This document defines agency as a contract where one person binds themselves to render service or perform actions on behalf of another, with the consent of the latter. It discusses the nature, forms, and types of agency. The key points are:
1) Agency allows one to extend their personality through another by using an agent's services.
2) For an agency relationship to be established, the principal and agent must have legal capacity to contract.
3) Once an agency is established, the agent's actions on behalf of the principal have the same legal effect as if the principal took those actions themselves.
This document defines agency as a contract where one person binds themselves to render service or perform actions on behalf of another, with the consent of the latter. It discusses the nature, forms, and types of agency. The key points are:
1) Agency allows one to extend their personality through another by using an agent's services.
2) For an agency relationship to be established, the principal and agent must have legal capacity to contract.
3) Once an agency is established, the agent's actions on behalf of the principal have the same legal effect as if the principal took those actions themselves.
This document defines agency as a contract where one person binds themselves to render service or perform actions on behalf of another, with the consent of the latter. It discusses the nature, forms, and types of agency. The key points are:
1) Agency allows one to extend their personality through another by using an agent's services.
2) For an agency relationship to be established, the principal and agent must have legal capacity to contract.
3) Once an agency is established, the agent's actions on behalf of the principal have the same legal effect as if the principal took those actions themselves.
AGENCY I. NATURE, FORM AND KINDS OF AGENCY 1. DEFINITION AND OBJECTIVE OF AGENCY a. Defnition Article 1868 of the Civil Code de!e" the co!tr#ct of #$e!c% #" o!e &here'% (# )er"o! 'i!d" hi*"elf to re!der "o*e "ervice or to do "o*ethi!$ i! re)re"e!t#tio! or o! 'eh#lf of #!other+ &ith the co!"e!t or #,thorit% of the l#tter.( -1. b. !"#o$e o" Ob%e&ti'e o( A)en&* I! Eurotech Industrial Technologies, Inc. v. Cuizon, /01 1CRA /82 304456+ the Co,rt held 77 I! # co!tr#ct of #$e!c%+ # )er"o! 'i!d" hi*"elf to re!der "o*e "ervice or to do "o*ethi!$ i! re)re"e!t#tio! or o! 'eh#lf of #!other &ith the l#tter8" co!"e!t. The ,!derl%i!$ )ri!ci)le of the co!tr#ct of #$e!c% i" to #cco*)li"h re",lt" '% ,"i!$ the "ervice" of other" 7 to do # $re#t v#riet% of thi!$" li9e "elli!$+ ',%i!$+ *#!,f#ct,ri!$+ #!d tr#!")orti!$. It" ),r)o"e i" to e:te!d the )er"o!#lit% of the )ri!ci)#l or the )#rt% for &ho* #!other #ct" #!d fro* &ho* he or "he derive" the #,thorit% to #ct. 3#t ). /;06 I! Orient Air Service & Hotel Representatives v. Court of Appeals+ 1;5 1CRA 62/ 31;;16+ the Co,rt held th#t the purpose of ever% co!tr#ct of #$e!c% i" the #'ilit%+ '% le$#l ctio!+ to e:te!d the )er"o!#lit% of the )ri!ci)#l thro,$h the f#cilit% of the #$e!t< ',t the "#*e c#! o!l% 'e e=ected &ith the co!"e!t of the )ri!ci)#l. I! iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466+ the Co,rt held th#t (It 'e#r" "tre""i!$ th#t i! #! #$e!t7)ri!ci)#l rel#tio!"hi)+ the )er"o!#lit% of the )ri!ci)#l i" e:te!ded thro,$h the f#cilit% of the #$e!t. I! "o doi!$+ the #$e!t+ '% le$#l ctio!+ 'eco*e" the )ri!ci)#l+ #,thori>ed to )erfor* #ll #ct" &hich the l#tter &o,ld h#ve hi* do. 1,ch # rel#tio!"hi) c#! o!l% 'e e=ected &ith the co!"e!t of the )ri!ci)#l+ &hich *,"t !ot+ i! #!% &#%+ 'e co*)elled '% l#& or '% #!% co,rt.( -0. 3#t ). 00?6 I! #oles v. Angeles + 2;0 1CRA 645 304466+ the Co,rt held 77 (The CA i" i!correct &he! it co!"idered the f#ct th#t the (",))o"ed frie!d" of -)etitio!er".+ the #ct,#l 'orro&er"+ did !ot )re"e!t the*"elve" to -re")o!de!t.( #" evide!ce th#t !e$#te" the #$e!c% rel#tio!"hi)77it i" ",@cie!t th#t )etitio!er di"clo"ed to re")o!de!t th#t the for*er &#" #cti!$ i! 'eh#lf of her )ri!ci)#l"+ her frie!d" 1 &ho* "he referred to re")o!de!t. For #! #$e!c% to #ri"e+ it i" !ot !ece""#r% th#t the )ri!ci)#l )er"o!#ll% e!co,!ter the third )er"o! &ith &ho* the #$e!t i!ter#ct". The l#& i! f#ct co!te*)l#te"+ #!d to # $re#t de$ree+ i*)er"o!#l de#li!$" &here the )ri!ci)#l !eed !ot )er"o!#ll% 9!o& or *eet the third )er"o! &ith &ho* her #$e!t tr#!"#ct"< )reci"el%+ the ),r)o"e of #$e!c% i" to e:te!d the )er"o!#lit% of the )ri!ci)#l thro,$h the f#cilit% of the #$e!t.( 3#t ). 6006 Ahe! #! #$e!c% i" e"t#'li"hed+ #!d the #$e!t #ct" for the )ri!ci)#l+ he i" i!"of#r #" the &orld i" co!cer!ed e""e!ti#ll% the )ri!ci)#l #cti!$ i! the )#rtic,l#r co!tr#ct or tr#!"#ctio! o! h#!d. Co!"eB,e!tl%+ the #ct" of the #$e!t o! 'eh#lf of the )ri!ci)#l &ithi! the "co)e of the #,thorit% h#ve the "#*e le$#l e=ect #!d co!"eB,e!ce #" tho,$h the )ri!ci)#l h#d 'ee! the o!e "o #cti!$ i! the $ive! "it,#tio!. 1o*e of the le$#l co!"eB,e!ce" th#t Co& fro* the doctri!e of re)re"e!t#tio! i! the co!tr#ct of #$e!c% #re th#t 77 Notice to the #$e!t i" !otice to the )ri!ci)#l. Air $rance v. Court of Appeals + 106 1CRA 228 31;8?6. %no&ledge of the agent pertains to the principal D Ahe! #! #$e!t ),rch#"e" the )ro)ert% i! '#d f#ith+ the )ri!ci)#l "ho,ld #l"o 'e dee*ed # ),rch#"er i! '#d f#ith. Cara', "r. v. aureta + 14? 1CRA 5 31;816. A ",it #$#i!"t #! #$e!t c#!!ot+ &itho,t co*)elli!$ re#"o!"+ 'e co!"idered # ",it #$#i!"t the )ri!ci)#l ()* v. Ritratto +roups, Inc.+ ?60 1CRA 016 304416. &. a"tie$ to a Cont"a&t o( A)en&* The )#rtie" to # co!tr#ct of #$e!c% #re the RINCIA+ 3the )er"o! re)re"e!ted6 #!d the AGENT 3the )er"o! &ho #ct" for #!d i! re)re"e!t#tio! of #!other6. Altho,$h Article 1868 de!e" #$e!c% i! ter*" of 'ei!$ # co!tr#ct+ it "ho,ld #l"o 'e co!"idered th#t ,)o! the )erfectio! of the co!tr#ct of #$e!c%+ it cre#te" 'et&ee! the )ri!ci)#l #!d #! #$e!t #! o!7$oi!$ le$#l rel#tio!"hi) th#t i*)o"e" )er"o!#l o'li$#tio!" o! 'oth )#rtie". The other ter*" ,"ed for the )o"itio! of #$e!t #re (#ttor!e%7i!7f#ct(+ ()ro:%(+ (dele$#te( or (re)re"e!t#tive.( ,1- Capacity of the Parties The )ri!ci)#l *,"t h#ve c#)#cit% to co!tr#ct 3Art". 1?05 #!d 1?0;6+ #!d *#% either 'e # !#t,r#l or E,ridic#l )er"o! 3Art. 1;1;-2.6. 0 There i" le$#l liter#t,re th#t hold" th#t "i!ce the #$e!t #"",*e" !o )er"o!#l li#'ilit%+ he doe" !ot h#ve to )o""e"" f,ll c#)#cit% to #ct i!"of#r #" third )er"o!" #re co!cer!ed. -?. 1i!ce # co!tr#ct of #$e!c% i" r"t #!d fore*o"t # co!tr#ct i! it"elf+ the )#rtie" 3'oth )ri!ci)#l #!d #$e!t6 *,"t h#ve to h#ve le$#l c#)#cit% to v#lidl% e!ter i!to #! #$e!c%. If o!e of the )#rtie" h#" !o le$#l c#)#cit% to co!tr#ct+ the! the co!tr#ct of #$e!c% i" !ot void+ ',t *erel% void#'le+ &hich *e#!" th#t it i" v#lid ,!til #!!,lled. Th,"+ # void#'le #$e!c% &ill )rod,ce le$#l co!"eB,e!ce"+ &he! it i" ),r",ed to e!ter i!to E,ridic#l rel#tio!" &ith third )#rtie". If the )ri!ci)#l i" the o!e &ho h#" !o le$#l c#)#cit% to co!tr#ct+ #!d hi" #$e!t e!ter" i!to # co!tr#ct,#l rel#tio!"hi) i! hi" !#*e &ith # third )#rt%+ the re",lti!$ co!tr#ct i" void#'le #!d ",'Eect to #!!,l*e!t. O! the other h#!d+ if the )ri!ci)#l h#" le$#l c#)#cit%+ #!d it i" the #$e!t th#t h#" !o le$#l c#)#cit% to co!tr#ct+ the ,!derl%i!$ #$e!c% rel#tio!"hi) i" void#'le+ #!d &he! the i!c#)#cit#ted #$e!t e!ter" i!to # co!tr#ct &ith # third )#rt%+ the re",lti!$ co!tr#ct &o,ld 'e v#lid+ !ot void#'le+ for the #$e!t8" i!c#)#cit% i" irrelev#!t+ the co!tr#ct h#vi!$ 'ee! e!tered i!to for #!d i! 'eh#lf of the )ri!ci)#l+ &ho h#" f,ll le$#l c#)#cit%. The fore$oi!$ di"c,""io!" &o,ld #ll *#9e "e!"e to ",))ort the f#ct th#t #" # $e!er#l )ro)o"itio! the l#c9 of le$#l c#)#cit% of the #$e!t doe" !ot #=ect the co!"tit,tio! of the #$e!c% rel#tio!"hi). A!d %et+ it i" cle#r ,!der Article 1;1;3?6 th#t if d,ri!$ the ter* of the #$e!c%+ the )ri!ci)#l or #$e!t i" )l#ced ,!der civil i!terdictio!+ or 'eco*e" i!"#!e or i!"olve!t+ the #$e!c% i" ipso !ure e:ti!$,i"hed. It i" therefore o!l% lo$ic#l to co!cl,de th#t if the lo"" of le$#l c#)#cit% of the #$e!t e:ti!$,i"he" the #$e!c%+ the! !ece""#ril% #!% of tho"e c#,"e th#t h#ve the e=ect of re*ovi!$ le$#l c#)#cit% o! either or 'oth the )ri!ci)#l #!d #$e!t #t the ti*e of )erfectio! &o,ld !ot 'ri!$ #'o,t # co!tr#ct of #$e!c%. O'vio,"l%+ there "ee*" to 'e #! i!co!$r,e!c% &he! it co*e" to )ri!ci)le" i!volvi!$ the le$#l c#)#citie" of the )#rtie" to # co!tr#ct of #$e!c%. The re#"o! for th#t i" th#t the )ri!ci)le" #ct,#ll% occ,)% t&o di=ere!t le$#l )l#i!". Ahe! it co*e" to cre#ti!$ #!d e:ti!$,i"hi!$ the co!tr#ct,#l rel#tio!"hi) of )ri!ci)#l #!d #$e!t+ the )rovi"io!" of l#& t#9e i!to co!"ider#tio! ),rel% i!tr#*,r#l *#tter" )ert#i!i!$ to the )#rtie" thereto ,!der the )ri!ci)le of rel#tivit%. 1i!ce #$e!c% i" e""e!ti#ll% # )er"o!#l rel#tio!"hi) '#"ed o! the ),r)o"e of re)re"e!t#tio!+ the! &he! either the )ri!ci)#l or #$e!t die or 'eco*e le$#ll% i!c#)#cit#ted+ the! the #$e!c% rel#tio! "ho,ld ipso !ure ce#"e. B,t # co!tr#ct of #$e!c% i" *erel% # )re)#r#tor% co!tr#ct+ &here the *#i! ),r)o"e i" to e=ect thro,$h the #$e!t co!tr#ct" #!d other E,ridic#l rel#tio!"hi)" &ith third )#rtie". The ),'lic )olic% i" th#t third )#rtie" &ho #ct i! $ood f#ith &ith #! ? #$e!t h#ve # ri$ht to e:)ect th#t their co!tr#ct" &o,ld 'e v#lid #!d 'i!di!$ o! the )ri!ci)#l. Therefore+ eve! &he! '% le$#l c#,"e #! #$e!c% rel#tio!"hi) h#" ter*i!#ted+ "#% &ith the i!"#!it% of the )ri!ci)#l+ if the #$e!t #!d # third )#rt% he e!ter" i!to co!tr#ct #re ,!#&#re of the "it,#tio!+ the! the v#rio," )rovi"io!" o! the F#& o! A$e!c% &o,ld #@r* the v#lidit% of the co!tr#ct. Gore o! thi" )oi!t &ill 'e covered ,!der the "ectio! o! the e""e!ti#l ch#r#cteri"tic" of #$e!c%. .. E/e0ent$ o( t1e Cont"a&t o( A)en&* Fi9e #!% other co!tr#ct+ #$e!c% i" co!"tit,ted of the e""e!ti#l ele*e!t" of co!"e!t+ o'Eect or ",'Eect *#tter+ #!d c#,"e or co!"ider#tio!. I! Rallos v. $eli, +o Chan & Sons Realt- Corp.+ 81 1CRA 0/1 31;586+ the Co,rt held th#t the follo&i!$ #re the e""e!ti#l ele*e!t" of the co!tr#ct of #$e!c%D 3#6 Con$ent+ e:)re"" or i*)lied+ of the )#rtie" to e"t#'li"h the rel#tio!"hi)< 3'6 Ob%e&t, &hich i" the e:ec,tio! of # E,ridic#l #ct i! rel#tio! to third )#rtie"< 3c6 A$e!t #ct" #" # re)re"e!t#tive #!d !ot for hi*"elf< #!d 3d6 A$e!t #ct" &ithi! the "co)e of hi" #,thorit%. -2.
The ele*e!t !ot i!cl,ded i! the Rallos e!,*er#tio! i" the c#,"e or co!"ider#tio! of ever% co!tr#ct of #$e!c%. H!der Article 185/+ ever% #$e!c% i" )re",*ed to 'e for # co*)e!"#tio!+ ,!le"" there i" )roof to the co!tr#r%. ,1- Consent iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466+ held th#t co!"e!t of 'oth )ri!ci)#l #!d #$e!t i" !ece""#r% to cre#te #! #$e!c%. The )ri!ci)#l *,"t i!te!d th#t the #$e!t "h#ll #ct for hi*< the #$e!t *,"t i!te!d to #cce)t the #,thorit% #!d #ct o! it+ #!d the i!te!tio! of the )#rtie" *,"t !d e:)re""io! either i! &ord" or co!d,ct 'et&ee! the*. I! the "#*e *#!!er+ #o'inion Insurance Corp. v. Court of Appeals+ 206 1CRA 604 304406+ held th#t the '#"i" for #$e!c% i" re)re"e!t#tio!. O! the )#rt of the )ri!ci)#l+ there *,"t 'e #! #ct,#l i!te!tio! to #))oi!t
or #! i!te!tio! !#t,r#ll% i!fer#'le fro* hi" &ord" or #ctio!"<
#!d o! the )#rt of the #$e!t+ there *,"t 'e #! i!te!tio! to #cce)t the #))oi!t*e!t #!d #ct o! it+ #!d i! the #'"e!ce of ",ch i!te!t+ there i" $e!er#ll% !o #$e!c%. Ierh#)" the o!l% e:ce)tio! to thi" r,le i" #$e!c% '% e"to))el+ ',t eve! the! it i" '% the 2 "e)#r#te #ct" of the ),r)orted )ri!ci)#l #!d ),r)orted #$e!t+ '% &hich the% #re 'ro,$ht i!to the rel#tio!"hi) i!"of#r #" third )#rtie" #cti!$ i! $ood f#ith #re co!cer!ed. Gore di"c,""io!" o! the e""e!ti#l ele*e!t of co!"e!t "h#ll t#9e )l#ce i! the "ectio! o! e""e!ti#l ch#r#cteri"tic of co!"e!",#lit% of co!tr#ct" of #$e!c%. ,2- Object or Subject Matter Object of #! #$e!c% co!tr#ct i" service+ &hich )#rtic,l#rl% i" ,!dert#9i!$ of the #$e!t to e!ter i!to E,ridic#l #ct" &ith third )er"o!" o! 'eh#lf of the )ri!ci)#l. Ite*" 3'6+ 3c6 #!d 3d6 i! the e!,*er#ted ele*e!t" of Rallos c#! #ct,#ll% 'e ",**#ri>ed i!to the o'Eect of ever% co!tr#ct of #$e!c% to 'e th#t of service,i.e.+ the ,!dert#9i!$ 3o'li$#tio!6 of the #$e!t to e!ter i!to # E,ridic#l #ct &ith third )#rtie" o! 'eh#lf of the )ri!ci)#l #!d &ithi! the "co)e of hi" #,thorit%. ,3- Consideration Cause or Consideration i! #$e!c% i" the co**i""io! th#t the )ri!ci)#l &o,ld )#% the #$e!t. H!der Article 185/+ #$e!c% i" )re",*ed to 'e for # co*)e!"#tio!+ ,!le"" there i" )roof to the co!tr#r%. I! other &ord"+ li'er#lit% *#% 'e the )ro)er c#,"e or co!"ider#tio! for #! #$e!c% co!tr#ct o!l% &he! it i" "o e:)re""l% #$reed ,)o!. H!le"" other&i"e "ti),l#ted+ therefore+ ever% #$e!t i" e!titled to re*,!er#tio! or co*)e!"#tio! for the "ervice" )erfor*ed ,!der the co!tr#ct of #$e!c%. I! Aguna v. arena+ /5 Ihil 6?4 31;?06+ #ltho,$h the #$e!t h#d re!dered "ervice to the )ri!ci)#l coveri!$ collectio! of re!t#l" fro* the v#rio," te!#!t" of the )ri!ci)#l+ #!d i! ")ite of the #$ree*e!t th#t )ri!ci)#l &o,ld )#% for the #$e!t8" "ervice+ !everthele""+ the )ri!ci)#l #llo&ed the #$e!t to occ,)% o!e of hi" )#rcel" of l#!d #!d to ',ild hi" ho,"e thereo!. The Co,rt held th#t the "ervice re!dered '% the #$e!t &#" dee*ed to 'e $r#t,ito,"+ #)#rt fro* the occ,)#tio! of "o*e of the ho,"e of the dece#"ed '% the )l#i!ti= #!d hi" f#*il%+ (for if it &ere tr,e th#t the #$e!t #!d the dece#"ed )ri!ci)#l h#d #! ,!der"t#!di!$ to the e=ect th#t the #$e!t &#" to receive co*)e!"#tio! #"ide fro* the ,"e #!d occ,)#tio! of the ho,"e" of the dece#"ed+ it c#!!ot 'e e:)l#i!ed ho& the #$e!t co,ld h#ve re!dered "ervice" #" he did for ei$ht %e#r" &itho,t receivi!$ #!d cl#i*i!$ #!% co*)e!"#tio! fro* the dece#"ed.( 3#t ). 6?06 ,4- Entit/e0ent o( A)ent to Co00i$$ion An&1o"e. on t1e Ren.e"in) o( Se"'i&e The co*)e!"#tio! th#t the )ri!ci)#l #$ree" to )#% to the #$e!t i" )#rt of the ter*" of the co!tr#ct of #$e!c% ,)o! &hich their *i!d" *eet. Therefore+ the e:te!t #!d *#!!er '% &hich the / #$e!t &o,ld 'e e!titled to receive co*)e!"#tio! or co**i""io! i" '#"ed o! the ter*" of the co!tr#ct. 1o*eti*e"+ the ter*" #re !ot th#t cle#r+ #!d deci"io!" h#ve h#d to de#l &ith the i"",e of &he! #! #$e!t h#" *erited the ri$ht to receive the co*)e!"#tio! either "ti),l#ted or i*)lied fro* the ter*" of the co!tr#ct. The doctri!e th#t *#% 'e derived fro* the v#rio," deci"io!" o! the *#tter #re #!chored o! the !#t,re of the co!tr#ct of #$e!c% #" # ")ecie" of co!tr#ct" of "ervice" i! $e!er#l< #!d th#t co!"eB,e!tl%+ #! #$e!t "ho,ld 'e e!titled to receive co*)e!"#tio! &he! it h#" 'ee! e"t#'li"hed th#t it &#" thro,$h hi" e=ort" or "ervice th#t the o'Eect of the #$e!c% &#" #chieved. Th,"+ i! Inland Realt- v. Court of Appeals+ 05? 1CRA 54 31;;56+ the Co,rt held th#t (Altho,$h the ,lti*#te ',%er &#" i!trod,ced '% the #$e!t to the )ri!ci)#l d,ri!$ the ter* of the #$e!c%+ !everthele""+ the l#)"e of the )eriod of *ore th#! o!e 316 %e#r #!d ve 3/6 *o!th" 'et&ee! the e:)ir#tio! of )etitio!er"8 #,thorit% to "ell #!d the co!",**#tio! of the "#le+ c#!!ot #,thori>e co*)elli!$ the )ri!ci)#l to )#% the "ti),l#ted 'ro9er8" fee+ "i!ce the #$e!t &#" !ot lo!$er e!titled thereto. The Co,rt t#9e" i!to "tro!$ co!"ider#tio! th#t ,tter l#c9 of evide!ce of the #$e!t "ho&i!$ #!% f,rther i!volve*e!t i! the !e$oti#tio!" 'et&ee! )ri!ci)#l #!d ',%er d,ri!$ th#t )eriod #!d i! the ",'"eB,e!t )roce""i!$ of the doc,*e!t" )erti!e!t to "#id "#le.( 3#t ). 5;6 I! co!tr#"t+ i! .anoto/ *ros. Inc. v. Court of Appeals+ 001 1CRA 002 31;;?6+ the Co,rt held th#t #ltho,$h the "#le of the o'Eect of the #$e!c% to "ell &#" )erfected three d#%" #fter the e:)ir#tio! of the #$e!c% )eriod+ the #$e!t &#" "till 'e e!titled to receive the co**i""io! "ti),l#ted '#"ed o! the doctri!e held i! (rats v. Court of Appeals+ 81 1CRA ?64 31;586+ th#t &he! the #$e!t &#" the efcient procuring cause in bringing about the sale th#t the #$e!t &#" e!titled to co*)e!"#tio!. I! e""e!ce+ the Co,rt r,led th#t &he! there i" # clo"e+ )ro:i*#te #!d c#,"#l co!!ectio! 'et&ee! the #$e!t8" e=ort" #!d l#'or #!d the )ri!ci)#l8" "#le of hi" )ro)ert%+ the #$e!t i" e!titled to # co**i""io!. The *#tter )ert#i!i!$ to e!title*e!t to co**i""io! &ill 'e di"c,""ed i! $re#ter det#il" o! the "ectio! th#t co!tr#"t #! co!tr#ct of #$e!c% fro* th#t of # 'ro9er8" co!tr#ct. e. E$$entia/ C1a"a&te"i$ti&$ o( A)en&* ,1- Nominate and Principal Not o!l% i" the co!tr#ct of #$e!c% ")ecic#ll% !#*ed #" ",ch ,!der the Civil Code+ it i" # )ri!ci)#l co!tr#ct 'ec#,"e it c#! "t#!d o! it" o&! &itho,t !eed of #!other co!tr#ct to v#lid#te it. The re#l v#l,e of the co!tr#ct of #$e!c% 'ei!$ # (!o*i!#te #!d )ri!ci)#l( co!tr#ct i" th#t it 6 h#" 'ee! "o "et #)#rt '% l#& #!d )rovided &ith it" o&! "et of r,le" #!d le$#l co!"eB,e!ce"+ th#t #!% other #rr#!$e*e!t th#t e""e!ti#ll% f#ll" &ithi! it" ter*" "h#ll 'e co!"idered #" #! #$e!c% #rr#!$e*e!t #!d "h#ll 'e $over!ed '% the F#& o! A$e!c%+ !ot&ith"t#!di!$ #!% i!te!tio! of the )#rtie" to the co!tr#r%. After #ll+ # co!tr#ct i" &h#t the l#& "#%" it i"+ #!d !ot &h#t the )#rtie" c#ll it. I! #oles v. Angeles, 2;0 1CRA 645 304466+ it &#" held th#t if #! #ct do!e '% o!e )er"o! i! 'eh#lf of #!other i" i! it" e""e!ti#l !#t,re o!e of #$e!c%+ the for*er i" the #$e!t of the l#tter !ot&ith"t#!di!$ he or "he i" !ot "o c#lled77it &ill 'e #! #$e!c% &hether the )#rtie" ,!der"tood the e:#ct !#t,re of the rel#tio! or !ot. ,2- Consensual The co!tr#ct of #$e!c% i" )erfected '% *ere co!"e!t. H!der Article 186;+ #! #$e!c% *#% 'e e:)re""ed or i*)lied fro* the #ct of the )ri!ci)#l+ fro* hi" "ile!ce or l#c9 of #ctio!+ or f#il,re to re),di#te the #$e!c%< #$e!c% *#% 'e or#l+ ,!le"" the l#& reB,ire" # ")ecic for*. -/.
H!der Article 1854+ #cce)t#!ce '% the #$e!t *#% #l"o 'e e:)re""+ or i*)lied fro* hi" #ct" &hich c#rr% o,t the #$e!c%+ of fro* hi" "ile!ce or i!#ctio! #ccordi!$ to the circ,*"t#!ce". ,3- Unilateral and Primarily Onerous Ordi!#ril%+ #! #$e!c% i" o!ero," i! !#t,re+ &here the #$e!c% e:)ect" co*)e!"#tio! for hi" "ervice" i! the for* of co**i""io!". Jo&ever+ Article 185/ reco$!i>e" th#t #! #$e!c% *#% 'e ",))orted '% ),re li'er#lit%+ #!d th," &o,ld 'e $r#t,ito,"+ ',t the ',rde! of )roof &o,ld 'e to "ho& th#t the #$e!c% &#" co!"tit,ted $r#t,ito,"l%. Ahe! it i" $r#t,ito,"+ the co!tr#ct of #$e!c% i" ,!il#ter#l co!tr#ct 'ec#,"e it o!l% cre#te" #! o'li$#tio! o! the )#rt of the #$e!t. B,t eve! &he! it i" ",))orted '% # v#l,#'le co!"ider#tio! 3i.e.+ co*)e!"#ted or o!ero," #$e!c%6+ it &o,ld "till 'e ch#r#cteri>ed #" # ,!il#ter#l co!tr#ct+ 'ec#,"e it i" o!l% the f,lll*e!t of the )ri*#r% o'li$#tio!" of the #$e!t to re!der "o*e "ervice ,)o! &hich the ",'ordi!#te o'li$#tio! of the )ri!ci)#l to )#% the co*)e!"#tio! #$reed ,)o! #ri"e". Ahe! #! #$e!t #cce)t" the #$e!c% )o"itio! &itho,t co*)e!"#tio!+ he #"",*e" the "#*e re")o!"i'ilit% to c#rr% o,t the #$e!c% #!d therefore i!c,r" the "#*e li#'ilit% &he! he f#il" to f,lll hi" o'li$#tio!" to the )ri!ci)#l. I" i" therefore r#ther "tr#!$e th#t ,!der Article 1;4;+ the circ,*"t#!ce th#t the #$e!c% &#" for co*)e!"#tio! or !ot "h#ll 'e co!"idered '% the co,rt" i! deter*i!i!$ the e:te!t of the li#'ilit% of the #$e!t for fr#,d or !e$li$e!ce. ,4- Preparatory and Representative 5 There i" !o do,'t th#t #$e!c% i" # ")ecie" of the 'ro#d $ro,)i!$ of &h#t &e c#ll the ("ervice co!tr#ct"(+ &hich i!cl,de" e*)lo%*e!t co!tr#ct+ *#!#$e*e!t co!tr#ct #!d co!tr#ct7for7# )iece of &or9. There #re #l"o ")eci#l "ervice co!tr#ct" &hich i!cl,de the re!deri!$ of )rofe""io!#l "ervice 3e.g.+ doctor" #!d l#&%er"6+ #!d co!",lt#!c% &or9. B,t it i" the ch#r#cteri"tic of (re)re"e!t#tio!( th#t i" the *o"t di"ti!$,i"hi!$ *#r9 of #$e!c% &he! co*)#red &ith other "ervice co!tr#ct"+ i! th#t the *#i! ),r)o"e i" to #llo& the #$e!t to e!ter i!to co!tr#ct" &ith third )#rtie" &hich &o,ld 'i!d the )ri!ci)#l. A co!tr#ct of #$e!c% doe" !ot e:i"t for it" o&! ),r)o"e< it i" # )re)#r#tor% co!tr#ct e!tered i!to for other ),r)o"e th#t de#l &ith the ),'lic. Thi" ch#r#cteri"tic of #! #$e!c% i" reCected i! v#rio," )rovi"io!" i! the F#& o! A$e!c%+ #!d i! c#"e7l#&+ th#t "ee9 to )rotect the v#lidit% #!d e!force#'ilit% of co!tr#ct" e!tered i!to ),r",#!t to the #$e!c% #rr#!$e*e!t+ eve! &he! to do "o &o,ld co!tr#ve!e "trict #$e!c% )ri!ci)le". I! #!other &#% of ),tti!$ it+ #! #$e!c% co!tr#ct i" *erel% # tool for # $re#ter o'Eective to e!ter i!to E,ridic#l rel#tio!" o! 'eh#lf of the )ri!ci)#l< co!"ider#tio!" th#t )ert#i! *erel% to the tool+ cert#i!l% c#!!ot o,t&ei$h co!"ider#tio!" th#t )ert#i! to the *#i! o'Eect" of the #$e!c%. I! A'on Trading Corp. v. Court of Appeals, 255 1CRA //0 3044/6+ the Co,rt decreed th#t (I! # 'ev% of c#"e" #" the #v,!c,l#r c#"e of 0ictorias .illing Co., Inc. v. Court Appeals+ -??? 1CRA 66? 304446.+ the Co,rt decreed fro* Article 1868 th#t the '#"i" of #$e!c% i" re)re"e!t#tio!+( 3#t ). /646+52 #!d th#t co!"eB,e!tl% o!e of the "tro!$e"t fe#t,re of # tr,e co!tr#ct of #$e!c% i" th#t of (co!trol(77th#t the #$e!t i" ,!der the co!trol #!d i!"tr,ctio! of the )ri!ci)#l. Th,"+ i! 0ictorias .illing Co., Inc. v. Court of Appeals+ ??? 1CRA 66? 304446+ it &#" r,led 77 It i" cle#r fro* Article 1868 th#t the '#"i" of #$e!c% i" re)re"e!t#tio!. -6. O! the )#rt of the )ri!ci)#l+ there *,"t 'e #! #ct,#l i!te!tio! to #))oi!t or #! i!te!tio! !#t,r#ll% i!fer#'le fro* hi" &ord" or #ctio!"< #!d o! the )#rt of the #$e!t+ there *,"t 'e #! i!te!tio! to #cce)t the #))oi!t*e!t #!d #ct o! it+ #!d i! the #'"e!ce of ",ch i!te!t+ there i" $e!er#ll% !o #$e!c%. O!e f#ctor &hich *o"t cle#rl% di"ti!$,i"he" #$e!c% fro* other le$#l co!ce)t" i" co!trol< o!e )er"o! 77 the #$e!t 77 #$ree" to #ct ,!der the co!trol or directio! of #!other 77 the )ri!ci)#l. I!deed+ the ver% &ord (#$e!c%( h#" co*e to co!!ote co!trol '% the )ri!ci)#l. -5. The co!trol f#ctor+ *ore th#! #!% other+ h#" c#,"ed the co,rt" to ),t co!tr#ct" 'et&ee! )ri!ci)#l #!d #$e!t i! # "e)#r#te c#te$or%. . . . : : : I! the i!"t#!t c#"e+ it #))e#r" )l#i! to ," th#t )riv#te re")o!de!t C1C &#" # ',%er of the 1FDFR for*+ #!d !ot #! #$e!t of 1TG. Iriv#te re")o!de!t 8 C1C &#" !ot ",'Eect to 1TG8" co!trol. The B,e"tio! of &hether # co!tr#ct i" o!e of "#le or #$e!c% de)e!d" o! the i!te!tio! of the )#rtie" #" $#thered fro* the &hole "co)e #!d e=ect of the l#!$,#$e e*)lo%ed. Th#t the #,thori>#tio! $ive! to C1C co!t#i!ed the )hr#"e (for #!d i! o,r 31TG8"6 'eh#lf( did !ot e"t#'li"h #! #$e!c%. Hlti*#tel%+ &h#t i" deci"ive i" the i!te!tio! of the )#rtie". Th#t !o #$e!c% &#" *e#!t to 'e e"t#'li"hed '% the C1C #!d 1TG i" cle#rl% "ho&! '% C1C8" co**,!ic#tio! to )etitio!er th#t 1FDR No. 1012G h#d 'ee! ("old #!d e!dor"ed( to it. The ,"e of the &ord" ("old #!d e!dor"ed( *e#!" th#t 1TG #!d C1C i!te!ded # co!tr#ct of "#le+ #!d !ot #! #$e!c%. . . 3#t )). 65676556 I! #oles v. Angeles, 2;0 1CRA 645 304466+ it &#" held th#t for #! #$e!c% to #ri"e+ it i" !ot !ece""#r% th#t the )ri!ci)#l )er"o!#ll% e!co,!ter the third )er"o! &ith &ho* the #$e!t i!ter#ct"KLM)reci"el%+ the ),r)o"e of #$e!c% i" to e:te!d the )er"o!#lit% of the )ri!ci)#l thro,$h the f#cilit% of the #$e!t. I! Eurotech Industrial TEchnologies, Inc. v. Cuizon, /01 1CRA /82 304456+ the Co,rt held 77 It i" "#id th#t the '#"i" of #$e!c% i" re)re"e!t#tio!+ th#t i"+ the #$e!t #ct" for #!d o! 'eh#lf of the )ri!ci)#l o! *#tter" &ithi! the "co)e of hi" #,thorit% #!d "#id #ct" h#ve the "#*e le$#l e=ect #" if the% &ere )er"o!#ll% e:ec,ted '% the )ri!ci)#l. B% thi" le$#l ctio!+ the #ct,#l or re#l #'"e!ce of the )ri!ci)#l i" co!verted i!to hi" le$#l or E,ridic#l )re"e!ce 7 1ui facit per aliu' facit per se. 3#t ). /;?6 E#rlier+ i! Rallos v. $eli, +o Chan & Sons Realt- Corp.+ 81 1CRA 0/1 31;586+ the Co,rt held th#t (A$e!c% i" '#"ic#ll% )er"o!#l+ re)re"e!t#tive+ #!d deriv#tive i! !#t,re. The #,thorit% of the #$e!t to #ct e*#!#te" fro* the )o&er" $r#!ted to hi* '% hi" )ri!ci)#l< hi" #ct i" the #ct of the )ri!ci)#l if do!e &ithi! the "co)e of the #,thorit%. 2ui facit per aliu' facit per se. 8Je &ho #ct" thro,$h #!other #ct" hi*"elf.8( 3#t ). 0/;6 Principles lo!ing from "gency Characteristics of #Prepartatory and Representative$ 33 The follo&i!$ )ri!ci)le" Co& fro* the #))lic#tio! of the e""e!ti#l ch#r#cteri"tic" of #! #$e!c% 'ei!$ ()re)#r#tor% #!d re)re"e!t#tive( co!tr#ct+ th,"D 3#6 The co!tr#ct e!tered i!to &ith third )er"o!" )ert#i!" to the )ri!ci)#l #!d !ot to the #$e!t< the #$e!t i" # "tr#!$er to "#id co!tr#ct #ltho,$h he )h%"ic#ll% &#" the o!e &ho e!tered i!to it i! # re)re"e!t#tive c#)#cit%< ; the #$e!t h#" !either ri$ht" or o'li$#tio!" fro* the re",lti!$ co!tr#ct<
the #$e!t h#" !o le$#l "t#!di!$ to ",e ,)o! "#id
co!tr#ct 3'6 The li#'ilitie" i!c,rred "h#ll )ert#i! to the )ri!ci)#l #!d !ot the #$e!t< 3c6 Ge!er#ll%+ #ll #ct" th#t the )ri!ci)#l c#! do i! )er"o!+ he *#% do thro,$h #! #$e!t+ e:ce)t tho"e &hich ,!der ),'lic )olic% #re "trictl% )er"o!#l to the )er"o! of the )ri!ci)#l. 3d6 The #$e!t &ho #ct" #" ",ch i" !ot )er"o!#lit% li#'le to the )#rt% &ith &ho* he co!tr#ct"+ ,!le"" he e:)re""l% 'i!d" hi*"elf or e:ceed" the li*it" of hi" #,thorit% &itho,t $ivi!$ ",ch )#rt% ",@cie!t !otice of hi" )o&er". 3Art. 18;56 3e6 Notice to the #$e!t "ho,ld #l&#%" 'e co!"tr,ed #" !otice 'i!di!$ o! the )ri!ci)#l+ eve! &he! i! f#ct the )ri!ci)#l !ever 'ec#*e #&#re thereof. Air $rance v. Court of Appeals+ 106 1CRA 228 31;8?6 3f6 N!o&led$e of the #$e!t i" eB,iv#le!t to 9!o&led$e of the )ri!ci)#l. EOCEIT D 316 &here the #$e!t8" i!tere"t" #re #dver"e to tho"e of the )ri!ci)#l< 306 &here the #$e!t8" d,t% i" !ot to di"clo"e the i!for*#tio!+ #" &here he i" i!for*ed '% &#% of co!de!ti#l i!for*#tio!< #!d 3?6 &here the )er"o! cl#i*i!$ the 'e!et of the r,le coll,de" &ith the #$e!t to defr#,d the )ri!ci)#l 3De Feo! P De Feo!+ #t ). ?65+citing TEFFER+ #t ).1/46 Th,"+ i! Eurotech Industrial Technologies, Inc. v. Cuizon, /01 1CRA /82 304456+ the Co,rt held 77 Article 18;5 rei!force" the f#*ili#r doctri!e th#t #! #$e!t+ &ho #ct" #" ",ch+ i" !ot )er"o!#ll% li#'le to the )#rt% &ith &ho* he co!tr#ct". The "#*e )rovi"io!+ ho&ever+ )re"e!t" t&o i!"t#!ce" &he! #! #$e!t 'eco*e" )er"o!#ll% li#'le to # third )er"o!. The r"t i" &he! he e:)re""l% 'i!d" hi*"elf to the o'li$#tio! #!d the "eco!d i" &he! he e:ceed" hi" #,thorit%. I! the l#"t i!"t#!ce+ the 14 #$e!t c#! 'e held li#'le if he doe" !ot $ive the third )#rt% ",@cie!t !otice of hi" )o&er". 3#t ). /;?6 I! (hilpotts v. (hil. .fg. Co.+ 24 Ihil 251 31;1;6+ the Co,rt held th#t the ri$ht of i!")ectio! $ive! to # "toc9holder ,!der the l#& c#! 'e e:erci"ed either '% hi*"elf or '% #!% )ro)er re)re"e!t#tive or #ttor!e% i! f#ct+ #!d either &ith or &itho,t the #tte!d#!ce of the "toc9holder. Thi" i" i! co!for*it% &ith the $e!er#l r,le th#t &h#t # *#! *#% do i! )er"o! he *#% do thro,$h #!other. ,5- %erivative& iduciary and Revocable A co!tr#ct of #$e!c% cre#te" # le$#l rel#tio!"hi) of re)re"e!t#tio! '% the #$e!t o! 'eh#lf of the )ri!ci)#l+ &here the )o&er" of the #$e!t i" e""e!ti#ll% derived fro* the )ri!ci)#l+ #!d co!"eB,e!tl%+ it i" d,ci#r% i! !#t,re. O!e of the le$#l co!"eB,e!ce" of the d,ci#r% !#t,re of the co!tr#ct of #$e!c% i" th#t it i" e""e!ti#ll% revoc#'leD !either the )ri!ci)#l !or the #$e!t c#! 'e le$#ll% *#de to re*#i! i! the rel#tio!"hi) &he! the% choo"e to h#ve it ter*i!#ted. Severino v. Severino+ 22 Ihil. ?2? 31;0?6+ held th#t the rel#tio!" of #! #$e!t to hi" )ri!ci)#l #re d,ci#r% i! ch#r#cter 'ec#,"e the% #re '#"ed o! tr,"t #!d co!de!ce+ &hich *,"t Co& fro* the e""e!ti#l !#t,re # co!tr#ct of #$e!c% th#t *#9e" the #$e!t the re)re"e!t#tive of the )ri!ci)#l. Co!"eB,e!tl%D 3#6 A" re$#rd" )ro)ert% for*i!$ the ",'Eect *#tter of the #$e!c%+ the #$e!t i" e"to))ed fro* #""erti!$ or #cB,iri!$ # title #dver"e to th#t of the )ri!ci)#l. 3Art. 12?/6< 3'6 I! # co!Cict7of7i!tere"t "it,#tio!+ the #$e!t c#!!ot choo"e # co,r"e th#t f#vor" hi*"elf to the detri*e!t of the )ri!ci)#l< he *,"t choo"e to the 'e"t #dv#!t#$e of the )ri!ci)#l. Tho'as v. (ineda+ 8; Ihil. ?10 31;/16< (al'a v. Cristo4al+ 55 Ihil. 510 31;266< #!d 3c6 The #$e!t c#!!ot ),rch#"e for hi*"elf the )ro)ert% of the )ri!ci)#l &hich h#" 'ee! $ive! to hi" *#!#$e*e!t for "#le or di")o"itio! 3Art. 12;1-0.6< ,!le"" there i" #! e:)re"" co!"e!t o! the )#rt of the )ri!ci)#l 3Cui v. Cui+ 144 Ihil. ;1? 31;/56< or &he! the #$e!t ),rch#"e" #fter the #$e!c% i" ter*i!#ted 30alera v. Vel#"co+ 11 /1 Ihil. 6;/ 31;086. A co!tr#ct of #$e!c% i" $e!er#ll% revoc#'le #" it i" # )er"o!#l co!tr#ct of re)re"e!t#tio! '#"ed o! tr,"t #!d co!de!ce re)o"ed '% the )ri!ci)#l o! hi" #$e!t. A" the )o&er of the #$e!t to #ct de)e!d" o! the &ill #!d lice!"e of the )ri!ci)#l he re)re"e!t"+ the )o&er of the #$e!t ce#"e" &he! the &ill or )er*i""io! i" &ithdr#&! '% the )ri!ci)#l. Th,"+ $e!er#ll%+ the #$e!c% *#% 'e revo9ed '% the )ri!ci)#l #t &ill. Repu4lic v. Evangelista+ 266 1CRA /22 3044/6. I! Orient Air Services v. Court of Appeals+ 1;5 1CRA 62/ 31;;16+ it &#" held th#t the deci"io! of the lo&er co,rt orderi!$ the )ri!ci)#l #irli!e co*)#!% to (rei!"t#te defe!d#!t #" it" $e!er#l "#le" #$e!t for )#""e!$er tr#!")ort#tio! i! the Ihili))i!e" i! #ccord#!ce &ith "#id G1A A$ree*e!t+( &#" ,!l#&f,l "i!ce co,rt" h#ve !o #,thorit% to co*)el the )ri!ci)#l to rei!"t#te # co!tr#ct of #$e!c% it h#" ter*i!#ted &ith the #$e!tD (1,ch &o,ld 'e viol#tive of the )ri!ci)le" #!d e""e!ce of #$e!c%+ de!ed '% l#& #" # co!tr#ct &here'% (# )er"o! 'i!d" hi*"elf to re!der "o*e "ervice or to do "o*ethi!$ i! re)re"e!t#tio! or o! 'eh#lf of #!other+ AITJ TJE CON1ENT OR AHTJORITY OF TJE FATTER.( I! #! #$e!t7)ri!ci)#l rel#tio!"hi)+ the )er"o!#lit% of the )ri!ci)#l i" e:te!ded thro,$h the f#cilit% of the #$e!t. I! "o doi!$+ the #$e!t+ '% le$#l ctio!+ 'eco*e" the )ri!ci)#l+ #,thori>ed to )erfor* #ll #ct" &hich the l#tter &o,ld h#ve hi* do. 1,ch # rel#tio!"hi) c#! o!l% 'e e=ected &ith the co!"e!t of the )ri!ci)#l+ &hich *,"t !ot+ i! #!% &#%+ 'e co*)elled '% l#& or '% #!% co,rt. The A$ree*e!t it"elf 'et&ee! the )#rtie" "t#te" th#t (either )#rt% *#% ter*i!#te the A$ree*e!t &itho,t c#,"e '% $ivi!$ the other ?4 d#%"KLQ !otice '% letter+ tele$r#* or c#'le.8( -8. 3#t ). 6/66 (. Di$tin)!i$1e. ("o0 Ot1e" Si0i/a" Cont"a&t$ ,1- rom 'mployment Contract H!li9e #$e!c% rel#tio!"hi) &hich i" e""e!ti#ll% co!tr#ct,#l i! !#t,red+ ,!der Article 1544 of the Civil Code+ (-t.he rel#tio!"hi) 'et&ee! c#)it#l #!d l#'or #re !ot *erel% co!tr#ct,#l. The% #re "o i*)re""ed &ith ),'lic i!tere"t th#t l#'or co!tr#ct" *,"t %ield to the co**o! $ood. Therefore+ ",ch co!tr#ct" #re ",'Eect to the ")eci#l l#&" o! l#'or ,!io!"+ collective '#r$#i!i!$+ "tri9e" #!d loc9o,t"+ clo"ed "ho)+ &#$e"+ &or9i!$ co!ditio!"+ ho,r" of l#'or #!d "i*il#r ",'Eect".( Gore ")ecic#ll%+ the ),r)o"e of #! e*)lo%er7 e*)lo%ee rel#tio!"hi) i" for the e*)lo%ee to re!der "ervice for the direct 'e!et of the e*)lo%er or of the ',"i!e"" of the e*)lo%er< &hile #$e!c% rel#tio!"hi) i" e!tered i!to to e!ter i!to E,ridic#l rel#tio!"hi) o! 'eh#lf of the )ri!ci)#l &ith third )#rtie". 10 I! #ela Cruz v. )orthern Theatrical Enterprises+ ;/ Ihil 5?; 31;/26+ the Co,rt held th#t the rel#tio!"hi) 'et&ee! the cor)or#tio! &hich o&!" #!d o)er#te" # the#tre+ #!d the i!divid,#l it hire" #" # "ec,rit% $,#rd to *#i!t#i! the )e#ce #!d order #t the e!tr#!ce of the the#tre i" !ot th#t of )ri!ci)#l #!d #$e!t+ 'ec#,"e the )ri!ci)le of re)re"e!t#tio! &#" i! !o &#% i!volved. The "ec,rit% $,#rd &#" !ot e*)lo%ed to re)re"e!t the defe!d#!t cor)or#tio! i! it" de#li!$" &ith third )#rtie"< he &#" # *ere e*)lo%ee hired to )erfor* # cert#i! ")ecic d,t% or t#"9+ th#t of #cti!$ #" ")eci#l $,#rd #!d "t#%i!$ #t the *#i! e!tr#!ce of the *ovie ho,"e to "to) $#te cr#"her" #!d to *#i!t#i! )e#ce #!d order &ithi! the )re*i"e". ,2- rom Contract for a Piece(of()or* H!der Article 151? of the Civil Code+ (-'.% the co!tr#ct for # )iece of &or9 the co!tr#ctor 'i!d" hi*"elf to e:ec,te # )iece of &or9 for the e*)lo%er+ i! co!"ider#tio! of # cert#i! )rice or co*)e!"#tio!. The co!tr#ctor *#% either e*)lo% o!l% hi" l#'or or "9ill+ or #l"o f,r!i"h the *#teri#l.( H!der # co!tr#ct for # )iece of &or9+ the co!tr#ctor i" !ot #! #$e!t of the ()ri!ci)#l(+ #!d the co!tr#ctor h#" !o #,thorit% to re)re"e!t the )ri!ci)#l i! e!teri!$ i!to E,ridic#l #ct" &ith third )#rtie". Ahere the co!tr#ct e!tered i!to i" o!e &here the i!divid,#l ,!dertoo9 #!d #$reed to ',ild for the other )#rt% # co"tl% edice+ the ,!derl%i!$ co!tr#ct i" o!e for # co!tr#ct for # )iece of &or9+ #!d !ot # )ri!ci)#l #!d #$e!c% rel#tio!. Co!"eB,e!tl%+ the co!tr#ct i" #,thori>ed to do the &or9 #ccordi!$ to hi" o&! *ethod #!d &itho,t 'ei!$ ",'Eect to the clie!t8" co!trol+ e:ce)t #" to the re",lt of the &or9< he co,ld ),rch#"e hi" *#teri#l" #!d ",))lie" fro* &ho* he )le#"ed #!d #t ",ch )rice" #" he de"ired to )#%. A!d the *ere f#ct th#t it &#" "ti),l#ted i! the co!tr#ct th#t the clie!t co,ld t#9e )o""e""io! of the &or9 "ite ,)o! the h#))e!i!$ of ")ecied co!ti!$e!cie" did !ot *#9e the rel#tio! i!to th#t of #! #$e!c%. Co!"eB,e!tl%+ &he! the clie!t did t#9e over the ,!!i"hed &or9"+ he did !ot #"",*e #!% direct li#'ilit% to the ",))lier" of the co!tr#ctor. $ressel v. .ariano 5- Chaco Sons & Co., ?2 Ihil. 100 31;1/6. ,3- rom a Management "greement I! 'oth #$e!c% #!d le#"e of "ervice"+ o!e of the )#rtie" 'i!d" hi*"elf to re!der "o*e "ervice to the other )#rt%. A$e!c%+ ho&ever+ i" di"ti!$,i"hed fro* le#"e of &or9 or "ervice" i! th#t the '#"i" of #$e!c% i" re)re"e!t#tio!+ &hile i! the le#"e of &or9 or "ervice" the '#"i" i" e*)lo%*e!t. The le""or of "ervice" doe" !ot re)re"e!t hi" e*)lo%er+ &hile the #$e!t re)re"e!t" hi" )ri!ci)#l. : : : . There i" #!other o'vio," di"ti!ctio! 'et&ee! #$e!c% #!d le#"e of "ervice". A$e!c% i" # )re)#r#tor% co!tr#ct+ #" #$e!c% (doe" !ot "to) &ith the #$e!c% 'ec#,"e 1? the ),r)o"e i" to e!ter i!to other co!tr#ct".( The *o"t ch#r#cteri"tic fe#t,re of #! #$e!c% rel#tio!"hi) i" the #$e!t8" )o&er to 'ri!$ #'o,t ',"i!e"" rel#tio!" 'et&ee! hi" )ri!ci)#l #!d third )er"o!". (The #$e!t i" de"ti!e to e:ec,te E,ridic#l #ct" 3cre#tio!+ *odic#tio! or e:ti!ctio! of rel#tio!" &ith third )#rtie"6. Fe#"e of "ervice" co!te*)l#te o!l% *#teri#l 3!o!7E,ridic#l6 #ct". -;. ( )ielson & Co., Inc. v. epanto Consolidated .ining Co., 06 1CRA /24+ /267/25 31;686. Ahere the )ri!ci)#l #!d )#r#*o,!t ,!dert#9i!$ of the (*#!#$er( ,!der # G#!#$e*e!t Co!tr#ct &#" the o)er#tio! #!d develo)*e!t of the *i!e #!d the o)er#tio! of the *ill+ #!d #ll other ,!dert#9i!$" *e!tio!ed i! the co!tr#ct #re !ece""#r% or i!cide!t#l to the )ri!ci)#l ,!dert#9i!$77the"e other ,!dert#9i!$" 'ei!$ de)e!de!t ,)o! the &or9 o! the develo)*e!t of the *i!e #!d the o)er#tio! of the *ill. I! the )erfor*#!ce of thi" )ri!ci)#l ,!dert#9i!$ the *#!#$er &#" !ot i! #!% &#% e:ec,ti!$ E,ridic#l #ct" for the )ri!ci)#l+ de"ti!ed to cre#te+ *odif% or e:ti!