A.

LAW ON AGENCY

I. NATURE AND OBJECT OF AGENCY

1. DEFINITION OF “AGENCY”; PARTIES IN AN AGENCY RELATIONSHIP (ART. 1868)
 The Spanish terms
a. “principal” is “mandante”;
b. “agent” are “mandatario”, “factor”, “broker”, “attorney-in-fact”, “proxy”, “delegate” or “representative.”

2. ROOT AND OBJECTIVES OF AGENCY (ARTS. 1317 AND 1403[1])

 “What a man may do in person he may do through another.”
 The underlying principle of the contract of agency is to accomplish results by using the services of others—to do a
great variety of things.
 Doctrine of Representation - acts of the agent on behalf of the principal within the scope of the authority given
have the same legal effects and consequences as though the principal had been the one so acting in the
given situation

3. ELEMENTS OF THE CONTRACT OF AGENCY

 Rallos v. Felix Go Chan & Sons Realty Corp., 81 SCRA 251 (1978):
a. Consent, express or implied, of the parties to establish the relationship;
b. Object, which is the Execution of Juridical Acts in Relation to Third Parties;
c. The agent acts as a representative and not for himself; and
d. The agent acts within the scope of his authority.

a. CONSENT (Arts. 1317 and 1403[1])

o Intention to appoint and intention to accept
o The law makes no presumption of agency; proving its existence, nature and extent is incumbent upon
the person alleging it.
o Perhaps the only EXCEPTION to this rule is the principle of "agency by estoppel;" but even then it is by
the separate acts of the purported principal and purported agent, by which they are brought into the
relationship insofar as third parties acting in good faith are concerned.

b. SUBJECT M ATTER: Service – Execution of Juridical Acts in Behalf of Principal and Within the
Scope of Authority
o It is clear from Art. 1868 that the basis of agency is representation.
o One factor which most clearly distinguishes agency from other legal concepts is control: the agent agrees
to act under the control or direction of the principal
c. CONSIDERATION: Agency Presumed to Be for Compensation,
Unless There Is Proof to the Contrary (Art. 1875)
o Old Civil Code: Agency presumed to be gratuitous
o New Civil Code: 1875

4. ESSENTIAL CHARACTERISTICS OF AGENCY

a. Nominate and Principal
 Not only is the contract of agency specifically named as such under the New Civil Code, it is a principal contract
because it can stand on its own without need of another contract to validate it.
 The real value of the contract of agency being a "nominate and principal contract is that it has been so set apart
by law and provided with its own set of rules and legal consequences, that any other arrangement that
essentially falls within its terms shall be considered as an agency arrangement and shall be governed by the Law
on Agency, notwithstanding any intention of the parties to the contrary.
b. Unilateral and Primarily Onerous (Art. 1875)

 Agency is presumed to be for compensation;

c. Consensual (Arts. 1869 and 1870)
 In an agency, the principal’s personality is extended through the facility of the agent
  The agent, by legal fiction, becomes the principal, authorized to perform all acts which the latter would have him
do.
 Such a relationship can only be effected with the consent of the principal, which must not, in any way, be compelled
by law or by any court. Orient Air Services v. Court of Appeals, 197 SCRA 645 (1991).
d. Personal, Representative and Derivative (Art. 1868)
 Agency is basically personal, representative, and derivative in nature.
 The authority of the agent emanates from the powers granted to him by his principal;
 His act is the act of the principal if done within the scope of the authority.
 Qui facit per alium facit per se. “He who acts through another acts himself.”
 Consequently, agency is extinguished by the death of the principal or agent. Rallos v. Felix Go Chan & Sons
Realty Corp., 81 SCRA 251 (1978).
 The basis for agency is representation, and therefore every person dealing with an agent is put upon inquiry and
must discover upon his peril the authority of the agent.
e. Fiduciary and Revocable
 The relations of an agent to his principal are fiduciary and in regard to the property forming the subject matter of
the agency, he is estopped from acquiring or asserting a title adverse to that of the principal.
 A contract of agency is generally revocable as it is a personal contract of representation based on trust and
confidence reposed by the principal on his agent.
 As the power of the agent to act depends on the will and license of the principal he represents, the power of

f. Agency Is a “Preparatory Contract”

 The object of agency is for the agent to enter on behalf of the principal and within the scope of his authority into
juridical acts with third parties.

