Short answer. Yes, very likely. Under Article 1869 of the Civil Code, agency can arise not only from an express appointment but also from the principal's silence or failure to repudiate another person's acts, provided the principal knew those acts were being done on their behalf. Your silence while aware of your friend's dealings can create a legally binding implied agency.
What the law says
Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority.
Civil Code, Article 1869 — Express or Implied Agency. Read the full provision →
How agency can arise without a written appointment
Article 1869 of the Civil Code recognises two broad forms of agency: express (a formal appointment, oral or written) and implied. Implied agency can emerge from a principal's own conduct — including their silence or inaction — when they are aware that someone else is acting on their behalf. No signed document, no specific words, and no conscious intent to 'appoint' an agent is required. The law looks at what the principal knew and what they did — or failed to do — in response.
The knowledge requirement is critical
Silence alone is not enough. Article 1869 specifies that the implied agency arises when the principal remains silent knowing that another person is acting on their behalf without authority. If you genuinely did not know your friend was entering deals in your name, no implied agency is created by that ignorance. But if you were aware and still said nothing — no call, no letter, no message — the law treats that silence as acquiescence. The deals your friend made can bind you as if you had formally authorised them.
What this means for the deals your friend entered
Once an implied agency is found, your friend's acts within the scope of those dealings bind you as the principal. Third parties who transacted with your friend in good faith, relying on the apparent authority you allowed to exist, may hold you to those agreements. You cannot simply walk away from contracts by saying no formal appointment was ever signed. The other side's good faith reliance on the apparent authority is protected.
How to stop the agency going forward
If you want to end the implied agency, you need to repudiate it clearly and promptly — tell your friend, and if practicable, put third parties on notice that your friend no longer has authority to act on your behalf. Continuing to stay silent while new deals are made will simply extend the agency further. What you do after learning of the problem matters as much as what happened before. Speak to a lawyer early if there are pending transactions that could create further liability.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Sps. Fernando and Lourdes Viloria vs. Continental Airlines, Inc, G.R. No. 188288, January 16, 2012 — read the decision on LawPhil →
- Yun Kwan Byung vs. Philippine Amusement Gaming Corporation, G.R. No. 163553, December 11, 2009 — read the decision on LawPhil →
- Professional Services, Inc. vs. Natividad & Enrique Agana, G.R. No. 126297, January 31, 2007 — read the decision on LawPhil →
- Samuel Parilla, et al. vs. Dr. Prospero Pilar, G.R. No. 167680, November 30, 2006 — read the decision on LawPhil →