CIVIL LAW (AGENCY) MEMORY AID 2002

ATENEO CENTRAL BAR OPERATIONS

Definition: 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. (Article 1868) Ch ! "te!i#ti"#: 1. consensual !. nominate $. preparatory . principal ". unilateral# reciprocal (if for compensation)

N t$!e: %ince it is a contract, there must be a meeting of the minds as to consent, ob&ect, and cause. B #i#: Representation. 'he acts of the agent on behalf of the principal within the scope of his authority produce the same legal and binding effects as if they were personally done by the principal. (ence, the distinguishing features of agency are its representative character ) its derivative authority. P$!%o#e: e*tend the personality of the principal through the facility of the agent C % "it& of the P !tie#: 'he principal may be a natural or a &uridical person. And he must be capacitated. 'he rule is if a person is capacitated to act for himself or his own right, he can act through an agent. As to the agent, insofar as the third persons are concerned, it is enough that the principal is capacitated. But insofar as his obligations to his principal are concerned, the agent must be able to bind himself. E##enti ' E'e(ent#: 1. consent of the parties to establish the relationship# !. ob&ect of the contract is the e*ecution of a &uridical act in relation to third persons# $. agent acts as a representative and not for himself# and . agent acts within the scope of his authority A"t# Th t C nnot Be Done B& A)ent (1) +ersonal Acts (!) ,riminal or -llegal Acts Nature of Relationship Between Principal & Agent: .iduciary, based on trust ) confidence Distinction Between Agency & Lease of Service A)en"& Basis +owers ) functions +ersons involved representation agent e*ercises discretionary powers $ persons/ principal, agent and the $rd person with whom the agent contracts Le #e of Se!*i"e employment lessor ordinarily performs only ministerial functions ! persons/ lessor and lessee

'ypes of transactions involved

relates to commercial or business relates more to the matters of transactions mere manual or mechanical e*ecution

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Distinction Between Agency & Guardianship A)en"& Agent represents a capacitated person G$ !+i n#hi% A guardian represents an incapacitated person.

Agent is appointed by the principal and can be 0uardian is appointed by the court and stands removed by the latter. in loco parentis. Agent is sub&ect to the directions of the principal. 0uardian is not sub&ect to the directions of the ward but must act for the benefit of the latter

Agent can ma1e the principal personally liable. 0uardian has no power to impose personal liability on the ward.

Distinction Between Agency & Lease of Property A)en"& Agent is controlled by the principal. Le #e of %!o%e!t& 2essee is not controlled by the lessor.

Agency may involve things other than property. 2ease of property involves property.. Agent can bind the principal. 2essee cannot bind the lessor.

Distinction Between Agency to Sell & Sale A)en"& to #e'' Agent receives the goods as the principal3s goods Agent delivers the proceeds of the sale S 'e Buyer receives the goods as owner Buyer pays the price

Agent can return the ob&ect in case he is unable Buyer, as a general rule, cannot return the to sell the same to a third person ob&ect sold Agent in dealing with the thing received is Buyer can deal with the thing as he pleases, bound to act according to the instructions of his being the owner principal

Distinction Between Agent & ontractor A)ent represents his principal In+e%en+ent Cont! "to! employed by the employer

acts under the principal3s control and instruction acts according to his own method principal is liable for torts committed by the agent within the scope of his authority employer not liable for torts committed by the independent contractor.

CIVIL LAW (AGENCY) MEMORY AID 2002

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C' ##ifi" tion of A)en"& A! As to "anner of creation 1. Express agent has been actually authori4ed by the principal, either orally or in writing !. Implied 5 agency is implied from the acts of the principal, from his silence or lac1 of action or his failure to repudiate the agency 1nowing that another person is acting on his behalf without authority, or from the acts of the agent which carry out the agency, or from his silence or inaction according to the circumstances B! As to character $. Gratuitous 5 agent receives no compensation for his services . Onerous agent receives compensation for his services ! As to e#tent of $usiness of the principal ". General 5 agency comprises all the business of the principal 6. Special 5 agency comprises one or more specific transactions D! As to authority conferred 6. Couched in general terms 5 agency is created in general terms and is deemed to comprise only acts in the name and representation of the principal 8. Simple or Commission 5 agent acts in his own name but for the account of the principal ,o!( of A)en"&: GR: appointment of an agent may be oral or written# no formal re7uirements %#ception: when the law re7uires a specific form (e.g. agent3s sale of real property or any interest therein) ,o!( of A""e%t n"e -& A)ent A. Express 8 when it is oral or written B. Implied -when it can be inferred from the acts of the agent which carry out the agency, or from his silence of inaction according to the circumstances 1. Between persons who are present 5 implied acceptance if the principal delivers his power of attorney to the agent and the latter receives it without any ob&ection !. Between persons who are absent 5 acceptance not deemed implied from the silence of the agent E CE!"/ a. 9hen the principal transmits his power of attorney to the agent, who receives it without any ob&ection b. 9hen 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

