Kinds of Agency.

Agency Based on Business or Transactions Encompassed. (Article 1876).

1. General or ni!ersal Agency.
An agent may "e (1) uni!ersal# ($) general% or (&) special. A universal agent is one aut'ori(ed to
do all acts for 'is principal )'ic' can la)fully "e delegated to an agent# suc' an agent may "e said to
'a!e uni!ersal aut'ority. A general agent is one aut'ori(ed to do all acts pertaining to a "usiness of a
certain *ind or at a particular place% or all acts pertaining to a "usiness of a particular class or series +e
'as usually aut'ority eit'er e,pressly conferred in general terms or in effect made general "y t'e usages%
customs or nature of t'e "usiness )'ic' 'e is aut'ori(ed to transact. An agent% t'erefore% )'o is
empo)ered to transact all t'e "usiness of 'is principal of a particular *ind or in a particular place% )ould
for t'is reason. Be ordinarily deemed a general agent. A special agent is one aut'ori(ed to do some
particular act or to act upon some particular occasion# 'e acts usually in accordance )it' specific
instructions or under limitations necessarily implied from t'e nature of t'e act to "e done.
Siasat !s. IAC, 1&- iscraa $&8 (1-8.).
2. /pecial or 0articular Agency.
T'e rig't of an agent to indorse commercial paper (c'ec*) is a !ery responsi"le po)er and )ill
not "e lig'tly inferred. A salesman )it' aut'ority to collect money for 'is principal does not 'a!e t'e
implied aut'ority to indorse c'ec*s recei!ed in payment. Any person ta*ing c'ec*s made paya"le to a
corporation )'ic' can act only "y agents does so at 'is peril% and must a"ide "y t'e conse1uence if t'e
agent )'o indorses t'e same is )it'out aut'ority. Insular Drug vs. PNB, .8 0'il 682 (1-&&).
Agency 3'et'er 4t 5o!ers 6egal 7atters.
1. Attorney8at86a).
9nly t'e employee% not 'is counsel% can impugn t'e consideration of t'e compromise as "eing
unconsciona"le. T'e relation of attorney and client is in many respects one of agency and t'e general
rules of agency apply to suc' relation8t'e circumstances of t'is case indicate t'at t'e employee:s counsel
acted "eyond t'e scope of 'is aut'ority in 1uestioning t'e compromise agreement. Alt'oug' a client 'as
undou"tedly t'e rig't to compromise a suit )it'out t'e inter!ention of 'is la)yer% t'e same cannot "e
done to defraud t'e la)yer of t'e earned attorney:s fees. J-Phil Marine, Inc. !s. NLRC, .61 iscraa 67.
($;;8).
An attorney cannot% )it'out a client:s aut'ori(ation% settle t'e action or su"<ect matter of t'e
litigation e!en )'en 'e "elie!es t'at suc' a settlement )ill "est ser!e 'is client:s interest.
Philippine Aluminum heels, Inc. !. !AS"I #nterprises, Inc., &2$ iscraa 7$$ ($;;;).
2. Attorney8in8=act.
T'e relations'ip of attorney and client is in many respects one of agency and t'e general rules of
agency apply to suc' relation. T'e acts of an agent are deemed t'e acts of t'e principal only if t'e agent
acts )it'in t'e scope of 'is aut'ority. T'us% )'en t'e la)yer files an opposition to t'e compromise
agreement t'at 'as "een !alidly entered into "y 'is client% 'e is acting "eyond t'e scope of 'is aut'ority.
$J-Phil. Marine, Inc. !. NLRC, .61 iscraa 67. ($;;8).
Agency 3'et'er 4t 5o!ers Acts of Administration or Acts of >ominion? %P&'ers of Att&rne(.%
1. =orm of 0o)ers of Attorney.
4n a case in!ol!ing aut'ority to act in "arangay conciliation cases co!ering an e<ectment for failure
to pay rentals? @A po)er of attorney is an instrument in )riting "y )'ic' one person% as principal% appoints
anot'er as 'is agent and confers upon 'im t'e aut'ority to perform certain specified acts or *inds of acts
on "e'alf of t'e principal. T'e )ritten aut'ori(ation itself is t'e po)er of attorney% and t'is is clearly
indicated "y t'e fact t'at it 'as also "een called a @letter of attorney.@ ee !s. De Castr&, .6$ iscraa 6-.
($;;8).
T'e 6etter dated Aanuary 16% 1--6 relied upon "y t'e petitioners )as signed "y respondent
=ernande( alone% )it'out any aut'ority from t'e respondents8o)ners. T'ere is no actuation of respondent
=ernande( in connection )it' 'er dealings )it' t'e petitioners. As suc'% said letter is not "inding on t'e
respondents as o)ners of t'e su"<ect properties. Lit&n)ua vs. !ernan*e+, 2$7 iscraa 278 ($;;2).
