CONTADO, SHERY ANN

JURIS DOCTOR- 3RD YEAR

1.

No, the contract of sale is not valid. Law on Agency provides that authority to sell a real property
or interest therein shall be in writing otherwise the sale is void.

The contract of sale even though it is in public instrument remains to be invalid because the
appointment of James to sell the property belonging to Ferdinand was only made thru an overseas call
and not in writing which is expressly required by law for the sale to be valid.
2.

The contract entered into by Armando with Barbie’s bakeshop shall not bind Purifine. According
to the Law on Agency, when the principal has appointed a person as his agent thru a publication in a
newspaper, the revocation of authority thru publication in a newspaper is considered as a sufficient
notice to the third person and such binds the third person.

Since Purefine revoked Armando’s authority by giving notice of revocation to Armando and
publishing a notice of revocation in the Philippine Star,thus, even if Barbie Barredo, the owner of the
Barbie’s bakeshop did not read such notice, she can no longer compel Purifine to deliver the flour she
had ordered.

However, Barbie can still file an appropriate action to Armando who misrepresented himself to
be the agent of Purifine despite its revocation.
3.

Yes, an agency is created, because there is an implied acceptance. Pursuant to Law on Agency,
an agency is created, as between persons who are not present, when a power of attorney appointing a
person to be the agent of the other is sent thru a telegram or letter despite the absence of the latter’s
acceptance or reply, provided that such agent is habitually engaged in doing the business he is engaged.

In the given case, Aguada (Alberto),is an agent dealing with appliances in the Percision’s office in
Cebu, thus, it can be inferred that such agent is habitually engaged in doing the business he is engaged
in.
4.

The sale is valid with respect to Carmina, a third person who did know the limit of the authority
given to Armando. As provided by the Law on Agency, while it is true that a person is obliged to inquire
with respect the authority given to the agent, however the law does not require to go beyond to the
apparent authority of the latter.

In the case, the giving of fifty thousand pesos (Ph.P 50,000.00) discount by Armando to Carmina
shall be borne by the agent, Armando or Paramount, as the case may be but shall not prejudice the right
of a third person, Carmina who relied on Armando’s apparent authority even though in truth the same
was exceeded.
5.

A is required to turn over the amount of P120,000.00 to P. Law on Agency requires that the
agent is oblige to deliver whatever he may received by virtue of the agency.

Furthermore, the authority conferred upon the agent shall not be considered exceeded if such
has entered in a contract which is more advantageous to the principal.
6A

Express trust is a kind of trust which is establishes or created by the trustor or by the parties.
Express trust with regard to an immovable property or interest therein may not be proven by parol
evidence. Also, repudiation by the trustee is necessary to bar an action for the enforcement of trust, the
ten years prescriptive period of which shall commence to run from the time when the repudiation is
made known to the beneficiary.

On the other hand, Implied Trust is created by operation of law which could either be Resulting
Trust or Constructive Trust. Implied Trust can be proved by parol evidence. Furthermore, In Constructive
Trust, repudiation is not necessary to bar an action for the enforcement of trust, and the ten years
prescriptive period of which shall commence to run from the time when the constructive trust arises.

6B

As provided by Law on Trust, the following are the parties in trust:

1. Trustor, one who establishes the trust;

2. Trustee, one to whom the confidence is reposed with regard to the property held in trust for the
benefit of the beneficiary or the person having title over the said property; and,
3. Beneficiary, one for whose benefit the trust is created or the person who has equitable to the
property.

6C

Resulting Trust is a kind of trust which is presumed by law to be created by the intention of the
parties and which can be inferred from the nature of their transaction and facts of the case.

On the other hand, Constructive Trust is one which is imposed by law regardless of the intention
of the parties or contrary to their intention to promote justice, frustrate fraud and prevent unjust
enrichment.
7.

Yes, A should account to P all the profits that he obtained from the transaction. Law on Agency
provides that the agent is obliged to render an account of all his transaction and any stipulation
contrary to such or waiver of such obligation shall be void.

7B

The following are the obligation of the agent to his principal:

1. To act with utmost good faith and loyalty in furtherance of the principal’s interest, to be
answerable for damages by reason of his or her fault or negligence and to finish the
transaction that has begun upon the death of the principal if delay will entail danger;
2. To render an account of his transaction and to deliver to the principal whatever he may
received by virtue of agency;
3. To advance fund necessary for the execution of the agency, if there is stipulation to such
unless the principal is insolvent;
4. If the authority is to lend money, the agent is not allowed to borrow unless consented by
the principal;
5. If the authority is to borrow money, he may be the lender and apply the current interest
rate; and
6. Not to borrow money unless such is indispensable for the preservation or protection of the
principal’s interest.

