One love, jah love.

Agency, Trust and Joint Ventures b.) The agent acts as representative and
Samplex Compilation: 2011-2012 not for himself; Q: What is the essential difference between a
Atty. Joaquin P. Obieta c.) Consideration or remuneration of true contract of agency and a true brokerage
the agent; contract? (2011, 2012)
Note: Same as the midterms rev, for the MCQ I did not d.) Agent acts within the scope of its A: An agency is empowered to enter into
include the choices anymore.  Essay answers are not authority juridical acts on behalf of the principal, whereas,
sure, some of them are from bluebooks, and I have no are essential elements of agency except: a broker represents the purported principal but
intention to impair anyone’s intellectual property. (2011, 2012) without power to enter into juridical acts in the
A: C. Consideration or remuneration of the name of the principal.
Note #2: Please read with case doctrines, in case of bad agent.
faith. Good luck to us! Q: When in the commission issued by the
Q: When may an agent appoint a substitute? principal to the agent, he states that he
MCQ (2011, 2012) “withholds no power and that the agent’s
Q: Since an agent assumes no personal A: If the principal has not prohibited him from powers are beyond powers of
liability on the contract he enters into in the doing so. administration,” then what is the agency
name of the principal, if the agent indeed is a constituted? (2011, 2012)
minor, then the agency entered into is: (2011, Q: What is the essential feature of Agency as A: A general power of attorney.
2012) distinguished from other similar contracts?
A: Valid until annulled. (2011, 2012) Q: When under a “Special Power of
A: It is a relationship whereby one party pursues Attorney” the agent has been given the
Q: The termination of the agency through juridical acts in the name of the other party. power to sell the principal’s land in Taguig
revocation by the principal: (2011, 2012) covered by TCT ####, under such terms
A: Is at the will of the principal made known to Q: What is the liability of two or more agents and conditions as the attorney-in-fact deems
the agent, even if such at of revocation is who are appointed simultaneously by the reasonable and convenient,” and the agent
contrary to the terms of the agency instrument. same principal? (2011, 2012) purchases for himself the land under a formal
A: Not solidary. (Solidary only if stipulated) Deed of Absolute Sale, what is the status of
Q: When to principals have jointly appointed the contract? (2011, 2012)
a common agent for the same transaction, Q: A provision on the Power of Attorney A: The contract of sale to the agent is void for
then revocation by one of them without the providing that “the appointment of the agent being in violation of his fiduciary obligations to
consent of the other: (2011, 2012) is irrevocable for a period of 8 years, and any the principal.
A: Terminates the entire agency relationship. attempt before the end of that period to
terminate the agency shall be null and void,” Q: When an agent acts in the name of the
Q: The following is? (2011, 2012) principal and within the scope of his
a.) Consent, express or implied of the A: Valid, but cannot prevent the principal form authority – (2011, 2012)
parties to establish the relationship; revoking the agency, nor the agent from A: The agent has complied with his duty of
withdrawing from the agency. obedience.

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Agency, Trusts and Joint Ventures, Atty. Obieta
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 One love, jah love.
d.) When the agency is a Means to the
Q: When an agent acts within the scope of fulfilment of an obligation already Q: What kind of contract arises if the agent
his authority, but enters into the contract in contracted; acts: (2012)
his own name – (2011, 2012) e.) When a partner was Appointed as a a. With authority in the principal’s
A: The agent has violated his duty of loyalty. manager of a partnership in a behalf?
partnership contract and his A: VALID contract of agency. Principal is
Q: When an agent acts in the name of the termination is unjustified. [BB] primarily liable as if he entered into the
principal without or in excess of authority, (Note: Give examples) contract himself.
what is the status of the contract? (2011, 2012)
A: The contract is void as to the principal. Q: Enumerate 5 causes for the termination of b. With authority but in his own name?
a contract of agency. (2011, 2012) A: VALID as to the agent and 3rd person
Q: When an agent has been appointed under A: (RWD-DAX) with whom he contracted with. Principal has
a “Power of Attorney” to administer a a.) Revocation of the principal; no riht of action against 3rd person and the
designated business as its “General b.) Withdrawal from the agency by the 3rd person against the principal unless the
Manager,” what is the power of the agent? agent; contract involves things of the principal.
(2011, 2012) c.) By the Death, civil interdiction, c. Without authority in the principal’s
A: Only to enter into contracts and transactions insolvency, insanity of either agent or behalf?
that go into the day-to-day affairs of the business the principal; A: VOID as to the principal and may not be
enterprise. d.) Dissolution of the firm which entered enforced against him if the 3rd party with
into the contract of agency; whom the agent contracted with had notice
ESSAY QUESTIONS e.) eXpiration of the time period for which of the authority and power of the agent.
the agency was agreed to be constituted. Agent is primarily liable for his contract with
Q: What is an agency coupled with an [BB] the 3rd person.
interest? Give an example. (2012)
A: (3B-BAM) An agency is coupled with an Q: Are the modes of extinguishment of d. Without authority in his own name?
interest if: agency enumerated in Art. 1919 exclusive? A: VOID as to the principal. It is as if the
a.) It is constituted not only for the benefit Explain your answer briefly. (2011, 2012) agent entered into the contract in his own
of the principal but also for the interest A: No. The modes of extinguishment of agency personal capacity and no representation
of a 3rd person who accepted such under Article 1919 are not exclusive. There are whatsoever with regard to the principal.
stipulation in his favour; many other ways by which agency can be
b.) The agency is constituted for the extinguished such as loss of the thing which is Q: Principal (P) authorized Agent (A) to sell
interest of Both the principal and the the subject matter of the agency, or novation or a certain parcel of land. Subsequently, P also
agent; the act that was supposed to be undertaken by gave authority to Another Agent (AA) to sell
c.) When the agency involves a Bilateral the agent became illegal or the agent couldn’t the same parcel of land. (2012)
contract; fulfil his duty because of a fortuitous event such a. Is there implied revocation of the
as war, conflagration, etc. [BB] agency of A?