4t is a general rule t'at a po)er of attorney must "e strictly construed# t'e instrument )ill "e 'eld
to grant only t'ose po)ers t'at are specified% and t'e agent may neit'er go "eyond nor de!iate from t'e
po)er of attorney. ,la - gueer vs. Purug - ganan, Jr., .1. iscraa 26; ($;;7).
($.) General 0o)er of Attorney. (Article 1877).
Agency couc'ed in general terms comprises only acts of administration% e!en if t'e principal
s'ould state t'at 'e )it''olds no po)er or t'at t'e agent may e,ecute suc' acts as 'e may consider
appropriate% or e!en t'oug' t'e agency s'ould aut'ori(e a general and unlimited management. .&shi+a/i
vs. J&( $raining Center &0 Aur&ra, Inc., 7;$ iscraa 6&1 ($;1&).
3e stress t'at t'e po)er of administration does not include acts of disposition or encum"rance%
)'ic' are acts of strict o)ners'ip. As suc'% an aut'ority to dispose cannot proceed from an aut'ority to
administer% and vice versa, for t'e t)o po)ers may only "e e,ercised "y an agent "y follo)ing t'e
pro!isions on agency of t'e 5i!il 5ode% (from Article 1876 to Article 1878). Agga1a& vs. Parulan Jr., 6$-
iscraa .6$ ($;1;).
(&.) /pecial 0o)er of Attorney.
Alt'oug' a @/pecial 0o)er of Attorney@ )as issued "y t'e insurance company to its agency
manager% it )ordings s'o) t'at it soug't only to esta"lis' an agency t'at comprises all t'e "usiness of
t'e principal )it'in t'e designated locality% "ut couc'ed in general terms% and conse1uently )as limited
only to acts of administration. A general po)er permits t'e agent to do all acts for )'ic' t'e la) does not
re1uire a special po)er T'us% t'e acts enumerated in or similar to t'ose enumerated in t'e @/pecial
0o)er of Attorney@ - that is, really a general po)er of attorney B did not re1uire a special po)er of
attorney% and could only co!er acts of administration. D&mini&n Insurance C&rp. vs. C&urt of Appeals, &76
iscraa $&- ($;;$).
E!en )'en t'e title gi!en to a deed is as a @General 0o)er of Attorney%@ "ut its operati!e clause
contains an aut'ority to sell% it constituted t'e re1uisite special po)er of attorney to sell a piece of land.
@T'us% t'ere )as no need to e,ecute a separate and special po)er of attorney since t'e general po)er of
attorney 'ad e,pressly aut'ori(ed t'e agent or attorney in fact t'e po)er to sell t'e su"<ect property. T'e
special po)er of attorney can "e included in t'e general po)er )'en it is specified t'erein t'e act or
transaction for )'ic' t'e special po)er is re1uired.@ 2el&s& vs. C&urt of Appeals, $6; iscraa .-& (1--6).
3'en an agent 'as "een gi!en general control and management of t'e "usiness% 'e is deemed
to 'a!e po)er to employ suc' agents and employees as are usual and necessary in t'e conduct of t'e
"usiness% and needs no special po)er of attorney for suc' purpose. B Yu Chuc/ vs. %3&ng Li P&,% 26 0'il
6;8 (1-$2).
An attorney8in8fact empo)ered to pay t'e de"ts of t'e principal and employ legal counsel to
defend t'e principal:s interest% 'as certainly t'e implied po)er to pay on "e'alf of t'e principal t'e
attorney:s fees c'arged "y t'e la)yer. Municipal C&uncil &0 Il&il& vs. #vangelista. .. 0'il $-; (1-&;).
A co8o)ner )'o is made an attorney8in8fact% )it' t'e same po)er and aut'ority to deal )it' t'e
property )'ic' t'e principal mig't or could 'a!e 'ad if personally present% may adopt t'e usual legal
means to accomplis' t'e o"<ect% including acceptance of ser!ice and engaging of legal counsel to
preser!e t'e o)ners'ip and possession of t'e principal:s property. "&vernment &0 PI v. agner, .2 0'il
1&$ (1-$-).
