AGENCY a person binds himself to
Agent is appointed by the
render some service or to do something in
representation or on behalf of another,
with the consent or authority of the latter.
*An agent receives a commission upon the
successful conclusion of a sale. Upon the
other hand, a broker earns his pay merely
by bringing the buyer and the seller
together, even if no sale is eventually
made.
Roman law: contract of mandatum,
mandans (principal), mandatarius (agent)
Spanish law: contract of mandato,
mandante, mandatario
Characteristics of Agency:
1. Principal, nominate, bilateral,
preparatory, commutative and
generally onerous
2. It is a representative relation, not a
status since agency is not inherent
or permanent.
3. It is a fiduciary relation since it is
based on trust and confidence.
Parties to Agency:
1. Principal he whom the agent
represents and from whom he
derives authority; the one
primarily concerned in the
contract
2. Agent he who acts or stands for
another
Agency vs Partnership: An agent acts not
for himself, but for his principal; a partner
acts for himself, for his firm, and for his
partners. It may even be said that
partnership is a branch of the law on
agency.
Agency vs Loan: An agent may be given
funds by the principal to advance the
latters business, while a borrower is given
money for purposes of his own, and he
must generally return it, whether or not his
own business is successful.
Agency v Guardianship:
1. Agent represents capacitated
person; guardian represents
incapacitated
2.
principal; guardian, court
3. Agent is subject to the directions
of the principal; guardian, not
subject to the directions of the
ward
4. Agent can make the principal
personally liable; guardian has no
power to impose personal liability
on the ward.
Agency v Lease of Property
1. The agent is controlled by the
principal; lease not controlled by
the lessor.
2. Agency involves things other than
property; involves property only
3. The agent can bind the principal;
lessee cannot bind lessor.
Agency v Negotiorum Gestio:
1. There is a contract caused by
meeting of the minds, expressly or
impliedly. This is only a quasi-
contract, there having been no
meeting of the minds.
2. Agent is controlled by the
principal. The officious manager
follows his judgment and the
presumed will of the owner.
3. The legal relation is created by the
parties; by law.
Agency v Trust:
1. Agent usually holds no title;
trustee, may hold legal title
2. Agent acts in the name of the
principal; trustee, may act in his
own name
3. Agency may not be connected
with property; trust involves
control over property.
Agency to sell from sale: Ownership of the
goods is not transferred to the agent. In
sale, ownership is transferred to the buyer
upon delivery.
Agency to buy from sale:
1. the buyer acquires ownership for
himself. The agent acquires
ownership in behalf of the
principal.
2. the buyer who obtains a discount
does not have to reveal such fact
 to its own buyer. The agent must
account for all benefits or
discounts received from the seller.
Kinds of agency as to the manner of
constitution:
1. express
2. implied from principals acts,
silence, lack of action or failure to
repudiate the agency
*Acceptance by the agent may also be
express or implied from his acts which
carry out the agency, or from his silence or
inaction according to the circumstances.
Implied acceptance:
1. between persons who are present
if principal delivers his POA to
the agent who receives it without
objection
2. between persons who are absent
acceptance of the agency cannot
be implied from the silence of the
agent EXCEPT:
when the principal
transmits his POA to the
agent who receives it
without any objection
(e.g. writes a letter of
acknowledgment of the
offer but offers no
objection to the agency; if
offeree did not reply, not
implied acceptance)
when the principal
entrusts to him by letter or
telegram a POA with
respect to the business in
which he is habitually
engaged as an agent and
he did not reply to the
letter or telegram
Informing other people of the existence of
agency:
1. special information
2. public advertisement
Agency by Estoppel vs Implied Agency
As between the principal and the agent:
1. In an agency by estoppel, the
agent is not a true agent; hence, he
has no rights as such.
2. In an implied agency, the agent is
a true agent, with rights and duties
of an agent.
As to third persons:
1. If the estoppel is caused by the
principal, he is liable, but only if
the third person acted on the
misrepresentation; in an implied
agency, the principal is always
liable.
2. If the estoppel is caused by the
agent, it is only the agent who is
liable, never the alleged principal;
in an implied agency, the agent is
never personally liable.
Agency may be:
1. general comprises all the
business of the principal
2. special comprises one or more
specific transactions
**An agency couched in general terms
comprises only acts of administration,
even if the 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.
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 the time the agency
was constituted;
(3) To compromise, to submit
questions to arbitration, to
renounce the right to appeal from
a judgment, to waive objections to
the venue of an action or to
abandon a prescription already
acquired (5 different powers, a
right given regarding one is not
