LAW ON AGENCY

ART 1868- PERSON BINDS HIMSELF TO RENDER SOME SERVICE OR TO DO SOMETHING IN

REPRESENTATION OR ON BEHALF OF ANOTHER, WITH THE CONSENT OR AUTHORITY OF THE LATTER.

**WHAT the agent really does for the principal is a juridical act, and not merely a material one. while
an agent may exercise discretionary powers, the lessee of services ordinarily performs only ministerial
functions.

** definition is very broad to include all situations in which one person is employed to render service
for another BUT EXCLUDES employer and employee, of master and servant and of employer and
independent contractor.

** a relationship which implies a power in an agent to contract with a third person on behalf of a
principal. It is this power to affect the principal’s contractual relations with third persons that
differentiates the agent from the employee, the servant, and the independent contractor.

** importance of agency – it enables man to increase the range of his individual and corporate activity
by enabling him to be constructively present in many places and to carry on diverse activities at the
same time.

CHARACTERISTICS – Principal, consensual, nominate, bilateral, preparatory, commutative and

generally onerous

**Also a representative relation , NOT a status since agency is not inherent or permanent.

__ it is a fiduciary relation since it is based on trust and confidence.

PARTIES TO THE CONTRACT:

Principal – he whom the agent represent and from whom he derives authority. He is the one
primarily concerned in the contract.

AGENTS – He who acts or stands for another. Usually, he is given full or partial discretion, but
sometimes he acts under a specific command. He may have his own agent, who is referred to as sub-
agent.
CAPACITY OF PRINCIPAL- If capacitated to act for himself, he can act thru an agent. He must therefore
be capacitated to give consent. If any special capacity is needed, it is he who must possess it and not
the agent, for the latter merely acts in his behalf.

Principal may be a NATURAL OR A JURIDICAL PERSON- matter of fact , a private corporation and a
partnership can only act thru agents.

GENERALLY, an emancipated minor can be a principal. So may a married woman. Husband may
appoint her as agent or administrator of his capital or conjugal partnership. Similarly, a married
woman may appoint her husband as an agent, say, of her paraphernal property.

CAPACITY OF AGENT – same as in the law of contracts. He must be able to bind himself, but only
insofar as his obligations to his principal are concerned. Insofar as third persons are concerned,
however, it is enough that his principal be the one capacitated, for generally an agent assumes no
personal liability. Usually therefore the contract with a stranger is valid, even if the agent be a minor
so long as his principal was capacitated. However, as between them (principal and agent), the minor
agent can set up his incapacity , provided he is not in estoppel.

PARTNERSHIP VS. AGENCY

** Agent acts not for himself but for his principal, partner acts for himself , for his firm and for his
partners. Partnership is a branch of the law on agency.

***agency from loan –agent may be given funds by the principal to advance the latter’s business, while
a borrower is given money for purposes of his own, and he must generally return it whether or not his
own business is successful .

Agency v. guardianship- agent represents capacitated person—guardian represents an incapacitated

person; agent appointed by principal—guardian by court; agent subject to directions of principal—
guardian not subject to directions of the ward but act for benefit of latter; agent can make principal
personally liable—guardian has no power to impose personal liability on ward.

Agency v. lease of property –agent is controlled by principal—lessee is not controlled by the lessor ;
agency may involve things other than property—obviously , a lease of property involves property only;
agent can bind the principal—lessee cannot bind the lessor.

Agency v. lease of services - agent represents principal – worker or the lessor of services does not
represent his employer; relationship can be terminated at will by principal or agent—can be terminated
at will by both; agent exercises discretionary powers—employee has ministerial functions; usually
involves 3 persons—involves only two persons.

Agency v. independent contractor – agent acts under control of principal – authorized to do work
according to his own methods; agents of agent may be controlled by principal – employees of
contractor are not the employees of the employer of the contractor; agent can bind the principal—
ordinarily, the independent contractor cannot bind the employer by tort; negligence of the agent is
imputable to principal – negligence of the independent contractor is generally not imputable to his
employer.
Agency v. negotiorum gestio- contract caused by meeting of minds, expressly or impliedly—there is
only a quasi contract, no meeting of minds; agent controlled by principal – officious manager follows his
judgment and presumed will of the owner with diligence; legal relation is created by parties—legal
relation is created by the law.

