Agency, Reviewer Notes

8/20/2019 Agency, Reviewer Notes

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I. DEFINITION AND OBJECTIVE OF A CONTRACT OF AGENCY

I. NATURE, FORM AND KINDS OF AGENCY

1. DEFINITION AND OBJECTIVE OF AGENCY

a. Definition

Article 1868 of the Civil Code defie! the cotr"ct of "#ec$ "! oe%here&$ '" (er!o &id! hi)!elf to reder !o)e !ervice or to do !o)ethi# ire(re!et"tio or o &eh"lf of "other* %ith the co!et or "+thorit$ of thel"tter.' ,1-

b. !"#o$e o" Ob%e&ti'e of A(en&)

I Eurotech Industrial Technologies, Inc. v. Cuizon, /1 0CRA 82/3345* the Co+rt held

I " cotr"ct of "#ec$* " (er!o &id! hi)!elf to reder !o)e !ervice or to do !o)ethi# i re(re!et"tio or o &eh"lf of "other %ith the l"tter7!co!et. The +derl$i# (rici(le of the cotr"ct of "#ec$ i! to "cco)(li!hre!+lt! &$ +!i# the !ervice! of other! to do " #re"t v"riet$ of thi#! lie!elli#* &+$i#* )"+f"ct+ri#* "d tr"!(orti#. It! (+r(o!e i! to e9ted the(er!o"lit$ of the (rici("l or the ("rt$ for %ho) "other "ct! "d fro) %ho)he or !he derive! the "+thorit$ to "ct. 2"t (. :/5

I Orient Air Service & Hotel Representatives v. Court of Appeals * 1:40CRA 6 21::15* the Co+rt held th"t the purpose of ever$ cotr"ct of "#ec$i! the "&ilit$* &$ le#"l fictio* to e9ted the (er!o"lit$ of the (rici("l thro+#hthe f"cilit$ of the "#et; &+t the !")e c" ol$ &e effected %ith the co!et of

the (rici("l.

I iton!ua, "r. v. Eternit Corp., :3 0CRA /3 2/3365* the Co+rt held th"t'It &e"r! !tre!!i# th"t i " "#et(rici("l rel"tio!hi(* the (er!o"lit$ of the(rici("l i! e9teded thro+#h the f"cilit$ of the "#et. I !o doi#* the "#et* &$le#"l fictio* &eco)e! the (rici("l* "+thori


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+1 Capacity of the Parties

The (rici("l )+!t h"ve c"("cit$ to cotr"ct 2Art!. 1=/4 "d 1=/:5* "d)"$ either &e " "t+r"l or +ridic"l (er!o 2Art. 1:1:,-5.

There i! le#"l liter"t+re th"t hold! th"t !ice the "#et "!!+)e! o(er!o"l li"&ilit$* he doe! ot h"ve to (o!!e!! f+ll c"("cit$ to "ct i!of"r "!third (er!o! "re cocered.,=- 0ice " cotr"ct of "#ec$ i! f ir!t "d fore)o!t

" cotr"ct i it!elf* the ("rtie! 2&oth (rici("l "d "#et5 )+!t h"ve to h"vele#"l c"("cit$ to v"lidl$ eter ito " "#ec$. If oe of the ("rtie! h"! o le#"lc"("cit$ to cotr"ct* the the cotr"ct of "#ec$ i! ot void* &+t )erel$void"&le* %hich )e"! th"t it i! v"lid +til "+lled.

Th+!* " void"&le "#ec$ %ill (rod+ce le#"l co!e?+ece!* %he it i!(+r!+ed to eter ito +ridic"l rel"tio! %ith third ("rtie!. If the (rici("l i! theoe %ho h"! o le#"l c"("cit$ to cotr"ct* "d hi! "#et eter! ito "cotr"ct+"l rel"tio!hi( i hi! ")e %ith " third ("rt$* the re!+lti# cotr"ct i!void"&le "d !+&ect to "+l)et. O the other h"d* if the (rici("l h"! le#"lc"("cit$* "d it i! the "#et th"t h"! o le#"l c"("cit$ to cotr"ct* the+derl$i# "#ec$ rel"tio!hi( i! void"&le* "d %he the ic"("cit"ted "#et

eter! ito " cotr"ct %ith " third ("rt$* the re!+lti# cotr"ct %o+ld &e v"lid*ot void"&le* for the "#et7! ic"("cit$ i! irrelev"t* the cotr"ct h"vi# &eeetered ito for "d i &eh"lf of the (rici("l* %ho h"! f+ll le#"l c"("cit$.

The fore#oi# di!c+!!io! %o+ld "ll )"e !e!e to !+((ort the f"ct th"t"! " #eer"l (ro(o!itio the l"c of le#"l c"("cit$ of the "#et doe! ot "ffectthe co!tit+tio of the "#ec$ rel"tio!hi(. Ad $et* it i! cle"r +der Article1:1:2=5 th"t if d+ri# the ter) of the "#ec$* the (rici("l or "#et i! (l"ced+der civil iterdictio* or &eco)e! i!"e or i!olvet* the "#ec$ i! ipso !uree9ti#+i!hed. It i! therefore ol$ lo#ic"l to cocl+de th"t if the lo!! of le#"lc"("cit$ of the "#et e9ti#+i!he! the "#ec$* the ece!!"ril$ "$ of tho!ec"+!e th"t h"ve the effect of re)ovi# le#"l c"("cit$ o either or &oth the

(rici("l "d "#et "t the ti)e of (erfectio %o+ld ot &ri# "&o+t " cotr"ct of "#ec$.

O&vio+!l$* there !ee)! to &e " ico#r+ec$ %he it co)e! to(rici(le! ivolvi# the le#"l c"("citie! of the ("rtie! to " cotr"ct of "#ec$.The re"!o for th"t i! th"t the (rici(le! "ct+"ll$ occ+($ t%o differet le#"l(l"i!. >he it co)e! to cre"ti# "d e9ti#+i!hi# the cotr"ct+"lrel"tio!hi( of (rici("l "d "#et* the (rovi!io! of l"% t"e ito co!ider"tio(+rel$ itr")+r"l )"tter! (ert"ii# to the ("rtie! thereto +der the (rici(le of rel"tivit$. 0ice "#ec$ i! e!!eti"ll$ " (er!o"l rel"tio!hi( &"!ed o the(+r(o!e of re(re!et"tio* the %he either the (rici("l or "#et die or &eco)e le#"ll$ ic"("cit"ted* the the "#ec$ rel"tio !ho+ld ipso !ure ce"!e.

B+t " cotr"ct of "#ec$ i! )erel$ " (re("r"tor$ cotr"ct* %here the )"i

(+r(o!e i! to effect thro+#h the "#et cotr"ct! "d other +ridic"lrel"tio!hi(! %ith third ("rtie!. The (+&lic (olic$ i! th"t third ("rtie! %ho "ct i#ood f"ith %ith " "#et h"ve " ri#ht to e9(ect th"t their cotr"ct! %o+ld &ev"lid "d &idi# o the (rici("l. Therefore* eve %he &$ le#"l c"+!e ""#ec$ rel"tio!hi( h"! ter)i"ted* !"$ %ith the i!"it$ of the (rici("l* if the"#et "d " third ("rt$ he eter! ito cotr"ct "re +"%"re of the !it+"tio*the the v"rio+! (rovi!io! o the "% o A#ec$ %o+ld "ffir) the v"lidit$ of the cotr"ct. ore o thi! (oit %ill &e covered +der the !ectio o the

e!!eti"l ch"r"cteri!tic! of "#ec$.

-. Ee/ent$ of t0e Cont"a&t of A(en&)

ie "$ other cotr"ct* "#ec$ i! co!tit+ted of the e!!eti"l ele)et!of co!et* o&ect or !+&ect )"tter* "d c"+!e or co!ider"tio. I Rallos v.$eli +o Chan & Sons Realt- Corp.* 81 0CRA /1 21:485* the Co+rt held th"tthe follo%i# "re the e!!eti"l ele)et! of the cotr"ct of "#ec$@

2"5 Con$ent* e9(re!! or i)(lied* of the ("rtie! to e!t"&l i!hthe rel"tio!hi(;

2&5 Ob%e&t, %hich i! the e9ec+tio of " +ridic"l "ct i rel"tioto third ("rtie!;

2c5 A#et "ct! "! " re(re!et"tive "d ot for hi)!elf;"d

2d5 A#et "ct! %ithi the !co(e of hi! "+thorit$.,-

The ele)et ot icl+ded i the Rallos e+)er"tio i! the c"+!e or co!ider"tio of ever$ cotr"ct of "#ec$. der Article 184* ever$ "#ec$ i!(re!+)ed to &e for " co)(e!"tio* +le!! there i! (roof to the cotr"r$.

+1 Consent

iton!ua, "r. v. Eternit Corp., :3 0CRA /3 2/3365* held th"t co!et of &oth (rici("l "d "#et i! ece!!"r$ to cre"te " "#ec$. The (rici("l )+!tited th"t the "#et !h"ll "ct for hi); the "#et )+!t ited to "cce(t the"+thorit$ "d "ct o it* "d the itetio of the ("rtie! )+!t fid e9(re!!ioeither i %ord! or cod+ct &et%ee the).

I the !")e )"er* #o'inion Insurance Corp. v. Court of Appeals* /60CRA 6/3 2/33/5* held th"t the &"!i! for "#ec$ i! re(re!et"tio. O the ("rtof the (rici("l* there )+!t &e " "ct+"l itetio to "((oit or " itetio

"t+r"ll$ ifer"&le fro) hi! %ord! or "ctio!; "d o the ("rt of the "#et* there2

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)+!t &e " itetio to "cce(t the "((oit)et "d "ct o it* "d i the"&!ece of !+ch itet* there i! #eer"ll$ o "#ec$.

erh"(! the ol$ e9ce(tio to thi! r+le i! "#ec$ &$ e!to((el* &+t evethe it i! &$ the !e("r"te "ct! of the (+r(orted (rici("l "d (+r(orted "#et*&$ %hich the$ "re &ro+#ht ito the rel"tio!hi( i!of"r "! third ("rtie! "cti# i#ood f"ith "re cocered. ore di!c+!!io! o the e!!eti"l ele)et of co!et !h"ll t"e (l"ce i the !ectio o e!!eti"l ch"r"cteri!tic of

co!e!+"lit$ of cotr"ct! of "#ec$.

+ Object or Subject Matter

Object of " "#ec$ cotr"ct i! service* %hich ("rtic+l"rl$ i! +dert"i#of the "#et to eter ito +ridic"l "ct! %ith third (er!o! o &eh"lf of the(rici("l.

Ite)! 2&5* 2c5 "d 2d5 i the e+)er"ted ele)et! of Rallos c""ct+"ll$ &e !+))"ri


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Not ol$ i! the cotr"ct of "#ec$ !(ecific"ll$ ")ed "! !+ch +der theCivil Code* it i! " (rici("l cotr"ct &ec"+!e it c" !t"d o it! o% %itho+teed of "other cotr"ct to v"lid"te it.

The re"l v"l+e of the cotr"ct of "#ec$ &ei# " 'o)i"te "d (rici("l'cotr"ct i! th"t it h"! &ee !o !et "("rt &$ l"% "d (rovided %ith it! o% !et of r+le! "d le#"l co!e?+ece!* th"t "$ other "rr"#e)et th"t e!!eti"ll$ f"ll!%ithi it! ter)! !h"ll &e co!idered "! " "#ec$ "rr"#e)et "d !h"ll &e

#overed &$ the "% o A#ec$* ot%ith!t"di# "$ itetio of the ("rtie! tothe cotr"r$. After "ll* " cotr"ct i! %h"t the l"% !"$! it i!* "d ot %h"t the("rtie! c"ll it.

I #oles v. Angeles, :/ 0CRA 634 2/3365* it %"! held th"t if " "ct doe&$ oe (er!o i &eh"lf of "other i! i it! e!!eti"l "t+re oe of "#ec$* thefor)er i! the "#et of the l"tter ot%ith!t"di# he or !he i! ot !o c"lledit%ill &e " "#ec$ %hether the ("rtie! +der!tood the e9"ct "t+re of therel"tio or ot.

+ Consensual

The cotr"ct of "#ec$ i! (erfected &$ )ere co!et. der Article 186:*" "#ec$ )"$ &e e9(re!!ed or i)(lied fro) the "ct of the (rici("l* fro) hi!!ilece or l"c of "ctio* or f"il+re to re(+di"te the "#ec$; "#ec$ )"$ &eor"l* +le!! the l"% re?+ire! " !(ecific for).,-

der Article 1843* "cce(t"ce &$ the "#et )"$ "l!o &e e9(re!!* or i)(lied fro) hi! "ct! %hich c"rr$ o+t the "#ec$* of fro) hi! !ilece or i"ctio"ccordi# to the circ+)!t"ce!.

+2 Unilateral and Primarily Onerous

Ordi"ril$* " "#ec$ i! oero+! i "t+re* %here the "#ec$ e9(ect!co)(e!"tio for hi! !ervice! i the for) of co))i!!io!. o%ever* Article184 reco#i


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the (rici("l. Ideed* the ver$ %ord '"#ec$' h"! co)e to coote cotrol &$the (rici("l.,4- The cotrol f"ctor* )ore th" "$ other* h"! c"+!ed the co+rt!to (+t cotr"ct! &et%ee (rici("l "d "#et i " !e("r"te c"te#or$. . . .

9 9 9

I the i!t"t c"!e* it "((e"r! (l"i to +! th"t (riv"te re!(odet C0C%"! " &+$er of the 0DFR for)* "d ot " "#et of 0T. riv"te re!(odet

C0C %"! ot !+&ect to 0T7! cotrol. The ?+e!tio of %hether " cotr"ct i!oe of !"le or "#ec$ de(ed! o the itetio of the ("rtie! "! #"thered fro)the %hole !co(e "d effect of the l"#+"#e e)(lo$ed. Th"t the "+thori


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i! ifor)ed &$ %"$ of cofideti"lifor)"tio; "d

2=5 %here the (er!o cl"i)i# the &eefitof the r+le coll+de! %ith the "#et todefr"+d the (rici("l 2De eo L De

eo* "t (. =64*citing TEER* "t (.135

Th+!* i Eurotech Industrial Technologies, Inc. v. Cuizon, /1 0CRA 82/3345* the Co+rt held

Article 18:4 reiforce! the f")ili"r doctrie th"t " "#et* %ho "ct! "!!+ch* i! ot (er!o"ll$ li"&le to the ("rt$ %ith %ho) he cotr"ct!. The !")e(rovi!io* ho%ever* (re!et! t%o i!t"ce! %he " "#et &eco)e!(er!o"ll$ li"&le to " third (er!o. The fir!t i! %he he e9(re!!l$ &id! hi)!elf to the o&li#"tio "d the !ecod i! %he he e9ceed! hi! "+thorit$. I the l"!ti!t"ce* the "#et c" &e held li"&le if he doe! ot #ive the third ("rt$!+fficiet otice of hi! (o%er!. 2"t (. :=5

I (hilpotts v. (hil. fg. Co.* 3 hil 41 21:1:5* the Co+rt held th"t theri#ht of i!(ectio #ive to " !tocholder +der the l"% c" &e e9erci!ed either &$ hi)!elf or &$ "$ (ro(er re(re!et"tive or "ttore$ i f"ct* "d either %ith or %itho+t the "tted"ce of the !tocholder. Thi! i! i cofor)it$ %ith the #eer"lr+le th"t %h"t " )" )"$ do i (er!o he )"$ do thro+#h "other.

