By: Jacqueline Ann Quinto

SEVERINO vs. SEVERINO The relations of an agent to his principal are fiduciary and in regard to the property forming the subject-matter of the agency, he is stopped from acquiring or asserting a title adverse to that of the principal. An action in personam will lie against an agent to compel him to return or transfer to his principal, or the latter's estate, the real properly committed to his custody as such agent and also it execute the necessary documents of conveyance to effect such retransfer. an agent is not only estopped from denying hi principal's title to the property, but he is also disable from acquiring interests therein adverse to those of his principal during the term of the agency THOMAS vs. PINEDA A receiver, trustee, attorney, agent, or any other person occupying fiduciary relations respecting property or persons, is utterly disabled from acquiring for his own benefit the property committed to his custody for management. This rule is entirely independent of the fact whether any fraud has intervened. No fraud in fact need be shown, and no excuse will be heard from the trustee. I PALMA vs. CRISTOBAL The relations of an agent to his principal are fiduciary and in regard to property forming the subject matter of the agency, he is estopped from acquiring or asserting a title adverse to that of the principal. His position is analogous to that of a trustee and he cannot consistently, with the principles of good faith, be allowed to create in himself an interest in opposition to that of his principal or cestui que trust. A trustee cannot acquire by prescription the ownership of a property entrusted to him. The position of a trustee is of representative nature. It is logical that all benefits derived by the possession and acts of the agent, as such agent, should accrue to the benefit of his principal. RAMOS vs. CAOIBES Where an agent makes use of his power of attorney after the death of his principal, the agent has the obligation to deliver the amount collected by him by virtue of said power to the administratrix of the estate of his principal. Where a donation of personal property was made in writing but has not been accepted in the same form, the donation is not valid. Nor can it be considered a donation upon valuable consideration where no services or valuable consideration were involved. The mere fact that the agent collected the principal's claim from the War Damage Commission is not such a service as to require compensation. the contract of agency is presumed to be gratuitous, unless the agent is a professional agent. PEOPLE vs. BULU CHOWDURY An employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. It has been held that the existence of the corporate entity does not shield from prosecution the corporate agent who knowingly and intentionally causes the corporation to commit a crime. The corporation obviously acts, and can act, only by and through its human agents, and it is their conduct which the law must deter. The employee or agent of a corporation engaged in unlawful business naturally aids and abets in the carrying on of such business and will be prosecuted as principal if, with knowledge of the business, its purpose and effect, he consciously contributes his efforts to its conduct and promotion, however slight his contribution may be. The law of agency, as applied in civil cases, has no application in criminal cases, and no man can escape punishment when he participates in the commission of a crime upon the ground that he simply acted as an agent of any party. The culpability of the employee therefore hinges on his knowledge of the offense and his active participation in its commission. Where it is shown that the employee was merely acting under the direction of his superiors and was unaware that his acts constituted a crime, he may not be held criminally liable for an act done for and in behalf of his employer. Agents or representatives appointed by a licensed recruitment agency whose appointments are not previously approved by the POEA are considered "nonlicensee" or "non-holder of authority" and therefore not authorized to engage in recruitment activity. The obligation to register its personnel with the POEA belongs to the officers of the agency. A mere employee of the agency cannot be expected to know the legal requirements for its operation. EDUARDO B. OLAGUER, petitioner, vs. EMILIO PURUGGANAN, JR. AND RAUL LOCSIN It is a general rule that a power of attorney must be strictly construed; the instrument will be held to grant only those powers that are specified, and the agent may
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By: Jacqueline Ann Quinto