Agency v. Trust- agent usually hold no title at all—trustee may hold legal title to property ; agent acts in
name of principal- trustee may act in his own name; agency may be terminated or revoked any time—
trust ended by accomplishment of purpose; may not be connected at all with property—trust involves
control over property; agent has authority to make contracts bind upon principal—trustee does not
necessarily or even ordinarily possess such authority to bind the trustor or the cestui que trust. Agency
is really a contractual relation—a trust may be the result of the contract or not or it may be created by
law.

Brokerage-commission agent is one engaged in the purchase or sale for another of personal property
which for this purpose is placed in his possession and at his disposal. He maintains a relation not only
with his principal and purchaser or vendor, but also with the property which is the subject matter of the
transaction. ON THE OTHERHAND, A BROKER has no relation with the thing he buys or sells, he is merely
an intermediary between the purchaser and the vendor. He acquires neither the custody nor the
possession of the thing he sells. His only office is to bring together the parties to the transaction.

Acts that may be delegated to agents- general rule- what a man may do in person, he may do thru
another. Thus a stockholder may delegate to another his right to inspect the books of the corporation
because this is an act which he can lawfully do personally.

Some acts that cannot be done thru an agent—a. personal acts- right to vote, making of a will,
statement which are required to be made under oath b. criminal acts or acts not allowed by law-
delegating to another authority to do an act which if done by the principal would be illegal is void; aliens
purchasing private agricultural land through a Filipino agent.

Art 1869- agency may be express or implied from acts of principal, from his silence or lack of action or
his failure to repudiate the agency, knowing that another persons is acting on his behalf without
authority. Agency maybe oral, unless the law requires a specific form.

Example when law requires specific form—sale of land or any interest therein is through an agent,
authority of the latter shall be in writing, otherwise the sale shall be void.

Kinds of agency: 1. Express or implied; 2. Gratuitous or compensated/onerous; 3. General or special;

4. couched in general terms- comprise only acts of administration or couched in specific terms-
authorizing only the performance of a specific act or acts ; 5. Ostensible/representative- agent acts in
the name and representation of the principal or simple or commission- agent acts for the account of
the principal but in his own name. (art. 1883- agent acts on his own name but involves things owned by
principal)

Art 1870- acceptance by agent – express or implied from his acts to carry out the agency or from his
silence or inaction according to the circumstances.

Art 1871- between persons who are present, the acceptance of the agency may also be implied if the
principal delivers his power of attorney to the agent and the latter receives it without objection..

Art 1872- between persons who are absent, the acceptance of the agency cannot be implied from the
silence of the agent EXCEPT: 1. WHEN THE PRINCIPAL TRANSMITS HIS POWER OF ATTORNEY TO THE
AGENT, WHO RECEIVES IT WITHOUT ANY OBJECTION; 2. WHEN THE PRINCIPAL ENTRUSTS TO HIM BY
LETTER OR TELEGRAM A POWER OF ATTORNEY WITH RESPECT TO THE BUSINESS IN WHICH HE IS
HABITUALLY ENGAGED AS AN AGENT,AND HE DID NOT REPLY TO THE LETTER OR TELEGRAM.

ART.1873- If a person specifically informs another or states by public advertisement that he has given a
power of attorney to a 3rd person, the latter thereby becomes a duly authorized agent in the former case
with respect to the person who received the special information, and in the latter case with regard to
any person.

Communications of existence of agency: 1. By special information ; 2. By public advertisement- with

regard to any persons(newspaper, radio, posters, billboards, etc.)—REVOCATION- IN THE SAME
MANNER IN WHICH IT WAS GIVEN.

Art. 1874—When a sale of a piece of land or any interest therein is through an agent, authority of the
latter shall be in writing, otherwise the sale shall be void.