$,i"h ',"i!e"" rel#tio!" 'et&ee! the )ri!ci)#l #!d third )er"o!. I! other &ord"+ i! )erfor*i!$ it" )ri!ci)#l ,!dert#9i!$ the *#!#$er &#" !ot #cti!$ #" #! #$e!t of the )ri!ci)#l+ i! the "e!"e th#t the ter* #$e!t i" i!ter)reted ,!der the l#& of #$e!c%+ ',t #" o!e &ho &#" )erfor*i!$ *#teri#l #ct" for #! e*)lo%er+ for # co*)e!"#tio!. Co!"eB,e!tl%+ the *#!#$e*e!t co!tr#ct !ot 'ei!$ #! #$e!c% c#!!ot 'e revo9ed #t &ill #!d &#" 'i!di!$ to it" f,ll co!tr#cted )eriod. )ielson & Co., Inc. v. epanto Consolidated .ining Co., 06 1CRA /24+ /267/25 31;686. T#9i!$ i!to co!"ider#tio! the f#ct" th#t the o)er#tor o&ed hi" )o"itio! to the co*)#!% #!d the l#tter co,ld re*ove hi* or ter*i!#te hi" "ervice" #t &ill< th#t the "ervice "t#tio! 'elo!$ed to the co*)#!% #!d 'ore it" tr#de!#*e #!d the o)er#tor "old o!l% the )rod,ct" of the co*)#!%< th#t the eB,i)*e!t ,"ed '% the o)er#tor 'elo!$ed to the co*)#!% #!d &ere E,"t lo#!ed to the o)er#tor #!d the co*)#!% too9 ch#r$e of their re)#ir #!d *#i!te!#!ce< th#t #! e*)lo%ee of the co*)#!% ",)ervi"ed the o)er#tor #!d co!d,cted )eriodic i!")ectio! of the co*)#!%8" $#"oli!e #!d "ervice "t#tio!< th#t the )rice of the )rod,ct" "old '% the o)er#tor &#" :ed '% the co*)#!% #!d !ot '% the o)er#tor< #!d th#t he &#" # *ere #$e!t+ the !di!$ of the Co,rt of A))e#l" th#t the o)er#tor &#" #! #$e!t of the co*)#!% #!d !ot #! i!de)e!de!t co!tr#ctor "ho,ld !ot 'e di"t,r'ed. Shell Co. v. $ire'en6s Insurance of )e&ar/+ 144 Ihil. 5/5 31;/56. ,4- from Contract of Sale H!der Article 1266 of the Civil Code+ (-i.! co!"tr,i!$ # co!tr#ct co!t#i!i!$ )rovi"io!" ch#r#cteri"tic of 'oth the co!tr#ct of "#le #!d of the co!tr#ct of #$e!c% to "ell+ the e""e!ti#l cl#,"e" of the &hole i!"tr,*e!t "h#ll 'e co!"idered.( J,ri")r,de!ce h#" i!dic#ted &h#t the 12 (e""e!ti#l cl#,"e"( th#t "ho,ld i!dic#te &hether it i" o!e of "#le or #$e!c% to "ellR),rch#"e+ refer" to "ti),l#tio!" i! the co!tr#ct &hich )l#ce" o'li$#tio! "o! the )#rt of the ),r)orted (#$e!t( h#vi!$ to do &ith &h#t "ho,ld 'e # "eller8 o'li$#tio! to tr#!"fer o&!er"hi) #!d deliver )o""e""io! of the ",'Eect *#tter+ or the ',%er8" o'li$#tio! o! the )#%*e!t of the )rice. I! 2uiroga v. (arsons+ ?8 Ihil. /41 31;186+ #ltho,$h the )#rtie" de"i$!#ted the #rr#!$e*e!t #" #! #$e!c% #$ree*e!t+ the Co,rt fo,!d the #rr#!$e*e!t to 'e o!e of "#le "i!ce the e""e!ti#l cl#,"e )rovided th#t (-).#%*e!t &#" to 'e *#de #t the e!d of "i:t% d#%"+ or 'efore+ #t the -)ri!ci)#l8". reB,e"t+ or i! c#"h+ if the -#$e!t. "o )referred+ #!d i! the"e l#"t t&o c#"e" #! #dditio!#l di"co,!t &#" to 'e #llo&ed for )ro*)t )#%*e!t.( The"e co!ditio!" to the Co,rt &ere ()reci"el% the e""e!ti#l fe#t,re" of # co!tr#ct of ),rch#"e #!d "#le( 'ec#,"e there &#" the o'li$#tio! o! the )#rt of the ),r)orted )ri!ci)#l to ",))l% the 'ed"+ #!d+ o! the )#rt of the ),r)orted #$e!t+ to )#% their )rice+ th,"D The"e fe#t,re" e:cl,de the le$#l co!ce)tio! of #! #$e!c% or order to "ell &here'% the *#!d#tor% or #$e!t received the thi!$ to "ell it+ #!d doe" !ot )#% it" )rice+ ',t deliver" to the )ri!ci)#l the )rice he o't#i!" fro* the "#le of the thi!$ to # third )er"o!+ #!d if he doe" !ot ",cceed i! "elli!$ it+ he ret,r!" it. B% virt,e of the co!tr#ct 'et&ee! the )l#i!ti= #!d the defe!d#!t+ the l#tter+ o! receivi!$ the 'ed"+ &#" !ece""#ril% o'li$ed to )#% their )rice &ithi! the ter* :ed+ &itho,t #!% other co!"ider#tio! #!d re$#rdle"" #" to &hether he h#d or h#d !ot "old the 'ed". 3#t ). /4/6 A" # co!"eB,e!ce+ the (revoc#tio!( "o,$ht to 'e *#de '% the )ri!ci)#l o! the ),r)orted #$e!c% #rr#!$e*e!t &#" de!ied '% the Co,rt+ the rel#tio!"hi) 'ei!$ o!e of "#le+ #!d the )o&er to re"ci!d i" #v#il#'le o!l% &he! the ),r)orted )ri!ci)#l i" #'le to "ho& ",'"t#!ti#l 're#ch o! the )#rt of the ),r)orted #$e!t. Ahe! the ter*" of the #$ree*e!t co*)el" the ),r)orted #$e!t to )#% for the )rod,ct" received fro* the ),r)orted )ri!ci)#l &ithi! the "ti),l#ted )eriod+ eve! &he! there h#" 'ee! !o "#le thereof to the ),'lic+ the ,!derl%i!$ rel#tio!"hi) 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 doe" !ot #"",*e )er"o!#l re")o!"i'ilit% for the )#%*e!t of the )rice of the o'Eect of the #$e!c%< hi" o'li$#tio! i" *erel% to t,r!7over to the )ri!ci)#l the )roceed" of the "#le o!ce he receive" the* fro* the ',%er. Co!"eB,e!tl%+ "i!ce the ,!derl%i!$ #$ree*e!t i" !ot #! #$e!c% #$ree*e!t+ it c#!!ot 'e revo9ed e:ce)t for c#,"e. 2uiroga v. (arsons+ ?8 Ihil /40 31;186. I! +onzalo (u-at & Sons, Inc. v. Arco A'use'ent Co'pan-+ 50 Ihil. 240 31;216+ &hich covered # ),r)orted #$e!c% co!tr#ct to ),rch#"e+ 1/ the Co,rt loo9ed i!to the )rovi"io!" of their co!tr#ct+ #!d fo,!d th#t the letter" 'et&ee! the )#rtie" cle#rl% "ti),l#ted for :ed )rice" o! the eB,i)*e!t ordered+ &hich (#d*itted !o other i!ter)ret#tio! th#! th#t the -)ri!ci)#l. #$reed to ),rch#"e fro* the -#$e!t. the eB,i)*e!t i! B,e"tio! #t the )rice" i!dic#ted &hich #re :ed #!d deter*i!#te.( 3#t ). 2456. The Co,rt held th#t (&h#tever ,!fore"ee! eve!t" *i$ht h#ve t#9e! )l#ce ,!f#vor#'le to the -#$e!t.+ ",ch #" ch#!$e i! )rice"+ *i"t#9e i! their B,ot#tio!+ lo"" of the $ood" !ot covered '% i!",r#!ce or f#il,re of the 1t#rr Ii#!o Co*)#!% to )ro)erl% ll the order" #" )er ")ecic#tio!"+ the -)ri!ci)#l. *i$ht "till le$#ll% hold the -#$e!t. to the )rice" :ed.( 3#t ). 2456. Co!"eB,e!tl%+ the de*#!d '% the ),r)orted )ri!ci)#l of #ll di"co,!t" #!d 'e!et" o't#i!ed '% the ),r)orted #$e!t fro* the A*eric#! ",))lier" ,!der the theor% th#t #ll 'e!et" received '% the #$e!t ,!der the tr#!"#ctio!" &ere to 'e #cco,!ted for the 'e!et of the )ri!ci)#l &#" de!ied '% the co,rt+ the ,!derl%i!$ rel#tio!"hi) 'ei!$ e""e!ti#ll% # co!tr#ct of ),rch#"e. Ahe! ,!der the ter*" of the #$ree*e!t+ the ),r)orted #$e!t 'eco*e" re")o!"i'le for #!% ch#!$e" i! the #cB,i"itio! co"t of the o'Eect he h#" 'ee! #,thori>ed to ),rch#"e fro* # ",))lier i! the H!ited 1t#te"+ the ,!derl%i!$ #$ree*e!t i" !ot #! co!tr#ct of #$e!c% to ',%+ "i!ce #! #$e!t doe" !ot 'e#r #!% ri"9 rel#ti!$ to the ",'Eect *#tter or the )rice. Bei!$ tr,l% # co!tr#ct of "#le+ #!% )rot" re#li>ed '% the ),r)orted #$e!t fro* di"co,!t" received fro* the A*eric#! ",))lier+ )ert#i! to it &ith !o o'li$#tio! to #cco,!t for it+ *,ch le"" to t,r! it over+ to the ),r)orted )ri!ci)#l. +onzalo (u-at v. Arco+ 50 Ihil. 240 31;216. Reiterated in $ar Eastern E,port & I'port Co., v. i' Tech Suan+ ;5 Ihil. 151 31;//6. I! %er & Co., td. v. ingad+ ?8 1CRA /02 31;516+ coveri!$ # co!tr#ct of di"tri',tor"hi)+ it &#" ")ecic#ll% "ti),l#ted i! the co!tr#ct th#t (#ll $ood" o! co!"i$!*e!t "h#ll re*#i! the )ro)ert% of the Co*)#!% ,!til "old '% the Di"tri',tor to the ),rch#"er or ),rch#"er"+ ',t #ll "#le" *#de '% the Di"tri',tor "h#ll 'e i! hi" !#*e<( #!d th#t the Co*)#!% (#t it" o&! e:)e!"e+ &#" to 9ee) the co!"i$!ed "toc9 f,ll% i!",red #$#i!"t lo"" or d#*#$e '% re or #" # re",lt of re+ the )olic% of ",ch i!",r#!ce to 'e )#%#'le to it i! the eve!t of lo"".( It &#" f,rther "ti),l#ted th#t the co!tr#ct (doe" !ot co!"tit,te the Di"tri',tor the #$e!t or le$#l re)re"e!t#tive of the Co*)#!% for #!% ),r)o"e &h#t"oever. Di"tri',tor i" !ot $r#!ted #!% ri$ht or #,thorit% to #"",*e or to cre#te #!% o'li$#tio! or re")o!"i'ilit%+ e:)re"" or i*)lied i! 'eh#lf of or i! the !#*e of the Co*)#!%+ or to 'i!d the Co*)#!% i! #!% *#!!er or thi!$ &h#t"oever.( I! ")ite of ",ch "ti),l#tio!"+ the Co,rt did !d the rel#tio!"hi) to 'e o!e of #$e!c%+ 'ec#,"e it did !ot tr#!"fe2r o&!er"hi) of the *erch#!di"e to the ),r)orted di"tri',tor+ eve! tho,$h it &#" ",))o"ed to e!ter i!to "#le" #$ree*e!t" i! the Ihili))i!e" i! it" o&! !#*e+ th,"D 16 The tr#!"fer of title or #$ree*e!t to tr#!"fer it for # )rice )#id or )ro*i"ed i" the e""e!ce of "#le. If ",ch tr#!"fer ),t" the tr#!"feree i! the #ttit,de or )o"itio! of #! o&!er #!d *#9e" hi* li#'le to the tr#!"feror #" # de'tor for the #$reed )rice+ #!d !ot *erel% #" #! #$e!t &ho *,"t #cco,!t for the )roceed" of # re"#le+ the tr#!"#ctio! i" # "#le< &hile the e""e!ce of #! #$e!c% to "ell i" the deliver% to #! #$e!t+ !ot #" hi" )ro)ert%+ ',t #" the )ro)ert% of the )ri!ci)#l+ &ho re*#i!" the o&!er #!d h#" the ri$ht to co!trol the "#le+ : the )rice+ #!d ter*"+ de*#!d #!d receive the )roceed" le"" the #$e!t8" co**i""io! ,)o! "#le" *#de. 3#t ). /?46 I! 0ictoria .illing Co., Inc. v. Court of Appeals+ ??? 1CRA 66? 304446+ the Co,rt held th#t #! #,thori>#tio! $ive! to the ',%er of $ood" to o't#i! the* fro* the '#ilee (for #!d i! 'eh#lf( of the '#ilor7"eller doe" !ot !ece""#ril% e"t#'li"h #! #$e!c%+ "i!ce the i!te!tio! of the )#rtie" &#" for the ',%er to t#9e )o""e""io! #!d o&!er"hi) over the $ood" &ith the deci"ive l#!$,#$e i! the #,thori>#tio! 'ei!$ ("old #!d e!dor"ed.( A" # $e!er#l r,le+ #! #$e!c% to "ell o! co**i""io! '#"i" doe" !ot 'elo!$ to #!% of the co!tr#ct" covered '% Article" 1?/5 #!d 1?/8 reB,iri!$ the* to 'e i! # )#rtic,l#r for*+ #!d !ot o!e e!,*er#ted ,!der the 1t#t,te" of Fr#,d" i! Article 124?. Je!ce+ ,!li9e # "#le co!tr#ct &hich *,"t co*)l% &ith the 1t#t,te of Fr#,d" for e!force#'ilit%+ # co!tr#ct of #$e!c% to "ell i" v#lid #!d e!force#'le i! &h#tever for* it *#% 'e e!tered i!to. i' v. Court of Appeals+ 0/2 1CRA 154 31;;66. ,5- rom +ro*er A 'ro9er i" 'e"t de!ed i! Sch'id and O4erl-, Inc. v. R" .artinez+ 166 1CRA 2;? 31;886+ &here the Co,rt held th#t # 'ro9er i" (o!e &ho i" e!$#$ed+ for other"+ o! # co**i""io!+ !e$oti#ti!$ co!tr#ct" rel#tive to )ro)ert% &ith the c,"tod% of &hich he h#" !o co!cer!< the !e$oti#tor 'et&ee! other )#rtie"+ !ever #cti!$ i! hi" o&! !#*e ',t i! the !#*e of tho"e &ho e*)lo%ed hi*. . . . # 'ro9er i" o!e &ho"e occ,)#tio! i" to 'ri!$ the )#rtie" to$ether+ i! *#tter" of tr#de+ co**erce or !#vi$#tio!.( 3#t ). /416 H!li9e #! #$e!t &ho *,"t #ct i! the !#*e of the )ri!ci)#l+ # 'ro9er i" o!e &ho i" e!$#$ed for other" o! # co**i""io! to !e$oti#te 'et&ee! other )#rtie"+ !ever #cti!$ i! hi" o&! !#*e ',t i! the !#*e of tho"e &ho e*)lo%ed hi*. Re-es v. Rural *an/ of San .iguel+ 202 1CRA 1?/ 304426. Je h#" !o rel#tio! &ith the thi!$ he h#" 'ee! ret#i!ed to ',% or to "ell< he i" *erel% #! i!ter*edi#r% 'et&ee! the ),rch#"er #!d the ve!dor. Je #cB,ire" !either the c,"tod% !or the )o""e""io! of the thi!$ he "ell". Ji" o!l% o@ce i" to 'ri!$ to$ether the )#rtie" to the tr#!"#ctio!. (aci7c Co''ercial Co. v. 8atco+ 6? Ihil. ?;8 31;?66. 15 A 'ro9er *#% #t the "#*e ti*e 'e #! #$e!t. Ahe! he #ct" i! hi" 'eh#lf i! de#li!$ &ith the ),'lic+ eve! &he! he h#!dle" thi!$" )ert#i!i!$ to the )ri!ci)#l+ he i" # *ere 'ro9er. O! the other h#!d+ if he i" d,l% #,thori>ed to #ct i! the !#*e of the )ri!ci)#l+ there i" !o do,'t th#t the 'ro9er i" #l"o #! #$e!t. Th,"+ i! A4acus Securities Corp. v. A'pil, 28? 1CRA ?1/ 304466+ it &#" held th#t "i!ce i! th#t c#"e the 'ro9er#$e rel#tio!"hi) &#" !ece""#r% # co!tr#ct for the e*)lo%*e!t of #! #$e!t+ )ri!ci)le" of co!tr#ct l#& #l"o $over! the 'ro9er7)ri!ci)#l rel#tio!"hi). I! the "#*e *#!!er+ i! #o'ingo v. #o'ingo+ 20 1CRA 1?1 31;516+ the Co,rt held th#t the d,tie" #!d li#'ilitie" of # 'ro9er to hi" e*)lo%er #re e""e!ti#ll% tho"e &hich #! #$e!t o&e" to hi" )ri!ci)#l. I! ",ch # "it,#tio!+ the deci"ive le$#l )rovi"io!" -to deter*i!e &hether # 'ro9er h#" viol#ted hi" d,t% or o'li$#tio!. #re fo,!d i! Article" 18;1 #!d 1;4; of the Ne& Civil Code+ &here'% ever% #$e!t i" 'o,!d to re!der #! #cco,!t of hi" tr#!"#ctio!" #!d to deliver to the )ri!ci)#l &h#tever he *#% h#ve received '% virt,e of the #$e!c%+ eve! tho,$h it *#% !ot 'e o&!i!$ to the )ri!ci)#l< #!d th#t #! #$e!t i" re")o!"i'le !ot o!l% for fr#,d+ ',t #l"o for !e$li$e!ce .-14 O! the other h#!d+ the Co,rt #l"o held i! #o'ingo th#t (-t.he d,t% e*'odied i! Article 18;1 of the Ne& Civil Code &ill !ot #))l% if the #$e!t or 'ro9er #cted o!l% #" # *iddle*#! &ith the t#"9 of *erel% 'ri!$i!$ to$ether the ve!dor #!d ve!dee+ &ho the*"elve" there#fter &ill !e$oti#te o! the ter*" #!d co!ditio!" of the tr#!"#ctio!.( 3#t ). 1246 +ro*er ,as No "uthority -o 'nter into Contract in the Name of the Principal$ 33 I! iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466+ it &#" held th#t # re#l e"t#te 'ro9er i" o!e &ho !e$oti#te" the "#le of re#l )ro)ertie". Ji" ',"i!e""+ $e!er#ll% ")e#9i!$+ i" o!l% to !d # ),rch#"er &ho i" &illi!$ to ',% the l#!d ,)o! ter*" :ed '% the o&!er. Je h#" !o #,thorit% to 'i!d the )ri!ci)#l '% "i$!i!$ # co!tr#ct of "#le. I!deed+ #! #,thorit% to !d # ),rch#"er of re#l )ro)ert% doe" !ot i!cl,de #! #,thorit% to "ell. Th,"+ &he! the "eller hi*"elf clo"e" the "#le &ith the ),rch#"er loc#ted '% the 'ro9er+ the "eller i" 'o,!d to )#% the co**i""io! he h#" co!tr#cted &ith the 'ro9er for *erel% !di!$ the ',%er. +ro*er .s Not /egally .ncapacityaa to Purchase Property of the Principal$ 33 I! Araneta, Inc. v. #el (aterno+ ;1 Ihil. 586 31;/06+ it &#" held th#t the '#! of )#r#$r#)h 0 of -Article 12;1. &he! re!der" #! #$e!t le$#ll% i!c#)#'le of ',%i!$ the )ro)ertie" of hi" )ri!ci)#l co!!ote" the ide# of tr,"t #!d (co!de!ce< #!d "o &here the rel#tio!"hi) doe" !ot i!volve co!"ider#tio!" of $ood f#ith #!d i!te$rit% the )rohi'itio! "ho,ld !ot #!d doe" !ot #))l%. To co*e ,!der the )rohi'itio!+ the #$e!t *,"t 'e i! # d,ci#r% rel#tio! &ith hi" )ri!ci)#l.( The Co,rt held th#t # 'ro9er doe" !ot co*e &ithi! the *e#!i!$ of Article 12;0+ 'ec#,"e he i" !othi!$ *ore th#! # $o7'et&ee! or 18 *iddle*#! 'et&ee! the defe!d#!t #!d the ),rch#"er+ 'ri!$i!$ the* to$ether to *#9e the co!tr#ct the*"elve". There i" !o co!de!ce to 'e 'etr#%ed+ "i!ce # 'ro9er i" !ot #,thori>ed to *#9e # 'i!di!$ co!tr#ct for the ),r)orted )ri!ci)#l< he i" !ot "ell the )ro)ert%+ ',t o!l% to loo9 for # ',%er #!d the o&!er i" to *#9e the "#le< he &#" !ot to : the )rice of the "#le 'ec#,"e the )rice h#d to 'e #lre#d% :ed i! hi" co**i""io!< he i" !ot to *#9e the ter*" of )#%*e!t 'ec#,"e the"e+ too+ &o,ld 'e cle#rl% ")ecied i! hi" co**i""io!. I! !e+ # 'ro9er i" left !o )o&er or di"cretio! &h#t"oever+ &hich he co,ld #',"e to hi" #dv#!t#$e #!d to the o&!erKLQ" )reE,dice. 'ntitlement to Commission. 77 I! B,ite # !,*'er of deci"io!"+ the Co,rt h#" held th#t the deter*i!#tio! of &hether o!e i" #! #$e!t or # 'ro9er co!"tit,te" # critic#l f#ctor of &hether he &o,ld 'e e!titled to the co**i""io! "ti),l#ted i! the co!tr#ct. Th,"+ i! Tan v. +ullas+ ?;? 1CRA ??2 304406+ B,oti!$ fro* Sch'id & O4erl-, Inc. v. R" .artinez $ishing Corp.+ 166 1CRA 2;? 31;886+ it de!ed # ('ro9er( #" (o!e &ho i" e!$#$ed+ for other"+ o! # co**i""io!+ !e$oti#ti!$ co!tr#ct" rel#tive to )ro)ert% &ith the c,tod% of &hich he h#" !o co!cer!< the !e$oti#tor 'et&ee! other )#rtie"+ !ever #cti!$ i! hi" o&! !#*e ',t i! the !#*e of tho"e &ho e*)lo%ed hi*. : : : # 'ro9er i" o!e &ho"e occ,)#tio! i" to 4ring the parties together+ i! *#tter" of tr#de+ co**erce or !#vi$#tio!.( 3#t ). ??;6 The Co,rt the! held th#t (A! agent receive" # co**i""io! ,)o! the ",cce""f,l co!cl,"io! of # "#le. O! the other h#!d+ # 4ro/er e#r!" hi" )#% 'erel- 4- 4ringing the 4u-er and the seller together+ eve! if !o "#le i" eve!t,#ll% *#de.( . . . Cle#rl%+ therefore+ )etitio!er"+ #" 'ro9er"+ "ho,ld 'e e!titled to the co**i""io! &hether or !ot the "#le of the )ro)ert% ",'Eect *#tter of the co!tr#ct &#" co!cl,ded thro,$h their e=ort".( 3#t ). ?216. I! (hil. Health3care (roviders 9.a,icare: v. Estrada, /20 1CRA 616 304486+ the Co,rt held th#t the ter* ()roc,ri!$ c#,"e( i! de"cri'i!$ # 'ro9er8" #ctivit%+ refer" to # c#,"e originating # "erie" of eve!t" &hich+ &itho,t 're#9 i! their co!ti!,it%+ re",lt i! the #cco*)li"h*e!t of the )ri*e o'Eective of the e*)lo%*e!t of the 'ro9er77 )rod,ci!$ # ),rch#"er re#d%+ &illi!$ #!d #'le to ',% o! the o&!er8" ter*". To 'e re$#rded #" the ()roc,ri!$ c#,"e( of # "#le #" to 'e e!titled to # co**i""io!+ # 'ro9er8" e=ort" *,"t h#ve 'ee! the fo,!d#tio! o! &hich the !e$oti#tio!" re",lti!$ i! # "#le 'e$#!. Fro* deci"io!" of the 1,)re*e Co,rt+ it "ee*" th#t the #rr#!$e*e!t o! e!title*e!t to co**i""io! deter*i!e" &hether the rel#tio!"hi) i" o!e of 'ro9er or #$e!c%. Th,"+ i! Hahn v. Court of Appeals+ 066 1CRA /?5 31;;56+ the Co,rt held th#t (Co!tr#r% to the #))ell#te co,rt8" co!cl,"io!+ thi" #rr#!$e*e!t "ho&" #! #$e!c%. A! #$e!t receive" # co**i""io! ,)o! the ",cce""f,l 1; co!cl,"io! of # "#le. O! the other h#!d+ # 'ro9er e#r!" hi" )#% *erel% '% 'ri!$i!$ the ',%er #!d the "eller to$ether+ eve! if !o "#le i" eve!t,#ll% *#de.( 3#t ). /2;6 B,t tr,l%+ "i!ce 'oth # 'ro9er#$e #rr#!$e*e!t #!d #! #$e!c% #$ree*e!t #re i!here!tl% co!tr#ct,#l rel#tio!"+ the e!title*e!t of # 'ro9er or #$e!t to the co*)e!"#tio! or co**i""io! "ti),l#ted &o,ld h#ve to de)e!d ,)o! the co!tr#ct,#l cl#,"e coveri!$ the "#*e. I! other &ord"+ it *#% &ell 'e "ti),l#ted i! # tr,e 'ro9er#$e #rr#!$e*e!t th#t the 'ro9er &o,ld 'e e!titled to # co**i""io! o!l% &he! # "#le i" eve!t,#ll% *#de. I! the "#*e *#!!er+ the #$e!c% co!tr#ct *#% &ell "ti),l#te th#t the #$e!t "h#ll 'e e!titled to e#r! co**i""io! '% *erel% 'ri!$i!$ the ',%er #!d the "eller to$ether+ eve! &he! the #ct,#l "#le of the )er"o! referred to '% the #$e!t h#))e!" lo!$ #fter the #$e!c% rel#tio!"hi) h#" ter*i!#ted. To ill,"tr#te+ i! +uarde, v. )RC+ 1;1 1CRA 285 31;;46+ the Co,rt held th#t &he! the ter*" of the #$e!c% #rr#!$e*e!t i" to the e=ect th#t e!title*e!t to the co**i""io! &#" co!ti!$e!t o! the ),rch#"e '% # c,"to*er of # re tr,c9+ the i*)licit co!ditio! 'ei!$ th#t the #$e!t &o,ld e#r! the co**i""io! if he &#" i!"tr,*e!t#l i! 'ri!$i!$ the "#le #'o,t. 1i!ce the #$e!t h#d !othi!$ to do &ith the "#le of the re tr,c9+ #!d i" !ot therefore e!titled to #!% co**i""io! #t #ll. Altho,$h Sch'id & O4erl-, Inc. i" !o& credited &ith l#%i!$ do&! the de!itio! of # 'ro9er+ the deci"io! "ho&" th#t it B,oted fro* the e#rl% deci"io! of *ehn, .e-er and Co., td. v. )olting and +arcia + ?/ Ihil. 052 31;166+ &here the Co,rt held 77 (A 4ro/er i" $e!er#ll% de!ed #" o!e &ho i" e!$#$ed+ for other"+ o! # co**i""io!+ !e$oti#ti!$ co!tr#ct" rel#tive to )ro)ert% &ith the c,"tod% of &hich he h#" !o co!cer!< the !e$oti#tio! 'et&ee! other )#rtie"+ !ever #cti!$ i! hi" o&! !#*e ',t i! the !#*e of tho"e &ho e*)lo%ed hi*< he i" "trictl% # *iddle*#! #!d for "o*e ),r)o"e the #$e!t of 'oth )#rtie". 31; C%c.+ 186< Je!der"o! v". The 1t#te+ /4 I!d.+ 0?2< B#lc98" F#& Dictio!#r%.6 A 'ro9er i" o!e &ho"e occ,)#tio! it i" to 'ri!$ )#rtie" to$ether to '#r$#i!+ or to '#r$#i! for the*+ i! *#tter" of tr#de+ co**erce or !#vi$#tio!. 3Geche* o! A$e!c%+ "ec. 1?< Ah#rto! o! A$e!c%+ "ec. 6;/6. J,d$e 1tore%+ i! hi" &or9 o! A$e!c%+ de!e" # 'ro9er #" #! #$e!t e*)lo%ed to *#9e '#r$#i!" #!d co!tr#ct" 'et&ee! other )er"o!"+ i! *#tter" of tr#de+ co**erce or !#vi$#tio!+ for co*)e!"#tio! co**o!l% c#lled 'ro9er#$e. 31tore% o! A$e!c%+ "ec. 086( 3#t ). 05;70846 Note therefore th#t ('ro9er( i" co!"idered # co**erci#l ter* for # )er"o! e!$#$ed #" # *iddle*#! to 'ri!$ )#rtie" to$ether i! *#tter" )ert#i!i!$ to tr#de+ co**erce or !#vi$#tio!. If the )er"o! h#" !ot 'ee! $ive! the )o&er to e!ter 04 i!to the co!tr#ct or co**erce i! 'eh#lf of the )#rtie"+ the! he i" # ('ro9er( i! the "e!"e th#t hi" Eo' *#i!l% i" (to 'ri!$ )#rtie" to$ether to '#r$#i!+( #!d eve! the! he *#% !ot 'e e!titled to hi" co**i""io! if the '#r$#i!i!$ 'et&ee! the )#rtie" doe" !ot re",lt i! # co!tr#ct 'ei!$ )erfected. B,t i! thi" "e!"e+ the 'ro9er doe" !ot #"",*e the role of #! #$e!t 'ec#,"e he h#" !o )o&er to e!ter i!to # co!tr#ct i! 'eh#lf of #!% of the )#rtie"< he #l"o #"",*e" !o d,ci#r% o'li$#tio!" to either or 'oth )#rtie"+ "i!ce the% #re e:)ected to ,"e their o&! E,d$*e!t i! decidi!$ to 'i!d or !ot to 'i!d the*"elve" to # co!tr#ct. O! the other h#!d+ if the )er"o! h#" 'ee! $ive! the )o&er to e!ter i!to # co!tr#ct or co**erce o! 'eh#lf of #!%+ or eve! for 'oth the )#rtie"+ he i" tr,l% # 'ro9er #!d #! #$e!t. I! &hich c#"e+ he #"",*e" d,ci#r% o'li$#tio!" to the )er"o! &ho i" therefore le$#ll% hi" )ri!ci)#l. I! ",ch c#"e+ he i" e!titled to # co**i""io! if hi" e=ort" 3i.e.+ the "ervice" he re!dered6 &here the e@cie!t c#,"e for the eve!t,#l )erfectio! #!d co!",**#tio! of the co!tr#ct th#t &#" the o'Eect for #))oi!ti!$ hi* 'ro9erR#$e!t. Re/ate. Ca$e$6 Chua )go v. 5niversal Trading Co., Inc.+ 85 Ihil. ??1 31;/46. $ar Eastern E,port & I'port Co. v. i' Tech Suan+ ;5 Ihil. 151 31;//6. (earl Island Co''ercial Corp. v. i' Tan Tong+ 141 Ihil. 58; 31;/56. )ational Rice and Corn Corp. v. Court of Appeals+ ;1 1CRA 2?5 31;5;6.
-1.See Che'phil E,port v. Court of Appeals+ 0/1 1CRA 015 31;;/6< Shopper6s (aradise Realt- v. Ro1ue+ 21; 1CRA ;? 304426< #o'inion Insurance Corp. v. Court of Appeals+ 206 1CRA 604+ 606 304406< Repu4lic v. Evangelista+ 266 1CRA /22 3044/6< iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466< Eurotech Industrial Technologies, Inc. v. Cuizon, /01 1CRA /82 304456. -0.Citing Orient Air Services and Hotel Representatives v. Court of Appeals+ 052 Ihil. ;05+ ;?; 31;;16. -?.DE FEON AND DE FEON+ COGGENT AND CA1E1 ON IARTNER1JII AGENCY AND TRH1T1+ 044/ ed.+ #t ). ?/6< herei!#fter referred to #" (DE FEON1(. -2.Reiterated in Eurotech Industrial Technologies, Inc. v. Cuizon+ /01 1CRA /82 304456. -/.See also iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466. -6.Citing *ordador v. uz+ 08? 1CRA ?52+ ?80 31;;56. 01 -5.RO1COE T. 1TEFFEN+ AGENCY7 IARTNER1JII IN A NHT1JEFF 31;556 ?47?1. -8.Reiterated in iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466. -;.2uoting fro' Re%e" #!d I,!o+ (A! O,tli!e of Ihili))i!e Civil F#&+( Vol. V+ ). 055. -14.Citing 10 A*. J,r. 0d 8?/< 1?2 AFR 1?26< 1 AFR 0d ;85< *ro&n vs. Coates+ 65 AFR 0d ;2?< Ha-'es vs. Rogers+ 15 AFR 0d 8;6< .oore vs. Turner+ ?0 AFR 0d 51?. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 ?D0/ AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT II. FORG RETHIRED FOR CONTRACT1 OF AGENCY
2. Fo"0$ Re7!i"e. o( A)en&* a. 8o9 A)en&* Ma* Be Con$tit!te. Article 186; e*)h#"i>e" the consensual nature of the co!tr#ct of #$e!c%D (A$e!c% *#% 'e e:)re""+ or i*)lied fro* the #ct" of the )ri!ci)#l+ fro* hi" "ile!ce or l#c9 of #ctio!+ or hi" f#il,re to re),di#te the #$e!c%+ 9!o&i!$ th#t #!other )er"o! i" #cti!$ o! hi" 'eh#lf &itho,t #,thorit%. A$e!c% *#% 'e or#l+ ,!le"" the l#& reB,ire" # ")ecic for*.( I! E1uita4le (CI3*an/ v. %u+ ?// 1CRA ?4; 304416+ it &#" held th#t #! #$e!c% *#% 'e e:)re"" ',t it *#% #l"o 'e i*)lied fro* the #ct" of the )ri!ci)#l+ fro* hi" "ile!ce+ or l#c9 of #ctio! or hi" f#il,re to re),di#te the #$e!c% 9!o&i!$ th#t #!other )er"o! i" #cti!$ o! hi" 'eh#lf &itho,t #,thorit%. Fi9e&i"e+ #cce)t#!ce '% the #$e!t *#% #l"o 'e e:)re""+ #ltho,$h it *#% #l"o 'e i*)lied fro* hi" #ct" &hich c#rr% o,t the #$e!c%+ or fro* hi" "ile!ce or i!#ctio! #ccordi!$ to the circ,*"t#!ce". Th,"+ &he! # l#& r* #llo&ed the e*)lo%ee of it" clie!t to occ#"io!#ll% receive it" *#il+ #!d !ot h#vi!$ for*#ll% o'Eected to the recei)t '% "#id e*)lo%ee of # co,rt )roce""+ or t#9e! #!% "te)" to ),t # "to) to it+ *e#!t th#t #! #$e!c% rel#tio!"hi) h#d 'ee! e"t#'li"hed+ to &hich recei)t of the co,rt )roce"" '% "#id e*)lo%ee &#" le$#ll% dee*ed to 'e "ervice to the l#& r*. I! i' v. Court of Appeals+ 0/2 1CRA 154 31;;66+ the Co,rt !oted th#t there #re "o*e )rovi"io!" of l#& &hich reB,ire cert#i! for*#litie" for )#rtic,l#r co!tr#ctD the r"t i" &he! the for* i" reB,ired for the v#lidit% of the co!tr#ct< the "eco!d i" &he! it i" reB,ired to *#9e the co!tr#ct e=ective #" #$#i!"t third )#rtie" ",ch #" tho"e *e!tio!ed i! Article 1?/5 #!d 1?/8 of the Civil Code< #!d the third i" &he! the for* i" reB,ired for the ),r)o"e of )rovi!$ the e:i"te!ce of the 00 co!tr#ct+ ",ch #" tho"e )rovide i! the 1t#t,te of Fr#,d" i! Article 124?. 1i!ce # co!tr#ct of #$e!c% to "ell )iece" of Ee&elr% o! co**i""io! doe" !ot f#ll i!to #!% of the three c#te$orie"+ it &#" co!"idered v#lid #!d e!force#'le i! &h#tever for* it *#% h#ve 'ee! e!tered i!to. ,1- rom the Side of the Principal O! the "ide of the )ri!ci)#l+ Article 186; of the Civil Code )rovide" th#t #! #$e!c% i" i*)liedl% co!"tit,ted 3i.e., )ri!ci)#l h#" $ive! hi" co!"e!t to the #$e!c% #rr#!$e*e!t6 fro* hi" #ct" for*#ll% #do)ti!$ it+ or fro* hi" "ile!ce or i!#ctio!+ or )#rtic,l#rl% fro* hi" f#il,re to re),di#te the #$e!c% 9!o&i!$ "o*eo!e i" #cti!$ i! hi" !#*e. Cert#i!l%+ the ide#l for* '% &hich the )ri!ci)#l i" dee*ed to h#ve e!tered i!to # co!tr#ct of #$e!c% i" &he! he i"",e" # &ritte! )o&er of #ttor!e% to the )er"o! de"i$!#ted #" #$e!t. ,2- rom the Side of the "gent O! the "ide of the #$e!t+ Article 1854 )rovide" th#t hi" #cce)t#!ce of the #$e!c% 3i.e., #$e!t h#" $ive! hi" co!"e!t to the #$e!c% #rr#!$e*e!t6 *#% 'e e:)re""ed+ or i*)lied fro* hi" #ct" &hich c#rr% o,t the #$e!c%+ or fro* hi" "ile!ce or i!#ctio! #ccordi!$ to the circ,*"t#!ce". H!der Article 1851+ &hich de"cri'e" the *o"t ide#l for* of )erfectio! of the co!tr#ct of #$e!c%+ &he! the co!"tit,tio! of the #$e!c% i" *#de &ith 'oth )ri!ci)#l #!d #$e!t 'ei!$ )h%"ic#ll% )re"e!t #t the ti*e of )erfectio! of the co!tr#ct of #$e!c% 3i.e.+ (Bet&ee! )er"o!" &ho #re )re"e!t(6+ the #cce)t#!ce of the #$e!c% *#% 'e i*)lied if the )ri!ci)#l deliver" hi" )o&er of #ttor!e% to the #$e!t #!d the l#tter receive" it &itho,t o'Eectio!. O! the other h#!d+ ,!der Article 1850+ &he! the co!"tit,tio! of the #$e!c% i" *#de &ith the )ri!ci)#l #!d #$e!t !ot 'ei!$ )h%"ic#ll% )re"e!t i! o!e )l#ce 3i.e.+ (Bet&ee! )er"o!" &ho #re #'"e!t(6+ the! there c#! 'e !o i*)lied #cce)t#!ce of the #$e!c% fro* the "ile!ce or i!#ctio! of the #$e!t+ e:ce)t i! t&o i!"t#!ce"D 3#6 Ahe! the )ri!ci)#l trans'it hi" )o&er of #ttor!e% to the #$e!t 3i.e.+ it i" i! &riti!$U6+ &ho receive" it &itho,t #!% o'Eectio!< or 3'6 Ahe! the )ri!ci)#l e!tr,"t" to the #$e!t '% letter or tele$r#* # )o&er of #ttor!e% &ith respect to the 4usiness in &hich he is ha4ituall- engaged as an agent, #!d he did !ot re)l% to the letter or tele$r#*. The l#!$,#$e" ,"ed i! Article" 1851 #!d 1850 i!dic#te" th#t the ()o&er of #ttor!e%( *,"t co!"tit,te # &ritte! i!"tr,*e!t"+ 'ec#,"e i! 'oth 0? c#"e" the #rticle" refer to "it,#tio!" &here (the )ri!ci)#l deliver" hi" )o&er of #ttor!e% to the #$e!t+( #!d &he! (the )ri!ci)#l tr#!"*it" hi" )o&er of #ttor!e% to the #$e!t+( &hich reB,ire" th#t it *,"t 'e i! &riti!$+ &hich tod#% &o,ld i!cl,de te:ti!$ #!d electro!ic *#il+ &hich #re co!"idered to 'e eB,iv#le!t to # &ritte! i!"tr,*e!t ,!der the Electro!ic Co**erce F#&. Co!"eB,e!tl%+ &he! the other )rovi"io!" of the F#& o! A$e!c% refer" to ($e!er#l )o&er of #ttor!e%( #!d (")eci#l )o&er of #ttor!e%+( doe" the l#& *e#! th#t the% co!for* to the r,di*e!t#r% reB,ire*e!t th#t the% 'e i! &riti!$U ,3- rom the Side of -hird Parties0Public The )revio," r,le" o! &he! # co!tr#ct of #$e!c% i" dee*ed co!"tit,ted 3i.e., )erfected6 #re t#9e! fro* the i!tr#*,r#l )oi!t of vie&D #" 'et&ee! the )#rtie" to the co!tr#ct of #$e!c%. Jo&ever+ # co!tr#ct of #$e!c% i" *erel% # )re)#r#tor% co!tr#ct+ #!d i" *e#!t to #chieve $o#l" 'e%o!d it" o&! ('ei!$(< co!"eB,e!tl%+ the F#& o! A$e!c% co!t#i!ed i! the Civil Code )rovide" for #dditio!#l r,le th#t #ddre""e" *o"t e""e!ti#ll% the t#r$et" of ever% co!tr#ct of #$e!c%D the third )#rtie" i!te!ded to 'e co!tr#cted &ith '% the #$e!t i! 'eh#lf of the )ri!ci)#l. H!der Article 185?+ &he! the )ri!ci)#l i!for*" #!other )er"o! th#t he h#" $ive! # )o&er of #ttor!e% to # third )er"o! 3the #$e!t6+ the l#tter there'% 'eco*e" # d,l% #,thori>ed #$e!t &ith re")ect to the )er"o! &ho received the ")eci#l i!for*#tio!. The cle#r i*)lic#tio! i" th#t eve! &he! i! f#ct there h#" 'ee! !o *eeti!$ of the *i!d" 'et&ee! the ),r)orted )ri!ci)#l #!d #$e!t 3i.e.+ there i" "trictl% ")e#9i!$ !o co!tr#ct of #$e!c%6+ there i" dee*ed to h#ve #ri"e! o!e &ith re")ect to the third )#rt% &ho h#" 'ee! "o i!for*ed '% the )ri!ci)#l. O! the other h#!d+ &he! the )ri!ci)#l "t#te" '% ),'lic #dverti"e*e!t th#t he h#" $ive! # )o&er of #ttor!e% to # third )er"o! 3the #$e!t6+ the l#tter there'% 'eco*e" # d,l% #,thori>ed #$e!t &ith re$#rd to #!% )er"o!. It i" ")ecic#ll% )rovided i! "#id #rticle th#t (-t.he )o&er -of the #$e!t. "h#ll co!ti!,e to 'e i! f,ll force ,!til the !otice i" re"ci!ded i! the "#*e *#!!er i! &hich it &#" $ive!.( Th,"+ ,!der Article 1;01+ if the #$e!c% h#" 'ee! e!tr,"ted for the ),r)o"e of co!tr#cti!$ &ith ")ecic )er"o!" 3referred to #" (")eci#l #$e!c%(6+ the revoc#tio! of the #$e!c% "h#ll !ot )reE,dice the l#tter if the% &ere !ot $ive! !otice thereof. H!der Article 1;00+ if the #$e!t h#d 'ee! $r#!ted $e!er#l )o&er" 3referred to #" ($e!er#l #$e!c%(6+ the revoc#tio! of the #$e!c% &ill !ot )reE,dice third )er"o!" &ho #cted i! $ood f#ith #!d &itho,t 9!o&led$e of the revoc#tio!< ho&ever+ !otice of the revoc#tio! i! # !e&")#)er of $e!er#l 02 circ,l#tio! co!"tit,te" ",@cie!t !otice to 'i!d third )er"o!". I! Rallos v. 8angco+ 04 Ihil 06; 31;116+ the Co,rt held th#t # lo!$7"t#!di!$ clie!t+ #cti!$ i! $ood f#ith #!d &itho,t 9!o&led$e+ h#vi!$ "e!t $ood" to "ell o! co**i""io! to the for*er #$e!t of the defe!d#!t+ co,ld recover fro* the defe!d#!t+ &he! !o )revio," !otice of the ter*i!#tio! of #$e!c% &#" $ive! "#id clie!t. The Co,rt e*)h#"i>ed th#t h#vi!$ #dverti"ed the f#ct th#t Coll#!te" &#" hi" #$e!t #!d h#vi!$ $ive! ")eci#l !otice to the )l#i!ti= of th#t f#ct+ #!d h#vi!$ $ive! the* # ")eci#l i!vit#tio! to de#l &ith ",ch #$e!t+ it &#" the d,t% of the defe!d#!t o! the ter*i!#tio! of the rel#tio!"hi) of )ri!ci)#l #!d #$e!t to $ive d,e #!d ti*el% !otice thereof to the )l#i!ti=". F#ili!$ to do "o+ the defe!d#!t &#" held re")o!"i'le to the* for &h#tever $ood" *#% h#ve 'ee! i! $ood f#ith #!d &itho,t !e$li$e!ce "e!t to the #$e!t &itho,t 9!o&led$e+ #ct,#l or co!"tr,ctive+ of the ter*i!#tio! of ",ch rel#tio!"hi). I! Conde v. Court of Appeals+ 11; 1CRA 02/ 31;806+ the Co,rt held th#t &he! the ri$ht of rede*)tio! '% "eller"7#7retro i" e:erci"ed '% their "o!7i!7l#& &ho &#" $ive! !o e:)re"" #,thorit% to do "o+ #!d the ',%er7#7retro #cce)ted the e:erci"e #!d do!e !othi!$ for the !e:t te! %e#r" to cle#r their title of the #!!ot#ted ri$ht of re),rch#"e o! their title+ #!d )o""e""io! h#d 'ee! $ive! to the "eller"7#7retro d,ri!$ the "#*e )eriod+ the! (#! i*)lied #$e!c% *,"t 'e held to h#ve 'ee! cre#ted fro* their "ile!ce or l#c9 of #ctio!+ or their f#il,re to re),di#te the #$e!c%.( ,4- A)en&* Not "e$!0e. to E:i$t Altho,$h #! #$e!c% co!tr#ct i" co!"e!",#l i! !#t,re #!d $e!er#ll% reB,ire" !o for*#lit%+ the Co,rt h#" "tre""ed th#t #! #$e!c% #rr#!$e*e!t i" !ever )re",*ed. opez v. Tan Tioco+ 8 Ihil. 6;? 31;456 I! other &ord"+ the decl#r#tio! of o!e th#t he i" #! #$e!t of #!other i" !ever to 'e #cce)ted #t f#ce v#l,e. e:ce)t i! tho"e c#"e" &here #! #$e!c% #ri"e" '% e:)re"" )rovi"io! of l#&. Co'pania .ariti'a v. i'son+ 121 1CRA 245 31;866. I! (eople v. 8a4ut, 56 1CRA 602 31;556+ it &#" held th#t #ltho,$h the )erfectio! of # co!tr#ct of #$e!c% *#% t#9e #! i*)lied for*+ the e:i"te!ce of #! #$e!c% rel#tio!"hi) i" !ever )re",*ed. The rel#tio!"hi) of )ri!ci)#l #!d #$e!t c#!!ot 'e i!ferred fro* *ere f#*il% rel#tio!"hi)< for the rel#tio! to e:i"t+ there *,"t 'e co!"e!t '% 'oth )#rtie". The l#& *#9e" !o )re",*)tio! of #$e!c%< it *,"t e:i"t #" # f#ct. -1. I! Harr- E. %eeler Elec . Co. v. Rodriguez+ 22 Ihil. 1; 31;006+ the Co,rt r,led th#t # third )er"o! *,"t #ct &ith ordi!#r% )r,de!ce #!d re#"o!#'le dili$e!ce to #"cert#i! &hether the #$e!t i" #cti!$ #!d de#li!$ &ith hi* &ithi! the "co)e of hi" )o&er". O'vio,"l%+ if he 9!o&" or h#" 0/ $ood re#"o! to 'elieve th#t the #$e!t i" e:ceedi!$ hi" #,thorit%+ he c#!!ot cl#i* )rotectio!. 1o+ if the ch#r#cter #"",*ed '% the #$e!t i" of ",ch # ",")icio," or ,!re#"o!#'le !#t,re+ or if the #,thorit% &hich he "ee9" i" of ",ch #! ,!,",#l or i*)ro'#'le ch#r#cter+ #" &o,ld ",@ce to ),t #! ordi!#ril% )r,de!t *#! ,)o! hi" $,#rd+ the )#rt% de#li!$ &ith hi* *#% !ot "h,t hi" e%e" to the re#l "t#te of the c#"e ',t "ho,ld &ith#l ref,"e to de#l &ith the #$e!t #t #ll+ or "ho,ld #"cert#i! fro* the )ri!ci)#l the tr,e co!ditio! of #=#ir". I! *ordador v. uz+ 08? 1CRA ?52 31;;56+ the Co,rt held th#t (The '#"i" for #$e!c% i" re)re"e!t#tio!. Jere+ there i" !o "ho&i!$ th#t Bri$id# co!"e!ted to the #ct" of De$#!o" or #,thori>ed hi* to #ct o! her 'eh#lf+ *,ch le"" &ith re")ect to the )#rtic,l#r tr#!"#ctio!" i!volved. Ietitio!er"8 #tte*)t to foi"t li#'ilit% o! re")o!de!t ")o,"e" thro,$h the ",))o"ed #$e!c% rel#tio! &ith De$#!o" i" $ro,!dle"" #!d ill7 #dvi"ed. Be"ide"+ it &#" $ro""l% #!d i!e:c,"#'l% !e$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!" #" evide!ced '% "i: recei)t"+ "ever#l )iece" of Ee&elr% of ",'"t#!ti#l v#l,e &itho,t reB,iri!$ # &ritte! #,thori>#tio! fro* hi" #lle$ed )ri!ci)#l. A )er"o! de#li!$ &ith #! #$e!t i" ),t ,)o! i!B,ir% #!d *,"t di"cover ,)o! hi" )eril the #,thorit% of the #$e!t.( 3#t ). ?806 I! #izon v. Court of Appeals+ ?40 1CRA 088 31;;;6+ the Co,rt held th#t # co7o&!er doe" !ot 'eco*e #! #$e!t of the other co7o&!er"+ #!d therefore+ #!% e:erci"e of #! o)tio! to ',% # )iece of l#!d tr#!"#cted &ith o!e co7o&!er doe" !ot 'i!d the other co7o&!er" of the l#!d. The '#"i" for #$e!c% i" re)re"e!t#tio! #!d # )er"o! de#li!$ &ith #! #$e!t i" ),t ,)o! i!B,ir% #!d *,"t di"cover ,)o! hi" )eril the #,thorit% of the #$e!t. 1i!ce there &#" !o "ho&i!$ th#t the other co7 o&!er" co!"e!ted to the #ct of o!e co7o&!er !or #,thori>ed her to #ct o! their 'eh#lf &ith re$#rd to her tr#!"#ctio! &ith ),r)orted ',%er. The *o"t )r,de!t thi!$ the ),r)orted ',%er "ho,ld h#ve do!e &#" to #"cert#i! the e:te!t of the #,thorit% "#id co7o&!er< 'ei!$ !e$li$e!t i! thi" re$#rd+ the ),r)orted ',%er c#!!ot "ee9 relief o! the '#"i" of # ",))o"ed #$e!c%. O! the other h#!d+ ,!der Article 185?+ the decl#r#tio! of # )er"o! th#t he h#" #))oi!ted #!other #" hi" #$e!t i" dee* to h#ve co!"tit,ted the )er"o! #ll,ded to #" #! #$e!t 3eve! &he! the l#tter i" ,!#&#re6+ i!"of#r #" the )er"o! to &ho* ",ch delc#r#tio! ih#" 'ee! *#de. Ah#t i" cle#r therefore i" th#t third )#rtie" *,"t !ever t#9e the &ord" or re)re"e!t#tio! of the ),r)orted #$e!t #t f#ce v#l,e< the% #re *#!d#ted to #))ri"e the*"elve" of the co**i""io! #!d e:te!t of )o&er" of the ),r)orted #$e!t. O! the other h#!d+ third )#rtie" 3to the co!tr#ct of #$e!c%6 c#! t#9e the &ord"+ decl#r#tio!" #!d re)re"e!t#tio!" of the ),r)orted )ri!ci)#l &ith re")ect to the 06 #))oi!t*e!t of+ #!d e:te!t of )o&er"+ of the ),r)orted #$e!t. The )ri!ci)le i" "elf7evide!t fro* the !#t,re of #$e!c% #" # rel#tio! of re)re"e!t#tio!77th#t #! #$e!t #ct" #" tho,$h he &ere the )ri!ci)#l7 #!d therefore if the )ri!ci)#l hi*"elf "#%" "o+ the! it i" t#9e! #t f#ce v#l,e #" # co!tr#ct,#l co**it*e!t. b. A)en&* b* E$to##e/ H!der Article 185?+ if # )er"o! ")eci#ll% i!for*" #!other or "t#te" '% ),'lic #dverti"e*e!t th#t he h#" $ive! # )o&er of #ttor!e% to # third )er"o!+ the l#tter there'% 'eco*e" # d,l% #,htori>ed #$e!t+ eve! if )revio,"l% there &#" !ever # *eeti!$ of *i!d" 'et&ee! the*.