@ 5ontracts of agency and general po)ers of attorney% must "e interpreted in accordance )it' t'e
language used "y t'e parties. T'e real intention of t'e parties is primarily to "e determined from t'e
language used. T'e intention is to "e gat'ered from t'e )'ole instrument. 4n case of dou"t% resort must
"e 'ad to t'e situation% surroundings% and relations of t'e parties. 3'ene!er it is possi"le% e00ect is to "e
gi!en to e!ery )ord or clause used "y t'e parties. 4t is to "e presumed t'at t'e parties said )'at t'ey
intended to say and t'at t'ey used eac' )ord or clause )it' sole purpose% and t'at purpose is% if
possi"le% to "e ascertained and enforced. 4f t'e contract "e open to t)o constructions% one of )'ic' )ould
)'ile t'e ot'er )ould o!ert'ro) it% t'e former is to "e c'osen. 4f "y one construction t'e contract )ould "e
illegal% and "y anot'er e1ually permissi"le construction )ould "e la)ful% t'e latter must "e adopted. T'e
acts of t'e parties )ill "e presumed to "e done in conformity )it' and not contrary to t'e intent of t'e
contract. T'e meaning of general )ords must "e construed )it' reference to t'e specific o"<ect to "e
accomplis'ed and limited "y t'e recitals made in reference to suc' o"<ect. Linan vs. Pun&, &1 0'il $.-
(1-1.).
(2.) E,press 0o)er of Attorney E,cludes 0o)ers of Administration 4e5ample, General 0o)er of Attorney).
T'e instrument )'ic' grants to t'e agent t'e po)er @To follo)8up% as*% demand% collect and
receipt for my "enefit indemnities or sum due me relati!e to t'e sin*ing of 7C Demos in t'e !icinity of E4
Aadida% 5asa"lanca% 7orocco on t'e e!ening of =e"ruary 17% 1-86%@ is a special po)er of attorney%
e,cludes any intent to grant a general po)er of attorney or to constitute a uni!ersal agency. Being special
po)ers of attorney% t'ey must "e strictly construed. T'e instrument cannot "e read to gi!e po)er to t'e
attorney8in8fact @to o"tain% recei!e% receipt from@ t'e insurance company t'e proceeds arising from t'e
deat' of t'e seaman8insured% especially )'en t'e commercial practice for group insurance of t'is nature
is t'at it is t'e employer8policy'older )'o too* out t'e policy )'o is empo)ered to collect t'e proceeds
on "e'alf of t'e co!ered insured or t'eir "eneficiaries. Pine*a !s. C&urt &0 Appeals, $$6 iscraa 7.2 (1--&).
5ases 3'ere /pecial 0o)ers of Attorney Are Decessary. (Article 1878).
(1.) To 7a*e 0ayments %As Are N&t 6suall( C&nsi*ere* as Acts &0 A*ministrati&n.%
4n t'e case of t'e area manager of an insurance company% it )as 'eld t'at t'e payment of claims
is not an act of administration% and t'at since t'e settlement of claims )as not included among t'e acts
enumerated in le /pecial 0o)er of Attorney issued "y t'e insurance company% nor is of a c'aracter
similar to t'e acts enumerated t'erein% t'en a special po)er of attorney )as re1uired "efore suc' area
manager could settle t'e insurance claims of t'e insured. 5onse1uently% t'e amounts paid "y t'e area
manager to settle suc' claims cannot "e reim"ursed from t'e principal insurance company. D&mini&n
Insurance C&rp. !s. C&urt of Appeals, &76 iscraa $&- ($;;$).
($.) To Effect Do!ations 3'ic' 0ut an End to 9"ligations Already in E,istence at t'e Time t'e Agency
3as 5onstituted.
(&.) To 5ompromise% To /u"mit Euestions to Ar"itration% To Fenounce t'e Fig't to Appeal from a
Audgment% To 3ai!e 9"<ections to t'e Cenue of an Action% or To A"andon a 0rescription Already
Ac1uired.
T'e po)er to compromise e,cludes t'e po)er to su"mit to ar"itration. 4t )ould also "e
reasona"le to conclude t'at t'e po)er to su"mit to ar"itration does not carry )it' it t'e po)er to
compromise. (Article 188;).
3'en an agent 'as "een empo)ered to sell 'emp in a foreign country% t'at e,press po)er
carries )it' it t'e implied po)er to ma*e and enter into t'e usual and customary contract for its sale%
)'ic' sale contract may pro!ide for settlement of issues "y ar"itration. @3e are clearly of t'e opinion t'at
t'e contract in 1uestion is !alid and "inding upon t'e defendant GprincipalH% and t'at aut'ority to ma*e and
enter into it for and on "e'alf of t'e defendant GprincipalH% "ut as a matter of fact t'e contract )as legally
ratified and appro!ed "y t'e su"se1uent acts and conducts of t'e defendant GprincipalH.@ R&1ins&n
!leming !. Cru+, 2- 0'il 2$ (1-$6).