neither go beyond nor deviate from the power of attorney. However, the rule is not absolute and should not be applied to the extent of destroying the very purpose of the power. If the language will permit, the construction that should be adopted is that which will carry out instead of defeat the purpose of the appointment. Clauses in a power of attorney that are repugnant to each other should be reconciled so as to give effect to the instrument in accordance with its general intent or predominant purpose. Furthermore, the instrument should always be deemed to give such powers as essential or usual in effectuating the express powers. 31 It is, indeed, a familiar and universally recognized doctrine that a person who undertakes to act as agent for another cannot be permitted to deal in the agency matter on his own account and for his own benefit without the consent of his principal, freely given, with full knowledge of every detail known to the agent which might affect the transaction. 40 The prohibition against agents purchasing property in their hands for sale or management is, however, clearly, not absolute. It does not apply where the principal consents to the sale of the property in the hands of the agent or administrator. In re H. V. BAMBERGER Lawyers are bound to promptly account for money or property received by them on behalf of their clients and failure to do so constitutes professional misconduct. DOMINGO vs. DOMINGO The duties and liabilities of a broker to his employer are essentially those which an agent owes to his principal. Consequently, the decisive legal provisions are found in Articles 1891 and 1909 of the New Civil Code. The aforecited provisions demand the utmost good faith, fidelity, honesty, candor and fairness on the part of the agent, the real estate broker in this case, to his principal, the vendor. The law imposes upon the agent the absolute obligation to make a full disclosure or complete account to his principal of all his transactions and other material facts relevant to the agency, so much so that the law as amended does not countenance any stipulation exempting the agent from such an obligation and considers such an exemption as void. The duly of an agent is likened to that of a trustee. This is not a technical or arbitrary rule but a rule founded on the highest and truest principle of morality as well as of the strictest justice. An agent who takes a secret profit in the nature of a bonus, gratuity or personal benefit from the vendee, without revealing the same to his principal, the vendor, is guilty of a breach of his loyalty to the principal and forfeits his right to collect the commission from his principal, even if the principal does not suffer any injury by reason of such breach of fidelity, or that he obtained better results or that the agency is a gratuitous one, or that usage or custom allows it, because the rule is to prevent the possibility of any wrong, not to remedy or repair an actual damage. By taking such profit or bonus or gift or propina from the vendee, the agent thereby assumes a position wholly inconsistent with that of being an agent for his principal, who has a right to treat him, insofar as his commission is concerned, as if no agency had existed. The fact that the principal may have been benefited by the valuable services of the said agent does not exculpate the agent who has only himself to blame for such a result by reason of his treachery or perfidy. Because of his responsibility under the aforecited Article 1720, an agent is likewise liable for estafa for failure to deliver to his principal the total amount collected by him in behalf of his principal and cannot retain the commission pertaining to him by subtracting the same from his collections. Where a principal has paid an agent or broker a commission while ignorant of the fact that the latter has been unfaithful, the principal may recover back the commission paid, since an agent or broker who has been unfaithful is not entitled to any compensation. If the agent does not conduct himself with entire fidelity towards his principal, but is guilty of taking a secret profit or commission in regard the matter in which he is employed, he loses his right to compensation on the ground that he has taken a position wholly inconsistent with that of agent for his employer, and which gives his employer, upon discovering it, the right to treat him so far as compensation, at least, is concerned as if no agency had existed. This may operate to give to the principal the benefit of valuable services rendered by the agent, but the agent has only himself to blame for that result. As a general rule, it is a breach of good faith and loyalty to his principal for an agent, while the agency exists, so to deal with the subject matter thereof, or with information acquired during the course of the agency, as to make a profit out of it for himself in excess of his lawful compensation; and if he does so he may be held as a trustee and may be compelled to account to his principal for all profits, advantages, rights, or privileges acquired by him in such dealings, whether in performance or in violation of his duties, and be required
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to transfer them to his principal upon being reimbursed for his expenditures for the same, unless the principal has consented to or ratified the transaction knowing that benefit or profit would accrue, or had accrued, to the agent, or unless with such knowledge he has allowed the agent so as to change his condition that he cannot be put in status quo. The application of this rule is not affected by the fact that the principal did not suffer any injury by reason of the agent's dealings, or that he in fact obtained better results; nor is it affected by the fact that there is a usage or custom to the contrary, or that the agency is a gratuitous one. ESCUETA vs. LIM the Baloloys have ratified the contract of sale when they accepted and enjoyed its benefits. "The doctrine of estoppel applicable to petitioners here is not only that which prohibits a party from assuming inconsistent positions, based on the principle of election, but that which precludes him from repudiating an obligation voluntarily assumed after having accepted benefits therefrom. To countenance such repudiation would be contrary to equity, and would put a premium on fraud or misrepresentation." MENDEZONA vs. GOITIA an agent shall be liable for interest upon any sums he may have applied to his own use, from the day on which he did so, and upon those which he still owes, after the expiration of the agency, from the time of his default. METROBANK vs CA the bank obligates itself only as the depositor's collecting agent, assuming no responsibility beyond care in selecting correspondents, and until such time as actual payment shall have come into possession of this bank, the right is reserved to charge back to the depositor's account any amount previously credited, whether or not such item is returned. This also applies to checks drawn on local banks and bankers and their branches as well as on this bank, which are unpaid due to insufficiency of funds, forgery, unauthorized overdraft or any other reason. AUSTRIA vs. CA The point at issue in this proceeding is how the fact of robbery is to be established in order that a person may avail of the exempting provision of Article 1174 of the new Civil Code, which reads as follows: . . It may be noted therefrom that the emphasis of the provision is on In the present case, Namerco, the agent of a New Yorkbased principal, entered into a contract of sale with the National Power Corporation without disclosing to the NPC the limits of its powers and, contrary to its principal's prior cabled instructions that the sale should be subject to availability of a steamer, it agreed that non3

the events, not on the agents or factors responsible for them. To avail of the exemption granted in the law, it is not necessary that the persons responsible for the occurrence should be found or punished; it would only be sufficient to establish that the unforeseeable event, the robbery in this case, did take place without any concurrent fault on the debtor's part, and this can be done by preponderant evidence. To require in the present action for recovery the prior conviction of the culprits in the criminal case, in order to establish the robbery as a fact, would be to demand proof beyond reasonable doubt to prove a fact in a civil case. It is undeniable that in order to completely exonerate the debtor for reason of a fortuitous event, such debtor must, in addition to the casus itself, be free of any concurrent or contributory fault or negligence. This is apparent from Article 1170 of the Civil Code of the Philippines, providing that: . . It is clear that under the circumstances prevailing at present in the City of Manila and its suburbs, with their high incidence of crimes against persons and property, that renders travel after nightfall a matter to be sedulously avoided without suitable precaution and protection, the conduct of respondent Maria G. Abad, in returning alone to her house in the evening, carrying jewelry of considerable value, would be negligent per se, and would not exempt her from responsibility in the case of a robbery. We are not persuaded, however, that the same rule should obtain ten years previously, in 1961, when the robbery in question did take place, for at that time criminality had not by far reached the levels attained in the present day. INTL FILMS vs. LYRIC FILMS The defendant company, as subagent of the plaintiff in the exhibition of the film "Monte Carlo Madness", was not obliged to insure it against fire, not having received any express mandate to that effect, and it is not liable for the accidental destruction thereof by fire. NAPOCOR vs. NATIONAL MERCHANDISING CORP. the agent who exceeds the limits of his authority without giving the party with whom he contracts sufficient notice of his powers is personally liable to such party. The Court, however, further reduced the solidary liability of defendants-appellants for liquidated damages.

