NATSCI

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per alium facit per se. Eurotech Industrial Technologies, Inc. v. Cuizon, 521 SCRA 584 (2007) Article 1897 reinforces the familiar doctrine that an agent, who acts as such, is not personally liable to the party with whom he contracts. The same provision, however, presents two instances when an agent becomes personally liable to a third person. The first is when he expressly binds himself to the obligation and the second is when he exceeds his authority. In the last instance, the agent can be held liable if he does not give the third party sufficient notice of his powers. Eurotech Industrial Technologies, Inc. v. Cuizon, 521 SCRA 584 (2007). Notice to the agent should always be construed as notice binding on the principal, even when in fact the principal never became aware thereof. Air France v. Court of Appeals, 126 SCRA 448 (1983). e. Personal, Fiduciary and Revocable The relations of an agent to his principal are fiduciary and in regard to the property forming the subject matter of the agency, he is estopped from acquiring or asserting a title adverse to that of the principal. Severino v. Severino, 44 Phil. 343 (1923). By reason of the personal, representative and derivative nature of agency, agency is extinguished by the death of the principal or agent. Rallos v. Felix Go Chan & Sons Realty Corp., 81 SCRA 251 (1978). A contract of agency is generally revocable as it is a personal contract of representation based on trust and confidence reposed by the principal on his agent. As the power of the agent to act depends on the will and license of the principal he represents, the power of the agent ceases when the will or permission is withdrawn by the principal. Thus, generally, the agency may be revoked by the principal at will. Republic v. Evangelista, 466 SCRA 544 (2005). In an agency, the principal’s personality is extended through the facility of the agent—the agent, by legal fiction, becomes the principal, authorized to perform all acts which the latter would have him do. Such a relationship can only be effected with the consent of the principal, which must not, in any way, be compelled by law or by any court. The Agreement itself between the parties states that “either party may terminate the Agreement without cause by giving the other 30 days’ notice by letter, telegram or cable.” Orient Air Services v. Court of Appeals, 197 SCRA 645 (1991). 1 5. Distinguished from Other Similar Contracts: a. From Employment Contract 1 Litonjua, Jr. v. Eternit Corp., 490 SCRA 204 (2006).

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Transcript of NATSCI

per alium facit per se.Eurotech Industrial Technologies, Inc. v. Cuizon, 521SCRA 584 (2007)Article 1897 reinforces the familiar doctrine that an agent, who acts as such, is notpersonally liable to the party with whom he contracts. The same provision, however,presents two instances when an agent becomes personally liable to a third person.Thefrst is when he epressly binds himself to the obligation and the second is when heeceeds his authority.!n the last instance, the agent can be held liable if he does notgive the third party su"cient notice of his powers.Eurotech IndustrialTechnologies, Inc. v. Cuizon, 521 SCRA 584 (2007).#otice to the agent should always be construed as notice binding on the principal,evenwhenin facttheprincipal neverbecame aware thereof.AirFrance v.CourtofAppeals, 1$% &'(A ))8 *198+,.e. Personal, Fiduciary and RevocaleTherelationsofanagenttohisprincipal arefduciaryandinregardtothepropertyforming the sub-ect matter of the agency, he is estopped from ac.uiring or asserting a titleadverse to that of the principal.Severino v. Severino, )) /hil. +)+ *19$+,.0y reason of the personal, representative and derivative nature of agency, agency isetinguished by the death of the principal or agent. Rallos v. Felix Go Chan & Sons RealtyCorp., 81 &'(A $11 *1978,.A contract of agency is generally revocable as it is a personal contract of representationbased on trust and confdence reposed by the principal on his agent. As the power of theagent to act depends on the will and license of the principal he represents, the power oftheagent ceases whenthe will or permission is withdrawn by theprincipal. Thus,generally, the agency may e revo!ed y the principal at "ill.Repulic v. #vangelista, )%%&'(A 1)) *$221,.!n an agency, the principal3s personality is etended through the facility of the agent4the agent, by legal fction, becomes the principal, authori5ed to perform all acts which thelatter would have him do. &uch a relationship can only be e6ected with the consent of theprincipal, which must not, in any way, becompelledby lawor by any court. TheAgreement itself between the parties states that 7either party may terminate theAgreement without cause by giving the other +2 days3 notice by letter, telegram or cable.8Orient Air Services v. Court of Appeals, 1!7 SCRA "45 (1!!1).15. #is$in%uis&ed 'ro( )$&er Si(ilar Con$rac$s*a. Fro( +(,loy(en$ Con$rac$The relationship between the corporation which owns and operates a theatre, and theindividual it hires as a security guard to maintain the peace and order at the entrance ofthe theatre is not that of principal and agent, because the principle of representation wasinnoway involved.Thesecurity guard wasnot employed torepresentthe defendantcorporation in its dealings with third parties9 he was a mere employee hired to perform acertainspecifcdutyortas:, thatofactingasspecial guardandstayingatthemainentranceof themoviehousetostopgatecrashersandtomaintainpeaceandorderwithin the premises.