AGENCY person with whom he has contracted, as if the transaction were his own, except when contract involves

person with whom he has contracted, as if the transaction were his own, except when contract involves things belonging to
Chapter 1: Nature, Form and Kinds of Agency principal. The provisions of this article shall be understood to be without prejudice to actions between principal and agent.
Art. 1868. By contract of agency a person binds himself to render some service or to do something in representation or on Chapter 2: Obligations of Agent
behalf of another, with the consent or authority of the latter. Art. 1884. The agent is bound by his acceptance to carry out the agency, and is liable for damages which, through his non-
Art. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure performance, the principal may suffer. He must also finish the business already begun on the death of the principal, should
to repudiate the agency, knowing that another person is acting on his behalf without authority. Agency may be oral, unless delay entail any danger.
the law requires a specific form. Art. 1885. In case a person declines an agency, he is bound to observe the diligence of a good father of a family in the
Art. 1870. Acceptance by agent may also be express, or implied from his acts that carry out the agency, or from his silence custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or take
or inaction according to circumstances. charge of goods.
Art. 1871. Between persons present, the acceptance of agency may also be implied if the principal delivers his power of Art. 1886. Should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so except
attorney to the agent and the latter receives it without any objection. when the principal is insolvent.
Art. 1872. Between persons absent, acceptance of agency cannot be implied from silence of agent, except: Art. 1887. In execution of agency, the agent shall act in accordance with the instructions of principal. In default thereof, he
(1) When principal transmits his power of attorney to the agent, who receives it without objection; shall do all that a good father of a family would do, as required by nature of the business.
(2) When principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is Art. 1888. An agent shall not carry out an agency if its execution would manifestly result in loss or damage to the principal.
habitually engaged as agent, and he did not reply to the letter or telegram. Art. 1889. The agent shall be liable for damages if, there being a conflict between his interests and those of the principal, he
Art. 1873. If a person specially informs another or states by public advertisement that he has given a power of attorney to a should prefer his own.
third person, the latter thereby becomes a duly authorized agent, in the former case with respect to the person who Art. 1890. If agent has been empowered to borrow money, he may himself be the lender at the current rate of interest. If
received the special information, and in the latter case with regard to any person. The power shall continue to be in full he has been authorized to lend money at interest, he cannot borrow it without the consent of principal.
force until the notice is rescinded in same manner in which it was given. Art. 1891. Every agent is bound to render account of his transactions and to deliver to principal whatever he may have
Art. 1874. When a sale of piece of land or any interest therein is through an agent, the authority of latter shall be in writing; received by virtue of agency, even though it may not be owing to principal. Every stipulation exempting the agent from
otherwise, the sale shall be void. obligation to render an account shall be void.
Art. 1875. Agency is presumed to be for compensation, unless there is proof to the contrary. Art. 1892. The agent may appoint a substitute if principal has not prohibited him from doing so; but he shall be responsible
Art. 1876. An agency is either general or special. The former comprises all business of principal. The latter, one or more for the acts of the substitute when he was:
specific transactions. (1) Not given power to appoint one;
Art. 1877. An agency couched in general terms comprises only acts of administration, even if the principal should state that (2) Given such power, but without designating the person, and person appointed was notoriously incompetent or insolvent.
he withholds no power or that the agent may execute such acts as he may consider appropriate, or even though the agency All acts of substitute appointed against the prohibition of principal shall be void.
should authorize a general and unlimited management. Art. 1893. In cases mentioned in Nos. 1 and 2 of preceding article, the principal may furthermore bring an action against the
Art. 1878. SPA is necessary in the following 15 cases: WELCOME-LAMB-CRAB substitute with respect to obligations that the latter has contracted under substitution.
(1) Waive any obligation gratuitously; Art. 1894. The responsibility of two or more agents, even though they have been appointed simultaneously, is not solidary,
(2) Effect novations that put an end to obligations already in existence at the time the agency was constituted; if solidarity has not been expressly stipulated.