By: Jacqueline Ann Quinto

availability of a steamer was not a justification for nonpayment of the liquidated damages. Namerco. therefore, is liable for damages. The rule that every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent would apply only in cases where the principal is sought to be held liable on the contract entered into by the agent. The said rule is not applicable in the instant case since it is the agent, not the principal, that is sought to be held liable on the contract of sale which was expressly repudiated by the principal because the agent took chances, it exceeded its authority and, in effect. it acted in its own name. PHILIPPINE PRODUCTS COMPANY vs. PRIMATERIA SOCIETE ANONYME POUR LE COMMERCE EXTERIEUR: PRIMATERIA (PHILIPPINES) INC. WHEN AGENT OF FOREIGN CORPORATION PERSONALLY LIABLE; RIGHT OF CONTRACTING PARTY TO RECOVER FROM BOTH PRINCIPAL AND AGENT. Art. 1897 of the New Civil Code does not hold that in case of excess of authority, both the agent and the principal are liable to the other contracting party. In the absence of express legislation, the liability of the agent of a foreign corporation doing business, but not licensed in the Philippines, is premised on the inability to sue the principal or non-liability thereof. DPB vs. CA The liability of an agent who exceeds the scope of his authority depends upon whether the third person is aware of the limits of the agent's powers. There is no showing that Dans knew of the limitation on DBP's authority to solicit applications for MRI. If the third person dealing with an agent is unaware of the limits of the authority conferred by the principal on the agent and he (third person) has been deceived by the non-disclosure thereof by the agent, then the latter is liable for damages to him The rule that the agent is liable when he acts without authority is founded upon the supposition that there has been some wrong or omission on his part either in misrepresenting, or in affirming, or concealing the authority under which he assumes to act. Inasmuch as the non-disclosure of the limits of the agency carries with it the implication that a deception was perpetrated on the unsuspecting client, the provisions of Articles 19, 20 and 21 of the Civil Code of the Philippines come into play. E. MACIAS vs. WARNER BROS. A resident agent of a foreign insurance company doing business in the Philippine Islands is not liable, as principal or agent, on insurance contracts issued in the name of the company. IN THE ABSENCE OF CONTRACT AGENT NOT LIABLE. The defendant in the instant case is "Warner, Barnes & Co., in its capacity as agents of" insurance companies. W. B. & Co. never made any insurance contract, and is not liable, either as principal or agent. NO BREACH OF CONTRACT. There is no breach of contract by W. B. & Co., either as agent or principal, for the very simple reason that W. B. & Co. did not make any contract with plaintiff, either as agent or principal. MANILA MEMORIAL PARK CEMETERY vs LINSANGAN if an agent misrepresents to a purchaser and the principal accepts the benefits of such misrepresentation, he cannot at the same time deny responsibility for such misrepresentation By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. 33 Thus, the elements of agency are (i) consent, express or implied, of the parties to establish the relationship; (ii) the object is the execution of a juridical act in relation to a third person; (iii) the agent acts as a representative and not for himself; and (iv) the agent acts within the scope of his authority. The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. 39 If he does not make such an inquiry, he is chargeable with knowledge of the agent's authority and his ignorance of that authority will not be any excuse. , the ignorance of a person dealing with an agent as to the scope of the latter's authority is no excuse to such person and the fault cannot be thrown upon the principal. 41 A person dealing with an agent assumes the risk of lack of authority in the agent. He cannot charge the principal by relying upon the agent's assumption of authority that proves to be unfounded. The principal, on the other hand, may act on the presumption that third persons dealing with his agent will not be negligent in failing to ascertain the extent of his authority as well as the existence of his agency. the acts of an agent beyond the scope of his authority do not bind the principal, unless he ratifies them, expressly or impliedly. Only the principal can ratify; the agent cannot ratify his own unauthorized
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By: Jacqueline Ann Quinto

acts. Moreover, the principal must have knowledge of the acts he is to ratify. Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority. The substance of the doctrine is confirmation after conduct, amounting to a substitute for a prior authority. Ordinarily, the principal must have full knowledge at the time of ratification of all the material facts and circumstances relating to the unauthorized act of the person who assumed to act as agent. Thus, if material facts were suppressed or unknown, there can be no valid ratification and this regardless of the purpose or lack thereof in concealing such facts and regardless of the parties between whom the question of ratification may arise. 45 Nevertheless, this principle does not apply if the principal's ignorance of the material facts and circumstances was willful, or that the principal chooses to act in ignorance of the facts. 46 However, in the absence of circumstances putting a reasonably prudent man on inquiry, ratification cannot be implied as against the principal who is ignorant of the facts. To repeat, the acts of the agent beyond the scope of his authority do not bind the principal unless the latter ratifies the same. It also bears emphasis that when the third person knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person was aware of such limits of authority, he is to blame and is not entitled to recover damages from the agent, unless the latter undertook to secure the principal's ratification. By the relationship of agency, one party called the principal authorizes another called the agent to act for and in his behalf in transactions with third persons. The authority of the agent to act emanates from the powers granted to him by his principal; his act is the act of the principal if done within the scope of the authority. "He who acts through another acts himself." We find that a valid agency was created between Siredy and Santos, and the authority conferred upon the latter includes the power to enter into a construction contract to build houses such as the Deed of Agreement between Santos and De Guzman's Jigscon Construction. Hence, the inescapable conclusion is that Siredy is bound by the contract through the representation of its agent Santos. The basis of agency is representation, that is, the agent acts for and in behalf of the principal on matters within the scope of his authority (Art. 1881) and said acts have the same legal effect as if they were personally done by the principal. By this legal fiction of representation, the actual or legal absence of the principal is converted into his legal or juridical presence. Article 1900 of the Civil Code provides: Art. 1900. So far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such act is within the terms of the power of attorney, as written, even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and the agent. The scope of the agent's authority is what appears in the written terms of the power of attorney. While third persons are bound to inquire into the extent or scope of the agent's authority, they are not required to go beyond the terms of the written power of attorney. Third persons cannot be adversely affected by an understanding between the principal and his agent as to the limits of the latter's authority. In the same way, third persons need not concern themselves with instructions given by the principal to his agent outside of the written power of attorney.

