Topics

Art. 1892

Art. 1893

Art. 1894

Art. 1895

Art. 1892

The Agent may appoint a substitute if the

principal has not prohibited him from
doing so; but he shall be responsible for
the acts of the substitute:
1)

When he was not given the power to

appoint one;

2)

When he was given such power, but

without designating the person, and
the person appointed was notoriously
incompetent or insolvent.

All acts of the substitute appointed

against the prohibition shall be void.

General Rule: Agent may appoint a subagent

Reason: for convenience and practical
utility

Exceptions:
a)

When prohibited by the principal

b)

When the work entrusted to the agent

to carry out requires special
knowledge, skill or competence

Exception to the 2nd exception:

When so authorized by the principal

When agent is responsible for the act of

substitute:
a)

He is not given the power to appoint

b)

He was given such power but without

designating the person, and the person
appointed was notoriously incompetent
or insolvent

Reason: This is an abuse by the agent of

the principal's confidence

Sub-agent

Person employed or appointed by an

agent as his agent, to assist him in the
performance of an act for the principal
which the agent has been empowered to
perform (De Leon, Comments and
Cases on Partnership 2014, Agency and
Trusts, p. 480)

Effect of Substitution
when authorized or not
Substitution is
authorized by
principal

Substitution is
prohibited by
principal

Substitution is neither
prohibited nor
authorized by
principal

As to relations of
Principal, agent and
sub-agent

There exists fiduciary

relationship:
principal-agent
agent-sub-agent and
principal-sub-agent

The principal and

sub-agent are
strangers to each
other

There exist fiduciary

relationship when
sub-agent is in actual
control of business
and the principal
knows of his
appointment or
knows that his
appointment is
necessary

As to effect of death
of agent on subagent's authority

Death of agent does

not affect authority

Regardless of death
of agent, the subagent has no
authority

Death of agent
terminates authority

Effect of Substitution
when authorized or not
Substitution is
authorized by
principal
As to acts of subagent representing
principal

Valid except when

acted beyond the
scope of authority

As to responsibility of Agent is released

agent to acts of sub- from responsibility
agent

Substitution is
prohibited by
principal

Substitution is
neither prohibited
nor authorized by
principal

Acts of the substitute Valid except when

shall be void
acted beyond the
scope of authority
Agent is responsible
for the acts of the
sub-agent

Agent is responsible
for the acts of the
sub-agent

Illustration:

X authorized Y to manage his business

during the time that X was in the
province. Y allowed Z to manage the
store for him. Is X responsible for
damages caused by Z? Is the
substitution valid? Are the acts of Z in
the name of X valid?

Art. 1893

In the cases mentioned in Nos. 1 and 2

of the preceding article, the principal
may furthermore bring an action against
the substitute with respect to the
obligations which the latter has
contracted under the substitution.

Illustration:

In the previous example suppose that Y

allowed Z to manage the store without
authority of X but without any prohibition
on sub-agency by X and that Z upon
managing the store rented it to
boarders. Can X bring an action against
Z?

Art. 1894

The responsibility of two or more agents,

even though they have been appointed
simultaneously, is not solidary, if
solidarity has not been expressly
stipulated.

General Rule: Responsibility of 2 or

more agents is joint
Exception: When solidarity had been
expressly stipulated.

Art. 1895

If solidarity has been agreed upon, each

of the agents is responsible for the nonfulfillment of the agency, and for the fault
or negligence of his fellow agents,
except in the latter case when the fellow
agents acted beyond the scope of
authority.

Illustrations:

X appointed Y and Z to manage his

business. If because of Y's negligence
the store incurred P100,000 loss, is Z
liable for damages?
In the above if solidarity was agreed
upon what then?
If solidarity was agreed upon but it was
found out that the reason the store
incurred P100,000 loss was because Y
pocketed P200,000 what then?