that P also acts in
BF. Case:
/ agent = general power of admin only. Sold land
Note: for double the price. Agent exceeded? YES.
Cannot be revoked. 1 bilateral contract, Important is he made a sale. Requires SPA. Ni
roght to alienate.
DOCTRINE OF AGENCY BY NECESSITY:
“GR agency cannot be created by necessity”
XPN: in view of emergency, auth of agent enlarged 819 1883 – agent acts in his own name, P has no
in order to cope w/ exigencies or necessities of the right of action against persons with whom the
moment. JURIS. Conditions: agent has contracted, neither does that 3 rd person
1. Existence of emergency against P.
2. Inability of agent to communicate to P
3. Exercise of additional auth protects the P thus, agent, is the one directly bound, as if
4. Means adopted is reasonable considering transaction was his own, except when the
the circs contract INVOLVES things BELONGING TO P.
5. Ceasing of the auth the moment the w/o prejudice to actions between P against A.
emergency no longer demands the same.
Example: bus conductor seriously hurt, thus  Here “agency” w/ undisclosed P.
driver auth to engage the services of a physician in AUTHORIZED!! but acting in A’s behalf.
company’s name. Note: 1883 applies only if AUHTORIZED
AGENT.
Ex. A asked B to borrow from C. however, B did General: GF and loyalty, Due diligence, follow or
not disclosed to C his Principal. thus, C cannot ask instructions
A for payment. Only B has duty to pay.
If Negligent AGENT, who is liable? If mere
Mismanagement, P still liable. If BF or amounts to
Case: tort, Agent liable.
/ if agent sign BOE. He must: indicate, that signing
as agent, name of principal, to be not personally When is an agent personally liable? EXCEED, own
liable. name, or unauth.

 Note the XPN: if P owns the thing. Note libale when, within scope, agent’s name, for
 If A buys in his own name, but really in agent’s benefit.
behalf of P? seller has option to look to
either for payment unless: 822 1884 – AGENT is BOUND by his acceptance to
1. He trusted the agent exclusively carry out the agency and is liable for damages he
2. Or usage and understanding of business, causes thru non-performance P may suffer.
the agent only is held
3. Or circs reveal that only agent was He must also finish the business already
intended to be bound and the seller begun on the death of P, should delay entail any
knew it. Page 820 #5 danger.

 When auth of agent is doubtful? Action  “DUTY of agent” = carry out the agency.
must be directed both against A and P.
Case:
 If things belonging to P: / lawyer fails to perfect an appeal does not give rise
Ex. agent buys, thru P’s money, auth, but in his own to damages in the absence of showing that the
name. P has still right of action against buyer and decision, which is already final and executory, was
vice versa. unjust.

But note:  DEATH of P = As a rule, death of P


extinguishes Agency. But Agent is obliged to
If undisclosed principal but auth to sell. Buyer takes finish business already begun if DELAY
title to the merchandise and the P cannot maintain should ENTAIL any danger.
successfully an action against him for the recovery  AGENT sells to himself = P not required to
pf the merchandise or for damages, but can only fill such order unless P ratifies the sale after
proceed against the agent. In this cse, buyer has he had full knowledge.
NO KNOWLEDGE of the true principal. But! If
agent not auth to sell, whole transation is null and 823 1885 – Person DECLINES an agency, he is
void. Thus cannot be invoked 1883. bound to observe DOAGFOAF in the custody and
preservation of goods forwarded to him until the
1883 cannot be invoked if, contract of sale did not owner appoints another agent. Owner shall
cover property of the supposed Principal but appoint another agent or take charge of the goods.
involved prop of 3rd person.
 DOAGFOAF, equity demands said diligence,
Page 821. kahit allowed to refuse.
 Duty of owner to act as soon as possible
to: appoint new agent, or take charge of
OBLIGATIONS OF THE AGENT goods.
823 1886 – agent obliged to Advance necessary  Also, because Agent generally acts for P’s
funds only when there is stipulation, provided that benefit and not to detriment P.
P is not insolvent.  Manifestly meaning would damage ANY
principal.
 Thus, even if may stipulation, agent not
bound to advance if P subsequently became 827 1889 – If there is conflict of interest between P
insolvent. Why? IDK, wala sinabi. Probanly and A, should A prefer his own and causes damage,
bec wala na pambayad P kay Agent? Agent shall be liable for damages.

