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Weeks 3 & 4 - Obligations, Powers & Liabilities of the Agent

August 19 & 26, 2026
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Obligations, Powers & Liabilities of the AgentArts. 1881-1909

Weeks 3 & 4 Coverage Table

The table below mirrors the syllabus list for August 19 and 26, 2026. Entries marked supra were digested in an earlier week; the link points to that original digest.
#Assigned CaseTopic/SubtopicDigest
1San Miguel Corporation v. Trinidad, G.R. No. 237506, July 28, 2020, suprae. Obligation to act in accordance with the principal's instructions and to be diligent (Art. 1887, cf: Art. 1902, Art. 1888)
2Spouses Villaluz v. Land Bank of the Philippines, G.R. No. 192602, January 18, 2017h. Power of agent to appoint a substitute (Arts. 1892-1893)
3Serona v. Court of Appeals, G.R. No. 130423, November 18, 2002h. Power of agent to appoint a substitute (Arts. 1892-1893)
4National Power Corp. v. National Merchandising Corp., G.R. Nos. L-33819 & L-33897, October 23, 1982j. When agent personally liable to third persons (Art. 1897)
5Development Bank of the Phils. v. Court of Appeals, G.R. No. 109937, March 21, 1994j. When agent personally liable to third persons (Art. 1897)
6Cervantes v. CA, G.R. No. 125138, March 2, 1999m. Consequences if agent contracts in the name of the principal and if he contracts in his own name (Arts. 1898, 1893)
7Rural Bank of Bombon (Camarines Sur), Inc. v. CA, G.R. No. 95703, August 3, 1992m. Consequences if agent contracts in the name of the principal and if he contracts in his own name (Arts. 1898, 1893)
8Green Valley Poultry & Allied Products, Inc. v. IAC, G.R. No. L-49395, December 26, 1984o. Specific obligation rules for commission agents (Arts. 1903-1909) — Ordinary agent v. Commission agent
Note on the syllabus outline. Item (m) is captioned "Consequences if agent contracts in the name of the principal and if he contracts in his own name (Arts. 1898, 1893)." The article governing an agent who contracts in his own name is Art. 1883, not Art. 1893 (which concerns the appointment of a substitute and belongs to item (h)). The topic labels above reproduce the syllabus as written; the digests discuss Arts. 1898 and 1883, which are the provisions the caption actually describes.

Study Notes

Article 1897 is the spine of these two weeks. The agent who acts within his authority and in the principal's name drops out of the transaction entirely. He becomes personally liable only in two situations: (a) he expressly binds himself, or (b) he exceeds the limits of his authority without giving the third party sufficient notice of his powers. NAPOCOR v. NAMERCO is the classic illustration of (b) — the agent quietly dropped its principal's shipping-availability condition and was made to answer for the liquidated damages.
Acting "in the principal's name" is a separate requirement. Rural Bank of Bombon separates the two ideas cleanly: the attorneys-in-fact there had authority to mortgage, but they executed the mortgage in their own names, so the bank acquired nothing. Authority without representation is not agency.
Substitution is permitted unless prohibited. Villaluz reads Arts. 1892–1893 together: an agent may appoint a substitute where the principal has not forbidden it, and the substitute's acts bind the principal. Serona is the criminal-law counterpart — entrusting goods to a sub-agent is not the "misappropriation or conversion" that estafa requires, though the agent remains civilly liable for the unremitted proceeds.
When the characterization is contested, check both branches. Green Valley Poultry is a useful exam pattern: the Court held the distributor liable whichever way the contract was read — as an agent who sold on credit without authority (Arts. 1905–1906), or as a buyer who simply owed the price.
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