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LA W O N A G EN CY CHAPTER 1: NATURE, FORM AND KINDS OF A Basis: G 0 E N C Y Contract of Agency is a contract whereby a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. (Art. 1868) Exception to contractual nature: en age the is ncy ate cre by d era op n tio law of Ex: Ag enc y by Est opp el Representatio n: The acts of the agent on behalf of the principal within the scope of his authority produce the same legal and binding effects as if they were personally done by the principal. 0 Hence, the distinguishing features of agency are its representative character & its derivative authority.
Characteristics: Purpose: Extend the 1. Consensual 2. Nominate personality of the 3. Preparatory principal through the 4. Principal facility of the agent 5. Unilateral; Bilateral (ifCapacity of the agency isParties: QuickTime and a for Principal are needed to see this picture. compensati b. He must be capacitated. The rule is if on) a person is capacitated to act for himself or Nature: Since it is a his own right, he can act through an contract there must agent. be a meeting of the
TIFF (Uncompressed) decompressor a. He may be a natural or a juridical person
i . 2. Agent 1. I n s o f a r a s t h e t h i r d p e r s o n s a r e c o n c e r n e d , i t i s e n
o u g h t h a t t h e p r i n c i p a l i s c a p a c i t a t e d . 2. I n s o f a r a s h i s o b
l i g a t i o n s t o h i s p r i n c i p a l a r e c o n c e r n e d , t h e a g e n t m u s t
b e a b l e t o b i n d h i m s e l f . 3. B u t a s a n a g e n t , s o m e m e n t a l c
a p a c i t y i s n e c e s s a r y , s o , t h o s e w h o a r e a b s o l u t e l y i n
c a p a c i t a t e d ( e x .
1. Consent of the parties to establish the relationship; 2. Object of the contract is the execution of a juridical act in relation to third persons; 3. Agent acts as a representative and not for himself; and 4. Agent acts within the scope of his authority.
I Orient Air Services v. n CA, G.R. No. 76931, s May 29, 1991 a n An illegal termination of e agency does not justify reinstatement of the p agent as such. The agency cannot be e compelled by the courts r to be reinstated s because such o relationship can only be n effected with the s consent of the principal. ) Acts That Cannot Be c Done By Agent: of ex. Making will a 1. Personal Acts a 2. Criminal or n Illegal Acts n o Nature of Relationship tbetween Principal and Agent: b Fiduciary - based on e trust & confidence 1. Agent is a estopped from g asserting interest adverse e n 2. to his principal Agent must not act as adverse party an 3. Agent must not t act for an s adverse party . 4. Agent must not use or disclose secret information
Essential Elements:
e t h e p e r s o n c l a i m i n g t h e b e n e f i t o f
Adviser: Dean Cynthia Roxas-Del Castillo; Heads: Joy Marie Ponsaran, Eleanor Mateo ; Understudies: Joy Stephanie Tajan, John Paul Lim; Subject Head: Thea Jimenez; Pledgees: Naealla Rose Bainto, Sandra May Maclang
2.
to a third person
Agent in dealing with the Buyer can deal with the thing received is bound thing as he pleases, to act according to the being the owner instructions of his principal Distinction between Agent & Contractor Agent Independent Contractor Represents his principal Employed by the employer Acts under the principals Acts according to his own control and instruction method Principal is liable for torts Employer not liable for committed by the agent torts committed by the within the scope of his independent contractor. authority Distinction between Agency and Partnership Agency Partnership An agent must submit to A co-partner is not the principals right to subject to co-partners control right to control, unless there is an agreement to that effect The agent assumes no The partner binds not personal liability where only the firm members he acts within the scope but himself as well of his authority The agent takes his The profits belong to all agreed share of profits the partners as common not as owner but as an proprietors in agreed agreed measure of proportions compensation for his services
Art. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. Agency may be oral, unless the law requires a specific form. (1710a) Classifications of Agency 1. As to manner of creation 1. Express agent has been actually authorized by the principal, either orally or in writing 2. Implied agency is implied from the acts of the principal, from his silence or lack of action or his failure to repudiate the agency knowing that
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Agent receives the goods as the principals goods Agent delivers the proceeds of the sale Agent can return the object in case he is unable to sell the same
Agency to sell
are
t o
this picture.