5. DISTINGUISHED FROM OTHER SIMILAR CONTRACTS:

A. FROM BROKERAGE
 Difference in the Nature of the “Service” Covered: A real estate broker is one who negotiates the sale of real
properties. His business, generally speaking, is only to find a purchaser who is willing to buy the land upon terms
fixed by the owner.
o He has no authority to bind the principal by signing a contract of sale.
o Indeed, an authority to find a purchaser of real property does not include an authority to sell.
 On the Duties and Obligations Assumed: “The duties and liability of a broker to his employer are essentially those
which an agent owes to his principal.
o Consequently, the decisive legal provisions on determining whether a broker is mandated to give to the
employer the propina or gift received from the buyer would be Articles 1891 and 1909 of the Civil Code.”
(CLV: Yet the facts did indicate clearly that the real estate broker was appointed as an exclusive agent.)
 Entitlement to the Commission Agreed Upon: Agent receives a commission upon successful conclusion of a sale;
whereas, broker earns his pay merely by bringing the buyer and the seller together, even if no sale is eventually
madeTan v. Gullas, 393 SCRA 334 (2002).
o The business of a real estate broker, generally, is only to find a bona fide purchaser, and the settled rule
is that, in the absence of an express stipulation on the matter between broker and his principal, the broker
becomes entitled to the usual commissions only when he brings to his principal a party who is able and
willing to take the property and enter into a valid contract upon the terms then named by the principal,
although the particulars may be arranged and the matter negotiated and completed between the principal
and the purchaser directly. Macondray & Co. v. Sellner, 33 Phil. 370 (1916).
o Thus, when the terms of the brokerage arrangement is to the effect that entitlement to the commission was
contingent on the purchase by a customer of a fire truck, the implicit condition being that the broker would
earn the commission if he was instrumental in bringing the sale about. Since the agent had nothing to do
with the sale of the fire truck, he is not entitled to any commission at all. Guardex v. NLRC, 191 SCRA
487 (1990).
o Doctrine of “Efficient Procuring Cause”. – In agencies to sell where the entitlement of the commission
is subject to the successful consummation of the sale with the buyer located by the agent, said agent would
still be entitled to the commission on sales consummated after the expiration of his agency when the facts
show that the agent was the “efficient procuring cause in bringing about the sale”. Pratts v. Court of
Appeals, 81 SCRA 360 (1978).
o Although the sale of the object of agency was perfected three days after expiration of the agency period,
agent would still be entitled to receive commission stipulated based on doctrine in Pratts v. Court of
 Appeals, 81 SCRA 360 (1978), that when agent was the efficient procuring cause in bringing about the
sale he was entitled to compensation. Manotok Bros. Inc. v. Court of Appeals, 221 SCRA 224 (1993).
o Although the buyer was introduced by the broker to the seller, nonetheless broker was not entitled to
receive the commission even with the consummation of the sale because the lapse of the period of more
than one (1) year and five (5) months between the expiration of broker’s authority to sell and the
consummation of the sale to the buyer, is significant index of the broker’s non-participation in the really
critical events leading to the consummation of said sale. Broker was not the efficient procuring cause in
bringing about the sale and therefore not entitled to the stipulated broker’s commission. Inland Realty
v. Court of Appeals, 273 SCRA 70 (1997).
o The term “procuring cause” in describing a broker’s activity, refers to a cause originating a series of
events which, without break in their continuity, result in the accomplishment of the prime objective of the
employment of the broker—producing a purchaser ready, willing and able to buy on the owner’s terms. To
be regarded as the “procuring cause” of a sale as to be entitled to a commission, a broker’s efforts must
have been the foundation on which the negotiations resulting in a sale began. Medrano v. Court of
Appeals, 452 SCRA 77 (2005). Ticong v. Malim, 819 SCRA 116 (2017).