H!der Article 1;11+ eve! &he! the #$e!t h#" e:ceeded hi" #,thorit% 3i.e., he #ct" &itho,t #,thorit% fro* the )ri!ci)#l6+ the )ri!ci)#l "h#ll 'e "olid#ril% &ith the #$e!t if he #llo&ed the #$e!t to #ct #" tho,$h he h#d f,ll )o&er". I! I! .ac/e v. Ca'ps+ 5 Ihil //? 31;456. &here the o&!er of # hotelRc#fe ',"i!e"" #llo&ed # )er"o! to ,"e the title (*#!#$i!$ #$e!t( #!d d,ri!$ hi" )rolo!$ed #'"e!ce" #llo&ed ",ch )er"o! to t#9e ch#r$e of the ',"i!e""+ )erfor*i!$ the d,tie" ,",#ll% e!tr,"ted to *#!#$i!$ #$e!t+ the! ",ch o&!er i" 'o,!d '% the #ct of ",ch )er"o!.The Co,rt held th#t (O!e &ho clothe" #!other #))#re!t #,thorit% #" hi" #$e!t+ #!d hold" hi* o,t to the ),'lic #" ",ch+ c#! !ot 'e )er*itted to de!% the #,thorit% of ",ch )er"o! to #ct #" hi" #$e!t+ to the )reE,dice of i!!oce!t third )#rtie" de#li!$ &ith ",ch )er"o! i! $ood f#ith #!d i! the follo&i!$ )re7#"",*)tio!" or ded,ctio!"+ &hich the l#& e:)re""l% direct" to 'e *#de fro* )#rtic,l#r f#ct"+ #re dee*ed co!cl,"ive.( 3#t ). ///6 The hotel o&!er &#" dee*ed 'o,!d '% the co!tr#ct" e!tered i!to '% "#id *#!#$i!$ #$e!t th#t #re &ithi! the "co)e of #,thorit% )erti!e!t to ",ch )o"itio!+ i!cl,di!$ the ),rch#"i!$ ",ch re#"o!#'le B,#!titie" of ",))lie" #" *i$ht fro* ti*e to ti*e 'e !ece""#r% i! c#rr%i!$ o! the ',"i!e"" of hotel '#r. I! )aguiat v. Court of Appeals+ 210 1CRA /;0 3044?6+ the Co,rt #))lied the )rovi"io!" of Article 185? of the Civil Code to r,le th#t if '% the i!ter#ctio! 'et&ee! # ),r)orted )ri!ci)#l #!d # ),r)orted #$e!t i! the )re"e!ce of # third )er"o!+ the l#tter &#" $ive! the i*)re""io! of the e:i"te!ce of # )ri!ci)#l7#$e!c% rel#tio!+ #!d the ),r)orted )ri!ci)#l did !othi!$ to correct the third )er"o!8" i*)re""io!+ #! (#$e!c% '% e"to))el i" dee*ed to h#ve 'ee! co!"tit,ted+ #!d the r,le i" cle#rD o!e &ho clothe" #!other &ith #))#re!t #,thorit% #" hi" #$e!t+ #!d hold" hi* o,t to the ),'lic #" ",ch+ c#!!ot 'e )er*itted to de!% the #,thorit% of ",ch )er"o! to #ct #" hi" #$e!t+ to the )reE,dice of i!!oce!t third )#rtie" de#li!$ &ith ",ch )er"o! i! $ood f#ith+ #!d i! the ho!e"t 'elief th#t he i" &h#t he #))e#r" to 'e.( 3#t ). /;;6 05 I! iton!ua, "r. v. Eternit Corporation, 2;4 1CRA 042 304466+ the Co,rt held th#t for #! #$e!c% '% e"to))el to e:i"t+ the follo&i!$ *,"t 'e e"t#'li"hedD 316 the )ri!ci)#l *#!ife"ted # re)re"e!t#tio! of the #$e!t8" #,thorit% or 9!o&i!$l% #llo&ed the #$e!t to #"",*e ",ch #,thorit%< 306 the third )er"o!+ i! $ood f#ith+ relied ,)o! ",ch re)re"e!t#tio!< 3?6 rel%i!$ ,)o! ",ch re)re"e!t#tio!+ ",ch third )er"o! h#" ch#!$ed hi" )o"itio! to hi" detri*e!t. A! #$e!c% '% e"to))el+ &hich i" "i*il#r to the doctri!e of #))#re!t #,thorit%+ reB,ire" )roof of reli#!ce ,)o! the re)re"e!t#tio!"+ #!d th#t+ i! t,r!+ !eed" )roof th#t the re)re"e!t#tio!" )red#ted the #ctio! t#9e! i! reli#!ce. -1.Reiterated in i' v. Court of Appeals+ 0/1 1CRA 248 31;;/6. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 ?D01 AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT III. NIND1 OF AGENCY 3. Kin.$ o( A)en&* a. Ba$e. on t1e B!$ine$$ o" T"an$a&tion$ Co'e"e. H!der Article 1856+ #! #$e!c% i" ter*ed to 'e # (general agenc%( &he! it e!co*)#""e" #ll of the ',"i!e"" of the )ri!ci)#l. The 'etter ter* for ",ch #! #$e!c% &o,ld 'e # (universal agenc-+( for the ter* ($e!er#l #$e!c%( i" o!e th#t i" #ddre""ed to the $e!er#l ),'lic+ #!d !ot E,"t # )#rtic,l#r )er"o! or $ro,) of )er"o!" &hich &ho* the #$e!t i" to tr#!"#ct. I! Siasat v. Inter'ediate Appellate Court+ 1?; 1CRA 0?8 31;8/6+ the Co,rt held th#t # )o&er of #ttor!e% &hich )rovide" th#t (Thi" i" to for*#li>e o,r #$ree*e!t for %o, to re)re"e!t H!ited Fl#$ I!d,"tr% to de#l &ith #!% e!tit% or or$#!i>#tio!+ )riv#te or $over!*e!t+ i! co!!ectio! &ith the *#r9eti!$ of o,r )rod,ct"77 C#$" #!d #ll it" #cce""orie". For %o,r "ervice"+ %o, &ill 'e e!titled to # co**i""io! of ?4V+( &#" co!"tr,ed to #,thori>e the #$e!t to e!ter i!to co!tr#ct of "#le over the )rod,ct" covered #!d for &hich he &o,ld 'e e!titled to receive co**i""io!" "ti),l#ted. It held th#t (-#. $e!er#l 08 #$e!t ,",#ll% h#" #,thorit% either e:)re""l% co!ferred i! $e!er#l ter*" or i! e=ect *#de $e!er#l '% the ,"#$e"+ c,"to*" or !#t,re of the ',"i!e"" &hich he i" #,thori>ed to tr#!"#ct.( O! the other h#!d+ Article 1856 de!e" # (special agenc%( &he! it cover" o!l% o!e or *ore ")ecic tr#!"#ctio!". The 'etter ter* for ",ch #! #$e!c% i" (particular agenc-<( for i!deed+ the ter* (")eci#l #$e!c%( h#" 'ee! ,"ed i! deci"io!" of the 1,)re*e Co,rt to refer to o!e &hich i" #ddre""ed to # )#rtic,l#r )er"o! or $ro,) of )er"o!" &ith &ho* the #$e!t i" to tr#!"#ct. The cl#""ic#tio!" ,!der Article 1856 #re *ore #c#de*ic th#! )r#ctic#l+ "i!ce o,t"ide of $,#rdi#!"hi) )roceedi!$"+ h#rdl% #!%'od% i! the *oder! &orld e*)o&er" #! #$e!t to cover ever% ',"i!e"" #")ect o&!ed '% the )ri!ci)#l. Be"ide ",ch # cl#""ic#tio! i" !ot re#ll% ,"ef,l 'ec#,"e # ($e!er#l or ,!iver"#l #$e!c%( c#! '% l#& o!l% cover $e!er#l )o&er" of #ttor!e% coveri!$ *erel% #ct" of #d*i!i"tr#tio!< #!d c#!!ot+ &itho,t e:)re"" or det#iled de"cri)tio!+ cover ")eci#l )o&er" of #ttor!e%+ coveri!$ )#rtic,l#r #ct" of "trict o&!er"hi). Therefore+ # $e!er#l #$e!c% i" 'etter #chieved '% other co!tr#ct,#l for*" ",ch #" # co!tr#ct of e*)lo%*e!t+ or # ,!iver"#l )#rt!er"hi). Ro4inson $le'ing v. Cruz+ ;2 Ihil 20 31;066 b. ;1et1e" o" Not It Co'e"$ +iti)ation Matte"$ Altho,$h !ot ")ecic#ll% tre#ted i! the Civil Code+ &e "ho,ld di"ti!$,i"h 'et&ee! # for* of #$e!c% c#lled (attorne-3at3la&+( fro* th#t of (attorne-3in3fact..( A! #ttor!e%7#t7l#&+ !ece""#ril% *e#!" the #))oi!t*e!t of #! #$e!t to re)re"e!t the )ri!ci)#l o! le$#l *#tter"+ )#rtic,l#rl% o! *#tter" )ert#i!i!$ to liti$#tio! or co,rt *#tter". Not ever% #ttor!e%7clie!t rel#tio!"hi) i" # co!tr#ct of #$e!c% &here the e""e!ti#l o'Eective i" re)re"e!t#tio!+ ",ch #" &he! #! #ttor!e% i" ret#i!ed to dr#&7,) le$#l doc,*e!t". B,t &he! it co*e" to liti$#tio!+ the ret#i!i!$ of #! #ttor!e% i" tr,l% i! re)re"e!t#tio! of the clie!t7)ri!ci)#l 'efore the co,rt+ ",ch th#t the #ct" of the #ttor!e% for #!d i! 'eh#lf of the clie!t+ th#t !otice to the #ttor!e%+ #!d "ervice of E,dici#l )roce"" to the #ttor!e%+ i" eB,iv#le!t to "ervice to the clie!t )ri!ci)#l. H!der e:i"ti!$ r,le" #!d E,ri")r,de!ce+ ",ch #! #$e!t &o,ld 'e )r#ctici!$ l#& #!d &o,ld h#ve to 'e # lice!"ed l#&%er. The rel#tio!"hi) i" o!e th#t i" d,ci#r% #!d )rofe""io!#l+ #!d i" $over!ed '% "e)#r#te r,le"+ i!cl,di!$ the le$#l )rofe""io!#l code #!d the r,le" )ro*,l$#ted '% the 1,)re*e Co,rt coveri!$ the )r#ctice of l#&. Co!"eB,e!tl%+ the ter* (#ttor!e%7i!7f#ct( i" i!te!ded to de"cri'e #ll #$e!t" #))oi!ted '% # )ri!ci)#l to #ct o! E,ridic#l rel#tio!" th#t h#ve 0; !othi!$ to do &ith le$#l *#tter" #!d do !ot co!"tit,te # )r#ctice of l#& o! the )#rt of the #$e!t. Thi" i" the cl#""ic#tio! th#t cover" the (co!tr#ct of #$e!c%( $over!ed '% the Civil Code. It "ho,ld 'e !oted+ ho&ever+ th#t eve! i! the c#"e of #! #ttor!e%7#t7l#& re)re"e!ti!$ # clie!t i! # co,rt c#"e+ there #re cert#i! )o&er" &hich #re !ot i!here!t i! the )o"itio! of #! #ttor!e%7#t7l#& to le$#ll% 'i!d the clie!t+ ",ch #" the )o&er to co*)ro*i"e+ to #r'itr#te+ etc. Ahether #! #ttor!e%7#t7l#& h#" )o&er to 'i!d the clie!t )ri!ci)#l i! ",ch *#tter" #re $over!ed '% the r,le" of the Civil Code o! ")eci#l #$e!c% or ")eci#l )o&er" of #ttor!e%. &. ;1et1e" It Co'e"$ A&t$ o( A.0ini$t"ation o" A&t$ o( O9ne"$1i# It i" i! the re#l* of (#ttor!e%7i!7f#ct( th#t &e &o,ld *ore #))ro)ri#tel% ,"e the cl#""ic#tio!" of ($e!er#l )o&er of #ttor!e%( #!d (")eci#l )o&er of #ttor!e%( to de"cri'e the #,thorit% #!d )o&er of the #$e!t. 1i*)l% "t#ted+ # general po!er of attorney cover" o!l% #ct" of #d*i!i"tr#tio!+ or e:)re""ed i! co**erci#l ter*"+ it o!l% cover" )o&er to ),r",e the ordi!#r% or re$,l#r co,r"e of ',"i!e"". Ahere#"+ # special po!er of attorney cover" #ct" of do*i!io! or "trict o&!er"hi). The $e!er#l r,le i" th#t ,!le"" "o e:)re""l% "t#ted+ #! #$e!c% cover" o!l% the )o&er" to e:ec,te #ct" of #d*i!i"tr#tio!. Th,"+ ,!der Article 1855 of the Civil CodeD (A! #$e!c% co,ched i! $e!er#l ter*" co*)ri"e" o!l% #ct" of #d*i!i"tr#tio!+ eve! if the )ri!ci)#l "ho,ld "t#te th#t he &ithhold" !o )o&er or th#t the #$e!t *#% e:ec,te ",ch #ct" #" he *#% co!"ider #))ro)ri#te+ or eve! tho,$h the #$e!c% "ho,ld #,thori>e # $e!er#l #!d ,!li*ited *#!#$e*e!t.( Di"ti!ctio! 'et&ee! $e!er#l )o&er of #ttor!e% #!d ")eci#l )o&er of #ttor!e% "h#ll 'e covered i! the i**edi#tel% ",cceedi!$ ch#)ter o! the (Io&er #!d A,thorit%+ D,tie" #!d O'li$#tio!"+ of the A$e!t.( I! .ac/e vs. Ca'ps+ 5 Ihill. //? 31;456+ the Co,rt heldD (It "ee*" e#"% to #!"&er th#t #ct" of #d*i!i"tr#tio! #re tho"e &hich do !ot i*)l% the #,thorit% to #lie!#te for the e:erci"e of &hich #! e:)re"" )o&er i" !ece""#r%. Yet &h#t #re #ct" of #d*i!i"tr#tio! &ill #l&#%" 'e # B,e"tio! of f#ct+ r#ther th#! of l#&+ 'ec#,"e there c#! 'e !o do,'t th#t "o,!d *#!#$e*e!t &ill "o*eti*e" reB,ire the )erfor*#!ce of #! #ct of o&!er"hi). 310 G#!re"# 2686 B,t+ ,!le"" the co!tr#r% #))e#r"+ the #,thorit% of #! #$e!t i" )re",*ed to i!cl,de #ll the !ece""#r% #!d ,",#l *e#!" to c#rr% o,t the #$e!c% i!to e=ect.( 3#t ). ///6 I! Insular #rug Co. v. ()*+ /8 Ihil 682 31;??6+ it &#" held th#t the ri$ht of #! #$e!t to i!dor"e # co**erci#l )#)er i" !ever )re",*ed to e:i"t"< it *,"t 'e cle#rl% $r#!ted '% the )ri!ci)#l. ?4 A "#le"*#! &ith #,thorit% to collect *o!e% 'elo!$i!$ to the )ri!ci)#l doe" !ot h#ve i*)lied #,thorit% to i!dor"e the chec9" received i! )#%*e!t. A!% )er"o! t#9i!$ chec9" )#%#'le to # cor)or#tio! thro,$h the e!dor"e*e!t of #! #$e!t+ doe" "o #t hi" )eril #!d *,"t #'ide '% the co!"eB,e!ce" if the #$e!t &ho i!dor"e" the "#*e i" &itho,t #,thorit%. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 ?D1; AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT IV. AHTJORITY P IOAER+ DHTIE1 P OBFIGATION1+ OF TJE AGENT II. O;ER < AUT8ORITY, DUTIES < OB+IGATIONS, OF T8E AGENT 1. GENERA+ OB+IGATION OF AGENT ;8O ACCETS T8E AGENCY
H!der Article 1882+ &he! #! #$e!t #cce)t" the #))oi!t*e!t of the )ri!ci)#l+ the! he i" le$#ll% 'o,!d to c#rr% o,t the ter*" of the #$e!c%< other&i"e+ if he f#il" or ref,"e" to c#rr% o! the #$e!c%+ he "h#ll 'e li#'le for d#*#$e" ",=ered '% the )ri!ci)#l '% re#"o! of hi" !o!7fe#"#!ce or !o!7)erfor*#!ce. Article 1882 e:)re""e" i! the re#l* of A$e!c% the co!tr#ct l#& )ri!ci)le" of consensualit-+ 'utualit- #!d o4ligator- force e:)re""ed i! Article" 11/; #!d 1?1/ of the Civil Code+ &hich )rovide th#t (O'li$#tio!" #ri"i!$ fro* co!tr#ct" h#ve the force of l#& 'et&ee! the co!tr#cti!$ )#rtie" #!d "ho,ld 'e co*)lied &ith i! $ood f#ith+( #!d th#t (Co!tr#ct" #re )erfected '% *ere co!"e!t+ #!d fro* th#t *o*e!t the )#rtie" #re 'o,!d !ot o!l% to the f,lll*e!t of &h#t h#" 'ee! e:)re""l% "ti),l#ted ',t #l"o to #ll the co!"eB,e!ce" &hich+ #ccordi!$ to their !#t,re+ *#% 'e i! 9ee)i!$ &ith $ood f#ith+ ,"#$e #!d l#&.( Fi9e&i"e+ Article 1?/6 of the Civil Code )rovide" th#t (Co!tr#ct" "h#ll 'e o'li$#tor%+ i! &h#tever for* the% *#% h#ve 'ee! e!tered i!to+ )rovided #ll the e""e!ti#l reB,i"ite" for their v#lidit% #re )re"e!t.( Fi!#ll%+ Article 1?48 )rovide" th#t the (co!tr#ct *,"t 'i!d 'oth co!tr#cti!$ )#rtie"< it" v#lidit% or co*)li#!ce c#!!ot 'e left to the &ill of o!e of the*.( ?1 De")ite the o'li$#tor% !#t,re of ever% co!tr#ct of #$e!c%+ !ote th#t Article 1882 e*)h#"i>e" the )oi!t th#t &he! #! #$e!t ref,"e" to co*)l% &ith the o'li$#tio!" he #cce)ted for hi*"elf+ the re*ed% of the )ri!ci)#l i" to ",e hi* for d#*#$e"+ "i!ce #! #ctio! for ")ecic )erfor*#!ce i" !ot #v#il#'le for )er"o!#l o'li$#tio!" to do or !ot to do. The li#'ilit% of #! #$e!t for d#*#$e" &he! he f#il" to c#rr% o,t hi" o'li$#tio!" i" co!"i"te!t &ith the ter*" of Article 1154 of the Civil Code &hich )rovide" th#t (Tho"e &ho i! the )erfor*#!ce of their o'li$#tio!" #re $,ilt% of fr#,d+ !e$li$e!ce+ or del#%+ #!d tho"e &ho i! #!% *#!!er co!tr#ve!e the te!or thereof+ #re li#'le for d#*#$e".( Thi" "#*e )ri!ci)le i" e:)re""ed i! Article 1;4; of the F#& o! A$e!c%+ &hich )rovide" th#t (-t.he #$e!t i" re")o!"i'le !ot o!l% for fr#,d+ ',t #l"o for !e$li$e!ce+ &hich "h#ll 'e #dE,d$ed &ith *ore or le"" ri$or '% the co,rt"+ #ccordi!$ to &hether the #$e!c% &#" or &#" !ot for # co*)e!"#tio!.( Fi!#ll%+ #ltho,$h # co!tr#ct of #$e!c% i" ter*i!#ted ipso !ure ,)o! the de#th of the )ri!ci)#l+ !o!ethele""+ Article 1882 )rovide" e:)re""l% th#t the #$e!t *,"t !i"h the ',"i!e"" #lre#d% 'e$,! ,)o! de#th of )ri!ci)#l "ho,ld del#% e!t#il #!% d#!$er. Thi" )rovi"io! e*)h#"i>e" the ch#r#cteri"tic of #$e!c% to 'e *erel% # preparator- contract< th#t it i" co!"tit,ted !ot for it" o&! "#9e+ '% )ri*#ril% to 'e the '#"i" '% &hich the #$e!t *#% e!ter i!to E,ridic#l #ct" o! 'eh#lf of the )ri!ci)#l &ith re")ect to third )#rtie". Co!"eB,e!tl%+ eve! if "trictl% ")e#9i!$ the #$e!c% rel#tio! i" ter*i!#ted ,)o! the de#th of the )ri!ci)#l+ the e"t#'li"hed ',t ,!!i"hed co!tr#ct" #!d tr#!"#ctio!" the! )e!di!$ *,"t 'e f,llled '% the #$e!t o! 'eh#lf of the decede!t+ &he! co!ti!,#tio! of re)re"e!t#tio! i" !ece""#r%. ,1- Measure of %amage for an "gent1s Non( Performance of Obligation I! *A $inance v. Court of Appeals+ 041 1CRA 1/5 31;;16+ ,!der the deed of ch#ttel *ort$#$e+ the !#!ce co*)#!% &#" co!"tit,ted #" #! #ttor!e%7i!7 f#ct for the *ort$#$or" &ith f,ll )o&er #!d #,thorit% to le+ follo&7,)+ )ro"ec,te+ co*)ro*i"e or "ettle i!",r#!ce cl#i*"< to "i$! e:ec,te #!d deliver the corre")o!di!$ )#)er"+ recei)t" #!d doc,*e!t" to the i!",r#!ce co*)#!% #" *#% 'e !ece""#r% to )rove the cl#i*+ #!d to collect fro* the l#tter the )roceed" of i!",r#!ce to the e:te!t of it" i!tere"t"+ i! the eve!t th#t the *ort$#$ed c#r ",=er" #!% lo"" or d#*#$e+ the $r#!t of )o&er co!"tit,ted the !#!ce co*)#!% #" the #$e!t of the *ort$#$or". Ahe! the *ort$#$ed *otor vehicle $,red i! #! #ccide!t th#t &o,ld h#ve #llo&ed recover% o! the i!",r#!ce cl#i* for tot#l lo""+ #!d the *ort$#$or" h#d i!"tr,cted the !#!ce co*)#!% to *#9e ",ch cl#i*+ ',t i!"te#d it o)ted to h#ve the *otor vehicle re)#ired #!d fore$o the tot#l lo"" cl#i*+ the Co,rt decreed th#t the f#il,re #!d ref,"#l of the !#!ce co*)#!% to "ee9 tot#l lo"" cl#i*" o! the vehicle *ort$#$ed #$#i!"t the i!",r#!ce co*)#!%+ co!"tit,ted !e$li$e!ce #!d !ot o,tri$ht ref,"#l to co*)l% &ith the i!"tr,ctio!" of the )ri!ci)#l"+ #!d li#'le for d#*#$e". It held th#t ,!der ?0 Article 1882 of the Civil Code+ the !#!ce co*)#!% &#" 'o,!d '% it" #cce)t#!ce to c#rr% o,t the #$e!c%+ #!d i" li#'le for d#*#$e" &hich+ thro,$h it" !o!7 )erfor*#!ce+ the )ri!ci)#l"7*ort$#$or" *#% ",=er. Co!"eB,e!tl%+ '% re#"o! of the lo"" ",=ered '% the )ri!ci)#l"+ the Co,rt held th#t the !#!ce co*)#!% co,ld !o lo!$er collect o! the ,!)#id '#l#!ce of the )ro*i""or% !ote "ec,red '% the ch#ttel *ort$#$e. I! ()* v. .anila Suret-+ 12 1CRA 556 31;6/6+ &here the holder of #! e:cl,"ive #!d irrevoc#'le )o&er of #ttor!e% to *#9e collectio!"+ f#iled to collect the ",*" d,e to the )ri!ci)#l #!d there'% #llo&ed the #llotted f,!d" to 'e e:h#,"ted '% other creditor"+ ",ch #$e!t &#" #dE,d$ed to h#ve f#iled to #ct &ith the c#re of # $ood f#ther of # f#*il% reB,ired ,!der Article 1885 #!d 'ec#*e )er"o!#ll% li#'le for the d#*#$e" &hich the )ri!ci)#l *#% ",=er thro,$h hi" !o!7)erfor*#!ce. I! *arton v. e-te Asphalt+ 26 Ihil ;?8 31;026+ &here the )rev#ili!$ "t#t,tor% r,le the! &#" Article 065 of the Code of Co**erce &hich del#red th#t !o #$e!t "h#ll ),rch#"e for hi*"elf or for #!other th#t &hich he h#" 'ee! ordered to "ell+ the Co,rt held th#t # "#le '% # 'ro9er to hi*"elf &itho,t the co!"e!t of the )ri!ci)#l &o,ld 'e void #!d i!e=ect,#l &hether the 'ro9er h#" 'ee! $,ilt% of fr#,d,le!t co!d,ct or !ot. Co!"eB,e!tl%+ ",ch 'ro9er i" !ot e!titled to receive #!% co**i""io! ,!der the co!tr#ct+ *,ch le"" #!% rei*',r"e*e!t of e:)e!"e" i!c,rred i! ),r",i!$ #!d clo"i!$ ",ch "#le". 2. OB+IGATION OF AGENT ;8O DEC+INES AGENCY H!der Article 188/+ if # )er"o! decli!e" #! #$e!c%+ (he i" 'o,!d to o'"erve the dili$e!ce of # $ood f#ther of # f#*il% i! the c,"tod% #!d )re"erv#tio! of the $ood" for&#rded to hi* '% the o&!er ,!til the l#tter "ho,ld #))oi!t #! #$e!t.( The #rticle *#!d#te" the o&!er i! ",ch c#"e to (#" "oo! #" )r#ctic#'le either #))oi!t #! #$e!t or t#9e ch#r$e of the $ood".( Ae "ho,ld co*)#re the o'li$#tio!" of # )er"o! &ho decli!e" #! #$e!c%+ fro* o!e &ho &ithdr#&" fro* #! #$e!c% he )revio,"l% #cce)ted. H!der Article 1;0;+ eve! if #! #$e!t &ithdr#&" fro* the #$e!c% for # v#lid re#"o!+ (he *,"t co!ti!,e to #ct ,!til the )ri!ci)#l h#" h#d re#"o!#'le o))ort,!it% to t#9e the !ece""#r% "te)" to *eet the "it,#tio!.( The )rovi"io!" of Article" 188/ #!d 1;0; co!"tit,te r#re i!"t#!ce" &here # d,t% of dili$e!ce i" o&ed '% # )er"o! to #!other o,t"ide of #! e:i"ti!$ co!tr#ct,#l 'o!d. 3. GENERA+ RU+E ON AGENT=S O;ER AND AUT8ORITY 6
a. A)ent M!$t A&t ;it1in t1e S&o#e o( 8i$ A!t1o"it* ?? H!der Article 1881+ the #$e!t *,"t #ct (&ithi! the "co)e of hi" #,thorit%+( &hich e""e!ti#ll% *e#!" th#t "i!ce the #$e!t #ct" i! re)re"e!t#tio! of the )ri!ci)#l+ he *,"t e!ter i!to E,ridic#l rel#tio!" o! 'eh#lf of the )ri!ci)#l #!d re)re"e!ti!$ the &ill of the )ri!ci)#l+ #!d !ot hi" 3#$e!t8"6 o&! &ill. The $e!er#l r,le e*'odie" the t&o d,ci#r% d,tie" of the #$e!t to the )ri!ci)#lD d,t% of o'edie!ce #!d the d,t% of dili$e!ce. a. D!t* o( Obe.ien&e ,1- "s +et!een the Principal and the "gent Th#t the #$e!t *,"t #ct (&ithi! the "co)e of hi" #,thorit%( *e#!" th#t th#t ever% #$e!t #"",*e" '% hi" #cce)t#!ce of the #$e!c% to 'e o'edie!t to the &ill of the )ri!ci)#l+ &hich i" 'e"t e:)re""ed ,!der Article 1885 of the Civil Code+ &hich )rovide" th#t (-i.! the e:ec,tio! of the #$e!c%+ the #$e!t "h#ll #ct i! #ccord#!ce &ith the i!"tr,ctio!" of the )ri!ci)#l.( There i" !o do,'t th#t &he! #! #$e!t co*)lie" &ith the i!"tr,ctio!" of hi" )ri!ci)#l+ he i" #cti!$ &ithi! the "co)e of hi" #,thorit%. A" held i! 0ictorias .illing Co., Inc. v. Court of Appeals+ ??? 1CRA 66? 304446+ o!e f#ctor th#t *o"t cle#rl% di"ti!$,i"he" #! #$e!c% fro* other le$#l co!ce)t"+ i!cl,di!$ "#le+ i" control; o!e )er"o!77the #$e!t77#$ree" to #ct ,!der the co!trol or directio! of #!other77the )ri!ci)#l. It i" cle#r therefore+ th#t &he! #! #$e!t #ct" i! #ccord#!ce &ith the )ri!ci)#lKLQ" i!"tr,ctio!+ he i" #cti!$ &ithi! the "co)e of hi" #,thorit%.
No!ethele""+ #$e!c% rel#tio! i" e!tered i!to *#i!l% for ',"i!e"" or co**erci#l ve!t,re"+ #!d it i" !ot e:)ected th#t the )ri!ci)#l c#! cover ever co!ti!$e!cie" &ith ")ecic i!"tr,ctio!"+ or th#t ever% #ct of the #$e!t *,"t 'e '#"ed o! det#iled i!"tr,ctio!" of the )ri!ci)#l. I!deed+ the #$e!t i" e:)ected to ,"e hi" ',"i!e"" di"cretio! #" th#t of the )ri!ci)#l &o,ld or co,ld if )er"o!#ll% )re"e!t. Therefore+ &e "ho,ld co!"ider the )ri!ci)#l8" i!"tr,ctio!" #" the li*it of #! #$e!t8" )o&er< #!d th#t i! the #'"e!ce of li*iti!$ i!"tr,ctio!"+ it i" e:)ected th#t the #$e!t ,"e" hi" 'e"t E,d$*e!t to "t#% &ithi! the "co)e of the )ri!ci)#l8" #,thorit% $r#!ted to hi*. Thi" i" )#rt of the d,t% of dili$e!ce of ever% #$e!t &ho #cce)t" #! #$e!c% de"i$!#tio!. Thi" )ri!ci)le i" 'e"t e:)re""ed ,!der Article 1881+ &hich )rovide" th#t the #$e!t (#!% do ",ch #ct" #" *#% 'e co!d,cive to the #cco*)li"h*e!t of the ),r)o"e of the #$e!c%.( Fi9e&i"e+ Article 1880 )rovide" th#t (-t.he li*it" of the #$e!t8" #,thorit% "h#ll !ot 'e co!"idered e:ceed "ho,ld it h#ve 'ee! )erfor*ed i! # *#!!er *ore #dv#!t#$eo," to the )ri!ci)#l th#! th#t ")ecied '% hi*.( I! other &ord"+ #! #$e!t !ot o!l% h#" e:)re"" )o&er"+ ',t #l"o i*)lied )o&er" e*#!#ti!$ fro* the e:)re"" )o&er" $r#!ted to hi*< #" &ell #" i!cide!t#l )o&er" !ece""#r% i! ?2 order to #chieve the ),r)o"e for &hich the #$e!c% &#" co!"tit,ted. I!Tan Tiong v. SEC+ 6; Ihil 20/ 31;246+ it &#" held th#t the #$e!t i" !ot dee*ed to h#ve e:ceeded hi" #,thorit% "ho,ld he )erfor* the #$e!c% i! # *#!#$er *ore #dv#!t#$eo," to the )ri!ci)#l th#! th#t i!dic#ted '% the )ri!ci)#l. Th,"+ &he! the #$e!t "ell" the c#r of the )ri!ci)#l for *ore th#! the #*o,!t i!dic#ted '% the )ri!ci)#l+ the! he h#" !ot e:ceeded hi" #,thorit% 'ec#,"e # hi$her )rice i" *ore #dv#!t#$eo," to the )ri!ci)#l. The )ri!ci)le &#" reiter#ted i! the "%ll#'," of the ),'li"hed deci"io! i!Olaguer v. (urugganan, "r.+ /1/ 1CRA 264 304456+ it &#" held th#t ,!der Article 1880 of the Civil Code the li*it" of #! #$e!t8" #,thorit% "h#ll !ot 'e co!"idered e:ceeded "ho,ld it h#ve 'ee! )erfor*ed i! # *#!!er #dv#!t#$eo," to the )ri!ci)#l th#! th#t ")ecied '% hi*. I! th#t deci"io!+ the *#!!er '% &hich the #ttor!e%7i!7f#ct ),r",ed the "#le of the "h#re" of the )ri!ci)#l+ #!d the )#%*e!t of the co!"ider#tio! "o #" !ot to reve#l th#t he o&!ed ",ch "h#re" #" reB,e"ted '% the )ri!ci)#l+ &ere #ll dee*ed to h#ve 'ee! e:ec,ted '% the #$e!t &ithi! the "co)e of hi" #,thorit%. ,2- "s -o -hird Parties The ter*" of Article 1885 &hich e=ectivel% "t#te" th#t &he! #! #$e!t #ct" co!tr#r% to the i!"tr,ctio!" of hi" )ri!ci)#l+ he i" dee*ed to h#ve #cted &itho,t or i! e:ce"" of #,thorit%+ i" # r,le th#t $over!" the rel#tio!"hi) of the )ri!ci)#l #!d #$e!t< it i" !ot # r,le th#t e""e!ti#ll% #ddre""e" the i!tere"t" of third )#rtie" &ith &ho* the #$e!t e!ter" i!to E,ridic#l rel#tio!" o! 'eh#lf of the )ri!ci)#l. Th,"+ ,!der Article 1;11+ eve! &he! the #$e!t h#" e:ceeded hi" #,thorit%+ the )ri!ci)#l re*#i!" "olid#ril% li#'le &ith the #$e!t if the )ri!ci)#l #llo&ed the #$e!t to #ct #" tho,$h he h#d f,ll )o&er". H!der Article 1;44+ i!"of#r #" third )er"o!" #re co!cer!ed+ (#! #ct i" dee*ed to h#ve 'ee! )erfor*ed &ithi! the "co)e of the #$e!t8" #,thorit%+ if ",ch #ct i" &ithi! the ter*" of the )o&er of #ttor!e%+ #" &ritte!+ eve! if the #$e!t h#" i! f#ct e:ceeded the li*it" of hi" #,thorit% #ccordi!$ to #! ,!der"t#!di!$ 'et&ee! the )ri!ci)#l #!d #$e!t.( I! other &ord"+ #" to third )#rtie" #cti!$ i! $ood f#ith+ the &ritten instructions of the )ri!ci)#l #re the 'i!di!$ )o&er" of the #$e!t+ #!d c#!!ot 'e overco*e '% !o!7&ritte! i!"tr,ctio!" of the )ri!ci)#l !ot *#de 9!o&! to the*. I! *an/ of (.I. v. #e Coster+ 25 Ihil. /;2 31;0/6+ the Co,rt held th#t the )o&er" #!d d,tie" of #! #$e!t #re co!!ed #!d li*ited to tho"e &hich #re ")ecied #!d de!ed i! hi" &ritte! )o&er of #ttor!e%+ &hich li*it#tio! i" # !otice to+ #!d i" 'i!di!$ ,)o!+ the )er"o! de#li!$ &ith ",ch #$e!t. I! e=ect+ &he! the )o&er of #ttor!e% of the #$e!t h#" 'ee! red,ced i! &riti!$ '% the )ri!ci)#l+ it co!"tit,te+ eve! #" to third )#rtie" de#li!$ &ith the #$e!t+ the hi$he"t for* of the e:te!t #!d li*it#tio! of the )o&er" of the #$e!t+ ?/ #!d third )#rtie" "ho,ld co!tr#ct o! the '#"i" of ",ch &ritte! i!"tr,*e!t. Th,"+ Article 1;40 )rovide" th#t # third )er"o! &ith &ho* the #$e!t &i"he" to co!tr#ct o! 'eh#lf of the )ri!ci)#l *#% reB,ire the )re"e!t#tio! of the )o&er of #ttor!e%+ or the i!"tr,ctio!" #" re$#rd" the #$e!c%. I! #dditio!+ )riv#te or "ecret order" #!d i!"tr,ctio!" of the )ri!ci)#l do !ot )reE,dice third )er"o!" &ho h#ve relied ,)o! the )o&er of #ttor!e% or i!"tr,ctio! "ho&! the*. O,t"ide of the &ritte! )o&er of #ttor!e% of #! #$e!t+ third )#rtie" &ho de#l &ith ",ch #$e!t #re !ot ",))o"ed to )re",*e th#t the #$e!t i" f,ll% #,thori>ed. The r,le h#" #l&#%" 'ee! th#t ever% )er"o! de#li!$ &ith #! #"",*ed #$e!t i" ),t ,)o! #! i!B,ir% #!d *,"t di"cover ,)o! hi" )eril+ if he &o,ld hold the )ri!ci)#l li#'le+ !ot o!l% the f#ct of the #$e!c% ',t the !#t,re #!d e:te!t of the #,thorit% of the #$e!t. Strong v. +utierrez Repide+ 6 Ihil. 684 31;646< #een v. (aci7c Co''ercial Co.+ 20 Ihil. 5?8 31;006< 0elso v. a 5r4ana, /8 Ihil. 681 31;??6<To-ota Sha&, Inc. v. Court of Appeals+ 022 1CRA ?04 31;;/6. The f#ct th#t o!e i" de#li!$ &ith #! #$e!t+ &hether the #$e!c% 'e $e!er#l or ")eci#l+ "ho,ld 'e # d#!$er "i$!#l. The *ere re)re"e!t#tio! or decl#r#tio! of o!e th#t he i" #,thori>ed to #ct o! 'eh#lf of #!other c#!!ot of it"elf "erve #" )roof of hi" #,thorit% to #ct #" #$e!t or of the e:te!t of hi" #,thorit% #" #$e!t. 8u Eng Cho v. (an A'erican <orld Air&a-s, Inc.+ ?08 1CRA 515 304446. The #,thorit% or e:te!t of #,thorit% of #! #$e!t c#!!ot 'e e"t#'li"hed '% hi" o&! re)re"e!t#tio!" o,t of co,rt ',t ,)o! the '#"i" of the *#!ife"t#tio!" of the )ri!ci)#l hi*"elf. I! c#"e the f#ct of #$e!c% or the e:te!t of the #,thorit% of the #$e!t i" co!troverted+ the 4urden of proof is upon the third person to esta4lish it. *A $inance Corp. v. Court of Appeals+ 011 1CRA 110 31;;06< 0elasco v. a 5r4ana, /8 Ihil. 681 31;??6< *acaltos Coal .ines v. Court of Appeals+ 02/ 1CRA 264 31;;/6< Sa7c Alcan & Cie v. I'perial 0egeta4le Oild co., Inc., ?// 1CRA //; 304416. If # third )er"o! doe" !ot *#9e #! i!B,ir% i!to the #,thorit% of #! #"",*ed #$e!t+ he i" ch#r$e#'le &ith 9!o&led$e of the #$e!t8" #,thorit%+ #!d hi" i$!or#!ce of th#t #,thorit% &ill !ot 'e #! e:c,"e. *acaltos Coal .ines v. Court of Appeals+ 02/ 1CRA 264 31;;/6. No!ethele""+ i! ")ite of the f#ct th#t the ),r)orted #$e!t #ct" &itho,t #,thorit% or i! e:ce"" of #,thorit%+ ,!der Article 1;41+ # third )er"o! c#!!ot "et7,) the f#ct th#t the #$e!t h#" e:ceeded hi" )o&er"+ if the )ri!ci)#l h#" r#tied+ or h#" "i$!ied hi" &illi!$!e"" to r#tif% the #$e!tKLQ" #ct". b. D!t* o( Di/i)en&e ,1- "s +et!een the Principal and the "gent ?6 H!der Article 1885+ it i" the o'li$#tio! of ever% #$e!t &ho #cce)t" the #$e!c% to #ct i! #ccord#!ce &ith the i!"tr,ctio!" of the )ri!ci)#l+ #!d i! def#,lt thereof+ to do #ll th#t # $ood f#ther of # f#*il% &o,ld do #" reB,ired '% the !#t,re of the ',"i!e"". I! the "#*e *#!!er+ Article 1;4; )rovide" e:)re""l% th#t the #$e!t i" re")o!"i'le !ot o!l% for fr#,d+ ',t #l"o for !e$li$e!ce.
