[AGENT ACTING IN HIS OWN NAME; EXCEPTION] with whom the agent has contracted, cases involving things

the agent has contracted, cases involving things belonging to the

SICAD, Mark Anthony
ARTICLE 1883
General rule: if an agent acts in his own name, the agent is the one directly liable to
the person with whom he contracted as if the transaction were his own.
Exception: when the contract involves things belonging to the principal.
 This applies only when the agent has been authorized by the principal to
enter into a particular transaction, however, the agent acted in his own
name.
 This exception is necessary to protect third persons against possible
collusion between the agent and the principal.
o But does this collusion ever happen in reality?
 The remedy of the principal is to demand from the agent damages for his
failure to comply with the agency.
o Art. 1883 implies that the principal may also have an action
against the third person and vice versa.
 The third person also has a right of action not only against the principal but
also against the agent.
SY-JUCO vs. SY-JUCO
principal are excepted. According to this exception (when things belonging to the
principal are dealt with), the agent is bound to the principal although he does not
assume the character of such agent and appears acting in his own name This means
that in the case of this exception the agent's apparent representation yields to the
principal's true representation and that, in reality and in effect, the contract must be
considered as entered into between the principal and the third person; and,
consequently, if the obligations belong to the former, to him alone must also belong
the rights arising from the contract. The money with which the launch was bough
having come from the plaintiff, the exception established in article 1717 is applicable
to the instant case.
As to the first casco, Santiago’s allegation is contradicted by the petitioners’
testimony that on the date the casco was constructed, he did not have sufficient
money with which to pay the expense of this construction.
As to the car, there was sufficient evidence to show that its price was paid with the
petitioners’ money. Santiago’s adverse allegation that it was paid with his own
money is not supported by the evidence.
As to the second casco, it was found that it belonged to the petitioners but they sold
it afterwards to Santiago by means of a public instrument.

Santiago, the respondent, was appointed by his parents, the petitioners, to be the
administrator of their property. The petitioners allege that during his administration,
Santiago acquired certain properties (one launch, two cascos, and one car) in his
capacity as administrator with their money and for their benefit. The TC ruled in favor
of the petitioners and ordered Santiago to return the properties save for the second
casco.

The Supreme Court ruled that Santiago, in acquiring the launch using his own name,
violated the agency. What is important is whose money was used in acquiring the
property. It appears that Santiago bought in his own name from Pacific Commercial
Co. and registered it at the Custom House. However, this not necessarily show that
the he bought it for himself and with his own money. The parents’ claim is supported
by the fact that immediately after the purchase of the launch, it had to be repaired at
their expense. There is no reason for the petitioners to pay for the repairs aside from
the fact that they are the true owners.

From the rule established in Article 1717 of the Old Civil Code that, when an agency
acts in his own name, the principal shall have no right of action against the person