Juridical basis of agency; termination by death

There are various ways of extinguishing agency, but, in this case, the Supreme Court was concerned only with one cause — death of the principal Paragraph 3 of Art. 1919 of the Civil Code which was taken from Art. 1709 of the Spanish Civil Code provides:

ART. 1919. Agency is extinguished: xxx

3. By the death, civil interdiction, insanity or insolvency of the principal or of the agent; xxx

By reason of the very nature of the relationship between principal and agent, agency is extinguished by the death of the principal or the agent. This is the law in this jurisdiction.

Manresa commenting on Art. 1709 of the Spanish Civil Code explains that the rationale for the law is found in the juridical basis of agency which is representation. There being an integration of the personality of the principal with that of the agent, it is not possible for the representation to continue to exist once the death of either is established. Pothier agrees with Manresa that, by reason of the nature of agency, death is a necessary cause for its extinction. Laurent says that the juridical tie between the principal and the agent is severed ipso jure upon the death of either without necessity for the heirs of the fact to notify the agent of the fact of death of the former.
The same rule prevails at common law — the death of the principal effects instantaneous and absolute revocation of the authority of the agent unless the power be coupled with an interest. This is the prevalent rule in American jurisprudence where it is well-settled that a power without an interest conferred upon an agent is dissolved by the principal's death, and any attempted execution of the power afterward is not binding on the heirs or representatives of the deceased. (G.R. No. L-24332. January 31, 1978) 

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