SAFIC ALCAN & CIE vs. IMPERIAL VEGETABLE OIL CO., INC., The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. If he does not make such inquiry, he is chargeable with knowledge of the agent's authority, and his ignorance of that authority will not be any excuse. Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but also the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it.

TOYOTA SHAW, INC. Vs. CA A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent.

BACALTOS COAL MINES vs. CA

SIREDY ENTERPRISES, INC. Vs. CA

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By: Jacqueline Ann Quinto

Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. If he does not make such inquiry, he is chargeable with knowledge of the agent's authority, and his ignorance of that authority will not be any excuse. Person dealing with an assumed agent, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but also the nature and extent of the authority, and in case either is controverted, the burden of the proof is upon them to establish it. American jurisprudence summarizes the rule in dealing with an agent as follows: A third person dealing with a known agent may not act negligently with regard to the extent of the agent's authority or blindly trust the agent's statements in such respect. Rather, he must use reasonable diligence and prudence to ascertain whether the agent is acting and dealing with him within the scope of his powers. The mere opinion of an agent as to the extent of his powers, or his mere assumption of authority without foundation, will not bind the principal; and a third person dealing with a known agent must bear the burden of determining for himself, by the exercise of the reasonable diligence and prudence, the existence or non-existence of the agent's authority to act in the premises. In other words, whether the agency is general or special, the third person is bound to ascertain not only the fact of agency, but the nature and extent of the authority . The principal, on the other hand, may act on the presumption that third persons dealing with his agent will not be negligent in failing to ascertain the extent of his authority as well as the existence of his agency. Or, as stated in Harry E. Keller Electric Co. vs. Rodriguez, (44 Phil. 19 [1922]) quoting Mechem on Agency: The person dealing with the agent must also act with ordinary prudence and reasonable diligence. Obviously, if he knows or has good reason to believe that the agent is exceeding his authority, he cannot claim protection. So if the suggestions of probable limitations be of such a clear and reasonable quality, or if the character assumed by the agent is of such a suspicious or unreasonable nature, or if the authority which he seeks to exercise is of such an unusual or improbable character, as would suffice to put an ordinarily prudent man upon his guard, the party dealing with him may not shut his eyes to the real state of the case, but should either refuse to deal with the agent at all, or should ascertain from the principal the true condition of affairs. PREROGATIVE GIVEN TO AGENT MUST RELATE OR BE GERMANE TO THE EXPRESS POWER In the instant case, since the agency of Savellon is based on a written document, the Authorization of 1 March 1988, the extent and scope of his powers must be determined on the basis thereof. The language of the Authorization is clear. It pertinently states as follows: I, GERMAN A. BACALTOS . . . do hereby authorize RENE R. SAVELLON . . . to use the 'coal operating contract' of BACALTOS COAL MINES, of which I am the proprietor, for any legitimate purpose that it may serve. Namely, but not by the way of limitation, as follows: . . There is only one express power granted to Savellon, viz., to use the coal operating contract for any legitimate purpose it may serve. The enumerated "five prerogatives " to employ the term used by the Court of Appeals are nothing but the specific prerogatives subsumed under or classified as part of or as examples of the power to use the coal operating contract. The clause "but not by the way of limitation" which precedes the enumeration could only refer to or contemplate other prerogatives which must exclusively pertain or relate or be germane to the power to use the coal operating contract. The conclusion then of the Court of Appeals that the Authorization includes the power to enter into the Trip Charter Party because the "five prerogatives" are prefaced by such clause, is seriously flawed. It fails to note that the broadest scope of Savellon's authority is limited to the use of the coal operating contract and the clause cannot contemplate any other power not included in the enumeration or which are unrelated either to the power to use the coal operating contract or to those already enumerated. In short, while the clause allows some room for flexibility, it can comprehend only additional prerogatives falling within the primary power and within the same class as those enumerated . The trial court, however, went further by hastily making a sweeping conclusion that "a company such as a coal mining company is not prohibited to engage in entering into a Trip Charter Party contract." But what the trial court failed to consider was that there is no evidence at all that Bacaltos Coal Mines as a coal mining company owns and operates vessels, and even if it owned any such vessels, that it was allowed to charter or lease them. The trial court also failed to note that the Authorization is not a general power of attorney. It is a special power of attorney for it refers to a clear mandate specifically authorizing the performance of a specific power and of express acts subsumed therein. In short, both courts below unreasonably expanded the express terms of or otherwise gave
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unrestricted meaning to a clause which was precisely intended to prevent unwarranted and unlimited expansion of the powers entrusted to Savellon. The suggestion of the Court of Appeals that there is obscurity in the Authorization which must be construed against German Bacaltos because he prepared the Authorization has no leg to stand on inasmuch as there is no obscurity or ambiguity in the instrument. If any obscurity or ambiguity indeed existed, then there will be more reason to place SMC on guard and for it to exercise due diligence in seeking clarification or enlightenment thereon, for that was part of its duty to discover upon its peril the nature and extent of Savellon's written agency. Unfortunately, it did not. BA FINANCE CORPORATION vs. CA CIVIL LAW; SPECIAL CONTRACTS; AGENCY; PERSONS DEALING WITH AN ASSUMED AGENT, BOUND AT THEIR PERIL; CASE AT BAR. It is a settled rule that persons dealing with an assumed agent, whether the assumed agency be a general or special one are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it (Harry Keeler v. Rodriguez, 4 Phil. 19). Hence, the burden is on respondent bank to satisfactorily prove that the credit administrator with whom they transacted acted within the authority given to him by his principal. AUTHORITY OF AN AGENT SHOULD NOT BE INFERRED FROM THE USE OF VAGUE OR GENERAL WORDS. Although Wong was clearly authorized to approve loans even up to P350,000.00 without any security requirement, which is far above the amount subject of the guaranty in the amount of P60,000.00, nothing in the said memorandum expressly vests on the credit administrator power to issue guarantees. We cannot agree with respondent's contention that the phrase "contingent commitment" set forth in the memorandum means guarantees. It has been held that a power of attorney or authority of an agent should not be inferred from the use of vague or general words. REPRESENTATION OF A PERSON WHO ACTS AS AGENT; CANNOT BY ITSELF SERVE AS PROOF OF HIS AUTHORITY TO ACT AS AGENT. The sole allegation of the credit administrator in the absence of any other proof that he is authorized to bind petitioner in a contract of guaranty with third persons should not be given weight. The representation of one who acts as agent cannot by itself serve as proof of his authority to act as agent or of the extent of his authority as agent AGENT WHO EXCEEDS HIS AUTHORITY; PERSONALLY LIABLE FOR DAMAGES. Wong's testimony that he had entered into similar transactions of guaranty in the past for and in behalf of the petitioner, lacks credence due to his failure to show documents or records of the alleged past transactions. The actuation of Wong in claiming and testifying that he has the authority is understandable. He would naturally take steps to save himself from personal liability for damages to respondent bank considering that he had exceeded his authority. The rule is clear that an agent who exceeds his authority is personally liable for damages It has been held that a power of attorney or authority of an agent should not be inferred from the use of vague or general words. Guaranty is not presumed, it must be expressed and cannot be extended beyond its specified limits

