IV. OBLIGATIONS OF THE PRINCIPAL Flashcards
ARTICLE 1912. The principal must advance to the agent, should the latter so request, the _______ for the execution of the agency.
CC
ARTICLE 1886. Should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so except when the principal is insolvent. (n)
ARTICLE 1912. The principal must advance to the agent, should the latter so request, the sums necessary for the execution of the agency.
Art. 1886 contemplates a situation where advancement is done by the agent instead of a principal due to a stipulation.
Exceptions to the rule under Art. 1912 or when the principal must advance the necessary funds
- When by stipulation, the agent must advance the necessary funds (Art. 1886), in which case the agent should be reimbursed
- When by stipulation, the expenses would be borne by the agent or that the latter would be allowed only a certain sum, in which case the agent is not reimbursed (Art. 1918 (4))
ETE: Insolvent principal (Art. 1886)
What is the effect of the principal’s failure to remburse the agent?
ARTICLE 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.
ARTICLE 1918. The principal is not liable for the expenses incurred by the agent in the following cases:
(1) If the agent acted in contravention of the principal’s instructions, unless the latter should wish to avail himself of the benefits derived from the contract;
EXC: Implied ratification
(2) When the expenses were due to the fault of the agent;
(3) When the agent incurred them with knowledge that an unfavorable result would ensue, if the principal was not aware thereof;
- BF and lack of diligence
(4) When it was stipulated that the expenses would be borne by the agent, or that the latter would be allowed only a certain sum. (n)
CAVEAT: As long as not contrary to law morals, good custom, public order, or public policy
ARTICLE 1913. The principal must also _______ the agent for all the damages which________, without __________.
ARTICLE 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.
ARTICLE 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be __________.
ARTICLE 1915. If two or more persons have appointed an agent for a common transaction or undertaking, they shall be solidarily liable to the agent for all the consequences of the agency.
GR: ARTICLE 1875. Agency is presumed to be for a compensation…
EXC:
- Unless there is proof to the contrary. (Art. 1875)
- Except if stipulated that the broker needs to sell the property also (Uniland v DBP)
When commission is merited for brokers:
- When the broker is the efficient/procuring cause of the sale (Danon v. Brimo)
- By reason of equity when the agent’s efforts were helpful (Prats v. CA)
- Bad faith of the principal (Infante and Domingo cases)
CC
ARTICLE 1891. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal.
Every stipulation exempting the agent from the obligation to render an account shall be void.
ARTICLE 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. (1730)
Art. 1891 is pursuant to the duty of loyatlty and the duty to render an account/deliver by the agent.
1914 speaks of an exclusive right of retention by the agent only when the principal fails to reimburse and/or when the agent suffers injury in the execution of agency.
Article 1883. If an agent acts in his own name, the principal has no right of action
against ________ neither have such persons against the principal.
In such case the agent is the one directly bound in favor of the person with whom
he has contracted, as if the transaction were his own, except when _________.
The provisions of this article shall be understood to be without prejudice to the
actions between ________.
Article 1883. If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted; neither have such persons against the principal.
In such case the agent is the one directly bound in favor of the person with whom
he has contracted, as if the transaction were his own, except when the contract
involves things belonging to the principal.
The provisions of this article shall be understood to be without prejudice to the
actions between the principal and agent.
Article 1910. The principal must comply with ________.
As for any obligation wherein the agent has exceeded his power, the principal is not
bound except _________.
Article 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.
Article 1917. In the case referred to in the preceding article, if the agent has acted in good faith, the principal shall be _______. If the agent acted in bad faith, ________.
Article 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.
Article 1900. So far as third persons are concerned, an act is deemed to have been
performed within the scope of the agent’s authority, if ___________, even if the agent has in fact exceeded the limits
of his authority according to an understanding between the principal and the agent.
Article 1900. So far as third persons are concerned, an act is deemed to have been
performed within the scope of the agent’s authority, if such act is within the terms
of the power of attorney, as written, even if the agent has in fact exceeded the limits
of his authority according to an understanding between the principal and the agent.
(n)
Provision on agency by estoppel
Article 1911. Even when the agent has exceeded his authority, the principal is
solidarily liable with the agent if the former allowed the latter to act as though he
had full powers.
Article 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, __________.
Article 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.
CC
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.
Liability of the principal for crimes or torts
GR: The principal is liable to injured third parties for the
torts committed by the agent at the principal’s direction or in the course of
and within the scope of the agent’s authority. Since the act of negligence was that of the agent,
he also becomes civilly liable to the injured parties, even when he acts in
representation of the principal.