B. FROM EMPLOYMENT CONTRACT

C. FROM CONTRACT FOR A PIECE-OF-WORK

D. AGENCY TO SELL DIFFERENTIATED FROM A CONTRACT OF SALE

 When the agency agreement compels the agent to pay for the products received from the principal within the
stipulated period, even when there has been no sale thereof to the public, the underlying relationship is not one of
contract of agency to sell, but one of actual sale.
 A true agent does not assume personal responsibility for the payment of the price of the object of the agency; his
obligation is merely to turn-over to the principal the proceeds of the sale once he receives them from the buyer.
 The primordial difference between a sale and an agency to sell is the transfer of ownership or title over the property
subject of the contract. In an agency, the principal retains ownership and control over the property and the agent
merely acts on the principal's behalf and under his instructions in furtherance of the objectives for which the agency
was established. On the other hand, the contract is clearly a sale if the parties intended that the delivery of the
property will effect a relinquishment of title, control and ownership in such a way that the recipient may do with the
property as he pleases.
E. FROM AGRICULTURAL TENANCY
 There is no agency relationship existing in a tenancy arrangement over agricultural land:
 The tenant farmer, who has possession of the land, and has sole discretion in all matters of agricultural production,
acts for his sole benefit and not under the control of the landowner, whose only right under the set-up is to demand
annually the delivery of the agreed number of cavanes of palay, without any concern about how the cultivation
could be improved in order to yield more produce. Jusayan v.Sombilla, G.R. No. 163928, 21 Jan. 2015.