824 1887 - Agent shall ACT IN accordance w/ P’s  APPLIES whether the Agency is grat or oner.
instructions.
827 1890 – Agent empowered to borrow money,
If none, DOAGFOAF as required by the he may himself be the lender at the current rate
nature of the business. of interest. If he has been auth to lend money at
interest, he cannot borrow it w/o P’s consent.
 “Duty to follow instructions”
 ACTS of agents beyond his powers would  here borrowing is for P’s benefit.
still bind P if:
1. P’s acts have contributed to deceive a  NOTE: under 1491; agents cannot acquire
3rd person by purchase, even at a public or jud auction,
2. Limited power of A could not have been property whose admin or sale may have
known by a 3rd person been entrusted to him, unless the consent
3. P has placed in the hands of agent of P has been given.
instruments signed by him in BLANK.

 If agent follows instructions, he cannot be 828 1891 – Agents are bound to render an account
held personally liable. (responsible only if of his transactions and to deliver to P whatever he
exceeded auth, or acted with Negligence, may receive by virtue of the agency, even though it
deceit, fraud) may not be owing to the P.
 IF instructions unclear. P may be bound by
acts of agent relying in GF on his own Stip. exempting Agent from obli. to render
interpretation. account shall be VOID! (against pub pol, bec it
shall be conducive to fraud)
 Agent’s failure: exceeded, or negligent to
fully exercise its auth.  Duty to account
 When need not duty to account? Acted only
 If may excess, excess can be disregarded acted as middleman, if agent informed the
and portion complete may be given effect. principal of the gift bonus or profit, right of
lien exist in favor of the agent. NOTE: mali
 Can disobey: if illegal, will affect also agents’ ata daw.
interest, or next art.
Case:
/ Secret profit made by agent. Such breach of
826 1888 – An agent shall NOT CARRY out an loyalty forfeits the AGENT’s entitlement to collect
agency of its execution would MANIFESTLY RESULT commission ordinarily due to him. Regardless of
in LOSS or DAMAGES to the P. agency being grat or oner. Because agent has
 Why? Because Agent should exer Due absolute duty to make full disclosure or
diligence. accounting of all transactions and material facts
relevant to the agency.
2. Given such power but sub appointed was
 Duty to deliver funds. All funds collected, notoriously incompetent and insolvent.
thus kahit di stipulated.
 Note: although agent entitled to All acts of sub appointed against prohibition of
commission, there exist no co-ownership P shall be void.
regarding the money collected by virtue of
P’s business. No co-ownership established.
If agent subtracts prior to giving the funds  If Agent appointed, even if nothing was
to P, ESTAFA. mentioned kung pwede or not, acts of sub
 Neither is agent allowed to make profit for are valid but A shall be responsible for the
his own benefit as long as agency exists. acts of sub.
 If the Sub violated the instruction, P can
 DOCTRINES: (duty to account) hold A and sub liable. (1893)
 If, P agreed na pwedeing magsub. A can be
1. Duty comes from the representative held liable, subsidirialy or primarily, if A
relation and fiduciary nature appointed a notoriously income and
2. Duty to account may be demanded by P’s isolvent sub. If not, P cannot hold A liable.
heirs, thus kahit namatay na si P and  If A prohibited to appoint, but A appointed.
terminated na agency, such duty still exists Acts of sub is void.
3. P or his legal rep has right to pass upon
correctness of the accounting
4. Also P has right to make reasonable 834 1893 – in cases mentioned in 1 and 2 in 1894,
inspection of books etc the P may furthermore bring an action against the
5. Agent cannot dispute P’s title to the SUB with respect to the obli which the latter has
property in agent’s possession. contracted under the sub.

Cases:  Here, if P has not prohibited A to appoint.