Sale
Buyer receives the goods as owner Buyer pays the price Buyer, as a general rule, cannot return the object sold
Forms of Acceptance by Agent: 1. Express - when it is oral or written 2. Implied -when it can be inferred from the acts ofWhat is meant by present? the agent which carry out the agency, or from his Generally, face to face, but includes people silence of inaction according to theconversing directly through technology (ex. over the circumstances telephone). 1. Between persons who are present implied acceptance if the principalPower of Attorney: Instrument in writing by which one delivers his power of attorney to theperson, as principal, appoints another as his agent and agent and the latter receives it withoutconfers upon him the authority to perform certain specified any objection acts or kinds of acts on behalf of the principal; primary 2. Between persons who are absent purpose is to evidence agents authority to third parties acceptance not deemed implied from thewithin whom the agent deals silence of the agent. Exceptions: Construction of Power of Attorney: 1. When General Rule: Strictly construed and strictly pursued; held the to grant only those specified powers princip Exception: when strict construction will destroy the very purpose of the power al TIFF (Uncompressed) decompressor are needed to see this picture. transm its his power Art. 1873. If a person specially informs another or of states by public advertisement that he has given a attorne y topower of attorney to a third person, the latter thereby becomes a duly authorized agent, in the former case the agent with respect to the person who received the special who information, and in the latter case with regard to any receive person. s it without any objecti on 2. When the princip al entrust s to him by letter or telegra m a power of attorne y with respect to the busines s in which he is
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habitually engaged as an agent, and he did not reply to the letter or telegram
believed that the principal intended him to act as an agent The power shall continue to be in full force until the notice is rescinded in the same manner in which it was given. (n) Way of Giving Notice of Agency & Its Effect: 1. By special information - the person appointed as agent is considered such with respect to the person to whom it was given. 2. By public advertisement - the agent is considered such with regard to any person How do you revoke an agency? In the same manner as it was constituted. However, constitution by Special Information may be revoked by notice in a daily newspaper, provided it can be proven that 3rd persons in question read the revocation What is an agency by estoppel? There is really no agency at all, but the alleged agent seemed to have apparent or ostensible, although no real authority to represent another. Distinction between Agency by Estoppel and Implied Agency Implied Agency Estoppel Existence of actual agency Can be invoked only by a 3rd person who in good faith relied on the conduct of the principal in agent holding the agent out as being authorized An agent by estoppel has none of the rights of an agent, except where the principals conduct are such that the agent reasonably There is an actual No agency at all agency
ncy by
Such reliance in
not needed, since
Nature of Authority
An agent by implied appointment has all the rights and liabilities of an agent, i.e. has actual authority to
instructions Apparent authority does not terminate by the mere revocation of his authority without notice to the third party
Duty imposed upon the third party to inquire makes termination of the relationship as between the principal and agent effective as to such third party unless the agency has been entrusted for the purpose of contracting with such third party Strictly construed as they limit the agents authority
Attorney-In-Fact: 0 One who is given authority by his principal to do a particular act not of a legal character 0 The term is, in loose language, used to include agents of all kinds, but in its strict sense, it How are contracts of agency construed? means an agent having a special authority Contracts of agency, as well as general powers of created by a deed. attorney, must be interpreted in accordance with the language used by the parties. Distinctions between a General Agent and a Special 0 The real intention of the parties is primarily Agent determined from the language used and General Agent Special Agent gathered from the whole instrument. All acts Specific acts in Scope of 0 In case of doubt, resort must be had to the connected with pursuance of situation, surroundings ad relations of the Authority the business or particular parties. The intention of the parties must be employment in instructions or sustained rather than defeated. which he is with restrictions 0 So if the contract be open to constructions, one engaged necessarily of which would uphold the intention while the implied from the other would overthrow it, the former is to be act to be done chosen. Nature of Involves No continuity of