+4 $erivative% Fiduciary and Revocable

A cotr"ct of "#ec$ cre"te! " le#"l rel"tio!hi( of re(re!et"tio &$ the"#et o &eh"lf of the (rici("l* %here the (o%er! of the "#et i! e!!eti"ll$

derived fro) the (rici("l* "d co!e?+etl$* it i! fid+ci"r$ i "t+re. Oe of the le#"l co!e?+ece! of the fid+ci"r$ "t+re of the cotr"ct of "#ec$ i! th"tit i! e!!eti"ll$ revoc"&le@ either the (rici("l or the "#et c" &e le#"ll$)"de to re)"i i the rel"tio!hi( %he the$ choo!e to h"ve it ter)i"ted.

Severino v. Severino* hil. == 21:/=5* held th"t the rel"tio! of ""#et to hi! (rici("l "re fid+ci"r$ i ch"r"cter &ec"+!e the$ "re &"!ed otr+!t "d cofidece* %hich )+!t flo% fro) the e!!eti"l "t+re " cotr"ct of "#ec$ th"t )"e! the "#et the re(re!et"tive of the (rici("l. Co!e?+etl$@

2"5 A! re#"rd! (ro(ert$ for)i# the !+&ect )"tter of the"#ec$* the "#et i! e!to((ed fro) "!!erti# or

"c?+iri# " t it le "dver!e to th"t of the (rici("l. 2Art.1=5;

2&5 I " cofl ictofitere!t !it+"tio* the "#et c"otchoo!e " co+r!e th"t f"vor! hi)!elf to the detri)et ofthe (rici("l; he )+!t choo!e to the &e!t "dv"t"#e ofthe (rici("l. Tho'as v. (ineda* 8: hil. =1/ 21:15;

(al'a v. Cristo4al * 44 hil. 41/ 21:65; "d

2c5 The "#et c"ot (+rch"!e for hi)!elf the (ro(ert$ ofthe (rici("l %hich h"! &ee #ive to hi! )""#e)etfor !"le or di!(o!itio 2Art. 1:1,/-5; +le!! there i! "

e9(re!! co!et o the ("rt of the (rici("l 2Cui v. Cui *133 hil. :1= 21:45; or %he the "#et (+rch"!e! "fterthe "#ec$ i! ter)i"ted 20alera v. Vel"!co* 1 hil.

6: 21:/85.

A cotr"ct of "#ec$ i! #eer"ll$ revoc"&le "! it i! " (er!o"l cotr"ct of re(re!et"tio &"!ed o tr+!t "d cofidece re(o!ed &$ the (rici("l o hi!"#et. A! the (o%er of the "#et to "ct de(ed! o the %ill "d lice!e of the

(rici("l he re(re!et!* the (o%er of the "#et ce"!e! %he the %ill or (er)i!!io i! %ithdr"% &$ the (rici("l. Th+!* #eer"ll$* the "#ec$ )"$ &erevoed &$ the (rici("l "t %ill. Repu4lic v. Evangelista* 66 0CRA 2/335.

I Orient Air Services v. Court of Appeals* 1:4 0CRA 6 21::15* it %"!held th"t the deci!io of the lo%er co+rt orderi# the (rici("l "irlie co)("$to 'rei!t"te defed"t "! it! #eer"l !"le! "#et for ("!!e#er tr"!(ort"tioi the hili((ie! i "ccord"ce %ith !"id G0A A#ree)et*' %"! +l"%f+l !iceco+rt! h"ve o "+thorit$ to co)(el the (rici("l to rei!t"te " cotr"ct of "#ec$ it h"! ter)i"ted %ith the "#et@

'0+ch %o+ld &e viol"tive of the (rici(le! "d e!!ece of "#ec$* defied &$

l"% "! " cotr"ct %here&$ '" (er!o &id! hi)!elf to reder !o)e !ervice or todo !o)ethi# i re(re!et"tio or o &eh"lf of "other* >IT TE CON0ENTOR ATORITY OF TE ATTER.' I " "#et(rici("l rel"tio!hi(* the(er!o"lit$ of the (rici("l i! e9teded thro+#h the f"cilit$ of the "#et. I !odoi#* the "#et* &$ le#"l fictio* &eco)e! the (rici("l* "+thori


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+1 From &mployment Contract

lie "#ec$ rel"tio!hi( %hich i! e!!eti"ll$ cotr"ct+"l i "t+red*+der Article 1433 of the Civil Code* ',t-he rel"tio!hi( &et%ee c"(it"l "dl"&or "re ot )erel$ cotr"ct+"l. The$ "re !o i)(re!!ed %ith (+&lic itere!tth"t l"&or cotr"ct! )+!t $ield to the co))o #ood. Therefore* !+ch cotr"ct!"re !+&ect to the !(eci"l l"%! o l"&or +io!* collective &"r#"ii#* !trie!"d loco+t!* clo!ed !ho(* %"#e!* %ori# coditio!* ho+r! of l"&or "d

!i)il"r !+&ect!.' ore !(ecific"ll$* the (+r(o!e of " e)(lo$ere)(lo$eerel"tio!hi( i! for the e)(lo$ee to reder !ervice for the direct &eefit of thee)(lo$er or of the &+!ie!! of the e)(lo$er; %hile "#ec$ rel"tio!hi( i!etered ito to eter ito +ridic"l rel"tio!hi( o &eh"lf of the (rici("l %iththird ("rtie!.

I #ela Cruz v. )orthern Theatrical Enterprises* : hil 4=: 21:5* theCo+rt held th"t the rel"tio!hi( &et%ee the cor(or"tio %hich o%! "do(er"te! " the"tre* "d the idivid+"l it hire! "! " !ec+rit$ #+"rd to )"it"ithe (e"ce "d order "t the etr"ce of the the"tre i! ot th"t of (rici("l "d"#et* &ec"+!e the (rici(le of re(re!et"tio %"! i o %"$ ivolved. The!ec+rit$ #+"rd %"! ot e)(lo$ed to re(re!et the defed"t cor(or"tio i it!

de"li#! %ith third ("rtie!; he %"! " )ere e)(lo$ee hired to (erfor) " cert"i!(ecific d+t$ or t"!* th"t of "cti# "! !(eci"l #+"rd "d !t"$i# "t the )"ietr"ce of the )ovie ho+!e to !to( #"te cr"!her! "d to )"it"i (e"ce "dorder %ithi the (re)i!e!.

+ From Contract for a Piece'of'(or)

der Article 141= of the Civil Code* ',&-$ the cotr"ct for " (iece of %orthe cotr"ctor &id! hi)!elf to e9ec+te " (iece of %or for the e)(lo$er* ico!ider"tio of " cert"i (rice or co)(e!"tio. The cotr"ctor )"$ either e)(lo$ ol$ hi! l"&or or !ill* or "l!o f+ri!h the )"teri"l.' der " cotr"ct for " (iece of %or* the cotr"ctor i! ot " "#et of the '(rici("l'* "d the

cotr"ctor h"! o "+thorit$ to re(re!et the (rici("l i eteri# ito +ridic"l"ct! %ith third ("rtie!.

>here the cotr"ct etered ito i! oe %here the idivid+"l +dertoo"d "#reed to &+ild for the other ("rt$ " co!tl$ edifice* the +derl$i# cotr"cti! oe for " cotr"ct for " (iece of %or* "d ot " (rici("l "d "#ec$rel"tio. Co!e?+etl$* the cotr"ct i! "+thori


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o(er"tor; "d th"t he %"! " )ere "#et* the fidi# of the Co+rt of A((e"l!th"t the o(er"tor %"! " "#et of the co)("$ "d ot " ide(edetcotr"ctor !ho+ld ot &e di!t+r&ed. Shell Co. v. $ire'en6s Insurance of )ear/ * 133 hil. 44 21:45.

+3 from Contract of Sale

der Article 166 of the Civil Code* ',i- co!tr+i# " cotr"ct

cot"ii# (rovi!io! ch"r"cteri!tic of &oth the cotr"ct of !"le "d of thecotr"ct of "#ec$ to !ell* the e!!eti"l cl"+!e! of the %hole i!tr+)et !h"ll&e co!idered.' J+ri!(r+dece h"! idic"ted %h"t the 'e!!eti"l cl"+!e!' th"t!ho+ld idic"te %hether it i! oe of !"le or "#ec$ to !ell(+rch"!e* refer! to!ti(+l"tio! i the cotr"ct %hich (l"ce! o&li#"tio !o the ("rt of the(+r(orted '"#et' h"vi# to do %ith %h"t !ho+ld &e " !eller7 o&li#"tio totr"!fer o%er!hi( "d deliver (o!!e!!io of the !+&ect )"tter* or the &+$er7!o&li#"tio o the ("$)et of the (rice.

I 2uiroga v. (arsons* =8 hil. 31 21:185* "ltho+#h the ("rtie!de!i#"ted the "rr"#e)et "! " "#ec$ "#ree)et* the Co+rt fo+d the"rr"#e)et to &e oe of !"le !ice the e!!eti"l cl"+!e (rovided th"t

',(-"$)et %"! to &e )"de "t the ed of !i9t$ d"$!* or &efore* "t the,(rici("l7!- re?+e!t* or i c"!h* if the ,"#et- !o (referred* "d i the!e l"!t t%oc"!e! " "dditio"l di!co+t %"! to &e "llo%ed for (ro)(t ("$)et.' The!ecoditio! to the Co+rt %ere '(reci!el$ the e!!eti"l fe"t+re! of " cotr"ct of (+rch"!e "d !"le' &ec"+!e there %"! the o&li#"tio o the ("rt of the(+r(orted (rici("l to !+((l$ the &ed!* "d* o the ("rt of the (+r(orted "#et*to ("$ their (rice* th+!@

The!e fe"t+re! e9cl+de the le#"l coce(tio of " "#ec$ or order to !ell%here&$ the )"d"tor$ or "#et received the thi# to !ell it* "d doe! ot ("$it! (rice* &+t deliver! to the (rici("l the (rice he o&t"i! fro) the !"le of the

thi# to " third (er!o* "d if he doe! ot !+cceed i !elli# it* he ret+r! it. B$virt+e of the cotr"ct &et%ee the (l"itiff "d the defed"t* the l"tter* oreceivi# the &ed!* %"! ece!!"ril$ o&li#ed to ("$ their (rice %ithi the ter)fi9ed* %itho+t "$ other co!ider"tio "d re#"rdle!! "! to %hether he h"d or h"d ot !old the &ed!. 2"t (. 35

A! " co!e?+ece* the 'revoc"tio' !o+#ht to &e )"de &$ the (rici("lo the (+r(orted "#ec$ "rr"#e)et %"! deied &$ the Co+rt* therel"tio!hi( &ei# oe of !"le* "d the (o%er to re!cid i! "v"il"&le ol$ %hethe (+r(orted (rici("l i! "&le to !ho% !+&!t"ti"l &re"ch o the ("rt of the(+r(orted "#et.

>he the ter)! of the "#ree)et co)(el! the (+r(orted "#et to ("$ for the (rod+ct! received fro) the (+r(orted (rici("l %ithi the !ti(+l"ted (eriod*eve %he there h"! &ee o !"le thereof to the (+&lic* the +derl$i#rel"tio!hi( i! ot oe of cotr"ct of "#ec$ to !ell* &+t oe of "ct+"l !"le. Are"l "#et doe! ot "!!+)e (er!o"l re!(o!i&ilit$ for the ("$)et of the(rice of the o&ect of the "#ec$; hi! o&li#"tio i! )erel$ to t+rover to the(rici("l the (roceed! of the !"le oce he receive! the) fro) the &+$er.Co!e?+etl$* !ice the +derl$i# "#ree)et i! ot " "#ec$ "#ree)et* itc"ot &e revoed e9ce(t for c"+!e. 2uiroga v. (arsons* =8 hil 3/ 21:185.

I +onzalo (u-at & Sons, Inc. v. Arco A'use'ent Co'pan- * 4/ hil.3/ 21:15* %hich covered " (+r(orted "#ec$ cotr"ct to (+rch"!e* the Co+rtlooed ito the (rovi!io! of their cotr"ct* "d fo+d th"t the letter! &et%eethe ("rtie! cle"rl$ !ti(+l"ted for fi9ed (rice! o the e?+i()et ordered* %hich'"d)itted o other iter(ret"tio th" th"t the ,(rici("l- "#reed to (+rch"!efro) the ,"#et- the e?+i()et i ?+e!tio "t the (rice! idic"ted %hich "refi9ed "d deter)i"te.' 2"t (. 345. The Co+rt held th"t '%h"tever +fore!eeevet! )i#ht h"ve t"e (l"ce +f"vor"&le to the ,"#et-* !+ch "! ch"#e i(rice!* )i!t"e i their ?+ot"tio* lo!! of the #ood! ot covered &$ i!+r"ceor f"il+re of the 0t"rr i"o Co)("$ to (ro(erl$ fill the order! "! (er

!(ecific"tio!* the ,(rici("l- )i#ht !till le#"ll$ hold the ,"#et- to the (rice!fi9ed.' 2"t (. 345. Co!e?+etl$* the de)"d &$ the (+r(orted (rici("l of "lldi!co+t! "d &eefit! o&t"ied &$ the (+r(orted "#et fro) the A)eric"!+((lier! +der the theor$ th"t "ll &eefit! received &$ the "#et +der thetr"!"ctio! %ere to &e "cco+ted for the &eefit of the (rici("l %"! deied&$ the co+rt* the +derl$i# rel"tio!hi( &ei# e!!eti"ll$ " cotr"ct of (+rch"!e.