II. FORMS AND KINDS OF AGENCY

1. How Agency May Be Constituted (Art. 1869)

 There are provisions of law which require certain formalities for particular contracts:
a. the first is when the form is required for the validity of the contract;
b. the second is when it is required to make the contract effective as against third parties; and
c. the third is when the form is required for the purpose of proving the existence of the contract.
 A contract of agency to sell on commission basis does not belong to any of these three categories, hence it is valid
and enforceable in whatever form in may be entered into. Consequently, when the agent signs her signature on
any face of the receipt showing that she receives the jewelry for her to sell on commission, she is bound to the
obligations of an agent. Lim v. Court of Appeals, 254 SCRA 170 (1996).
 Where there is no showing that Brigida consented to or authorized the acts of Deganos, any attempt to foist liability
on her through the supposed agency relation with Deganos is groundless. It was grossly negligent of petitioners to
entrust to Deganos, not once or twice but on at least six occasions as evidenced by receipts, several pieces of
jewelry of substantial value without requiring a written authorization from his alleged principal. Bordador v. Luz,
283 SCRA 374 (1997).
A. FROM SIDE OF THE PRINCIPAL (ART. 1869)
 Where the principal has acquiesced in the act of his agent for a long period of time, and has received and
appropriated to his own use the benefits result in from the acts of his agent, courts cannot declare the acts of the
agent null and void.
B. FROM SIDE OF THE AGENT (ARTS. 1870, 1871 AND 1872)
 Whether or not an agency has been created is determined by the fact that one is representing and acting for
another. The law makes no presumption of agency; proving its existence, nature and extent is incumbent upon the
person alleging it.
C. FROM SIDE OF THIRD PARTIES/PUBLIC (ARTS. 1873 AND 1408; 1921 AND 1922)
(i) Agency Is Not Presumed to Exist
 Every person dealing with an agent is put upon inquiry and must discover upon his peril the agent’s authority.
 One who alleges the existent of an agency relationship must prove such fact for the law does not make presumption
of agency and proving its existence, nature and extent is incumbent upon the person alleging it.
 Persons dealing with an assumed agent are bound at their peril, and if they would hold the principal liable, to
ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted,
the burden of proof is upon them to prove it.
(ii) Agency by Estoppel With Respect to Third Parties
 The registered owner who placed in the hands of another an executed document of transfer of the registered land,
was held to have effectively represented to a third party that the holder of such document is authorized to deal with
the property. Blondeau v. Nano, 61 Phil. 625 (1935).
 “One who clothes another apparent authority as his agent, and holds him out to the public as such, cannot be
permitted to deny the authority of such person to act as his agent, to the prejudice of innocent third parties dealing
with such person in good faith and in the following pre-assumptions or deductions, which the law expressly directs
to be made from particular facts, are deemed conclusive.”
 An agency by estoppel - similar to the doctrine of apparent authority, requires proof of reliance upon the
representations, and that, in turn, needs proof that the representations predated the action taken in reliance.
Country Bankers Insurance Corp. v Keppel Cebu Shipyard, 673 SCRA 427 (2012).
 By agency by estoppel or doctrine of apparent authority, the principal is bound by the acts of his agent with the
apparent authority which he knowingly permits the agent to assume or which he holds the agent out to the public
as possessing.  Republic v. Banez (2015)
2. KINDS OF AGENCY
a. Based on Business or Transactions Encompassed (Art. 1876): General or Universal Agency versus Special or Particular
Agency
 Universal Agent - is authorized to do all acts for his principal which can lawfully be delegated to an agent; such an agent may be
said to have universal authority.
 General Agent - is authorized to do all acts pertaining to a business of a certain kind or at a particular place, or all acts pertaining
to a business of a particular class or series. He has usually authority expressly conferred in general terms or in effect made general
by the usages, customs or nature of the business which he is authorized to transact.
 Special Agent is authorized to do some particular act or to act upon some particular occasion; he acts usually in accordance with
specific instructions or under limitations necessarily implied from the nature of the act to be done.
b. Whether It Covers Legal Matters: Attorney-at-Law versus Attorney-in-Fact
 The relation of attorney and client is in many respects one of agency, and the general rules of agency apply to such relation;
 Therefore, only the employee-client, not his counsel, can impugn the consideration of the compromise as being unconscionable.
 On the other hand, although a client has undoubtedly the right to compromise a suit without the intervention of his lawyer, the same
cannot be done to defraud the lawyer of the earned attorney’s fees.
 An attorney cannot, without a client’s authorization, settle the action or subject matter of the litigation, even when he believes that
such a settlement will best serve his client’s interest.
c. Whether It Covers Acts of Administration or Acts of Dominion: General Power of Attorney versus Special Power of Attorney
(1) Formal Requisite: Must Be in Writing and Signed by Principal
 When no particular formality is required by law, then the principal may appoint his agent in any form which might suit his convenience
or that of the agent
 A power of attorney to convey real property need not be in a public document, it need only be in writing, since a private document is
competent to create, transmit, modify, or extinguish a right in real property.
(2) How Powers of Attorney Construed or Interpreted
 General rule is that a power of attorney must be strictly construed; it will be held to grant only those powers that are specified, and
the agent may neither go beyond nor deviate from the power of attorney.
 Contracts of agency and general powers of attorney, must be interpreted in accordance with the language used by the parties—the
real intention of the parties is primarily to be determined from the language used, and to be gathered from the whole instrument.
o In case of doubt, resort must be had to the situation, surroundings, and relations of the parties.
o Whenever it is possible, effect is to be given to every word or clause used by the parties, for it is to be presumed that the
parties said what they intended to say and that they used each word or clause with sole purpose, and that purpose is, if
possible, to be ascertained and enforced.
o If by one construction the contract would be illegal, and by another equally permissible construction would be lawful, the
latter must be adopted.
o The acts of the parties will be presumed to be done in conformity with and not contrary to the intent of the contract.
o The meaning of general words must be construed with reference to the specific object to be accomplished and limited by
the recitals made in reference to such object.
(3) Notarized Power of Attorney
 When a special power of attorney is duly notarized, the notarial acknowledgment is prima facie evidence of the fact of its due
execution—a buyer has every reason to rely on a person’s authority to sell a particular property owned by a corporation on the basis
of a notarized board resolution—undeniably the buyer is an innocent purchaser for value in good faith.

