Professional Documents
Culture Documents
CHAPTER I – NATURE, FORM AND KINDS OF AGENCY Acceptance of Agency Between Persons Who are ABSENT
Agency: a person binds himself to render some service or to do GR: Silence of agent doest not imply acceptance of agent
something in representation or on behalf of another, with consent Exceptions:
or authority of the latter 1. principal transmits power of attorney by letter/telegram to
agent who receives it w/o objection from agent
Essential Characteristics of Agency 2. principal transmits power of attorney by letter/telegram
1. nominate w/ respect to business where agent is habitually engaged
2. preparatory contract
3. for representation Effects of Special Notification or Public Advertisement Re:
4. fiduciary in nature Appointment of Agent
5. essentially revocable
6. consensual 1. Person specially notified
a. the 3rd person name as being given power of
Commercial Broker attorney is a duly authorized agent
1. a middleman b. revocation shall not prejudice the specified
2. acting in his own name persons if they were not given notice thereof
3. acts as agent for both seller & buyer to effect a sale 2. Public advertisement
between them a. the 3rd person given the power of attorney is a
duly authorized agent to any person
How Agency May Be Constituted b. notice of revocation in a newspaper of general
1. expressly circulation is sufficient warning to 3rd persons
2. impliedly 3. agency continues until notice is rescinded in the same
a. principal’s acts manner in w/c it was given
b. silence
c. inaction Presumption: Agency is for compensation
d. failure to repudiate agency knowing someone is
acting in his name General Agency Special Agency
All the business of the principal One or more specific transactions
GR: An agency may be oral
Exception: when the law requires a specific form Agency Couched in General Terms
1. include only acts of administration, even if
When Special Powers of Attorney (SPA) are Necessary a. the principal states he withholds no power
1. to make such payments as are not usually considered as b. states that agent may execute acts he considers
acts of administration appropriate
2. to effect novations w/c put an end to obligations already in c. principal authorized general & unlimited
existence at the time the agency was constituted management
3. to compromise
4. to submit questions to arbitration GR: a SPA is necessary for an agent to borrow money
5. to renounce the right to appeal from a judgment Exception: When it is urgent & indispensable for the preservation
6. to waive objections to the venue of an action of the things w/c are under his administration
7. to abandon a prescription already acquired
8. to waive any obligation gratuitously Construction of Power of Attorney
9. to enter into any contract by w/c the ownership of an 1. must be strictly construed
immovable is transmitted, either gratuitously or for 2. grants only those powers that are specified
valuable consideration 3. agent may neither go beyond nor deviate from the power
10. to make gifts of attorney
a. exception 1: customary gifts for charity
b. exception 2: gifts made to employees in the GR: In order to bind the principal by a mortgage on real property
business managed by the agent executed by an agent, it must on its face purport to be made,
11. to loan or borrow money signed and sealed in the name of the principal
12. to lease any real property to another for more than 1 year Violation of Rule: it will bind the agent only
13. to bind the principal to render some service w/o
compensation Power Power EXCLUDED
14. to bind the principal in a contract of partnership Power to sell Power to mortgage
15. to obligate the principal as a guarantor/surety Power to mortgage Power to sell
16. to create/convey real rights over immovable property Power to compromise Power to submit to arbitration
17. to accept/repudiate an inheritance
18. to ratify/recognize obligations contracted before the GR: Agent Must Act Within Scope of Authority
agency 1. Performance of scope of his authority
19. other acts of strict dominion a. such act is w/in the terms of the power of
attorney, as written
b. even if the agent has exceeded the limits of his
Acceptance by Agent authority according to an understanding bet. the
1. express agent & principal
2. implied 2. may perform acts conducive to the accomplishment of the
a. agent’s acts w/c carry out the agency purpose of the agency
b. silence/inaction accdg. to circumstances 3. agent shall act in accordance w/ instructions of principal
4. absence of instruction - observe the diligence of a good
Acceptance of Agency Between Persons PRESENT: Implied father of a family
1. principal delivers his power of attorney to agent
2. agent receives it w/o objection Exception: Authority of agent not deemed exceeded if performed
in a manner more advantageous to principal
Effect if Agent Acts Beyond Scope of his Authority Effect when agent appoints substitute:
1. Void 1. he is responsible for the acts of the substitute if:
a. Agent contracts in the name of the principal a. he was not given power to appoint
b. He exceeds the scope of his authority b. he was given such power w/o designating the
c. the party w/ whom the agent contracted w/ is person & substitute is notoriously incompetent or
aware of the limits of the powers granted by the insolvent
principal 2. all acts of substitute appointed against principal’s
2. Unenforceable probation are void (as against the principal)
a. those entered into in the name of another person
b. by one who has been given no authority or legal GR: the responsibility of 2 or more agents, even though they have
representation been appointed simultaneously, is not solidary
c. or who has acted beyond his authority Exception: if solidarity has been expressly stipulated
Consequences of Agents who Acts in His Own Name GR: When 2 or More Agents Solidarily Bound:
1. principal has no right against 3rd person 1. each agent is responsible for non-fulfillment of the agency
2. agent is the one who is directly bound to 3rd person as if 2. each agent is responsible for the fault/negligence of his
the transaction were his own fellow agents
Exception: when the contract involves things belonging to principal a. Exception: when the fellow agent acted beyond
the scope of their authority
GR: Agent must act in person but may appoint a substitute if not Note: Principal should be the one to question agent’s lack/excess of
prohibited authority