Duty Of A Person Dealing With An Agent

It is a settled rule that persons dealing with an agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it. (YU Eng Cho vs. Pan American World Airways, 385 Phil. 453 (2000). The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. (Safric Alcan & Cie vs. Imperial Vegetable Oil Co., Inc., 355 SCRA 559). If he does not make such an inquiry, he is chargeable with knowledge of the agent’s authority and his ignorance of that authority will not be any excuse. (Bacaltos Coal Mines vs. CA, 245 SCRA 460; Manila Memorial Park Cemetery, Inc. vs. Pedro Linsangan, G.R. No. 151319, November 22, 2004).