Service
Agency Couched in General Terms: Covers only MERE ACTS OF ADMINISTRATION even if: 1. The principal should state that he withholds no power 2. The agent may execute such acts as he may consider appropriate 3. The agency should authorize a general and unlimited management
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service May bind his principal by an act within the scope of his authority although it may be contrary to the latters special
continuity of
service
Can not bind his principal in a manner beyond or outside the specific acts which he is authorized to perform
Art. 1878 . Special powers of attorney are necessary in the following cases:
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Powers To sell 1. Not Included in the Power to Mortgage: 2. To execute a second mortgage 1. To make such payments as are not usually 3. To mortgage for the agents or any 3rd persons considered as acts of administration; benefit, UNLESS clearly indicated 2. To effect novations which put an end to Powers Not Included in the Power to Compromise obligations already in existence at the time Submission to Arbitration the agency was constituted; Rationale: 3. To compromise, to submit questions to A principal may authorize his agent to compromise arbitration, to renounce the right to appeal because of absolute confidence in the latters from a judgment, to waive objections to the judgment and discretion to protect the formers venue of an action or to abandon a rights and obtain for him the best bargain in the prescription already acquired; transaction. 4. To waive any obligation gratuitously; 0 If the transaction would be left in the hands of an
5. To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;
arbitrator, said arbitrator may not enjoy the trust of the principal.
6. To make gifts, except customary ones for Art. 1881. The agent must act within the scope of his charity or those made to employees in the authority. He may do such acts as may be conducive business managed by the agent; to the accomplishment of the purpose of the agency. 7. To loan or borrow money, unless the latter (1714a) act be urgent and indispensable for the preservation of the things which are under Art. 1882. The limits of the agent's authority shall not administration; be considered exceeded should it have been 8. To lease any real property to another performed in a manner more advantageous to the person for more than one year; principal than that specified by him. (1715) 9. To bind the principal to render some service without compensation; Art. 1883 . If an agent acts in his own name, the 10. To bind the principal in a contract of principal has no right of action against the persons partnership; with whom the agent has contracted; neither have 11. To obligate the principal as a guarantor or such persons against the principal. surety; In such case the agent is the one directly bound 12. To create or convey real rights over in favor of the person with whom he has contracted, immovable property; as if the transaction were his own, except when the 13. To accept or repudiate an inheritance; contract involves things belonging to the principal. 14. To ratify or recognize obligations The provisions of this article shall be understood contracted before the agency; to be without prejudice to the actions between the 15. Any other act of strict dominion. (n) principal and agent. (1717) Art. 1879. A special power to sell excludes the power to mortgage; and a special power to mortgage does Requisites for Principal to in behalf of by Act of Agent: 1. The agent must act be Bound the principal not include the power to sell. (n) 2. The agent must act within the scope of his authority Art. 1880. A special power to compromise does not authorize submission to arbitration. (1713a)
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are needed see this picture.
When a The latterin the without orby act ofthe scope of his principal NOT BOUND beyond agent: 1. authority acts formers name Exceptions: 1. Where the acts of the principal have Special Power of Attorney: an instrument in writing by which one person, as principal, appoints another as his Page 177 of 297 agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. The special power of attorney can be included in the general power when it specifies therein the act or transaction for which the special power is required.
Held: The loan obtained by Lilia cannot be collected from Don Pepito, but the cost of campaign materials is properly collectible.
