AGENCY Atty.

Cochingyan
The person whom the agent One who represents the principal
AGENCY__________ represents and from whom he
derives authority
Unincorporated, Business Organizations
Kinds
Primarily from the Codigo Sibil
Disclosed Principal Universal: business + personal matters
- March 20 1947, and on January 26, 1948: complete report: “Report of the
Civil Code Commission” which is RA 386 Partially Disclosed General: business administration
Civil Code of the Philippines Undisclosed principal Special: specific act
- of Spanish and French origin (Code Napolean, conquered Spain) Main
inspiration: Roman Law 2. Root and objectives of Agency (Arts. 1317 and 1403(1))
Purpose: To extend the personality of the principal
Eg: bienes immuebles: real property Phillpots v Phil Mfg Co
Beines muebles: personal property Issue: WN a stockholder’s right of inspection can be exercised through an
Servidumbers: easement agent or atty in fact --- YES
“What a man can do in person, he may do through another. A stockholder’s
So you see, the form of the code is English, but the substance is Spanish and right of inspection can be exercised either by himself or by an atty-in-fact,
Filipino either with or without the stockholder’s attendance.”
Law of Agency: Argentina and a dash of German: unifies Civil code and code
of commerce. *the act if the agent is the act of the principal
Basis: Representation
Agency according to Manresa, permits man to perform diverse juridical acts Nature: Fiduciary (Trust and Confidence)
which otherwise would not be possible because of physiological conditions.
Because of such, man can reproduce himself. Its raison d’etre is the GR: all acts may be delegated, except: personal and criminal acts
extension of the personality of the Principal - ubiquity Oral agency: valid except to sell land (needs a written instrument)

1. Nature and Object of Agency *Principal should be legally capacitated, if the agent is incapacitated, the
Definition: a contract wherein a person binds himself to render some contract of agency is voidable but the contracts entered into by the agent in
service or do something in representation or on behalf of another with the behalf of the principal is valid.
consent or authority of the latter. (1868)
A contract entered into in the name of another by one who has no authority
or who has acted beyond his powers shall be enforceable unless it is ratified
Spanish word: Mandato from the words: manu and datu or dare, genuine expressly or impliedly by the person on whose behalf it has been executed
expression of friendship- consensual contract… before it is revoked by the other contracting party. One can sell only what he
owns or is authorized to sell and the buyer acquires no more right than what
Parties in a Contract of Agency the seller can transfer legally.
Principal Agent 3. Element of a contract of Agency
Mandante Mandatario, factor, broker, atty-in- 1. Consent: since the basis of agency is representation, there must be an
fact, proxy, delegate, representative actual intention on the part of the principal to appoint or an intention naturally
inferable from his words or actions. Agent must also have the intention to
accept. In absence of intent, there is no agency.
AGENCY Atty. Cochingyan
Consent of the principal is necessary.
“In an agent-principal relationship, the personality of the principal is extended
through the facility of the agent. In so doing, the agent, by legal fiction,
becomes the principal, authorized to perform all acts which the latter would
have him do. A relationship of principal and agent can only be effected
with the consent of the principal, which must not, in any way, be
compelled by law or by any court.”
By legal fiction, agent becomes the principal.
2. Subject Matter – Execution of Juridical Acts in Behalf of Principal and
Within the Scope of Authority
*THE BASIS OF AGENCY IS REPRESENTATION.
Distinguishing factor: Control by the principal.
No agency: common carrier leases the trucks of another carrier because there is no
power of representation.
3. Consideration: Agency is presumed for compensation unless there is proof to the
contrary.
Eg of “proof to the contrary”: nature of relationship, Mother and child, beadle and
class
Old Civil Code: The service rendered by the agent was deemed to be
gratuitous; if it were true that agent and principal had an understanding
that the agent was to receive compensation aside from the use and
occupation of the houses of the deceased, it cannot be explained how
the agent could have rendered services for eight years without receiving
and claiming any compensation from the deceased. Aguña v. Larena, 57
Phil 630 (1932).