/ if P approved the fraudulent accounting fully  P can sue both A and Sub.
knowing the fraudulent act, the heirs cannot  Only XPN to sa article 1311, respecting
subsequently invoke it to set aside the accounting privity of contracts.
made. Because P had already ratified.
835 1894 – responsibility of 2 or more agents, even
/ agent, somehow got the land registerd in his own if appointed simultaneously, is not SOLIDARY,
name with a torrens title and decree became final. unless otherwise stipulated.
Reconveyance can still be made if proven na agent
was only a trustee/ admin agent with respect to  JOINT not solidary
the land. Since agency is fiduciary nature, agent is  Liability here refers to agents towards P.
estopped from acquiring a title adverse to that of and not to 3rd parties.
his P. By the registration of the land, it is true that  But only if each can act separately, meaning
the agent is the owner as to 3rd persons are if All agents should ACT, and 1 is unable,
concerned, but as against P, no. Cert of title cannot only that one unable to act is liable.
shield fraudulent acts. Page 832 case
835 1895 – if solidarity has been agreed upon,
each A are b responsible for non-fulfillment of
833 1892 – Agent may appoint a substitute if P has agency, and for fault or neg of his fellow A, XPN: if
not prohibited it, but agent is responsible for acts 1 acted beyond the scope of his auth.
of his sub when:
1. He was not given power to appoint one Ex. when 1 acts beyond auth. If sold another thing
stipulated, 1 acting beyond auth is the only liable.
839 1898 – Agent contracts in the name of P,
836 1896 – Agent owes interest on the sums he has exceeding scope, and the P does not ratify.
applied to his own use from the day on which he Contract is VOID if the party whom the agent is
did so, and on those which he still owes after aware of the limit. Agent is liable if he undertook
extinguishment of the agency to secure the P’s ratification.
 P bound only if ratified.
 Pertains to liability of the AGENT for  And 3rd person, knows the defect.
interest
840 1899 – Agent acts in accordance w/ order of P,
 Those converted for AGENTS own use, or latter cannot set up the ignorance of the agent as
not converted pero not yet remitted at the to the circs where himself was, or ought to be
time of expiration of Agency aware.

 Equity, dahil Agent complied naman with


836 1897 – Agent not liable personally, unless he his duty
expressly binds himself or exceeds the limits  Pertains to agent’s ignorance.
of his AUTH w/o giving such party notice of  Why? Kasi P should have appointed an
his powers. agent not ignorant.
 HERE, AGENT complies w/in auth, complies
w/ instructions.

 NO PERSONAL LIABILITY – 840 1900 – as 3rd persons are concerned, ACT IS


WHY? Representative only. DEEMED TO HAVE BEEN PERFORMED WITHIN
SCOPE OF AGENT’S AUTHORITY. If such act is
 If AGENT obligates himself personally, aside within the terms of the power of ATTY, (WRITTEN)
from acting on behalf of P, BOTH are even if the agent has in fact exceeded the limits of
BOUND. his auth according to an understanding bet. P and
A.
Case:
/ if exec or admin, w/o court auth, contracts on  “to protect interest of innocent 3rd persons”
behalf of estate, he imposes upon himself a  NOTE: this applies if AUTH IS IN WRITING!
personal obli. True even if not signing the contract  THUS, not required to go beyond the terms
himself. of the written SPA. So kahit may agreement
si P and A na sila lang nakakaalam.
/ agent bound himself to pay debt. Will not relieve
P of his liability. Liability of agent merely security. 841 1901 – 3rd person cannot set up the fact that
the agent exceeded the powers, if P has ratified, or
/ Agent prohibited to do acts that could prevent has signified his willingness to ratify agent’s acts.
fulfillment on the part of P.
 Ratification grants AUTH.

 Proper parties to the suit – suit should be 842 1902 – 3rd person may require presentation of
against the P. not agent, XPN when agent power of ATTY, or the instructions as regards the
acts in his own name, or exceeds limit. Juris agency. Private or secret orders cannot prejudice
din. 3rd persons.