By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the
which he did so, and on those which he still owes after the extinguishment of the agency. (1724a)
Art. 1897. The agent who acts as such is not Art. 1884. The agent is bound by his acceptance to personally liable to the party with whom he contracts, carry out the agency, and is liable for the damages which, through his non-performance, the principal unless he expressly binds himself or exceeds the limits of his authority without giving such party may suffer. He must also finish the business already begun sufficient notice of his powers. (1725) on the death of the principal, should delay entail any danger. (1718) Obligations of the Agent to the Principal 1. General: Art. 1885. In case a person declines an agency, he is 1. Act with utmost good faith & bound to observe the diligence of a good father of a loyalty for the furtherance of family in the custody and preservation of the goods principals interests forwarded to him by the owner until the latter should 2. Obey principals instructions appoint an agent or take charge of the goods. (n) 3. Exercise reasonable care Art. 1886. Should there be a stipulation that the agent 2. Specific: shall advance the necessary funds, he shall be 1. Carry out the agency bound to do so except when the principal is 2. Answer for damages which insolvent. (n) through his non-performance the principal may suffer Art. 1887. In the execution of the agency, the agent 3. Finish the business already shall act in accordance with the instructions of the begun on the death of the principal. principal should delay entail any In default thereof, he shall do all that a good father of danger (exception to the rule that a family would do, as required by the nature of the death extinguishes agency) business. (1719) 4. Observe the diligence of a good father in the custody and Art. 1888. An agent shall not carry out an agency if preservation of the goods its execution would manifestly result in loss or forwarded to him by the owner in damage to the principal. (n) case he declines an agency, until an agent is appointed Art. 1889. The agent shall be liable for damages if, 5. Advance necessary funds if there there being a conflict between his interests and those be a stipulation to do so (except of the principal, he should prefer his own. when the principal is insolvent) (n) 6. Act in accordance with the instructions of the principal, and Art. 1890. If the agent has been empowered to borrow in default thereof, to do all that a money, he may himself be the lender at the current good father of a family would do rate of interest. If he has been authorized to lend Exceptions (to the rule that the agent must money at interest, he cannot borrow it without the not depart from the instructions of principal): consent of the principal. (n) 1. Theres a sudden Art. 1891. Every agent is bound to render an account emergency of his transactions and to deliver to the principal 2. If the instructions whatever he may have received by are ambiguous virtue of the agency, even though it may not be 3. If the departure TIFF (Uncompressed) decompressor owing is so to the principalareneeded. to see this picture. insubstantial that Every stipulation exempting the agent from the it does not affect obligation to render an account shall be void. (1720a) the result and the principal suffers no damage thereby Art. 1896. The agent owes interest on the sums he 7. Not to carry out the agency if it has applied to his own use from the day on would manifestly result in loss or damage to the principal 8. Answer for damages if there being a conflict between his &
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principals interests, he prefers his own 9. Not to loan to himself if he has been authorized to loan money at interest 10. Render an account of his transactions and deliver to the principal whatever he
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3. When an agent by his act prevents performance on the part of the may principal have 4. When a receiv person acts ed by as an agent virtue without of the authority or agenc without a y (If principal the 5. A person who agent purports to act fails to as agents of deliver an and incapacitated instea principal d conver ts or appro priates for his own use the money or proper ty belong ing to his princip al, he may be charg ed with ESTA FA.)
11. B e r e s p o n s i b l e
i n c e r t a i n c a s e s f o r t h e a c t o f t h e s u b s t i t u t e a p p o i n t e d b y h i m
12. Pay interest on funds he has applied to Art. 1892. The agent may appoint a substitute if
applicable: agent 1. If the only acted as middlemana with task merely and bringing the together the vendor the vendees. of 2. If the agent had informed the principal Distinctions of the between gift/bonus/profi Authority and he received from the QuickTime and a the Principals TIFF (Uncompressed) decompressor Instructions are thereto. needed Authority Instructions to see this picture. 3. Where a Sum total of the powers right of lien committed to the agent exists in by the principal favor of the agent. Relates to the subject/business with which the agent is When empowered to deal or act agent may incur Limitations of authority personal liability? are operative as against expressly the 1. When himself agent binds those who have/charged When 2. the with knowledge of them agent Contemplated to be exceeds his made known to third authority persons dealing with the agent his own use
purc has er and his princ ipal
did
not objec t