** sale of a piece of land or any interest thereon like usufruct, mortgage etc.. through an agent must be
in writing otherwise it is VOID. A letter containing an authority to sell is held sufficient. – THIS ARTICLE
SPEAKS ONLY FOR AGENCY FOR THE SALE OF A PIECE OF LAND OR ANY INTEREST THEREON. IT MAY BE
ARGUED THEREFORE THAT AN AGENCY TO PURCHASE NEED NOT BE IN WRITING BUT COVERED BY
ARTICLE 1878-(SPECIAL POWERS OF ATTORNEY

Art. 1875- Agency is presumed to be for a compensation unless there is proof to the contrary.

Broker- one who in behalf of others, and for a commission or fee, negotiates contracts relative to
property. He is the negotiator between parties, never acting in his own name, but in the name of those
who employ him. Middleman. His occupation is to bring parties together to bargain or to bargain for the
in matters of trade, commerce or navigation. HE IS AN AGENT WITH SPECIAL AND LIMITED AUTHORITY.
Art. 1876- agency either general or special- general comprises all the business of the principal. The
former comprises all business of the principal and latter, one or more specific transactions.

AGENTS CLASSIFIED:

1. UNIVERSAL AGENT- authorized to do all acts that the principal may personally do or he can
lawfully delegate to another the power of doing.
2. General agent – authorized to transact all the business of his principal, or all business of a
particular kind or in a particular place or in otherwords to do all acts connected with a particular
trade, business or employment.
3. Special or particular agent – authorized to act in one or more specific transactions or to act upon
a particular occasion.

ART.1877- Agency couched in general terms – acts of administration, even if principal should state the
he withholds no power or that the agent may execute such acts as he may consider appropriate, or even
though the agency should authorize a general and unlimited management.

Example- pedro made juan his agent : I make you my agent for all my properties. I withhold no power
from you. You may execute such acts as you may consider appropriate. You are hereby given general
and unlimited management. Q. may Juan compromise? A . NO ; Q. May juan accept or repudiate an
inheritance for Pedro? A.NO; Q. May Juan sell or mortgage Pedro’s lands? A. NO REASON:

THESE ARE ACTS OF STRICT DOMINION,NOT MERE ACTS OF ADMINISTATION. TO DO THE ACTS ABOVE
MENTIONED, AN AGENCY COUCHED IN GENERAL TERM IS NOT SUFFICIENT. SPECIAL POWER OF
ATTORNEY ARE NEEDED.

ACTS OF MERE ADMINISTRATION—sue for collection of debts; employ workers or servants and
employees needed; engage counsel to preserve the ownership and possession of principal’s property;
lease real property to another for one year or less provided lease is not registered; make customary gifts
for charity or to employees; borrow money if it be urgent and indispensable for preservation of things
under administration.

Art. 1878- Special powers of attorney-necessary in the following:

1. Make such payments as are not usually considered acts of administration.

2. Effect novation
3. Compromise,submit to arbitration, renounce right to appeal from judgment ,abandon
prescription, waive objections to venue of action.
4. Waive any obligation gratuitously
5. Enter into contract which ownership of an immovable is transmitted, acquired either
gratuitously or for a valuable consideration
6. Make gifts except customary one for charity or employees in the business managed by agent
7. Loan or borrow money unless urgent and indispensable for the preservation of the things which
are under administration
8. Lease any real property for more than 1 year
 9. Bind principal to render some service without compensation
10. Bind principal in a contract of partnership
11. Obligate the principal as guarantor or surety
12. Create or convey real rights over immovable
13. Accept or repudiate an inheritance
14. Ratify or recognize obligations contracted before the agency
15. Any other act of strict dominion-e.g. sale or purchase of personal property as capital asset but
not purchase of goods as part of inventory- these are acts of mere administration.

Art 1879-special power to sell excludes the power to mortgage and a special power to mortgage does
not include power to sell.

Art. 1880- A special power to compromise does not authorize submission to arbitration. –

Principal may have absolute confidence on agent but not with an arbitrator.

Art.1881- agent must act within the scope of his authority. Do such acts may be conducive to the
accomplishment of the purpose of the agency.

