(i)Principles Flowing from Agency Characteristics ofPreparatory and Representative (Art. 1897)It s sad that the bass of agency s representaton, that s, the agent acts for and onbehaf of the prncpa on matters wthn the scope of hs authorty and sad acts havethe same ega ehect as f they were personay executed by the prncpa. By ths egacton, the actua or rea absence of the prncpa s converted nto hs ega or |urdcapresence qui facit per alium facit per se. Eurotech Industrial Technologies Inc!v! Cui"on 521 SCRA 584 (2007)Artce 1897 renforces the famar doctrne that an agent, who acts as such, s notpersonay abe to the party wth whom he contracts. The same provson, however,presents two nstances when an agent becomes personay abe to a thrd person.Therst s when he expressy bnds hmsef to the obgaton and the second s when heexceeds hs authorty.In the ast nstance, the agent can be hed abe f he does notgve the thrd party sumcent notce of hs powers.Eurotech IndustrialTechnologies Inc! v! Cui"on 521 SCRA 584 (2007).Notce to the agent shoud aways be construed as notce bndng on the prncpa,evenwhenn facttheprncpa neverbecame aware thereof.AirFrance v.CourtofAppeals, 126 SCRA 448 (1983).e. Personal, Fiduciar and Re!oca"leThereatonsofanagenttohsprncpa areducaryandnregardtothepropertyformng the sub|ect matter of the agency, he s estopped from acqurng or assertng a tteadverse to that of the prncpa.Severino v. Severino, 44 Ph. 343 (1923).By reason of the personal, representative and derivative nature of agency, agency sextngushed by the death of the prncpa or agent. Rallos v. Felix Go Chan & Sons RealtyCorp., 81 SCRA 251 (1978).A contract of agency s generay revocabe as t s a persona contract of representatonbased on trust and condence reposed by the prncpa on hs agent. As the power of theagent to act depends on the w and cense of the prncpa he represents, the power oftheagent ceases whenthe w or permsson s wthdrawn by theprncpa. Thus,enerally, the aency may !e revo"ed !y the principal at #ill.Repu!lic v. $vanelista, 466SCRA 544 (2005).In an agency, the prncpas personaty s extended through the facty of the agent-the agent, by ega cton, becomes the prncpa, authorzed to perform a acts whch theatter woud have hm do. Such a reatonshp can ony be ehected wth the consent of theprncpa, whch must not, n any way, becompeedby awor by any court. TheAgreement tsef between the partes states that "ether party may termnate theAgreement wthout cause by gvng the other 30 days notce by etter, teegram or cabe."#rient Air $ervices v! Court of Appeals, 197 SCRA #45 (1991).15. $istin%uis&ed 'ro( )t&er Si(ilar Contracts*a. Fro( +(,lo(ent ContractThe reatonshp between the corporaton whch owns and operates a theatre, and thendvdua t hres as a securty guard to mantan the peace and order at the entrance of1Litonjua, Jr. v. Eternit Corp., 490 SCRA 204 (2006).the theatre s not that of prncpa and agent, because the prncpe of representaton wasnnoway nvoved.Thesecurty guard wasnot empoyed torepresentthe defendantcorporaton n ts deangs wth thrd partes; he was a mere empoyee hred to perform acertanspeccdutyortask, thatofactngasspeca guardandstayngatthemanentranceof themovehousetostopgatecrashersandtomantanpeaceandorderwthn the premses.%ela Cru& v. 'orthern Theatrical $nterprises, 95 Ph 739 (1954).But to set the record straght, the concept of a snge person havng the dua roe ofagentandempoyeewhedongthesametasksanove onenour|ursprudence,whch must be vewed wth cauton especay when t s de!oid o' an -uris,rudentialsu,,ort or ,recedent. A these, read wthout any cear understandng of ne egadstnctons, appear to speak of contro by the nsurance company over ts agents. Theyare, however, contros amed ony at specc resuts n undertakng an nsurance agency,andare, nfact, parameters set by awndenngannsuranceagency andtheattendant dutes and responsbtes an nsurance agent must observe and undertake.They do not reach the eve of contro nto the means and manner of dong an assgnedtask that nvaraby characterzes an empoyment reatonshp as dened by abor aw.Tong%o v! The &anufacturers 'ife Insurance Co! (Phils!) Inc!, #40 SCRA .95(2011).". Fro( Contract 'or a Piece/o'/0or1Takng nto consderaton the facts that the operator owed hs poston to the