/ SPA allowing agent to sell all prop, sufficient to Case:


validate sale.
/ if may defect, should make necessary inquiry  In sum, if may guarantee comm = agent
verification as to the auth of the applicants and to shall Pay P in case 3 person failed to. Agent
find out WON parties are actually the Principal. bears the risk of collecting.
 Note: ang Guarant comm ata, is paid in
843 1903 – Commission agent responsible for the advance.
goods received by him, if may damage sa goods, 
presumed na goods were damaged while in
custody of the AGENT. Disputable
847 1908 – COMM agent who does not collect the
 “commission agent” merchant or broker, credits of his P when due and demandable na, shall
having option to act in his own name or P’s be liable for DAMAGES, unless proved na he exer
name. DUE dilig to collect.
 So magkaiba pa daw comm agent and
broker.  Article applies if no guarantee commission.
 Com agent = engaged in sale or purchase But if meron, then failed, liable for interest
for P of personal property. Things placed at in lieu of damages.
his disposal.  DUE DILIG= legal means, and reasonable
time.
844 1904 – COMM agent, handling goods
belonging to different owners shall place  NOTE: sa GUARANTEE COMMISISN, if
countermarks to distinguish ofc. meron = every time purchaser fails to pay,
AGENT pays or assumes the risk. Kaya may
844 1905 – COMM agent CANNOT SELL ON CREDIT guarantee comm.
W/O P’S CONSENT. Should he do so, P may
demand from A payment in cash, but comm agent 848 1909 – Agent is responsible not only for fraud,
shall be entitled to any interest or benefit resulting but also for NEG.
from the sale.
 If NEG, consider kung grat or oner. Kung
 P may demand A payment in cash if sold on grat lang, not liable? NOT SURE.
credit w/o consent. Or ratify.  If fraud, liable always.
 Agent cannot invoke defense that konti ang  AGENT no duty to insure the Goods, unless
profit kapag cash basis. agreed upon.

Cases:
846 1906 – if allowed to sell on credit, agent shall / 849
inform P such selling on credit to be made, with
names of buyer. If A failed to do so, sale shall be case/
deemed to have been made in cash insofar as P is P said sold this tomorrow for 1 peso.
concerned. A = sold the thing for 1 peso but at said date the
price was 2 pesos.
 “DUTY to inform P” Thus, A is liable for the difference. Did not act with
 So di pwedeng sabihin na on cash pero In due diligence.
reality credit.
Case/
846 1907 – If COMM agent, received additional for Agent, entrusted to hold diamond pendant.
ordinary commission, or guarantee commission, he However, it was robbed, robber not yet convicted.
shall bear the risk of collection and shall pay the P A liable? No., excused because of fortuitous event
the proceed agreed upon w/ the purchaser. took place without A’s fault. As long as proven by
preponderance of evidence.
855 1912. P must advance to A, necessary sum for
Case/ execution of the agency, if A requests.
Agent signed receipt as witness. But never received
said amount. NOT liable. If A advance them, instead of P, P must
reimburse him, even if the business was not
successful, PROVIDED that A is free from all fault.
OBLI OF THE PRINICIPAL
REIMBURSEMENT shall include interest, from the
Liability of principal in case of mismanagement or day the advance was made.
tort.
 “duty to advance necessary funds”
852 1910. P must comply with all the obli which the  Even if Agency is grat. This applies, interest
A contracted within the scope of his auth. and reimbursement.

P not bound, to those contracted by A 855 1913. P must indemnify the A for all the
exceeding its auth, unless RATIFIED expressly or damages which the “execution of the agency” may
impliedly. have caused to A, w/o fault ofc on A’s part.
 “duty to comply w/ agent’s commitments”
 “duty to compensate damages caused by
Note: the Agency contract”
1. agent acting within the scope of his auth  based on EQUITY, applies in grat or oner.
2. acting in the name of P (not in his own  Note: here, Agency actually exists. If not
name, otherwise P not bound, xpn: then none.
remember? When things belonging to P)
1883 856 1914. Agent may retain in pledge the things
object of the Agency until P reimburses and pays
 Impliedly ratifies, “P accept benefits of the the sum set forth in 1912 and 1913.
misrepresentation”
 Requisite of ratification:  Agent’s right to retain things, by way of
1. Unauth act pledge.
2. P consents  Thus, pledge by operation of LAW.
3. P accepts benefits and oblis, acceptance
must be absolute,or accepted in entirety. 856 1915. If 2 or more person, appointed an A for
4. P has full knowledge of what he is ratifying aa common transaction, they shall be solidarily
liable to said A for all the consequence of the
 Effects of ratification: agency.
1. A relieved
2. P now bound  Thus, kahit A have been appointed
separately. This applies. Basta for same
transactions. (meaning kahit di jointly
854 1911. Even if A exceeded his auth, P is chinena siya as agent nung dalawa)
solidarily liable with A if P allowed A to act as
though he had full powers. Ex. W, X, and Y employed A, agent, to sell land
owned by them three. A promised to receive
 “Estoppel” – failed to adopt the needed commission. If A is successful, A can collect from
measures to prevent misrepresentation. ANY. Solidary. Ofc subject to reimbursement sa
 SOLIDARY LIABILITY is imposed by law. mga may ari.
Ofc, not apply, if WXY appointed one A, to sell their
separate properties. Kahit nasa one instrument 859 1918. P NOT liable for expnses incurred by A in
lang. NOT a common transaction. the FF cases:

1. A acted contrary to P’s instructions, unless P


Case: ratified.
Applies if made in separate acts, as long as for 2. Expenses resulted from A’s fault
same transactions. 3. A incurred them w/ knowledge that an
UNFAVORABLE RESULT would ensue, if P
857 1916. If a Person contracts with Agents and P was not aware thereof.
separately, but for the same transactions. And the 4. Stipulated that expenses would borne by
two contracts are incompatible. That of the PRIOR the A, or that A would be allowed only for A
date shall be preferred, w/o prejudice to 1544. certain SUM.

 1544 – provision on SALES, about property Reasons:


sold to different person. To the first seller, if 1 = punish agent
RP, first who records. If none, first 2 = punish agent
possessor in GF, oldest title. 3 = kasi tantamount to BF and lack of due diligence.
4 = stipulation is valid, not against good morals and
Case: pub pol.
X owner.
A1 = agent w/ general power of atty
A2 = special power to sell land EXTINGUISHMENT OF AGENCY

Both sold the land on same date. 860 1919.


Thus, sale made by A2 is valid and enforceable.
Since A1 had no right nor auth to sell. Selling is not
mere act of admin. Thus need special power. A1 So kahit namatay. Valid pa din SPA? NO. kung may
liable for damages. sale na before death, valid.

Case/
P = authorized A to sell his land. A sold and buyer TRUST OBLICON PARAS 888
registered.
DEFINED: right to the benficial enjoyment of
P subsequently sold the land and buyer managed property, the legal title to which is vested in
to title the land. another.

First transaction must prevail, since it was registred Charactertisitcs:


in GF of the sale in registry of property. - Fiduciary
- Created by law, or agreement
Prejudiced second buyer may sue, for breach of - Legal title held by trustee, beneficial title
warranty against eviction. The value of the land held by beneficiary.
sold must be returned. Even if said value be greater
or less than the price of sale. GUARdianship – holder does not hold legal title

859 1917. In the preceding article, If A acted in GF, In pour autrui – arise only in contracts, refers to
P shall be liable for damages to the third person specific property or other things, trsut specific
whose contract must be rejected. If in BF, A alone property lang.
shall be responsible.
COwonrship – is a form of trust. Each co owner 1. Resulting – (bare or passive) there is intent
being a trustee for each other. to create a trust but not considered as
express trust. (1451)
889 1440 – establishes a trust = trustor Sample: inherits a property but he register
holding the property fro benefit of another, it in anothers name, so he wants the
confidence repose = trustee beneficial use, only title to said person.
whose beefit the trust has bee created =
beneficiary 2. Constructive – no intention to create trust,
but nevertheless created to prevent unjust
“parties” enrichment. (sample: acquires property by
mistake, 1456)
beneficiary = “cestui que trust”
Elememts:
note: trustor may be the beneficiary himself. Trust res
Sufficiently certain beneficiary
Elements:
Parties and property or “trust estate” or subject
matter. 890 1442 – principles of general law of trusts are
adopted. (basta di in conflict with CC,
COCommerce, ROC other special laws)
Case ni sir:
/ co-heirs porp mort sa bank. Naforclsoe. Thus, suppletory.
napunta na sa bank ownership.
Bank allowed redeem kahit beyond period. Meaning ata neto’ = adopts Amercian Law on
1 paid, and said 1 heir sakanya na name. (pero Trusts
hinandle niya muna bayad since wala pambayad
co-heir) Cases:
/Lawyer acts as trustee of his client pending
/ lilipat ni A ung haws ni B kunwari skanya. Para litigation with respect to matters in litigation ofc.
may prop kunwari si A para maapporve ung visa
niya na kunwari mayaman siya haha. is it a trust? /see 891

