Liability of principal to third persons
(1) General rule. —where the relation of agency legally exists,
ART. 1910. The principal must comply with all the
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.
● The duties and liabilities of the principal are primarily
based upon the contract and the validity of the contract
between them.
● In addition to his contractual duties, the principal is
under an obligation to deal fairly and in good faith with
his agent who owes the same duty to his principal.
Specific obligations of principal to agent.
In the absence of express agreement, the law imposes upon
the principal certain obligations to his agent, among which are
the following:
(1) To comply with all the obligations which the agent may
have contracted within the scope of his authority and in the
name of the principal
(2) To advance to the agent, should the latter so request, the
sums necessary for the execution of the agency
(3) To reimburse the agent for all advances made by him,
provided the agent is free from fault
(4) To indemnify the agent for all the damages which the
execution of the agency may have caused the latter without
fault or negligence on his part
(5) To pay the agent the compensation agreed upon, or if no
compensation was specified, the reasonable value of the
agent’s services.
the principal will be liable to third persons for all acts
committed by the agent and obligations contracted by him in
the principal’s behalf in the course and within the actual
(express or implied) or apparent scope of his authority, and
should bear the damage caused to third persons.
(2) Reason for liability. — A principal is liable for the acts of
his agent within his express authority because the act of such
agent is the act of the principal.
(3) Estoppel to deny - An agency by estoppel may involve the
expansion of the authority given to a designated agent or
create authority in the alleged agent though not actually
granted. (see Art. 1911.) The principal is bound by either the
actual (express or implied) or apparent authority of the agent.
(4) Waiver of claim against principal. — Since it is the
principal who should be answerable for the obligation arising
from the agency, it is obvious that if a third person waives his
claims against the principal, he cannot assert them against the
agent.
(5) Agency from necessity or by operation of law. - An
agency from necessity is created, or the ordinary powers of an
agent may be enlarged, when an emergency occurs and an
employee or an agent is unable to get in touch with his
employer.
The "agency-from-necessity" doctrine has been most
frequently applied, although it in no wise so limited, to
accidents. It is generally held that the highest ranking agent or
employee on the scene is authorized to employ physicians or
surgeons for immediate medical services in behalf of the
company.
The authority is limited to the necessity and ceases to exist
when the emergency has passed.
Liability of third persons to principal.
The principal’s rights are the third parties’ liabilities.
(1) In contract. — A third person is liable to the principal upon
contracts entered into by his agent, in the same manner as
though the contract were entered into by the principal himself.
● It follows that the third party may not set-off or allege
any defense against the agent, in an action by the
principal to enforce the contract other than one which
arises out of the particular contract upon which the
action is brought.
● Since notice by a third party to the agent is notice to
the principal, the third party is not liable for damages
for failure of the agent to give notice to his principal.
(2) In tort. — The third person’s tort liability to the principal,
insofar as the agent is involved in the tort, arises in three main
factual situations:
● Where the third person damages or injures property or
interest of the principal in the possession of the agent;
● Where the third person colludes with the agent to injure
or defraud the principal;
● Where the third person induces the agent to violate his
contract with the principal to betray the trust reposed
upon him by the principal.
(3) In respect of property received. - An agent does not
have legal title to property entrusted to his possession by the
principal, but in some cases he possesses a power to effect a
transfer thereof, valid as against the principal. In the absence
of a law or the possession by the agent of apparent authority
or circumstances working an estoppel against the principal,
the latter may recover property from the agent's transferee.
(4) In respect of negotiable instruments, however, the law
protects third parties who are bona fi de holders thereof or
holders in due course. The principal cannot recover money
and negotiable instruments wrongfully transferred by his agent
to innocent holders for value who have no knowledge or notice
of the agent’s wrongful acts.
Liability of principal for mismanagement of business by
his agent. P IS LIABLE TO 3RD P
Under general rules and principles of law, the mismanagement
of the business of a party by his agents does not relieve said
part from the responsibility that he had contracted to third
persons. Thus, the fact that the agent defrauded the principal
in not turning over the proceeds of the transactions to the latter
cannot in any way relieve nor exonerate him from liability to
the third person who relied on his agent's authority. It is an
equitable maxim that as between two (2) innocent parties, the
one who made it possible for the wrong to be done should be
the one to bear the resulting loss.