>he +der the ter)! of the "#ree)et* the (+r(orted "#et &eco)e!re!(o!i&le for "$ ch"#e! i the "c?+i!itio co!t of the o&ect he h"! &ee"+thori


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the co!i#ed !toc f+ll$ i!+red "#"i!t lo!! or d")"#e &$ fire or "! " re!+ltof fire* the (olic$ of !+ch i!+r"ce to &e ("$"&le to it i the evet of lo!!.' It%"! f+rther !ti(+l"ted th"t the cotr"ct 'doe! ot co!tit+te the Di!tri&+tor the"#et or le#"l re(re!et"tive of the Co)("$ for "$ (+r(o!e %h"t!oever.Di!tri&+tor i! ot #r"ted "$ ri#ht or "+thorit$ to "!!+)e or to cre"te "$o&li#"tio or re!(o!i&ilit$* e9(re!! or i)(lied i &eh"lf of or i the ")e of theCo)("$* or to &id the Co)("$ i "$ )"er or thi# %h"t!oever.' I !(iteof !+ch !ti(+l"tio!* the Co+rt did fid the rel"tio!hi( to &e oe of "#ec$*

&ec"+!e it did ot tr"!fer o%er!hi( of the )erch"di!e to the (+r(orteddi!tri&+tor* eve tho+#h it %"! !+((o!ed to eter ito !"le! "#ree)et! i thehili((ie! i it! o% ")e* th+!@

The tr"!fer of title or "#ree)et to tr"!fer it for " (rice ("id or (ro)i!edi! the e!!ece of !"le. If !+ch tr"!fer (+t! the tr"!feree i the "ttit+de or (o!itio of " o%er "d )"e! hi) li"&le to the tr"!feror "! " de&tor for the"#reed (rice* "d ot )erel$ "! " "#et %ho )+!t "cco+t for the (roceed!of " re!"le* the tr"!"ctio i! " !"le; %hile the e!!ece of " "#ec$ to !ell i!the deliver$ to " "#et* ot "! hi! (ro(ert$* &+t "! the (ro(ert$ of the(rici("l* %ho re)"i! the o%er "d h"! the ri#ht to cotrol the !"le* fi9 the(rice* "d ter)!* de)"d "d receive the (roceed! le!! the "#et7!

co))i!!io +(o !"le! )"de. 2"t (. =35

I 0ictoria illing Co., Inc. v. Court of Appeals* === 0CRA 66= 2/3335*the Co+rt held th"t " "+thori


10/54

&o+d to ("$ the co))i!!io he h"! cotr"cted %ith the &roer for )erel$fidi# the &+$er.

*ro)er -s Not .egally -ncapacityaa to Purchase Property of thePrincipal# 33 I Araneta, Inc. v. #el (aterno* :1 hil. 486 21:/5* it %"! heldth"t the &" of ("r"#r"(h / of ,Article 1:1- %he reder! " "#et le#"ll$ic"("&le of &+$i# the (ro(ertie! of hi! (rici("l coote! the ide" of tr+!t"d 'cofidece; "d !o %here the rel"tio!hi( doe! ot ivolve

co!ider"tio! of #ood f"ith "d ite#rit$ the (rohi&itio !ho+ld ot "d doe!ot "((l$. To co)e +der the (rohi&itio* the "#et )+!t &e i " fid+ci"r$rel"tio %ith hi! (rici("l.' The Co+rt held th"t " &roer doe! ot co)e %ithithe )e"i# of Article 1:/* &ec"+!e he i! othi# )ore th" " #o&et%ee or )iddle)" &et%ee the defed"t "d the (+rch"!er* &ri#i# the) to#ether to )"e the cotr"ct the)!elve!. There i! o cofidece to &e &etr"$ed* !ice" &roer i! ot "+thori


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1=; >h"rto o A#ec$* !ec. 6:5. J+d#e 0tore$* i hi! %or o A#ec$*defie! " &roer "! " "#et e)(lo$ed to )"e &"r#"i! "d cotr"ct!&et%ee other (er!o!* i )"tter! of tr"de* co))erce or "vi#"tio* forco)(e!"tio co))ol$ c"lled &roer"#e. 20tore$ o A#ec$* !ec. /85' 2"t (./4:/835

Note therefore th"t '&roer' i! co!idered " co))erci"l ter) for "(er!o e#"#ed "! " )iddle)" to &ri# ("rtie! to#ether i )"tter! (ert"ii#to tr"de* co))erce or "vi#"tio. If the (er!o h"! ot &ee #ive the (o%erto eter ito the cotr"ct or co))erce i &eh"lf of the ("rtie!* the he i! "'&roer' i the !e!e th"t hi! o& )"il$ i! 'to &ri# ("rtie! to#ether to&"r#"i*' "d eve the he )"$ ot &e etitled to hi! co))i!!io if the&"r#"ii# &et%ee the ("rtie! doe! ot re!+lt i " cotr"ct &ei# (erfected.B+t i thi! !e!e* the &roer doe! ot "!!+)e the role of " "#et &ec"+!e heh"! o (o%er to eter ito " cotr"ct i &eh"lf of "$ of the ("rtie!; he "l!o"!!+)e! o fid+ci"r$ o&li#"tio! to either or &oth ("rtie!* !ice the$ "ree9(ected to +!e their o% +d#)et i decidi# to &id or ot to &idthe)!elve! to " cotr"ct.

O the other h"d* if the (er!o h"! &ee #ive the (o%er to eter ito "cotr"ct or co))erce o &eh"lf of "$* or eve for &oth the ("rtie!* he i! tr+l$" &roer "d " "#et. I %hich c"!e* he "!!+)e! fid+ci"r$ o&li#"tio! to the(er!o %ho i! therefore le#"ll$ hi! (rici("l. I !+ch c"!e* he i! etitled to "co))i!!io if hi! effort! 2i.e.* the !ervice! he redered5 %here the efficietc"+!e for the evet+"l (erfectio "d co!+))"tio of the cotr"ct th"t %"!the o&ect for "((oiti# hi) &roer"#et.

Reate- Ca$e$5

Chua )go v. 5niversal Trading Co., Inc.* 84 hil. ==1 21:35.

$ar Eastern Eport & I'port Co. v. i' Tech Suan * :4 hil. 141 21:5.

(earl Island Co''ercial Corp. v. i' Tan Tong * 131 hil. 48: 21:45.

)ational Rice and Corn Corp. v. Court of Appeals* :1 0CRA =4 21:4:5.

,1-See Che'phil Eport v. Court of Appeals* /1 0CRA /14 21::5; Shopper6s(aradise Realt- v. Ro1ue* 1: 0CRA := 2/335; #o'inion Insurance Corp. v.Court of Appeals* /6 0CRA 6/3* 6/6 2/33/5; Repu4lic v. Evangelista* 660CRA 2/335; iton!ua, "r. v. Eternit Corp., :3 0CRA /3 2/3365;Eurotech Industrial Technologies, Inc. v. Cuizon, /1 0CRA 8 2/3345.

,/-Citing Orient Air Services and Hotel Representatives v. Court of Appeals */4 hil. :/4* :=: 21::15.

,=-DE EON AND DE EON* COENT AND C A0E0 ON ARTNER0I AGENCY AND TR0T0* /33 ed.* "t (. =6; herei"fter referred to "! 'DE EON0'.

,-Reiterated in Eurotech Industrial Technologies, Inc. v. Cuizon * /1 0CRA8 2/3345.

,-See also iton!ua, "r. v. Eternit Corp., :3 0CRA /3 2/3365.

,6-Citing *ordador v. uz * /8= 0CRA =4* =8/ 21::45.

,4-RO0COE T. 0TEFFEN* AGENCY ARTNER0I IN A NT0E 21:445=3=1.

,8-Reiterated in iton!ua, "r. v. Eternit Corp., :3 0CRA /3 2/3365.

,:-2uoting fro' Re$e! "d +o* 'A O+tlie of hili((ie Civil "%*' Vol. V* (./44.

,13-Citing 1/ A). J+r. /d 8=; 1= AR 1=6; 1 AR /d :84; *ron vs.Coates* 64 AR /d :=; Ha-'es vs. Rogers* 14 AR /d 8:6; oore vs.Turner * =/ AR /d 41=.

O0TED BY De" Ce!"r . Vill"+ev" AT 83//338 =@/ A 3COENT0 O0T A COENT DIGG IT

II. FOR REPIRED FOR CONTRACT0 OF AGENCY

11

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. Fo"/$ Re6!i"e- of A(en&)

a. 7o8 A(en&) Ma) Be Con$tit!te-

Article 186: e)(h"!ihe the (rici("l trans'it hi! (o%er of "ttore$ tothe "#et 2i.e.* it i! i %riti#Q5* %ho receive! it %itho+t

"$ o&ectio; or

2&5 >he the (rici("l etr+!t! to the "#et &$ letter ortele#r") " (o%er of "ttore$ ith respect to the

4usiness in hich he is ha4ituall- engaged as an agent, "d he did ot re(l$ to the letter or tele#r").

The l"#+"#e! +!ed i Article! 1841 "d 184/ idic"te! th"t the '(o%er of "ttore$' )+!t co!tit+te " %ritte i!tr+)et!* &ec"+!e i &oth c"!e! the

"rticle! refer to !it+"tio! %here 'the (rici("l deliver! hi! (o%er of "ttore$ tothe "#et*' "d %he 'the (rici("l tr"!)it! hi! (o%er of "ttore$ to the"#et*' %hich re?+ire! th"t it )+!t &e i %riti#* %hich tod"$ %o+ld icl+dete9ti# "d electroic )"il* %hich "re co!idered to &e e?+iv"let to " %rittei!tr+)et +der the Electroic Co))erce "%. Co!e?+etl$* %he the other (rovi!io! of the "% o A#ec$ refer! to '#eer"l (o%er of "ttore$' "d'!(eci"l (o%er of "ttore$*' doe! the l"% )e" th"t the$ cofor) to ther+di)et"r$ re?+ire)et th"t the$ &e i %riti#Q

+2 From the Side of ,hird Parties/Public

The (revio+! r+le! o %he " cotr"ct of "#ec$ i! dee)ed co!tit+ted

2i.e., (erfected5 "re t"e fro) the itr")+r"l (oit of vie%@ "! &et%ee the12


13/54

("rtie! to the cotr"ct of "#ec$. o%ever* " cotr"ct of "#ec$ i! )erel$ "(re("r"tor$ cotr"ct* "d i! )e"t to "chieve #o"l! &e$od it! o% '&ei#';co!e?+etl$* the "% o A#ec$ cot"ied i the Civil Code (rovide! for "dditio"l r+le th"t "ddre!!e! )o!t e!!eti"ll$ the t"r#et! of ever$ cotr"ct of "#ec$@ the third ("rtie! iteded to &e cotr"cted %ith &$ the "#et i &eh"lf of the (rici("l.

der Article 184=* %he the (rici("l ifor)! "other (er!o th"t he h"!#ive " (o%er of "ttore$ to " third (er!o 2the "#et5* the l"tter there&$&eco)e! " d+l$ "+thori


14/54

e%elr$ of !+&!t"ti"l v"l+e %itho+t re?+iri# " %ritte "+thori


15/54

III. IND0 OF AGENCY

2. Kin-$ of A(en&)

a. Ba$e- on t0e B!$ine$$ o" T"an$a&tion$ Co'e"e-

der Article 1846* " "#ec$ i! ter)ed to &e " 'general agenc$' %he iteco)("!!e! "ll of the &+!ie!! of the (rici("l. The &etter ter) for !+ch ""#ec$ %o+ld &e " 'universal agenc- *' for the ter) '#eer"l "#ec$' i! oeth"t i! "ddre!!ed to the #eer"l (+&lic* "d ot +!t " ("rtic+l"r (er!o or #ro+( of (er!o! %hich %ho) the "#et i! to tr"!"ct.

I Siasat v. Inter'ediate Appellate Court * 1=: 0CRA /=8 21:85* theCo+rt held th"t " (o%er of "ttore$ %hich (rovide! th"t 'Thi! i! to for)"lihere"!* " special poer

of attorney cover! "ct! of do)iio or !trict o%er!hi(. The #eer"l r+le i!15

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th"t +le!! !o e9(re!!l$ !t"ted* " "#ec$ cover! ol$ the (o%er! to e9ec+te"ct! of "d)ii!tr"tio. Th+!* +der Article 1844 of the Civil Code@ 'A "#ec$co+ched i #eer"l ter)! co)(ri!e! ol$ "ct! of "d)ii!tr"tio* eve if the(rici("l !ho+ld !t"te th"t he %ithhold! o (o%er or th"t the "#et )"$e9ec+te !+ch "ct! "! he )"$ co!ider "((ro(ri"te* or eve tho+#h the "#ec$!ho+ld "+thori


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"ct! o &eh"lf of the (rici("l %ith re!(ect to third ("rtie!. Co!e?+etl$* eveif !trictl$ !(e"i# the "#ec$ rel"tio i! ter)i"ted +(o the de"th of the(rici("l* the e!t"&li!hed &+t +fii!hed cotr"ct! "d tr"!"ctio! the(edi# )+!t &e f+lfilled &$ the "#et o &eh"lf of the decedet* %hecoti+"tio of re(re!et"tio i! ece!!"r$.

+1 Measure of $amage for an !gent0s Non' Performance of Obligation

I *A $inance v. Court of Appeals* /31 0CRA 14 21::15* +der thedeed of ch"ttel )ort#"#e* the fi"ce co)("$ %"! co!tit+ted "! ""ttore$if"ct for the )ort#"#or! %ith f+ll (o%er "d "+thorit$ to file* follo%+(* (ro!ec+te* co)(ro)i!e or !ettle i!+r"ce cl"i)!; to !i# e9ec+te "ddeliver the corre!(odi# ("(er!* recei(t! "d doc+)et! to the i!+r"ceco)("$ "! )"$ &e ece!!"r$ to (rove the cl"i)* "d to collect fro) the l"tter the (roceed! of i!+r"ce to the e9tet of it! itere!t!* i the evet th"t the)ort#"#ed c"r !+ffer! "$ lo!! or d")"#e* the #r"t of (o%er co!tit+ted thefi"ce co)("$ "! the "#et of the )ort#"#or!. >he the )ort#"#ed )otor vehicle fi#+red i " "ccidet th"t %o+ld h"ve "llo%ed recover$ o thei!+r"ce cl"i) for tot"l lo!!* "d the )ort#"#or! h"d i!tr+cted the fi"ce

co)("$ to )"e !+ch cl"i)* &+t i!te"d it o(ted to h"ve the )otor vehiclere("ired "d fore#o the tot"l lo!! cl"i)* the Co+rt decreed th"t the f"il+re "dref+!"l of the fi"ce co)("$ to !ee tot"l lo!! cl"i)! o the vehicle)ort#"#ed "#"i!t the i!+r"ce co)("$* co!tit+ted e#li#ece "d oto+tri#ht ref+!"l to co)(l$ %ith the i!tr+ctio! of the (rici("l!* "d li"&le for d")"#e!. It held th"t +der Article 188 of the Civil Code* the fi"ceco)("$ %"! &o+d &$ it! "cce(t"ce to c"rr$ o+t the "#ec$* "d i! li"&le for d")"#e! %hich* thro+#h it! o(erfor)"ce* the (rici("l!)ort#"#or! )"$!+ffer. Co!e?+etl$* &$ re"!o of the lo!! !+ffered &$ the (rici("l!* the Co+rtheld th"t the fi"ce co)("$ co+ld o lo#er collect o the +("id &"l"ce of the (ro)i!!or$ ote !ec+red &$ the ch"ttel )ort#"#e.