EUGENIO vs. CA The substantive law is that payment shall be made to the person in whose favor the obligation has been constituted, or his successor-in-interest or any person authorized to receive it. 39 As far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such is within the terms of the power of attorney, as written, even if the agent has in fact exceeded the limits of his authority according to an understanding between the principal and his agent.

WOODCHILD HOLDINGS vs. ROXAS ELECTRIC a corporation may act only through its board of directors or, when authorized either by its by-laws or by its board resolution, through its officers or agents in the normal course of business. The general principles of agency govern the relation between the corporation and its officers or agents, subject to the articles of incorporation, by-laws, or relevant provisions of law Generally, the acts of the corporate officers within the scope of their authority are binding on the corporation. However, under Article 1910 of the New Civil Code, acts done by such officers beyond the scope of their authority cannot bind the corporation unless it has ratified such acts expressly or tacitly, or is estopped from denying them: As for any obligation wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly or tacitly.
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By: Jacqueline Ann Quinto

Thus, contracts entered into by corporate officers beyond the scope of authority are unenforceable against the corporation unless ratified by the corporation Powers of attorney are generally construed strictly and courts will not infer or presume broad powers from deeds which do not sufficiently include property or subject under which the agent is to deal. 29 The general rule is that the power of attorney must be pursued within legal strictures, and the agent can neither go beyond it; nor beside it. The act done must be legally identical with that authorized to be done. It bears stressing that apparent authority is based on estoppel and can arise from two instances: first, the principal may knowingly permit the agent to so hold himself out as having such authority, and in this way, the principal becomes estopped to claim that the agent does not have such authority; second, the principal may so clothe the agent with the indicia of authority as to lead a reasonably prudent person to believe that he actually has such authority. 32 There can be no apparent authority of an agent without acts or conduct on the part of the principal and such acts or conduct of the principal must have been known and relied upon in good faith and as a result of the exercise of reasonable prudence by a third person as claimant and such must have produced a change of position to its detriment. The apparent power of an agent is to be determined by the acts of the principal and not by the acts of the agent. For the principle of apparent authority to apply, the petitioner was burdened to prove the following: (a) the acts of the respondent justifying belief in the agency by the petitioner; (b) knowledge thereof by the respondent which is sought to be held; and, (c) reliance thereon by the petitioner consistent with ordinary care and prudence. For an act of the principal to be considered as an implied ratification of an unauthorized act of an agent, such act must be inconsistent with any other hypothesis than that he approved and intended to adopt what had been done in his name. 36 Ratification is based on waiver the intentional relinquishment of a known right. Ratification cannot be inferred from acts that a principal has a right to do independently of the unauthorized act of the agent. Moreover, if a writing is required to grant an authority to do a particular act, ratification of that act must also be in writing. 37 Since the respondent had not ratified the unauthorized acts of Roxas, the same are unenforceable. 38 Hence, by the respondents retention of the amount, it cannot thereby be implied that it had ratified the unauthorized acts of its agent, Roberto Roxas. BEDIA vs WHITE AGENT, NOT LIABLE FOR ACTS PERFORMED BY HER FOR AND IMPUTABLE TO THE PRINCIPAL. If the plaintiffs had any doubt about the capacity in which Bedia was acting, what they should have done was verify the matter with Hontiveros. They did not. Instead, they simply accepted Bedia's representation that she was an agent of Hontiveros and dealt with her as such. Under Article 1910 of the Civil Code, "the principal must comply with all the obligations which the agent may have contracted within the scope of his authority." Hence, the private respondents cannot now hold Bedia liable for the acts performed by her for, and imputable to, Hontiveros as her principal. WAIVER OF CLAIMS AGAINST THE PRINCIPAL; FORFEITS WHATEVER CLAIMS AGAINST THE AGENT; CASE AT BAR. The plaintiffs' position became all the more untenable when they moved on June 5, 1984, for the dismissal of the complaint against Hontiveros, leaving Bedia as the sole defendant. Hontiveros had admitted as early as when it filed its answer that Bedia was acting as its agent. The effect of the motion was to leave the plaintiffs without a cause of action against Bedia for the obligation, if any, of Hontiveros. Our conclusion is that since it has not been found that Bedia was acting beyond the scope of her authority when she entered into the Participation Contract on behalf of Hontiveros, it is the latter that should be held answerable for any obligation arising from that agreement. By moving to dismiss the complaint against Hontiveros, the plaintiffs virtually disarmed themselves and forfeited whatever claims they might have proved against the latter under the contract signed for it by Bedia. It should be obvious that having waived these claims against the principal, they cannot now assert them against the agent. if the agent acts in his own name, the principal has no right of action against the persons with whom the agent had contracted.

