CASE DOCTRINES AGENCY - MOD 1

1 Rallos vs. Felix Go Chan Agency is basically personal representative, and derivative in nature. The authority
& Sons Realty Corp. of the agent to act emanates from the powers granted to him by his principal; his act
is the act of the principal if done within the scope of the authority.

Qui facit per alium facit se. "He who acts through another acts himself".

Agency is extinguished ipso jure upon the death of either principal or agent.

2 Orient Air Services & "a person binds himself to render some service or to do something in representation
Hotel Representatives vs. or on behalf of another, WITH THE CONSENT OR AUTHORITY OF THE LATTER.”
Court of Appeals
In an agent-principal relationship, the personality of the principal is extended through
the facility of the agent. In so doing, the agent, by legal fiction, becomes the
principal, authorized to perform all acts which the latter would have him do.

3 Tan vs. Spouses Gullas "An agent receives a commission upon the successful conclusion of a sale. On
the other hand, a broker earns his pay merely by bringing the buyer and the seller
together, even if no sale is eventually made."

4 Manotok Brothers, Inc. vs. GENERAL RULE: A broker or agent is not entitled to any commission until he has
Court of Appeals successfully done the job given to him.

EXCEPTION: Equity. when there is a close, proximate and causal connection

between the agent's efforts and labor and the principal's sale of his property, the
agent is entitled to a commission.

5 Inland Realty Investment To be entitled to commissions, the Agent must be the PROCURING CAUSE of
Service, Inc. vs. Court of the Sale.
Appeals
The term "procuring cause," in describing a broker's activity, refers to a cause
originating a series of events which, without break in their continuity, results in the
accomplishment of the prime objective of employing the broker - to produce a
purchaser ready, willing and able to buy real estate on the owner's terms.

Critical events leading to the consummation of said sale, i.e., the negotiations to
convince Stanford to sell at Araneta, Inc.'s asking price, the finalization of the terms
and conditions of the sale, the drafting of the deed of sale, the processing of pertinent
documents, and the delivery of the shares of stock to Stanford.

SUMMARY FACTS:

● Although the ultimate buyer was introduced by the agent to the principal
during the term of the agency,
● nevertheless, the lapse of the period of more than one (1) year and five (5)
months between the expiration of petitioners' authority to sell and the
consummation of the sale, cannot authorize compelling the principal to pay
the stipulated broker’s fee, since the agent was no longer entitled thereto.
● The Court takes into strong consideration that utter lack of evidence of the
agent showing any further involvement in the negotiations between principal
and buyer during that period and in the subsequent processing of the
documents pertinent to said sale.
● The broker was not the efficient procuring cause in bringing about the sale in
question, and are therefore not entitled to the stipulated broker’s commission.

6 Ticong vs. Malim When there is a close, proximate and causal connection between the agent's
efforts and the sale of the property, the agents are entitled to their commission.

To be regarded as the procuring cause of a sale, a broker's efforts must have

been the foundation of the negotiations which subsequently resulted in a sale.
 "The broker must be the efficient agent or the procuring cause of the sale. The
means employed by him and his efforts must result in the sale. He must find the
purchaser, and the sale must proceed from his efforts acting as broker."

7 Lim vs. Court of Appeals A contract of agency to sell on commission basis does not require any particular
formalities under the Civil Code, hence it is valid and enforceable in whatever form
it may be entered into.

8 Bordador vs. Luz Art. 1868, NCC. By the contract of agency a person binds himself to render some
service or to do something in representation or on behalf of another, with the consent
or authority of the latter.

The basis for agency is representation. There must be consent, express or

implied, to form an agency.

A person dealing with an agent is put upon inquiry and must discover upon his
peril the authority of the agent. Petitioners, who were negligent in their transactions
with Deganos, cannot seek relief from the effects of their negligence by conjuring
a supposed agency relation between the two respondents where no evidence
supports such claim.