Where the agent’s acts bind the principal, the latter may seek
recourse against the agent.
Liability of principal for tort of agent.
GR: P IS CIVILLY LIABLE
(1) General rule. — As a general rule, the principal is civilly
liable to third persons for torts of an agent committed at the
principal’s direction or in the course and within the scope of the
agent’s employment. The principal cannot escape liability so
long as the tort was committed by the agent while performing
his duties in furtherance of the principal’s business or at his
direction although outside the scope of his employment or
authority.
(2) Reason for liability. — This rule is based upon the
principle that he who does an act through another does it
himself. The agent, to be sure, is also liable with the principal
and their liability shall be solidary, i.e., the third person may
sue both the principal and the agent or choose whom he will
hold.
(3) Business hazard theory. - The “business hazard theory”
advances the argument that “it is thought that the hazards of
business should be borne by the business directly. It is
reasoned that if the cost then is added to the expense of doing
business, it will ultimately be borne by the consumer of the
product; that the consumer should pay the costs which the
hazards of the business have incurred.”
(4) Motivation-deviation test. — The bounds of the agent’s
authority are not the limits of the principal’s tort liability, but
rather the “scope of the employment” which may or may not be
within the bounds of authority.
Scope of employment is much wider than scope of authority.
But an act is not necessarily done within the scope of
employment by reason merely of the fact that it is done during
the employment.
An examination of a large number of cases discussing
vicarious liability for tort shows that where two factors are
present, such liability is imposed, but that where either of the
two factors is missing, such liability is not imposed.
These factors are:
(1) satisfactory evidence that the employee in doing the act, in
the doing of which the tort was committed, was motivated in
part, at least, by a desire to serve his employer; and
(2) satisfactory evidence that the act, in the doing of which the
tort was committed, was not an extreme deviation from the
normal conduct of such employee.
Representation, essence of agency.
(1) Agent acts in a representative capacity.
Representation being the essence of agency, it is evident that
the obligations contracted by the agent are for and in behalf of
the principal to bind him as if he personally contracted. It is not
enough, however, that the agent should act within the scope of
his authority under Article 1910.
The agent must also act in a representative capacity (Art.
1868.), in the principal's name; otherwise, the principal
assumes no liability. (Art. 1883.)
A IS PERSONALLY LIABLE TO P IF HE EXCESSIVE AUTHORITY
(2) Agent acts within limits of his authority. - Under the second
paragraph of Article 1910, the agent who exceeds his authority
is not deemed a representative of the principal. In effect, he
acts without authority and becomes personally liable for any
damage caused. Hence, the principal is not bound unless he
ratifies the act expressly or impliedly. Without such ratification,
the agent is the one personally liable. Of course, the principal
must have capacity to ratify the unauthorized act.
Doctrine of Ratification
Ratification is the adoption or affirmance by a person of a prior
act which did not bind him, but which was done or professed to
be done on his account thus giving effect to the acts as if
originally authorized. The doctrine applies to the ratification of
the act of an agent in excess of his authority or the act of one
who purports to be an agent but is really not.
Act of ratification purely voluntary.
Option to ratify or not- The very idea of ratification implies that
the principal has an option to ratify or not, and that he has this
advantage over the other party, to wit: that he may hold the
other party whether the other party wishes it or not whereas
the other party cannot hold him if he is not willing to be held.
Effect of failure or refusal of the principal to ratify the
unauthorized acts of his agent makes the latter personally in
damages to the third party.
Conditions for ratification.
In addition to an intent to ratify, the following conditions must
be fulfilled for ratification to be effective:
(1) The principal must have the capacity and power to ratify;
(2) He must have had knowledge or had reason to know of
material or essential facts about the transaction;
(3) He must ratify the acts in its entirety;
(4) The act must be capable of ratification; and
(5) The act must be done in behalf of the principal.
Forms of ratification. An unauthorized act may be ratified (or
affirmed) expressly or impliedly.
(1) There is express ratification where, for example, the
principal simply informs the agent, the third party, or someone
else of his intention to honor the agent's unauthorized
dealings.
(2) The principal can nevertheless be deemed to have
impliedly communicated his intent to ratify by words or conduct
that had amounted to ratification (e.g., acts showing adoption
or approval of the act, acceptance of benefits by the principal
under a contract entered in his name), or even by silence or
inaction where under the circumstances a reasonable person
would have expressed objections to what the agent's had
done.