PNB vs. RITRATTO GROUP INC A SUIT AGAINST AN AGENT, ABSENT COMPELLING REASONS, IS NOT A SUIT AGAINST THE PRINCIPAL. In any case, the parent-subsidiary relationship between PNB and PNB-IFL is not the significant legal relationship involved in this case since the petitioner was not sued because it is the parent company of PNB-IFL. Rather, the petitioner was sued because it
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By: Jacqueline Ann Quinto

acted as an attorney-in-fact of PNB-IFL in initiating the foreclosure proceedings. As suit against an agent cannot without compelling reasons be considered as a suit against the principal. Under the Rules of Court, every action must be prosecuted of defended in the name of the real party-in-interest, unless otherwise authorized by law or these Rules. In mandatory terms, the Rules require that "parties-in-interest without whom no final determination can be had, an action shall be joined either as plaintiffs or defendants." In the case at bar, the injunction suit is directed only against the agent, not the principal. FORTIS vs HERMANOS In an action by an agent to recover the amount of certain disbursements and not compensation for service, the article of the Civil Code applicable to the case is article 1728, and not article 1711. militates against the De Castros' theory that the other co-owners should be impleaded as indispensable parties. A noted commentator explained Article 1915 thus "The rule in this article applies even when the appointments were made by the principals in separate acts, provided that they are for the same transaction. The solidarity arises from the common interest of the principals, and not from the act of constituting the agency. By virtue of this solidarity, the agent can recover from any principal the whole compensation and indemnity owing to him by the others. The parties, however, may, by express agreement, negate this solidary responsibility. The solidarity does not disappear by the mere partition effected by the principals after the accomplishment of the agency. If the undertaking is one in which several are interested, but only some create the agency, only the latter are solidarily liable, without prejudice to the effects of negotiorum gestio with respect to the others. And if the power granted includes various transactions some of which are common and others are not, only those interested in each transaction shall be liable for it." When the law expressly provides for solidarity of the obligation, as in the liability of co-principals in a contract of agency, each obligor may be compelled to pay the entire obligation. The agent may recover the whole compensation from any one of the co-principals, as in this case. Indeed, Article 1216 of the Civil Code provides that a creditor may sue any of the solidary debtors. CONTRACT OF AGENCY IS THE LAW BETWEEN PARTIES; 5% REAL ESTATE BROKER'S COMMISSION IS WITHIN THE STANDARD PRACTICE IN THE REAL ESTATE INDUSTRY. A contract of agency which is not contrary to law, public order, public policy, morals or good custom is a valid contract, and constitutes the law between the parties. The contract of agency entered into by Constante with Artigo is the law between them and both are bound to comply with its terms and conditions in good faith. The mere fact that "other agents" intervened in the consummation of the sale and were paid their respective commissions cannot vary the terms of the contract of agency granting Artigo a 5 percent commission based on the selling price. . . . In any event, we find that the 5 percent real estate broker's commission is reasonable and within the standard practice in the real estate industry for transactions of this nature. PAYMENT; RECEIPT OF PARTIAL PAYMENT OF COMMISSION BY AN AGENT NEITHER AMOUNTS TO A WAIVER OF THE BALANCE NOR PUTS HIM IN
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CIA., S. en C. vs. The PHILIPPINE REFINING CO In the appellant's brief contention is advanced that the contract between the plaintiff and the Visayan Refining Co. created the relation of principal and agent between the parties, and reliance is placed upon article 1729 of the Civil Code which requires the principal to indemnify the agent for damages incurred in carrying out the agency. Attentive perusal of the contract is, however, convincing to the effect that the relation between the parties was not that of principal and agent in so far as relates to the purchase of copra by the plaintiff. It is true that the Visayan Refining Co. made the plaintiff one of its instruments for the collection of copra; but it is clear that in making its purchases from the producers the plaintiff was buying upon its own account and that when it turned over the copra to the Visayan Refining Co., pursuant to that agreement, a second sale was effected.

