CESAR L.

VILLANUEVA
I. DEFINITION AND OBJECTIVE OF A CONTRACT OF
AGENCY
a. Definition
Article 1868 of te Ci!il Co"e "efi#e$ te co#tr%ct of
%&e#c' %$ o#e (ere)' *% +er$o# )i#"$ i,$elf to re#"er $o,e
$er!ice or to "o $o,eti#& i# re+re$e#t%tio# or o# )e%lf of
%#oter- (it te co#$e#t or %.torit' of te l%tter.*
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b. Purpose or Objective of Agency
I# Eurotech Industrial Technologies, Inc. v. Cuizon, 121
SCRA 183 425567- te Co.rt el" 88
I# % co#tr%ct of %&e#c'- % +er$o# )i#"$ i,$elf to re#"er
$o,e $er!ice or to "o $o,eti#& i# re+re$e#t%tio# or o# )e%lf of
%#oter (it te l%tter9$ co#$e#t. Te .#"erl'i#& +ri#ci+le of te
co#tr%ct of %&e#c' i$ to %cco,+li$ re$.lt$ )' .$i#& te $er!ice$
of oter$ 8 to "o % &re%t !%riet' of ti#&$ li:e $elli#&- ).'i#&-
,%#.f%ct.ri#&- %#" tr%#$+orti#&. It$ +.r+o$e i$ to e;te#" te
+er$o#%lit' of te +ri#ci+%l or te +%rt' for (o, %#oter %ct$
%#" fro, (o, e or $e "eri!e$ te %.torit' to %ct. 4%t +.1<27
Te purpose of e!er' co#tr%ct of %&e#c' i$ te %)ilit'- )'
le&%l fictio#- to e;te#" te +er$o#%lit' of te +ri#ci+%l tro.&
te f%cilit' of te %&e#t= ).t te $%,e c%# o#l' )e effecte" (it
te co#$e#t of te +ri#ci+%l. Orient Air Service & Hotel
Representatives v. Court of Appeals- 1<6 SCRA 631 41<<17.
I# iton!ua, "r. v. Eternit Corp., 3<5 SCRA 253 425567- te
Co.rt el" t%t *It )e%r$ $tre$$i#& t%t i# %# %&e#t8+ri#ci+%l
rel%tio#$i+- te +er$o#%lit' of te +ri#ci+%l i$ e;te#"e" tro.&
te f%cilit' of te %&e#t. I# $o "oi#&- te %&e#t- )' le&%l fictio#-
)eco,e$ te +ri#ci+%l- %.tori>e" to +erfor, %ll %ct$ (ic te
l%tter (o.l" %!e i, "o. S.c % rel%tio#$i+ c%# o#l' )e
effecte" (it te co#$e#t of te +ri#ci+%l- (ic ,.$t #ot- i# %#'
(%'- )e co,+elle" )' l%( or )' %#' co.rt.*
/20
4%t +.22?7
@e# te %&e#c' i$ e$t%)li$e"- %#" te %&e#t %ct$ for te
+ri#ci+%l- e i$ i#$of%r %$ te (orl" i$ co#cer#e" e$$e#ti%ll' te
+ri#ci+%l %cti#& i# te +%rtic.l%r co#tr%ct or tr%#$%ctio# o# %#".
Co#$eA.e#tl'- te %ct$ of te %&e#t o# )e%lf of te +ri#ci+%l
(iti# te $co+e of te %.torit' %!e te $%,e le&%l effect %#"
co#$eA.e#ce %$ to.& te +ri#ci+%l %" )ee# te o#e $o %cti#&
i# te &i!e# $it.%tio#. So,e of te le&%l co#$eA.e#ce$ t%t flo(
fro, te "octri#e of re+re$e#t%tio# i# te co#tr%ct of %&e#c' %re
t%t 88
Notice to te %&e#t i$ #otice to te +ri#ci+%l.
Air #rance v. Court of Appeals- 126 SCRA
338 41<8?7.
@e# %# %&e#t +.rc%$e$ te +ro+ert' i# )%"
f%it- te +ri#ci+%l $o.l" %l$o )e "ee,e" %
+.rc%$er i# )%" f%it. Cara$, "r. v. aureta-
15? SCRA 6 41<817.
A $.it %&%i#$t %# %&e#t c%##ot- (ito.t
co,+elli#& re%$o#$- )e co#$i"ere" % $.it
%&%i#$t te +ri#ci+%l %&' v. Ritratto (roups,
Inc.- ?62 SCRA 216 425517.
c. Parties to a Contract of Agency
Te +%rtie$ to % co#tr%ct of %&e#c' %re te PRINCIPAL 4te
+er$o# re+re$e#te"7 %#" te AGENT 4te +er$o# (o %ct$ for %#"
i# re+re$e#t%tio# of %#oter7. Alto.& Article 1868 "efi#e$
%&e#c' i# ter,$ of )ei#& % co#tr%ct- it $o.l" %l$o )e co#$i"ere"
t%t .+o# te +erfectio# of te co#tr%ct of %&e#c'- it cre%te$
)et(ee# te +ri#ci+%l %#" %# %&e#t %# o#8&oi#& le&%l
rel%tio#$i+ t%t i,+o$e$ +er$o#%l o)li&%tio#$ o# )ot +%rtie$.
Te oter ter,$ .$e" for te +o$itio# of %&e#t %re
*%ttor#e'8i#8f%ct*- *+ro;'*- *"ele&%te* or *re+re$e#t%ti!e.*
!" Capacity of the Parties
Te +ri#ci+%l ,.$t %!e c%+%cit' to co#tr%ct 4Art$. 1?26
%#" 1?2<7- %#" ,%' eiter )e % #%t.r%l or B.ri"ic%l +er$o# 4Art.
1<1</307.
Tere i$ le&%l liter%t.re t%t ol"$ t%t $i#ce te %&e#t
%$$.,e$ #o +er$o#%l li%)ilit'- e "oe$ #ot %!e to +o$$e$$ f.ll
c%+%cit' to %ct i#$of%r %$ tir" +er$o#$ %re co#cer#e".
/?0
Si#ce %
co#tr%ct of %&e#c' i$ fir$t %#" fore,o$t % co#tr%ct i# it$elf- te
+%rtie$ 4)ot +ri#ci+%l %#" %&e#t7 %!e to )e c%+%cit%te" for %
!%li" %&e#c' co#tr%ct to %ri$e. If o#e of te +%rtie$ %$ #o le&%l
c%+%cit' to co#tr%ct- te# te co#tr%ct of %&e#c' i$ #ot !oi"- ).t
,erel' !oi"%)le- (ic ,e%#$ t%t it i$ !%li" .#til %##.lle".
T.$- % !oi"%)le %&e#c' (ill +ro".ce le&%l co#$eA.e#ce$-
(e# it i$ +.r$.e" to e#ter i#to B.ri"ic%l rel%tio#$ (it tir"
+%rtie$. If te +ri#ci+%l i$ te o#e (o %$ #o le&%l c%+%cit' to
co#tr%ct- %#" i$ %&e#t e#ter$ i#to % co#tr%ct.%l rel%tio#$i+ i#
i$ #%,e (it % tir" +%rt'- te re$.lti#& co#tr%ct i$ !oi"%)le %#"
$.)Bect to %##.l,e#t. O# te oter %#"- if te +ri#ci+%l %$
le&%l c%+%cit'- %#" it i$ te %&e#t t%t %$ #o le&%l c%+%cit' to
co#tr%ct- te .#"erl'i#& %&e#c' rel%tio#$i+ i$ !oi"%)le- %#"
(e# te i#c%+%cit%te" %&e#t e#ter$ i#to % co#tr%ct (it % tir"
+%rt'- te re$.lti#& co#tr%ct (o.l" )e !%li"- #ot !oi"%)le- for te
%&e#tC$ i#c%+%cit' i$ irrele!%#t- for te co#tr%ct %$ )ee# e#tere"
i#to for %#" i# )e%lf of te +ri#ci+%l- (o %$ f.ll le&%l
c%+%cit'.
Te fore&oi#& "i$c.$$io#$ (o.l" %ll ,%:e $e#$e to $.++ort
te f%ct t%t %$ % &e#er%l +ro+o$itio# te l%c: of le&%l c%+%cit' of
te %&e#t "oe$ #ot %ffect te co#$tit.tio# of te %&e#c'
rel%tio#$i+. A#" 'et- it i$ cle%r .#"er Article 1<1<4?7 t%t if
".ri#& te ter, of te %&e#c'- te +ri#ci+%l or %&e#t i$ +l%ce"
.#"er ci!il i#ter"ictio#- or )eco,e$ i#$%#e or i#$ol!e#t- te
%&e#c' i$ ipso !ure e;ti#&.i$e". It i$ terefore o#l' lo&ic%l to
co#cl."e t%t if te lo$$ of le&%l c%+%cit' of te %&e#t
e;ti#&.i$e$ te %&e#c'- te# #ece$$%ril' %#' of to$e $%,e l%c:
of le&%l c%+%cit' o# eiter or )ot te +ri#ci+%l %#" %&e#t (o.l"
#ot )ri#& %)o.t % co#tr%ct of %&e#c'.
#. E$e%ents of t&e Contract of Agency
Li:e %#' oter co#tr%ct- %&e#c' co#t%i#$ te e$$e#ti%l
ele,e#t$ of co#$e#t- o)Bect or $.)Bect ,%tter %#" c%.$e or
co#$i"er%tio#. I# Rallos v. #eli) (o Chan & Sons Realt* Corp.-
81 SCRA 211 41<687- te Co.rt el" t%t te follo(i#& %re te
e$$e#ti%l ele,e#t$ of te co#tr%ct of %&e#c'D
4%7 Co#$e#t- e;+re$$ or i,+lie"- of te +%rtie$ to e$t%)li$
te rel%tio#$i+=
4)7 O)Bect- i$ te e;ec.tio# of % B.ri"ic%l %ct i# rel%tio# to
tir" +%rtie$=
4c7 Te %&e#t %ct$ %$ % re+re$e#t%ti!e %#" #ot for i,$elf=
%#"
4"7 Te %&e#t %ct$ (iti# te $co+e of i$ %.torit'.
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!" Consent
Co#$e#t of )ot +ri#ci+%l %#" %&e#t i$ #ece$$%r' to cre%te
%# %&e#c'. Te +ri#ci+%l ,.$t i#te#" t%t te %&e#t $%ll %ct for
i,= te %&e#t ,.$t i#te#" to %cce+t te %.torit' %#" %ct o# it-
%#" te i#te#tio# of te +%rtie$ ,.$t fi#" e;+re$$io# eiter i#
(or"$ or co#".ct )et(ee# te,. iton!ua, "r. v. Eternit Corp.,
3<5 SCRA 253 425567.
Te )%$i$ for %&e#c' i$ re+re$e#t%tio#. O# te +%rt of te
+ri#ci+%l- tere ,.$t )e %# %ct.%l i#te#tio# to %++oi#t

or %#
i#te#tio# #%t.r%ll' i#fer%)le fro, i$ (or"$ or %ctio#$=

%#" o#
te +%rt of te %&e#t- tere ,.$t )e %# i#te#tio# to %cce+t te
%++oi#t,e#t %#" %ct o# it-

%#" i# te %)$e#ce of $.c i#te#t-
tere i$ &e#er%ll' #o %&e#c'. +o$inion Insurance Corp. v. Court
of Appeals- 326 SCRA 625 425527.
'" Object or Subject Matter
Object of %# %&e#c' co#tr%ct i$ service- (ic +%rtic.l%rl'
i$ .#"ert%:i#& of te %&e#t to e#ter i#to B.ri"ic%l %ct$ (it tir"
+er$o#$ o# )e%lf of te +ri#ci+%l.
(" Consideration
Cause or Consideration i# %&e#c' i$ te co,,i$$io# t%t
te +ri#ci+%l (o.l" +%' te %&e#t. U#"er Article 1861- %&e#c' i$
+re$.,e" to )e for % co,+e#$%tio#- .#le$$ tere i$ +roof to te
co#tr%r'. I# oter (or"$- li)er%lit' ,%' )e te +ro+er c%.$e or
co#$i"er%tio# for %# %&e#c' co#tr%ct o#l' (e# it i$ $o e;+re$$l'
%&ree" .+o#.
I# Aguna v. arena- 16 Eil 6?5 41<?27- %lto.& te %&e#t
%" re#"ere" $er!ice to te +ri#ci+%l co!eri#& collectio# of
re#t%l$ fro, te !%rio.$ te#%#t$ of te +ri#ci+%l- %#" i# $+ite of
te %&ree,e#t t%t +ri#ci+%l (o.l" +%' for te %&e#t9$ $er!ice-
#e!ertele$$- te +ri#ci+%l %llo(e" te %&e#t to occ.+' o#e of
i$ +%rcel$ of l%#" %#" to ).il" i$ o.$e tereo#. Co#$eA.e#tl'-
te Co.rt el" t%t te $er!ice re#"ere" )' te %&e#t (%$ "ee,e"
to )e &r%t.ito.$- %+%rt fro, te occ.+%tio# of $o,e of te o.$e
of te "ece%$e" )' te +l%i#tiff %#" i$ f%,il'- *for if it (ere tr.e
t%t te %&e#t %#" te "ece%$e" +ri#ci+%l %" %# .#"er$t%#"i#& to
te effect t%t te %&e#t (%$ to recei!e co,+e#$%tio# %$i"e fro,
te .$e %#" occ.+%tio# of te o.$e$ of te "ece%$e"- it c%##ot
)e e;+l%i#e" o( te %&e#t co.l" %!e re#"ere" $er!ice$ %$ e
"i" for ei&t 'e%r$ (ito.t recei!i#& %#" cl%i,i#& %#'
co,+e#$%tio# fro, te "ece%$e".* 4%t +. 6?27
)" Entit$e%ent of Agent to Co%%ission Anc&ore# on
Ren#ering of *ervice
Te co,+e#$%tio# t%t te +ri#ci+%l %&ree$ to +%' to te
%&e#t i$ +%rt of te ter,$ of te co#tr%ct of %&e#c' .+o# (ic
teir ,i#"$ ,eet. Terefore- te e;te#t %#" ,%##er )' (ic te
%&e#t (o.l" )e e#title" to recei!e co,+e#$%tio# or co,,i$$io#
i$ )%$e" o# te ter,$ of te co#tr%ct. So,eti,e$- te ter,$ %re
#ot t%t cle%r- %#" "eci$io#$ %!e %" to "e%l (it te i$$.e of
(e# %# %&e#t %$ ,erite" te ri&t to recei!e te co,+e#$%tio#
$ti+.l%te". Te "octri#e t%t ,%' )e "eri!e" fro, te !%rio.$
"eci$io#$ o# te ,%tter %re %#core" o# te #%t.re of te
co#tr%ct of %&e#c' %$ % $+ecie$ of co#tr%ct$ of $er!ice$ i#
&e#er%l= %#" t%t co#$eA.e#tl'- %# %&e#t $o.l" )e e#title" to
recei!e co,+e#$%tio# (e# it %$ )ee# e$t%)li$e" t%t it (%$
tro.& i$ effort$ or $er!ice t%t te o)Bect of te %&e#c' (%$
%cie!e".
T.$- i# Inland Realt* v. Court of Appeals- 26? SCRA 65
41<<67- te Co.rt el" t%t *Alto.& te .lti,%te ).'er (%$
i#tro".ce" )' te %&e#t to te +ri#ci+%l ".ri#& te ter, of te
%&e#c'- #e!ertele$$- te l%+$e of te +erio" of ,ore t%# o#e 417
'e%r %#" fi!e 417 ,o#t$ )et(ee# te e;+ir%tio# of +etitio#er$9
%.torit' to $ell %#" te co#$.,,%tio# of te $%le- c%##ot
%.tori>e co,+elli#& te +ri#ci+%l to +%' te $ti+.l%te" )ro:erC$
fee- $i#ce te %&e#t (%$ #ot lo#&er e#title" tereto. Te Co.rt
t%:e$ i#to $tro#& co#$i"er%tio# t%t .tter l%c: of e!i"e#ce of te
%&e#t $o(i#& %#' f.rter i#!ol!e,e#t i# te #e&oti%tio#$
)et(ee# +ri#ci+%l %#" ).'er ".ri#& t%t +erio" %#" i# te
$.)$eA.e#t +roce$$i#& of te "oc.,e#t$ +erti#e#t to $%i" $%le.*
4%t +. 6<7
I# co#tr%$t- i# ,anoto- 'ros. Inc. v. Court of Appeals- 221
SCRA 223 41<<?7- te Co.rt el" t%t %lto.& te $%le of te
o)Bect of te %&e#c' to $ell (%$ +erfecte" tree "%'$ %fter te
e;+ir%tio# of te %&e#c' +erio"- te %&e#t (%$ $till )e e#title" to
recei!e te co,,i$$io# $ti+.l%te" )%$e" o# te "octri#e el" i#
%rats v. Court of Appeals- 81 SCRA ?65 41<687- t%t (e# te
%&e#t (%$ te efficient procuring cause in bringing about the
sale t%t te %&e#t (%$ e#title" to co,+e#$%tio#. I# e$$e#ce- te
Co.rt r.le" t%t (e# tere i$ % clo$e- +ro;i,%te %#" c%.$%l
co##ectio# )et(ee# te %&e#t9$ effort$ %#" l%)or %#" te
+ri#ci+%l9$ $%le of i$ +ro+ert'- te %&e#t i$ e#title" to %
co,,i$$io#.
e. Essentia$ C&aracteristics of Agency
!" Nominate and Principal
Not o#l' i$ te co#tr%ct of %&e#c' $+ecific%ll' #%,e" %$
$.c .#"er te Ci!il Co"e- it i$ % +ri#ci+%l co#tr%ct )ec%.$e it
c%# $t%#" o# it$ o(# (ito.t #ee" of %#oter co#tr%ct to !%li"%te
it.
Te re%l !%l.e of te co#tr%ct of %&e#c' )ei#& % *#o,i#%te
%#" +ri#ci+%l* co#tr%ct i$ t%t it %$ )ee# $o $et %+%rt )' l%( %#"
+ro!i"e" (it it$ o(# $et of r.le$ %#" le&%l co#$eA.e#ce$- t%t
%#' oter %rr%#&e,e#t t%t e$$e#ti%ll' f%ll$ (iti# it$ ter,$ $%ll
)e co#$i"ere" %$ %# %&e#c' %rr%#&e,e#t %#" $%ll )e &o!er#e"
)' te L%( o# A&e#c'- #ot(it$t%#"i#& %#' i#te#tio# of te
+%rtie$ to te co#tr%r'. After %ll- % co#tr%ct i$ (%t te l%( $%'$ it
i$- %#" #ot (%t te +%rtie$ c%ll it.
I# +oles v. Angeles, 3<2 SCRA 656 425567- it (%$ el" t%t
if %# %ct "o#e )' o#e +er$o# i# )e%lf of %#oter i$ i# it$
e$$e#ti%l #%t.re o#e of %&e#c'- te for,er i$ te %&e#t of te
l%tter #ot(it$t%#"i#& e or $e i$ #ot $o c%lle"88it (ill )e %#
%&e#c' (eter te +%rtie$ .#"er$too" te e;%ct #%t.re of te
rel%tio# or #ot.
'" Consensual
Te co#tr%ct of %&e#c' i$ +erfecte" )' ,ere co#$e#t.
U#"er Article 186<- %# %&e#c' ,%' )e e;+re$$e" or i,+lie"
fro, te %ct of te +ri#ci+%l- fro, i$ $ile#ce or l%c: of %ctio#-
or f%il.re to re+."i%te te %&e#c'= %&e#c' ,%' )e or%l- .#le$$ te
l%( reA.ire$ % $+ecific for,.
/10
(" Unilateral and Primarily Onerous
Or"i#%ril'- %# %&e#c' i$ o#ero.$ i# #%t.re- (ere te
%&e#c' e;+ect$ co,+e#$%tio# for i$ $er!ice$ i# te for, of $%'
co,,i$$io#$. Fo(e!er- Article 1861 reco&#i>e$ t%t %# %&e#c'
,%' )e $.++orte" )' +.re li)er%lit'- %#" t.$ (o.l" )e
&r%t.ito.$- ).t te ).r"e# of +roof (o.l" )e to $o( t%t te
%&e#c' (%$ co#$tit.te" &r%t.ito.$l'.
@e# it i$ &r%t.ito.$- te co#tr%ct of %&e#c' i$ .#il%ter%l
co#tr%ct )ec%.$e it o#l' cre%te$ %# o)li&%tio# o# te +%rt of te
%&e#t. B.t e!e# (e# it i$ $.++orte" )' % !%l.%)le co#$i"er%tio#
4i.e.- co,+e#$%te" or o#ero.$ %&e#c'7- it (o.l" $till )e
c%r%cteri>e" %$ % .#il%ter%l co#tr%ct- )ec%.$e it i$ o#l' te
f.lfill,e#t of te +ri,%r' o)li&%tio#$ of te %&e#t to re#"er
$o,e $er!ice .+o# (ic te $.)or"i#%te o)li&%tio# of te
+ri#ci+%l to +%' te co,+e#$%tio# %&ree" .+o# %ri$e$.
@e# %# %&e#t %cce+t$ te %&e#c' +o$itio# (ito.t
co,+e#$%tio#- e %$$.,e$ te $%,e re$+o#$i)ilit' to c%rr' o.t
te %&e#c' %#" terefore i#c.r$ te $%,e li%)ilit' (e# e f%il$
to f.lfill i$ o)li&%tio#$ to te +ri#ci+%l. Fo(e!er- .#"er Article
1<5<- te circ.,$t%#ce t%t te %&e#c' (%$ for co,+e#$%tio# or
#ot $%ll )e co#$i"ere" )' te co.rt$ i# "eter,i#i#& te e;te#t of
te li%)ilit' of te %&e#t for fr%." or #e&li&e#ce.
)" Preparatory and Representative
Tere i$ #o "o.)t t%t %&e#c' i$ % $+ecie$ of te )ro%"
&ro.+i#& of (%t (e c%ll te *$er!ice co#tr%ct$*- (ic i#cl."e$
e,+lo',e#t co#tr%ct- ,%#%&e,e#t co#tr%ct %#" co#tr%ct8for8%
+iece of (or:. Tere %re %l$o $+eci%l $er!ice co#tr%ct$ (ic
i#cl."e te re#"eri#& of +rofe$$io#%l $er!ice 4e.&.- "octor$ %#"
l%('er$7- %#" co#$.lt%#c' (or:. B.t it i$ te c%r%cteri$tic of
*re+re$e#t%tio#* t%t i$ te ,o$t "i$ti#&.i$i#& c%r%cteri$tic of
%&e#c' (e# co,+%re" (it oter $er!ice co#tr%ct$- i# t%t te
,%i# +.r+o$e i$ to %llo( te %&e#t to e#ter i#to co#tr%ct$ (it
tir" +%rtie$ (ic (o.l" )i#" te +ri#ci+%l.
A co#tr%ct of %&e#c' "oe$ #ot e;i$t for it$ o(# +.r+o$e= it
i$ % +re+%r%tor' co#tr%ct e#tere" i#to for oter +.r+o$e t%t "e%l
(it te +.)lic.
I# A$on Trading Corp. v. Court of Appeals, 366 SCRA
112 425517- te Co.rt "ecree" t%t *I# % )e!' of c%$e$ %$ te
%!.#c.l%r c%$e of .ictorias ,illing Co., Inc. v. Court Appeals-
??? SCRA 66? 425557 te S.+re,e Co.rt "ecree" fro, Article
1868 t%t te )%$i$ of %&e#c' i$ re+re$e#t%tio#-* %#" t%t
co#$eA.e#tl' o#e of te $tro#&e$t fe%t.re of % tr.e co#tr%ct of
%&e#c' i$ t%t of *co#trol*88t%t te %&e#t i$ .#"er te co#trol
%#" i#$tr.ctio# of te +ri#ci+%l. T.$- i# .ictorias ,illing Co.,
Inc. v. Court of Appeals- ??? SCRA 66? 425557- it (%$ r.le" 88
It i$ cle%r fro, Article 1868 t%t te )%$i$ of %&e#c' i$
re+re$e#t%tio#.
/60
O# te +%rt of te +ri#ci+%l- tere ,.$t )e %#
%ct.%l i#te#tio# to %++oi#t or %# i#te#tio# #%t.r%ll' i#fer%)le
fro, i$ (or"$ or %ctio#$= %#" o# te +%rt of te %&e#t- tere
,.$t )e %# i#te#tio# to %cce+t te %++oi#t,e#t %#" %ct o# it- %#"
i# te %)$e#ce of $.c i#te#t- tere i$ &e#er%ll' #o %&e#c'. O#e
f%ctor (ic ,o$t cle%rl' "i$ti#&.i$e$ %&e#c' fro, oter le&%l
co#ce+t$ i$ co#trol= o#e +er$o# 8 te %&e#t 8 %&ree$ to %ct .#"er
te co#trol or "irectio# of %#oter 8 te +ri#ci+%l. I#"ee"- te
!er' (or" *%&e#c'* %$ co,e to co##ote co#trol )' te
+ri#ci+%l.
/60
Te co#trol f%ctor- ,ore t%# %#' oter- %$ c%.$e"
te co.rt$ to +.t co#tr%ct$ )et(ee# +ri#ci+%l %#" %&e#t i# %
$e+%r%te c%te&or'. . . .
; ; ;
I# te i#$t%#t c%$e- it %++e%r$ +l%i# to .$ t%t +ri!%te
re$+o#"e#t CSC (%$ % ).'er of te SLDFR for,- %#" #ot %#
%&e#t of STG. Eri!%te re$+o#"e#t CSC (%$ #ot $.)Bect to STG9$
co#trol. Te A.e$tio# of (eter % co#tr%ct i$ o#e of $%le or
%&e#c' "e+e#"$ o# te i#te#tio# of te +%rtie$ %$ &%tere" fro,
te (ole $co+e %#" effect of te l%#&.%&e e,+lo'e". T%t te
%.tori>%tio# &i!e# to CSC co#t%i#e" te +r%$e *for %#" i# o.r
4STG9$7 )e%lf* "i" #ot e$t%)li$ %# %&e#c'. Ulti,%tel'- (%t i$
"eci$i!e i$ te i#te#tio# of te +%rtie$. T%t #o %&e#c' (%$ ,e%#t
to )e e$t%)li$e" )' te CSC %#" STG i$ cle%rl' $o(# )'
CSC9$ co,,.#ic%tio# to +etitio#er t%t SLDR No. 1213G %"
)ee# *$ol" %#" e#"or$e"* to it. Te .$e of te (or"$ *$ol" %#"
e#"or$e"* ,e%#$ t%t STG %#" CSC i#te#"e" % co#tr%ct of $%le-
%#" #ot %# %&e#c'. Fe#ce- o# ti$ $core- #o error (%$ co,,itte"
)' te re$+o#"e#t %++ell%te co.rt (e# it el" t%t CSC (%$ #ot
STG9$ %&e#t %#" co.l" i#"e+e#"e#tl' $.e +etitio#er. 4%t ++. 6668
6667
I# +oles v. Angeles, 3<2 SCRA 656 425567- it (%$ el" t%t
for %# %&e#c' to %ri$e- it i$ #ot #ece$$%r' t%t te +ri#ci+%l
+er$o#%ll' e#co.#ter te tir" +er$o# (it (o, te %&e#t
i#ter%ct$H +reci$el'- te +.r+o$e of %&e#c' i$ to e;te#" te
+er$o#%lit' of te +ri#ci+%l tro.& te f%cilit' of te %&e#t.
I# Eurotech Industrial Technologies, Inc. v. Cuizon, 121
SCRA 183 425567- te Co.rt el" 88
It i$ $%i" t%t te )%$i$ of %&e#c' i$ re+re$e#t%tio#- t%t i$-
te %&e#t %ct$ for %#" o# )e%lf of te +ri#ci+%l o# ,%tter$
(iti# te $co+e of i$ %.torit' %#" $%i" %ct$ %!e te $%,e
le&%l effect %$ if te' (ere +er$o#%ll' e;ec.te" )' te +ri#ci+%l.
B' ti$ le&%l fictio#- te %ct.%l or re%l %)$e#ce of te +ri#ci+%l i$
co#!erte" i#to i$ le&%l or B.ri"ic%l +re$e#ceI /ui facit per aliu$
facit per se. 4%t +.1<?7
E%rlier- i# Rallos v. #eli) (o Chan & Sons Realt* Corp.-
81 SCRA 211 41<687- te Co.rt el" t%t *A&e#c' i$ )%$ic%ll'
+er$o#%l- re+re$e#t%ti!e- %#" "eri!%ti!e i# #%t.re. Te %.torit'
of te %&e#t to %ct e,%#%te$ fro, te +o(er$ &r%#te" to i, )'
i$ +ri#ci+%l= i$ %ct i$ te %ct of te +ri#ci+%l if "o#e (iti# te
$co+e of te %.torit'. 0ui facit per aliu$ facit per se. 9Fe (o
%ct$ tro.& %#oter %ct$ i,$elf.9* 4%t +. 21<7
)" Fiduciary and Revocable
A co#tr%ct of %&e#c' cre%te$ % le&%l rel%tio#$i+ of
re+re$e#t%tio# )' te %&e#t o# )e%lf of te +ri#ci+%l- %#"
co#$eA.e#tl'- it i$ fi".ci%r' i# #%t.re. O#e of te le&%l
co#$eA.e#ce$ of te fi".ci%r' #%t.re of te co#tr%ct of %&e#c' i$
t%t it i$ e$$e#ti%ll' re!oc%)le i# #%t.reD #eiter te +ri#ci+%l #or
te %&e#t c%# )e le&%ll' ,%"e to re,%i# i# te rel%tio#$i+ (e#
te' coo$e to %!e it ter,i#%te".
Severino v. Severino- 33 Eil. ?3? 41<2?7- el" t%t te
rel%tio#$ of %# %&e#t to i$ +ri#ci+%l %re fi".ci%r' i# c%r%cter
)ec%.$e te' %re )%$e" o# tr.$t %#" co#fi"e#ce- (ic ,.$t flo(
fro, te e$$e#ti%l #%t.re % co#tr%ct of %&e#c' t%t ,%:e$ te
%&e#t te re+re$e#t%ti!e of te +ri#ci+%l. Co#$eA.e#tl'D
4%7 A$ re&%r"$ +ro+ert' for,i#& te $.)Bect ,%tter of te
%&e#c'- te %&e#t i$ e$to++e" fro, %$$erti#& or
%cA.iri#& % title %"!er$e to t%t of te +ri#ci+%l. 4Art.
13?17=
4)7 I# % co#flict8of8i#tere$t $it.%tio#- te %&e#t c%##ot
coo$e % co.r$e t%t f%!or$ i,$elf to te "etri,e#t of
te +ri#ci+%l= e ,.$t coo$e to te )e$t %"!%#t%&e of
te +ri#ci+%l. Tho$as v. %ineda- 8< Eil. ?12 41<117=
%al$a v. Cristo1al- 66 Eil. 612 41<367= %#"
4c7 Te %&e#t c%##ot %cA.ire for i,$elf te +ro+ert' of
te +ri#ci+%l (ic %$ )ee# &i!e# to i$ ,%#%&e,e#t
for $%le or "i$+o$itio# 4Art. 13<1/207= .#le$$ tere i$ %#
e;+re$$ co#$e#t o# te +%rt of te +ri#ci+%l 4Cui v. Cui-
155 Eil. <1? 41<167= or (e# te %&e#t +.rc%$e$ %fter
te %&e#c' i$ ter,i#%te" 4.alera v. Vel%$co- 11 Eil.
6<1 41<287.
A co#tr%ct of %&e#c' i$ &e#er%ll' re!oc%)le %$ it i$ %
+er$o#%l co#tr%ct of re+re$e#t%tio# )%$e" o# tr.$t %#" co#fi"e#ce
re+o$e" )' te +ri#ci+%l o# i$ %&e#t. A$ te +o(er of te %&e#t
to %ct "e+e#"$ o# te (ill %#" lice#$e of te +ri#ci+%l e
re+re$e#t$- te +o(er of te %&e#t ce%$e$ (e# te (ill or
+er,i$$io# i$ (it"r%(# )' te +ri#ci+%l. T.$- &e#er%ll'- te
%&e#c' ,%' )e re!o:e" )' te +ri#ci+%l %t (ill. Repu1lic v.
Evangelista- 366 SCRA 133 425517.
I# Orient Air Services v. Court of Appeals- 1<6 SCRA 631
41<<17- it (%$ el" t%t te "eci$io# of te lo(er co.rt or"eri#&
te +ri#ci+%l %irli#e co,+%#' to *rei#$t%te "efe#"%#t %$ it$
&e#er%l $%le$ %&e#t for +%$$e#&er tr%#$+ort%tio# i# te
Eili++i#e$ i# %ccor"%#ce (it $%i" GSA A&ree,e#t-* i$
.#l%(f.l $i#ce co.rt$ %!e #o %.torit' to co,+el te +ri#ci+%l
to rei#$t%te % co#tr%ct of %&e#c' it %$ ter,i#%te" (it te %&e#tD
*S.c (o.l" )e !iol%ti!e of te +ri#ci+le$ %#" e$$e#ce of
%&e#c'- "efi#e" )' l%( %$ % co#tr%ct (ere)' 9% +er$o# )i#"$
i,$elf to re#"er $o,e $er!ice or to "o $o,eti#& i#
re+re$e#t%tio# or o# )e%lf of %#oter- @ITF TFE CONSENT
OR AUTFORITY OF TFE LATTER.9 I# %# %&e#t8+ri#ci+%l
rel%tio#$i+- te +er$o#%lit' of te +ri#ci+%l i$ e;te#"e" tro.&
te f%cilit' of te %&e#t. I# $o "oi#&- te %&e#t- )' le&%l fictio#-
)eco,e$ te +ri#ci+%l- %.tori>e" to +erfor, %ll %ct$ (ic te
l%tter (o.l" %!e i, "o. S.c % rel%tio#$i+ c%# o#l' )e
effecte" (it te co#$e#t of te +ri#ci+%l- (ic ,.$t #ot- i# %#'
(%'- )e co,+elle" )' l%( or )' %#' co.rt. Te A&ree,e#t it$elf
)et(ee# te +%rtie$ $t%te$ t%t eiter +%rt' ,%' ter,i#%te te
A&ree,e#t (ito.t c%.$e )' &i!i#& te oter ?5 "%'$C #otice )'
letter- tele&r%, or c%)le.9*
/80
4%t +. 6167
!" Principles Floing from !gency Characteristics
of "Preparatory and Representative"
Te follo(i#& +ri#ci+le$ flo( fro, te %++lic%tio# of te
e$$e#ti%l c%r%cteri$tic$ of %# %&e#c' )ei#& *+re+%r%tor' %#"
re+re$e#t%ti!e* co#tr%ct- t.$D
4%7 Te co#tr%ct e#tere" i#to (it tir" +er$o#$ +ert%i#$
to te +ri#ci+%l %#" #ot to te %&e#t= te %&e#t i$ %
$tr%#&er to $%i" co#tr%ct %lto.& e +'$ic%ll' (%$
te o#e (o e#tere" i#to it i# % re+re$e#t%ti!e
c%+%cit'=
te %&e#t %$ #eiter ri&t$ or o)li&%tio#$ fro,
te re$.lti#& co#tr%ct=
te %&e#t %$ #o le&%l $t%#"i#& to $.e .+o#
$%i" co#tr%ct
4)7 Te li%)ilitie$ i#c.rre" $%ll +ert%i# to te +ri#ci+%l
%#" #ot te %&e#t=
4c7 Ge#er%ll'- %ll %ct$ t%t te +ri#ci+%l c%# "o i# +er$o#-
e ,%' "o tro.& %# %&e#t- e;ce+t to$e (ic
.#"er +.)lic +olic' %re $trictl' +er$o#%l to te +er$o#
of te +ri#ci+%l.
4"7 Te %&e#t (o %ct$ %$ $.c i$ #ot +er$o#%ll' li%)le
to te +%rt' (it (o, e co#tr%ct$- .#le$$ e
e;+re$$l' )i#"$ i,$elf or e;cee"$ te li,it$ of i$
%.torit' (ito.t &i!i#& $.c +%rt' $.fficie#t #otice of
i$ +o(er$. 4Art. 18<67
4e7 Notice to te %&e#t $o.l" %l(%'$ )e co#$tr.e" %$
#otice )i#"i#& o# te +ri#ci+%l- e!e# (e# i# f%ct te
+ri#ci+%l #e!er )ec%,e %(%re tereof. Air #rance v.
Court of Appeals- 126 SCRA 338 41<8?7
4f7 J#o(le"&e of te %&e#t i$ eA.i!%le#t to :#o(le"&e
of te +ri#ci+%l.
E+CEPT , 417 (ere te %&e#t9$ i#tere$t$ %re
%"!er$e to to$e of te +ri#ci+%l=
427 (ere te %&e#t9$ ".t' i$ #ot to
"i$clo$e te i#for,%tio#- %$ (ere e
i$ i#for,e" )' (%' of co#fi"e#ti%l
i#for,%tio#= %#"
4?7 (ere te +er$o# cl%i,i#& te )e#efit
of te r.le coll."e$ (it te %&e#t to
"efr%." te +ri#ci+%l 4De Leo# K De
Leo#- %t +. ?66-citing TELLER- %t +.1157
T.$- i# Eurotech Industrial Technologies, Inc. v. Cuizon,
121 SCRA 183 425567- te Co.rt el" 88
Article 18<6 rei#force$ te f%,ili%r "octri#e t%t %# %&e#t-
(o %ct$ %$ $.c- i$ #ot +er$o#%ll' li%)le to te +%rt' (it (o,
e co#tr%ct$. Te $%,e +ro!i$io#- o(e!er- +re$e#t$ t(o
i#$t%#ce$ (e# %# %&e#t )eco,e$ +er$o#%ll' li%)le to % tir"
+er$o#. Te fir$t i$ (e# e e;+re$$l' )i#"$ i,$elf to te
o)li&%tio# %#" te $eco#" i$ (e# e e;cee"$ i$ %.torit'. I#
te l%$t i#$t%#ce- te %&e#t c%# )e el" li%)le if e "oe$ #ot &i!e
te tir" +%rt' $.fficie#t #otice of i$ +o(er$. 4%t +. 1<?7
I# %hilpotts v. %hil. ,fg. Co.- 35 Eil 361 41<1<7- te Co.rt
el" t%t te ri&t of i#$+ectio# &i!e# to % $toc:ol"er .#"er te
l%( c%# )e e;erci$e" eiter )' i,$elf or )' %#' +ro+er
re+re$e#t%ti!e or %ttor#e' i# f%ct- %#" eiter (it or (ito.t te
%tte#"%#ce of te $toc:ol"er. Ti$ i$ i# co#for,it' (it te
&e#er%l r.le t%t (%t % ,%# ,%' "o i# +er$o# e ,%' "o
tro.& %#oter.
g. Distinguis&e# fro% Ot&er *i%i$ar Contracts
!" From #mployment Contract
U#li:e %&e#c' rel%tio#$i+ (ic i$ e$$e#ti%ll' co#tr%ct.%l
i# #%t.re"- .#"er Article 1655 of te Ci!il Co"e- */t0e
rel%tio#$i+ )et(ee# c%+it%l %#" l%)or %re #ot ,erel'
co#tr%ct.%l. Te' %re $o i,+re$$e" (it +.)lic i#tere$t t%t l%)or
co#tr%ct$ ,.$t 'iel" to te co,,o# &oo". Terefore- $.c
co#tr%ct$ %re $.)Bect to te $+eci%l l%($ o# l%)or .#io#$-
collecti!e )%r&%i#i#&- $tri:e$ %#" loc:o.t$- clo$e" $o+- (%&e$-
(or:i#& co#"itio#$- o.r$ of l%)or %#" $i,il%r $.)Bect$.* Gore
$+ecific%ll'- te +.r+o$e of %# e,+lo'er8e,+lo'ee rel%tio#$i+ i$
for te e,+lo'ee to re#"er $er!ice for te "irect )e#efit of te
e,+lo'er or of te ).$i#e$$ of te e,+lo'er= (ile %&e#c'
rel%tio#$i+ i$ e#tere" i#to to e#ter i#to B.ri"ic%l rel%tio#$i+ o#
)e%lf of te +ri#ci+%l (it tir" +%rtie$.
I# +ela Cruz v. &orthern Theatrical Enterprises- <1 Eil
6?< 41<137- te Co.rt el" t%t te rel%tio#$i+ )et(ee# te
cor+or%tio# (ic o(#$ %#" o+er%te$ % te%tre- %#" te
i#"i!i".%l it ire$ %$ % $ec.rit' &.%r" to ,%i#t%i# te +e%ce %#"
or"er %t te e#tr%#ce of te te%tre i$ #ot t%t of +ri#ci+%l %#"
%&e#t- )ec%.$e te +ri#ci+le of re+re$e#t%tio# (%$ i# #o (%'
i#!ol!e". Te $ec.rit' &.%r" (%$ #ot e,+lo'e" to re+re$e#t te
"efe#"%#t cor+or%tio# i# it$ "e%li#&$ (it tir" +%rtie$= e (%$ %
,ere e,+lo'ee ire" to +erfor, % cert%i# $+ecific ".t' or t%$:-
t%t of %cti#& %$ $+eci%l &.%r" %#" $t%'i#& %t te ,%i# e#tr%#ce
of te ,o!ie o.$e to $to+ &%te cr%$er$ %#" to ,%i#t%i# +e%ce
%#" or"er (iti# te +re,i$e$.
'" From Contract for a Piece$of$%or&
U#"er Article 161? of te Ci!il Co"e- */)0' te co#tr%ct for
% +iece of (or: te co#tr%ctor )i#"$ i,$elf to e;ec.te % +iece
of (or: for te e,+lo'er- i# co#$i"er%tio# of % cert%i# +rice or
co,+e#$%tio#. Te co#tr%ctor ,%' eiter e,+lo' o#l' i$ l%)or
or $:ill- or %l$o f.r#i$ te ,%teri%l.* U#"er % co#tr%ct for %
+iece of (or:- te co#tr%ctor i$ #ot %# %&e#t of te *+ri#ci+%l*-
%#" te co#tr%ctor %$ #o %.torit' to re+re$e#t te +ri#ci+%l i#
e#teri#& i#to B.ri"ic%l %ct$ (it tir" +%rtie$.
@ere te co#tr%ct e#tere" i#to i$ o#e (ere te i#"i!i".%l
.#"ertoo: %#" %&ree" to ).il" for te oter +%rt' % co$tl' e"ifice-
te .#"erl'i#& co#tr%ct i$ o#e for % co#tr%ct for % +iece of (or:-
%#" #ot % +ri#ci+%l %#" %&e#c' rel%tio#. Co#$eA.e#tl'- te
co#tr%ct i$ %.tori>e" to "o te (or: %ccor"i#& to i$ o(#
,eto" %#" (ito.t )ei#& $.)Bect to te clie#tC$ co#trol- e;ce+t
%$ to te re$.lt of te (or:= e co.l" +.rc%$e i$ ,%teri%l$ %#"
$.++lie$ fro, (o, e +le%$e" %#" %t $.c +rice$ %$ e "e$ire"
to +%'. A#" te ,ere f%ct t%t it (%$ $ti+.l%te" i# te co#tr%ct
t%t te clie#t co.l" t%:e +o$$e$$io# of te (or: $ite .+o# te
%++e#i#& of $+ecifie" co#ti#&e#cie$ "i" #ot ,%:e te rel%tio#
i#to t%t of %# %&e#c'. Co#$eA.e#tl'- (e# te clie#t "i" t%:e
o!er te .#fi#i$e" (or:$- e "i" #ot %$$.,e %#' "irect li%)ilit'
to te $.++lier$ of te co#tr%ctor. #ressel v. ,ariano 2* Chaco
Sons & Co., ?3 Eil. 122 41<117.
(" From a Management !greement
I# )ot %&e#c' %#" le%$e of $er!ice$- o#e of te +%rtie$
)i#"$ i,$elf to re#"er $o,e $er!ice to te oter +%rt'. A&e#c'-
o(e!er- i$ "i$ti#&.i$e" fro, le%$e of (or: or $er!ice$ i# t%t
te )%$i$ of %&e#c' i$ re+re$e#t%tio#- (ile i# te le%$e of (or:
or $er!ice$ te )%$i$ i$ e,+lo',e#t. Te le$$or of $er!ice$ "oe$
#ot re+re$e#t i$ e,+lo'er- (ile te %&e#t re+re$e#t$ i$
+ri#ci+%l. ; ; ; . Tere i$ %#oter o)!io.$ "i$ti#ctio# )et(ee#
%&e#c' %#" le%$e of $er!ice$. A&e#c' i$ % +re+%r%tor' co#tr%ct-
%$ %&e#c' *"oe$ #ot $to+ (it te %&e#c' )ec%.$e te +.r+o$e i$
to e#ter i#to oter co#tr%ct$.* Te ,o$t c%r%cteri$tic fe%t.re of
%# %&e#c' rel%tio#$i+ i$ te %&e#tC$ +o(er to )ri#& %)o.t
).$i#e$$ rel%tio#$ )et(ee# i$ +ri#ci+%l %#" tir" +er$o#$. *Te
%&e#t i$ "e$ti#e to e;ec.te B.ri"ic%l %ct$ 4cre%tio#- ,o"ific%tio#
or e;ti#ctio# of rel%tio#$ (it tir" +%rtie$7. Le%$e of $er!ice$
co#te,+l%te o#l' ,%teri%l 4#o#8B.ri"ic%l7 %ct$.
/<0
* &ielson & Co.,
Inc. v. epanto Consolidated ,ining Co., 26 SCRA 135- 1368
136 41<687.
@ere te +ri#ci+%l %#" +%r%,o.#t .#"ert%:i#& of te
*,%#%&er* .#"er % G%#%&e,e#t Co#tr%ct (%$ te o+er%tio# %#"
"e!elo+,e#t of te ,i#e %#" te o+er%tio# of te ,ill- %#" %ll
oter .#"ert%:i#&$ ,e#tio#e" i# te co#tr%ct %re #ece$$%r' or
i#ci"e#t%l to te +ri#ci+%l .#"ert%:i#&88te$e oter .#"ert%:i#&$
)ei#& "e+e#"e#t .+o# te (or: o# te "e!elo+,e#t of te ,i#e
%#" te o+er%tio# of te ,ill. I# te +erfor,%#ce of ti$ +ri#ci+%l
.#"ert%:i#& te ,%#%&er (%$ #ot i# %#' (%' e;ec.ti#& B.ri"ic%l
%ct$ for te +ri#ci+%l- "e$ti#e" to cre%te- ,o"if' or e;ti#&.i$
).$i#e$$ rel%tio#$ )et(ee# te +ri#ci+%l %#" tir" +er$o#. I#
oter (or"$- i# +erfor,i#& it$ +ri#ci+%l .#"ert%:i#& te ,%#%&er
(%$ #ot %cti#& %$ %# %&e#t of te +ri#ci+%l- i# te $e#$e t%t te
ter, %&e#t i$ i#ter+rete" .#"er te l%( of %&e#c'- ).t %$ o#e (o
(%$ +erfor,i#& ,%teri%l %ct$ for %# e,+lo'er- for %
co,+e#$%tio#. Co#$eA.e#tl'- te ,%#%&e,e#t co#tr%ct #ot )ei#&
%# %&e#c' c%##ot )e re!o:e" %t (ill %#" (%$ )i#"i#& to it$ f.ll
co#tr%cte" +erio". &ielson & Co., Inc. v. epanto Consolidated
,ining Co., 26 SCRA 135- 1368136 41<687.
T%:i#& i#to co#$i"er%tio# te f%ct$ t%t te o+er%tor o(e"
i$ +o$itio# to te co,+%#' %#" te l%tter co.l" re,o!e i, or
ter,i#%te i$ $er!ice$ %t (ill= t%t te $er!ice $t%tio# )elo#&e" to
te co,+%#' %#" )ore it$ tr%"e#%,e %#" te o+er%tor $ol" o#l'
te +ro".ct$ of te co,+%#'= t%t te eA.i+,e#t .$e" )' te
o+er%tor )elo#&e" to te co,+%#' %#" (ere B.$t lo%#e" to te
o+er%tor %#" te co,+%#' too: c%r&e of teir re+%ir %#"
,%i#te#%#ce= t%t %# e,+lo'ee of te co,+%#' $.+er!i$e" te
o+er%tor %#" co#".cte" +erio"ic i#$+ectio# of te co,+%#'9$
&%$oli#e %#" $er!ice $t%tio#= t%t te +rice of te +ro".ct$ $ol"
)' te o+er%tor (%$ fi;e" )' te co,+%#' %#" #ot )' te
o+er%tor= %#" t%t e (%$ % ,ere %&e#t- te fi#"i#& of te Co.rt
of A++e%l$ t%t te o+er%tor (%$ %# %&e#t of te co,+%#' %#"
#ot %# i#"e+e#"e#t co#tr%ctor $o.l" #ot )e "i$t.r)e". Shell Co.
v. #ire$en3s Insurance of &e4ar-- 155 Eil. 616 41<167.