When agent has a right to disobey the principals instructions: 1. When the instructi on calls for the perform ance of illegal acts 2. Where he is privilege d to do so to protect his security in the subject matter of the agency When obligation to account not
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 designati ng the person, and the person appointe d was notorious ly incompet ent or insolvent. All acts of the substitute appointed against the prohibition 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) Appointment of Sub-agent:
1. If the principal has not prohibited the agent from appointing a substitute, he will be liable to 3rd persons for the acts of the sub-agent within the scope of his authority 2. If there is a prohibition but nevertheless the agent appoints a subagent, all the subagents acts are void as to the principal. 3. If there is authority to appoint and subagent is not designated by the principal, the agent will be liable for all the acts of the subagent if the subagent is notoriously incompetent or insolvent. 4. If there is authority to appoint and subagent is designated by the principal, the agent is released from any liability from the acts of the subagent. 5. If the appointment of a sub-agent is not authorized but not prohibited, it shall be valid if it is beneficial to the principal. But, should
the e for the acts principal of the incur substitute. damage due to such appointme nt, theArt. 1894. The agent shallresponsibility of two be or more agents, primarily even though they responsibl have been appointed
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cond uct of the princi pal rather than his com muni catio n is the 4. key. But befor e ratific ation, the third party is free to revok e the unaut horiz ed contr act. Effects of Ratification 1. respectto With torelieves - agent the agent from liability theand for party third unauthori zed acting transactio n, his principalto for without authority; may recover compens ation 2. With respect to principal assumes responsib ility for the unauthori zed act, as fully as if the agent had acted
proceedings is not deemed ratification where the principals action is undertaken to avert a greater loss Robinson v. rather than to assert a Borse Ratification is gain. spelled out when the principal brings legal proceedings to NOTE: Agent always enforce the liable for fraud but not contract entered for negligence, which into by the shall be judged with more or less rigor by unauthorized agent, subject to the courts, according qualification, to whether the agency however, that the was or was not for bringing of legal compensation. Effect Exception(s) 1. Binds principal; In behalf of the principal, 2. Agent not personally liable within the scope of authority Contract is unenforceable as against Without or beyond scope of the principal but binds the agent to authority the third person
Agent liable if he: 1. Expressly makes himself liable 2. Exceeds the limits of his authority without giving the parties sufficient notice of his powers Binding on the principal when: 1. Ratified or 2. The principal allowed the agent to act as though he had full powers
When the transaction involves things belonging to the principal: 2. Principal has no cause of action 1. Remedy of the principal - damages for rd against the 3 parties and vice agents failure to comply with the versa agency 2. Remedies of the third person If the case falls under the general rule, he can sue the agent. But when the contract involves things belonging to the principal, he can sue the principal. But if it cannot be determined without litigation who is liable, he can sue both. 1. Not binding on the principal; 1. Insofar
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3rd persons
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to
his authority according to an understanding between him & the principal With improper motives
the written power, agent acted within scope of his authority; Principal 2. estopped Motive is immaterial; as long as within the scope of authority, valid
1. Third person knew agent was acting for his own benefit: principal is not liable to 3rd third
Agent in good faith but prejudices 3rd parties Agent in bad faith and prejudices 3rd persons
Art. 1903. The commission agent shall be responsible for the goods received by him in the terms and conditions and as described in the consignment, unless upon receiving them he should make a written statement of the damage and deterioration suffered by the same. (n) Art. 1904 . The commission agent who handles goods of the same kind and mark, which belong to different owners, shall distinguish them by countermarks, and designate the merchandise respectively belonging to each principal. (n) Art. 1905. The commission agent cannot, without the express or implied consent of the principal,
sell on credit. Should he do so, the principal may
demand from himTIFF(Uncompressed)paymentdecompressorincash, but the
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commission agent shall be entitled to any interest or benefit, which may result from such sale. (n) Commission Agent: One whose Art. 1906. Should the commission agent, with authority of the principal, business is to receive and sell goods sell on credit, he shall so inform the principal, with a statement of the for a commission and who is names of the buyers. Should he fail to do so, the sale shall be deemed to entrusted by the principal with the have been made for cash possession of goods to be sold, and usually selling in his own name.