DE CASTRO vs CA The mere fact that "other agents" intervened in the consummation of the sale and were paid their respective commissions cannot vary the terms of the contract of agency. In any event, the Court found that the 5% real estate broker's commission was reasonable and within the standard practice in the real estate industry for transactions of this nature. AGENT MAY RECOVER THE WHOLE COMPENSATION FROM ANY ONE OF THE CO-PRINCIPALS. The solidary liability of the four co-owners, however,

By: Jacqueline Ann Quinto

ESTOPPEL; CASE AT BAR. Artigo's acceptance of partial payment of his commission neither amounts to a waiver of the balance nor puts him in estoppel. This is the import of Article 1235 which was explained in this wise: "The word accept, as used in Article 1235 of the Civil Code, means to take as satisfactory or sufficient, or agree to an incomplete or irregular performance. Hence, the mere receipt of a partial payment is not equivalent to the required acceptance of performance as would extinguish the whole obligation." There is thus a clear distinction between acceptance and mere receipt. In this case, it is evident that Artigo merely received the partial payment without waiving the balance. Thus, there is no estoppel to speak of ROMANA vs. CARLOS IMPERIO SALES; WARRANTY AGAINST EVICTION; RETURN OF VALUE OF THE THING SOLD. Unless a contrary intention appears, the vendor warrants his title to the thing sold, and, in the event of eviction, the vendee shall be entitled to the return of the value which the thing sold had at the time of the eviction, be it greater or less than the price of the sale. relationship between principal and agent, agency is extinguished by the death of the principal or of the agent and any act of an agent after the death of his principal is void ab initio, except as explicitly provided for in the New Civil Code: (1) when the agency is coupled with an interest (Art. 1930); and (2) when the agent performed an act for the principal without knowledge of the principal's death and the third person who contracted with him acted in good faith. (Art. 1931) REVOCATION BY PRINCIPAL DISTINGUISHED FROM REVOCATION BY OPERATION OF LAW. Although a revocation of a power of attorney to be effective must be communicated to the parties concerned, yet a revocation by operation of law, such as death of the principal is, as a rule, instantaneously effective inasmuch as "by legal fiction the agent's exercise of authority is regarded as an execution of the principal's continuing will." With death, the principal's will ceases or is terminated; the source of authority is extinguished. AGENT'S HEIRS MUST NOTIFY PRINCIPAL OF AGENT'S DEATH. The heirs of the agent who dies must notify the principal of his death and in the meantime adopt such measures as circumstances may demand in the interest of the latter, but the heirs of the principal are not duty-bound to give notice of the principal's death to the agent.

SARSABA vs VDA DE TE Agency is extinguished by the death of the [51] principal. The only exception where the agency shall remain in full force and effect even after the death of the principal is when 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.

BUASON vs PANUYAS If it does not appear that the second purchasers had actual knowledge of the previous sale to the appellants, they had a right to rely on the face of the certificate of title of the registered owners and of the authority conferred by them upon the agent with a power of attorney recorded on the back of the certificate. In case of double sale of land registered under the Land Registration Act, he who records the sale in the Registry of Deeds has a better right than he who did not. AGENCY; ACTS DONE BY AN AGENT AFTER DEATH OF PRINCIPAL WITHOUT HIS KNOWLEDGE OF SUCH DEATH. The contention that as the death of the principal ended the authority of the agent, the sale made by the latter of the land in question after the death of the principal is null and void, is untenable, it not having been shown that the agent knew of his principal's demise, and for that reason the sale made by the agent is valid and effective with respect to third persons who have contracted wiht him in good faith. (Art. 1723, Old Civil Code, 1931, New Civil Code).
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VDA. DE GABRIEL vs CIR The first point to be considered is that the relationship between the decedent and Philtrust was one of agency, which is a personal relationship between agent and principal. Under Article 1919 (3) of the Civil Code, death of the agent or principal automatically terminates the agency. In this instance, the death of the decedent on April 3, 1979 automatically severed the legal relationship between her and Philtrust, and such could not be revived by the mere fact that Philtrust continued to act as her agent when, on April 5, 1979, it filed her Income Tax Return for the year 1978.

RALLOS vs GO CHAN DEATH AS MODE OF EXTINGUISHMENT; EXCEPTIONS. By reason of the very nature of the

By: Jacqueline Ann Quinto

BARETTO VS STA MARINA * PRINCIPAL AND AGENT; REVOCATION OF AGENT'S AUTHORITY. The time during which the agent may hold his position is indefinite or undetermined, when no period has been fixed in his commission and so long as the confidence reposed in him by the principal exists; but as soon as this confidence disappears the principal has a right to revoke the power he conferred upon the agent, especially when the latter has resigned his position for good reasons. (Art. 1733, Civil Code; art. 279, Code of Commerce.) * RIGHT OF PRINCIPAL TO DISMISS AGENT. Even though a period is stipulated during which the agent or employee is to hold his position in the service of the owner or head of a mercantile establishment, yet the latter may, for any of the special reasons specified in article 300 of the Code of Commerce, dismiss such agent or employee even before the termination of the period. * DAMAGES. No period having been stipulated and the principal owner of the business having acted within his powers in relieving his agent and appointing another person in his stead, for good reasons and because of the express written resignation by the employee or agent of the position he was holding, it would be improper to award him damages, which were not proven, except his right to collect the salary due for one month prior to quitting the position, as accorded by article 302 of the Code of Commerce. DEL ROSARIO VS ABAD AGENCY; POWER OF ATTORNEY WHEN COUPLED WITH INTEREST; TERMINATION OF; CASE AT BAR. Within the prohibitive period of five years, the homesteader mortgaged the improvements of the homestead in favor of defendant P. A. At the same time, he executed an "irrevocable special power of attorney coupled with interest" in favor of the mortgagee authorizing him to sell the land. After the lapse of the prohibitive period, the mortgagor died leaving the mortgage debt unpaid. Thereafter, acting on the power of attorney, the mortgagee sold the land. Held: The power of attorney executed by the homesteader in favor of defendant did not create an agency with interest nor did it clothe the agency with irrevocable character. A mere statement in the power of attorney that it is coupled with interest is not enough. In what does such interest consist must be stated in the power of attorney. The mortgage has nothing to do with the power of attorney and may be foreclosed by the mortgagee upon failure of the mortgagor to comply with his obligation. As the agency was not coupled with an interest, it was terminated upon the death of the principal, and the agent could no longer validly convey the land. Hence, the sale was null and void. DY BUNCIO & COMPANY, INC. vs. ONG GUAN CAN PRINCIPAL AND AGENT; TERMINATION OF POWER OF ATTORNEY. Article 1732 of the Civil Code is silent over the partial termination of an agency. The making and accepting of a new power of attorney, whether it enlarges or decreases the power of the agent under a prior power of attorney, must be held to supplant and revoke the latter when the two are inconsistent. If the new appointment with limited powers does not revoke the general power of attorney, the execution of the second power of attorney would be a mere futile gesture.