True% said counsel asserted t'at 'e 'ad !er"al aut'ority to compromise t'e case. T'e
Fules% 'o)e!er% re1uire% for attorneys to compromise t'e litigation of t'eir clients% a @special aut'ority@
(/ection $&% Fule 1&8% Fules of 5ourt). And )'ile t'e same does not state t'at t'e special aut'ority "e in
)riting% t'e court 'as e!ery reason to e,pect% t'at% if not in )riting% t'e same "e duly esta"lis'ed "y
e!idence ot'er t'an t'e self8ser!ing assertion of counsel 'imself t'at suc' aut'ority )as !er"ally gi!en to
'im. =or% aut'ority to compromise cannot lig'tly "e presumed. 7&me Insurance 5o. !s. 6SL, $1 iscraa 86&
(1-67).
,l* Civil C&*e8 T'e po)er to "ring suit in order to collect sums of money accruing in t'e ordinary
course of "usiness @as properly "elonging to t'e class of acts descri"ed in article 171& of t'e 5i!il 5ode
as acts of :strict o)ners'ip:. 4t seems rat'er to "e somet'ing )'ic' is necessarily a part of t'e mere
administration of suc' a "usiness as t'at descri"ed in t'e instrument in 1uestion and only incidentally% if
at all% in!ol!ing a po)er to dispose of t'e title to property.@ G4n any e!ent% t'e pro!ision to @e,act t'e
payment of sums of money @"y legal means@ )as construed to "e e,press po)er to sue.H "ermann !s.
D&nal*s&n, 1 0'il 6& (1-;1).
(2.) To 3ai!e Any 9"ligation Gratuitously.
(..) To Enter 4nto Any 5ontract "y 3'ic' t'e 9)ners'ip of an 4mmo!a"le 4s Transmitted or Ac1uired
Eit'er Gratuitously or for a Calua"le 5onsideration.
According to t'e pro!isions of Article 1872 on Agency% )'en t'e sale of a piece of land or any
interest t'erein is made t'roug' an agent% t'e aut'ority of t'e latter s'all "e in )riting. A"sent t'is
re1uirement% t'e sale s'all "e !oid. Also% under Article 1878% a special po)er of attorney is necessary in
order for an agent to enter into a contract "y )'ic' t'e o)ners'ip of an immo!a"le property is transmitted
or ac1uired% eit'er gratuitously or for a !alua"le consideration. #state of Lin of ,laguer vs. ,ng)&c&, .6&
iscraa &7& ($;;8).
Article 1878 pro!ides t'at a special po)er of attorney is necessary to enter into any contract "y
)'ic' t'e o)ners'ip of an immo!a"le is transmitted or ac1uired eit'er gratuitously or for a !alua"le
consideration% or to create or con!ey real rig'ts o!er immo!a"le property% or for any ot'er act of strict
dominion. Any sale of real property "y one purporting to "e t'e agent of t'e registered o)ner )it'out any
aut'ority t'erefore in )riting from t'e said o)ner is null and !oid# declarations of t'e agent alone are
generally insufficient to esta"lis' t'e fact or e,tent of 'er aut'ority.@ Lit&n)ua vs. !ernan*e+, 2$7 iscraa 278
($;;2).
T'e po)er e,pressly conferred on t'e agent to sell @for suc' price or amount@ is "road enoug' to
co!er t'e e,c'ange contemplated in t'e >eed of Assignment and 5on!eyance "et)een t'e properties
and t'e corresponding corporate s'ares in a corporation% )it' t'e latter replacing t'e cas' e1ui!alent of
t'e option money initially agreed to "e paid "y t'e said corporation under t'e 7emorandum of
Agreement. A special po)er of attorney to sell is sufficient to ena"le t'e agent to ma*e a "inding
commitment under t'e >eed of Assignment and 5on!eyance. 7ernan*e+-Nievera !s. 7ernan*e+, 62$
iscraa 626 ($;11).
(.8A) /ale of a 0iece of 6and or 4nterest T'erein. (Article 1872).
GArticle 1872 and Aritcle 187. (.) e,plicitly re1uire a )ritten aut'ority )'en t'e sale of a piece of
land is t'roug' an agent% )'et'er t'e sale is gratuitously or for a !alua"le consideration. A"sent suc'
aut'ority in )riting% t'e sale is null and !oid. 4n t'e case at "ar% it is undisputed t'at t'e sale of t'e su"<ect
lots to /pouses Bautista )as !oid. Based on t'e records% Dasino 'ad no )ritten aut'ority from /pouses
Aalandoni to sell t'e su"<ect lots. T'e testimony of Eliseo t'at Dasino )as empo)ered "y a special po)er
of attorney to sell t'e su"<ect lots )as "ereft of merit as t'e alleged special po)er attorney )as neit'er
presented in court nor )as it referred to in t'e deeds of a"solute sale. Bare allegations% unsu"stantiated
"y e!idence% are not e1ui!alent to proof under t'e Fules of 5ourt. B Bautista vs. Sp&uses Jalan*&ni [GR
#17 12 62% Do!em"er $7%$;1&H.
