ART. 1892.

The agent may appoint a substitute if the principal has not prohibited
him from doing so; but he shall be responsible for the acts of the substitute:
(1) When he was not given the power to appoint one;
(2) When he was given such power, but without designating the person, and the
person appointed was notoriously incompetent or insolvent.
All acts of the substitute appointed against the pro-hibition of the principal shall
be void. (1721)

ART. 1893. In the cases mentioned in Nos. 1 and 2 of the preceding article, the
principal may furthermore bring an action against the substitute with respect to
the obligations which the latter has contracted under the substitution. (1722a)

Article 1892 states that an agent can also his own agent, a sub-agent or a substitute if
the principal allowed him to. A sub-agent is a person who is appointed by the agent as
his agent to assist him in fulfilling the obligation given by the principal.

However, there different effects on the substitution depending on the situation. First, if
the substitution was prohibited by the principal but the agent still appointed a substitute,
the agent did exceed the limits of his authority, thus, all acts of the substitute is void.
Second, if the substitution is authorized by the principal and the principal himself
appointed the substitute, the agent is exempted on any acts of the substitute, but if
there is no specific substitute appointed by the principal, the agent can appoint the
substitute who is not incompetent or insolvent. Lastly, if the substitution was not
authorized, but not prohibited, the substitute appointed by the agent, and the acts of the
substitute is recognized valid by the law if it will result on the benefits of the principal,
but if the acts of the substitute damaged the principal, the agent must be responsible for
it as if he did the act himself, and the principal also has a right of action against the
substitute.

Example:

Eren made Misaka as his agent and appointed her to sell his car for PHP350,000 since
he'll be out of town for a month. Misaka then allowed Armin to sell Even's. However,
Armin sold the car for PHP250,000 instead of PHP350,000, and now Eren incurred
damages, who is responsible for the damages. If Eren restricted Misaka to appoint a
substitute, Misaka must be liable for the damages, but if Eren allowed the substitution
and appointed Armin, Armin is liable Misaka cannot be deemed liable. Is the substitution
valid? No, if Eren prohibited the substitution, yes, if Eren authorized it. Is the sale valid?
No, of the substitution is prohibited.
ART. 1927. An agency cannot be revoked if a bilateral contract depends upon it,
or if it is the means of fulfilling an obligation already contracted, or if a partner is
appointed manager of a partnership in the contract of partnership and his
removal from the management is unjustifiable. (n)