Distinguish from other contracts/relationships

A. Partnership 1767
Partnership
Acts in representation himself as a principal
Liable
Profit sharing
B. Independent contractor
Contractor
Accomplishes a certain result using his own method
without being subject to the other partys control
Independent and not in representation of employer
Employer not liable to tort

Agency
Acts in representation of the principal
Only principal is liable
Compensation
Agency
Agent is subject to the control and direction of the
principal
In representation
Principal liable to torts

C. Employer-employee; lease of service 1644

Lease
Basis is service/employment
Only ministerial functions
Only between the lessor and the lessee
Manual or mechanical execution under the direct
control of lessor

Agency
Basis is representation
Has discretionary functions
Three persons involved
Commercial/business transactions

D. Sale 1458
Owner of the Goods received
Buyer pays price
Cant return object sold
Can do as he pleases

Agency
Goods received as goods of the principal
Delivers proceeds of Sale
Can return object
Bound by instructions from principal

E. Brokerage 1903 to 1908

Brokerage
No relation to things he buys or sells/ mere
intermediary
Commission for merely bringing the buyer and seller
together

F. Negotiorum gestio/quasi-contract 2144, 2145

Negotiorum Gestio
No authority and knowledge
Representation
Quasi-Contract

G. Judicial administrator

Agency
Property is placed in his possession and Disposal
Commission upon successful conclusion of sale

Agency
Authority expressly conferred
Representation
Contract

Judicial Administrator
Appointed by the court. He is not only the
representative of the said court, but also of the heirs
and creditors of the estate
Before entering into his duties, is required to fi le a
bond
the acts of a judicial administrator are subject to
specific provisions of law and orders of the appointing
court

Agency
Only answerable to his principal

The protection which the law gives the principal,

in limiting the powers and rights of an agent, stems
from the fact that control by the principal can only be
through agreements

H. Loan 1933
Loan
Money expressly regarded as money lent
Money used for personal purposes
I.

Guardianship
Guardianship
Authority not derived from ward
Relationship is created irrespective of consent and
capacity
Not subject to control of ward
Substituted by law
Represent one with no capacity to contract

J.

Agency

Agency
Authority derived from principal
Relationship founded on consent
Subject to control of the principal
Appointed by the principal
Represents one with capacity to Contract

Trust 1440
Trust
Title and control of the property under the trust
instrument passes to the trustee who acts in his
own name
a trust may ordinarily be terminated only by the
fulfillment of its purpose
based on the idea of discretion in the trustee and
guidance by the settler or cestui only to a limited
extent and when expressly provided for
it is possible for a trustee to be an agent also
where extensive direction and control are kept
over the trustee

Agency
Represents and acts for his principal

Agency may in general be revoked at any time.

formed with the thought of constant supervision
and control by principal,

Shell v. Firemens Insurance Co., G.R. No. L-8169, January 29, 1957
o Dela Fuente carried Shells Brand Name

Fressel v. Mariano Uy Chaco, G.R. No. 10918, March 4, 1916

Nielson v. Lepanto Consolidated, G.R. No. 21601, December 28, 1968
o Contract to operate
Quiroga v. Parsons Hardware, G.R. No. 11491, August 23, 1918
Gonzalo Puyat v. Arco Amusement, G.R. No. 47538, June 20, 1941
Ker v. Lingad, G.R. No. L-20871, April 30, 1971
o Facts:
CIR assessed the sum of P20,272.33 as the commercial brokers percentage tax, surcharge,
and compromise penalty against Ker & Co. Ker and Co. requested for the cancellation of the

assessment and filed a petition for review with the Court of Tax Appeals. The CTA ruled that Ker
and Co is liable as a commercial broker. Ker has a contract with US rubber. Ker is the
distributor of the said company. Ker was precluded from disposing the products elsewhere
unless there has been a written consent from the company. The prices, discounts, terms of
payment, terms of delivery and other conditions of sale were subject to change in the discretion
of the Company.
Issue:
Whether the relationship of Ker and Co and US rubber was that of a vendor- vendee or
principal-broker
Ruling:
The relationship of Ker and Co and US rubber was that of a principal-broker/ agency. Ker and
Co is only an agent of the US rubber because it can dispose of the products of the Company
only to certain persons or entities and within stipulated limits, unless excepted by the contract
or by the Rubber Company, it merely receives, accepts and/or holds upon consignment the
products, which remain properties of the latter company, every effort shall be made by petitioner
to promote in every way the sale of the products and that sales made by petitioner are subject
to approval by the company. Since the company retained ownership of the goods, even as it
delivered possession unto the dealer for resale to customers, the price and terms of which were
subject to the companys control, the relationship between the company and the dealer is one
of agency.