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W & of Gi*in) Noti"e of A)en"& . It# Effe"t 1. B# special in$ormation 8 the person appointed as agent is considered such with respect to the person to whom it was given 2. B# public ad%ertisement 8 the agent is considered such with regard to any person Po/e! of Atto!ne&: instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or 1inds of acts on behalf of the principal# primary purpose is to evidence agent3s authority to third parties within whom the agent deals Po/e! of Atto!ne&0 1o/ Con#t!$e+: GR: strictly construed and strictly pursued# held to grant only those specified powers %#ception: when strict construction will destroy the very purpose of the power

Sale of a Piece of Land&Any 'nterest (herein: agent3s authority must be in writing, otherwise sale is void A)en"& Co$"he+ in Gene! ' Te!(#: covers only :;<; A,'% =. A>:-?-%'<A'-=? e%en i$ a. the principal should state that he withholds no power b. the agent may e*ecute such acts as he may consider appropriate c. the agency should authori4e a general and unlimited management S%e"i ' Po/e!# of Atto!ne& 1. 'o ma1e such payments as are not usually considered as acts of administration !. 'o effect novations which put an end to obligations already in e*istence at the time the agency was constituted $. 'o compromise, to submit 7uestions to arbitration, to renounce the right to appeal from a &udgment, to waive ob&ections to the venue of an action or to abandon a prescription already ac7uired . 'o waive any obligation gratuitously ". 'o enter into any contract by which the ownership of an immovable is transmitted or ac7uired either gratuitously or for a valuable consideration 6. 'o ma1e gifts, e*cept customary ones for charity or those made to employees in the business managed by the agent 6. 'o loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration 8. 'o lease any real property to another person for more than one year @. 'o bind the principal to render some service without compensation 1A. 'o bind the principal in a contract of partnership 11. 'o obligate the principal as a guarantor or surety 1!. 'o create or convey real rights over immovable property

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1$. 'o accept or repudiate an inheritance 1 . 'o ratify or recogni4e obligations contracted before the agency 1". Any other act of strict dominion Not 'ncluded in the Power to )ortgage: 1. to sell !. to e*ecute a second mortgage $. to mortgage for the agent3s or any $rd persons3 benefit, B?2;%% clearly indicated !ower to compromise does not include submission to arbitration. %ffects of Acts of Agent ACTS O, T1E AGENT 1. in behalf of the principal, within the scope of authority E,,ECT binds principal# agent not personally liable E2CEPTION3S agent liable if he (1)e*pressly ma1es himself liable# (!)e*ceeds the limits of his authority without giving the parties sufficient notice of his powers binding on the principal when ratified or when the principal allowed the agent to act as though he had full powers when the transaction involves things belonging to the principal 1. remedy of the principal 8 damages for agent3s failure to comply with the agency !. remedy of the third person 8 -f the case falls under the general rule, he can sue the agent. But when the contract involves things belonging to the principal, he can sue the principal. But if it cannot be determined without litigation who is liable, he can sue both.

!. without or beyond scope of authority $. within the scope of authority but in the agent3s name

contract is unenforceable as against the principal but binds the agent to the third person not binding on the principal# principal has no cause of action against the $rd parties and vice versa

. within the scope of the written power of attorney but agent has actuall# e*ceeded his authority according to an understanding between him ) the principal ". with improper motives

insofar as $rd persons are concerned (not re7uired to in7uire further than the terms of the written power, agent acted within scope of his authority# principal estopped motive is immaterial# as long as within the scope of authority, valid

(1)$rd person 1new agent was acting for his own benefit/ principal is not liable to $rd third person (!) owner is see1ing recovery of personal property of which he has been unlawfully deprived

6. with misrepresentations by the agent

a. authori4ed 8 principal still liable b. beyond the scope of the agent3s authority GR/ principal not liable

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6. mismanagement of the business by the agent

