EL ESTADIO MIS 5E EN LA REGION CANTÁBRICA. ESTADO DE LA CUESTION

Another possible obligation of an agent may result from an appointment of substitute

BE: X appoints Y as his agent to sell his (X) products in Cebu City. Can Y appoint sub- agent? And if he does what are the effects of this appointment?

A: Yes, the agent may appoint a substitute or sub- agent, if the principal does not prohibit him in doing so. But he shall be responsible for the acts of the substitute (because he was not given authority by the principal) especially if one appointed turns to be incompetent or insolvent.

Atty. Uribe: Is this correct?

Mukhang mali. Mukhang confused ang sagot. Ang tanong sub-agent? Can Y appoint sub-agent? Yes, the agent may appoint substitute or sub-agent which means apparently there is no distinction between a sub-agent and substitute. With due respect to the answer of the UP Law Center, Professor de Leon is really good on this matter, a sub-agent is very much different from a substitute.

If it is in replacement (kapalit) that is a substitute which means that the agent would be disassociating himself from the agency (Aalis na sya or lalabas na sya ng Pilipinas etc.) and somebody else must take over his functions.

An agent who appoints a sub-agent will continue to be an agent in that agency relationship. He does not disassociate himself from the relationship. He is still the agent and therefore all the rights and obligations would still be there even if he appointed a sub-agent. But if the agent appointed a substitute, the answer will depend on Art 1892.

Kung ang tanong ay substitute and during the management of the business by the substitute, losses were incurred by the principal, mask isang taon pa lng ang substitute 2M was incurred by the principal, may the principal hold the agent liable? Iba ung can the principal hold the substitute liable?

A: The first thing you have to consider is if he was prohibited in appointing a substitute or not. If he was prohibited he will be held liable because he appointed 1 despite the prohibition. In fact, under the law all acts of the substitute appointed, if it is against the prohibition, such acts are void. If he was not prohibited under the law, he shall be responsible for the acts of the substitute under certain circumstances. Take note that the operative word here is responsible and not liable. You may be responsible - there are consequences.

If he was not prohibited there are 2 scenarios:

(1) Not prohibited but he was neither given the power to appoint or

(2) He was not prohibited precisely because he was given the power to appoint.

Kung he was not prohibited he but he also lacks the power to appoint, ang scenario dito wala lng namention sa SPA so nothing was mentioned in the SPA regarding the appointment of the substitute. Ang ibig sabihin nun he was not

prohibited and he was neither given the power to appoint. If that is the case will he be liable necessarily because of losses which were incurred by the principal?

A: Hindi naman. If the substitute acted within the scope of authority in representation of the principal and the substitute acted in good faith with the diligence of a good father of the family, nonetheless losses were incurred by the principal - Pwede bang mangyari un? Yes, ang negosyo ay negosyo kahit na napakagaling mo pang negosyante kung palugi na talaga negosyo, there are forces beyond the control of every person. To be factual about this kapag ngcoconstruct ng LRT halimbawa sa Aurora boulevard, during the construction stage ilang taon yan 2 or 3 years, sa tingin nyo kung may restaurant pa dyan buhay pa ba? Wala na kakain dyan puro alikabok na.

As long as he acted within the scope of his authority, in representation of the principal and he acted with good faith, the agent cannot be held liable. He is responsible for the acts of the substitute and if the substitute acted within the scope of authority di ba. This is consistent to the principle of agency - that the agent is not the insurer of the success of the business of the principal. Otherwise, wala na mag-a-agent dahil kapag nalugi liable sya.

However, if in the management of the business of the principal losses were incurred because the substitute misappropriated the income of the business or acted with gross negligence, mga once a week lng nya dinadalaw ang business, if that is the case, the agent will be responsible for the acts of the substitute and he may be held liable for the losses incurred by the principal because the substitute acted negligently, outside the scope of the authority and in bad faith.

However, if the agent was given the power to appoint, there may be 2 scenarios:

(1) The person to be appointed as the substitute may have been designated or (2) the person to be appointed was not designated.

Sabi ng principal – “ok you can appoint a substitute but if you will appoint a substitute, appoint Pedro”. If the agent appointed Pedro, would he be held liable for the losses incurred by the principal coz of the acts of Pedro? A: Hindi naman. The substitute was designated because the principal said that he should appoint Pedro kaya inaapoint nya si Pedro but this should be subjected to the provision of agency that he should not carry out the agency if such would manifest loss or damage to the principal.

Example

At the time of the appointment, the agent was at that time fully aware that the person was

notoriously incompetent. He should have at least informed the principal that the substitute is notoriously incompetent. If he failed to do so having the opportunity to inquire, then he can be held liable.

If the person to be appointed was not designated, he will only be liable if the substitute turns out to be notoriously incompetent or insolvent. (Article 1892).