AGENCY

(Modes of Extinguishment of Agency)

Federico Valera vs. Miguel Velasco
51 Phil. 695

FACTS:

Miguel Velasco was appointed attorney-in-fact of Federico Valera with authority to manage his
property located on Echague Street, Manila. Velasco managed the said property, reported its
operations, and rendered accounts of his administration.

After a liquidation of accounts, it was revealed that Valera owed Velasco the amount of ₱1,100, from
which a misunderstanding arose between the two. Defendant Velasco brought suit against Plaintiff
Valera, wherein judgment was rendered in his favor.

After a writ of execution was issued, the sheriff levied upon plaintiff Valera’s right of usufruct, sold it
at a public auction and adjudicated it to the defendant Velasco in payment of all of his claims.
Subsequently, plaintiff Valera sold his right of redemption to one Eduardo Hernandez, for the sum of
₱200 who conveyed the same right of redemption, for the sum of ₱200, to the Valera himself.

After the plaintiff had recovered his right of redemption, a certain Salvador Vallejo, who had an
execution upon a judgment against the plaintiff rendered in a civil case against the latter, levied
upon said right of redemption, which was sold by the sheriff at public auction to Salvador Vallejo for
₱250. After some time, he transferred said right to redemption to the defendant Velasco. To simplify
things, the transfer of right of redemption went from Plaintiff Federico Valera to Eduardo Hernandez
to Valera (again) to Salvador Vallejo and subsequently to Defendant Miguel Velasco.

ISSUE:

Whether or not there was a revocation of agency between Federico Valera and Miguel Velasco?

RULING:

Yes, the contract of agency between Federico Valera and Miguel Velasco was revoked
(extinguished). This is in consideration of the fact that the defendant brought suit against the said
principal for the payment of the balance owed to him. This act clearly proves the breach of the
juridical relation between them.

Although the agent has not expressly told his principal that he renounced the agency, proper logic
dictates that the latter should not continue representing a person who has portayed such a
villainous attitude towards him.

Article 1919 of the New Civil Code provides that agency is extinguished: (1) By its revocation; (2) By
the withdrawal of the agent; (3) By the death, civil interdiction, insanity or insolvency of the principal
orof the agent; (4) By the dissolution of the firm or corporation which entrusted or accepted the
agency; (5) By the accomplishment of the object or purpose of the agency; (6) By the expiration of
the period for which the agency was constituted.

Further, Article 1928 states that: “An agent may withdraw from the agency by giving notice to the
principal. Should the latter suffer any damage through the withdrawal, the agent must indemnify
him therefore, unless the agent's reason for his withdrawal should be the impossibility of continuing
to act as such without serious detriment to himself".

With that said, the filing of a complaint by an agent against his principal for the collection of a
balance in his favor resulting from a liquidation of the agency accounts between them, and his
rendering of a final account of his operations, are equivalent to an express renunciation of the
agency between them. Thus, there was a revocation of agency between Valera and Velasco.