Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Distinctions
1. Basis
Lease
Agency of is
Workrepresentation
2. Agent represents the principal
3. Agent exercises discretionary powers
4. 3 persons involved principal, agent, 3rd person w/ whom the agent contracted
5. Basis
1. Relatesistoemployment
commercial or business transactions
2. Lessor does not represent his employer
3. Lessor performs only ministerial functions
4. 2 persons involved
5. relates to matters of manual execution where the servant acts under the direc
tion and control of the master
Agency
Independent Contractor
1. A acts under the control of P
2. A of A may be may be controlled by P
3. A can bind P in case of tort or injury
4. Authorized
1. Negligence to
of work
A is according
imputable to his
P own method w/o being subject to P s control
except insofar as the result is concerned
2. EE s of contractor are not EE s of the P
3. Cannot bind P in case of tort or injury
4. Negligence of the contractor is not imputable to P
Agency
Partnership
1. A acts for the P
2. A is controlled by P
3. A assumes NO liability in contracts entered into w/in the scope of his author
ity
4. Partner
1. A does not
actsshare
for himself,
in the profits
the firm and for his partners
2. P is not controlled by other P s unless there is an agreement to the effect
3. P assumed liability for himself and the firm
4. P shares in the profits and losses
Sale to Sell
Agency
1. A receives the goods as the goods of P (ownership is not transferred)
2. A delivers the proceeds/price of the sale
3. A can return the goods in case he is unable to sell the same
4. A is bound to act according to the instruction of P in dealing w/ the goods
5. Essence is the appointment of one to act for another
6. Buyer
1. A relationship
receives goods
w/c often
fromresults
seller as
in owner
sale
2. B pays the price
3. B, as a general rule, cannot return the goods sold
4. B can deal with the goods as he pleases, being the owner
5. Essence is the transfer of title from S to B
6. A subsequent step in the transaction
ImpliedbyAgency
Agency Estoppel
1. There is no agency at all, but the one assuming to acts as agent has apparent
or ostensible, but NOT real authority to represent another
2. Can be invoked only by a 3rd person who, in good faith, relied on the conduct
of P in holding A out as being authorized
3. A is no agent at all, and, as against P, has none of the rights of an agent
4. There
1. Shouldisbeanrestricted
actual agency
to cases in w/c the authority is not real but apparent
2. Reliance by the 3rd person is not necessary because A is a real agent
3. A is a real agent w/ authority to act on behalf of the principal
4. A fact to be proved by deductions or inferences from other facts
Broker
Commission Agent
1. Is in possession of the goods of P
2. Has a relation w/ P and the goods
3. Only
1. Receives
actsaascommission
an intermediary,
upon thedoes
successful
not posses
conclusion
the goods
of the transaction
2. Has no relation with the goods
3. Earns his pay merely bringing the buyer and seller together, even if no sale
is eventually made
Authority
Power
1. May be considered the source or cause
2. An act is w/in the authority of A if it is not a violation of his duty to P
13.May
An be
A who
considered
has authority
the effect
also or
hasthe
thelimitation
power to bind
uponPA s ability to bind P
2 An act is w/in A s power if he has the legal ability to bind P to a 3rd person,
although the act constitutes a violation of his duty to P
3 Power cannot exist without authority
Instructions
Authority
1. The sum total of the powers committed or permitted to A by P
Bank Teller
Agent (Juridical
(Physical
Possession)
Possession)
1. Can assert even against P, an independent, autonomous right to retain the mon
ey or goods received in consequence of the agency, as when P fails to reimburse
him for advances he has made
2. When A misappropriates or fails to turn over P s proceeds of goods he was commi
ssioned
1. Payment
or by
authorized
3rd person
to to
sell,
a teller,
he is guilty
who isofa mere
estafakeeper of the funds, is paym
ent to the bank itself; T has no independent right or title to retain or posses
the funds as against the bank
2. If T misappropriates money receives by him for the bank, he is guilty of qual
ified theft
Agency
Trust
Agent usually
Trustee may holdholds
legal
no title toat the
all property
Agent acts
Trustee mayinacttheonname
his own
of principal
name
Agencyismayusually
Trust be terminated
ended byortherevoked
accomplishment
at any time
of the purposes for which it was fo
rmed
Agencyinvolves
Trust may not control
be connected
over property
at all with property
Agent hasdoes
Trustee authority
not necessarily
to make contracts
or even possesses
which willsuch
be authority
binding ontoisbind
principal
the trusto
r or the cestui que trust
AAgency
trustismayreally
be thea result
contractual
of therelation
contract or not; it may be created also by law
Definition:
ART 1868. By the contract of agency a person binds himself:
1. to render some service or
2. to do something in representation or on behalf of another,
with the consent or authority of the latter.
