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Agency - Week One
Agency - Week One
Agency - Week One
Introduction
A. How is agency defined?
Art 1868, CC. By the contract of agency
a person binds himself
to render some service or to do something
in representation or on behalf of another,
with the consent or authority of the latter.
1. Consent
Art 1868. By the contract of agency,
a person binds himself to render some service or to do something in representation
or on behalf of another,
with the consent or authority of the latter.
Art 1910. The principal must comply with all obligations which the agent may have
contracted within the scope of his authority.
As for any obligation wherein the agent has exceeded his power,
the principal is not bound
except when he ratifies it expressly
or tacitly
a. Express ratification
b. Implied ratification
2. Object
3. Consideration
Art 1875. Agency is presumed
to be for a compensation,
unless there is proof to the contrary.
Agency, 1-35
Agency, definitions
- A legal relationship; connection in law between one person or entity and another
- Mechem: a legal relation,
o founded upon the express or implied contract of the parties—
o or created by law—
o by virtue of which one party—called the agent—is employed and authorized to
represent and act
o for the other, called the principal—
o in business dealings.
- Restatement: a fiduciary relationship that arises
o when one person (principal) manifests assent
o to another (agent)
o that the agent shall act on the principal’s behalf and subject to the principal’s control,
o and the agent manifests assent or otherwise consents to so act
- Am Jur: a fiduciary relationship in which
o a party confides
o to another
o the management of some business
o to be transacted in the former’s name or on his or her account,
o and by which such other assumes to do the business and render an account of it
- Rallos v Felix Go Chan: relationship whereby one party, called the principal (mandante),
o authorizes another, called the agent (mandatario),
o to act for and in his behalf
o in transactions with third persons
- Severino v Severino: fiduciary
- A contract || 1868; consent crucial. But legal relation may be created by operation of law
Agency, purpose
Agency, elements
- Civil Code
o A person
must bind himself to render some service or to do something
in representation or on behalf of another person
o with the consent of the other person
- Court (Rallos)
o Consent, express or implied, of the parties to establish the relationship
Must be clearly proved by evidence
Mere closeness of relationship does not mean that agency exists
Principal: naturally inferable intention to appoint from words, actions
Agent: intention to accept appointment and act upon it
Contract largely depends on intention of parties
o Object is the execution of a juridical act in relation to a third person
Subject matter of contract of agency: representation
Specific juridical relation need not be specified upon est of rel
Ee could also be an agent if ee has power to represent er and enter into binding
transactions
o Agent acts as a representative and not for himself
A consequence of the contract; not necessary that agent actually represents the
principal
Agent acting for self under circumstances of conflict of interest does not
invalidate original contract; only a breach
This an obligation, not really an essential element; contract only needs consent
o Agent acts within the scope of his authority
Also a consequence; not condition for existence of agency
1869: implied agency exists even when agent acts outside authority
Provided principal silent, does not repudiate acts
Nature of act only affects validity of act, not that of agency
- Casis || CC
o Consent on the part of the principal and agent to establish agency relationship
o Purpose of contract: representation
Agency, effects
Ramon Rallos v Felix Go Chan & Sons Realty Corp, CA (1978, Munoz Palma, review on certiorari)
William Uy, Rodel Roxas v CA, Hon Balao, NHA (1999, Kapunan, review on certiorari)
Eduardo Litonjua, Antonio Litonjua v Eternit Corp, Etroutremer, SA, Far East Bank (2006, Callejo, RoC)
- Sps (Fernando only) bought 2 roundtrip Continental Airlines tickets for self and wife
o San Diego to New Jersey (Aug 13-Aug 21)
o $400 each
o From Holiday Travel, travel agency
o Through Margaret Mager
o Because no more Amtrak seats (train)
o Requested to reschedule to Aug 6 but fuly booked
o Was offered alternative roundtrip via Frontier Air @ 526 each and night travel
Fernando asked for a refund instead
Denied. Non-refundable
Continental can offer re-issuance of new tickets within one year from date subj
tickets issued
o Went to Greyhound Station and saw Amtrak station
Found out seats were available; bought 2 tickets
- In PH, demanded refund from Continental and alleged Mager deluded them into buying
Continental
- Denied. Was told by Continental Micronesia tickets may only be re-issued or payment for
purchase of another Continental ticket + re-issuance fee (letter, March)
- Fernando wento to Ayala office. Tickets for one round trip ticket to LA, $1867.4 v others’ 800
o Lourdes’ ticket non-transferable
o Will still have to pay for difference between old and new tickets
- Fernando demanded refund again + overcharged LA ticket + non-transferability of wife’s ticket against
March letter (Micronesia)
- RTC: Fernando v Continental: refund + moral, exem, fees (1M, 500k, 250k)
o Continental: tickets non-refundable, no right to ask for refund; non-transferable; Mager not CAI
ee; CAI, ees, agents not in bad faith so no damages
o Entitled to refund. Mager misrepresented to obtain consent.
