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AGENCY Will you be remiss in your duties if you

November 25 2019 – Monday 2hrs refuse?

RECAP – BAGUNAS LI REBOJA Is your obligation to advance unlimited?

No, it is limited to the amount necessary to

CHAPTER 3 – OBLIGATIONS OF THE When you say necessary, what does it


Situation. When you invited the buyer to a

Specific Obligations of the Principal restaurant, he invited his whole family?
(1) Comply with the obligation of agency Situation by Atty Espedido.
(2) Advance sums of money should the
agent request, for the execution of the
agency Situation. Enhancement of the car to induce
(3) Reimburse the agent of the advances he buyers
made provided the agent is not at fault Commission gent authorized to sell the car of
(4) Indemnify for damages principal for 500K. Being a commission agent, it
(5) Pay compensation was in your possession. When you saw the car
you painted it another color. You spent money for
IOW, principal is obliged to comply with the it. You also enhanced the stereo of the car. You
obligations contracted by the agent. Because a were able to easily sell the car. When you
person who does through another does it himself, presented the expenses to the principal, you
so long as the agent complies with the authority think that the principal will reimburse you?
Yes, because spending for such expenses
UNLESS (PAPEE) manifest the agent’s desire to serve the principal.
Instances when agent is liable:
Was the agent able to sell the car easily
because of the enhancements?
AGENT Can the principal reimburse?
Situation. Agent advanced money necessary for If the agent is sure that with the enhancements,
the execution of the agency. the buyer will be induced to buy the car, agent
will be entitled to reimbursement.
How do we limit the expenses?
We limit by determining WON the expected profit Atty Espedido: Ask principal for permission. If
is greater than the expenses he agrees, then agent is entitled to
Do we have the same rules?
Yes. Partners are agents of each other. How about in case of debatable or gray area?
What should the agent do?
May the agent make any advances?
Yes, so long as it is necessary to the execution of There is a danger that you will not be
the agency. reimbursed. What instances will you not be
reimbursed? (FUCS)
Is the agent really obliged to make (1) Fault on the part of the agent
advances? (2) Unfavorable to the principal
No. (3) Contravention to instruction
(4) Expressly stipulated that it will be borne
If the principal tells him to make advances, by the agent
will you make advances?
If I have the money, I will make the advances to Example of an instance where the result is
execute the agency. unfavourable to the principal?
When you for a fact that it will not benefit the
Would there be any instance when you principal. You have knowledge that it will not be
might not make advances even if you have successful.
the money?
Yes, when the principal is insolvent.
Situation. You were authorized to sell the land
Principal told you to make advances even of your principal. You were about to finalize the
though the principal has money. Would you same and just as you were about to finalize the
agree? same, another agent was able to sell it. There
Yes, unless principal is insolvent. were two agents authorized.
The second buyer was able to finalize the sale What about the expenses for the power and
with Agent No.2. On the following day, Agent 1 water?
was able to finalize the sale to Buyer No 2. Not make them co-owners
Which of the same shall we honor?
It would have been different if ABC
Determine first if the same land is sold. If same inherited 3 apartment units as the co-
land is sold, prior date of sale is binding. owners.

General Rule: Prior date of sale is binding You were authorized to sell the property of A
composed of 10,000 sqm. In the same manner,
If both were sold on the same date, the rules in another agent, also authorized to sell the same
double sale will apply. property for 10K. Both sold at 5K (to different
Real Property: buyers)
(1) First to register in the Register of Deeds
in good faith shall be preferred Whose sale should be respected?
(2) If both registered at the same – first to Rules. Prior sale shall be honored
possess in good faith
(3) If both possessed in good faith at the If on the same date:
same time – person who has older title Qualify.

Movable Property Do you agree with the rules?

First to possess in good faith
For personal properties? If the property sold is the same – comply with
Situation. More than one agent, what is the rule?
Liability shall be joint UNLESS there is an express If different portions were sold – do not apply
agreement that it will be solidary. rules.

Two or more principals – solidarily liable RULES: We only apply the rules if the two
transactions are incompatible.
Liability in the negligence of the agent?
Solidary liability We apply the rules on incompatibility (instead of
using rules on double sale)
If both are negligent?
Solidary liable If Agent 1 sold the lot on the East Side and Agent
2 sold the property in the West Side. No
Situation. 3 brothers inherited from their incompatibility. Do not apply the rules.
parents 3 units of apartments. Brother A for unit
1. Brother B – Unit 2. Brother C – Unit 3. All of If incompatible – apply the rules.
them agreed that they will share equally on the
expenses for water. However, they also shared
equally for the caretaker, there agent. They Next meeting: CHAPTER 4 (LAST AND FINAL
authorized their agent to sell all of their CHAPTER)

Agent was looking for a buyer. Unit B was

dilapidated, agent has to suspend for the
repairs and restorations. For which he spent
25K. After he was able to find a buyer for the 3
units, agent sought reimbursement of the 25K.

From whom the agent can go after for

Go after B.

Requisites for solidarity:

(1) Commonality of transaction
(2) Two or more principals
(3) Principals concurred in the appointment
or undertaking

He is a common agent but three different

transactions. Therefore, the solidarity rule does
not apply.

It would be different if they were co-owners.