Agency
1. Definition - A relationship w/c implies a power in an agent to contract with
a 3rd person on behalf of a principal
2. Purpose - To extend the personality of the principal through the facility of
the agent
3. Nature of Relation Fiduciary in character since it is based on trust and conf
idence
Characteristics of Contract of Agency
1. Consensual perfected by mere consent
2. Principal it can stand on its own
3. Nominate it has its own name
4. Either:
a. Unilateral if it is gratuitous, because it creates obligations only for one o
f the parties
b. Bilateral if it is for compensation, because it gives rise to reciprocal righ
ts and obligations
5. Preparatory entered into as a means to an end; i.e., the creation of other tr
ansactions or contracts
6. Based on fiduciary relationship
Essential Elements of Agency
1. There is consent, express or implied, of the parties to establish the relatio
nship
2. The object is the execution of a juridical act in relation to 3rd persons
3. The agent acts as a representative and not for himself
4. The agent acts within the scope of his authority
Capacity of the Parties
1. Principal
a. any person who is capacitated may be a principal
b. may be a natural or juridical person
2. Agent since he assumes no personal liability, he does not have to possess ful
l capacity to act insofar as 3rd persons are concerned
a. The agent must be competent to bind himself to the principal
b. So far as 3rd persons are concerned, principal must be the one capacitated
Acts That May be Delegated to an Agent
1. General Rule What a man may do in person, he may do thru another
2. Exceptions
a. Personal Acts if personal performance is required
* right to vote
* making of a will
* contract of marriage
* statements required to be under oath
* member of BOD cannot act validly by proxy
* agent cannot delegate to a sub-agent performance of acts w/c he has been appoi
nted to perform in person
b. Criminal Acts
c. Acts not allowed by law
* alien cannot purchase land through a Filipino
Fiduciary Nature of Agency
1. A is estopped from asserting his interest adverse to P
2. A must not act as an adverse party
3. A must not act for an adverse party
4. A must not use or disclose secret information
5. A must give notice of material facts summons to A is summons to P
Qui facit per alium facit per se
He who acts though another, acts for himself
ART 1869. Agency may be:
1. express, or
2. implied:
a. from the acts of the principal,
b. from his silence or lack of action, or
c. 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.
Classification of Agency:
1. Manner of creation
a. Express
b. Implied
2. As to its character
a. Gratuitous
b. Compensated or onerous
3. Extent of business covered
a. General = comprises all the business of the principal
b. Special = comprises one or more special transaction
4. Authority conferred
a. Couched in general terms = deemed to comprise only acts of administration (18
77)
b. Couched in specific terms = authorizing only the performance of a specific ac
t or acts (1878)
5. Nature & effects
a. Ostensible or representative = agents act in the name and representation of t
he principal (1868)
b. Simple or commission = agents act in his own name but for the account of the
principal
ART 1870. Acceptance by the agent may also be:
1. express, or
2. implied:
a. from his acts which carry out the agency, or
b. from his silence or inaction according to the circumstances.
Implied Acceptance:
ART 1871. Between persons who are PRESENT, the acceptance of the agency may also
be implied if:
1. the principal delivers his power of attorney to the agent and
2. the agent receives it without any objection.