o 1868, 1869: Mager Continental’s agent, therefore bound by bad faith
Travel agency binds self to render service
Travel agencies represent selves as agents in the reservation and booking of tours and
issuance of tickets for a fee
o CAI in bad faith for reneging on undertaking to reissue tickets
- CA: reversed. No proof of principal-agent relationship be Continental and Holiday Travel.
o Relationship not agency but of sale—Holiday buys from Continental and sells same at premium
to clients. Non-refundable printed. No bad faith; price fixing mgt prerog
- SC:
o Sps: same allegations
o CAI: Holiday independent contractor. Not in bad faith, etc
o Holiday and Continental agent and principal respectively
|| Rallos v Felix Go Chan: agency definition
All elements exist
Undisputed that Continental concluded agreement with Holiday
(Holiday to enter into ctracts of carriage with third persons on CAI’s
behalf)
Undisputed that Holiday merely acted in representative capacity and
CAI, not Holiday bound by contracts of carriage entered into by Holiday
on its behalf
Continental did not allege that Holiday exceeded authority that was
granted to it
o Continental actually maintained validity of contracts
o || letters where it impliedly recognized validity of contracts bet
Holiday and sps
o Never refuted authority given to Holiday before filing of
complaint
+ 1869, CC: may be express or implied from acts of p, silence, inaction, failure to
repudiate…
Not a contract of sale. || Commissioner of Internal Revenue v Constantino
Primordial diff bet sale and agency: transfer of ownership or title over
the property subj of the contract
o Agency: principal retains ownership and control; agent merely
acts on p’s behalf and under instructions in furtherance of
objectives for which agency was established
o Sale: title transfers (intention of parties), along with ownership
and control, in such a way that recipient may do with property
as he pleases
o Liability of principal for agent’s ees depends evidence that principal also at fault or
negligent in control and supervision
|| China Air Lines: airline company not completely exonerated from any liability
for tort committed by agent’s ees
Cause of action must be determined.
o If quasi-delict: must show airline at fault or negligent or
contributed to negligence or tortuous conduct of agent’s ee
o If contract: prove existence of contract and fact of non-
performance or breach by carrier
No evidence to support liability for tort (exercise or control of CAI over Mager)
o Sps not entitled to refund
Even if Continental liable for Mager, no showing that Mager acted fraudulently
o If there was fraud, sps deemed to have ratified the contracts anyway
In seeking rescission, sps admitted impliedly the validity of subject contracts. Forfeited
right to annulment
Party cannot rely on contract and claim rts or obligations under it and at the same time
impugn its existence or validity
o Contracts cannot be rescinded for slight, casual breach
Non-transferability cannot be inferred from letter or tickets. CAI cannot take advantage
of ambiguity. Cannot refuse transfer of Lourdes’ ticket
Refusal = casual breach only; not essential to fulfillment of undertaking to reissue
o Both in default—refusal to transfer and refusal to pay amount not covered
o DENIED
II. What is the form of the contract of agency?
A. Oral
B. Written
Agency, 67-96
III. Who has the obligation to determine existence and scope of agency?