3'ere t'e nep'e) in 'is o)n name sold a parcel of land )it' a masonry 'ouse constructed
t'ereon to t'e company% )'en in fact it )as property o)ned "y t'e uncle% "ut in t'e estafa case filed "y
t'e company against t'e nep'e)% t'e uncle s)ore under oat' t'at 'e 'ad aut'ori(ed 'is nep'e) to sell
t'e property% t'e uncle can "e compelled in t'e ci!il action to e,ecute t'e deed of sale co!ering t'e
property. @4t 'a!ing "een pro!en at t'e trial t'at 'e ga!e 'is consent to t'e said sale% it follo)s t'at t'e
defendant conferred !er"al% or at least implied% po)er of agency upon 'is nep'e) >uran% )'o accepted it
in t'e same )ay "y selling t'e said property. T'e principal must t'erefore fulfill all t'e o"ligations
contracted "y t'e agent% )'o acted )it'in t'e scope of 'is aut'ority. (Articles 17;-% 171; and 17$7)# and%
"utierre+ 7erman&s vs. ,rense, $8 0'il .7$ (1-12).
3'en no particular formality is re1uired "y la)% rules or regulation% t'en t'e principal may appoint
'is agent in any form )'ic' mig't suit 'is con!enience or t'at of t'e agent% in t'is case a letter addressed
to t'e agent re1uesting 'im to file a protest in "e'alf of t'e principal )it' t'e 5ollector of 5ustoms against
t'e appraisement of t'e merc'andise imported into t'e country "y t'e principal. 3uen+le an* Strei00 !s.
C&llect&r &0 Cust&ms, &1 0'il 626 (1-1.).
A po)er of attorney to con!ey real property need not "e in a pu"lic document% it need only "e in
)riting% since a pri!ate document is competent to create% transmit% modify% or e,tinguis' a rig't in real
property. Jimene+ !s. Ra1at, &8 0'il &78 (1-18).
nder /ection &&. of t'e 5ode of 5i!il 0rocedure% an agreement for t'e leasing for a longer
period t'an one year% or for t'e sale of real property% or of an interest t'erein% is in!alid if made "y t'e
agent unless t'e aut'ority of t'e agent "e in )riting and su"scri"ed "y t'e party soug't to "e c'arged.
Ri& y ,la11arrieta !s. .utec, 2- 0'il $76 (1-$6).
T'e e,press mandate re1uired "y Article 1872 to ena"le an appointee of an agency couc'ed in
general terms to sell must "e one t'at e,pressly mentions a sale of a piece of land or t'at includes a sale
as a necessary ingredient of t'e act mentioned. T'e po)er of attorney need not contain a specific
description of t'e land to "e sold% suc' t'at gi!ing t'e agent t'e po)er to sell @any or all tracts% lots% or
parcels@ of land "elonging to t'e principal is ade1uate. D&ming& !. D&ming&, 2$ iscraa 1&1 (1-71).
3'ere t'e special po)er of attorney primarily empo)ered t'e agent of t'e corporation to "ring an
e<ectment case against t'e occupant and also @to compromise so far as it s'all protect t'e rig'ts and
interest of t'e corporation in t'e aforementioned lots%@ and t'at t'e agent did e,ecute a compromise in t'e
legal proceedings filed )'ic' sold t'e lots to t'e occupant% t'e compromise agreement is !oid for t'e
po)er to sale "y )ay of compromise could not "e implied to protect t'e interests of t'e principal to secure
possession of t'e properties. B C&smic Lum1er v. C&urt of Appeals, $6. iscraa 168 (1--6).
Article 1878 pro!ides t'at in t'e sale of a parcel of land or any interest t'erein made t'roug' an
agent% a special po)er of attorney is essential# Article 1872 pro!ides t'at suc' aut'ority must "e in
)riting% ot'er)ise t'e sale s'all "e !oid.@ Pine*a vs. C&urt &0 Appeals, &76 iscraa $$$ ($;;$).