Power of Attorney
1. Definition An instrument in writing by which one person, as principal, appoin
ts another as his agent and confers upon him the authority to perform certain sp
ecified acts or kinds of acts on behalf of the principal
2. Purpose To evidence the authority of A to 3rd parties w/in whom A deals
Implied Acceptance:
ART 1872. Between persons who are ABSENT, the acceptance of the agency CANNOT be
implied from the silence of the agent, except:
1. When the principal transmits his power of attorney to the agent, who receives
it without any objection;
2. When the principal entrusts to him by letter or telegram a power of attorney
with respect to the business in which he is habitually engaged as an agent, and
he did not reply to the letter or telegram.
Between Persons Who are Absent
1. General Rule If both P and A are absent, acceptance of the agency by A is NOT
implied by silence or inaction
2. Exceptions When there is implied acceptance:
a. When P transmits (sends) his power of attorney to A, who receives it without
any objection; (must sent a reply, acknowledging receipt)
b. When P entrusts to A (by letter or telegram) a power of attorney with respect
to the business in which A is habitually engaged as an agent, and A did not rep
ly to the letter or telegram (no need to reply)
ART 1873. If a person specially informs another or states by public advertisemen
t that he has given a power of attorney to a third person, the latter thereby be
comes a duly authorized agent,
1. in the former case with respect to the person who received the special inform
ation, and
2. in the latter case with regard to any person.
The power shall continue to be in full force until the notice is rescind
ed in the same manner in which it was given.
2 Ways of Giving Notice of Agency
1. By SPECIAL INFORMATION the person appointed as agent is considered such w/ re
spect to the person to whom it was given
2. By PUBLIC ADVERTISMENT the agent is considered as such w/ regard to any perso
n
Note
The power of attorney must be revoked in the same manner in w/c it was g
iven.
ImpliedbyAgency
Agency Estoppel
(1881-1882)
(1911)
No agency
There is anatactual
all agency
If caused by principal, he is liable to 3rd persons who relied on the misreprese
ntation
Principal
If
Agent
Can caused
beisinvoked
never
is agent,
by always
personally
only liable
then
by a 3rd
Aliable
isperson
the only
whoone
in good
liablefaith, relied
Reliance
An
Agent
apparent
is abyreal
3rd agent
agent
person
is nonot
de
agent
jure
necessary
atagent
all
ART 1874. When a sale of a piece of land or any interest therein is through an a
gent, the authority of the latter shall be in writing; otherwise, the sale shall
be void.
Q ACTUALLY this is voidable since principal can ratify under 1901, 1910(2)
Q Agency to Purchase Land = covered by 1878(5)
Q Real estate broker is not within Art 1874 where his authority is limited to fi
nding prospective buyer
ART 1875. Agency is presumed to be for a compensation, unless there is proof to
the contrary.
Double Agency
Agent acting at once for both contracting parties
This is disapproved by law unless:
1. the agent acted with full knowledge and free consent of both principal or
2. his employment was merely to bring parties together
ART 1876. An agency is either general or special.
The former comprises all the business of the principal.
The latter, one or more specific transactions.
Classification of an Agent:
1. Universal Agent = employed to do all acts that the principal may personally d
o and which he can lawfully delegate to another the power of doing
2. General Agent = employed to do all acts connected with a particular trade, bu
siness, or employment
3. Special or particular agent = authorized to act in one or more specific trans
action, or to do one or more specific acts, or to act upon a particular occasion
(atty-at-law; auctioneer; broker; factor)
Special Agent
General
Authorized to do only
all acts
one or
connected
more specific
with theacts
business
in pursuance of particular instr
uctions
Authorized to conduct a single
series transaction
of instructions
or ainvolving
series ofatransactions
continuity ofnotservice
invol
ving continuity of service
May bind his principal by an act within the scope of his authority although it m
ay be contrary
Cannot bind thetoprincipal
his special
in ainstructions
manner beyond or outside the specific acts which
he is authorized to perform on behalf of the principal
Continuing and unrestricted by limitations other than those which confine the au
thority within the bounds of what is usual, proper, or necessary
Temporary and naturally suggests limitations of power of which 3rd persons must
inform themselves
Apparent authority does not terminate without notice to 3rd party
3rd party by
Statement musttheinquire
principal
aboutofthe
thetermination
former s authority would ordinarily be regarded
as advisory
Such statements will be regarded as words limiting the authority
ART 1877. An agency couched in general terms comprises only acts of administrati
on,
1. even if the principal should state:
a. that he withholds no power or
b. that the agent may execute such acts as he may consider appropriate, or
2. even though the agency should authorize a general and unlimited management.