8. tort committed by the agent

@. agent in good faith but pre&udices $rd parties 1A. agent in bad faith and pre&udices $rd persons

Exception/ principal ta1es advantage of a contract or receives benefits made under false representation of his agent c. for the agent3s own benefit 5 principal still liable# agent3s motive immaterial principal still responsible for the acts contracted by the agent with respect to $rd persons# principal, however, may see1 recourse from the agent principal civilly liable so long as the tort is committed by the agent while performing his duties in furtherance of the principal3s business principal is liable for damages only the agent is liable for damages

NOTE: Agent always liable $or $raud but not $or negligence, which shall be &udged with more or less rigor by the courts, according to whether the agency was or was not for a compensation. O-'i) tion# of the A)ent to the P!in"i% ' (a) GENERAL: 1. act with utmost good faith ) loyalty for the furtherance of principal3s interests !. obey principal3s instructions $. e*ercise reasonable care (b) SPECI,IC: 1. carry out the agency !. answer for damages which through his non8performance the principal may suffer $. finish the business already begun on the death of the principal should delay entail any danger (exception to the rule that death e*tinguishes agency) . observe the diligence of a good father in the custody and preservation of the goods forwarded to him by the owner in case he declines an agency, until an agent is appointed ". advance necessary funds if there be a stipulation to do so (except when the principal is insolvent) 6. act in accordance with the instructions of the principal, and in default thereof, to do all that a good father of a family would do (&O"E/ A departure $rom the principal's instructions may be &ustified by a sudden emergency, or if the instructions are ambiguous, or if the departure is so insubstantial that it does not affect the result and the principal suffers no damage thereby. .urther, an agent has the right to disobe# the principal3s instructions when the instruction calls for the performance of illegal acts, or where he is privileged to do so to protect his security interest in the sub&ect matter of the agency.) 6. not to carry out the agency if it would manifestly result in loss or damage to the principal

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8. answer for damages if there being a conflict between his ) principal3s interests, he prefers his own @. not to loan to himself if he has been authori4ed to loan money at interest 1A. render an account of his transactions and deliver to the principal whatever he may have received by virtue of the agency (-f the agent fails to deliver and instead converts or appropriates for his own use the money or property belonging to his principal, he may be charged with ES"()(.) 11. be responsible in certain cases for the act of the substitute appointed by him 1!. pay interest on funds he has applied to his own use Distinction Between Authority and the Principal*s 'nstructions A4T1ORITY sum total of the powers committed to the agent by the principal relates to the sub&ectCbusiness with which the agent is empowered to deal or act limitations of authority are operative as against those who haveCcharged with 1nowledge of them contemplated to be made 1nown to third persons dealing with the agent Appoint"ent of Su$+agent: 1. -f there is no prohibition from the principal and the agent appoints a subagent, the agent is responsible for all the acts of the subagent. !. -f there is a prohibition but nevertheless the agent appoints a subagent, all the subagent3s acts are void as to the principal. $. -f there is authority to appoint and subagent is not designated by the principal, the agent will be liable for all the acts of the subagent if the subagent is notoriously incompetent or insolvent. . -f there is authority to appoint and subagent is designated by the principal, the agent is released from any liability from the acts of the subagent. Re#%on#i-i'it& of 2 o! Mo!e A)ent# A%%ointe+ Si($'t neo$#'&: GR: liable &ointly %#ception: solidarity has been e*pressly stipulated# each of the agents becomes solidarily liable for (1) the non8fulfillment of the agency# of for (!) the fault or negligence of his fellow agent %#ception to the e#ception: when one of the other agentCs acts beyond the scope of his authority 5 innocent agent is ?=' liable ?='; however that if two or more persons have appointed an agent for a common transaction or underta1ing, they shall be solidaril# liable to the agent for all the conse7uences of the agency. Any of them also revo1e the agency. INSTR4CTIONS contemplates only a private rule of guidance to the agent# independent and distinct in character refers to the manner or mode of agent3s action without significance as against those with neither 1nowledge nor notice of them not e*pected to be made 1nown to those with whom the agent deals

Bro,er: negotiate contracts relative to property in behalf of others and for a compensation or fee -hen Bro,er %ntitled to o"pensation: whenever he brings to his principal a party who is able and willing to ta1e the property, and enter into a valid contract upon the terms named by

CIVIL LAW (AGENCY) MEMORY AID 2002

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the principal, although the particulars may be arranged and the matter negotiated and completed between the principal and the purchaser directly (?=';/ A bro1er is never entitled to commission for unsuccessful efforts.)