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Agency, Trusts and Joint Ventures, Atty. Obieta
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 One love, jah love.
A: No, there is no implied revocation here A: Yes. Arturo is entitled to recover the the agent is in good faith, mistakes as to matters
because the subsequent grant of authority to difference in price. of discretion will NOT make the agent liable for
the second agent was not an exclusive In a contract of agency, the interest of damages to the principal.
agency to sell the land; therefore, it did not the principal should be the priority of the agent.
effectively revoke the first one. The agent is primarily acting for the benefit of Q: Juliet is the appointed operator of a
the principal and must exercise DUE gasoline station owned by an oil company.
b. Would your answer be the same if DILIGENCE in carrying out the agency. It The station bears the company logo, sells
the authority given to AA was could be considered in the case at hand that the only Caltex products, at prices fixed by the
“exclusive”? stockbroker did not exercise due diligence and company, and uses equipment lent by the
A: No, my answer would not be the same if was negligent in trading Arturo’s shares for company. Because of her loyalty to the oil
the authority given to the second agent was Php500 when normally they are being traded at company, Juliet is allowed to maintain a
exclusive. If indeed, the subsequent grant of Php550. Therefore, Arturo can recover the personally-owned mini-grocery inside the
authority is exclusive, it shall effectively difference in price that he has lost because of the station office where she would sell grocery
revoke the authority of the first agent. negligence of his stockbroker. items to station customers. One day, a
c. What is the effect if A comes to customer bought some cigarettes from here
know of a contract of sale of the land Q: Arturo ordered another stockbroker, and lighted one immediately. Somehow, the
by AA? Miguel, to sell his 10,000 shares of PDTL. lighted cigarette caused a fire which
A: He will be in bad faith if he sells the same Arturo did not specify any price. He gave damaged several cars lined up at the station.
parcel of land to another person, and Miguel the discretion to sell the shares if he The insurers of the cars now seek to collect
therefore will also be liable for damages. believes it would be profitable to Arturo, or damages. As between Juliet and the oil
not to sell them if he believes the price would company, who is liable for the damages?
d. What is the effect if AA comes to still go up. Miguel sold the PDTL shares at Explain. (2011)
know of a contract of sale of the land Php900 per share. The next day, the price of A: I don’t know.. huhuhuhuhu. (Time to
by A? PDTL rose to Php1,000 per share. Is Miguel brainstorm!)
A: he will be in bad faith if he sells the same liable to Arturo for the difference? Why?
parcel of land to another person and (2012) Q: A businesswoman authorized her
therefore liable also for damages. A: No. Miguel is not liable to Arturo for the husband to “loan or borrow any sum of
difference in price. money or fungible things at the rate of
Q: Arturo ordered his stockbroker to sell his First, there was no instruction by Arturo interest and for the time and under the
10,000 shares of SanMig at a minimum of to sell it at a specific price. And the law provides conditions which he might deem
Php500 per share. All the transactions in the that when there are no instructions from the convenient.” Later, the husband mortgaged
trading floor showed that SanMig shares principal on how to carry out the agency, the his wife’s property as security for his own
were being traded at Php550. The agent must exercise the diligence of a good father debt. Did the husband, as agent, act within
stockbroker sold Arturo’s shares at Php500 of a family in carrying out his obligations as the scope of the authority granted to him?
per share. Is Arturo entitled to recover the agent. Furthermore, the law provides that when Explain. (2011)
difference in price? Why? (2012) there are no instructions from the principal and

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Agency, Trusts and Joint Ventures, Atty. Obieta
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 One love, jah love.
A: No, the husband did not act within the scope As for B, the contract is VOID because
of authority granted by his wife. In a similarly he knew of the scope of A’s authority and that is
decided case by the SC, it held that authority to sell the TV at Php100,000. However, this sale
given to an agent should be strictly construed could be ratified by P in order for it to be valid
according to what was assigned to be done. and enforceable.
In the case at bar, the husband violated Assuming that A entered the contract
his authority by mortgaging his wife’s property using his name and selling the TV to B, P can sue
instead of obtaining a loan or borrowing money. B because in this situation, although the agent
Furthermore, he also violated the authority given didn’t act on behalf of the principal, he used or
when he applied the mortgage as security for his soled an object belonging to the principal. This
own debt which was not stipulated in the would vest a cause of action for P to sue B.
authority given to him. Any transactions entered
by the agent without the authority of the
principal are unenforceable against the latter
unless duly ratified by her.

Q: P gave a written power of attorney to A to

sell P’s 72-inch flat screen TV for Php100,000.
A offered the TV to B, who made a counter-
offer to buy it for Php80,000. A replied that he
could not accept the counter offer and
showed B the written power of attorney. After
further haggling, however, A finally agreed to
sell the TV to B for Php90,000. What are the
rights and liabilities of A, B and P? (2011)
A: A is liable to pay damages to P because he
acted in excess of his authority when he sold the
TV to B at the rate of Php90,000. This is in
direct contravention with the tenor of the power
of attorney given to A which is to sell the TV at
Php100,000. In a contract of Agency, the agent
should pursue acts beneficial to the principal
because he derives his authority from the latter.
In this case, he failed to act according to what
was clearly instructed to him and thus, he is liable
to pay damages to the principal.

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Agency, Trusts and Joint Ventures, Atty. Obieta
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