$ela Cru% v. &orthern Theatrical #nterprises, 91 /hil 7+9 *191),.1Litonjua, Jr. v. Eternit Corp., 490 SCRA 204 (2006).0ut to set the record straight, the concept of a single person having the dual role ofagentandemployeewhiledoingthesametas:isanovel oneinour-urisprudence,which must be viewed with caution especially when it is devoid o' any -uris,ruden$ialsu,,or$ or ,receden$. All these, read without any clear understanding of fne legaldistinctions, appear to spea: of control by the insurance company over its agents. Theyare, however, controls aimed only at specifc results in underta:ing an insurance agency,andare, infact, parameters set by lawindefninganinsuranceagency andtheattendant duties and responsibilities an insurance agent must observe and underta:e.They do not reach the level of control into the means and manner of doing an assignedtas: that invariably characteri5es an employment relationship as defned by labor law.Tongko v. The Manufacturers Life Insurance Co. !hils.", Inc., "40 SCRA .!5(2011).. Fro( Con$rac$ 'or a Piece/o'/0or1Ta:ing into consideration the facts that the operator owed his position to the companyand the latter could remove him or terminate his services at will9 that the service stationbelonged to the company and bore its tradename and the operator sold only the productsof the company9 that the e.uipment used by the operator belonged to the company andwere-ust loanedtotheoperator andthecompanytoo:chargeof their repair andmaintenance9 that an employee of the company supervised the operator and conductedperiodic inspection of the company;s gasoline and service station9 that the price of theproducts sold by the operator was fed by the company and not by the operator9 andthat he was a mere agent, the fnding of the 'ourt of Appeals that the operator was anagent of the company and not an independent contractor should not be disturbed. Shellv. Firemen's (ns. Co., 122 /hil 717 *1917,.c. Fro( 2ro1er The .uestion as to what constitutes a sale so as to entitle a real estate bro:er to hiscommissions is etensively annotated in the case of )unney vs. *ealey *#ebras:a, . . . )) ?7Thebusinessof areal estatebro:er or agent, generally, isonlytofndapurchaser, andthesettledruleasstatedbythecourtsisthat, intheabsenceof anepress contract between bro:er and his principal, the implication generally is that thebro:er becomes entitled to the usual commissions whenever he brings to his principal aparty who is able and willing to ta:e the property and enter into a valid contract upon theterms then named by the principal, although the particulars may be arranged and thematter negotiatedandcompletedbetweentheprincipal andthepurchaser directly.8+acondray & Co. v. Sellner, ++ /hil. +72 *191%,.7Thedutiesandliabilityofabro:ertohisemployerareessentiallythosewhichanagent owes to his principal. 'onse.uently, the decisive legal provisions on determiningwhether a bro:er is mandated to give to the employer the propina or gift received fromthe buyer would be Articles 1891 and 1929 of the 'ivil 'ode.8 *@et the facts did indicateclearly that the real estate bro:er was appointed as an eclusive agent., #o$ingo v.#o$ingo, 42 SCRA 1.1 (1!71).Ahere the purported agent was orally given authority to 7follow up8 the purchase ofthe fre truc: with the municipalgovernment, there is no authority to sellnor has thepurported agent been empowered to ma:e a sale for and in behalf of the seller.Guardexv. &)RC, 191 &'(A )87 *1992,.Ahenthetermsoftheagencyarrangementistothee6ectthatentitlementtothecommission was contingent on the purchase by a customer of a fre truc:, the implicitconditionbeingthat theagentwouldearnthecommissionif hewasinstrumental inbringing the sale about. &ince the agent had nothing to do with the sale of the fre truc:,and is not therefore entitled to any commission at all. Guardex v. &)RC, 191 &'(A )87*1992,.A ro!eris one who is engaged,forothers,on a commission,negotiating contractsrelative to property with the custody of which he has no concern9 the negotiator betweenthe other parties, never acting in his own name but in the name of those who employedhim. Bisoccupationistoringthepartiestogether, inmatterof trade, commerceornavigation.Sch$id and O%erl&, Inc. v. '(L Martinez, 1"" SCRA 4!. (1!88).Anagent receives a commission upon the successful conclusion of a sale. Cn the other hand,a ro!erearns his pay merely y ringing the uyer and the seller together, even if nosale is eventually made.Tan v. )ullas, .!. SCRA ..4 (2002).!nrelationthereto, wehaveheldthat theterm7procuringcause8indescribingabro:er3s activity, refers to a cause originating a series of events which, without brea: intheir continuity, result in the accomplishment of the prime ob-ective of the employmentof the bro:er4producing a purchaser ready, willing and able to buy on the owner3s terms.To be regarded as the 7procuring cause8 of a sale as to be entitled to a commission, abro:er3s e6orts must have been the foundation on which the negotiations resulting in asale began. Medrano v. Court of Appeals, 452 SCRA 77 (2005).