Short answer. Act as a prudent person would. Under Article 1887, the agent must follow the principal's instructions; but in default of any instruction, he shall do all that a good father of a family would do, as required by the nature of the business. So where you left a gap, your agent falls back on ordinary prudence.
What the law says
In default thereof, he shall do all that a good father of a family would do, as required by the nature of the business.
Civil Code, Article 1887 — Following the Principal's Instructions. Read the full provision →
Instructions first
An agent's primary compass is the principal's instructions. Article 1887 opens with the rule: in the execution of the agency, the agent shall act in accordance with the instructions of the principal. The agent is not there to do what he thinks best in the abstract; he is there to carry out the principal's will, and where the principal has said how the task is to be done, the agent must follow that. Instructions are the whole point of the arrangement — the principal is directing his own affairs through the agent's hands.
The gap-filler: a good father of a family
No principal can foresee everything, so the article supplies a standard for the unforeseen. In default thereof, he shall do all that a good father of a family would do, as required by the nature of the business. Where there is no instruction covering the situation, the agent does not freeze, and he does not do whatever he pleases — he acts as a reasonably prudent person would in that line of business. The measure is twofold: the ordinary diligence of a careful person, and what the nature of the particular business requires. So an agent faced with an unaddressed decision asks what a sensible person managing this kind of affair would do, and does that.
Judgement in the principal's interest, not the agent's
The gap-filling standard is not a blank cheque. It asks what a prudent person would do in the principal's interest, judged by the needs of the business — not what suits the agent. So an agent using this rule must still act for the principal, choose the course a careful manager would choose, and avoid decisions that serve himself or take reckless risks with the principal's affairs. When something urgent arises and there is no time to ask, this is the standard that guides him: do what a sensible person would do to protect and advance the principal's interest.
For principal and agent
For a principal, this is reassuring but also a prompt: your agent will fill genuine gaps with sensible judgement, but the more clearly you instruct on the points that matter to you, the less he has to guess. Spell out anything you feel strongly about; leave the rest to his prudence. For an agent, follow the instructions you have, and where none covers a situation, act as a careful person in that business would, in the principal's interest — and consult the principal where you reasonably can.
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.
- Bank of the Philippine Islands and FGU Insurance Corporation vs. Yolanda Laingo, G.R. No. 205206, March 16, 2016 — read the decision on LawPhil →
- Gregorio V. Tongko vs. The Manufacturers Life Insurance Co. (Phils.), Inc. and Renato A. Vergel de Dios, G.R. No. 167622, January 25, 2011 — read the decision on LawPhil →