Obligations of a Commission Agent: 1. Responsible for the goods received by him, as described in the consignment, UNLESS upon receiving them he should make a written statement of the damage and deterioration suffered by the same 2. If goods are of the same kind and mark but belonging to different owners, make a distinction by counter marks and designate the merchandise respectively belonging to each principal cannot, without consent of the principal, sell on credit; should he do, principal may demand payment in cash, but the commission agent entitled to any interest/benefit which may result from such sale 3. If an agent receiving guarantee commission (a del credere agent), bears the risk of collection and pay the principal the proceeds of the sale
on the same terms agreed upon with the
purchaser liable
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collect the credits of his principal at the time when they become due and demandable, UNLESS he proves, that he exercised due diligence for that purpose.
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Art. 1910. The principal must comply with all the obligations which the agent may have contracted within the scope of his authority. As for any obligation wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly or tacitly. (1727) Art. 1912. The principal must advance to the agent, should the latter so request, the sums necessary for the execution of the agency. Should the agent have advanced them, the principal must reimburse him therefor, even if the business or undertaking was not successful, provided the agent is free from all fault. The reimbursement shall include interest on the sums advanced, from the day on which the advance was made. (1728) Art. 1913 . The principal must also indemnify the agent for all the damages which the execution of the agency may have caused the latter, without fault or negligence on his part. (1729) Art. 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency. (1731) Art. 1916. When two persons contract with regard to the same thing, one of them with the agent and the other with the principal, and the two contracts are incompatible with each other, that of prior date shall be preferred, without prejudice to the provisions of Article 1544. (n) Art. 1917. In the case referred to in the preceding article, if the agent has acted in good faith, the principal shall be liable in damages to the third person whose contract must be rejected. If the agent acted in bad faith, he alone shall be responsible. (n) Obligations of the Principal to the Agent: 1. Comply with all the obligations agent contracted in representation of the principal 2. Advance sums necessary for the execution of the agency, when agent so requests; liable for reimbursement regardless of the undertakings success whenever agent had advanced & has no fault; includes interest
3. Reimburse the agent for all advances made
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by him provided the agent is free from fault 4. Indemnify the agent for all the damages which the execution of the agency may have caused the latter without fault or negligence onAgents Right of Retention: 1. Specific (only for those goods connected with the his part agency) and 5. Pay the agent the compensation agreed upon or 2. Until the principal effects the reimbursement and the reasonable value of the latters services pays the indemnity Liability of 3rd persons to the Principal: 1. In Contract a 3rd person is liable to the principal upon contracts entered into by his agent, as if the Art. 1918 . The principal is not liable for the expenses incurred by theagentinstructions, unless the benefits in contract; contract has been entered into by the principal. 1. If the wish the availin contravention of the principal's should from to the following cases: derived agent acted himself of the latter 2. When the expenses were due to the fault of 2. In Tort the 3rd persons tort liability to the principal, the agent; insofar as the agent is involved in the tort, arises in 3 3. When the agent incurred them with situations: knowledge that an unfavorable result would a. Where the 3rd person damages or injures ensue, if the principal was not aware thereof; property or interest of the principal in the 4. When it was stipulated that the expenses possession of the agent would be borne by the agent, or that the latter 2. Where the 3rd person colludes with the would be allowed only a certain sum. (n) agent to injure/defraud the principal 3. Where the 3rd person induces the agent to violate his contract with the principal toPrincipals Liability for Expenses: betray the trust reposed upon him by theGeneral Rule: Principal is liable for the expenses principal. incurred by the agent Exceptions: (AFUS) Requisites forare 2 or more principals 1. There solidary liability of principals: 1. If the agent acted in contravention of the 2. The principals have all concurred in the principal's instructions, unless principal appointment of the same agent derives benefits from the contract 3. The agent is appointed for a common transaction 2. When the expenses were due to the fault of or undertaking the agent 3. When the agent incurred them with Note: The rule in Art. 1915 applies even when the knowledge that an unfavorable result would appointments were made by the principals in separate ensue, if the principal was not aware thereof acts, provided that they are for the same transaction. The solidarity arises from the common interest of the Should it be immovable property, the ownership shall principals and not from the act of constituting the agency. Rule where 2 persons contract separately with agent and principal Two persons may contract separately with the agent and the principal with regard to the same
thing. If the two contractsQuickTimeareand incompatible with TIFF (Uncompressed) decompressor
Art. 1914. The agent may retain in pledge the things which are the object of the agency until the principal effects the reimbursement and pays the indemnity set forth in the two preceding articles. (1730)
each other, the oneareofneededpriortoseedatethispictureshall. be preferred. This is subject, however, to the rules under Article 1544 of the Civil Code (Double Sale). 1
belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. Page 185 of 297
1 Art.
1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be a movable property.
Distinction between Apparent Authority & Authority by Estoppel Apparent Authority Authority by Estoppel Though not actually Where the principal, by Who can be estopped toto deny professing to act as granted, principal agency? his negligence, permits 1. Estoppel of asserted one his agency the third agent estopped denyprincipal and which he against interested in the transaction in both persons his Agentis engaged knowingly permits/holds his agent to exercise 2. Estoppel by the Principal out the agent as powers not granted to 1. As to agent one knowing possessing the him, even though the another is acting as his agent necessary powers to act principal may have no and fails to repudiate his acts, notice or knowledge of or accept the benefits of them, in a certain way the conduct of the agent will be estopped to deny the agency as against such other 2. As to sub-agent for the principal to be estopped from CHAPTER 4: MODES OF EXTINGUISHING denying his liability to a third AGENCY person, he must have known or be charged with knowledge of the transaction and the terms of Agency is Extinguished: (EDWARD)of the period for 1. By the expiration agency which the was constituted. the agreement between the 2. By the death, civil interdiction, agent and sub-agent insanity or insolvency of the 3. As to third persons one who principal or of the agent; knows that another is acting as 3. By the withdrawal of the agent; his agent or permitted another 4. By the accomplishment of to appear as his agent, to the the object or purpose of the injury of third persons who have agency; dealt with the apparent agent as 5. By its revocation; such in good faith and in the 6. By the dissolution of the firm or exercise of reasonable corporation which entrusted or prudence, is estopped to deny accepted the agency(Art. the agency 1919) 3. Estoppel of Third Persons a third person, having dealt with one as an agent may be 0 The list not exclusive; causes particular only to estopped to deny the agency as against the agency; may be extinguished by the modes of principal, agent or 3rd persons in interest extinguishment of obligations in general 4. Estoppel of the Government - government whenever they are applicable, like loss of the neither estopped by the mistake/error of its thing and novation agents; may be estopped through affirmative acts TIFF (Uncompressed) decompressor 0 Agency is TERMINATED, as a matter of law, of its officers acting within the scope of their upon the outbreak of war. authority Presumption of Continuance of Agency 0 It means that when once shown to have existed, Distinction between Ratification and Estoppel an agency relation will be presumed to have Ratification Estoppel continued, in the absence of anything to show Rests on intention Rests on prejudice its termination. Affects the entire Affects only relevant Continuance of Agency transaction from the parts of the transaction Parties must be 1. Present, 2. Capacitated and 3. Solvent
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Art. 1926. A general power of attorney is revoked by a special one granted to another agent, as regards the special matter involved in the latter. Change of Circumstance: General Rule: when there is a basic change in the(n) circumstances surrounding the transaction, which as not Art. 1927. An agency cannot be revoked if a bilateral contemplated by the parties and which would reasonably contract depends upon it, or if it is the means of lead the agent to believe that the principal would not desire him to act, the authority of the agent is terminated fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in the Exceptions: 1. If the original circumstances are restoredcontract of partnership and his removal from the within a reasonable period of time, themanagement is unjustifiable. (n) agent's authority may be revived Art. 1928. The agent may withdraw from the agency 2. Where the agent has reasonable doubts as by giving due notice to the principal. If the latter to whether the principal would desire him to should suffer any damage by reason of the act, his authority will not be terminated if he withdrawal, the agent must indemnify him therefor, acts reasonably unless the agent should base his withdrawal upon 3. Where the principal and agent are in close the impossibility of continuing the performance of daily contact, the agent's authority to act will the agency without grave detriment to himself. not terminate upon a change of (1736a) circumstances if the agent knows the principal is aware of the change and does notArt. 