(a) For an act of the principal to be considered as an implied
ratification of an unauthorized act of an agent, such act must
be inconsistent with any other hypothesis than that he
approved and intended to adopt what had been done in his
name.
(b) Ratification is based on waiver - the intentional
relinquishment of a known right. It cannot be inferred from acts
that a principal has a right to do independently of the
authorized act of the agent. Moreover, if a writing is required to
grant an authority to do a particular act, ratification of the act
must also be in writing.
Of course, the agent cannot ratify his own unauthorized acts.
A. Persons entitled to ratify IF MAY POWER TO RATIFY
1. In order that one may be entitled to ratify the
unauthorized act of an agent, it is necessary that the
ratifier has the power or authority to do, on his account,
the original act which is sought to be ratified.
IF TINAGO / SUPRESS = NO VALID RATIFICATION
2. A principal is incapable of ratifying an act if his own
position has, in the interval between the time the agent
performed the act and the time when the ratification is
supposed to have occurred, so altered that he is no
longer capable of doing the original act.
VOIDABLE TRANSACTION CAN BE RATIFIED
3. A voidable act or transaction by reason of incapacity to
give consent may be ratified but the defect must first be
removed before a valid ratification can take place.
Thus, an infant is not bound by ratification of a contract
entered by an agent.
3RD P CAN WIDRAW
4. The third party has a right to withdraw from the
transaction prior to ratification. The principal will not be
permitted to ratify after the third party has already
indicated a desire to withdraw from the transaction.
Obviously, there can be no ratification of an illegal
transaction.
B. Knowledge by ratifier of material facts essential.
(1) Meaning of material facts. — Within the meaning of the
requirement, they are those which reasonably ought to be
known by the principal, having in mind the factors of time,
place, and circumstance, and especially the situation of the
parties. The problem is one which must be determined by
reference to the facts of the particular case.
(2) Full and complete knowledge. — In order to bind a
principal by ratification, he must have been in possession of all
the facts and must have acted in the light of such facts.
If material facts were suppressed or unknown, there can be no
valid ratification, regardless of the purpose or lack thereof in
concealing such facts. This principle does not apply if the
principal’s ignorance of the material facts and circumstances
was willful, or that the principal chooses to act in ignorance of
the facts.
(3) Actual knowledge. - This requirement springs from the
fact that a principal has the election of repudiating or affirming
an agent’s unauthorized act, and he ought not to be made
liable in spite of his ignorance.
Burden to show such knowledge.
● Party relying on the ratification. — Whoever,
therefore, seeks to rely on a ratification is bound to
 show that it was made under such circumstances as in
law to be binding on the principal, especially to see that
all material facts were made known to him.
C. Ratification must be entire
● When actual knowledge assumed. - What this means
is that the principal must have either actual knowledge
of material facts or sufficient knowledge or notice of
other facts so that it would have been easy to find out
the material facts.
P RECKLESSLY DISREGARDS THE INFO KNOWLEDGE
o Actual knowledge will be assumed where the
principal’s reckless disregard of the natural
consequences of known facts induces an inference
that he was willing to assume a risk in respect of the
facts.
o Similarly, actual knowledge will be assumed where
the principal has actual knowledge of a fact or facts
that a person of ordinary intelligence would thereby
infer the existence of the fact or facts about which the
dispute exists.
Acts that may be ratified
● Imputing agent's knowledge to principal- An agent
is expected and has a duty to inform the principal about
relevant facts that relate to the agency. Thus, it is
assumed that the agent has performed this duty. In
case his failure to do so causes a loss, the principal,
not the third party - should suffer that loss since the
principal selected the agent whom he placed in a
position of authority. To be bound, however, by the
knowledge received by the agent, the latter must have
actual or apparent authority to receive this type of
knowledge and the knowledge or information must be
within the scope or subject matter of the agency.
● The act must be ratified in its entirety or not at all. In
other words, the principal cannot accept the benefits of
a transaction and refuse to accept the obligations (e.g.,
warranties in a contract of sale) that are part of it.