I ()* v. anila Suret- * 1 0CRA 446 21:65* %here the holder of "e9cl+!ive "d irrevoc"&le (o%er of "ttore$ to )"e collectio!* f"iled tocollect the !+)! d+e to the (rici("l "d there&$ "llo%ed the "llotted f+d! to&e e9h"+!ted &$ other creditor!* !+ch "#et %"! "d+d#ed to h"ve f"iled to "ct%ith the c"re of " #ood f"ther of " f")il$ re?+ired +der Article 1884 "d&ec")e (er!o"ll$ li"&le for the d")"#e! %hich the (rici("l )"$ !+ffer thro+#h hi! o(erfor)"ce.

I *arton v. e-te Asphalt * 6 hil :=8 21:/5* %here the (rev"ili#!t"t+tor$ r+le the %"! Article /64 of the Code of Co))erce %hich del"redth"t o "#et !h"ll (+rch"!e for hi)!elf or for "other th"t %hich he h"! &eeordered to !ell* the Co+rt held th"t " !"le &$ " &roer to hi)!elf %itho+t the

co!et of the (rici("l %o+ld &e void "d ieffect+"l %hether the &roer h"!

&ee #+ilt$ of fr"+d+let cod+ct or ot. Co!e?+etl$* !+ch &roer i! otetitled to receive "$ co))i!!io +der the cotr"ct* )+ch le!! "$rei)&+r!e)et of e9(e!e! ic+rred i (+r!+i# "d clo!i# !+ch !"le!.

. OB*IGATION OF AGENT :7O DEC*INES AGENCY

der Article 188* if " (er!o declie! " "#ec$* 'he i! &o+d to

o&!erve the dili#ece of " #ood f"ther of " f")il$ i the c+!tod$ "d(re!erv"tio of the #ood! for%"rded to hi) &$ the o%er +til the l"tter !ho+ld"((oit " "#et.' The "rticle )"d"te! the o%er i !+ch c"!e to '"! !oo "!(r"ctic"&le either "((oit " "#et or t"e ch"r#e of the #ood!.'

>e !ho+ld co)("re the o&li#"tio! of " (er!o %ho declie! " "#ec$*fro) oe %ho %ithdr"%! fro) " "#ec$ he (revio+!l$ "cce(ted. der Article1:/:* eve if " "#et %ithdr"%! fro) the "#ec$ for " v"lid re"!o* 'he )+!tcoti+e to "ct +til the (rici("l h"! h"d re"!o"&le o((ort+it$ to t"e theece!!"r$ !te(! to )eet the !it+"tio.'

The (rovi!io! of Article! 188 "d 1:/: co!tit+te r"re i!t"ce!

%here " d+t$ of dili#ece i! o%ed &$ " (er!o to "other o+t!ide of " e9i!ti#cotr"ct+"l &od.

2. GENERA* RU*E ON AGENT


18/54

%he " "#et co)(lie! %ith the i!tr+ctio! of hi! (rici("l* he i! "cti#%ithi the !co(e of hi! "+thorit$.

A! held i 0ictorias illing Co., Inc. v. Court of Appeals * === 0CRA 66=2/3335* oe f"ctor th"t )o!t cle"rl$ di!ti#+i!he! " "#ec$ fro) other le#"lcoce(t!* icl+di# !"le* i! control: oe (er!othe "#et"#ree! to "ct +der the cotrol or directio of "otherthe (rici("l. It i! cle"r therefore* th"t %he" "#et "ct! i "ccord"ce %ith the (rici("lHM! i!tr+ctio* he i! "cti#

%ithi the !co(e of hi! "+thorit$.

Noethele!!* "#ec$ rel"tio i! etered ito )"il$ for &+!ie!! or

co))erci"l vet+re!* "d it i! ot e9(ected th"t the (rici("l c" cover ever coti#ecie! %ith !(ecific i!tr+ctio!* or th"t ever$ "ct of the "#et )+!t &e&"!ed o det"iled i!tr+ctio! of the (rici("l. Ideed* the "#et i! e9(ected to+!e hi! &+!ie!! di!cretio "! th"t of the (rici("l %o+ld or co+ld if (er!o"ll$(re!et. Therefore* %e !ho+ld co!ider the (rici("l7! i!tr+ctio! "! the li)itof " "#et7! (o%er; "d th"t i the "&!ece of li)iti# i!tr+ctio!* it i!e9(ected th"t the "#et +!e! hi! &e!t +d#)et to !t"$ %ithi the !co(e of the(rici("l7! "+thorit$ #r"ted to hi). Thi! i! ("rt of the d+t$ of dili#ece of ever$

"#et %ho "cce(t! " "#ec$ de!i#"tio.

Thi! (rici(le i! &e!t e9(re!!ed +der Article 1881* %hich (rovide! th"tthe "#et '"$ do !+ch "ct! "! )"$ &e cod+cive to the "cco)(li!h)et of the (+r(o!e of the "#ec$.' ie%i!e* Article 188/ (rovide! th"t ',t-he li)it! of the "#et7! "+thorit$ !h"ll ot &e co!idered e9ceed !ho+ld it h"ve &ee(erfor)ed i " )"er )ore "dv"t"#eo+! to the (rici("l th" th"t !(ecified&$ hi).' I other %ord!* " "#et ot ol$ h"! e9(re!! (o%er!* &+t "l!oi)(lied (o%er! e)""ti# fro) the e9(re!! (o%er! #r"ted to hi); "! %ell "!icidet"l (o%er! ece!!"r$ i order to "chieve the (+r(o!e for %hich the"#ec$ %"! co!tit+ted.

ITan Tiong v. SEC * 6: hil / 21:35* it %"! held th"t the "#et i! otdee)ed to h"ve e9ceeded hi! "+thorit$ !ho+ld he (erfor) the "#ec$ i ")""#er )ore "dv"t"#eo+! to the (rici("l th" th"t idic"ted &$ the(rici("l. Th+!* %he the "#et !ell! the c"r of the (rici("l for )ore th" the")o+t idic"ted &$ the (rici("l* the he h"! ot e9ceeded hi! "+thorit$&ec"+!e " hi#her (rice i! )ore "dv"t"#eo+! to the (rici("l.

The (rici(le %"! reiter"ted i the !$ll"&+! of the (+&li!hed deci!ioiOlaguer v. (urugganan, "r.* 1 0CRA 63 2/3345* it %"! held th"t +der Article 188/ of the Civil Code the li)it! of " "#et7! "+thorit$ !h"ll ot &eco!idered e9ceeded !ho+ld it h"ve &ee (erfor)ed i " )"er "dv"t"#eo+! to the (rici("l th" th"t !(ecified &$ hi). I th"t deci!io* the

)"er &$ %hich the "ttore$if"ct (+r!+ed the !"le of the !h"re! of the

(rici("l* "d the ("$)et of the co!ider"tio !o "! ot to reve"l th"t heo%ed !+ch !h"re! "! re?+e!ted &$ the (rici("l* %ere "ll dee)ed to h"ve&ee e9ec+ted &$ the "#et %ithi the !co(e of hi! "+thorit$.

+ !s ,o ,hird Parties

The ter)! of Article 1884 %hich effectivel$ !t"te! th"t %he " "#et"ct! cotr"r$ to the i!tr+ctio! of hi! (rici("l* he i! dee)ed to h"ve "cted

%itho+t or i e9ce!! of "+thorit$* i! " r+le th"t #over! the rel"tio!hi( of the(rici("l "d "#et; it i! ot " r+le th"t e!!eti"ll$ "ddre!!e! the itere!t! of third ("rtie! %ith %ho) the "#et eter! ito +ridic"l rel"tio! o &eh"lf of the(rici("l.

Th+!* +der Article 1:11* eve %he the "#et h"! e9ceeded hi!"+thorit$* the (rici("l re)"i! !olid"ril$ li"&le %ith the "#et if the (rici("l"llo%ed the "#et to "ct "! tho+#h he h"d f+ll (o%er!.

der Article 1:33* i!of"r "! third (er!o! "re cocered* '" "ct i!dee)ed to h"ve &ee (erfor)ed %ithi the !co(e of the "#et7! "+thorit$* if !+ch "ct i! %ithi the ter)! of the (o%er of "ttore$* "! %ritte* eve if the

"#et h"! i f"ct e9ceeded the li)it! of hi! "+thorit$ "ccordi# to "+der!t"di# &et%ee the (rici("l "d "#et.' I other %ord!* "! to third("rtie! "cti# i #ood f"ith* the ritten instructions of the (rici("l "re the&idi# (o%er! of the "#et* "d c"ot &e overco)e &$ o%rittei!tr+ctio! of the (rici("l ot )"de o% to the). I *an/ of (.I. v. #eCoster * 4 hil. : 21:/5* the Co+rt held th"t the (o%er! "d d+tie! of ""#et "re cofied "d li)ited to tho!e %hich "re !(ecified "d defied i hi!%ritte (o%er of "ttore$* %hich li)it"tio i! " otice to* "d i! &idi# +(o*the (er!o de"li# %ith !+ch "#et.

I effect* %he the (o%er of "ttore$ of the "#et h"! &ee red+ced i%riti# &$ the (rici("l* it co!tit+te* eve "! to third ("rtie! de"li# %ith the

"#et* the hi#he!t for) of the e9tet "d li)it"tio of the (o%er! of the "#et*"d third ("rtie! !ho+ld cotr"ct o the &"!i! of !+ch %ritte i!tr+)et. Th+!* Article 1:3/ (rovide! th"t " third (er!o %ith %ho) the "#et %i!he! tocotr"ct o &eh"lf of the (rici("l )"$ re?+ire the (re!et"tio of the (o%er of "ttore$* or the i!tr+ctio! "! re#"rd! the "#ec$. I "dditio* (riv"te or !ecret order! "d i!tr+ctio! of the (rici("l do ot (re+dice third (er!o!%ho h"ve relied +(o the (o%er of "ttore$ or i!tr+ctio !ho% the).

O+t!ide of the %ritte (o%er of "ttore$ of " "#et* third ("rtie! %hode"l %ith !+ch "#et "re ot !+((o!ed to (re!+)e th"t the "#et i! f+ll$"+thori


19/54

"d e9tet of the "+thorit$ of the "#et. Strong v. +utierrez Repide* 6 hil. 68321:635; #een v. (acific Co''ercial Co.* / hil. 4=8 21://5; 0elso v. a5r4ana, 8 hil. 681 21:==5;To-ota Sha, Inc. v. Court of Appeals* / 0CRA=/3 21::5.

The f"ct th"t oe i! de"li# %ith " "#et* %hether the "#ec$ &e#eer"l or !(eci"l* !ho+ld &e " d"#er !i#"l. The )ere re(re!et"tio or decl"r"tio of oe th"t he i! "+thori


20/54

"#ec$ %"! or %"! ot for " co)(e!"tio.' I other %ord!* "ct! of fr"+d or e#li#ece o the ("rt of the "#et* eve %he "cti# for "d i &eh"lf of the(rici("l* "re &$ the)!elve! c"+!e! of "ctio for the i+red ("rt$ "#"i!t the(er!o of the "cti# "#et.

Th+!* i *ritish Aira-s v. Court of Appeals* /8 0CRA 3 21::85* it%"! held th"t %he oe "irlie co)("$ 2Briti!h Air%"$!5 !+&cotr"ct! " le# of the iter"tio"l tri( of it! ("!!e#er to "other "irlie co)("$ 2A5* thecotr"ct of "ir tr"!(ort"tio %"! e9cl+!ivel$ &et%ee ("!!e#er "d BA* %ithA )erel$ "cti# "! it! "#et o the "il" to o# o# le# of the o+re$.The %ell!ettled r+le i! th"t " "#et i! "l!o re!(o!i&le for "$ e#li#ece ithe (erfor)"ce of it! f+ctio "d i! li"&le for d")"#e! %hich the (rici("l)"$ !+ffer &$ re"!o of the "#et7! e#li#et "ct.

&. Effe&t$ on t0e A(ent of Cont"a&t$ Ente"e- into:it0in t0e S&o#e of 7i$ A!t0o"it)

All cotr"ct! "d tr"!"ctio! etered ito &$ the "#et o &eh"lf of the(rici("l %ith the !co(e of hi! "+thorit$ "re &idi# o the (rici("l* "d the"#et doe! ot !t"d to either &e li"&le* or to h"ve #"ied "$ ri#ht o hi! o%

"ccord* there+der. Th+!* Article 18:4 (rovide! th"t ',t-he "#et %ho "ct! "!!+ch i! ot (er!o"ll$ li"&le to the ("rt$ %ith %ho) he cotr"ct* +le!! hee9(re!!l$ &id! hi)!elf or e9ceed! the li)it! of hi! "+thorit$ %itho+t #ive!+ch ("rt$ !+fficiet otice of hi! (o%er!.'

I Ang v. $ulton $ire Insurance Co.* / 0CRA : 21:615* it %"! heldth"t %he the "#et h"! "cted %ithi the !co(e of hi! "+thorit$* the "ctio othe cotr"ct )+!t &e &ro+#ht "#"i!t the (rici("l "d ot "#"i!t the"#et.

I *a- 0ie Hotel v. %er & Co.* 116 0CRA =/4 21:8/5* the Co+rt heldth"t the "ct! "d decl"r"tio of the "#et %ithi the !co(e of hi! "+thorit$ "d

d+ri# it! e9i!tece "re co!idered "d tre"ted "! tho!e of (rici("l.

>he " "#et* i e9ec+ti# the order! "d co))i!!io! of hi!(rici("l* c"rrie! o+t the i!tr+ctio! he h"! received fro) hi! (rici("l* "ddoe! ot "((e"r to h"ve e9ceeded hi! "+thorit$ or to h"ve "cted %ithe#li#ece* deceit* or fr"+d* he c"ot &e held re!(o!i&le for the f"il+re of hi!(rici("l to "cco)(li!h the o&ect of the "#ec$. +utierrez Her'anos v. OriaHer'anos* =3 hil. :1 21:15; +. (u-at & Sons, Inc. v. Arco A'use'ent Co'pan- * 4/ hil. 3/ 21:15.