)" !gency to Sell or to Purchase from Contract of
Sale
U#"er Article 1366 of te Ci!il Co"e- */i0# co#$tr.i#& %
co#tr%ct co#t%i#i#& +ro!i$io#$ c%r%cteri$tic of )ot te co#tr%ct
of $%le %#" of te co#tr%ct of %&e#c' to $ell- te e$$e#ti%l cl%.$e$
of te (ole i#$tr.,e#t $%ll )e co#$i"ere".* J.ri$+r."e#ce %$
i#"ic%te" (%t te *e$$e#ti%l cl%.$e$* t%t $o.l" i#"ic%te
(eter it i$ o#e of $%le or %&e#c' to $ellL+.rc%$e- refer$ to
$ti+.l%tio#$ i# te co#tr%ct (ic +l%ce$ o)li&%tio# $o# te +%rt
of te +.r+orte" *%&e#t* %!i#& to "o (it (%t $o.l" )e %
$ellerC$ o)li&%tio# to tr%#$fer o(#er$i+ %#" "eli!er +o$$e$$io#
of te $.)Bect ,%tter- or te ).'erC$ o)li&%tio# o# te +%',e#t of
te +rice.
I# 0uiroga v. %arsons- ?8 Eil. 151 41<187- %lto.& te
+%rtie$ "e$i&#%te" te %rr%#&e,e#t %$ %# %&e#c' %&ree,e#t- te
Co.rt fo.#" te %rr%#&e,e#t to )e o#e of $%le $i#ce te e$$e#ti%l
cl%.$e +ro!i"e" t%t */+0%',e#t (%$ to )e ,%"e %t te e#" of
$i;t' "%'$- or )efore- %t te /+ri#ci+%l9$0 reA.e$t- or i# c%$- if te
/%&e#t0 $o +referre"- %#" i# te$e l%$t t(o c%$e$ %# %""itio#%l
"i$co.#t (%$ to )e %llo(e" for +ro,+t +%',e#t.* Te$e
co#"itio#$ to te Co.rt (ere *+reci$el' te e$$e#ti%l fe%t.re$ of %
co#tr%ct of +.rc%$e %#" $%le* )ec%.$e tere (%$ te o)li&%tio#
o# te +%rt of te +.r+orte" +ri#ci+%l to $.++l' te )e"$- %#"- o#
te +%rt of te +.r+orte" %&e#t- to +%' teir +rice- t.$D
Te$e fe%t.re$ e;cl."e te le&%l co#ce+tio# of %# %&e#c'
or or"er to $ell (ere)' te ,%#"%tor' or %&e#t recei!e" te
ti#& to $ell it- %#" "oe$ #ot +%' it$ +rice- ).t "eli!er$ to te
+ri#ci+%l te +rice e o)t%i#$ fro, te $%le of te ti#& to % tir"
+er$o#- %#" if e "oe$ #ot $.ccee" i# $elli#& it- e ret.r#$ it. B'
!irt.e of te co#tr%ct )et(ee# te +l%i#tiff %#" te "efe#"%#t- te
l%tter- o# recei!i#& te )e"$- (%$ #ece$$%ril' o)li&e" to +%' teir
+rice (iti# te ter, fi;e"- (ito.t %#' oter co#$i"er%tio# %#"
re&%r"le$$ %$ to (eter e %" or %" #ot $ol" te )e"$. 4%t +.
1517
A$ % co#$eA.e#ce- te *re!oc%tio#* $o.&t to )e ,%"e )'
te +ri#ci+%l o# te +.r+orte" %&e#c' %rr%#&e,e#t (%$ "e#ie"
)' te Co.rt- te rel%tio#$i+ )ei#& o#e of $%le- %#" te +o(er to
re$ci#" i$ %!%il%)le o#l' (e# te +.r+orte" +ri#ci+%l i$ %)le to
$o( $.)$t%#ti%l )re%c o# te +%rt of te +.r+orte" %&e#t.
@e# te ter,$ of te %&ree,e#t co,+el$ te +.r+orte"
%&e#t to +%' for te +ro".ct$ recei!e" fro, te +.r+orte"
+ri#ci+%l (iti# te $ti+.l%te" +erio"- e!e# (e# tere %$ )ee#
#o $%le tereof to te +.)lic- te .#"erl'i#& rel%tio#$i+ i$ #ot
o#e of co#tr%ct of %&e#c' to $ell- ).t o#e of %ct.%l $%le. A re%l
%&e#t "oe$ #ot %$$.,e +er$o#%l re$+o#$i)ilit' for te +%',e#t of
te +rice of te o)Bect of te %&e#c'= i$ o)li&%tio# i$ ,erel' to
t.r#8o!er to te +ri#ci+%l te +rocee"$ of te $%le o#ce e
recei!e$ te, fro, te ).'er. Co#$eA.e#tl'- $i#ce te
.#"erl'i#& %&ree,e#t i$ #ot %# %&e#c' %&ree,e#t- it c%##ot )e
re!o:e" e;ce+t for c%.$e. 0uiroga v. %arsons- ?8 Eil 152
41<187.
I# (onzalo %u*at & Sons, Inc. v. Arco A$use$ent
Co$pan*- 62 Eil. 352 41<317- (ic co!ere" % +.r+orte"
%&e#c' co#tr%ct to +.rc%$e- te Co.rt loo:e" i#to te +ro!i$io#$
of teir co#tr%ct- %#" fo.#" t%t te letter$ )et(ee# te +%rtie$
cle%rl' $ti+.l%te" for fi;e" +rice$ o# te eA.i+,e#t or"ere"-
(ic *%",itte" #o oter i#ter+ret%tio# t%# t%t te /+ri#ci+%l0
%&ree" to +.rc%$e fro, te /%&e#t0 te eA.i+,e#t i# A.e$tio# %t
te +rice$ i#"ic%te" (ic %re fi;e" %#" "eter,i#%te.* 4%t +.
3567. Te Co.rt el" t%t *(%te!er .#fore$ee# e!e#t$ ,i&t
%!e t%:e# +l%ce .#f%!or%)le to te /%&e#t0- $.c %$ c%#&e i#
+rice$- ,i$t%:e i# teir A.ot%tio#- lo$$ of te &oo"$ #ot co!ere"
)' i#$.r%#ce or f%il.re of te St%rr Ei%#o Co,+%#' to +ro+erl'
fill te or"er$ %$ +er $+ecific%tio#$- te /+ri#ci+%l0 ,i&t $till
le&%ll' ol" te /%&e#t0 to te +rice$ fi;e".* 4%t +. 3567.
Co#$eA.e#tl'- te "e,%#" )' te +.r+orte" +ri#ci+%l of %ll
"i$co.#t$ %#" )e#efit$ o)t%i#e" )' te +.r+orte" %&e#t fro, te
A,eric%# $.++lier$ .#"er te teor' t%t %ll )e#efit$ recei!e" )'
te %&e#t .#"er te tr%#$%ctio#$ (ere to )e %cco.#te" for te
)e#efit of te +ri#ci+%l (%$ "e#ie" )' te co.rt- te .#"erl'i#&
rel%tio#$i+ )ei#& e$$e#ti%ll' % co#tr%ct of +.rc%$e.
@e# .#"er te ter,$ of te %&ree,e#t- te +.r+orte"
%&e#t )eco,e$ re$+o#$i)le for %#' c%#&e$ i# te %cA.i$itio#
co$t of te o)Bect e %$ )ee# %.tori>e" to +.rc%$e fro, %
$.++lier i# te U#ite" St%te$- te .#"erl'i#& %&ree,e#t i$ #ot %#
co#tr%ct of %&e#c' to ).'- $i#ce %# %&e#t "oe$ #ot )e%r %#' ri$:
rel%ti#& to te $.)Bect ,%tter or te +rice. Bei#& tr.l' % co#tr%ct
of $%le- %#' +rofit$ re%li>e" )' te +.r+orte" %&e#t fro,
"i$co.#t$ recei!e" fro, te A,eric%# $.++lier- +ert%i# to it (it
#o o)li&%tio# to %cco.#t for it- ,.c le$$ to t.r# it o!er- to te
+.r+orte" +ri#ci+%l. (onzalo %u*at v. Arco- 62 Eil. 352 41<317.
Reiterated in #ar Eastern E)port & I$port Co., v. i$ Tech
Suan- <6 Eil. 161 41<117.
I# 5er & Co., td. v. ingad- ?8 SCRA 123 41<617-
co!eri#& % co#tr%ct of "i$tri).tor$i+- it (%$ $+ecific%ll'
$ti+.l%te" i# te co#tr%ct t%t *%ll &oo"$ o# co#$i&#,e#t $%ll
re,%i# te +ro+ert' of te Co,+%#' .#til $ol" )' te Di$tri).tor
to te +.rc%$er or +.rc%$er$- ).t %ll $%le$ ,%"e )' te
Di$tri).tor $%ll )e i# i$ #%,e=* %#" t%t te Co,+%#' *%t it$
o(# e;+e#$e- (%$ to :ee+ te co#$i&#e" $toc: f.ll' i#$.re"
%&%i#$t lo$$ or "%,%&e )' fire or %$ % re$.lt of fire- te +olic' of
$.c i#$.r%#ce to )e +%'%)le to it i# te e!e#t of lo$$.* It (%$
f.rter $ti+.l%te" t%t te co#tr%ct *"oe$ #ot co#$tit.te te
Di$tri).tor te %&e#t or le&%l re+re$e#t%ti!e of te Co,+%#' for
%#' +.r+o$e (%t$oe!er. Di$tri).tor i$ #ot &r%#te" %#' ri&t or
%.torit' to %$$.,e or to cre%te %#' o)li&%tio# or re$+o#$i)ilit'-
e;+re$$ or i,+lie" i# )e%lf of or i# te #%,e of te Co,+%#'-
or to )i#" te Co,+%#' i# %#' ,%##er or ti#& (%t$oe!er.* I#
$+ite of $.c $ti+.l%tio#$- te Co.rt "i" fi#" te rel%tio#$i+ to
)e o#e of %&e#c'- )ec%.$e it "i" #ot tr%#$fe3r o(#er$i+ of te
,erc%#"i$e to te +.r+orte" "i$tri).tor- e!e# to.& it (%$
$.++o$e" to e#ter i#to $%le$ %&ree,e#t$ i# te Eili++i#e$ i# it$
o(# #%,e- t.$D
Te tr%#$fer of title or %&ree,e#t to tr%#$fer it for % +rice
+%i" or +ro,i$e" i$ te e$$e#ce of $%le. If $.c tr%#$fer +.t$ te
tr%#$feree i# te %ttit."e or +o$itio# of %# o(#er %#" ,%:e$ i,
li%)le to te tr%#$feror %$ % "e)tor for te %&ree" +rice- %#" #ot
,erel' %$ %# %&e#t (o ,.$t %cco.#t for te +rocee"$ of %
re$%le- te tr%#$%ctio# i$ % $%le= (ile te e$$e#ce of %# %&e#c' to
$ell i$ te "eli!er' to %# %&e#t- #ot %$ i$ +ro+ert'- ).t %$ te
+ro+ert' of te +ri#ci+%l- (o re,%i#$ te o(#er %#" %$ te
ri&t to co#trol te $%le- fi; te +rice- %#" ter,$- "e,%#" %#"
recei!e te +rocee"$ le$$ te %&e#t9$ co,,i$$io# .+o# $%le$
,%"e. 4%t +. 1?57
I# .ictoria ,illing Co., Inc. v. Court of Appeals- ???
SCRA 66? 425557- te Co.rt el" t%t %# %.tori>%tio# &i!e# to
te ).'er of &oo"$ to o)t%i# te, fro, te )%ilee *for %#" i#
)e%lf* of te )%ilor8$eller "oe$ #ot #ece$$%ril' e$t%)li$ %#
%&e#c'- $i#ce te i#te#tio# of te +%rtie$ (%$ for te ).'er to
t%:e +o$$e$$io# %#" o(#er$i+ o!er te &oo"$ (it te "eci$i!e
l%#&.%&e i# te %.tori>%tio# )ei#& *$ol" %#" e#"or$e".*
A$ % &e#er%l r.le- %# %&e#c' to $ell o# co,,i$$io# )%$i$
"oe$ #ot )elo#& to %#' of te co#tr%ct$ co!ere" )' Article$ 1?16
%#" 1?18 reA.iri#& te, to )e i# % +%rtic.l%r for,- %#" #ot o#e
e#.,er%te" .#"er te St%t.te$ of Fr%."$ i# Article 135?. Fe#ce-
.#li:e % $%le co#tr%ct (ic ,.$t co,+l' (it te St%t.te of
Fr%."$ for e#force%)ilit'- % co#tr%ct of %&e#c' to $ell i$ !%li" %#"
e#force%)le i# (%te!er for, it ,%' )e e#tere" i#to. i$ v.
Court of Appeals- 213 SCRA 165 41<<67.
Re$ate# Cases,
Chua &go v. 2niversal Trading Co., Inc.- 86 Eil. ??1 41<157.
#ar Eastern E)port & I$port Co. v. i$ Tech Suan- <6 Eil. 161
41<117.
%earl Island Co$$ercial Corp. v. i$ Tan Tong- 151 Eil. 68<
41<167.
&ational Rice and Corn Corp. v. Court of Appeals- <1 SCRA
3?6 41<6<7.
-" From 'ro&er
A )ro:er i$ )e$t "efi#e" i# Sch$id and O1erl*, Inc. v. R"
,artinez- 166 SCRA 3<? 41<887- (ere te Co.rt el" t%t %
)ro:er i$ *o#e (o i$ e#&%&e"- for oter$- o# % co,,i$$io#-
#e&oti%ti#& co#tr%ct$ rel%ti!e to +ro+ert' (it te c.$to"' of
(ic e %$ #o co#cer#= te #e&oti%tor )et(ee# oter +%rtie$-
#e!er %cti#& i# i$ o(# #%,e ).t i# te #%,e of to$e (o
e,+lo'e" i,. . . . % )ro:er i$ o#e (o$e occ.+%tio# i$ to )ri#&
te +%rtie$ to&eter- i# ,%tter$ of tr%"e- co,,erce or
#%!i&%tio#.* 4%t +. 1517
Strictl' $+e%:i#&- % )ro:er i$ o#e (o i$ e#&%&e" for oter$
o# % co,,i$$io# to #e&oti%te )et(ee# oter +%rtie$- #e!er %cti#&
i# i$ o(# #%,e ).t i# te #%,e of to$e (o e,+lo'e" i,.
Re*es v. Rural 'an- of San ,iguel- 323 SCRA 1?1 425537. Fe
%$ #o rel%tio# (it te ti#& e %$ )ee# ret%i#e" to ).' or to
$ell= e i$ ,erel' %# i#ter,e"i%r' )et(ee# te +.rc%$er %#" te
!e#"or. Fe %cA.ire$ #eiter te c.$to"' #or te +o$$e$$io# of te
ti#& e $ell$. Fi$ o#l' office i$ to )ri#& to&eter te +%rtie$ to
te tr%#$%ctio#. %acific Co$$ercial Co. v. 6atco- 6? Eil. ?<8
41<?67.
A )ro:er ,%' %t te $%,e ti,e )e %# %&e#t. @e# e %ct$
i# i$ )e%lf i# "e%li#& (it te +.)lic- e!e# (e# e %#"le$
ti#&$ +ert%i#i#& to te +ri#ci+%l- e i$ % ,ere )ro:er. O# te
oter %#"- if e i$ ".l' %.tori>e" to %ct i# te #%,e of te
+ri#ci+%l- tere i$ #o "o.)t t%t te )ro:er i$ %l$o %# %&e#t. T.$-
i# A1acus Securities Corp. v. A$pil, 38? SCRA ?11 425567- it
(%$ el" t%t $i#ce i# t%t c%$e te )ro:er%&e rel%tio#$i+ (%$
#ece$$%r' % co#tr%ct for te e,+lo',e#t of %# %&e#t- +ri#ci+le$
of co#tr%ct l%( %l$o &o!er# te )ro:er8+ri#ci+%l rel%tio#$i+.
I# te $%,e ,%##er- i# +o$ingo v. +o$ingo- 32 SCRA
1?1 41<617- te Co.rt el" t%t te ".tie$ %#" li%)ilitie$ of %
)ro:er to i$ e,+lo'er %re e$$e#ti%ll' to$e (ic %# %&e#t o(e$
to i$ +ri#ci+%l. I# $.c % $it.%tio#- te "eci$i!e le&%l +ro!i$io#$
/to "eter,i#e (eter % )ro:er %$ !iol%te" i$ ".t' or
o)li&%tio#0 %re fo.#" i# Article$ 18<1 %#" 1<5< of te Ne( Ci!il
Co"e- (ere)' e!er' %&e#t i$ )o.#" to re#"er %# %cco.#t of i$
tr%#$%ctio#$ %#" to "eli!er to te +ri#ci+%l (%te!er e ,%' %!e
recei!e" )' !irt.e of te %&e#c'- e!e# to.& it ,%' #ot )e
o(#i#& to te +ri#ci+%l= %#" t%t %# %&e#t i$ re$+o#$i)le #ot o#l'
for fr%."- ).t %l$o for #e&li&e#ce
./15
0 O# te oter %#"- te
Co.rt %l$o el" i# +o$ingo t%t */t0e ".t' e,)o"ie" i# Article
18<1 of te Ne( Ci!il Co"e (ill #ot %++l' if te %&e#t or )ro:er
%cte" o#l' %$ % ,i""le,%# (it te t%$: of ,erel' )ri#&i#&
to&eter te !e#"or %#" !e#"ee- (o te,$el!e$ tere%fter (ill
#e&oti%te o# te ter,$ %#" co#"itio#$ of te tr%#$%ctio#.* 4%t +.
1357
'ro&er (as No !uthority )o #nter into Contract in the
Name of the Principal* 7 I# iton!ua, "r. v. Eternit Corp., 3<5
SCRA 253 425567- it (%$ el" t%t % re%l e$t%te )ro:er i$ o#e
(o #e&oti%te$ te $%le of re%l +ro+ertie$. Fi$ ).$i#e$$-
&e#er%ll' $+e%:i#&- i$ o#l' to fi#" % +.rc%$er (o i$ (illi#& to
).' te l%#" .+o# ter,$ fi;e" )' te o(#er. Fe %$ #o %.torit'
to )i#" te +ri#ci+%l )' $i&#i#& % co#tr%ct of $%le. I#"ee"- %#
%.torit' to fi#" % +.rc%$er of re%l +ro+ert' "oe$ #ot i#cl."e %#
%.torit' to $ell.
+ncapacity to Purchase Property of the Principal* 7 I#
Araneta, Inc. v. +el %aterno- <1 Eil. 686 41<127- it (%$ el"
t%t te )%# of +%r%&r%+ 2 of /Article 13<10 (e# re#"er$ %#
%&e#t le&%ll' i#c%+%)le of ).'i#& te +ro+ertie$ of i$ +ri#ci+%l
co##ote$ te i"e% of tr.$t %#" *co#fi"e#ce= %#" $o (ere te
rel%tio#$i+ "oe$ #ot i#!ol!e co#$i"er%tio#$ of &oo" f%it %#"
i#te&rit' te +roi)itio# $o.l" #ot %#" "oe$ #ot %++l'. To co,e
.#"er te +roi)itio#- te %&e#t ,.$t )e i# % fi".ci%r' rel%tio#
(it i$ +ri#ci+%l.* Te Co.rt el" t%t % )ro:er "oe$ #ot co,e
(iti# te ,e%#i#& of Article 13<2- )ec%.$e e i$ #oti#& ,ore
t%# % &o8)et(ee# or ,i""le,%# )et(ee# te "efe#"%#t %#" te
+.rc%$er- )ri#&i#& te, to&eter to ,%:e te co#tr%ct
te,$el!e$. Tere i$ #o co#fi"e#ce to )e )etr%'e"- $i#ce % )ro:er
i$ #ot %.tori>e" to ,%:e % )i#"i#& co#tr%ct for te +.r+orte"
+ri#ci+%l= e i$ #ot $ell te +ro+ert'- ).t o#l' to loo: for % ).'er
%#" te o(#er i$ to ,%:e te $%le= e (%$ #ot to fi; te +rice of
te $%le )ec%.$e te +rice %" to )e %lre%"' fi;e" i# i$
co,,i$$io#= e i$ #ot to ,%:e te ter,$ of +%',e#t )ec%.$e
te$e- too- (o.l" )e cle%rl' $+ecifie" i# i$ co,,i$$io#. I# fi#e-
% )ro:er i$ left #o +o(er or "i$cretio# (%t$oe!er- (ic e
co.l" %).$e to i$ %"!%#t%&e %#" to te o(#erC$ +reB."ice.
#ntitlement to Commission Stipulated. 8 I# A.ite % #.,)er
of it$ "eci$io#- te "eter,i#%tio# of (eter o#e i$ %# %&e#t or %
)ro:er %$ )ee# te "eter,i#i#& f%ctor of (eter e (o.l" )e
e#title" to te co,,i$$io# $ti+.l%te" i# te co#tr%ct.
T.$- i# Tan v. (ullas- ?<? SCRA ??3 425527- it (%$ el"
t%t % 1ro-er i$ o#e (o i$ e#&%&e"- for oter$- o# % co,,i$$io#-
#e&oti%ti#& co#tr%ct$ rel%ti!e to +ro+ert' (it te c.$to"' of
(ic e %$ #o co#cer#= te #e&oti%tor )et(ee# te oter
+%rtie$- #e!er %cti#& i# i$ o(# #%,e ).t i# te #%,e of to$e
(o e,+lo'e" i,. Fi$ occ.+%tio# i$ to 1ring the parties
together- i# ,%tter of tr%"e- co,,erce or #%!i&%tio#. A# agent
recei!e$ % co,,i$$io# .+o# te $.cce$$f.l co#cl.$io# of % $%le.
O# te oter %#"- % 1ro-er e%r#$ i$ +%' $erel* 1* 1ringing the
1u*er and the seller together- e!e# if #o $%le i$ e!e#t.%ll' ,%"e.
I# %hil. Health7care %roviders 8,a)icare9 v. Estrada, 132
SCRA 616 425587- te Co.rt el" t%t te ter, *+roc.ri#&
c%.$e* i# "e$cri)i#& % )ro:erC$ %cti!it'- refer$ to % c%.$e
originating % $erie$ of e!e#t$ (ic- (ito.t )re%: i# teir
co#ti#.it'- re$.lt i# te %cco,+li$,e#t of te +ri,e o)Becti!e
of te e,+lo',e#t of te )ro:er88+ro".ci#& % +.rc%$er re%"'-
(illi#& %#" %)le to ).' o# te o(#erC$ ter,$. To )e re&%r"e" %$
te *+roc.ri#& c%.$e* of % $%le %$ to )e e#title" to % co,,i$$io#-
% )ro:erC$ effort$ ,.$t %!e )ee# te fo.#"%tio# o# (ic te
#e&oti%tio#$ re$.lti#& i# % $%le )e&%#.
Fro, "eci$io#$ of te S.+re,e Co.rt- it $ee,$ t%t te
%rr%#&e,e#t o# e#title,e#t to co,,i$$io# "eter,i#e$ (eter
te rel%tio#$i+ i$ o#e of )ro:er or %&e#c'. T.$- i# Hahn v.
Court of Appeals- 266 SCRA 1?6 41<<67- te Co.rt el" t%t
*Co#tr%r' to te %++ell%te co.rt9$ co#cl.$io#- ti$ %rr%#&e,e#t
$o($ %# %&e#c'. A# %&e#t recei!e$ % co,,i$$io# .+o# te
$.cce$$f.l co#cl.$io# of % $%le. O# te oter %#"- % )ro:er
e%r#$ i$ +%' ,erel' )' )ri#&i#& te ).'er %#" te $eller
to&eter- e!e# if #o $%le i$ e!e#t.%ll' ,%"e.* 4%t +. 13<7
B.t tr.l'- $i#ce )ot % )ro:er%&e %rr%#&e,e#t %#" %#
%&e#c' %&ree,e#t %re i#ere#tl' co#tr%ct.%l rel%tio#$- te
e#title,e#t of % )ro:er or %&e#t to te co,+e#$%tio# or
co,,i$$io# $ti+.l%te" (o.l" %!e to "e+e#" .+o# te
co#tr%ct.%l cl%.$e co!eri#& te $%,e. I# oter (or"$- it ,%' (ell
)e $ti+.l%te" i# % tr.e )ro:er%&e %rr%#&e,e#t t%t te )ro:er
(o.l" )e e#title" to % co,,i$$io# o#l' (e# % $%le i$ e!e#t.%ll'
,%"e. I# te $%,e ,%##er- te %&e#c' co#tr%ct ,%' (ell
$ti+.l%te t%t te %&e#t $%ll )e e#title" to e%r# co,,i$$io# )'
,erel' )ri#&i#& te ).'er %#" te $eller to&eter- e!e# (e# te
%ct.%l $%le of te +er$o# referre" to )' te %&e#t %++e#$ lo#&
%fter te %&e#c' rel%tio#$i+ %$ ter,i#%te".
To ill.$tr%te- i# (uarde) v. &RC- 1<1 SCRA 386 41<<57-
te Co.rt el" t%t (e# te ter,$ of te %&e#c' %rr%#&e,e#t i$
to te effect t%t e#title,e#t to te co,,i$$io# (%$ co#ti#&e#t
o# te +.rc%$e )' % c.$to,er of % fire tr.c:- te i,+licit
co#"itio# )ei#& t%t te %&e#t (o.l" e%r# te co,,i$$io# if e
(%$ i#$tr.,e#t%l i# )ri#&i#& te $%le %)o.t. Si#ce te %&e#t %"
#oti#& to "o (it te $%le of te fire tr.c:- %#" i$ #ot terefore
e#title" to %#' co,,i$$io# %t %ll.
/10See Che$phil E)port v. Court of Appeals- 211 SCRA 216
41<<17= Shopper3s %aradise Realt* v. Ro/ue- 31< SCRA <?
425537= +o$inion Insurance Corp. v. Court of Appeals- 326
SCRA 625- 626 425527= Repu1lic v. Evangelista- 366 SCRA 133
425517= iton!ua, "r. v. Eternit Corp., 3<5 SCRA 253 425567=
Eurotech Industrial Technologies, Inc. v. Cuizon, 121 SCRA 183
425567.
/20Citing Orient Air Services and Hotel Representatives v. Court
of Appeals- 263 Eil. <26- <?< 41<<17.
/?0DE LEON AND DE LEON- COGGENT AND CASES ON
EARTNERSFIE AGENCY AND TRUSTS- 2551 e".- %t +. ?16=
erei#%fter referre" to %$ IDE LEONSH.
/30Reiterated in Eurotech Industrial Technologies, Inc. v.
Cuizon- 121 SCRA 183 425567.
/10See also iton!ua, "r. v. Eternit Corp., 3<5 SCRA 253 425567.
/60Citing 'ordador v. uz- 28? SCRA ?63- ?82 41<<67.
/60ROSCOE T. STEFFEN- AGENCY8 EARTNERSFIE IN A
NUTSFELL 41<667 ?58?1.
/80Reiterated in iton!ua, "r. v. Eternit Corp., 3<5 SCRA 253
425567.
/<00uoting fro$ Re'e$ %#" E.#o- IA# O.tli#e of Eili++i#e
Ci!il L%(-H Vol. V- +. 266.
/150Citing 12 A,. J.r. 2" 8?1= 1?3 ALR 1?36= 1 ALR 2" <86=
'ro4n vs. Coates- 66 ALR 2" <3?= Ha*$es vs. Rogers- 16 ALR
2" 8<6= ,oore vs. Turner- ?2 ALR 2" 61?.
II. FORG REMUIRED FOR CONTRACTS OF AGENCY
a. .o/ Agency 0ay 1e Constitute#
Article 186< e,+%$i>e$ te consensual nature of te
co#tr%ct of %&e#c'D *A&e#c' ,%' )e e;+re$$- or i,+lie" fro,
te %ct$ of te +ri#ci+%l- fro, i$ $ile#ce or l%c: of %ctio#- or i$
f%il.re to re+."i%te te %&e#c'- :#o(i#& t%t %#oter +er$o# i$
%cti#& o# i$ )e%lf (ito.t %.torit'. A&e#c' ,%' )e or%l-
.#le$$ te l%( reA.ire$ % $+ecific for,.*
I# E/uita1le %CI7'an- v. 5u- ?11 SCRA ?5< 425517- it (%$
el" t%t %# %&e#c' ,%' )e e;+re$$ ).t it ,%' %l$o )e i,+lie"
fro, te %ct$ of te +ri#ci+%l- fro, i$ $ile#ce- or l%c: of %ctio#
or i$ f%il.re to re+."i%te te %&e#c' :#o(i#& t%t %#oter
+er$o# i$ %cti#& o# i$ )e%lf (ito.t %.torit'. Li:e(i$e-
%cce+t%#ce )' te %&e#t ,%' %l$o )e e;+re$$- %lto.& it ,%'
%l$o )e i,+lie" fro, i$ %ct$ (ic c%rr' o.t te %&e#c'- or fro,
i$ $ile#ce or i#%ctio# %ccor"i#& to te circ.,$t%#ce$. T.$-
(e# % l%( fir, %llo($ te e,+lo'ee of it$ clie#t to occ%$io#%ll'
recei!e it$ ,%il- %#" #ot %!i#& for,%ll' o)Becte" to te recei+t
)' $%i" e,+lo'ee of % co.rt +roce$$- or t%:e# %#' $te+$ to +.t %
$to+ to it- ,e%#$ t%t %# %&e#c' rel%tio#$i+ %$ )ee#
e$t%)li$e"- to (ic recei+t )' $%i" e,+lo'ee i$ le&%ll' "ee,e"
to )e recei+t )' te l%( fir,.
i$ v. Court of Appeals- 213 SCRA 165 41<<67- te Co.rt
el" t%t tere %re $o,e +ro!i$io#$ of l%( (ic reA.ire cert%i#
for,%litie$ for +%rtic.l%r co#tr%ctD te fir$t i$ (e# te for, i$
reA.ire" for te !%li"it' of te co#tr%ct= te $eco#" i$ (e# it i$
reA.ire" to ,%:e te co#tr%ct effecti!e %$ %&%i#$t tir" +%rtie$
$.c %$ to$e ,e#tio#e" i# Article 1?16 %#" 1?18= %#" te tir"
i$ (e# te for, i$ reA.ire" for te +.r+o$e of +ro!i#& te
e;i$te#ce of te co#tr%ct- $.c %$ to$e +ro!i"e i# te St%t.te of
Fr%."$ i# Article 135?. Si#ce % co#tr%ct of %&e#c' to $ell +iece$
of Be(elr' o# co,,i$$io# "oe$ #ot f%ll o#to %#' of te tree
c%te&orie$- it i$ !%li" %#" e#force%)le i# (%te!er for, it ,%' )e
e#tere" i#to.
!" From the Side of the Principal
O# te $i"e of te +ri#ci+%l- %# %&e#c' i$ i,+lie"l'
co#$tit.te" fro, i$ %ct$ for,%ll' %"o+ti#& it- or fro, i$ $ile#ce
or i#%ctio#- or +%rtic.l%rl' fro, i$ f%il.re to re+."i%te te
%&e#c' :#o(i#& $o,eo#e i$ %cti#& i# i$ #%,e. 4Art. 186<7
'" From the Side of the !gent
O# te $i"e of te %&e#t- i$ %cce+t%#ce of te %&e#c' ,%'
)e e;+re$$e"- or i,+lie" fro, i$ %ct$ (ic c%rr' o.t te
%&e#c'- or fro, i$ $ile#ce or i#%ctio# %ccor"i#& to te
circ.,$t%#ce$. 4Art. 18657
U#"er Article 1861- (e# te co#$tit.tio# of te %&e#c' i$
,%"e (it )ot +ri#ci+%l %#" %&e#t )ei#& +'$ic%ll' +re$e#t
4i.e.- *Bet(ee# +er$o#$ (o %re +re$e#t*7- te %cce+t%#ce of te
%&e#c' ,%' )e i,+lie" if te +ri#ci+%l "eli!er$ i$ +o(er of
%ttor#e' to te %&e#t %#" te l%tter recei!e$ it (ito.t o)Bectio#.
O# te oter %#"- .#"er Article 1862- (e# te
co#$tit.tio# of te %&e#c' i$ ,%"e (it te +ri#ci+%l %#" %&e#t
#ot )ei#& +'$ic%ll' +re$e#t i# o#e +l%ce 4i.e.- *Bet(ee# +er$o#$
(o %re %)$e#t*7- te# tere c%# )e #o i,+lie" %cce+t%#ce of te
%&e#c' fro, te $ile#ce or i#%ctio# of te %&e#t- e;ce+t i# t(o
i#$t%#ce$D
4%7 @e# te +ri#ci+%l tr%#$,it i$ +o(er of %ttor#e' to
te %&e#t 4i.e.- it i$ i# (riti#&7- (o recei!e$ it (ito.t
%#' o)Bectio#= or
4)7 @e# te +ri#ci+%l e#tr.$t$ to te %&e#t )' letter or
tele&r%, % +o(er of %ttor#e' 4ith respect to the
1usiness in 4hich he is ha1ituall* engaged as an agent,
%#" e "i" #ot re+l' to te letter or tele&r%,.
Te l%#&.%&e$ .$e" i# Article$ 1861 %#" 1862 i#"ic%te$
t%t te *+o(er of %ttor#e'* ,.$t co#$tit.te % (ritte#
i#$tr.,e#t$- )ec%.$e i# )ot c%$e$ te %rticle$ refer to $it.%tio#$
(ere *te +ri#ci+%l "eli!er$ i$ +o(er of %ttor#e' to te %&e#t-*
%#" (e# *te +ri#ci+%l tr%#$,it$ i$ +o(er of %ttor#e' to te
%&e#t-* (ic reA.ire$ t%t it ,.$t )e i# (riti#&. Co#$eA.e#tl'-
(e# te oter +ro!i$io#$ of te L%( o# A&e#c' refer$ to
*&e#er%l +o(er of %ttor#e'* %#" *$+eci%l +o(er of %ttor#e'-* it
,.$t ,e%# t%t te co#for, to te r."i,e#t%r' reA.ire,e#t t%t
te' )e i# (riti#&.
(" From the Side of )hird Parties,Public
U#"er Article 186?- (e# te +ri#ci+%l i#for,$ %#oter
+er$o# t%t e %$ &i!e# % +o(er of %ttor#e' to % tir" +er$o#
4te %&e#t7- te l%tter tere)' )eco,e$ % ".l' %.tori>e" %&e#t
(it re$+ect to te +er$o# (o recei!e" te $+eci%l i#for,%tio#.
O# te oter %#"- (e# te +ri#ci+%l $t%te$ )' +.)lic
%"!erti$e,e#t t%t e %$ &i!e# % +o(er of %ttor#e' to % tir"
+er$o# 4te %&e#t7- te l%tter tere)' )eco,e$ % ".l' %.tori>e"
%&e#t (it re&%r" to %#' +er$o#.
It i$ $+ecific%ll' +ro!i"e" i# $%i" %rticle t%t */t0e +o(er
/of te %&e#t0 $%ll co#ti#.e to )e i# f.ll force .#til te #otice i$
re$ci#"e" i# te $%,e ,%##er i# (ic it (%$ &i!e#.*
T.$- .#"er Article 1<21- if te %&e#c' %$ )ee# e#tr.$te"
for te +.r+o$e of co#tr%cti#& (it $+ecific +er$o#$- te
re!oc%tio# of te %&e#c' $%ll #ot +reB."ice te l%tter if te'
(ere #ot &i!e# #otice tereof. U#"er Article 1<22- if te %&e#t
%" )ee# &r%#te" &e#er%l +o(er$- te re!oc%tio# of te %&e#c'
(ill #ot +reB."ice tir" +er$o#$ (o %cte" i# &oo" f%it %#"
(ito.t :#o(le"&e of te re!oc%tio#= o(e!er- #otice of te
re!oc%tio# i# % #e($+%+er of &e#er%l circ.l%tio# co#$tit.te$
$.fficie#t #otice to )i#" tir" +er$o#$.
I# Rallos v. 6angco- 25 Eil 26< 41<117- % lo#&8$t%#"i#&
clie#t- %cti#& i# &oo" f%it %#" (ito.t :#o(le"&e- %!i#& $e#t
&oo"$ to $ell o# co,,i$$io# to te for,er %&e#t of te
"efe#"%#t- c%# reco!er of te "efe#"%#t- (e# #o +re!io.$
#otice of te ter,i#%tio# of %&e#c' (%$ &i!e# $%i" clie#t. F%!i#&
%"!erti$e" te f%ct t%t Coll%#te$ (%$ i$ %&e#t %#" %!i#& &i!e#
$+eci%l #otice to te +l%i#tiff of t%t f%ct- %#" %!i#& &i!e# te,
% $+eci%l i#!it%tio# to "e%l (it $.c %&e#t- it (%$ te ".t' of te
"efe#"%#t o# te ter,i#%tio# of te rel%tio#$i+ of +ri#ci+%l %#"
%&e#t to &i!e ".e %#" ti,el' #otice tereof to te +l%i#tiff$.
F%ili#& to "o $o- e i$ re$+o#$i)le to te, for (%te!er &oo"$
,%' %!e )ee# i# &oo" f%it %#" (ito.t #e&li&e#ce $e#t to te
%&e#t (ito.t :#o(le"&e- %ct.%l or co#$tr.cti!e- of te
ter,i#%tio# of $.c rel%tio#$i+.
I# Conde v. Court of Appeals- 11< SCRA 231 41<827- te
Co.rt el" t%t (e# te ri&t of re"e,+tio# )' $eller$8%8retro i$
e;erci$e" )' teir $o#8i#8l%( (o (%$ &i!e# #o e;+re$$
%.torit' to "o $o- %#" te ).'er8%8retro %cce+te" te e;erci$e
%#" "o#e #oti#& for te #e;t te# 'e%r$ to cle%r teir title of te
%##ot%te" ri&t of re+.rc%$e o# teir title- %#" +o$$e$$io# %"
)ee# &i!e# to te $eller$ % retro ".ri#& te $%,e +erio"- te# *%#
i,+lie" %&e#c' ,.$t )e el" to %!e )ee# cre%te" fro, teir
$ile#ce or l%c: of %ctio#- or teir f%il.re to re+."i%te te %&e#c'.*
)" Agency Not Presu%e# to E2ist
Alto.& %# %&e#c' co#tr%ct i$ co#$e#$.%l i# #%t.re %#"
&e#er%ll' reA.ire$ #o for,%lit'- te Co.rt %$ $tre$$e" t%t %#
%&e#c' %rr%#&e,e#t i$ #e!er +re$.,e". opez v. Tan Tioco- 8
Eil. 6<? 41<567= e;ce+t i# to$e c%$e$ (ere %# %&e#c' %ri$e$
)' e;+re$$ +ro!i$io# of l%(. Co$pania ,ariti$a v. i$son- 131
SCRA 356 41<867.
I# %eople v. 6a1ut, 66 SCRA 623 41<667- it (%$ el" t%t
%lto.& te +erfectio# of % co#tr%ct of %&e#c' ,%' t%:e %#
i,+lie" for,- te e;i$te#ce of %# %&e#c' rel%tio#$i+ i$ #e!er
+re$.,e". Te rel%tio#$i+ of +ri#ci+%l %#" %&e#t c%##ot )e
i#ferre" fro, ,ere f%,il' rel%tio#$i+= for te rel%tio# to e;i$t-
tere ,.$t )e co#$e#t )' )ot +%rtie$. Te l%( ,%:e$ #o
+re$.,+tio# of %&e#c'= it ,.$t e;i$t %$ % f%ct.
/10
I# Harr* E. 5eeler Elec . Co. v. Rodriguez- 33 Eil. 1<
41<227- te Co.rt r.le" t%t % tir" +er$o# ,.$t %ct (it or"i#%r'
+r."e#ce %#" re%$o#%)le "ili&e#ce to %$cert%i# (eter te %&e#t
i$ %cti#& %#" "e%li#& (it i, (iti# te $co+e of i$ +o(er$.
O)!io.$l'- if e :#o($ or %$ &oo" re%$o# to )elie!e t%t te
%&e#t i$ e;cee"i#& i$ %.torit'- e c%##ot cl%i, +rotectio#. So-
if te c%r%cter %$$.,e" )' te %&e#t i$ of $.c % $.$+icio.$ or
.#re%$o#%)le #%t.re- or if te %.torit' (ic e $ee:$ i$ of $.c
%# .#.$.%l or i,+ro)%)le c%r%cter- %$ (o.l" $.ffice to +.t %#
or"i#%ril' +r."e#t ,%# .+o# i$ &.%r"- te +%rt' "e%li#& (it
i, ,%' #ot $.t i$ e'e$ to te re%l $t%te of te c%$e ).t $o.l"
(it%l ref.$e to "e%l (it te %&e#t %t %ll- or $o.l" %$cert%i#
fro, te +ri#ci+%l te tr.e co#"itio# of %ff%ir$.
I# 'ordador v. uz- 28? SCRA ?63 41<<67- te Co.rt el"
t%t *Te )%$i$ for %&e#c' i$ re+re$e#t%tio#. Fere- tere i$ #o
$o(i#& t%t Bri&i"% co#$e#te" to te %ct$ of De&%#o$ or
%.tori>e" i, to %ct o# er )e%lf- ,.c le$$ (it re$+ect to te
+%rtic.l%r tr%#$%ctio#$ i#!ol!e". Eetitio#er$9 %tte,+t to foi$t
li%)ilit' o# re$+o#"e#t $+o.$e$ tro.& te $.++o$e" %&e#c'
rel%tio# (it De&%#o$ i$ &ro.#"le$$ %#" ill8%"!i$e". Be$i"e$- it
(%$ &ro$$l' %#" i#e;c.$%)l' #e&li&e#t of +etitio#er$ to e#tr.$t to
De&%#o$- #ot o#ce or t(ice ).t o# %t le%$t $i; occ%$io#$ %$
e!i"e#ce" )' $i; recei+t$- $e!er%l +iece$ of Be(elr' of
$.)$t%#ti%l !%l.e (ito.t reA.iri#& % (ritte# %.tori>%tio# fro,
i$ %lle&e" +ri#ci+%l. A +er$o# "e%li#& (it %# %&e#t i$ +.t .+o#
i#A.ir' %#" ,.$t "i$co!er .+o# i$ +eril te %.torit' of te
%&e#t.* 4%t +. ?827
I# +izon v. Court of Appeals- ?52 SCRA 288 41<<<7- te
Co.rt el" t%t % co8o(#er "oe$ #ot )eco,e %# %&e#t of te
oter co8o(#er$- %#" terefore- %#' e;erci$e of %# o+tio# to ).'
% +iece of l%#" tr%#$%cte" (it o#e co8o(#er "oe$ #ot )i#" te
oter co8o(#er$ of te l%#". Te )%$i$ for %&e#c' i$
re+re$e#t%tio# %#" % +er$o# "e%li#& (it %# %&e#t i$ +.t .+o#
i#A.ir' %#" ,.$t "i$co!er .+o# i$ +eril te %.torit' of te
%&e#t. Si#ce tere (%$ #o $o(i#& t%t te oter co8o(#er$
co#$e#te" to te %ct of o#e co8o(#er #or %.tori>e" er to %ct o#
teir )e%lf (it re&%r" to er tr%#$%ctio# (it +.r+orte" ).'er.
Te ,o$t +r."e#t ti#& te +.r+orte" ).'er $o.l" %!e "o#e
(%$ to %$cert%i# te e;te#t of te %.torit' $%i" co8o(#er= )ei#&
#e&li&e#t i# ti$ re&%r"- te +.r+orte" ).'er c%##ot $ee: relief
o# te )%$i$ of % $.++o$e" %&e#c'.
b. Agency by Estoppe$
U#"er Article 1<11- e!e# (e# te %&e#t %$ e;cee"e" i$
%.torit' 4i.e., e %ct$ (ito.t %.torit' fro, te +ri#ci+%l7- te
+ri#ci+%l $%ll )e $oli"%ril' (it te %&e#t if e %llo(e" te
%&e#t to %ct %$ to.& e %" f.ll +o(er$.
@e# te o(#er of % otel ).$i#e$$ %llo($ % +er$o# to .$e
te title *,%#%&i#& %&e#t* %#" ".ri#& i$ +rolo#&e" %)$e#ce$
%llo($ $.c +er$o# to t%:e c%r&e of te ).$i#e$$- +erfor,i#&
te ".tie$ .$.%ll' e#tr.$te" to ,%#%&i#& %&e#t- te# $.c o(#er
i$ )o.#" )' te %ct of $.c +er$o#. *O#e (o clote$ %#oter
%++%re#t %.torit' %$ i$ %&e#t- %#" ol"$ i, o.t to te +.)lic
%$ $.c- c%# #ot )e +er,itte" to "e#' te %.torit' of $.c
+er$o# to %ct %$ i$ %&e#t- to te +reB."ice of i##oce#t tir"
+%rtie$ "e%li#& (it $.c +er$o# i# &oo" f%it %#" i# te
follo(i#& +re8%$$.,+tio#$ or "e".ctio#$- (ic te l%(
e;+re$$l' "irect$ to )e ,%"e fro, +%rtic.l%r f%ct$- %re "ee,e"
co#cl.$i!e.* Te otel o(#er i$ )o.#" )' te co#tr%ct$ e#tere"
i#to )' $%i" ,%#%&i#& %&e#t t%t %re (iti# te $co+e of
%.torit' +erti#e#t to $.c +o$itio#- i#cl."i#& te +.rc%$i#&
$.c re%$o#%)le A.%#titie$ of $.++lie$ %$ ,i&t fro, ti,e to ti,e
)e #ece$$%r' i# c%rr'i#& o# te ).$i#e$$ of otel )%r. ,ac-e v.
Ca$ps- 6 Eil 122 41<567.
I# &aguiat v. Court of Appeals- 312 SCRA 1<2 4255?7- te
Co.rt %++lie" te +ro!i$io#$ of Article 186? of te Ci!il Co"e to
r.le t%t if )' te i#ter%ctio# )et(ee# % +.r+orte" +ri#ci+%l %#" %
+.r+orte" %&e#t i# te +re$e#ce of % tir" +er$o#- te l%tter (%$
&i!e# te i,+re$$io# of te e;i$te#ce of % +ri#ci+%l8%&e#c'
rel%tio#- %#" te +.r+orte" +ri#ci+%l "i" #oti#& to correct te
tir" +er$o#9$ i,+re$$io#- %# *%&e#c' )' e$to++el i$ "ee,e" to
%!e )ee# co#$tit.te"- %#" te r.le i$ cle%rD o#e (o clote$
%#oter (it %++%re#t %.torit' %$ i$ %&e#t- %#" ol"$ i, o.t
to te +.)lic %$ $.c- c%##ot )e +er,itte" to "e#' te %.torit'
of $.c +er$o# to %ct %$ i$ %&e#t- to te +reB."ice of i##oce#t
tir" +%rtie$ "e%li#& (it $.c +er$o# i# &oo" f%it- %#" i# te
o#e$t )elief t%t e i$ (%t e %++e%r$ to )e.
I# iton!ua, "r. v. Eternit Corporation, 3<5 SCRA 253
425567- te Co.rt el" t%t for %# %&e#c' )' e$to++el to e;i$t- te
follo(i#& ,.$t )e e$t%)li$e"D 417 te +ri#ci+%l ,%#ife$te" %
re+re$e#t%tio# of te %&e#t9$ %.torit' or :#o(i#&l' %llo(e" te
%&e#t to %$$.,e $.c %.torit'= 427 te tir" +er$o#- i# &oo"
f%it- relie" .+o# $.c re+re$e#t%tio#= 4?7 rel'i#& .+o# $.c
re+re$e#t%tio#- $.c tir" +er$o# %$ c%#&e" i$ +o$itio# to i$
"etri,e#t. A# %&e#c' )' e$to++el- (ic i$ $i,il%r to te
"octri#e of %++%re#t %.torit'- reA.ire$ +roof of reli%#ce .+o#
te re+re$e#t%tio#$- %#" t%t- i# t.r#- #ee"$ +roof t%t te
re+re$e#t%tio#$ +re"%te" te %ctio# t%:e# i# reli%#ce.
/10Reiterated in i$ v. Court of Appeals- 211 SCRA 358 41<<17.
III. JINDS OF AGENCY
a. 1ase# on t&e 1usiness or Transactions
Enco%passe#
U#"er Article 1866- %# %&e#c' i$ ter,e" to )e % *&e#er%l
%&e#c'* (e# it e#co,+%$$e$ %ll of te ).$i#e$$ of te +ri#ci+%l.