Prescinding from the principle that the terms of the contract of agency
constituted the law between the principal and the agent, the mere fact
that “other agents” intervened in the consummation of the sale and were
paid their respective commissions could not vary the terms of the agency
with the plaintiff entitled to a 5% commission based on the selling price.
4. Essential Characteristics of Agency
a. Nominate and Principal
Nominate: it has a name designated to it by the law.
Nature: acts done by one person in behalf on another who
authorized such acts is the essential nature of the agency – it will be an
agency whether or not parties understood the exact nature of the relation.
Also, the fact that two agents enter into a contract of behalf of their
principals, even if the principals do not actually and personally know each
other, the same does not affect their juridical standing as agents, since
the very purpose of agency is to extent the personality of the principal
through the facility of the agent.
Even when the Agreement provides that the manager shall be
considered an independent contractor and not an agent, nonetheless
since the manager is expressly authorized to solicit and remit offers to
purchase interments spaces, it covers an agency arrangement.
Principal: Its validity does not depend another contract.
b. Bilateral and Primarily Onerous
Agency is presumed to be for compensation; when agent performs
services for principal at the latter’s request, principal’s intent to
compensate the agent for services performed will be inferred from the
principal's request for the agent’s service.
Buuuttt…. A unilateral is one in which one party makes a promise or
undertakes a performance. It is observed that many unilateral contracts
are really gratuitous promises enforced for good reason with no element
of bargain. An agency is a unilateral contract because it is the agent who
undertakes the performance of the agency. Manresa: the totality of
cases involving agency will always be bilateral not because as one
ordinarily supposes, there will be obligations exclusively for the agient
and rights exclusively for the principal. More common in agency is the
mutuality and reciprocity that arises from the existence of an obligation
against another obligation. A right against another right. Manresa
c. Consensual (1869 & 1870)
An agency may be expressed or implied from the act of the principal,
from his silence or lack of action, or failure to repudiate the agency.
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.
Where there is no showing that Brigida consented to or authorized the
acts of Deganos, then 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 six receipts, several pieces of jewelry
AGENCY Atty. Cochingyan
of substantial value without requiring a written authorization from his
alleged principal. Bordador v. Luz, 283 SCRA 374 (1997). f. Preparatory Contract.
It is a means by which other contracts are entered into.
A co-owner as such does not become an agent of the other co-owners,
and any exercise of an option to buy a piece of land transacted with one
co-owner does not bind the other co-owners. The most prudent thing the
purported buyer should have done was to ascertain the extent of the
authority said co-owner; being negligent in this regard, he cannot seek
relief on the basis of a supposed agency. Dizon v. CA, 302 SCRA 288 AGENCY AS DISTINGUISHED FROM SIMILAR CONTRACTS
(1999).
Agency Brokerage
The relationship can only be effected with the consent of the principal Nature of service covered
and cannot be compelled by law or by any court. Can bind the Real estate broker is one who negotiates the sale of
principal, not real properties.
d. Personal, Representative and Derivative (1868)
The authority of the agent emanates from the powers granted to him by limited to merely - No authority to bind the principal by signing
his principal; his act is the act of the principal done within the scope of the negotiating the a contract of sale.
authority. Qui facit per alium facit per se. “He who acts through another sale - Authority to find a buyer does not include
acts himself.” the authority to sell.
On duties and obligations assumed
Consequently… Generally those that
A co-owner as such does not become an agent of the other co-owners, an agent owes to
and any exercise of an option to buy a piece of land transacted with one the principal
co-owner does not bind the other co-owners. Entitlement to the Commission Agreed Upon
Upon successful By bringing the buyer and the seller together even if
An agent is not personally liable to the party with who he contracts, it is conclusion of a no sale is eventually made
the principal who is liable.