$A realestate bro:er is one who negotiates the sale of realproperties. Bis business,generally spea:ing, is only to fnd a purchaser who is willing to buy the land upon termsfed by the owner. Be has no authority to bind the principal by signing a contract of sale.!ndeed, an authority to fnd a purchaser of real property does not include an authority tosell. Liton*ua, (r. v. Eternit Corp., 4!0 SCRA 204 (200").&ince bro:erage relationship is necessary a contract for the employment of an agent,principles of contract law also govern the bro:erDprincipal relationship. xAacus SecuritiesCorp. v. Ampil, )8+ &'(A +11 *$22%,.'ontrary tothe appellatecourt;s conclusion,this arrangementshowsanagency.Anagent receives a commission upon the successful conclusion of a sale. Cn the other hand,a bro:er earns his pay merely by bringing the buyer and the seller together, even if nosale is eventually made. *,iter - the issue "as "hether it "as an independentdistriutorof .+/carsinthe0hilippines,x*ahnv. Courtof Appeals, $%%&'(A1+7*1997,.d. Fro( SaleAhen the terms of the agreement compels the purported agent to pay for the productsreceived from the purported principal within the stipulated period, even when there hasbeen no sale thereof to the public, the underlying relationship is not one of contract ofagency to sell, but one of actual sale. A real agent does not assume personalresponsibility for the payment of the price of the ob-ect of the agency9 his obligation ismerely to turnDover to the principal the proceeds of the sale once he receives them fromthe buyer. 'onse.uently, since the underlying agreement is not an agency agreement, itcannot be revo:ed ecept for cause.1uiroga v. 0arsons, +8 /hil 12$ *1918,.$Reiterated in 0hil. *ealth2care 0roviders 3+axicare4 v. #strada, 1)$ &'(A %1% *$228,. Ahen under the agreement the purported agent becomes responsible for any changesin the ac.uisition cost of the ob-ect he has been authori5ed to purchase from a supplier inthe Enited &tates, the underlying agreement is not an contract of agency to buy, since atrue agent does not bear any ris: relating to the sub-ect matter or the price. 0eing acontract of saleandnot agency, anyprofts reali5edbythepurportedagent fromdiscounts receivedfromtheAmericansupplier pertainedtoit withnoobligationtoaccount for it, much less to turn it over, to the purported principal.Gon%alo 0uyat v. Arco,7$ /hil. )2$ *19)1,.Thedistinctionsbetweenasaleandanagencyarenotdi"culttodiscernandthis'ourt, as early as 1972, had already formulated the guidelines that would aid indi6erentiating the two *$, contracts. = that the primordial di6erentiating considerationbetweenthetwo*$, contractsisthetransferof ownershiportitleoverthepropertysub-ect of the contract. !n an agency, the principal retains ownership and control over theproperty and the agent merely acts on the principal;s behalf and under his instructions infurtherance of the ob-ectives for which the agency was established. Cn the other hand,the contract is clearly a sale if the parties intended that the delivery of the property wille6ect a relin.uishment of title, control and ownership in such a way that the recipientmay do with the property as he pleases. Spouses 5iloria v. Continental Airlines, (nc., F.(.#o. 188$88.1% Ganuary$21$.33. F)R4S A5# 635#S )F A7+5C8 1. 9o: A%ency 4ay 2e Cons$i$u$ed (Ar$. 18"!)Therearesomeprovisionsof lawwhichre.uirecertainformalitiesfor particularcontracts> thefrstiswhentheformisre.uiredforthevalidityof thecontract9 thesecond is when it is re.uired to ma:e the contract e6ective as against third parties9 andthe third is when the form is re.uired for the purpose of proving the eistence of thecontract. A contract of agency to sell on commission basis does not belong to any ofthese three categories, hence it is valid and enforceable in whatever form in may beenteredinto. 'onse.uently, whentheagent signsher signatureonanyfaceof thereceipt showing that she receives the -ewelry for her to sell on commission, she is boundto the obligations of an agent. The eact position of the agent3s signature in the receipt*in this case near the description of the goods and not on top of her printed name, isimmaterial. )im v. Court of Appeals, $1) &'(A 172 *199%,.a. Fro( Side o' $&e Princi,al (Ar$. 18"!)Ahen the buyersDa2retrofailed for severalyears to clear their title to the propertypurchased and allowed the sellerDa2retroto remain in possession in spite of theepirationof theperiodof redemption, thentheeecutionof thememorandumofrepurchase by the buyers3 sonDinDlaw, which stood unrepudiated for many years,constituted an implied agency under Article 18%9 of the 'ivil 'ode, from their silence orlac: of action, or their failure to repudiate the agency.Conde v. Court of Appeals, 119&'(A $)1 *198$,.Ahere the principal has ac.uiesced in the act of his agent for a long period of time,and has received and appropriated to his own use the benefts result in from the acts ofhis agent, courts should be slow in declaring the acts of the agent null and void.)inan v.0uno, +1 /hil. $19 *1911,.. Fro( Side o' $&e A%en$ (Ar$s. 1870, 1871 and 1872)c. Fro( Side o' ;&ird Par$ies