LYCEUM NORTHWESTERN UNIVERSITY

Dagupan City, Pangasinan

COLLEGE OF LAW

Title X. - AGENCY
CHAPTER 1
NATURE, FORM AND KINDS OF AGENCY

Title X. - AGENCY
CHAPTER 1
NATURE, FORM AND KINDS OF AGENCY

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.
(1709a)

Art. 1869. Agency may be express, or implied from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the agency, knowing that another person is acting on
his behalf without authority.

Agency may be oral, unless the law requires a specific form. (1710a)

Art. 1870. Acceptance by the agent may also be express, or implied from his acts which carry
out the agency, or from his silence or inaction according to the circumstances. (n)

Art. 1871. Between persons who are present, the acceptance of the agency may also be implied
if the principal delivers his power of attorney to the agent and the latter receives it without any
objection. (n)

Art. 1872. Between persons who are absent, the acceptance of the agency cannot be implied
from the silence of the agent, except:

(1) When the principal transmits his power of attorney to the agent, who receives it
without any objection;

(2) When the principal entrusts to him by letter or telegram a power of attorney with
respect to the business in which he is habitually engaged as an agent, and he did not
reply to the letter or telegram. (n)

Art. 1873. If a person specially informs another or states by public advertisement that he has
given a power of attorney to a third person, the latter thereby becomes a duly authorized agent,
in the former case with respect to the person who received the special information, and in the
latter case with regard to any person.

The power shall continue to be in full force until the notice is rescinded in the same manner in
which it was given. (n)

Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the
authority of the latter shall be in writing; otherwise, the sale shall be void. (n)

Art. 1875. Agency is presumed to be for a compensation, unless there is proof to the contrary.
(n)

Art. 1876. An agency is either general or special.

The former comprises all the business of the principal. The latter, one or more specific
transactions. (1712)
Art. 1877. An agency couched in general terms comprises only acts of administration, even if
the principal should state that he withholds no power or that the agent may execute such acts
as he may consider appropriate, or even though the agency should authorize a general and
unlimited management. (n)

Art. 1878. Special powers of attorney are necessary in the following cases:

(1) To make such payments as are not usually considered as acts of administration;

(2) To effect novations which put an end to obligations already in existence at the time
the agency was constituted;

(3) To compromise, to submit questions to arbitration, to renounce the right to appeal

from a judgment, to waive objections to the venue of an action or to abandon a
prescription already acquired;

(4) To waive any obligation gratuitously;

(5) To enter into any contract by which the ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable consideration;

(6) To make gifts, except customary ones for charity or those made to employees in the
business managed by the agent;

(7) To loan or borrow money, unless the latter act be urgent and indispensable for the
preservation of the things which are under administration;

(8) To lease any real property to another person for more than one year;

(9) To bind the principal to render some service without compensation;

(10) To bind the principal in a contract of partnership;

(11) To obligate the principal as a guarantor or surety;

(12) To create or convey real rights over immovable property;

(13) To accept or repudiate an inheritance;

(14) To ratify or recognize obligations contracted before the agency;

(15) Any other act of strict dominion. (n)

Art. 1879. A special power to sell excludes the power to mortgage; and a special power to
mortgage does not include the power to sell. (n)

Art. 1880. A special power to compromise does not authorize submission to arbitration. (1713a)

Art. 1881. The agent must act within the scope of his authority. He may do such acts as may be
conducive to the accomplishment of the purpose of the agency. (1714a)

Art. 1882. The limits of the agent's authority shall not be considered exceeded should it have
been performed in a manner more advantageous to the principal than that specified by him.
(1715)

Art. 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. (1717)

Cases:
1. Patrimonio v. Gutierrez G.R. No. 187769 June 4, 2014
2. Salvador v. Rabajo G.R. No. 199990 February 4, 2015
3. San Miguel v. Vda de Trinidad G.R. No. 237506 July 28, 2020
4. V-Gent, Inc. v. Morning Star Travel and Tours G.R. No. 186305 July 22, 2015
5. PNB v. Sian-Limsiaco G.R. No. 196323 February 8, 2021