Te )etter ter, for $.c %# %&e#c' (o.l" )e % *.#i!er$%l
%&e#c'.*
A +o(er of %ttor#e' (ic +ro!i"e$ t%t *Ti$ i$ to
for,%li>e o.r %&ree,e#t for 'o. to re+re$e#t U#ite" Fl%&
I#".$tr' to "e%l (it %#' e#tit' or or&%#i>%tio#- +ri!%te or
&o!er#,e#t- i# co##ectio# (it te ,%r:eti#& of o.r +ro".ct$88
fl%&$ %#" %ll it$ %cce$$orie$. For 'o.r $er!ice$- 'o. (ill )e
e#title" to % co,,i$$io# of ?5N=* %.tori>e$ te %&e#t to e#ter
i#to co#tr%ct of $%le o!er te +ro".ct$ co!ere" %#" for (ic e
(o.l" )e e#title" to recei!e co,,i$$io#$ $ti+.l%te". *A &e#er%l
%&e#t .$.%ll' %$ %.torit' eiter e;+re$$l' co#ferre" i# &e#er%l
ter,$ or i# effect ,%"e &e#er%l )' te .$%&e$- c.$to,$ or #%t.re
of te ).$i#e$$ (ic e i$ %.tori>e" to tr%#$%ct.* Siasat v*
+ntermediate !ppellate Court3 !(4 *CRA '(5 !45-".
O# te oter %#"- it i$ % *$+eci%l %&e#c'* (e# it co!er$
o#l' o#e or ,ore $+ecific tr%#$%ctio#$. Te )etter ter, for $.c
%# %&e#c' i$ *+%rtic.l%r %&e#c'.*
S.c cl%$$ific%tio#$ %re ,ore %c%"e,ic t%# +r%ctic%l-
$i#ce o.t$i"e of &.%r"i%#$i+ +rocee"i#&$- %r"l' %#')o"' i# te
,o"er# (orl" e,+o(er$ %# %&e#t to co!er e!er' ).$i#e$$ %$+ect
o(#e" )' te +ri#ci+%l. Be$i"e $.c % cl%$$ific%tio# i$ #ot re%ll'
.$ef.l )ec%.$e % *&e#er%l or .#i!er$%l %&e#c'* c%# )' l%( o#l'
co!er &e#er%l +o(er$ of %ttor#e' co!eri#& ,erel' %ct$ of
%",i#i$tr%tio#= %#" c%##ot- (ito.t e;+re$$ or "et%ile"
"e$cri+tio#- co!er $+eci%l +o(er$ of %ttor#e'- co!eri#& +%rtic.l%r
%ct$ of $trict o(#er$i+. Terefore- % &e#er%l %&e#c' i$ )etter
%cie!e" )' oter co#tr%ct.%l for,$ $.c %$ % co#tr%ct of
e,+lo',e#t.
Te ri&t of %# %&e#t to i#"or$e % co,,erci%l +%+er i$
#e!er +re$.,e" to e;i$t$= it ,.$t )e cle%rl' &r%#te" )' te
+ri#ci+%l. A $%le$,%# (it %.torit' to collect ,o#e' )elo#&i#&
to te +ri#ci+%l "oe$ #ot %!e i,+lie" %.torit' to i#"or$e te
cec:$ recei!e" i# +%',e#t. A#' +er$o# t%:i#& cec:$ +%'%)le
to % cor+or%tio# tro.& te e#"or$e,e#t of %# %&e#t- "oe$ $o %t
i$ +eril %#" ,.$t %)i"e )' te co#$eA.e#ce$ if te %&e#t (o
i#"or$e$ te $%,e i$ (ito.t %.torit'. +nsular -rug Co* v*
PN'3 -5 P&i$ 65) !4((".
Ro1inson #le$ing v. Cruz- <3 Eil 32 41<267
b. 7&et&er or Not It Covers Litigation 0atters
U#"er #ot $+ecific%ll' tre%te" i# te Ci!il Co"e- (e $o.l"
"i$ti#&.i$ )et(ee# % for, of %&e#c' c%lle" *attorney$at$la-*
fro, t%t of *attorney$in$fact*"
A# %ttor#e'8%t l%(- #ece$$%ril' ,e%#$ te %++oi#t,e#t of
%# %&e#t to re+re$e#t te +ri#ci+%l o# le&%l ,%tter$- +%rtic.l%rl'
o# ,%tter$ +ert%i#i#& to liti&%tio# or co.rt ,%tter$. Not e!er'
%ttor#e'8clie#t rel%tio#$i+ i$ % co#tr%ct of %&e#c' (ere te
e$$e#ti%l o)Becti!e if re+re$e#t%tio#- $.c %$ (e# %# %ttor#e' i$
ret%i#e" to "r%(8.+ le&%l "oc.,e#t$. B.t (e# it co,e$ to
liti&%tio#- te ret%i#i#& of %# %ttor#e' i$ tr.l' i# re+re$e#t%tio# of
te clie#t8+ri#ci+%l )efore te co.rt- $.c t%t te %ct$ of te
%ttor#e' %#" for %#" i# )e%lf of te clie#t- %#" t%t #otice to te
%ttor#e' %#" $er!ice of B."ici%l +roce$$ to te %ttor#e'- i$
eA.i!%le#t to $er!ice to te clie#t +ri#ci+%l. U#"er e;i$ti#& r.le$
%#" B.ri$+r."e#ce- $.c %# %&e#t (o.l" )e +r%ctici#& l%( %#"
(o.l" %!e to )e % lice#$e" l%('er. Te rel%tio#$i+ i$ o#e t%t
i$ fi".ci%r' %#" +rofe$$io#%l- %#" i$ &o!er#e" )' $e+%r%te r.le$-
i#cl."i#& te le&%l +rofe$$io#%l co"e %#" te r.le$ +ro,.l&%te"
)' te S.+re,e Co.rt co!eri#& te +r%ctice of l%(.
Co#$eA.e#tl'- te ter, *%ttor#e'8i#8f%ct* i$ i#te#"e" to
"e$cri)e %ll %&e#t$ %++oi#te" )' % +ri#ci+%l to %ct o# ,%tter$ t%t
%!e #oti#& to "o (it le&%l ,%tter$ %#" "o #ot co#$tit.te %
+r%ctice of l%( o# te +%rt of te %&e#t. Ti$ i$ te cl%$$ific%tio#
t%t co!er$ te co#tr%ct of %&e#c' &o!er#e" )' te Ci!il Co"e.
It $o.l" )e #ote" o(e!er t%t- e!e# i# te c%$e of %#
%ttor#e'8%t8l%(- re+re$e#ti#& % clie#t i# % co.rt c%$e- tere %re
cert%i# +o(er$ (ic %re #ot i#ere#t i# te +o$itio# of %#
%ttor#e'8%t8l%( to le&%ll' )i#" te clie#t- $.c %$ te +o(er to
co,+ro,i$e- to %r)itr%te- etc. @eter %# %ttor#e'8%t8l%( %$
+o(er to )i#" te clie#t +ri#ci+%l i# $.c ,%tter$ %re &o!er#e"
)' te r.le$ of te Ci!il Co"e o# $+eci%l %&e#c' or $+eci%l
+o(er$ of %ttor#e'.
c. 7&et&er It Covers Acts of A#%inistration or Acts
of Do%inion
It i$ i# te re%l, of *%ttor#e'8i#8f%ct* t%t (e (o.l" ,ore
%++ro+ri%tel' .$e te cl%$$ific%tio#$ of *&e#er%l +o(er of
%ttor#e'* %#" *$+eci%l +o(er of %ttor#e'* to "e$cri)e te
%.torit' %#" +o(er of te %&e#t.
Si,+l' $t%te"- % general poer of attorney co!er$ o#l'
%ct$ of %",i#i$tr%tio#- or e;+re$$e" i# co,,erci%l ter,$- it o#l'
co!er$ +o(er to +.r$.e te or"i#%r' or re&.l%r co.r$e of
).$i#e$$. @ere%$- % special poer of attorney co!er$ %ct$ of
"o,i#io# or $trict o(#er$i+. Te &e#er%l r.le i$ t%t .#le$$ $o
e;+re$$l' $t%te"- %# %&e#c' co!er$ o#l' te +o(er$ to e;ec.te
%ct$ of %",i#i$tr%tio#.
Di$ti#ctio# )et(ee# &e#er%l +o(er of %ttor#e' %#" $+eci%l
+o(er of %ttor#e' $%ll )e co!ere" i# te i,,e"i%tel'
$.ccee"i#& c%+ter o# te Eo(er$ %#" O)li&%tio#$ of te A&e#t.
I# Mac&e vs* Camps3 8 P&i$$. --( !498"- te Co.rt el"D
*It $ee,$ e%$' to %#$(er t%t %ct$ of %",i#i$tr%tio# %re to$e
(ic "o #ot i,+l' te %.torit' to %lie#%te for te e;erci$e of
(ic %# e;+re$$ +o(er i$ #ece$$%r'. Yet (%t %re %ct$ of
%",i#i$tr%tio# (ill %l(%'$ )e % A.e$tio# of f%ct- r%ter t%# of
l%(- )ec%.$e tere c%# )e #o "o.)t t%t $o.#" ,%#%&e,e#t (ill
$o,eti,e$ reA.ire te +erfor,%#ce of %# %ct of o(#er$i+. 412
G%#re$% 3687 B.t- .#le$$ te co#tr%r' %++e%r$- te %.torit' of
%# %&e#t i$ +re$.,e" to i#cl."e %ll te #ece$$%r' %#" .$.%l
,e%#$ to c%rr' o.t te %&e#c' i#to effect.* 4%t +. 1117
IV. AUTFORITY K EO@ER- DUTIES K OBLIGATIONS- OF
TFE AGENT
!. GENERAL O1LIGATION O: AGENT 7.O ACCEPT* T.E
AGENC;
U#"er Article 1883- (e# %# %&e#t %cce+t$ te %++oi#t,e#t of
te +ri#ci+%l- te# e i$ le&%ll' )o.#" to c%rr' o.t te ter,$ of
te %&e#c'= oter(i$e- e i$ li%)le for "%,%&e$ $.ffere" )' te
+ri#ci+%l )' re%$o# of i$ #o#8fe%$%#ce or #o#8+erfor,%#ce.
Article 1883 e;+re$$e$ i# te re%l, of A&e#c' te co#tr%ct l%(
+ri#ci+le$ of consensualit*- $utualit* %#" o1ligator* force
e;+re$$e" i# Article$ 111< %#" 1?11 of te Ci!il Co"e- (ic
+ro!i"e t%t IO)li&%tio#$ %ri$i#& fro, co#tr%ct$ %!e te force
of l%( )et(ee# te co#tr%cti#& +%rtie$ %#" $o.l" )e co,+lie"
(it i# &oo" f%it-H %#" t%t ICo#tr%ct$ %re +erfecte" )' ,ere
co#$e#t- %#" fro, t%t ,o,e#t te +%rtie$ %re )o.#" #ot o#l' to
te f.lfill,e#t of (%t %$ )ee# e;+re$$l' $ti+.l%te" ).t %l$o to
%ll te co#$eA.e#ce$ (ic- %ccor"i#& to teir #%t.re- ,%' )e i#
:ee+i#& (it &oo" f%it- .$%&e %#" l%(.H Li:e(i$e- Article 1?16
of te Ci!il Co"e +ro!i"e$ t%t ICo#tr%ct$ $%ll )e o)li&%tor'- i#
(%te!er for, te' ,%' %!e )ee# e#tere" i#to- +ro!i"e" %ll te
e$$e#ti%l reA.i$ite$ for teir !%li"it' %re +re$e#t.H Fi#%ll'- Article
1?58 +ro!i"e$ t%t te Ico#tr%ct ,.$t )i#" )ot co#tr%cti#&
+%rtie$= it$ !%li"it' or co,+li%#ce c%##ot )e left to te (ill of
o#e of te,.H
De$+ite te o)li&%tor' #%t.re of e!er' co#tr%ct of %&e#c'- #ote
t%t Article 1883 e,+%$i>e$ te +oi#t t%t (e# %# %&e#t
ref.$e$ to co,+l' (it te o)li&%tio#$ e %cce+te" for i,$elf-
te re,e"' of te +ri#ci+%l i$ to $.e i, for "%,%&e$- $i#ce %#
%ctio# for $+ecific +erfor,%#ce i$ #ot %!%il%)le for +er$o#%l
o)li&%tio#$ to "o or #ot to "o. Te li%)ilit' of %# %&e#t for
"%,%&e$ (e# e f%il$ to c%rr' o.t i$ o)li&%tio#$ i$ co#$i$te#t
(it te ter,$ of Article 1165 of te Ci!il Co"e (ic +ro!i"e$
t%t ITo$e (o i# te +erfor,%#ce of teir o)li&%tio#$ %re
&.ilt' of fr%."- #e&li&e#ce- or "el%'- %#" to$e (o i# %#'
,%##er co#tr%!e#e te te#or tereof- %re li%)le for "%,%&e$.H
Ti$ $%,e +ri#ci+le i$ e;+re$$e" i# Article 1<5< of te L%( o#
A&e#c'- (ic +ro!i"e$ t%t I/t0e %&e#t i$ re$+o#$i)le #ot o#l'
for fr%."- ).t %l$o for #e&li&e#ce- (ic $%ll )e %"B."&e" (it
,ore or le$$ ri&or )' te co.rt$- %ccor"i#& to (eter te %&e#c'
(%$ or (%$ #ot for % co,+e#$%tio#.H
Fi#%ll'- %lto.& % co#tr%ct of %&e#c' i$ ter,i#%te" ipso !ure
.+o# te "e%t of te +ri#ci+%l- #o#etele$$- Article 1883
+ro!i"e$ e;+re$$l' t%t te %&e#t ,.$t fi#i$ te ).$i#e$$
%lre%"' )e&.# .+o# "e%t of +ri#ci+%l $o.l" "el%' e#t%il %#'
"%#&er. Ti$ +ro!i$io# e,+%$i>e$ te c%r%cteri$tic of %&e#c' to
)e ,erel' % preparator* contract= t%t it i$ co#$tit.te" #ot for it$
o(# $%:e- )' +ri,%ril' to )e te )%$i$ )' (ic te %&e#t ,%'
e#ter i#to B.ri"ic%l %ct$ o# )e%lf of te +ri#ci+%l (it re$+ect to
tir" +%rtie$. Co#$eA.e#tl'- e!e# if $trictl' $+e%:i#& te %&e#c'
rel%tio# i$ ter,i#%te" .+o# te "e%t of te +ri#ci+%l- te
e$t%)li$e" ).t .#fi#i$e" co#tr%ct$ %#" tr%#$%ctio#$ te#
+e#"i#& ,.$t )e f.lfille" )' te %&e#t o# )e%lf of te "ece"e#t-
(e# co#ti#.%tio# of re+re$e#t%tio# i$ #ece$$%r'.
!" Measure of -amage for an !gent.s Non$Performance of
Obligation
I# 'A #inance v. Court of Appeals- 251 SCRA 116 41<<17- .#"er
te "ee" of c%ttel ,ort&%&e- te fi#%#ce co,+%#' (%$
co#$tit.te" %$ %ttor#e'8i#8f%ct for te ,ort&%&or$ (it f.ll +o(er
%#" %.torit' to file- follo(8.+- +ro$ec.te- co,+ro,i$e or $ettle
i#$.r%#ce cl%i,$= to $i&# e;ec.te %#" "eli!er te corre$+o#"i#&
+%+er$- recei+t$ %#" "oc.,e#t$ to te i#$.r%#ce co,+%#' %$ ,%'
)e #ece$$%r' to +ro!e te cl%i,- %#" to collect fro, te l%tter te
+rocee"$ of i#$.r%#ce to te e;te#t of it$ i#tere$t$- i# te e!e#t
t%t te ,ort&%&e" c%r $.ffer$ %#' lo$$ or "%,%&e- te &r%#t of
+o(er co#$tit.te" te fi#%#ce co,+%#' %$ te %&e#t of te
,ort&%&or$. @e# te ,ort&%&e" ,otor !eicle fi&.re" i# %#
%cci"e#t t%t (o.l" %!e %llo(e" reco!er' o# te i#$.r%#ce
cl%i, for tot%l lo$$- %#" te ,ort&%&or$ %" i#$tr.cte" te
fi#%#ce co,+%#' to ,%:e $.c cl%i,- ).t i#$te%" it o+te" to
%!e te ,otor !eicle re+%ire" %#" fore&o te tot%l lo$$ cl%i,-
te Co.rt "ecree" t%t te f%il.re %#" ref.$%l of te fi#%#ce
co,+%#' to $ee: tot%l lo$$ cl%i,$ o# te !eicle ,ort&%&e"
%&%i#$t te i#$.r%#ce co,+%#'- co#$tit.te" #e&li&e#ce %#" #ot
o.tri&t ref.$%l to co,+l' (it te i#$tr.ctio#$ of te +ri#ci+%l$-
%#" li%)le for "%,%&e$. Te Co.rt el" t%t .#"er Article 1883
of te Ci!il Co"e- te fi#%#ce co,+%#' (%$ )o.#" )' it$
%cce+t%#ce to c%rr' o.t te %&e#c'- %#" i$ li%)le for "%,%&e$
(ic- tro.& it$ #o#8+erfor,%#ce- te +ri#ci+%l$8,ort&%&or$
,%' $.ffer. Co#$eA.e#tl'- )' re%$o# of te lo$$ $.ffere" )' te
+ri#ci+%l$- te Co.rt el" t%t te fi#%#ce co,+%#' co.l" #o
lo#&er collect o# te .#+%i" )%l%#ce of te +ro,i$$or' #ote
$ec.re" )' te c%ttel ,ort&%&e.
@e# te ol"er of %# e;cl.$i!e %#" irre!oc%)le +o(er of
%ttor#e' to ,%:e collectio#$- f%ile" to collect te $.,$ ".e to te
+ri#ci+%l %#" tere)' %llo(e" te %llotte" f.#"$ to )e e;%.$te"
)' oter cre"itor$- $.c %&e#t %$ f%ile" to %ct (it te c%re of %
&oo" f%ter of % f%,il' reA.ire" .#"er Article 1886 %#" )ec%,e
+er$o#%ll' li%)le for te "%,%&e$ (ic te +ri#ci+%l ,%' $.ffer
tro.& i$ #o#8+erfor,%#ce. PN' v* Manila Surety3 !) *CRA
886 !46-".
'arton v. e*te Asphalt- 36 Eil <?8 41<237
Heredia v. Salina- 15 Eil 116 41<587
'. O1LIGATION O: AGENT 7.O DECLINE* AGENC;
U#"er Article 1881- if % +er$o# "ecli#e$ %# %&e#c'- Ie i$ )o.#"
to o)$er!e te "ili&e#ce of % &oo" f%ter of % f%,il' i# te
c.$to"' %#" +re$er!%tio# of te &oo"$ for(%r"e" to i, )' te
o(#er .#til te l%tter $o.l" %++oi#t %# %&e#t.H Te %rticle
,%#"%te$ te o(#er i# $.c c%$e to I%$ $oo# %$ +r%ctic%)le eiter
%++oi#t %# %&e#t or t%:e c%r&e of te &oo"$.H
@e $o.l" co,+%re te o)li&%tio#$ of % +er$o# (o "ecli#e$ %#
%&e#c'- fro, o#e (o (it"r%($ fro, %# %&e#c' e +re!io.$l'
%cce+te". U#"er Article 1<2<- e!e# if %# %&e#t (it"r%($ fro,
te %&e#c' for % !%li" re%$o#- Ie ,.$t co#ti#.e to %ct .#til te
+ri#ci+%l %$ %" re%$o#%)le o++ort.#it' to t%:e te #ece$$%r'
$te+$ to ,eet te $it.%tio#.H
(. GENERAL R<LE ON AGENT=* PO7ER AND A<T.ORIT; ,
Agent 0ust Act 7it&in t&e *cope of .is Aut&ority
U#"er Article 1881- te %&e#t ,.$t %ct I(iti# te $co+e of i$
%.torit'-H (ic e$$e#ti%ll' ,e%#$ t%t $i#ce te %&e#t %ct$ i#
re+re$e#t%tio# of te +ri#ci+%l- e ,.$t e#ter i#to B.ri"ic%l
rel%tio#$ o# )e%lf of te +ri#ci+%l %#" re+re$e#ti#& te (ill of
te +ri#ci+%l- %#" #ot i$ o(# (ill. Te &e#er%l r.le e,)o"ie$
te t(o fi".ci%r' ".tie$ of te %&e#t to te +ri#ci+%lD ".t' of
o)e"ie#ce %#" te ".t' of "ili&e#ce.
a. Duty of Obe#ience
!" !s 'eteen the Principal and the !gent
T%t te %&e#t ,.$t %ct I(iti# te $co+e of i$ %.torit'H
,e%#$ t%t t%t e!er' %&e#t %$$.,e$ )' i$ %cce+t%#ce of te
%&e#c' to )e o)e"ie#t to te (ill of te +ri#ci+%l- (ic i$ )e$t
e;+re$$e" .#"er Article 1886 (e# it +ro!i"e$ t%t I/i0# te
e;ec.tio# of te %&e#c'- te %&e#t $%ll %ct i# %ccor"%#ce (it
te i#$tr.ctio#$ of te +ri#ci+%l.H Tere i$ #o "o.)t t%t (e# %#
%&e#t co,+lie$ (it te i#$tr.ctio#$ of i$ +ri#ci+%l- e i$ %cti#&
(iti# te $co+e of i$ %.torit'.
A$ el" i# .ictorias ,illing Co., Inc. v. Court of Appeals- ???
SCRA 66? 425557- o#e f%ctor t%t ,o$t cle%rl' "i$ti#&.i$e$ %#
%&e#c' fro, oter le&%l co#ce+t$- i#cl."i#& $%le- i$ control: o#e
+er$o#Hte %&e#tOPH%&ree$ to %ct .#"er te co#trol or "irectio#
of %#oterOPHte +ri#ci+%l. It i$ cle%r terefore- t%t (e# %#
%&e#t %ct$ i# %ccor"%#ce (it te +ri#ci+%lC$ i#$tr.ctio#- e i$
%cti#& (iti# te $co+e of i$ %.torit'.
Olaguer v* Purugganan/ 0r*3 -!- *CRA )69 '998"- el" t%t
.#"er Article 1882 of te Ci!il Co"e te li,it$ of %# %&e#tC$
%.torit' $%ll #ot )e co#$i"ere" e;cee"e" $o.l" it %!e )ee#
+erfor,e" i# % ,%##er %"!%#t%&eo.$ to te +ri#ci+%l t%# t%t
$+ecifie" )' i,.
)an )iong v* S#C3 64 P&i$ )'- !4)9"- el" t%t te %&e#t i$ #ot
"ee,e" to %!e e;cee"e" i$ %.torit' $o.l" e +erfor, te
%&e#c' i# % ,%#%&er ,ore %"!%#t%&eo.$ to te +ri#ci+%l t%#
t%t i#"ic%te" )' te +ri#ci+%l. T.$- (e# te %&e#t $ell$ te c%r
of te +ri#ci+%l for ,ore t%# te %,o.#t i#"ic%te" )' te
+ri#ci+%l- te# e %$ #ot i$ %.torit' )ec%.$e % i&er +rice i$
,ore %"!%#t%&eo.$ to te +ri#ci+%l.
No#etele$$- %&e#c' rel%tio# i$ e#tere" i#to ,%i#l' for ).$i#e$$
or co,,erci%l !e#t.re$- %#" it i$ #ot e;+ecte" t%t te +ri#ci+%l
c%# co!er e!er co#ti#&e#cie$ (it $+ecific i#$tr.ctio#$- or t%t
e!er' %ct of te %&e#t ,.$t )e )%$e" o# "et%ile" i#$tr.ctio#$ of
te +ri#ci+%l. I#"ee"- te %&e#t i$ e;+ecte" to .$e i$ ).$i#e$$
"i$cretio# %$ t%t of te +ri#ci+%l (o.l" or co.l" if +er$o#%ll'
+re$e#t. Terefore- (e $o.l" co#$i"er te +ri#ci+%lC$
i#$tr.ctio#$ %$ te li,it of %# %&e#tC$ +o(er= %#" t%t i# te
%)$e#ce of li,iti#& i#$tr.ctio#$- it i$ e;+ecte" t%t te %&e#t .$e$
i$ )e$t B."&,e#t to $t%' (iti# te $co+e of te +ri#ci+%lC$
%.torit' &r%#te" to i,
Ti$ +ri#ci+le i$ )e$t e;+re$$e" .#"er Article 1881- (ic
+ro!i"e$ t%t te %&e#t I%#' "o $.c %ct$ %$ ,%' )e co#".ci!e to
te %cco,+li$,e#t of te +.r+o$e of te %&e#c'.H Li:e(i$e-
Article 1882 +ro!i"e$ t%t I/t0e li,it$ of te %&e#tC$ %.torit'
$%ll #ot )e co#$i"ere" e;cee" $o.l" it %!e )ee# +erfor,e" i#
% ,%##er ,ore %"!%#t%&eo.$ to te +ri#ci+%l t%# t%t $+ecifie"
)' i,.H I# oter (or"$- %# %&e#t #ot o#l' %$ e;+re$$ +o(er$-
).t %l$o i,+lie" +o(er$ e,%#%ti#& fro, te e;+re$$ +o(er$
&r%#te" to i,= %$ (ell %$ i#ci"e#t%l +o(er$ #ece$$%r' i# or"er
to %cie!e te +.r+o$e for (ic te %&e#c' (%$ co#$tit.te".
'" !s )o )hird Parties
Te ter,$ of Article 1886 (ic effecti!el' $t%te$ t%t (e# %#
%&e#t %ct$ co#tr%r' to te i#$tr.ctio#$ of i$ +ri#ci+%l- e i$
"ee,e" to %!e %cte" (ito.t or i# e;ce$$ of %.torit'- i$ r.le
t%t &o!er#$ te rel%tio#$i+ )et(ee# te +ri#ci+%l %#" %&e#t.
U#"er Article 1<11- e!e# (e# te %&e#t %$ e;cee"e" i$
%.torit'- te +ri#ci+%l re,%i#$ $oli"%ril' li%)le (it te %&e#t if
te +ri#ci+%l %llo(e" te %&e#t to %ct %$ to.& e %" f.ll
+o(er$.
U#"er Article 1<55- i#$of%r %$ tir" +er$o#$ %re co#cer#e"- I%#
%ct i$ "ee,e" to %!e )ee# +erfor,e" (iti# te $co+e of te
%&e#tC$ %.torit'- if $.c %ct i$ (iti# te ter,$ of te +o(er of
%ttor#e'- %$ (ritte#- e!e# if te %&e#t %$ i# f%ct e;cee"e" te
li,it$ of i$ %.torit' %ccor"i#& to %# .#"er$t%#"i#& )et(ee# te
+ri#ci+%l %#" %&e#t.H I# oter (or"$- %$ to tir" +%rtie$ %cti#& i#
&oo" f%it- te (ritte# i#$tr.ctio#$ of te +ri#ci+%l %re te
)i#"i#& +o(er$ of te %&e#t- %#" c%##ot )e o!erco,e )' #o#8
(ritte# i#$tr.ctio#$ of te +ri#ci+%l #ot ,%"e :#o(# to te,.
T.$- Article 1<52 +ro!i"e$ t%t % tir" +er$o# (it (o, te
%&e#t (i$e$ to co#tr%ct o# )e%lf of te +ri#ci+%l ,%' reA.ire
te +re$e#t%tio# of te +o(er of %ttor#e'- or te i#$tr.ctio#$ %$
re&%r"$ te %&e#c'. I# %""itio#- +ri!%te or $ecret or"er$ %#"
i#$tr.ctio#$ of te +ri#ci+%l "o #ot +reB."ice tir" +er$o#$ (o
%!e relie" .+o# te +o(er of %ttor#e' or i#$tr.ctio# $o(#
te,.
'an& of P*+* v* -e Coster3 )8 P&i$. -4) !4'-"- t.$ el" t%t te
+o(er$ %#" ".tie$ of %# %&e#t %re co#fi#e" %#" li,ite" to to$e
(ic %re $+ecifie" %#" "efi#e" i# i$ (ritte# +o(er of %ttor#e'-
(ic li,it%tio# i$ % #otice to- %#" i$ )i#"i#& .+o#- te +er$o#
"e%li#& (it $.c %&e#t.
Fi#%ll'- .#"er Article 1<51- % tir" +er$o# c%##ot $et8.+ te f%ct
t%t te %&e#t %$ e;cee"e" i$ +o(er$- if te +ri#ci+%l %$
r%tifie"- or %$ $i&#ifie" i$ (illi#&#e$$ to r%tif' te %&e#tC$ %ct$.
NONET.ELE** ,
E!er' +er$o# "e%li#& (it %# %$$.,e" %&e#t i$ +.t .+o# %#
i#A.ir' %#" ,.$t "i$co!er .+o# i$ +eril- if e (o.l" ol" te
+ri#ci+%l li%)le- #ot o#l' te f%ct of te %&e#c' ).t te #%t.re
%#" e;te#t of te %.torit' of te %&e#t. 1elso v* 2a Urbana/ -5
P&i$. 65! !4(("= Strong v. (utierrez Repide- 6 Eil. 685 41<565=
+een v. %acific Co$$ercial Co.- 32 Eil. 6?8 41<227= To*ota
Sha4, Inc. v. Court of Appeals- 233 SCRA ?25 41<<17.
If % tir" +er$o# "oe$ #ot ,%:e %# i#A.ir' i#to te %.torit' of
%# %$$.,e" %&e#t- e i$ c%r&e%)le (it :#o(le"&e of te
%&e#tC$ %.torit'- %#" i$ i&#or%#ce of t%t %.torit' (ill #ot )e
%# e;c.$e. 'acaltos Coal Mines v* Court of !ppeals3 ')- *CRA
)69 !44-".
Te f%ct t%t o#e i$ "e%li#& (it %# %&e#t- (eter te %&e#c' )e
&e#er%l or $+eci%l- $o.l" )e % "%#&er $i&#%l. Te ,ere
re+re$e#t%tio# or "ecl%r%tio# of o#e t%t e i$ %.tori>e" to %ct
o# )e%lf of %#oter c%##ot of it$elf $er!e %$ +roof of i$
%.torit' to %ct %$ %&e#t or of te e;te#t of i$ %.torit' %$ %&e#t.
3u #ng Cho v* Pan !merican %orld !irays/ +nc*3 ('5 *CRA
8!8 '999".
Te %.torit' or e;te#t of %.torit' of %# %&e#t c%##ot )e
e$t%)li$e" )' i$ o(# re+re$e#t%tio#$ o.t of co.rt ).t .+o# te
)%$i$ of te ,%#ife$t%tio#$ of te +ri#ci+%l i,$elf. I# c%$e te
f%ct of %&e#c' or te e;te#t of te %.torit' of te %&e#t i$
co#tro!erte"- te 1urden of proof is upon the third person to
esta1lish it. '! Finance Corp* v* Court of !ppeals3 '!! *CRA
!!' !44'"= .elasco v. a 2r1ana, 18 Eil. 681 41<??7= 'acaltos
Coal ,ines v. Court of Appeals- 231 SCRA 365 41<<17= Safic
Alcan & Cie v. I$perial .egeta1le Oild co., Inc., ?11 SCRA 11<
425517.
b. Duty of Di$igence
!" !s 'eteen the Principal and the !gent
U#"er Article 1886- it i$ te o)li&%tio# of e!er' %&e#t (o
%cce+t$ te %&e#c' to %ct i# %ccor"%#ce (it te i#$tr.ctio#$ of
te +ri#ci+%l- %#" i# "ef%.lt tereof- to "o %ll t%t % &oo" f%ter
of % f%,il' (o.l" "o %$ reA.ire" )' te #%t.re of te ).$i#e$$. I#
te $%,e ,%##er- Article 1<5< +ro!i"e$ e;+re$$l' t%t te %&e#t
i$ re$+o#$i)le #ot o#l' for fr%."- ).t %l$o for #e&li&e#ce. I#
e$$e#ce- te ".t' of "ili&e#ce reA.ire$ of te %&e#t to %ct o#
)e%lf of te +ri#ci+%l e;erci$i#& te ".e "ili&e#ce of % &oo"
f%ter of % f%,il'= %#" e i$ i# )re%c of $.c fi".ci%r' ".t'
(e# e %ct$ i# fr%." or i# #e&li&e#ce- e!e# (e# e +.r$.e$ te
).$i#e$$ of te +ri#ci+%l. Te %rticle$ co#fir, te tr.i$, t%t i#
te +.r$.it of te %&e#c'- it i$ e;+ecte" t%t te %&e#t (o.l"
%!e to %ct )%$e" o# i$ o(# %$$e$$,e#t of (%t i$ #ece$$%r'
.#"er te $it.%tio# (e# it i$ #ot co!ere" )' %# e;+re$$
i#$tr.ctio# fro, te +ri#ci+%l.
A$ % ,%tter of &.i"eli#e of (%t i$ (iti# i$ +o(er- Article
1888 +ro!i"e$ t%t te %&e#t I$%ll #ot c%rr' o.t %# %&e#c' if it$
e;ec.tio# (o.l" ,%#ife$tl' re$.lt i# lo$$ or "%,%&e to te
+ri#ci+%l.H Notice t%t te %rticle co!er$ o#l' %ct$ t%t (o.l"
I,%#ife$tl'H le%" to lo$$e$= i# oter (or"$- te %&e#t c%##ot )e %
&.%r%#tor t%t te +ri#ci+%l (o.l" $.ffer #o lo$$ or "%,%&e i#
te +.r$.it of te %&e#c'= .,%# #%t.re %$ it i$- te $.$t%i#i#& of
lo$$e$ ".e to .,%# error i$ +%rt of te ri$: of e!er' o(#er or
+ri#ci+%l- e!e# (e# e i,$elf c%rrie$ o# te ).$i#e$$. Te
o)li&%tio# of te %&e#t i$ to %!oi" lo$$e$ (ic %re cle%rl'
%!oi"%)le fro, te e;erci$e of ".e "ili&e#ce of % &oo" f%ter of
% f%,il'.
@e# %# %&e#t !iol%te$ i$ ".t' of lo'%lt'- e )eco,e$
+er$o#%ll' li%)le to te +ri#ci+%l for te "%,%&e$ c%.$e" to te
+ri#ci+%l )' re%$o# of i$ fr%." or #e&li&e#ce.
It $o.l" )e e,+%$i>e" o(e!er- t%t (e# te %&e#t %ct$ i#
%ccor"%#ce (it te i#$tr.ctio#$ of te +ri#ci+%l- te %&e#t
c%##ot )e "ee,e" to %!e %cte" i# fr%." %&%i#$t te +ri#ci+%l or
to %!e %cte" #e&li&e#tl'- e!e# (e# "%,%&e (%$ c%.$e" to te
+ri#ci+%l. T.$ Article 18<< +ro!i"e$ t%t IIf % ".l' %.tori>e"
%&e#t %ct$ i# %ccor"%#ce (it te or"er$ of te +ri#ci+%l- te
/+ri#ci+%l0 c%##ot $et .+ te i&#or%#ce of te %&e#t %$ to
circ.,$t%#ce$ (ereof e i,$elf (%$- or o.&t to %!e )ee#-
%(%re.H
'" !s to )hird Parties
Si#ce %# %&e#t %ct$ i# re+re$e#t%tio# of i$ +ri#ci+%l- (e# e
%ct$ (iti# te $co+e of i$ %.torit'- ).t "oe$ $o (it
#e&li&e#ce t%t c%.$e$ "%,%&e to tir" +er$o#$- te +ri#ci+%l i$
li%)le to $.c i#B.re" +%rtie$ to te "%,%&e$ c%.$e" )' te %&e#t-
%$ to.& e i,$elf %" "irectl' c%.$e" te "%,%&e$.
;hen an agent acts 4ith fraud or negligence 1ut pursuant to the
instructions of the principal, 4ould the agent then 1e personall*
lia1le to the third parties in!ured there1*< In other 4ords, does
the agent also 1eco$e personall* lia1le to third parties in!ured
1* his fraudulent or negligent acts<
c. Effects on t&e Agent of Contracts Entere# into 7it&in t&e
*cope of .is Aut&ority
All co#tr%ct$ %#" tr%#$%ctio#$ e#tere" i#to )' te %&e#t o# )e%lf
of te +ri#ci+%l (it te $co+e of i$ %.torit' %re )i#"i#& o# te
+ri#ci+%l- %#" te %&e#t "oe$ #ot $t%#" to eiter )e li%)le- or to
%!e &%i#e" %#' ri&t o# i$ o(# %ccor"- tere.#"er.
'ay 1ie (otel v* 4er 5 Co*3 !!6 *CRA ('8 !45'"- el" t%t
te %ct$ %#" "ecl%r%tio# of te %&e#t (iti# te $co+e of i$
%.torit' %#" ".ri#& it$ e;i$te#ce %re co#$i"ere" %#" tre%te" %$
to$e of +ri#ci+%l.
'ritish Air4a*s v. Court of Appeals- 281 SCRA 315 41<<87- el"
t%t (e# o#e %irli#e co,+%#' 4Briti$ Air(%'$7 $.)co#tr%ct$ %
le& of te i#ter#%tio#%l tri+ of it$ +%$$e#&er to %#oter %irli#e
co,+%#' 4EAL7- te co#tr%ct of %ir tr%#$+ort%tio# (%$
e;cl.$i!el' )et(ee# +%$$e#&er %#" BA- (it EAL ,erel' %cti#&
%$ it$ %&e#t o# te G%#il% to Fo#& Jo#& le& of te Bo.r#e'. Te
(ell8$ettle" r.le i$ t%t %# %&e#t i$ %l$o re$+o#$i)le for %#'
#e&li&e#ce i# te +erfor,%#ce of it$ f.#ctio# %#" i$ li%)le for
"%,%&e$ (ic te +ri#ci+%l ,%' $.ffer )' re%$o# of te %&e#tC$
#e&li&e#t %ct.
@e# %# %&e#t- i# e;ec.ti#& te or"er$ %#" co,,i$$io#$ of i$
+ri#ci+%l- c%rrie$ o.t te i#$tr.ctio#$ e %$ recei!e" fro, i$
+ri#ci+%l- %#" "oe$ #ot %++e%r to %!e e;cee"e" i$ %.torit' or
to %!e %cte" (it #e&li&e#ce- "eceit- or fr%."- e c%##ot )e el"
re$+o#$i)le for te f%il.re of i$ +ri#ci+%l to %cco,+li$ te
o)Bect of te %&e#c'. 6utierre7 (ermanos v* Oria (ermanos3
(9 P&i$. )4! !4!-"= (. %u*at & Sons, Inc. v. Arco A$use$ent
Co$pan*- 62 Eil. 352 41<317.
It i$ % &e#er%l r.le i# te l%( %&e#c' t%t- i# or"er to )i#" te
+ri#ci+%l )' % ,ort&%&e o# re%l +ro+ert' e;ec.te" )' %# %&e#t- it
,.$t .+o# it$ f%ce +.r+ort to )e ,%"e- $i&#e" %#" $e%le" i# te
#%,e of te +ri#ci+%l- oter(i$e- it (ill )i#" te %&e#t o#l'.
(ozun v. ,ercado 111 SCRA ?51 425567.
A# %ctio# )ro.&t i# te #%,e of te %&e#t %#" #ot i# te #%,e
of te +ri#ci+%l (o i$ te re%l +%rt' i# i#tere$t- ,.$t )e
"i$,i$$e" #ot .+o# te ,erit$- ).t .+o# te &ro.#" t%t it %$
#ot )ee# +ro+erl' i#$tit.te". #speran7a and 'ullo v* Catindig3
'8 P&i$. (48 !4!)".
@e# te %&e#t %$ %cte" (iti# te $co+e of i$ %.torit'- te
%ctio# o# te co#tr%ct ,.$t )e )ro.&t %&%i#$t te +ri#ci+%l %#"
#ot %&%i#$t te %&e#t. !ng v* Fulton Fire +nsurance Co*3 '
*CRA 4)- !46!".
Re$ate# CasesD
Cason v* Richards3 - P&i$ 6!! !496"
%&' v. ,anila Suret*- 13 SCRA 666 41<617
&epo$uceno v. Heredia- 6 Eil 16? 41<567
%hil. 'an- of Co$$erce v. Aruego- 152 SCRA 1?5 41<817
&#A v. IAC- 183 SCRA 166 41<<57
,ariti$e Agencies & Securities, Inc. v. Court of appeals- 186
SCRA ?36 41<<57.
#. Effects of Acts Done by Agent 7it&out or in E2cess of .is
Aut&ority
Te &e#er%l r.le i$ $et .#"er Article 1?16 of te Ci!il Co"e t%t
INo o#e ,%' co#tr%ct i# te #%,e of %#oter (ito.t )ei#&
%.tori>e" )' te l%tter- or .#le$$ e %$ )' l%( % ri&t to
re+re$e#t i,. A co#tr%ct e#tere" i#to i# te #%,e of %#oter )'
o#e (o %$ #o %.torit' or le&%l re+re$e#t%tio#- or (o %$
%cte" )e'o#" i$ +o(er$- $%ll )e .#e#force%)le- .#le$$ it i$
r%tifie"- e;+re$$l' or i,+lie"l'- )' te +er$o# o# (o$e )e%lf it
%$ )ee# e;ec.te"- )efore it i$ re!o:e" )' te oter +%rt'.H
Te r.le$ .#"er Article 1?16 %re $.++orte" .#"er Article 135?-
(ic i#cl."e$ %,o#& to$e cl%$$ifie" %# I.#e#force%)le
co#tr%ct$-H I417 To$e e#tere" i#to i# te #%,e of %#oter +er$o#
)' o#e (o %$ )ee# &i!e# #o %.torit' or le&%l re+re$e#t%tio#-
or (o %$ %cte" )e'o#" i$ +o(er.H
S+ecific%ll'- .#"er te L%( o# A&e#c'- Article 18<8 +ro!i"e$
t%t I/i0f te %&e#t co#tr%ct$ i# te #%,e of te +ri#ci+%l-
e;cee"i#& te $co+e of i$ %.torit'- %#" te +ri#ci+%l "oe$ #ot
r%tif' te co#tr%ct- it $%ll )e !oi" if te +%rt' (it (o, te
%&e#t co#tr%cte" i$ %(%re of te li,it$ of te +o(er$ &r%#te" )'
te +ri#ci+%l. I# ti$ c%$e- o(e!er- te %&e#t i$ li%)le if e
.#"ertoo: to $ec.re te +ri#ci+%lC$ r%tific%tio#.H te follo(i#&
co#$eA.e#ce$ $%ll flo(D
4%7 it $%ll )e !oi" if te +%rt' (it (o, te %&e#t co#tr%cte" i$
%(%re of te li,it$ of te +o(er$ &r%#te" )' te +ri#ci+%l=
4)7 I# $.c c%$e- te %&e#t (o.l" )e li%)le +er$o#%ll' to $.c
tir" +%rt'- if e .#"ertoo: to $ec.re te +ri#ci+%lC$ r%tific%tio#=
Ti$ +ri#ci+le i$ reiter%te" i# te $eco#" +%r%&r%+ of Article
1<15 (ic +ro!i"e$ t%t IA$ for %#' o)li&%tio# (erei# te
%&e#t %$ e;cee"e" i$ +o(er- te +ri#ci+%l i$ #ot )o.#" e;ce+t
(e# e r%tifie$ it e;+re$$l' or t%citl'.H
O# te oter %#"- if te +%rt' (ic (o, te %&e#t co#tr%ct i$
.#%(%re of te li,it$ of te +o(er$ &r%#te" )' te +ri#ci+%l- te
co#tr%ct i$ .#e#force%)le .#"er Article 135?417.
U#"er Article 1<55- te (ritte# +o(er of %ttor#e' &i!e# )' te
+ri#ci+%l &o!er#$ te co#tr%ct$ e#tere" i#to (it tir" +%rtie$-
re&%r"le$$ of %#' +ri!%te li,it%tio# of +o(er$ %&ree" .+o#
)et(ee# te +ri#ci+%l %#" te %&e#t.
Te li%)ilit' of %# %&e#t (o e;cee"$ te $co+e of i$ %.torit'
"e+e#"$ .+o# (eter te tir" +er$o# (%$ %(%re of te li,it$
of te %&e#tC$ +o(er. Te %&e#t i$ #ot )o.#" #or li%)le for
"%,%&e$ i# c%$e e &%!e #otice of i$ +o(er to te +er$o# (it
(o, e %$ co#tr%cte"- #or i# c%$e $.c +er$o# i$ %(%re of te
li,it$ of te %&e#tC$ +o(er$. Te re$.lti#& co#tr%ct (o.l" )e
!oi" e!e# %$ )et(ee# te %&e#t %#" te tir" +er$o#- %#"
co#$eA.e#tl' #ot le&%ll' )i#"i#& %$ )et(ee# te,. Fo(e!er- if
te %&e#t +ro,i$e" or .#"ertoo: to $ec.re te +ri#ci+%lC$
r%tific%tio# %#" f%ile"- e i$ +er$o#%ll' li%)le. If te r%tific%tio# i$
o)t%i#e"- te# te +ri#ci+%l )eco,e$ li%)le. Cervantes v. Court
of Appeals- ?53 SCRA 21 41<<<7= Safic Alcan v. I$perial
.egeta1le- ?11 SCRA 11< 425517= +'% v. Court of Appeals- 2?1
SCRA ?65 41<<37.
Re$ate# Cases,
'orja v* Sulyap3 (44 *CRA 69! '99(".
&ational %o4er v. &A,ARCO- 116 SCRA 68< 41<827
%&' v. Agudelo- 18 Eil 611 41<??7
=a*co v. Serra- 3< Eil <81 41<217
%&' v. ;elsh #airchild- 33 Eil 685 41<2?7
e. Conse>uences 7&en Agent Acts in .is O/n Na%e
U#"er Article 188?- if %# %&e#t %ct$ i# i$ o(# #%,e- te
+ri#ci+%l %$ #o ri&t of %ctio# %&%i#$t te +er$o#$ (it (o,
te %&e#t %$ co#tr%cte"= %#" #eiter %!e $.c +er$o#$ % ri&t or
c%.$e of %ctio# %&%i#$t te +ri#ci+%l. It % (ell8e$t%)li$e"
"octri#e t%t (e# %# %&e#t- "o %cti#& (iti# te $co+e of i$
%.torit'- e#ter$ i#to te co!ere" co#tr%ct i# i$ o(# #%,e- te#
te co#tr%ct i$ )i#"i#& o#l' %&%i#$t te %&e#t- %#" te +ri#ci+%l i$
#ot )o.#"- #or "oe$ e %!e le&%l $t%#"i#& to e#force it= ti$ i$
)ec%.$e te co#tr%ct i$ "ee,e" to %!e )ee# e#tere" )et(ee# te
tir" +%rt' %#" te %&e#t %$ i$ o(# +ri#ci+%l./10
I# ,ari$perio Co$pania &aviera, S.A. v. Court of Appeals- 116
SCRA ?68 41<867- te Co.rt el" t%t .#"er Article 188? of te
Ci!il Co"e- if %# %&e#t %ct$ i# i$ o(# #%,e- te +ri#ci+%l %$ #o
ri&t of %ctio# %&%i#$t te +er$o#$ (it (o, te %&e#t %$
co#tr%cte"= #eiter %!e $.c +er$o#$ %&%i#$t te +ri#ci+%l. I#
$.c c%$e te %&e#t i$ te o#e "irectl' )o.#" i# f%!or of te
+er$o# (it (o, e %$ co#tr%cte"- %$ if te tr%#$%ctio# (ere
i$ o(#- e;ce+t (e# te co#tr%ct i#!ol!e$ ti#&$ )elo#&i#& to
te +ri#ci+%l. Si#ce te +ri#ci+%l$ %!e c%.$e" teir %&e#t to
e#ter i#to % c%rter +%rt' i# i$ o(# #%,e %#" (ito.t "i$clo$i#&
t%t e %ct$ for %#' +ri#ci+%l- te# $.c +ri#ci+%l$ %!e #o
$t%#"i#& to $.e .+o# %#' i$$.e or c%.$e of %ctio# %ri$i#& fro,
$%i" c%rter +%rt'.
!" #8ception9 %hen the Property +nvolved in the Contract
'elongs to the Principal
E;ce+tio# i$ (e# te +ro+ertie$ of te +ri#ci+%l %re i#!ol!e"- i#
(ic c%$e te +ri#ci+%l i$ )o.#". (old Star ,ining Co., Inc. v.
i$7"i$ena- 21 SCRA 1<6 41<687= %#" i$ % r.le #ece$$%r' for
te +rotectio# of tir" +er$o#$ %&%i#$t +o$$i)le coll.$io#
)et(ee# te %&e#t %#" te +ri#ci+%l. PN' v* !gudelo y
6on7aga3 -5 P&i$. 6(- !4((".
T.$- te f%ct t%t ,o#e' .$e" )' te %&e#t )elo#&e" to te
+ri#ci+%l i$ co!ere" )' te e;ce+tio#. Sy$0uco v* Sy$0uco3 )9
P&i$ 6() !4'9".