L / on Do$-'e A)en"&: disapproved by law for being against public policy and sound morality E CE!" where the agent acted with full 1nowledge and consent of the principals o"pensation for a Dou$le Agent: a. with *nowledge o$ both principals 8 recovery can be had from both principals b. without the *nowledge o$ both principals - the agent can recover from neither c. with *nowledge o$ one principal 8 as to the principal who 1new of that fact and as to the agent, they are in pari delicto and the courts shall leave them as they were, the contract between them being void as against public policy and good morals Atto!ne&5In5, "t: one who is given authority by his principal to do a particular act not of a legal character NOTE: 'he term is, in loose language, used to include agents of all 1inds, but in its strict sense, it means an agent having a special authority created by a deed. GENERAL AGENT all acts connected with the business or employment in which he is engaged involves continuity of service may bind his principal by an act within the scope of his authority although it may be contrary to the latter3s special instructions apparent authority does not terminate by the mere revocation of his authority without notice to the third party SPECIAL AGENT specific acts in pursuance of particular instructions or with restrictions necessarily implied from the act to be done no continuity of service can not bind his principal in a manner beyond or outside the specific acts which he is authori4ed to perform duty imposed upon the third party to in7uire ma1es termination of the relationship as between the principal and agent effective as to such third party unless the agency has been entrusted for the purpose of contracting with such third party strictly construed as they limit the agent3s authority

%cope of Authority

?ature of %ervice Authori4ed ;*tent to 9hich Agent :ay Bind the +rincipal

'ermination of Authority

,onstruction of +rincipal3s -nstructions Co((i##ion A)ent:

merely advisory in nature

one whose business is to receive and sell goods for a commission and who is entrusted by the principal with the possession of goods to be sold, and usually selling in his own name

Distinction Between .rdinary Agent & o""ission Agent

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O!+in !& )ent acts for and in behalf of his principal need not have possession of principal3s goods

Co((i##ion )ent act on his own name or in that his principal must be in possession of the goods

Distinction Between o""ission Agent & Bro,er Co((i##ion )ent engaged in the purchase and sale for a principal of personal property which has to be placed in his possession and disposal has a relation with principal, buyers or sellers, and property which is the ob&ect of the transaction O-'i) tion# of 1. Co((i##ion A)ent B!o6e! no custody or possession of the thing he disposes# merely a go8between, an intermediary between the sellers and the buyer maintains no relation with the thing which he purchases or sells

responsible for the goods received by him, as described in the consignment, +&,ESS upon receiving them he should ma1e a written statement of the damage and deterioration suffered by the same if goods are of the same 1ind and mar1 but belonging to different owners, ma1e a distinction by counter mar1s and designate the merchandise respectively belonging to each principal cannot, without consent of the principal, sell on credit# should he do, principal may demand payment in cash, but the commission agent entitled to any interestCbenefit which may result from such sale if a del credere agent receiving guarantee commission, bears the ris1 of collection and pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser liable for damages if agent does not collect the credits of his principal at the time when they become due and demandable, B?2;%% he proves, that he e*ercised due diligence for that purpose

!.

$.

. ".

O-'i) tion# of the P!in"i% ' to the A)ent 1. comply with all the obligations agent contracted in representation of the principal !. advance sums necessary for the e*ecution of the agency, when agent so re7uests# liable for reimbursement regardless of the underta1ing3s success whenever agent had advanced ) has no fault# includes interest $. reimburse the agent for all advances made by him provided the agent is free from fault . indemnify the agent for all the damages which the e*ecution of the agency may have caused the latter without fault or negligence on his part ". pay the agent the compensation agreed upon or the reasonable value of the latter3s services

A)ent7# Ri)ht of Retention:

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speci$ic (only for those goods connected with the agency) and until the principal effects the reimbursement and pays the indemnity P!in"i% '7# Li -i'it& fo! E8%en#e#: GR: principal liable for the e*penses incurred by the agent %#ceptions: 1. -f the agent acted in contravention of the principalDs instructions, unless principal derives benefits from the contract !. 9hen the e*penses were due to the fault of the agent $. 9hen the agent incurred them with 1nowledge that an unfavorable result would ensure, if the principal was not aware thereof . 9hen it was stipulated that the e*penses would be borne by the agent, or that the latter would be allowed only a certain sum A)en"& -& E#to%%e': there is no agency at all, and the alleged agent seemed to have apparent or ostensible, although not real authority to represent another -ho can $e under estoppel to deny agency/ (1) Estoppel o$ (gent8 one professing to act as agent estopped to deny his agency both as against his asserted principal and the third persons interested in the transaction in which he is engaged

a. b.

