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AGENCY (QUIZ WEEK 4)

1. No, the petitioner’s argument is incorrect. Under the law, an agent may be (1) universal; (2)
general, or (3) special. A general agent is one 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. An agent, therefore, who is empowered to transact all the business of his principal of a
particular kind or in a particular place, would, for this reason, be ordinarily deemed a general
agent. The power granted to the respondent was so broad that it practically covers the
negotiations leading to, and the execution of, a contract of sale of petitioners' merchandise with
any entity or organization.

2. Yes, the complaint will prosper.

Art 1878 of the civil code provides instances when a special power of attorney is required.:
1) To make such payment as are not usually considered as acts of administration.
15) any other act of dominion

The payment of claims is not an act of administration which requires a special power of
attorney before Guevarra could settle the insurance claims of the insured. Also Guevarra was
instructed that the payment for the insured must come from the revolving fund or collection in
his possession, Gueverra should not have paid the insured through his own capacity. Under 1918
of civil code an agent who acted in contravention of the principal’s instruction, the principal will
not be liable for the expenses incurred by the agent. However, in the case at bar, even if ithe law
on agency prohibits from obtaining reimbursement his right to recover may be justified under
article 1236 of the civil code. Hence, Guevarra must be reimbursed but only to the extent that
Dominion has benefited without interest or demand for damages.

3. The contention is meritorious. The authority granted by defendants-appellants (except


Valeriana) unto their brother, Maximo, was merely to mortgage the property jointly owned by
them. They did not grant Maximo any authority to contract for any loans in their names and
behalf. Maximo alone, with Valeriana who authorized him to borrow money, must answer for
said loans and the other defendants-appellants' only liability is that the real estate authorized by
them to be mortgaged would be subject to foreclosure and sale to respond for the obligations
contracted by Maximo. But they cannot be held personally liable for the payment of such
obligations, as erroneously held by the trial court.

4. The contention is meritorious. Under the law, if an instrument, where powers and duties are
specified and defined, all of such powers and duties are limited and confined to those expressly
mentioned therein and all other power and duties are excluded. In the case at bar, when the
note which a real mortgage is supposed to secure is found to be VOID as to the principal, then it
follows that the mortgage is also VOID as to the principal. Hence, the principal is not liable for an
obligation contracted by his agent beyond his power.

5. The contention is not meritorious. The pertinent clauses of the power of attorney from which
may be determined the intention of the principals in authorizing their agent to obtain a loan,
securing it with their real property, were quoted at the beginning. The terms thereof are limited;
the agent was thereby authorized only to borrow any amount of money which he deemed
necessary. The loan obtained and the mortgage executed by Yulo was valid and therefore
defendants are bound to pay for it. By virtue of the authority conferred by the defendants by
executing a power of attorney, agent Yulo was authorized to borrow money and invest it as he
wished, without being obliged to apply it necessarily for the benefit of his principals.