'" Remedy of the Principal +s to Recover -amages from the
!gent
Article 188? ,%:e$ it cle%r t%t te fore&oi#& r.le$ %re (ito.t
+reB."ice to %ctio#$ )et(ee# +ri#ci+%l %#" %&e#t.
Te r.le i# ti$ B.ri$"ictio# i$ t%t (ere te ,erc%#"i$e i$
+.rc%$e" fro, %# %&e#t (it .#"i$clo$e" +ri#ci+%l %#" (ito.t
:#o(le"&e o# te +%rt of te +.rc%$er t%t te !e#"or i$ ,erel'
%# %&e#t- te +.rc%$er t%:e title$ to te ,erc%#"i$e %#" te
+ri#ci+%l c%##ot %# %ctio#$ %&%i#$t i, for te reco!er' of te
,erc%#"i$e or e!e# for "%,%&e$- ).t c%# o#l' +rocee" %&%i#$t
te %&e#t. !ivad v* Filma Mercantile Co*/ )4 P&i$. 5!6 !4'6".
Alto.& %ccor"i#& to %rticle 188?- (e# te %&e#t %ct$ i# i$
o(# #%,e e i$ #ot +er$o#%ll' li%)le to te +er$o# (it (o, e
e#ter$ i#to % co#tr%ct (e# ti#&$ )elo#&i#& to te +ri#ci+%l %re
te $.)Bect tereof= 'et $.c tir" +er$o# %$ % ri&t of %ctio# #ot
o#l' %&%i#$t te +ri#ci+%l ).t %l$o %&%i#$t te %&e#t- (e# te
ri&t$ %#" o)li&%tio#$ (ic %re te $.)Bect ,%tter of te
liti&%tio# c%##ot )e le&%ll' %#" B.ri"ic%ll' "eter,i#e" (ito.t
e%ri#& )ot of te,. 'eaumont v* Prieto3 )! P&i$. 689 !4'!"*
&ational #ood Authorit* v. Inter$ediate Appellate Court- 183
SCRA 166 41<<57
/10Herranz & (arriz v. 5er & Co.- 8 Eil. 162 41<567= i$ Tiu
v. Ruiz- 11 Eil ?66 41<157= S$ith 'ell v. Sotelo ,atti- 33 Eil
863 41<227= 'ehn ,e*er & Co. v. 'anco Espa>?ol7#ilipino- 11
Eil. 21? 41<267= i$ Te- (oan v. Azores- 65 Eil. ?6? 41<357=
Ortega v. 'auang #ar$ers Cooperative ,ar-eting Assn.- 156
Eil. 866 41<1<7.
V. RULES OF @FAT EO@ERS GAY BE VALIDLY
EQERCISED BY TFE AGENY
a. Genera$ Ru$e on Po/er of A#%inistration
I# te %)$e#ce of te &r%#t of $+eci%l +o(er of %ttor#e' to te
%&e#t- e i$ "ee,e" to %!e )ee# e;te#"e" o#l' % &e#er%l +o(er
of %ttor#e' )' te +ri#ci+%l- %#" i$ +o(er$ c%# o#l' co!er %ct$
of %",i#i$tr%tio#. T.$- .#"er Article 1866- e!er' %&e#c'
co.ce" i# &e#er%l ter,$ c%# o#l' )e co#$tr.e" %$ &r%#ti#& to
te %&e#t te +o(er to e;ec.te %ct$ of %",i#i$tr%tio#- e!e# if te
+ri#ci+%lD
4%7 St%te$ t%t e (itol"$ #o +o(er fro, te %&e#t=
4)7 St%te$ t%t te %&e#t ,%' e;ec.te %ct$ e co#$i"er$
%++ro+ri%te= or
4c7 A.tori>e$ &e#er%l %#" .#li,ite" ,%#%&e,e#t
Act$ of %",i#i$tr%tio# %$ te $%,e co,,erci%l %#" le&%l
$i&#ific%#ce %$ Ito %ct i# te or"i#%r' co.r$e of ).$i#e$$.H For
e;%,+le- te ri&t to $.e for te collectio# of "e)t o(i#& to te
+ri#ci+%l i$ "ee,e" not %# i#ci"e#t of $trict o(#er$i+ (ic
,.$t )e co#ferre" i# e;+re$$ ter,$. 6erman 5 Co* v*
-onaldson/ Sim 5 Co*3 ! P&i$. 6( !49!".
A# %ttor#e'8i#8f%ct e,+o(ere" to +%' te "e)t$ of te +ri#ci+%l
%#" to e,+lo' le&%l co.#$el to "efe#" te +ri#ci+%lC$ i#tere$t-
%$ cert%i#l' te i,+lie" +o(er to +%' o# )e%lf of te +ri#ci+%l
te %ttor#e'C$ fee$ c%r&e" )' te l%('er. ,unicipal Council of
Iloilo v. Evangelista- 11 Eil 2<5 41<?57.
A# %&e#t &r%#te" .#"er % +o(er of %ttor#e' te %.torit' to "e%l
(it +ro+ert' (ic te +ri#ci+%l ,i&t or co.l" %!e "o#e if
+er$o#%ll' +re$e#t- i$ "ee,e" %.tori>e" to e#&%&e te $er!ice$
of % l%('er to +re$er!e te o(#er$i+ %#" +o$$e$$ of te
+ro+ertie$ of te +ri#ci+%l.
A# officer (o %$ co#trol %#" ,%#%&e,e#t of te cor+or%tio#C$
).$i#e$$- or % $+ecific +%rt tereof- i$ "ee,e" to %!e +o(er to
e,+lo' $.c %&e#t$ %#" e,+lo'ee$ %$ %re .$.%l %#" #ece$$%r' i#
te co#".ct of te cor+or%tio#C$ ).$i#e$$- e;ce+t o#l' (ere
$.c %.torit' i$ e;+re$$l' !e$te" i# te Bo%r" of Director$. 3u
Chuc& v* 4ong 2i Po3 )6 P&i$ 695 !4')".
(overn$ent of %I v. ;agner- 13 Eil 1?2 41<2<7.
@eter (%t i$ &r%#te" i$ %# %.torit' to ,erel' %",i#i$ter
4&e#er%l +o(er of %ttor#e'7- or to "o %# %ct of $trict o(#er$i+
4$+eci%l +o(er of %ttor#e'7- i$ #ot "eter,i#e" fro, te title
&i!e# to te i#$tr.,e#t- ).t #%t.re o# te #%t.re of te +o(er
&i!e# .#"er te o+er%ti!e +ro!i$io#$ of $.c i#$tr.,e#t.
B.t (eter (%t i$ &r%#te" to te %&e#t i$ % &e#er%l +o(er of
%ttor#e' or % $+eci%l +o(er of %ttor#e'- te r.le of $trict
co#$tr.ctio# $till +re!%il$. T.$D
RS Eo(er$ of %ttor#e' %re &e#er%ll' co#$tr.e" $trictl' %#" co.rt$
(ill #ot i#fer or +re$.,e )ro%" +o(er$ fro, "ee"$ (ic "o #ot
$.fficie#tl' i#cl."e +ro+ert' or $.)Bect .#"er (ic te %&e#t i$
to "e%l. Te %ct "o#e ,.$t )e le&%ll' i"e#tic%l (it t%t
%.tori>e" to )e "o#e. %oodchild (oldiings/ +nc* v* Ro8as
#lectric 5 Construction Co*/ +nc*3 )(6 *CRA '(- '99)".
RS Te "ecl%r%tio# of te %&e#t %lo#e %re &e#er%ll' i#$.fficie#t to
e$t%)li$ te f%ct or e;te#t of er %.torit'. Te $ettle" r.le i$
t%t +er$o#$ "e%li#& (it %# %$$.,e" %&e#t %re )o.#" %t teir
+eril- %#" if te' (o.l" ol" te +ri#ci+%l li%)le to %$cert%i# #ot
o#l' te f%ct of %&e#c' ).t %l$o te #%t.re %#" e;te#t of
%.torit'- %#" i# c%$e eiter i$ co#tro!erte"- te ).r"e# of +roof
i$ .+o# te, to +ro!e it. iton!ua v. #ernandez- 326 SCRA 368
425537- citing 6u Eng Cho v. %an A$erican ;orld Air4a*s, Inc.-
?28 SCRA 616 425557.
RS E!e# (e# % $+eci%l +o(er of %ttor#e' i$ &r%#te" )' te
+ri#ci+%l to i$ %&e#t- it i$ $till te &e#er%l r.le t%t % +o(er of
%ttor#e' ,.$t )e $trictl' co#$tr.e"= te i#$tr.,e#t (ill )e el"
to &r%#t o#l' to$e +o(er$ t%t %re $+ecifie"- %#" te %&e#t ,%'
#eiter &o )e'o#" #or "e!i%te fro, te +o(er of %ttor#e'.
Olaguer v. %urugganan, "r.- 111 SCRA 365 425567.
!" Forms Re:uired of Poers of !ttorney
Alto.& %&e#c' i$ % co#$e#$.%l co#tr%ct %#" ,%' t.$ )e
co#$tit.te" )' ,ere ,eeti#& of ,i#"$- it $ee,$ t%t (e# te
l%( reA.ire$ te %&e#c' to )e i# te for, of % I+o(er of
%ttor#e'H- it ,e%#$ t%t i"e%ll' 4).t #ot #ece$$%ril'7 it $ust 1e in
4riting. @e# te %&e#c' i$ #ot i# (riti#&- te# it "oe$ #ot
#ece$$%ril' ,e%# t%t te co#tr%ct of %&e#c' i$ !oi"- ).t t%t
f%il.re to co,+l' (it te for, reA.ire" (o.l" %!e $erio.$
le&%l co#$eA.e#ce$.
T.$- .#"er Article 1863 of te Ci!il Co"e- %# %&e#c' to $ell %
+iece of l%#" or %# i#tere$t terei# ,.$t )e i# (riti#&- oter(i$e-
te re$.lti#& co#tr%ct of $%le (o.l" )e !oi".
U#"er Article 1868- % $+eci%l +o(er of %ttor#e' i$ #ece$$%r' to
co#fer +o(er i# te %&e#c' t%t (o.l" co#$tit.te %ct$ of
o(#er$i+- i"e%ll' te %&e#c' co#tr%ct ,.$t )e i# (riti#&. @e#
terefore % $+eci%l +o(er of %ttor#e'- or te co#fer,e#t of
+o(er$ to te %&e#t to e;ec.te %ct$ of $trict o(#er$i+ o# )e%lf
of te +ri#ci+%l- i$ "o#e or%ll'- te %&e#c' rel%tio#$i+ ,%' )e
!%li" %$ )et(ee# te +ri#ci+%l %#" %&e#t- ).t t%t tir" +%rtie$
(o "e%l (it i, ,.$t reA.ire (ritte# e!i"e#ce of i$ +o(er to
e;ec.te %ct$ of $trict o(#er$i+- oter(i$e- te' %re )o.#" to
e#ter i#to te co#tr%ct %t teir o(# ri$:.
I# Ho$e Insurance Co. v. 2nited States ines Co., 21 SCRA 86?
41<667- te Co.rt el" t%t Article 1868 "oe$ #ot $t%te t%t te
$+eci%l +o(er of %ttor#e' )e i# (riti#&= )e t%t %$ it ,%'- te
$%,e ,.$t )e ".l' e$t%)li$e" )' e!i"e#ce oter t%# te $elf8
$er!i#& %$$ertio# of te +%rt' cl%i,i#& t%t $.c %.torit' (%$
!er)%ll' &i!e# i,. I# Ho$e Insurance Co.- i# $+ite of co.#$elC$
%$$.r%#ce t%t e %" !er)%l %.torit' to e#ter i#to co,+ro,i$e
for +.r+o$e of +re8tri%l +rocee"i#&$- te R.le$ of Co.rt reA.ire
for %ttor#e'$ to co,+ro,i$e te liti&%tio# of teir clie#t$ %
I$+eci%l %.torit'H 4te# Sectio# 2?- R.le 1?8- R.le$ of Co.rt7.
A#" (ile te $%,e "oe$ #ot $t%te t%t te $+eci%l %.torit' )e i#
(riti#&- te co.rt %$ e!er' re%$o# to e;+ect t%t- if #ot i#
(riti#&- te $%,e )e ".l' e$t%)li$e" )' e!i"e#ce oter t%# te
$elf8$er!i#& %$$ertio# of co.#$el i,$elf t%t $.c %.torit' (%$
!er)%ll' &i!e# i,. . . For %.torit' to co,+ro,i$e c%##ot
li&tl' )e +re$.,e". A#" if- (it &oo" re%$o#- te B."&e i$ #ot
$%ti$fie" t%t $%i" %.torit' e;i$t$- %$ i# ti$ c%$e- "i$,i$$%l of
te $.it for #o#8%++e%r%#ce of +l%i#tiff i# +re8tri%l i$ $%#ctio#e"
)' te R.le$.
Alto.&- tere i$ #o reA.ire,e#t t%t te +o(er of %ttor#e' to
)e !%li" %#" )i#"i#& ,.$t )e #ot%ri>e" or i# % +.)lic i#$tr.,e#t.
'arretto v. Tuason- 1< Eil. 831 41<?37. Fo(e!er- % #ot%ri>e"
+o(er of %ttor#e' c%rrie$ te e!i"e#ti%r' (ei&t co#ferre" .+o#
it (it re$+ect to it$ ".e e;ec.tio#. 1eloso v* Court of !ppeals3
'69 *CRA -4( !446".
'" Construction Rules on Poers of !ttorney
T%t % +o(er of %ttor#e' )e i# (riti#& $ee,$ to )e ,ore critic%l
to te co#$tit.tio# of % $+eci%l +o(er of %ttor#e'- t%# to %
&e#er%l +o(er of %ttor#e'. I# )ot t'+e$ of %&e#cie$- )ec%.$e of
te %)$e#ce of % (ritte# e!i"e#ce- te ).r"e# of +roof to $o(
t%t tere i$ i#"ee" % co#tr%ct of %&e#c' i$ o# te +%rt of te
+er$o# (o +.r+ort$ to %ct for %#" i# )e%lf of % +ri#ci+%l- %#"
e!e# te# tir" +%rtie$ %re "irecte" to e#$.re te #%t.re %#"
e;te#t of te %&e#tC$ +o(er. B.t if (%t (%$ co#$tit.te" (%$ %
&e#er%l +o(er of %ttor#e'- it co!er$ ,erel' %ct$ of
%",i#i$tr%tio#- %#" terefore tir" +%rtie$ (o.l" )e le$$ (%r'
t%t te co#tr%ct or tr%#$%ctio# te' e#tere" i#to i$ #ot (iti# te
+o(er$ of te %&e#t. O# te oter %#"- (e# (%t (%$
co#$tit.te" (%$ %# or%l $+eci%l +o(er of %ttor#e'- te# l%c:i#&
te (ritte# e!i"e#ce of (%t +%rtic.l%r +o(er of o(#er$i+ %$
)ee# &r%#te" to te %&e#t- te tir" +%rt' ,%' o#l' re%$o#%)l'
+re$.,e t%t te %&e#t i$ &r%#te" o#l' +o(er$ of %",i#i$tr%tio#.
Terefore- o.t$i"e of Article 1863 (ic re#"er$ te $%le of %
+iece of l%#" !oi" if te +o(er of %ttor#e' i$ #ot i# (riti#&-
e!er' co#tr%ct e#tere" i#to )' te %&e#t o# )e%lf of te
+ri#ci+%l co!eri#& %ct$ of o(#er$i+ ,%"e +.r$.%#t to % !er)%l
$+eci%l +o(er of %ttor#e' (o.l" #ot )e !oi"- ).t r%ter
.#e#force%)le- for te +ri#ci+%l %$ e!er' %.torit' to +.r$.e te
re$.lti#& co#tr%ct- %#" te tir"8+%rt' (o.l" )e e$to++e" fro,
ref.$i#& to co,+l' (it % co#tr%ct e (illi#&l' e#tere" i#to
%)$e#t te (ritte# %.torit' of te %&e#t.
b. Cases 7&ere *pecia$ Po/ers of Attorney Are Necessary
Article 1868 e#.,er%te$ fo.rtee# i#$t%#ce$ (ic %re "e$cri)e"
%$ I%ct$ of $trict "o,i#io#-H %#" (ic c%##ot )e "ee,e" to )e
(iti# te +o(er of te %&e#t .#le$$ e;+re$$l' &r%#te" 4i.e.-
e;ce+t .#"er % $+eci%l +o(er of %ttor#e'7- %#" te fiftee#t c%$e
e#.,er%te" %ct.%ll' co!er$ te &e#er%l r.leD A dul* appointed
agent has no po4er to e)ercise on 1ehalf of the principal an* act
of strict do$inion unless it is under a special po4er of attorne*.
;hat $a-es an agenc* a special po4er of attorne*< It i$ #ot te
#%,e or title &i!e# i# te "ee" i$$.e" )' te +ri#ci+%l t%t
"eter,i#e$ (eter te %&e#t c%# e;erci$e %ct$ of $trict
"o,i#io# for %#" i# )e%lf of te +ri#ci+%l.
!" )o Ma&e Payments as !re Not Usually Considered as !cts
of !dministration
E%',e#t$ ,%"e i# te or"i#%r' co.r$e of ).$i#e$$ co#$tit.te
,erel' %ct$ of %",i#i$tr%tio#- $i#ce te' te# &o i#to ,ere %ct$
of ,%#%&e,e#t. U#"er Article 1866- %# %&e#c' co.ce" i#
&e#er%l ter,$ co,+ri$e$ %ct$ of %",i#i$tr%tio# (ic (o.l"
i#cl."e I&e#er%l %#" .#li,ite" ,%#%&e,e#t.H
All oter for,$ of +%',e#t for %#" i# )e%lf of te +ri#ci+%l
(o.l" co#$tit.te %ct$ of $trict "o,i#io#- (ic %re #ot "ee,e"
(iti# te +o(er of e!e# % ".l' %++oi#te" %&e#t- .#le$$ &r%#te"
$+eci%ll' or .#"er % $+eci%l +o(er of %ttor#e'.
I# +o$inion Insurance v. Court of Appeals- ?66 SCRA ?2<
425527- %lto.& % IS+eci%l Eo(er of Attor#e'H (%$ i$$.e" )'
te i#$.r%#ce co,+%#' to it$ %&e#c' ,%#%&er- it$ (or"i#&$
$o(e" t%t it $o.&t o#l' to e$t%)li$ %# %&e#c' t%t co,+ri$e$
%ll te ).$i#e$$ of te +ri#ci+%l (it te "e$i&#%te" loc%lit'- ).t
co.ce" i# &e#er%l ter,$- %#" co#$eA.e#tl' (%$ li,ite" o#l' to
%ct$ of %",i#i$tr%tio#. Te Co.rt el" t%t % &e#er%l +o(er
+er,it$ te %&e#t to "o %ll %ct$ for (ic te l%( "oe$ #ot
reA.ire % $+eci%l +o(er. T.$- te %ct$ e#.,er%te" i# or $i,il%r
to to$e e#.,er%te" i# te IS+eci%l Eo(er of Attor#e'H 4i.e.-
re%ll' % &e#er%l +o(er of %ttor#e'7 "i" #ot reA.ire % $+eci%l
+o(er of %ttor#e'- %#" co.l" o#l' co!er %ct$ of %",i#i$tr%tio#.
I# +o$inion Insurance- it (%$ el" t%t te +%',e#t of cl%i,$
)' te %re% ,%#%&er of %# i#$.r%#ce co,+%#' "i" #ot co#$tit.te
%# %ct of %",i#i$tr%tio#- %#" t%t $i#ce te $ettle,e#t of cl%i,$
(%$ #ot i#cl."e" %,o#& te %ct$ e#.,er%te" i# te S+eci%l
Eo(er of Attor#e' i$$.e" )' te i#$.r%#ce co,+%#'- #or i$ of %
c%r%cter $i,il%r to te %ct$ e#.,er%te" terei#- te# % $+eci%l
+o(er of %ttor#e' (%$ reA.ire" )efore $.c %re% ,%#%&er co.l"
$ettle te i#$.r%#ce cl%i,$ of te i#$.re". Co#$eA.e#tl'- te
%,o.#t$ +%i" )' te %re% ,%#%&er to $ettle $.c cl%i,$ (ere #ot
%llo(e" to )e rei,).r$e" fro, te +ri#ci+%l i#$.r%#ce co,+%#'.
'" )o #ffect Novation %hich Put an #nd to Obligations
!lready in #8istence at the )ime the !gency %as Constituted
Te +o(er of %# %&e#t to #o!%te o)li&%tio#$ I%lre%"' i#
e;i$te#ce %t te ti,e te %&e#c' (%$ co#$tit.te"-H (ic ,.$t )e
co!ere" )' % $+eci%l +o(er of %ttor#e'- (o.l" i,+l' t%t if te
o)li&%tio# (%$ cre%te" o#l' ".ri#& te %&e#c' rel%tio#$i+- te
+o(er to cre%te $.c o)li&%tio# &r%#te" to te %&e#t )ri#&$ (it
it te i,+lie" +o(er to #o!%te it.
;hat happens if the agent is clearl* e$po4ered under a special
po4er of attorne* to incur an o1ligation in 1ehalf of the
principal, and in the process of doing so, the agent novates an
pre7e)isting o1ligation<
(" )o Compromise/ )o Submit ;uestions to !rbitration/ )o
Renounce the Right to !ppeal from a 0udgment/ )o %aive
Objections to the 1enue of an !ction/ or )o !bandon a
Prescription !lready !c:uired
U#"er Article 1885- % $+eci%l +o(er to co,+ro,i$e "oe$ #ot
%.tori>e $.),i$$io# to %r)itr%tio#. It ,%' %l$o )e "e".ce" t%t %
$+eci%l +o(er to $.),it to %r)itr%tio# c%##ot )e co#$tr.e" to
&r%#t to te %&e#t te +o(er to co,+ro,i$e.
U#"er Article 2528- co,+ro,i$e i$ % co#tr%ct (ere)' te
+%rtie$- )' ,%:i#& reci+roc%l co#ce$$io#$- %!oi" % liti&%tio# or
+.t %# e#" to o#e %lre%"' co,,e#ce".
Sectio# ?4"7 of te Alter#%ti!e Di$+.te Re$ol.tio# Act of 2553
4R.A. No. <2817- I%r)itr%tio#H i$ "efi#e" %$ I% !ol.#t%r' "i$+.te
re$ol.tio# +roce$$ i# (ic o#e or ,ore %r)itr%tor$- %++oi#te" i#
%ccor"%#ce (it te %&ree,e#t of te +%rtie$- or r.le$
+ro,.l&%te" +.r$.%#t to ti$ Act- re$ol!e % "i$+.te )' re#"eri#&
%# %(%r".H
U#"er Article 1885- te +o(er to co,+ro,i$e e;cl."e$ te
+o(er to $.),it to %r)itr%tio#. It (o.l" %l$o )e re%$o#%)le to
co#cl."e t%t te +o(er to $.),it to %r)itr%tio# "oe$ #ot c%rr'
(it it te +o(er to co,+ro,i$e. ;ith such special e)clusion
rule under Article @AAB as to the po4ers to co$pro$ise and
ar1itrate, 4ould that $ean all other po4ers covered under the
paragraph nu$1ered C of Article @ADA are not $utuall*
e)clusive< I# or"er (or"$- te &r%#t of te $+eci%l +o(er to
co,+ro,i$e (o.l" ,e%# t%t te i,+lie" +o(er of te %&e#t to
re#o.#ce te ri&t to %++e%l fro, % B."&,e#t of % lo(er co.rt- if
t%t )e e$$e#ti%l i# %rri!i#& %t % co,+ro,i$e re$ol.tio# )efore
te %++ell%te co.rt. S%,e ti#& co.l" )e $%i" of te $+eci%l
+o(er to (%i!e o)Bectio#$ to te !e#.e of %# %ctio#- or to (%i!e
% +re$cri+tio# %lre%"' %cA.ire"- !i$8T 8!i$ te $+eci%l +o(er to
co,+ro,i$e.
@e# te %ttor#e'8i#8f%ct %$ )ee# %.tori>e" i# (riti#& to
i#$tit.te %#' %ctio# i# co.rt to eBect %ll +er$o# fo.#" i# %
$+ecifie" +%rcel of l%#" I%#" for ti$ +.r+o$e- to %++e%r %t te
+re8tri%l %#" e#ter i#to %#' $ti+.l%tio# of f%ct$ %#"Lor
co,+ro,i$e %&ree,e#t ).t o#l' i#$of%r %$ ti$ (%$ +rotecti!e of
te ri&t$ %#" i#tere$t$ of te +ri#ci+%l i# te +ro+ert'-H te $%,e
"oe$ #ot co#$tit.te %.torit' to e#ter i#to % co,+ro,i$e
%&ree,e#t t%t +ro!i"e$ for te $%le of te +ro+ert' to te
"efe#"%#t i# te c%$e t.$ file". Te B."&,e#t )%$e" o#
co,+ro,i$e e#tere" i#to )' te %ttor#e' (o %$ #ot $o(#
$+ecific %.torit' to "o $o (%$ "ecl%re" !oi". Cos$ic u$1er v.
Court of Appeals- 261 SCRA 168 41<<67. No#etele$$- i#
-ungo v* 2opena3 6 *CRA !998 !46'"- te co.rt c%r%cteri>e"
% co,+ro,i$e e#tere" i#to )' te l%('er (ito.t te $+eci%l
+o(er of %ttor#e' of clie#t #ot to )e !oi" ).t ,erel'
.#e#force%)le.
Co#fe$$io# of B."&,e#t$ $t%#"$ o# te $%,e footi#& %$ %
co,+ro,i$e- %#" ,%' #ot )e e#tere" i#to )' co.#$el e;ce+t (it
te :#o(le"&e %#" co#$e#t of te clie#t- or .+o# i$ $+eci%l
e,+o(er,e#t. !cener v* Sison3 5 *CRA 8!! !46(".
)" )o %aive !ny Obligation 6ratuitously
ITo (%i!e %#' o)li&%tio# &r%t.ito.$l'H i$ te i#ele&%#t !er$io#
of te le&%l ter, Ico#"o#%tio# or re,i$$io# of te "e)tH (ic
.#"er Article 1265 Ii$ e$$e#ti%ll' &r%t.ito.$- %#" reA.ire$ te
%cce+t%#ce )' te o)li&or. It ,%' )e ,%"e e;+re$$l' or
i,+lie"l'.H I# oter (or"$- %# %&e#t c%##ot o.t$i"e of % $+eci%l
+o(er of %ttor#e'- co#"o#e or re,it te o)li&%tio#$ o(i#& to te
+ri#ci+%l= %#" if e "oe$ $o- te %ct i$ I.#e#force%)le.H
It "oe$ #ot ,e%# o(e!er- t%t e!er' %&e#t of te +ri#ci+%l
(o.l" %!e te +o(er to (%i!e te +ri#ci+%lC$ o)li&%tio# for
!%l.%)le co#$i"er%tio# o.t$i"e of %.torit' to "o $o= (%t it
,e%#$ i$ t%t (e# (iti# te $co+e of %.torit' of te %&e#tC$
%.torit' e ,%' "o $o %$ %# i,+lie" or i#ci"e#t%l +o(er=
(ere%$- te +o(er to (%i!e %# o)li&%tio# o(e" to te +ri#ci+%l
&r%t.ito.$l' c%# o#l' %ri$e %$ %# e;+re$$ +o(er- ).t #ot i,+lie"
or i#ci"e#t%l +o(er of %# %&e#t. I# oter (or"$- te eA.i!%le#t of
te ter, Ito (%i!e %#' o)li&%tio# o#ero.$l'-H (o.l" )e
eA.i!%le#t to +%',e#t or +erfor,%#ce of te o)li&%tio#- (ic
)' it$ e$$e#ce i$ %# %ct %"!%#t%&eo.$ to te +ri#ci+%l- %#" (e#
"o#e (ito.t e;+re$$ %.torit' i$ $till (iti# te $co+e of te
%&e#tC$ %.torit'.
A#oter (%' of %++ro%ci#& te i$$.e- i$ t%t if .#"er +%r%&r%+
#.,)ere" 1 of Article 1868- e!er' %&e#t %$ te i,+lie" +o(er
to ,%:e +%',e#t$ t%t i# te or"i#%r' co.r$e of ).$i#e$$- te#
,ore$o c%# %# %&e#t collect +%',e#t$ o# o)li&%tio#$ o(i#& to
te +ri#ci+%l- (ic )' teir #%t.re %re %l$o %ct$ of
%",i#i$tr%tio# or ,%#%&e,e#t.
-" )o #nter into !ny Contract by %hich the Onership of an
+mmovable +s )ransmitted or !c:uired #ither 6ratuitously or
for a 1aluable Consideration
E%r%&r%+ #.,)ere" 1 of Article 1868 co!er$ o#l' i,,o!%)le
+ro+ert'- %$ "i$ti#&.i$e" fro, ,o!%)le +ro+ert'. It "oe$ #ot
,e%# t%t e!er' %&e#t %$ te i,+lie" +o(er to tr%#$,it or
%cA.ire o(#er$i+ o!er ,o!%)le +ro+ert' o# )e%lf of te
+ri#ci+%l= (%t te +%r%&r%+ i#te#"$ to co#!e' i$ t%t tere c%#
#e!er )e %# i,+lie" +o(er o# te +%rt of te %&e#t to tr%#$,it or
%cA.ire o(#er$i+ o!er i,,o!%)le +ro+ert'- (eter )'
o#ero.$ or &r%t.ito.$ title= if $.c +o(er $%ll )e "ee,e" to
e;i$t i$ ,.$t )e e;+re$$l' &r%#te".
E%r%&r%+ #.,)ere" 1 of Article 1868 cre%te$ te I&e#er%l r.leH
of $+eci%l +o(er of %ttor#e' (e# it co,e$ to i,,o!%)le
+ro+ert'= %#" &e#er%ll' re#"er$ te re$.lti#& co#tr%ct$ ,erel'
.#e#force%)le. @e# it co,e$ to % +%rtic.l%r t'+e of i,,o!%)le
+ro+ert'- #%,el' l%#" or %#' i#tere$t terei#- Article 1863
%++lie$ $+ecific%ll'- i.e.- #ot o#l' ,.$t te +o(er )e &r%#te"
.#"er % $+eci%l +o(er of %ttor#e' 4i.e.- e;+re$$l' &i!e#7- it ,.$t
)e i# (riti#&- oter(i$e- te re$.lti#& co#tr%ct of $%le i$ !oi".
O)!io.$l'- i# te +.rc%$e of % +iece of l%#" or %#' i#tere$t
terei# tro.& %# %&e#t- Article 1863 "oe$ #ot %++l'- %#" (o.l"
)e co!ere" )' Article 1868. Li:e(i$e- "o#%tio#$ of i,,o!%)le$
tro.& %# %&e#t %re co!ere" e#tirel' .#"er +%r%&r%+ 1 of
Article 1868.
Fi#%ll'- it i$ cle%r fro, % co,+%ri$o# of te +ro!i$io#$ of Article
1863 %#" 1868/10- t%t te +o(er &r%#te" to %# %&e#t to +.rc%$e
% +iece of l%#" or %#' i#tere$t terei# ,.$t )e i# te for, of
$+eci%l +o(er of %ttor#e'- te $%,e #ee" #ot )e i# (riti#& i#
or"er to )e !%li". Rodrigue7 v* Court of !ppeals3 '4 *CRA )!4
!464". I# %ineda v. Court of Appeals- ?66 SCRA 222 425527- it
(%$ el" t%t (e# % o.$e %#" lot (%$ $ol" )' %# %&e#t (o
%" #o %.torit' fro, te re&i$tere" o(#er to "o $o- te re$.lti#&
$%le i$ !oi"D
Te Ci!il Co"e +ro!i"e$ t%t i# % $%le of % +%rcel of l%#" or %#'
i#tere$t terei# i$ ,%"e tro.& %# %&e#t- % $+eci%l +o(er of
%ttor#e' i$ e$$e#ti%l. /Article 18680 Ti$ %.torit' ,.$t )e i#
(riti#&- oter(i$e te $%le $%ll )e !oi". /Article 18630 ; ; ; A
$+eci%l +o(er of %ttor#e' i$ #ece$$%r' to e#ter i#to %#' co#tr%ct
)' (ic te o(#er$i+ of %# i,,o!%)le i$ tr%#$,itte" or
%cA.ire" for % !%l.%)le co#$i"er%tio#. @ito.t %# %.torit' i#
(riti#& . . . %#' OPU$%leC . . . i$ !oi". 4%t +. 2287
Tere i$ #o "oc.,e#t%r' e!i"e#ce o# recor" t%t te o(#er$ of %
l%r&e tr%ct of l%#" $+ecific%ll' %.tori>e" te )ro:er to $ell teir
+ro+ert' to %#oter. Article 1868 of te Ne( Ci!il Co"e +ro!i"e$
t%t % $+eci%l +o(er of %ttor#e' i$ #ece$$%r' to e#ter i#to %#'
co#tr%ct )' (ic te o(#er$i+ of %# i,,o!%)le i$ tr%#$,itte"
or %cA.ire" eiter &r%t.ito.$l' or for % !%l.%)le co#$i"er%tio#
/Article 18684170- to cre%te or co#!e' re%l ri&t$ o!er i,,o!%)le
+ro+ert' /Article 186841270- or for %#' oter %ct of $trict
"o,i#io# /Article 186841150. A#' $%le or re%l +ro+ert' )' o#e
+.r+orti#& to )e %# %&e#t of te re&i$tere" o(#er (ito.t %#'
%.torit' terefor i# (riti#& fro, $%i" o(#er i$ #.ll %#" !oi"./10
iton!ua v. #ernandez- 326 SCRA 368 425537.
U#"er Article 186<- I/%0 $+eci%l +o(er to $ell e;cl."e$ te
+o(er to ,ort&%&e= %#" % $+eci%l +o(er to ,ort&%&e "oe$ #ot
i#cl."e te +o(er to $ell.H
-?A" Sale of a Piece of 2and
Article 1863 of te Ci!il Co"e +ro!i"e$ t%t I@e# % $%le of %
+iece of l%#" or %#' i#tere$t terei# i$ tro.& %# %&e#t- te
%.torit' of te l%tter $%ll )e i# (riti#&= oter(i$e- te $%le $%ll
)e !oi".H Note t%t te %rticle "oe$ #ot "ecl%re te %&e#c' to )e
!oi"- ).t te re$.lti#& co#tr%ct of $%le effecte" )' te %&e#t. Is
the agenc* itself void<
Te De Leo#$ %!e o+i#e" t%t te $t%t.$ of $.c % $%le effecte"
tro.& %# %&e#t (o$e $+eci%l +o(er of %ttor#e' i$ #ot i#
(riti#&- i$ #ot re%ll' !oi"- ).t ,erel' !oi"%)le I$i#ce te $%le
c%# )e r%tifie" )' te +ri#ci+%l 4$ee Art$. 1<51- 1<15- +%r. 27
$.c %$ )' %!%ili#& i,$elf of te )e#efit$ "eri!e" fro, te
co#tr%ct.H 4%t +. 3167.
I#"ee"- i# (utierrez Her$anos v. Orense- 28 Eil 162 41<137-
te Co.rt el" t%t %lto.& te $eller %" #ot +re!io.$l'
%.tori>e" % +er$o# to $ell i$ +%rcel of l%#"- ).t (e# $.c
+er$o# $.)$eA.e#tl' %++ro!e" te %ctio# of te +.r+orte" %&e#t-
ti$ +ro".ce" te effect of r%tific%tio# co#!erti#& te rel%tio#$i+
i#to %# e;+re$$ %&e#c'. Fo(e!er- te r.li#& i# (uitierrez
Her$anos c%##ot )e relie" .+o# to $.++ort te co#cl.$io# t%t %
$%le of % +iece of l%#" tro.& %# %&e#t (ito.t % (ritte#
%.torit' (o.l" ,erel' )e .#e#force%)le i# $+ite of te cle%r
l%#&.%&e of Article 1863 $i#ce te "eci$io# (%$ re#"ere" .#"er
te ter,$ of te ol" Ci!il Co"e- %#" Article 1863 i$ %# e#tirel'
#e( +ro!i$io# i# te Ne( Ci!il Co"e. Li:e(i$e- %+%rt fro, te
"ee" of $%le effecte" )' te %&e#t i# (utierrez Her$anos- te
re&i$tere" o(#er $.)$eA.e#tl' tereto %ffir,e" te $%le .#"er
+.)lic "oc.,e#t%tio#. Te +roce".re i$ %l$o +o$$i)le .#"er
Article 1863- (ic ,e%#$ t%t if te %&e#t e#ter$ i#to % $%le of %
+iece of l%#" (ito.t (ritte# %.torit'- i#"ee" te $%le (o.l" )e
!oi"= ).t t%t if te +ri#ci+%l $.)$eA.e#tl'- e#ter$ "irectl' %&%i#
(it te $%,e ).'er i#to % for,%l "ee" of $%le- te# te $eco#"
tr%#$%ctio#$ (o.l" )e !%li" for it i$ #o lo#&er co!ere" .#"er
Article 1863.
Te r.le terefore i$ )e$t e;+re$$e" i# Raet v. Court of Appeals-
2<1 SCRA 666 41<<87- (ere te Co.rt el" t%t Article 1863 of
te Ci!il Co"e reA.ire$ for te !%li"it' of % $%le i#!ol!i#& l%#"
t%t te %&e#t $o.l" %!e %# %.tori>%tio# i# (riti#&= oter(i$e
%#' $%le co#cl."e" o# te l%#" i$ !oi"=/20 %#" t%t i# Rodriguez
v. Court of A++e%l$- 2< SCRA 31< 41<6<7- (ic el" t%t
Article 1863 refer$ to $%le$ ,%"e )' %# %&e#t for % +ri#ci+%l %#"
#ot te $%le$ ,%"e )' te o(#er +er$o#%ll' to %#oter- (eter
t%t oter )e %cti#& +er$o#%ll' or tro.& % re+re$e#t%ti!e. Is it
clear therefore that Art. @AEF does not cover directl* an agency
to purchase a piece of land or an interest therein.
No#etele$$- o#l' rece#tl' i# Escueta v. i$, 112 SCRA 311
425567- te Co.rt %ffir,e" te r.li#& i# (utierrez Her$anos.
Escueta i#!ol!e" te $%le i$ +%rcel$ of l%#" effecte" )' te $.)8
%&e#t %++oi#te" )' te %ttor#e'8i#8f%ct of te o(#er- (o cl%i,$
t%t t%t te $.)8%&e#t (%$ #ot &i!e# %#' $+eci%l +o(er of
%ttor#e' to $ell te +%rcel$ of l%#". Te Co.rt el"D IE!e#
%$$.,i#& t%t /te $.)8%&e#t0 %$ #o %.torit' to $ell te $.)Bect
+ro+ertie$- te co#tr%ct $e e;ec.te" i# f%!or of te re$+o#"e#t$
i$ #ot !oi"- ).t $i,+l' .#e#force%)le- .#"er te $eco#"
+%r%&r%+ of Article 1?16 of te Ci!il Co"e (ic re%"$ . . . %
co#tr%ct e#tere" i#to i# te #%,e of %#oter )' o#e (o %$ #o
%.torit' or le&%l re+re$e#t%tio#- or (o %cte" )e'o#" i$
+o(er$- $%ll )e .#e#force%)le- .#le$$ it i$ r%tifie"- e;+re$$l' or
i,+lie"l'- )' te +er$o#$ o# (o$e )e%lf it %$ )ee# e;ec.te"-
)efore it i$ re!o:e" )' te oter co#tr%cti#& +%rt'.H 4%t +. 3237.
A letter co#t%i#i#& te $+ecific %.torit' to $ell i$ $.fficie#t %#"
co,+lie$ (it Article 1863. "i$enez v. Ra1ot- ?8 Eil. ?86
41<187. T.$- I# Cit* ite Realt* Inc. v. Court of Appeals- ?21
SCRA ?81 425557- te (ritte# letter i$$.e" )' % l%#"o(#er re%"D
I@e (ill %++reci%te Getro Dr.&C$ %$$i$t%#ce i# referri#& to .$
).'er$ for +ro+ert'. Ele%$e +rocee" to ol" +reli,i#%r'
#e&oti%tio#$ (it i#tere$te" ).'er$ %#" e#"or$e for,%l offer$ to
.$ for o.r fi#%l e!%l.%tio# %#" %++r%i$%l.H Te Co.rt el" t%t
te l%#&.%&e of te letter "i" #ot co#$tit.te (ritte# %.torit' to
$ell te l%#"- %#" te %++oi#te" i#"i!i".%l (%$ o#l' "e$i&#%te"
%$ % co#t%ct +er$o# or % )ro:er (it #o %.torit' to co#cl."e %
$%le of te +ro+ert'. A#' $%le o# te +%rcel of l%#" co#cl."e" )'
$.c %# %++oi#tee (o.l" )e !oi"- %#" te $%le co.l" #ot +ro".ce
%#' le&%l effect %$ to tr%#$fer te $.)Bect +ro+ert' fro, it$ l%(f.l
o(#er.
I# i>?an v. %uno- ?1 Eil. 21< 41<117- te Co.rt el" t%t for
te +ri#ci+%l to co#fer te ri&t .+o# %# %&e#t to $ell re%l e$t%te-
% +o(er of %ttor#e' ,.$t $o e;+re$$ te +o(er$ of te %&e#t i#
cle%r %#" .#,i$t%:%)le l%#&.%&e= %#" (e# tere i$ %#'
re%$o#%)le "o.)t t%t te l%#&.%&e $o .$e" co#!e'$ $.c +o(er-
#o $.c co#$tr.ctio# $%ll )e &i!e# te "oc.,e#t. T.$- i# t%t
"eci$io#- % +o(er of %ttor#e' +ro!i"i#& t%t II ere)' co#fer
$.fficie#t +o(er ; ; ; .+o# A- i# or"er t%t i# ,' #%,e %#"
re+re$e#t%tio# e ,%' %",i#i$ter te i#tere$t I +o$$e$$ (iti#
ti$ G.#ici+%lit' of T%rl%c- +.rc%$e- $ell- collect %#" +%'- etc.H
(%$ el" $.fficie#t to co!er te $%le )' te %&e#t of l%#" of te
+ri#ci+%l i# T%rl%c.
I# Strong v* 6utierre7 Repide3 6 P&i$. 659 !496"- te Co.rt
cl%rifie" t%t Te e;+re$$ ,%#"%te reA.ire" )' Article 1863 to
e#%)le %# %++oi#tee of %# %&e#c' co.ce" i# &e#er%l ter,$ to
$ell ,.$t )e o#e t%t e;+re$$l' ,e#tio#$ % $%le or t%t i#cl."e$ %
$%le %$ % #ece$$%r' i#&re"ie#t of te %ct ,e#tio#e". Te +o(er of
%ttor#e' #ee" #ot co#t%i# % $+ecific "e$cri+tio# of te l%#" to )e
$ol"- $.c t%t &i!i#& te %&e#t te +o(er to $ell I%#' or %ll
tr%ct$- lot$- or +%rcel$H of l%#" )elo#&i#& to te +ri#ci+%l i$
%"eA.%te.
I# 4atigba& v* )ai (ing Co*3 -' P&i$. 6'' !4'5"- it (%$ el"
t%t te %.torit' to $ell %#' :i#" of re%lt' t%t I,i&t )elo#&H to
te +ri#ci+%l (%$ el" to i#cl."e %l$o $.c %$ te +ri#ci+%l ,i&t
%fter(%r"$ %!e ".ri#& te ti,e it (%$ i# force.
I# P* !mico and 0* !migo v* S* )eves3 46 P&i$. '-' !4-)"- te
Co.rt el" t%t (ere te +o(er of %ttor#e' $%'$ t%t te %&e#t
c%# e#ter i#to %#' co#tr%ct co#cer#i#& % l%#"- or c%# $ell te l%#"
.#"er %#' ter, or co#"itio# %#" co!e#%#t e ,%' ti#: fit- e i$
cert%i#l' &r%#te" +o(er to "e%l (it te l%#"- %#" $ell it- i# te
$%,e ,%##er %#" (it te $%,e )re%"t %#" l%tit."e %$ te
+ri#ci+%l co.l".
Alto.& te "oc.,e#t e;ec.te" )' te o(#er of te l%#" (%$
"e#o,i#%te" %$ % IGe#er%l Eo(er of Attor#e'-H it (%$ (it
re$+ect to te %.torit' &i!e# to $ell te l%#" % $+eci%l +o(er of
%ttor#e'- for it +ro+erl' "e$cri)e" te title of te l%#" %#" te
cle%r +o(er to $ell it. T.$ tere (%$ #o #ee" to e;ec.te %
$e+%r%te %#" $+eci%l +o(er of %ttor#e' for te %&e#t to effect te
$%le of te l%#" i# te #%,e of te +ri#ci+%l. ITe $+eci%l +o(er
of %ttor#e' c%# )e i#cl."e" i# te &e#er%l +o(er (e# it i$
$+ecifie" terei# te %ct or tr%#$%ctio# for (ic te $+eci%l
+o(er i$ reA.ire".H .eloso v. Court of Appeals, 265 SCRA 1<?
41<<67.
Fi#%ll'- it $o.l" )e #ote" t%t i# 'ico Savings 5 2oan !ssn* v*
Court of Appea$s3 !8! *CRA 6(9 !454"- te Co.rt el" t%t
te $%le +ro$cri)e" .#"er Article 186< refer$ to % !ol.#t%r' $%le
effecte" tro.& te %&e#t= it "oe$ #ot co!er te +.)lic $%le t%t
%++e#$ %$ +%rt of te foreclo$.re o# te ,ort&%&e ".l'
co#$tit.te".
Re$ate# Cases,
%&' v. Court of Appeals- <3 SCRA ?16 41<6<7
5uenzle and Streiff v. Collector of Custo$s- ?1 Eil 636 41<117
+ela %ena v. Hidalgo- 16 Eil 315 41<157
Rio * Ola11arrieta v. 6utec- 3< Eil 266 41<267
-?1" Agent Cannot @a$i#$y Purc&ase Property of Principa$
U#"er Article 13<1427 of te Ci!il Co"e- .#le$$ $o e;+re$$l'
%.tori>e"- %# %&e#t c%##ot +.rc%$e te +ro+ert' of i$
+ri#ci+%l= %#" if e "oe$ $o- te $%le (o.l" )e !oi". It ,e%#$
terefore t%t e!e# (e# te %&e#t %$ )ee# &r%#te" % $+eci%l
+o(er of %ttor#e' to $ell % +iece of l%#" or %#' i#tere$t i# it- $.c
+o(er "oe$ #ot i#cl."e )' i,+lic%tio# te +o(er to $ell to
i,$elf .#"er te cle%r +ro!i$io#$ of Article 13<1427 of te Ci!il
Co"e- .#le$$ tere (%$ $.c +rior %.tori>%tio# &i!e# )' te
+ri#ci+%l.
Olaguer v. %urugganan, "r.- 111 SCRA 365 425567- reco&#i>e"
t%t te +roi)itio# %&%i#$t %&e#t$ +.rc%$i#& +ro+ert' i# teir
%#"$ for $%le or ,%#%&e,e#t i$ cle%rl'- #ot %)$ol.te= (e# $o
%.tori>e" )' te +ri#ci+%l- te %&e#t i$ #ot "i$A.%lifie" fro,
+.rc%$i#& te +ro+ert' e ol"$ .#"er % co#tr%ct of %&e#c' to
$ell.
6" To 0aAe Gifts
A &ift or % "o#%tio# i$ "efi#e" .#"er Article 621 of te Ci!il
Co"e %$ %# %ct of li)er%lit' (ere)' % +er$o# "i$+o$e$
&r%t.ito.$l' of % ti#& or ri&t i# f%!or of %#oter +er$o# (o
%cce+t$ it.
U#"er +%r%&r%+ 6 of Article 1868- for %# %&e#t to %!e te
+o(er to ,%:e &ift$ or "o#%tio#$ o# )e%lf of te +ri#ci+%l
(o.l" reA.ire te $%,e to )e i# te for, of % $+eci%l +o(er of
%ttor#e'- e;ce+tD
4%7 C.$to,%r' o#e$ for c%rit'
4)7 To$e ,%"e to e,+lo'ee$ i# te ).$i#e$$ ,%#%&e" )' te
%&e#t
@e# % &ift or "o#%tio# i$ ,%"e )' %# %&e#t o# )e%lf of te
+ri#ci+%l (ic i$ #ot co!ere" )' % $+eci%l +o(er of %ttor#e'- it
"oe$ #ot )eco,e !oi" for f%il.re to co,+l' (it te$e
reA.ire,e#t i# A&e#c' L%( 4)ec%.$e $.c "eficie#c' ,erel'
re#"er$ te co#tr%ct .#e#force%)le7- ).t r%ter it i$ !oi" or #ot
"e+e#"i#& o# (eter it co,+lie$ (it te for,%litie$ reA.ire"
.#"er te L%( o# Do#%tio#- for e!er' %ct of "o#%tio# co#$tit.te"
% $ole,# co#tr%ct. Te #et effect of co,+li%#ce (it te
for,%litie$ reA.ire" )' te L%( o# Do#%tio# (o.l" )e to ,%:e
te re$.lti#& &ift or "o#%tio# .#e#force%)le- (e# it "oe$ #ot
co,+l' (it te $+eci%l +o(er of %ttor#e' reA.ire,e#t.