I! e""e!ce+ the d,t% of dili$e!ce reB,ire" of the #$e!t to #ct o! 'eh#lf of the )ri!ci)#l e:erci"i!$ the d,e dili$e!ce of # $ood f#ther of # f#*il%< #!d he i" i! 're#ch of ",ch d,ci#r% d,t% &he! he #ct" i! fr#,d or i! !e$li$e!ce+ eve! &he! he ),r",e" the ',"i!e"" of the )ri!ci)#l. Article" 1885 #!d 1;4; of the Civil Code co!r* the tr,i"* th#t i! the ),r",it of the #$e!c%+ it i" e:)ected th#t the #$e!t &o,ld h#ve to #ct '#"ed o! hi" o&! #""e""*e!t of &h#t i" !ece""#r% ,!der the "it,#tio! &he! it i" !ot covered '% #! e:)re"" i!"tr,ctio! fro* the )ri!ci)#l. The #$e!t i" ",))o"ed to e:erci"e the ',"i!e"" E,d$*e!t e:)ected fro* the )ri!ci)#l &he! e!teri!$ i!to E,ridic#l rel#tio!" &ith third )#rtie" or ),r",i!$ the ',"i!e"" ,!der hi" *#!#$e*e!t. A" # *#tter of $,ideli!e of &h#t i" &ithi! hi" )o&er+ Article 1888 )rovide" th#t the #$e!t ("h#ll !ot c#rr% o,t #! #$e!c% if it" e:ec,tio! &o,ld *#!ife"tl% re",lt i! lo"" or d#*#$e to the )ri!ci)#l.( Notice th#t the #rticle cover" o!l% #ct" th#t &o,ld (*#!ife"tl%( le#d to lo""e"< i! other &ord"+ the #$e!t c#!!ot 'e # $,#r#!tor th#t the )ri!ci)#l &o,ld ",=er !o lo"" or d#*#$e i! the ),r",it of the #$e!c%< h,*#! !#t,re #" it i"+ the ","t#i!i!$ of lo""e" d,e to h,*#! error i" )#rt of the ri"9 of ever% o&!er or )ri!ci)#l+ eve! &he! he hi*"elf c#rrie" o! the ',"i!e"". The o'li$#tio! of the #$e!t i" to #void lo""e" &hich #re cle#rl% #void#'le fro* the e:erci"e of d,e dili$e!ce of # $ood f#ther of # f#*il%. Ahe! #! #$e!t viol#te" hi" d,t% of dili$e!ce+ he 'eco*e" )er"o!#ll% li#'le to the )ri!ci)#l for the d#*#$e" c#,"ed to the )ri!ci)#l '% re#"o! of hi" fr#,d or !e$li$e!ce. It "ho,ld 'e e*)h#"i>ed ho&ever+ th#t &he! the #$e!t #ct" i! #ccord#!ce &ith the i!"tr,ctio!" of the )ri!ci)#l+ the #$e!t c#!!ot 'e dee*ed to h#ve #cted i! fr#,d #$#i!"t the )ri!ci)#l or to h#ve #cted !e$li$e!tl%+ eve! &he! d#*#$e &#" c#,"ed to the )ri!ci)#l. Th," Article 18;; )rovide" th#t (If # d,l% #,thori>ed #$e!t #ct" i! #ccord#!ce &ith the order" of the )ri!ci)#l+ the -)ri!ci)#l. c#!!ot "et ,) the i$!or#!ce of the #$e!t #" to circ,*"t#!ce" &hereof he hi*"elf &#"+ or o,$ht to h#ve 'ee!+ #&#re.( ,2- "s to -hird Parties 1i!ce #! #$e!t #ct" i! re)re"e!t#tio! of hi" )ri!ci)#l+ &he! he #ct" &ithi! the "co)e of hi" #,thorit%+ ',t doe" "o &ith fr#,d or !e$li$e!ce th#t c#,"e" d#*#$e to third )er"o!"+ the )ri!ci)#l i" li#'le to ",ch i!E,red )#rtie" to the d#*#$e" ?5 c#,"ed '% the #$e!t+ #" tho,$h he hi*"elf h#d directl% c#,"ed the d#*#$e". Ahe! #! #$e!t #ct" &ith fr#,d or !e$li$e!ce ',t ),r",#!t to the i!"tr,ctio!" of the )ri!ci)#l+ &o,ld the #$e!t the! 'e )er"o!#ll% li#'le to the third )#rtie" i!E,red there'%U I! other &ord"+ doe" the #$e!t #l"o 'eco*e )er"o!#ll% li#'le to third )#rtie" i!E,red '% hi" fr#,d,le!t or !e$li$e!t #ct"U The #!"&er &o,ld 'e i! the #@r*#tive. H!der Article 1;4;+ (-t.he #$e!t i" -)er"o!#ll%. re")o!"i'le !ot o!l% for fr#,d+ ',t #l"o for !e$li$e!ce+ &hich "h#ll 'e E,d$ed &ith *ore or le"" ri$or '% the co,rt"+ #ccordi!$ to &hether the #$e!c% &#" or &#" !ot for # co*)e!"#tio!.( I! other &ord"+ #ct" of fr#,d or !e$li$e!ce o! the )#rt of the #$e!t+ eve! &he! #cti!$ for #!d i! 'eh#lf of the )ri!ci)#l+ #re '% the*"elve" c#,"e" of #ctio! for the i!E,red )#rt% #$#i!"t the )er"o! of the #cti!$ #$e!t. Th,"+ i! *ritish Air&a-s v. Court of Appeals+ 08/ 1CRA 2/4 31;;86+ it &#" held th#t &he! o!e #irli!e co*)#!% 3Briti"h Air&#%"6 ",'co!tr#ct" # le$ of the i!ter!#tio!#l tri) of it" )#""e!$er to #!other #irli!e co*)#!% 3IAF6+ the co!tr#ct of #ir tr#!")ort#tio! &#" e:cl,"ivel% 'et&ee! )#""e!$er #!d BA+ &ith IAF *erel% #cti!$ #" it" #$e!t o! the G#!il# to Jo!$ No!$ le$ of the Eo,r!e%. The &ell7"ettled r,le i" th#t #! #$e!t i" #l"o re")o!"i'le for #!% !e$li$e!ce i! the )erfor*#!ce of it" f,!ctio! #!d i" li#'le for d#*#$e" &hich the )ri!ci)#l *#% ",=er '% re#"o! of the #$e!t8" !e$li$e!t #ct. &. E>e&t$ on t1e A)ent o( Cont"a&t$ Ente"e. into ;it1in t1e S&o#e o( 8i$ A!t1o"it* All co!tr#ct" #!d tr#!"#ctio!" e!tered i!to '% the #$e!t o! 'eh#lf of the )ri!ci)#l &ith the "co)e of hi" #,thorit% #re 'i!di!$ o! the )ri!ci)#l+ #!d the #$e!t doe" !ot "t#!d to either 'e li#'le+ or to h#ve $#i!ed #!% ri$ht o! hi" o&! #ccord+ there,!der. Th,"+ Article 18;5 )rovide" th#t (-t.he #$e!t &ho #ct" #" ",ch i" !ot )er"o!#ll% li#'le to the )#rt% &ith &ho* he co!tr#ct+ ,!le"" he e:)re""l% 'i!d" hi*"elf or e:ceed" the li*it" of hi" #,thorit% &itho,t $ive! ",ch )#rt% ",@cie!t !otice of hi" )o&er".( I! Ang v. $ulton $ire Insurance Co.+ 0 1CRA ;2/ 31;616+ it &#" held th#t &he! the #$e!t h#" #cted &ithi! the "co)e of hi" #,thorit%+ the #ctio! o! the co!tr#ct *,"t 'e 'ro,$ht #$#i!"t the )ri!ci)#l #!d !ot #$#i!"t the #$e!t. I! *a- 0ie& Hotel v. %er & Co.+ 116 1CRA ?05 31;806+ the Co,rt held th#t the #ct" #!d decl#r#tio! of the #$e!t &ithi! the "co)e of hi" #,thorit% #!d d,ri!$ it" e:i"te!ce #re co!"idered #!d tre#ted #" tho"e of )ri!ci)#l. Ahe! #! #$e!t+ i! e:ec,ti!$ the order" #!d co**i""io!" of hi" )ri!ci)#l+ c#rrie" o,t the i!"tr,ctio!" he h#" received fro* hi" )ri!ci)#l+ #!d doe" !ot #))e#r to h#ve e:ceeded hi" #,thorit% or to h#ve #cted &ith !e$li$e!ce+ deceit+ ?8 or fr#,d+ he c#!!ot 'e held re")o!"i'le for the f#il,re of hi" )ri!ci)#l to #cco*)li"h the o'Eect of the #$e!c%. +utierrez Her'anos v. Oria Her'anos+ ?4 Ihil. 2;1 31;1/6< +. (u-at & Sons, Inc. v. Arco A'use'ent Co'pan-+ 50 Ihil. 240 31;216. A! #ctio! 'ro,$ht i! the !#*e of the #$e!t #!d !ot i! the !#*e of the )ri!ci)#l &ho i" the re#l )#rt% i! i!tere"t+ *,"t 'e di"*i""ed !ot ,)o! the *erit"+ ',t ,)o! the $ro,!d th#t it h#" !ot 'ee! )ro)erl% i!"tit,ted. Esperanza and *ullo v. Catindig+ 05 Ihil. ?;5 31;126. Re/ate. Ca$e$D Cason v$ Richards, 5 1i/ ?11 ,1@A?- ()* v. .anila Suret-+ 12 1CRA 556 31;6/6 )epo'uceno v. Heredia+ 5 Ihil /6? 31;456 (hil. *an/ of Co''erce v. Aruego+ 140 1CRA /?4 31;816 )ational $ood Authorit- v. IAC+ 182 1CRA 166 31;;46 .ariti'e Agencies & Securities, Inc. v. Court of Appeals+ 185 1CRA ?26 31;;46. .. E>e&t$ o( A&t$ Done b* A)ent ;it1o!t o" in E:&e$$ o( 8i$ A!t1o"it* The $e!er#l r,le i" "et ,!der Article 1?15 of the Civil Code th#t (No o!e *#% co!tr#ct i! the !#*e of #!other &itho,t 'ei!$ #,thori>ed '% the l#tter+ or ,!le"" he h#" '% l#& # ri$ht to re)re"e!t hi*. A co!tr#ct e!tered i!to i! the !#*e of #!other '% o!e &ho h#" !o #,thorit% or le$#l re)re"e!t#tio!+ or &ho h#" #cted 'e%o!d hi" )o&er"+ "h#ll 'e ,!e!force#'le+ ,!le"" it i" r#tied+ e:)re""l% or i*)liedl%+ '% the )er"o! o! &ho"e 'eh#lf it h#" 'ee! e:ec,ted+ 'efore it i" revo9ed '% the other )#rt%.( The r,le" ,!der Article 1?15 #re ",))orted ,!der Article 124?+ &hich i!cl,de" #*o!$ tho"e cl#""ied #! (,!e!force#'le co!tr#ct"+( (316 Tho"e e!tered i!to i! the !#*e of #!other )er"o! '% o!e &ho h#" 'ee! $ive! !o #,thorit% or le$#l re)re"e!t#tio!+ or &ho h#" #cted 'e%o!d hi" )o&er.( 1)ecic#ll%+ ,!der the F#& o! A$e!c%+ Article 18;8 )rovide" th#t (-i.f the #$e!t co!tr#ct" i! the !#*e of the )ri!ci)#l+ e:ceedi!$ the "co)e of hi" #,thorit%+ #!d the )ri!ci)#l doe" !ot r#tif% the co!tr#ct+ it "h#ll 'e void if the )#rt% &ith &ho* the #$e!t co!tr#cted i" #&#re of the li*it" of the )o&er" $r#!ted '% the )ri!ci)#l. I! thi" c#"e+ ho&ever+ the #$e!t i" li#'le if he ,!dertoo9 to "ec,re the )ri!ci)#l8" r#tic#tio!.( the follo&i!$ co!"eB,e!ce" "h#ll Co&D 3#6 it "h#ll 'e void if the )#rt% &ith &ho* the #$e!t ?; co!tr#cted i" #&#re of the li*it" of the )o&er" $r#!ted '% the )ri!ci)#l< 3'6 I! ",ch c#"e+ the #$e!t &o,ld 'e li#'le )er"o!#ll% to ",ch third )#rt%+ if he ,!dertoo9 to "ec,re the )ri!ci)#l8" r#tic#tio!< Thi" )ri!ci)le i" reiter#ted i! the "eco!d )#r#$r#)h of Article 1;14 &hich )rovide" th#t (A" for #!% o'li$#tio! &herei! the #$e!t h#" e:ceeded hi" )o&er+ the )ri!ci)#l i" !ot 'o,!d e:ce)t &he! he r#tie" it e:)re""l% or t#citl%.( O! the other h#!d+ if the )#rt% &hich &ho* the #$e!t co!tr#ct i" ,!#&#re of the li*it" of the )o&er" $r#!ted '% the )ri!ci)#l+ the co!tr#ct i" ,!e!force#'le ,!der Article 124?316. H!der Article 1;44+ the &ritte! )o&er of #ttor!e% $ive! '% the )ri!ci)#l $over!" the co!tr#ct" e!tered i!to &ith third )#rtie"+ irre$#rdle"" of #!% )riv#te li*it#tio! of )o&er" #$reed ,)o! 'et&ee! the )ri!ci)#l #!d the #$e!t. The li#'ilit% of #! #$e!t &ho e:ceed" the "co)e of hi" #,thorit% de)e!d" ,)o! &hether the third )er"o! &#" #&#re of the li*it" of the #$e!t8" )o&er. The #$e!t i" !ot 'o,!d !or li#'le for d#*#$e" i! c#"e he $#ve !otice of hi" )o&er to the )er"o! &ith &ho* he h#" co!tr#cted+ !or i! c#"e ",ch )er"o! i" #&#re of the li*it" of the #$e!t8" )o&er". The re",lti!$ co!tr#ct &o,ld 'e void eve! #" 'et&ee! the #$e!t #!d the third )er"o!+ #!d co!"eB,e!tl% !ot le$#ll% 'i!di!$ #" 'et&ee! the*. Jo&ever+ if the #$e!t )ro*i"ed or ,!dertoo9 to "ec,re the )ri!ci)#l8" r#tic#tio! #!d f#iled+ he i" )er"o!#ll% li#'le. If the r#tic#tio! i" o't#i!ed+ the! the )ri!ci)#l 'eco*e" li#'le. Cervantes v. Court of Appeals+ ?42 1CRA 0/ 31;;;6< Sa7c Alcan v. I'perial 0egeta4le+ ?// 1CRA //; 304416< #*( v. Court of Appeals+ 0?1 1CRA ?54 31;;26. Re/ate. Ca$e$6 +orja v$ Sulyap, 3@@ SCRA ?A1 ,2AA3-. )ational (o&er v. )A.ARCO+ 115 1CRA 58; 31;806 =a-co v. Serra+ 2; Ihil ;8/ 31;0/6 ()* v. <elsh $airchild+ 22 Ihil 584 31;0?6 e. Con$e7!en&e$ ;1en A)ent A&t$ in 8i$ O9n Na0e H!der Article 188?+ if #! #$e!t #ct" i! hi" o&! !#*e+ the )ri!ci)#l h#" !o ri$ht of #ctio! #$#i!"t the )er"o!" &ith &ho* the #$e!t h#" co!tr#cted< #!d !either h#ve ",ch )er"o!" # ri$ht or c#,"e of #ctio! #$#i!"t the )ri!ci)#l. It # &ell7e"t#'li"hed doctri!e th#t &he! #! #$e!t+ do #cti!$ &ithi! the "co)e of hi" #,thorit%+ e!ter" i!to the covered co!tr#ct i! hi" o&! !#*e+ the! the co!tr#ct i" 'i!di!$ o!l% #$#i!"t the 24 #$e!t+ #!d the )ri!ci)#l i" !ot 'o,!d+ !or doe" he h#ve le$#l "t#!di!$ to e!force it< thi" i" 'ec#,"e the co!tr#ct i" dee*ed to h#ve 'ee! e!tered 'et&ee! the third )#rt% #!d the #$e!t #" hi" o&! )ri!ci)#l. -1.
I! +ozun v. .ercado /11 1CRA ?4/ 304466+ it &#" held th#t it i" # $e!er#l r,le i! the l#& #$e!c% th#t+ i! order to 'i!d the )ri!ci)#l '% # *ort$#$e o! re#l )ro)ert% e:ec,ted '% #! #$e!t+ it *,"t ,)o! it" f#ce ),r)ort to 'e *#de+ "i$!ed #!d "e#led i! the !#*e of the )ri!ci)#l+ other&i"e+ it &ill 'i!d the #$e!t o!l%.
I! .ari'perio Co'pania )aviera, S.A. v. Court of Appeals+ 1/6 1CRA ?68 31;856+ the Co,rt held th#t ,!der Article 188? of the Civil Code+ if #! #$e!t #ct" i! hi" o&! !#*e+ the )ri!ci)#l h#" !o ri$ht of #ctio! #$#i!"t the )er"o!" &ith &ho* the #$e!t h#" co!tr#cted< !either h#ve ",ch )er"o!" #$#i!"t the )ri!ci)#l. I! ",ch c#"e the #$e!t i" the o!e directl% 'o,!d i! f#vor of the )er"o! &ith &ho* he h#" co!tr#cted+ #" if the tr#!"#ctio! &ere hi" o&!+ e:ce)t &he! the co!tr#ct i!volve" thi!$" 'elo!$i!$ to the )ri!ci)#l. 1i!ce the )ri!ci)#l" h#ve c#,"ed their #$e!t to e!ter i!to # ch#rter )#rt% i! hi" o&! !#*e #!d &itho,t di"clo"i!$ th#t he #ct" for #!% )ri!ci)#l+ the! ",ch )ri!ci)#l" h#ve !o "t#!di!$ to ",e ,)o! #!% i"",e or c#,"e of #ctio! #ri"i!$ fro* "#id ch#rter )#rt%. ,1- '2ception3 )hen the Property .nvolved in the Contract +elongs to the Principal The e:ce)tio!+ #" )rovided i! Article 188?+ i" &he! the )ro)ertie" of the )ri!ci)#l #re i!volved+ i! &hich c#"e the )ri!ci)#l i" 'o,!d eve! &he! the co!tr#ct &#" e!tered i!to i! the !#*e of the #$e!t. +old Star .ining Co., Inc. v. i'3"i'ena+ 0/ 1CRA /;5 31;686< #!d i" # r,le !ece""#r% for the )rotectio! of third )er"o!" #$#i!"t )o""i'le coll,"io! 'et&ee! the #$e!t #!d the )ri!ci)#l. ()* v. Agudelo + /8 Ihil. 6// 31;??6. Th,"+ the f#ct th#t *o!e% ,"ed '% the #$e!t 'elo!$ed to the )ri!ci)#l i" covered '% the e:ce)tio!. Sy(4uco v$ Sy(4uco, 4A 1i/ ?34 ,1@2A-. ,2- Remedy of the Principal .s to Recover %amages from the "gent Article 188? *#9e" it cle#r th#t the fore$oi!$ r,le" #re &itho,t )reE,dice to #ctio!" 'et&ee! )ri!ci)#l #!d #$e!t. The r,le i! thi" E,ri"dictio! i" th#t &here the *erch#!di"e i" ),rch#"ed fro* #! #$e!t &ith ,!di"clo"ed )ri!ci)#l #!d &itho,t 9!o&led$e o! the )#rt of the ),rch#"er th#t the ve!dor i" *erel% #! #$e!t+ the ),rch#"er t#9e title" to the *erch#!di"e #!d the )ri!ci)#l c#!!ot #! #ctio!" #$#i!"t hi* for the recover% of the *erch#!di"e or eve! for d#*#$e"+ ',t c#! o!l% )roceed #$#i!"t the #$e!t. "ivad v$ ilma Mercantile Co$& 4@ 1i/. B1? ,1@2?-. 21 Altho,$h #ccordi!$ to #rticle 188?+ &he! the #$e!t #ct" i! hi" o&! !#*e he i" !ot )er"o!#ll% li#'le to the )er"o! &ith &ho* he e!ter" i!to # co!tr#ct &he! thi!$" 'elo!$i!$ to the )ri!ci)#l #re the ",'Eect thereof< %et ",ch third )er"o! h#" # ri$ht of #ctio! !ot o!l% #$#i!"t the )ri!ci)#l ',t #l"o #$#i!"t the #$e!t+ &he! the ri$ht" #!d o'li$#tio!" &hich #re the ",'Eect *#tter of the liti$#tio! c#!!ot 'e le$#ll% #!d E,ridic#ll% deter*i!ed &itho,t he#ri!$ 'oth of the*. +eaumont v$ Prieto, 41 1i/. ?CA ,1@21-$ )ational $ood Authorit- v. Inter'ediate Appellate Court+ 182 1CRA 166 31;;46 -1.Herranz & +arriz v. %er & Co.+ 8 Ihil. 160 31;456< i' Tiu v. Ruiz+ 1/ Ihil ?65 31;146< S'ith *ell v. Sotelo .atti+ 22 Ihil 852 31;006< *ehn .e-er & Co. v. *anco Espanol3$ilipino+ /1 Ihil. 0/? 31;056< i' Te/ +oan v. Azores+ 54 Ihil. ?6? 31;246< Ortega v. *auang $ar'ers Cooperative .ar/eting Assn.+ 146 Ihil. 865 31;/;6. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 ?D18 AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT V. RHFE1 OF AJAT IOAER1 GAY BE VAFIDFY EOERCI1ED BY TJE AGENY a. Gene"a/ R!/e on o9e" o( A.0ini$t"ation I! the #'"e!ce of the $r#!t of ")eci#l )o&er of #ttor!e% to the #$e!t+ he i" dee*ed to h#ve 'ee! e:te!ded o!l% # $e!er#l )o&er of #ttor!e% '% the )ri!ci)#l+ #!d hi" )o&er" c#! o!l% cover #ct" of #d*i!i"tr#tio!. Th,"+ ,!der Article 1855+ ever% #$e!c% co,ched i! $e!er#l ter*" c#! o!l% 'e co!"tr,ed #" $r#!ti!$ to the #$e!t the )o&er to e:ec,te #ct" of #d*i!i"tr#tio!+ eve! if the )ri!ci)#lD 3#6 1t#te" th#t he &ithhold" !o )o&er fro* the #$e!t< 3'6 1t#te" th#t the #$e!t *#% e:ec,te #ct" he co!"ider" #))ro)ri#te< or 3c6 A,thori>e" $e!er#l #!d ,!li*ited *#!#$e*e!t Act" of #d*i!i"tr#tio! h#" the "#*e co**erci#l #!d le$#l "i$!ic#!ce #" (to #ct i! the ordi!#r% co,r"e of ',"i!e"".( For e:#*)le+ the ri$ht to ",e for the collectio! of de't o&i!$ to the )ri!ci)#l i" dee*ed not #! i!cide!t of "trict 20 o&!er"hi) &hich *,"t 'e co!ferred i! e:)re"" ter*". 5erman 6 Co$ v$ %onaldson& Sim 6 Co$, 1 1i/. ?3 ,1@A1-. A! #ttor!e%7i!7f#ct e*)o&ered to )#% the de't" of the )ri!ci)#l #!d to e*)lo% le$#l co,!"el to defe!d the )ri!ci)#lKLQ" i!tere"t+ h#" cert#i!l% the i*)lied )o&er to )#% o! 'eh#lf of the )ri!ci)#l the #ttor!e%8" fee" ch#r$ed '% the l#&%er. .unicipal Council of Iloilo v. Evangelista+ // Ihil 0;4 31;?46. A! #$e!t $r#!ted ,!der # )o&er of #ttor!e% the #,thorit% to de#l &ith )ro)ert% &hich the )ri!ci)#l *i$ht or co,ld h#ve do!e if )er"o!#ll% )re"e!t+ i" dee*ed #,thori>ed to e!$#$e the "ervice" of # l#&%er to )re"erve the o&!er"hi) #!d )o""e"" of the )ro)ertie" of the )ri!ci)#l. A! o@cer &ho h#" co!trol #!d *#!#$e*e!t of the cor)or#tio!8" ',"i!e""+ or # ")ecic )#rt thereof+ i" dee*ed to h#ve )o&er to e*)lo% ",ch #$e!t" #!d e*)lo%ee" #" #re ,",#l #!d !ece""#r% i! the co!d,ct of the cor)or#tio!8" ',"i!e""+ e:ce)t o!l% &here ",ch #,thorit% i" e:)re""l% ve"ted i! the Bo#rd of Director". 7u Chuc* v$ 8ong /i Po, 4? 1i/ ?AB ,1@24-. +overn'ent of (I v. <agner+ /2 Ihil 1?0 31;0;6. Ahether &h#t i" $r#!ted i" #! #,thorit% to *erel% #d*i!i"ter 3$e!er#l )o&er of #ttor!e%6+ or to do #! #ct of "trict o&!er"hi) 3")eci#l )o&er of #ttor!e%6+ i" !ot deter*i!ed fro* the title $ive! to the i!"tr,*e!t+ ',t !#t,re o! the !#t,re of the )o&er $ive! ,!der the o)er#tive )rovi"io!" of ",ch i!"tr,*e!t. B,t &hether &h#t i" $r#!ted to the #$e!t i" # $e!er#l )o&er of #ttor!e% or # ")eci#l )o&er of #ttor!e%+ the r,le of "trict co!"tr,ctio! "till )rev#il". Th," 77 Io&er" of #ttor!e% #re $e!er#ll% co!"tr,ed "trictl% #!d co,rt" &ill !ot i!fer or )re",*e 'ro#d )o&er" fro* deed" &hich do !ot ",@cie!tl% i!cl,de )ro)ert% or ",'Eect ,!der &hich the #$e!t i" to de#l. The #ct do!e *,"t 'e le$#ll% ide!tic#l &ith th#t #,thori>ed to 'e do!e. )oodchild ,oldiings& .nc$ v$ Ro2as 'lectric 6 Construction Co$& .nc$, 43? SCRA 235 ,2AA4-. The decl#r#tio! of the #$e!t #lo!e #re $e!er#ll% i!",@cie!t to e"t#'li"h the f#ct or e:te!t of her #,thorit%. The "ettled r,le i" th#t )er"o!" de#li!$ &ith #! #"",*ed #$e!t #re 'o,!d #t their )eril+ #!d if the% &o,ld hold the )ri!ci)#l li#'le to #"cert#i! !ot o!l% the f#ct of #$e!c% ',t #l"o the !#t,re #!d e:te!t of #,thorit%+ #!d i! c#"e either i" co!troverted+ the ',rde! of )roof i" ,)o! the* to )rove it. iton!ua v. $ernandez+ 205 1CRA 258 304426+ citing 8u Eng Cho v. (an A'erican <orld Air&a-s, Inc.+ ?08 1CRA 515 304446. Eve! &he! # ")eci#l )o&er of #ttor!e% i" $r#!ted '% the )ri!ci)#l to hi" #$e!t+ it i" "till 2? the $e!er#l r,le th#t # )o&er of #ttor!e% *,"t 'e "trictl% co!"tr,ed< the i!"tr,*e!t &ill 'e held to $r#!t o!l% tho"e )o&er" th#t #re ")ecied+ #!d the #$e!t *#% !either $o 'e%o!d !or devi#te fro* the )o&er of #ttor!e%. Olaguer v. (urugganan, "r.+ /1/ 1CRA 264 304456. ,1- orms Re9uired of Po!ers of "ttorney Altho,$h #$e!c% i" # co!"e!",#l co!tr#ct #!d *#% th," 'e co!"tit,ted '% *ere *eeti!$ of *i!d"+ it "ee*" th#t &he! the l#& reB,ire" the #$e!c% to 'e i! the for* of # ()o&er of #ttor!e%(+ it *e#!" th#t ide#ll% 3',t !ot !ece""#ril%6 it 'ust 4e in &riting. Ahe! the #$e!c% i" !ot i! &riti!$+ the! it doe" !ot !ece""#ril% *e#! th#t the co!tr#ct of #$e!c% i" void+ ',t th#t f#il,re to co*)l% &ith the for* reB,ired &o,ld h#ve "erio," le$#l co!"eB,e!ce". Th,"+ ,!der Article 1852 of the Civil Code+ #! #$e!c% to "ell # )iece of l#!d or #! i!tere"t therei! *,"t 'e i! &riti!$+ other&i"e+ the re",lti!$ co!tr#ct of "#le &o,ld 'e void. H!der Article 1858+ # ")eci#l )o&er of #ttor!e% i" !ece""#r% to co!fer )o&er i! the #$e!c% th#t &o,ld co!"tit,te #ct" of o&!er"hi)+ ide#ll% the #$e!c% co!tr#ct *,"t 'e i! &riti!$. Ahe! therefore # ")eci#l )o&er of #ttor!e%+ or the co!fer*e!t of )o&er" to the #$e!t to e:ec,te #ct" of "trict o&!er"hi) o! 'eh#lf of the )ri!ci)#l+ i" do!e or#ll%+ the #$e!c% rel#tio!"hi) *#% 'e v#lid #" 'et&ee! the )ri!ci)#l #!d #$e!t+ ',t th#t third )#rtie" &ho de#l &ith hi* *,"t reB,ire &ritte! evide!ce of hi" )o&er to e:ec,te #ct" of "trict o&!er"hi)+ other&i"e+ the% #re 'o,!d to e!ter i!to the co!tr#ct #t their o&! ri"9. I! Ho'e Insurance Co. v. 5nited States ines Co., 01 1CRA 86? 31;656+ the Co,rt held th#t Article 1858 doe" !ot "t#te th#t the ")eci#l )o&er of #ttor!e% 'e i! &riti!$< 'e th#t #" it *#%+ the "#*e *,"t 'e d,l% e"t#'li"hed '% evide!ce other th#! the "elf7"ervi!$ #""ertio! of the )#rt% cl#i*i!$ th#t ",ch #,thorit% &#" ver'#ll% $ive! hi*. I! Ho'e Insurance Co.+ i! ")ite of co,!"el8" #"",r#!ce th#t he h#d ver'#l #,thorit% to e!ter i!to co*)ro*i"e for ),r)o"e of )re7tri#l )roceedi!$"+ the R,le" of Co,rt reB,ire for #ttor!e%" to co*)ro*i"e the liti$#tio! of their clie!t" # (")eci#l #,thorit%( 3the! 1ectio! 0?+ R,le 1?8+ R,le" of Co,rt6. A!d &hile the "#*e doe" !ot "t#te th#t the ")eci#l #,thorit% 'e i! &riti!$+ the co,rt h#" ever% re#"o! to e:)ect th#t+ if !ot i! &riti!$+ the "#*e 'e d,l% e"t#'li"hed '% evide!ce other th#! the "elf7"ervi!$ #""ertio! of co,!"el hi*"elf th#t ",ch #,thorit% &#" ver'#ll% $ive! hi*. . . For #,thorit% to co*)ro*i"e c#!!ot li$htl% 'e )re",*ed. A!d if+ &ith $ood re#"o!+ the E,d$e i" !ot "#ti"ed th#t "#id #,thorit% e:i"t"+ #" i! thi" c#"e+ di"*i""#l of the ",it for !o!7#))e#r#!ce of )l#i!ti= i! )re7tri#l i" "#!ctio!ed '% the R,le". Altho,$h+ there i" !o reB,ire*e!t th#t the )o&er of #ttor!e% to 'e v#lid #!d 'i!di!$ *,"t 'e 22 !ot#ri>ed or i! # ),'lic i!"tr,*e!t. *arretto v. Tuason+ /; Ihil. 82/ 31;?26. Jo&ever+ # !ot#ri>ed )o&er of #ttor!e% c#rrie" the evide!ti#r% &ei$ht co!ferred ,)o! it &ith re")ect to it" d,e e:ec,tio!. :eloso v$ Court of "ppeals, 2?A SCRA 5@3 ,1@@?-. ,2- Construction Rules on Po!ers of "ttorney Th#t # )o&er of #ttor!e% 'e i! &riti!$ "ee*" to 'e *ore critic#l to the co!"tit,tio! of # ")eci#l )o&er of #ttor!e%+ th#! to # $e!er#l )o&er of #ttor!e%. I! 'oth t%)e" of #$e!cie"+ 'ec#,"e of the #'"e!ce of # &ritte! evide!ce+ the ',rde! of )roof to "ho& th#t there i" i!deed # co!tr#ct of #$e!c% i" o! the )#rt of the )er"o! &ho ),r)ort" to #ct for #!d i! 'eh#lf of # )ri!ci)#l+ #!d eve! the! third )#rtie" #re directed to e!",re the !#t,re #!d e:te!t of the #$e!t8" )o&er. B,t if &h#t &#" co!"tit,ted &#" # $e!er#l )o&er of #ttor!e%+ it cover" *erel% #ct" of #d*i!i"tr#tio!+ #!d therefore third )#rtie" &o,ld 'e le"" &#r% th#t the co!tr#ct or tr#!"#ctio! the% e!tered i!to i" !ot &ithi! the )o&er" of the #$e!t. O! the other h#!d+ &he! &h#t &#" co!"tit,ted &#" #! or#l ")eci#l )o&er of #ttor!e%+ the! l#c9i!$ the &ritte! evide!ce of &h#t )#rtic,l#r )o&er of o&!er"hi) h#" 'ee! $r#!ted to the #$e!t+ the third )#rt% *#% o!l% re#"o!#'l% )re",*e th#t the #$e!t i" $r#!ted o!l% )o&er" of #d*i!i"tr#tio!. Therefore+ o,t"ide of Article 1852 &hich re!der" the "#le of # )iece of l#!d void if the )o&er of #ttor!e% i" !ot i! &riti!$+ ever% co!tr#ct e!tered i!to '% the #$e!t o! 'eh#lf of the )ri!ci)#l coveri!$ #ct" of o&!er"hi) *#de ),r",#!t to # ver'#l ")eci#l )o&er of #ttor!e% &o,ld !ot 'e void+ ',t r#ther ,!e!force#'le+ for the )ri!ci)#l h#" ever% #,thorit% to ),r",e the re",lti!$ co!tr#ct+ #!d the third7)#rt% &o,ld 'e e"to))ed fro* ref,"i!$ to co*)l% &ith # co!tr#ct he &illi!$l% e!tered i!to #'"e!t the &ritte! #,thorit% of the #$e!t. b. Ca$e$ ;1e"e S#e&ia/ o9e"$ o( Atto"ne* A"e Ne&e$$a"* Article 1858 e!,*er#te" fo,rtee! i!"t#!ce" &hich #re de"cri'ed #" (#ct" of "trict do*i!io!+( #!d &hich c#!!ot 'e dee*ed to 'e &ithi! the )o&er of the #$e!t ,!le"" e:)re""l% $r#!ted 3i.e.+ e:ce)t ,!der # ")eci#l )o&er of #ttor!e%6+ #!d the ftee!th c#"e e!,*er#ted #ct,#ll% cover" the $e!er#l r,leD A dul- appointed agent has no po&er to e,ercise on 4ehalf of the principal an- act of strict do'inion unless it is under a special po&er of attorne-. <hat 'a/es an agenc- a special po&er of attorne-> It i" !ot the !#*e or title $ive! i! the deed i"",ed '% the )ri!ci)#l th#t deter*i!e" &hether the #$e!t c#! e:erci"e #ct" of "trict do*i!io! for #!d i! 'eh#lf of the )ri!ci)#l. 2/ ,1- -o Ma*e Payments as "re Not Usually Considered as "cts of "dministration I#%*e!t" *#de i! the ordi!#r% co,r"e of ',"i!e"" co!"tit,te *erel% #ct" of #d*i!i"tr#tio!+ "i!ce the% the! $o i!to *ere #ct" of *#!#$e*e!t. H!der Article 1855+ #! #$e!c% co,ched i! $e!er#l ter*" co*)ri"e" #ct" of #d*i!i"tr#tio! &hich &o,ld i!cl,de ($e!er#l #!d ,!li*ited *#!#$e*e!t.( All other for*" of )#%*e!t for #!d i! 'eh#lf of the )ri!ci)#l &o,ld co!"tit,te #ct" of "trict do*i!io!+ &hich #re !ot dee*ed &ithi! the )o&er of eve! # d,l% #))oi!ted #$e!t+ ,!le"" $r#!ted ")eci#ll% or ,!der # ")eci#l )o&er of #ttor!e%. I! #o'inion Insurance v. Court of Appeals+ ?56 1CRA ?0; 304406+ #ltho,$h # (1)eci#l Io&er of Attor!e%( &#" i"",ed '% the i!",r#!ce co*)#!% to it" #$e!c% *#!#$er+ it" &ordi!$" "ho&ed th#t it "o,$ht o!l% to e"t#'li"h #! #$e!c% th#t co*)ri"e" #ll the ',"i!e"" of the )ri!ci)#l &ith the de"i$!#ted loc#lit%+ ',t co,ched i! $e!er#l ter*"+ #!d co!"eB,e!tl% &#" li*ited o!l% to #ct" of #d*i!i"tr#tio!. The Co,rt held th#t # $e!er#l )o&er )er*it" the #$e!t to do #ll #ct" for &hich the l#& doe" !ot reB,ire # ")eci#l )o&er. Th,"+ the #ct" e!,*er#ted i! or "i*il#r to tho"e e!,*er#ted i! the (1)eci#l Io&er of Attor!e%( 3i.e.+ re#ll% # $e!er#l )o&er of #ttor!e%6 did !ot reB,ire # ")eci#l )o&er of #ttor!e%+ #!d co,ld o!l% cover #ct" of #d*i!i"tr#tio!. I! #o'inion Insurance+ it &#" held th#t the )#%*e!t of cl#i*" '% the #re# *#!#$er of #! i!",r#!ce co*)#!% did !ot co!"tit,te #! #ct of #d*i!i"tr#tio!+ #!d th#t "i!ce the "ettle*e!t of cl#i*" &#" !ot i!cl,ded #*o!$ the #ct" e!,*er#ted i! the 1)eci#l Io&er of Attor!e% i"",ed '% the i!",r#!ce co*)#!%+ !or i" of # ch#r#cter "i*il#r to the #ct" e!,*er#ted therei!+ the! # ")eci#l )o&er of #ttor!e% &#" reB,ired 'efore ",ch #re# *#!#$er co,ld "ettle the i!",r#!ce cl#i*" of the i!",red. Co!"eB,e!tl%+ the #*o,!t" )#id '% the #re# *#!#$er to "ettle ",ch cl#i*" &ere !ot #llo&ed to 'e rei*',r"ed fro* the )ri!ci)#l i!",r#!ce co*)#!%. ,2- -o ';ect Novation )hich Put an 'nd to Obligations "lready in '2istence at the -ime the "gency )as Constituted The )o&er of #! #$e!t to !ov#te o'li$#tio!" (#lre#d% i! e:i"te!ce #t the ti*e the #$e!c% &#" co!"tit,ted+( &hich *,"t 'e covered '% # ")eci#l )o&er of #ttor!e%+ &o,ld i*)l% th#t if the o'li$#tio! &#" cre#ted o!l% d,ri!$ the #$e!c% rel#tio!"hi)+ the )o&er to cre#te ",ch o'li$#tio! $r#!ted to the #$e!t 'ri!$" &ith it the i*)lied )o&er to !ov#te it. <hat happens if the agent is clearl- e'po&ered under a special po&er of attorne- to incur an o4ligation in 4ehalf of the principal, and 26 in the process of doing so, the agent novates an pre3e,isting o4ligation> ,3- -o Compromise& -o Submit <uestions to "rbitration& -o Renounce the Right to "ppeal from a 4udgment& -o )aive Objections to the :enue of an "ction& or -o "bandon a Prescription "lready "c9uired H!der Article 1884+ # ")eci#l )o&er to co*)ro*i"e doe" !ot #,thori>e ",'*i""io! to #r'itr#tio!. It *#% #l"o 'e ded,ced th#t # ")eci#l )o&er to ",'*it to #r'itr#tio! c#!!ot 'e co!"tr,ed to $r#!t to the #$e!t the )o&er to co*)ro*i"e. H!der Article 0408+ co*)ro*i"e i" # co!tr#ct &here'% the )#rtie"+ '% *#9i!$ reci)roc#l co!ce""io!"+ #void # liti$#tio! or ),t #! e!d to o!e #lre#d% co**e!ced. 1ectio! ?3d6 of the Alter!#tive Di"),te Re"ol,tio! Act of 0442 3R.A. No. ;08/6+ (#r'itr#tio!( i" de!ed #" (# vol,!t#r% di"),te re"ol,tio! )roce"" i! &hich o!e or *ore #r'itr#tor"+ #))oi!ted i! #ccord#!ce &ith the #$ree*e!t of the )#rtie"+ or r,le" )ro*,l$#ted ),r",#!t to thi" Act+ re"olve # di"),te '% re!deri!$ #! #&#rd.( H!der Article 1884+ the )o&er to co*)ro*i"e e:cl,de" the )o&er to ",'*it to #r'itr#tio!. It &o,ld #l"o 'e re#"o!#'le to co!cl,de th#t the )o&er to ",'*it to #r'itr#tio! doe" !ot c#rr% &ith it the )o&er to co*)ro*i"e. <ith such special e,clusion rule under Article ?@@A as to the po&ers to co'pro'ise and ar4itrate, &ould that 'ean all other po&ers covered under the paragraph nu'4ered B of Article ?@C@ are not 'utuall- e,clusive> I! order &ord"+ the $r#!t of the ")eci#l )o&er to co*)ro*i"e &o,ld *e#! th#t the i*)lied )o&er of the #$e!t to re!o,!ce the ri$ht to #))e#l fro* # E,d$*e!t of # lo&er co,rt+ if th#t 'e e""e!ti#l i! #rrivi!$ #t # co*)ro*i"e re"ol,tio! 'efore the #))ell#te co,rt. 1#*e thi!$ co,ld 'e "#id of the ")eci#l )o&er to &#ive o'Eectio!" to the ve!,e of #! #ctio!+ or to &#ive # )re"cri)tio! #lre#d% #cB,ired+ vi"7W 7vi" the ")eci#l )o&er to co*)ro*i"e. Ahe! the #ttor!e%7i!7f#ct h#" 'ee! #,thori>ed i! &riti!$ to i!"tit,te #!% #ctio! i! co,rt to eEect #ll )er"o! fo,!d i! # ")ecied )#rcel of l#!d (#!d for thi" ),r)o"e+ to #))e#r #t the )re7 tri#l #!d e!ter i!to #!% "ti),l#tio! of f#ct" #!dRor co*)ro*i"e #$ree*e!t ',t o!l% i!"of#r #" thi" &#" )rotective of the ri$ht" #!d i!tere"t" of the )ri!ci)#l i! the )ro)ert%+( the "#*e doe" !ot co!"tit,te #,thorit% to e!ter i!to # co*)ro*i"e #$ree*e!t th#t )rovide" for the "#le of the )ro)ert% to the defe!d#!t i! the c#"e th," led. The E,d$*e!t '#"ed o! co*)ro*i"e e!tered i!to 25 '% the #ttor!e% &ho h#" !ot "ho&! ")ecic #,thorit% to do "o &#" decl#red void. Cos'ic u'4er v. Court of Appeals+ 06/ 1CRA 168 31;;66. No!ethele""+ i! %ungo v$ /opena, ? SCRA 1AAC ,1@?2-+ the co,rt ch#r#cteri>ed # co*)ro*i"e e!tered i!to '% the l#&%er &itho,t the ")eci#l )o&er of #ttor!e% of clie!t !ot to 'e void ',t *erel% ,!e!force#'le. Co!fe""io! of E,d$*e!t" "t#!d" o! the "#*e footi!$ #" # co*)ro*i"e+ #!d *#% !ot 'e e!tered i!to '% co,!"el e:ce)t &ith the 9!o&led$e #!d co!"e!t of the clie!t+ or ,)o! hi" ")eci#l e*)o&er*e!t. "cener v$ Sison, B SCRA C11 ,1@?3-. ,4- -o )aive "ny Obligation 5ratuitously (To &#ive #!% o'li$#tio! $r#t,ito,"l%( i" the i!ele$#!t ver"io! of the le$#l ter* (co!do!#tio! or re*i""io! of the de't( &hich ,!der Article 1054 (i" e""e!ti#ll% $r#t,ito,"+ #!d reB,ire" the #cce)t#!ce '% the o'li$or. It *#% 'e *#de e:)re""l% or i*)liedl%.( I! other &ord"+ #! #$e!t c#!!ot o,t"ide of # ")eci#l )o&er of #ttor!e%+ co!do!e or re*it the o'li$#tio!" o&i!$ to the )ri!ci)#l< #!d if he doe" "o+ the #ct i" (,!e!force#'le.( It doe" !ot *e#! ho&ever+ th#t ever% #$e!t of the )ri!ci)#l &o,ld h#ve the )o&er to &#ive the )ri!ci)#l8" o'li$#tio! for v#l,#'le co!"ider#tio! o,t"ide of #,thorit% to do "o< &h#t it *e#!" i" th#t &he! &ithi! the "co)e of #,thorit% of the #$e!t8" #,thorit% he *#% do "o #" #! i*)lied or i!cide!t#l )o&er< &here#"+ the )o&er to &#ive #! o'li$#tio! o&ed to the )ri!ci)#l $r#t,ito,"l% c#! o!l% #ri"e #" #! e:)re"" )o&er+ ',t !ot i*)lied or i!cide!t#l )o&er of #! #$e!t. I! other &ord"+ the eB,iv#le!t of the ter* (to &#ive #!% o'li$#tio! o!ero,"l%+( &o,ld 'e eB,iv#le!t to )#%*e!t or )erfor*#!ce of the o'li$#tio!+ &hich '% it" e""e!ce i" #! #ct #dv#!t#$eo," to the )ri!ci)#l+ #!d &he! do!e &itho,t e:)re"" #,thorit% i" "till &ithi! the "co)e of the #$e!t8" #,thorit%. A!other &#% of #))ro#chi!$ the i"",e+ i" th#t if ,!der )#r#$r#)h !,*'ered 1 of Article 1858+ ever% #$e!t h#" the i*)lied )o&er to *#9e )#%*e!t" th#t i! the ordi!#r% co,r"e of ',"i!e""+ the! *ore"o c#! #! #$e!t collect )#%*e!t" o! o'li$#tio!" o&i!$ to the )ri!ci)#l+ &hich '% their !#t,re #re #l"o #ct" of #d*i!i"tr#tio! or *#!#$e*e!t. ,5- -o 'nter into "ny Contract by )hich the O!nership of an .mmovable .s -ransmitted or "c9uired 'ither 5ratuitously or for a :aluable Consideration I#r#$r#)h !,*'ered / of Article 1858 cover" o!l% i**ov#'le )ro)ert%+ #" di"ti!$,i"hed fro* *ov#'le )ro)ert%. It doe" !ot *e#! th#t 28 ever% #$e!t h#" the i*)lied )o&er to tr#!"*it or #cB,ire o&!er"hi) over *ov#'le )ro)ert% o! 'eh#lf of the )ri!ci)#l< &h#t the )#r#$r#)h i!te!d" to co!ve% i" th#t there c#! !ever 'e #! i*)lied )o&er o! the )#rt of the #$e!t to tr#!"*it or #cB,ire o&!er"hi) over i**ov#'le )ro)ert%+ &hether '% o!ero," or $r#t,ito," title< if ",ch )o&er "h#ll 'e dee*ed to e:i"t i" *,"t 'e e:)re""l% $r#!ted. I#r#$r#)h !,*'ered / of Article 1858 cre#te" the ($e!er#l r,leS( of ")eci#l )o&er of #ttor!e% &he! it co*e" to i**ov#'le )ro)ert%< #!d $e!er#ll% re!der" the re",lti!$ co!tr#ct" *erel% ,!e!force#'le. Ahe! it co*e" to # )#rtic,l#r t%)e of i**ov#'le )ro)ert%+ !#*el% l#!d or #!% i!tere"t therei!+ Article 1852 #))lie" ")ecic#ll%+ i.e.+ !ot o!l% *,"t the )o&er 'e $r#!ted ,!der # ")eci#l )o&er of #ttor!e% 3i.e.+ e:)re""l% $ive!6+ it *,"t 'e i! &riti!$+ other&i"e+ the re",lti!$ co!tr#ct of "#le i" void. O'vio,"l%+ i! the ),rch#"e of # )iece of l#!d or #!% i!tere"t therei! thro,$h #! #$e!t+ Article 1852 doe" !ot #))l%+ #!d &o,ld 'e covered '% Article 1858. Fi9e&i"e+ do!#tio!" of i**ov#'le" thro,$h #! #$e!t #re covered e!tirel% ,!der )#r#$r#)h / of Article 1858. Fi!#ll%+ it i" cle#r fro* # co*)#ri"o! of the )rovi"io!" of Article 1852 #!d 1858-/.+ th#t the )o&er $r#!ted to #! #$e!t to ),rch#"e # )iece of l#!d or #!% i!tere"t therei! *,"t 'e i! the for* of ")eci#l )o&er of #ttor!e%+ the "#*e !eed !ot 'e i! &riti!$ i! order to 'e v#lid. Rodrigue= v$ Court of "ppeals, 2@ SCRA 41@ ,1@?@-. I! (ineda v. Court of Appeals+ ?56 1CRA 000 304406+ it &#" held th#t &he! # ho,"e #!d lot &#" "old '% #! #$e!t &ho h#d !o #,thorit% fro* the re$i"tered o&!er to do "o+ the re",lti!$ "#le i" voidD The Civil Code )rovide" th#t i! # "#le of # )#rcel of l#!d or #!% i!tere"t therei! i" *#de thro,$h #! #$e!t+ # ")eci#l )o&er of #ttor!e% i" e""e!ti#l. -Article 1858. Thi" #,thorit% *,"t 'e i! &riti!$+ other&i"e the "#le "h#ll 'e void. -Article 1852. : : : A ")eci#l )o&er of #ttor!e% i" !ece""#r% to e!ter i!to #!% co!tr#ct '% &hich the o&!er"hi) of #! i**ov#'le i" tr#!"*itted or #cB,ired for # v#l,#'le co!"ider#tio!. Aitho,t #! #,thorit% i! &riti!$ . . . #!% 8"#le8 . . . i" void. 3#t ). 0086 There i" !o doc,*e!t#r% evide!ce o! record th#t the o&!er" of # l#r$e tr#ct of l#!d ")ecic#ll% #,thori>ed the 'ro9er to "ell their )ro)ert% to #!other. Article 1858 of the Ne& Civil Code )rovide" th#t # ")eci#l )o&er of #ttor!e% i" !ece""#r% to e!ter i!to #!% co!tr#ct '% &hich the o&!er"hi) of #! i**ov#'le i" tr#!"*itted or #cB,ired either $r#t,ito,"l% or for # v#l,#'le co!"ider#tio! -Article 18583/6.+ to cre#te or co!ve% re#l ri$ht" over i**ov#'le )ro)ert% -Article 18583106.+ or for #!% other #ct of "trict do*i!io! -Article 185831/4.. A!