SO FAR AS THIRD PERSONS ARE

CONCERNED, AN ACT I S DEEMED TO HAVE

BEEN PERFORMED WI THI N THE SCOPE OF
THE AGENT S AUTHORI TY, I F SUCH ACT I S
WI THI N THE TERMS OF THE POWER OF
ATTORNEY, AS WRI TTEN, EVEN I F THE
AGENT HAS I N FACT EXCEEDED THE LIMI TS
OF HI S AUTHORITY ACCORDI NG TO AN
UNDERSTANDING BETWEEN THE PRI NCI PAL
AND THE AGENT.
( N)

Art 1900
Scope of Agents Authority
1) Where authority not in writing
2) Where authority in writing
RESPONSIBILITY OF PRINCIPAL WHERE
AGENT ACTED WITH IMPROPER MOTIVES
1) General Rule-the motive of the agent in entering
into contract to a third person is immaterial, where a
written authority given to an agent covers the thing
done by him on behalf of the principal, it is not
competent to the court to look into the minds of the
agent and if he had applied his authority for his own
ends, to hold that the principal is not bound.
2) Exceptions
A) Where the third person knew that the agent was acting for
his private benefit.
B) Where the owner is seeking recovery of personal property of
which he has been lawfully deprived.
A THIRD PERSON CANNOT SET UP THE
FACT THAT THE AGENT HAS EXCEEDED
HIS POWERS, I F THE PRINCI PAL HAS
RATI FI ED, OR HAS SI GNI FI ED HI S
WI LLI NGNESS TO RATI FY THE AGENT S
ACTS. ( N)
Art. 1901
RATIFICATION BY THE PRINCIPAL
1) Binding Effect of Ratification- the principal is not
bound by the contract of his agent should the latter
exceed his power.
2) Only Principal Can Ratify
3) Receipt by Principal of Benefits of Transaction-
where a person acts for another who accepts or
retains the benefits or proceeds of his effort with
knowledge of the material facts surrounding the
transaction, the latter must be deemed to have
ratified the methods employed.
A THIRD PERSON WI TH WHOM THE
AGENT WI SHES TO CONTRACT ON
BEHALF OF THE PRI NCI PAL MAY RE-
QUI RE THE PRESENTATI ON OF THE
POWER OF ATTORNEY, OR THE
I NSTRUCTI ONS AS REGARDS THE
AGENCY. PRI VATE OR SECRET OR- DERS
AND I NSTRUCTI ONS OF THE PRI NCI PAL
DO NOT PREJUDI CE THI RD PERSONS
WHO HAVE RELI ED UPON THE POWER
OF ATTOR- NEY OR INSTRUCTIONS
SHOWN THEM. ( N)
Art. 1902
THE COMMI SSI ON AGENT SHALL BE
RESPON- SI BLE FOR THE GOODS
RECEI VED BY HIM I N THE TERMS AND
CONDI TIONS AND AS DESCRIBED I N THE
CONSI GNMENT, UNLESS UPON
RECEI VI NG THEM HE SHOULD MAKE A
WRI TTEN STATE- MENT OF THE DAMAGE
AND DETERI ORATI ON SUFFERED BY THE
SAME. ( N)
Art. 1903
A factor of commission agent is one whose business
is to receive and sell goods for a commission(as
called factorage) and who is entrusted by the
principal with the possession kf goods to be sold, and
usually selling in his own name.
THE COMMISSION AGENT WHO
HANDLES GOODS OF THE SAME KIND
AND MARK, WHICH BELONG TO
DIFFERENT OWNERS, SHALL
DISTINGUISH THEM BY COUNTER-
MARKS, AND DESIGNATE THE
MERCHANDISE RESPECTIVELY
BELONGING TO EACH PRINCIPAL. (N)
Art. 1904
THE COMMI SSI ON AGENT CANNOT,
WI THOUT THE EXPRESS OR IMPLIED
CONSENT OF THE PRI NCI PAL, SELL ON
CREDI T. SHOULD HE DO SO, THE
PRI NCI PAL MAY DEMAND FROM HIM
PAYMENT I N CASH, BUT THE
COMMI SSI ON AGENT SHALL BE
ENTI TLED TO ANY I NTEREST OR
BENEFI T, WHI CH MAY RESULT FROM
SUCH SALE. ( N)
Art. 1905
Right of principal where sale on credit made
without authority
1) He may require payment in cash, in which case,
any interest or benefit from the sale on credit shall
belong to the agent since the principal cannot be
allowed to enrich himself at the agents expense; or

2) He may ratify the sale on credit in which case it
will have all the risks and advantages to him.
SHOULD THE COMMI SSI ON AGENT,
WI TH AU- THORI TY OF THE PRI NCI PAL,
SELL ON CREDI T, HE SHALL SO I NFORM
THE PRI NCI PAL, WITH A STATEMENT OF
THE NAMES OF THE BUY- ERS. SHOULD
HE FAI L TO DO SO, THE SALE SHALL BE
DEEMED TO HAVE BEEN MADE FOR
CASH I NSOFAR AS THE PRI NCI PAL I S
CONCERNED. ( N)
Art. 1906
SHOULD THE COMMI SSI ON AGENT
RECEI VE ON A SALE, I N ADDI TION TO
THE ORDINARY COMMI SSI ON, ANOTHER
CALLED A GUARANTEE COMMI SSI ON, HE
SHALL BEAR THE RI SK OF COLLECTI ON
AND SHALL PAY THE PRINCI PAL THE
PROCEEDS OF THE SALE ON THE SAME
TERMS AGREED UPON WI TH THE PUR-
CHASER. ( N)
Art 1907
Meaning and purpose of guarantee
commission
1) Guarantee commission (also called del credere
commission) is one where, in consideration of an
increased commission, the factor or commission
agent guarantees to the principal the payment of
debts arising through his agency.
2) The purpose of the guarantee commission is to
compensate the agent for the risks he will have to
bear in the collection of the credit due the principal.
THE COMMI SSI ON AGENT WHO DOES
NOT COL- LECT THE CREDI TS OF HI S
PRI NCI PAL AT THE TI ME WHEN THEY
BECOME DUE AND DEMANDABLE SHALL
BE LI ABLE FOR DAM- AGES, UNLESS HE
PROVES THAT HE EXERCI SED DUE
DI LI GENCE FOR THAT PURPOSE. ( N)
Art. 1908
THE AGENT I S RESPONSIBLE NOT ONLY
FOR FRAUD, BUT ALSO FOR
NEGLI GENCE, WHICH SHALL BE JUDGED
WI TH MORE OR LESS RI GOR BY THE
COURTS, ACCORDING TO WHETHER THE
AGENCY WAS OR WAS NOT FOR A
COMPENSATI ON. ( 1726)

Art. 1909