A "ctio &ro+#ht i the ")e of the "#et "d ot i the ")e of the(rici("l %ho i! the re"l ("rt$ i itere!t* )+!t &e di!)i!!ed ot +(o the

)erit!* &+t +(o the #ro+d th"t it h"! ot &ee (ro(erl$ i!tit+ted. Esperanzaand *ullo v. Catindig * /4 hil. =:4 21:15.

Reate- Ca$e$@

Cason v# Richards, 4 0i =11 +1>?=

()* v. anila Suret- * 1 0CRA 446 21:65

)epo'uceno v. Heredia* 4 hil 6= 21:345

(hil. *an/ of Co''erce v. Aruego* 13/ 0CRA =3 21:815

)ational $ood Authorit- v. IAC * 18 0CRA 166 21::35

ariti'e Agencies & Securities, Inc. v. Court of Appeals * 184 0CRA =621::35.

-. Effe&t$ of A&t$ Done b) A(ent :it0o!t o" in

E9&e$$ of 7i$ A!t0o"it)

The #eer"l r+le i! !et +der Article 1=14 of the Civil Code th"t 'No oe)"$ cotr"ct i the ")e of "other %itho+t &ei# "+thori


21/54

2"5 it !h"ll &e void if the ("rt$ %ith %ho) the "#etcotr"cted i! "%"re of the li)it! of the (o%er!#r"ted &$ the (rici("l;

2&5 I !+ch c"!e* the "#et %o+ld &e li"&le (er!o"ll$ to!+ch third ("rt$* if he +dertoo to !ec+re the(rici("l7! r"tific"tio;

Thi! (rici(le i! reiter"ted i the !ecod ("r"#r"(h of Article 1:13 %hich(rovide! th"t 'A! for "$ o&li#"tio %herei the "#et h"! e9ceeded hi! (o%er*the (rici("l i! ot &o+d e9ce(t %he he r"tifie! it e9(re!!l$ or t"citl$.'

O the other h"d* if the ("rt$ %hich %ho) the "#et cotr"ct i!+"%"re of the li)it! of the (o%er! #r"ted &$ the (rici("l* the cotr"ct i!+eforce"&le +der Article 13=215.

der Article 1:33* the %ritte (o%er of "ttore$ #ive &$ the (rici("l#over! the cotr"ct! etered ito %ith third ("rtie!* irre#"rdle!! of "$ (riv"teli)it"tio of (o%er! "#reed +(o &et%ee the (rici("l "d the "#et.

The li"&ilit$ of " "#et %ho e9ceed! the !co(e of hi! "+thorit$ de(ed!+(o %hether the third (er!o %"! "%"re of the li)it! of the "#et7! (o%er.The "#et i! ot &o+d or li"&le for d")"#e! i c"!e he #"ve otice of hi!(o%er to the (er!o %ith %ho) he h"! cotr"cted* or i c"!e !+ch (er!o i!"%"re of the li)it! of the "#et7! (o%er!. The re!+lti# cotr"ct %o+ld &e voideve "! &et%ee the "#et "d the third (er!o* "d co!e?+etl$ ot le#"ll$&idi# "! &et%ee the). o%ever* if the "#et (ro)i!ed or +dertoo to!ec+re the (rici("l7! r"tific"tio "d f"iled* he i! (er!o"ll$ li"&le. If ther"tific"tio i! o&t"ied* the the (rici("l &eco)e! li"&le. Cervantes v. Court of

Appeals* =3 0CRA / 21:::5; Safic Alcan v. I'perial 0egeta4le* = 0CRA: 2/3315; #*( v. Court of Appeals* /=1 0CRA =43 21::5.

Reate- Ca$e$5

*orja v# Sulyap, 2>> SCRA =?1 +??2.

)ational (oer v. )AARCO* 114 0CRA 48: 21:8/5


22/54

Article 188= )"e! it cle"r th"t the fore#oi# r+le! "re %itho+t (re+diceto "ctio! &et%ee (rici("l "d "#et.

The r+le i thi! +ri!dictio i! th"t %here the )erch"di!e i! (+rch"!edfro) " "#et %ith +di!clo!ed (rici("l "d %itho+t o%led#e o the ("rt of the (+rch"!er th"t the vedor i! )erel$ " "#et* the (+rch"!er t"e title! tothe )erch"di!e "d the (rici("l c"ot " "ctio! "#"i!t hi) for therecover$ of the )erch"di!e or eve for d")"#e!* &+t c" ol$ (roceed"#"i!t the "#et. !ivad v# Filma Mercantile Co#% 3> 0i. @1= +1>=.

Altho+#h "ccordi# to "rticle 188=* %he the "#et "ct! i hi! o% ")ehe i! ot (er!o"ll$ li"&le to the (er!o %ith %ho) he eter! ito " cotr"ct%he thi#! &elo#i# to the (rici("l "re the !+&ect thereof; $et !+ch third(er!o h"! " ri#ht of "ctio ot ol$ "#"i!t the (rici("l &+t "l!o "#"i!t the"#et* %he the ri#ht! "d o&li#"tio! %hich "re the !+&ect )"tter of theliti#"tio c"ot &e le#"ll$ "d +ridic"ll$ deter)ied %itho+t he"ri# &oth of the). *eaumont v# Prieto, 31 0i. =? +1>1#

)ational $ood Authorit- v. Inter'ediate Appellate Court * 18 0CRA 16621::35

,1-Herranz & +arriz v. %er & Co.* 8 hil. 16/ 21:345; i' Tiu v. Ruiz * 1 hil=64 21:135; S'ith *ell v. Sotelo atti * hil 84 21://5; *ehn e-er & Co.v. *anco Espanol3$ilipino* 1 hil. /= 21:/45; i' Te/ +oan v. Azores* 43hil. =6= 21:35; Ortega v. *auang $ar'ers Cooperative ar/eting Assn.* 136hil. 864 21::5.

O0TED BY De" Ce!"r . Vill"+ev" AT 83//338 =@18 A 3COENT0 O0T A COENT DIGG IT

V. RE0 OF >AT O>ER0 AY BE VAIDY EKERCI0ED BY TE AGENY

a. Gene"a R!e on o8e" of A-/ini$t"ation

I the "&!ece of the #r"t of !(eci"l (o%er of "ttore$ to the "#et* hei! dee)ed to h"ve &ee e9teded ol$ " #eer"l (o%er of "ttore$ &$ the(rici("l* "d hi! (o%er! c" ol$ cover "ct! of "d)ii!tr"tio. Th+!* +der Article 1844* ever$ "#ec$ co+ched i #eer"l ter)! c" ol$ &e co!tr+ed "!#r"ti# to the "#et the (o%er to e9ec+te "ct! of "d)ii!tr"tio* eve if the(rici("l@

2"5 0t"te! th"t he %ithhold! o (o%er fro) the "#et;

2&5 0t"te! th"t the "#et )"$ e9ec+te "ct! he co!ider!"((ro(ri"te; or

2c5 A+thori?1.

A "ttore$if"ct e)(o%ered to ("$ the de&t! of the (rici("l "d toe)(lo$ le#"l co+!el to defed the (rici("lHM! itere!t* h"! cert"il$ thei)(lied (o%er to ("$ o &eh"lf of the (rici("l the "ttore$7! fee! ch"r#ed &$the l"%$er. unicipal Council of Iloilo v. Evangelista* hil /:3 21:=35.

A "#et #r"ted +der " (o%er of "ttore$ the "+thorit$ to de"l %ith(ro(ert$ %hich the (rici("l )i#ht or co+ld h"ve doe if (er!o"ll$ (re!et* i!dee)ed "+thori


23/54

B+t %hether %h"t i! #r"ted to the "#et i! " #eer"l (o%er of "ttore$or " !(eci"l (o%er of "ttore$* the r+le of !trict co!tr+ctio !till (rev"il!. Th+!

• o%er! of "ttore$ "re #eer"ll$ co!tr+ed !trictl$ "d co+rt! %ill otifer or (re!+)e &ro"d (o%er! f ro) deed! %hich do ot !+fficietl$icl+de (ro(ert$ or !+&ect +der %hich the "#et i! to de"l. The "ctdoe )+!t &e le#"ll$ idetic"l %ith th"t "+thori


24/54

&$ the "#et o &eh"lf of the (rici("l coveri# "ct! of o%er!hi( )"de(+r!+"t to " ver&"l !(eci"l (o%er of "ttore$ %o+ld ot &e void* &+t r"ther +eforce"&le* for the (rici("l h"! ever$ "+thorit$ to (+r!+e the re!+lti#cotr"ct* "d the third("rt$ %o+ld &e e!to((ed fro) ref+!i# to co)(l$ %ith "cotr"ct he %illi#l$ etered ito "&!et the %ritte "+thorit$ of the "#et.

b. Ca$e$ :0e"e S#e&ia o8e"$ of Atto"ne) A"eNe&e$$a")

Article 1848 e+)er"te! fo+rtee i!t"ce! %hich "re de!cri&ed "! '"ct!of !trict do)iio*' "d %hich c"ot &e dee)ed to &e %ithi the (o%er of the"#et +le!! e9(re!!l$ #r"ted 2 i.e.* e9ce(t +der " !(eci"l (o%er of "ttore$5* "d the fifteeth c"!e e+)er"ted "ct+"ll$ cover! the #eer"l r+le@

A dul- appointed agent has no poer to eercise on 4ehalf of the principal an- act of strict do'inion unless it is under a special poer of attorne- .

;hat 'a/es an agenc- a special poer of attorne-= It i! ot the ")e or title #ive i the deed i!!+ed &$ the (rici("l th"t deter)ie! %hether the"#et c" e9erci!e "ct! of !trict do)iio for "d i &eh"lf of the (rici("l.

+1 ,o Ma)e Payments as !re Not UsuallyConsidered as !cts of !dministration

"$)et! )"de i the ordi"r$ co+r!e of &+!ie!! co!tit+te )erel$ "ct!of "d)ii!tr"tio* !ice the$ the #o ito )ere "ct! of )""#e)et. der Article 1844* " "#ec$ co+ched i #eer"l ter)! co)(ri!e! "ct! of "d)ii!tr"tio %hich %o+ld icl+de '#eer"l "d +li)ited )""#e)et.'

All other for)! of ("$)et for "d i &eh"lf of the (rici("l %o+ldco!tit+te "ct! of !trict do)iio* %hich "re ot dee)ed %ithi the (o%er of eve " d+l$ "((oited "#et* +le!! #r"ted !(eci"ll$ or +der " !(eci"l(o%er of "ttore$.

I #o'inion Insurance v. Court of Appeals* =46 0CRA =/: 2/33/5*"ltho+#h " '0(eci"l o%er of Attore$' %"! i!!+ed &$ the i!+r"ce co)("$to it! "#ec$ )""#er* it! %ordi#! !ho%ed th"t it !o+#ht ol$ to e!t"&li!h ""#ec$ th"t co)(ri!e! "ll the &+!ie!! of the (rici("l %ith the de!i#"tedloc"lit$* &+t co+ched i #eer"l ter)!* "d co!e?+etl$ %"! li)ited ol$ to"ct! of "d)ii!tr"tio. The Co+rt held th"t " #eer"l (o%er (er)it! the "#etto do "ll "ct! for %hich the l"% doe! ot re?+ire " !(eci"l (o%er. Th+!* the "ct!e+)er"ted i or !i)il"r to tho!e e+)er"ted i the '0(eci"l o%er of Attore$' 2i.e.* re"ll$ " #eer"l (o%er of "ttore$5 did ot re?+ire " !(eci"l(o%er of "ttore$* "d co+ld ol$ cover "ct! of "d)ii!tr"tio.

I #o'inion Insurance* it %"! held th"t the ("$)et of cl"i)! &$ the"re" )""#er of " i!+r"ce co)("$ did ot co!tit+te " "ct of "d)ii!tr"tio* "d th"t !ice the !ettle)et of cl"i)! %"! ot icl+ded ")o#the "ct! e+)er"ted i the 0(eci"l o%er of Attore$ i!!+ed &$ the i!+r"ceco)("$* or i! of " ch"r"cter !i)il"r to the "ct! e+)er"ted therei* the "!(eci"l (o%er of "ttore$ %"! re?+ired &efore !+ch "re" )""#er co+ld !ettlethe i!+r"ce cl"i)! of the i!+red. Co!e?+etl$* the ")o+t! ("id &$ the"re" )""#er to !ettle !+ch cl"i)! %ere ot "llo%ed to &e rei)&+r!ed fro)the (rici("l i!+r"ce co)("$.

+ ,o &ffect Novation (hich Put an &nd toObligations !lready in &1istence at the ,ime the

!gency (as Constituted

The (o%er of " "#et to ov"te o&li#"tio! '"lre"d$ i e9i!tece "t theti)e the "#ec$ %"! co!tit+ted*' %hich )+!t &e covered &$ " !(eci"l (o%er of "ttore$* %o+ld i)(l$ th"t if the o&li#"tio %"! cre"ted ol$ d+ri# the"#ec$ rel"tio!hi(* the (o%er to cre"te !+ch o&li#"tio #r"ted to the "#et&ri#! %ith it the i)(lied (o%er to ov"te it.

;hat happens if the agent is clearl- e'poered under a special poer of attorne- to incur an o4ligation in 4ehalf of the principal, and in the process of doing so, the agent novates an pre3eisting o4ligation=

+2 ,o Compromise% ,o Submit :uestions to !rbitration% ,o Renounce the Right to !ppeal froma 3udgment% ,o (aive Objections to the 9enue of

an !ction% or ,o !bandon a Prescription !lready !c8uired

der Article 1883* " !(eci"l (o%er to co)(ro)i!e doe! ot "+thori


25/54

der Article 1883* the (o%er to co)(ro)i!e e9cl+de! the (o%er to!+&)it to "r&itr"tio. It %o+ld "l!o &e re"!o"&le to cocl+de th"t the (o%er to!+&)it to "r&itr"tio doe! ot c"rr$ %ith it the (o%er to co)(ro)i!e. ;ith suchspecial eclusion rule under Article >??@ as to the poers to co'pro'ise and ar4itrate, ould that 'ean all other poers covered under the paragraphnu'4ered of Article >?B? are not 'utuall- eclusive= I order %ord!* the#r"t of the !(eci"l (o%er to co)(ro)i!e %o+ld )e" th"t the i)(lied (o%er of the "#et to reo+ce the ri#ht to "((e"l fro) " +d#)et of " lo%er co+rt* if th"t &e e!!eti"l i "rrivi# "t " co)(ro)i!e re!ol+tio &efore the "((ell"te

co+rt. 0")e thi# co+ld &e !"id of the !(eci"l (o%er to %"ive o&ectio! to theve+e of " "ctio* or to %"ive " (re!cri(tio "lre"d$ "c?+ired* vi!S vi! the!(eci"l (o%er to co)(ro)i!e.