(3) Loan or borrow money, unless the latter act be urgent and indispensable for preservation of things under administration; Art. 1895. If solidarity has been agreed upon, each of agents is responsible for non-fulfillment of agency, and for fault or
(4) Compromise, submit questions to arbitration, renounce the right to appeal from judgment, waive objections to the negligence of his fellow agents, except in latter case when fellow agents acted beyond the scope of their authority.
venue of action or to abandon a prescription already acquired; Art. 1896. The agent owes interest on the sums he has applied to his own use from the day on which he did so, and on
(5) Obligate the principal as guarantor or surety; those which he still owes after extinguishment of agency.
(6) Make payments not usually considered as acts of administration; Art. 1897. The agent who acts as such is not personally liable to party with whom he contracts, unless he expressly binds
(7) Enter into any contract by which the ownership of immovable is transmitted or acquired either gratuitously or for himself or exceeds the limits of his authority without giving such party sufficient notice of his powers.
valuable consideration; Art. 1898. If the agent contracts in the name of principal, exceeding the scope of his authority, and the principal does not
(8) Lease real property to another person for more than 1 year; ratify the contract, it shall be void if the party with whom the agent contracted is aware of the limits of powers granted by
(9) Accept or repudiate inheritance; principal. But in this case, agent is liable if he undertook to secure the principal's ratification.
(10) Make gifts, except customary ones for charity or those made to employees in business managed by agent; Art. 1899. If a duly authorized agent acts in accordance with orders of principal, the latter cannot set up the ignorance of
(11) Bind the principal in a contract of partnership; the agent as to circumstances whereof he himself was, or ought to have been, aware.
(12) Create or convey real rights over immovable property; Art. 1900. So far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's
(13) Any other act of strict dominion; authority, if such act is within the terms of the power of attorney, as written, even if the agent has in fact exceeded the
(14) Ratify or recognize obligations contracted before the agency; limits of his authority according to an understanding between principal and agent.
(15) Bind the principal to render some service without compensation. Art. 1901. A third person cannot set up the fact that the agent has exceeded his powers, if the principal has ratified, or has
Art. 1879. A special power to sell excludes the power to mortgage; and a special power to mortgage does not include the signified his willingness to ratify the agent's acts.
power to sell. Art. 1902. A third person with whom the agent wishes to contract on behalf of principal may require presentation of the
Art. 1880. A special power to compromise does not authorize submission to arbitration. power of attorney, or instructions as regards the agency. Private or secret orders and instructions of the principal do not
Art. 1881. The agent must act within the scope of his authority. He may do such acts as may be conducive to the prejudice third persons who have relied upon the power of attorney or instructions shown them.
accomplishment of the purpose of agency. Art. 1903. Commission agent shall be responsible for goods received by him in terms and conditions as described in
Art. 1882. The limits of agent's authority shall not be considered exceeded should it have been performed in a manner more consignment, unless upon receiving them he should make written statement of damage and deterioration suffered by
advantageous to the principal than that specified by him. same.
Art. 1883. If agent acts in his own name, the principal has no right of action against the persons with whom the agent has Art. 1904. Commission agent who handles goods of same kind and mark, which belong to different owners, shall distinguish
contracted; neither have such persons against the principal. In such case the agent is the one directly bound in favor of them by countermarks, and designate the merchandise respectively belonging to each principal.
Art. 1905. Commission agent cannot, without express or implied consent of principal, sell on credit. Should he do so, the Art. 1923. Appointment of new agent for same business or transaction revokes the previous agency from the day on which
principal may demand from him payment in cash, but the commission agent shall be entitled to any interest or benefit, notice thereof was given to the former agent, without prejudice to provisions of the two preceding articles.
which may result from such sale. Art. 1924. Agency is revoked if principal directly manages the business entrusted to agent, dealing directly with third
Art. 1906. Should commission agent, with authority of principal, sell on credit, he shall so inform the principal, with a persons.
statement of names of buyers. Should he fail to do so, the sale shall be deemed to have been made for cash insofar as the Art. 1925. When two or more principals have granted power of attorney for a common transaction, any one of them may
principal is concerned. revoke the same without consent of the others.