(mem) ART 1878. Special powers of attorney are necessary in the following cases:
1. To make such payments as are not usually considered as acts of administration
;
2. To effect novations which put an end to obligations already in existence at t
he time the agency was constituted;
3. To:
a. compromise,
b. submit questions to arbitration,
c. renounce the right to appeal from a judgment,
d. waive objections to the venue of an action or
e. abandon a prescription already acquired;
4. To waive any obligation gratuitously;
5. To enter into any contract by which the ownership of an immovable is transmit
ted or acquired either gratuitously or for a valuable consideration;
6. To make gifts, except:
a. customary ones for charity or
b. those made to employees in the business managed by the agent;
7. To loan or borrow money, unless the latter act be urgent and indispensable fo
r the preservation of the things which are under administration;
8. To lease any real property to another person for more than one year;
9. To bind the principal to render some service without compensation;
10. To bind the principal in a contract of partnership;
11. To obligate the principal as a guarantor or surety;
12. To create or convey real rights over immovable property;
13. To accept or repudiate an inheritance;
14. To ratify or recognize obligations contracted before the agency;
15. Any other act of strict dominion.
Summary of Above Acts:
1. acts of strict dominion or ownership (as distinguished from acts of mere admi
nistration)
2. gratuitous contracts
3. contracts where personal trust or confidence is of the essence of the agreeme
nt
ART 1879. A special power to sell excludes the power to mortgage
A special power to mortgage does not include the power to sell.
Distinctions
1. Exclusive Agency to Sell
a. P is not prohibited from selling the goods himself
b. P is only prohibited from allowing other agents to sell the goods
2. Exclusive Power of Sale
a. Even P cannot compete with A in the selling of the goods
b. Includes the power to:
* look for prospective buyers
* execute the documents of sale
* accept the payment in cash only
* deliver the goods/property
ART 1880. A special power to compromise does not authorize submission to arbitra
tion.
REASON: arbitrator may not enjoy the trust and confidence of the principal
Special Power to Compromise:
Agent authorized to compromise can do anything which the principal himse
lf can do to effect a settlement
ART 1881. The agent must act within the scope of his authority.
He may do such acts as may be conducive to the accomplishment of the pur
pose of the agency.
Authority:
Power of the agent to affect the legal relations of the principal by act
s done in accordance with the principal s manifestation of consent to him
Authority may be considered as the source or cause while power is the ef
fect.
Authority by Necessity or Operation of Law
1. There must exist an emergency wherein A is required to act immediately
2. There must be inability on the part of A to communicate w/ P
3. The exercise by A of the authority is for the protection and the benefit of P
4. The means used by A must be legal
5. The authority ceases when the emergency ceases
(1883)within
Does
Acts
VALID;ingenerally,
not
principal
behalf
actthe
inofscope
behalf
isnot
thebound;
principal
of
binding
ofhis
Principal
agent
authority
on principal;
not personally
agentliable
and stranger
unless hearebound
the only
himself
part
ies, except regarding things belonging to the principal
Outsidew/n
Unauthorized
VALID, thethe
scope
andsubject
Unenforceable
of hismatter
authority
belongs
but maytobethe
RATIFIED
principal,
(1403,provided,
1407) at the time de
livery is to be made, the agent can transfer legally the ownership of the thing. O
therwise, he will be held liable for breach of warranty against eviction
CHAPTER 3
Obligations of the Principal
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 prin
cipal is not bound except when he ratifies it expressly or tacitly.
