OBLIGATIONS OF THE AGENT

CHAPTER 2 ARTICLE 1884 – 1909

SPECIFIC OBLIGATION OF THE AGENT TO THE PRINCIPAL

• To carry out the agency that he has accepted

• To suffer damages which through his performance the principal may suffer
• To finish the partnership already begun on the death of the principal
• To observe diligence of a father of a good family in the custody and the preservation of the
goods forwarded to him in case he declines the agency until an agent is appointed
• To advance the necessary funds should there be a necessity to do so
•
SPECIFIC OBLIGATION OF THE AGENT TO THE PRINCIPAL

• To act in accordance with the instructions of the principal and in default thereof to do all
the good father of a family would do
• Not to carry out the agency if its execution would manifest a result in the loss or damage
to the principal
• To answer for damages if there being a conflict between his interest and the principal , he
should prefer his own
• Not to loan to himself if he has been authorized to lend money at interest
SPECIFIC OBLIGATION OF THE AGENT TO THE PRINCIPAL

• To render an account of his transaction and to deliver to the principal whatever he may
receive by virtue of the agency
• To be responsible in certain cases for the acts of the substitute appointed by him
• To inform the principal where an unauthorized sale of credit has been made of such sale
• To bear the risk of collection should he receive on a sale a guarantee commission
SPECIFIC OBLIGATION OF THE AGENT TO THE PRINCIPAL

• To distinguish goods by countermarks and designate the merchandise respectively

belonging to each principal in the case of a commission agent who handles goods of the
same kind and mark which belong to different owner
• To pay the interest of funds he has applied to his own use
• To indemnify the principal for damages for his failure to collect the credits of his principal
at the time that they become due
• To be responsible for fraud negligence

ILLUSTRATIVE CASES

FACTS: P ASKED A TO LOOK FOR A HOUSE WITH CERTAIN SPECIFICATIONS , A

FOUND A HOUSE WORTH 5000 AND BOUGHT THE SAME. THEREAFTER HE TRIED TO
SELL IT TO P FOR 6000 REPRESENTING THAT HE HAD BOUGHT THE SAME FOR 5500

ISSUE: IS P ENTITLED TO A’S PROFIT

HELD : YES WHEN THE RELATIONSHIP OF AN AGENT AND PRINCIPAL EXIST IT IS
THE DUTY OF THE AGENT TO ACT HONESTLY AND FAITHFULLY TOWARDS HIS
PRINCIPAL AND HE CONCEALS , AND BY FRAUD HE OBTAINS ADVANTAGE HE
SHALL BE LIABLE

( REIGER VS CAMPBELL-STUART)

FACTS : P ASKED A TO SELL HIS SHARE WHICH IS VALUED AT 1 PER SHARE.

UPON ARRIVING AT THE MARKET A KNEW THAT SUCH SHARE IS BEING SOLD FOR
1.5 PER SHARE . A STILL SOLD THE SHARE FOR 1 PESO PER SHARE

ISSUE : IS A LIABLE FOR DAMAGES

HELD : YES AN AGENT HAS THEOBLIGATION TO EXERCISE DILIGENCE AS A

FATHER OF A GOOD FAMILY HENCE HE IS LIABLE TO THE LOSS OF THE PRINCIPAL

HECTOR DE LEON