>he the "ttore$if"ct h"! &ee "+thori=*the co+rt ch"r"cteri


26/54

The Civil Code (rovide! th"t i " !"le of " ("rcel of l"d or "$ itere!ttherei i! )"de thro+#h " "#et* " !(eci"l (o%er of "ttore$ i! e!!eti"l.,Article 1848- Thi! "+thorit$ )+!t &e i %riti#* other%i!e the !"le !h"ll &e void.,Article 184- 9 9 9 A !(eci"l (o%er of "ttore$ i! ece!!"r$ to eter ito "$cotr"ct &$ %hich the o%er!hi( of " i))ov"&le i! tr"!)itted or "c?+ired for " v"l+"&le co!ider"tio. >itho+t " "+thorit$ i %riti# . . . "$ 7!"le7 . . . i!void. 2"t (. //85

There i! o doc+)et"r$ evidece o record th"t the o%er! of " l"r#etr"ct of l"d !(ecific"ll$ "+thori


27/54

of the (ro(ert$. A$ !"le o the ("rcel of l"d cocl+ded &$ !+ch " "((oitee%o+ld &e void* "d the !"le co+ld ot (rod+ce "$ le#"l effect "! to tr"!fer the !+&ect (ro(ert$ fro) it! l"%f+l o%er.

I inan v. (uno* =1 hil. /: 21:15* the Co+rt held th"t for the (rici("lto cofer the ri#ht +(o " "#et to !ell re"l e!t"te* " (o%er of "ttore$ )+!t!o e9(re!! the (o%er! of the "#et i cle"r "d +)i!t""&le l"#+"#e; "d%he there i! "$ re"!o"&le do+&t th"t the l"#+"#e !o +!ed cove$! !+ch(o%er* o !+ch co!tr+ctio !h"ll &e #ive the doc+)et. Th+!* i th"tdeci!io* " (o%er of "ttore$ (rovidi# th"t 'I here&$ cofer !+fficiet (o%er 99 9 +(o A* i order th"t i )$ ")e "d re(re!et"tio he )"$ "d)ii!ter theitere!t I (o!!e!! %ithi thi! +ici("lit$ of T"rl"c* (+rch"!e* !ell* collect "d("$* etc.' %"! held !+fficiet to cover the !"le &$ the "#et of l"d of the(rici("l i T"rl"c.

I Strong v# 4utierre; Repide, = 0i. =@? +1>?=* the Co+rt cl"rifiedth"t The e9(re!! )"d"te re?+ired &$ Article 184 to e"&le " "((oitee of " "#ec$ co+ched i #eer"l ter)! to !ell )+!t &e oe th"t e9(re!!l$)etio! " !"le or th"t icl+de! " !"le "! " ece!!"r$ i#rediet of the "ct)etioed. The (o%er of "ttore$ eed ot cot"i " !(ecific de!cri(tio of

the l"d to &e !old* !+ch th"t #ivi# the "#et the (o%er to !ell '"$ or "lltr"ct!* lot!* or ("rcel!' of l"d &elo#i# to the (rici("l i! "de?+"te.

I 7atigba) v# ,ai +ing Co#, 4 0i. = +1>@* it %"! held th"t the"+thorit$ to !ell "$ id of re"lt$ th"t ')i#ht &elo#' to the (rici("l %"! held to icl+de "l!o !+ch "! the (rici("l )i#ht "fter%"rd!h"ve d+ri# the ti)e it %"! i force.

I P# !mico and 3# !migo v# S# ,eves , >= 0i. 4 +1>43* the Co+rtheld th"t %here the (o%er of "ttore$ !"$! th"t the "#et c" eter ito "$cotr"ct coceri# " l"d* or c" !ell the l"d +der "$ ter) or coditio"d cove"t he )"$ thi fit* he i! cert"il$ #r"ted (o%er to de"l %ith the

l"d* "d !ell it* i the !")e )"er "d %ith the !")e &re"dth "d l"tit+de "!the (rici("l co+ld.

Altho+#h the doc+)et e9ec+ted &$ the o%er of the l"d %"!deo)i"ted "! " 'Geer"l o%er of Attore$*' it %"! %ith re!(ect to the"+thorit$ #ive to !ell the l"d " !(eci"l (o%er of "ttore$* for it (ro(erl$de!cri&ed the title of the l"d "d the cle"r (o%er to !ell it. Th+! there %"! oeed to e9ec+te " !e("r"te "d !(eci"l (o%er of "ttore$ for the "#et toeffect the !"le of the l"d i the ")e of the (rici("l. 'The !(eci"l (o%er of "ttore$ c" &e icl+ded i the #eer"l (o%er %he it i! !(ecified therei the"ct or tr"!"ctio for %hich the !(eci"l (o%er i! re?+ired.' 0eloso v. Court of

Appeals, /63 0CRA := 21::65.

Fi"ll$* it !ho+ld &e oted th"t i *ico Savings 5 .oan !ssn# v# Court of A##ea$, 11 SCRA =2? +1>@>* the Co+rt held th"t the !"le (ro!cri&ed+der Article 184: refer! to " vol+t"r$ !"le effected thro+#h the "#et; it doe!ot cover the (+&lic !"le th"t h"((e! "! ("rt of the foreclo!+re o the)ort#"#e d+l$ co!tit+ted.

Reate- Ca$e$5

()* v. Court of Appeals* : 0CRA =4 21:4:5

%uenzle and Streiff v. Collector of Custo's* =1 hil 66 21:15

#ela (ena v. Hidalgo* 16 hil 3 21:135

Rio - Ola44arrieta v. 7utec * : hil /46 21:/65

+4B A(ent Cannot Vai-) !"&0a$e "o#e"t) of"in&i#a

der Article 1:12/5 of the Civil Code* +le!! !o e9(re!!l$ "+thori


28/54

2"5 C+!to)"r$ oe! for ch"rit$

2&5 Tho!e )"de to e)(lo$ee! i the &+!ie!! )""#ed &$the "#et

>he " #ift or do"tio i! )"de &$ " "#et o &eh"lf of the (rici("l%hich i! ot covered &$ " !(eci"l (o%er of "ttore$* it doe! ot &eco)e voidfor f"il+re to co)(l$ %ith the!e re?+ire)et i A#ec$ "% 2&ec"+!e !+ch

deficiec$ )erel$ reder! the cotr"ct +eforce"&le5* &+t r"ther it i! void or ot de(edi# o %hether it co)(lie! %ith the for)"litie! re?+ired +der the"% o Do"tio* for ever$ "ct of do"tio co!tit+ted " !ole) cotr"ct. Theet effect of co)(li"ce %ith the for)"litie! re?+ired &$ the "% o Do"tio%o+ld &e to )"e the re!+lti# #ift or do"tio +eforce"&le* %he it doe! otco)(l$ %ith the !(eci"l (o%er of "ttore$ re?+ire)et.

+ To *oan o" Bo""o8 Mone)

der ("r"#r"(h 4 of Article 1848* the (o%er of " "#et to either lo"or &orro% )oe$* i! " "ct of !trict o%er!hi(* "d re?+ire! the !")e to &e ithe for) of " !(eci"l (o%er of "ttore$. The e9ce(tio %o+ld &e %he the "ct

'&e +r#et "d idi!(e!"&le for the (re!erv"tio of the thi#! %hich "re +der "d)ii!tr"tio.',=- The ("r"#r"(h h"! &ee co!tr+ed to cover ol$ the&orro%i# of )oe$ +der 'utuu'* "d doe! ot icl+de (+rch"!i# of #ood!o credit o &eh"lf of the (rici("l. #e 0illa v. $a4ricante* 13 hil. 64/ 21::5.

0ice the "+thorit$ to &orro% )oe$ i! r"rel$ iferred* i Rural *an/ of Caloocan, Inc. v. Court of Appeals* 13 0CRA 11 21:815* the Co+rt r+led th"t" creditor !ho+ld re?+ire the e9ec+tio of " (o%er of "ttore$ i order th"t oe)"$ &e +der!tood to h"ve #r"ted "other the "+thorit$ to &orro% o &eh"lf of the for)er.

;hat happens hen there is no poer of attorne- given= I +ozun v.ercado 11 0CRA =3 2/3365* the Co+rt held th"t " !(eci"l (o%er of "ttore$i! ece!!"r$ for " "#et to &orro% )oe$* +le!! it &e +r#et "didi!(e!"&le for the (re!erv"tio of the thi#! %hich "re +der "d)ii!tr"tio;"d th"t !+ch cotr"ct etered ito i the ")e of "other (er!o &$ oe %hoh"! &ee #ive o "+thorit$ or le#"l re(re!et"tio or %ho h"! "cted &e$odhi! (o%er! "re cl"!!ified "! +"+thori


29/54

(er!o"l (ro(ert$* for %h"tever (eriod* %o+ld co!tit+te )erel$ " #eer"l(o%er of "ttore$; "d )"$ &e i)(lied fro) the e9(re!! (o%er! #ive.

I thi! coectio* it !ho+ld &e oted th"t +der Article 13=2/5 of theCivil Code* " "#ree)et for the le"!i# of re"l (ro(ert$ for " (eriod lo#er th" oe $e"r i! +eforce"&le +le!! )"de i %riti#. Therefore* eve %hethe "#ec$ (o!!e!! " !(eci"l (o%er of "ttore$ to le"!e re"l (ro(ert$* %hethe le"!e it!elf for )ore th" " $e"r i! ot i %riti#* the re!+lti# cotr"ct%o+ld !till &e +eforce"&le.

I " cotr"ct of "#ec$* the "#et "ct! i re(re!et"tio or i &eh"lf of "other %ith the co!et of the l"tter. Article 1848 of the Civil Code e9(re!!e!th"t " !(eci"l (o%er of "ttore$ i! ece!!"r$ to le"!e "$ re"l (ro(ert$ to"other (er!o for )ore th" oe $e"r. The le"!e of re"l (ro(ert$ for )oreth" oe $e"r i! co!idered ot )erel$ " "ct of "d)ii!tr"tio &+t " "ct of !trict do)iio or of o%er!hi(. A !(eci"l (o%er of "ttore$ i! th+! ece!!"r$for it! e9ec+tio thro+#h " "#et. Shopper6s (aradise Realt- v. Ro1ue* 1:0CRA := 2/335.

;hat is the legal status of a contract entered into 4- an agent on 4ehalf

of the principal here the la re1uires that he should 4e ar'ed ith a special poer of attorne-, and -et he had no such special poer= I 0da. #e Chua v.IAC * //: 0CRA :: 21::5* %here the i!!+e &efore the 0+(re)e Co+rt %"! 'the"ffir)"ce &$ the Co+rt of A((e"l! of the deci!io of the tri"l co+rt* orderi#their eect)et fro) the (re)i!e! i ?+e!tio "d the de)olitio of thei)(rove)et! itrod+ced thereo*' the le!!ee! relied o the cotr"ct of le"!eetered ito &$ o &eh"lf of the (rici("lle!!or* &$ her "ttore$ i f"ct %ho%"! ot "r)ed to le"!e the (re)i!e! for )ore th" oe $e"r. o%ever* thef"ct! !ho%ed th"t the le!!ee! !t"$ed i the (re)i!e! d+ri# the ter) of thele"!e* "d %hich %"! i)(liedl$ ree%ed thro+#h tacita reconduccion. TheCo+rt e9(re!!l$ "#reed %ith the Co+rt of A((e"l! re!ol+tio 'decl"ri# thecotr"ct of le"!e 2E9h 'C'5 void' o the #ro+d th"t the "#et '%"! ot "r)ed

%ith " !(eci"l (o%er of "ttore$ to eter ito " le"!e cotr"ct for " (eriod of )ore th" oe $e"r* th+!@

>e "#ree %ith the Co+rt of A((e"l!.

The le"!e cotr"ct 2E9h. 'C'5* the lich(i of (etitioer!7 c"+!e of "ctio*ivolve! the le"!e of re"l (ro(ert$ for " (eriod of )ore th" oe $e"r. Thecotr"ct %"! etered ito &$ the "#et of the le!!or "d ot the le!!or her!elf.I !+ch " c"!e* the l"% re?+ire! th"t the "#et &e "r)ed %ith " !(eci"l (o%er of "ttore$ to le"!e the (re)i!e!. 9 9 9.

It i! tr+e th"t re!(odet errer" "llo%ed (etitioer! to occ+($ thele"!ed (re)i!e! "fter the e9(ir"tio of the le"!e cotr"ct 2E9h. 'C'5 "d +der Article 1643 of the Civil Code of the hili((ie!* " t"cit ree%"l of the le"!e2t"cit" recod+ccio5 i! dee)ed to h"ve t"e (l"ce. o%ever* "! held iBer"rdo . Di ,o *ind the Principal to Render Some Service(ithout Compensation

Altho+#h the "#et )"$ &id hi)!elf to the cotr"ct of "#ec$ %itho+tco)(e!"tio* 2Article 1845* i order to &id the (rici("l to eter ito !ervice%itho+t co)(e!"tio %o+ld &e +eforce"&le %itho+t " !(eci"l (o%er of "ttore$. The i)(lic"tio of ("r"#r"(h +)&er : of Article 1848 i! th"t to &idthe (rici("l to reder !ervice for co)(e!"tio %o+ld &e dee)ed " )ere "ctof "d)ii!tr"tio* "d co!tit+ted i " )ere #eer"l (o%er of "ttore$* or )ore!(ecific"ll$* to &e " i)(lied (o%er of ever$ "#et.

I di!"#ree* "$ cotr"ct of !ervice to &e etered ito o &eh"lf of the(rici("l !ho+ld (ro(erl$ &e co!idered " "ct of !trict o%er!hi(* for iti)(i#e! o o&li#i# the (rici("l to reder " (er!o"l o&li#"tio* %hich if heref+!e! )"e! hi) li"&le for d")"#e!. >h$ !ho+ld cotr"ct! of !ervice* eve%he for co)(e!"tio* &e dee)ed to &e %ithi i)(lied (o%er! of the "#et to&id the (rici("lQ

+1? ,o *ind the Principal in a Contract of Partnership

Ever$ "#ree)et &$ the "#et o &eh"lf of the (rici("l %hich h"! theeffect of o&li#i# the (rici("l to cotri&+te )oe$ or id+!tr$ to " co))of+d %ith the itetio of derivi# (rofit! therefro) %o+ld &e +eforce"&le

%itho+t " !(eci"l (o%er of "ttore$ h"vi# &ee (revio+!l$ #ive to the "#et*for it i effect )"e! the (rici("l " ("rter i " ("rter!hi(. 2Art. 14645.