8" To Loan or 1orro/ 0oney
U#"er +%r%&r%+ 6 of Article 1868- te +o(er of %# %&e#t to
eiter lo%# or )orro( ,o#e'- i$ %# %ct of $trict o(#er$i+- %#"
reA.ire$ te $%,e to )e i# te for, of % $+eci%l +o(er of
%ttor#e'. Te e;ce+tio# (o.l" )e (e# te %ct I)e .r&e#t %#"
i#"i$+e#$%)le for te +re$er!%tio# of te ti#&$ (ic %re .#"er
%",i#i$tr%tio#.H/?0 Te +%r%&r%+ %$ )ee# co#$tr.e" to co!er
o#l' te )orro(i#& of ,o#e' .#"er $utuu$- %#" "oe$ #ot
i#cl."e +.rc%$i#& of &oo"$ o# cre"it o# )e%lf of te +ri#ci+%l.
+e .illa v. #a1ricante- 151 Eil. 662 41<1<7.
Si#ce te %.torit' to )orro( ,o#e' i$ r%rel' i#ferre"- i# Rural
'an- of Caloocan, Inc. v. Court of Appeals- 153 SCRA 111
41<817- te Co.rt r.le" t%t % cre"itor $o.l" reA.ire te
e;ec.tio# of % +o(er of %ttor#e' i# or"er t%t o#e ,%' )e
.#"er$too" to %!e &r%#te" %#oter te %.torit' to )orro( o#
)e%lf of te for,er.
;hat happens 4hen there is no po4er of attorne* given< I#
(ozun v. ,ercado 111 SCRA ?51 425567- te Co.rt el" t%t %
$+eci%l +o(er of %ttor#e' i$ #ece$$%r' for %# %&e#t to )orro(
,o#e'- .#le$$ it )e .r&e#t %#" i#"i$+e#$%)le for te +re$er!%tio#
of te ti#&$ (ic %re .#"er %",i#i$tr%tio#= %#" t%t $.c
co#tr%ct e#tere" i#to i# te #%,e of %#oter +er$o# )' o#e (o
%$ )ee# &i!e# #o %.torit' or le&%l re+re$e#t%tio# or (o %$
%cte" )e'o#" i$ +o(er$ %re cl%$$ifie" %$ .#%.tori>e" co#tr%ct$
%#" %re .#e#force%)le- .#le$$ te' %re r%tifie".
Te $+eci%l %.torit' to )orro( ,o#e' for te +ri#ci+%l i$ #ot to
)e i,+lie" fro, te $+eci%l +o(er of %ttor#e' to ,ort&%&e re%l
e$t%te. PN' v* Sta* 0aria3 '4 *CRA (9( !464"= %#" te +o(er
to )orro( ,o#e' &r%#te" to te %&e#t cannot be deemed to
i#cl."e te +o(er to $+e#" te %,o.#t t.$ )orro(e" %$ e
+le%$e$. (odges v* Salas3 6( P&i$. -68 !4(6".
O# te oter %#"- .#"er Article 18<5- if te %&e#t %$ )ee#
e,+o(ere" to )orro( ,o#e'- te# e i$ #ot "i$A.%lifie" fro,
)ei#& i,$elf te le#"er %t te c.rre#t r%te of i#tere$t. O# te
oter %#"- te %rticle %l$o +ro!i"e$- t%t if te %&e#t %$ )ee#
e,+o(ere" to le#" ,o#e' %t i#tere$t- e c%##ot )orro( it
(ito.t te co#$e#t of te +ri#ci+%l.
I# Rural 'an- of Caloocan v. Court of Appeals- 153 SCRA 111
41<817- te Co.rt el" t%t %lto.& it i$ +ri#ci+le i$ t%t %
+er$o# (o$e %ct$ ol"i#& %#oter +er$o# to )e i$ %&e#t %#"
(o.l" le%" % tir" +er$o# to )elie!e $.c +.r+orte" %&e#t (%$
%.tori>e" to $+e%: %#" )i#" i,- c%##ot #o( )e +er,itte" to
"e#' te %.torit' of te +.r+orte" %&e#t= ).t ti$ i$ o#l' tr.e
(e# te +.r+orte" %&e#t (%$ clote" (it %++%re#t %.torit'. I#
ti$ c%$e- (ere te %.torit' of te +.r+orte" %&e#t (%$ o#l' to
follo( .+ of te +ri#ci+%lC$ lo%# %++lic%tio# (it te )%#:- it
c%##ot )e +re$.,e" t%t e (%$ %l$o &r%#te" %.torit' to )orro(
o# )e%lf of te +ri#ci+%l- e$+eci%ll' (e# te +ri#ci+%l er$elf
(e#t to te )%#: to $i&# te +ro,i$$or' #ote for te lo%#
o)t%i#e" fro, te )%#:. If te +ri#ci+%lC$ %ct %" )ee#
.#"er$too" )' te )%#: to )e % &r%#t of %# %.torit' to te %&e#t
to )orro( o# )e%lf of te +ri#ci+%l- te )%#: $o.l" %!e
reA.ire" % $+eci%l +o(er of %ttor#e' co!eri#& $.c +o(er to
)orro(.
Re$ate# Case,
+e .illa v. #a1ricante- 151 Eil 662 41<1<7
%&' v. Tan Ong Sze- 1? Eil. 311 41<2<7
Rodriguez v. %a$intuan- ?6 Eil 866 41<187
%&' v. Sta. ,aria- 2< SCRA 25? 41<6<7
5" To Lease Rea$ Property for 0ore T&an One ;ear
It $ee,$ cle%r fro, +%r%&r%+ #.,)ere" 8 of Article 1868- te
le%$e of re%l +ro+ert' for ,ore t%# o#e 'e%r i$ %# %ct of $trict
o(#er$i+= (ere%$- te %ct of e#teri#& i#to % co#tr%ct of le%$e
for o#e 'e%r or le$$- (o.l" )e co#$i"ere" %# %ct of
%",i#i$tr%tio#- %#" ,%' )e i# te for, of &e#er%l +o(er of
%ttor#e'.
Te +%r%&r%+ "oe$ #ot co!er le%$e$ of +er$o#%l +ro+ert'- (ic
te# (o.l" le%" to te co#cl.$io# t%t %#' +o(er &i!e# to te
%&e#t to le%$e +er$o#%l +ro+ert'- for (%te!er +erio"- (o.l"
co#$tit.te ,erel' % &e#er%l +o(er of %ttor#e'= %#" ,%' )e
i,+lie" fro, te e;+re$$ +o(er$ &i!e#.
I# ti$ co##ectio#- it $o.l" )e #ote" t%t .#"er Article 135?427
of te Ci!il Co"e- %# %&ree,e#t for te le%$i#& of re%l +ro+ert'
for % +erio" lo#&er t%# o#e 'e%r i$ .#e#force%)le .#le$$ ,%"e
i# (riti#&. Terefore- e!e# (e# te %&e#c' +o$$e$$ % $+eci%l
+o(er of %ttor#e' to le%$e re%l +ro+ert'- (e# te le%$e it$elf for
,ore t%# % 'e%r i$ #ot i# (riti#&- te re$.lti#& co#tr%ct (o.l"
$till )e .#e#force%)le.
I# % co#tr%ct of %&e#c'- te %&e#t %ct$ i# re+re$e#t%tio# or i#
)e%lf of %#oter (it te co#$e#t of te l%tter. Article 1868 of
te Ci!il Co"e e;+re$$e$ t%t % $+eci%l +o(er of %ttor#e' i$
#ece$$%r' to le%$e %#' re%l +ro+ert' to %#oter +er$o# for ,ore
t%# o#e 'e%r. Te le%$e of re%l +ro+ert' for ,ore t%# o#e 'e%r
i$ co#$i"ere" #ot ,erel' %# %ct of %",i#i$tr%tio# ).t %# %ct of
$trict "o,i#io# or of o(#er$i+. A $+eci%l +o(er of %ttor#e' i$
t.$ #ece$$%r' for it$ e;ec.tio# tro.& %# %&e#t. Shopper3s
%aradise Realt* v. Ro/ue- 31< SCRA <? 425537.
;hat is the legal status of a contract entered into 1* an agent on
1ehalf of the principal 4here the la4 re/uires that he should 1e
ar$ed 4ith a special po4er of attorne*, and *et he had no such
special po4er< I# .da. +e Chua v. IAC- 22< SCRA << 41<<37-
(ere te i$$.e )efore te S.+re,e Co.rt (%$ Ite %ffir,%#ce
)' te Co.rt of A++e%l$ of te "eci$io# of te tri%l co.rt-
or"eri#& teir eBect,e#t fro, te +re,i$e$ i# A.e$tio# %#" te
"e,olitio# of te i,+ro!e,e#t$ i#tro".ce" tereo#-H te le$$ee$
relie" o# te co#tr%ct of le%$e e#tere" i#to )' o# )e%lf of te
+ri#ci+%l8le$$or- )' er %ttor#e' i# f%ct (o (%$ #ot %r,e" to
le%$e te +re,i$e$ for ,ore t%# o#e 'e%r. Fo(e!er- te f%ct$
$o(e" t%t te le$$ee$ $t%'e" i# te +re,i$e$ ".ri#& te ter, of
te le%$e- %#" (ic (%$ i,+lie"l' re#e(e" tro.& tacita
reconduccion. Te Co.rt e;+re$$l' %&ree" (it te Co.rt of
A++e%l$ re$ol.tio# I"ecl%ri#& te co#tr%ct of le%$e 4E; ICH7
!oi"H o# te &ro.#" t%t te %&e#t I(%$ #ot %r,e" (it % $+eci%l
+o(er of %ttor#e' to e#ter i#to % le%$e co#tr%ct for % +erio" of
,ore t%# o#e 'e%r- t.$D
@e %&ree (it te Co.rt of A++e%l$.
Te le%$e co#tr%ct 4E;. *C*7- te li#c+i# of +etitio#er$9 c%.$e
of %ctio#- i#!ol!e$ te le%$e of re%l +ro+ert' for % +erio" of ,ore
t%# o#e 'e%r. Te co#tr%ct (%$ e#tere" i#to )' te %&e#t of te
le$$or %#" #ot te le$$or er$elf. I# $.c % c%$e- te l%( reA.ire$
t%t te %&e#t )e %r,e" (it % $+eci%l +o(er of %ttor#e' to le%$e
te +re,i$e$. ; ; ;.
It i$ tr.e t%t re$+o#"e#t Ferrer% %llo(e" +etitio#er$ to occ.+'
te le%$e" +re,i$e$ %fter te e;+ir%tio# of te le%$e co#tr%ct
4E;. *C*7 %#" .#"er Article 1665 of te Ci!il Co"e of te
Eili++i#e$- % t%cit re#e(%l of te le%$e 4t%cit% reco#".ccio#7 i$
"ee,e" to %!e t%:e# +l%ce. Fo(e!er- %$ el" i# Ber#%r"o G.
Di>o# !. A,)ro$io G%&$%'$%'- 16 SCRA 215 41<637- % t%cit
re#e(%l i$ li,ite" o#l' to te ter,$ of te co#tr%ct (ic %re
&er,%#e to te le$$ee9$ ri&t of co#ti#.e" e#Bo',e#t of te
+ro+ert' %#" "oe$ #ot e;te#" to %lie# ,%tter$- li:e te o+tio# to
).' te le%$e" +re,i$e$. 4%t +. 1567
4" )o 'ind the Principal to Render Some Service %ithout
Compensation
Alto.& te %&e#t ,%' )i#" i,$elf to te co#tr%ct of %&e#c'
(ito.t co,+e#$%tio#- 4Article 18617- i# or"er to )i#" te
+ri#ci+%l to e#ter i#to $er!ice (ito.t co,+e#$%tio# (o.l" )e
.#e#force%)le (ito.t % $+eci%l +o(er of %ttor#e'. Te
i,+lic%tio# of +%r%&r%+ #.,)er < of Article 1868 i$ t%t to )i#"
te +ri#ci+%l to re#"er $er!ice for co,+e#$%tio# (o.l" )e
"ee,e" % ,ere %ct of %",i#i$tr%tio#- %#" co#$tit.te" i# % ,ere
&e#er%l +o(er of %ttor#e'- or ,ore $+ecific%ll'- to )e %# i,+lie"
+o(er of e!er' %&e#t.
I "i$%&ree- %#' co#tr%ct of $er!ice to )e e#tere" i#to o# )e%lf of
te +ri#ci+%l $o.l" +ro+erl' )e co#$i"ere" %# %ct of $trict
o(#er$i+- for it i,+i#&e$ o# o)li&i#& te +ri#ci+%l to re#"er %
+er$o#%l o)li&%tio#- (ic if e ref.$e$ ,%:e$ i, li%)le for
"%,%&e$. @' $o.l" co#tr%ct$ of $er!ice- e!e# (e# for
co,+e#$%tio#- )e "ee,e" to )e (iti# i,+lie" +o(er$ of te
%&e#t to )i#" te +ri#ci+%lV
!9" )o 'ind the Principal in a Contract of Partnership
E!er' %&ree,e#t )' te %&e#t o# )e%lf of te +ri#ci+%l (ic
%$ te effect of o)li&i#& te +ri#ci+%l to co#tri).te ,o#e' or
i#".$tr' to % co,,o# f.#" (it te i#te#tio# of "eri!i#& +rofit$
terefro, (o.l" )e .#e#force%)le (ito.t % $+eci%l +o(er of
%ttor#e' %!i#& )ee# +re!io.$l' &i!e# to te %&e#t- for it i#
effect ,%:e$ te +ri#ci+%l % +%rt#er i# % +%rt#er$i+. 4Art. 16667.
!!" )o Obligate the Principal as a 6uarantor or Surety
U#"er Article 2536 of te Ci!il Co"e- )' te co#tr%ct of
&.%r%#t'- te &.%r%#tor )i#"$ i,$elf to f.lfill te o)li&%tio# of
te +ri#ci+%l "e)tor i# c%$e te l%tter $o.l" f%il to "o $o= %#" if
te +er$o# )i#"$ i,$elf $oli"%ril' (it te +ri#ci+%l "e)tor- e
)eco,e$ % $.ret' .#"er % co#tr%ct of $.ret'$i+.
Terefore- .#"er +%r%&r%+ #.,)ere" 11 of Article 1868- #o
co#tr%ct of &.%r%#t' or $.ret' i$ e#force%)le %&%i#$t te +ri#ci+%l
(e# it %$ )ee# e#tere" i#to )' %# %&e#t (o +o$$e$$e$ #o
$+eci%l +o(er of %ttor#e' to "o $o
It %$ )ee# el" t%t % co#tr%ct of &.%r%#t' or $.ret' c%##ot )e
i#ferre" fro, .$ of !%&.e or &e#er%l (or"$ of co,,it,e#t.
T.$- te %.torit' &i!e# )' te cor+or%tio# to it$ %&e#t to
%++ro!e % lo%# .+ to E?15-555 (ito.t %#' $ec.rit' reA.ire,e#t
"oe$ #ot i#cl."e te %.torit' to i$$.e &.%r%#tee$ for %#'
%,o.#t. 'A #inance Corp. v. Court of Appeals- 211 SCRA 112
41<<27. T.$D
RS A +o(er of %ttor#e' to $ell or le%$e te +ro+ert' of te
+ri#ci+%l (it te +ro!i$io# t%t e,+o(er$ te %&e#t Ito +erfor,
%#" e;ec.te %ll %#" e!er' l%(f.l %#" re%$o#%)le %ct %$ f.ll' %#"
effecti!el' %$ I ,i&t or co.l" "o if +er$o#%ll' +re$e#t-H c%##ot
)e co#$tr.e" to i#cl."e te +o(er to e#ter i#to % co#tr%ct of
&.%r%#t' to )i#" te +ri#ci+%l. +irector of %u1lic ;or-s v. Sing
"uco- 1? Eil. 251 41<2<7.
RS A +o(er of %ttor#e' to lo%# ,o#e' "oe$ #ot i#cl."e te
i,+lie" +o(er to ,%:e te +ri#ci+le % $.ret' for te +%',e#t of
te "e)t % tir" +er$o#. 'an- of %.I. v. Coster- 36 Eil. 1<3
41<217.
It $o.l" )e rec%lle" t%t .#"er Article 135?/20/)0 of te Ci!il
Co"e- % co#tr%ct of &.%r%#t' i$ .#e#force%)le .#le$$ it i$ ,%"e
i# (riti#&. Co#$eA.e#tl'- e!e# (e# te %&e#t %$ te reA.i$ite
$+eci%l +o(er of %ttor#e' to e#ter i#to % co#tr%ct of &.%r%#t' i#
)e%lf of te +ri#ci+%l- te re$.lt co#tr%ct (o.l" )e
.#e#force%)le if #ot re".ce" i# (riti#&.
!'" )o Create or Convey Real Rights Over +mmovable
U#"er +%r%&r%+ #.,)ere" 12 of Article 1868- %# %&e#t c%##ot-
i# te #%,e of te +ri#ci+%l- cre%te or co#!e' re%l ri&t$ o!er
i,,o!%)le +ro+ert' (ito.t )ei#& +o$$e$$e" of % $+eci%l +o(er
of %ttor#e'= oter(i$e- te re$.lti#& co#tr%ct (o.l" )e
.#force%)le %&%i#$t te +ri#ci+%l.
Te +%r%&r%+ i#te#"$ to co!er "e%li#&$ o# i,,o!%)le +ro+ert'
o.t$i"e of te $%le of % +iece of l%#" or %#' i#tere$t terei#
co!ere" $+ecific%ll' .#"er Article 1863- %#" co#tr%ct$ of
+.rc%$e of % +iece of l%#"- %#" co#tr%ct$ of "o#%tio#$ of e!er'
t'+e of i,,o!%)le +ro+ert'.
IRe%l ri&t$H o!er i,,o!%)le +ro+ert' (o.l" co!er $.c
co#tr%ct$ %$ ,ort&%&e$- .$.fr.ct- e%$e,e#t- etc. It o)!io.$l'
co!er$ te e#teri#& i#to % le%$e co#tr%ct o!er %# i,,o!%)le (it
% +erio" e;cee"i#& o#e 'e%r 4$e+%r%tel' co!ere" .#"er +%r%&r%+
#.,)ere" 8 of Article 18687.
@e# it co,e$ to % ,ort&%&e- te Co.rt %$ e;+re$$e" te
"octri#e t%t % +er$o# c%# )eco,e li%)le o# % re%l e$t%te
,ort&%&e (ic e #e!er e;ec.te" eiter i# +er$o# or )'
%ttor#e'8i#8f%ct. %hilippine sugar Estates +ev. Co. v. %oizat, 38
Eil. 1?6 41<267. Rural 'an- of 'o$1on, Inc. v. Court of
Appeals- 212 SCRA 21 41<<27.
U#"er Article 186<- te +o(er to $ell e;cl."e$ te +o(er to
,ort&%&e= %#" t%t te +o(er to ,ort&%&e e;cl."e$ te +o(er
$ell. Ti$ $.++ort$ te +ro+o$itio# t%t e%c of te +o(er$
e#.,er%te" .#"er Article 1868- %re #%,e" I%ct$ of $trict
"o,i#io#-H %#" c%##ot )e i,+lie" +o(er$= %#" t%t o#e for, of
#%,e" $+eci%l +o(er c%##ot &i!e te +re$.,+tio# t%t it
i#cl."e$ .#"er %#' for, of co#$tr.ctio# or i#ter+ret%tio# %#oter
#%,e" $+eci%l +o(er. Rodrigue7 v* Pamintuan and -e 0esus3
(8 P&i$. 586 !4!5".
Te +o(er to ,ort&%&e "oe$ #ot c%rr' te i,+lie" +o(er to
re+re$e#t te +ri#ci+%l i# liti&%tio#. .al$onte v. Court of
Appeals- 212 SCRA <2 41<<67.
I# Rural 'an- of 'o$1on v. Court of Appeals- 212 SCRA 21
41<<27- %lto.& te %&e#t (%$ &i!e# % $+eci%l +o(er of %ttor#e'
to ,ort&%&e te +ro+ert' of te +ri#ci+%l- #o#etele$$- (e# e
$i&#e" te Dee" of Re%l E$t%te Gort&%&e i# i$ #%,e %lo#e %$
,ort&%&or- (ito.t %#' i#"ic%tio# t%t e (%$ $i&#i#& for %#" i#
)e%lf of te +ro+ert' o(#er- te ,ort&%&e i$ !oi"- %#" te %&e#t
)o.#" i,$elf %$ te o#l' "e)tor of .#"er te lo%# o)t%i#e" fro,
te )%#:.
I# %hilippine Sugar Estates +ev. Co., v. %oizat- 38 Eil. 1?6
41<217- te Co.rt el" t%t it i$ % &e#er%l r.le i# te l%( of
%&e#c' t%t- i# or"er to )i#" te +ri#ci+%l )' % ,ort&%&e o# re%l
+ro+ert' e;ec.te" )' %# %&e#t- it ,.$t .+o# it$ f%ce +.r+o$e to
)e ,%"e- $i&#e" %#" $e%le" i# te #%,e of te +ri#ci+%l-
oter(i$e- it (ill )i#" te %&e#t o#l'. It i$ #ot e#o.& ,erel'
t%t te %&e#t (%$ i# f%ct %.tori>e" to ,%:e te ,ort&%&e- if e
%$ #ot %cte" i# te #%,e of te +ri#ci+%l. Neiter i$ it or"i#%ril'
$.fficie#t t%t i# te ,ort&%&e te %&e#t "e$cri)e" i,$elf %$
%cti#& )' !irt.e of te +o(er of %ttor#e'- if i# f%ct te %&e#t %$
%cte" i# i$ o(# #%,e %#" %$ $et i$ o(# %#" %#" $e%l to te
,ort&%&e. Ti$ i$ e$+eci%ll' tr.e (ere te %&e#t i,$elf i$ %
+%rt' to te i#$tr.,e#t. Fo(e!er cle%rl' te )o"' of te
,ort&%&e ,%' $o( %#" i#te#" t%t it $%ll )e te %ct of te
+ri#ci+%l- 'et- .#le$$ i# f%ct it i$ e;ec.te" )' te %&e#t for %#" o#
)e%lf of i$ +ri#ci+%l- it i$ #ot !%li" %$ to te +ri#ci+%l.
!(" )o !ccept or Repudiate an +nheritance
U#"er Article 1533 of te Ci!il Co"e- %#' +er$o# I%!i#& te
free "i$+o$%l of i$ +ro+ert' ,%' %cce+t or re+."i%te %#
i#erit%#ce-H (ic o)!io.$l' .#"er +%r%&r%+ 1? of Article
1868 co#$tit.te %ct$ of $trict "o,i#io#. @ile tere i$ #o "o.)t
t%t re+."i%tio# of %# i#erit%#ce i$ %# %ct t%t &oe$ %&%i#$t te
i#tere$t of te +ri#ci+%l %#" (o.l" reA.ire te &r%#t of % $+eci%l
+o(er of %ttor#e' if it i$ to )e "o#e tro.& %# %&e#t- te
%cce+t%#ce of i#erit%#ce %$ %#oter )%$i$ .+o# (ic it c%##ot
)e %# i,+lie" +o(er of i$ %&e#tD te %cce+t%#ce of %#
i#erit%#ce i#!ol!e$ %# %ct of &r%tit."e o# te +%rt of te eir-
%#" terefore c%##ot )e +re$.,e" to )e % I).r"e#H t%t te
+ri#ci+%l i$ +re$.,e to %cce+t %$ % ,%tter of co.r$e..
!)" )o Ratify or Recogni7e Obligations Contracted 'efore the
!gency
IR%tif'H i$ % le&%l ter, t%t i#!ol!e$ te %cce+t%#ce of %
co#tr%ct- (ic i$ eiter !oi"%)le or .#e#force%)le- %#" %$ te
effect cle%#$i#& $.c co#tr%ct of it$ le&%l "efect$ t%t retro%ct$ to
te "%te of it$ +erfectio#. U#"er Article$ 1?<2 %#" 1?<6-
I/r0%tific%tio# e;ti#&.i$e$ te %ctio# to %##.l % !oi"%)le
co#tr%ct-H %#" Icle%$e#$e$ te co#tr%ct fro, %ll it$ "efect$ fro,
te ,o,e#t it (%$ co#$tit.te".H @e# it co,e$ to .#e#force%)le
co#tr%ct$- .#"er Article 1353- to$e co#tr%ct$ t%t %re &o!er#e"
)' te St%t.te$ of Fr%."$ I%re r%tifie" )' te f%il.re to o)Bect to
te +re$e#t%tio# of or%l e!i"e#ce to +ro!e te $%,e- or )' te
%cce+t%#ce of )e#efit$ .#"er te,.H
E%r%&r%+ #.,)ere" 13 of Article 1868 cle%rl' reco&#i>e$ t%t
te %ct of r%tif'i#& or cle%#$i#& % "efect co#tr%ct t%t terefore
co.l" !%li"l' )e e#force" %&%i#$t te +ri#ci+%l i$ %# %ct of $trict
o(#er$i+- %#" c%##ot )e effecte" )' te %&e#t (ito.t $+eci%l
+o(er of %ttor#e'.
IReco&#itio#H of %# o)li&%tio# refer$ to %c:#o(le"&i#& (%t
(%$ % #%t.r%l o)li&%tio# (ic (%$ #ot terefore te $.)Bect of
ci!il e#force,e#t= it %$ te effect of ,%:i#& % for,er #%t.r%l
o)li&%tio# )e tr%#$for,e" i#to % ci!il o)li&%tio# t%t c%# )e
e#force" %&%i#$t te e$t%te of te +ri#ci+%l. Reco&#itio# i$ %# %ct
of $trict o(#er$i+ (ic c%# )e +erfor,e" )' %# %&e#t o#
)e%lf of te +ri#ci+%l (o +o$$e$$e$ % $+eci%l +o(er of
%ttor#e'.
+irector v. Sing "uco- 1? Eil 251 41<2<7
.illa v. (arcia 'os/ue- 3< Eil 126 41<267
'an- of %I v. +e Coster- 36 Eil 1<3 41<217
Aznar v. ,orris- ? Eil 6?6 41<537
(er$ann v. +onaldson- 1 Eil 6? 41<517
!-" !ny Other !ct of Strict -ominion
Ge#er%ll'- te $%le or +.rc%$e of e!e# +er$o#%l +ro+ertie$
$o.l" )e tre%te" %$ %ct$ of $trict "o,i#io# %#" (o.l" reA.ire %
$+eci%l +o(er of %ttor#e' to )e e;ec.te" )' te %&e#t i# )e%lf
of te +ri#ci+%l. B.t .#"er Article 1866- % $%le or +.rc%$e ,%"e
i# te or"i#%r' co.r$e of ,%#%&e,e#t i$ ,erel' %# %ct of
%",i#i$tr%tio# %#"- terefore- i#cl."e" i# %&e#c' co.ce" i#
&e#er%l ter,$. Te cle%r i,+lic%tio# .#"er +%r%&r%+ #.,)ere"
11 i$ t%t to$e t%t ,%' )e co#$tit.te" %$ %ct$ of $trict
o(#er$i+- ).t #ot $o $+ecific%ll' #%,e" i# te fir$t fo.rtee#
+%r%&r%+$- (o.l" %l(%'$ #ee" % $+eci%l +o(er of %ttor#e' to )e
e;ec.te" i# )e%lf of te +ri#ci+%l )' te %&e#t- BUT #ot %!i#&
$o #%,e"- it i$ +o$$i)le t%t $.c %ct$ of $trict o(#er$i+ ,%'-
"e+e#"i#& o# circ.,$t%#ce$ +re!%ili#& i# e%c c%$e- (o.l" )e
%ct$ of %",i#i$tr%tio#- %#" ,%' )e &o!er#e" )' % &e#er%l +o(er
of %ttor#e'- or ,%' )e i,+lie" or i#ci"e#t%l fro, e;+re$$ +o(er$
or fro, te #%t.re of te ).$i#e$$ co!ere" )' te %&e#c'
%rr%#&e,e#t.
I# (arcia v. +e ,anzano- ?< Eil 166 41<1<7- o#e of te i$$.e to
)e re$ol!e" (%$ (eter % +o(er of %ttor#e' t%t &r%#te" te $o#
te follo(i#& +o(er$D ITo e#%)le i, to ).' or $ell- %)$ol.tel'
or .#"er +%cto "e retro- %#' of te r.r%l or .r)%# e$t%te$ t%t I
#o( o(# %#" ,%' %cA.ire i# te f.t.re- %t $.c +rice %$ e ,%'
"ee, ,o$t %"!%#t%&eo.$- (ic e $%ll collect i# c%$ or )'
i#$t%ll,e#t$ %#" .#"er $.c co#"itio#$ %$ e ,%' co#$i"er
+ro+er- %#" e $%ll $et fort te e#c.,)r%#ce$ o# te +ro+ertie$
%#" teir ori&i#. I )i#" ,'$elf to (%rr%#t %#" "efe#"- i#
%ccor"%#ce (it l%(- te title$ to $.c +ro+ertie$= %#" if te
+ro+ertie$ %lie#%te" )' ti$ %&ree,e#t $o.l" )e re"ee,e"- e i$
e,+o(ere" to re"ee, te, )' +%'i#& te +rice t%t ,%' %!e
)ee# fi;e"- %#"- for ti$ +.r+o$e- $%ll e;ec.te te +ro+er
i#$tr.,e#t-H (o.l" &r%#t i, %.torit' to $ell te %lf8i#tere$t
t%t te +ri#ci+%l %" i# % )o%t. Te co.rt el" i# te %ffir,%ti!e-
r.li#& %$ follo($ 88
Te +o(er8of8%ttor#e' %.tori>e$ te $%le of re%l +ro+ert'- te
).'i#& of re%l +ro+ert' %#" ,ort&%&i#& te $%,e- te )orro(i#&
of ,o#e' %#" i# f%ct i$ &e#er%l %#" co,+lete.
Te +o(er "oe$ #ot e;+re$$l' $t%te t%t te %&e#t ,%' $ell te
)o%t- ).t % +o(er $o f.ll %#" co,+lete %#" %.tori>i#& te $%le
of re%l +ro+ert'- ,.$t #ece$$%ril' c%rr' (it it te ri&t to $ell %
%lf i#tere$t i# % $,%ll )o%t. Te recor" f.rter $o($ te $%le
(%$ #ece$$%r' i# or"er to &et ,o#e' or % cre"it (ito.t (ic it
(o.l" )e i,+o$$i)le to co#ti#.e te ).$i#e$$ (ic (%$ )ei#&
co#".cte" i# te #%,e of N%rci$o L. G%#>%#o %#" for i$
)e#efit. 4%t +. 1817
+e ,anzano i$ %.torit' to $o( t%t %lto.& te +o(er to $ell
i,,o!%)le$ ,.$t )e co#t%i#e" i# % $+eci%l +o(er of %ttor#e'-
%#" terefore %l(%'$ co#$tit.te$ %# %ct of $trict o(#er$i+- te
$%le or e#c.,)r%#ce of ,o!%)le$ ,%' co#$tit.te eiter %ct$ of
%",i#i$tr%tio# or %ct$ of $trict o(#er$i+- "e+e#"i#& o# te
+re!%ili#& circ.,$t%#ce$. T.$- i# +e ,anzano- te &r%#t of te
e;+re$$ +o(er to ,%#%&e te e#tire ).$i#e$$ %ff%ir$ of te
+ri#ci+%l- (%$ "ee,e" to i#cl."e te +o(er to $ell co8o(#er$i+
i#tere$t i# ,o!%)le +ro+ert'- e$+eci%ll' (e# te $%le (%$
#ece$$%r' to co#".ct te ).$i#e$$ of te +ri#ci+%l.
/10Citing Cit*7ite Realt* Corp. v. Court of Appeals- ?21 SCRA
?81 425557= Raet v. Court of Appeals- 2<1 SCRA 666 41<<87.
/20Reiterated in iton!ua, "r. v. Eternit Corp., 3<5 SCRA 253
425567.
/?0See (ozun v. ,ercado 111 SCRA ?51 425567= 6asu$a v.
Heirs of Cecilio S. +e .illa, 3<< SCRA 366 425567.
VI. SEECIFIC OBLIGATION RULES FOR AGENTS
a. Ob$igation of Agent to A#vance :un#s
Tere i$ #o co,,o#8l%( ".t' or o)li&%tio# o# te +%rt
of te %&e#t to %"!%#ce i$ o(# f.#"$ i# )e%lf of te +ri#ci+%l=
for i#"ee"- o#e of te "i$ti#&.i$i#& c%r%cteri$tic of e!er'
%&e#c' i$ t%t te %&e#t "oe$ #ot +er$o#%ll' )eco,e li%)le for
te co#tr%ct$ %#" tr%#$%ctio#$ +.r$.e" i# )e%lf of te +ri#ci+%l.
U#"er Article 1886 of te Ci!il Co"e- te o#l' ti,e t%t
%# %&e#t i$ le&%ll' )o.#" to %"!%#ce +er$o#%l f.#"$ i# te
+.r$.it of te %&e#c' i$ (e# $.c o)li&%tio# %$ )ee# e;+re$$l'
%&ree" .+o# i# te cre%tio# of te co#tr%ct of %&e#c'. B.t e!e#
i# $.c % c%$e- te %&e#t ,%' ref.$e to %"!%#ce %#' +er$o#%l
f.#"$ (e# te +ri#ci+%l i$ i#$ol!e#t. I#"ee"- .#"er Article
1<1<4?7- i#$ol!e#c' of te +ri#ci+%l e;ti#&.i$e$ te %&e#c'.
b. Agent=s Duty of Loya$ty
!" -uty of 2oyalty in 6eneral
Article 18<< $et$8o.t (%t i# cor+or%te +%rl%#ce i$
:#o(# %$ te ".t' of lo'%lt' of %# %&e#tD ITe %&e#t $%ll )e
li%)le for "%,%&e$ if- tere )ei#& % co#flict )et(ee# i$ i#tere$t
%#" to$e of te +ri#ci+%l- e $o.l" +refer i$ o(#.H A&e#c'
rel%tio# i$ e$$e#ti%ll' fi".ci%r' i# c%r%cter- (ic reA.ire$ of
te %&e#t to o)$er!e .t,o$t &oo" f%it %#" lo'%lt' to te
+ri#ci+%l.
@e# % %&e#t !iol%te$ i$ ".t' of lo'%lt'- %#" i# %
co#flict8of8i#tere$t$ $it.%tio#- e +refer$ i$ o(# i#tere$t to te
"etri,e#t of te +ri#ci+%l- Article 18<< "oe$ #ot "ecl%re te
co#tr%ct or tr%#$%ctio# e e#tere" i#to to )e !oi"- ).t ,erel'
,%:e$ te %&e#t li%)le for te "%,%&e$ $.ffere" )' te +ri#ci+%l.
I# Cor+or%te L%(- (e# % "irector or officer !iol%te$ i$ ".t' of
lo'%lt' to te cor+or%tio#- e i$ )o.#" to "i$&or&e to te
cor+or%tio# %ll te +rofit$ %#" e%r#i#&$ e o)t%i# fro, i$ )re%c
of ".t'- e!e# (e# e .$e" i$ o(# c%+it%l or f.#"$ for te
co#tr%ct or tr%#$%ctio# 4Sectio#$ ?1 %#" ?3- Cor+or%tio# Co"e7.
;ould the $easure of da$ages due to the principal 1e the sa$e
4hen an agent violates his dut* of lo*alt*<
Do.)le %&e#c' 4(ere te $%,e %&e#t $er!e$ te t(o
co#tr%cti#& +ri#ci+%l$ i$ fro(#e" .+o# )' l%(- %#" (ill )e
%llo(e" o#l' (e# :#o(# to )ot +%rtie$. -omingo v*
-omingo3 )' *CRA !(! !48!".
'" %hen !gent #nters into a
Contract in (is On Name
on a Matter that Falls %ith
the Scope of the !gency
Article 188? +ro!i"e$ t%t I/i0f %# %&e#t %ct$ i# i$ o(#
#%,e- te +ri#ci+%l %$ #o ri&t of %ctio# %&%i#$t te +er$o# (it
(o, te %&e#t %$ co#tr%cte"= #eiter %!e $.c +er$o#$
%&%i#$t te +ri#ci+%l.H I# $.c % c%$e it i$ +ro!i"e" t%t it i$ te
%&e#t (o Ii$ te o#e "irectl' )o.#" i# f%!or of te +er$o# (it
(o, e %$ co#tr%cte"- %$ if te tr%#$%ctio# (ere i$ o(#-
e;ce+t (e# te co#tr%ct i#!ol!e$ ti#&$ )elo#&i#& to te
+ri#ci+%l.H
If te ,%tter$ e#tere" i#to )' te %&e#t i# i$ o(# #%,e
%re ,%tter$ t%t %re (iti# te $co+e of i$ %.torit' or to$e
+ert%i#i#& to ,%tter$ t%t $o.l" +ert%i# to te ).$i#e$$ of te
+ri#ci+%l- tere (o.l" )e #o "o.)t t%t te %&e#t %$ )re%c i$
fi".ci%r' ".t' of lo'%lt'- )' %!i#& +referre" i$ o(# i#tere$t$ to
t%t of te +ri#ci+%lC$. @eter te %&e#t %$ .$e" i$ o(# f.#"$
or +ro+ert'- or to$e of te +ri#ci+%lC$- e (o.l" $till )e i#
)re%c of ti$ fi".ci%r' ".t'- %#" .#"er Article 18<1- e Ii$
)o.#" to re#"er %# %cco.#t of i$ tr%#$%ctio#$ %#" to "eli!er to
te +ri#ci+%l (%te!er e ,%' %!e recei!e" )' !irt.e of te
%&e#c'- e!e# to.& it ,%' #ot )e o(i#& to te +ri#ci+%l.H I#
eiter c%$e- terefore- te +ri#ci+%l %$ te ri&t to "e,%#" t%t
te %&e#t $o.l" t.r#8o!er to i, (%te!er co#tr%ct- +ro+ert' or
).$i#e$$ %$ )ee# %cA.ire" )' te %&e#t i# )re%c of i$ ".t' of
lo'%lt'.
I# ,iguel v. Court of Appeals- 2< SCRA 665 41<6<7-
te Co.rt el" t%t I% fi".ci%r' rel%tio# %ri$e$ (ere o#e ,%#
%$$.,e$ to %ct %$ %&e#t for %#oter %#" te oter re+o$e$
co#fi"e#ce i# i,- %lto.& tere i$ #o (ritte# co#tr%ct or #o
co#tr%ct %t %ll. If te %&e#t !iol%te$ i$ ".t' %$ fi".ci%r'- %
co#$tr.cti!e tr.$t %ri$e$. It i$ i,,%teri%l t%t tere (%$ #o
%#tece"e#t fi".ci%r' rel%tio# %#" t%t it %ro$e
co#te,+or%#eo.$l' (it te +%rtic.l%r tr%#$%ctio#.H/10
If te %&e#t %" .$e" te f.#"$ )elo#&i#& to te
+ri#ci+%l- .#"er Article 18<6 e Io(e$ i#tere$t o# te $.,$ e
%$ %++lie" to i$ o(# .$e fro, te "%' o# (ic e "i" $o- %#"
o# to$e (ic e $till o(e$ %fter te e;ti#&.i$,e#t of te
%&e#c'.H Te +ro!i$io#$ of ti$ %rticle +re$.,e$ t%t te +ro+ert'
or ).$i#e$$ %cA.ire" )' te %&e#t for i$ o(# i# !iol%tio# of i$
fi".ci%r' ".t' i$ o#e t%t te +ri#ci+%l i$ #ot "e,%#"i#& to )e
"eli!ere" to i,. Ti$ i$ cle%r fro, Article 1<18 (ic +ro!i"e$
t%t I/t0e +ri#ci+%l i$ #ot li%)le for te e;+e#$e$ i#c.rre" )' te
%&e#t . . . /i0f te %&e#t %cte" i# co#tr%!e#tio# of te +ri#ci+%lC$
i#$tr.ctio#$- .#le$$ te l%tter $o.l" (i$ to %!%il i,$elf of te
)e#efit$ "eri!e" fro, te co#tr%ct.H I# oter (or"$- if te
co#tr%ct or ).$i#e$$ %cA.ire" )' te %&e#t i# )re%c of i$ ".t'
of lo'%lt' i$ "e,%#"e" )' te +ri#ci+%l to )e t.r#e" o!er to i,-
te# te .$e of te +ri#ci+%lC$ $., to %cA.ire $.c ).$i#e$$
(o.l" )e "ee,e" to %!e )ee# r%tifie"- %#" te %&e#t i$ #ot
+er$o#%ll' li%)le for te i#tere$t$ ".e o# $%i" %,o.#t.
I# %""itio#- Article 1311 of te Ci!il Co"e 4o# i,+lie"
tr.$t$7- +ro!i"e$ t%t I/(0e# %#' tr.$tee- &.%r"i%# or oter
+er$o# ol"i#& % fi".ci%r' rel%tio#$i+ .$e$ tr.$t f.#"$ for te
+.rc%$e of +ro+ert' %#" c%.$e$ te co#!e'%#ce to )e ,%"e to
i, or to % tir" +er$o#- % tr.$t i$ e$t%)li$e" )' o+er%tio# of l%(
i# f%!or of te +er$o# to (o, te f.#"$ )elo#&.H
(" Particular Rules on Conflict of +nterests
Situations
Te follo(i#& %re $+ecific r.le$ co!eri#& !iol%tio# of
te ".t' of lo'%lt' of te %&e#tD
4%7 %urchase of %rincipal3s %ropert* OPI
Article 13<1427 of te Ci!il Co"e
+ro!i"e$ for %#' co#flict8of8i#tere$t
$it.%tio# (e# it +ro!i"e$ t%t %#
%&e#t i$ +roi)ite" fro, ).'i#&
+ro+ert' e#tr.$te" to i, for
%",i#i$tr%tio# or ,%#%&e,e#t-
(ito.t te +ri#ci+%lC$ co#$e#t. E!e#
(e# %# %&e#t i$ %.tori>e" to $ell
te +ro+ert'- %#" e $ell$ it to i,$elf
for !%l.%)le co#$i"er%tio# ).t (ito.t
te co#$e#t of te +ri#ci+%l- te $%le
(o.l" )e !oi".
4)7 ;hen Agent E$po4ered to 'orro4 or
end ,one* OPI Article 18<5
+ro!i"e$ t%t (e# te %&e#t i$
e,+o(ere" to )orro( or le#" ,o#e'
)' te +ri#ci+%l- te#D
4i7 If e,+o(ere" to )orro(
,o#e'- e ,%' )e te
le#"er %t c.rre#t
i#tere$t= %#"
4ii7 If e,+o(ere" to le#"
,o#e' %t i#tere$t- e
c%##ot )orro( (ito.t
+ri#ci+%lC$ co#$e#t.
4c7 O1ligation To Tuh1rn7Over to the
%rincipal ;hatever Received 1*
.irtue of the Agenc* OPI U#"er
Article 18<5- e!er' %&e#t i$ )o.#" to
"eli!er to te +ri#ci+%l (%te!er e
,%' %!e recei!e" )' !irt.e of te
%&e#c'- e!e# to.& it ,%' #ot )e
o(i#& to te +ri#ci+%l- %#" e!e#
(e# &i!e# to i, for i$ )e#efit.
;hat happens 4hen the agent violates his o1ligations
under Article @AGB< I# te c%$e (ere te %&e#t (%$ te le#"er
to te +ri#ci+%l %#" c%r&e" i#tere$t i&er t%# te c.rre#t r%te-
te "iffere#ce (o.l" %!e to )e ret.r#e" to te +ri#ci+%l. If te
%&e#t )orro($ for i,$elf (ito.t te +ri#ci+%lC$ te ,o#e'
(ic te +ri#ci+%l %$ %.tori>e" i, to le#" o.t- e (o.l" #ot
o#l' )e li%)le for te c.rre#t i#tere$t t%t te +ri#ci+%l (o.l"
%!e e%r#e" %" it )ee# le#t o.t to % tir" +%rt'- e (o.l" %l$o )e
li%)le for "%,%&e$ t%t te +ri#ci+%l ,%' %!e $.ffere".
Re$ate# Cases,
A1oitiz v. +e Silva- 31 Eil 88? 41<237
Sing "uco v. Sun*antong orente- 3? Eil 18< 41<227
Severino v. Severino- 33 Eil ?3? 41<2?7
Hodges v. Salas- 6? Eil 166 41<?67
c. Ob$igation of Agent to Ren#er Account
U#"er 18<1 of te Ci!il Co"e- IE!er' %&e#t i$ )o.#" to
re#"er %# %cco.#t of i$ tr%#$%ctio#$ %#" to "eli!er to te
+ri#ci+%l (%te!er e ,%' %!e recei!e" )' !irt.e of te %&e#c'-
e!e# to.& it ,%' #ot )e o(i#& to te +ri#ci+%l. E!er'
$ti+.l%tio# e;e,+ti#& te %&e#t fro, te o)li&%tio# to re#"er %#
%cco.#t $%ll )e !oi".H
Te (ell8e$t%)li$e" r.le i$ t%t %# %&e#t c%##ot ret%i#
%$ i$ co,,i$$io# %#' +%rt of te +rocee"$ t%t )elo#& to te
+ri#ci+%l./20 IA$ % #ece$$%r' co#$eA.e#ce of $.c )re%c of
tr.$t- "efe#"%#t8%++ellee Gre&orio Do,i#&o ,.$t forfeit i$
ri&t to te co,,i$$io# %#" ,.$t ret.r# te +%rt of te
co,,i$$io# e recei!e" fro, i$ +ri#ci+%l.H +o$ingo v.
+o$ing- 32 SCRA 1?1 41<617.


Te re%$o# (' %# %&e#t %$ to t.r#8o!er to te
+ri#ci+%l e!er'ti#& e recei!e$ )' !irt.e of te %&e#c' i$ t%t
(e# e %ct$- e "oe$ $o ,erel' %$ % re+re$e#t%ti!e of te
+ri#ci+%l- %#" (%te!er e recei!e$ i$ %$ to.& it (%$ te
+ri#ci+%l (o recei!e$ it. Fe %$ #o $t%#"i#& terefore to ret%i#
for i,$elf %#' %,o.#t or ite, recei!e" i# +.r$.it of te %&e#c'.
Te o)li&%tio# of te %&e#t to %cco.#t for e!er'ti#& to
te +ri#ci+%l lie$ %t te core of i$ fi".ci%r' o)li&%tio#$ t%t %#'
$ti+.l%tio# e;e,+ti#& te %&e#t fro, te o)li&%tio# to re#"er %#
%cco.#ti#& i$ "ecl%re" !oi" .#"er Article 18<1.
+o$ingo v. +o$ingo- 32 SCRA 1?1 41<617- el" t%t
IE%r%&r%+ 2 of Article 18<1 i$ % #e( %""itio# "e$i&#e" to $tre$$
te i&e$t lo'%lt' t%t i$ reA.ire" to %# %&e#t co#"e,#i#& %$
!oi" %#' $ti+.l%tio# e;e,+ti#& te %&e#t fro, te ".t' %#"
li%)ilit' i,+o$e" o# i, i# +%r%&r%+ o#e tereof.H It eA.%te$
te t%:i#& of $ecret +rofit )' te %&e#t %$ to )e % fr%."
co,,itte" %&%i#$t te +ri#ci+%l. It el" t%t OPH
Fe#ce- %# %&e#t (o t%:e$ % $ecret
+rofit i# te #%t.re of % )o#.$- &r%t.it' or
+er$o#%l )e#efit fro, te !e#"ee- (ito.t
re!e%li#& te $%,e to i$ +ri#ci+%l- te
!e#"or- i$ &.ilt' of % )re%c of i$ lo'%lt'
to te +ri#ci+%l %#" forfeit$ i$ ri&t to
collect te co,,i$$io# fro, i$ +ri#ci+%l-
e!e# if te +ri#ci+%l "oe$ #ot $.ffer %#'
i#B.r' )' re%$o# of $.c )re%c of fi"elit'-
or t%t e o)t%i#e" )etter re$.lt$ or t%t
te %&e#c' i$ % &r%t.ito.$ o#e- or t%t
.$%&e or c.$to, %llo($ it= )ec%.$e te
r.le i$ to +re!e#t te +o$$i)ilit' of %#'
(ro#&- #ot to re,e"' or re+%ir %# %ct.%l
"%,%&e. ? B' t%:i#& $.c +rofit or )o#.$
or &ift or +ro+i#% fro, te !e#"ee- te
%&e#t tere)' %$$.,e$ % +o$itio# (oll'
i#co#$i$te#t (it t%t of )ei#& %# %&e#t
for i$ +ri#ci+%l- (o %$ % ri&t to tre%t
i,- i#$of%r %$ i$ Co,,i$$io# i$
co#cer#e"- %$ if #o %&e#c' %" e;i$te".