● The acceptance of the result of the act, moreover,
ratifies the whole transaction including the means
whereby that result was achieved. This rule is
constantly applied to promises, misrepresentations,
and even fraud upon which the contract was based.
● At the time of accepting the benefits of the act, the
person may be ignorant of the practices resorted to.
Even so, he is liable unless he attempts to undo the
thing within a reasonable time after he is advised of it.
The rule, however, is not broad enough to constitute
ratification of another act which, though closely related
to the ratified act, is not a part of it.
● Valid acts (NOT VOID)
● Voidable acts - because it is only imperfectly
inoperative.
● Unrevoked acts - The general rule is that a principal
must ratify his agent’s unauthorized contract before it is
revoked by the other contracting party. In other words,
the third party’s contract with the unauthorized agent
may be said to constitute an offer to the principal which
can be revoked by the offeror before acceptance by the
offeree. This aspect of the doctrine of ratification would
 appear to contradict a fundamental concept of the
doctrine, that of relation back to the time when the
contract was originally entered into.
o It may be revoked in 2 ways:
1. Express revocation
2. Change in the nature of the contract originally
entered into
● Criminal acts. - The general rule is subject to
qualification in one important particular. A substantial
number of cases hold that one whose name has been
forged can ratify the act. A slight majority of the cases,
however, hold that since forgery involves a crime and a
public wrong and is also opposed to public policy, it
cannot be ratified. This is another instance where
ratification should not be confused with estoppel. All
would probably agree that a person who expressly or
impliedly represents that his forged signature is
genuine, would be stopped from denying its
genuineness against one who has changed his position
from the worse.
● Tortious acts. - An agency to commit a tort would
generally be inoperative and, therefore, the ratification
without more of a tort is inconceivable, and is, in fact, a
rare phenomenon. The usual case, however, presents
the ratification of a transaction in general, which
includes, by circumstance, a tort.
D. Acts must be done in behalf of principal
A principal cannot ratify the unauthorized act of another
person unless that person purported to act as agent for, and in
the name of, the principal, and not in his own behalf. The rule
operates to prevent one person from acquiring the right of
another.
Effects of ratification by principal.
By ratification, the relation of principal and agency is created
since ratification by a principal is equivalent to prior authority.
Once made, ratification becomes irrevocable.
relieves A from liability
1. With respect to agent – relieves the agent from liability
to the third party and to his principal. He may recover
compensation due for performing the act which has
been ratified assumes responsibility
2. With respect to the principal himself – assumes the
responsibility of the unauthorized act. But he is not
liable for acts outside the authority approved by his
ratification. 3rd p is bound except if withdraw / revoke
3. With respect to third persons - Ordinarily, a third person
is bound by a ratification to the same extent as he
would have been bound if the ratified act had been
authorized in the first instance, and he cannot raise the
question of the agent’s authority to do the ratified act.
But before ratification, the third party is free to revoke
the unauthorized contract.
Retroactive effect of ratification.
GR: The effect is the same as where the principal allowed the
agent to act as though the latter had full authority from the
beginning.
EXPN:
1. Rights of third parties - Where to do so would be to defeat
prejudice to another
rights of third parties which have accrued between the time of
the making of the unauthorized contract and the time of party is bound because he he is bound notwithstanding
ratification. intended to be the absence of such
intention because the other
2. Intervening act or omission otherwise rightful. — Where to party will be prejudiced and
defrauded by his conduct,
do so would be to render wrongful an otherwise rightful act or
unless the law treats him as
omission which has taken place between the making of the legally bound.
unauthorized contract and the time of its ratification.
affects the entire transaction affects only the relevant
3. Circumvention of legal rule or provision. — Where to do so and from the beginning parts of the transaction and
would be to allow the circumvention of a rule of law formulated from that time only when
estoppel may be said to be
in the interest of public policy.
spelled out

4. Withdrawal by third party from contract. — If the third party Substance of ratification is substance of estoppel is the
has withdrawn from the contract, the act or transaction is no confirmation of the principal’s inducement to
longer capable of ratification. unauthorized act or contract another to act to his
Solidarily liability of AGENT after it has been done or prejudice
made
ART. 1911. Even when the agent has exceeded his A acted in P's name
authority, the principal is solidarily liable with the agent if the
former allowed the latter to act as though he had full powers When principal solidarily liable with the agent. and 3rd P is not
aware of limits
Under Article 1911, the agent must have acted in the name of
a disclosed principal and the third person were not aware of
Estoppel is a bar which precludes a person from denying or the limits of the power granted by the principal.