can co heir may say that 1 is holding the property EXPRESS TIWALA
in trust?? Yrs. 1452
893 1443 – NO EXPRESS TRUSTS CONCERNING RP
/ what if alien, pinahgalan niya sayo land, para OR INTEREST THEREIN MAY BE PROVED BY PAROL
kunwari hindi skanaya, kasi bawal alien dba. Kanino EVIDENCE.
iaaward? Kasi sabi ni Chinese ibalik sakanya since
pera niya. “parol” = Christmas, char. ORAL evidence.

NO cannot be used trust to circumvent the law. Thus, EXPRESS trust MUST be WRITTEN to be
dismissed. Title name = ownership. Not alien. enforceable. Note necessarily for validity. (so may
be valid but unenforceable)
890 1441 – may be EXPRESS or implied.
Express = agreement of parties  Only for RP, so for PP oral agreement is
IMPLIED = law valid and enforceable.
 To affect 3rd persons, ofc, ulit ulit. Must be
 Kinds of implied: in a public instrument and registered in the
ROP, IF RP.
2. Also make inventory of RP and PP in trust
 On the other hand, if implied trust, wether (ROC)
real or personal involved, may be proved by 3. Must manage and dispose of the estate ad
parol evidence. (1457) faithfully discharge his trust in realtion
thereto, according to the law or according
to the terms of the trust (ROC)
893 1444 – No PARTICULAR words needed, as long 4. Render true and clear account ROC
as there is clear intention to create. 5. Trustee cannot acquire the property held
in trst by PRESCRIPTION as long as the
 Need not even to include the word “trust” trust is admitted. (if repudiated however,
 So how created: and made knonw to party involved, PWEDE
PRESCRIPTION) juris
1. Conveyance to the trustee by act inter vivos
or MC Notes:
2. By admission of the trustee that he holds / Trustee is personally liable GR. XPN:
the property , in his capacity as a TRSUTEE. stipulation na liable ang TRUST ESTATE.

Case: / trustee may sue or be sued alone if his trust is


/ plaintiff allowed defendants and permitted to express. In writing deed will or by court
occupy and take possession of RP. Thus, there is proceedings ganun daw di ko gets. 897 juris
recognition, although still in plaintiff’s name, was
held in trust for the defendant. To be conveyed to
him on payment of the purchase price (express 897 1445 – NO trust shall fail because the trstee
trust). appointed declines the designation, UNLESS the
contrary intention appears in the instrument.
/ naked ownership of land passed to the creditor,
while usufruct remaind w/ children for an  When trustee declines
undetermined period of time. Thus children held
the land as trustees of the creditor of deceased GR: trust continues even if declined. Why??? Court
father. (thus imprescriptible daw) page 895 may appoint new trustee, unless provided sa
(kaso parang wala trust daw kasi walang fiduciary instrument na, wala na, finish na, di pwede new
relationship created?) so more like DATION in appointmet.
payment daw. (court should have fixed transfer of
property) Why? No trustee = No trust.

 “clear intention” Mother > Uncle = for trustee in insurance proceeds


 as to capacity: of a minor.

1. TRSTR must be capacitated to convey (note


joit owner may be trstr and other owner as 898 1446 – ACCEPTANCE by the BEN is necessary.
trstee) BUT!! If it imposes no ONEROUS condiditons, trust
2. TRSTEE capcitated to hold and enter into is presumed, if NO proof to the contrary.
contracts
3. Beneficiary – capcitated to receive  Acceptance – express/ implied/ presumed/
gratuitously  Presumed if it is PURELY GRAT.
 NOTE: not need formalities of acceptance
ADMINISTRATION of the trust: for donation. (kasi sa donation of property,
1. Trustee must file a bod. (ROC) dat pub ins din dba) thus, kahit RP involved,
acceptance need not pub ins.
FORMER IS TRUSTEE.
 END of trusts: LATTER BENEFICIARY

