Week No. 8II. AGENCY1. Historical Context1. World Context2. Philippine Context-Laws 28 and 32, Title 12, Partida 3-Spanish Civil Code (Civil Agency)-Spanish Code of Commerce (Commercial Agency)-Civil Code Art. 2270 (2)

Repealing Clause Article 2270. The following laws and regulations are hereby repealed: (1) xxx(2) The provisions of the Code of Commerce governing sales, partnership, agency, loan, deposit and guaranty;

1. Nature, Concept and Purpose1. Agency as a contracta) Definition (Art. 1868)

Article 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)

i. Critique/ Articles-Espiritu, XV Lawyers Journal 297- J.B.L. Reyes, XVI Lawyers Journal 138ii. Other definitions

b) Essential requisites/ elements (Art. 1318)

Article 1318. There is no contract unless the following requisites concur: (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. (1261)

-Rallos vs. Felix Go Chan & Sons Realty Corp., 81 SCRA 251

Facts:Concepcion and Gerundia Rallos are sisters and registered co-owners of a parcel of land known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No. 11116 of the Registry of Cebu. In 1954, the sisters executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell the said lot for and on their behalf. After a year, Concepcion Rallos died. Months following her death, Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia in lot 5983 to Felix Go Chan & Sons Realty Corporation.

Ramon Rallos, administrator of the Intestate Estate of Concepcion Rallos filed a complaint before the Court of First Instance of Cebu, praying (1) that the sale of the undivided share of the deceased Concepcion Rallos in lot 5983 be declared unenforceable. While the case was pending in the trial court, both Simeon and his sister Gerundia died and they were substituted by the respective administrators of their estates. The trial the court declared the sale as null and void insofar as the share of Concepcion Rallos is concerned. Upon appeal by Felix Go Chan & Sons Realty Corporation, the Court of Appeals sustained the sale in question. Issue:Whether or not the sale contracted by an agent after the death of his principal is unenforceable.

Held:The Supreme Court upheld the decision of the Trial Court.

Art. 1919 of the Civil Code provides, Agency is extinguished by the death of the principal or of the agent. However, Article 1931 of the Civil Code provides for exception to the provision of Art. 1919. Under Article 1931, an act done by the agent after the death of his principal is valid and effective only under two conditions, viz: (1)that the agent acted without knowledge of the death of the principal and (2) that the third person who contracted with the agent himself acted in good faith. Good faith here means that the third person was not aware of the death of the principal at the time he contracted with said agent. These two requisites must concur, the absence of one will render the act of the agent invalid and unenforceable.

In the instant case, it cannot be questioned that agent, Simeon Rallos must have known of the death of his sister, and yet he proceeded with the sale of the lot in the name of both his sisters Concepcion and Gerundia Rallos without informing the vendee of the death of Concepcion. Accordingly, Ramon Rallos executed the sale notwithstanding notice of the death of his principal, hence, his act as agent is unenforceable against the estate of his principal.c) Characteristicsd) Purpose

2. Agency as a relationa) Fiduciary characterb) Representative character1