Te f%ct t%t te +ri#ci+%l ,%' %!e
)ee# )e#efite" )' te !%l.%)le $er!ice$ of
te $%i" %&e#t "oe$ #ot e;c.l+%te te %&e#t
(o %$ o#l' i,$elf to )l%,e for $.c %
re$.lt )' re%$o# of i$ tre%cer' or
+erfi"'. 4%t ++. 1?681?87
+o$ingo v. +o$ingo- 32 SCRA 1?1 41<617- cite$
A,eric%# B.ri$+r."e#ce t%t %++l' te "octri#e .#"er Article
18<1- t.$ OPH
Te A,eric%# B.ri$+r."e#ce o# ti$
$core i$ (ell8#i& .#%#i,o.$.
*@ere % +ri#ci+%l %$ +%i" %# %&e#t
or )ro:er % co,,i$$io# (ile i&#or%#t of
te f%ct t%t te l%tter %$ )ee# .#f%itf.l-
te +ri#ci+%l ,%' reco!er )%c: te
co,,i$$io# +%i"- $i#ce %# %&e#t or )ro:er
(o %$ )ee# .#f%itf.l i$ #ot e#title" to
%#' co,+e#$%tio#.
;;; ;;; ;;;
*I# "i$c.$$i#& te ri&t of te
+ri#ci+%l to reco!er co,,i$$io#$ ret%i#e"
)' %# .#f%itf.l %&e#t- te co.rt i# Little
!$. Ei++$ 41<117 258 G%$$. ??l- <3 NE
265- ?3 LRA 4NS7 1536- $%i"D 9It i$ (ell
$ettle" t%t te %&e#t i$ )o.#" to e;erci$e
te .t,o$t &oo" f%it i# i$ "e%li#&$ (it
i$ +ri#ci+%l. A$ Lor" C%ir#$ $%i"- ti$
r.le *i$ #ot % tec#ic%l or %r)itr%r' r.le. It
i$ % r.le fo.#"e" o# te i&e$t %#" tr.e$t
+ri#ci+le$ of ,or%lit'.* E%r:er !$.
GcJe##% 418637 LR 15 C 4E#&7 <6-
118.. If te %&e#t "oe$ #ot co#".ct i,$elf
(it e#tire fi"elit' to(%r"$ i$ +ri#ci+%l-
).t i$ &.ilt' of t%:i#& % $ecret +rofit or
co,,i$$io# i# re&%r" te ,%tter i# (ic
e i$ e,+lo'e"- e lo$e$ i$ ri&t to
co,+e#$%tio# o# te &ro.#" t%t e %$
t%:e# % +o$itio# (oll' i#co#$i$te#t (it
t%t of %&e#t for i$ e,+lo'er- %#" (ic
&i!e$ i$ e,+lo'er- .+o# "i$co!eri#& it-
te ri&t to tre%t i, $o f%r %$
co,+e#$%tio#- %t le%$t- i$ co#cer#e" %$ if
#o %&e#c' %" e;i$te". Ti$ ,%' o+er%te
to &i!e to te +ri#ci+%l te )e#efit of
!%l.%)le $er!ice$ re#"ere" )' te %&e#t-
).t te %&e#t %$ o#l' i,$elf to )l%,e
for t%t re$.lt.9
; ; ;
*Te i#te#t (it (ic te %&e#t too:
% $ecret +rofit %$ )ee# el" i,,%teri%l
(ere te %&e#t %$ i# f%ct e#tere" i#to %
rel%tio#$i+ i#co#$i$te#t (it i$ %&e#c'-
$i#ce te l%( co#"e,#$ te corr.+ti#&
te#"e#c' of te i#co#$i$te#t rel%tio#$i+.
Little !$. Ei++$ 41<117 <3 NE 265.*
*A$ % &e#er%l r.le- it i$ % )re%c of
&oo" f%it %#" lo'%lt' to i$ +ri#ci+%l for
%# %&e#t- (ile te %&e#c' e;i$t$- $o to
"e%l (it te $.)Bect ,%tter tereof- or
(it i#for,%tio# %cA.ire" ".ri#& te
co.r$e of te %&e#c'- %$ to ,%:e % +rofit
o.t of it for i,$elf i# e;ce$$ of i$ l%(f.l
co,+e#$%tio#D %#" if e "oe$ $o e ,%'
)e el" %$ % tr.$tee %#" ,%' )e co,+elle"
to %cco.#t to i$ +ri#ci+%l for %ll +rofit$-
%"!%#t%&e$- ri&t$- or +ri!ile&e$ %cA.ire"-
)' i, i# $.c "e%li#&$- (eter i#
+erfor,%#ce or i# !iol%tio# of i$ ".tie$-
%#" )e reA.ire" to tr%#$fer te, to i$
+ri#ci+%l .+o# )ei#& rei,).r$e" for i$
e;+e#"it.re$ for te $%,e- .#le$$ te
+ri#ci+%l %$ co#$e#te" to or r%tifie" te
tr%#$%ctio# :#o(i#& t%t )e#efit or +rofit
(o.l" %ccr.e- or %" %ccr.e"- to te
%&e#t- or .#le$$ (it $.c :#o(le"&e e
%$ %llo(e" te %&e#t $o %$ to c%#&e i$
co#"itio# t%t e c%##ot )e +.t i# $t%t.$
A.o. Te %++lic%tio# of ti$ r.le i$ #ot
%ffecte" )' te f%ct t%t te +ri#ci+%l "i"
#ot $.ffer %#' i#B.r' )' re%$o# of te
%&e#t9$ "e%li#&$- or t%t e i# f%ct o)t%i#e"
)etter re$.lt$= #or i$ it %ffecte" )' te f%ct
t%t tere i$ % .$%&e or c.$to, to te
co#tr%r'- or t%t te %&e#c' i$ % &r%t.ito.$
o#e.* 4%t +. 1?<7
Fo(e!er- +o$ingo %l$o el" t%t te ".t' e,)o"ie" i#
Article 18<1 to %cco.#t (ill #ot %++l' Iif te %&e#t or )ro:er %"
i#for,e" te +ri#ci+%l of te &ift or )o#.$ or +rofit e recei!e"
fro, te +.rc%$er %#" i$ +ri#ci+%l "i" #ot o)Bect tereto.H 4%t
+. W7
Te Co.rt %l$o el" i# +o$ingo t%t E%r%&r%+ 2 of
Article 18<1 4(%i!er of ".t' to %cco.#t i$ !oi"7 i$ "e$i&#e" to
$tre$$ te i&e$t lo'%lt' t%t i$ reA.ire" of %# %&e#t. Article
18<1 4%#" Art. 1<5<7 i,+o$e" .+o# te %&e#t te %)$ol.te
o)li&%tio# to ,%:e % f.ll "i$clo$.re or co,+lete %cco.#t to i$
+ri#ci+%l of %ll i$ tr%#$%ctio#$ %#" oter ,%teri%l f%ct$ rele!%#t
to te %&e#c'- $o ,.c $o t%t te l%( "oe$ #ot co.#te#%#ce %#'
$ti+.l%tio# e;e,+ti#& te %&e#t for, $.c o)li&%tio# %#"
co#"e,#$ %$ !oi" $.c $ti+.l%tio#. Te ".t' of %# %&e#t i$
li:e#e" to t%t of % tr.$tee. Ti$ i$ #ot % tec#ic%l or %r)itr%r'
r.le ).t % r.le fo.#"e" o# te i&e$t %#" tr.e$t +ri#ci+le of
,or%lit' %$ (ell %$ of te $tricte$t B.$tice.
A# %&e#t- .#li:e % $er!%#t or ,e$$e#&er- %$ )ot te
+'$ic%l %#" B.ri"ic%l +o$$e$$io# of te &oo"$ recei!e" i#
%&e#c'- or te +rocee"$ tereof- (ic t%:e te +l%ce of te
&oo"$ %fter teir $%le )' te %&e#t. Fi$ ".t' to t.r# o!er te
+rocee"$ of te %&e#c' "e+e#"$ .+o# i$ "i$c%r&e %$ (ell %$ te
re$.lt of te %cco.#ti#& )et(ee# i, %#" te +ri#ci+%l- %#" e
,%' #ot $et .+ i$ ri&t of +o$$e$$io# %$ %&%i#$t t%t of te
+ri#ci+%l .#til te %&e#c' i$ ter,i#%te". 6u7man v* Court of
!ppeals3 44 P&i$. 89( !4-6".
It i$ i,,%teri%l (eter $.c ,o#e' or +ro+ert' i$ te
re$.lt of te +erfor,%#ce or !iol%tio# of te %&e#tC$ ".t'- if it )e
te fr.it of te %&e#c'- it ,.$t )e %cco.#te" for %#" t.r#e" o!er
to te +ri#ci+%l. If i$ ".t' i$ $trictl' +erfor,e"- te re$.lti#&
+rofit %ccr.e$ to te +ri#ci+%l %$ te le&iti,%te co#$eA.e#ce of
te rel%tio#= if +rofit %ccr.e$ fro, i$ !iol%tio# of ".t' (ile
e;ec.ti#& te %&e#c'- t%t li:e(i$e )elo#&$ to te +ri#ci+%l- #ot
o#l' )ec%.$e te +ri#ci+%l %$ to %$$.,e te re$+o#$i)ilit' of te
tr%#$%ctio#- ).t %l$o )ec%.$e te %&e#t c%##ot )e +er,itte" to
"eri!e %"!%#t%&e fro, i$ o(# "ef%.lt. -umaguin v* Reynolds/
4' P&i$. 66 !4-'".
Terefore- (e# te %&e#t e#ter$ i#to % co#tr%ct t%t
$o.l" +ert%i# to te +ri#ci+%l- ).t i# i$ o(# #%,e- it (o.l" )e
% !iol%tio# of i$ ".t' of lo'%lt' to te +ri#ci+%l- %#" %$ )et(ee#
te +ri#ci+%l %#" te %&e#t- te l%tter ,.$t %cco.#t to te
+ri#ci+%l for %ll +rofit$ e%r#e" fro, te tr%#$%ctio#.
It ,%tter$ #o( o( f%ir te co#".ct of te %&e#t ,%'
%!e )ee# i# % +%rtic.l%r c%$e- #or t%t te +ri#ci+%l (o.l" %!e
)ee# #o )etter of if te %&e#t %" $trictl' +.r$.e" i$ +o(er- #or
t%t te +ri#ci+%l (%$ #ot- i# f%ct- i#B.re" )' te i#ter!e#tio# of
te %&e#t for i$ o(# +rofit. Te re$.lt i# )ot c%$e$ i$ te $%,e=
te +rofit$ $%ll $till +ert%i# to te +ri#ci+%l. Ojinaga v* #state of
Pere73 4 P&i$. !5- !498".
!" %hen the -uty to !ccount -oes Not !pply
U#"er Article 1<13- te %&e#t ,%' ret%i# i# +le"&e te
ti#&$ (ic %re te o)Bect of te %&e#c' .#til te +ri#ci+%l
effect$ te rei,).r$e,e#t %#" +%'$ te i#"e,#it' +ro!i"e" i#
Article 1<12 %#" 1<1?.
g. Liabi$ity of Agent for Interest
U#"er Article 18<6- te %&e#t (o.l" o(e i#tere$t to te
+ri#ci+%l o# te follo(i#& ite,$D
4%7 O# $.,$ te %&e#t %++lie" to i$ o(#
.$e fro, te ti,e e .$e" te,= %#"
4)7 O# $.,$ o(i#& te +ri#ci+%l (ic
re,%i# o.t$t%#"i#& %t te ti,e of
e;ti#&.i$,e#t of te %&e#c'- i#tere$t
to r.# fro, te ti,e of $.c
e;ti#&.i$,e#t.
Te S.+re,e Co.rt %$ reco&#i>e" te t(o "i$ti#ct
c%$e$ co!ere" .#"er Article 18<6./?0
Te S.+re,e Co.rt reco&#i>e" i# 'orja v* -e 'orja3
-5 P&i$ 5!! !4(("- t%t tere i$ #o i#tere$t ".e o# $.,$ o(e"
)' te %&e#t to te +ri#ci+%l (ic %!e #ot )ee# te re$.lt of
%&e#tC$ co#!er$io# to i$ o(# .$e- $.c %&e#t (o.l" )e li%)le for
i#tere$t$ to r.# fro, te "%te te %&e#c' i$ e;ti#&.i$e" .#til e
+%'$ $.c $.,$.
&. Agent Liab$e for :rau# an# Neg$igence
Article 1<5< +ro!i"e$ t%t I/t0e %&e#t i$ re$+o#$i)le
#ot o#l' for fr%."- ).t %l$o for #e&li&e#ce- (ic $%ll )e B."&e"
(it ,ore or le$$ ri&or )' te co.rt$- %ccor"i#& to (eter te
%&e#c' (%$ or (%$ #ot for % co,+e#$%tio#.H
+o$ingo v. +o$ingo- 32 SCRA 1?1 41<617- el" t%t
te +ro!i$io#$ of Article 1<5< H"e,%#" te .t,o$t &oo" f%it-
fi"elit'- o#e$t'- c%#"or %#" f%ir#e$$ o# te +%rt of te %&e#t- te
re%l e$t%te )ro:er i# ti$ c%$e- to i$ +ri#ci+%l- te !e#"or. Te
l%( i,+o$e$ .+o# te %&e#t te %)$ol.te o)li&%tio# to ,%:e %
f.ll "i$clo$.re or co,+lete %cco.#t to i$ +ri#ci+%l of %ll i$
tr%#$%ctio#$ %#" oter ,%teri%l f%ct$ rele!%#t to te %&e#c'- $o
,.c $o t%t te l%( %$ %,e#"e" "oe$ #ot co.#te#%#ce %#'
$ti+.l%tio# e;e,+ti#& te %&e#t fro, $.c %# o)li&%tio# %#"
co#$i"er$ $.c %# e;e,+tio# %$ !oi". Te ".t' of %# %&e#t i$
li:e#e" to t%t of % tr.$tee. Ti$ i$ #ot % tec#ic%l or %r)itr%r'
r.le ).t % r.le fo.#"e" o# te i&e$t %#" tr.e$t +ri#ci+le of
,or%lit' %$ (ell %$ of te $tricte$t.H 4%t +. 1?67
Te +ro!i$io#$ of Article 1<5< %re ,erel' %#
i,+le,e#t%tio# of te ".t' of "ili&e#ce e;+re$$e" i# Article
1886 (ic +ro!i"e$ t%t i# te e;ec.tio# of te %&e#c'- te
%&e#t $%ll %ct i# %ccor"%#ce (it te i#$tr.ctio#$ of te
+ri#ci+%l- %#" i# "ef%.lt of i#$tr.ctio#$- te %&e#t I$%ll "o %ll
t%t % &oo" f%ter of % f%,il' (o.l" "o- %$ reA.ire" )' te #%t.re
of te ).$i#e$$=H %#" Article 1888- (ic +ro!i"e$ t%t %# %&e#t
I$%ll #ot c%rr' o.t %# %&e#c' if it$ e;ec.tio# (o.l" ,%#ife$tl'
re$.lt i# lo$$ or "%,%&e to te +ri#ci+%l.H
It ,.$t )e #ote" t%t %# %&e#t c%##ot )e el" +er$o#%ll'
li%)le )' te +ri#ci+%l for "%,%&e$ c%.$e" (ere- %$ +ro!i"e"
.#"er Article 18<<- te I%&e#t %ct$ i# %ccor"%#ce (it te or"er$
of te +ri#ci+%l- te +ri#ci+%l c%##ot $et8.+ te i&#or%#ce of te
%&e#t %$ to circ.,$t%#ce$ (ereof e i,$elf (%$- or o.&t to
%!e )ee#- %(%re.H Ti$ refer$ to te li%)ilit' i#c.rre" )' te
+ri#ci+%l %$ to tir" +%rtie$D %!i#& %++oi#te" %# i&#or%,.$ for
%# %&e#t- (o %ct$ i# %ccor"%#ce (it te +ri#ci+%lC$ i#$tr.ctio#
4"oe$ #ot .$e &oo" B."&,e#t7- te +ri#ci+%l c%##ot %!oi" i$
o)li&%tio#$ %ri$i#& fro, te co#tr%ct.
Article 1<5< i$ %l$o te le&%l )%$i$ )' (ic %# %&e#t
)eco,e$ +er$o#%ll' li%)le to tir" +%rtie$ (o %re i#B.re" )' i$
%ct of fr%." or #e&li&e#ce.
Re$ate# Cases,
Strong v. (uiterrez Repide- 31 Eil <36 41<5<7
'ritish !irays v* Court of !ppeals3 '5- *CRA )-9
!445"
Metroban& v* Court of !ppeals3 !4) *CRA !64 !44!"
International #il$s 8China9 v. *ric #il$- 6? Eil 668
41<?67
Austria v. Court of Appeals- ?< SCRA 126 41<617
Cad4allader v. S$ith 'ell- 6 Eil 361 41<567
/10%t +. 666- citing Scott o# Tr.$t$- ?
r"
e".- Vol. V- +. 2133-
citing Harrop v. Cole,- 81 N.J. EA. ?2- <1 A. ?68- %ffC" 86 N.J.
E%. 215- <8 A. 1581.
/202.S. v. Re*es- ?6 Eil. 6<1 41<167= 2.S. v. 5iene- 6 Eil. 6?6
41<567= O!inaga v. Estate of %erez- < Eil. 181 41<567= In re
'a$1erger- 3< Eil. <62 41<627= +uhart #reres * Co$pania v.
,acia- 13 Eil. 11? 41<?57.
/?0O!inaga v. Estate of %erez- < Eil. 181 41<567=
,endezona v. .da. +e (oitia- 13 Eil 116 41<?57= A.. A$$en
Transportation Co. v. +e ,argallo- 13 Eil. 165 41<?57.
VII. EO@ER OF AGENT TO AEEOINT A SUBSTITUTE
Article 18<2 $et$ te "ef%.lt r.le t%t I/t0e %&e#t ,%' %++oi#t %
$.)$tit.te if te +ri#ci+%l %$ #ot +roi)ite" i, fro, "oi#& $o.H
I# Escueta v. i$, 112 SCRA 311 425567- te f%ter (o %"
&i!e# er "%.&ter % $+eci%l +o(er of %ttor#e' to $ell re%l
+ro+ertie$- co.l" #ot $ee: te "ecl%r%tio# of #.llit' of te $%le
effecte" )' te $.)$tit.te %&e#t %++oi#t )' te "%.&terD
IA++l'i#& /Article 18<2 of te Ci!il Co"e0 to te $+eci%l +o(er
of %ttor#e' e;ec.te" )' /te f%ter0 i# f%!or of i$ "%.&ter . . .-
it i$ cle%r t%t $e i$ #ot +roi)ite" fro, %++oi#ti#& % $.)$tit.te.
B' %.tori>i#& /te $.)8%&e#t0 to $ell te $.)Bect +ro+ertie$- /te
"%.&ter0 ,erel' %cte" (iti# te li,it$ of te %.torit' &i!e#
)' er f%ter- ).t $e (ill %!e to )e OPUre$+o#$i)le for te %ct$
of te $.)8%&e#t-C %,o#& (ic i$ +reci$el' te $%le of te
$.)Bect +ro+ertie$ i# f%!or of re$+o#"e#t$.H 4%t ++. 32?83237
a. Effects 7&en Agent Appoints a *ubstitute,
!" @e# te $.)8%&e#t %$ )ee# %++oi#te" +.r$.%#t to te
i#$tr.ctio#$ of te +ri#ci+%lD
4i7 Cle%rl' te $.)8%&e#t i$ re%ll' %# %&e#t of te +ri#ci+%l %$
(ell.
A#' %ct "o#e )' te %&e#t or te $.)$tit.te i# )e%lf of te
+ri#ci+%l i$ "ee,e" te %ct of te +ri#ci+%l=
'" @e# e %$ #ot )ee# +roi)ite" )' te +ri#ci+%l- %#" te
%&e#t %++oi#t$ % $.)$tit.te- e i$ re$+o#$i)le for %ct$ of
$.)$tit.teD
4i7 e (%$ #ot &i!e# +o(er to %++oi#t o#e
4ii7 e (%$ &i!e# $.c +o(er (ito.t "e$i&#%ti#& te +er$o# %#"
$.)$tit.te i$ #otorio.$l' i#co,+ete#t or i#$ol!e#t.
I# eiter c%$e- te +ri#ci+%l ,%' f.rter,ore )ri#& %# %ctio#
%&%i#$t te $.)$tit.te (it re$+ect to te o)li&%tio#$ (ic te
l%tter %$ co#tr%cte" .#"er te $.)$tit.tio#. 4Art. 18<?7
(" @e# te %&e#t %++oi#t$ % $.)$tit.te %&%i#$t te +ri#ci+%lC$
+roi)itio#D
4i7 All %ct$ of $.)$tit.te %$ %&%i#$t te +ri#ci+%l %re !oi". 4Art.
18<27
4ii7 It i$ cle%r t%t it (o.l" )e te %&e#t (o )eco,e$ +er$o#%ll'
li%)le for te co#tr%ct$ e#tere" i#to )' te $.)$tit.te
Te i,+lic%tio# fro, te l%#&.%&e .$e" i# Article 18<?- t%t te
+ri#ci+%l (o.l" %!e #o c%.$e of %ctio# %&%i#$t te $.)$tit.te.
Te le&%l ,%;i, potestas delegate non delegare potestI % +o(er
o#ce "ele&%te" c%##ot )e re8"ele&%te"- (ile %++lie" +ri,%ril'
i# +olitic%l l%( to te e;erci$e of le&i$l%ti!e +o(er- i$ % +ri#ci+le
of %&e#c'OPHfor %#oter- % re8"ele&%tio# of te %&e#c' (o.l" )e
"etri,e#t%l to te +ri#ci+%l %$ te $eco#" %&e#t %$ #o +ri!it' of
co#tr%ct (it te for,er. 'altazar v. O$1uds$an 115 SCRA 63
425567.
If te %++oi#t,e#t of % $.)8%&e#t (ic (%$ #eiter +roi)ite"
or %.tori>e"- %$ occ%$io#e" te i#c.rri#& of "%,%&e$ )' te
+ri#ci+%l- te %&e#t $%ll )e +ri,%ril' re$+o#$i)le for te %ct$ of
te $.)$tit.te- i# %ccor"%#ce (it te +ro!i$io#$ of Article
18<2417. Serona v* Court of !ppeals3 (4' *CRA (- '99'".
A $.)8%&e#t %++oi#te" to collect te "eferre" i#$t%ll,e#t$ fro,
te $%le of +ro+ert' ,%"e )' %# %ttor#e'8i#8f%ct %$ #o %.torit'
to e#ter i#to % #e( co#tr%ct (it te tr%#$feree )' ,o"if'i#& te
ter,$ of te $%le %#" rele%$i#& te $oli"%r' $.retie$ i# te
ori&i#%l co#tr%ct. 1illa v* 6arcia 6os:ue3 )4 P&i$. !'6 !4'9".
Re$ate# Cases,
+el Rosario v. a 'adenia- ?? Eil ?16 41<167.
opez v. Seva- 6< Eil ?11 41<357 4S+%#i$7.
,ar/uez v. .arela- <2 Eil. ?6? 41<127.
6. R<LE ON LIA1ILIT; 7.EN T7O OR 0ORE AGENT*
APPOINTED 1; T.E *A0E PRINCIPAL
Article 18<3 +ro!i"e$ for te r.le of re$+o#$i)ilit' 4li%)ilit'7 of
t(o or ,ore %&e#t$ $er!i#& te $%,e +ri#ci+%l- e!e# (e# te'
%!e )ee# %++oi#te" $i,.lt%#eo.$l'D 4%7 Joi#t- (e# #oti#& i$
$ti+.l%te"= %#" 4)7 Soli"%r'- o#l' (e# $o $ti+.l%te".
U#"er Article 18<1- (e# $oli"%rit' %$ )ee# %&ree" .+o#- e%c
of te %&e#t$ i$ re$+o#$i)le for te #o#8f.lfill,e#t of te %&e#c'-
%#" for te f%.lt or #e&li&e#ce of i$ fello( %&e#t$- e;ce+t i# te
l%tter c%$e (e# te fello( %&e#t$ %cte" )e'o#" te $co+e of
teir %.torit'.
Co,+%re te r.le i# Article i# 18<3 (it te &e#er%l r.le of
$oli"%r' li%)ilit' .#"er Article 1<11D (e# te %&e#t i$ $er!i#&
t(o or ,ore +ri#ci+%l$- te li%)ilit' of te +ri#ci+%l$ i$ $oli"%r'.
I# ,unicipal Council of Iloilo v. Evangelista- 11 Eil 2<5
41<?57- te Co.rt $et te &e#er%l r.leD (e# % +er$o# %++oi#t$
t(o %&e#t$ i#"e+e#"e#tl'- te co#$e#t of o#e (ill #ot )e reA.ire"
to !%li"%te te %ct$ of te oter- .#le$$ t%t %++e%r$ +o$iti!el' to
%!e )ee# te +ri#ci+%lC$ i#te#tio#.
8. R<LE* O: AGENT=* LIA1ILIT; TO T.IRD PARTIE*
a. 7&en t&e Agent Acts 7it&in t&e *cope of .is Aut&ority,
!" 6eneral Rule9
Article 18<6 e;+re$$l' +ro!i"e$ t%t I/t0e %&e#t (o %ct$ %$
$.c i$ #ot +er$o#%ll' li%)le to te +%rt' (it (o, e
co#tr%ct$=H %#" ti$ i$ $.++le,e#te" )' Article 1<15- (ic
+ro!i"e$ t%t I/t0e +ri#ci+%l ,.$t co,+l' (it %ll te
o)li&%tio#$ (ic te %&e#t ,%' %!e co#tr%cte" (iti# te
$co+e of i$ %.torit'.H
Article 18<6 of te Ci!il Co"e rei#force$ te f%,ili%r "octri#e
t%t %# %&e#t- (o %ct$ %$ $.c- i$ #ot +er$o#%ll' li%)le to te
+%rt' (it (o, e co#tr%ct$. Eurotech Industrial Technologies,
Inc. v. Cuizon, 121 SCRA 183 425567.
I# 2* v. Court of Appeals- ?13 SCRA 6< 41<<<7- %&e#t$ (o
%!e )ee# %.tori>e" to $ell +%rcel$ of l%#" c%##ot cl%i,
+er$o#%l "%,%&e$ i# te #%t.re of .#re%li>e" co,,i$$io# )'
re%$o# of te %ct of te ).'er i$ ref.$i#& to +rocee" (it te
$%leD IEetitio#er$ %re #ot +%rtie$ to te co#tr%ct of $%le )et(ee#
teir +ri#ci+%l$ %#" NFA. Te' %re ,ere %&e#t$ of te o(#er$ of
te l%#" $.)Bect of te $%le. A$ %&e#t$- te' o#l' re#"er $o,e
$er!ice or "o $o,eti#& i# re+re$e#t%tio# or o# )e%lf of teir
+ri#ci+%l$. /Article 1868- Ci!il Co"e.0 Te re#"eri#& of $.c
$er!ice "i" #ot ,%:e te, +%rtie$ to te co#tr%ct$ of $%le
e;ec.te" i# )e%lf of te l%tter. Si#ce % co#tr%ct ,%' )e !iol%te"
o#l' )' te +%rtie$ tereto %$ %&%i#$t e%c oter- te re%l +%rtie$8
i#8i#tere$t- eiter %$ +l%i#tiff or "efe#"%#t- i# %# %ctio# .+o# t%t
co#tr%ct ,.$t- &e#er%ll'- eiter )e +%rtie$ to $%i" co#tr%ct./10
'" #8ceptions9
I# te follo(i#& c%$e$- %# %&e#t- e!e# (e# %cti#& %$ $.c
(iti# te $co+e of i$ %.torit'- ,%' )eco,e +er$o#%ll' li%)le
o# te co#tr%ct$ or tr%#$%ctio#$ e#tere" i#to- (e#D
4%7 Te %&e#t e;+re$$l' ,%:e$ i,$elf +er$o#%ll' li%)le for te
co#tr%ct$ of i$ +ri#ci+%l. 4Art. 18<67= or
4)7 Te %&e#t %ct$ (it fr%." or #e&li&e#ce 4Art. 1<5<7.
A +er$o# "e%li#& (it % :#o(# %&e#t i$ #ot %.tori>e"- .#"er
%#' circ.,$t%#ce$- )li#"l' to tr.$t te %&e#t$= $t%te,e#t$ %$ to
te e;te#t of i$ +o(er$= $.c +er$o# ,.$t #ot %ct #e&li&e#tl'
).t ,.$t .$e re%$o#%)le "ili&e#ce %#" +r."e#ce to %$cert%i#
(eter te %&e#t %ct$ (iti# te $co+e of i$ %.torit'. Te
$ettle" r.le i$ t%t- +er$o#$ "e%li#& (it %# %$$.,e" %&e#t %re
)o.#" %t teir +eril- %#" if te' (o.l" ol" te +ri#ci+%l li%)le-
to %$cert%i# #ot o#l' te f%ct of %&e#c' ).t %l$o te #%t.re %#"
e;te#t of %.torit'- %#" i# c%$e eiter i$ co#tro!erte"- te ).r"e#
of +roof i$ .+o# te, to +ro!e it. iton!ua v. #ernandez- 326
SCRA 368 425537. Reiterated in iton!ua, "r. v. Eternit Corp.,
3<5 SCRA 253 425567.
A +er$o# %cti#& %$ % ,ere re+re$e#t%ti!e of %#oter %cA.ire$ #o
ri&t$ (%t$oe!er- #or "oe$ e i#c.r %#' li%)ilitie$ %ri$i#& fro,
te $%i" co#tr%ct )et(ee# i$ +ri#ci+%l %#" %#oter +%rt'.
Angeles v. %hilippine &ational Rail4a*s 8%&R9- 155 SCRA 333
425567. Chua v. Total Office %roducts and Services 8Topros9,
Inc., 361 SCRA 155 425517= Tan v. Engineering Services, 3<8
SCRA <? 425567= Chong v. Court of Appeals, 126 SCRA 133
425567.
Te e$$e#ce of %&e#c' )ei#& te re+re$e#t%tio# of %#oter- it i$
e!i"e#t t%t te o)li&%tio#$ co#tr%cte" %re for %#" o# )e%lf of
te +ri#ci+%lOPI% co#$eA.e#ce of ti$ re+re$e#t%tio# i$ te
li%)ilit' of te +ri#ci+%l for te %ct$ of i$ %&e#t +erfor,e"
(iti# te li,it$ of i$ %.torit' t%t i$ eA.i!%le#t to te
+erfor,%#ce )' te +ri#ci+%l i,$elf (o $o.l" %#$(er
terefor. Tan v. Engineering Services, 3<8 SCRA <? 425567.
Si#ce- %$ % r.le- te %&e#c'- %$ % co#tr%ct- i$ )i#"i#& o#l'
)et(ee# te co#tr%"icti#& +%rtie$- te# o#l' te +%rtie$- %$ (ell
%$ te tir" +er$o# (o tr%#$%ct$ (it te +%rtie$ te,$el!e$-
,%' A.e$tio# te !%li"it' of te %&e#c' or te !iol%tio# of te
ter,$ %#" co#"itio#$ fo.#" terei#. .illegas v. ingan, 126
SCRA 6? 425567.
O#e (o $i&#$ % recei+t %$ % (it#e$$ (it te (or" I%&e#tH
t'+e" )elo( i$ $i&#%t.re- ).t #e!er recei!e" te %lle&e" %,o.#t
or %#'ti#& o# %cco.#t of te $.)Bect tr%#$%ctio#- i$ #ot
+er$o#%ll' li%)le. Caoile v* Court of !ppeals3 ''6 *CRA 6-5
!44(".
A# %&e#t )eco,e$ +er$o#%ll' li%)le (e# )' i$ (ro#& or
o,i$$io#- e "e+ri!e$ te tir" +er$o# (it (o, e co#tr%ct$
of %#' re,e"' %&%i#$t te +ri#ci+%l. Te tir" +er$o# (o.l" )e
"efr%."e" if e (o.l" #ot )e %llo(e" to reco!er fro, te %&e#t.
National Poer Corp* v* National Merchandising Corp*3 !!8
*CRA 854 !45'".
b. 7&en t&e Agent Acts 7it&out or in E2cess of Aut&ority
!" 6eneral Rule9
U#"er Article 18<6- %# %&e#t (o %ct$ (ito.t or i# e;ce$$ of
i$ %.torit' )eco,e$ +er$o#%ll' li%)le to tir" +%rtie$ e!e#
(e# e e#ter$ i#to $%i" co#tr%ct$ or tr%#$%ctio#$ i# te #%,e of
te +ri#ci+%l- (ito.t &i!i#& $.c tir" +%rtie$ $.fficie#t #otice
of i$ +o(er$. Ti$ i$ $.++le,e#te" .#"er Article 1<15 (ic
+ro!i"e$ t%t I/%0$ for %#' o)li&%tio# (erei# te %&e#t %$
e;cee"e" i$ +o(er- te +ri#ci+%l i$ #ot )o.#".H
'" #8ceptions9
I# te follo(i#& c%$e$- e!e# to.& te %&e#t %ct$ (ito.t or i#
e;ce$$ of i$ %.torit'- e (o.l" #ot )e +er$o#%ll' li%)le for te
co#tr%ct$ or tr%#$%ctio#$ e e#tere" i#to i# te #%,e of te
+ri#ci+%lD
4%7 @e# te +ri#ci+%l r%tifie$ te co#tr%ct or tr%#$%ctio#$ 4Art$.
18<8 %#" 1<157=
4)7 A$ to tir" +%rtie$ (o relie" .+o# te ter,$ of te +o(er of
%ttor#e' %$ (ritte#- e!e# if i# f%ct te %&e#t %" e;cee"e" te
li,it$ of i$ %.torit' %ccor"i#& to %# .#"er$t%#"i#& )et(ee# te
+ri#ci+%l %#" te %&e#t 4Art$. 1<55 %#" 1<5?7=
U#"er Article 1<51- % Itir" +er$o# c%##ot $et .+ te f%ct t%t
te %&e#t %$ e;cee"e" i$ +o(er$- if te +ri#ci+%l %$ r%tifie"-
or %$ $i&#ifie" i$ (illi#&#e$$ to r%tif' te %&e#tC$ %ct.H
U#"er Article 1<52- e!er' tir" +er$o# (it (o, te %&e#t
(i$e$ to co#tr%ct o# )e%lf of te +ri#ci+%l ,%' reA.ire te
+re$e#t%tio# of te +o(er of %ttor#e' or te i#$tr.ctio#$ %$
re&%r"$ te %&e#c'. Co#$eA.e#tl'- +ri!%te or $ecret or"er$ %#"
i#$tr.ctio#$ of te +ri#ci+%l "o #ot +reB."ice tir" +er$o#$ (o
%!e relie" .+o# te +o(er of %ttor#e' or i#$tr.ctio#$ $o(#
te,.
(" Conse:uence on Contracts #ntered +nto %ithout or +n
#8cess of !uthority9
RS Genera$ Ru$e, Te co#tr%ct (o.l" )e unenforceab$e 4Art$.
1?6 %#" 135?/107.
RS E2ceptions,
i" @a$i# OPI if te +ri#ci+%l $%ll r%tif' te co#tr%ct=
ii" @oi# OPI if te +%rt' (it (o, te %&e#t co#tr%cte" i$
%(%re of te li,it$ of te +o(er$ &r%#te" )' te +ri#ci+%l= BUT
te %&e#t i$ +er$o#%ll' li%)le- if e .#"ertoo: to $ec.re te
+ri#ci+%lC$ r%tific%tio#. 4Art. 18<87.
Te r.le t%t te %&e#t i$ li%)le (e# e %ct$ (ito.t %.torit' i$
fo.#"e" .+o# te $.++o$itio# t%t tere %$ )ee# $o,e (ro#& or
o,i$$io# o# i$ +%rt eiter i# ,i$re+re$e#ti#&- or i# %ffir,i#&- or
co#ce%li#& te %.torit' .#"er (ic e %$$.,e$ to %ct.
I#%$,.c %$ te #o#8"i$clo$.re of te li,it$ of te %&e#c'
c%rrie$ (it it te i,+lic%tio# t%t % "ece+tio# (%$ +er+et.%te"
o# te .#$.$+ecti#& clie#t- te +ro!i$io#$ of Article$ 1<- 25 %#"
21 of te Ci!il Co"e co,e i#to +l%'. -'P v* Court of !ppeals3
'(! *CRA (89 !44)".
Te R.le t%t % co#tr%ct e#tere" i#to )' o#e (o %$ %cte"
)e'o#" i$ +o(er$ $%ll )e .#e#force%)le refer$ to te
.#e#force%)ilit' of te co#tr%ct %&%i#$t te +ri#ci+%l- %#" "oe$
#ot %++l' (ere te %ctio# i$ %&%i#$t te %&e#t i,$elf for
co#tr%cti#& i# e;ce$$ of te li,it$ of i$ %.torit'. National
Poer Corp* v* National Merchandising Corp*3 !!8 *CRA 854
!45'".
@e# %&e#t e;cee"$ i$ %.torit'- te ,%tter c%# )e r%i$e" o#l'
)' te +ri#ci+%l- %#" (e# #ot $o r%i$e"- reco!er' c%# )e ,%"e
)' te tir" +%rt' o#l' %&%i#$t te +ri#ci+%l. Article 18<6 "oe$
#ot ol" t%t i# c%$e of e;ce$$ of %.torit'- )ot te %&e#t %#"
te +ri#ci+%l %re li%)le to te oter co#tr%cti#& +%rt'. %hil.
%roducts co. v. %ri$ateria %our e Co$$erce E)terieur:
%ri$aterial J%hil.K, Inc.- 11 SCRA ?51 41<617.
To reiter%te- te fir$t +%rt of Article 18<6 "ecl%re$ t%t te
+ri#ci+%l i$ li%)le i# c%$e$ (e# te %&e#t %cte" (iti# te
)o.#"$ of i$ %.torit'. U#"er ti$- te %&e#t i$ co,+letel'
%)$ol!e" of %#' li%)ilit'. Te $eco#" +%rt of te $%i" +ro!i$io#
+re$e#t$ te $it.%tio#$ (e# te %&e#t i,$elf )eco,e$ li%)le to
% tir" +%rt' (e# e e;+re$$l' )i#"$ i,$elf or e e;cee"$ te
li,it$ of i$ %.torit' (ito.t &i!i#& #otice of i$ +o(er$ to te
tir" +er$o#. Fo(e!er- it ,.$t )e +oi#te" o.t t%t i# c%$e of
e;ce$$ of %.torit' )' te %&e#t- li:e (%t +etitio#er cl%i,$
e;i$t$ ere- te l%( "oe$ #ot $%' t%t % tir" +er$o# c%# reco!er
fro, )ot te +ri#ci+%l %#" te %&e#t. Eurotech Industrial
Technologies, Inc. v. Cuizon, 121 SCRA 183 425567
@e li:e(i$e t%:e #ote of te f%ct t%t i# ti$ c%$e- +etitio#er i$
$ee:i#& to reco!er )ot fro, re$+o#"e#t$ ER@IN- te +ri#ci+%l-
%#" ED@IN- te %&e#t. It i$ (ell to $t%te ere t%t Article 18<6
of te Ne( Ci!il Co"e .+o# (ic +etitio#er %#cor$ it$ cl%i,
%&%i#$t re$+o#"e#t ED@IN I"oe$ #ot ol" t%t i# c%$e of e;ce$$
of %.torit'- )ot te %&e#t %#" te +ri#ci+%l %re li%)le to te
oter co#tr%cti#& +%rt'. Eurotech Industrial Technologies, Inc. v.
Cuizon, 121 SCRA 183 425567
Te $co+e %#" e;te#t of te f.#ctio# of %# %"B.$t,e#t %#"
$ettle,e#t %&e#t- "oe$ #ot i#cl."e +er$o#%l li%)ilit'. Fi$
f.#ctio#$ %re ,erel' to $ettle %#" %"B.$t cl%i,$ i# )e%lf of i$
+ri#ci+%l. If to$e cl%i,$ %re "i$%++ro!e" )' te +ri#ci+%l- te
%&e#t "oe$ #ot %$$.,e %#' +er$o#%l li%)ilit'. Te reco.r$e of te
i#$.re" i$ to +re$$ ci$ cl%i, %&%i#$t te +ri#ci+%l. Salonga v.
;arner 'arnes- 88 Eil 121 41<117= #* Macias and Co* v*
%arner 'arnes3 )( P&i$ !-- !4''".
@e# te %&e#t e;+re$$l' )i#" i,$elf- e tere)' o)li&%te$
i,$elf +er$o#%ll' )' i$ o(# %ct- ).t t%t "oe$ #ot relie!e te
+ri#ci+%l fro, i$ o)li&%tio# to +%' te "e)t i#c.rre" for i$
)e#efit. )uason v* Oro7co3 - P&i$ -46 !496".
A# %&e#t i$ #ot +er$o#%ll' li%)le to te +%rt' (it (o, e
co#tr%ct$ .#le$$ e e;+re$$l' )i#"$ i,$elf or e e;cee"$ te
li,it$ of i$ %.torit' (ito.t &i!i#& $.c +%rt' $.fficie#t #otice
of i$ +o(er$. =ialcita76useco v. Si$$ons- <6 Eil. 386 41<117=
'an/ue (enerale 'elge v. ;alter, 'ull & Co., Inc., 83 Eil. 163
41<3<7= Salmon 5 Pacific Commercial Co* v* )an Cueco3 (6
P&i$. --6 !4!8".
Re$ate# Cases,
3u #ng Cho v* P!N!M3 ('5 *CRA 8!8 '999"
'acaltos Coal Mines v* Court of !ppeals3 ')- *CRA )69
!44-"
)oyota Sha/ inc* v* Court of !ppeals3 ')) *CRA ('9 !44-"
#ugenio v* Court of !ppeals3 '(4 *CRA '98 !44)"
'! Finance v* Court of !ppeals3 '9! *CRA !-8 !44!"
'A #inance v. Court of Appeals- 211 SCRA 112 41<<27
Smith 'ell v* Court of !ppeals3 '68 *CRA -(9 !448"
-'P v* Court of !ppeals3 '(! *CRA (89 !44)"
Pineda v* Court of !ppeals3 ''6 *CRA 8-) !44("
'enguet v. 'CI E$plo*ees- 2? SCRA 361 41<687
'an- of %I v. +e Coster- 36 Eil 1<3 41<217
)" T&ir# Person Cannot *et?up :acts of Agent=s E2cee#ing
Aut&ority
U#"er Article 1<51- % tir" +er$o# c%##ot $et .+ te f%ct t%t te
%&e#t %$ e;cee"e" i$ +o(er$- if te +ri#ci+%l %$ r%tifie"- or
%$ $i&#ifie" i$ (illi#&#e$$ to r%tif' te %&e#tC$ %ct$.
Te $ettle" r.le i$ t%t- +er$o#$ "e%li#& (it %# %$$.,e" %&e#t
%re )o.#" %t teir +eril- %#" if te' (o.l" ol" te +ri#ci+%l
li%)le- to %$cert%i# #ot o#l' te f%ct of %&e#c' ).t %l$o te #%t.re
%#" e;te#t of %.torit'- %#" i# c%$e eiter i$ co#tro!erte"- te
).r"e# of +roof i$ .+o# te, to +ro!e it.
36
I# ti$ c%$e- te
+etitio#er$ f%ile" to "i$c%r&e teir ).r"e#= e#ce- +etitio#er$ %re
#ot e#title" to "%,%&e$. iton!ua, "r. v. Eternit Corp., 3<5 SCRA
253 425567./20
Re$ate# Cases,
Commissioner v* San -iego3 (! *CRA 6!8 !489"
'acaltos Coal Mines v* Court of !ppeals3 ')- *CRA )69
!44-"
)oyota Sha v* Court of !ppeals3 ')) *CRA ('9 !44-"
%&' v. Tan Ong Sze- 1? Eil 311 41<2<7
5. IN*TANCE* 7.EN T.IRD PART; LIA1LE TO T.E AGENT
.I0*EL:
I# te follo(i#& c%$e$- % tir" +%rt' (o.l" )e "irectl' li%)le to
te %&e#t i,$elf e!e# o# co#tr%ct$ e#tere" i#to +.r$.%#t to te
%&e#c' %rr%#&e,e#t- t.$D
4%7 @ere te %&e#t co#tr%ct$ i# i$ o(# #%,e- o# % ,%tter t%t
it (iti# te $co+e of te %&e#c' 4Art. 188?7=
4)7 @ere te %&e#t +o$$e$$e$ % )e#efici%l i#tere$t i# te $.)Bect
,%tter of te %&e#c'- $.c %$ % f%ctor $elli#& .#"er % del credere
co,,i$$io# 4Art. 1<567=
4c7 @ere % tir" +%rt' co,,it$ % tort %&%i#$t te %&e#t.
4. O1LIGATION* O: CO00I**ION AGENT*
a. Nature of :actor or Co%%ission Agent
A co,,i$$io# %&e#t i$ o#e (o$e ).$i#e$$ it i$ to recei!e %#"
$ell &oo"$ for % co,,i$$io#- %#" (o i$ e#tr.$te" )' te
+ri#ci+%l (it te +o$$e$$io# of te &oo"$ to )e $ol"- %#" .$.%ll'
$elli#& i# i$ o(# #%,e. A# or"i#%r' %&e#t #ee" #ot %!e
+o$$e$$io# of te &oo"$ of i$ +ri#ci+%l- (ile te co,,i$$io#
%&e#t ,.$t )e i# +o$$e$$io#. 4DE LEON- %t +. 1337.
b. *pecific Ob$igations of a Co%%ission Agent
!" )a&e Custody of 6oods OPI A co,,i$$io# %&e#t )' )ei#&
$.c i$ re$+o#$i)le for te &oo"$ recei!e" )' i, i# te ter,$
%#" co#"itio#$ %#" %$ "e$cri)e" i# te co#$i&#,e#t- .#le$$ .+o#
recei!i#& te, e $o.l" ,%:e % (ritte# $t%te,e#t of te
"%,%&e %#" "eterior%tio# $.ffere" )' te $%,e. 4Art. 1<5?7=
'" Not to Commingle Similar 6oods 'elong to -ifferent
Principal OPI .#"er Article 1<53- % co,,i$$io# %&e#t (o
%#"le$ &oo"$ of te $%,e :i#" %#" ,%r:- (ic )elo#& to
"iffere#t o(#er$- $%ll "i$ti#&.i$ te, )' co.#ter,%r:$- %#"
"e$i&#%te te ,erc%#"i$e re$+ecti!el' )elo#& to e%c +ri#ci+%l.
I# oter (or"$- te "ef%.lt r.le i$ t%t co,,i$$io# %&e#t c%##ot
co,,i#&le &oo"$ of te $%,e :i#" )elo#&i#& to "iffere#t
+ri#ci+%l$.
Di$ti#&.i$ ti$ "ef%.lt r.le i# te c%$e of % co#tr%ct of "e+o$it-
(ic .#"er Article 1<66- te "e+o$it%r' i$ %llo(e" to
co,,i#&le &r%i# or oter %rticle$ of $i,il%r #%t.re %#" A.%lit'
4Co#tr%ct of De+o$it7 OPI De+o$it%r' ,%' co,,i#&le &r%i# or
oter %rticle$ of $i,il%r #%t.re %#" A.%lit'- %#" te re$.lt (o.l"
)e +ro8r%t% o(#er$i+ %,o#& te o(#er$ tereof.
(" Cannot Sell on Credit ithout Principal.s !uthori7ation OPI
If e $ell$ o# cre"it- te +ri#ci+%l ,%' $till "e,%#" fro, i$
+%',e#t i# c%$- ).t te %&e#t $%ll )e e#title" to %#' i#tere$t or
)e#efit (ic ,%' re$.lt fro, $.c $%le. 4Art. 1<517=
)" )o +nform the Principal of #very Pre$!uthori7ed Sale on
Credit OPI U#"er Article 1<56- $o.l" te %&e#t $ell o# cre"it
(it te %.torit' of te +ri#ci+%l- te# te %&e#t $%ll $o i#for,
te +ri#ci+%l (it % $t%te,e#t of te3 #%,e$ of te ).'er$. If e
f%il$ to "o $o- te $%le $%ll )e "ee,e" to %!e )ee# ,%"e for
c%$ i#$of%r %$ te +ri#ci+%l i$ co#cer#e".