Specific Obligations of P to A
1. To comply with all the obligations which the A may have contracted w/in the s
cope of his authority and in the name of the P
2. To advance to the A, should the A so request, the sums necessary for the exec
ution of the agency (1911)
3. To reimburse the A for all advances made by him, provided the A is free from
fault (1912)
4. To indemnify the A for all the damages w/c the execution of the agency may ha
ve caused the A w/o fault or negligence on his part. (1913)
5. To pay the A the compensation agreed upon, or if no compensation was specifie
d, the reasonable value of the A s services (1875, 1306)
Liability of P to 3rd Persons
1. General Rule P is liable to 3rd persons for all acts committed by A in P s beha
lf w/in the scope of his authority
2. Reason because the act of A is the act of P
Liability of P for Tort of A
1. General Rule P is solidarily liable to 3rd persons for torts of A committed a
t P s direction and w/in the scope of his authority; 3rd person may sue both P and
A or choose whom he will hold
2. Reason he who does an act through another, does it himself
Conditions for Ratification to be Effective
1. P must have the intent to ratify
2. The ratification must be done voluntarily
3. P must have the capacity and power to ratify
4. P must have knowledge of material facts
5. P must ratify the acts in its entirety
6. The act must be capable of ratification
7. The act must be done in behalf of P
Effects of Ratification by P
1. With respect to A ratification relieves A from liability to:
a. the 3rd party to the unauthorized transaction
b. P for acting w/o authority
2. With respect to P himself
a. P assumes responsibility for the unauthorized act, as fully as if A had acted
under original authority
b. P is not liable for acts outside the authority approved by his ratification
3. With respect to 3rd persons
a. bound by the ratification
b. but before ratification, the 3rd person is free to revoke the unauthorized co
ntract
GR: Ratification have retroactive effect equivalent to initial approval
EXCEPTION:
1. to do so would defeat the right of 3rd parties
2. would render wrongful an otherwise rightful act or omission
3. allow circumvention of a rule of law formulated in the interest of public pol
icy
4. if the 3rd party has withdrawn from the contract
ART 1911. Even when the agent has exceeded his authority, the principal is solid
arily liable with the agent if the former allowed the latter to act as though he
had full powers.
2 Instances When P is Solidarily Liable With A
1. For torts of A committed at P s direction or w/in the scope of A s authority
2. Even when A has exceeded his authority, if P allowed A to act as though he ha
d full powers Estoppel
Estoppel
A bar which precludes a person from denying or asserting anything contra
ry to that which has been established as the truth by his own deed or representa
tion, either express or implied
Ratification
Estoppel
Rests on intention, express or implied, regardless of prejudice to another
Rests
The
He isparty
on prejudice
bound
isnotwithstanding
bound because
rather than
hetheintended
intention
absencetoofbesuch intention because the other part
y will be prejudiced and defrauded by his conduct, unless the law treats him as
legally bound
Retroactive
Affects only theaffects
relevant
the entire
parts otransaction
the transaction
and from
and the
frombeginning
that time only when e
stoppel may be said to be spelled out
The substance of ratification is confirmation of the unauthorized act or contrac
t after
The substance
it hasofbeen
estoppel
done orismade
the principal s inducement to another to act to his p
rejudice
ART 1912. The principal must advance to the agent, should the latter so request,
the sums necessary for the execution of the agency. (applies when there is no s
tipulation that A advance the funds)
Should the agent have advanced them, the principal must reimburse him th
erefor, even if the business or undertaking was not successful, provided the age
nt is free from all fault. (w/n advanced by A on his own initiative or by stipul
ation because A is not the insurer of the business of P)
The reimbursement shall include interest on the sums advanced, from the
day on which the advance was made. (demand is not necessary in order that delay
on the part of P shall exist)
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 neglige
nce on his part.
Q But if A is negligent, he can be held liable.
P is NOT Liable:
1. For any wrongful act committed by 3rd persons such as muggers, hit and run dr
ivers, etc
2. When A acts in his own account and not as an agent
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 2 preceding articles.
Right of Lien
1. If P fails to reimburse or indemnify A
2. An instance of pledge w/c is created by operation of law
Nature of A s Right of Lien
1. Right is limited to the subject matter of agency not a general lien w/c gives
A the right to retain P s goods for claims disconnected w/ the business of agency
2. Right requires possession by A of subject matter actual or constructive; must
have acquired that possession lawfully in his capacity as an agent
3. Right generally only in favor of agent not of sub-agent or one who A delegate
s his authority where no privity exists between SA and P
ART 1915. If two or more persons have appointed an agent for a common transactio
n or undertaking, they shall be solidarily liable to the agent for all the conse
quences of the agency.
