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AGENCY - Doctrine of apparent authority

AGENCY -  Doctrine of apparent authority

Doctrine of apparent authority –– The bank, in its capacity as principal, may also be adjudged liable under the doctrine of apparent authority; the principal’s liability in this case however, is solidary with that of his employee; the doctrine of apparent authority or what is sometimes referred to as the “holding out” theory, or the doctrine of ostensible agency, imposes liability, not “as the result of the reality of a contractual relationship, but rather because of the actions of a principal or an employer in somehow misleading the public into believing that the relationship or the authority exists.” (Citystate Savings Bank vs. Tobias, G.R. No. 227990, March 07, 2018)

––   The existence of apparent or implied authority is measured by previous acts that have been ratified or approved or where the accruing benefits have been accepted by the principal; it may also be established by proof of the course of business, usages and practices of the bank; or knowledge that the bank or its officials have, or is presumed to have of its responsible officers’ acts regarding bank branch affairs. (Citystate Savings Bank vs. Tobias, G.R. No. 227990, March 07, 2018)

Source: Supreme Court of the Philippines

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