Agency may "e oral unless t'e la) re1uires a specific form. +o)e!er% to create or con!ey real
rig'ts o!er immo!a"le property% a special po)er of attorney is necessary. T'us% )'en a sale of a piece of
land or any portion t11ereof is t'roug' an agent% t'e aut'ority of t'e latter s'all "e in )riting% ot'er)ise%
t'e sale s'all "e !oid. Lit&n)ua, Jr. vs. #ternit C&rp., 9:; iscraa $;2 ($;;6). G56C 8 Dotice t'at t'e article
does not declare t'e agency to "e !oid% "ut t'e resulting contract of sale effected "y% t'e agent Is the
agenc( itsel0 v&i*<=
nder Article 1878 of t'e 5i!il 5ode% a special po)er of attorney is necessary for an agent to
enter into a contract "y )'ic' t'e o)ners'ip of an immo!a"le property is transmitted or ac1uired% eit'er
gratuitously or for a !alua"le consideration. A"sence of a )ritten aut'ority to sell a piece of land is ips&
)ure !oid% precisely to protect t'e interest of an unsuspecting o)ner from "eing pre<udiced "y t'e
un)arranted act of anot'er. Pahu* vs. C&urt &0 Appeals, >:? iscraa 1& ($;;-).
4n sales in!ol!ing real property or any interest t'erein% a )ritten aut'ority in fa!or of t'e agent is
necessary% ot'er)ise t'e sale is !oid. As a general rule% a contract of agency may "e oral. +o)e!er% it
must "e )ritten )'en t'e la) re1uires a specific form. /pecifically% Article 1872 of t'e 5i!il 5ode pro!ides
t'at t'e contract of agency must "e )ritten for t'e !alidity of t'e sale of a piece of land or any interest
t'erein. 9t'er)ise% t'e sale s'all "e !oid. A related pro!ision% Article 1878 of t'e 5i!il 5ode% states t'at
special po)ers of attorney are necessary to con!ey real rig'ts o!er immo!a"le properties. .&shi+a/i vs.
J&( $raining Center &0 Aur&ra, Inc., 7;$ /5FA 6&1 ($;1&).
5orporate /ale of land. 8 3'en t'e sale of a piece of land or any interest t'erein is t'roug' an
agent% t'e aut'ority of t'e latter s'all "e in )riting# ot'er)ise% t'e sale s'all "e !oid. T'e same situation
applies )'en t'e sale of corporate piece of land is pursued t'roug' an officer )it'out )ritten aut'ority.
Cit(-Lite Realt( C&rp. v. C&urt &0 Appeals, &$. /5FA &8. ($;;;).
3'en t'e corporation:s primary purpose is to mar*et% distri"ute% e,port and import merc'andise%
t'e sale of land is not )it'in t'e actual or apparent aut'ority of t'e corporation acting t'roug' its officers%
muc' less )'en acting t'roug' t'e treasurer. 6i*e)ise% Articles 1872 and 1878 re1uire t'at )'en land is
sold t'roug' an agent% t'e agent:s aut'ority must "e in )riting% ot'er)ise t'e sale is !oid. San Juan
Structural vs. CA, $-6 iscraa 6&1 (1--8).
(.8B). Agents 5annot Buy 0roperty of 0rincipal nless Aut'ori(ed. (Article 12-1 G$H).
T'e pro'i"ition against agents purc'asing property in t'eir 'ands for sale or management is%
'o)e!er% clearly% not a"solute. 3'en so aut'ori(ed "y t'e principal% t'e agent is not dis1ualified from
purc'asing t'e property 'e 'olds under a contract of agency to sell. ,lageer vs. Purug-ganan, Jr., .1.
iscraa 26; ($;;7).
(6.) To lease Feal 0roperty for 7ore T'an 9ne Iear.
Article 1878 of t'e 5i!il 5ode e,presses t'at a special po)er of attorney is necessary to lease
any real property to anot'er person for more t'an one year. T'e lease of real property for more t'an one
year is considered not merely an act of administration "ut an act of strict dominion or of o)ners'ip A
special po)er of attorney is t'us necessary for its e,ecution t'roug' an agent. Sh&pper@s Para*ise Realt(
v R&Aue, 21- iscraa -& ($;;2).
3'ere t'e lease contract in!ol!es t'e lease of real property for a period of more t'an one year%
and% it )as entered into "y t'e agent of t'e lessor and not t'e lessor 'erself% in suc' a case% Article 1878
of t'e 5i!il 5ode re1uires t'at t'e agent "e armed )it' a special po)er of attorney to lease t'e premises.
5onse1uently% t'e pro!isions of t'e contract of lease% including t'e grant t'erein of an option to purc'ase
to t'e lessee% )ould "e unenforcea"le. 2iu*a De Chua vs. IAC, $$- iscraa -- (1--2).