Requisites for Solidary Liability
1. There are 2 or more principals
2. The principals have all concurred in the appointment of the same agent
3. The agent is appointed for a common transaction or undertaking
Double Sale:
ART 1916. When 2 persons contract with regard to the same thing,
1. one of them with the agent and
2. the other with the principal,
and the 2 contracts are incompatible with each other, that of prior date shall b
e preferred, without prejudice to the provisions of Art. 1544.
ART 1544. If the same thing should have been sold to different vendees, the owne
rship shall be transferred to the person who may have first taken possession the
reof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the perso
n 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 perso
n:
1. who in good faith was first in the possession; and,
2. in the absence thereof, to the person who presents the oldest title, provided
there is good faith.
Example When 2 Persons Contract Separately with A and P
1. P authorized A to contract for the construction of his house for a price not
more than P100,000. Without the knowledge of A, P contracted w/ B for P95,000. L
ater A contracted with C for P90,000
a. Under Art. 1916, the contract between P and B shall prevail as it is of prior
date
2. P gave A authority to sell a car. Without the knowledge of A, P sold the car
to B to be delivered the next day. Before delivery, A sold the car to C, who bou
ght it in good faith and immediately took possession of the car
a. Under Art, 1544[1], C is considered the owner because he took possession of t
he car first
3. P gave A an SPA to sell his land. A sold the land to B who did not register t
he sale. Later, P sold the same land to C, who in good faith, registered the sal
e
a. Under Art. 1544[2], C is considered the owner because he registered the sale
first
4. If neither sale was registered and C took possession of the land in good fait
h
a. Under Art. 1544[3], the land should belong to C because he first took possess
ion in good faith
5. If neither took possession of the land
a. Under Art. 1544[3], the land should belong to B because his title is older th
an C
ART 1917. In the case referred to in Art. 1916,
1. If the agent has acted in good faith, the principal shall be liable in damage
s to the 3rd person whose contract must be rejected.
2. If the agent acted in bad faith, he alone shall be responsible.
ART 1918. The principal is not liable for the expenses incurred by the agent in
the following cases:
1. If the agent acted in contravention of the principal's instructions, unless t
he latter should wish to avail himself of the benefits derived from the contract
; (this is to punish A unless A s acts were impliedly ratified by P)
2. When the expenses were due to the fault of the agent;
3. When the agent incurred them with knowledge that an unfavorable result would
ensue, if the principal was not aware thereof; (here A is guilty of bad faith an
d lack of diligence)
4. When it was stipulated that the expenses would be borne by the agent, or that
the latter would be allowed only a certain sum. (when a limit was imposed by P
for the amount of expenses)
CHAPTER 4
Modes of Extinguishment of Agency
Agency is extinguished (1919): [EDWARD]
1. By the expiration of the period for which the agency was constituted.
2. By the death, civil interdiction, insanity or insolvency of the principal or
of the agent;
3. By the withdrawal of the agent;
4. By the accomplishment of the object or purpose of the agency;
5. By its revocation by the principal;
6. By the dissolution of the firm or corporation which entrusted or accepted the
agency;
Presumption of Continuance of Agency
1. When shown to have existed an agency relation will be presumed to have contin
ued
2. In the absence of anything to show its termination the burden of proving its
extinguishment is on the party asserting it
Death of the P or A
1. General Rule Agency is extinguished ipso jure upon the death of either P or A
2. Exceptions:
a. When the agency is coupled with interest
b. When the act of A was executed w/o the knowledge of the death of P and the 3r
d person who contracted with A acted in good faith
c. Act 3135 [REM Law] The power of sale in a deed of mortgage is not revoked by
the death of P (mortgagor) as it is not an ordinary agency but an authority conf
erred upon the mortgagee for his own protection
Other Modes of Extinguishment of Agency
1. Loss of the thing
2. Novation of the contract
3. War if the A or P is the enemy alien
4. Legal impossibility
5. Termination of P s authority as when P is merely an agent or trustee
ART 1920. The principal may revoke the agency at will, and compel the agent to r
eturn the document evidencing the agency.