DOCTRINE OF AGENCY BY NECESSITY—Agency cannot be created by necessity—what is meant here is

that by virtue of the existence of an emergency, the authority of an agent is correspondingly enlarged in
order to cope with the exigencies or the necessities of the moment. Conditions necessary are:

1. Real existence of an emergency

2. Inability of the agent to communicate with the principal
3. Exercise of the addt’l authority for the principal’s own protection
4. Adoption of fairly reasonable means, premises duly considered
5. The ceasing of the authority the moment the emergency no longer demands the same

AUTHORITY VS. POWER- AUTHORITY IS THE CAUSE, POWER IS THE EFFECT. AUTHORITY COMES FROM
PRINCIPAL GIVENTO THE AGENT WHO THEREBY BECOMES EMPOWERED.

Kinds of authority: 1. Express 2. Implied- incidental to transactions or reasonable necessary to

accomplish purpose of the agency . 3. apparent or ostensible/authority by estoppels/implied 4.
General- refers to all business of the principal 5. Special 6. Authority by necessity- explained above
under article 1881.

Art. 1882- the limits of the agent’s authority shall not be considered exceeded should it have been
performed in a manner more advantageous to the principal than that specified by him.

Art. 1883—agent acts in his own name, the principal has no right of action against the persons with
whom the agent has contracted, neither have such person against the principal. Agent is directly
bound in favor of the person with whom he has contracted, as if the transaction were his own, except
when the contract involves things belonging to the principal. The provisions of this article shall be
understood to be without prejudice to the actions between the principal and agent.

OBLIGATIONS OF AGENT

Art. 1884- agent bound by accepting : 1. Carry out the agency 2.liable for damages through non-
performance, the principal may suffer 3. Finish the business already begun on the death of the principal,
should delay entail any danger.

Art 1885- incase person declines agency, he is bound to observe the diligence of a good father of a
family in the custody and preservation of the goods forwarded to him by the owner until the latter
should appoint an agent. The owner shall as soon as practicable either appoint an agent or take charge
of the goods.

Art. 1886- should there be a stipulation that the agent shall advance the necessary funds, he shall be
bound to do so except when the principal is insolvent.

Art. 1887 – In the execution of the agency, the agent shall act in accordance with the instruction of the
principal. In default thereof, he shall do all that a good father of a family would do, as required by the
nature of the business.

Art. 1888- An agent shall not carry out an agency if its execution would manifestly result in loss or
damage to the principal.

Art. 1889- Agent shall be liable for damages if, there being a conflict between his interests and those of
the principal he should prefer his own.

Art. 1890- If the agent has been empowered to borrow money, he may himself be the lender at the
current rate of interest. If he has been authorized to lend money at interest, he cannot borrow it
without the consent of the principal.

Art.1891 – Every agent is bound to render an account of his transactions and to deliver to the principal
whatever he may have received by virtue of the agency, even though it may not be owing to the
principal. Every stipulation exempting the agent from the obligation to render an account shall be void.

Art.1892- The agent may appoint a substitute if the principal has not prohibited him from doing so, but
he shall be responsible for the acts of the substitute: 1. When he was not given the power to appoint
one; 2. When he was given such power, but without designating the person, and the person appointed
was notoriously incompetent or insolvent. All acts of the substitute appointed against the prohibition of
the principal shall be void.

Art. 1893- in cases mentioned in l892 items 1 & 2 - principal may furthermore bring an action against
the substitute with respect to the obligations which the latter has contracted under the substitution.
Art. 1894- responsibility of two or more agents, even though they have been appointed simultaneously,
is not solidary , if solidarity has not been expressly stipulated. Art.1895- If solidarity has been agreed
upon , each of the agent is responsible for the non-fulfillment of the agency, and for the fault or
negligence of his fellow agents, except in the latter case when the fellow agents acted beyond the scope
of their authority.

Art. 1896- The agent owes interest on the sums he has applied to his own use from the day on which he
did so, and on those which he still owes after the extinguishment of the agency.

Art. 1897- agent who acts as such is not personally liable to the party with whom he contracts, unless
he expressly binds himself or exceeds the limits of his authority without giving such party sufficient
notice of his powers.