3. GENERAL POWERS OF ATTORNEY (Art. 1877)

 Agency couched in general terms comprises only acts of administration, even if principal should state that he withholds no power or
that the agent may execute such acts as he may consider appropriate, or even though the agency should authorize a general and
unlimited management.
 When the authority is couched in general terms, without mentioning any specific power to sell or mortgage or to do other specific
acts of strict dominion, then only acts of administration are deemed conferred.
 The power of administration does not include acts of disposition, which are acts of strict ownership.
 “Acts of Administration” means to perform acts which the principal himself may pursue in the ordinary course of the business, thus:
o When agent has been given general control and management of the business, he is deemed to have power to employ such
agents and employees as are usual and necessary in the conduct of the business, and needs no SPA for such purpose.
o A co-owner who is made an attorney-in-fact, with the same power and authority to deal with the property which the principal
might or could have had if personally present, may retain the services of legal counsel to preserve the ownership and
possession of the principal’s property.
o Admissions obtained by agent from the adverse party prior to the formal amendment of complaint that included principal as
a party, can be availed of by the principal, since an agent may do such acts as may be conducive to the accomplishment of
the purpose of the agency, admissions secured by the agent within the scope of the agency ought to favor the principal.
o Power of administration does not include dispositions or encumbrances which are acts of strict ownership. Authority to
dispose cannot proceed from authority to administer, and vice versa, for the two powers may only be exercised by an agent
by following the provisions Arts. 1876 to 1878.

4. SPECIAL POWERS OF ATTORNEY

 Although document is entitled “Special Power of Attorney” its wordings show that it sought only to establish an agency that comprises
all the business of the principal within the designated locality, but couched in general terms, and consequently was limited only to
acts of administration. A general power permits the agent to do all acts for which the law does not require a special power, and only
covers acts of administration. Dominion Insurance Corp. v. Court of Appeals, 376 SCRA 239 (2002).
 Even when instrument’s title is “General Power of Attorney,” but its operative clause contains an authority to sell, it constituted the
requisite special power of attorney to sell a piece of land. Thus, there was no need to execute a separate and special power of
attorney since the general power of attorney had expressly authorized the agent or attorney in fact the power to sell the subject
property.
 Article 1878 does not state that a special power of attorney must be in writing. As long as the mandate is express, such authority
may be either oral or written. We unequivocably declare that the requirement under Art. 1878 refers to the nature of the authorization
and not to its form. Be that as it may, the authority must be duly established by competent and convincing evidence other than the
self-serving assertion of the party claiming that such authority was verbally given. Patrimonio v. Gutierrez, 724 SCRA 636 (2014).

(1) WITH RESPECT TO MATTERS INVOLVED IN LITIGATION INVOLVING THE PRINCIPAL:

(a) To Compromise
(b) To Submit Questions to Arbitration
(c) To Renounce the Right to Appeal from a Judgment
(d) To Waive Objections to the Venue of an Action
(e) To Abandon a Prescription Already Acquired
 Power to Compromise Excludes Power to Submit to Arbitration; Vice Versa (Art. 1880)
o Power to Bring Suits in Behalf of the Principal to collect amounts accruing in the ordinary course of business properly belonging
to the class of acts described in Art. 1713 of the old Civil Code as “acts of strict ownership”. Nonetheless, the provision in the
power of attorney to “exact the payment of sums of money by legal means” must be construed to be an express power to sue.
o Although counsel asserted verbal authority to compromise, however, Sec. 23, Rule 138 require a “special authority” for attorneys
to compromise the litigation of their clients. While the same does not state that the special authority be in writing, courts has every
reason to expect, that, if not in writing, the same be duly established by evidence other than the self-serving assertion of counsel
himself – for, authority to compromise cannot lightly be presumed. xHome Insurance Co. v. United Shipping Lines, 21 SCRA 863
(1967).

(2) WITH RESPECT TO MONEY OR FUNDS OF THE PRINCIPAL:

(a) To Make Payments “Are Not Usually Considered as Acts of Administration”
 The payment of claims by the area manager of an insurance company is not an act of administration, and that since the settlement
of claims was not included among the acts enumerated in the SPA issued by the insurance company, nor is of a character similar to
the acts enumerated therein, then a special power of attorney was required before such area manager could settle the insurance
claims of the insured. Consequently, the amounts paid by the area manager to settle such claims cannot be reimbursed from the
principal insurance company. Dominion Insurance Corp. v. Court of Appeals, 376 SCRA 239 (2002).
(b) To Collect or Receive Payments on Behalf of the Principal
 The right of an agent to indorse check will not be lightly inferred. A salesman with authority to collect money for his principal does
not have the implied authority to indorse checks received in payment. Any person taking checks made payable to a corporation which
can act only by agents does so at his peril, and must abide by the consequence if the agent who indorses the same is without
authority.
(c) To Loan or Borrow Money
EXCEPT: Agent May Borrow Money When It Is Urgent and Indispensable for the Preservation of the Things Which
Are Under Administration
 An SPA is necessary for an agent to borrow money, unless it be urgent and indispensable for the preservation of the things which
are under administration. Yasuma v. HeirsofCecilio S. De Villa, 499 SCRA 466 (2006).
 Wife may not be held liable for the mortgage loan contracted by the husband personally, where the power of attorney given to the
husband was limited to a grant of authority to mortgage land titled in the wife’s name.
 Entrusting by the principal of blank pre-signed checks to the agent, does not give the agent the implied authority to enter into loan in
the name of the principal. The contract of agency and the special fiduciary relationship inherent in this contract must exist as a matter
of fact. The person alleging it has the burden of proof to show, not only the fact of agency, but also its nature and extent. Patrimonio
v. Gutierrez, 724 SCRA 636 (2014)

