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Read also: MAY AN AGENT APPOINT A SUBSTITUTE OR SUB-AGENT?
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Two or more agents appointed by the principal is assumed to have joint obligation
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If solidarity has been agreed upon, each of the agents is responsible for the non-fulfillment of the agency, and for the fault or negligence of his fellow agents
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An agent who exceeds his powers does not act as such agent, and, therefore, the principal assumes no liability to third persons.
The essence of agency is representation. For a Contract of Agency to exist, it is essential that the principal consents that the agent shall act on the former’s behalf and the agent consents to such act. The agent is bound by his acceptance to carry out the agency, and is liable for the damages which, through his non-performance, the principal may suffer.
However, may principal appoint two or more agent for a common transaction? What would be the liability of each of the agents?
CIVIL CODE PROVIDES THAT:
The responsibility of two or more agents, even though they have been appointed simultaneously, is not solidary, if solidarity has not been expressly stipulated.
However, if solidarity has been agreed upon, each of the agents is responsible for the non-fulfillment of the agency, and for the fault or negligence of his fellow agents, except in the latter case when the fellow agents acted beyond the scope of their authority.
Accordingly, two or more agents appointed by the principal is assumed to have joint obligation. In a joint obligation, each debtor is liable only for a proportionate part of the debt.
However, if the agents agreed to have a solidary obligation, each debtor is liable for the entire obligation. And if solidarity has been agreed upon, each of the agents becomes solidarily liable:
- for the non-fulfillment of the agency even though the fellow agents acted beyond the scope of their authority; and
- for the fault or negligence of his fellow agents provided the latter acted within the scope of their authority. The innocent agent has a right later on to recover from the guilty or negligent agent.
An agent who exceeds his powers does not act as such agent, and, therefore, the principal assumes no liability to third persons. Since this is so, solidary liability cannot be demanded by the principal.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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