Such revocation may be express or implied.
Revocation of Agency by P
1. General Rule P may revoke the agency at will even if the agency is said to be
irrevocable
2. Exceptions:
a. Art. 1927 partially executed contracts
b. Art. 1930 agency coupled with interest
3. Reasons:
a. Since the authority of A emanates from P, it is enough that P should wish to
terminate the agency
b. Confidence being the cardinal basis of the relation, it stands to reason that
it should cease when such confidence disappears
c. The P-A relationship is consensual and personal in nature
Liability of P for Damages Caused by Revocation
1. When the agency constituted for a fixed period P shall be liable for damages
occasioned by the wrongful discharge of A before the expiration of the period
2. When no time fixed for continuance of agency P is at liberty to terminate it
wt will subject only to the requirements of good faith
Kinds of Revocation
1. Express either by personal notice or by publication
2. Implied examples:
a. when P appoints a new agent for the same business transaction
b. when P completely takes over the management of the business entrusted to A
c. when P, after granting a GPA to A, grants an SPA to another
Notice of Revocation
1. To Agent express or implied
2. To 3rd Persons:
a. former customers actual notice
b. other persons publication
Renunciation by Agent
1. A has the power to renounce the agency, subject only to the contractual oblig
ations owing to P
2. Form express or implied
ART 1921. If the agency has been entrusted for the purpose of contracting with s
pecified persons, its revocation shall not prejudice the latter if they were not
given notice thereof.
ART 1922. If the agent had general powers, revocation of the agency does not pre
judice third persons:
1. who acted in good faith and
2. without knowledge of the revocation.
Notice of the revocation in a newspaper of general circulation is a suff
icient warning to third persons.
Effect of Revocation in Relation to 3rd Persons
1. When A is authorized to contract with SPECIFIED persons actual or personal no
tice should be given to them
2. When A is authorized to contract with the public in GENERAL mere publication
is sufficient warning
ART 1923. (Implied Revocation)
The appointment of a new agent for the same business or transaction revo
kes the previous agency from the day on which notice thereof was given to the fo
rmer agent, without prejudice to the provisions of the 2 preceding articles.
ART 1924. (Implied Revocation)
The agency is revoked if the principal directly manages the business ent
rusted to the agent, dealing directly with third persons.
Q Art. 1924 should be distinguished from Art. 1916.
ART 1925. When 2 or more principals have granted a power of attorney for a commo
n transaction, any one of them may revoke the same without the consent of the ot
hers.
ART 1926. (Partial Implied Revocation)
A general power of attorney is revoked by a SPA granted to another agent
, as regards the special matter involved in SPA.
ART 1927. (VIP)
An agency cannot be revoked:
1. if a bilateral contract depends upon it, or
2. if it is the means of fulfilling an obligation already contracted, or
3. if a partner is appointed manager of a partnership in the contract of partner
ship and his removal from the management is unjustifiable.
When Agency Irrevocable (Exception to Art. 1920)
1. General Rule P may revoke an agency at will
2. Exceptions:
a. When the agency is created:
* not only for the interest of P but also for the interest of 3rd persons
* for the mutual interest of both P and A
b. When it is a means of fulfilling an obligation already contracted
* Example P borrowed money from A (contract of loan). P then authorizes A to col
lect rents from P s property to pay for the loan P contracted from A
c. When A, who is a partner, is appointed as manager, he cannot be removed:
* unless for justifiable or lawful causes
* upon the vote of the partners representing controlling interest
ART 1928. The agent may withdraw from the agency by giving due notice to the pri
ncipal.
If P should suffer any damage by reason of the withdrawal, the agent mus
t indemnify him therefor, unless the agent should base his withdrawal upon the i
mpossibility of continuing the performance of the agency without grave detriment
to himself.