Art. 1907. Should commission agent receive on a sale, in addition to the ordinary commission, another called a guarantee Art. 1926. General power of attorney is revoked by special one granted to another agent, as regards the special matter
commission, he shall bear the risk of collection and shall pay the principal the proceeds of the sale on the same terms involved in the latter.
agreed upon with the purchaser. Art. 1927. Agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation
Art. 1908. The commission agent who does not collect the credits of his principal at the time when they become due and already contracted, or if a partner is appointed manager of a partnership in the contract of partnership and his removal
demandable shall be liable for damages, unless he proves that he exercised due diligence for that purpose. from management is unjustifiable.
Art. 1909. The agent is responsible not only for fraud, but also for negligence, which shall be judged with more or less rigor Art. 1928. Agent may withdraw from the agency by giving due notice to principal. If the latter should suffer any damage by
by courts, according to whether the agency was or was not for compensation. reason of withdrawal, agent must indemnify him therefor, unless the agent should base his withdrawal upon impossibility of
Chapter 3: Obligations of Principal continuing the performance of agency without grave detriment to himself.
Art. 1910. Principal must comply with all the obligations that the agent may have contracted within the scope of his Art. 1929. Agent, even if he should withdraw from agency for valid reason, must continue to act until the principal has had
authority. As for any obligation wherein the agent has exceeded his power, the principal is not bound except when he reasonable opportunity to take the necessary steps to meet the situation.
ratifies it expressly or tacitly. Art. 1930. Agency shall remain in full force and effect even after the death of principal, if it has been constituted in common
Art. 1911. Even when agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed interest of the latter and of the agent, or in interest of third person who has accepted the stipulation in his favor.
the latter to act as though he had full powers. Art. 1931. Anything done by agent, without knowledge of the death of principal or of any other cause that extinguishes the
Art. 1912. Principal must advance to agent, should the latter so request, the sums necessary for execution of agency. Should agency, is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith.
agent have advanced them, the principal must reimburse him therefor, even if the business or undertaking was not Art. 1932. If the agent dies, his heirs must notify the principal thereof, and in the meantime adopt such measures as the
successful, provided the agent is free from all faults. The reimbursement shall include interest on the sums advanced, from circumstances may demand in the interest of the latter.
the day on which the advance was made.
Art. 1913. The principal must also indemnify the agent for all damages that the execution of agency may have caused the TRUSTS
latter, without fault or negligence on his part. Chapter 1: General Provisions
Art. 1914. The agent may retain in pledge the things that are the object of agency until the principal effects the Art. 1440. A person who establishes a trust is called the trustor; one in whom confidence is reposed as regards property for
reimbursement and pays the indemnity set forth in the two preceding articles. the benefit of another person is known as the trustee; and the person for whose benefit the trust has been created is
Art. 1915. If two or more persons have appointed an agent for common transaction or undertaking, they shall be solidarily referred to as the beneficiary.
liable to the agent for all the consequences of agency. Art. 1441. Trusts are either express or implied. Express trusts are created by intention of the trustor or of the parties.
Art. 1916. When two persons contract with regard to the same thing, one of them with agent and the other with principal, Implied trusts come into being by operation of law.
and the two contracts are incompatible with each other, that of prior date shall be preferred, without prejudice Art. 1544. Art. 1442. Principles of the general law of trusts, insofar as they are not in conflict with this Code, the Code of Commerce,
Art. 1917. In the case referred to in preceding article, if agent has acted in good faith, the principal shall be liable in Rules of Court and special laws are hereby adopted.
damages to third person whose contract must be rejected. If agent acted in bad faith, he alone shall be responsible. Chapter: Express Trusts
Art. 1918. Principal is not liable for expenses incurred by the agent in the following cases: Art. 1443. No express trusts concerning an immovable or any interest therein may be proved by parol evidence.