Hahn v. CA, G.R. No. 113074, January 22, 1997

o FACTS:
Petitioner Alfred Hahn is a Filipino citizen doing business under the name and style "HahnManila". On the other hand, private respondent (BMW) is a nonresident foreign corporation
existing under the laws of the former Federal Republic of Germany, with principal office at
Munich, Germany.
On March 7, 1967, petitioner executed in favor of private respondent a "Deed of Assignment
with Special Power of Attorney. Per the agreement, the parties "continue[d] business relations
as has been usual in the past without a formal contract."
But on February 16, 1993, in a meeting with a BMW representative and the president of
Columbia Motors Corporation (CMC), Jose Alvarez, petitioner was informed that BMW was
arranging to grant the exclusive dealership of BMW cars and products to CMC, which had
expressed interest in acquiring the same.
On February 24, 1993, petitioner received confirmation of the information from BMW which, in a
letter, expressed dissatisfaction with various aspects of petitioner's business, mentioning
among other things, decline in sales, deteriorating services, and inadequate showroom and
warehouse facilities, and petitioner's alleged failure to comply with the standards for an
exclusive BMW dealer.
Nonetheless, BMW expressed willingness to continue business relations with the petitioner on
the basis of a "standard BMW importer" contract, otherwise, it said, if this was not acceptable to
petitioner, BMW would have no alternative but to terminate petitioner's exclusive dealership
effective June 30, 1993.
Because of Hahn's insistence on the former business relations, BMW withdrew on March 26,
1993 its offer of a "standard importer contract" and terminated the exclusive dealer relationship
effective June 30, 1993.
On April 29, 1993, BMW proposed that Hahn and CMC jointly import and distribute BMW cars
and parts.
Hahn found the proposal unacceptable. On May 14, 1993, he filed a complaint for specific
performance and damages against BMW to compel it to continue the exclusive dealership.

ISSUE:
Whether petitioner Alfred Hahn is the agent or distributor in the Philippines of private
respondent BMW
HELD:
Alfred Hahn is an agent of BMW.
The Supreme Court held that agency is shown when Hahn claimed he took orders for BMW
cars and transmits them to BMW. Then BMW fixes the down payment and pricing charges and
will notify Hahn of the scheduled production month for the orders, and reconfirm the orders by
signing and returning to Hahn the acceptance sheets.
The payment is made by the buyer directly to BMW. Title to cars purchased passed directly to
the buyer and Hahn never paid for the purchase price of BMW cars sold in the Philippines.
Hahn was credited with a commission equal to 14% of the purchase price upon the invoicing of
a vehicle order by BMW. Upon confirmation in writing that the vehicles had been registered in
the Philippines and serviced by him, Hahn received an additional 3% of the full purchase price.
Hahn performed after-sale services, including, warranty services. for which he received
reimbursement from BMW. All orders were on invoices and forms of BMW.
Moreover, the Court distinguished an agent from a broker. The court ruled that an agent
receives a commission upon the successful conclusion of a sale. On the other hand, a broker
earns his pay merely by bringing the buyer and the seller together, even if no sale is eventually
made.
V. Scope of authority as to business covered 1876
A. Universal
B. General
C. Special

Siasat v. IAC, G.R. No. L-67889, October 10, 1985

Dominion Insurance v. CA, G.R. No. 129919, February 6, 2002

VI. Scope of authority as to power conferred 1877 to 1880

A. Couched in general terms (GPA)
B. Couched in specific terms (SPA)

1. Mortgage 1878 (2)

BPI v. De Coster, G.R. No. 23181, March 16, 1925

Mercado v. Allied Banking Corporation, G.R. No. 171460, July 27, 2007

2. Loan/borrow 1878(7)

Hodges v. Salas, G.R. No. L-42958, October 21, 1936

3. Sell 1878(5)

Katigbak v. Tai Hing Co., G.R. No. 29917, December 29, 1928
Goquiolay v. SyCip, G.R. No. L-11840, July 26, 1960

4. Lease 1878(8)

Chua v. IAC, 229 SCRA 99

5. Compromise 1878(3)

Dungo v. Lopena, G.R. No. L-18377, December 29, 1962

Vicente v. Geraldez, G.R. No. L-32473, July 13, 1973

6. Other acts of strict dominion 1878(12)

Insular Drug Co. v. PNB, G.R. No. 38816, November 3, 1933