companyand the atter coud remove hm or termnate hs servces at w; that the servce statonbeonged to the company and bore ts tradename and the operator sod ony the productsof the company; that the equpment used by the operator beonged to the company andwere|ust oanedtotheoperator andthecompanytookchargeof ther repar andmantenance; that an empoyee of the company supervsed the operator and conductedperodc nspecton of the company's gasone and servce staton; that the prce of theproducts sod by the operator was xed by the company and not by the operator; andthat he was a mere agent, the ndng of the Court of Appeas that the operator was anagent of the company and not an ndependent contractor shoud not be dsturbed. Shellv. Firemen(s )ns. Co., 100 Ph 757 (1957).c. Fro( 2ro1er The queston as to what consttutes a sae so as to entte a rea estate broker to hscommssons s extensvey annotated n the case of *unney vs. +ealey (Nebraska) . . . 44Law Rep. Ann. 593 ., and the ong ne of authortes there cted support the foowngrue: #"Thebusnessof area estatebroker or agent, generay, sonytondapurchaser, andthesettedrueasstatedbythecourtssthat, ntheabsenceof anexpress contract between broker and hs prncpa, the mpcaton generay s that thebroker becomes entted to the usua commssons whenever he brngs to hs prncpa aparty who s abe and wng to take the property and enter nto a vad contract upon theterms then named by the prncpa, athough the partcuars may be arranged and thematter negotatedandcompetedbetweentheprncpa andthepurchaser drecty.",acondray & Co. v. Sellner, 33 Ph. 370 (1916)."Thedutesandabtyofabrokertohsempoyerareessentaythosewhchanagent owes to hs prncpa. Consequenty, the decsve ega provsons on determnngwhether a broker s mandated to gve to the empoyer the propina or gft receved fromthe buyer woud be Artces 1891 and 1909 of the Cv Code." (Yet the facts dd ndcateceary that the rea estate broker was apponted as an excusve agent.) *omingo v!*omingo, 42 SCRA 1.1 (1971).Where the purported agent was oray gven authorty to "foow up" the purchase ofthe re truck wth the muncpagovernment, there s no authorty to senor has thepurported agent been empowered to make a sae for and n behaf of the seer.Guardexv. '*RC, 191 SCRA 487 (1990).Whenthetermsoftheagencyarrangementstotheehectthatenttementtothecommsson was contngent on the purchase by a customer of a re truck, the mpctcondtonbengthat theagentwoudearnthecommssonf hewasnstrumenta nbrngng the sae about. Snce the agent had nothng to do wth the sae of the re truck,and s not therefore entted to any commsson at a. Guardex v. '*RC, 191 SCRA 487(1990).A !ro"ers one who s engaged,forothers,on a commsson,negotatng contractsreatve to property wth the custody of whch he has no concern; the negotator betweenthe other partes, never actng n hs own name but n the name of those who empoyedhm. Hsoccupatonsto!rinthepartiestoether, nmatterof trade, commerceornavgaton.$chmid and #+erly Inc! v! R,' &artine", 1## SCRA 49. (1988).Anaent receves a commsson upon the successfu concuson of a sae. On the other hand,a !ro"erearns hs pay merely !y !rinin the !uyer and the seller toether, even f nosae s eventuay made.Tan v! -ullas, .9. SCRA ..4 (2002).Inreatonthereto, wehavehedthat theterm"procurngcause"ndescrbngabrokers actvty, refers to a cause oriinatin a seres of events whch, wthout break nther contnuty, resut n the accompshment of the prme ob|ectve of the empoymentof the broker-producng a purchaser ready, wng and abe to buy on the owners terms.To be regarded as the "procurng cause" of a sae as to be entted to a commsson, abrokers ehorts must have been the foundaton on whch the negotatons resutng n asae began. &edrano v! Court of Appeals, 452 SCRA 77 (2005).2A reaestate broker s one who negotates the sae of reapropertes. Hs busness,generay speakng, s ony to nd a purchaser who s wng to buy the and upon termsxed by the owner. He has no authorty to bnd the prncpa by sgnng a contract of sae.Indeed, an authorty to nd a purchaser of rea property does not ncude an authorty tose. 