9 Spouses Salvador vs. According to Article 1900 of the New Civil Code, insofar as third persons are
Spouses Rabaja concerned, an act is deemed to have been performed within the scope of the
agent's authority, if such act is within the terms of the power of attorney, as written.

The basis for agency is representation and a person dealing with an agent is put
upon inquiry and must discover on his own peril the authority of the agent.

10 Country Bankers RATIFICATION in agency is the adoption or confirmation by one person of an act
Insurance Corp. (CBIC) performed on his behalf by another without authority. The substance of the doctrine is
vs. Keppel Cebu Shipyard confirmation after conduct, amounting to a substitute for a prior authority.

11 Republic vs. Bañez In a contract of agency, the agent acts for and in behalf of the principal on matters
within the scope of the authority conferred upon him, such that, the acts of the agent
have the same legal effect as if they were personally done by the principal.

In an agency by estoppel or apparent authority, "[t]he principal is bound by the

acts of his agent with the apparent authority which he knowingly permits the agent to
assume, or which he holds the agent out to the public as possessing."

12 Dominion Insurance Corp. On the part of the principal, there must be an actual intention to appoint or an
vs. Court of Appeals intention naturally inferable from his words or actions; and on the part of the agent,
there must be an intention to accept the appointment and act on it, and in the
absence of such intent, there is generally no agency.

A general agency is limited to Acts of Administration.

Despite the word "special" in the title of the document, the contents reveal that what
was constituted was actually a general agency because The agency comprises all
the business of the principal, but, couched in general terms. Thus, it is limited only
to acts of administration.

SUMMARY:

● The Special Power of Attorney between Dominion and Guevarra established

a principal-agent relationship, despite being titled as "special."
● The terms of the agreement granted Guevarra the authority to conduct, sign,
manage, and transact bonding and insurance business on behalf of
Dominion.
● However, the payment of claims is not considered an act of
administration and is not included in the acts enumerated in the Special
 Power of Attorney.
● A special power of attorney was required for Guevarra to settle the insurance
claims.
● Guevarra deviated from the instructions of the principal, Dominion, by using
his personal money to settle the claims.
● Petitioner Dominion is not liable for the expenses Guevarra incurred in
settling the claims, as stated in Article 1918 of the Civil Code.

13 Patrimonio vs. Gutierrez As a general rule, a contract of agency may be oral. However, it must be written
when the law requires a specific form, for example, in a sale of a piece of land or any
interest therein through an agent.

Article 1878 paragraph 7 of the Civil Code expressly requires a special power of
authority before an agent can loan or borrow money in behalf of the principal

14 CMS Logging, Inc. vs. The principal may revoke a contract of agency at will, and such revocation may be
Court of Appeals express, or implied, and may be availed of even if the period fixed in the contract of
agency as not yet expired. As the principal has this absolute right to revoke the
agency, the agent can not object thereto;

[GR]: An agent may not claim damages arising from the principal’s revocation,

[XPT] Unless it is shown that such was done in order to evade the payment of
agent's commission [bad faith].

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ADDITIONAL RULES

1 ART 1877 The rule is that the principal is liable on contracts entered into by his general agent
from improper motives or on contracts which represent violation of his fi duciary duty
to the principal. (Empire Trust Co. vs. Cahan, 274 U.S. 474, cited in Teller, p. 228.)

A general agent usually has authority either expressly conferred in general terms or
in effect made general by the usages, customs or nature of the business which he is
authorized to transact x x x.” (Siasat vs. Intermediate Appellate Court, 139 SCRA 238
[1985].)

A general agent is one employed to transact all the business of his principal, or all
business of a particular kind or in a particular place, or in other words, to do all acts,
connected with a particular trade, business, or employment. (Ibid., 1036.) He has
authority to do all acts connected with or necessary to accomplish a certain job. A
manager of a store is an example of a general agent. [DE LEON 2010, p. 403]