Agency Midterm (Additional Reviewer)

I.

Objective Portion
A. Definitions
1. What is a Power of Attorney?
- A power of attorney is an instrument in writing by which one
person, as principal, appoints another as his agent and confers
upon him the authority to perform certain specified acts or kinds
of acts on behalf of the principal
2. How is Agency a legal relation?
- Agency is a legal relation founded upon express/implied contract
created by parties or law wherein the agent is employed to
represent a principal in dealings with third persons (Mechem).
3. How is Agency a contract?
- Art. 1868 NCC
B. Distinguish
1. Difference of Agency and Assignment
-

The concept of agency is distinct from assignment. In agency, the agent

acts not on his own behalf but on behalf of his principal. While in
assignment, there is total transfer or relinquishment of right by the
assignor to the assignee. The assignee takes the place of the assignor and
is no longer bound to the latter.

2. Difference between Agent and Broker

-

An agent receives a commission upon the successful conclusion of a sale.

On the other hand, a broker earns his pay merely by bringing the buyer
and the seller together, even if no sale is eventually made.

3. Agency by Estoppel and Implied Agency

-

An agent in Implied Agency is a true agent with rights and duties while an
agency by estoppel is not a true agency due to the misrepresentation by
the principal or self-declared agent.
C. Enumerations
1. Elements of Agency (Rallos v Go)
The essential elements of agency are:
(1) there is consent, express or implied of the parties to establish the
relationship;
(2) the object is the execution of a juridical act in relation to a third
person;
(3) the agents acts as a representative and not for himself, and
(4) the agent acts within the scope of his authority

2. Q: When is a special power necessary?

A: CALL MO SPRING COW
1. to Create or convey real rights over immovable property;
2. Convey or Acquire immovable
3. to Loan or borrow money, unless the latter act be urgent and indispensable for
the preservation of the things which are under administration;
4. to Lease any real property to another person for more than one year;
5. to Make such Payments as are not usually considered as acts of administration;
6. to Obligate principal as guarantor or surety
7. to bind the principal to render some Service without compensation;
8. to bind the principal in a contract of Partnership;
9. to Ratify obligations contracted before the agency
10. to Accept or repudiate an Inheritance
11. Effect Novation
12. to make Gifts, except customary ones for charity or those made to employees
in the business managed by the agent
13. Compromise, Arbitration and Confession of Judgment
14. any Other act of strict dominion
15. Waive an obligation gratuitously
II.

Short Essay Questions

A. Assigned Cases (Doctrines)
1. De la Cruz v. Northern Theatrical
-

The relationship between the movie corporation and the plaintiff

was not that of principal and agent because the Principle of
representation was in no way involved. Plaintiff was not
employed to represent the defendant corporation in its dealings
with third parties. He was a mere employee hired to perform a
certain specific duty or task, that of acting as special guard and
staying at the main entrance of the movie house to stop gate
crashers and to maintain peace and order within the premises.

2. Calibo v. CA
-

As indicated in Article 1869, for an agency relationship to be

deemed as implied, the principal must know that another
person is acting on his behalf without authority. Here,
appellee categorically stated that the only purpose for his leaving
the subject tractor in the care and custody of Mike Abella was for
safekeeping, and definitely not for him to pledge or alienate the
same. If it were true that Mike pledged appellees tractor to
appellant, then Mike was acting not only without appellees
authority but without the latters knowledge as well.

Article 1911, on the other hand, mandates that the principal is

solidarily liable with the agent if the former allowed the
latter to act as though he had full powers. Again, in view of
appellees lack of knowledge of Mikes pledging the tractor without
any authority from him, it stands to reason that the former
could not have allowed the latter to pledge the tractor as if
he had full powers to do so.

3. Dy Buncio v. Ong Guan Can

- 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.
-

"Special Agency for certain task assigned to another agent

overwrites the General Agencys ability to previously handle said
certain task under its authority.

4. Sunace v. NLRC
- Theory of imputed knowledge ascribes the knowledge of
the agent, Sunace, to the principal, employer Xiong, not the
other way around. The knowledge of the principal-foreign
employer cannot, therefore, be imputed to its agent Sunace.
-

As the New Civil Code provides,

Contracts take effect only between the parties, their

assigns, and heirs, except in case where the rights and
obligations arising from the contract are not transmissible
by their nature, or by stipulation or by provision of law.

Furthermore, as Sunace correctly points out, there was an implied

revocation of its agency relationship with its foreign principal when,

after the termination of the original employment contract, the

foreign principal directly negotiated with Divina and
entered into a new and separate employment contract in
Taiwan.
-

Article 1924 of the New Civil Code reading

The agency is revoked if the principal directly manages the
business entrusted to the agent, dealing directly with third
persons.

5. Lorca v. Dineros
- In this case it is clear from the certificate of sale attached to the
complaint, Dineros acted all the time in the name of the ExOfficio Provincial Sheriff (There was valid representation and
authority in this case). The Sheriff is liable to third persons on the
acts of his deputy
-

III.

This is not the first time an action is dismissed for the

reason that the agent instead of his principal was
made the party defendant.

Long Essay Questions

A. Possible Doctrines to be asked
-

The basis for agency is representation. There is no agency when

there is no showing that an alleged principal consented to the acts
of the alleged agent or authorized him to act on his/her behalf.

A person dealing with an agent is put upon inquiry and must

discover upon his peril the authority of the agent, agents
declarations alone are insufficient.

An authorization given containing the phrase for and in our behalf

does not establish an agency. Ultimately, what is decisive is the
intention of the parties. The use of the words sold and endorsed
means that the parties intended a contract of sale, and not an
agency.

The doctrine of piercing the corporate veil of corporate fiction is an

equitable doctrine developed to address situations where the
separate corporate personality of a corporation is abused or used
for wrongful purposes. Also, a suit against an agent cannot without
compelling reasons be considered a suit against the principal.

Where one party to contract was authorized to do work according to

his own method and without being subject to the other partys

control, except as to the result of the work, he is an independent

contractor and not an agent.
-

The contract of agency is extinguished by the death of the principal.

It is only valid if these two conditions are present: (1) the agent
acted without knowledge of the death of the principal; and (2) the
third person who contracted with the agent himself acted in good
faith.