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(10) To Bind the Principal in a Contract of PartnershipEvery agreement by the agent on behalf of the principalwhich has the effect of obliging the principal to contributemoney or industry to a common fund with the intention ofderiving profits therefrom would be unenforceable without aspecial power of attorney having been previously given to theagent, for it in effect makes the principal a partner in apartnership. (Art. 1767). (11) To Obligate the Principal as a Guarantor or SuretyUnder Article 2047 of the Civil Code, by the contract ofguaranty, the guarantor binds himself to fulfill the obligation ofthe principal debtor in case the latter should fail to do so; andif the person binds himself solidarily with the principal debtor,he becomes a surety under a contract of suretyship.Therefore, under paragraph numbered 11 of Article 1878,no contract of guaranty or surety is enforceable against theprincipal when it has been entered into by an agent whopossesses no special power of attorney to do soIt has been held that a contract of guaranty or suretycannot be inferred from us of vague or general words ofcommitment. Thus, the authority given by the corporation toits agent to approve a loan up to P350,000 without anysecurity requirement does not include the authority to issueguarantees for any amount. BA Finance Corp. v. Court ofAppeals, 211 SCRA 112 (1992). Thus:A power of attorney to sell or lease the property of the principal with the provision that empowers the agent "to perform and execute all and every lawful and reasonable act as fully andeffectively as I might or could do if personally present," cannot be construed toinclude the power to enter into a contract of guaranty to bind the principal. Director of Public Works v. Sing Juco, 53 Phil. 205 (1929). A power of attorney to loan money does not include the implied power to make the principle a surety for the payment of the debt a third person. Bank of P.I. v. Coster, 47 Phil. 594 (1925).49
It should be recalled that under Article 1403[b] of theCivil Code, a contract of guaranty is unenforceable unless it ismade in writing. Consequently, even when the agent has therequisite special power of attorney to enter into a contract ofguaranty in behalf of the principal, the result contract wouldbe unenforceable if not reduced in writing.(12) To Create or Convey Real Rights Over ImmovableUnder paragraph numbered 12 of Article 1878, an agentcannot, in the name of the principal, create or convey realrights over immovable property without being possessed of aspecial power of attorney; otherwise, the resulting contractwould be unforceable against the principal.The paragraph intends to cover dealings on immovableproperty outside of the sale of a piece of land or any interesttherein covered specifically under Article 1874, and contractsof purchase of a piece of land, and contracts of donations ofevery type of immovable property.