-" Shall 'ear the Ris& of Collection under -el Credere
Commission Set$up OPI U#"er Article 1<58- $o.l" te
co,,i$$io# %&e#t recei!e o# % $%le- i# %""itio# to te or"i#%r'
co,,i$$io#- %#oter c%lle" % &.%r%#tee co,,i$$io#- te#D 4i7 Fe
$%ll )e%r te ri$: of collectio#= %#" 4ii7 Fe $%ll +%' te
+ri#ci+%l te +rocee"$ of $%le o# $%,e ter,$ %&ree" (it
+.rc%$er
6" )o Collect Credits of the Principal OPI U#"er Article 1<58- %
co,,i$$io# %&e#t (o "oe$ #ot collect te cre"it$ of i$
+ri#ci+%l %t te ti,e (e# te' )eco,e ".e %#" "e,%#"%)le
$%ll )e li%)le for "%,%&e$- .#le$$ e +ro!e$ t%t e e;erci$e ".e
"ili&e#ce for t%t +.r+o$e.
8" Shall 'e Responsible for (is Fraud and Negligence OPI
U#"er Article 1<5<- te %&e#t i$ re$+o#$i)le to te +ri#ci+%l for
te "%,%&e$ $.ffere" for i$ fr%." %#" i$ #e&li&e#ce- (ic
$%ll )e B."&e" (it ,ore or le$$ ri&or )' te co.rt$ %ccor"i#& to
(eter te %&e#c' (%$ or (%$ #ot for % co,+e#$%tio#.
Te f%il.re of te $.)8%&e#t (o %$ c.$to"' of te fil, to
i#$.re %&%i#$t lo$$ )' fire- (ere tere (%$ #o i#$tr.ctio#
recei!e" fro, te +ri#ci+%l to $o i#$.re or t%t te i#$.r%#ce of
te fil, (%$ #ot % +%rt of te o)li&%tio# i,+o$e" .+o# %# %&e#t
)' l%(- "oe$ #ot co#$tit.te eiter #e&li&e#ce or fr%.".
+nternational Films v* 2yric Film #8change/ 6( P&i$. 885
!4(6".
@ere te clie#t or"er te )ro:er to $ell te $%re$ &i!i#& % floor
or ,i#i,., +rice- %#" te )ro:er "i" $ell %t te ,i#i,., +rice
i#"ic%te" e!e# to.& te +re!%ili#& r%#&i#& +rice$ (ere ,.c
i&er t%t te'- te )ro:er i$ li%)le for te "iffere#ce $.ffere"
)' te +ri#ci+%l )ec%.$e te )ro:er f%ile" to e;erci$e te
+r."e#ce %#" t%ct of % &oo" f%ter of % f%,il' (ic te l%(
reA.ire" of i,. )an )iong )ec& v* S#C3 64 P&i$. )'- !4)9".
@ere te ,%#%&er of te )%#: rele%$e" te +rocee"$ of %#
.#%.tori>e" lo%# to .#A.%lifie" )orro(er- te )%#: ,%' reco!er
)ot %&%i#$t te )orro(er %#" it$ ,%#%&er- %#" te $.it c%##ot )e
co#$i"ere" %$ te +ri#ci+%l8)%#: r%tif'i#& te .#%.tori>e" %ct
of it$ %&e#t8,%#%&er- ).t i$ ,erel' $ee:i#& to "i,i#i$ %$ ,.c
%$ +o$$i)le te lo$$ to it$elf. PN' v* 'agamasbad and Ferrer/
54 P&i$. (6- !4-!".
I# (reen .alle* v. IAC- 1?? SCRA 6<6 41<837- (ere te
+.r+orte" %&e#t ref.$e" to )e el" li%)le for ,erc%#"i$e
recei!e" fro, te +ri#ci+le o# te &ro.#" t%t it (%$ % ,ere
%&e#t to $ell %#" te .lti,%te ).'er$ of te +ro".ct$ $o.l" )e
te o#e ,%"e li%)le for te +.rc%$e +rice- 4(ere%$ te
+.r+orte" +ri#ci+%l i#$i$te" t%t it (%$ % $%le %rr%#&e,e#t7- te
Co.rt r.le" t%t (eter te co#tr%ct )et(ee# te +%rtie$ )e o#e
of $%le or %&e#c' to $ell- tere i$ #o "o.)t t%t te +.r+orte"
%&e#t (o.l" )e +er$o#%ll' li%)le for te +rice of te ,erc%#"i$e
$ol". Bei#& % co,,i$$io# %&e#t .#"er it$ %.torit'- te#
+.r$.%#t to Article 1<51- it $o.l" #ot %!e $ol" te ,erc%#"i$e
o# cre"it. U#"er Article 1<51- te co,,i$$io# %&e#t c%##ot-
(ito.t te e;+re$$ or i,+lie" co#$e#t of te +ri#ci+%l- $ell o#
cre"it= %#" $o.l" e "o $o- te +ri#ci+%l ,%' "e,%#" fro, i,
+%',e#t i# c%$.
/10Citing ,ari$perio Co$pania &aviera, S.A. v. Court of
Appeals- 116 SCRA ?68 41<867.
/20Citing iton!ua v. #ernandez- 326 SCRA 368 425537= 'A
#inance Corp. v. Court of Appeals- 211 SCRA 112 41<<27.
VIII. OBLIGATIONS OF TFE ERINCIEAL
!. 1INDING E::ECT O: T.E TER0* O: T.E CONTRACT O:
AGENC;
I#"ee"- $i#ce % co#tr%ct of %&e#c' i$ ,erel' % +re+%r%tor'
co#tr%ct- it i$ (ell (iti# te le&%l c%+%cit' of )ot +%rtie$ to
e#ter i#to %#' $ti+.l%tio#- o)li&%tio# %#" .#"ert%:i#& )' (ic
te' c%# t%ilor8fit te rel%tio#$i+ to )e$t %cie!e te +.r+o$e of
te %&e#c'. Li:e %#' oter co#tr%ct &o!er#e" )' te +ri#ci+le$ of
,.t.%lit' %#" o)li&%tor' force- te +ri#ci+%l i$ )o.#" )' te
ter,$ %&ree" .+o# .#"er te co#tr%ct of %&e#c'.
A+%rt fro, te co#tr%ct.%l o)li&%tio#$ !ol.#t%ril' %$$.,e"
)' te +ri#ci+%l .#"er te ter,$ of te +%rtic.l%r co#tr%ct of
%&e#c' e#tere" i#to- te follo(i#& %re te co,,o#8l%( ".tie$
%#" o)li&%tio#$ of te +ri#ci+%l )' te !er' f%ct t%t e %$
co#$tit.te" %#oter +er$o#- te %&e#t- to re+re$e#t i, i#
+.r$.i#& B.ri"ic%l %ct$ %#" co#tr%ct$- i# i$ #%,e.
'. PRINCIPAL I* 1O<ND 1; T.E CONTRACT* 0ADE 1; T.E
AGENT IN .I* 1E.AL:
Te ce#tr%l +ri#ci+le i# %&e#c' l%( i$ t%t %ll co#tr%ct$ %#"
tr%#$%ctio#$ e#tere" i#to )' te %&e#t o# )e%lf of te +ri#ci+%l
(iti# te $co+e of i$ %.torit' %re )i#"i#& o# te +ri#ci+%l %$
to.& e i,$elf %" e#tere" i#to te, "irectl'. Ti$ te#et i$
re+e%te"l' e;+re$$e" i# !%rio.$ +ro!i$io#$ of te L%( o#
A&e#c'.
Article 18<6 +ro!i"e$ t%t te %&e#t (o %ct$ %$ $.c i$ #ot
+er$o#%ll' li%)le to te +%rt' (it (o, e co#tr%ct$ (e#
%cti#& (iti# te $co+e of i$ %.torit'.
Article 1<15 +ro!i"e$ t%t te +ri#ci+%l ,.$t co,+l' (it
%ll te o)li&%tio#$ (ic te %&e#t ,%' %!e co#tr%cte" (iti#
te $co+e of i$ %.torit'.
a. Principa$ Not 1oun# by Contracts 0a#e by t&e Agent
7it&out or Outsi#e t&e *cope of .is Aut&ority
Te collol%r' r.le (o.l" te# )e t%t *for %#' o)li&%tio#
(erei# te %&e#t %$ e;cee" i$ +o(er-* or %ct$ "o#e )' te
%&e#t o.t$i"e of te $co+e of i$ %.torit'- e!e# (e# e#tere"
i#to i# te #%,e of te +ri#ci+%l- (o.l" #ot )i#" te +ri#ci+%l-
%#" (o.l" t.$ #ot )e !oi"- ).t ,erel' .#e#force%)le 4Art.
135?7. I# te follo(i#& c%$e$- to.&- e!e# %ct$ "o#e )' te
%&e#t i# te #%,e of te +ri#ci+%l- o.t$i"e of te $co+e of i$
%.torit'- (o.l" )i#" te +ri#ci+%l- t.$D
4%7 @e# te +ri#ci+%l r%tifie$ $.c co#tr%ct- e;+re$$l' or
t%citl' 4Art. 1<157=
4)7 @e# te +ri#ci+%l %$ %llo(e" te +.r+orte" %&e#t to
%ct %$ to.& e %" f.ll +o(er$ 4Art. 1<117= %#"
4c7 @e# te +ri#ci+%l %$ re!o:e" te %&e#c'- ).t te tir"
+%rt' %!e %cte" i# &oo" f%it (ito.t #otice of $.c re!oc%tio#.
U#"er Article 1<11- e!e# (e# te %&e#t %$ e;cee"e" i$
%.torit'- te +ri#ci+%l i$ $oli"%ril' li%)le (it te %&e#t if te
for,er %llo(e" te l%tter to %ct %$ to.& e %" f.ll +o(er$.
Ti$ i$ ter,e" %$ %&e#c' )' e$to++el. It i$ %l$o referre" to %$ te
"octri#e of %++%re#t %.torit' i# Cor+or%te L%(.
@e# % )%#:- )' it$ %ct$ %#" f%il.re to %ct- %$ cle%rl'
clote" it$ ,%#%&er (it %++%re#t %.torit' to $ell %# %cA.ire"
%$$et i# te #or,%l co.r$e of ).$i#e$$- it i$ le&%ll' o)li&e" to
co#fir, te tr%#$%ctio# )' i$$.i#& % )o%r" re$ol.tio# to e#%)le
te ).'er$ to re&i$ter te +ro+ert' i# teir #%,e$. It %$ % ".t' to
+erfor, #ece$$%r' %#" l%(f.l %ct$ to e#%)le te oter +%rtie$ to
e#Bo' %ll )e#efit$ of te co#tr%ct (ic it %" %.tori>e". Rural
'an- of ,ilaor v. Ocfe$ia- ?21 SCRA << 425557.
Fo( "oe$ Ocfe$ia r.li#& Bi!e (it te oter r.li#&$ of te
S.+re,e Co.rt t%t ol" t%t e!e# i# te c%$e of % cor+or%tio#-
te $%le tro.& it$ %&e#t of % +iece of l%#" reA.ire$ t%t te
%.torit' of te cor+or%te officer to $ell o# )e%lf of te
cor+or%tio# ,.$t )e i# (riti#&- oter(i$e te re$.lti#&
tr%#$%ctio# i$ !oi" +.r$.%#t to Article 1863V Te Ocfe$ia r.li#&
$o($ t%t te .$e of te ter, *!oi"* .#"er Article 1863- i$
rel%ti!e- i# t%t it i$ !oi" o#l' i#$of%r %$ te +ri#ci+%l i$
co#cer#e"= %#" t%t %#' %tte,+t to e#force te +.rc%$e )' %
tir" +%rt' i$ !oi" (e# te +ri#ci+%l ref.$e$ to %cce+t te $%le
of % +iece of l%#" effecte" )' %# %&e#t i# i$ #%,e (ito.t
(ritte# +o(er of %ttor#e'. I# oter (or"$- if te +ri#ci+%l- %fter
te f%ct of $%le- %cce+t$ te co#tr%ct- "oe$ #ot o++o$e te !%li"it'
of te $%le- or i# oter (or"$- r%tifie$ te $%le- it (o.l" te# )e
!%li" %#" )i#"i#& o# te +ri#ci+%l.
I# Ocfe$ia- (e# %# %ctio# (%$ )ro.&t )' te ).'er
%&%i#$t te )%#: to e#force te $%le- it f%ile" to co#te$t te
&e#.i#e#e$$ %#" ".e e;ec.tio# of te "ee" of %)$ol.te $%le
e;ec.te" )' it$ &e#er%l ,%#%&er. Te Co.rt el" 88
Re$+o#"e#t$ )%$e" teir %ctio# )efore te tri%l co.rt o# te
Dee" of S%le- te $.)$t%#ce of (ic (%$ %lle&e" i# %#" % co+'
tereof (%$ %tt%ce" to te Eetitio# for G%#"%,.$. Te Dee"
#%,e" Fe S. Te#% %$ te re+re$e#t%ti!e of te )%#:. Eetitio#er-
o(e!er- f%ile" to $+ecific%ll' "e#' .#"er o%t te %lle&%tio#$ i#
t%t co#tr%ct. I# f%ct- it file" #o %#$(er %t %ll- for (ic re%$o# it
(%$ "ecl%re" i# "ef%.lt. ; ; ;.
I# f%ili#& to file it$ %#$(er $+ecific%ll' "e#'i#& .#"er o%t
te Dee" of S%le- te )%#: %",itte" te ".e e;ec.tio# of te $%i"
co#tr%ct. S.c %",i$$io# ,e%#$ t%t it %c:#o(le"&e" t%t Te#%
(%$ %.tori>e" to $i&# te Dee" of S%le o# it$ )e%lf.1?
/I,+eri%l Te;tile Gill$- I#c. !. C.A.- 18? SCRA 1- G%rc 22-
1<<5.0 T.$- "efe#$e$ t%t %re i#co#$i$te#t (it te ".e
e;ec.tio# %#" te &e#.i#e#e$$ of te (ritte# i#$tr.,e#t %re c.t
off )' %# %",i$$io# i,+lie" fro, % f%il.re to ,%:e % !erifie"
$+ecific "e#i%l.
; ; ;.
I# %#' e!e#t- te )%#: %c:#o(le"&e"- )' it$ o(# %ct$ or
f%il.re to %ct- te %.torit' of Fe S. Te#% to e#ter i#to )i#"i#&
co#tr%ct$. After te e;ec.tio# of te Dee" of S%le- re$+o#"e#t$
occ.+ie" te +ro+ertie$ i# "i$+.te %#" +%i" te re%l e$t%te t%;e$
".e tereo#. If te )%#: ,%#%&e,e#t )elie!e" t%t it %" title to
te +ro+ert'- it $o.l" %!e t%:e# $o,e ,e%$.re$ to +re!e#t te
i#fri#&e,e#t or i#!%$io# of it$ title tereto %#" +o$$e$$io#
tereof.
Li:e(i$e- Te#% %" +re!io.$l' tr%#$%cte" ).$i#e$$ o#
)e%lf of te )%#:- %#" te l%tter %" %c:#o(le"&e" er
%.torit'. A )%#: i$ li%)le to i##oce#t tir" +er$o#$ (ere
re+re$e#t%tio# i$ ,%"e i# te co.r$e of it$ #or,%l ).$i#e$$ )' %#
%&e#t li:e G%#%&er Te#%- e!e# to.& $.c %&e#t i$ %).$i#& er
%.torit'.13 /Fir$t Eili++i#e I#ter#%tio#%l B%#: !. CA- i#fr%-
#ote 16.0 Cle%rl'- +er$o#$ "e%li#& (it er co.l" #ot )e )l%,e"
for )elie!i#& t%t $e (%$ %.tori>e" to tr%#$%ct ).$i#e$$ for %#"
o# )e%lf of te )%#:. T.$- ti$ Co.rt %$ r.le" i# Bo%r" of
LiA.i"%tor$ !. J%l%(D11 /25 SCRA <86- 1551- A.&.$t 13- 1<66-
+er S%#ce>- J.0
*Settle" B.ri$+r."e#ce %$ it t%t (ere $i,il%r %ct$ %!e
)ee# %++ro!e" )' te "irector$ %$ % ,%tter of &e#er%l +r%ctice-
c.$to,- %#" +olic'- te &e#er%l ,%#%&er ,%' )i#" te co,+%#'
(ito.t for,%l %.tori>%tio# of te )o%r" of "irector$. I# !%r'i#&
l%#&.%&e- e;i$te#ce of $.c %.torit' i$ e$t%)li$e"- )' +roof of
te co.r$e of ).$i#e$$- te .$%&e$ %#" +r%ctice$ of te co,+%#'
%#" )' te :#o(le"&e (ic te )o%r" of "irector$ %$- or ,.$t
)e +re$.,e" to %!e- of %ct$ %#" "oi#&$ of it$ $.)or"i#%te$ i#
%#" %)o.t te %ff%ir$ of te cor+or%tio#. So %l$o-
*9; ; ; %.torit' to %ct for %#" )i#" % cor+or%tio# ,%' )e
+re$.,e" fro, %ct$ of reco&#itio# i# oter i#$t%#ce$ (ere te
+o(er (%$ i# f%ct e;erci$e".9
*9; ; ; T.$- (e#- i# te .$.%l co.r$e of ).$i#e$$ of %
cor+or%tio#- %# officer %$ )ee# %llo(e" i# i$ offici%l c%+%cit'
to ,%#%&e it$ %ff%ir$- i$ %.torit' to re+re$e#t te cor+or%tio#
,%' )e i,+lie" fro, te ,%##er i# (ic e %$ )ee# +er,itte"
)' te "irector$ to ,%#%&e it$ ).$i#e$$.9*
Not(it$t%#"i#& te +.t%ti!e %.torit' of te ,%#%&er to
)i#" te )%#: i# te Dee" of S%le- +etitio#er %$ f%ile" to file %#
%#$(er to te Eetitio# )elo( (iti# te re&le,e#t%r' +erio"- let
%lo#e +re$e#t e!i"e#ce co#tro!erti#& $.c %.torit'. I#"ee"-
(e# o#e of erei# re$+o#"e#t$- G%rife S. Ni#o- (e#t to te
)%#: to %$: for te )o%r" re$ol.tio#- $e (%$ ,erel' tol" to )ri#&
te recei+t$. Te )%#: f%ile" to c%te&oric%ll' "ecl%re t%t Te#%
%" #o %.torit'.
A$ to te ,erit$ of te c%$e- it i$ % (ell8e$t%)li$e" r.le t%t
o#e (o clote$ %#oter (it %++%re#t %.torit' %$ i$ %&e#t %#"
ol"$ i, o.t to te +.)lic %$ $.c c%##ot )e +er,itte" to "e#'
te %.torit' of $.c +er$o# to %ct %$ i$ %&e#t- to te +reB."ice
of i##oce#t tir" +%rtie$ "e%li#& (it $.c +er$o# i# &oo" f%it
%#" i# te o#e$t )elief t%t e i$ (%t e %++e%r$ to )e 4G%c:-
et %l. !. C%,+$- 6 Eil. 11? /1<560= Eili++i#e N%tio#%l B%#: !.
Co.rt of A++e%l$- <3 SCRA ?16 /1<6<07. Fro, te f%ct$ %#" te
e!i"e#ce o# recor"- tere i$ #o "o.)t t%t ti$ r.le o)t%i#$. Te
+etitio# ,.$t terefore f%il. 4%t ++. 156815<7
@e# % tir" +%rt' %",it$ i# er (ritte# corre$+o#"e#ce
t%t e %" co#tr%cte" (it te +ri#ci+%l tro.& %# ".l'
%.tori>e" %&e#t- %#" te# $.e$ )ot te +ri#ci+%l %#" te %&e#t
o# %# %lle&e" )re%c of t%t co#tr%ct- %#" i# f%ct l%ter o#
"i$,i$$e$ te $.it i#$of%r %$ te +ri#ci+%l i$ co#cer#e"- tere c%#
)e #o c%.$e of %ctio# %&%i#$t te %&e#t. Si#ce it i$ te +ri#ci+%l
(o $o.l" )e %#$(er%)le for te o)li&%tio# %ri$i#& fro, te
%&e#c'- it i$ o)!io.$ t%t if % tir" +er$o# (%i!e$ i$ cl%i,$
%&%i#$t te +ri#ci+%l- e c%##ot %$$ert te, %&%i#$t te %&e#t.
'edia v. ;hite- 253 SCRA 26? 41<<17.
Te )%$i$ of %&e#c' i$ re+re$e#t%tio#= Te A.e$tio# of
(eter %# %&e#c' %$ )ee# cre%te" i$ or"i#%ril' % A.e$tio#
(ic ,%' )e e$t%)li$e" i# te $%,e (%' %$ %#' oter f%ct-
eiter )' "irect or circ.,$t%#ti%l e!i"e#ce= To.& t%t f%ct or
e;te#t of %.torit' of te %&e#t$ ,%' #ot- %$ % &e#er%l r.le$- )e
e$t%)li$e" fro, te "ecl%r%tio#$ of te %&e#t$ %lo#e- if o#e
+rofe$$e$ to %ct %$ %&e#t for %#oter- $e ,%' )e e$to++e" to
"e#' er %&e#c' )ot %$ %&%i#$t te %$$erte" +ri#ci+%l %#" te
tir" +er$o#$ i#tere$te" i# te tr%#$%ctio# i# (ic e or e i$
e#&%&e". +oles v. Angeles, 3<2 SCRA 656 425567.
Te f%ct t%t te %&e#t "efr%."e" te +ri#ci+%l i# #ot
t.r#i#& o!er te +rocee"$ of te tr%#$%ctio#$ to te l%tter c%##ot
i# %#' (%' relie!e or e;o#er%te $.c +ri#ci+%l fro, li%)ilit' to
te tir" +er$o#$ (o relie" o# i$ %&e#tC$ %.torit'. It i$ %#
eA.it%)le ,%;i, t%t %$ )et(ee# t(o i##oce#t +%rtie$- te o#e
(o ,%"e it +o$$i)le for te (ro#& to )e "o#e $o.l" )e te o#e
to )e%r te re$.lti#& lo$$. Cuison v. Court of Appeals, 226 SCRA
?<1 41<<?7.
U#"er te &e#er%l r.le$ %#" +ri#ci+le$ of l%(- te
,i$,%#%&e,e#t of te ).$i#e$$ of % +%rt' )' i$ %&e#t$ "oe$ #ot
relie!e $%i" +%rt' fro, te re$+o#$i)ilit' t%t e %" co#tr%cte"
(it tir" +er$o#$. Commercial 'an& 5 )rust Co* v* Republic
!rmored Car Services Corp*3 5 *CRA )'- !46(".
@e# te +ri#ci+%l i$$.e" te cec:$ i# f.ll +%',e#t of te
t%;e$ ".e- ).t i$ %&e#t$ %" ,i$%++lie" te cec: +rocee"$- te
+ri#ci+%l (o.l" $till )e li%)le- )ec%.$e (e# % co#tr%ct of
%&e#c' e;i$t$- te %&e#tC$ %ct$ )i#" i$ +ri#ci+%l- (ito.t
+reB."ice to te l%tter $ee:i#& reco.r$e %&%i#$t te %&e#t i# %#
%++ro+ri%te ci!il or cri,i#%l %ctio#. -y Peh v* Collector of
+nternal Revenue3 '5 *CRA '!6 !464".
A re&i$tere" o(#er (o +l%ce$ i# te %#"$ of %#oter %#
e;ec.te" "oc.,e#t of tr%#$fer of te re&i$tere" l%#" effecti!el'
re+re$e#t$ to % tir" +%rt' t%t e ol"er of $.c "oc.,e#t i$
%.tori>e" to "e%l (it te +ro+ert'. 'londeau v* Nano3. 6!
P&i$. 6'- !4(-"B -omingo v* Robles3 )-( *CRA 5!' '99-".
Re$ate# Cases,
Pleasantville -ev* v* Court of !ppeals3 '-( *CRA !9 !446"
2im&et&ai Sons v Court of !ppeals3 '-9 *CRA -'( !44-"
!ir France v* Court of !ppeals3 !'6 *CRA ))5 !45("
PN' v* Court of !ppeals3 4) *CRA (-8 !484"
PN' v* 'agamaspad3 54 P&i$. (6- !4-!"
,anila Re$nants v. Court of Appeals- 1<1 SCRA 622 41<<57
.ersoza v. i$- 31 Eil 316 41<2?7
opez v. Alvendia- 125 Eil 132 41<637
;ise and Co. v. Tanglao- 6? Eil ?62 41<?67
5atig1a- v. Tai Hing Co.- 12 Eil 622 41<287
Ro1inson, #le$ing and Co. v. Cruz- 3< Eil 32 41<267
(onzales v. Ha1erer- 36 Eil ?85 41<217
'arton v. e*te Asphalt- 36 Ei= <?8 41<237
&antes v. ,adriguera- 32 Eil ?8< 41<217
i$ Chai Seng v. Trinidad- 31 Eil 133 41<217
(. LIA1ILIT; O: T.E PRINCIPAL :OR T.E TORT* O: T.E
AGENT
Te &e#er%l r.le i$ t%t te +ri#ci+%l i$ li%)le to i#B.re"
tir" +%rtie$ for te tort$ co,,itte" )' te %&e#t %t te
+ri#ci+%lC$ "irector or i# te co.r$e %#" (iti# te $co+e of te
%&e#tC$ %.torit'. It %l$o &oe$ (ito.t $%'i#&- t%t $i#ce te %ct
of #e&li&e#ce (%$ t%t of te %&e#t- e %l$o )eco,e$ ci!ill'
li%)le to te i#B.re" +%rtie$- e!e# (e# e %ct$ i# re+re$e#t%tio#
of te +ri#ci+%l.
). O1LIGATION* O: T.E PRINCIPAL TO T.E AGENT
a. Ob$igation to A#vance *u%s Re>ueste# for E2ecution of
Agency
U#"er Article 1<12- te +ri#ci+%l ,.$t %"!%#ce to te
%&e#t- $o.l" te l%tter $o reA.e$t- te $.,$ #ece$$%r' for te
e;ec.tio# of te %&e#c'. So.l" te %&e#t %!e %"!%#ce" te,-
te +ri#ci+%l ,.$t rei,).r$e te %&e#t terefor- e!e# if te
).$i#e$$ or .#"ert%:i#& (%$ #ot $.cce$$f.l- +ro!i"e" te %&e#t i$
free fro, f%.lt.
Te rei,).r$e,e#t $%ll i#cl."e i#tere$t o# te $.,$
%"!%#ce"- fro, te "%' o# (ic te %"!%#ce (%$ ,%"e.
@e $o.l" co,+%re ti$ to te +ro!i$io#$ i# Article 1886
(ere te %&e#t i$ )o.#" to %"!%#ce te $.,$ #ece$$%r' to c%rr'
o.t te %&e#c'- ).t o#l' (e# e $o co#$e#t$ or i$ $ti+.l%te" i#
te %&ree,e#t.
1erso7a v* 2im3 )- P&i$ )!6 !4'("
b. 7&en Principa$ Not Liab$e for Agent=s E2penses
U#"er Article 1<18- te +ri#ci+%l i$ #ot li%)le for te
e;+e#$e$ i#c.rre" )' te %&e#t i# te follo(i#& c%$e$D
417 if te %&e#t %cte" i# co#tr%!e#tio# of te +ri#ci+%lC$
i#$tr.ctio#$- .#le$$ te l%tter $o.l" (i$ to %!%il i,$elf of te
)e#efit$ "eri!e" fro, te co#tr%ct=
427 @e# te e;+e#$e$ (ere ".e to te f%.lt of te %&e#t=
4?7 @e# te %&e#t i#c.rre" te, (it :#o(le"&e t%t %#
.#f%!or%)le re$.lt (o.l" e#$.e- if te +ri#ci+%l (%$ #ot %(%re
tereof= or
437 @e# it (%$ $ti+.l%te" t%t te e;+e#$e$ (o.l" )e )or#e
)' te %&e#t- or t%t te l%tter (o.l" )e %llo(e" o#l' % cert%i#
$.,.
@e# te %.torit' of te %re% ,%#%&er to $ettli#& te
cl%i,$ i$ f.rter li,ite" )' te (ritte# $t%#"%r" %.torit' to +%'-
(ic $t%te$ t%t te +%',e#t $%ll co,e fro, i$ re!ol!i#&
f.#" or collectio#- te $ettle,e#t )e'o#" $.c f.#" (%$ % cle%r
"e!i%tio# fro, te i#$tr.ctio#$ of te +ri#ci+%l. Co#$eA.e#tl'-
te e;+e#$e$ i#c.rre" )' te %re% ,%#%&er i# te $ettle,e#t of
te cl%i,$ of te i#$.re" ,%' #ot )e rei,).r$e" fro, te
i#$.r%#ce co,+%#' +.r$.%#t to te cle%r +ro!i$io# of Article
1<18417 of te Ci!il Co"e.
Fo(e!er- (ile te l%( o# %&e#c' +roi)it$ te %re%
,%#%&er fro, o)t%i#i#& rei,).r$e,e#t- i$ ri&t to reco!er ,%'
$till )e B.$tifie" .#"er te &e#er%l l%( o# o)li&%tio#$ %#"
co#tr%ct$- +%rtic.l%rl' Article 12?6 of te Ci!il Co"e o# +%',e#t
)' % tir" +%rt' of te o)li&%tio# of te "e)tor- %llo($ reco!er'
Io#l' i#$of%r %$ te +%',e#t %$ )ee# )e#efici%l to te "e)tor.H
T.$- to te e;te#t t%t te o)li&%tio# of te i#$.r%#ce co,+%#'
%$ )ee# e;ti#&.i$e"- te %re% ,%#%&er ,%' "e,%#" for
rei,).r$e,e#t fro, i$ +ri#ci+%l. To r.le oter(i$e (o.l"
re$.lt i# .#B.$t e#ric,e#t of +etitio#er. +o$inion Insurance v.
Court of Appeals- ?66 SCRA 2?< 425527.
c. Principa$ Liab$e to In#e%nify Agent for t&e Da%ages
*ustaine#
U#"er Article 1<1?- te +ri#ci+%l ,.$t i#"e,#if' te %&e#t
for %ll te "%,%&e$ (ic te e;ec.tio# of te %&e#c' ,%' %!e
c%.$e" te %&e#t- (ito.t f%.lt or #e&li&e#ce o# %&e#tC$ +%rt.
Article 1<1? i$ te co.#ter8)%l%#ce to te +ro!i$io# i#
Article 1883 t%t ,%:e$ te %&e#t li%)le for "%,%&e$ $.$t%i#e"
)' te +ri#ci+%l for %&e#tC$ ref.$%l to +erfor, i$ o)li&%tio#$
.#"er te %&e#c'.
!lbaladejo y Cia v* PRC3 )- P&i$ --6 !4'(".
!" Right of !gent to Retain Object of !gency in Pledge for
!dvances and -amages
U#"er Article 1<13- te %&e#t i$ &r%#te" te +o(er to ret%i#
i# +le"&e te ti#&$ (ic %re te o)Bect of te %&e#c' .#til te
+ri#ci+%l effect$ te rei,).r$e,e#t %#" +%'$ te i#"e,#it'
co!eri#& %"!%#ce$ ,%"e %#" "%,%&e$ $.$t%i#e". Ti$ i$ %#
e;ce+tio# to te ".t' of te %&e#t- e;+re$$e" i# Article 18<1- to
"eli!er to te +ri#ci+%l e!er'ti#& e recei!e" e!e# if #ot ".e to
te +ri#ci+%l.
#. Ob$igation of Principa$ to Pay Agent=s Co%pensation
I# %# o#ero.$ or co,+e#$%te" %&e#c'- te o)li&%tio# of te
+ri#ci+%l to +%' te %&e#t $%ll )e i# %ccor"%#ce (it te ter,$
%&ree" .+o# (e# te %&e#c' (%$ co#$tit.te". If #o +%rtic.l%r
for,.l% %$ )ee# %&ree" .+o# o# te %&e#tC$ co,+e#$%tio#- te#
te follo(i#& r.le$ $o.l" %++l'D
4i7 te +ri#ci+%l $%ll +%' te %&e#tC$ co,,i$$io# o#l' o#
te le&%l )%$i$ t%t te %&e#t %$ co,+lie" (it i$ o)li&%tio#$
(it te +ri#ci+%l= %#"
4ii7 te +ri#ci+%l $%ll )e li%)le to te %&e#t for te
re%$o#%)le !%l.e of te %&e#tC$ $er!ice$.
A )ro:er i$ e#title" to te .$.%l co,,i$$io# (e#e!er e
)ri#&$ to i$ +ri#ci+%l % +%rt' (o i$ %)le %#" (illi#& to t%:e te
+ro+ert' %#" e#ter i#to % !%li" co#tr%ct .+o# te ter,$ te#
#%,e" )' te +ri#ci+%l- %lto.& te +%rtic.l%r$ ,%' )e %rr%#&e"
%#" te ,%tter #e&oti%te" %#" co#$.,,%te" )et(ee# te
+ri#ci+%l %#" te +.rc%$er "irectl'. It (o.l" )e te ei&t of
i#B.$tice to +er,it te +ri#ci+%l te# to (it"r%( te %.torit' %$
%&%i#$t %# e;+re$$ +ro!i$io# of te co#tr%ct- %#" re%+ te
)e#efit$ of te %&e#tC$ l%)or$- (ito.t )ei#& li%)le to i, for i$
co,,i$$io#. Macondray 5 Co* v* *e$$ner3 (( P&i$. (89 !4!6".
Re$ate# Cases,
Infante v. Cunanan- <? Eil. 6<? 41<1?7.
i$ v. Sa1an- 336 SCRA 2?2 425537.
#iege & 'ro4n v. S$ith, 'ell & Co., 3? Eil. 118 41<227.
Ra$os v. Court of Appeals- 6? SCRA ??1 41<617.
".,. Tuazon & Co. v. Collector of Internal Revenue, 158 Eil.
655 41<657.
Inland Realt* Invest$ent Service, Inc. v. Court of Appeals- 26?
SCRA 65 41<<67.
+a>?on v. 'ri$o & Co., 32 Eil. 1?? 41<217.
Re*es v. ,os/ueda- << Eil. 231 41<167.
Collector of Internal Revenue v. Tan Eng Hong- 18 SCRA 1?1
41<667.
-. O1LIGATION O: T7O OR 0ORE PRINCIPAL* TO AGENT
APPOINTED :OR CO00ON TRAN*ACTION*
U#"er Article 1<11- if t(o or ,ore +er$o#$ %!e %++oi#te"
%# %&e#t for % co,,o# tr%#$%ctio# or .#"ert%:i#&- te' $%ll )e
$oli"%ril' li%)le to te %&e#t for %ll te co#$eA.e#ce$ of te
%&e#c'.
E!e# if te +ri#ci+%l$ "o #ot %ct.%ll' %#" +er$o#%ll' :#o(
e%c oter- $.c i&#or%#ce "oe$ #ot %ffect teir B.ri"ic%l $t%#"i#&
of te %&e#t. +oles v. Angeles, 3<2 SCRA 656 425567.
-e Castro v* Court of !ppeals3 (5) *CRA 698 '99'"
6. RIG.T* O: PER*ON* 7.EN :ACED 7IT. CON:LICTING
CONTRACT*
U#"er Article 1<16- (e# t(o +er$o#$ co#tr%ct (it re&%r"
to te $%,e ti#&- o#e of te, (it te %&e#t %#" te oter (it
te +ri#ci+%l- %#" te t(o co#tr%ct$ %re i#co,+%ti)le (it e%c
oter- t%t of +rior "%te $%ll )e +referre"- (ito.t +reB."ice to
te +ro!i$io#$ of Article 1133 o# te r.le$ o# "o.)le $%le$.
Article 1<16 +ro!i"e$ t%t i# $.c % c%$e- if te %&e#t %"
%cte" i# &oo" f%it- te +ri#ci+%l $%ll )e li%)le i# "%,%&e$ to te
tir" +er$o# (o$e co#tr%ct ,.$t )e reBecte". O# te oter %#"-
if te %&e#t %cte" i# )%" f%it- e %lo#e $%ll )e re$+o#$i)le.
IQ. EQTINGUISFGENT OF AGENCY
!. .O7 AND 7.EN AGENC; E+TING<I*.ED

Article 1<1< of te Ci!il Co"e e#.,er%te$ te ,o"e$ )'
(ic %# %&e#c' co#tr%ct i$ e;ti#&.i$e"- t.$D
a. 1y revocation
b. 1y t&e /it&#ra/a$ of t&e agent
c. 1y #eat&3 civi$ inter#iction3 insanity or inso$vency of eit&er
t&e principa$ or agent
#. 1y t&e #isso$ution of t&e juri#ica$ entity /&ic& entruste#
or accepte# t&e agency
e. 1y t&e acco%p$is&%ent of t&e object or purpose of t&e
agency
f. 1y t&e e2piration of t&e perio# for /&ic& t&e agency /as
constitute#
Oter ,o"e$ of e;ti#&.i$,e#t of %# %&e#c' (o.l" )e
,.t.%l (it"r%(%l- )' $.+er!e#i#& e!e#t t%t ,%:e$ ille&%l or
i,+o$$i)le te o)Becti!e or +.r+o$e for (ic te %&e#c' i$
co#$tit.te"- li:e te "e$tr.ctio# of te $.)Bect ,%tter (ic i$ te
o)Bect of te %&e#c'.
'. RE@OCATION O: T.E AGENC;
Te l%( reco&#i>e$ te +o(er to re!o:e %# %&e#c' rel%tio#
)' +ri#ci+%l- i# :ee+i#& (it te tr.i$, t%t %# %&e#c' i$ %
i&l' +er$o#%l rel%tio#$i+ %#" o#e ).ilt .+o# tr.$t %#"
co#fi"e#ce. U#li:e te re,e"' of re$ci$$io# (ic reA.ire$ te
e;i$te#ce of $.)$t%#ti%l )re%c of co#tr%ct- re!oc%tio# i$ liter%ll'
%t te (ill of te +ri#ci+%l.
B.t te #e%r %)$ol.te +o(er of te +ri#ci+%l to re!o:e te
%&e#c' $o.l" #ot )e co#f.$e" (it te to.&t t%t tere c%# )e
#o )re%c of co#tr%ct co,,itte" )' % +ri#ci+%l (o re!o:e$ te
%&e#c' (ic (%$ co#$tit.te" %$ *irre!oc%)le* for % "efi#ite
ter, or +erio". I# $.c % c%$e- te %&ree,e#t %$ to te ter, of
te %&e#c' (o.l" #ot ,%:e te +ri#ci+%l lo$e i$ +o(er to
re!o:e- %#" (e# e "oe$ $o re!o:e te %&e#c' i$ ter,i#%te"-
).t e (o.l" )e li%)le to te %&e#t for te "%,%&e$ c%.$e"-
i#cl."i#& to te co,+e#$%tio# ".e i, (e# te re!oc%tio# (%$
"o#e i# )%" f%it- i.e.- to %!oi" te +%',e#t of te co,,i$$io#
e%r#e" )' te %&e#t.
a. E2press Revocation
U#"er Article 1<25- te +ri#ci+%l ,%' re!o:e te %&e#c' %t
(ill- e;+re$$ or i,+lie"- %#" tere)' co,+el te %&e#t to ret.r#
te "oc.,e#t e!i"e#ci#& te %&e#c'. Ti$ (o.l" e#$.re t%t te
"oc.,e#t- i.e.- +o(er of %ttor#e'- (o.l" #ot f%ll i#to te %#"$
of tir" +%rtie$ (o te# %ct i# &oo" f%it i# e#teri#& i#to %
co#tr%ct i# te #%,e of te +ri#ci+%l- )elie!i#& tere i$ $till
e;i$ti#& te %&e#c' rel%tio#.
If te %&e#t f%il$ or ref.$e$ to ret.r# te +o(er of %ttor#e'-
it i$ i#c.,)e#t .+o# te +ri#ci+%l to &i!e +ro+er #otice to te
,e,)er$ of te +.)lic (o ,%' )e %ffecte" )' te re!oc%tio#.
U#"er Article 1<21- if te %&e#c' %$ )ee# e#tr.$te" for te
+.r+o$e of co#tr%cti#& (it $+ecifie" +er$o#$- it$ re!oc%tio#
$%ll #ot +reB."ice te l%tter if te' (ere #ot &i!e# #otice
tereof. U#"er Article 1<22- if te %&e#t %" &e#er%l +o(er$
4i.e.- #ot "irecte" to(%r"$ $+ecific +er$o#$7- #otice of te
re!oc%tio# i# % #e($+%+er of &e#er%l circ.l%tio# i$ % $.fficie#t
(%r#i#& to tir" +er$o#$.
U#"er Article 1<21- (e# t(o or ,ore +ri#ci+%l$ %!e
&r%#te" % +o(er of %ttor#e' for % co,,o# tr%#$%ctio#- %#' o#e
of te, ,%' re!o:e te $%,e (ito.t te co#$e#t of te oter$.
Ti$ r.le i$ co#$i$te#t (it te r.le .#"er Article 1<11 t%t te
o)li&%tio# of t(o or ,ore +ri#ci+%l$ to % co,,o# %&e#t i$
$oli"%r'- %#" co#$eA.e#tl'- te +o(er to re!o:e te %&e#c' c%#
)e ,%"e )' te (ill of o#l' o#e of te +ri#ci+%l$.
b. I%p$ie# Revocation
Te follo(i#& %!e )ee# e#.,er%te" %$ to co#$tit.te
i,+lie" re!oc%tio#- t.$D
!" !ppointment of Ne !gent for Same 'usiness
U#"er Article 1<2?- te %++oi#t,e#t of % #e( %&e#t for te
$%,e ).$i#e$$ or tr%#$%ctio# re!o:e$ te +re!io.$ %&e#c' fro,
te "%' o# (ic #otice tereof (%$ &i!e# to te for,er %&e#t.
Te effect of re!oc%tio# i$ (ito.t +reB."ice to te ri&t$ of tir"
+%rtie$ (o (ere #ot %(%re of or #otifie" of $.c $it.%tio#.
Te critic%l ti,e (e# te %&e#c' i$ re!o:e" i$ *fro, te
"%' o# (ic #otice tereof (%$ &i!e# to te for,er %&e#t.*
T.$- i# (arcia v. +e ,anzano- ?< Eil 166 41<1<7- (ere te
f%ter fir$t &%!e % +o(er of %ttor#e' o!er te ).$i#e$$ to i$ $o#-
%#" $.)$eA.e#tl' to te ,oter- te Co.rt el" t%t (ito.t
e!i"e#ce $o(i#& t%t te $o# (%$ i#for,e" of te i$$.%#ce of
te +o(er of %ttor#e' to te ,oter- te tr%#$%ctio# effecte" )'
te $o# +.r$.%#t to i$ +o(er of %ttor#e'- (%$ !%li" %#" )i#"i#&-
t.$ 88
Tere i$ #o +roof i# te recor" t%t te fir$t %&e#t- te $o#-
:#e( of te +o(er8of8%ttor#e' to i$ ,oter.
It (%$ #ece$$%r' .#"er te l%( for te "efe#"%#t$- i# or"er
to e$t%)li$ teir co.#tercl%i,- to +ro!e t%t te $o# %" #otice
of te $eco#" +o(er8of8%ttor#e'. Te' %!e #ot "o#e $o- %#" it
,.$t )e co#$i"ere" t%t A#&el L. G%#>%#o (%$ %cti#& .#"er %
!%li" +o(er8of8%ttor#e' fro, i$ f%ter (ic %" #ot )ee#
le&%ll' re!o:e" o# te "%te of te $%le of te %lf i#tere$t i# te
$te%,er to te +l%i#tiff$ $o#- (ic %lf i#tere$t (%$ le&%ll'
i#erite" )' te +l%i#tiff$. 4%t +. 1837
'" %hen Principal -irectly Manages 'usiness OPI
U#"er Article 1<23- te %&e#c' i$ re!o:e" (e# te
+ri#ci+%l "irectl' ,%#%&e$ te ).$i#e$$ e#tr.$te" to te %&e#t-
"e%li#& "irectl' (it tir" +er$o#$. Te +ro!i$io# "oe$ #ot $t%te
(e# te %ct of re!oc%tio# t%:e$ +l%ce- %#" it c%# )e +re$.,e"
terefore t%t te ,o,e#t te +ri#ci+%l "irectl' ,%#%&e$ te
).$i#e$$ )' "e%li#& "irectl' (it tir" +er$o#$- te %&e#c' i$
re!o:e". B.t t%t (o.l" o#l' ,e%# t%t te re!oc%tio# of te
%&e#c' i$ o#l' (it re$+ect to te tir" +er$o#$ (it (o, te
+ri#ci+%l "e%l$ "irectl'= %$ to tir" +%rtie$ (o %!e +re!io.$l'
:#o(# of te +o(er of %ttor#e' of te %&e#t %#" (o %!e #ot
"e%lt (it te +ri#ci+%l- te %&e#c' c%##ot )e co#$i"ere"
re!o:e". It i$ %l$o %++%re#t t%t .#le$$ te %&e#t i$ %(%re or
&i!e# #otice t%t te +ri#ci+%l %$ "irectl' ,%#%&e" te ).$i#e$$
(ic i$ co!ere" )' i$ +o(er of %ttor#e'- te# i#$of%r %$ te
%&e#t i$ co#cer#e" tere i$ %$ 'et #o re!oc%tio# of i$ +o(er$.
It ,.$t )e ,%"e cle%r t%t te co#ti#.e" i#!ol!e,e#t of te
+ri#ci+%l i# te ,%#%&e,e#t of te ).$i#e$$ or te +ro+ert'
(ic i$ te o)Bect of % +o(er of %ttor#e' &i!e# to %# %&e#t "oe$
#ot #ece$$%ril' ,e%# tere i$ i#te#t to re!o:e. For i#"ee"-
%&e#c' %rr%#&e,e#t$ %re #ot ,e%#t to c.rt%il te +o(er of te
+ri#ci+%l to e;ec.te %ct$ of o(#er$i+ %#" %",i#i$tr%tio#- ).t %$
% ,%tter of ).$i#e$$ $e#$e- to %llo( te +ri#ci+%l- )' le&%l
fictio#- to e;te#" i$ +er$o#%lit' tro.& te f%cilit' of te %&e#t
4Orient Air Service & Hotel Representatives v. Court of Appeals-
1<6 SCRA 631 /1<<107. I# oter (or"$- te "irect ,%#%&e,e#t
of te ).$i#e$$ )' te +ri#ci+%l %#" "irectl' "e%li#& (it tir"
+%rtie$ $%ll )e "ee,e" to +ro".ce te effect of re!oc%tio# (e#
$.c %ct$ (o.l" )e i#co#$i$te#t (it te ter,$ of te +o(er of
%ttor#e' +re!io.$l' &i!e# to te %&e#t.
S.c +ri#ci+le i$ )e$t ill.$tr%te" i# C,S ogging v. Court
of Appeals- 211 SCRA ?63 41<<27- (ere te +ri#ci+%l %++oi#te"
te %&e#t *%$ i$ $ole %#" e;cl.$i!e e;+ort $%le$ %&e#t (it f.ll
%.torit' . . .to $ell %#" e;+ort .#"er % fir, $%le$ co#tr%ct . . . %ll
lo&$ +ro".ce" )' /te +ri#ci+%l0 for % +erio" of fi!e 417 'e%r$
co,,e#ci#& .+o# te e;ec.tio# of te %&ree,e#t ; ; ; /%#" for
(ic te %&e#t0 $%ll recei!e fi!e 41N7 +er ce#t co,,i$$io# of
te &ro$$ $%le$ of lo&$ of /te +ri#ci+%l0 )%$e" o# F.O.B. i#!oice
!%l.e (ic co,,i$$io# $%ll )e "e".cte" fro, te +rocee"$ of
%#' %#"Lor %ll ,o#e'$ recei!e" )' /%&e#t0 for %#" i# )e%lf %#"
for te %cco.#t of /te +ri#ci+%l0.* D.ri#& te fi!e 'e%r8+erio"-
te +ri#ci+%l $ol" lo&$ "irectl' to J%+%#e$e fir,$- %#" for (ic
te %&e#t #o( $ee:$ to reco!er te co,,i$$io# to (ic e (%$
e#title" to .#"er te e;cl.$i!e %&e#c' %rr%#&e,e#t. I# "e#'i#&
%#' ri&t o# te +%rt of te %&e#t to recei!e co,,i$$io# fro, te
+ri#ci+%lC$ "irect $%le$ of lo&$ to it$ J%+%#e$e c.$to,er$- te
Co.rt el" 88
Fo(e!er- @e fi#" ,erit i# /+ri#ci+%lC$0 co#te#tio# t%t te
%++ell%te co.rt erre" i# ol"i#& t%t /te %&e#t0 (%$ e#title" to
it$ co,,i$$io# fro, te $%le$ ,%"e )' /te +ri#ci+%l0 to
J%+%#e$e fir,$.