3'en t'e attorney8in8fact )as empo)ered "y 'is principal to ma*e an assignment of credits%
rig'ts% and interests% in payment of de"ts for professional ser!iced rendered "y la)s% and t'e 'iring of
la)yers to ta*e c'arge of any actions necessary or e,pedient for t'e interests of 'is principal% and to
defend suits "roug't against t'e principal% suc' po)ers necessarily implies t'e aut'ority to pay for t'e
professional ser!ices t'us engaged% )'ic' includes assignment of t'e <udgment secured for t'e principal
in settlement of outstanding professional fees. Municipal C&uncil &0 Il&il& v. #vangelista, .. 0'il. $-;
(1-&;).
(7.) To Create or Convey Real Rights over Immovable Property.
(8.) To Make Gifts.
(.) To !oan or "orro# Money.
$%&ept' T'e agent may "orro) money )'en it s urgent and indispensa"le for t'e o
preser!ation of t'e t'ings )'ic' are under administration.
Po#er to (ell $%&l)*es Po#er to Mortgage an* Vice Versa. (+rti&le ,87).
A special po)er of attorney is necessary for an agent to "orro) money% unless it "e urgent and
indispensa"le for t'e preser!ation of t'e t'ings )'ic' are under administration. .asuma vs. 7eirs &0
Cecilia /. >e 2illa, 2-- iscraa 266 ($;;6).
4t is a general rule in t'e la) agency t'at% in order to "ind t'e principal "y a mortgage on real
property e,ecuted "y an agent% it must upon its face purport to "e made% signed and sealed in t'e name
of t'e principal# ot'er)ise% it )ill "ind t'e agent only. "&+un vs. Merca*& .11 iscraa &;. ($;;6).
A po)er of attorney% li*e any ot'er instrument% is to "e construed according to t'e natural import
of its language# and t'e aut'ority )'ic' t'e principal 'as conferred upon 'is agent is not to "e e,tended
"y implication "eyond t'e natural and ordinary significance of t'e terms in )'ic' t'at aut'ority 'as "een
gi!en. T'e attorney 'as only suc' aut'ority as t'e principal 'as c'osen to confer upon 'im% and one
dealing )it' 'im must ascertain at 'is o)n ris* )'et'er 'is acts )ill "ind t'e principal. T'us% )'ere t'e
po)er of attorney )'ic' !ested t'e agent )it' aut'ority @for me and in my name to sign% seal and
e,ecute% and as my act and deed% deli!ery any lease% any ot'er deed for conveying any real or personal
property@ or @any ot'er deed for t'e con!eying of any real or personal property%@ it does not carry )it' it or
imply t'at t'e agent for and on "e'alf of 'is principal 'as t'e po)er to e,ecute a promissory note or a
mortgage to secure its payment. Nati&nal Ban/ vs. $an ,ng S+e, .& 0'il 2.1 (1-$-).
3'ere t'e po)er of attorney e,ecuted "y t'e principal aut'ori(ed t'e agent @By means of a
mortgage of my real property% to "orro) and lend sums in cas'% at suc' interest and for suc' periods and
conditions as 'e may deem property and to collect or to pay t'e principal and interest t'ereon )'en due%@
)'ile it did not aut'ori(e t'e agent to e,ecute deeds of sale )it' rig't of repurc'ase o!er t'e property of
t'e principal% nonet'eless )ould !alidate t'e main contract of loan entered into )it' t'e deed of sale )it'
rig't of repurc'ase constituting merely an e1uita"le mortgage% "ot' contracts of )'it##' )ere )it'in t'e
scope of aut'ority of t'e agent. R&*rigue+ vs. Pamintuan an* >e Jesus, &7 0'il 876 (1-18).
An /0A to mortgage real estate is limited to suc' aut'ority to mortgage and does not "ind t'e
grantor personally to ot'er o"ligations contracted "y t'e grantee (in t'is case t'e personal loan o"tained
"y t'e agent in 'is o)n name from t'e 0DB) in t'e a"sence of any ratification or ot'er similar act t'at
)ould estop t'e grantor from 1uestioning or diso)ning suc' ot'er o"ligations contracted "y t'e grantee.
PNB vs. Sta. Maria, $- iscraa &;& (1-6-).
4n ot'er )ords% t'e po)er to mortgage does not include t'e po)er to o"tain loans% especially
)'en t'e grantors allege t'at t'ey 'ad no "enefit at all from t'e proceeds of t'e loan ta*en "y t'e agent
in 'is o)n name from t'e "an*. @4t is not unusual in family and "usiness circles t'at one )ould allo) 'is
property or an undi!ided s'are in real estate to "e mortgaged "y anot'er as security% eit'er as an
accommodation or for !alua"le consideration% "ut t'e grant of suc' aut'ority does not e,tend to assuming
personal lia"ility% muc' less solidary lia"ility% for any loan secured "y t'e grantee in t'e a"sence of
e,press aut'ority so gi!en "y t'e grantor.@ PNB vs. Sta. Maria, $- iscraa &;&%&1; (1-6-).