% "#le or re#l )ro)ert% '% o!e ),r)orti!$ to 'e #! #$e!t of the re$i"tered o&!er &itho,t #!% #,thorit% therefor i! 2; &riti!$ fro* "#id o&!er i" !,ll #!d void. -1. iton!ua v. $ernandez+ 205 1CRA 258 304426. H!der Article 185;+ (-#. ")eci#l )o&er to "ell e:cl,de" the )o&er to *ort$#$e< #!d # ")eci#l )o&er to *ort$#$e doe" !ot i!cl,de the )o&er to "ell.( ,5DA- Sale of a Piece of /and Article 1852 of the Civil Code )rovide" th#t (Ahe! # "#le of # )iece of l#!d or #!% i!tere"t therei! i" thro,$h #! #$e!t+ the #,thorit% of the l#tter "h#ll 'e i! &riti!$< other&i"e+ the "#le "h#ll 'e void.( Note th#t the #rticle doe" !ot decl#re the #$e!c% to 'e void+ ',t the re",lti!$ co!tr#ct of "#le e=ected '% the #$e!t. Is the agenc- itself void> The De Feo!" h#ve o)i!ed th#t the "t#t," of ",ch # "#le e=ected thro,$h #! #$e!t &ho"e ")eci#l )o&er of #ttor!e% i" !ot i! &riti!$+ i" !ot re#ll% void+ ',t *erel% void#'le ("i!ce the "#le c#! 'e r#tied '% the )ri!ci)#l 3"ee Art". 1;41+ 1;14+ )#r. 06 ",ch #" '% #v#ili!$ hi*"elf of the 'e!et" derived fro* the co!tr#ct.( 3#t ). 2166. I!deed+ i! +utierrez Her'anos v. Orense+ 08 Ihil /50 31;126+ the Co,rt held th#t #ltho,$h the "eller h#d !ot )revio,"l% #,thori>ed # )er"o! to "ell hi" )#rcel of l#!d+ ',t &he! ",ch )er"o! ",'"eB,e!tl% #))roved the #ctio! of the ),r)orted #$e!t+ thi" )rod,ced the e=ect of r#tic#tio! co!verti!$ the rel#tio!"hi) i!to #! e:)re"" #$e!c%. Jo&ever+ the r,li!$ i! +uitierrez Her'anos c#!!ot 'e relied ,)o! to ",))ort the co!cl,"io! th#t # "#le of # )iece of l#!d thro,$h #! #$e!t &itho,t # &ritte! #,thorit% &o,ld *erel% 'e ,!e!force#'le i! ")ite of the cle#r l#!$,#$e of Article 1852 "i!ce the deci"io! &#" re!dered ,!der the ter*" of the old Civil Code+ #!d Article 1852 i" #! e!tirel% !e& )rovi"io! i! the Ne& Civil Code. Fi9e&i"e+ #)#rt fro* the deed of "#le e=ected '% the #$e!t i! +utierrez Her'anos+ the re$i"tered o&!er ",'"eB,e!tl% thereto #@r*ed the "#le ,!der ),'lic doc,*e!t#tio!. The )roced,re i" #l"o )o""i'le ,!der Article 1852+ &hich *e#!" th#t if the #$e!t e!ter" i!to # "#le of # )iece of l#!d &itho,t &ritte! #,thorit%+ i!deed the "#le &o,ld 'e void< ',t th#t if the )ri!ci)#l ",'"eB,e!tl%+ e!ter" directl% #$#i! &ith the "#*e ',%er i!to # for*#l deed of "#le+ the! the "eco!d tr#!"#ctio!" &o,ld 'e v#lid for it i" !o lo!$er covered ,!der Article 1852. The r,le therefore i" 'e"t e:)re""ed i! Raet v. Court of Appeals+ 0;/ 1CRA 655 31;;86+ &here the Co,rt held th#t Article 1852 of the Civil Code reB,ire" for the v#lidit% of # "#le i!volvi!$ l#!d th#t the #$e!t "ho,ld h#ve #! #,thori>#tio! i! &riti!$< other&i"e #!% "#le co!cl,ded o! the l#!d i" void< -0. #!d th#t i! Rodriguez v. Court of A))e#l"+ 0; 1CRA 21; 31;6;6+ &hich held th#t Article 1852 refer" to "#le" *#de '% #! #$e!t for # )ri!ci)#l #!d !ot the "#le" *#de '% the o&!er )er"o!#ll% to #!other+ &hether th#t other 'e /4 #cti!$ )er"o!#ll% or thro,$h # re)re"e!t#tive. Is it clear therefore that Art. ?@DE does not cover directl- an agency to purchase a piece of land or an interest therein. No!ethele""+ o!l% rece!tl% i! Escueta v. i', /10 1CRA 211 304456+ the Co,rt #@r*ed the r,li!$ i! +utierrez Her'anos. Escueta i!volved the "#le i" )#rcel" of l#!d e=ected '% the ",'7 #$e!t #))oi!ted '% the #ttor!e%7i!7f#ct of the o&!er+ &ho cl#i*" th#t th#t the ",'7#$e!t &#" !ot $ive! #!% ")eci#l )o&er of #ttor!e% to "ell the )#rcel" of l#!d. The Co,rt heldD (Eve! #"",*i!$ th#t -the ",'7#$e!t. h#" !o #,thorit% to "ell the ",'Eect )ro)ertie"+ the co!tr#ct "he e:ec,ted i! f#vor of the re")o!de!t" i" !ot void+ ',t "i*)l% ,!e!force#'le+ ,!der the "eco!d )#r#$r#)h of Article 1?15 of the Civil Code &hich re#d" . . . # co!tr#ct e!tered i!to i! the !#*e of #!other '% o!e &ho h#" !o #,thorit% or le$#l re)re"e!t#tio!+ or &ho #cted 'e%o!d hi" )o&er"+ "h#ll 'e ,!e!force#'le+ ,!le"" it i" r#tied+ e:)re""l% or i*)liedl%+ '% the )er"o!" o! &ho"e 'eh#lf it h#" 'ee! e:ec,ted+ 'efore it i" revo9ed '% the other co!tr#cti!$ )#rt%.( 3#t ). 2026. A letter co!t#i!i!$ the ")ecic #,thorit% to "ell i" ",@cie!t #!d co*)lie" &ith Article 1852. "i'enez v. Ra4ot+ ?8 Ihil. ?85 31;186. Th,"+ I! Cit- ite Realt- Inc. v. Court of Appeals+ ?0/ 1CRA ?8/ 304446+ the &ritte! letter i"",ed '% # l#!do&!er re#dD (Ae &ill #))reci#te Getro Dr,$8" #""i"t#!ce i! referri!$ to ," ',%er" for )ro)ert%. Ile#"e )roceed to hold )reli*i!#r% !e$oti#tio!" &ith i!tere"ted ',%er" #!d e!dor"e for*#l o=er" to ," for o,r !#l ev#l,#tio! #!d #))r#i"#l.( The Co,rt held th#t the l#!$,#$e of the letter did !ot co!"tit,te &ritte! #,thorit% to "ell the l#!d+ #!d the #))oi!ted i!divid,#l &#" o!l% de"i$!#ted #" # co!t#ct )er"o! or # 'ro9er &ith !o #,thorit% to co!cl,de # "#le of the )ro)ert%. A!% "#le o! the )#rcel of l#!d co!cl,ded '% ",ch #! #))oi!tee &o,ld 'e void+ #!d the "#le co,ld !ot )rod,ce #!% le$#l e=ect #" to tr#!"fer the ",'Eect )ro)ert% fro* it" l#&f,l o&!er. I! inan v. (uno+ ?1 Ihil. 0/; 31;1/6+ the Co,rt held th#t for the )ri!ci)#l to co!fer the ri$ht ,)o! #! #$e!t to "ell re#l e"t#te+ # )o&er of #ttor!e% *,"t "o e:)re"" the )o&er" of the #$e!t i! cle#r #!d ,!*i"t#9#'le l#!$,#$e< #!d &he! there i" #!% re#"o!#'le do,'t th#t the l#!$,#$e "o ,"ed co!ve%" ",ch )o&er+ !o ",ch co!"tr,ctio! "h#ll 'e $ive! the doc,*e!t. Th,"+ i! th#t deci"io!+ # )o&er of #ttor!e% )rovidi!$ th#t (I here'% co!fer ",@cie!t )o&er : : : ,)o! A+ i! order th#t i! *% !#*e #!d re)re"e!t#tio! he *#% #d*i!i"ter the i!tere"t I )o""e"" &ithi! thi" G,!ici)#lit% of T#rl#c+ ),rch#"e+ "ell+ collect #!d )#%+ etc.( &#" held ",@cie!t to cover the "#le '% the #$e!t of l#!d of the )ri!ci)#l i! T#rl#c. I! Strong v$ 5utierre= Repide, ? 1i/. ?BA ,1@A?-+ the Co,rt cl#ried th#t The e:)re"" *#!d#te reB,ired '% Article 1852 to e!#'le #! #))oi!tee of #! #$e!c% co,ched i! $e!er#l ter*" /1 to "ell *,"t 'e o!e th#t e:)re""l% *e!tio!" # "#le or th#t i!cl,de" # "#le #" # !ece""#r% i!$redie!t of the #ct *e!tio!ed. The )o&er of #ttor!e% !eed !ot co!t#i! # ")ecic de"cri)tio! of the l#!d to 'e "old+ ",ch th#t $ivi!$ the #$e!t the )o&er to "ell (#!% or #ll tr#ct"+ lot"+ or )#rcel"( of l#!d 'elo!$i!$ to the )ri!ci)#l i" #deB,#te. I! 8atigba* v$ -ai ,ing Co$, 52 1i/. ?22 ,1@2B-+ it &#" held th#t the #,thorit% to "ell #!% 9i!d of re#lt% th#t (*i$ht 'elo!$( to the )ri!ci)#l &#" held to i!cl,de #l"o ",ch #" the )ri!ci)#l *i$ht #fter&#rd" h#ve d,ri!$ the ti*e it &#" i! force. I! P$ "mico and 4$ "migo v$ S$ -eves, @? 1i/. 252 ,1@54-+ the Co,rt held th#t &here the )o&er of #ttor!e% "#%" th#t the #$e!t c#! e!ter i!to #!% co!tr#ct co!cer!i!$ # l#!d+ or c#! "ell the l#!d ,!der #!% ter* or co!ditio! #!d cove!#!t he *#% thi!9 t+ he i" cert#i!l% $r#!ted )o&er to de#l &ith the l#!d+ #!d "ell it+ i! the "#*e *#!!er #!d &ith the "#*e 're#dth #!d l#tit,de #" the )ri!ci)#l co,ld. Altho,$h the doc,*e!t e:ec,ted '% the o&!er of the l#!d &#" de!o*i!#ted #" # (Ge!er#l Io&er of Attor!e%+( it &#" &ith re")ect to the #,thorit% $ive! to "ell the l#!d # ")eci#l )o&er of #ttor!e%+ for it )ro)erl% de"cri'ed the title of the l#!d #!d the cle#r )o&er to "ell it. Th," there &#" !o !eed to e:ec,te # "e)#r#te #!d ")eci#l )o&er of #ttor!e% for the #$e!t to e=ect the "#le of the l#!d i! the !#*e of the )ri!ci)#l. (The ")eci#l )o&er of #ttor!e% c#! 'e i!cl,ded i! the $e!er#l )o&er &he! it i" ")ecied therei! the #ct or tr#!"#ctio! for &hich the ")eci#l )o&er i" reB,ired.( 0eloso v. Court of Appeals, 064 1CRA /;? 31;;66. Fi!#ll%+ it "ho,ld 'e !oted th#t i! +ico Savings 6 /oan "ssn$ v$ Court of A##ea/$, 1C1 SCRA ?3A ,1@B@-+ the Co,rt held th#t the "#le )ro"cri'ed ,!der Article 185; refer" to # vol,!t#r% "#le e=ected thro,$h the #$e!t< it doe" !ot cover the ),'lic "#le th#t h#))e!" #" )#rt of the foreclo",re o! the *ort$#$e d,l% co!"tit,ted. Re/ate. Ca$e$6 ()* v. Court of Appeals+ ;2 1CRA ?/5 31;5;6 %uenzle and StreiF v. Collector of Custo's+ ?1 Ihil 626 31;1/6 #ela (ena v. Hidalgo+ 16 Ihil 2/4 31;146 Rio - Ola44arrieta v. 8utec+ 2; Ihil 056 31;066 ,5DB- A)ent Cannot Va/i./* !"&1a$e "o#e"t* o( "in&i#a/ H!der Article 12;1306 of the Civil Code+ ,!le"" "o e:)re""l% #,thori>ed+ #! #$e!t c#!!ot ),rch#"e the )ro)ert% of hi" )ri!ci)#l< #!d if he /0 doe" "o+ the "#le &o,ld 'e void. It *e#!" therefore th#t eve! &he! the #$e!t h#" 'ee! $r#!ted # ")eci#l )o&er of #ttor!e% to "ell # )iece of l#!d or #!% i!tere"t i! it+ ",ch )o&er doe" !ot i!cl,de '% i*)lic#tio! the )o&er to "ell to hi*"elf ,!der the cle#r )rovi"io!" of Article 12;1306 of the Civil Code+ ,!le"" there &#" ",ch )rior #,thori>#tio! $ive! '% the )ri!ci)#l. Olaguer v. (urugganan, "r.+ /1/ 1CRA 264 304456+ reco$!i>ed th#t the )rohi'itio! #$#i!"t #$e!t" ),rch#"i!$ )ro)ert% i! their h#!d" for "#le or *#!#$e*e!t i" cle#rl%+ !ot #'"ol,te< &he! "o #,thori>ed '% the )ri!ci)#l+ the #$e!t i" !ot di"B,#lied fro* ),rch#"i!$ the )ro)ert% he hold" ,!der # co!tr#ct of #$e!c% to "ell. ,?- To MaEe Gi(t$ A $ift or # do!#tio! i" de!ed ,!der Article 50/ of the Civil Code #" #! #ct of li'er#lit% &here'% # )er"o! di")o"e" $r#t,ito,"l% of # thi!$ or ri$ht i! f#vor of #!other )er"o! &ho #cce)t" it. H!der )#r#$r#)h 6 of Article 1858+ for #! #$e!t to h#ve the )o&er to *#9e $ift" or do!#tio!" o! 'eh#lf of the )ri!ci)#l &o,ld reB,ire the "#*e to 'e i! the for* of # ")eci#l )o&er of #ttor!e%+ e:ce)tD 3#6 C,"to*#r% o!e" for ch#rit% 3'6 Tho"e *#de to e*)lo%ee" i! the ',"i!e"" *#!#$ed '% the #$e!t Ahe! # $ift or do!#tio! i" *#de '% #! #$e!t o! 'eh#lf of the )ri!ci)#l &hich i" !ot covered '% # ")eci#l )o&er of #ttor!e%+ it doe" !ot 'eco*e void for f#il,re to co*)l% &ith the"e reB,ire*e!t i! A$e!c% F#& 3'ec#,"e ",ch decie!c% *erel% re!der" the co!tr#ct ,!e!force#'le6+ ',t r#ther it i" void or !ot de)e!di!$ o! &hether it co*)lie" &ith the for*#litie" reB,ired ,!der the F#& o! Do!#tio!+ for ever% #ct of do!#tio! co!"tit,ted # "ole*! co!tr#ct. The !et e=ect of co*)li#!ce &ith the for*#litie" reB,ired '% the F#& o! Do!#tio! &o,ld 'e to *#9e the re",lti!$ $ift or do!#tio! ,!e!force#'le+ &he! it doe" !ot co*)l% &ith the ")eci#l )o&er of #ttor!e% reB,ire*e!t. ,C- To +oan o" Bo""o9 Mone* H!der )#r#$r#)h 5 of Article 1858+ the )o&er of #! #$e!t to either lo#! or 'orro& *o!e%+ i" #! #ct of "trict o&!er"hi)+ #!d reB,ire" the "#*e to 'e i! the for* of # ")eci#l )o&er of #ttor!e%. The e:ce)tio! &o,ld 'e &he! the #ct ('e ,r$e!t #!d i!di")e!"#'le for the )re"erv#tio! of the thi!$" &hich #re ,!der #d*i!i"tr#tio!.( -?. The )#r#$r#)h h#" 'ee! co!"tr,ed to cover o!l% the 'orro&i!$ of *o!e% ,!der 'utuu'+ #!d doe" !ot i!cl,de ),rch#"i!$ of $ood" o! credit o! 'eh#lf of the )ri!ci)#l. #e 0illa v. $a4ricante+ 14/ Ihil. 650 31;/;6. /? 1i!ce the #,thorit% to 'orro& *o!e% i" r#rel% i!ferred+ i! Rural *an/ of Caloocan, Inc. v. Court of Appeals+ 142 1CRA 1/1 31;816+ the Co,rt r,led th#t # creditor "ho,ld reB,ire the e:ec,tio! of # )o&er of #ttor!e% i! order th#t o!e *#% 'e ,!der"tood to h#ve $r#!ted #!other the #,thorit% to 'orro& o! 'eh#lf of the for*er. <hat happens &hen there is no po&er of attorne- given> I! +ozun v. .ercado /11 1CRA ?4/ 304466+ the Co,rt held th#t # ")eci#l )o&er of #ttor!e% i" !ece""#r% for #! #$e!t to 'orro& *o!e%+ ,!le"" it 'e ,r$e!t #!d i!di")e!"#'le for the )re"erv#tio! of the thi!$" &hich #re ,!der #d*i!i"tr#tio!< #!d th#t ",ch co!tr#ct e!tered i!to i! the !#*e of #!other )er"o! '% o!e &ho h#" 'ee! $ive! !o #,thorit% or le$#l re)re"e!t#tio! or &ho h#" #cted 'e%o!d hi" )o&er" #re cl#""ied #" ,!#,thori>ed co!tr#ct" #!d #re ,!e!force#'le+ ,!le"" the% #re r#tied. The ")eci#l #,thorit% to 'orro& *o!e% for the )ri!ci)#l i" !ot to 'e i*)lied fro* the ")eci#l )o&er of #ttor!e% to *ort$#$e re#l e"t#te. PN+ v$ Sta$ Ma"ia, 2@ SCRA 3A3 ,1@?@-< #!d the )o&er to 'orro& *o!e% $r#!ted to the #$e!t cannot be deemed to i!cl,de the )o&er to ")e!d the #*o,!t th," 'orro&ed #" he )le#"e". ,odges v$ Salas, ?3 1i/. 5?C ,1@3?-. O! the other h#!d+ ,!der Article 18;4+ if the #$e!t h#" 'ee! e*)o&ered to 'orro& *o!e%+ the! he i" !ot di"B,#lied fro* 'ei!$ hi*"elf the le!der #t the c,rre!t r#te of i!tere"t. O! the other h#!d+ the #rticle #l"o )rovide"+ th#t if the #$e!t h#" 'ee! e*)o&ered to le!d *o!e% #t i!tere"t+ he c#!!ot 'orro& it &itho,t the co!"e!t of the )ri!ci)#l. I! Rural *an/ of Caloocan v. Court of Appeals+ 142 1CRA 1/1 31;816+ the Co,rt held th#t #ltho,$h it i" )ri!ci)le i" th#t # )er"o! &ho"e #ct" holdi!$ #!other )er"o! to 'e hi" #$e!t #!d &o,ld le#d # third )er"o! to 'elieve ",ch ),r)orted #$e!t &#" #,thori>ed to ")e#9 #!d 'i!d hi*+ c#!!ot !o& 'e )er*itted to de!% the #,thorit% of the ),r)orted #$e!t< ',t thi" i" o!l% tr,e &he! the ),r)orted #$e!t &#" clothed &ith #))#re!t #,thorit%. I! thi" c#"e+ &here the #,thorit% of the ),r)orted #$e!t &#" o!l% to follo& ,) of the )ri!ci)#l8" lo#! #))lic#tio! &ith the '#!9+ it c#!!ot 'e )re",*ed th#t he &#" #l"o $r#!ted #,thorit% to 'orro& o! 'eh#lf of the )ri!ci)#l+ e")eci#ll% &he! the )ri!ci)#l her"elf &e!t to the '#!9 to "i$! the )ro*i""or% !ote for the lo#! o't#i!ed fro* the '#!9. If the )ri!ci)#8KLQ" #ct h#d 'ee! ,!der"tood '% the '#!9 to 'e # $r#!t of #! #,thorit% to the #$e!t to 'orro& o! 'eh#lf of the )ri!ci)#l+ the '#!9 "ho,ld h#ve reB,ired # ")eci#l )o&er of #ttor!e% coveri!$ ",ch )o&er to 'orro&. Re/ate. Ca$e6 #e 0illa v. $a4ricante+ 14/ Ihil 650 31;/;6 /2 ()* v. Tan Ong Sze+ /? Ihil. 2/1 31;0;6 Rodriguez v. (a'intuan+ ?5 Ihil 856 31;186 ()* v. Sta. .aria+ 0; 1CRA 04? 31;6;6 ,B- To +ea$e Rea/ "o#e"t* (o" Mo"e T1an One Yea" It "ee*" cle#r fro* )#r#$r#)h !,*'ered 8 of Article 1858+ the le#"e of re#l )ro)ert% for *ore th#! o!e %e#r i" #! #ct of "trict o&!er"hi)< &here#"+ the #ct of e!teri!$ i!to # co!tr#ct of le#"e for o!e %e#r or le""+ &o,ld 'e co!"idered #! #ct of #d*i!i"tr#tio!+ #!d *#% 'e i! the for* of $e!er#l )o&er of #ttor!e%. The )#r#$r#)h doe" !ot cover le#"e" of )er"o!#l )ro)ert%+ &hich the! &o,ld le#d to the co!cl,"io! th#t #!% )o&er $ive! to the #$e!t to le#"e )er"o!#l )ro)ert%+ for &h#tever )eriod+ &o,ld co!"tit,te *erel% # $e!er#l )o&er of #ttor!e%< #!d *#% 'e i*)lied fro* the e:)re"" )o&er" $ive!. I! thi" co!!ectio!+ it "ho,ld 'e !oted th#t ,!der Article 124?306 of the Civil Code+ #! #$ree*e!t for the le#"i!$ of re#l )ro)ert% for # )eriod lo!$er th#! o!e %e#r i" ,!e!force#'le ,!le"" *#de i! &riti!$. Therefore+ eve! &he! the #$e!c% )o""e"" # ")eci#l )o&er of #ttor!e% to le#"e re#l )ro)ert%+ &he! the le#"e it"elf for *ore th#! # %e#r i" !ot i! &riti!$+ the re",lti!$ co!tr#ct &o,ld "till 'e ,!e!force#'le. I! # co!tr#ct of #$e!c%+ the #$e!t #ct" i! re)re"e!t#tio! or i! 'eh#lf of #!other &ith the co!"e!t of the l#tter. Article 1858 of the Civil Code e:)re""e" th#t # ")eci#l )o&er of #ttor!e% i" !ece""#r% to le#"e #!% re#l )ro)ert% to #!other )er"o! for *ore th#! o!e %e#r. The le#"e of re#l )ro)ert% for *ore th#! o!e %e#r i" co!"idered !ot *erel% #! #ct of #d*i!i"tr#tio! ',t #! #ct of "trict do*i!io! or of o&!er"hi). A ")eci#l )o&er of #ttor!e% i" th," !ece""#r% for it" e:ec,tio! thro,$h #! #$e!t. Shopper6s (aradise Realt- v. Ro1ue+ 21; 1CRA ;? 304426. <hat is the legal status of a contract entered into 4- an agent on 4ehalf of the principal &here the la& re1uires that he should 4e ar'ed &ith a special po&er of attorne-, and -et he had no such special po&er> I! 0da. #e Chua v. IAC+ 00; 1CRA ;; 31;;26+ &here the i"",e 'efore the 1,)re*e Co,rt &#" (the #@r*#!ce '% the Co,rt of A))e#l" of the deci"io! of the tri#l co,rt+ orderi!$ their eEect*e!t fro* the )re*i"e" i! B,e"tio! #!d the de*olitio! of the i*)rove*e!t" i!trod,ced thereo!+( the le""ee" relied o! the co!tr#ct of le#"e e!tered i!to '% o! 'eh#lf of the )ri!ci)#l7le""or+ '% her #ttor!e% i! f#ct &ho &#" !ot #r*ed to le#"e the )re*i"e" for *ore th#! o!e %e#r. Jo&ever+ the f#ct" "ho&ed th#t the le""ee" "t#%ed i! the )re*i"e" d,ri!$ the ter* of the le#"e+ #!d &hich &#" i*)liedl% re!e&ed thro,$h tacita // reconduccion. The Co,rt e:)re""l% #$reed &ith the Co,rt of A))e#l" re"ol,tio! (decl#ri!$ the co!tr#ct of le#"e 3E:h (C(6 void( o! the $ro,!d th#t the #$e!t (&#" !ot #r*ed &ith # ")eci#l )o&er of #ttor!e% to e!ter i!to # le#"e co!tr#ct for # )eriod of *ore th#! o!e %e#r+ th,"D Ae #$ree &ith the Co,rt of A))e#l". The le#"e co!tr#ct 3E:h. (C(6+ the li!ch)i! of )etitio!er"8 c#,"e of #ctio!+ i!volve" the le#"e of re#l )ro)ert% for # )eriod of *ore th#! o!e %e#r. The co!tr#ct &#" e!tered i!to '% the #$e!t of the le""or #!d !ot the le""or her"elf. I! ",ch # c#"e+ the l#& reB,ire" th#t the #$e!t 'e #r*ed &ith # ")eci#l )o&er of #ttor!e% to le#"e the )re*i"e". : : :. It i" tr,e th#t re")o!de!t Jerrer# #llo&ed )etitio!er" to occ,)% the le#"ed )re*i"e" #fter the e:)ir#tio! of the le#"e co!tr#ct 3E:h. (C(6 #!d ,!der Article 1654 of the Civil Code of the Ihili))i!e"+ # t#cit re!e&#l of the le#"e 3t#cit# reco!d,ccio!6 i" dee*ed to h#ve t#9e! )l#ce. Jo&ever+ #" held i! Ber!#rdo G. Di>o! v. A*'ro"io G#$"#%"#%+ /5 1CRA 0/4 31;526+ # t#cit re!e&#l i" li*ited o!l% to the ter*" of the co!tr#ct &hich #re $er*#!e to the le""ee8" ri$ht of co!ti!,ed e!Eo%*e!t of the )ro)ert% #!d doe" !ot e:te!d to #lie! *#tter"+ li9e the o)tio! to ',% the le#"ed )re*i"e". 3#t ). 1466 ,@- -o +ind the Principal to Render Some Service )ithout Compensation Altho,$h the #$e!t *#% 'i!d hi*"elf to the co!tr#ct of #$e!c% &itho,t co*)e!"#tio!+ 3Article 185/6+ i! order to 'i!d the )ri!ci)#l to e!ter i!to "ervice &itho,t co*)e!"#tio! &o,ld 'e ,!e!force#'le &itho,t # ")eci#l )o&er of #ttor!e%. The i*)lic#tio! of )#r#$r#)h !,*'er ; of Article 1858 i" th#t to 'i!d the )ri!ci)#l to re!der "ervice for co*)e!"#tio! &o,ld 'e dee*ed # *ere #ct of #d*i!i"tr#tio!+ #!d co!"tit,ted i! # *ere $e!er#l )o&er of #ttor!e%+ or *ore ")ecic#ll%+ to 'e #! i*)lied )o&er of ever% #$e!t. I di"#$ree+ #!% co!tr#ct of "ervice to 'e e!tered i!to o! 'eh#lf of the )ri!ci)#l "ho,ld )ro)erl% 'e co!"idered #! #ct of "trict o&!er"hi)+ for it i*)i!$e" o! o'li$i!$ the )ri!ci)#l to re!der # )er"o!#l o'li$#tio!+ &hich if he ref,"e" *#9e" hi* li#'le for d#*#$e". Ah% "ho,ld co!tr#ct" of "ervice+ eve! &he! for co*)e!"#tio!+ 'e dee*ed to 'e &ithi! i*)lied )o&er" of the #$e!t to 'i!d the )ri!ci)#lU ,1A- -o +ind the Principal in a Contract of Partnership Ever% #$ree*e!t '% the #$e!t o! 'eh#lf of the )ri!ci)#l &hich h#" the e=ect of o'li$i!$ the )ri!ci)#l to co!tri',te *o!e% or i!d,"tr% to # co**o! f,!d &ith the i!te!tio! of derivi!$ )rot" /6 therefro* &o,ld 'e ,!e!force#'le &itho,t # ")eci#l )o&er of #ttor!e% h#vi!$ 'ee! )revio,"l% $ive! to the #$e!t+ for it i! e=ect *#9e" the )ri!ci)#l # )#rt!er i! # )#rt!er"hi). 3Art. 15656. ,11- -o Obligate the Principal as a 5uarantor or Surety H!der Article 0425 of the Civil Code+ '% the co!tr#ct of $,#r#!t%+ the $,#r#!tor 'i!d" hi*"elf to f,lll the o'li$#tio! of the )ri!ci)#l de'tor i! c#"e the l#tter "ho,ld f#il to do "o< #!d if the )er"o! 'i!d" hi*"elf "olid#ril% &ith the )ri!ci)#l de'tor+ he 'eco*e" # ",ret% ,!der # co!tr#ct of ",ret%"hi). Therefore+ ,!der )#r#$r#)h !,*'ered 11 of Article 1858+ !o co!tr#ct of $,#r#!t% or ",ret% i" e!force#'le #$#i!"t the )ri!ci)#l &he! it h#" 'ee! e!tered i!to '% #! #$e!t &ho )o""e""e" !o ")eci#l )o&er of #ttor!e% to do "o It h#" 'ee! held th#t # co!tr#ct of $,#r#!t% or ",ret% c#!!ot 'e i!ferred fro* ," of v#$,e or $e!er#l &ord" of co**it*e!t. Th,"+ the #,thorit% $ive! '% the cor)or#tio! to it" #$e!t to #))rove # lo#! ,) to I?/4+444 &itho,t #!% "ec,rit% reB,ire*e!t doe" !ot i!cl,de the #,thorit% to i"",e $,#r#!tee" for #!% #*o,!t. *A $inance Corp. v. Court of Appeals+ 011 1CRA 110 31;;06. Th,"D A )o&er of #ttor!e% to "ell or le#"e the )ro)ert% of the )ri!ci)#l &ith the )rovi"io! th#t e*)o&er" the #$e!t (to )erfor* #!d e:ec,te #ll #!d ever% l#&f,l #!d re#"o!#'le #ct #" f,ll% #!d e=ectivel% #" I *i$ht or co,ld do if )er"o!#ll% )re"e!t+( c#!!ot 'e co!"tr,ed to i!cl,de the )o&er to e!ter i!to # co!tr#ct of $,#r#!t% to 'i!d the )ri!ci)#l. #irector of (u4lic <or/s v. Sing "uco+ /? Ihil. 04/ 31;0;6. A )o&er of #ttor!e% to lo#! *o!e% doe" !ot i!cl,de the i*)lied )o&er to *#9e the )ri!ci)le # ",ret% for the )#%*e!t of the de't # third )er"o!. *an/ of (.I. v. Coster+ 25 Ihil. /;2 31;0/6. It "ho,ld 'e rec#lled th#t ,!der Article 124?-0.-'. of the Civil Code+ # co!tr#ct of $,#r#!t% i" ,!e!force#'le ,!le"" it i" *#de i! &riti!$. Co!"eB,e!tl%+ eve! &he! the #$e!t h#" the reB,i"ite ")eci#l )o&er of #ttor!e% to e!ter i!to # co!tr#ct of $,#r#!t% i! 'eh#lf of the )ri!ci)#l+ the re",lt co!tr#ct &o,ld 'e ,!e!force#'le if !ot red,ced i! &riti!$. ,12- -o Create or Convey Real Rights Over .mmovable H!der )#r#$r#)h !,*'ered 10 of Article 1858+ #! #$e!t c#!!ot+ i! the !#*e of the )ri!ci)#l+ cre#te or co!ve% re#l ri$ht" over i**ov#'le )ro)ert% &itho,t 'ei!$ )o""e""ed of # /5 ")eci#l )o&er of #ttor!e%< other&i"e+ the re",lti!$ co!tr#ct &o,ld 'e ,!force#'le #$#i!"t the )ri!ci)#l. The )#r#$r#)h i!te!d" to cover de#li!$" o! i**ov#'le )ro)ert% o,t"ide of the "#le of # )iece of l#!d or #!% i!tere"t therei! covered ")ecic#ll% ,!der Article 1852+ #!d co!tr#ct" of ),rch#"e of # )iece of l#!d+ #!d co!tr#ct" of do!#tio!" of ever% t%)e of i**ov#'le )ro)ert%. (Re#l ri$ht"( over i**ov#'le )ro)ert% &o,ld cover ",ch co!tr#ct" #" *ort$#$e"+ ,",fr,ct+ e#"e*e!t+ etc. It o'vio,"l% cover" the e!teri!$ i!to # le#"e co!tr#ct over #! i**ov#'le &ith # )eriod e:ceedi!$ o!e %e#r 3"e)#r#tel% covered ,!der )#r#$r#)h !,*'ered 8 of Article 18586. Ahe! it co*e" to # *ort$#$e+ the Co,rt h#" e:)re""ed the doctri!e th#t # )er"o! c#! 'eco*e li#'le o! # re#l e"t#te *ort$#$e &hich he !ever e:ec,ted either i! )er"o! or '% #ttor!e%7i!7f#ct. (hilippine sugar Estates #ev. Co. v. (oizat, 28 Ihil. /?6 31;066. Rural *an/ of *o'4on, Inc. v. Court of Appeals+ 010 1CRA 0/ 31;;06. H!der Article 185;+ the )o&er to "ell e:cl,de" the )o&er to *ort$#$e< #!d th#t the )o&er to *ort$#$e e:cl,de" the )o&er "ell. Thi" ",))ort" the )ro)o"itio! th#t e#ch of the )o&er" e!,*er#ted ,!der Article 1858+ #re !#*ed (#ct" of "trict do*i!io!+( #!d c#!!ot 'e i*)lied )o&er"< #!d th#t o!e for* of !#*ed ")eci#l )o&er c#!!ot $ive the )re",*)tio! th#t it i!cl,de" ,!der #!% for* of co!"tr,ctio! or i!ter)ret#tio! #!other !#*ed ")eci#l )o&er. Rodrigue= v$ Pamintuan and %e 4esus, 3C 1i/. BC? ,1@1B-. The )o&er to *ort$#$e doe" !ot c#rr% the i*)lied )o&er to re)re"e!t the )ri!ci)#l i! liti$#tio!. 0al'onte v. Court of Appeals+ 0/0 1CRA ;0 31;;66. I! Rural *an/ of *o'4on v. Court of Appeals+ 010 1CRA 0/ 31;;06+ #ltho,$h the #$e!t &#" $ive! # ")eci#l )o&er of #ttor!e% to *ort$#$e the )ro)ert% of the )ri!ci)#l+ !o!ethele""+ &he! he "i$!ed the Deed of Re#l E"t#te Gort$#$e i! hi" !#*e #lo!e #" *ort$#$or+ &itho,t #!% i!dic#tio! th#t he &#" "i$!i!$ for #!d i! 'eh#lf of the )ro)ert% o&!er+ the *ort$#$e i" void+ #!d the #$e!t 'o,!d hi*"elf #" the o!l% de'tor of ,!der the lo#! o't#i!ed fro* the '#!9. I! (hilippine Sugar Estates #ev. Co., v. (oizat+ 28 Ihil. /?6 31;0/6+ the Co,rt held th#t it i" # $e!er#l r,le i! the l#& of #$e!c% th#t+ i! order to 'i!d the )ri!ci)#l '% # *ort$#$e o! re#l )ro)ert% e:ec,ted '% #! #$e!t+ it *,"t ,)o! it" f#ce ),r)o"e to 'e *#de+ "i$!ed #!d "e#led i! the !#*e of the )ri!ci)#l+ other&i"e+ it &ill 'i!d the #$e!t o!l%. It i" !ot e!o,$h *erel% th#t the #$e!t &#" i! f#ct #,thori>ed to *#9e the *ort$#$e+ if he h#" !ot #cted i! the !#*e of the )ri!ci)#l. Neither i" it ordi!#ril% ",@cie!t th#t i! the *ort$#$e the #$e!t de"cri'ed hi*"elf #" #cti!$ '% virt,e of the /8 )o&er of #ttor!e%+ if i! f#ct the #$e!t h#" #cted i! hi" o&! !#*e #!d h#" "et hi" o&! h#!d #!d "e#l to the *ort$#$e. Thi" i" e")eci#ll% tr,e &here the #$e!t hi*"elf i" # )#rt% to the i!"tr,*e!t. Jo&ever cle#rl% the 'od% of the *ort$#$e *#% "ho& #!d i!te!d th#t it "h#ll 'e the #ct of the )ri!ci)#l+ %et+ ,!le"" i! f#ct it i" e:ec,ted '% the #$e!t for #!d o! 'eh#lf of hi" )ri!ci)#l+ it i" !ot v#lid #" to the )ri!ci)#l. ,13- -o "ccept or Repudiate an .nheritance H!der Article 1422 of the Civil Code+ #!% )er"o! (h#vi!$ the free di")o"#l of hi" )ro)ert% *#% #cce)t or re),di#te #! i!herit#!ce+( &hich o'vio,"l% ,!der )#r#$r#)h 1? of Article 1858 co!"tit,te #ct" of "trict do*i!io!. Ahile there i" !o do,'t th#t re),di#tio! of #! i!herit#!ce i" #! #ct th#t $oe" #$#i!"t the i!tere"t of the )ri!ci)#l #!d &o,ld reB,ire the $r#!t of # ")eci#l )o&er of #ttor!e% if it i" to 'e do!e thro,$h #! #$e!t+ the #cce)t#!ce of i!herit#!ce h#" #!other '#"i" ,)o! &hich it c#!!ot 'e #! i*)lied )o&er of hi" #$e!tD the #cce)t#!ce of #! i!herit#!ce i!volve" #! #ct of $r#tit,de o! the )#rt of the heir+ #!d therefore c#!!ot 'e )re",*ed to 'e # (',rde!( th#t the )ri!ci)#l i" )re",*e to #cce)t #" # *#tter of co,r"e.. ,14- -o Ratify or Recogni=e Obligations Contracted +efore the "gency (R#tif%( i" # le$#l ter* th#t i!volve" the #cce)t#!ce of # co!tr#ct+ &hich i" either void#'le or ,!e!force#'le+ #!d h#" the e=ect cle#!"i!$ ",ch co!tr#ct of it" le$#l defect" th#t retro#ct" to the d#te of it" )erfectio!. H!der Article" 1?;0 #!d 1?;6+ (-r.#tic#tio! e:ti!$,i"he" the #ctio! to #!!,l # void#'le co!tr#ct+( #!d (cle#"e!"e" the co!tr#ct fro* #ll it" defect" fro* the *o*e!t it &#" co!"tit,ted.( Ahe! it co*e" to ,!e!force#'le co!tr#ct"+ ,!der Article 1242+ tho"e co!tr#ct" th#t #re $over!ed '% the 1t#t,te" of Fr#,d" (#re r#tied '% the f#il,re to o'Eect to the )re"e!t#tio! of or#l evide!ce to )rove the "#*e+ or '% the #cce)t#!ce of 'e!et" ,!der the*.( I#r#$r#)h !,*'ered 12 of Article 1858 cle#rl% reco$!i>e" th#t the #ct of r#tif%i!$ or cle#!"i!$ # defect co!tr#ct th#t therefore co,ld v#lidl% 'e e!forced #$#i!"t the )ri!ci)#l i" #! #ct of "trict o&!er"hi)+ #!d c#!!ot 'e e=ected '% the #$e!t &itho,t ")eci#l )o&er of #ttor!e%. (Reco$!itio!( of #! o'li$#tio! refer" to #c9!o&led$i!$ &h#t &#" # !#t,r#l o'li$#tio! &hich &#" !ot therefore the ",'Eect of civil e!force*e!t< it h#" the e=ect of *#9i!$ # for*er !#t,r#l o'li$#tio! 'e tr#!"for*ed i!to # civil o'li$#tio! th#t c#! 'e e!forced #$#i!"t the e"t#te of the )ri!ci)#l. Reco$!itio! i" #! #ct of "trict o&!er"hi) &hich c#! 'e )erfor*ed '% #! #$e!t o! 'eh#lf of the )ri!ci)#l &ho )o""e""e" # ")eci#l )o&er of #ttor!e%. /; #irector v. Sing "uco+ /? Ihil 04/ 31;0;6 0illa v. +arcia *os1ue+ 2; Ihil 106 31;066 *an/ of (I v. #e Coster+ 25 Ihil /;2 31;0/6 Aznar v. .orris+ ? Ihil 6?6 31;426 +er'ann v. #onaldson+ 1 Ihil 6? 31;416 ,15- "ny Other "ct of Strict %ominion Ge!er#ll%+ the "#le or ),rch#"e of eve! )er"o!#l )ro)ertie" "ho,ld 'e tre#ted #" #ct" of "trict do*i!io! #!d &o,ld reB,ire # ")eci#l )o&er of #ttor!e% to 'e e:ec,ted '% the #$e!t i! 'eh#lf of the )ri!ci)#l. B,t ,!der Article 1855+ # "#le or ),rch#"e *#de i! the ordi!#r% co,r"e of *#!#$e*e!t i" *erel% #! #ct of #d*i!i"tr#tio! #!d+ therefore+ i!cl,ded i! #$e!c% co,ched i! $e!er#l ter*". The cle#r i*)lic#tio! ,!der )#r#$r#)h !,*'ered 1/ i" th#t tho"e th#t *#% 'e co!"tit,ted #" #ct" of "trict o&!er"hi)+ ',t !ot "o ")ecic#ll% !#*ed i! the r"t fo,rtee! )#r#$r#)h"+ &o,ld #l&#%" !eed # ")eci#l )o&er of #ttor!e% to 'e e:ec,ted i! 'eh#lf of the )ri!ci)#l '% the #$e!t+ BHT !ot h#vi!$ "o !#*ed+ it i" )o""i'le th#t ",ch #ct" of "trict o&!er"hi) *#%+ de)e!di!$ o! circ,*"t#!ce" )rev#ili!$ i! e#ch c#"e+ &o,ld 'e #ct" of #d*i!i"tr#tio!+ #!d *#% 'e $over!ed '% # $e!er#l )o&er of #ttor!e%+ or *#% 'e i*)lied or i!cide!t#l fro* e:)re"" )o&er" or fro* the !#t,re of the ',"i!e"" covered '% the #$e!c% #rr#!$e*e!t. I! +arcia v. #e .anzano+ ?; Ihil /55 31;1;6+ o!e of the i"",e to 'e re"olved &#" &hether # )o&er of #ttor!e% th#t $r#!ted the "o! the follo&i!$ )o&er"D (To e!#'le hi* to ',% or "ell+ #'"ol,tel% or ,!der )#cto de retro+ #!% of the r,r#l or ,r'#! e"t#te" th#t I !o& o&! #!d *#% #cB,ire i! the f,t,re+ #t ",ch )rice #" he *#% dee* *o"t #dv#!t#$eo,"+ &hich he "h#ll collect i! c#"h or '% i!"t#ll*e!t" #!d ,!der ",ch co!ditio!" #" he *#% co!"ider )ro)er+ #!d he "h#ll "et forth the e!c,*'r#!ce" o! the )ro)ertie" #!d their ori$i!. I 'i!d *%"elf to &#rr#!t #!d defe!d+ i! #ccord#!ce &ith l#&+ the title" to ",ch )ro)ertie"< #!d if the )ro)ertie" #lie!#ted '% thi" #$ree*e!t "ho,ld 'e redee*ed+ he i" e*)o&ered to redee* the* '% )#%i!$ the )rice th#t *#% h#ve 'ee! :ed+ #!d+ for thi" ),r)o"e+ "h#ll e:ec,te the )ro)er i!"tr,*e!t+( &o,ld $r#!t hi* #,thorit% to "ell the h#lf7i!tere"t th#t the )ri!ci)#l h#d i! # 'o#t. The co,rt held i! the #@r*#tive+ r,li!$ #" follo&" 77 The )o&er7of7#ttor!e% #,thori>e" the "#le of re#l )ro)ert%+ the ',%i!$ of re#l )ro)ert% #!d *ort$#$i!$ the "#*e+ the 'orro&i!$ of *o!e% #!d i! f#ct i" $e!er#l #!d co*)lete. The )o&er doe" !ot e:)re""l% "t#te th#t the #$e!t *#% "ell the 'o#t+ ',t # )o&er "o f,ll #!d co*)lete #!d #,thori>i!$ the "#le of re#l 64 )ro)ert%+ *,"t !ece""#ril% c#rr% &ith it the ri$ht to "ell # h#lf i!tere"t i! # "*#ll 'o#t. The record f,rther "ho&" the "#le &#" !ece""#r% i! order to $et *o!e% or # credit &itho,t &hich it &o,ld 'e i*)o""i'le to co!ti!,e the ',"i!e"" &hich &#" 'ei!$ co!d,cted i! the !#*e of N#rci"o F. G#!>#!o #!d for hi" 'e!et. 3#t ). /8/6 #e .anzano i" #,thorit% to "ho& th#t #ltho,$h the )o&er to "ell i**ov#'le" *,"t 'e co!t#i!ed i! # ")eci#l )o&er of #ttor!e%+ #!d therefore #l&#%" co!"tit,te" #! #ct of "trict o&!er"hi)+ the "#le or e!c,*'r#!ce of *ov#'le" *#% co!"tit,te either #ct" of #d*i!i"tr#tio! or #ct" of "trict o&!er"hi)+ de)e!di!$ o! the )rev#ili!$ circ,*"t#!ce". Th,"+ i! #e .anzano+ the $r#!t of the e:)re"" )o&er to *#!#$e the e!tire ',"i!e"" #=#ir" of the )ri!ci)#l+ &#" dee*ed to i!cl,de the )o&er to "ell co7o&!er"hi) i!tere"t i! *ov#'le )ro)ert%+ e")eci#ll% &he! the "#le &#" !ece""#r% to co!d,ct the ',"i!e"" of the )ri!ci)#l. -1.Citing Cit-3ite Realt- Corp. v. Court of Appeals+ ?0/ 1CRA ?8/ 304446< Raet v. Court of Appeals+ 0;/ 1CRA 655 31;;86. -0.Reiterated in iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466. -?.See +ozun v. .ercado /11 1CRA ?4/ 304466< 8asu'a v. Heirs of Cecilio S. #e 0illa, 2;; 1CRA 266 304466. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 0D/? AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT VI. 1IECIFIC OBFIGATION RHFE1 FOR AGENT1 a. Ob/i)ation o( A)ent to A.'an&e F!n.$ There i" !o co**o!7l#& d,t% or o'li$#tio! o! the )#rt of the #$e!t to #dv#!ce hi" o&! f,!d" i! 'eh#lf of the )ri!ci)#l< for i!deed+ o!e of the di"ti!$,i"hi!$ ch#r#cteri"tic of ever% #$e!c% i" th#t the #$e!t doe" !ot )er"o!#ll% 'eco*e li#'le for the co!tr#ct" #!d tr#!"#ctio!" ),r",ed i! 'eh#lf of the )ri!ci)#l. H!der Article 1886 of the Civil Code+ the o!l% ti*e th#t #! #$e!t i" le$#ll% 'o,!d to #dv#!ce )er"o!#l f,!d" i! the ),r",it of the #$e!c% i" &he! ",ch o'li$#tio! h#" 'ee! e:)re""l% #$reed ,)o! i! the cre#tio! of the co!tr#ct of #$e!c%. B,t eve! i! ",ch # c#"e+ the #$e!t *#% ref,"e to #dv#!ce #!% )er"o!#l f,!d" &he! the )ri!ci)#l i" i!"olve!t. I!deed+ ,!der 61 Article 1;1;3?6+ i!"olve!c% of the )ri!ci)#l e:ti!$,i"he" the #$e!c%. b. A)entFGH$ D!t* o( +o*a/t* ,1- %uty of /oyalty in 5eneral Article 18;; "et"7o,t &h#t i! cor)or#te )#rl#!ce i" 9!o&! #" the d,t% of lo%#lt% of #! #$e!tD (The #$e!t "h#ll 'e li#'le for d#*#$e" if+ there 'ei!$ # co!Cict 'et&ee! hi" i!tere"t #!d tho"e of the )ri!ci)#l+ he "ho,ld )refer hi" o&!.( A$e!c% rel#tio! i" e""e!ti#ll% d,ci#r% i! ch#r#cter+ &hich reB,ire" of the #$e!t to o'"erve ,t*o"t $ood f#ith #!d lo%#lt% to the )ri!ci)#l. Ahe! # #$e!t viol#te" hi" d,t% of lo%#lt%+ #!d i! # co!Cict7of7i!tere"t" "it,#tio!+ he )refer" hi" o&! i!tere"t to the detri*e!t of the )ri!ci)#l+ Article 18;; doe" !ot decl#re the co!tr#ct or tr#!"#ctio! he e!tered i!to to 'e void+ ',t *erel% *#9e" the #$e!t li#'le for the d#*#$e" ",=ered '% the )ri!ci)#l. I! Cor)or#te F#&+ &he! # director or o@cer viol#te" hi" d,t% of lo%#lt% to the cor)or#tio!+ he i" 'o,!d to di"$or$e to the cor)or#tio! #ll the )rot" #!d e#r!i!$" he o't#i! fro* hi" 're#ch of d,t%+ eve! &he! he ,"ed hi" o&! c#)it#l or f,!d" for the co!tr#ct or tr#!"#ctio! 31ectio!" ?1 #!d ?2+ Cor)or#tio! Code6. <ould the 'easure of da'ages due to the principal 4e the sa'e &hen an agent violates his dut- of lo-alt-> Do,'le #$e!c% 3&here the "#*e #$e!t "erve" the t&o co!tr#cti!$ )ri!ci)#l" i" fro&!ed ,)o! '% l#&+ #!d &ill 'e #llo&ed o!l% &he! 9!o&! to 'oth )#rtie". %omingo v$ %omingo, 42 SCRA 131 ,1@C1-. ,2- )hen "gent 'nters into a Contract in ,is O!n Name on a Matter that alls )ith the Scope of the "gency Article 188? )rovide" th#t (-i.f #! #$e!t #ct" i! hi" o&! !#*e+ the )ri!ci)#l h#" !o ri$ht of #ctio! #$#i!"t the )er"o! &ith &ho* the #$e!t h#" co!tr#cted< !either h#ve ",ch )er"o!" #$#i!"t the )ri!ci)#l.