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Does death of principal voids agent’s transaction?

Does death of principal voids agent’s transaction?
"My brother-in-law constituted me as his agent and executed a Special Power of Attorney for the purpose of selling his lot. Henceforth, I have transacted with our neighbor and was able to make a good deal. I communicated with my brother-in-law about it, and he was amenable to the terms of the supposed sale. I was then able to sell the lot a week after I talked to my brother-in-law. However, it was unfortunate that a day before the sale, my brother-in-law passed away. I had no knowledge about the death of my brother-in-law. Had I known it, I would not have continued with the transaction.Is the transaction I made with regard to the sale of the aforesaid lot valid considering that my brother-in-law passed away before the transaction took place? Respectfully,Tweetie Dear Tweetie,By the contract of agency, a 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 and ordinarily, the death of the principal extinguishes the contract of agency (Articles 1868, 1919, New Civil Code). Nonetheless, the transactions made by an agent after the death of the principal may be valid subject to certain conditions set forth in Article 1931 of the New Civil Code. Article 1931 of the said law provides that anything done by the agent, without the 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. In connection with this provision, the Supreme Court through Associate Justice Cecilia Muñoz-Palma, stated in the case of Rallos vs. Chan (G.R. No. L-24332, January 31, 1978), the following:“Under this provision, an act done by the agent after the death of his principal is valid and effective only under two conditions, viz: (1) that the agent acted without knowledge of the death of the principal and (2) that the third person who contracted with the agent himself acted in good faith. Good faith here means that the third person was not aware of the death of the principal at the time he contracted with said agent. These two requisites must concur the absence of one will render the act of the agent invalid and unenforceable.”Thus, the transaction you made as an agent of your brother-in-law with regard to the sale of the lot owned by the latter may be considered valid although the sale took place after the death of your brother-in-law provided that you acted without knowledge of his death and that your neighbor who transacted with you was in good faith. This means that your neighbor was also not aware of the death of your brother-in-law at the time of the aforesaid sale.We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated. Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to ." - https://www.affordablecebu.com/
 

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"Does death of principal voids agent’s transaction?" was written by Mary under the Legal Advice category. It has been read 545 times and generated 0 comments. The article was created on and updated on 15 September 2021.
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