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7.) To loan or borrow money, unless the 5.) Fix the terms of the sale unless there be set
latter act be urgent and indispensable for conditions stipulated by the principal;
the preservation of the things which are 6.) Sell only for cash;
under administration; 7.) Receive the price unless he was authorized only
8.) To lease any real property to another to solicit orders.
person for more than one year;
9.) To bind the principal to render some The ff are not included in a Power to Mortgage
service without compensation; The power to:
10.) To bind the principal in a contract of 1.) Sell;
partnership; 2.) Execute a 2nd mortgage;
11.) To obligate the principal as a guarantor 3.) Mortgage for the agents personal benefit or for
or surety; the benefit of any 3rd person, unless the contrary
12.) To create or convey real rights over has been clearly indicated.
immovable property;
13.) To accept or repudiate an inheritance; Does the principal have the power to revoke a contract
14.) To ratify or recognize obligations giving an agent exclusive authority to sell?
contracted before the agency; YES. But he may not have the right to use such
15.) Any other act of strict dominion. power if he has agreed not to exercise such power
during a certain period. In case he fails to comply with
Scope of General Authority to Purchase this obligation-not-to-do, he will be liable for damages.
Where an agents power to purchase is general and
unrestricted, he has implied authority to do whatever is Art. 1880. A special power to compromise does
usual and necessary in the exercise of such power. He not authorize submission to arbitration.
may:
1.) Determine the usual and necessary details of the Rationale:
contract, A principal may authorize his agent to compromise
2.) agree upon the price, because of absolute confidence in the latters judgment
3.) modify or rescind the contract of purchase, and discretion to protect the formers rights and obtain
4.) accept delivery for his principal, for him the best bargain in the transaction. If the
5.) give directions for the delivery of the property transaction would be left in the hands of an arbitrator,
purchased, and said arbitrator may not enjoy the trust of the principal.
6.) may borrow money to pay for the care and
preservation of the property purchased. What happens if the agent is specifically authorized to
But he has no special power to submit to arbitration?
1.) Settle a contest between the principal and a 3rd Then the arbitration award binds the principal,
person regarding the ownership of goods provided, of course, that the agent acted within the
purchased, or scope of his authority.
2.) Agree to an account stated, or
3.) Do anything not usual or necessary to the Art. 1881. The agent must act within the scope
exercise of such authority. of his authority. He may do such acts as may be
conducive to the accomplishment of the purpose of
Scope of Special Authority to Purchase the agency.
Where the agency is a special one, or is restricted to
purchases upon certain terms and conditions, the agent Authority: The power of the agent to affect the legal
has no authority to relations of the principal by acts done in accordance with
1.) Purchase upon different terms and conditions the principals manifestation of consent to him. The
from those authorized, or authority of the agent is the very essence sine qua
2.) Modify or rescind a contract of purchase made non of the principal and agent relationship. This
by the principal. authority, unless it is otherwise agreed, includes only
the authority to act for the benefit of the principal, and
Art. 1879. A special power to sell excludes the the source of the authority is the principal and never the
power to mortgage; and a special power to agent.
mortgage does not include the power to sell.
Kinds of Authority:
The ff are included in a Power to Sell: 1.) Actual: when it is actually granted, and it may
The power to: be express or implied. It results from what the
1.) Find a purchaser or to sell directly; principal indicates to the agent.
2.) Deliver the property; 2.) Express: when it is directly conferred by words.
3.) Make the usual representation and warranty; 3.) Implied: when it is incidental to the transaction
4.) Execute the necessary transfer documents; or reasonably necessary to accomplish the
purpose of the agency, and therefore, the
Right of the principal in case the commission agent sold Art. 1908. The commission agent who does not
goods on credit without authority: [CR] collect the credits of his principal at the time when
2 alternatives: they become due and demandable shall be liable
1.) He may require payment in cash, in w/c case, for damages, unless he proves that he exercised
any interest or benefit from the sale on credit due diligence for that purpose.
shall belong to the agent since the principal
cannot be allowed to enrich himself at the Obligation of the commission agent under this article:
agents expense; or The commission agent who has made an authorized
2.) He may ratify the sale on credit, in w/c case it sale on credit must collect the credits due the principal
will have all the risks and advantages to him. at the time they become due and demandable. If he fails
to do so, he shall be liable for damages unless he can
Art. 1906. Should the commission agent, with show that the credit could not be collected
authority of the principal, sell on credit, he shall so notwithstanding the exercise of due diligence on his
inform the principal, with a statement of the part. In such a case, the principals remedy is to proceed
names of the buyers. Should he fail to do so, the against the debtor.
sale shall be deemed to have been made for cash
insofar as the principal is concerned. Does this article apply to a case where there is a
guarantee commission?