( I! ",ch # c#"e it i" )rovided th#t it i" the #$e!t &ho (i" the o!e directl% 'o,!d i! f#vor of the )er"o! &ith &ho* he h#" co!tr#cted+ #" if the tr#!"#ctio! &ere hi" o&!+ e:ce)t &he! the co!tr#ct i!volve" thi!$" 'elo!$i!$ to the )ri!ci)#l.( If the *#tter" e!tered i!to '% the #$e!t i! hi" o&! !#*e #re *#tter" th#t #re &ithi! the "co)e of hi" #,thorit% or tho"e )ert#i!i!$ to *#tter" th#t "ho,ld )ert#i! to the ',"i!e"" of the )ri!ci)#l+ there &o,ld 'e !o do,'t th#t the #$e!t h#" 're#ch hi" d,ci#r% d,t% of lo%#lt%+ '% h#vi!$ )referred hi" o&! i!tere"t" to th#t of the )ri!ci)#lKLQ". Ahether the #$e!t h#" ,"ed hi" o&! f,!d" or )ro)ert%+ or tho"e of the )ri!ci)#lKLQ"+ he &o,ld "till 'e i! 're#ch of thi" d,ci#r% d,t%+ #!d ,!der Article 18;1+ he (i" 'o,!d to re!der #! #cco,!t of hi" tr#!"#ctio!" #!d to deliver to the )ri!ci)#l &h#tever he *#% 60 h#ve received '% virt,e of the #$e!c%+ eve! tho,$h it *#% !ot 'e o&i!$ to the )ri!ci)#l.( I! either c#"e+ therefore+ the )ri!ci)#l h#" the ri$ht to de*#!d th#t the #$e!t "ho,ld t,r!7over to hi* &h#tever co!tr#ct+ )ro)ert% or ',"i!e"" h#" 'ee! #cB,ired '% the #$e!t i! 're#ch of hi" d,t% of lo%#lt%. I! .iguel v. Court of Appeals+ 0; 1CRA 564 31;6;6+ the Co,rt held th#t (# d,ci#r% rel#tio! #ri"e" &here o!e *#! #"",*e" to #ct #" #$e!t for #!other #!d the other re)o"e" co!de!ce i! hi*+ #ltho,$h there i" !o &ritte! co!tr#ct or !o co!tr#ct #t #ll. If the #$e!t viol#te" hi" d,t% #" d,ci#r%+ # co!"tr,ctive tr,"t #ri"e". It i" i**#teri#l th#t there &#" !o #!tecede!t d,ci#r% rel#tio! #!d th#t it #ro"e co!te*)or#!eo,"l% &ith the )#rtic,l#r tr#!"#ctio!.( -1. If the #$e!t h#d ,"ed the f,!d" 'elo!$i!$ to the )ri!ci)#l+ ,!der Article 18;6 he (o&e" i!tere"t o! the ",*" he h#" #))lied to hi" o&! ,"e fro* the d#% o! &hich he did "o+ #!d o! tho"e &hich he "till o&e" #fter the e:ti!$,i"h*e!t of the #$e!c%.( The )rovi"io!" of thi" #rticle )re",*e" th#t the )ro)ert% or ',"i!e"" #cB,ired '% the #$e!t for hi" o&! i! viol#tio! of hi" d,ci#r% d,t% i" o!e th#t the )ri!ci)#l i" !ot de*#!di!$ to 'e delivered to hi*. Thi" i" cle#r fro* Article 1;18 &hich )rovide" th#t (-t.he )ri!ci)#l i" !ot li#'le for the e:)e!"e" i!c,rred '% the #$e!t . . . -i.f the #$e!t #cted i! co!tr#ve!tio! of the )ri!ci)#lKLQ" i!"tr,ctio!"+ ,!le"" the l#tter "ho,ld &i"h to #v#il hi*"elf of the 'e!et" derived fro* the co!tr#ct.( I! other &ord"+ if the co!tr#ct or ',"i!e"" #cB,ired '% the #$e!t i! 're#ch of hi" d,t% of lo%#lt% i" de*#!ded '% the )ri!ci)#l to 'e t,r!ed over to hi*+ the! the ,"e of the )ri!ci)#l8" ",* to #cB,ire ",ch ',"i!e"" &o,ld 'e dee*ed to h#ve 'ee! r#tied+ #!d the #$e!t i" !ot )er"o!#ll% li#'le for the i!tere"t" d,e o! "#id #*o,!t. I! #dditio!+ Article 12// of the Civil Code 3o! i*)lied tr,"t"6+ )rovide" th#t (-&.he! #!% tr,"tee+ $,#rdi#! or other )er"o! holdi!$ # d,ci#r% rel#tio!"hi) ,"e" tr,"t f,!d" for the ),rch#"e of )ro)ert% #!d c#,"e" the co!ve%#!ce to 'e *#de to hi* or to # third )er"o!+ # tr,"t i" e"t#'li"hed '% o)er#tio! of l#& i! f#vor of the )er"o! to &ho* the f,!d" 'elo!$.( ,3- Particular Rules on Con>ict of .nterests Situations The follo&i!$ #re ")ecic r,le" coveri!$ viol#tio! of the d,t% of lo%#lt% of the #$e!tD 3#6 (urchase of (rincipalGHIs (ropert- 7 Article 12;1306 of the Civil Code )rovide" for #!% co!Cict7of7i!tere"t "it,#tio! &he! it )rovide" th#t #! #$e!t i" )rohi'ited fro* ',%i!$ )ro)ert% e!tr,"ted to hi* for #d*i!i"tr#tio! or *#!#$e*e!t+ &itho,t the )ri!ci)#l8" co!"e!t. Eve! &he! #! #$e!t i" #,thori>ed to "ell the )ro)ert%+ #!d he "ell" it to hi*"elf for 6? v#l,#'le co!"ider#tio! ',t &itho,t the co!"e!t of the )ri!ci)#l+ the "#le &o,ld 'e void. 3'6 <hen Agent E'po&ered to *orro& or end .one- 7 Article 18;4 )rovide" th#t &he! the #$e!t i" e*)o&ered to 'orro& or le!d *o!e% '% the )ri!ci)#l+ the!D 3i6 If e*)o&ered to 'orro& *o!e%+ he *#% 'e the le!der #t c,rre!t i!tere"t< #!d 3ii6 If e*)o&ered to le!d *o!e% #t i!tere"t+ he c#!!ot 'orro& &itho,t )ri!ci)#l8" co!"e!t. 3c6 O4ligation To Turn3Over to the (rincipal <hatever Received 4- 0irtue of the Agenc- 3 H!der Article 18;4+ ever% #$e!t i" 'o,!d to deliver to the )ri!ci)#l &h#tever he *#% h#ve received '% virt,e of the #$e!c%+ eve! tho,$h it *#% !ot 'e o&i!$ to the )ri!ci)#l+ #!d eve! &he! $ive! to hi* for hi" 'e!et. <hat happens &hen the agent violates his o4ligations under Article ?@JA> I! the c#"e &here the #$e!t &#" the le!der to the )ri!ci)#l #!d ch#r$ed i!tere"t hi$her th#! the c,rre!t r#te+ the di=ere!ce &o,ld h#ve to 'e ret,r!ed to the )ri!ci)#l. If the #$e!t 'orro&" for hi*"elf &itho,t the )ri!ci)#l8" the *o!e% &hich the )ri!ci)#l h#" #,thori>ed hi* to le!d o,t+ he &o,ld !ot o!l% 'e li#'le for the c,rre!t i!tere"t th#t the )ri!ci)#l &o,ld h#ve e#r!ed h#d it 'ee! le!t o,t to # third )#rt%+ he &o,ld #l"o 'e li#'le for d#*#$e" th#t the )ri!ci)#l *#% h#ve ",=ered. Re/ate. Ca$e$6 A4oitiz v. #e Silva+ 2/ Ihil 88? 31;026 Sing "uco v. Sun-antong orente+ 2? Ihil /8; 31;006 Severino v. Severino+ 22 Ihil ?2? 31;0?6 Hodges v. Salas+ 6? Ihil /65 31;?66 &. Ob/i)ation o( A)ent to Ren.e" A&&o!nt H!der 18;1 of the Civil Code+ (Ever% #$e!t i" 'o,!d to re!der #! #cco,!t of hi" tr#!"#ctio!" #!d to deliver to the )ri!ci)#l &h#tever he *#% h#ve received '% virt,e of the #$e!c%+ eve! tho,$h it *#% !ot 'e o&i!$ to the )ri!ci)#l. Ever% "ti),l#tio! e:e*)ti!$ the #$e!t fro* the o'li$#tio! to re!der #! #cco,!t "h#ll 'e void.( The &ell7e"t#'li"hed r,le i" th#t #! #$e!t c#!!ot ret#i! #" hi" co**i""io! #!% )#rt of the )roceed" th#t 'elo!$ to the )ri!ci)#l. -0. ( A" # !ece""#r% co!"eB,e!ce of ",ch 're#ch of tr,"t+ defe!d#!t7#))ellee Gre$orio Do*i!$o *,"t forfeit 62 hi" ri$ht to the co**i""io! #!d *,"t ret,r! the )#rt of the co**i""io! he received fro* hi" )ri!ci)#l.( #o'ingo v. #o'ing+ 20 1CRA 1?1 31;516. The re#"o! &h% #! #$e!t h#" to t,r!7over to the )ri!ci)#l ever%thi!$ he receive" '% virt,e of the #$e!c% i" th#t &he! he #ct"+ he doe" "o *erel% #" # re)re"e!t#tive of the )ri!ci)#l+ #!d &h#tever he receive" i" #" tho,$h it &#" the )ri!ci)#l &ho receive" it. Je h#" !o "t#!di!$ therefore to ret#i! for hi*"elf #!% #*o,!t or ite* received i! ),r",it of the #$e!c%. The o'li$#tio! of the #$e!t to #cco,!t for ever%thi!$ to the )ri!ci)#l lie" #t the core of hi" d,ci#r% o'li$#tio!" th#t #!% "ti),l#tio! e:e*)ti!$ the #$e!t fro* the o'li$#tio! to re!der #! #cco,!ti!$ i" decl#red void ,!der Article 18;1. #o'ingo v. #o'ingo+ 20 1CRA 1?1 31;516+ held th#t (I#r#$r#)h 0 of Article 18;1 i" # !e& #dditio! de"i$!ed to "tre"" the hi$he"t lo%#lt% th#t i" reB,ired to #! #$e!t co!de*!i!$ #" void #!% "ti),l#tio! e:e*)ti!$ the #$e!t fro* the d,t% #!d li#'ilit% i*)o"ed o! hi* i! )#r#$r#)h o!e thereof.( It eB,#te" the t#9i!$ of "ecret )rot '% the #$e!t #" to 'e # fr#,d co**itted #$#i!"t the )ri!ci)#l. It held th#t 77 Je!ce+ #! #$e!t &ho t#9e" # "ecret )rot i! the !#t,re of # 'o!,"+ $r#t,it% or )er"o!#l 'e!et fro* the ve!dee+ &itho,t reve#li!$ the "#*e to hi" )ri!ci)#l+ the ve!dor+ i" $,ilt% of # 're#ch of hi" lo%#lt% to the )ri!ci)#l #!d forfeit" hi" ri$ht to collect the co**i""io! fro* hi" )ri!ci)#l+ eve! if the )ri!ci)#l doe" !ot ",=er #!% i!E,r% '% re#"o! of ",ch 're#ch of delit%+ or th#t he o't#i!ed 'etter re",lt" or th#t the #$e!c% i" # $r#t,ito," o!e+ or th#t ,"#$e or c,"to* #llo&" it< 'ec#,"e the r,le i" to )reve!t the )o""i'ilit% of #!% &ro!$+ !ot to re*ed% or re)#ir #! #ct,#l d#*#$e. ? B% t#9i!$ ",ch )rot or 'o!," or $ift or )ro)i!# fro* the ve!dee+ the #$e!t there'% #"",*e" # )o"itio! &holl% i!co!"i"te!t &ith th#t of 'ei!$ #! #$e!t for hi" )ri!ci)#l+ &ho h#" # ri$ht to tre#t hi*+ i!"of#r #" hi" Co**i""io! i" co!cer!ed+ #" if !o #$e!c% h#d e:i"ted. The f#ct th#t the )ri!ci)#l *#% h#ve 'ee! 'e!eted '% the v#l,#'le "ervice" of the "#id #$e!t doe" !ot e:c,l)#te the #$e!t &ho h#" o!l% hi*"elf to 'l#*e for ",ch # re",lt '% re#"o! of hi" tre#cher% or )erd%. 3#t )). 1?571?86 #o'ingo v. #o'ingo+ 20 1CRA 1?1 31;516+ cite" A*eric#! E,ri")r,de!ce th#t #))l% the doctri!e ,!der Article 18;1+ th," 77 6/ The A*eric#! E,ri")r,de!ce o! thi" "core i" &ell7!i$h ,!#!i*o,". (Ahere # )ri!ci)#l h#" )#id #! #$e!t or 'ro9er # co**i""io! &hile i$!or#!t of the f#ct th#t the l#tter h#" 'ee! ,!f#ithf,l+ the )ri!ci)#l *#% recover '#c9 the co**i""io! )#id+ "i!ce #! #$e!t or 'ro9er &ho h#" 'ee! ,!f#ithf,l i" !ot e!titled to #!% co*)e!"#tio!. ::: ::: ::: (I! di"c,""i!$ the ri$ht of the )ri!ci)#l to recover co**i""io!" ret#i!ed '% #! ,!f#ithf,l #$e!t+ the co,rt i! Fittle v". Ihi))" 31;116 048 G#"". ??l+ ;2 NE 064+ ?2 FRA 3N16 1426+ "#idD 8It i" &ell "ettled th#t the #$e!t i" 'o,!d to e:erci"e the ,t*o"t $ood f#ith i! hi" de#li!$" &ith hi" )ri!ci)#l. A" Ford C#ir!" "#id+ thi" r,le (i" !ot # tech!ic#l or #r'itr#r% r,le. It i" # r,le fo,!ded o! the hi$he"t #!d tr,e"t )ri!ci)le" of *or#lit%.( I#r9er v". GcNe!!# 318526 FR 14 Ch 3E!$6 ;6+ 118.. If the #$e!t doe" !ot co!d,ct hi*"elf &ith e!tire delit% to&#rd" hi" )ri!ci)#l+ ',t i" $,ilt% of t#9i!$ # "ecret )rot or co**i""io! i! re$#rd the *#tter i! &hich he i" e*)lo%ed+ he lo"e" hi" ri$ht to co*)e!"#tio! o! the $ro,!d th#t he h#" t#9e! # )o"itio! &holl% i!co!"i"te!t &ith th#t of #$e!t for hi" e*)lo%er+ #!d &hich $ive" hi" e*)lo%er+ ,)o! di"coveri!$ it+ the ri$ht to tre#t hi* "o f#r #" co*)e!"#tio!+ #t le#"t+ i" co!cer!ed #" if !o #$e!c% h#d e:i"ted. Thi" *#% o)er#te to $ive to the )ri!ci)#l the 'e!et of v#l,#'le "ervice" re!dered '% the #$e!t+ ',t the #$e!t h#" o!l% hi*"elf to 'l#*e for th#t re",lt.8 : : : (The i!te!t &ith &hich the #$e!t too9 # "ecret )rot h#" 'ee! held i**#teri#l &here the #$e!t h#" i! f#ct e!tered i!to # rel#tio!"hi) i!co!"i"te!t &ith hi" #$e!c%+ "i!ce the l#& co!de*!" the corr,)ti!$ te!de!c% of the i!co!"i"te!t rel#tio!"hi). Fittle v". Ihi))" 31;116 ;2 NE 064.( (A" # $e!er#l r,le+ it i" # 're#ch of $ood f#ith #!d lo%#lt% to hi" )ri!ci)#l for #! #$e!t+ &hile the #$e!c% e:i"t"+ "o to de#l &ith the ",'Eect *#tter thereof+ or &ith i!for*#tio! #cB,ired d,ri!$ the co,r"e of the #$e!c%+ #" to *#9e # )rot o,t of it for hi*"elf i! e:ce"" of hi" l#&f,l co*)e!"#tio!D #!d if he doe" "o he *#% 'e held #" # 66 tr,"tee #!d *#% 'e co*)elled to #cco,!t to hi" )ri!ci)#l for #ll )rot"+ #dv#!t#$e"+ ri$ht"+ or )rivile$e" #cB,ired+ '% hi* i! ",ch de#li!$"+ &hether i! )erfor*#!ce or i! viol#tio! of hi" d,tie"+ #!d 'e reB,ired to tr#!"fer the* to hi" )ri!ci)#l ,)o! 'ei!$ rei*',r"ed for hi" e:)e!dit,re" for the "#*e+ ,!le"" the )ri!ci)#l h#" co!"e!ted to or r#tied the tr#!"#ctio! 9!o&i!$ th#t 'e!et or )rot &o,ld #ccr,e+ or h#d #ccr,ed+ to the #$e!t+ or ,!le"" &ith ",ch 9!o&led$e he h#" #llo&ed the #$e!t "o #" to ch#!$e hi" co!ditio! th#t he c#!!ot 'e ),t i! "t#t," B,o. The #))lic#tio! of thi" r,le i" !ot #=ected '% the f#ct th#t the )ri!ci)#l did !ot ",=er #!% i!E,r% '% re#"o! of the #$e!t8" de#li!$"+ or th#t he i! f#ct o't#i!ed 'etter re",lt"< !or i" it #=ected '% the f#ct th#t there i" # ,"#$e or c,"to* to the co!tr#r%+ or th#t the #$e!c% i" # $r#t,ito," o!e.( 3#t ). 1?;6 Jo&ever+ #o'ingo #l"o held th#t the d,t% e*'odied i! Article 18;1 to #cco,!t &ill !ot #))l% (if the #$e!t or 'ro9er h#d i!for*ed the )ri!ci)#l of the $ift or 'o!," or )rot he received fro* the ),rch#"er #!d hi" )ri!ci)#l did !ot o'Eect thereto.( 3#t ). 1246 The Co,rt #l"o held i! #o'ingo th#t I#r#$r#)h 0 of Article 18;1 3&#iver of d,t% to #cco,!t i" void6 i" de"i$!ed to "tre"" the hi$he"t lo%#lt% th#t i" reB,ired of #! #$e!t. Article 18;1 3#!d Art. 1;4;6 i*)o"ed ,)o! the #$e!t the #'"ol,te o'li$#tio! to *#9e # f,ll di"clo",re or co*)lete #cco,!t to hi" )ri!ci)#l of #ll hi" tr#!"#ctio!" #!d other *#teri#l f#ct" relev#!t to the #$e!c%+ "o *,ch "o th#t the l#& doe" !ot co,!te!#!ce #!% "ti),l#tio! e:e*)ti!$ the #$e!t for* ",ch o'li$#tio! #!d co!de*!" #" void ",ch "ti),l#tio!. The d,t% of #! #$e!t i" li9e!ed to th#t of # tr,"tee. Thi" i" !ot # tech!ic#l or #r'itr#r% r,le ',t # r,le fo,!ded o! the hi$he"t #!d tr,e"t )ri!ci)le of *or#lit% #" &ell #" of the "tricte"t E,"tice. A! #$e!t+ ,!li9e # "erv#!t or *e""e!$er+ h#" 'oth the )h%"ic#l #!d E,ridic#l )o""e""io! of the $ood" received i! #$e!c%+ or the )roceed" thereof+ &hich t#9e the )l#ce of the $ood" #fter their "#le '% the #$e!t. Ji" d,t% to t,r! over the )roceed" of the #$e!c% de)e!d" ,)o! hi" di"ch#r$e #" &ell #" the re",lt of the #cco,!ti!$ 'et&ee! hi* #!d the )ri!ci)#l+ #!d he *#% !ot "et ,) hi" ri$ht of )o""e""io! #" #$#i!"t th#t of the )ri!ci)#l ,!til the #$e!c% i" ter*i!#ted. 5u=man v$ Court of "ppeals, @@ 1i/. CA3 ,1@5?-. It i" i**#teri#l &hether ",ch *o!e% or )ro)ert% i" the re",lt of the )erfor*#!ce or viol#tio! of the #$e!t8" d,t%+ if it 'e the fr,it of the #$e!c%+ it *,"t 'e #cco,!ted for #!d t,r!ed 65 over to the )ri!ci)#l. If hi" d,t% i" "trictl% )erfor*ed+ the re",lti!$ )rot #ccr,e" to the )ri!ci)#l #" the le$iti*#te co!"eB,e!ce of the rel#tio!< if )rot #ccr,e" fro* hi" viol#tio! of d,t% &hile e:ec,ti!$ the #$e!c%+ th#t li9e&i"e 'elo!$" to the )ri!ci)#l+ !ot o!l% 'ec#,"e the )ri!ci)#l h#" to #"",*e the re")o!"i'ilit% of the tr#!"#ctio!+ ',t #l"o 'ec#,"e the #$e!t c#!!ot 'e )er*itted to derive #dv#!t#$e fro* hi" o&! def#,lt. %umaguin v$ Reynolds& @2 1i/. ?? ,1@52-. Therefore+ &he! the #$e!t e!ter" i!to # co!tr#ct th#t "ho,ld )ert#i! to the )ri!ci)#l+ ',t i! hi" o&! !#*e+ it &o,ld 'e # viol#tio! of hi" d,t% of lo%#lt% to the )ri!ci)#l+ #!d #" 'et&ee! the )ri!ci)#l #!d the #$e!t+ the l#tter *,"t #cco,!t to the )ri!ci)#l for #ll )rot" e#r!ed fro* the tr#!"#ctio!. It *#tter" !o& ho& f#ir the co!d,ct of the #$e!t *#% h#ve 'ee! i! # )#rtic,l#r c#"e+ !or th#t the )ri!ci)#l &o,ld h#ve 'ee! !o 'etter of if the #$e!t h#d "trictl% ),r",ed hi" )o&er+ !or th#t the )ri!ci)#l &#" !ot+ i! f#ct+ i!E,red '% the i!terve!tio! of the #$e!t for hi" o&! )rot. The re",lt i! 'oth c#"e" i" the "#*e< the )rot" "h#ll "till )ert#i! to the )ri!ci)#l. Ojinaga v$ 'state of Pere=, @ 1i/. 1B5 ,1@AC-. ,1- )hen the %uty to "ccount %oes Not "pply H!der Article 1;12+ the #$e!t *#% ret#i! i! )led$e the thi!$" &hich #re the o'Eect of the #$e!c% ,!til the )ri!ci)#l e=ect" the rei*',r"e*e!t #!d )#%" the i!de*!it% )rovided i! Article 1;10 #!d 1;1?. ). +iabi/it* o( A)ent (o" Inte"e$t H!der Article 18;6+ the #$e!t &o,ld o&e i!tere"t to the )ri!ci)#l o! the follo&i!$ ite*"D 3#6 O! ",*" the #$e!t #))lied to hi" o&! ,"e fro* the ti*e he ,"ed the*< #!d 3'6 O! ",*" o&i!$ the )ri!ci)#l &hich re*#i! o,t"t#!di!$ #t the ti*e of e:ti!$,i"h*e!t of the #$e!c%+ i!tere"t to r,! fro* the ti*e of ",ch e:ti!$,i"h*e!t. The 1,)re*e Co,rt h#" reco$!i>ed the t&o di"ti!ct c#"e" covered ,!der Article 18;6. -?. The 1,)re*e Co,rt reco$!i>ed i! +orja v$ %e +orja, 5B 1i/ B11 ,1@33-+ th#t there i" !o i!tere"t d,e o! ",*" o&ed '% the #$e!t to the )ri!ci)#l &hich h#ve !ot 'ee! the re",lt of #$e!tKLQ" co!ver"io! to hi" o&! ,"e+ ",ch #$e!t &o,ld 'e li#'le for i!tere"t" to r,! fro* the d#te the #$e!c% i" e:ti!$,i"hed ,!til he )#%" ",ch ",*". 1. A)ent +iab/e (o" F"a!. an. Ne)/i)en&e Article 1;4; )rovide" th#t (-t.he #$e!t i" re")o!"i'le !ot o!l% for fr#,d+ ',t #l"o for !e$li$e!ce+ &hich "h#ll 'e E,d$ed &ith *ore or 68 le"" ri$or '% the co,rt"+ #ccordi!$ to &hether the #$e!c% &#" or &#" !ot for # co*)e!"#tio!.( #o'ingo v. #o'ingo+ 20 1CRA 1?1 31;516+ held th#t the )rovi"io!" of Article 1;4; Kde*#!d the ,t*o"t $ood f#ith+ delit%+ ho!e"t%+ c#!dor #!d f#ir!e"" o! the )#rt of the #$e!t+ the re#l e"t#te 'ro9er i! thi" c#"e+ to hi" )ri!ci)#l+ the ve!dor. The l#& i*)o"e" ,)o! the #$e!t the #'"ol,te o'li$#tio! to *#9e # f,ll di"clo",re or co*)lete #cco,!t to hi" )ri!ci)#l of #ll hi" tr#!"#ctio!" #!d other *#teri#l f#ct" relev#!t to the #$e!c%+ "o *,ch "o th#t the l#& #" #*e!ded doe" !ot co,!te!#!ce #!% "ti),l#tio! e:e*)ti!$ the #$e!t fro* ",ch #! o'li$#tio! #!d co!"ider" ",ch #! e:e*)tio! #" void. The d,t% of #! #$e!t i" li9e!ed to th#t of # tr,"tee. Thi" i" !ot # tech!ic#l or #r'itr#r% r,le ',t # r,le fo,!ded o! the hi$he"t #!d tr,e"t )ri!ci)le of *or#lit% #" &ell #" of the "tricte"t.( 3#t ). 1?56 The )rovi"io!" of Article 1;4; #re *erel% #! i*)le*e!t#tio! of the d,t% of dili$e!ce e:)re""ed i! Article 1885 &hich )rovide" th#t i! the e:ec,tio! of the #$e!c%+ the #$e!t "h#ll #ct i! #ccord#!ce &ith the i!"tr,ctio!" of the )ri!ci)#l+ #!d i! def#,lt of i!"tr,ctio!"+ the #$e!t ("h#ll do #ll th#t # $ood f#ther of # f#*il% &o,ld do+ #" reB,ired '% the !#t,re of the ',"i!e""<( #!d Article 1888+ &hich )rovide" th#t #! #$e!t ("h#ll !ot c#rr% o,t #! #$e!c% if it" e:ec,tio! &o,ld *#!ife"tl% re",lt i! lo"" or d#*#$e to the )ri!ci)#l.( It *,"t 'e !oted th#t #! #$e!t c#!!ot 'e held )er"o!#ll% li#'le '% the )ri!ci)#l for d#*#$e" c#,"ed &here+ #" )rovided ,!der Article 18;;+ the (#$e!t #ct" i! #ccord#!ce &ith the order" of the )ri!ci)#l+ the )ri!ci)#l c#!!ot "et7,) the i$!or#!ce of the #$e!t #" to circ,*"t#!ce" &hereof he hi*"elf &#"+ or o,$ht to h#ve 'ee!+ #&#re.( Thi" refer" to the li#'ilit% i!c,rred '% the )ri!ci)#l #" to third )#rtie"D h#vi!$ #))oi!ted #! i$!or#*," for #! #$e!t+ &ho #ct" i! #ccord#!ce &ith the )ri!ci)#lKLQ" i!"tr,ctio! 3doe" !ot ,"e $ood E,d$*e!t6+ the )ri!ci)#l c#!!ot #void hi" o'li$#tio!" #ri"i!$ fro* the co!tr#ct. Article 1;4; i" #l"o the le$#l '#"i" '% &hich #! #$e!t 'eco*e" )er"o!#ll% li#'le to third )#rtie" &ho #re i!E,red '% hi" #ct of fr#,d or !e$li$e!ce. Re/ate. Ca$e$6 Strong v. +uiterrez Repide+ 21 Ihil ;25 31;4;6 +ritish "ir!ays v$ Court of "ppeals, 2B5 SCRA 45A ,1@@B- Metroban* v$ Court of "ppeals, 1@4 SCRA 1?@ ,1@@1- International $il's 9China: v. -ric $il'+ 6? Ihil 558 31;?66 6; Austria v. Court of Appeals+ ?; 1CRA /05 31;516 Cad&allader v. S'ith *ell+ 5 Ihil 261 31;456 -1.#t ). 555+ citing 1cott o! Tr,"t"+ ? rd ed.+ Vol. V+ ). 0/22+ citing Harrop v. Cole,+ 8/ N.J. EB. ?0+ ;/ A. ?58+ #=KLQd 86 N.J. E#. 0/4+ ;8 A. 148/. -0.5.S. v. Re-es+ ?6 Ihil. 5;1 31;156< 5.S. v. %iene+ 5 Ihil. 5?6 31;456< O!inaga v. Estate of (erez+ ; Ihil. 18/ 31;456< In re *a'4erger+ 2; Ihil. ;60 31;506< #uhart $reres - Co'pania v. .acia+ /2 Ihil. /1? 31;?46. -?.O!inaga v. Estate of (erez+ ; Ihil. 18/ 31;456< .endezona v. 0da. #e +oitia+ /2 Ihil //5 31;?46< A.. A''en Transportation Co. v. #e .argallo+ /2 Ihil. /54 31;?46. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 0D06 AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT VII. IOAER OF AGENT TO AIIOINT A 1HB1TITHTE Article 18;0 "et" the def#,lt r,le th#t KLX-t.he #$e!t *#% #))oi!t # ",'"tit,te if the )ri!ci)#l h#" !ot )rohi'ited hi* fro* doi!$ "o.KL I! Escueta v. i', /10 1CRA 211 304456+ the f#ther &ho h#d $ive! her d#,$hter # ")eci#l )o&er of #ttor!e% to "ell re#l )ro)ertie"+ co,ld !ot "ee9 the decl#r#tio! of !,llit% of the "#le e=ected '% the ",'"tit,te #$e!t #))oi!t '% the d#,$hterD KLXA))l%i!$ -Article 18;0 of the Civil Code. to the ")eci#l )o&er of #ttor!e% e:ec,ted '% -the f#ther. i! f#vor of hi" d#,$hter . . .+ it i" cle#r th#t "he i" !ot )rohi'ited fro* #))oi!ti!$ # ",'"tit,te. B% #,thori>i!$ -the ",'7#$e!t. to "ell the ",'Eect )ro)ertie"+ -the d#,$hter. *erel% #cted &ithi! the li*it" of the #,thorit% $ive! '% her f#ther+ ',t "he &ill h#ve to 'e KLYre")o!"i'le for the #ct" of the ",'7#$e!t+KLQ #*o!$ &hich i" )reci"el% the "#le of the ",'Eect )ro)ertie" i! f#vor of re")o!de!t".KL 3#t )). 20?72026 a. E>e&t$ ;1en A)ent A##oint$ a S!b$tit!te6 ,1- Ahe! the ",'7#$e!t h#" 'ee! #))oi!ted ),r",#!t to the i!"tr,ctio!" of the )ri!ci)#lD 3i6 Cle#rl% the ",'7#$e!t i" re#ll% #! #$e!t of the )ri!ci)#l #" &ell. A!% #ct do!e '% the #$e!t or the ",'"tit,te i! 'eh#lf of the )ri!ci)#l i" dee*ed the #ct of the )ri!ci)#l< ,2- Ahe! he h#" !ot 'ee! )rohi'ited '% the )ri!ci)#l+ #!d the #$e!t #))oi!t" # ",'"tit,te+ he i" re")o!"i'le for #ct" of ",'"tit,teD 54 3i6 he &#" !ot $ive! )o&er to #))oi!t o!e 3ii6 he &#" $ive! ",ch )o&er &itho,t de"i$!#ti!$ the )er"o! #!d ",'"tit,te i" !otorio,"l% i!co*)ete!t or i!"olve!t. I! either c#"e+ the )ri!ci)#l *#% f,rther*ore 'ri!$ #! #ctio! #$#i!"t the ",'"tit,te &ith re")ect to the o'li$#tio!" &hich the l#tter h#" co!tr#cted ,!der the ",'"tit,tio!. 3Art. 18;?6 ,3- Ahe! the #$e!t #))oi!t" # ",'"tit,te #$#i!"t the )ri!ci)#lKLQ" )rohi'itio!D 3i6 All #ct" of ",'"tit,te #" #$#i!"t the )ri!ci)#l #re void. 3Art. 18;06 3ii6 It i" cle#r th#t it &o,ld 'e the #$e!t &ho 'eco*e" )er"o!#ll% li#'le for the co!tr#ct" e!tered i!to '% the ",'"tit,te The i*)lic#tio! fro* the l#!$,#$e ,"ed i! Article 18;?+ th#t the )ri!ci)#l &o,ld h#ve !o c#,"e of #ctio! #$#i!"t the ",'"tit,te. The le$#l *#:i* potestas delegate non delegare potestL # )o&er o!ce dele$#ted c#!!ot 'e re7 dele$#ted+ &hile #))lied )ri*#ril% i! )olitic#l l#& to the e:erci"e of le$i"l#tive )o&er+ i" # )ri!ci)le of #$e!c%KLMfor #!other+ # re7dele$#tio! of the #$e!c% &o,ld 'e detri*e!t#l to the )ri!ci)#l #" the "eco!d #$e!t h#" !o )rivit% of co!tr#ct &ith the for*er. *altazar v. O'4uds'an /14 1CRA 52 304466. If the #))oi!t*e!t of # ",'7#$e!t &hich &#" !either )rohi'ited or #,thori>ed+ h#" occ#"io!ed the i!c,rri!$ of d#*#$e" '% the )ri!ci)#l+ the #$e!t "h#ll 'e )ri*#ril% re")o!"i'le for the #ct" of the ",'"tit,te+ i! #ccord#!ce &ith the )rovi"io!" of Article 18;0316. Serona v$ Court of "ppeals, 3@2 SCRA 35 ,2AA2-. A ",'7#$e!t #))oi!ted to collect the deferred i!"t#ll*e!t" fro* the "#le of )ro)ert% *#de '% #! #ttor!e%7i!7f#ct h#" !o #,thorit% to e!ter i!to # !e& co!tr#ct &ith the tr#!"feree '% *odif%i!$ the ter*" of the "#le #!d rele#"i!$ the "olid#r% ",retie" i! the ori$i!#l co!tr#ct. :illa v$ 5arcia 5os9ue, 4@ 1i/. 12? ,1@2A-. Re/ate. Ca$e$6 #el Rosario v. a *adenia+ ?? Ihil ?16 31;166. opez v. Seva+ 6; Ihil ?11 31;246 31)#!i"h6. .ar1uez v. 0arela+ ;0 Ihil. ?5? 31;/06. ?. RU+E ON +IABI+ITY ;8EN T;O OR MORE AGENTS AOINTED BY T8E SAME RINCIA+ Article 18;2 )rovide" for the r,le of re")o!"i'ilit% 3li#'ilit%6 of t&o or *ore #$e!t" "ervi!$ the "#*e )ri!ci)#l+ eve! &he! the% h#ve 'ee! #))oi!ted "i*,lt#!eo,"l%D 3#6 Joi!t+ &he! !othi!$ i" 51 "ti),l#ted< #!d 3'6 1olid#r%+ o!l% &he! "o "ti),l#ted. H!der Article 18;/+ &he! "olid#rit% h#" 'ee! #$reed ,)o!+ e#ch of the #$e!t" i" re")o!"i'le for the !o!7f,lll*e!t of the #$e!c%+ #!d for the f#,lt or !e$li$e!ce of hi" fello& #$e!t"+ e:ce)t i! the l#tter c#"e &he! the fello& #$e!t" #cted 'e%o!d the "co)e of their #,thorit%. Co*)#re the r,le i! Article i! 18;2 &ith the $e!er#l r,le of "olid#r% li#'ilit% ,!der Article 1;1/D &he! the #$e!t i" "ervi!$ t&o or *ore )ri!ci)#l"+ the li#'ilit% of the )ri!ci)#l" i" "olid#r%. I! .unicipal Council of Iloilo v. Evangelista+ // Ihil 0;4 31;?46+ the Co,rt "et the $e!er#l r,leD &he! # )er"o! #))oi!t" t&o #$e!t" i!de)e!de!tl%+ the co!"e!t of o!e &ill !ot 'e reB,ired to v#lid#te the #ct" of the other+ ,!le"" th#t #))e#r" )o"itivel% to h#ve 'ee! the )ri!ci)#lKLQ" i!te!tio!. C. RU+ES OF AGENTIGHS +IABI+ITY TO T8IRD ARTIES a. ;1en t1e A)ent A&t$ ;it1in t1e S&o#e o( 8i$ A!t1o"it*6 ,1- 5eneral Rule3 Article 18;5 e:)re""l% )rovide" th#t KLX-t.he #$e!t &ho #ct" #" ",ch i" !ot )er"o!#ll% li#'le to the )#rt% &ith &ho* he co!tr#ct"<KL #!d thi" i" ",))le*e!ted '% Article 1;14+ &hich )rovide" th#t KLX-t.he )ri!ci)#l *,"t co*)l% &ith #ll the o'li$#tio!" &hich the #$e!t *#% h#ve co!tr#cted &ithi! the "co)e of hi" #,thorit%.KL Article 18;5 of the Civil Code rei!force" the f#*ili#r doctri!e th#t #! #$e!t+ &ho #ct" #" ",ch+ i" !ot )er"o!#ll% li#'le to the )#rt% &ith &ho* he co!tr#ct". Eurotech Industrial Technologies, Inc. v. Cuizon, /01 1CRA /82 304456. I! 5- v. Court of Appeals+ ?12 1CRA 6; 31;;;6+ #$e!t" &ho h#ve 'ee! #,thori>ed to "ell )#rcel" of l#!d c#!!ot cl#i* )er"o!#l d#*#$e" i! the !#t,re of ,!re#li>ed co**i""io! '% re#"o! of the #ct of the ',%er i" ref,"i!$ to )roceed &ith the "#leD KLXIetitio!er" #re !ot )#rtie" to the co!tr#ct of "#le 'et&ee! their )ri!ci)#l" #!d NJA. The% #re *ere #$e!t" of the o&!er" of the l#!d ",'Eect of the "#le. A" #$e!t"+ the% o!l% re!der "o*e "ervice or do "o*ethi!$ i! re)re"e!t#tio! or o! 'eh#lf of their )ri!ci)#l". -Article 1868+ Civil Code.. The re!deri!$ of ",ch "ervice did !ot *#9e the* )#rtie" to the co!tr#ct" of "#le e:ec,ted i! 'eh#lf of the l#tter. 1i!ce # co!tr#ct *#% 'e viol#ted o!l% '% the )#rtie" thereto #" #$#i!"t e#ch other+ the re#l )#rtie"7i!7i!tere"t+ either #" )l#i!ti= or defe!d#!t+ i! #! #ctio! ,)o! th#t co!tr#ct *,"t+ $e!er#ll%+ either 'e )#rtie" to "#id co!tr#ct.-1. ,2- '2ceptions3 50 I! the follo&i!$ c#"e"+ #! #$e!t+ eve! &he! #cti!$ #" ",ch &ithi! the "co)e of hi" #,thorit%+ *#% 'eco*e )er"o!#ll% li#'le o! the co!tr#ct" or tr#!"#ctio!" e!tered i!to+ &he!D 3#6 The #$e!t e:)re""l% *#9e" hi*"elf )er"o!#ll% li#'le for the co!tr#ct" of hi" )ri!ci)#l. 3Art. 18;56< or 3'6 The #$e!t #ct" &ith fr#,d or !e$li$e!ce 3Art. 1;4;6. A )er"o! de#li!$ &ith # 9!o&! #$e!t i" !ot #,thori>ed+ ,!der #!% circ,*"t#!ce"+ 'li!dl% to tr,"t the #$e!t"< "t#te*e!t" #" to the e:te!t of hi" )o&er"< ",ch )er"o! *,"t !ot #ct !e$li$e!tl% ',t *,"t ,"e re#"o!#'le dili$e!ce #!d )r,de!ce to #"cert#i! &hether the #$e!t #ct" &ithi! the "co)e of hi" #,thorit%. The "ettled r,le i" th#t+ )er"o!" de#li!$ &ith #! #"",*ed #$e!t #re 'o,!d #t their )eril+ #!d if the% &o,ld hold the )ri!ci)#l li#'le+ to #"cert#i! !ot o!l% the f#ct of #$e!c% ',t #l"o the !#t,re #!d e:te!t of #,thorit%+ #!d i! c#"e either i" co!troverted+ the ',rde! of )roof i" ,)o! the* to )rove it. iton!ua v. $ernandez+ 205 1CRA 258 304426. Reiterated in iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466. A )er"o! #cti!$ #" # *ere re)re"e!t#tive of #!other #cB,ire" !o ri$ht" &h#t"oever+ !or doe" he i!c,r #!% li#'ilitie" #ri"i!$ fro* the "#id co!tr#ct 'et&ee! hi" )ri!ci)#l #!d #!other )#rt%. Angeles v. (hilippine )ational Rail&a-s 9()R:+ /44 1CRA 222 304466. Chua v. Total OMce (roducts and Services 9Topros:, Inc., 251 1CRA /44 3044/6< Tan v. Engineering Services, 2;8 1CRA ;? 304466< Chong v. Court of Appeals, /05 1CRA 122 304456. The e""e!ce of #$e!c% 'ei!$ the re)re"e!t#tio! of #!other+ it i" evide!t th#t the o'li$#tio!" co!tr#cted #re for #!d o! 'eh#lf of the )ri!ci)#lKLZ# co!"eB,e!ce of thi" re)re"e!t#tio! i" the li#'ilit% of the )ri!ci)#l for the #ct" of hi" #$e!t )erfor*ed &ithi! the li*it" of hi" #,thorit% th#t i" eB,iv#le!t to the )erfor*#!ce '% the )ri!ci)#l hi*"elf &ho "ho,ld #!"&er therefor. Tan v. Engineering Services, 2;8 1CRA ;? 304466. 1i!ce+ #" # r,le+ the #$e!c%+ #" # co!tr#ct+ i" 'i!di!$ o!l% 'et&ee! the co!tr#dicti!$ )#rtie"+ the! o!l% the )#rtie"+ #" &ell #" the third )er"o! &ho tr#!"#ct" &ith the )#rtie" the*"elve"+ *#% B,e"tio! the v#lidit% of the #$e!c% or the viol#tio! of the ter*" #!d co!ditio!" fo,!d therei!. 0illegas v. ingan, /06 1CRA 6? 304456. O!e &ho "i$!" # recei)t #" # &it!e"" &ith the &ord KLX#$e!tKL t%)ed 'elo& hi" "i$!#t,re+ ',t !ever received the #lle$ed #*o,!t or #!%thi!$ o! #cco,!t of the ",'Eect tr#!"#ctio!+ i" !ot )er"o!#ll% li#'le. Caoile v$ Court of "ppeals, 22? SCRA ?5B ,1@@3-. A! #$e!t 'eco*e" )er"o!#ll% li#'le &he! '% hi" &ro!$ or o*i""io!+ he de)rive" the third )er"o! &ith &ho* he co!tr#ct" of #!% re*ed% #$#i!"t 5? the )ri!ci)#l. The third )er"o! &o,ld 'e defr#,ded if he &o,ld !ot 'e #llo&ed to recover fro* the #$e!t. National Po!er Corp$ v$ National Merchandising Corp$, 11C SCRA CB@ ,1@B2-. b. ;1en t1e A)ent A&t$ ;it1o!t o" in E:&e$$ o( A!t1o"it* ,1- 5eneral Rule3 H!der Article 18;5+ #! #$e!t &ho #ct" &itho,t or i! e:ce"" of hi" #,thorit% 'eco*e" )er"o!#ll% li#'le to third )#rtie" eve! &he! he e!ter" i!to "#id co!tr#ct" or tr#!"#ctio!" i! the !#*e of the )ri!ci)#l+ &itho,t $ivi!$ ",ch third )#rtie" ",@cie!t !otice of hi" )o&er". Thi" i" ",))le*e!ted ,!der Article 1;14 &hich )rovide" th#t KLX-#." for #!% o'li$#tio! &herei! the #$e!t h#" e:ceeded hi" )o&er+ the )ri!ci)#l i" !ot 'o,!d.KL ,2- '2ceptions3 I! the follo&i!$ c#"e"+ eve! tho,$h the #$e!t #ct" &itho,t or i! e:ce"" of hi" #,thorit%+ he &o,ld !ot 'e )er"o!#ll% li#'le for the co!tr#ct" or tr#!"#ctio!" he e!tered i!to i! the !#*e of the )ri!ci)#lD 3#6 Ahe! the )ri!ci)#l r#tie" the co!tr#ct or tr#!"#ctio!" 3Art". 18;8 #!d 1;146< 3'6 A" to third )#rtie" &ho relied ,)o! the ter*" of the )o&er of #ttor!e% #" &ritte!+ eve! if i! f#ct the #$e!t h#d e:ceeded the li*it" of hi" #,thorit% #ccordi!$ to #! ,!der"t#!di!$ 'et&ee! the )ri!ci)#l #!d the #$e!t 3Art". 1;44 #!d 1;4?6< H!der Article 1;41+ # KLXthird )er"o! c#!!ot "et ,) the f#ct th#t the #$e!t h#" e:ceeded hi" )o&er"+ if the )ri!ci)#l h#" r#tied+ or h#" "i$!ied hi" &illi!$!e"" to r#tif% the #$e!tKLQ" #ct.KL H!der Article 1;40+ ever% third )er"o! &ith &ho* the #$e!t &i"he" to co!tr#ct o! 'eh#lf of the )ri!ci)#l *#% reB,ire the )re"e!t#tio! of the )o&er of #ttor!e% or the i!"tr,ctio!" #" re$#rd" the #$e!c%. Co!"eB,e!tl%+ )riv#te or "ecret order" #!d i!"tr,ctio!" of the )ri!ci)#l do !ot )reE,dice third )er"o!" &ho h#ve relied ,)o! the )o&er of #ttor!e% or i!"tr,ctio!" "ho&! the*. ,3- Conse9uence on Contracts 'ntered .nto )ithout or .n '2cess of "uthority3 [\ Gene"a/ R!/e6 The co!tr#ct &o,ld 'e !nen(o"&eab/e 3Art". 1?5 #!d 124?-1.6. [\ E:&e#tion$6 ,i- Va/i. KLZ if the )ri!ci)#l "h#ll r#tif% the co!tr#ct< ,ii- Voi. KLZ if the )#rt% &ith &ho* the #$e!t co!tr#cted i" #&#re of the li*it" of the )o&er" $r#!ted 52 '% the )ri!ci)#l< BHT the #$e!t i" )er"o!#ll% li#'le+ if he ,!dertoo9 to "ec,re the )ri!ci)#lKLQ" r#tic#tio!. 3Art. 18;86. The r,le th#t the #$e!t i" li#'le &he! he #ct" &itho,t #,thorit% i" fo,!ded ,)o! the ",))o"itio! th#t there h#" 'ee! "o*e &ro!$ or o*i""io! o! hi" )#rt either i! *i"re)re"e!ti!$+ or i! #@r*i!$+ or co!ce#li!$ the #,thorit% ,!der &hich he #"",*e" to #ct. I!#"*,ch #" the !o!7di"clo",re of the li*it" of the #$e!c% c#rrie" &ith it the i*)lic#tio! th#t # dece)tio! &#" )er)et,#ted o! the ,!",")ecti!$ clie!t+ the )rovi"io!" of Article" 1;+ 04 #!d 01 of the Civil Code co*e i!to )l#%. %+P v$ Court of "ppeals, 231 SCRA 3CA ,1@@4-. The R,le th#t # co!tr#ct e!tered i!to '% o!e &ho h#" #cted 'e%o!d hi" )o&er" "h#ll 'e ,!e!force#'le refer" to the ,!e!force#'ilit% of the co!tr#ct #$#i!"t the )ri!ci)#l+ #!d doe" !ot #))l% &here the #ctio! i" #$#i!"t the #$e!t hi*"elf for co!tr#cti!$ i! e:ce"" of the li*it" of hi" #,thorit%. National Po!er Corp$ v$ National Merchandising Corp$, 11C SCRA CB@ ,1@B2-. Ahe! #$e!t e:ceed" hi" #,thorit%+ the *#tter c#! 'e r#i"ed o!l% '% the )ri!ci)#l+ #!d &he! !ot "o r#i"ed+ recover% c#! 'e *#de '% the third )#rt% o!l% #$#i!"t the )ri!ci)#l. Article 18;5 doe" !ot hold th#t i! c#"e of e:ce"" of #,thorit%+ 'oth the #$e!t #!d the )ri!ci)#l #re li#'le to the other co!tr#cti!$ )#rt%. (hil. (roducts co. v. (ri'ateria (our e Co''erce E,terieur; (ri'aterial N(hil.O, Inc.+ 1/ 1CRA ?41 31;6/6. To reiter#te+ the r"t )#rt of Article 18;5 decl#re" th#t the )ri!ci)#l i" li#'le i! c#"e" &he! the #$e!t #cted &ithi! the 'o,!d" of hi" #,thorit%. H!der thi"+ the #$e!t i" co*)letel% #'"olved of #!% li#'ilit%. The "eco!d )#rt of the "#id )rovi"io! )re"e!t" the "it,#tio!" &he! the #$e!t hi*"elf 'eco*e" li#'le to # third )#rt% &he! he e:)re""l% 'i!d" hi*"elf or he e:ceed" the li*it" of hi" #,thorit% &itho,t $ivi!$ !otice of hi" )o&er" to the third )er"o!. Jo&ever+ it *,"t 'e )oi!ted o,t th#t i! c#"e of e:ce"" of #,thorit% '% the #$e!t+ li9e &h#t )etitio!er cl#i*" e:i"t" here+ the l#& doe" !ot "#% th#t # third )er"o! c#! recover fro* 'oth the )ri!ci)#l #!d the #$e!t. Eurotech Industrial Technologies, Inc. v. Cuizon, /01 1CRA /82 304456 Ae li9e&i"e t#9e !ote of the f#ct th#t i! thi" c#"e+ )etitio!er i" "ee9i!$ to recover 'oth fro* re")o!de!t" ERAIN+ the )ri!ci)#l+ #!d EDAIN+ the #$e!t. It i" &ell to "t#te here th#t Article 18;5 of the Ne& Civil Code ,)o! &hich )etitio!er #!chor" it" cl#i* #$#i!"t re")o!de!t EDAIN KLXdoe" !ot hold th#t i! c#"e of e:ce"" of #,thorit%+ 'oth the #$e!t #!d the )ri!ci)#l #re li#'le to the other co!tr#cti!$ )#rt%. Eurotech Industrial Technologies, Inc. v. Cuizon, /01 1CRA /82 304456 The "co)e #!d e:te!t of the f,!ctio! of #! #dE,"t*e!t #!d "ettle*e!t #$e!t+ doe" !ot 5/ i!cl,de )er"o!#l li#'ilit%. Ji" f,!ctio!" #re *erel% to "ettle #!d #dE,"t cl#i*" i! 'eh#lf of hi" )ri!ci)#l. If tho"e cl#i*" #re di"#))roved '% the )ri!ci)#l+ the #$e!t doe" !ot #"",*e #!% )er"o!#l li#'ilit%. The reco,r"e of the i!",red i" to )re"" chi" cl#i* #$#i!"t the )ri!ci)#l. Salonga v. <arner *arnes+ 88 Ihil 10/ 31;/16< '$ Macias and Co$ v$ )arner +arnes, 43 1i/ 155 ,1@22-. Ahe! the #$e!t e:)re""l% 'i!d hi*"elf+ he there'% o'li$#te" hi*"elf )er"o!