(3) WITH RESPECT TO OBLIGATIONS DUE TO/FROM THE PRINCIPAL:

(a) To Effect Novations Which Put an End to Obligations Already in Existence at the Time the Agency Was Constituted
(b) To Waive Any Obligation Gratuitously
 The SPAs executed by Ng Wee constituted Wincorp as agent relative to the borrowings of Power Merge, allegedly without risk of
liability on the part of Wincorp. However, the SPAs do not specifically include a provision empowering Wincorp to excuse Power
Merge from repaying the amounts it had drawn from its credit line via the Side Agreements. They merely authorized Wincrop to
agree, deliver, sign, execute loa documents relative to the borrowing of a corporate borrower. Otherwise stated, Wincorp had no
Authority to absolve Power Merge from the latter’s indebtedness to its lenders. Doing so therefore violated the express terms of the
SPAs that limited Wincorp’s authority to contracting loan. Virata v. Ng Wee (2017)
(c) To Ratify or Recognize Obligations Contracted Before the Agency
 Where a wife gave her husband a power of attorney “to loan and borrow money” and to mortgage her property, that fact does not
carry with it or imply that he has a legal right to sign her name to a promissory note which would make her liable for the payment of
a pre-existing debt of the husband or that of his firm, for which she was not previously liable, or to mortgage her property to secure
the pre-existing debt.
 Where the power granted to attorney-in-fact was to the end that the principal-seller may be able to collect the balance of the selling
price of the printing establishment sold, such agent had no power to enter into new sales arrangements with the buyer, or to novate
the terms of the original sale.
 (4) WITH RESPECT TO IMMOVABLE PROPERTIES:
(a) To Enter Into Any Contract by Which Ownership of an Immovable Is Trans-mitted or Acquired,
Gratuitously or For a Valuable Consideration
(b) Sale of a Piece of Land or Interest Therein (Art. 1874)
 Old Civil Code: Under Sec. 335 of the Code of Civil Procedure, an agreement for the leasing for a longer period than one year, or for
the sale of real property, or of an interest therein, is invalid if made by the agent unless the authority of the agent be in writing and
subscribed by the party sought to be charged. Rio y Olabbarrieta v.Yutec, 49 Phil 276 (1926).
 Where nephew in his own name sold a house and lot to the company, when in fact it was the uncle’s property, but in the estafa case
filed by the company against the nephew, the uncle swore that he had authorized his nephew to sell the property, the uncle can be
compelled in the civil action to execute the deed of sale covering the property. “It having been proven at the trial that he gave his
consent to the said sale, it follows that the defendant conferred verbal, or at least implied, power of agency upon his nephew Duran,
who accepted it in the same way by selling the said property. The principal must therefore fulfill all the obligations contracted by the
agent, who acted within the scope of his authority. (Arts. 1709, 1710 and 1727) Gutierrez Hermanos v. Orense, 28 Phil. 572
(1914).
 Authority found in a power of attorney “to sell any kind of realty that might belong” to the principal is deem to include also such as
the principal might afterwards have or acquire during the time it was in force. xKatigbak v. Tai Hing Co., 52 Phil. 622 (1928).
 Express mandate required by Art. 1874 is for power of attorney to expressly empower the agent “to sell land” belonging to the
principal. It need not contain a specific description of the land to be sold, such that giving the agent the power to sell “any or all tracts,
lots, or parcels” of land belonging to the principal is adequate. xDomingo v. Domingo, 42 SCRA 131 (1971).
 The rule under Art. 1874 that “when the sale of a piece of land or any interest therein is through an agent, the authority of the latter
shall be in writing; otherwise, the sale shall be void,” applies when the sale of corporate piece of land is pursued through an officer
without written authority. City-Lite Realty Corp. v. Court of Appeals, 325 SCRA 385 (2000).
 Art. 1878 provides that an SPA is necessary to enter into any contract by which the ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable consideration, or to create or convey real rights over immovable property, or for any
other act of strict dominion. Any sale of real property by one purporting to be the agent of the registered owner without any authority
therefore in writing from the said owner is null and void; declarations of the agent alone are generally insufficient to establish the
fact or extent of her authority.” xLitonjua v. Fernandez, 427 SCRA 478 (2004).
 Under Art. 1892, when a SPA to sell a piece of land does not contain a clear prohibition against the agent in appointing a substitute,
the appointment of a substitute to execute the contract is within the limits of the authority given by the principal, but then agent would
have to be responsible for the acts of the sub-agent. Escueta v. Lim (2007)
 Under Art. 1878, an SPA is necessary for agent to enter into a contract by which the ownership of an immovable property is
transmitted or acquired, either gratuitously or for a valuable consideration. Absence of a written authority makes sale of a piece of
land is ipso jure void, precisely to protect the interest of an unsuspecting owner from being prejudiced by the unwarranted act of