asserting anything contrary to that which has been established
as the truth by his own deed or representation either express The third person with whom the agent dealt may sue either the
or implied. agent or the principal alone, or both. The agent should be
Ratification vs Estoppel exempt from liability if he acted in good faith. 3rd p may sue P or A
RATIFICATION ESTOPPEL
Apparent Authority vs Authority by Estoppel
rests on intention, express or rests on prejudice rather
implied, regardless of than intention. Apparent Authority Authority by Estoppel

Apparent Authority
is that which though not
actually granted, the
principal knowingly permits
the agent to exercise or
holds him out as possessing.
P Permits A even if not
actually granted
not founded in negligence of
the principal but in the
conscious permission of acts
beyond the powers granted
Implied Authority vs Agency by Estoppel
Implied Authority
error lang tlga ng grant. Negligent kc
Authority by Estoppel
arises in those cases where
the principal, by his culpable
negligence, permits his
agent to exercise powers not
granted to him, even though
the principal may have no
notice or knowledge of the
conduct of the agent.
basis in the negligence of the
principal in failing properly to
supervise the affairs of the
agent, allowing him to
exercise powers not granted
to him, and so justifies others
in believing he possesses
the requisite authority.
Agency by Estoppel
EVEN IF NOT SUCCESFUL NEED PARIN PAY
or undertaking was not successful, provided the agent is
free from all fault. The reimbursement shall include interest
on the sums advanced, from the day on which the advance
was made
Obligation to advance funds.
The principal is under obligation to provide the means with
which to execute the agency. In the absence of stipulation that
the agent shall advance the necessary funds, the principal
must advance to the agent upon his request the sums
necessary for the execution of the agency.
FAILURE OF P TO PAY = AGENT NOT LIABLE FOR DAMAGES
If the principal fails to comply with his obligations, the agent
will not be liable for the damage which, through his
nonperformance, the principal may suffer.
Obligation to reimburse agent for funds advanced by
latter.
Demand is not necessary in order that delay on the part of the
principal shall exist.

here is an actual agency the authority of the agent is (1) Obligation founded on implied promise to repay. - This
not real but only apparent rule is based upon the principle that a request to undertake an
agency, the proper execution of which involves the expenditure
Principal is liable If caused by principal – liable of money on the part of the agent, operates not only as an
to 3rd person who relied on implied request on the part of the principal to incur such
the misrepresentation If expenditure but also as a promise to repay it.
caused by agent – only the
agent is liable (2) Obligation not affected even if undertaking not
successful. — The law adds that the obligation to reimburse
MUST GIVE MONEY NEEDED TO ExeCUTE AGENCY the agent cannot be defeated by the fact that “the business or
ART. 1912. The principal must advance to the agent, should undertaking was not successful” provided the agent is free
the latter so request, the sums necessary for the execution from all fault.
of the agency. Should the agent have advanced them, the
principal must reimburse him therefor, even if the business
 INDEMNIFY THE DAMAGES BY A NO FAULT OR NEGLI
ART. 1913. The principal must also indemnify the agent for
all the damages which the execution of the agency may
have caused the latter, without fault or negligence on his
part.
Obligation to indemnify agent for damages.
AGENT NOT LIABLE
(1) Where damages caused by the execution of agency. -
Having no personal interest in the act other than the
performance of his duty, the agent should not be required to
suffer loss from the doing of an act apparently lawful in itself,
and which he has undertaken to do by the direction and for the
benefit and advantage of his principal.
P NOT LIABLE TO 3RD P IF 3RDP DAMAGED IT
(2) Where damages caused by wrongful acts of third
persons. — Be it noted, however, that the liability of the
principal for damages is limited only to that which the
execution of the agency has caused the agent. Thus, no
promise to indemnify will be implied for losses or damages
caused by the independent and unexpected wrongful acts of
third persons for which the principal is in no way responsible.
NO AGENCY = NO P LIABLE
(3) Where agent acted upon his own account. — Similarly,
there is no obligation to indemnify where no agency relation
exists, as where it appears that the supposed agent acted
upon its own account and not as an agent, in the legal sense.