7C

The following are the obligations of the principal:

1. In general, the obligation of the principal depends upon their contract:

2. To comply with the obligation entered into by his agent;
3. To reimbursement the expenses made by the agent and pay interest as the case may be;
4. To indemnify the agent for any damages that he may suffer by reason of agency;
5. To pay the compensation due to the agent, if any.
8.

Both statements are false. Law on Agency states that, a stipulation exempting the agent from
the obligation to render an account of his transaction is void.

Moreover, under the same law, a stipulation that the agent will advance the necessary funds to
carry out the agency is allowed, and the agent is obliged to advance such funds provided that the
principal is not insolvent.
9.

a) The statement is false. Purely personal acts may not be delegated. Thus, the right to vote during
elections for a public office may not be delegated by a person to his agent because it is a right that the
principal is required to do in his person or by himself.

b) The statement is false. Law on Agency provides that special power of attorney is required for
payments made by the agent, which are not usually considered as acts of administration.

c) The statement is false. According to Law on Agency, a special power of attorney is not required in
customary gifts for charity when made by an agent.

d) The statement is false. If the announcement of the appointment of an agent is by special information,
and the person to whom the special information was given must be properly notified to be bound by
the revocation.

e) The statement is false. As it is provided by Law on Agency, an agent is only bound to advance the
necessary funds for the accomplishment of the agency if there is stipulation that the agent shall make
such advances and provided that the principal is not insolvent.

f) The statement is false. Law on agency provides that he agent may not, without the consent of the
principal , borrow the money of the principal which is under his (agent’s) custody or administration
unless such is indispensable or necessary and urgent for the protection of such property under
administration.

g) The statement is false. Law on Agency states that, a stipulation exempting the agent from the
obligation to render an account of his transaction is void.

h) The statement is false. It is provided by the Law on Agency that the liability of two or more agents
appointed simultaneously is joint unless if there is stipulation that their liability shall be solidary.

i) The statement is false. A commission agent cannot sell on credit without the consent of his principal.

j) The statement is false. When two or more principals have appointed an agent for a common
transaction or undertaking, they shall be solidarily liable for all the consequences of the agency.
10. Discuss the meaning of the following terms under the provisions of the Civil Code of the

Philippines :

1. Withdrawal of an agent
It is an act by the agent which extinguishes the agency. The Agent may validly withdraw the
agency or authority conferred on him by giving notice to the principal. However, he shall
indemnify the principal for the damages that he may suffer because of such withdrawal unless
the agency is impossible to continue because of the grave danger or prejudice to himself.

2. Revocation of the agency

It an act done by the principal that extinguishes the agency. In general, the principal may
unilaterally revoke the agency except if agency is coupled with interest.

3. Agent
He is the person who binds himself to render some service or to do some acts in representation
of or on behalf of the principal with the consent or authority of the latter.
4. Principal
One who appointed an agent or has given authority to the latter to render some service or do
some act on his behalf.

5. Civil Interdiction
Civil interdiction is an accessory penalty for the commission of a crime and conviction thereof
and renders the person incapacitated to do some acts during his lifetime like, entering into a
contract and act of administration.

6. Commission Agent
A commission agent is a person who is engaged in the purchase and sale of personal property
for the principal, in which the subject of their agency or consignment shall be placed in the
possession of the agent and at his disposal.

7. Substitute
A person who is appointed by the agent originally appointed by the principal to help the former
or to carry out the agency.

8. Special Power of Attorney

It is a written instrument whereby the principal appoints an agent to be his true attorney in fact
and act on his behalf to do carry out some specific or particular transaction.

9. General Power of Attorney

It is a written instrument executed by the principal whereby he appoints the agent to act on his
behalf and which comprises that usual or general business of the principal only.

10. Express Agency

 It is one created by a clear intention of the principal or the parties. In general, it requires no
specific form.
11. Implied Agency
An agency is implied from the acts of the principal, his silence, lack of action or failure to
repudiate the agency despite his knowledge that there is someone who is acting on his behalf.

12. Fiduciary
Fiduciary implies trust and confidence between the parties in a contract of agency. Such that,
the agent is obliged to act or exercise utmost good faith and loyalty in furtherance of principal’s
interest.
13. Agency
It a contract whereby one binds himself to render some service or do something in
representation or on behalf of another, with the consent or authority of the latter.

14. Acts of Administration

Acts of administration comprises acts which are usual in carrying on the business of the principal
and does not include acts of ownership.
15. Acts of Strict Dominion
This is an act of ownership or those which are not usually done in carrying on the business of the
principal.

Prepared By: Atty. Ferdinand B. Sales, CESO IV