Art. 1898—If the agent contracts in the name of the principal- exceeding the scope of his authority, and
the principal does not ratify – it shall be void if party with whom the agent contracted is aware of the
limits of the powers granted by the principal. IN this case, however, the agent is liable if he undertook to
secure the principal’s ratification.

Art. 1899- authorized agent acts in accordance with the orders of the principal, the latter cannot set up
the ignorance of the agent as to circumstances whereof he himself was ought to have been aware.

Art.1900- 3rd persons are concerned, an act is deemed to have been performed within the scope of the
agent’s authority ,if such act is within the terms of the power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority according to an understanding between the principal and
the agent.

Art.1901- a third person cannot set up the fact that the agent has exceeded his powers,if theprincipal
has ratified ,or has signified his willingness to ratify the agent’s acts.

Art 1902—a third person with whom the agent wishes to contract on behalf of the principal may require
the presentation of the power of attorney, or the instructions as regards the agency. Private or secret
orders and instructions of the principal do not prejudice third persons who have relied upon the power
of attorney or instructions shown them.

Art. 1903- commission agent shall be responsible for the goods received by him in the terms and
conditions and as described in the consignment, unless upon receiving them he should make a written
statement of the damage and deterioration suffered by the same .

** A factor or commission agent – one whose business is to receive and sell goods for a commission and
who is entrusted by the principal with the possession of goods to be sold.

Art.1904 – The commission agent who handles goods of the same kind and mark, which belong to
different owners, shall distinguish them by countermarks, and designate the merchandise respectively
belonging to each principal.

Art. 1905- commission agent cannot, without the express or implied consent of the principal sell on
credit. Should he do so, the principal may demand from him payment in cash, but the commission agent
shall be entitled to any interest or benefit, which may result from such sale.
Art.1906—commission agent with authority of the principal sell on credit, he shall so inform the
principal, with a statement of the names of the buyers. Should he fail to do so, the sale shall be deemed
to have been made for cash in so far as the principal is concerned.

Art. 1907- Should the commission agent receive on a sale, in addition to the ordinary commission,
another called a guarantee commission, he shall bear the risk of collection and shall pay the principal
the proceeds of the sale on the terms agreed upon with the purchaser.

Guarantee commission- del credere commission –given in return for the risks the agent will have to
bear in the collection of credits.

Art. 1908—commission agent who does not collect the credits of his principal at the time when they
become due and demandable shall be liable for damages, unless he proves that he exercised due
diligence for that purpose.

Art. 1909—agent is responsible not only for fraud, but also for negligence, which shall be judged with
more or less rigor by the courts, according to whether the agency was or was not for a compensation.

OBLIGATIONS OF PRINCIPAL

Art. 1910 –principal must comply with all the obligations which the agent may have contracted within
the scope of his authority. As for any obligation wherein the agent has exceeded his power, the
principal is not bound except when he ratified it expressly or tacitly.

Art. 1911—even-agent has exceeded his authority, principal is solidarily liable with agent if the former
allowed the latter to act as though he had full powers.---based on ESTOPPEL to protect innocent 3 rd
persons.

ESTOPPEL – a bar which precludes a person from denying or asserting anything contrary to that
which has been established as the truth by his own deed or representation either express or implied.

APPARENT AUTHORITY- that which though not actually granted, the principal knowingly permits the
agent to exercise or holds him out as possessing.

AUTHORITY BY ESTOPPEL – arises in those cases where the principal by his culpable negligence permits
his agent to exercise powers not granted to him, even though the principal may have no notice or
knowledge or the conduct of the agent.

Art. 1912- principal- to advance to agent should latter request, sums necessary for the execution of the
agency. Agent advanced them, principal to SPECIAL him therefor . Even if the business or undertaking
was not successful, provided the agent is free from all fault.

Art. 1913- principal to indemnify agent for all the damages which the execution of the agency may have
caused the agent, without fault or negligence on his part.
Art. 1914- agent- may retain in pledge the things which are the object of the agency until the principal
effects the reimbursement and pays the indemnity set forth in the two preceding articles.(arts.
1912/1913)--- LEGAL PLEDGE OR PLEDGE CREATED BY OPERATION OF LAW.