-./ Estoppel b# the !rincipal a. (s to agent 5 one 1nowing another is acting as his agent and fails to repudiate his acts, or accept the benefits of them, will be estopped to deny the agency as against such other c. (s to sub-agent 5 to estop the principal from denying his liability to a third person, he must have 1nown or be charged with 1nowledge of the transaction and the terms of the agreement between the agent and sub8agent (s to third persons 5 one who 1nows that another is acting as his agent or permitted another to appear as his agent, to the in&ury of third persons who have dealt with the apparent agent as such in good faith and in the e*ercise of reasonable prudence, is estopped to deny the agency

d.

($) ( )

Estoppel o$ "hird !ersons 5 a third person, having dealt with one as an agent may be estopped to deny the agency as against the principal, agent or $rd persons in interest Estoppel o$ the Go%ernment - government neither estopped by the mista1eCerror of its agents# may be estopped through affirmative acts of its officers acting within the scope of their authority

Con+ition# fo! R tifi" tion 1. 'he principal must have capacity and power to ratify !. (e must have had 1nowledge of material facts $. (e must ratify the acts in its entirety . 'he act must be capable of ratification ". 'he act must be done in behalf of the principal

1A

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E 'o be effective, ratification need not be communicated or made 1nown to the agent or the third party. 'he act or conduct of the principal rather than his communication is the 1ey. But before ratification, the third party is free to revo1e the unauthori4ed contract. Effe"t# of R tifi" tion a. with respect to agent 8 relieves the agent from liability to the third party for the unauthori4ed transaction, and to his principal for acting without authority# may recover compensation with respect to principal 8 assumes responsibility for the unauthori4ed act, as fully as if the agent had acted under original authority but not liable for acts outside the authority approved by his ratification with respect to 0rd persons 8 bound by ratification to the same e*tent as if the ratified act had been authori4ed# cannot raise the 7uestion of the agent3s authority to do the ratified act

b.

c.

Distinction Between Ratification & %stoppel R tifi" tion rests on intention rests on pre&udice E#to%%e'

affects the entire transaction from the beginning affects only relevant parts of the transaction substance of ratification is confirmation of an authori4ed acts or conduct after it has been done substance of estoppel is the principal3s inducement to another to act to his pre&udice

Distinction Between Apparent Authority & Authority $y %stoppel A%% !ent A$tho!it& A$tho!it& -& E#to%%e'

though not actually granted, principal 1nowingly where the principal, by his negligence, permits permitsCholds out the agent as possessing the his agent to e*ercise powers not granted to necessary powers to act in a certain way him, even though the principal may have no notice or 1nowledge of the conduct of the agent Mo+e# of E8tin)$i#h(ent of A)en"& 1. revocation !. withdrawal of the agent $. death, civil interdiction, insanity or insolvency of the principal or of the agent . dissolution of the firm or corporation which entrusted or accepted the agency ". accomplishment of the ob&ect or purpose of the agency 6. e*piration of the period for which the agency was constituted NOTE: list not e*clusive# causes particular only to agency# may be e*tinguished by the modes of e*tinguishment of obligations in general whenever they are applicable, li1e loss of the thing and novation Agency is ';<:-?A';>, as a matter of law, upon the outbrea1 of war. Presu"ption of ontinuance of Agency:

