Article 1923. The appointment of a new agent for the same business or transaction revokes the previous agency from the day on which notice

thereof was given to the former agent, without prejudice to the provisions of the two preceding articles. (1735a)

Revocation by appointment of new agent.(1) Implied revocation of previous agency- Implied revocation: Principal appoints new agent for the same business or transaction provided there is ‘incompatibility’.- Revocation not effective between principal and agent unless communicated to the latter.- 3rd persons in good faith and w/o knowledge of revocation shall not be prejudiced.- No implied revocation where appointment of another agent NOT incompatible with authority of first agent.- No implied revocation if first agent not notified of appointment of new agent.

(2) Substitution of counsel of record- No substitution allowed unless the following requisites concur:

a. written request for substitutionb. written consent of the clientc. written consent of the attorney to be substitutedd. consent of attorney to be substituted cannot be obtained: show proof of notice that motion for substitution was served on him in accordance with manner prescribed by the Rules of Court.

NOTE! Mere filing of formal appearance by a new counsel cannot validly substitute the former. Requisites must be complied with for a valid substitution.

ART. 1921. If the agency has been entrusted for the purpose of contracting with specified persons, its revocation shall not prejudice the

latter if they were not given notice thereof. (1734)

Article 1922. If the agent had general powers, revocation of the agency does not prejudice third persons who acted in good faith and without knowledge of the revocation. Notice of the revocation in a newspaper

of general circulation is a sufficient warning to third persons. (n)

Effect of revocation in relation to 3rd persons.

(1) Agent authorized to contract with specified persons- Its revocation will not prejudice 3 rd persons until NOTICE is given to them.- Where SPA provides that the same is good not only for principal loan but also for individual, agricultural loan, or credit accommodation that agent may obtain and until SPA is revoked in a public instrument (copy of which furnished to the bank), absent any proof that bank had knowledge of the last three loans were w/o express authority of principal, the bank cannot be prejudiced.REASON: Since 3rd persons were led to believe by the principal that agent is authorized, they have the right to presume that representation exists absent notification by the principal.- NOTICE not required if 3rd persons already know the revocation.

(2) Agent authorized to contract with public in general- Agent has general powers: innocent 3rd persons dealing with the agent will not be prejudiced by the revocation before they had knowledge thereof.- However, revocation in a newspaper of general circulation is sufficient warning to 3rd persons.- PUBLICATION is notice to everybody WON 3rd persons have read it.

NOTE! In Art. 1921, notice of revocation “must” be personal. In Art. 1922, it “may” be personal.

Illustrative case: Central Surety & Insurance Co. vs. C.N. Hodges (pg. 594)

Article 1924. The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons. (n)

Revocation by direct management of business by principal himself- Article 1924 provides for another case of implied revocation:a. Unless principal desires that he and agent manage the business together, direct management of the business by the principal revokes agency for there would no longer be any basis for representation previously conferred.b. If principal’s purpose in directly managing the business is to avoid payment of agent’s commission, the implied revocation is in bad faith. The agent shall receive the commission due him.

- Article 1924 should be distinguished from Article 1916 which governs the relations as between themselves of 3rd persons who separately contract with the agent and the principal with regard to the same thing.

Article 1925. When two or more principals have granted a power of attorney for a common transaction, any one of them may revoke the

same without the consent of the others. (n)

Revocation by one of two or more principals.- Appointment of an agent by two or more principals for a common transaction makes them ‘solidarily’ liable to the agent for all consequences of the agency.- Any one of the principals is granted the right to revoke the appointment without the consent of the others.- Solidary obligations: act of one is the act of all.

Article 1926. A general power of attorney is revoked by a special one granted to another agent, as regards the special matter involved in the

latter. (n)

Partial revocation of general power by a special power.- Two agents are involved here:

1. to whom a general power is previously granted2. to whom a special power is given

- It may also apply where the special power is later granted to the same agent.- General power is impliedly revoked as to matters covered by the special power. The latter prevails over the former.- Notice of revocation to agent is indispensable.

ThArticle 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 of partnership and his removal from the management is

unjustifiable. (n)

Agency coupled with an interest.GENERAL RULE: “Principal may revoke an agency at will”Reason: Essence of agency is agent’s duty of obedience to the principal.EXCEPTIONS:

1. When agency is created not only for the interest of the principal but also for the interest of 3rd persons; and

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

- Either case, agency is deemed one coupled with an interest.- Agency cannot be revoked by the sole will of the principal as long as interest of the agent or of a 3rd person subsists because it is not solely the rights of the principal which are affected.- Irrevocable power of attorney obligatory only on the principal who executed the agency. It cannot affect one who is not a party.

3 instances of irrevocability:1. If a bilateral contract depends on the agency2. If it is the means of fulfilling an obligation already contracted3. If a partner is appointed manager of a partnership in the

contract of partnership; his removal from the management is unjustifiable

Termination of the agency.- Agency coupled with an interest cannot be revoked by sole will of the principal although it is revocable after the interest ceases.

