Agency Midterm (Additional Reviewer)

I. Objective Portion

A. Definitions

1. What is a Power of Attorney?- A power of attorney is an instrument in writing by which one person, as

principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal

2. How is Agency a legal relation?- Agency is a legal relation founded upon express/implied contract created by

parties or law wherein the agent is employed to represent a principal in dealings with third persons (Mechem).

3. How is Agency a contract?- Art. 1868 NCC

B. Distinguish

1. Difference of Agency and Assignment

- The concept of agency is distinct from assignment. In agency, the agent acts not on his own behalf but on behalf of his principal. While in assignment, there is total transfer or relinquishment of right by the assignor to the assignee. The assignee takes the place of the assignor and is no longer bound to the latter.

2. Difference between Agent and Broker

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

3. Agency by Estoppel and Implied Agency

- An agent in Implied Agency is a true agent with rights and duties while an agency by estoppel is not a true agency due to the misrepresentation by the principal or self-declared agent.

C. Enumerations1. Elements of Agency (Rallos v Go)

- The essential elements of agency are: (1) there is consent, express or implied of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agents acts as a representative and not for himself, and (4) the agent acts within the scope of his authority

2. Q: When is a special power necessary?A: CALL MO SPRING COW

1. to Create or convey real rights over immovable property;

2. Convey or Acquire immovable

3. to Loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration;

4. to Lease any real property to another person for more than one year;

5. to Make such Payments as are not usually considered as acts of administration;

6. to Obligate principal as guarantor or surety

7. to bind the principal to render some Service without compensation;

8. to bind the principal in a contract of Partnership;

9. to Ratify obligations contracted before the agency

10. to Accept or repudiate an Inheritance

11. Effect Novation

12. to make Gifts, except customary ones for charity or those made to employees in the business managed by the agent

13. Compromise, Arbitration and Confession of Judgment

14. any Other act of strict dominion

15. Waive an obligation gratuitously

II. Short Essay Questions

A. Assigned Cases (Doctrines)

1. De la Cruz v. Northern Theatrical

- The relationship between the movie corporation and the plaintiff was not that of principal and agent because the Principle of representation was in no way involved. Plaintiff was not employed to represent the defendant corporation in its dealings with third parties. He was a mere employee hired to perform a certain specific duty or task, that of acting as special guard and staying at the main entrance of the movie house to stop gate crashers and to maintain peace and order within the premises.

2. Calibo v. CA

- As indicated in Article 1869, for an agency relationship to be deemed as implied, the principal must know that another person is acting on his behalf without authority. Here, appellee categorically stated that the only purpose for his leaving the subject tractor in the care and custody of Mike Abella was for safekeeping, and definitely not for him to pledge or alienate the same. If it were true that Mike pledged appellees tractor to appellant, then Mike was acting not only without appellees authority but without the latter’s knowledge as well.

- Article 1911, on the other hand, mandates that the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. Again, in view of appellees lack of knowledge of Mikes pledging the tractor without any authority from him, it stands to reason that the former could not have allowed the latter to pledge the tractor as if he had full powers to do so.

3. Dy Buncio v. Ong Guan Can- The making and accepting of a new power of attorney, whether it enlarges or

decreases the power of the agent under a prior power of attorney, must be held to supplant and revoke the latter when the two are inconsistent. If the new appointment with limited powers does not revoke the general power of attorney, the execution of the second power of attorney would be a mere futile gesture.

- "Special Agency for certain task assigned to another agent overwrites the General Agency’s ability to previously handle said certain task under its authority.”

4. Sunace v. NLRC- Theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the

principal, employer Xiong, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent Sunace.

- As the New Civil Code provides,

- Contracts take effect only between the parties, their assigns, and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.

- Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with its foreign principal when, after the termination of the original employment contract, the foreign principal directly negotiated with Divina and entered into a new and separate employment contract in Taiwan.

- Article 1924 of the New Civil Code reading

The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons.

5. Lorca v. Dineros- In this case it is clear from the certificate of sale attached to the complaint, Dineros

acted all the time in the name of the Ex-Officio Provincial Sheriff (There was valid representation and authority in this case). The Sheriff is liable to third persons on the acts of his deputy

- This is not the first time an action is dismissed for the reason that the agent — instead of his principal — was made the party defendant.

III. Long Essay Questions

A. Possible Doctrines to be asked

- The basis for agency is representation. There is no agency when there is no showing that an alleged principal consented to the acts of the alleged agent or authorized him to act on his/her behalf.

- A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent, agent’s declarations alone are insufficient.

- An authorization given containing the phrase “for and in our behalf” does not establish an agency. Ultimately, what is decisive is the intention of the parties. The use of the words “sold and endorsed“ means that the parties intended a contract of sale, and not an agency.

- The doctrine of piercing the corporate veil of corporate fiction is an equitable doctrine developed to address situations where the separate corporate personality of a corporation is abused or used for wrongful purposes. Also, a suit against an agent cannot without compelling reasons be considered a suit against the principal.

- Where one party to contract was authorized to do work according to his own method and without being subject to the other party’s control, except as to the result of the work, he is an independent contractor and not an agent.

- The contract of agency is extinguished by the death of the principal. It is only valid if these two conditions are present: (1) the agent acted without knowledge of the death of the principal; and (2) the third person who contracted with the agent himself acted in good faith.