#ll% '% hi" o&! #ct+ ',t th#t doe" !ot relieve the )ri!ci)#l fro* hi" o'li$#tio! to )#% the de't i!c,rred for hi" 'e!et. -uason v$ Oro=co, 5 1i/ 5@? ,1@A?-. A! #$e!t i" !ot )er"o!#ll% li#'le to the )#rt% &ith &ho* he co!tr#ct" ,!le"" he e:)re""l% 'i!d" hi*"elf or he e:ceed" the li*it" of hi" #,thorit% &itho,t $ivi!$ ",ch )#rt% ",@cie!t !otice of hi" )o&er". =ialcita38useco v. Si''ons+ ;5 Ihil. 285 31;//6< *an1ue +enerale *elge v. <alter, *ull & Co., Inc., 82 Ihil. 162 31;2;6< Salmon 6 Paci?c Commercial Co$ v$ -an Cueco, 3? 1i/. 55? ,1@1C-. Re/ate. Ca$e$6 7u 'ng Cho v$ P"N"M, 32B SCRA C1C ,2AAA- +acaltos Coal Mines v$ Court of "ppeals, 245 SCRA 4?A ,1@@5- -oyota Sha!& inc$ v$ Court of "ppeals, 244 SCRA 32A ,1@@5- 'ugenio v$ Court of "ppeals, 23@ SCRA 2AC ,1@@4- +" inance v$ Court of "ppeals, 2A1 SCRA 15C ,1@@1- *A $inance v. Court of Appeals+ 011 1CRA 110 31;;06 Smith +ell v$ Court of "ppeals, 2?C SCRA 53A ,1@@C- %+P v$ Court of "ppeals, 231 SCRA 3CA ,1@@4- Pineda v$ Court of "ppeals, 22? SCRA C54 ,1@@3- *enguet v. *CI E'plo-ees+ 0? 1CRA 26/ 31;686 *an/ of (I v. #e Coster+ 25 Ihil /;2 31;0/6 ,4- T1i". e"$on Cannot SetD!# Fa&t$ o( A)entFGH$ E:&ee.in) A!t1o"it* H!der Article 1;41+ # third )er"o! c#!!ot "et ,) the f#ct th#t the #$e!t h#" e:ceeded hi" )o&er"+ if the )ri!ci)#l h#" r#tied+ or h#" "i$!ied hi" &illi!$!e"" to r#tif% the #$e!tKLQ" #ct". The "ettled r,le i" th#t+ )er"o!" de#li!$ &ith #! #"",*ed #$e!t #re 'o,!d #t their )eril+ #!d if the% &o,ld hold the )ri!ci)#l li#'le+ to #"cert#i! !ot o!l% the f#ct of #$e!c% ',t #l"o the !#t,re 56 #!d e:te!t of #,thorit%+ #!d i! c#"e either i" co!troverted+ the ',rde! of )roof i" ,)o! the* to )rove it. 26 I! thi" c#"e+ the )etitio!er" f#iled to di"ch#r$e their ',rde!< he!ce+ )etitio!er" #re !ot e!titled to d#*#$e". iton!ua, "r. v. Eternit Corp., 2;4 1CRA 042 304466.-0. Re/ate. Ca$e$6 Commissioner v$ San %iego, 31 SCRA ?1C ,1@CA- +acaltos Coal Mines v$ Court of "ppeals, 245 SCRA 4?A ,1@@5- -oyota Sha! v$ Court of "ppeals, 244 SCRA 32A ,1@@5- ()* v. Tan Ong Sze+ /? Ihil 2/1 31;0;6 B. INSTANCES ;8EN T8IRD ARTY +IAB+E TO T8E AGENT 8IMSE+F I! the follo&i!$ c#"e"+ # third )#rt% &o,ld 'e directl% li#'le to the #$e!t hi*"elf eve! o! co!tr#ct" e!tered i!to ),r",#!t to the #$e!c% #rr#!$e*e!t+ th,"D 3#6 Ahere the #$e!t co!tr#ct" i! hi" o&! !#*e+ o! # *#tter th#t it &ithi! the "co)e of the #$e!c% 3Art. 188?6< 3'6 Ahere the #$e!t )o""e""e" # 'e!eci#l i!tere"t i! the ",'Eect *#tter of the #$e!c%+ ",ch #" # f#ctor "elli!$ ,!der # del credere co**i""io! 3Art. 1;456< 3c6 Ahere # third )#rt% co**it" # tort #$#i!"t the #$e!t. @. OB+IGATIONS OF COMMISSION AGENTS a. Nat!"e o( Fa&to" o" Co00i$$ion A)ent A co**i""io! #$e!t i" o!e &ho"e ',"i!e"" it i" to receive #!d "ell $ood" for # co**i""io!+ #!d &ho i" e!tr,"ted '% the )ri!ci)#l &ith the )o""e""io! of the $ood" to 'e "old+ #!d ,",#ll% "elli!$ i! hi" o&! !#*e. A! ordi!#r% #$e!t !eed !ot h#ve )o""e""io! of the $ood" of hi" )ri!ci)#l+ &hile the co**i""io! #$e!t *,"t 'e i! )o""e""io!. 3DE FEON+ #t ). /226. b. S#e&if& Ob/i)ation$ o( a Co00i$$ion A)ent ,1- -a*e Custody of 5oods KLZ A co**i""io! #$e!t '% 'ei!$ ",ch i" re")o!"i'le for the $ood" received '% hi* i! the ter*" #!d co!ditio!" #!d #" de"cri'ed i! the co!"i$!*e!t+ ,!le"" ,)o! receivi!$ the* he "ho,ld *#9e # &ritte! "t#te*e!t of the d#*#$e #!d deterior#tio! ",=ered '% the "#*e. 3Art. 1;4?6< ,2- Not to Commingle Similar 5oods +elong to %i;erent Principal KLZ ,!der Article 1;42+ # co**i""io! #$e!t &ho h#!dle" $ood" of the "#*e 9i!d #!d *#r9+ &hich 'elo!$ to di=ere!t o&!er"+ "h#ll di"ti!$,i"h the* '% co,!ter*#r9"+ #!d de"i$!#te the 55 *erch#!di"e re")ectivel% 'elo!$ to e#ch )ri!ci)#l. I! other &ord"+ the def#,lt r,le i" th#t co**i""io! #$e!t c#!!ot co**i!$le $ood" of the "#*e 9i!d 'elo!$i!$ to di=ere!t )ri!ci)#l". Di"ti!$,i"h thi" def#,lt r,le i! the c#"e of # co!tr#ct of de)o"it+ &hich ,!der Article 1;56+ the de)o"it#r% i" #llo&ed to co**i!$le $r#i! or other #rticle" of "i*il#r !#t,re #!d B,#lit% 3Co!tr#ct of De)o"it6 KLZ De)o"it#r% *#% co**i!$le $r#i! or other #rticle" of "i*il#r !#t,re #!d B,#lit%+ #!d the re",lt &o,ld 'e )ro7r#t# o&!er"hi) #*o!$ the o&!er" thereof. ,3- Cannot Sell on Credit !ithout Principal@ABs "uthori=ation KLZ If he "ell" o! credit+ the )ri!ci)#l *#% "till de*#!d fro* hi" )#%*e!t i! c#"h+ ',t the #$e!t "h#ll 'e e!titled to #!% i!tere"t or 'e!et &hich *#% re",lt fro* ",ch "#le. 3Art. 1;4/6< ,4- -o .nform the Principal of 'very Pre( "uthori=ed Sale on Credit KLZ H!der Article 1;46+ "ho,ld the #$e!t "ell o! credit &ith the #,thorit% of the )ri!ci)#l+ the! the #$e!t "h#ll "o i!for* the )ri!ci)#l &ith # "t#te*e!t of the2 !#*e" of the ',%er". If he f#il" to do "o+ the "#le "h#ll 'e dee*ed to h#ve 'ee! *#de for c#"h i!"of#r #" the )ri!ci)#l i" co!cer!ed. ,5- Shall +ear the Ris* of Collection under %el Credere Commission Set(up KLZ H!der Article 1;48+ "ho,ld the co**i""io! #$e!t receive o! # "#le+ i! #dditio! to the ordi!#r% co**i""io!+ #!other c#lled # $,#r#!tee co**i""io!+ the!D 3i6 Je "h#ll 'e#r the ri"9 of collectio!< #!d 3ii6 Je "h#ll )#% the )ri!ci)#l the )roceed" of "#le o! "#*e ter*" #$reed &ith ),rch#"er ,?- -o Collect Credits of the Principal KLZ H!der Article 1;48+ # co**i""io! #$e!t &ho doe" !ot collect the credit" of hi" )ri!ci)#l #t the ti*e &he! the% 'eco*e d,e #!d de*#!d#'le "h#ll 'e li#'le for d#*#$e"+ ,!le"" he )rove" th#t he e:erci"e d,e dili$e!ce for th#t ),r)o"e. ,C- Shall +e Responsible for ,is raud and Negligence KLZ H!der Article 1;4;+ the #$e!t i" re")o!"i'le to the )ri!ci)#l for the d#*#$e" ",=ered for hi" fr#,d #!d hi" !e$li$e!ce+ &hich "h#ll 'e E,d$ed &ith *ore or le"" ri$or '% the co,rt" #ccordi!$ to &hether the #$e!c% &#" or &#" !ot for # co*)e!"#tio!. The f#il,re of the ",'7#$e!t &ho h#" c,"tod% of the l* to i!",re #$#i!"t lo"" '% re+ &here there &#" !o i!"tr,ctio! received fro* the )ri!ci)#l to "o i!",re or th#t the i!",r#!ce of the l* &#" !ot # )#rt of the o'li$#tio! i*)o"ed ,)o! #! #$e!t '% l#&+ doe" !ot co!"tit,te either !e$li$e!ce or fr#,d. .nternational ilms v$ /yric ilm '2change& ?3 1i/. CCB ,1@3?-. Ahere the clie!t order the 'ro9er to "ell the "h#re" $ivi!$ # Coor or *i!i*,* )rice+ #!d the 'ro9er did "ell #t the *i!i*,* )rice i!dic#ted eve! tho,$h the )rev#ili!$ r#!$i!$ )rice" &ere *,ch hi$her th#t the%+ the 'ro9er i" li#'le for the di=ere!ce ",=ered '% the )ri!ci)#l 'ec#,"e the 'ro9er f#iled to e:erci"e the )r,de!ce #!d t#ct of # $ood f#ther of # f#*il% &hich the l#& reB,ired of hi*. -an -iong -ec* v$ S'C, ?@ 1i/. 425 ,1@4A-. 58 Ahere the *#!#$er of the '#!9 rele#"ed the )roceed" of #! ,!#,thori>ed lo#! to ,!B,#lied 'orro&er+ the '#!9 *#% recover 'oth #$#i!"t the 'orro&er #!d it" *#!#$er+ #!d the ",it c#!!ot 'e co!"idered #" the )ri!ci)#l7'#!9 r#tif%i!$ the ,!#,thori>ed #ct of it" #$e!t7*#!#$er+ ',t i" *erel% "ee9i!$ to di*i!i"h #" *,ch #" )o""i'le the lo"" to it"elf. PN+ v$ +agamasbad and errer& B@ 1i/. 3?5 ,1@51-. I! +reen 0alle- v. IAC+ 1?? 1CRA 6;5 31;826+ &here the ),r)orted #$e!t ref,"ed to 'e held li#'le for *erch#!di"e received fro* the )ri!ci)le o! the $ro,!d th#t it &#" # *ere #$e!t to "ell #!d the ,lti*#te ',%er" of the )rod,ct" "ho,ld 'e the o!e *#de li#'le for the ),rch#"e )rice+ 3&here#" the ),r)orted )ri!ci)#l i!"i"ted th#t it &#" # "#le #rr#!$e*e!t6+ the Co,rt r,led th#t &hether the co!tr#ct 'et&ee! the )#rtie" 'e o!e of "#le or #$e!c% to "ell+ there i" !o do,'t th#t the ),r)orted #$e!t &o,ld 'e )er"o!#ll% li#'le for the )rice of the *erch#!di"e "old. Bei!$ # co**i""io! #$e!t ,!der it" #,thorit%+ the! ),r",#!t to Article 1;4/+ it "ho,ld !ot h#ve "old the *erch#!di"e o! credit. H!der Article 1;4/+ the co**i""io! #$e!t c#!!ot+ &itho,t the e:)re"" or i*)lied co!"e!t of the )ri!ci)#l+ "ell o! credit< #!d "ho,ld he do "o+ the )ri!ci)#l *#% de*#!d fro* hi* )#%*e!t i! c#"h. -1.Citing .ari'perio Co'pania )aviera, S.A. v. Court of Appeals+ 1/6 1CRA ?68 31;856. -0.Citing iton!ua v. $ernandez+ 205 1CRA 258 304426< *A $inance Corp. v. Court of Appeals+ 011 1CRA 110 31;;06. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 1D46 AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT VIII. OBFIGATION1 OF TJE IRINCIIAF 1. BINDING EFFECT OF T8E TERMS OF T8E CONTRACT OF AGENCY I!deed+ "i!ce # co!tr#ct of #$e!c% i" *erel% # )re)#r#tor% co!tr#ct+ it i" &ell &ithi! the le$#l c#)#cit% of 'oth )#rtie" to e!ter i!to #!% "ti),l#tio!+ o'li$#tio! #!d ,!dert#9i!$ '% &hich the% c#! t#ilor7t the rel#tio!"hi) to 'e"t #chieve the ),r)o"e of the #$e!c%. Fi9e #!% other co!tr#ct $over!ed '% the )ri!ci)le" of *,t,#lit% #!d o'li$#tor% force+ the )ri!ci)#l i" 'o,!d '% the ter*" #$reed ,)o! ,!der the co!tr#ct of #$e!c%. A)#rt fro* the co!tr#ct,#l o'li$#tio!" vol,!t#ril% #"",*ed '% the )ri!ci)#l ,!der the ter*" of the )#rtic,l#r co!tr#ct of #$e!c% e!tered i!to+ the follo&i!$ #re the co**o!7l#& d,tie" #!d 5; o'li$#tio!" of the )ri!ci)#l '% the ver% f#ct th#t he h#" co!"tit,ted #!other )er"o!+ the #$e!t+ to re)re"e!t hi* i! ),r",i!$ E,ridic#l #ct" #!d co!tr#ct"+ i! hi" !#*e. 2. RINCIA+ IS BOUND BY T8E CONTRACTS MADE BY T8E AGENT IN 8IS BE8A+F The ce!tr#l )ri!ci)le i! #$e!c% l#& i" th#t #ll co!tr#ct" #!d tr#!"#ctio!" e!tered i!to '% the #$e!t o! 'eh#lf of the )ri!ci)#l &ithi! the "co)e of hi" #,thorit% #re 'i!di!$ o! the )ri!ci)#l #" tho,$h he hi*"elf h#d e!tered i!to the* directl%. Thi" te!et i" re)e#tedl% e:)re""ed i! v#rio," )rovi"io!" of the F#& o! A$e!c%. Article 18;5 )rovide" th#t the #$e!t &ho #ct" #" ",ch i" !ot )er"o!#ll% li#'le to the )#rt% &ith &ho* he co!tr#ct" &he! #cti!$ &ithi! the "co)e of hi" #,thorit%. Article 1;14 )rovide" th#t the )ri!ci)#l *,"t co*)l% &ith #ll the o'li$#tio!" &hich the #$e!t *#% h#ve co!tr#cted &ithi! the "co)e of hi" #,thorit%. a. "in&i#a/ Not Bo!n. b* Cont"a&t$ Ma.e b* t1e A)ent ;it1o!t o" O!t$i.e t1e S&o#e o( 8i$ A!t1o"it* The collol#r% r,le &o,ld the! 'e th#t (for #!% o'li$#tio! &herei! the #$e!t h#" e:ceed hi" )o&er+( or #ct" do!e '% the #$e!t o,t"ide of the "co)e of hi" #,thorit%+ eve! &he! e!tered i!to i! the !#*e of the )ri!ci)#l+ &o,ld !ot 'i!d the )ri!ci)#l+ #!d &o,ld th," !ot 'e void+ ',t *erel% ,!e!force#'le 3Art. 124?6. I! the follo&i!$ c#"e"+ tho,$h+ eve! #ct" do!e '% the #$e!t i! the !#*e of the )ri!ci)#l+ o,t"ide of the "co)e of hi" #,thorit%+ &o,ld 'i!d the )ri!ci)#l+ th,"D 3#6 Ahe! the )ri!ci)#l r#tie" ",ch co!tr#ct+ e:)re""l% or t#citl% 3Art. 1;146< 3'6 Ahe! the )ri!ci)#l h#" #llo&ed the ),r)orted #$e!t to #ct #" tho,$h he h#d f,ll )o&er" 3Art. 1;116< #!d 3c6 Ahe! the )ri!ci)#l h#" revo9ed the #$e!c%+ ',t the third )#rt% h#ve #cted i! $ood f#ith &itho,t !otice of ",ch revoc#tio!. H!der Article 1;11+ eve! &he! the #$e!t h#" e:ceeded hi" #,thorit%+ the )ri!ci)#l i" "olid#ril% li#'le &ith the #$e!t if the for*er #llo&ed the l#tter to #ct #" tho,$h he h#d f,ll )o&er". Thi" i" ter*ed #" #$e!c% '% e"to))el. It i" #l"o referred to #" the doctri!e of #))#re!t #,thorit% i! Cor)or#te F#&. Ahe! # '#!9+ '% it" #ct" #!d f#il,re to #ct+ h#" cle#rl% clothed it" *#!#$er &ith #))#re!t #,thorit% to "ell #! #cB,ired #""et i! the !or*#l co,r"e of ',"i!e""+ it i" le$#ll% o'li$ed to co!r* the tr#!"#ctio! '% i"",i!$ # 'o#rd re"ol,tio! to e!#'le the ',%er" to re$i"ter the )ro)ert% i! their 84 !#*e". It h#" # d,t% to )erfor* !ece""#r% #!d l#&f,l #ct" to e!#'le the other )#rtie" to e!Eo% #ll 'e!et" of the co!tr#ct &hich it h#d #,thori>ed. Rural *an/ of .ilaor v. Ocfe'ia+ ?0/ 1CRA ;; 304446. Jo& doe" Ocfe'ia r,li!$ Eive &ith the other r,li!$" of the 1,)re*e Co,rt th#t hold th#t eve! i! the c#"e of # cor)or#tio!+ the "#le thro,$h it" #$e!t of # )iece of l#!d reB,ire" th#t the #,thorit% of the cor)or#te o@cer to "ell o! 'eh#lf of the cor)or#tio! *,"t 'e i! &riti!$+ other&i"e the re",lti!$ tr#!"#ctio! i" void ),r",#!t to Article 1852U The Ocfe'ia r,li!$ "ho&" th#t the ,"e of the ter* (void( ,!der Article 1852+ i" rel#tive+ i! th#t it i" void o!l% i!"of#r #" the )ri!ci)#l i" co!cer!ed< #!d th#t #!% #tte*)t to e!force the ),rch#"e '% # third )#rt% i" void &he! the )ri!ci)#l ref,"e" to #cce)t the "#le of # )iece of l#!d e=ected '% #! #$e!t i! hi" !#*e &itho,t &ritte! )o&er of #ttor!e%. I! other &ord"+ if the )ri!ci)#l+ #fter the f#ct of "#le+ #cce)t" the co!tr#ct+ doe" !ot o))o"e the v#lidit% of the "#le+ or i! other &ord"+ r#tie" the "#le+ it &o,ld the! 'e v#lid #!d 'i!di!$ o! the )ri!ci)#l. I! Ocfe'ia+ &he! #! #ctio! &#" 'ro,$ht '% the ',%er #$#i!"t the '#!9 to e!force the "#le+ it f#iled to co!te"t the $e!,i!e!e"" #!d d,e e:ec,tio! of the deed of #'"ol,te "#le e:ec,ted '% it" $e!er#l *#!#$er. The Co,rt held 77 Re")o!de!t" '#"ed their #ctio! 'efore the tri#l co,rt o! the Deed of 1#le+ the ",'"t#!ce of &hich &#" #lle$ed i! #!d # co)% thereof &#" #tt#ched to the Ietitio! for G#!d#*,". The Deed !#*ed Fe 1. Te!# #" the re)re"e!t#tive of the '#!9. Ietitio!er+ ho&ever+ f#iled to ")ecic#ll% de!% ,!der o#th the #lle$#tio!" i! th#t co!tr#ct. I! f#ct+ it led !o #!"&er #t #ll+ for &hich re#"o! it &#" decl#red i! def#,lt. : : :. I! f#ili!$ to le it" #!"&er ")ecic#ll% de!%i!$ ,!der o#th the Deed of 1#le+ the '#!9 #d*itted the d,e e:ec,tio! of the "#id co!tr#ct. 1,ch #d*i""io! *e#!" th#t it #c9!o&led$ed th#t Te!# &#" #,thori>ed to "i$! the Deed of 1#le o! it" 'eh#lf.1? -I*)eri#l Te:tile Gill"+ I!c. v. C.A.+ 18? 1CRA 1+ G#rch 00+ 1;;4.. Th,"+ defe!"e" th#t #re i!co!"i"te!t &ith the d,e e:ec,tio! #!d the $e!,i!e!e"" of the &ritte! i!"tr,*e!t #re c,t o= '% #! #d*i""io! i*)lied fro* # f#il,re to *#9e # veried ")ecic de!i#l. : : :. I! #!% eve!t+ the '#!9 #c9!o&led$ed+ '% it" o&! #ct" or f#il,re to #ct+ the #,thorit% of Fe 1. Te!# to e!ter i!to 'i!di!$ co!tr#ct". After the e:ec,tio! of the Deed of 1#le+ re")o!de!t" occ,)ied the )ro)ertie" i! di"),te #!d )#id the re#l e"t#te t#:e" d,e thereo!. If the '#!9 *#!#$e*e!t 'elieved th#t it h#d title to the )ro)ert%+ it "ho,ld h#ve t#9e! "o*e *e#",re" to 81 )reve!t the i!fri!$e*e!t or i!v#"io! of it" title thereto #!d )o""e""io! thereof. Fi9e&i"e+ Te!# h#d )revio,"l% tr#!"#cted ',"i!e"" o! 'eh#lf of the '#!9+ #!d the l#tter h#d #c9!o&led$ed her #,thorit%. A '#!9 i" li#'le to i!!oce!t third )er"o!" &here re)re"e!t#tio! i" *#de i! the co,r"e of it" !or*#l ',"i!e"" '% #! #$e!t li9e G#!#$er Te!#+ eve! tho,$h ",ch #$e!t i" #',"i!$ her #,thorit%.12 -Fir"t Ihili))i!e I!ter!#tio!#l B#!9 v. CA+ i!fr#+ !ote 15.. Cle#rl%+ )er"o!" de#li!$ &ith her co,ld !ot 'e 'l#*ed for 'elievi!$ th#t "he &#" #,thori>ed to tr#!"#ct ',"i!e"" for #!d o! 'eh#lf of the '#!9. Th,"+ thi" Co,rt h#" r,led i! Bo#rd of FiB,id#tor" v. N#l#&D1/ -04 1CRA ;85+ 144/+ A,$,"t 12+ 1;65+ )er 1#!che>+ J.. (1ettled E,ri")r,de!ce h#" it th#t &here "i*il#r #ct" h#ve 'ee! #))roved '% the director" #" # *#tter of $e!er#l )r#ctice+ c,"to*+ #!d )olic%+ the $e!er#l *#!#$er *#% 'i!d the co*)#!% &itho,t for*#l #,thori>#tio! of the 'o#rd of director". I! v#r%i!$ l#!$,#$e+ e:i"te!ce of ",ch #,thorit% i" e"t#'li"hed+ '% )roof of the co,r"e of ',"i!e""+ the ,"#$e" #!d )r#ctice" of the co*)#!% #!d '% the 9!o&led$e &hich the 'o#rd of director" h#"+ or *,"t 'e )re",*ed to h#ve+ of #ct" #!d doi!$" of it" ",'ordi!#te" i! #!d #'o,t the #=#ir" of the cor)or#tio!. 1o #l"o+ (8: : : #,thorit% to #ct for #!d 'i!d # cor)or#tio! *#% 'e )re",*ed fro* #ct" of reco$!itio! i! other i!"t#!ce" &here the )o&er &#" i! f#ct e:erci"ed.8 (8: : : Th,"+ &he!+ i! the ,",#l co,r"e of ',"i!e"" of # cor)or#tio!+ #! o@cer h#" 'ee! #llo&ed i! hi" o@ci#l c#)#cit% to *#!#$e it" #=#ir"+ hi" #,thorit% to re)re"e!t the cor)or#tio! *#% 'e i*)lied fro* the *#!!er i! &hich he h#" 'ee! )er*itted '% the director" to *#!#$e it" ',"i!e"".8( Not&ith"t#!di!$ the ),t#tive #,thorit% of the *#!#$er to 'i!d the '#!9 i! the Deed of 1#le+ )etitio!er h#" f#iled to le #! #!"&er to the Ietitio! 'elo& &ithi! the re$le*e!t#r% )eriod+ let #lo!e )re"e!t evide!ce co!troverti!$ ",ch #,thorit%. I!deed+ &he! o!e of herei! re")o!de!t"+ G#rife 1. Ni!o+ &e!t to the '#!9 to #"9 for the 'o#rd re"ol,tio!+ "he &#" *erel% told to 'ri!$ the recei)t". The '#!9 f#iled to c#te$oric#ll% decl#re th#t Te!# h#d !o #,thorit%. A" to the *erit" of the c#"e+ it i" # &ell7 e"t#'li"hed r,le th#t o!e &ho clothe" #!other &ith #))#re!t #,thorit% #" hi" #$e!t #!d hold" hi* o,t to the ),'lic #" ",ch c#!!ot 'e )er*itted to de!% the #,thorit% of ",ch )er"o! to #ct #" hi" #$e!t+ to the )reE,dice of i!!oce!t third )#rtie" de#li!$ &ith ",ch )er"o! i! $ood f#ith #!d i! the ho!e"t 'elief th#t he i" &h#t he #))e#r" to 'e 3G#c9+ et #l. v. C#*)"+ 5 Ihil. //? -1;45.< Ihili))i!e N#tio!#l B#!9 v. Co,rt of A))e#l"+ ;2 1CRA ?/5 -1;5;.6. Fro* the f#ct" #!d the evide!ce o! record+ there 80 i" !o do,'t th#t thi" r,le o't#i!". The )etitio! *,"t therefore f#il. 3#t )). 145714;6 Ahe! # third )#rt% #d*it" i! her &ritte! corre")o!de!ce th#t he h#d co!tr#cted &ith the )ri!ci)#l thro,$h #! d,l% #,thori>ed #$e!t+ #!d the! ",e" 'oth the )ri!ci)#l #!d the #$e!t o! #! #lle$ed 're#ch of th#t co!tr#ct+ #!d i! f#ct l#ter o! di"*i""e" the ",it i!"of#r #" the )ri!ci)#l i" co!cer!ed+ there c#! 'e !o c#,"e of #ctio! #$#i!"t the #$e!t. 1i!ce it i" the )ri!ci)#l &ho "ho,ld 'e #!"&er#'le for the o'li$#tio! #ri"i!$ fro* the #$e!c%+ it i" o'vio," th#t if # third )er"o! &#ive" hi" cl#i*" #$#i!"t the )ri!ci)#l+ he c#!!ot #""ert the* #$#i!"t the #$e!t. *edia v. <hite+ 042 1CRA 05? 31;;16. The '#"i" of #$e!c% i" re)re"e!t#tio!< The B,e"tio! of &hether #! #$e!c% h#" 'ee! cre#ted i" ordi!#ril% # B,e"tio! &hich *#% 'e e"t#'li"hed i! the "#*e &#% #" #!% other f#ct+ either '% direct or circ,*"t#!ti#l evide!ce< Tho,$h th#t f#ct or e:te!t of #,thorit% of the #$e!t" *#% !ot+ #" # $e!er#l r,le"+ 'e e"t#'li"hed fro* the decl#r#tio!" of the #$e!t" #lo!e+ if o!e )rofe""e" to #ct #" #$e!t for #!other+ "he *#% 'e e"to))ed to de!% her #$e!c% 'oth #" #$#i!"t the #""erted )ri!ci)#l #!d the third )er"o!" i!tere"ted i! the tr#!"#ctio! i! &hich he or he i" e!$#$ed. #oles v. Angeles, 2;0 1CRA 645 304466. The f#ct th#t the #$e!t defr#,ded the )ri!ci)#l i! !ot t,r!i!$ over the )roceed" of the tr#!"#ctio!" to the l#tter c#!!ot i! #!% &#% relieve or e:o!er#te ",ch )ri!ci)#l fro* li#'ilit% to the third )er"o!" &ho relied o! hi" #$e!tKLQ" #,thorit%. It i" #! eB,it#'le *#:i* th#t #" 'et&ee! t&o i!!oce!t )#rtie"+ the o!e &ho *#de it )o""i'le for the &ro!$ to 'e do!e "ho,ld 'e the o!e to 'e#r the re",lti!$ lo"". Cuison v. Court of Appeals, 005 1CRA ?;1 31;;?6. H!der the $e!er#l r,le" #!d )ri!ci)le" of l#&+ the *i"*#!#$e*e!t of the ',"i!e"" of # )#rt% '% hi" #$e!t" doe" !ot relieve "#id )#rt% fro* the re")o!"i'ilit% th#t he h#d co!tr#cted &ith third )er"o!". Commercial +an* 6 -rust Co$ v$ Republic "rmored Car Services Corp$, B SCRA 425 ,1@?3-. Ahe! the )ri!ci)#l i"",ed the chec9" i! f,ll )#%*e!t of the t#:e" d,e+ ',t hi" #$e!t" h#d *i"#))lied the chec9 )roceed"+ the )ri!ci)#l &o,ld "till 'e li#'le+ 'ec#,"e &he! # co!tr#ct of #$e!c% e:i"t"+ the #$e!tKLQ" #ct" 'i!d hi" )ri!ci)#l+ &itho,t )reE,dice to the l#tter "ee9i!$ reco,r"e #$#i!"t the #$e!t i! #! #))ro)ri#te civil or cri*i!#l #ctio!. %y Peh v$ Collector of .nternal Revenue, 2B SCRA 21? ,1@?@-. A re$i"tered o&!er &ho )l#ce" i! the h#!d" of #!other #! e:ec,ted doc,*e!t of tr#!"fer of the re$i"tered l#!d e=ectivel% re)re"e!t" to # third )#rt% th#t he holder of ",ch doc,*e!t i" #,thori>ed to de#l &ith the )ro)ert%. +londeau v$ 8? Nano,. ?1 1i/. ?25 ,1@35-J %omingo v$ Robles, 453 SCRA B12 ,2AA5-. Re/ate. Ca$e$6 Pleasantville %ev$ v$ Court of "ppeals, 253 SCRA 1A ,1@@?- /im*et*ai Sons v Court of "ppeals, 25A SCRA 523 ,1@@5- "ir rance v$ Court of "ppeals, 12? SCRA 44B ,1@B3- PN+ v$ Court of "ppeals, @4 SCRA 35C ,1@C@- PN+ v$ +agamaspad, B@ 1i/. 3?5 ,1@51- .anila Re'nants v. Court of Appeals+ 1;1 1CRA 600 31;;46 0ersoza v. i'+ 2/ Ihil 216 31;0?6 opez v. Alvendia+ 104 Ihil 120 31;626 <ise and Co. v. Tanglao+ 6? Ihil ?50 31;?66 %atig4a/ v. Tai Hing Co.+ /0 Ihil 600 31;086 Ro4inson, $le'ing and Co. v. Cruz+ 2; Ihil 20 31;066 +onzales v. Ha4erer+ 25 Ihil ?84 31;0/6 *arton v. e-te Asphalt+ 26 Ihi< ;?8 31;026 )antes v. .adriguera+ 20 Ihil ?8; 31;016 i' Chai Seng v. Trinidad+ 21 Ihil /22 31;016 3. +IABI+ITY OF T8E RINCIA+ FOR T8E TORTS OF T8E AGENT The $e!er#l r,le i" th#t the )ri!ci)#l i" li#'le to i!E,red third )#rtie" for the tort" co**itted '% the #$e!t #t the )ri!ci)#lKLQ" director or i! the co,r"e #!d &ithi! the "co)e of the #$e!tKLQ" #,thorit%. It #l"o $oe" &itho,t "#%i!$+ th#t "i!ce the #ct of !e$li$e!ce &#" th#t of the #$e!t+ he #l"o 'eco*e" civill% li#'le to the i!E,red )#rtie"+ eve! &he! he #ct" i! re)re"e!t#tio! of the )ri!ci)#l. 4. OB+IGATIONS OF T8E RINCIA+ TO T8E AGENT a. Ob/i)ation to A.'an&e S!0$ Re7!e$te. (o" E:e&!tion o( A)en&* H!der Article 1;10+ the )ri!ci)#l *,"t #dv#!ce to the #$e!t+ "ho,ld the l#tter "o reB,e"t+ the ",*" !ece""#r% for the e:ec,tio! of the #$e!c%. 1ho,ld the #$e!t h#ve #dv#!ced the*+ the )ri!ci)#l *,"t rei*',r"e the #$e!t therefor+ eve! if the ',"i!e"" or ,!dert#9i!$ &#" !ot ",cce""f,l+ )rovided the #$e!t i" free fro* f#,lt. 82 The rei*',r"e*e!t "h#ll i!cl,de i!tere"t o! the ",*" #dv#!ced+ fro* the d#% o! &hich the #dv#!ce &#" *#de. Ae "ho,ld co*)#re thi" to the )rovi"io!" i! Article 1886 &here the #$e!t i" 'o,!d to #dv#!ce the ",*" !ece""#r% to c#rr% o,t the #$e!c%+ ',t o!l% &he! he "o co!"e!t" or i" "ti),l#ted i! the #$ree*e!t. :erso=a v$ /im, 45 1i/ 41? ,1@23- b. ;1en "in&i#a/ Not +iab/e (o" A)entFGH$ E:#en$e$ H!der Article 1;18+ the )ri!ci)#l i" !ot li#'le for the e:)e!"e" i!c,rred '% the #$e!t i! the follo&i!$ c#"e"D 316 if the #$e!t #cted i! co!tr#ve!tio! of the )ri!ci)#lKLQ" i!"tr,ctio!"+ ,!le"" the l#tter "ho,ld &i"h to #v#il hi*"elf of the 'e!et" derived fro* the co!tr#ct< 306 Ahe! the e:)e!"e" &ere d,e to the f#,lt of the #$e!t< 3?6 Ahe! the #$e!t i!c,rred the* &ith 9!o&led$e th#t #! ,!f#vor#'le re",lt &o,ld e!",e+ if the )ri!ci)#l &#" !ot #&#re thereof< or 326 Ahe! it &#" "ti),l#ted th#t the e:)e!"e" &o,ld 'e 'or!e '% the #$e!t+ or th#t the l#tter &o,ld 'e #llo&ed o!l% # cert#i! ",*. Ahe! the #,thorit% of the #re# *#!#$er to "ettli!$ the cl#i*" i" f,rther li*ited '% the &ritte! "t#!d#rd #,thorit% to )#%+
&hich "t#te" th#t the )#%*e!t "h#ll co*e fro* hi" revolvi!$ f,!d or collectio!+ the "ettle*e!t 'e%o!d ",ch f,!d &#" # cle#r devi#tio! fro* the i!"tr,ctio!" of the )ri!ci)#l. Co!"eB,e!tl%+ the e:)e!"e" i!c,rred '% the #re# *#!#$er i! the "ettle*e!t of the cl#i*" of the i!",red *#% !ot 'e rei*',r"ed fro* the i!",r#!ce co*)#!% ),r",#!t to the cle#r )rovi"io! of Article 1;18316 of the Civil Code. Jo&ever+ &hile the l#& o! #$e!c% )rohi'it" the #re# *#!#$er fro* o't#i!i!$ rei*',r"e*e!t+ hi" ri$ht to recover *#% "till 'e E,"tied ,!der the $e!er#l l#& o! o'li$#tio!" #!d co!tr#ct"+ )#rtic,l#rl% Article 10?6 of the Civil Code o! )#%*e!t '% # third )#rt% of the o'li$#tio! of the de'tor+ #llo&" recover% KLXo!l% i!"of#r #" the )#%*e!t h#" 'ee! 'e!eci#l to the de'tor.KL Th,"+ to the e:te!t th#t the o'li$#tio! of the i!",r#!ce co*)#!% h#" 'ee! e:ti!$,i"hed+ the #re# *#!#$er *#% de*#!d for rei*',r"e*e!t fro* hi" )ri!ci)#l. To r,le other&i"e &o,ld re",lt i! ,!E,"t e!rich*e!t of )etitio!er. #o'inion Insurance v. Court of Appeals+ ?56 1CRA 0?; 304406. 8/ &. "in&i#a/ +iab/e to In.e0ni(* A)ent (o" t1e Da0a)e$ S!$taine. H!der Article 1;1?+ the )ri!ci)#l *,"t i!de*!if% the #$e!t for #ll the d#*#$e" &hich the e:ec,tio! of the #$e!c% *#% h#ve c#,"ed the #$e!t+ &itho,t f#,lt or !e$li$e!ce o! #$e!tKLQ" )#rt. Article 1;1? i" the co,!ter7'#l#!ce to the )rovi"io! i! Article 1882 th#t *#9e" the #$e!t li#'le for d#*#$e" ","t#i!ed '% the )ri!ci)#l for #$e!tKLQ" ref,"#l to )erfor* hi" o'li$#tio!" ,!der the #$e!c%. "lbaladejo y Cia v$ PRC, 45 1i/ 55? ,1@23-. ,1- Right of "gent to Retain Object of "gency in Pledge for "dvances and %amages H!der Article 1;12+ the #$e!t i" $r#!ted the )o&er to ret#i! i! )led$e the thi!$" &hich #re the o'Eect of the #$e!c% ,!til the )ri!ci)#l e=ect" the rei*',r"e*e!t #!d )#%" the i!de*!it% coveri!$ #dv#!ce" *#de #!d d#*#$e" ","t#i!ed. Thi" i" #! e:ce)tio! to the d,t% of the #$e!t+ e:)re""ed i! Article 18;1+ to deliver to the )ri!ci)#l ever%thi!$ he received eve! if !ot d,e to the )ri!ci)#l. .. Ob/i)ation o( "in&i#a/ to a* A)entFGH$ Co0#en$ation I! #! o!ero," or co*)e!"#ted #$e!c%+ the o'li$#tio! of the )ri!ci)#l to )#% the #$e!t "h#ll 'e i! #ccord#!ce &ith the ter*" #$reed ,)o! &he! the #$e!c% &#" co!"tit,ted. If !o )#rtic,l#r for*,l# h#" 'ee! #$reed ,)o! o! the #$e!tKLQ" co*)e!"#tio!+ the! the follo&i!$ r,le" "ho,ld #))l%D 3i6 the )ri!ci)#l "h#ll )#% the #$e!tKLQ" co**i""io! o!l% o! the le$#l '#"i" th#t the #$e!t h#" co*)lied &ith hi" o'li$#tio!" &ith the )ri!ci)#l< #!d 3ii6 the )ri!ci)#l "h#ll 'e li#'le to the #$e!t for the re#"o!#'le v#l,e of the #$e!tKLQ" "ervice". A 'ro9er i" e!titled to the ,",#l co**i""io! &he!ever the 'ri!$" to hi" )ri!ci)#l # )#rt% &ho i" #'le #!d &illi!$ to t#9e the )ro)ert% #!d e!ter i!to # v#lid co!tr#ct ,)o! the ter*" the! !#*ed '% the )ri!ci)#l+ #ltho,$h the )#rtic,l#r" *#% 'e #rr#!$ed #!d the *#tter !e$oti#ted #!d co!",**#ted 'et&ee! the )ri!ci)#l #!d the ),rch#"er directl%. It &o,ld 'e the hei$ht of i!E,"tice to )er*it the )ri!ci)#l the! to &ithdr#& the #,thorit% #" #$#i!"t #! e:)re"" )rovi"io! of the co!tr#ct+ #!d re#) the 'e!et" of the #$e!tKLQ" l#'or"+ &itho,t 'ei!$ li#'le to hi* for hi" co**i""io!. Macondray 6 Co$ v$ Se//ne", 33 1i/. 3CA ,1@1?-. Re/ate. Ca$e$6 86 Infante v. Cunanan+ ;? Ihil. 6;? 31;/?6. i' v. Sa4an+ 225 1CRA 0?0 304426. $iege & *ro&n v. S'ith, *ell & Co., 2? Ihil. 118 31;006. Ra'os v. Court of Appeals+ 6? 1CRA ??1 31;5/6. "... Tuazon & Co. v. Collector of Internal Revenue, 148 Ihil. 544 31;646. Inland Realt- Invest'ent Service, Inc. v. Court of Appeals+ 05? 1CRA 54 31;;56. #aPQon v. *ri'o & Co., 20 Ihil. 1?? 31;016. Re-es v. .os1ueda+ ;; Ihil. 021 31;/66. Collector of Internal Revenue v. Tan Eng Hong+ 18 1CRA /?1 31;666. 5. OB+IGATION OF T;O OR MORE RINCIA+S TO AGENT AOINTED FOR COMMON TRANSACTIONS H!der Article 1;1/+ if t&o or *ore )er"o!" h#ve #))oi!ted #! #$e!t for # co**o! tr#!"#ctio! or ,!dert#9i!$+ the% "h#ll 'e "olid#ril% li#'le to the #$e!t for #ll the co!"eB,e!ce" of the #$e!c%. Eve! if the )ri!ci)#l" do !ot #ct,#ll% #!d )er"o!#ll% 9!o& e#ch other+ ",ch i$!or#!ce doe" !ot #=ect their E,ridic#l "t#!di!$ of the #$e!t. #oles v. Angeles, 2;0 1CRA 645 304466. %e Castro v$ Court of "ppeals, 3B4 SCRA ?AC ,2AA2- ?. RIG8TS OF ERSONS ;8EN FACED ;IT8 CONF+ICTING CONTRACTS H!der Article 1;16+ &he! t&o )er"o!" co!tr#ct &ith re$#rd to the "#*e thi!$+ o!e of the* &ith the #$e!t #!d the other &ith the )ri!ci)#l+ #!d the t&o co!tr#ct" #re i!co*)#ti'le &ith e#ch other+ th#t of )rior d#te "h#ll 'e )referred+ &itho,t )reE,dice to the )rovi"io!" of Article 1/22 o! the r,le" o! do,'le "#le". Article 1;15 )rovide" th#t i! ",ch # c#"e+ if the #$e!t h#d #cted i! $ood f#ith+ the )ri!ci)#l "h#ll 'e li#'le i! d#*#$e" to the third )er"o! &ho"e co!tr#ct *,"t 'e reEected. O! the other h#!d+ if the #$e!t #cted i! '#d f#ith+ he #lo!e "h#ll 'e re")o!"i'le. IO1TED BY De#! Ce"#r F. Vill#!,ev# AT 8R40R0448 10D?2 AG S 4 COGGENT1 S IO1T A COGGENT S DIGG IT 85 IO. EOTINGHI1JGENT OF AGENCY 1. 8O; AND ;8EN AGENCY EKTINGUIS8ED
Article 1;1; of the Civil Code e!,*#r#te" the *ode" '% &hich #! #$e!c% co!tr#ct i" e:ti!$,i"hed+ th,"D a. B* "e'o&ation b. B* t1e 9it1."a9a/ o( t1e a)ent &. B* .eat1, &i'i/ inte".i&tion, in$anit* o" in$o/'en&* o( eit1e" t1e #"in&i#a/ o" a)ent .. B* t1e .i$$o/!tion o( t1e %!"i.i&a/ entit* 91i&1 ent"!$te. o" a&&e#te. t1e a)en&* e. B* t1e a&&o0#/i$10ent o( t1e ob%e&t o" #!"#o$e o( t1e a)en&* (. B* t1e e:#i"ation o( t1e #e"io. (o" 91i&1 t1e a)en&* 9a$ &on$tit!te. Other *ode" of e:ti!$,i"h*e!t of #! #$e!c% &o,ld 'e *,t,#l &ithdr#&#l+ '% ",)erve!i!$ eve!t th#t *#9e" ille$#l or i*)o""i'le the o'Eective or ),r)o"e for &hich the #$e!c% i" co!"tit,ted+ li9e the de"tr,ctio! of the ",'Eect *#tter &hich i" the o'Eect of the #$e!c%. 2. REVOCATION OF T8E AGENCY The l#& reco$!i>e" the )o&er to revo9e #! #$e!c% rel#tio! '% )ri!ci)#l+ i! 9ee)i!$ &ith the tr,i"* th#t #! #$e!c% i" # hi$hl% )er"o!#l rel#tio!"hi) #!d o!e ',ilt ,)o! tr,"t #!d co!de!ce. H!li9e the re*ed% of re"ci""io! &hich reB,ire" the e:i"te!ce of ",'"t#!ti#l 're#ch of co!tr#ct+ revoc#tio! i" liter#ll% #t the &ill of the )ri!ci)#l. B,t the !e#r #'"ol,te )o&er of the )ri!ci)#l to revo9e the #$e!c% "ho,ld !ot 'e co!f,"ed &ith the tho,$ht th#t there c#! 'e !o 're#ch of co!tr#ct co**itted '% # )ri!ci)#l &ho revo9e" the #$e!c% &hich &#" co!"tit,ted #" (irrevoc#'le( for # de!ite ter* or )eriod. I! ",ch # c#"e+ the #$ree*e!t #" to the ter* of the #$e!c% &o,ld !ot *#9e the )ri!ci)#l lo"e hi" )o&er to revo9e+ #!d &he! he doe" "o revo9e the #$e!c% i" ter*i!#ted+ ',t he &o,ld 'e li#'le to the #$e!t for the d#*#$e" c#,"ed+ i!cl,di!$ to the co*)e!"#tio! d,e hi* &he! the revoc#tio! &#" do!e i! '#d f#ith+ i.e.+ to #void the )#%*e!t of the co**i""io! e#r!ed '% the #$e!t. a. E:#"e$$ Re'o&ation H!der Article 1;04+ the )ri!ci)#l *#% revo9e the #$e!c% #t &ill+ e:)re"" or i*)lied+ #!d there'% co*)el the #$e!t to ret,r! the doc,*e!t evide!ci!$ the #$e!c%. Thi" &o,ld e!",re th#t the doc,*e!t+ i.e.+ )o&er of #ttor!e%+ &o,ld !ot f#ll 88 i!to the h#!d" of third )#rtie" &ho the! #ct i! $ood f#ith i! e!teri!$ i!to # co!tr#ct i! the !#*e of the )ri!ci)#l+ 'elievi!$ there i" "till e:i"ti!$ the #$e!c% rel#tio!. If the #$e!t f#il" or ref,"e" to ret,r! the )o&er of #ttor!e%+ it i" i!c,*'e!t ,)o! the )ri!ci)#l to $ive )ro)er !otice to the *e*'er" of the ),'lic &ho *#% 'e #=ected '% the revoc#tio!. H!der Article 1;01+ if the #$e!c% h#" 'ee! e!tr,"ted for the ),r)o"e of co!tr#cti!$ &ith ")ecied )er"o!"+ it" revoc#tio! "h#ll !ot )reE,dice the l#tter if the% &ere !ot $ive! !otice thereof. H!der Article 1;00+ if the #$e!t h#d $e!er#l )o&er" 3i.e.+ !ot directed to&#rd" ")ecic )er"o!"6+ !otice of the revoc#tio! i! # !e&")#)er of $e!er#l circ,l#tio! i" # ",@cie!t &#r!i!$ to third )er"o!". H!der Article 1;0/+ &he! t&o or *ore )ri!ci)#l" h#ve $r#!ted # )o&er of #ttor!e% for # co**o! tr#!"#ctio!+ #!% o!e of the* *#% revo9e the "#*e &itho,t the co!"e!t of the other". Thi" r,le i" co!"i"te!t &ith the r,le ,!der Article 1;1/ th#t the o'li$#tio! of t&o or *ore )ri!ci)#l" to # co**o! #$e!t i" "olid#r%+ #!d co!"eB,e!tl%+ the )o&er to revo9e the #$e!c% c#! 'e *#de '% the &ill of o!l% o!e of the )ri!ci)#l". b. I0#/ie. Re'o&ation The follo&i!$ h#ve 'ee! e!,*er#ted #" to co!"tit,te i*)lied revoc#tio!+ th,"D ,1- "ppointment of Ne! "gent for Same +usiness H!der Article 1;0?+ the #))oi!t*e!t of # !e& #$e!t for the "#*e ',"i!e"" or tr#!"#ctio! revo9e" the )revio," #$e!c% fro* the d#% o! &hich !otice thereof &#" $ive! to the for*er #$e!t. The e=ect of revoc#tio! i" &itho,t )reE,dice to the ri$ht" of third )#rtie" &ho &ere !ot #&#re of or !otied of ",ch "it,#tio!. The critic#l ti*e &he! the #$e!c% i" revo9ed i" (fro* the d#% o! &hich !otice thereof &#" $ive! to the for*er #$e!t.( Th,"+ i! +arcia v. #e .anzano+ ?; Ihil /55 31;1;6+ &here the f#ther r"t $#ve # )o&er of #ttor!e% over the ',"i!e"" to hi" "o!+ #!d ",'"eB,e!tl% to the *other+ the Co,rt held th#t &itho,t evide!ce "ho&i!$ th#t the "o! &#" i!for*ed of the i"",#!ce of the )o&er of #ttor!e% to the *other+ the tr#!"#ctio! e=ected '% the "o! ),r",#!t to hi" )o&er of #ttor!e%+ &#" v#lid #!d 'i!di!$+ th," 77 There i" !o )roof i! the record th#t the r"t #$e!t+ the "o!+ 9!e& of the )o&er7of7#ttor!e% to hi" *other. It &#" !ece""#r% ,!der the l#& for the defe!d#!t"+ i! order to e"t#'li"h their co,!tercl#i*+ to )rove th#t the "o! h#d !otice of the "eco!d )o&er7of7#ttor!e%. The% h#ve !ot do!e "o+ #!d it *,"t 'e co!"idered th#t A!$el F. G#!>#!o &#" #cti!$ ,!der # v#lid )o&er7of7 8; #ttor!e% fro* hi" f#ther &hich h#d !ot 'ee! le$#ll% revo9ed o! the d#te of the "#le of the h#lf i!tere"t i! the "te#*er to the )l#i!ti=" "o!+ &hich h#lf i!tere"t &#" le$#ll% i!herited '% the )l#i!ti=". 3#t ). /826 ,2- )hen Principal %irectly Manages +usiness KLZ H!der Article 1;02+ the #$e!c% i" revo9ed &he! the )ri!ci)#l directl% *#!#$e" the ',"i!e"" e!tr,"ted to the #$e!t+ de#li!$ directl% &ith third )er"o!". The )rovi"io! doe" !ot "t#te &he! the #ct of revoc#tio! t#9e" )l#ce+ #!d it c#! 'e )re",*ed therefore th#t the *o*e!t the )ri!ci)#l directl% *#!#$e" the ',"i!e"" '% de#li!$ directl% &ith third )er"o!"