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-t means that when once shown to have e*isted, an agency relation will be presumed to have continued, in the absence of anything to show its termination. ontinuance of Agency: parties must be (1)present, (!) capacitated and ($) solvent E8"e%tion# to E8tin)$i#h(ent -& De th 1. if the agency is coupled with an interest !. if the act of the agent was e*ecuted without the 1nowledge of the death of the principal and the third person who contracted with the agent acted in good faith $. to avoid damage . if it has been constituted in the common interest of the principal and of the agent, or in the interest of a third person who has accepted the stipulation in his favor C n the hei!# "ontin$e the )en"&9 GR: agency calls for personal services on the part of the agent# rights ) obligations intransmissible %#ception: 1. agency by operation of law, or a presumed or tacit agency !. agency is coupled with an interest in the %: of the agency (e*. power of sale in a mortgage) E8"e%tion# to E8tin)$i#h(ent 4%on Lo## o! De#t!$"tion of S$-:e"t M tte! 1. if it is possible to substitute other material for that which was destroyed without substantial detriment to either party or if the destroyed sub&ect matter was not in fact essential to the contract# !. a partial loss or destruction does not always result in a complete termination of the agency, and under such circumstances, while the agency may be ended in so far as the destroyed property is concerned, it may continue in e*istence as to other property not affected NOTE: -f the loss brought about by the principal (e.g. principal sells %: to another party even if an agent has been constituted in reference to it), principal liable for damages for his wrongful terminating act# if %: is lost without principal3s fault, no liability assumed by him Ch n)e of Ci!"$(#t n"e: GR 5 when there is a basic change in the circumstances surrounding the transaction, which was not contemplated by the parties and which would reasonably lead the agent to believe that the principal would not desire him to act, the authority of the agent is terminated %#ceptions: 1. -f the original circumstances are restored within a reasonable period of time, the agentDs authority may be revived !. 9here the agent has reasonable doubts as to whether the principal would desire him to act, his authority will not be terminated if he acts reasonably $. 9here the principal and agent are in close daily contact, the agentDs authority to act will not terminate upon a change of circumstances if the agent 1nows the principal is aware of the change and does not give him new instructions Re*o" tion 5 termination of the agency by the subse7uent act of the principal

1!

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Ren$n"i tion3With+! / ' 8 termination of the agency by the subse7uent act of the agent P!in"i% '7# Li -i'it& fo! D ( )e# De#%ite Re*o" tion 1. if the agency was constituted for a fi*ed period, the principal shall be liable for damages occasioned by the wrongful discharge of the agent before the e*piration of the period fi*ed !. even if there was no time fi*ed for the continuance of the agency, but the agent can prove that the principal acted in bad faith by revo1ing the agency in order to avoid the payment of commission about to be earned, the principal can be held liable for damages Ne"e##it& of Noti"e of Re*o" tion 1. as to the agent 5 e*press notice always necessary# sufficient notice if the party to be notified actually 1nows, or has reason to 1now, a fact indicating that his authority has been terminatedCsuspended# revocation without notice to the agent will not render invalid an act done in pursuance of the authority as to 0rd persons 5 e*press notice necessary as to $ormer customers 8 actual notice must be given to them because they always assume the continuance of the agency relationship

!.

a.

b.

as to other persons 8 notice by publication is enough

M & the )en"& -e e8tin)$i#he+ t /i''9 A. A0;?' may do so but sub&ect to the contractual obligations owing the principal (i.e. fi*ed period of time for the agency or purpose not yet accomplished)# expressl# or impliedl# (a) conducted himself in a manner incompatible with his duties# (b)abandons the ob&ect of agency and acts for himself in committing a fraud upon his principal# (c)he files a complaint against the principal and adopts an antagonistic attitude towards him 1. with &ust cause 8 give due notice !. without &ust cause 8 liable for damages if agent suffers damages thereby B?2;%% the agent should base his withdrawal upon the impossibility of continuing the performance of the agency without grave detriment to himself N.(%: 'he mere fact that the agent violates his instructions does not amount to renunciation, and although he may thus render himself liable to the principal, he does not cease to become an agent. B. +<-?,-+A2 may also revo1e the agency at will %#ception: agency coupled with interest

a. 9hen a bilateral contract depends upon the agency b. 9hen the agency is the means of fulfilling an obligation already contracted c. 9hen a partner is appointed as manager of a partnership in the contract of
partnership and his removal from the management is un&ustifiable. %#ception to the e#ception: when the agent acts to defraud the principal

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I(%'ie+ Re*o" tion of A)en"& 1. principal appoints a new agent for the same business or transaction, only if there is incompatibility)# effective as between the principal and the agent only if communicated to the agent# does not pre&udice rights of third persons acting in 0. without 1nowledge of the revocation !. principal directly manages the business entrusted to the agent, dealing directly with $rd persons Effe"t of E8tin)$i#h(ent Witho$t Noti"e: act of agent deemed valid insofar as $rd parties acting in good faith and without 1nowledge of revocation Effe"t of I##$ n"e of SPA:

'he general power is impliedly revo1ed as to matters covered by the special power because a special power naturally prevails over a general power.