sale
When the agent purchases property in bad faith, the principal is in bad To find a bona fide purchaser- one who is ready,
faith. able and willing to take the property and enter into
a valid contract upon the terms then named by the
Knowledge of the agent is knowledge of the principal. principal, although the particulars may be arranged
Notice to the agent is notice to the principal. and the matter negotiated and completed between
the principal and the purchaser directly.
e. Fiduciary and Revocable. Implicit condition: must be instrumental in bringing
Fiduciary: based on trust and confidence. Hence the agent is estopped from about the sale, must be the Efficient Procuring
acquiring or asserting a title adverse to that of the principal. Cause- cause originating a series of events which
without break in their continuity result in the
Revocable: it is a personal contract of representation based on trust and accomplishment of the prime objective of the
confidence reposed by the principal to the agent. The power of the agent to employment of the broker- producing a purchaser
act depends on will and license of the principal he represents. It is, thus, who is RAW to buy on the owner’s terms.
revocable at will.
AGENCY Atty. Cochingyan
Agency Employment Agency Agricultural Tenancy
Only interested in No principle of representation Tenant acts for his sole benefit, not under the control of
the end results the landowner
not so much with
the means Forms and Kinds of Agency
Element of Control 1. How agency may be constituted.
Control only in In the case of Tongko: insurance agent is an GR: Oral except when otherwise provided by law.
arriving at a employer of the insurance agency. Reversed. Certain legal provisions which require certain contractual formalities: 1.
specific task AGENCY na daw. Validity 2. Effective against 3rd parties 3. To prove the existence of the
1. No control in agency. Absolute contract
2. Not all the time. There are some instances *agency to sell: does not belong to any of these. Hence may be enforceable
in the general law of agency which allows the in whatever form it may be entered into. Its validity is determined by the
principal control over the agent in a manner existence of consent.
consistent with an agency relationship. But such is *Bordador v Luz: not requiring a written authorization from the principal is
not indicative of labor control. Foremost, such are negligence.
only directives that the Principal may impose on the
agent. From the side of From the side of the From the side of the Public
the Principal Agent
Must render an A. Express A. Express Agency is not presumed to exist.
account to the B. Implied from: B. Implied from: The person dealing with the
Principal 1. acts of the 1. acts that carry out gent is put upon inquiry and
principal the agency must discover upon his peril the
2. silence or 2. silence/ inaction authority of the agent.
Agency Contract for a Piece of Work inaction depending on the
No principle of representation, the laborer only acts 3. failure to circumstances Consequently:
for his benefit. repudiate the Persons dealing with the agent
No obligation to account for proceeds agency knowing Determined by the must ascertain:
3 parties 2 parties that another person fact that one is 1. the fact of agency
is acting on his representing and 2. nature and extent of his
Agency Contract of Sale behalf. acting for another. authority
Does not assume personal responsibility or
May be established The law makes no Agency by estoppel
any risk for the payment of the price of the by direct or presumption of
object. circumstantial agency. Proving its
Merely turns over the proceeds of the sale evidence. existence, nature and
once he receives them from the buyer. extent is incumbent
No transfer of ownership, principal retains Ultimately, a upon the person
such. question of alleging it.
3 parties 2 parties intention.
AGENCY Atty. Cochingyan
(ii) Agency by Estoppel With Respect to Third Parties
When the owner of a hotel/café business allows a person to use the title
“managing agent” and allows such person to take charge of the business
during his prolonged absence, performing the duties usually entrusted to
managing agent, then such owner is bound by the act of such person.
“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.” Macke
v. Camps, 7 Phil 522 (1907).
When the law firm has allowed for quite a period the messenger of
another office to receive mails and correspondence on their behalf, an
implied agency had been duly constituted, specially when there is no
showing that counsel had objected to such practice or took step to
put a stop to it. Equitable PCI-Bank v. Ku, 355 SCRA 309 (2001).
Agency by estoppel / Doctrine of apparent authority
- Requires proof of reliance upon the representations made by
purported principal which needs proof that the representations
predated the action taken by the relying third party
- 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.