+ the #$e!c% i" revo9ed. B,t th#t &o,ld o!l% *e#! th#t the revoc#tio! of the #$e!c% i" o!l% &ith re")ect to the third )er"o!" &ith &ho* the )ri!ci)#l de#l" directl%< #" to third )#rtie" &ho h#ve )revio,"l% 9!o&! of the )o&er of #ttor!e% of the #$e!t #!d &ho h#ve !ot de#lt &ith the )ri!ci)#l+ the #$e!c% c#!!ot 'e co!"idered revo9ed. It i" #l"o #))#re!t th#t ,!le"" the #$e!t i" #&#re or $ive! !otice th#t the )ri!ci)#l h#" directl% *#!#$ed the ',"i!e"" &hich i" covered '% hi" )o&er of #ttor!e%+ the! i!"of#r #" the #$e!t i" co!cer!ed there i" #" %et !o revoc#tio! of hi" )o&er". It *,"t 'e *#de cle#r th#t the co!ti!,ed i!volve*e!t of the )ri!ci)#l i! the *#!#$e*e!t of the ',"i!e"" or the )ro)ert% &hich i" the o'Eect of # )o&er of #ttor!e% $ive! to #! #$e!t doe" !ot !ece""#ril% *e#! there i" i!te!t to revo9e. For i!deed+ #$e!c% #rr#!$e*e!t" #re !ot *e#!t to c,rt#il the )o&er of the )ri!ci)#l to e:ec,te #ct" of o&!er"hi) #!d #d*i!i"tr#tio!+ ',t #" # *#tter of ',"i!e"" "e!"e+ to #llo& the )ri!ci)#l+ '% le$#l ctio!+ to e:te!d hi" )er"o!#lit% thro,$h the f#cilit% of the #$e!t 3Orient Air Service & Hotel Representatives v. Court of Appeals+ 1;5 1CRA 62/ -1;;1.6. I! other &ord"+ the direct *#!#$e*e!t of the ',"i!e"" '% the )ri!ci)#l #!d directl% de#li!$ &ith third )#rtie" "h#ll 'e dee*ed to )rod,ce the e=ect of revoc#tio! &he! ",ch #ct" &o,ld 'e i!co!"i"te!t &ith the ter*" of the )o&er of #ttor!e% )revio,"l% $ive! to the #$e!t. 1,ch )ri!ci)le i" 'e"t ill,"tr#ted i! C.S ogging v. Court of Appeals+ 011 1CRA ?52 31;;06+ &here the )ri!ci)#l #))oi!ted the #$e!t (#" hi" "ole #!d e:cl,"ive e:)ort "#le" #$e!t &ith f,ll #,thorit% . . .to "ell #!d e:)ort ,!der # r* "#le" co!tr#ct . . . #ll lo$" )rod,ced '% -the )ri!ci)#l. for # )eriod of ve 3/6 %e#r" co**e!ci!$ ,)o! the e:ec,tio! of the #$ree*e!t : : : -#!d for &hich the #$e!t. "h#ll receive ve 3/V6 )er ce!t co**i""io! of the $ro"" "#le" of lo$" of -the )ri!ci)#l. '#"ed o! F.O.B. i!voice v#l,e &hich co**i""io! "h#ll 'e ded,cted fro* the )roceed" of #!% #!dRor #ll *o!e%" received '% -#$e!t. for #!d i! 'eh#lf #!d for the #cco,!t of -the )ri!ci)#l..( D,ri!$ the ve %e#r7)eriod+ the )ri!ci)#l "old lo$" directl% to J#)#!e"e r*"+ #!d for &hich the #$e!t !o& "ee9" to recover the ;4 co**i""io! to &hich he &#" e!titled to ,!der the e:cl,"ive #$e!c% #rr#!$e*e!t. I! de!%i!$ #!% ri$ht o! the )#rt of the #$e!t to receive co**i""io! fro* the )ri!ci)#lKLQ" direct "#le" of lo$" to it" J#)#!e"e c,"to*er"+ the Co,rt held 77 Jo&ever+ Ae !d *erit i! -)ri!ci)#lKLQ". co!te!tio! th#t the #))ell#te co,rt erred i! holdi!$ th#t -the #$e!t. &#" e!titled to it" co**i""io! fro* the "#le" *#de '% -the )ri!ci)#l. to J#)#!e"e r*". The )ri!ci)#l *#% revo9e # co!tr#ct of #$e!c% #t &ill+ #!d ",ch revoc#tio! *#% 'e e:)re""+ or i*)lied+ #!d *#% 'e #v#iled of eve! if the )eriod :ed i! the co!tr#ct of #$e!c% #" !ot %et e:)ired. A" the )ri!ci)#l h#" thi" #'"ol,te ri$ht to revo9e the #$e!c%+ the #$e!t c#! !ot o'Eect thereto< !either *#% he cl#i* d#*#$e" #ri"i!$ fro* ",ch revoc#tio!+ ,!le"" it i" "ho&! th#t ",ch &#" do!e i! order to ev#de the )#%*e!t of #$e!t8" co**i""io!. 3#t )). ?817?806 C.S ogging co!r*" the le$#l )o"itio! th#t the i!dic#tio! of # )eriod i! the co!tr#ct of #$e!c% doe" !ot *e#! th#t the co!tr#ct &#" co!tr#ct,#ll% dee*ed irrevoc#'le &ithi! the )eriod $r#!ted+ #!d to the e=ect revoc#tio! &ithi! the )eriod &o,ld #*o,!t to 're#ch of co!tr#ct for &hich the )ri!ci)#l *#% 'e held li#'le for d#*#$e". I! #dditio!+ the r,li!$ #l"o co!r*" the )o"itio! th#t the $r#!t to # )er"o! of #! (e:cl,"ive #$e!c%( )o"itio! doe" !ot *e#! th#t the #$e!c% i" irrevoc#'le &ithi! the )eriod )rovided i! the co!tr#ct of #$e!c%+ ',t th#t *erel% it *e#!" th#t the )ri!ci)#l &o,ld !ot #))oi!t #!other #$e!t to h#!dle the ',"i!e"" covered. I! +uardez v. )RC+ 1;1 1CRA 285 31;;46+ &here the )ri!ci)#l h#d #,thori>ed the ),r)orted #$e!t to (follo& ,)( )ri!ci)#lKLQ" )revio," o=er to "ell # retr,c9 to # co*)#!%+ the Co,rt held th#t &he! the #$e!t dro))ed o,t of the "ce!e #!d it &#" the )ri!ci)#l th#t directl% !e$oti#ted &ith the co*)#!% to "#& the co!",**#tio! of the "#le+ !o co**i""io! &#" d,e to the #$e!t 'ec#,"e (",ch #$e!c% &o,ld h#ve 'ee! dee*ed revo9ed ,)o! the re",*)tio! of direct !e$oti#tio!" 'et&ee!( the )ri!ci)#l #!d the co*)#!%. I! )e& .anila u'4er Co'pan-, Inc. vs. Repu4lic of the (hilippines+ 145 Ihil 802 31;646+ the Co,rt r,led th#t the #ct of # co!tr#ctor+ &ho+ #fter e:ec,ti!$ )o&er" of #ttor!e% i! f#vor of #!other e*)o&eri!$ the l#tter to collect &h#tever #*o,!t" *#% 'e d,e to hi* fro* the Gover!*e!t+ #!d there#fter de*#!ded #!d collected fro* the Gover!*e!t the *o!e% the collectio! of &hich he e!tr,"ted to hi" #ttor!e%7i!7 f#ct+ co!"tit,ted revoc#tio! of the #$e!c% i! f#vor of the #ttor!e%7i!7f#ct. The r,li!$" i! the #'ove7di"c,""ed c#"e" i!dic#te th#t the i"",e of (i*)lied revoc#tio!( #ri"i!$ &he! the )ri!ci)#l directl% *#!#$e" the ;1 ',"i!e"" or )ro)ert% covered '% # )o&er of #ttor!e% re#ll% $o i!to the i"",e of e!title*e!t of the #$e!t to the co**i""io! or re*,!er#tio! #$reed ,)o! ,!der the co!tr#ct of #$e!c%. I! other &ord"+ it "ee*" th#t E,ri")r,de!ce i!dic#te" th#t #$e!c% 'ei!$ # co!tr#ct of "ervice+ the #$e!t *,"t e#r! thro,$h hi" "ervice or e=ort" the co**i""io! or re*,!er#tio! #$reed ,)o! &ith the )ri!ci)#l< ",ch th#t if it i" the )ri!ci)#l hi*"elf+ thro,$h hi" o&! e=ort"+ &ho i" #'le to e=ect the tr#!"#ctio! co!te*)l#ted '% the #$e!c% #rr#!$e*e!t+ the! the #$e!t &o,ld !ot 'e e!titled to receive #!% co**i""io!. ,3- Special Po!er of "ttorney Revo*es a 5eneral Po!er of "ttorney H!der Article 1;06+ (A $e!er#l )o&er of #ttor!e% i" revo9ed '% # ")eci#l o!e $r#!ted to #!other #$e!t+ #" re$#rd" the ")eci#l *#tter i!volved i! the( $e!er#l )o&er of #ttor!e%. It i" ,!fort,!#te th#t Article 1;06 f,"e" t&o di"ti!ct "it,#tio!" i!to o!e "t#t,tor% r,le. For e:#*)le+ the i*)lic#tio! fro* the l#!$,#$e of Article 1;06 i" th#t (# ")eci#l )o&er of #ttor!e% $r#!ted to o!e )er"o! i" !ot revo9ed '% # $e!er#l )o&er of #ttor!e% ",'"eB,e!tl% $r#!ted i! f#vor of #!other )er"o! #" to the ")eci#l *#tter i!volved i! the ")eci#l )o&er of #ttor!e%<( for i!deed the )ro)o"itio! if illo$ic#l. The ,"e of the ter*" ($e!er#l )o&er of #ttor!e%( #!d (")eci#l )o&er of #ttor!e%( i" co*)letel% *i"le#di!$ i! Article 1;06+ for the r,le i" )ro)erl% e*'odied i! Article 1;0?+ i! th#t (the #))oi!t*e!t of # !e& #$e!t for the "#*e ',"i!e"" or tr#!"#ctio! revo9e" the )revio," #$e!c% fro* the d#% o! &hich !otice thereof &#" $ive! to the for*er #$e!t.( A$#i!+ if &e loo9 #t the l#!$,#$e of Article 1;06+ it &o,ld *e#! th#t (# $e!er#l )o&er of #ttor!e% i" !ot revo9ed '% # ")eci#l o!e $r#!ted to the sa'e agent.( The f#l"it% of ",ch #! i*)lic#tio! i" 'e"t "ho&! i! the deci"io! i! #- *uncio and Co. v. Ong +uan Can+ 64 Ihil 6;6 31;?26. I! th#t deci"io!+ the "o! e:ec,ted o! 'eh#lf of the f#ther+ the deed coveri!$ the "#le of # rice7 *ill #!d c#*#ri!+ i! f#vor of ',%er" &ho relied ,)o! # 1;08 )o&er of #ttor!e% #tt#ched to the deed+ ',t &hich t,r!ed o,t &#" (!ot # $e!er#l )o&er of #ttor!e% ',t # li*ited o!e #!d -did. !ot $ive the e:)re"" )o&er to #lie!#te the )ro)ertie" i! B,e"tio!.( Ahe! the creditor" of the )ri!ci)#l "o,$ht to h#ve the "#le decl#red void+ the ',%er" cl#i*ed th#t the defect i! the "o!KLQ" #,thorit% to "ell o! 'eh#lf of the f#ther &#" c,red '% #! e#rlier 1;04 ($e!er#l )o&er of #ttor!e% $ive! to the "#*e #$e!t -"o!.( '% the f#ther. The Co,rt !o!ethele"" decl#red the "#le void o! the $ro,!d th#t (The *#9i!$ #!d #cce)ti!$ of # !e& )o&er of #ttor!e%+ &hether it e!l#r$e" or decre#"e" the )o&er of the #$e!t ,!der # )rior )o&er of #ttor!e%+ *,"t 'e held to ",))l#!t #!d revo9e the ;0 l#tter &he! the t&o #re i!co!"i"te!t. If the !e& #))oi!t*e!t &ith li*ited )o&er" doe" !ot revo9e the $e!er#l )o&er of #ttor!e%+ the e:ec,tio! of the "eco!d )o&er of #ttor!e% &o,ld 'e # *ere f,tile $e"t,re.( If the ),r)o"e of the )ri!ci)#l i! de#li!$ directl% &ith the ),rch#"er #!d hi*"elf e=ecti!$ the "#le of the )ri!ci)#lKLQ" )ro)ert% i" to #void )#%*e!t of hi" #$e!tKLQ" co**i""io!+ the i*)lied revoc#tio! i" dee*ed *#de i! '#d f#ith #!d c#!!ot 'e "#!ctio!ed &itho,t #ccordi!$ to the #$e!t the co**i""io! &hich i" d,e hi*. .nfante v$ Cunanan, @3 1i/ ?@3 ,1@53-. Ahere !o ti*e for the co!ti!,#!ce of the #$e!c% i" :ed '% the ter*"+ the )ri!ci)#l i" #t li'ert% to ter*i!#te it #t &ill ",'Eect o!l% to the reB,ire*e!t" of $ood f#ith. %aCDon v$ +rimo, 42 1i/ 133 ,1@21-. Re/ate. Ca$e$6 0alenzuala v. Court of Appeals, 1;1 1CRA 1 31;;46 $lorentino v. Sandigan4a-an+ 040 1CRA ?4; 31;;?6. #ialosa v. Court of Appeals+ 1?4 1CRA ?/4 31;826 .anila Trading v. .anila Trading a4orers Assn.+ 8? Ihil 0;5 31;2;6 0alera v. 0elasco+ /1 Ihil 6;/ 31;086 *arretto v. Santa .arina+ 06 Ihil 224 31;1?6 &. E>e&t$ o( Re'o&ation on T1i". a"tie$ ,1- )hen .t ";ects %ealings !ith Speci?ed -hird Parties H!der Article 1;01+ if the #$e!c% h#" 'ee! e!tr,"ted for the ),r)o"e of co!tr#cti!$ &ith ")ecied )er"o!"+ it" revoc#tio! "h#ll !ot )reE,dice the l#tter if the% &ere !ot $ive! !otice thereof. It "ee*" cle#r+ &he! co*)#red &ith the "it,#tio! i! Article 185?+ th#t !otice '% ),'lic #dverti"e*e!t &o,ld !ot co!"tit,te ",@cie!t !otice to 'i!d ",ch ")ecied third )#rtie". I! Rallos v. 8angco+ 04 Ihil 06; 31;116+ the for*er )ri!ci)#l ref,"ed to 'e )er"o!#ll% li#'le for #!% #cco,!t h#!dled '% hi" #$e!t 3Coll#!te"6 for tr#!"#ctio!" th#t occ,rred #fter the )ri!ci)#l h#d ter*i!#ted the #$e!c% rel#tio!"+ eve! to # lo!$7 "t#!di!$ c,"to*er &ho h#d do!e ',"i!e"" &ith the )ri!ci)#l thro,$h the #$e!t &ho &#" ")eci#ll% e!dor"ed. I! #@r*i!$ the li#'ilit% of the )ri!ci)#l+ the Co,rt held 77 It #))e#r"+ ho&ever+ th#t )rior to the "e!di!$ of "#id to'#cco the defe!d#!t h#d "evered hi" rel#tio!" &ith Coll#!te" #!d th#t the l#tter &#" !o lo!$er #cti!$ #" hi" f#ctor. ;? Thi" f#ct &#" !ot 9!o&! to the )l#i!ti="< #!d it i" co!ceded i! the c#"e th#t !o !otice of #!% 9i!d &#" $ive! '% the defe!d#!t to the )l#i!ti=" of the ter*i!#tio! of the rel#tio!" 'et&ee! the defe!d#!t #!d hi" #$e!t. The defe!d#!t ref,"ed to )#% the "#id ",* ,)o! de*#!d of the )l#i!ti="+ )l#ci!$ ",ch ref,"#l ,)o! the $ro,!d th#t #t the ti*e the "#id to'#cco &#" received #!d "old '% Coll#!te" he &#" #cti!$ )er"o!#ll% #!d !ot #" #$e!t of the defe!d#!t. Thi" #ctio! &#" 'ro,$ht to recover "#id ",*. A" i" "ee!+ the o!l% B,e"tio! for o,r deci"io! i" &hether or !ot the )l#i!ti="+ #cti!$ i! $ood f#ith #!d &itho,t 9!o&led$e+ h#vi!$ "e!t )rod,ce to "ell o! co**i""io! to the for*er #$e!t of the defe!d#!t+ c#! recover of the defe!d#!t ,!der the circ,*"t#!ce" #'ove "et forth. Ae #re of the o)i!io! th#t the defe!d#!t i" li#'le. J#vi!$ #dverti"ed the f#ct th#t Coll#!te" &#" hi" #$e!t #!d h#vi!$ $ive! ")eci#l !otice to the )l#i!ti=" of th#t f#ct+ #!d h#vi!$ $ive! the* # ")eci#l i!vit#tio! to de#l &ith ",ch #$e!t+ it &#" the d,t% of the defe!d#!t o! the ter*i!#tio! of the rel#tio!"hi) of )ri!ci)#l #!d #$e!t to $ive d,e #!d ti*el% !otice thereof to the )l#i!ti=". F#ili!$ to do "o+ he i" re")o!"i'le to the* for &h#tever $ood" *#% h#ve 'ee! i! $ood f#ith #!d &itho,t !e$li$e!ce "e!t to the #$e!t &itho,t 9!o&led$e+ #ct,#l or co!"tr,ctive+ of the ter*i!#tio! of ",ch rel#tio!"hi). 3#t )). 050705?6 ustan v. Court of Appeals+ 066 1CRA 66? 31;;56+ held th#t &he! the ")eci#l )o&er of #ttor!e% d,l% #,thori>ed the #$e!t to re)re"e!t #!d #ct o! 'eh#lf of the )ri!ci)#l+ the )o&er $r#!ted thereto c#! 'e relied ,)o! '% third )#rtie" for &ho* ")ecic#ll% the #,thorit% &#" i"",ed+ th,"D A" f#r #" third )er"o!" #re co!cer!ed+ #! #ct i" dee*ed to h#ve 'ee! )erfor*ed &ithi! the "co)e of the #$e!t8" #,thorit% if ",ch i" &ithi! the ter*" of the )o&er of #ttor!e% #" &ritte! eve! if the #$e!t h#" i! f#ct e:ceeded the li*it" of hi" #,thorit% #ccordi!$ to the ,!der"t#!di!$ 'et&ee! the )ri!ci)#l #!d the #$e!t. The 1)eci#l Io&er of Attor!e% )#rtic,l#rl% )rovide" th#t the "#*e i" $ood !ot o!l% for the )ri!ci)#l lo#! ',t #l"o for ",'"eB,e!t co**erci#l+ i!d,"tri#l+ #$ric,lt,r#l lo#! or credit #cco**od#tio! th#t the #ttor!e%7 i!7f#ct *#% o't#i! #!d ,!til the )o&er of #ttor!e% i" revo9ed i! # ),'lic i!"tr,*e!t #!d # co)% of &hich i" f,r!i"hed to INB. Eve! &he! the #$e!t h#" e:ceeded hi" #,thorit%+ the )ri!ci)#l i" "olid#ril% li#'le &ith the #$e!t if the for*er #llo&ed the l#tter to #ct #" tho,$h he h#d f,ll )o&er" 3Article 1;11+ Civil Code6. The *ort$#$e directl% #!d i**edi#tel% ",'Eect" the )ro)ert% ,)o! &hich it i" i*)o"ed. The )ro)ert% of third )er"o!" &hich h#" 'ee! e:)re""l% *ort$#$ed to $,#r#!tee #! o'li$#tio! to &hich the "#id )er"o!" #re forei$!+ i" directl% #!d Eoi!tl% li#'le for the f,lll*e!t thereof< it i" therefore ",'Eect to e:ec,tio! #!d "#le for the ),r)o"e of )#%i!$ the ;2 #*o,!t of the de't for &hich it i" li#'le. Jo&ever+ )etitio!er h#" #! ,!B,e"tio!#'le ri$ht to de*#!d )ro)ortio!#l i!de*!ic#tio! fro* I#r#!$#! &ith re")ect to the ",* )#id to INB fro* the )roceed" of the "#le of her )ro)ert% i! c#"e the "#*e i" "old to "#ti"f% the ,!)#id de't".( 3#t ). 6566 ustan hold" th#t &here the ")eci#l )o&er of #ttor!e% )rovide" th#t the "#*e i" $ood !ot o!l% for the )ri!ci)#l lo#! ',t #l"o for ",'"eB,e!t co**erci#l+ i!divid,#l+ #$ric,lt,r#l lo#! or credit #cco**od#tio! th#t the #ttor!e%7i!7f#ct *#% o't#i! #!d ,!til the )o&er of #ttor!e% i" revo9ed i! # ),'lic i!"tr,*e!t #!d # co)% of &hich i" f,r!i"hed to the '#!9+ i! the #'"e!ce of #!% )roof th#t the '#!9 h#d 9!o&led$e th#t the l#"t three lo#!" &ere &itho,t the e:)re"" #,thorit% of the )ri!ci)#l+ the '#!9 c#!!ot 'e )reE,dice. ,2- )hen Revocation of 5eneral Po!ers of "gency H!der Article 1;00+ if the #$e!t h#d $e!er#l )o&er"+ revoc#tio! of the #$e!c% doe" !ot )reE,dice third )er"o!" &ho #cted i! $ood f#ith #!d &itho,t 9!o&led$e of the revoc#tio!. Notice of the revoc#tio! i! # !e&")#)er of $e!er#l circ,l#tio! i" # ",@cie!t &#r!i!$ to third )er"o!". I! # c#"e coveri!$ # )o&er of #ttor!e% to de#l &ith the $e!er#l ),'lic+ the f#ct th#t the revoc#tio! &#" #dverti"ed i! # !e&")#)er of $e!er#l circ,l#tio! &o,ld 'e ",@cie!t &#r!i!$ to third )er"o!". Rammani v$ Court of "ppeals, 1@? SCRA C31 ,1@@1-. B% the o)e!i!$ of 'r#!ch o@ce &ith the #))oi!t*e!t of it" 'r#!ch *#!#$er #!d ho!ori!$ "ever#l ",ret% 'o!d" i"",ed i! it" 'eh#lf+ the i!",r#!ce co*)#!% i!d,ced the ),'lic to 'elieve th#t it" 'r#!ch *#!#$er h#d #,thorit% to i"",e ",ch 'o!d". A" # co!"eB,e!ce+ the i!",r#!ce co*)#!% &#" e"to))ed fro* )le#di!$+ )#rtic,l#rl% #$#i!"t # re$,l#r c,"to*er thereof+ th#t the 'r#!ch *#!#$er h#d !o #,thorit%. Central Surety 6 .nsurance Co$ v$ C$N$ ,odges, 3B SCRA 15@ ,1@C1-. Ahile Article 1?/8 of the Civil Code reB,ire" th#t the co!tr#ct" i!volvi!$ re#l )ro)ert% *,"t #))e#r i! # )ro)er doc,*e!t+ # revoc#tio! of # ")eci#l )o&er of #ttor!e% to *ort$#$e # )#rcel of l#!d+ e*'odied i! # )riv#te &riti!$+ i" v#lid #!d 'i!di!$ 'et&ee! the )#rtie"+ ",ch reB,ire*e!t of Article 1?/8 'ei!$ o!l% for the co!ve!ie!ce of the )#rtie" #!d to *#9e the co!tr#ct e=ective #" #$#i!"t third )er"o!". PN+ v$ .ntermediate "ppellate Court, 1B@ SCRA ?BA ,1@@A-. Cia. +en. #e To4acos v. #ia4a+ 04 Ihil ?01 31;116. .. CASES OF IRREVOCAB+E AGENCIES H!der Article 1;05+ #! #$e!c% c#!!ot 'e revo9ed &he!D ;/ [\ # 'il#ter#l co!tr#ct de)e!d" ,)o! it< [\ it i" the *e#!" of f,llli!$ #! o'li$#tio! #lre#d% co!tr#ct< [\ # )#rt!er i" #))oi!ted *#!#$er of # )#rt!er"hi) i! the co!tr#ct of )#rt!er"hi) #!d the re*ov#l fro* *#!#$e*e!t i" ,!E,"ti#'le. Jo&ever+ #! e:ce)tio! to the revoc#'ilit% of # co!tr#ct of #$e!c% i" &he! it i" co,)led &ith i!tere"t+ i.e.+ if # 'il#ter#l co!tr#ct de)e!d" ,)o! the #$e!c%. The re#"o! for it" irrevoc#'ilit% i" 'ec#,"e the #$e!c% 'eco*e" )#rt of #!other o'li$#tio! or #$ree*e!t. It i" !ot "olel% the ri$ht" of the )ri!ci)#l ',t #l"o th#t of the #$e!t #!d third )er"o!" &hich #re #=ected. Je!ce+ the l#& )rovide" th#t i! ",ch c#"e"+ the #$e!c% c#!!ot 'e revo9ed #t the "ole &ill of the )ri!ci)#l. Repu4lic v. Evangelista+ 266 1CRA /22 3044/6 I! Sevilla v. Court of Appeals+ 164 1CRA 151 31;686+ the Co,rt fo,!d th#t &he! the )etitio!er+ Fi!# 1evill#+ #$reed to *#! the re")o!de!t+ To,ri"t Aorld 1ervice+ I!c.8" Er*it# o@ce+ "he *,"t h#ve do!e "o ),r",#!t to # co!tr#ct of #$e!c%. It i" the e""e!ce of thi" co!tr#ct th#t the #$e!t re!der" "ervice" (i! re)re"e!t#tio! or o! 'eh#lf of #!other.( The Co,rt the! held 77 . . . I! the c#"e #t '#r+ 1evill# "olicited #irli!e f#re"+ ',t "he did "o for #!d o! 'eh#lf of her )ri!ci)#l+ To,ri"t Aorld 1ervice+ I!c. A" co*)e!"#tio!+ "he received 2V of the )roceed" i! the co!ce)t of co**i""io!". A!d #" &e "#id+ 1evill# her"elf+ '#"ed o! her letter of Nove*'er 08+ 1;61+ )re",*ed her )ri!ci)#l8" #,thorit% #" o&!er of the ',"i!e"" ,!dert#9i!$. Ae #re co!vi!ced+ co!"ideri!$ the circ,*"t#!ce" #!d fro* the re")o!de!t Co,rt8" recit#l of f#ct"+ th#t the )#rtie" h#d co!te*)l#ted # )ri!ci)#l7#$e!t rel#tio!"hi)+ r#ther th#! # Eoi!t *#!#$e*e!t or # )#rt!er"hi). B,t ,!li9e "i*)le $r#!t" of # )o&er of #ttor!e%+ the #$e!c% th#t &e here'% decl#re to 'e co*)#ti'le &ith the i!te!t of the )#rtie"+ c#!!ot 'e revo9ed #t &ill. The re#"o! i" th#t it i" o!e co,)led &ith #! i!tere"t+ the #$e!c% h#vi!$ 'ee! cre#ted for the *,t,#l i!tere"t of the #$e!t #!d the )ri!ci)#l. 1; It #))e#r" th#t Fi!# 1evill# i" # 'o!# de tr#vel #$e!t her"elf+ #!d #" ",ch+ "he h#d #cB,ired #! i!tere"t i! the ',"i!e"" e!tr,"ted to her. Goreover+ "he h#d #"",*ed # )er"o!#l o'li$#tio! for the o)er#tio! thereof+ holdi!$ her"elf "olid#ril% li#'le for the )#%*e!t of re!t#l". 1he co!ti!,ed the ',"i!e""+ ,"i!$ her o&! !#*e+ #fter To,ri"t Aorld h#d "to))ed f,rther o)er#tio!". Jer i!tere"t+ o'vio,"l%+ i" !ot li*ited to the co**i""io!" "he e#r!ed #" # re",lt of her ',"i!e"" tr#!"#ctio!"+ ',t o!e th#t e:te!d" to the ver% ",'Eect *#tter of the )o&er of *#!#$e*e!t dele$#ted to her. It i" #! #$e!c% th#t+ #" &e "#id+ c#!!ot 'e revo9ed #t the )le#",re of the )ri!ci)#l. Accordi!$l%+ the revoc#tio! co*)l#i!ed of "ho,ld e!title the )etitio!er+ Fi!# 1evill#+ to d#*#$e". ;6 : : :. Thi" co!d,ct o! the )#rt of To,ri"t Aorld 1ervice+ I!c. 'etr#%" # "i!i"ter e=ort to ),!i"h 1evill# for &h#t it h#d )erceived to 'e di"lo%#lt% o! her )#rt. It i" o=e!"ive+ i! #!% eve!t+ to ele*e!t#r% !or*" of E,"tice #!d f#ir )l#%. Ae r,le+ therefore+ th#t for it" ,!&#rr#!ted revoc#tio! of the co!tr#ct of #$e!c%+ the )riv#te re")o!de!t+ To,ri"t Aorld 1ervice+ I!c.+ "ho,ld 'e "e!te!ced to )#% d#*#$e". H!der the Civil Code+ *or#l d#*#$e" *#% 'e #&#rded for ('re#che" of co!tr#ct &here the defe!d#!t #cted . . . i! '#d f#ith.( 3#t ). 1826 Re/ate. Ca$e$6 National Sugar -rading v$ PN+, 3@? SCRA 52B ,2AA3- +acaling v$ Muya, 3BA SCRA C14 ,2AA2- Pere= v$ PN+, 1C SCRA B33 ,1@??- Coleongco v$ Claparols, 1A SCRA 5CC ,1@?4- %el Rosario v$ "bad, 1A4 1i/ ?4B ,1@5B- 3. ;IT8DRA;A+ OF T8E AGENT FROM T8E AGENCY H!der Article 1;08+ the #$e!t *#% &ithdr#&#l fro* the #$e!c% '% $ivi!$ d,e !otice to the )ri!ci)#l. If the )ri!ci)#l "ho,ld ",=er #!% d#*#$e '% re#"o! of the &ithdr#&#l+ the #$e!t *,"t i!de*!if% hi* therefore+ ,!le"" the #$e!t "ho,ld '#"e hi" &ithdr#&#l ,)o! the i*)o""i'ilit% of co!ti!,i!$ the )erfor*#!ce of the #$e!c% &itho,t $r#ve detri*e!t to hi*"elf. H!der Article 1;0;+ eve! &he! the #$e!t "ho,ld &ithdr#& for # v#lid re#"o!+ *,"t co!ti!,e to #ct ,!til the )ri!ci)#l h#" h#d re#"o!#'le o))ort,!it% to t#9e the !ece""#r% "te)" to *eet the "it,#tio!. Re/ate. Ca$e$6 0alera v. 0elasco+ /1 Ihil 6;/ 31;086 #ela (ena v. Hidalgo+ 16 Ihil 2/4 31;146 4. DEAT8, INCAACITY OR INSO+VENCY OF T8E RINCIA+ 1i!ce #$e!c% i" 'oth # d,ci#r% #!d re)re"e!t#tive rel#tio!"hi)+ the de#th of the )ri!ci)#l #,to*#tic#ll% e:ti!$,i"he" the co!tr#ct+ for cert#i!l% eve! if the #$e!t i" &illi!$ to $o o!+ he h#" !o'od% to re)re"e!t #!d 'i!d i! E,ridic#l rel#tio!". Th,"+ Rallos v. $eli, +o Chan & sons Realt- Corp.+ 81 1CRA 0/1 31;586+ the Co,rt held 77 B% re#"o! of the ver% !#t,re of the rel#tio!"hi) 'et&ee! )ri!ci)#l #!d #$e!t+ #$e!c% ;5 i" e:ti!$,i"hed '% the de#th of the )ri!ci)#l or the #$e!t. Thi" i" the l#& i! thi" E,ri"dictio!. G#!re"# co**e!ti!$ o! Art. 154; of the 1)#!i"h Civil Code e:)l#i!" th#t the r#tio!#le for the l#& i" fo,!d i! the E,ridic#l '#"i" of #$e!c% &hich i" re)re"e!t#tio!. There 'ei!$ #! i!te$r#tio! of the )er"o!#lit% of the )ri!ci)#l i!to th#t of the #$e!t it i" !ot )o""i'le for the re)re"e!t#tio! to co!ti!,e to e:i"t o!ce the de#th of either i" e"t#'li"h. Iothier #$ree" &ith G#!re"# th#t '% re#"o! of the !#t,re of #$e!c%+ de#th i" # !ece""#r% c#,"e for it" e:ti!ctio!. F#,re!t "#%" th#t the E,ridic#l tie 'et&ee! the )ri!ci)#l #!d the #$e!t i" "evered i)"o E,re ,)o! the de#th of either &itho,t !ece""it% for the heir" of the )ri!ci)#l to !otif% the #$e!t of the f#ct of de#th of the for*er. The "#*e r,le )rev#il" #t co**o! l#& the de#th of the )ri!ci)#l e=ect" i!"t#!t#!eo," #!d #'"ol,te revoc#tio! of the #,thorit% of the #$e!t ,!le"" the )o&er 'e co,)led &ith #! i!tere"t. 14 Thi" i" the )rev#le!t r,le i! A*eric#! J,ri")r,de!ce &here it i" &ell7"ettled th#t # )o&er &itho,t #! i!tere"t co!ferred ,)o! #! #$e!t i" di""olved '% the )ri!ci)#l8" de#th+ #!d #!% #tte*)ted e:ec,tio! of the )o&er #fter&#rd" i" !ot 'i!di!$ o! the heir" or re)re"e!t#tive" of the dece#"ed. 3#t ). 0646 The de#th of # clie!t dive"t" hi" l#&%er of #,thorit% to re)re"e!t hi* #" co,!"el. A de#d clie!t h#" !o )er"o!#lit% #!d c#!!ot 'e re)re"e!ted '% #! #ttor!e%. /avina v$ Court of "ppeals, 1C1 SCRA ?@1 ,1@BB-. Re/ate. Ca$e$6 -errado v$ Court of "ppeals, 131 SCRA 3C3 ,1@B4- Her'osa v. ongara+ ;? Ihil ;55 31;/?6 #anon v. *ri'o+ 20 Ihil 1?? 31;016 *arretto v. Santa .arina+ 06 Ihil 224 31;1?6 #ela (ena v. Hidalgo+ 16 Ihil 2/4 31;146 a. ;1en t1e A)en&* Contin!e$ De$#ite Deat1 o( "in&i#a/ H!der Article 1;?4+ the #$e!c% "h#ll re*#i! i! f,ll force #!d e=ect eve! #fter the de#th of the )ri!ci)#l+ if it h#" 'ee! co!"tit,ted i! the co**o! i!tere"t of the l#tter #!d of the #$e!t+ or i! the i!tere"t of # third )er"o! &ho h#" #cce)ted the "ti),l#tio! i! hi" f#vor. E#rlier o! i! (asno v. Ravina+ /2 Ihil ?58 31;?46+ the Co,rt reco$!i>ed th#t (the )o&er of "#le $ive! i! # *ort$#$e i" # )o&er co,)led &ith #! i!tere"t &hich ",rvive" the de#th of the $r#!tor.( ;8 A! e:#*)le of ",ch # "it,#tio!+ i" &he! # )o&er of #ttor!e% i" co!"tit,ted i! # co!tr#ct of re#l e"t#te *ort$#$e ),r",#!t to the reB,ire*e!t of Act No. ?1?/+ &hich &o,ld e*)o&er the *ort$#$ee ,)o! the def#,lt of the *ort$#$or to )#%*e!t the )ri!ci)#l o'li$#tio!+ to e=ect the "#le of the *ort$#$e )ro)ert% thro,$h e:tr#E,dici#l foreclo",re. It h#" 'ee! held th#t the )o&er of "#le i! the deed of re#l e"t#te *ort$#$2e i" !ot revo9ed '% the de#th of the )ri!ci)#l7*ort$#$or+ o! the $ro,!d th#t it i" #! #!cill#r% "ti),l#tio! ",))orted '% the "#*e c#,"e or co!"ider#tio! th#t ",))ort" the *ort$#$e #!d for*" #! e""e!ti#l i!"e)#r#'le )#rt of th#t 'il#ter#l #$ree*e!t. The )o&er of #ttor!e% therefore ",rvive" the de#th of the *ort$#$or+ #!d #llo&" the *ort$#$ee to e=ect the foreclo",re of the re#l e"t#te *ort$#$e eve! #fter the de#th of the )ri!ci)#l7*ort$#$or. (erez v. ()*+ 15 1CRA 8?? 31;666< #el Rosario v. A4ad and A4ad+ 142 Ihil. 628 31;/86. b. E>e&t o( A&t$ Done b* A)ent ;it1o!t Kno9/e.)e o( "in&i#a/FGH$ Deat1 H!der Article 1;?1+ #!%thi!$ do!e '% the #$e!t+ &itho,t 9!o&led$e of the de#th of the )ri!ci)#l or of #!% other c#,"e &hich e:ti!$,i"he" the #$e!c%+ i" v#lid #!d "h#ll 'e f,ll% e=ective &ith re")ect to third )er"o!" &ho *#% h#ve co!tr#cted &ith hi* i! $ood f#ith. It i" o'vio,"+ th#t third )#rtie" &ho de#l &ith the #$e!t i! '#d f#ith 3i.e., 9!o&i!$ th#t the )ri!ci)#l i" de#d6 &o,ld !ot 'e )rotected+ #!d the co!tr#ct &o,ld 'e void+ !ot E,"t ,!e!force#'le+ for l#c9 of the e""e!ti#l ele*e!t of co!"e!t. I! *uason v. (anu-as+ 14/ Ihil 5;/ 31;/;6+ the Co,rt #))lied the )rovi"io!" of Article 1;?1 i! ,)holdi!$ the v#lidit% of the "#le of the l#!d e=ected '% the #$e!t o!l% #fter the de#th of the )ri!ci)#l+ &he! !o evide!ce &#" #dd,ced to "ho& th#t #t the ti*e of "#le 'oth the #$e!t #!d the ',%er" &ere ,!#&#re of the de#th of the )ri!ci)#l. 3Reiterated in Herrera v. 5- %i' +uan+ 1 1CRA 246 -1;61.6. I! Rallos v. $eli, +o Chan & Sons Realt- Corp.+ 81 1CRA 0/1 31;586+ the Co,rt e*)h#"i>ed th#t l#c9 of 9!o&led$e of the de#th of the )ri!ci)#l *,"t e:i"t #t the ti*e of co!tr#ct &ith 'oth the #$e!t #!d the third )#rtie" for the )rovi"io! of Article 1;?1 to #))l%+ th," 77 Article 1;?1 i" the #))lic#'le l#&. H!der thi" )rovi"io!+ #! #ct do!e '% the #$e!t #fter the de#th of hi" )ri!ci)#l i" v#lid #!d e=ective o!l% ,!der t&o co!ditio!"+ vi>D 316 th#t the #$e!t #cted &itho,t 9!o&led$e of the de#th of the )ri!ci)#l+ #!d 306 th#t the third )er"o! &ho co!tr#cted &ith the #$e!t hi*"elf #cted i! $ood f#ith. Good f#ith here *e#!" th#t the third "o! &#" !ot #&#re of the de#th of the )ri!ci)#l #t the ti*e he co!tr#cted &ith "#id #$e!t. The"e t&o reB,i"ite" *,"t co!c,rD the #'"e!ce of o!e &ill re!der the #ct of the #$e!t i!v#lid ,!e!force#'le. ;; I! the i!"t#!t c#"e+ it c#!!ot 'e B,e"tio!ed th#t the #$e!t+ 1i*eo! R#llo"+ 9!e& of the de#th of hi" )ri!ci)#l #t the ti*e he "old the l#tter8" "h#re i! Fot No. /;8? to re")o!de!t cor)or#tio!. The 9!o&led$e of the de#th i" cle#rl% to 'e i!ferred fro* the )le#di!$" led '% 1i*eo! R#llo" 'efore the tri#l co,rt. Th#t 1i*eo! R#llo" 9!e& of the de#th of hi" "i"ter Co!ce)cio! i" #l"o # !di!$ of f#ct of the co,rt a 1uo #!d of re")o!de!t #))ell#te co,rt &he! the l#tter "t#ted th#t 1i*eo! R#llo" (*,"t h#ve 9!o&! of the de#th of hi" "i"ter+ #!d %et he )roceeded &ith the "#le of the lot i! the !#*e of 'oth hi" "i"ter" Co!ce)cio! #!d Ger,!di# R#llo" &itho,t i!for*i!$ #))ell#!t 3the re#lt% cor)or#tio!6 of the de#th of the for*er.( O! the '#"i" of the e"t#'li"hed 9!o&led$e of 1i*eo! R#llo" co!cer!i!$ the de#th of hi" )ri!ci)#l+ Co!ce)cio! R#llo"+ Article 1;?1 of the Civil Code i" i!#))lic#'le. The l#& e:)re""l% reB,ire" for it" #))lic#tio! l#c9 of 9!o&led$e o! the )#rt of the #$e!t of the de#th of hi" )ri!ci)#l< it i" !ot e!o,$h th#t the third )er"o! #cted i! $ood f#ith. 3#t ). 0606 The Co,rt f,rther held i! Rallos GHR A!other #r$,*e!t #dv#!ced '% re")o!de!t co,rt i" th#t the ve!dee #cti!$ i! $ood f#ith relied o! the )o&er of #ttor!e% &hich &#" d,l% re$i"tered o! the ori$i!#l certic#te of title recorded i! the Re$i"ter of Deed" of the Irovi!ce of Ce',+ th#t !o !otice of the de#th &#" ever #!!ot#ted o! "#id certic#te of title '% the heir" of the )ri!ci)#l #!d #ccordi!$l% the% *,"t ",=er the co!"eB,e!ce" of ",ch o*i""io!. To ",))ort ",ch #r$,*e!t refere!ce i" *#de to # )ortio! i! G#!re"#8" Co**e!t#rie" &hich Ae B,oteD (If the #$e!c% h#" 'ee! $r#!ted for the ),r)o"e of co!tr#cti!$ &ith cert#i! )er"o!"+ the revoc#tio! *,"t 'e *#de 9!o&! to the*. B,t if the #$e!c% i" $e!er#l i! !#t,re+ &itho,t refere!ce to )#rtic,l#r )er"o! &ith &ho* the #$e!t i" to co!tr#ct+ it i" ",@cie!t th#t the )ri!ci)#l e:erci"e d,e dili$e!ce to *#9e the revoc#tio! of the #$e!c% ),'licl% 9!o&!. (I! c#"e of # $e!er#l )o&er &hich doe" !ot ")ecif% the )er"o!" to &ho* re)re"e!t#tio! "ho,ld 'e *#de+ it i" the $e!er#l o)i!io! th#t #ll #ct" e:ec,ted &ith third )er"o!" &ho co!tr#cted i! $ood f#ith+ &itho,t 9!o&led$e of the revoc#tio!+ #re v#lid. I! ",ch c#"e+ the )ri!ci)#l *#% e:erci"e hi" ri$ht #$#i!"t the #$e!t+ &ho+ 9!o&i!$ of the revoc#tio!+ co!ti!,ed to #"",*e # )er"o!#lit% &hich he !o lo!$er h#d.( 3G#!re"#+ Vol. 11+ )). /61 #!d /5/< )). 1/716+ rollo6 The #'ove di"co,r"e+ ho&ever+ tre#t" of revoc#tio! '% #! #ct of the )ri!ci)#l #" # *ode of ter*i!#ti!$ #! #$e!c% &hich i" to 'e di"ti!$,i"hed fro* revoc#tio! '% o)er#tio! of l#& ",ch #" de#th of the )ri!ci)#l &hich o't#i!" i! thi" 144 c#"e. O! )#$e "i: of thi" O)i!io! Ae "tre""ed th#t '% re#"o! of the ver% !#t,re of the rel#tio!"hi) 'et&ee! )ri!ci)#l #!d #$e!t+ #$e!c% i" e:ti!$,i"hed ipso !ure ,)o! the de#th of either )ri!ci)#l or #$e!t. Altho,$h # revoc#tio! of # )o&er of #ttor!e% to 'e e=ective *,"t 'e co**,!ic#ted to the )#rtie" co!cer!ed+ %et # revoc#tio! '% o)er#tio! of l#&+ ",ch #" '% de#th of the )ri!ci)#l i"+ #" # r,le+ i!"t#!t#!eo,"l% e=ective i!#"*,ch #" ('% le$#l ctio! the #$e!t8" e:erci"e of #,thorit% i" re$#rded #" #! e:ec,tio! of the )ri!ci)#l8" co!ti!,i!$ &ill.( Aith de#th+ the )ri!ci)#l8" &ill ce#"e" or i" ter*i!#ted< the "o,rce of #,thorit% i" e:ti!$,i"hed. The Civil Code doe" !ot i*)o"e # d,t% o! the heir" to !otif% the #$e!t of the de#th of the )ri!ci)#l. Ah#t the Code )rovide" i! Article 1;?0 i" th#t+ if the #$e!t die"+ hi" heir" *,"t !otif% the )ri!ci)#l thereof+ #!d i! the *e#!ti*e #do)t ",ch *e#",re" #" the circ,*"t#!ce" *#% de*#!d i! the i!tere"t of the l#tter. Je!ce+ the f#ct th#t !o !otice of the de#th of the )ri!ci)#l &#" re$i"tered o! the certic#te of title of the )ro)ert% i! the O@ce of the Re$i"ter of Deed"+ i" !ot f#t#l to the c#,"e of the e"t#te of the )ri!ci)#l. 3#t ). 0626 5. DEAT8, INCAACITY OR INSO+VENCY OF T8E AGENT Article 1;1;3?6 )rovide" th#t the de#th+ civil i!terdictio!+ i!"#!it% or i!"olve!c% of the #$e!t e:ti!$,i"he" #t he #$e!c%. I! Terrado v. Court of Appeals+ 1?1 1CRA ?51 31;826+ the Co,rt held th#t co!tr#ct of #$e!c% e"t#'li"he" # ),rel% )er"o!#l rel#tio!"hi) 'et&ee! the )ri!ci)#l #!d the #$e!t+ ",ch th#t the #$e!c% i" e:ti!$,i"hed '% the de#th of the #$e!t+ #!d hi" ri$ht" #!d o'li$#tio!" #ri"i!$ fro* the co!tr#ct of #$e!c% #re !ot tr#!"*itt#'le to hi" heir". Jo&ever+ ,!der Article 1;?0+ if the #$e!t die" d,ri!$ the ter* of the #$e!c%+ hi" heir" *,"t !otif% the )ri!ci)#l thereof+ #!d i! the *e#!ti*e *,"t #do)t ",ch *e#",re" #" the circ,*"t#!ce" *#% de*#!d i! the i!tere"t of the )ri!ci)#l. The )rovi"io! e"t#'li"he" # r#re "it,#tio! &here #! o'li$#tio! i" i*)o"ed '% l#& ,)o! )er"o!" &ho #re !ot )#rtie" to # co!tr#ct,#l rel#tio!"hi)+ #!d th#t i! f#ct of o!e th#t h#" #lre#d% 'ee! e:ti!$,i"hed '% the de#th of the #$e!t. a. In &a$e o( M!/ti#/e A)ent$ Ge!er#ll%+ &itho,t "ho&i!$ #! i!te!tio! to the co!tr#r%+ i! c#"e of #! #$e!c% &here there #re "ever#l #$e!t" co!"tit,ted for the "#*e ',"i!e"" or )ro)ert%+ the de#th of o!e or *ore+ ',t !ot #ll of the* &o,ld !ot e:ti!$,i"h the #$e!c%+ &ith re")ect to tho"e &ho re*#i! livi!$. The "#*e r,le &o,ld #))l% i! c#"e of civil i!terdictio!+ i!"#!it% or i!"olve!c% of #!% ',t !ot #ll of the co**o! #$e!t". O! the other h#!d+ &he! it i" cle#r #t the co!"tit,tio! of the #$e!c% th#t the co**o! 141 #$e!t" &ere i!te!ded to 'e co!"idered #" h#vi!$ c#)#cit% #" # $ro,) #!d !ot i!divid,#ll% 3",ch #" '% the ,"e of the ter* KLX#!dKL i! de!i!$ their )o&er"6+ the! the de#th+ le$#l i!c#)#cit%+ or i!"olve!c% of o!e &o,ld le$#ll% ter*i!#te the #$e!c%. ?. DISSO+UTION OF A CORORATION The di""ol,tio! of # cor)or#tio! e:ti!$,i"he" it" E,ridic#l )er"o!#lit% for ever% ),r)o"e th#t "ee9" to ),r",e (!e& ',"i!e""( 3Alha'4ra Cigar v. SEC+ 02 1CRA 06; -1;68.6 or th#t of (# $oi!$ co!cer!( 3()* v. Court of $irst Instance of Rizal, (asig, *r. SSI+ 04; 1CRA 0;2 -1;;0.6. Co!"eB,e!tl%+ ,)o! the di""ol,tio! of # cor)or#tio!+ it" Bo#rd of Director" #!d cor)or#te o@cer" lo"e ever% le$#l ri$ht to e!ter i!to #! co!tr#ct or tr#!"#ctio! to ),r",e !e& ',"i!e"" or do!e i! the ordi!#r% co,r"e of ',"i!e""+ #!d #!% of ",ch co!tr#ct e!tered i!to &o,ld 'e void+ eve! #" #$#i!"t third )#rtie" &ho #ct i! $ood f#ith+ for #t the )oi!t of di""ol,tio!+ e:i"ti!$ creditor" of the cor)or#tio!" *,"t 'e )rotected ,!der the tr,"t f,!d doctri!e. Jo&ever+ the cor)or#tio! #fter di""ol,tio!+ #!d &ithi! three %e#r" therefro* co!ti!,e" to h#ve E,ridic#l )er"o!#lit% for o!l% for ),r)o"e" of liB,id#tio!. Co!"eB,e!tl%+ the Bo#rd of Director" #!d cor)or#te o@cer" co!ti!,e to h#ve #$e!c% )o&er" to re)re"e!t the cor)or#tio! for #!% #!d #ll ),r)o"e th#t "ee9 the liB,id#tio! of it" #""et" #!d the )#%*e!t of #ll it" li#'ilitie". C. OB+IGATIONS OF T8E AGENT EVEN ;8EN T8E AGENCY IS EKTINGUIS8ED The d,ci#r% !#t,re of the co!tr#ct of #$e!c% reB,ire" th#t eve! &he! the #$e!c% rel#tio! i" ter*i!#ted+ the #$e!t i" 'o,!d to 9ee) co!de!ti#l ",ch *#tter" #!d i!for*#tio! &hich he le#r!ed i! the co,r"e of the #$e!c% &he! the !#t,re of ",ch *#tter or i!for*#tio! i" co!de!ti#l+ ",ch #" ',"i!e"" "ecret". J,"t #" the )ri!ci)#l c#!!ot le$#ll% revo9e #! #$e!c% i! order to ev#de the )#%*e!t of co*)e!"#tio! d,e to the #$e!t+ the! i! the "#*e *#!!er #! #$e!t c#!!ot le$#ll% ter*i!#te #! #$e!c% i! order to t#9e #dv#!t#$e of the )ri!ci)#lKLQ" co!ditio! or to )rot '% i!for*#tio! re",lti!$ fro* hi" #$e!c%+ for ",ch &o,ld 'e i! 're#ch of hi" d,t% of lo%#lt%. 140