(1) Interest in the subject matter of power conferred- Interest of the agent shall be in the subject matter of the power conferred, not merely an interest in the exercise of the power because it entitles him to compensation therefor. Here, agency is irrevocable.

Agency coupled with an interest:a. Agent has parted with value or incurred liability at principal’s

request, looking to the exercise of the power as the means of reimbursement or indemnity; or

b. Interest in the thing concerning which the power is to be exercised arises from an assignment, pledge or lien created by the principal with the agent being given the power to deal with the thing in order to make the assignment, pledge or lien effectual.

(2) Sufficiency of interest- An agent is not considered to have an interest in the subject matter simply because he expects to make a commission or profit from his employment as agent.- Agent’s remedy if principal terminates their contract: sue for breach of contract.

Terminology used by parties not controlling.- Agreement of parties and facts and circumstances of the case: determine whether an interest making an agency irrevocable exists- Terminology by parties not controlling.- Even if agency/power is made irrevocable in terms, revocation is not prevented where agency is not coupled with an interest.

Illustrative cases: Del Rosario vs. Abad and Abad (pg. 604) Kolb vs. Bennet Land Co. (pg. 605)

Revocability of agency coupled with an interest.(1) Where there is no just cause- Contract to revoke agency only abridges the “right” of the principal to revoke, not his “power” to revoke.- Authority given to agent is supplemented with an interest: both the right and power to revoke agency without the agent’s consent is taken away.- Purported revocation can have no effect unless by express provision the authority remain revocable.

(2) Where there is a just cause- Coupled with interest or not, authority can be revoked for a just cause, such as when agent betrays the interest of the principal.- Irrevocability of power of attorney may not be used to shield perpetration of the acts in bad faith, breach of confidence, or betrayal of trust by the agent. That would amount to holding the power with an interest as authorization to commit frauds against the principal.- Agent with power coupled with an interest cannot stand on better grounds than a partner insofar as irrevocability of power is concerned. “Irrevocable without just or lawful cause.”

Nature of agent’s interest in power given as security to him.- Agent’s power may be given as security without transferring to the agent any interest in the subject matter of the agency- Agent may be given an interest in the subject matter of the agency.

(1) Revocable by death of principal when without interest in subject matter- 1st case: Power or authority given as security, which, though irrevocable during the principal’s lifetime, is revoked by his death.- 2nd case: Power or authority coupled with interest, which is irrevocable by the principal, whether by any act during his lifetime or by his death.

(2) Contrary view- Neither type of power is revocable by the principal, whether during his lifetime or by his death.

“Agency” coupled with an interest not a true agency.- Persons with proprietary interest in the subject matter of their agency are not true agents at all.

- Sometimes said that such an agency merely differs from other types in that it is IRREVOCABLE.- This negates the possibility that it can be an agency relation as one of the hallmarks of agency relation is principal’s control over the agent concerning the object of the agency.- If principal cannot terminate the relation, he has surrendered that degree of control which an agency requires.

Article 1928. The agent may withdraw from the 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 therefor, unless the agent should base his withdrawal upon the impossibility of continuing

the performance of the agency without grave detriment to himself. (1736a)

Right of agent to withdraw.- Just as principal may revoke the agency at will, the agent may also renounce or withdraw from the agency at any time, without the consent of the principal, even in violation of latter’s contractual rights.- Agent subject to liability for breach of contract or tort.- Rule applies whether agency is gratuitous or for compensation. Basis of the rule is the constitutional prohibition against involuntary servitude.- Also consistent with the concept that agency is a voluntary relationship between parties.(1) Without just cause- Agent has duty to give notice to the principal and if withdrawal is without just cause, to indemnify the principal or damages that the latter may suffer by reason of the withdrawal.(2) With just cause- If agent withdraws from agency for a valid reason: grave detriment to himself, or due to fortuitous event, the agent cannot be liable.- Agent is prohibited to prefer his own interests; but he is not required to sacrifice his own interests just to serve the principal.

Article 1929. The agent, even if he should withdraw from the 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. (1737a)

Obligation of agent to continue to act after withdrawal.- Necessary steps like appointment of a new agent to remedy the situation caused by the withdrawal. Purpose: to prevent damage or prejudice to the principal.- Withdrawal of agent is on the condition that no damage results to the principal.- If agent wants to be relieved of making reparations when he withdraws for a just cause, he must continue to act so that no injury may be caused to the principal.- Obligation in this article is similar to that provided in Article 1885 in case of a person who declines the agency.

Article 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. (n)

When death of principal does not terminate agency.- Agency is terminated instantly by the death of the principal.- Reason: Agency is based on representation. No one to be represented where principal is already dead.

Exceptions (agency remains in full force and effect even after the death of the principal)

1. Agency constituted in the common interest of the principal and the agent; and

2. Agency constituted in the interest of a third who has accepted the stipulation in his favor.

Illustrative case: Chrysler Corporation vs. Blozic (pg. 612)