(1) If the agent acted in contravention of principal's instructions, unless the latter should wish to avail himself of benefits Art. 1444. No particular words are required for creation of express trust, it being sufficient that trust is clearly intended.
derived from contract; Art. 1445. No trust shall fail because the trustee appointed declines the designation, unless the contrary should appear in
(2) When expenses were due to agent’s fault; the instrument constituting the trust.
(3) When agent incurred them with knowledge that unfavorable result would ensue, if principal was not aware thereof; Art. 1446. Acceptance by beneficiary is necessary. But if the trust imposes no onerous condition upon the beneficiary, his
(4) When it was stipulated that the expenses would be borne by agent, or that the latter would be allowed only certain sum. acceptance shall be presumed, if there is no proof to the contrary.
Chapter 4: Modes of Extinguishment of Agency Chapter 3: Implied Trusts
Art. 1919. Agency is extinguished by: Art. 1447. The enumeration of following cases of implied trust does not exclude others established by the general law of
(1) Expiration of period for which agency was constituted; trust, but the limitation laid down in article 1442 shall be applicable.
(2) Death, civil interdiction, insanity or insolvency of principal or agent; Art. 1448. There is implied trust when property is sold, and the legal estate is granted to one party but price is paid by
(3) Withdrawal of the agent; another for purpose of having beneficial interest of the property. The former is the trustee, while the latter is the
(4) Accomplishment of object or purpose of agency; beneficiary. But if the person to whom the title is conveyed is a child, legitimate or illegitimate, of one paying the price of
(5) Revocation; sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.
(6). Dissolution of firm or corporation that entrusted or accepted the agency. Art. 1449. There is an implied trust when a donation is made to a person but it appears that although the legal estate is
Art. 1920. Principal may revoke the agency at will, and compel the agent to return the document evidencing the agency. transmitted to the donee, he nevertheless is either to have no beneficial interest or only a part thereof.
Such revocation may be express or implied. Art. 1450. If the price of sale of property is loaned or paid by one person for benefit of another and conveyance is made to
Art. 1921. If agency has been entrusted for the purpose of contracting with specified persons, its revocation shall not the lender or payor to secure the payment of debt, a trust arises by operation of law in favor of person to whom the money
prejudice the latter if they were not given notice thereof. is loaned or for whom it is paid. The latter may redeem the property and compel a conveyance thereof to him.
Art. 1922. If agent had general powers, revocation of agency does not prejudice third persons who acted in good faith and Art. 1451. When land passes by succession to any person and he causes the legal title to be put in the name of another, a
without knowledge of revocation. Notice of revocation in newspaper of general circulation is sufficient warning to third trust is established by implication of law for the benefit of the true owner.
persons.
Art. 1452. If two or more persons agree to purchase property and by common consent the legal title is taken in the name of
one of them for benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each.
Art. 1453. When property is conveyed to a person in reliance upon his declared intention to hold it for, or transfer it to
another or the grantor, there is an implied trust in favor of person whose benefit is contemplated.
Art. 1454. If absolute conveyance of property is made in order to secure the performance of an obligation of the grantor
toward the grantee, a trust by virtue of law is established. If the fulfillment of obligation is offered by grantor when it
becomes due, he may demand the reconveyance of property to him.
Art. 1455. When any trustee, guardian or other person holding a fiduciary relationship uses trust funds for the purchase of
property and causes the conveyance to be made to him or to third person, a trust is established by operation of law in favor
of person to whom the funds belong.
Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee
of an implied trust for the benefit of person from whom the property comes.
Art. 1457. An implied trust may be proved by oral evidence.