another. However, we apply estoppel principle to enforce of the sale with respect to the principal.Pahud v. Court of Appeals, 597
SCRA 13 (2009).
 As a general rule, an agency may be oral; however, Art. 1874 provides that the contract of agency must be written for the validity of
the sale of a piece of land or any interest therein; otherwise, the sale shall be void. A related provision, Art. 1878 states that special
powers of attorney are necessary to convey real rights over immovable properties. Yoshizaki v. Joy Training Center of Aurora,
702 SCRA 631 (2013).
(c) Agents Cannot Buy Property of Principal Unless Authorized (Art. 1491[2])
 Prohibition against agents purchasing property held for sale or management is not absolute; when so authorized by principal, agent
is not disqualified from purchasing property held under an agency to sell. xOlaguer v. Purugganan, Jr., 515 SCRA 460 (2007).
(d) Power to Sell Excludes Power to Mortgage, Vice Versa (Art. 1879)
 Where the SPA authorized agent “By means of a mortgage of my real property, to borrow and lend sums in cash, at such interest
and for such periods and conditions as he may deem property and to collect or to pay the principal and interest thereon when due,”
while it did not authorize the agent to execute deeds of sale with right of repurchase over the property of the principal, nonetheless
would validate the main contract of loan entered into with the deed of sale with right of repurchase constituting merely an equitable
mortgage. xRodriguez v. Pamintuan and De Jesus, 37 Phil 876 (1918).
 Where SPA vested agent with authority “for me and in my name to sign, seal and execute, and as my act and deed, deliver any
lease, any other deed for conveying any real or personal property” or “any other deed for the conveying of any real or personal
property,” it does not carry with it or imply that agent has power to execute a promissory note or a mortgage to secure its payment.
xPNB v. Tan Ong Sze, 53 Phil. 451 (1929).
 An SPA to mortgage real estate is limited to such authority to mortgage and does not bind the grantor personally to other obligations
contracted by the grantee (in this case the personal loan obtained by the agent in his own name from the PNB). In other words, the
power to mortgage does not include the power to obtain loans, especially when the grantors allege that they had no benefit at all
from the proceeds of the loan taken by the agent in his own name from the bank. xPNB v. Sta. Maria, 29 SCRA 303 (1969).
 In Agency, in order to bind the principal by a mortgage on real property executed by an agent, it must upon its face purport to be
made, signed and sealed in the name of the principal, otherwise, it will bind the agent only. xGozun v. Mercado 511 SCRA 305
(2006).
(e) To Lease Real Property for More Than One Year
 Art. 1878 expresses that a special power of attorney is necessary to lease any real property to another person for more than one
year, for such is considered not merely an act of administration but an act of strict dominion or of ownership. xShopper’s Paradise
Realty v. Roque, 419 SCRA 93 (2004).
 Where lease contract involves the lease of real property for a period of more than one year was entered into by an agent on behalf
of the principle, Art. 1878 requires that the agent be armed with an SPA to lease the premises; otherwise, the provisions of the
contract of lease, including the grant therein of an option to purchase to the lessee, would be unenforceable. Vda. De Chua v. IAC,
229 SCRA 99 (1994).
 (5) WITH RESPECT TO SPECIFIC CONTRACTS “DEEMED PERSONAL” TO THE PRINCIPAL:
(a) To Accept or Repudiate an Inheritance
(b) To Make Gifts
(c) To Bind the Principal to Render Some Service Without Compensation
(d) To Bind the Principal in a Contract of Partnership
(e) To Obligate the Principal as a Guarantor or Surety
 When principal empowered his agent to mortgage his property, as well as a contract of surety, but the agent only entered into a
contract of mortgage, no inference can be made to make the principal liable as a surety. xWise and Co. v. Tanglao, 63 Phil. 372
(1936).
 Where a power of attorney is executed primarily to enable manager of a mercantile business, to conduct its affairs for and on behalf
of the principal-owner, i.e., “act and deed delivery, any lease, or any other deed for the conveying any real or personal property” and
“act and deed delivery, any lease, release, bargain, sale, assignment, conveyance or assurance, or any other deed for the conveying
any real or personal property,” such cannot be interpreted as giving the manager power to bind the principal to a contract of guaranty
or surety unconnected with the business. xDirector v. Sing Juco, 53 Phil 205 (1929).
 SPA to approve loans does not carry power to bind the principal to a guaranty even to the extent of the amount for which a loan could
have been granted by agent. “Guaranty is not presumed, it must be expressed and cannot be extended beyond its specified limits
(Director v. Sing Juco, 53 Phil. 205). Where a wife gave her husband power to loan money, such fact did not authorized him to make
her liable as a surety for the payment of the debt of a third person.
 A power of attorney authorizing agent to bind principal to a surety bond to a particular entity, cannot be relied upon as sufficient
authority to a surety bond issued to other persons or entity. xCountry Bankers Insurance v Keppel Cebu Shipyard, 673 SCRA 427
(2012).