enough to grant the others);
(4) To waive any obligation
gratuitously;
(5) To enter into any contract by
which the ownership of an
immovable is transmitted or
 acquired either gratuitously or for
a valuable consideration;
(6) To make gifts, except customary
ones for charity or 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 for 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
mortgage, create an easement
(13) To accept or repudiate an
inheritance;
(14) To ratify or recognize obligations
contracted before the agency;
(15) Any other act of strict dominion
sale or purchase of personalty
OR:
1. acts of strict dominion or
ownership
2. gratuitous contracts
3. contracts where personal trust or
confidence is of the essence of the
agreement
Special Power of Attorney refers to a
clear mandate, express or implied,
specifically authorizing the performance
of the act, and must therefore be
distinguished from an agency couched in
general terms. A general power of attorney
may however include a special power if
such special power is mentioned or
referred to in the general power, e.g. I
authorize you to sell ALL my properties.
Here no SPA is needed for each property
involved.
In general, the execution of a POA
does not need the intervention of any
notary public.
Fundamental principles of a true agency:
1. The agent must act within the scope
of his authority.
2. The agent must act in behalf of his
principal.
WITH AUTHORITY:
1. Principals behalf: valid
2. Agents behalf: the agent can only
have recourse against the buyer
and the buyer can have recourse
only against the agent. But if the
property belongs to the principal,
the principal and the buyer can
have recourse against each other.
WITHOUT AUTHORITY:
1. Principals behalf: unauthorized so
unenforceable
2. Agents behalf: agent must
already be the owner of the
property at the time of delivery,
otherwise he will be liable for
warranty against eviction.
Recourse only against the agent.
Authority the right of the agent to effect
the legal relations of his principal by the
performance of acts effectuated in
accordance with the principals
manifestation of consent. Kinds: express,
implied, general, special, apparent.
Doctrine of Agency by Necessity: By
virtue of the existence of an emergency,
the authority of an agent is
correspondingly enlarged in order to cope
with the exigencies or the necessities of
the moment. Requisites:
1. real existence of an emergency
2. inability of the agent to
communicate with the principal
3. exercise of the additional authority
for the principals own protection
4. adoption of fairly reasonable
means, premises duly considered
5. ceasing of the authority the
moment the emergency no longer
demands the same
Authority v Power: Authority is the cause,
while power is the effect. Authority
emanates from a principal and is given to
the agent, who now possesses power.
OBLIGATIONS OF THE AGENT
9. The agent may appoint a substitute if
the principal has not prohibited him
 from doing so; but he shall be
responsible for the acts of the
substitute:
(1) When he was not given the power
to appoint one;
(2) When he was given such power,
but without designating the person,
and the person appointed was
notoriously incompetent or insolvent.
All acts of the substitute appointed
against the prohibition of the principal
shall be void.
10. In the cases mentioned in Nos. 1 and 2
of the preceding article, the principal may
furthermore bring an action against the
substitute with respect to the obligations
which the latter has contracted under the
substitution.
*Commission agent v Broker: A
commission agent is one engaged in
the purchase and sale for a principal of
personal property, which for this
purpose, has to be placed in his
possession and at his disposal. He has
a relation not only with his principal,
and the buyers or sellers, but also with
the property which constitutes the
object of the transaction. A broker
maintains no relation with the thing
which he purchases or sells. His only
function is to bring the parties to the
transaction.
(4) By the dissolution of the firm or
corporation which entrusted or
accepted the agency;
(5) By the accomplishment of the
object or purpose of the agency;
(6) By the expiration of the period for
which the agency was constituted.
*Other causes mutual agreement to
terminate, novation, loss of subject matter
of agency
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
partnership and his removal from
the management is unjustifiable.
Art. 1930. The agency shall remain in full
force and effect even after the death of
the principal, if it has been constituted
in the common interest of the latter
and of the agent, or in the interest of a
third person who has accepted the
stipulation in his favor.

24. Should the commission agent receive

on a sale, in addition to the ordinary
commission, another called a
guarantee commission, he shall bear
the risk of collection and shall pay the
principal the proceeds of the sale on
the same terms agreed upon with the
purchaser.
Guarantee commission del credere
commission; given in return for the
risks in the collection of credits that
the agent will have to bear.

Agency is extinguished: EDWARD

(1) By its revocation;
(2) By the withdrawal of the agent;
(3) By the death, civil interdiction,
insanity or insolvency of the
principal or of the agent;