1929. The agent, even if he should withdraw from give him new instructions the agency for a valid reason, must continue to act until the principal has had reasonable opportunity to take the necessary steps to meet the situation. Art. 1920. The principal may revoke the agency at (1737a) will, and compel the agent to return the document evidencing the agency. Such revocation may be express or implied. (1733a) Revocation: Termination of the agency by the Art. 1921. If the agency has been entrusted for thesubsequent act of the principal purpose of contracting with specified persons, its Renunciation/Withdrawal: Termination of the agency by revocation shall not prejudice the latter if they were the subsequent act of the agent not given notice thereof. (1734) Art. 1922. If the agent had general powers, revocation May the agency be extinguished at will? of the agency does not prejudice third persons who 1. AGENT may do so but subject to the contractual acted in good faith and without knowledge of the obligations owing the principal (i.e. fixed period of revocation. Notice of the revocation in a newspaper time for the agency or purpose not yet of general circulation is a sufficient warning to third accomplished); persons. (n) 1. Expressly or impliedly 1. conducted himself in a Art. 1923. The appointment of a new agent for the manner incompatible same business or transaction revokes the previous with his duties; agency from the day on which notice thereof was 2. abandons the object of given to the former agent, without prejudice to the agency and acts for provisions of the two preceding himself in committing a articles. (1735a) QuickTime and a TIFF (Uncompressed) decompressor are fraud upon his principal; needed to see this picture. 3. he files a complaint Art. 1924. The agency is revoked if the principal against the principal and directly manages the business entrusted to the adopts an antagonistic agent, dealing directly with third persons. (n) attitude towards him with just cause - give due notice Art. 1925. When two or more principals have granted without just cause - liable for a power of attorney for a common transaction, any damages if agent suffers damages one of them may revoke the same without the thereby UNLESS the consent of the others. (n)
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Necessity of Notice of Revocation 1. As to the agent - express notice always necessary; sufficient notice if the party to be notified actually agent should base his withdrawal knows, or has reason to know, a fact indicating that upon the impossibility of continuing his authority has been terminated/suspended; the performance of the agency revocation without notice to the agent will not render without grave detriment to himself invalid an act done in pursuance of the authority 2. The mere fact that the agent violates his 2. As to 3rd persons express notice necessary instructions does not amount to renunciation, and 3. As to former customers - actual notice must be although he may thus render himself liable to the given to them because they always assume the principal, he does not cease to become an agent. continuance of the agency relationship 4. As to other persons - notice by publication is 2. PRINCIPAL may also revoke the agency at enough will Exception: agency coupled with interest 1. When a bilateral contract depends uponEffect of Extinguishment Without Notice the agency 0 Act of agent deemed valid insofar as 3 rd parties 2. When the agency is the means of acting in good faith and without knowledge of fulfilling an obligation already contracted revocation 3. When a partner is appointed as manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. Exception to the exception: when the agent acts to defraud the principal
Implied Revocation of Agency 1. Principal appoints a new agent for the same business or transaction, only if there is incompatibility); effective as between the principal and the agent only if communicated to the agent; does not prejudice rights of third persons acting in good faith without knowledge of the revocation 2. Principal directly manages the business entrusted to the agent, dealing directly with 3rd persons Effect of Issuance of a Special Power of Attorney: The general power is impliedly revoked as to matters covered by the special power because a special power naturally prevails over a general power. Principals Liability for Damages despite Revocation:
1. If the agency was constituted for a fixed TIFF (Uncompressed) decompressor
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damages occasioned by the wrongful discharge of the agent before the expiration of the period fixed 2. Even if there was no time fixed for the continuance of the agency, but the agent can prove that the principal acted in bad faith by revoking the agency in order to avoid the payment of commission about to be earned, the principal can be held liable for damages