+11 ,o Obligate the Principal as a 4uarantor orSurety

der Article /34 of the Civil Code* &$ the cotr"ct of #+"r"t$* the#+"r"tor &id! hi)!elf to f+lfill the o&li#"tio of the (rici("l de&tor i c"!ethe l"tter !ho+ld f"il to do !o; "d if the (er!o &id! hi)!elf !olid"ril$ %ith the(rici("l de&tor* he &eco)e! " !+ret$ +der " cotr"ct of !+ret$!hi(.

29


30/54

Therefore* +der ("r"#r"(h +)&ered 11 of Article 1848* o cotr"ct of #+"r"t$ or !+ret$ i! eforce"&le "#"i!t the (rici("l %he it h"! &eeetered ito &$ " "#et %ho (o!!e!!e! o !(eci"l (o%er of "ttore$ to do !o

It h"! &ee held th"t " cotr"ct of #+"r"t$ or !+ret$ c"ot &e iferredfro) +! of v"#+e or #eer"l %ord! of co))it)et. Th+!* the "+thorit$ #ive &$the cor(or"tio to it! "#et to "((rove " lo" +( to =3*333 %itho+t "$!ec+rit$ re?+ire)et doe! ot icl+de the "+thorit$ to i!!+e #+"r"tee! for "$")o+t. *A $inance Corp. v. Court of Appeals* /11 0CRA 11/ 21::/5. Th+!@

• A (o%er of "ttore$ to !ell or le"!e the (ro(ert$ of the (rici("l %iththe (rovi!io th"t e)(o%er! the "#et 'to (erfor) "d e9ec+te "ll "dever$ l"%f+l "d re"!o"&le "ct "! f+ll$ "d effectivel$ "! I )i#ht orco+ld do if (er!o"ll$ (re!et*' c"ot &e co!tr+ed to icl+de the(o%er to eter ito " cotr"ct of #+"r"t$ to &id the (rici("l.#irector of (u4lic ;or/s v. Sing "uco* = hil. /3 21:/:5.

• A (o%er of "ttore$ to lo" )oe$ doe! ot icl+de the i)(lied (o%erto )"e the (rici(le " !+ret$ for the ("$)et of the de&t " third(er!o. *an/ of (.I. v. Coster * 4 hil. : 21:/5.

It !ho+ld &e rec"lled th"t +der Article 13=,/-,&- of the Civil Code* "cotr"ct of #+"r"t$ i! +eforce"&le +le!! it i! )"de i %riti#.Co!e?+etl$* eve %he the "#et h"! the re?+i!ite !(eci"l (o%er of "ttore$to eter ito " cotr"ct of #+"r"t$ i &eh"lf of the (rici("l* the re!+lt cotr"ct%o+ld &e +eforce"&le if ot red+ced i %riti#.

+1 ,o Create or Convey Real Rights Over-mmovable

der ("r"#r"(h +)&ered 1/ of Article 1848* " "#et c"ot* i the

")e of the (rici("l* cre"te or cove$ re"l ri#ht! over i))ov"&le (ro(ert$%itho+t &ei# (o!!e!!ed of " !(eci"l (o%er of "ttore$; other%i!e* there!+lti# cotr"ct %o+ld &e +force"&le "#"i!t the (rici("l.

The ("r"#r"(h ited! to cover de"li#! o i))ov"&le (ro(ert$ o+t!ideof the !"le of " (iece of l"d or "$ itere!t therei covered !(ecific"ll$ +der Article 184* "d cotr"ct! of (+rch"!e of " (iece of l"d* "d cotr"ct! of do"tio! of ever$ t$(e of i))ov"&le (ro(ert$.

'Re"l ri#ht!' over i))ov"&le (ro(ert$ %o+ld cover !+ch cotr"ct! "!)ort#"#e!* +!+fr+ct* e"!e)et* etc. It o&vio+!l$ cover! the eteri# ito "le"!e cotr"ct over " i))ov"&le %ith " (eriod e9ceedi# oe $e"r

2!e("r"tel$ covered +der ("r"#r"(h +)&ered 8 of Article 18485.

>he it co)e! to " )ort#"#e* the Co+rt h"! e9(re!!ed the doctrie th"t" (er!o c" &eco)e li"&le o " re"l e!t"te )ort#"#e %hich he ever e9ec+ted either i (er!o or &$ "ttore$if"ct. (hilippine sugar Estates #ev.Co. v. (oizat, 8 hil. =6 21:/65. Rural *an/ of *o'4on, Inc. v. Court of

Appeals* /1/ 0CRA / 21::/5.

der Article 184:* the (o%er to !ell e9cl+de! the (o%er to )ort#"#e;"d th"t the (o%er to )ort#"#e e9cl+de! the (o%er !ell. Thi! !+((ort! the(ro(o!itio th"t e"ch of the (o%er! e+)er"ted +der Article 1848* "re ")ed'"ct! of !trict do)iio*' "d c"ot &e i)(lied (o%er!; "d th"t oe for) of ")ed !(eci"l (o%er c"ot #ive the (re!+)(tio th"t it icl+de! +der "$for) of co!tr+ctio or iter(ret"tio "other ")ed !(eci"l (o%er.Rodrigue; v# Pamintuan and $e 3esus, 2 0i. @= +1>1@.

The (o%er to )ort#"#e doe! ot c"rr$ the i)(lied (o%er to re(re!et the(rici("l i liti#"tio. 0al'onte v. Court of Appeals* // 0CRA :/ 21::65.

I Rural *an/ of *o'4on v. Court of Appeals * /1/ 0CRA / 21::/5*"ltho+#h the "#et %"! #ive " !(eci"l (o%er of "ttore$ to )ort#"#e the(ro(ert$ of the (rici("l* oethele!!* %he he !i#ed the Deed of Re"l E!t"te

ort#"#e i hi! ")e "loe "! )ort#"#or* %itho+t "$ idic"tio th"t he %"!!i#i# for "d i &eh"lf of the (ro(ert$ o%er* the )ort#"#e i! void* "d the"#et &o+d hi)!elf "! the ol$ de&tor of +der the lo" o&t"ied fro) the&".

I (hilippine Sugar Estates #ev. Co., v. (oizat * 8 hil. =6 21:/5* theCo+rt held th"t it i! " #eer"l r+le i the l"% of "#ec$ th"t* i order to &id the(rici("l &$ " )ort#"#e o re"l (ro(ert$ e9ec+ted &$ " "#et* it )+!t +(o it!f"ce (+r(o!e to &e )"de* !i#ed "d !e"led i the ")e of the (rici("l*other%i!e* it %ill &id the "#et ol$. It i! ot eo+#h )erel$ th"t the "#et %"!i f"ct "+thori


31/54

>hile there i! o do+&t th"t re(+di"tio of " iherit"ce i! " "ct th"t #oe!"#"i!t the itere!t of the (rici("l "d %o+ld re?+ire the #r"t of " !(eci"l(o%er of "ttore$ if it i! to &e doe thro+#h " "#et* the "cce(t"ce of iherit"ce h"! "other &"!i! +(o %hich it c"ot &e " i)(lied (o%er of hi!"#et@ the "cce(t"ce of " iherit"ce ivolve! " "ct of #r"tit+de o the ("rtof the heir* "d therefore c"ot &e (re!+)ed to &e " '&+rde' th"t the(rici("l i! (re!+)e to "cce(t "! " )"tter of co+r!e..

+13 ,o Ratify or Recogni;e Obligations Contracted*efore the !gency

'R"tif$' i! " le#"l ter) th"t ivolve! the "cce(t"ce of " cotr"ct* %hichi! either void"&le or +eforce"&le* "d h"! the effect cle"!i# !+ch cotr"ctof it! le#"l defect! th"t retro"ct! to the d"te of it! (erfectio. der Article!1=:/ "d 1=:6* ',r-"tific"tio e9ti#+i!he! the "ctio to "+l " void"&lecotr"ct*' "d 'cle"!e!e! the cotr"ct fro) "ll it! defect! fro) the )o)et it%"! co!tit+ted.' >he it co)e! to +eforce"&le cotr"ct!* +der Article13* tho!e cotr"ct! th"t "re #overed &$ the 0t"t+te! of Fr"+d! '"re r"tified&$ the f"il+re to o&ect to the (re!et"tio of or"l evidece to (rove the !")e*or &$ the "cce(t"ce of &eefit! +der the).'

"r"#r"(h +)&ered 1 of Article 1848 cle"rl$ reco#i


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the #r"t of the e9(re!! (o%er to )""#e the etire &+!ie!! "ff"ir! of the(rici("l* %"! dee)ed to icl+de the (o%er to !ell coo%er!hi( itere!t i)ov"&le (ro(ert$* e!(eci"ll$ %he the !"le %"! ece!!"r$ to cod+ct the&+!ie!! of the (rici("l.

,1-Citing Cit-3ite Realt- Corp. v. Court of Appeals * =/ 0CRA =8 2/3335;Raet v. Court of Appeals* /: 0CRA 644 21::85.

,/-Reiterated in iton!ua, "r. v. Eternit Corp., :3 0CRA /3 2/3365.

,=-See +ozun v. ercado 11 0CRA =3 2/3365; 7asu'a v. Heirs of Cecilio S.#e 0illa, :: 0CRA 66 2/3365.

O0TED BY De" Ce!"r . Vill"+ev" AT 83//338 /@= A 3

COENT0 O0T A COENT DIGG IT

VI. 0ECIFIC OBIGATION RE0 FOR AGENT0

a. Obi(ation of A(ent to A-'an&e F!n-$

There i! o co))ol"% d+t$ or o&li#"tio o the ("rt of the "#et to"dv"ce hi! o% f+d! i &eh"lf of the (rici("l; for ideed* oe of the

di!ti#+i!hi# ch"r"cteri!tic of ever$ "#ec$ i! th"t the "#et doe! ot(er!o"ll$ &eco)e li"&le for the cotr"ct! "d tr"!"ctio! (+r!+ed i &eh"lf of the (rici("l.

der Article 1886 of the Civil Code* the ol$ ti)e th"t " "#et i!le#"ll$ &o+d to "dv"ce (er!o"l f+d! i the (+r!+it of the "#ec$ i! %he!+ch o&li#"tio h"! &ee e9(re!!l$ "#reed +(o i the cre"tio of the cotr"ctof "#ec$. B+t eve i !+ch " c"!e* the "#et )"$ ref+!e to "dv"ce "$(er!o"l f+d! %he the (rici("l i! i!olvet. Ideed* +der Article 1:1:2=5*i!olvec$ of the (rici("l e9ti#+i!he! the "#ec$.

b. A(ent$ D!t) of *o)at)

+1 $uty of .oyalty in 4eneral

Article 18:: !et!o+t %h"t i cor(or"te ("rl"ce i! o% "! the d+t$of lo$"lt$ of " "#et@ 'The "#et !h"ll &e li"&le for d")"#e! if* there &ei# "coflict &et%ee hi! itere!t "d tho!e of the (rici("l* he !ho+ld (refer hi!o%.' A#ec$ rel"tio i! e!!eti"ll$ fid+ci"r$ i ch"r"cter* %hich re?+ire! of the"#et to o&!erve +t)o!t #ood f"ith "d lo$"lt$ to the (rici("l.

>he " "#et viol"te! hi! d+t$ of lo$"lt$* "d i " coflictofitere!t!!it+"tio* he (refer! hi! o% itere!t to the detri)et of the (rici("l* Article

18:: doe! ot decl"re the cotr"ct or tr"!"ctio he etered ito to &e void*&+t )erel$ )"e! the "#et li"&le for the d")"#e! !+ffered &$ the (rici("l. ICor(or"te "%* %he " director or officer viol"te! hi! d+t$ of lo$"lt$ to thecor(or"tio* he i! &o+d to di!#or#e to the cor(or"tio "ll the (rofit! "de"ri#! he o&t"i fro) hi! &re"ch of d+t$* eve %he he +!ed hi! o% c"(it"lor f+d! for the cotr"ct or tr"!"ctio 20ectio! =1 "d =* Cor(or"tioCode5. ;ould the 'easure of da'ages due to the principal 4e the sa'e henan agent violates his dut- of lo-alt-=

Do+&le "#ec$ 2%here the !")e "#et !erve! the t%o cotr"cti#(rici("l! i! fro%ed +(o &$ l"%* "d %ill &e "llo%ed ol$ %he o% to &oth("rtie!. $omingo v# $omingo, 3 SCRA 121 +1>1.

+ (hen !gent &nters into a Contract in +isOn Name on a Matter that Falls (ith theScope of the !gency

Article 188= (rovide! th"t ',i-f " "#et "ct! i hi! o% ")e* the(rici("l h"! o ri#ht of "ctio "#"i!t the (er!o %ith %ho) the "#et h"!cotr"cted; either h"ve !+ch (er!o! "#"i!t the (rici("l.' I !+ch " c"!e iti! (rovided th"t it i! the "#et %ho 'i! the oe directl$ &o+d i f"vor of the(er!o %ith %ho) he h"! cotr"cted* "! if the tr"!"ctio %ere hi! o%*e9ce(t %he the cotr"ct ivolve! thi#! &elo#i# to the (rici("l.'

If the )"tter! etered ito &$ the "#et i hi! o% ")e "re )"tter!

th"t "re %ithi the !co(e of hi! "+thorit$ or tho!e (ert"ii# to )"tter! th"t!ho+ld (ert"i to the &+!ie!! of the (rici("l* there %o+ld &e o do+&t th"tthe "#et h"! &re"ch hi! fid+ci"r$ d+t$ of lo$"lt$* &$ h"vi# (referred hi! o%itere!t! to th"t of the (rici("lHM!. >hether the "#et h"! +!ed hi! o%f+d! or (ro(ert$* or tho!e of the (rici("lHM!* he %o+ld !till &e i &re"ch of thi! fid+ci"r$ d+t$* "d +der Article 18:1* he 'i! &o+d to reder " "cco+t of hi! tr"!"ctio! "d to deliver to the (rici("l %h"tever he )"$ h"ve received&$ virt+e of the "#ec$* eve tho+#h it )"$ ot &e o%i# to the (rici("l.' Ieither c"!e* therefore* the (rici("l h"! the ri#ht to de)"d th"t the "#et!ho+ld t+rover to hi) %h"tever cotr"ct* (ro(ert$ or &+!ie!! h"! &ee"c?+ired &$ the "#et i &re"ch of hi! d+t$ of lo$"lt$.