(f) Any Other Act of Strict Dominion

 Instrument which grants agent power “To follow-up, ask, demand, collect and receipt for my benefit indemnities or sum due me
relative to the sinking of M.V. NEMOS in the vicinity of El Jadida, Casablanca, Morocco on the evening of February 17, 1986,” are
SPAs, and exclude any intent to grant a GPA or to constitute a universal agency. Being SPAs, they must be strictly construed, and
cannot be read to give power to the attorney-in-fact “to obtain, receive, receipt from” the insurance company the proceeds arising
from the death of the seaman-insured, especially when the commercial practice for group insurance of this nature is that it is the
employer-policyholder who took out the policy who is empowered to collect the proceeds on behalf of the covered insured or their
beneficiaries. Pineda v. CA, 226 SCRA 754 (1993).

5. DOCTRINE OF IMPLIED POWERS EMANATING FROM EXPRESS POWERS

 Specific grants of “Powers of Dominion” necessarily includes those implied powers or those necessary to fulfill those powers of
ownership granted, thus:
 Empowering the agent to sell hemp in a foreign country, carries with it implied power to make and enter into the usual and customary
contract for its sale, which may provide for settlement of issues by arbitration. xRobinson Fleming v. Cruz, 49 Phil 42 (1926).
 An SPA to make an assignment of credits, hire lawyers to take charge of actions necessary or expedient for principal’s interests, and
defend suits brought against principal, necessarily implies authority to pay for professional services thus engaged, which includes
assignment of the judgment secured for the principal in settlement of outstanding fees. Municipal Council of Iloilo v. Evangelista, 55
Phil. 290 (1930).
 SPA to sell “for such price or amount” is broad enough to cover exchange in the Deed of Assignment between the properties and the
corresponding corporate shares in a corporation, with the latter replacing the cash equivalent of the option money initially agreed to
be paid by the corporation under the MOA. xHernandez-Nievera v. Hernandez, 642 SCRA 646 (2011).