T'e )ife may not "e 'eld lia"le for t'e payment of t'e mortgage de"t contracted "y t'e 'us"and%
)'ere t'e po)er of attorney gi!en to t'e 'us"and )as limited to a grant of aut'ority to mortgage land
titled in t'e )ife:s name. >e 2illa vs. !a1ricante, 1;. 0'il 67$ (1-.-).
(,-.) To "in* the Prin&ipal to Ren*er (ome (ervi&e .itho)t Compensation.
(,,.) To "in* the Prin&ipal in a Contra&t of Partnership.
(,/.) To 0bligate the Prin&ipal as a G)arantor or ()rety.
3'ere a po)er of attorney is e,ecuted primarily to ena"le t'e attorney8in8fact. as manager of a
mercantile "usiness% to conduct its affairs for and on "e'alf of t'e principal% )'o is t'e o)ner of t'e
"usiness% and to t'is end t'e attorney8in8fact is aut'ori(ed to e,ecute contracts relating to t'e principal:s
property G@act and deed deli!ery% any lease% or any ot'er deed for t'e con!eying any real or personal
property@ and @act and deed deli!ery% any lease% release. "argain% sale% assignment% con!eyance or
assurance% or any ot'er deed for t'e con!eying any real or personal property@H % suc' po)er )ill not "e
interpreted as gi!ing t'e attorney8in8fact po)er to "ind t'e principal "y a contract of independent guaranty
or surety unconnected )it' t'e conduct of t'e mercantile "usiness. General )ords contained in suc'
po)er )ill not "e interpreted to e,tend po)er to t'e ma*ing of a contract of suretys'ip% "ut )ill "e limited%
under t'e )ell8*no) rule of construction indicated in t'e e,press in e)us*em generis, as applying to
matters similar to t'ose particularly mentioned. Direct&r vs. Sing Juc&, .& 0'il $;. (1-$-).
9ur la) mandates an agent to act )it'in t'e scope of 'is aut'ority (Article 1881)% )'ic' is )'at
appears in t'e )ritten terms of t'e po)er of attorney granted upon 'im (Article 1-;;). nder Article 1878
para 11 of t'e 5i!il 5ode% a special po)er of attorney is necessary to o"ligate t'e principal as a guarantor
or surety. C&untr( Ban/ers Insurance C&rp vs. 3eppel Ce1u Ship(ar*,
67& iscraa 2$7 ($;1$).
(1&.) To Accept or Fepudiate an 4n'eritance.
(12.) To Fatify or Fecogni(e 9"ligations 5ontracted Before t'e Agency.
3'ere a )ife ga!e 'er 'us"and a po)er of attorney @to loan and "orro) money@ and to mortgage
'er property% t'at fact does not carry )it' it or imply t'at 'e 'as a legal rig't to sign 'er name to a
promissory note )'ic' )ould ma*e 'er lia"le for t'e payment of a pre8e,isting de"t of t'e 'us"and or t'at
of 'is firm% for )'ic' s'e )as not pre!iously lia"le% or to mortgage 'er property to secure t'e pre8e,isting
de"t. BPI vs. De C&ster, 27 0'il .-2 (1-$.).
3'ere t'e po)er granted to su"stituted attorney8in8fact )as to t'e end t'at t'e principalseller
may "e a"le to collect t'e "alance of t'e selling price of t'e printing esta"lis'ment sold suc' su"stitute
agent 'ad no po)er to enter into ne) sales arrangements )it' t'e "uyer or to no!ate t'e terms of t'e
original sale. 2illa vs. "arcia B&sAue, 2- 0'il 1$6 (1-$6).
Dotari(ed 0o)er of Attorney.
A notari(ed po)er of attorney carries )it' it t'e e!identiary )eig't conferred upon it )it' respect
to its due e,ecution. 2els& vs. C&urt &0 Appeals, $6; iscraa .-& (1--6).
3'en a special po)er of attorney is duly notari(ed% t'e notarial ac*no)ledgment is prima 0acie
e!idence of t'e fact of its due e,ecution8a "uyer 'as e!ery reason to rely on a person:s aut'ority to sell a
particular property o)ned "y a corporation on t'e "asis of a notari(ed "oard resolution8undenia"ly t'e
"uyer is an innocent purc'aser for !alue in good fait'. St. Mar(@s !aun, Inc. vs. Prima Real Pr&perties,
Inc., .6; iscraa 7;2 ($;;8).