Art 1915- if two or more persons have appointed an agent for a common transaction or undertaking,
they shall be solidarily liable to the agent for all the consequences of the agency.

Art. 1916- when two persons contract with regard to the same thing, one of them with the agent and
the other with the principal, and the two contracts are incompatible with each other, that of prior date
shall be preferred without prejudice to the provision of article 1544.

Art. 1544-double sale: personal property- he who takes first possession.

Immovable- 1. First to register 2. First in possession 3. Present oldest title.

Art.1917- if agent has acted in good faith, the principal shall be liable in damages to the third person
whose contract must be rejected. If the agent acted in bad faith, he alone shall be responsible

Art. 1918- principal not liable for the expenses incurred by agent in the following cases:

1. If the agent acted in contravention of the principal’s instructions, unless the latter should
wish to avail himself of the benefits derived from the contract.
2. Expenses due to the fault of agent
3. Agent incurred them with knowledge that an unfavorable result would ensue, if the
principal was not aware thereof.
4. Stipulated that the expenses would be borne by the agent , or the latter would be allowed
only a certain sum.

MODES OF EXTINGUISHMENT OF AGENCY

Art. 1919- agency is extinguished: a. by its revocation; b. withdrawal of agent; c. death, civil interdiction,
insanity or insolvency of the principal or the agent; d. dissolution of the firm or corporation which
entrusted or accepted the agency; e. accomplishment of the object or purpose of the agency; f.
expiration of the period for which the agency was constituted. E D W A R D –Keyword.

Other causes—termination by mutual consent, novation , loss of subject matter of agency.

** if termination is done by principal- revocation; if done by agent- RENUNCIATION

Art. 1920—principal may revoke the agency at will, and compel the agent to return the document
evidencing the agency. Such revocation may be express or implied.

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.
Art. 1922—agent – had general powers, revocation of the agency does not prejudice 3 rd 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.

Art. 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.

Art. 1924—the agency is revoked if the principal directly manages the business entrusted to the agent,
dealing directly with third persons.

Art. 1925- when 2 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.

Art. 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.

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 of partnership and his removal from the management is unjustifiable.

Example: P sold to B a factory for P1M. B paid only P800K. it was stipulated that the ownership in the
factory would be transferred to B only after the payment of the balance of P200K to be made within 6
months. It was further agreed that P would appoint A to mange the factory and that profits would be
used to pay off the balance of the purchase price. HERE , P CANNOT REVOKE THE AGENCY AT WILL FOR
A BILATERAL CONTRACT DEPENDS UPON IT.

Example2: P borrowed by B P50K. as security for the debt, P gives A power of attorney to collect rents
due from tenants of P and authorizes A to apply the same to the debt of P50K. In this case P CANNOT
REVOKE THE AGENCY, WITHOUT ANY JUSTIFIABLE CAUSE, FOR IT IS A MEANS OF FULFILLING HIS
OBLIGATION TO B.

Agency means of …. E.g.: A, B and C are partners in business by common agreement. A was appointed a
manager in the articles of partnership. The appointment of A is revocable only upon just and lawful
cause and upon the vote of the partners representing the controlling interest. The reason is that the
appointment is , in effect, one of the conditions of the contract and it is only logical that such
appointment should not be revoked without the consent of all the partners including A.

Art. 1928-- 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.
Art. 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.
(to prevent damage to principal)

Art.1930 –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(art. 1927) , or in the interest of a third
person who has accepted the stipulation in his favor ( art. 1311- stipulation pour autrui – example- D
purchased C’s land for P10K. it was also agreed that only 8K would be given to C, because the remaining
P2k would be given by D to X, a creditor of C. If X communicates his acceptance of the stipulation to D,
X can demand its fulfillment.

Another example- P borrows from B P5K payable in 1 year. Before due date of the obligation, P
sells his land to A and he authorizes A to pay P’s debt out of the purchase price. B accepts the agency of
A. here, the right of B to receive payment from A cannot be defeated by the death of P.

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.

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.