1. Mutual agreement of ALL IF HOWEVER, THE PROPERTY IS CONVEYED TO


2. Expiration of term CHILD, LEG OR ILLEG, OF THE ONE PAYING THE
3. Resolutory condition PRICE OF SALE, NO IMPLIED TRUST. PRESUMED NA
4. Rescission or annulment GIFT IN FAVOR OF THE CHILD.
5. Loss of subject matter (physic of legal imp)
6. Court order  HERE property is purchased by title is given
7. Merger to another, NOT the payer.
8. Accomplishment of purpose  Here trust is intended.
 Sample: A buys land from B. A pays so that
Note: he have beneficial interest but legal title to
Testamentary trust for administration and C. C is trustee, A is ben.
eventual sale of certain proeprties of T ENDS, at  Suppose: C is legitimate child of A? then no.
the time SAID SALE was actually made and presumed gift kay child,
proceeds distributed. (trusteeship of Estate of  Formalities of donation not required daw.
diaz) Kasi presumption. Kasi if need formalities
then no need to be presumed.
 ALSO! Not implied trust if dox expresses
IMPLIED TRUSTS different intention like: “like if the purchase
paid because he was lending money to B”
Doctrine of implied trust is founded on EQUITY. Fair “b having the legal title”
dealing demands establishment of trust.
903 1449 – implied trust: donation made to a
person but DONEE does not get full ownership of
900 1447 – enumeration of implied trust does not benefit.
exclude others. But limitation in 1442 shall be
applicable.  Sample: a donated to B. but was agreed
upon that: “only 1/3 of the products of said
 As long as not in conflict with: cc, land shall belong to B. there is a trust here,
commerce, ROC, special laws other. B as trustee”

Case 904 1450 – one bought the property for another,


/ city holds I trust for the NATNL government, lands but the title is in his name although bought for
or community properties. another.

/ land was held in trust by NL (kasi si L nainheirt Said property them shall be considered as
daw niya sa lolo nya, pero alam niyann sold na sa security, for the payment of “another” of the
municipality, pero for some reason naka title siya) purchase price thur redemption. (so parang loan
evidence of ownership lang ung land, not chena to lang ung pera for said “another”)
acquire ownership

902 1448 – implied trust when: PROPERTY IS SOLD,  “constructive trust” here, to prevent unjust
AND THE LEGAL ESTATE IS GRANTED TO 1 PARTY enrishcment. How unjdt enrichment?
BUT THE PRICE IS PAID BY ANOTHER FOR THE  But if nagloan ng money, the siya mismo
PURPOSE OF HAVING THE BENEFICIAL INTEREST OF nagbuy, then seciruty, in this case,
THE PROPERTY. MORTGAGEnot, trust. Page 904
Case:
/ no ficusciary in trustee and trustor in constructive Note: shares of co-onwers are presumed equal.
trust. Article 485 second par.

/ trust receipt: importer magiging owner only if he 909 1453 – person declared his intent to hold the
paid price. property for someone else, there is implied trust in
favor of the person whose benefit is contemplated.
/trust receipt is a security rtransactio where
dealers who do not have sufficient funds to finance Rsulting trust.
imporatition of merchandise. Here collateral ung
merchandise imported. Sample:
A bought lanf from B and it was conveyed to jA on
/ cases in 905 A’s statement that he would hold it in behalf of C.
here A trustee, and C is ben,
906 1451 – when land passes by succession to any
person and he causes the legal title to be put in So, if sabi ni jose “he is the real owner” after such
the name of another, a trust is established by declaration. He cannot be allowed to do so. Kasi
implication of law for the benefit of the true estopped na siya aksi sabi niya held in trust for C.
owner.
 Applies also if person promised to hold
 Here “resulting trust” property until it be free from all debts and
 Sample; A inherited. But he caused the encumb. Here he is mere trustee.
legal title to be in the name of X, his
borther. Thus, here, X is trustee and A Case/
beneficiary. Page 909 910.
 CO-onwer, or co-heir, are truestees and of
each other. 910 1454 – trust if: the ben sold his property to
trustee, in order to secure ben’s obli to trustee.
Case/
Cannot acquire shares of co-heirs and owners by Here, if the obli was fulfilled, the trustee then shall
prescription. As long as not repudiated and ack the reconvey the property to ben. In other words ben
existence of co ownership may demand resale of the property to her.