Right of A to Withdraw
1. Without Just Cause
a. A should give notice to P
b. A must indemnify P should P suffer any damage by reason of such withdrawal
2. With Just Cause A cannot be held liable, such as when:
a. the withdrawal is based on the impossibility of continuing w/ the agency w/o
grave detriment to A
b. it is due to a fortuitous event
ART 1929. The agent, even if he should withdraw from the agency for a valid reas
on, must continue to act until the principal has had reasonable opportunity to t
ake the necessary steps to meet the situation.
ART 1930. (Agency Coupled with Interest)
The agency shall remain in full force and effect even after the death of
the principal, if it has been constituted:
1. in the common interest of the latter and of the agent, or
2. in the interest of a third person who has accepted the stipulation in his fav
or.
Agency coupled with an Interest:
The agent has acquired some interest of his own in the execution of the
authority granted to him, in addition to his mere interest in the contract of em
ployment with the resulting gains
ART 1931. Anything done by the agent, without knowledge of the death of the prin
cipal or of any other cause which extinguishes the agency, is valid and shall be
fully effective with respect to third persons who may have contracted with him
in good faith.
Q Applies to all other modes of extinguishment of agency
Act Done by A after Death of P Valid ONLY under 2 Conditions:
1. A acted w/o knowledge of the death of P
2. 3rd person who contracted with A acted in good faith
ART 1932. If the agent dies, his heirs must:
1. notify the principal thereof, and
2. in the meantime adopt such measures as the circumstances may demand in the in
terest of P.
Q Art. 1932 does NOT impose a duty on the heirs of P to notify A of the death of
P.
GR: Agent s duties cannot be performed by his personal representations
EXCEPTIONS:
1. Heir s duty to continue the agency after the death of the agent (agency by oper
ation of law; presumed or tacit agency)
2. Where the agency is one coupled with an interest in the subject matter of the
agency, his heirs may subsequently exercise the power conferred at least insofa
r as may be necessary to protect the interests of the estate of the agent
Trusts
CHAPTER 1
General Provisions
1. Created
Express
Implied Trust
by the intention of the trustor or parties
2. Created by direct and positive acts of the parties by some writing or deed or
will or by words evidencing an intention to create a trust
3. If it concerns an immovable, it cannot be proven by parole evidence
4. In order that prescription may bar an action to enforce an express trust, an
express
1. Comesrepudiation
into being by
madeoperation
known toofB law
is required
2. Those w/o being expressed, are deducible from the nature of the transaction b
y operation of law as matters of equity
3. May be proven by parole evidence
4. No express repudiation is required for laches or prescription to lie
CHAPTER 3
Implied Trusts
ART 1447. The enumeration of the following cases of implied trust does not exclu
de others established by the general law of trust, but the limitation laid down
in article 1442 shall be applicable.
Implied Trusts
Those, w/o being express, are deducible from the nature of the transacti
on as matters of intent, or which are superinduced on the transaction by operati
on of law, as matters of equity, independently of the particular intention of th
e parties.
Consequences of an Implied Trust
The implied trustee shall deliver the possession and reconvey title to t
he property to B and pay B the fruits and other net profits received from such p
roperty during the period of wrongful holding
Trustee May Claim Title by Prescription Founded on Adverse Possession When:
1. His repudiation is open and unequivocal
2. The positive acts of repudiation have been made known to B
3. The evidence thereon should be clear and conclusive or convincing
4. The period fixed by law has prescribed
Prescription
1. Prescriptive Periods
a. Express trust none, as long as not repudiated; no laches
b. Resulting none, as long as not repudiated; laches apply
c. Constructive 10 years; laches apply
2. An action for reconveyance of land based on constructive trust prescribes in
10 years from the time the right of action accrues
a. but this only applies when the person enforcing the trust is not in possessio
n of the land
b. if he is in possession of the land, he may wait until his possession is distu
rbed or his title attacked before taking steps to vindicate his right
3. The only limitation upon the right of B to recover title held in trust is tha
t the property must not have been transferred to an Innocent Purchaser for Value
, in which event, his remedy is to ask for damages
5
Agency and Trust
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