Te +ri#ci+%l ,%' re!o:e % co#tr%ct of %&e#c' %t (ill- %#"
$.c re!oc%tio# ,%' )e e;+re$$- or i,+lie"- %#" ,%' )e %!%ile"
of e!e# if te +erio" fi;e" i# te co#tr%ct of %&e#c' %$ #ot 'et
e;+ire". A$ te +ri#ci+%l %$ ti$ %)$ol.te ri&t to re!o:e te
%&e#c'- te %&e#t c%# #ot o)Bect tereto= #eiter ,%' e cl%i,
"%,%&e$ %ri$i#& fro, $.c re!oc%tio#- .#le$$ it i$ $o(# t%t
$.c (%$ "o#e i# or"er to e!%"e te +%',e#t of %&e#t9$
co,,i$$io#. 4%t ++. ?818?827
C,S ogging co#fir,$ te le&%l +o$itio# t%t te
i#"ic%tio# of % +erio" i# te co#tr%ct of %&e#c' "oe$ #ot ,e%#
t%t te co#tr%ct (%$ co#tr%ct.%ll' "ee,e" irre!oc%)le (iti#
te +erio" &r%#te"- %#" to te effect re!oc%tio# (iti# te +erio"
(o.l" %,o.#t to )re%c of co#tr%ct for (ic te +ri#ci+%l ,%'
)e el" li%)le for "%,%&e$. I# %""itio#- te r.li#& %l$o co#fir,$
te +o$itio# t%t te &r%#t to % +er$o# of %# *e;cl.$i!e %&e#c'*
+o$itio# "oe$ #ot ,e%# t%t te %&e#c' i$ irre!oc%)le (iti# te
+erio" +ro!i"e" i# te co#tr%ct of %&e#c'- ).t t%t ,erel' it
,e%#$ t%t te +ri#ci+%l (o.l" #ot %++oi#t %#oter %&e#t to
%#"le te ).$i#e$$ co!ere".
I# (uardez v. &RC- 1<1 SCRA 386 41<<57- (ere te
+ri#ci+%l %" %.tori>e" te +.r+orte" %&e#t to *follo( .+*
+ri#ci+%lC$ +re!io.$ offer to $ell % firetr.c: to % co,+%#'- te
Co.rt el" t%t (e# te %&e#t "ro++e" o.t of te $ce#e %#" it
(%$ te +ri#ci+%l t%t "irectl' #e&oti%te" (it te co,+%#' to
$%( te co#$.,,%tio# of te $%le- #o co,,i$$io# (%$ ".e to
te %&e#t )ec%.$e *$.c %&e#c' (o.l" %!e )ee# "ee,e"
re!o:e" .+o# te re$.,+tio# of "irect #e&oti%tio#$ )et(ee#* te
+ri#ci+%l %#" te co,+%#'.
I# &e4 ,anila u$1er Co$pan*, Inc. vs. Repu1lic of the
%hilippines- 156 Eil 823 41<657- te Co.rt r.le" t%t te %ct of %
co#tr%ctor- (o- %fter e;ec.ti#& +o(er$ of %ttor#e' i# f%!or of
%#oter e,+o(eri#& te l%tter to collect (%te!er %,o.#t$ ,%'
)e ".e to i, fro, te Go!er#,e#t- %#" tere%fter "e,%#"e"
%#" collecte" fro, te Go!er#,e#t te ,o#e' te collectio# of
(ic e e#tr.$te" to i$ %ttor#e'8i#8f%ct- co#$tit.te" re!oc%tio#
of te %&e#c' i# f%!or of te %ttor#e'8i#8f%ct.
Te r.li#&$ i# te %)o!e8"i$c.$$e" c%$e$ i#"ic%te t%t te
i$$.e of *i,+lie" re!oc%tio#* %ri$i#& (e# te +ri#ci+%l "irectl'
,%#%&e$ te ).$i#e$$ or +ro+ert' co!ere" )' % +o(er of %ttor#e'
re%ll' &o i#to te i$$.e of e#title,e#t of te %&e#t to te
co,,i$$io# or re,.#er%tio# %&ree" .+o# .#"er te co#tr%ct of
%&e#c'. I# oter (or"$- it $ee,$ t%t B.ri$+r."e#ce i#"ic%te$ t%t
%&e#c' )ei#& % co#tr%ct of $er!ice- te %&e#t ,.$t e%r# tro.&
i$ $er!ice or effort$ te co,,i$$io# or re,.#er%tio# %&ree"
.+o# (it te +ri#ci+%l= $.c t%t if it i$ te +ri#ci+%l i,$elf-
tro.& i$ o(# effort$- (o i$ %)le to effect te tr%#$%ctio#
co#te,+l%te" )' te %&e#c' %rr%#&e,e#t- te# te %&e#t (o.l"
#ot )e e#title" to recei!e %#' co,,i$$io#.
(" Special Poer of !ttorney Revo&es a 6eneral Poer of
!ttorney
U#"er Article 1<26- *A &e#er%l +o(er of %ttor#e' i$
re!o:e" )' % $+eci%l o#e &r%#te" to %#oter %&e#t- %$ re&%r"$ te
$+eci%l ,%tter i#!ol!e" i# te* &e#er%l +o(er of %ttor#e'. It i$
.#fort.#%te t%t Article 1<26 f.$e$ t(o "i$ti#ct $it.%tio#$ i#to
o#e $t%t.tor' r.le.
For e;%,+le- te i,+lic%tio# fro, te l%#&.%&e of Article
1<26 i$ t%t *% $+eci%l +o(er of %ttor#e' &r%#te" to o#e +er$o# i$
#ot re!o:e" )' % &e#er%l +o(er of %ttor#e' $.)$eA.e#tl' &r%#te"
i# f%!or of %#oter +er$o# %$ to te $+eci%l ,%tter i#!ol!e" i# te
$+eci%l +o(er of %ttor#e'=* for i#"ee" te +ro+o$itio# if illo&ic%l.
Te .$e of te ter,$ *&e#er%l +o(er of %ttor#e'* %#" *$+eci%l
+o(er of %ttor#e'* i$ co,+letel' ,i$le%"i#& i# Article 1<26- for
te r.le i$ +ro+erl' e,)o"ie" i# Article 1<2?- i# t%t *te
%++oi#t,e#t of % #e( %&e#t for te $%,e ).$i#e$$ or tr%#$%ctio#
re!o:e$ te +re!io.$ %&e#c' fro, te "%' o# (ic #otice
tereof (%$ &i!e# to te for,er %&e#t.*
A&%i#- if (e loo: %t te l%#&.%&e of Article 1<26- it (o.l"
,e%# t%t *% &e#er%l +o(er of %ttor#e' i$ #ot re!o:e" )' %
$+eci%l o#e &r%#te" to the sa$e agent.* Te f%l$it' of $.c %#
i,+lic%tio# i$ )e$t $o(# i# te "eci$io# i# +* 'uncio and Co.
v. Ong (uan Can- 65 Eil 6<6 41<?37.
I# t%t "eci$io#- te $o# e;ec.te" o# )e%lf of te f%ter-
te "ee" co!eri#& te $%le of % rice8,ill %#" c%,%ri#- i# f%!or of
).'er$ (o relie" .+o# % 1<28 +o(er of %ttor#e' %tt%ce" to te
"ee"- ).t (ic t.r#e" o.t (%$ *#ot % &e#er%l +o(er of %ttor#e'
).t % li,ite" o#e %#" /"i"0 #ot &i!e te e;+re$$ +o(er to %lie#%te
te +ro+ertie$ i# A.e$tio#.* @e# te cre"itor$ of te +ri#ci+%l
$o.&t to %!e te $%le "ecl%re" !oi"- te ).'er$ cl%i,e" t%t te
"efect i# te $o#C$ %.torit' to $ell o# )e%lf of te f%ter (%$
c.re" )' %# e%rlier 1<25 *&e#er%l +o(er of %ttor#e' &i!e# to te
$%,e %&e#t /$o#0* )' te f%ter. Te Co.rt #o#etele$$ "ecl%re"
te $%le !oi" o# te &ro.#" t%t *Te ,%:i#& %#" %cce+ti#& of %
#e( +o(er of %ttor#e'- (eter it e#l%r&e$ or "ecre%$e$ te
+o(er of te %&e#t .#"er % +rior +o(er of %ttor#e'- ,.$t )e el"
to $.++l%#t %#" re!o:e te l%tter (e# te t(o %re i#co#$i$te#t.
If te #e( %++oi#t,e#t (it li,ite" +o(er$ "oe$ #ot re!o:e te
&e#er%l +o(er of %ttor#e'- te e;ec.tio# of te $eco#" +o(er of
%ttor#e' (o.l" )e % ,ere f.tile &e$t.re.*
If te +.r+o$e of te +ri#ci+%l i# "e%li#& "irectl' (it te
+.rc%$er %#" i,$elf effecti#& te $%le of te +ri#ci+%lC$
+ro+ert' i$ to %!oi" +%',e#t of i$ %&e#tC$ co,,i$$io#- te
i,+lie" re!oc%tio# i$ "ee,e" ,%"e i# )%" f%it %#" c%##ot )e
$%#ctio#e" (ito.t %ccor"i#& to te %&e#t te co,,i$$io# (ic
i$ ".e i,. +nfante v* Cunanan3 4( P&i$ 64( !4-(".
@ere #o ti,e for te co#ti#.%#ce of te %&e#c' i$ fi;e"
)' te ter,$- te +ri#ci+%l i$ %t li)ert' to ter,i#%te it %t (ill
$.)Bect o#l' to te reA.ire,e#t$ of &oo" f%it. -a<=on v*
'rimo3 )' P&i$ !(( !4'!".
Re$ate# Cases,
.alenzuala v. Court of Appeals, 1<1 SCRA 1 41<<57
#lorentino v. Sandigan1a*an- 252 SCRA ?5< 41<<?7.
+ialosa v. Court of Appeals- 1?5 SCRA ?15 41<837
,anila Trading v. ,anila Trading a1orers Assn.- 8? Eil 2<6
41<3<7
.alera v. .elasco- 11 Eil 6<1 41<287
'arretto v. Santa ,arina- 26 Eil 335 41<1?7
c. Effects of Revocation on T&ir# Parties
!" %hen +t !ffects -ealings ith Specified )hird Parties
U#"er Article 1<21- if te %&e#c' %$ )ee# e#tr.$te" for
te +.r+o$e of co#tr%cti#& (it $+ecifie" +er$o#$- it$ re!oc%tio#
$%ll #ot +reB."ice te l%tter if te' (ere #ot &i!e# #otice
tereof. It $ee,$ cle%r- (e# co,+%re" (it te $it.%tio# i#
Article 186?- t%t #otice )' +.)lic %"!erti$e,e#t (o.l" #ot
co#$tit.te $.fficie#t #otice to )i#" $.c $+ecifie" tir" +%rtie$.
I# Rallos v . 6angco- 25 Eil 26< 41<117- te for,er
+ri#ci+%l ref.$e" to )e +er$o#%ll' li%)le for %#' %cco.#t %#"le"
)' i$ %&e#t 4Coll%#te$7 for tr%#$%ctio#$ t%t occ.rre" %fter te
+ri#ci+%l %" ter,i#%te" te %&e#c' rel%tio#$- e!e# to % lo#&8
$t%#"i#& c.$to,er (o %" "o#e ).$i#e$$ (it te +ri#ci+%l
tro.& te %&e#t (o (%$ $+eci%ll' e#"or$e". I# %ffir,i#& te
li%)ilit' of te +ri#ci+%l- te Co.rt el" 88
It %++e%r$- o(e!er- t%t +rior to te $e#"i#& of $%i"
to)%cco te "efe#"%#t %" $e!ere" i$ rel%tio#$ (it Coll%#te$
%#" t%t te l%tter (%$ #o lo#&er %cti#& %$ i$ f%ctor.
Ti$ f%ct (%$ #ot :#o(# to te +l%i#tiff$= %#" it i$
co#ce"e" i# te c%$e t%t #o #otice of %#' :i#" (%$ &i!e# )' te
"efe#"%#t to te +l%i#tiff$ of te ter,i#%tio# of te rel%tio#$
)et(ee# te "efe#"%#t %#" i$ %&e#t. Te "efe#"%#t ref.$e" to
+%' te $%i" $., .+o# "e,%#" of te +l%i#tiff$- +l%ci#& $.c
ref.$%l .+o# te &ro.#" t%t %t te ti,e te $%i" to)%cco (%$
recei!e" %#" $ol" )' Coll%#te$ e (%$ %cti#& +er$o#%ll' %#" #ot
%$ %&e#t of te "efe#"%#t. Ti$ %ctio# (%$ )ro.&t to reco!er
$%i" $.,.
A$ i$ $ee#- te o#l' A.e$tio# for o.r "eci$io# i$ (eter or
#ot te +l%i#tiff$- %cti#& i# &oo" f%it %#" (ito.t :#o(le"&e-
%!i#& $e#t +ro".ce to $ell o# co,,i$$io# to te for,er %&e#t of
te "efe#"%#t- c%# reco!er of te "efe#"%#t .#"er te
circ.,$t%#ce$ %)o!e $et fort. @e %re of te o+i#io# t%t te
"efe#"%#t i$ li%)le. F%!i#& %"!erti$e" te f%ct t%t Coll%#te$ (%$
i$ %&e#t %#" %!i#& &i!e# $+eci%l #otice to te +l%i#tiff$ of t%t
f%ct- %#" %!i#& &i!e# te, % $+eci%l i#!it%tio# to "e%l (it $.c
%&e#t- it (%$ te ".t' of te "efe#"%#t o# te ter,i#%tio# of te
rel%tio#$i+ of +ri#ci+%l %#" %&e#t to &i!e ".e %#" ti,el' #otice
tereof to te +l%i#tiff$. F%ili#& to "o $o- e i$ re$+o#$i)le to
te, for (%te!er &oo"$ ,%' %!e )ee# i# &oo" f%it %#"
(ito.t #e&li&e#ce $e#t to te %&e#t (ito.t :#o(le"&e- %ct.%l
or co#$tr.cti!e- of te ter,i#%tio# of $.c rel%tio#$i+. 4%t ++.
262826?7
ustan v. Court of Appeals- 266 SCRA 66? 41<<67- el" t%t
(e# te $+eci%l +o(er of %ttor#e' ".l' %.tori>e" te %&e#t to
re+re$e#t %#" %ct o# )e%lf of te +ri#ci+%l- te +o(er &r%#te"
tereto c%# )e relie" .+o# )' tir" +%rtie$ for (o, $+ecific%ll'
te %.torit' (%$ i$$.e"- t.$D
A$ f%r %$ tir" +er$o#$ %re co#cer#e"- %# %ct i$ "ee,e" to
%!e )ee# +erfor,e" (iti# te $co+e of te %&e#t9$ %.torit' if
$.c i$ (iti# te ter,$ of te +o(er of %ttor#e' %$ (ritte# e!e#
if te %&e#t %$ i# f%ct e;cee"e" te li,it$ of i$ %.torit'
%ccor"i#& to te .#"er$t%#"i#& )et(ee# te +ri#ci+%l %#" te
%&e#t. Te S+eci%l Eo(er of Attor#e' +%rtic.l%rl' +ro!i"e$ t%t
te $%,e i$ &oo" #ot o#l' for te +ri#ci+%l lo%# ).t %l$o for
$.)$eA.e#t co,,erci%l- i#".$tri%l- %&ric.lt.r%l lo%# or cre"it
%cco,,o"%tio# t%t te %ttor#e'8i#8f%ct ,%' o)t%i# %#" .#til te
+o(er of %ttor#e' i$ re!o:e" i# % +.)lic i#$tr.,e#t %#" % co+'
of (ic i$ f.r#i$e" to ENB. E!e# (e# te %&e#t %$
e;cee"e" i$ %.torit'- te +ri#ci+%l i$ $oli"%ril' li%)le (it te
%&e#t if te for,er %llo(e" te l%tter to %ct %$ to.& e %" f.ll
+o(er$ 4Article 1<11- Ci!il Co"e7. Te ,ort&%&e "irectl' %#"
i,,e"i%tel' $.)Bect$ te +ro+ert' .+o# (ic it i$ i,+o$e". Te
+ro+ert' of tir" +er$o#$ (ic %$ )ee# e;+re$$l' ,ort&%&e" to
&.%r%#tee %# o)li&%tio# to (ic te $%i" +er$o#$ %re forei&#- i$
"irectl' %#" Boi#tl' li%)le for te f.lfill,e#t tereof= it i$
terefore $.)Bect to e;ec.tio# %#" $%le for te +.r+o$e of +%'i#&
te %,o.#t of te "e)t for (ic it i$ li%)le. Fo(e!er- +etitio#er
%$ %# .#A.e$tio#%)le ri&t to "e,%#" +ro+ortio#%l
i#"e,#ific%tio# fro, E%r%#&%# (it re$+ect to te $., +%i" to
ENB fro, te +rocee"$ of te $%le of er +ro+ert' i# c%$e te
$%,e i$ $ol" to $%ti$f' te .#+%i" "e)t$.* 4%t +. 6667
ustan ol"$ t%t (ere te $+eci%l +o(er of %ttor#e'
+ro!i"e$ t%t te $%,e i$ &oo" #ot o#l' for te +ri#ci+%l lo%# ).t
%l$o for $.)$eA.e#t co,,erci%l- i#"i!i".%l- %&ric.lt.r%l lo%# or
cre"it %cco,,o"%tio# t%t te %ttor#e'8i#8f%ct ,%' o)t%i# %#"
.#til te +o(er of %ttor#e' i$ re!o:e" i# % +.)lic i#$tr.,e#t %#"
% co+' of (ic i$ f.r#i$e" to te )%#:- i# te %)$e#ce of %#'
+roof t%t te )%#: %" :#o(le"&e t%t te l%$t tree lo%#$ (ere
(ito.t te e;+re$$ %.torit' of te +ri#ci+%l- te )%#: c%##ot )e
+reB."ice.
'" %hen Revocation of 6eneral Poers of !gency
U#"er Article 1<22- if te %&e#t %" &e#er%l +o(er$-
re!oc%tio# of te %&e#c' "oe$ #ot +reB."ice tir" +er$o#$ (o
%cte" i# &oo" f%it %#" (ito.t :#o(le"&e of te re!oc%tio#.
Notice of te re!oc%tio# i# % #e($+%+er of &e#er%l circ.l%tio# i$
% $.fficie#t (%r#i#& to tir" +er$o#$.
I# % c%$e co!eri#& % +o(er of %ttor#e' to "e%l (it te
&e#er%l +.)lic- te f%ct t%t te re!oc%tio# (%$ %"!erti$e" i# %
#e($+%+er of &e#er%l circ.l%tio# (o.l" )e $.fficie#t (%r#i#& to
tir" +er$o#$. Rammani v* Court of !ppeals3 !46 *CRA 8(!
!44!".
B' te o+e#i#& of )r%#c office (it te %++oi#t,e#t of it$
)r%#c ,%#%&er %#" o#ori#& $e!er%l $.ret' )o#"$ i$$.e" i# it$
)e%lf- te i#$.r%#ce co,+%#' i#".ce" te +.)lic to )elie!e t%t
it$ )r%#c ,%#%&er %" %.torit' to i$$.e $.c )o#"$. A$ %
co#$eA.e#ce- te i#$.r%#ce co,+%#' (%$ e$to++e" fro,
+le%"i#&- +%rtic.l%rl' %&%i#$t % re&.l%r c.$to,er tereof- t%t te
)r%#c ,%#%&er %" #o %.torit'. Central Surety 5 +nsurance
Co* v* C*N* (odges3 (5 *CRA !-4 !48!".
@ile Article 1?18 of te Ci!il Co"e reA.ire$ t%t te
co#tr%ct$ i#!ol!i#& re%l +ro+ert' ,.$t %++e%r i# % +ro+er
"oc.,e#t- % re!oc%tio# of % $+eci%l +o(er of %ttor#e' to
,ort&%&e % +%rcel of l%#"- e,)o"ie" i# % +ri!%te (riti#&- i$ !%li"
%#" )i#"i#& )et(ee# te +%rtie$- $.c reA.ire,e#t of Article
1?18 )ei#& o#l' for te co#!e#ie#ce of te +%rtie$ %#" to ,%:e
te co#tr%ct effecti!e %$ %&%i#$t tir" +er$o#$. PN' v*
+ntermediate !ppellate Court3 !54 *CRA 659 !449".
Cia. (en. +e To1acos v. +ia1a- 25 Eil ?21 41<117.
#. CA*E* O: IRRE@OCA1LE AGENCIE*
U#"er Article 1<26- %# %&e#c' c%##ot )e re!o:e" (e#D
RS % )il%ter%l co#tr%ct "e+e#"$ .+o# it=
RS it i$ te ,e%#$ of f.lfilli#& %# o)li&%tio# %lre%"' co#tr%ct=
RS % +%rt#er i$ %++oi#te" ,%#%&er of % +%rt#er$i+ i# te co#tr%ct
of +%rt#er$i+ %#" te re,o!%l fro, ,%#%&e,e#t i$
.#B.$tifi%)le.
Fo(e!er- %# e;ce+tio# to te re!oc%)ilit' of % co#tr%ct
of %&e#c' i$ (e# it i$ co.+le" (it i#tere$t- i.e.- if % )il%ter%l
co#tr%ct "e+e#"$ .+o# te %&e#c'. Te re%$o# for it$
irre!oc%)ilit' i$ )ec%.$e te %&e#c' )eco,e$ +%rt of %#oter
o)li&%tio# or %&ree,e#t. It i$ #ot $olel' te ri&t$ of te
+ri#ci+%l ).t %l$o t%t of te %&e#t %#" tir" +er$o#$ (ic %re
%ffecte". Fe#ce- te l%( +ro!i"e$ t%t i# $.c c%$e$- te %&e#c'
c%##ot )e re!o:e" %t te $ole (ill of te +ri#ci+%l. Repu1lic v.
Evangelista- 366 SCRA 133 425517
I# Sevilla v. Court of Appeals- 165 SCRA 161 41<687- te Co.rt
fo.#" t%t (e# te +etitio#er- Li#% Se!ill%- %&ree" to ,%# te
re$+o#"e#t- To.ri$t @orl" Ser!ice- I#c.9$ Er,it% office- $e ,.$t
%!e "o#e $o +.r$.%#t to % co#tr%ct of %&e#c'. It i$ te e$$e#ce of
ti$ co#tr%ct t%t te %&e#t re#"er$ $er!ice$ *i# re+re$e#t%tio# or
o# )e%lf of %#oter.* Te Co.rt te# el" 88
. . . I# te c%$e %t )%r- Se!ill% $olicite" %irli#e f%re$- ).t $e
"i" $o for %#" o# )e%lf of er +ri#ci+%l- To.ri$t @orl" Ser!ice-
I#c. A$ co,+e#$%tio#- $e recei!e" 3N of te +rocee"$ i# te
co#ce+t of co,,i$$io#$. A#" %$ (e $%i"- Se!ill% er$elf- )%$e"
o# er letter of No!e,)er 28- 1<61- +re$.,e" er +ri#ci+%l9$
%.torit' %$ o(#er of te ).$i#e$$ .#"ert%:i#&. @e %re
co#!i#ce"- co#$i"eri#& te circ.,$t%#ce$ %#" fro, te
re$+o#"e#t Co.rt9$ recit%l of f%ct$- t%t te +%rtie$ %"
co#te,+l%te" % +ri#ci+%l8%&e#t rel%tio#$i+- r%ter t%# % Boi#t
,%#%&e,e#t or % +%rt#er$i+.
B.t .#li:e $i,+le &r%#t$ of % +o(er of %ttor#e'- te %&e#c'
t%t (e ere)' "ecl%re to )e co,+%ti)le (it te i#te#t of te
+%rtie$- c%##ot )e re!o:e" %t (ill. Te re%$o# i$ t%t it i$ o#e
co.+le" (it %# i#tere$t- te %&e#c' %!i#& )ee# cre%te" for te
,.t.%l i#tere$t of te %&e#t %#" te +ri#ci+%l. 1< It %++e%r$ t%t
Li#% Se!ill% i$ % )o#% fi"e tr%!el %&e#t er$elf- %#" %$ $.c- $e
%" %cA.ire" %# i#tere$t i# te ).$i#e$$ e#tr.$te" to er.
Goreo!er- $e %" %$$.,e" % +er$o#%l o)li&%tio# for te
o+er%tio# tereof- ol"i#& er$elf $oli"%ril' li%)le for te
+%',e#t of re#t%l$. Se co#ti#.e" te ).$i#e$$- .$i#& er o(#
#%,e- %fter To.ri$t @orl" %" $to++e" f.rter o+er%tio#$. Fer
i#tere$t- o)!io.$l'- i$ #ot li,ite" to te co,,i$$io#$ $e e%r#e"
%$ % re$.lt of er ).$i#e$$ tr%#$%ctio#$- ).t o#e t%t e;te#"$ to
te !er' $.)Bect ,%tter of te +o(er of ,%#%&e,e#t "ele&%te" to
er. It i$ %# %&e#c' t%t- %$ (e $%i"- c%##ot )e re!o:e" %t te
+le%$.re of te +ri#ci+%l. Accor"i#&l'- te re!oc%tio#
co,+l%i#e" of $o.l" e#title te +etitio#er- Li#% Se!ill%- to
"%,%&e$.
; ; ;.
Ti$ co#".ct o# te +%rt of To.ri$t @orl" Ser!ice- I#c.
)etr%'$ % $i#i$ter effort to +.#i$ Se!ill% for (%t it %"
+ercei!e" to )e "i$lo'%lt' o# er +%rt. It i$ offe#$i!e- i# %#'
e!e#t- to ele,e#t%r' #or,$ of B.$tice %#" f%ir +l%'.
@e r.le- terefore- t%t for it$ .#(%rr%#te" re!oc%tio# of
te co#tr%ct of %&e#c'- te +ri!%te re$+o#"e#t- To.ri$t @orl"
Ser!ice- I#c.- $o.l" )e $e#te#ce" to +%' "%,%&e$. U#"er te
Ci!il Co"e- ,or%l "%,%&e$ ,%' )e %(%r"e" for *)re%ce$ of
co#tr%ct (ere te "efe#"%#t %cte" . . . i# )%" f%it.* 4%t +. 1837
Re$ate# Cases,
National Sugar )rading v* PN'3 (46 *CRA -'5 '99("
'acaling v* Muya3 (59 *CRA 8!) '99'"
Pere7 v* PN'3 !8 *CRA 5(( !466"
Coleongco v* Claparols3 !9 *CRA -88 !46)"
-el Rosario v* !bad3 !9) P&i$ 6)5 !4-5"
(. 7IT.DRA7AL O: T.E AGENT :RO0 T.E AGENC;
U#"er Article 1<28- te %&e#t ,%' (it"r%(%l fro, te
%&e#c' )' &i!i#& ".e #otice to te +ri#ci+%l. If te +ri#ci+%l
$o.l" $.ffer %#' "%,%&e )' re%$o# of te (it"r%(%l- te %&e#t
,.$t i#"e,#if' i, terefore- .#le$$ te %&e#t $o.l" )%$e i$
(it"r%(%l .+o# te i,+o$$i)ilit' of co#ti#.i#& te +erfor,%#ce
of te %&e#c' (ito.t &r%!e "etri,e#t to i,$elf.
U#"er Article 1<2<- e!e# (e# te %&e#t $o.l" (it"r%(
for % !%li" re%$o#- ,.$t co#ti#.e to %ct .#til te +ri#ci+%l %$
%" re%$o#%)le o++ort.#it' to t%:e te #ece$$%r' $te+$ to ,eet
te $it.%tio#.
Re$ate# Cases,
.alera v. .elasco- 11 Eil 6<1 41<287
+ela %ena v. Hidalgo- 16 Eil 315 41<157
). DEAT.3 INCAPACIT; OR IN*OL@ENC; O: T.E PRINCIPAL
Si#ce %&e#c' i$ )ot % fi".ci%r' %#" re+re$e#t%ti!e
rel%tio#$i+- te "e%t of te +ri#ci+%l %.to,%tic%ll'
e;ti#&.i$e$ te co#tr%ct- for cert%i#l' e!e# if te %&e#t i$
(illi#& to &o o#- e %$ #o)o"' to re+re$e#t %#" )i#" i# B.ri"ic%l
rel%tio#$. T.$- Rallos v. #eli) (o Chan & sons Realt* Corp.- 81
SCRA 211 41<687- te Co.rt el" 88
B' re%$o# of te !er' #%t.re of te rel%tio#$i+ )et(ee#
+ri#ci+%l %#" %&e#t- %&e#c' i$ e;ti#&.i$e" )' te "e%t of te
+ri#ci+%l or te %&e#t. Ti$ i$ te l%( i# ti$ B.ri$"ictio#.
G%#re$% co,,e#ti#& o# Art. 165< of te S+%#i$ Ci!il
Co"e e;+l%i#$ t%t te r%tio#%le for te l%( i$ fo.#" i# te
B.ri"ic%l )%$i$ of %&e#c' (ic i$ re+re$e#t%tio#. Tere )ei#& %#
i#te&r%tio# of te +er$o#%lit' of te +ri#ci+%l i#to t%t of te
%&e#t it i$ #ot +o$$i)le for te re+re$e#t%tio# to co#ti#.e to e;i$t
o#ce te "e%t of eiter i$ e$t%)li$. Eotier %&ree$ (it G%#re$%
t%t )' re%$o# of te #%t.re of %&e#c'- "e%t i$ % #ece$$%r' c%.$e
for it$ e;ti#ctio#. L%.re#t $%'$ t%t te B.ri"ic%l tie )et(ee# te
+ri#ci+%l %#" te %&e#t i$ $e!ere" i+$o B.re .+o# te "e%t of
eiter (ito.t #ece$$it' for te eir$ of te +ri#ci+%l to #otif' te
%&e#t of te f%ct of "e%t of te for,er.
Te $%,e r.le +re!%il$ %t co,,o# l%( te "e%t of te
+ri#ci+%l effect$ i#$t%#t%#eo.$ %#" %)$ol.te re!oc%tio# of te
%.torit' of te %&e#t .#le$$ te +o(er )e co.+le" (it %#
i#tere$t. 15 Ti$ i$ te +re!%le#t r.le i# A,eric%# J.ri$+r."e#ce
(ere it i$ (ell8$ettle" t%t % +o(er (ito.t %# i#tere$t co#ferre"
.+o# %# %&e#t i$ "i$$ol!e" )' te +ri#ci+%l9$ "e%t- %#" %#'
%tte,+te" e;ec.tio# of te +o(er %fter(%r"$ i$ #ot )i#"i#& o#
te eir$ or re+re$e#t%ti!e$ of te "ece%$e". 4%t +. 2657
Te "e%t of % clie#t "i!e$t$ i$ l%('er of %.torit' to
re+re$e#t i, %$ co.#$el. A "e%" clie#t %$ #o +er$o#%lit' %#"
c%##ot )e re+re$e#te" )' %# %ttor#e'. 2avina v* Court of
!ppeals3 !8! *CRA 64! !455".
Re$ate# Cases,
)errado v* Court of !ppeals3 !(! *CRA (8( !45)"
Her$osa v. ongara- <? Eil <66 41<1?7
+anon v. 'ri$o- 32 Eil 1?? 41<217
'arretto v. Santa ,arina- 26 Eil 335 41<1?7
+ela %ena v. Hidalgo- 16 Eil 315 41<157
a. 7&en t&e Agency Continues Despite Deat& of Principa$
U#"er Article 1<?5- te %&e#c' $%ll re,%i# i# f.ll force
%#" effect e!e# %fter te "e%t of te +ri#ci+%l- if it %$ )ee#
co#$tit.te" i# te co,,o# i#tere$t of te l%tter %#" of te %&e#t-
or i# te i#tere$t of % tir" +er$o# (o %$ %cce+te" te
$ti+.l%tio# i# i$ f%!or.
E%rlier o# i# %asno v. Ravina- 13 Eil ?68 41<?57- te
Co.rt reco&#i>e" t%t *te +o(er of $%le &i!e# i# % ,ort&%&e i$ %
+o(er co.+le" (it %# i#tere$t (ic $.r!i!e$ te "e%t of te
&r%#tor.*
A# e;%,+le of $.c % $it.%tio#- i$ (e# % +o(er of
%ttor#e' i$ co#$tit.te" i# % co#tr%ct of re%l e$t%te ,ort&%&e
+.r$.%#t to te reA.ire,e#t of Act No. ?1?1- (ic (o.l"
e,+o(er te ,ort&%&ee .+o# te "ef%.lt of te ,ort&%&or to
+%',e#t te +ri#ci+%l o)li&%tio#- to effect te $%le of te
,ort&%&e +ro+ert' tro.& e;tr%B."ici%l foreclo$.re. It %$ )ee#
el" t%t te +o(er of $%le i# te "ee" of re%l e$t%te ,ort&%&3e i$
#ot re!o:e" )' te "e%t of te +ri#ci+%l8,ort&%&or- o# te
&ro.#" t%t it i$ %# %#cill%r' $ti+.l%tio# $.++orte" )' te $%,e
c%.$e or co#$i"er%tio# t%t $.++ort$ te ,ort&%&e %#" for,$ %#
e$$e#ti%l i#$e+%r%)le +%rt of t%t )il%ter%l %&ree,e#t. Te +o(er
of %ttor#e' terefore $.r!i!e$ te "e%t of te ,ort&%&or- %#"
%llo($ te ,ort&%&ee to effect te foreclo$.re of te re%l e$t%te
,ort&%&e e!e# %fter te "e%t of te +ri#ci+%l8,ort&%&or. %erez
v. %&'- 16 SCRA 8?? 41<667= +el Rosario v. A1ad and A1ad-
153 Eil. 638 41<187.
b. Effect of Acts Done by Agent 7it&out Cno/$e#ge of
Principa$=s Deat&
U#"er Article 1<?1- %#'ti#& "o#e )' te %&e#t- (ito.t
:#o(le"&e of te "e%t of te +ri#ci+%l or of %#' oter c%.$e
(ic e;ti#&.i$e$ te %&e#c'- i$ !%li" %#" $%ll )e f.ll'
effecti!e (it re$+ect to tir" +er$o#$ (o ,%' %!e co#tr%cte"
(it i, i# &oo" f%it. It i$ o)!io.$- t%t tir" +%rtie$ (o "e%l
(it te %&e#t i# )%" f%it 4i.e., :#o(i#& t%t te +ri#ci+%l i$
"e%"7 (o.l" #ot )e +rotecte"- %#" te co#tr%ct (o.l" )e !oi"-
#ot B.$t .#e#force%)le- for l%c: of te e$$e#ti%l ele,e#t of
co#$e#t.
I# 'uason v. %anu*as- 151 Eil 6<1 41<1<7- te Co.rt
%++lie" te +ro!i$io#$ of Article 1<?1 i# .+ol"i#& te !%li"it'
of te $%le of te l%#" effecte" )' te %&e#t o#l' %fter te "e%t
of te +ri#ci+%l- (e# #o e!i"e#ce (%$ %"".ce" to $o( t%t %t
te ti,e of $%le )ot te %&e#t %#" te ).'er$ (ere .#%(%re of
te "e%t of te +ri#ci+%l. 4Reiterated in Herrera v. 2* 5i$
(uan- 1 SCRA 356 /1<6107.
I# Rallos v. #eli) (o Chan & Sons Realt* Corp.- 81
SCRA 211 41<687- te Co.rt e,+%$i>e" t%t l%c: of :#o(le"&e
of te "e%t of te +ri#ci+%l ,.$t e;i$t %t te ti,e of co#tr%ct
(it )ot te %&e#t %#" te tir" +%rtie$ for te +ro!i$io# of
Article 1<?1 to %++l'- t.$ 88
Article 1<?1 i$ te %++lic%)le l%(. U#"er ti$ +ro!i$io#- %#
%ct "o#e )' te %&e#t %fter te "e%t of i$ +ri#ci+%l i$ !%li" %#"
effecti!e o#l' .#"er t(o co#"itio#$- !i>D 417 t%t te %&e#t %cte"
(ito.t :#o(le"&e of te "e%t of te +ri#ci+%l- %#" 427 t%t te
tir" +er$o# (o co#tr%cte" (it te %&e#t i,$elf %cte" i# &oo"
f%it. Goo" f%it ere ,e%#$ t%t te tir" $o# (%$ #ot %(%re of
te "e%t of te +ri#ci+%l %t te ti,e e co#tr%cte" (it $%i"
%&e#t. Te$e t(o reA.i$ite$ ,.$t co#c.rD te %)$e#ce of o#e (ill
re#"er te %ct of te %&e#t i#!%li" .#e#force%)le.
I# te i#$t%#t c%$e- it c%##ot )e A.e$tio#e" t%t te %&e#t-
Si,eo# R%llo$- :#e( of te "e%t of i$ +ri#ci+%l %t te ti,e e
$ol" te l%tter9$ $%re i# Lot No. 1<8? to re$+o#"e#t cor+or%tio#.
Te :#o(le"&e of te "e%t i$ cle%rl' to )e i#ferre" fro, te
+le%"i#&$ file" )' Si,eo# R%llo$ )efore te tri%l co.rt. T%t
Si,eo# R%llo$ :#e( of te "e%t of i$ $i$ter Co#ce+cio# i$ %l$o
% fi#"i#& of f%ct of te co.rt a /uo %#" of re$+o#"e#t %++ell%te
co.rt (e# te l%tter $t%te" t%t Si,eo# R%llo$ *,.$t %!e
:#o(# of te "e%t of i$ $i$ter- %#" 'et e +rocee"e" (it te
$%le of te lot i# te #%,e of )ot i$ $i$ter$ Co#ce+cio# %#"
Ger.#"i% R%llo$ (ito.t i#for,i#& %++ell%#t 4te re%lt'
cor+or%tio#7 of te "e%t of te for,er.*
O# te )%$i$ of te e$t%)li$e" :#o(le"&e of Si,eo#
R%llo$ co#cer#i#& te "e%t of i$ +ri#ci+%l- Co#ce+cio# R%llo$-
Article 1<?1 of te Ci!il Co"e i$ i#%++lic%)le. Te l%( e;+re$$l'
reA.ire$ for it$ %++lic%tio# l%c: of :#o(le"&e o# te +%rt of te
%&e#t of te "e%t of i$ +ri#ci+%l= it i$ #ot e#o.& t%t te tir"
+er$o# %cte" i# &oo" f%it. 4%t +. 2627
Te Co.rt f.rter el" i# Rallos LMH
A#oter %r&.,e#t %"!%#ce" )' re$+o#"e#t co.rt i$ t%t te
!e#"ee %cti#& i# &oo" f%it relie" o# te +o(er of %ttor#e'
(ic (%$ ".l' re&i$tere" o# te ori&i#%l certific%te of title
recor"e" i# te Re&i$ter of Dee"$ of te Ero!i#ce of Ce).- t%t
#o #otice of te "e%t (%$ e!er %##ot%te" o# $%i" certific%te of
title )' te eir$ of te +ri#ci+%l %#" %ccor"i#&l' te' ,.$t
$.ffer te co#$eA.e#ce$ of $.c o,i$$io#.
To $.++ort $.c %r&.,e#t refere#ce i$ ,%"e to % +ortio# i#
G%#re$%9$ Co,,e#t%rie$ (ic @e A.oteD
*If te %&e#c' %$ )ee# &r%#te" for te +.r+o$e of
co#tr%cti#& (it cert%i# +er$o#$- te re!oc%tio# ,.$t )e ,%"e
:#o(# to te,. B.t if te %&e#c' i$ &e#er%l i# #%t.re- (ito.t
refere#ce to +%rtic.l%r +er$o# (it (o, te %&e#t i$ to co#tr%ct-
it i$ $.fficie#t t%t te +ri#ci+%l e;erci$e ".e "ili&e#ce to ,%:e
te re!oc%tio# of te %&e#c' +.)licl' :#o(#.
*I# c%$e of % &e#er%l +o(er (ic "oe$ #ot $+ecif' te
+er$o#$ to (o, re+re$e#t%tio# $o.l" )e ,%"e- it i$ te &e#er%l
o+i#io# t%t %ll %ct$ e;ec.te" (it tir" +er$o#$ (o co#tr%cte"
i# &oo" f%it- (ito.t :#o(le"&e of te re!oc%tio#- %re !%li". I#
$.c c%$e- te +ri#ci+%l ,%' e;erci$e i$ ri&t %&%i#$t te %&e#t-
(o- :#o(i#& of te re!oc%tio#- co#ti#.e" to %$$.,e %
+er$o#%lit' (ic e #o lo#&er %".* 4G%#re$%- Vol. 11- ++. 161
%#" 161= ++. 11816- rollo7
Te %)o!e "i$co.r$e- o(e!er- tre%t$ of re!oc%tio# )' %#
%ct of te +ri#ci+%l %$ % ,o"e of ter,i#%ti#& %# %&e#c' (ic i$
to )e "i$ti#&.i$e" fro, re!oc%tio# )' o+er%tio# of l%( $.c %$
"e%t of te +ri#ci+%l (ic o)t%i#$ i# ti$ c%$e. O# +%&e $i; of
ti$ O+i#io# @e $tre$$e" t%t )' re%$o# of te !er' #%t.re of te
rel%tio#$i+ )et(ee# +ri#ci+%l %#" %&e#t- %&e#c' i$ e;ti#&.i$e"
ipso !ure .+o# te "e%t of eiter +ri#ci+%l or %&e#t. Alto.& %
re!oc%tio# of % +o(er of %ttor#e' to )e effecti!e ,.$t )e
co,,.#ic%te" to te +%rtie$ co#cer#e"- 'et % re!oc%tio# )'
o+er%tio# of l%(- $.c %$ )' "e%t of te +ri#ci+%l i$- %$ % r.le-
i#$t%#t%#eo.$l' effecti!e i#%$,.c %$ *)' le&%l fictio# te
%&e#t9$ e;erci$e of %.torit' i$ re&%r"e" %$ %# e;ec.tio# of te
+ri#ci+%l9$ co#ti#.i#& (ill.* @it "e%t- te +ri#ci+%l9$ (ill
ce%$e$ or i$ ter,i#%te"= te $o.rce of %.torit' i$ e;ti#&.i$e".
Te Ci!il Co"e "oe$ #ot i,+o$e % ".t' o# te eir$ to
#otif' te %&e#t of te "e%t of te +ri#ci+%l. @%t te Co"e
+ro!i"e$ i# Article 1<?2 i$ t%t- if te %&e#t "ie$- i$ eir$ ,.$t
#otif' te +ri#ci+%l tereof- %#" i# te ,e%#ti,e %"o+t $.c
,e%$.re$ %$ te circ.,$t%#ce$ ,%' "e,%#" i# te i#tere$t of te
l%tter. Fe#ce- te f%ct t%t #o #otice of te "e%t of te +ri#ci+%l
(%$ re&i$tere" o# te certific%te of title of te +ro+ert' i# te
Office of te Re&i$ter of Dee"$- i$ #ot f%t%l to te c%.$e of te
e$t%te of te +ri#ci+%l. 4%t +. 2637
-. DEAT.3 INCAPACIT; OR IN*OL@ENC; O: T.E AGENT
Article 1<1<4?7 +ro!i"e$ t%t te "e%t- ci!il i#ter"ictio#-
i#$%#it' or i#$ol!e#c' of te %&e#t e;ti#&.i$e$ %t e %&e#c'. I#
Terrado v. Court of Appeals- 1?1 SCRA ?61 41<837- te Co.rt
el" t%t co#tr%ct of %&e#c' e$t%)li$e$ % +.rel' +er$o#%l
rel%tio#$i+ )et(ee# te +ri#ci+%l %#" te %&e#t- $.c t%t te
%&e#c' i$ e;ti#&.i$e" )' te "e%t of te %&e#t- %#" i$ ri&t$
%#" o)li&%tio#$ %ri$i#& fro, te co#tr%ct of %&e#c' %re #ot
tr%#$,itt%)le to i$ eir$.
Fo(e!er- .#"er Article 1<?2- if te %&e#t "ie$ ".ri#& te
ter, of te %&e#c'- i$ eir$ ,.$t #otif' te +ri#ci+%l tereof-
%#" i# te ,e%#ti,e ,.$t %"o+t $.c ,e%$.re$ %$ te
circ.,$t%#ce$ ,%' "e,%#" i# te i#tere$t of te +ri#ci+%l. Te
+ro!i$io# e$t%)li$e$ % r%re $it.%tio# (ere %# o)li&%tio# i$
i,+o$e" )' l%( .+o# +er$o#$ (o %re #ot +%rtie$ to %
co#tr%ct.%l rel%tio#$i+- %#" t%t i# f%ct of o#e t%t %$ %lre%"'
)ee# e;ti#&.i$e" )' te "e%t of te %&e#t.
a. In case of 0u$tip$e Agents
Ge#er%ll'- (ito.t $o(i#& %# i#te#tio# to te co#tr%r'- i#
c%$e of %# %&e#c' (ere tere %re $e!er%l %&e#t$ co#$tit.te" for
te $%,e ).$i#e$$ or +ro+ert'- te "e%t of o#e or ,ore- ).t #ot
%ll of te, (o.l" #ot e;ti#&.i$ te %&e#c'- (it re$+ect to
to$e (o re,%i# li!i#&. Te $%,e r.le (o.l" %++l' i# c%$e of
ci!il i#ter"ictio#- i#$%#it' or i#$ol!e#c' of %#' ).t #ot %ll of te
co,,o# %&e#t$.
O# te oter %#"- (e# it i$ cle%r %t te co#$tit.tio# of te
%&e#c' t%t te co,,o# %&e#t$ (ere i#te#"e" to )e co#$i"ere"
%$ %!i#& c%+%cit' %$ % &ro.+ %#" #ot i#"i!i".%ll' 4$.c %$ )'
te .$e of te ter, I%#"H i# "efi#i#& teir +o(er$7- te# te
"e%t- le&%l i#c%+%cit'- or i#$ol!e#c' of o#e (o.l" le&%ll'
ter,i#%te te %&e#c'.
6. DI**OL<TION O: A CORPORATION
Te "i$$ol.tio# of % cor+or%tio# e;ti#&.i$e$ it$ B.ri"ic%l
+er$o#%lit' for e!er' +.r+o$e t%t $ee:$ to +.r$.e *#e(
).$i#e$$* 4Alha$1ra Cigar v. SEC- 23 SCRA 26< /1<6807 or t%t
of *% &oi#& co#cer#* 4%&' v. Court of #irst Instance of Rizal,
%asig, 'r. NNI- 25< SCRA 2<3 /1<<207. Co#$eA.e#tl'- .+o# te
"i$$ol.tio# of % cor+or%tio#- it$ Bo%r" of Director$ %#" cor+or%te
officer$ lo$e e!er' le&%l ri&t to e#ter i#to %# co#tr%ct or
tr%#$%ctio# to +.r$.e #e( ).$i#e$$ or "o#e i# te or"i#%r'
co.r$e of ).$i#e$$- %#" %#' of $.c co#tr%ct e#tere" i#to (o.l"
)e !oi"- e!e# %$ %&%i#$t tir" +%rtie$ (o %ct i# &oo" f%it- for %t
te +oi#t of "i$$ol.tio#- e;i$ti#& cre"itor$ of te cor+or%tio#$
,.$t )e +rotecte" .#"er te tr.$t f.#" "octri#e.
Fo(e!er- te cor+or%tio# %fter "i$$ol.tio#- %#" (iti#
tree 'e%r$ terefro, co#ti#.e$ to %!e B.ri"ic%l +er$o#%lit' for
o#l' for +.r+o$e$ of liA.i"%tio#. Co#$eA.e#tl'- te Bo%r" of
Director$ %#" cor+or%te officer$ co#ti#.e to %!e %&e#c' +o(er$
to re+re$e#t te cor+or%tio# for %#' %#" %ll +.r+o$e t%t $ee: te
liA.i"%tio# of it$ %$$et$ %#" te +%',e#t of %ll it$ li%)ilitie$.
8. O1LIGATION* O: T.E AGENT E@EN 7.EN T.E AGENC; I*
E+TING<I*.ED
Te fi".ci%r' #%t.re of te co#tr%ct of %&e#c' reA.ire$ t%t
e!e# (e# te %&e#c' rel%tio# i$ ter,i#%te"- te %&e#t i$ )o.#"
to :ee+ co#fi"e#ti%l $.c ,%tter$ %#" i#for,%tio# (ic e
le%r#e" i# te co.r$e of te %&e#c' (e# te #%t.re of $.c
,%tter or i#for,%tio# i$ co#fi"e#ti%l- $.c %$ ).$i#e$$ $ecret$.
J.$t %$ te +ri#ci+%l c%##ot le&%ll' re!o:e %# %&e#c' i#
or"er to e!%"e te +%',e#t of co,+e#$%tio# ".e to te %&e#t-
te# i# te $%,e ,%##er %# %&e#t c%##ot le&%ll' ter,i#%te %#
%&e#c' i# or"er to t%:e %"!%#t%&e of te +ri#ci+%lC$ co#"itio# or
to +rofit )' i#for,%tio# re$.lti#& fro, i$ %&e#c'- for $.c
(o.l" )e i# )re%c of i$ ".t' of lo'%lt'.