ARTICLES 1927-1932

TULIAO, Maria Athena E.

ART. 1927
An agency cannot be revoked if a bilateral
contract depends upon it, or if it is the
means of fulfilling an obligation already
contracted, or if a partner is appointed
manager of a partnership in the contract or
partnership and his removal from the
management is unjustifiable.

GENERAL RULE

Agency may be revoked at the will of the

principal

EXCEPTIONS
a.
b.

When the agency is created not only for the

interest of the principal and the agent
When the agency is created for the mutual
interest of both the principal and the agent

REQUISITE FOR AGENCY TO BE

IRREVOCABLE FOR BEING COUPLED WITH
AN INTEREST

Interest of the agent must be in the subject

matter of the power conferred and not
merely an interest in the exercise of the
power

ART. 1928
The agent may withdraw from agency by giving
due notice to the principal. If the latter
should suffer any damage by reason of the
withdrawal, the agent must indemnify him
therefore, unless the agent should base his
withdrawal upon impossibility of continuing
the performance of the agency without grave
detriment to himself.

EFFECT WHEN AGENT SUES

PRINCIPAL
a.
b.

Will not ordinarily permit the continuatuon

of the agency
Such a complaint will be equivalent to
withdrawal of the agent from the agency

KINDS OF WITHDRAWAL
a.
b.

Without just cause

With just cause

OBLIGATION OF AGENT IF HE
WITHDRAWS FROM AGENCY WITHOUT
JUST CAUSE

Notify principal (even if with just cause)

Indemnify the principal should the latter
suffer any damage by reason of such
withdrawal

ART. 1929
The agent, even if he should withdraw from
agency for a valid reason, must continue to
act until the principal has had reasonable
opportunity to take the necessary steps to
meet the situation.

REASON:

To prevent damage to the principal

ART. 1930
The agency shall remain in full force and
effect even after the death of the principal,
if it has been constituted in the common
interest of the latter and of the agent, or in
the interest of a third person who has
accepted the stipulation in his favor.

EXCEPTIONS
1. If the agency has been constituted in the
common interest of the principal and the
agent; and
2. If the agency has been constituted in the
interest of a third person who has accepted
the stipulation in his favor

ART. 1931
Anything done by the agent, without
knowledge of the death of the principal or of
any other cause which extinguishes the
agency, is valid and shall be fully effective
with respect to third persons who may have
contracted with him in good faith.

The law requires that there must be good

faith
- The death of the principal extinguishes the
agency, but in the same way that revocation
of the agency does not prejudice persons
who have dealt with the agent in good faith
without the notice of the revocation

ART. 1932
If the agent dies, his heirs must notify the
principal thereof, and in the meantime adopt
such measures as the circumstances may
demand in the interest of the latter.

EFFECT OF AGENTS DEATH IN CASE

AGENCY COUPLED WITH AN INTEREST

Generally, the agents death terminates the

agency for it should not be continued by one
upon whom the principal has reposed no
cpnfidence

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