I iguel v. Court of Appeals* /: 0CRA 463 21:6:5* the Co+rt held

th"t '" fid+ci"r$ rel"tio "ri!e! %here oe )" "!!+)e! to "ct "! "#et for 32

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"other "d the other re(o!e! cofidece i hi)* "ltho+#h there i! o %rittecotr"ct or o cotr"ct "t "ll. If the "#et viol"te! hi! d+t$ "! fid+ci"r$* "co!tr+ctive tr+!t "ri!e!. It i! i))"teri"l th"t there %"! o "tecedet fid+ci"r$rel"tio "d th"t it "ro!e cote)(or"eo+!l$ %ith the ("rtic+l"r tr"!"ctio.',1-

If the "#et h"d +!ed the f+d! &elo#i# to the (rici("l* +der Article18:6 he 'o%e! itere!t o the !+)! he h"! "((lied to hi! o% +!e fro) thed"$ o %hich he did !o* "d o tho!e %hich he !till o%e! "fter thee9ti#+i!h)et of the "#ec$.' The (rovi!io! of thi! "rticle (re!+)e! th"t the

(ro(ert$ or &+!ie!! "c?+ired &$ the "#et for hi! o% i viol"tio of hi!fid+ci"r$ d+t$ i! oe th"t the (rici("l i! ot de)"di# to &e delivered to hi).Thi! i! cle"r fro) Article 1:18 %hich (rovide! th"t ',t-he (rici("l i! ot li"&lefor the e9(e!e! ic+rred &$ the "#et . . . ,i-f the "#et "cted i cotr"vetioof the (rici("lHM! i!tr+ctio!* +le!! the l"tter !ho+ld %i!h to "v"il hi)!elf of the &eefit! derived fro) the cotr"ct.' I other %ord!* if the cotr"ct or &+!ie!! "c?+ired &$ the "#et i &re"ch of hi! d+t$ of lo$"lt$ i! de)"ded &$the (rici("l to &e t+red over to hi)* the the +!e of the (rici("l7! !+) to"c?+ire !+ch &+!ie!! %o+ld &e dee)ed to h"ve &ee r"tified* "d the "#eti! ot (er!o"ll$ li"&le for the itere!t! d+e o !"id ")o+t.

I "dditio* Article 1 of the Civil Code 2o i)(lied tr+!t!5* (rovide!th"t ',%-he "$ tr+!tee* #+"rdi" or other (er!o holdi# " fid+ci"r$

rel"tio!hi( +!e! tr+!t f+d! for the (+rch"!e of (ro(ert$ "d c"+!e! thecove$"ce to &e )"de to hi) or to " third (er!o* " tr+!t i! e!t"&li!hed &$o(er"tio of l"% i f"vor of the (er!o to %ho) the f+d! &elo#.'

+2 Particular Rules on Conflict of -nterests Situations

The follo%i# "re !(ecific r+le! coveri# viol"tio of the d+t$ of lo$"lt$of the "#et@

2"5 (urchase of (rincipalFGs (ropert- Article 1:12/5of the Civil Code (rovide! for "$ coflictofitere!t!it+"tio %he it (rovide! th"t " "#et i! (rohi&itedfro) &+$i# (ro(ert$ etr+!ted to hi) for

"d)ii!tr"tio or )""#e)et* %itho+t the (rici("l7!co!et. Eve %he " "#et i! "+thori


34/54

The o&li#"tio of the "#et to "cco+t for ever$thi# to the (rici("llie! "t the core of hi! fid+ci"r$ o&li#"tio! th"t "$ !ti(+l"tio e9e)(ti# the"#et fro) the o&li#"tio to reder " "cco+ti# i! decl"red void +der Article18:1.

#o'ingo v. #o'ingo* / 0CRA 1=1 21:415* held th"t '"r"#r"(h / of Article 18:1 i! " e% "dditio de!i#ed to !tre!! the hi#he!t lo$"lt$ th"t i!re?+ired to " "#et code)i# "! void "$ !ti(+l"tio e9e)(ti# the "#etfro) the d+t$ "d li"&ilit$ i)(o!ed o hi) i ("r"#r"(h oe thereof.' It e?+"te!

the t"i# of !ecret (rofit &$ the "#et "! to &e " fr"+d co))itted "#"i!t the(rici("l. It held th"t

ece* " "#et %ho t"e! " !ecret (rofit i the"t+re of " &o+!* #r"t+it$ or (er!o"l &eefit fro) thevedee* %itho+t reve"li# the !")e to hi! (rici("l* thevedor* i! #+ilt$ of " &re"ch of hi! lo$"lt$ to the (rici("l"d forfeit! hi! ri#ht to collect the co))i!!io fro) hi!(rici("l* eve if the (rici("l doe! ot !+ffer "$ i+r$ &$re"!o of !+ch &re"ch of fidelit$* or th"t he o&t"ied &etter re!+lt! or th"t the "#ec$ i! " #r"t+ito+! oe* or th"t+!"#e or c+!to) "llo%! it; &ec"+!e the r+le i! to (revet

the (o!!i&ilit$ of "$ %ro#* ot to re)ed$ or re("ir ""ct+"l d")"#e. = B$ t"i# !+ch (rofit or &o+! or #ift or (ro(i" fro) the vedee* the "#et there&$ "!!+)e! "(o!itio %holl$ ico!i!tet %ith th"t of &ei# " "#et for hi! (rici("l* %ho h"! " ri#ht to tre"t hi)* i!of"r "! hi!Co))i!!io i! cocered* "! if o "#ec$ h"d e9i!ted.

The f"ct th"t the (rici("l )"$ h"ve &ee &eefited &$the v"l+"&le !ervice! of the !"id "#et doe! ot e9c+l("tethe "#et %ho h"! ol$ hi)!elf to &l")e for !+ch " re!+lt&$ re"!o of hi! tre"cher$ or (erfid$. 2"t ((. 1=41=85

#o'ingo v. #o'ingo* / 0CRA 1=1 21:415* cite! A)eric"

+ri!(r+dece th"t "((l$ the doctrie +der Article 18:1* th+! The A)eric" +ri!(r+dece o thi! !core i! %elli#h

+"i)o+!.

'>here " (rici("l h"! ("id " "#et or &roer "co))i!!io %hile i#or"t of the f"ct th"t the l"tter h"!&ee +f"ithf+l* the (rici("l )"$ recover &"c theco))i!!io ("id* !ice " "#et or &roer %ho h"! &ee+f"ithf+l i! ot etitled to "$ co)(e!"tio.

999 999 999

'I di!c+!!i# the ri#ht of the (rici("l to recover co))i!!io! ret"ied &$ " +f"ithf+l "#et* the co+rt iittle v!. hi((! 21:115 /38 "!!. ==l* : NE /63* = RA2N05 136* !"id@ 7It i! %ell !ettled th"t the "#et i! &o+dto e9erci!e the +t)o!t #ood f"ith i hi! de"li#! %ith hi!(rici("l. A! ord C"ir! !"id* thi! r+le 'i! ot " techic"lor "r&itr"r$ r+le. It i! " r+le fo+ded o the hi#he!t "dtr+e!t (rici(le! of )or"lit$.' "rer v!. ce" 21845R 13 Ch 2E#5 :6* 118.. If the "#et doe! ot cod+ct

hi)!elf %ith etire fidelit$ to%"rd! hi! (rici("l* &+t i!#+ilt$ of t"i# " !ecret (rofit or co))i!!io i re#"rd the)"tter i %hich he i! e)(lo$ed* he lo!e! hi! ri#ht toco)(e!"tio o the #ro+d th"t he h"! t"e " (o!itio%holl$ ico!i!tet %ith th"t of "#et for hi! e)(lo$er* "d%hich #ive! hi! e)(lo$er* +(o di!coveri# it* the ri#ht totre"t hi) !o f"r "! co)(e!"tio* "t le"!t* i! cocered "!if o "#ec$ h"d e9i!ted. Thi! )"$ o(er"te to #ive to the(rici("l the &eefit of v"l+"&le !ervice! redered &$ the"#et* &+t the "#et h"! ol$ hi)!elf to &l")e for th"tre!+lt.7

9 9 9

'The itet %ith %hich the "#et too " !ecret (rofith"! &ee held i))"teri"l %here the "#et h"! i f"ctetered ito " rel"tio!hi( ico!i!tet %ith hi! "#ec$*!ice the l"% code)! the corr+(ti# tedec$ of theico!i!tet rel"tio!hi(. ittle v!. hi((! 21:115 : NE/63.'

'A! " #eer"l r+le* it i! " &re"ch of #ood f"ith "dlo$"lt$ to hi! (rici("l for " "#et* %hile the "#ec$e9i!t!* !o to de"l %ith the !+&ect )"tter thereof* or %ithifor)"tio "c?+ired d+ri# the co+r!e of the "#ec$* "!to )"e " (rofit o+t of it for hi)!elf i e9ce!! of hi! l"%f+lco)(e!"tio@ "d if he doe! !o he )"$ &e held "! "tr+!tee "d )"$ &e co)(elled to "cco+t to hi! (rici("lfor "ll (rofit!* "dv"t"#e!* ri#ht!* or (rivile#e! "c?+ired* &$hi) i !+ch de"li#!* %hether i (erfor)"ce or iviol"tio of hi! d+tie!* "d &e re?+ired to tr"!fer the) tohi! (rici("l +(o &ei# rei)&+r!ed for hi! e9(edit+re!for the !")e* +le!! the (rici("l h"! co!eted to or r"tified the tr"!"ctio o%i# th"t &eefit or (rofit %o+ld"ccr+e* or h"d "ccr+ed* to the "#et* or +le!! %ith !+cho%led#e he h"! "llo%ed the "#et !o "! to ch"#e hi!coditio th"t he c"ot &e (+t i !t"t+! ?+o. The"((lic"tio of thi! r+le i! ot "ffected &$ the f"ct th"t the

34


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(rici("l did ot !+ffer "$ i+r$ &$ re"!o of the "#et7!de"li#!* or th"t he i f"ct o&t"ied &etter re!+lt!; or i! it"ffected &$ the f"ct th"t there i! " +!"#e or c+!to) to thecotr"r$* or th"t the "#ec$ i! " #r"t+ito+! oe.' 2"t (.1=:5

o%ever* #o'ingo "l!o held th"t the d+t$ e)&odied i Article 18:1 to"cco+t %ill ot "((l$ 'if the "#et or &roer h"d ifor)ed the (rici("l of the#ift or &o+! or (rofit he received fro) the (+rch"!er "d hi! (rici("l did ot

o&ect thereto.' 2"t (. 135The Co+rt "l!o held i #o'ingo th"t "r"#r"(h / of Article 18:1

2%"iver of d+t$ to "cco+t i! void5 i! de!i#ed to !tre!! the hi#he!t lo$"lt$ th"ti! re?+ired of " "#et. Article 18:1 2"d Art. 1:3:5 i)(o!ed +(o the "#etthe "&!ol+te o&li#"tio to )"e " f+ll di!clo!+re or co)(lete "cco+t to hi!(rici("l of "ll hi! tr"!"ctio! "d other )"teri"l f"ct! relev"t to the "#ec$*!o )+ch !o th"t the l"% doe! ot co+te"ce "$ !ti(+l"tio e9e)(ti# the"#et for) !+ch o&li#"tio "d code)! "! void !+ch !ti(+l"tio. The d+t$ of " "#et i! lieed to th"t of " tr+!tee. Thi! i! ot " techic"l or "r&itr"r$ r+le&+t " r+le fo+ded o the hi#he!t "d tr+e!t (rici(le of )or"lit$ "! %ell "! of the !tricte!t +!tice.

A "#et* +lie " !erv"t or )e!!e#er* h"! &oth the (h$!ic"l "d +ridic"l (o!!e!!io of the #ood! received i "#ec$* or the (roceed! thereof*%hich t"e the (l"ce of the #ood! "fter their !"le &$ the "#et. i! d+t$ to t+rover the (roceed! of the "#ec$ de(ed! +(o hi! di!ch"r#e "! %ell "! there!+lt of the "cco+ti# &et%ee hi) "d the (rici("l* "d he )"$ ot !et +(hi! ri#ht of (o!!e!!io "! "#"i!t th"t of the (rici("l +til the "#ec$ i!ter)i"ted. 4u;man v# Court of !ppeals, >> 0i. ?2 +1>4=.

It i! i))"teri"l %hether !+ch )oe$ or (ro(ert$ i! the re!+lt of the(erfor)"ce or viol"tio of the "#et7! d+t$* if it &e the fr+it of the "#ec$* it)+!t &e "cco+ted for "d t+red over to the (rici("l. If hi! d+t$ i! !trictl$(erfor)ed* the re!+lti# (rofit "ccr+e! to the (rici("l "! the le#iti)"teco!e?+ece of the rel"tio; if (rofit "ccr+e! fro) hi! viol"tio of d+t$ %hile

e9ec+ti# the "#ec$* th"t lie%i!e &elo#! to the (rici("l* ot ol$ &ec"+!ethe (rici("l h"! to "!!+)e the re!(o!i&ilit$ of the tr"!"ctio* &+t "l!o&ec"+!e the "#et c"ot &e (er)itted to derive "dv"t"#e fro) hi! o%def"+lt. $umaguin v# Reynolds% > 0i. == +1>4.

Therefore* %he the "#et eter! ito " cotr"ct th"t !ho+ld (ert"i tothe (rici("l* &+t i hi! o% ")e* it %o+ld &e " viol"tio of hi! d+t$ of lo$"lt$to the (rici("l* "d "! &et%ee the (rici("l "d the "#et* the l"tter )+!t"cco+t to the (rici("l for "ll (rofit! e"red fro) the tr"!"ctio.

It )"tter! o% ho% f"ir the cod+ct of the "#et )"$ h"ve &ee i "("rtic+l"r c"!e* or th"t the (rici("l %o+ld h"ve &ee o &etter of if the "#eth"d !trictl$ (+r!+ed hi! (o%er* or th"t the (rici("l %"! ot* i f"ct* i+red &$

the itervetio of the "#et for hi! o% (rofit. The re!+lt i &oth c"!e! i! the

!")e; the (rofit! !h"ll !till (ert"i to the (rici("l. Ojinaga v# &state of Pere; ,> 0i. 1@4 +1>?.

+1 (hen the $uty to !ccount $oes Not !pply

der Article 1:1* the "#et )"$ ret"i i (led#e the thi#! %hich"re the o&ect of the "#ec$ +ti

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