PALICIO VS DE MANZANO PRINCIPAL AND AGENT; REVOCATION OF POWER OF ATTORNEY. A second power of attorney revokes the first one only after notice given to first agent.

CMS LOGGING, INC VS CA AGENCY; PRINCIPAL WITH ABSOLUTE RIGHT TO REVOKE AGENCY. The principal may revoke a contract of agency at will, and such revocation may be express, or implied, and may be availed of even if the period fixed in the contract of agency has not yet expired. As the principal has this absolute right to revoke the agency, the agent can not object thereto; neither may he claim damages arising from such revocation, unless it is shown that such was done in order to evade the payment of agent's commission. AGENT NOT ENTITLED TO A COMMISSION NOR DAMAGES THEREFOR. Since the contract of agency was revoked by CMS when it sold its logs to Japanese firms without the intervention of DRACOR, the latter is no longer entitled to its commission from the proceeds of such sale and is not entitled to retain whatever moneys it may have received as its commission for said transactions. Neither would DRACOR be entitled to collect damages from CMS, since damages are generally not awarded to the agent for the revocation of the agency, and the case at bar is not one falling under the exception mentioned, which is to evade the payment of the agent's commission.

LIM VS SABAN

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By: Jacqueline Ann Quinto

an agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable. Stated differently, an agency is deemed as one coupled with an interest where it is established for the mutual benefit of the principal and of the agent, or for the interest of the principal and of third persons, and it cannot be revoked by the principal so long as the interest of the agent or of a third person subsists. In an agency coupled with an interest, the agent's interest must be in the subject matter of the power conferred and not merely an interest in the exercise of the power because it entitles him to compensation. When an agent's interest is confined to earning his agreed compensation, the agency is not one coupled with an interest, since an agent's interest in obtaining his compensation as such agent is an ordinary incident of the agency relationship. not to employ or appoint another agent in Butuan City was to prevent competition against Sanchez' agency, in order that he might recover what he invested and eventually maximize his profits. The opening by BISTRANCO of a branch in Butuan City virtually resulted in consequences to Sanchez worse than if another agent had been appointed. In effect, the opening of a branch office in Butuan City was a violation of the Contracts of Agency. (Article 1315 of the Civil Code) * CANNOT BE REVOKED IF A BILATERAL CONTRACT DEPENDS UPON IT. The opening of a branch office which, in effect, was a revocation of the contracts of agency is not sanctioned by law because the agency was the means by which Sanchez could fulfill his obligations under Exhibits "F" and "G". Article 1927 of the Civil Code, among others, provides: "An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted" * DAMAGES; AWARD FOR UNEARNED COMMISSIONS AND DAMAGES, PROPER IN CASE AT BAR. As to the issue of whether the award of P588,000.00 to Sanchez for unearned commissions and damages is justified, the answer is also in the affirmative, considering that BISTRANCO violated the Contracts of agency and that Sanchez, before the breach by BISTRANCO of said agency Contracts, was already earning an average monthly commission of P32,000.00, as shown by the statements of commissions prepared by BISTRANCO itself. COLEONGCO VS CLAPAROLS PARTNERSHIP; POWER OF ATTORNEY COUPLED WITH INTEREST REVOCABLE FOR CAUSE. A power of attorney although coupled with interest in a partnership can be revoked for a just cause, such as when the attorney-in-fact betrays the interest of the principal as happened in the case at bar.

NATIONAL SUGAR TRADING VS PNB AGENCY; CANNOT BE REVOKED OR CANCELLED AT WILL BY ANY OF THE PARTIES IF THE AGENCY ESTABLISHED BETWEEN THE PARTIES IS ONE COUPLED WITH INTEREST; CASE AT BAR. [T]he relationship between NASUTRA/SRA and PNB when the former constituted the latter as its attorney-in-fact is not a simple agency. NASUTRA/SRA has assigned and practically surrendered its rights in favor of PNB for a substantial consideration. To reiterate, NASUTRA/SRA executed promissory notes in favor of PNB every time it availed of the credit line. The agency established between the parties is one coupled with interest which cannot be revoked or cancelled at will by any of the parties. BISAYA LAND TRANSPORTATION VS SANCHEZ ESTOPPEL; PARTY PRECLUDED FROM REPUDIATING AN OBLIGATION VOLUNTARILY ASSUMED AFTER HAVING ACCEPTED BENEFITS THEREFROM. The doctrine of estoppel precludes BISTRANCO from repudiating an obligation voluntarily assumed by it, after having accepted benefits therefrom. To countenance such repudiation would be contrary to equity and would put a premium on fraud or misrepresentation, which this Court will not sanction. * AGENCY; OPENING OF A BRANCH DURING EFFECTIVITY OF CONTRACT; EFFECT. It may be true that there is no express prohibition for BISTRANCO to open its branch in Butuan City. But, the very reason why BISTRANCO agreed

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