OBLIGATIONS OF AN AGENT Article 1888.
 An agent shall not carry out an agency if its execution would
C: Carry Out Obligation
A: Render an account of Transactions (Art. 1891)
D: Diligence of a good father of a family (Art. 1885, 1887)
A: Advance necessary funds (Art. 1886)
D: Damages (Art. 1889, 1884, 1908, 1909)
I: Interest (Art. 1896)
C: Commission Agent (Art. 1903-1908)
1. C: Carry Out Obligation
ART 1881: The agent must act within the scope of his authority. He
may do such acts as may be conducive to the accomplishment of the
purpose of the agency. (1714a)  1909 - "The agent is responsible not only for fraud, but also for negligence,
Authority defined. SOURCE OF POWERS TO DO JURIDICAL ACTS.
The right of the agent to effect the legal relations of his principal by the
performance of acts effectuated in accordance with the principal’s
manifestation of consent.
IMPLIED AUTHORITY EXAMPLE:
The expressed authority given to agent to exact payment by legal
means carries with it the implied authority to sue in court for collection.
(Germann and Col. v. Donaldson, Sim and Co., 1 Phil. 63).
NO IMPLIED AUTHORITY:
An agent authorized to collect money belonging to his principal does not
possess the implied authority to indorse the checks which had been
received by him in payment. (Insular Drug Co. v. Nat. Bank, 58 Phil.
684).
authorization to sell for cash does not carry with it authorization to sell on
credit, even if by such device a higher price can be obtained. (See Art.
1905).
AUTHORITY VS POWER
Authority is the CAUSE and POWER is the effect
‘Authority’ Distinguished from ‘Instruction’
Authority empowers the agent to transact with the third person on behalf of
the principal. Authority refers to power of attorney. Instructions are private
directions which the principal may give the agent in regard to manner of
performing his duties.
Authority is contemplated to be made known to the third persons, while
instructions are not expected to be made known to third persons.
ART. 1884. The agent is bound by his acceptance to carry out the
agency and is liable for the damages which, through his non-
performance, the principal may suffer.
He must also finish the business already begun on the death of the
principal, should delay entail any danger. (1718)
1884: General rule. 1888 EXCEPTION.
manifestly result in loss or damage to the principal.
Acceptance of Agency; - A person is free to refuse the agency because it is
PERSONAL (Pineda)
The article emphasizes the principle that once the agent accepts
the principal's appointment, the agent is bound to comply with his duty of
diligence or care.
Basis of liability for damages: 1170 AND 1909
ARTICLE 1170: "Those who in the performance of their obligations are
guilty of fraud, negligence, or delay, and those who in any manner
contravene the tenor thereof, are liable for damages."
which shall be adjudged with more or less rigor by the courts, according to
whether the agency was or was not for a compensation."
Requirements for the valid carrying out
1. Act within the scope of authority (1881)
2. In the name of the principal
If acted beyond scope of authority?
DEPENDS IF in the name of the principal or in his own name:
IN THE NAME OF THE PRINCIPAL:
DEPENDS If the principal ratifies the contract:
IF HE RATIFIES: The contract is valid.
IF HE DOES NOT RATIFY:
Void – if the party whom the agent contracted is aware of the
limits of the powers granted by the principal. (1898)
Unenforceable – If the party whom the agent contracted is not
aware. 1403 par 1
“(1) Those entered into in the name of another person by one who has been
given no authority or legal representation, or who has acted beyond his
powers;”
WITHIN AUTHORITY BUT HE ACTED IN HIS OWN NAME:
General Rule: VALID. The agent is directly bound in favor of the person
with whom he has contracted. (Art. 1883, par. 2) Exceptions:
1. When the contract involves the property of the principal (Art. 1883, par.
2); and
2. The act is performed in a manner more advantageous to the principal
than that specified by him (Art. 1882)
A: Render an account of Transactions (Art. 1891)
Article 1891- the agent "is bound to render an account of his transactions
and to deliver to the principal whatever he may have received by virtue of
the agency, even though it may not be owing to the principal."
“TO ACCOUNT”
Settling of account of administration or agency which includes
payment
Whoever administers another’s affairs must render an account because of
the representative relation and because of the fiduciary position
DOMINGO VS DOMINGO (SECRET PROFITS)