2. KINDS OF AGENCY
a. Based on Business or Transactions Encompassed (Art. 1876):
General or Universal Agency versus Special or Particular Agency
Universal agent authorized to do all acts for his principal which
can lawfully be delegated to an agent,
-possesses universal authority
General agent 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.
-authority expressly conferred in general terms or
in effect made by usages, customs or nature of the
business
Special agent Particular act or to act upon some particular
occasion.
- Acts in accordance to a particular act,
particular occasion or specific instructions
b. Whether it covers legal matters: attorney-at-law vs atty-in-fact
Relationship of attorney and client: one of agency.
- A law firm acting as counsel in the intestate proceedings cannot
file a petition for certiorari before the CA to protect its own
interest. Agent is not personally liable for the obligations of the
principal.
- Lawyer cannot settle the action or subject matter of litigation
without client authorization
c. Whether it covers acts of administration or acts of dominion:
general power of atty vs Special power of atty
1. Formal Requisite: must be in writing and signed by the Principal
- when no formality is required by law, P may appoint A in any form which
might suit his convenience or that of the agent. Eg. Letter to the agent
requesting him to protest…
Power of attorney: instrument in writing by which one person as
principal, appoints another as agent and confers upon him the authority
to perform certain specified acts or kinds of acts on behalf of the
principal.
- need not be in public document, only in writing. A private
document is competent to create, transmit, modify or extinguish a
right in real property.
2. How construed / Interpreted
GR: strictly construed. Limited to only those powers that are specified.
Agent may not go beyond or deviate.
Interpretation:
Language used by the parties, taking into consideration:
- whole instrument
- effect is to be given to every word
- when there are 2 constructions, choose that which is most
effectual
- acts done in conformity not in contrary to the intent of the contract
- general words are interpreted in reference to the specific object
3. Notarized Power of Atty
AGENCY Atty. Cochingyan
- notarial acknowledgement is prima facie evidence of the fact of its due 2. with respect 1. to make payments
execution. Buyer has every right to rely on a person’s authority. to money or - thus is not an act of administration.
funds of the 2. to collect or receive payments on behalf the
General Powers of attorney Principal principal
- right to indorse the check cannot be lightly inferred
Agency couched in general terms: only acts of administration, even if P 3. to loan or borrow money
states that he withholds no power or that the agent may execute acts as Except: when urgent and indispensable for the
may consider appropriate or even though agency authorizes general and preservation of the things which are under
unlimited management administration
3. with respect 1. to effect novations which put an end to obligations
When general powers are conferred without specific power, only acts of to obligations already in existence at the time it was constituted
administration are deemed conferred. Power to administer does not due to/ from 2. to waive any obligation gratuitously
include power to dispose. the principal 3. to ratify or recognize obligations contracted before
the agency
Acts of administrator: acts in the ordinary course of business.
Power to loan or borrow money does not include the
Special Powers Attorney right to make P liable for the payment of a pre-
- title is not controlling, look at the substance existing debt
- may be titled “Special Power of Attorney” but may only cover acts 4. With respect 1. to enter into any contract by which ownership of an
of administration and vv to immovable immovable is transmitted, acquired gratuitously or for
properties a valuable consideration
Cases where SPA is necessary 2. sale of a piece of land or interest therein
- 1878: SPA need not be in writing but it must be express. Be that
as it may, such must be established by competent and convincing
evidence.
1. With respect 1. to compromise
to matters 2. to submit questions to arbitration
involved in 3. to renounce the right to appeal from a judgment
litigation 4. to waive objections to the venue of an action
involving the
5. to abandon a prescription already acquired
principal
- power to compromise excludes power to
submit to arbitration and vv

*Power to bring suits in behalf of Principal / to collect

amounts accruing in the ordinary course of business
properly belongs to the class of acts of strict
ownership .
“to exact the payment of sums of money by legal
means”: express power to sue
*Not necessarily in writing but must be established by
evidence other than self-serving assertion since
authority cannot be lightly presumed
AGENCY Atty. Cochingyan