Professional Documents
Culture Documents
Art. 1884
Accepted agency
= agent is bound to carry out the agency
= agent is liable for damages if he does not carry out the agency
= if agent fulfills his duty, he is not liable personally
Art. 1885
Agent = bound to observe the diligence of a good father of a family in custody and
preservation of the goods forwarded to him by the owner until the latter should
appoint an agent
Owner = as soon as practicable either appoint an agent or take charge of the goods
Art. 1886
a. There is stipulation
b. Principal is bound to do so
Execution of agency
= agent shall act in accordance with the instructions of the principal
Without instructions:
= agent shall do all that a good father of a family would do so as required by the nature
of the business
AUTHORITY INSTRUCTIONS
a) Principal affects only 3rd persons, because a.) Concern only the principal and agent
if act is done outside the scope of the
agents authority, the principal is not
bound
b) 3rd person must verify or investigate the b) 3rd persons do not have to investigate or
authority verify the instructions
Principal cannot be held liable if agent does not follow principals instruction except:
1. Where principals act have contributed to deceive a third person in good faith;
2. Where the limitations upon the power created by the principal counld not have been known
by a 3rd person;
3. Where the princiapl has place in the hands of the agent instrument signed by him in blank.
= agent cannot be held responsible for the failure of his principal to accomplish the object of the
agency unless:
a. Agent exceeded authority
b. Has acted with negligence, deciet or fraud
Example.
A authorized B to sell a parcel of land. A made it clear to B that he has to sell the parcel of land
only to a couple engaged to be married. B made a transaction with X and Y, a couple. X and Y
paid to B the whole amount for the parcel of land owned by A. However, later X and Y found out
that the land has already been occupied and registered under the name of Wail. X and Y sued B.
Will the action prosper?
Art. 1888
Reasons:
Example:
Art. 1889
Conflict of interest
Example:
A authorize B to sell his Partnership, Agency and Trust Book authored by de leon. B also
owned the same book. X showed his interest to B to buy such kind of Book in the
amount of P1500. B, sold his book to X. Whats is the liability of B to A, if thereis?
Art. 1890
Art. 1891
Duty of Agent
Void stipulation
= exempting agent to render account
= against public policy
= conducive to fraud
Example:
A authorized B to sell a parcel of land owned by the former. A told B that he can sell the
land for the minimum amount of 1M and if B can sell the same for more than 1M, B
would get 10% of the excess as commission. B transacted with X, a rich balik-bayan, who
paid 2M for the said land. More than that, X, very thankful to B, he gave the latter
500,000 as a bonus/commission. Thereafter, B rendered accounting to A , turning over
the amount of 2M. B asks for his commission. In the meanwhile, A, learned that X gave
500k to B and the same was not reported to him. A refused to give the commission of B.
B sued A. Would A be liable?
Example:
A authorized B to sell his car. Even with As prohibition, B appointed C to sell the car
owned by A. C sold the car to X. Is the sale valid?
Art. 1893
Example:
A authorized B to sell his car. There is nothing in the contract prohibiting B to appoint a
substitute, B appointed C as a substitute. Suppose C violated an instruction of A. Whom
can A hold liable?
Answer: B and C
Since B is a good friend of A, the latter opted to sue C. C raised the defense of privity of
contracts, that A is not a party to the contract between B and C. Is his defense tenable?
Art. 1894
Example:
A authorized B and C to sell his Honda Vios car. True the fault of B, the agency was not
fulfilled. Can A sue C for damages?
Answer:
a. No, Art. 1894
What if there is a stipulation in the contract of agency? Can A sue C for damages?
Answer:
a. If B acted within the scope of his authority, C can be held liable.
If B instead of selling the Honda Vios of A, sold, the latters Mercedes Benz, Can C be held
liable to the actuations of B?
Answer:
a. No, B acted beyond the scope of his obligation.
Art. 1896
Art. 1897
Contract is VOID:
Example:
A authorize B to sell his Partnership, Agency and Trust Book authored by de leon. B,
however, sold As book on Insurance to X. Give status of sale?
Answer:
Valid, if X has no knowledge of B limitations. (Art. 1911)
Art. 1899
Art. 1900
Example:
A gave B a special power of attorney authorizing B to sell the properties of A, in Cebu
City, Mandaue and Lapu-lapu. However, A and B made an agreement that B will sell only
the property located in Mandaue City. Now, B sold all 3 properties. Is the sale of all
properties valid? Can A be held liable?
Art. 1901
Effect of Ratification
Art. 1902
3rd person
= May require the presentation of the power of attorney or instructions
Commission Agent
= merchant or broker
= having the option of acting in his own name or in that of the principal
Commission Agent
= engaged in the purchase and sale for a principal of personal property
= for such purpose, it has to be placed in his possession and his disposal
= has a relation as to his principal, buyer and sellers but also with the property which
constitute the object of transaction
Broker
= maintains no relation with the thing which he purchases or sells
= merely an intermediary between the seller and buyer
= he does not have either the custody or the possession of the thing that he disposes of
= only function is to bring parties to the transaction
Art. 1904
Art. 1905
If sold in credit:
a. Principal may demand payment in cash
b. Principal may ratify
Art. 1906
Art. 1907
Guarantee commission
= del credere commission
= one where, in consideration, of an increased commission, the factor or
commission agent guarantees to the principal the payment of debts arising
through his agency
Art. 1908
Art. 1909