Obligation of the commission agent where a sale on No, because the agent already assumed the risks of
credit was authorized: collection by accepting the guarantee commission.
An authorized sale on credit shall be deemed to have
been on a cash basis insofar as the principal is Art. 1909. The agent is responsible not only for
concerned if the agent fails to inform the principal of fraud, but also for negligence, which shall be
such sale on credit with a statement of the names of the judged with more or less rigor by the courts,
buyers. according to whether the agency was or was not
for a compensation.
Reason for this article: Prevent the agent from stating
that the same was on credit when in fact it was made Is the agent liable for fraud? Yes, in all cases.
for cash.
For negligence? Yes, but this shall be adjudged with
Art. 1907. Should the commission agent receive rigor by the courts.
on a sale, in addition to the ordinary commission,
another called a guarantee commission, he shall Why does the court have to take into consideration
bear the risk of collection and shall pay the whether the agency was gratuitous or for compensation?
principal the proceeds of the sale on the same In order to fix the liability of the agent for negligence
terms agreed upon with the purchaser. only (not fraud).
Purpose of guarantee commission: To compensate the Art. 1910. The principal must comply with all
agent for the risks he will have to bear in the collection the obligations which the agent may have
of the credit due to the principal. contracted within the scope of his authority.
As for any obligation wherein the agent has
Nature of liability of guarantee commission agent: exceeded his power, the principal is not bound
Liable to principal if the buyer fails to pay or is except when he ratifies it expressly or tacitly.
incapable of paying. But he is not primarily the debtor.
Art. 1922. If the agent had general powers, What does the above article provide?
revocation of the agency does not prejudice third It provides for another case of implied revocation.
persons who acted in good faith and without
knowledge of the revocation. Notice of the Effect of direct management of the business by the
revocation in a newspaper of general circulation is principal himself:
a sufficient warning to third persons. Generally, it revokes the agency because there would
no longer be any basis for the representation previously
conferred.
Effect of revocation in relation to 3rd persons if the agent
Exception: when the only desire of the principal in
was authorized to contract with the public in general:
In case the agent has general powers, innocent 3rd doing so is for him and the agent to manage the
business together.
parties dealing with the agent will not e prejudiced by
the revocation before they had knowledge thereof. In
Art. 1925. When two or more principals have
this case, however, the fact that the revocation was
granted a power of attorney for a common
advertised in a newspaper of general circulation would
transaction, any one of them may revoke the same
be sufficient to 3rd persons for publication constitutes
without the consent of the others.
notice upon everybody and this is true whether or not
such 3rd persons have read the newspaper concerned.
Rationale: Since the appointment of an agent by 2 or
more principals for a common transaction or undertaking
Notice required in art. 1921 v. that in art. 1922:
makes them solidarily liable to the agent for all
Art. 1921 Art. 1922
consequences of the agency, then each one of the
Must be personal. May be personal.
principals should be granted the right to revoke the
Revocation must be known Even if 3rd person doesnt
Exceptions: [BF=Partner] Art. 1928. The agent may withdraw from the
1.) When a bilateral contract depends on the agency by giving due notice to the principal. If the
agency; latter suffer any damage by reason of the
2.) When the agency is the means of fulfilling an withdrawal, the agent must indemnify him
obligation already contracted; therefor, unless the agent should base his
3.) When a partner is appointed as manager of a withdrawal upon the impossibility of continuing
partnership in the contract of partnership and the performance of the agency without grave
his removal from the management is detriment to himself.
unjustifiable.
Does the agent have a right to renounce or withdraw
Can an agency, coupled with an interest, be terminated from the agency at any time?
by the sole will of the principal? No. Yes. Even without the consent of the principal. But, in
the latter case, he may be subject to liability for breach
Requisite for agency to be irrevocable for being coupled of contract or for tort.
with a interest:
Interest of the agent must be in the subject matter of Basis: Constitutional prohibition against involuntary
the power conferred and not merely an interest in the servitude.
exercise of the power.
Obligation of agent if he withdraws from agency without
Instances of an agency coupled with an interest: just cause:
1.) When the agent has parted with value or 1.) Notify principal (even if w/ just cause); and
incurred liability at the principals request, and 2.) Indemnify the principal should the latter suffer
he is looking to the exercise of the power as the any damage by reason of such withdrawal.
means of reimbursement or indemnity.
2.) When the interest in the thing concerning which Reason for indemnity: To answer for losses and
the power is to be exercised arises from an damages occasioned by the non-fulfillment of his
assignment, pledge or lien created by the obligation as agent.
principal with the agent being given the power
General rule: Agency is terminated instantly by the This is for that small syndicate of people who name
death of the principal. themselves after a labor case!