/trust din kapag wife regisyered under husbands 910 1455 – when any trustee, guardian, or other
name properties. Wife may claim them as her own holding a fiduciary relationship uses trust funds
upons husbands death. for the purchase of property and causes the
conveyance to be made to him or to a third
/ co-heri nakauha ng title, may be compelled to person, a trust is established by op of law in favor
surrender for partition. of the person to whom the funds belong.

908 1452 – if 2 or more agree to purchase, and  Constructive trust. Prevent unjust
legal title is in the name of 1, for the benefit of all. enrichment.
There is also trust created by law, in proportion to  Applies to:
the interest of each.  Trustee, guardian other.

 Resulting trust also. Sample:


 Case/ Agent used his principals money to purchase land
in his onw name. and register the land in his onw
One with the title, is the trustee. name. here, he will be considered only as TRUSTEE,
and principal is BEN. P can bring action for
conveyance to himself, so long as no innocent Implied may be barred by lapse of time daw.
parties shall be prejudiced. Kasi sa express trust may intention na holding
as trustee lang. NOT ADVERSE, unlike in
Why? implied. Dba? Onga naman.
Estopple. Fiduciary relations, remove temptation to
enrich oneself at the expense of another. Or one’s In implied, NO PROMISE or fiduciary relation.
own integiryt and duty. niya Not holding for the ben, kasi adverse.
Inaangkin niya nga eh dba.
Case/
Person, should have been helping an illiterate, However, may cases na imprescriptible, if co-
enriched himself. There is breach of trust. heir? So kahit adverse. Ata. Or resulting FROM
FRAUD. May be barred by prescription. 4 years.
1456 912 – if property acquire thru mistake or
fraud, person obtaining is considered as trustee of Basta if di adverse, imprescriptible. No laches.
an implied trust. For the benefit of the true Sa express. Thus can recover anytime.
owner.
Cases/ page 916 onwards.
Constructive din kasi tp prevent unjust
enrichment. In implied trust. Imprescriptible if: resulting
trust. Intended na trust. Xpn: if repudiated ni
 Trustee may be compelled to exeute a deed ben.
of reconveyance of prop. Improperly
obtained Provided that tru owner is not In constructive: do pescribe.
barred by laches.
 “mistake” here means mistake of 3rd “sabi whether resulting or constructive, its
person, kasi kung party, then no trust. ENFORCEMENT may be barred by laches DAW.
 “farud” here extra contractual fraud. Nacalaban vs. CA and Duque v. domingo wut. “
 Action is against the trustee Not against the page 917
innocent purchaser. (within 4 year from
doscvery of fraud) or form date of / reconveyance of registered land based on
registration if registered. implied trust, prescirbes in 10 years.

Case:
/  How to prove trusts: express: NOT oral! See
NOT APPLY if: donee, breaks the condition of the page 920 salao v. salao
donation, she does not become a trustee. Still hers,
subject to revocation. Unles prescribed na.
 NOTE movables acquire thru a crime,
/ torrens cannot be shiled for fraud. Where 1 heir cannot be acquired by the offender thru
said only heir siya, and nagpatitle siya. Here cannot PRESSCRIPTION. 1133 civil code.
say na precirbed na. kahit registered na and may  CREATIVE TRUSTS: oage 922\
torrens na. kasi only as trustee lang siya. Sa pag
title. May reconvey! Page 915
1457 922 – implied = may be proved by PAROL.
/do trusts PRESCRIBE?? Wether RP and PP involved,
a. Express trust NO. as long as not repudiated. BUT! Ofc, oral evidence must stil, be trustworthy!
b. Implied – not sure “confusing” sabi ni paras. Kasi easily fabriscated mga oral chenes.
Haha page 915.
BAKA ITANONG!

LOSS V LIABILITY
DOCTRINE OF UNLIMITED LIABILITY
DOCTRINES

WHEN GENERAL, HWNE NEED SPA, ACTS OF STRICT


DOM, ACTS OF ADMIN,. KELAN LIABLE.

TRUST, RESULTING IMPLIED, AND CONSTRUTIVE.


TRUST BA OR HINDI.

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