RIGHT OF RETENTION = PLEDGE
ART. 1914. The agent may retain in pledge the things which
are the object of the agency until the principal effects the
reimbursement and pays the indemnity set forth in the two
preceding articles.
Right of agent to retain in pledge object of agency.
If the principal fails to reimburse or indemnify the agent as
required in Articles 1912 and 1913, the agent has the right to
retain in pledge the things which are the object of the agency.
This is an instance of legal pledge or pledge which is created
by operation of law. Unlike contractual pledges, however, the
agent is not entitled to the excess in case the things are sold
to satisfy his claim and the proceeds thereof are more than the
amount due.
Nature of agent’s right of lien.
limited lang
(1) Right limited to subject matter of agency. — The lien of
the agent is specific or particular in character.
must have possession
(2) Right requires possession by agent of subject matter.
— An agent in order to have a lien, must have some
possession, custody, control, or disposing power in and over
the subject matter in which the lien is claimed. To entitle the
agent to a lien, the funds or property against which it is
asserted must be in his actual or constructive possession, and
he must have acquired that possession lawfully and in his
capacity as agent.
only agent has this right not sub A
(3) Right generally only in favor of agent. — In the absence
of a ratification of a sub-agent’s acts by the principal, the right
of lien exists only in favor of the agent, and cannot be claimed
by one to whom the agent delegates his authority where no
privity exists between sub-agent and the principal.
 A lien is a right in rem against real or personal property, given
by law to secure the performance of an obligation existing in
favor of the lien holder.
(1) general lien - right to retain the property of another on
account of a general balance due from that other. It can be
asserted only by an agent where he has come into possession
of the money or property in the course of employment and
continues to possess the money or property; and
(2) special lien - right to retain the property of another on
2 Ps +
1A= account of labor or money employed in that specific property.
SOLIDA
ART. 1915. If two or more persons have appointed an agent
RILY
for a common transaction or undertaking, they shall be
LIABLE
solidarily liable to the agent for all the consequences of the
agency.
Under Article 1915, the so-called joint principals are solidarily
2 As = liable to the agent for all the consequences of the agency. It
JOINT
responisi would, therefore, be more appropriate to use the term
“solidary principals.” On the other hand, the responsibility of
blity
two or more agents, even though they have been appointed
simultaneously, is joint, not solidary.
Requisites for solidary liability. There are three requisites
for the application of the above article:
(1) There are two or more principals;
(2) The principals have all concurred in the appointment of the
same agent; and
(3) The agent is appointed for a common transaction or
undertaking.
Agency for a common transaction or undertaking
● The rule in Article 1915 applies even when the
appointments were made by the principals in separate
acts, provided that they are for the same transaction.
● The solidarity arises from the common interest of the
principals and not from the act of constituting the
agency.
● The parties, however, may, by express agreement
negate this solidarity responsibility.
.Where principals are members of a non-profit
association. The principals or members of a non-profit
association are liable personally only under two
circumstances:
NON Prof = Personally liable
(1) Where the member assented to the particular act or
transaction in respect of which personal liability is sought to be
fastened. Such assent is usually indicated by an affirmative
vote at the meeting where the proposal is discussed
(2) Where the member assented by his conduct, e.g., at a
meeting at which the contract was proposed, nobody
dissented. 2 3RDPs contract to A, another to P is
INCOMAPTIBLE = 1ST TO DATE IS PRIORITY
ART. 1916. When two persons contract with regard to the
same thing, one of them with the agent and the other with
the principal, and the two contracts are incompatible with
each other, that of prior date shall be preferred, without
prejudice to the provisions of article 1544.
Rule where two persons contract separately with agent
and principal.
Limitations:

Article 1544 - If the same thing should have been sold to

different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good
faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to

the person acquiring it who in good faith first recorded it in the
Registry of Property.

Should there be no inscription, the ownership shall pertain to

the person who, in good faith was first in the possession; and,
in the absence thereof, to the person who presents the oldest
title, provided there is good faith.

ART. 1917. In the case referred to in the preceding article, if

the agent has acted in good faith, the principal shall be liable
in damages to the third person whose contract must be
rejected. If the agent acted in bad faith, he alone shall be
responsible.