'iton.ua ,r! v! Eternit Corp! 490 SCRA 204 (200#).Snce brokerage reatonshp s necessary a contract for the empoyment of an agent,prncpes of contract aw aso govern the broker-prncpa reatonshp. xA!acus SecuritiesCorp. v. Ampil, 483 SCRA 315 (2006).Contrary tothe appeatecourt's concuson,ths arrangementshowsanagency.Anagent receves a commsson upon the successfu concuson of a sae. On the other hand,a broker earns hs pay merey by brngng the buyer and the seer together, even f nosae s eventuay made. (-!iter . the issue #as #hether it #as an independentdistri!utorof /,0carsinthe1hilippines)x+ahnv. Courtof Appeals, 266SCRA537(1997).d. Fro( Sale2Reiterated in 1hil. +ealth2care 1roviders 3,axicare4 v. $strada, 542 SCRA 616 (2008). When the terms of the agreement compes the purported agent to pay for the productsreceved from the purported prncpa wthn the stpuated perod, even when there hasbeen no sae thereof to the pubc, the underyng reatonshp s not one of contract ofagency to se, but one of actua sae. A rea agent does not assume personaresponsbty for the payment of the prce of the ob|ect of the agency; hs obgaton smerey to turn-over to the prncpa the proceeds of the sae once he receves them fromthe buyer. Consequenty, snce the underyng agreement s not an agency agreement, tcannot be revoked except for cause.5uiroa v. 1arsons, 38 Ph 502 (1918).When under the agreement the purported agent becomes responsbe for any changesn the acquston cost of the ob|ect he has been authorzed to purchase from a supper nthe Unted States, the underyng agreement s not an contract of agency to buy, snce atrue agent does not bear any rsk reatng to the sub|ect matter or the prce. Beng acontract of saeandnot agency, anyprots reazedbythepurportedagent fromdscounts recevedfromtheAmercansupper pertanedtot wthnoobgatontoaccount for t, much ess to turn t over, to the purported prncpa.Gon&alo 1uyat v. Arco,72 Ph. 402 (1941).ThedstnctonsbetweenasaeandanagencyarenotdmcuttodscernandthsCourt, as eary as 1970, had aready formuated the gudenes that woud ad ndherentatng the two (2) contracts. . that the prmorda dherentatng consderatonbetweenthetwo(2) contractssthetransferof ownershportteoverthepropertysub|ect of the contract. In an agency, the prncpa retans ownershp and contro over theproperty and the agent merey acts on the prncpa's behaf and under hs nstructons nfurtherance of the ob|ectves for whch the agency was estabshed. On the other hand,the contract s ceary a sae f the partes ntended that the devery of the property wehect a renqushment of tte, contro and ownershp n such a way that the recpentmay do wth the property as he peases. Spouses 6iloria v. Continental Airlines, )nc., G.R.No. 188288.16 |anuary2012.33. F)R4S A5$ 635$S )F A7+5C8 1. 9o: A%enc 4a 2e Constituted (Art. 18#9)Therearesomeprovsonsof awwhchrequrecertanformatesfor partcuarcontracts: therstswhentheformsrequredforthevadtyof thecontract; thesecond s when t s requred to make the contract ehectve as aganst thrd partes; andthe thrd s when the form s requred for the purpose of provng the exstence of thecontract. A contract of agency to se on commsson bass does not beong to any ofthese three categores, hence t s vad and enforceabe n whatever form n may beenterednto. Consequenty, whentheagent sgnsher sgnatureonanyfaceof therecept showng that she receves the |ewery for her to se on commsson, she s boundto the obgatons of an agent. The exact poston of the agents sgnature n the recept(n ths case near the descrpton of the goods and not on top of her prnted name) smmatera. *im v. Court of Appeals, 254 SCRA 170 (1996).a. Fro( Side o' t&e Princi,al (Art. 18#9)When the buyers-a2retrofaed for severayears to cear ther tte to the propertypurchased and aowed the seer-a2retroto reman n possesson n spte of theexpratonof theperodof redempton, thentheexecutonof thememorandumofrepurchase by the buyers son-n-aw, whch stood unrepudated for many years,consttuted an mped agency under Artce 1869 of the Cv Code, from ther sence orack of acton, or ther faure to repudate the agency.Conde v. Court of Appeals, 119SCRA 245 (1982).Where the prncpa has acquesced n the act of hs agent for a ong perod of tme,and has receved and approprated to hs own use the benets resut n from the acts ofhs agent, courts shoud be sow n decarng the acts of the agent nu and vod.*inan v.1uno, 31 Ph. 259 (1915).". Fro( Side o' t&e A%ent (Arts. 1870, 1871 and 1872)c. Fro( Side o' ;&ird Parties