CASE ANALYSIS: Start your answer with either YES or NO, if applicable, to be
followed by your legal reasons. A mere YES or NO answer without any reason
shall be treated as a mere guess work and hence, not entitled to any points.
BOTH the INITIAL ANSWER and the LEGAL REASON/s must be correct to be given
a credit. Be sure that your answer is brief and direct to the point. No erasures
and/or alterations of answers. Maximum of THIRTY-FIVE (35) important words only.
Do no repeat the question.
I
JC and Prince entered into a contract, whereby it was agreed that the Prince
shall administer and manage certain haciendas belonging to JC. In the
contract, it was stipulated that Prince shall have the power to contract the
services of labourers to work in the fields, that he can fix their compensation,
and that he can make improvements on the property. What contract was
perfected in this case – a contract of agency or a contract of employment?
Provide reasons.
ANALYSIS: Based on Article 1876, a contract of agency was perfected because
Prince, as a special agent, was authorized by JC to represent him to act in more
specific transactions for the property.
II
Adam sold a piece of land owned by his father to KD, signing as the owner’s
agent. The fact, however, is that no power of attorney has been executed in
Adam’s favor. Later on, in the presence of witnesses, Adam told KD that he
would abide by the sale. Can KD sue Adam for the enforcement of the sale?
Explain with reasons.
ANALYSIS: Yes, because on Article 1878, a special power of attorney given by
the principal to the agent is necessary in entering any contract which involves
the sale or acquisition of immovable property of the principal.
III
Lothar as an agent, with general powers of administration, leased to Emerald 2
parcels of land belonging to Eugene, his principal. One contract for 10 years
P1,000 a year payable annually, and another one without a fixed term at
P100.00 a month payable monthly. Do you think that these contracts are valid
and binding upon the principal? Give your reasons.
ANALYSIS: In Article 1878, lease for 10 years is void because SPA is needed for
lease period of more than 1 year. But Article 1687 allows lease without fixed term
because it’s payable on monthly basis.
IV
Arnold sold a large parcel of land in Cebu to Mel for P100 million payable in
annual instalments over a period of 10 years, but title will remain with Arnold until
the purchase price is fully paid. To enable Mel to pay the price, Arnold gave him
a power-of-attorney authorizing him to subdivide the land, sell the individual lots,
and deliver the proceeds to Arnold’s, to be applied to the purchase price. 5
years later, Arnold’s revoked the power of attorney and took over the sale of the
subdivision lots himself. Is the revocation valid or not? Why?
ANALYSIS: Under Article 1927, the revocation is not valid because an agency
cannot be revoked if a bilateral contract depends on it or if it is the means of
fulfilling an obligation already contracted.
V
In 2000, Anthony executed a power of attorney authorizing Ben to sell a parcel
of land consisting of 12 hectares. Anthony died in 2004. In 2006, Anthony’s
children sold 12 hectares of the land to Criselle. In 2007, Ben sold 8 hectares of
the same land to Dante. It appears that Criselle did not register the sale
executed by Anthony’s children. Dante, who was not aware of the previous
sale, on the other hand registered the sale executed by Ben whose authority to
sell was annotated on the back of the original certificate of title. (1) What was
the effect of the death of Anthony upon B’s authority to sell the land? Explain
your answer with reason.
ANALYSIS: In Article 1931, the death of principal extinguishes the agency but in
same way, revocation of the agency does not prejudice third persons who
dealt with the agent in good faith without notice of revocation.
VI
(a) What is a commission agent? How would you distinguish a commission agent
from a broker?
Commission Agent represents buyers/sellers in the property transaction,
also maintains a relation with the principal, the purchaser, and the property
itself. However, a Broker only acts as intermediary between the purchaser and
the seller.
(b) Distinguish between an ordinary commission and a guarantee commission.
Ordinary commission is the commission payable by principal to agent for
the sale of goods. Guarantee commission is the additional amount payable by
principal to the agent to compensate the risk for collecting credit sales.