2. Obligations of the Agent and of the Principal

General Obligations of the Agent to the Principal (GOC)

• Act with utmost Good faith & loyalty for the furtherance of principal’s interest
• Obey principal’s instructions
• Exercise reasonable Care

General Obligation of Agent who accepts the Agency

NOTE: The agent is bound by his acceptance to carry out the agency and is liable for the damages which, through his non-performance, the principal may suffer.

He must also finish the business already begun on the death of the principal, should delay entail any danger. (CIVIL CODE, Art. 1884)

Specific Obligations of the Agent

• Carry out the agency (CIVIL CODE, Art. 1884);
• Answer for damages which through his non- performance the principal may suffer;
• Finish the business already begun on the death of the principal should delay entail any danger (exception to the rule that death extinguishes agency) (CIVIL CODE, Art. 1884);
• Observe the Diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner in case he declines an agency, until an agent is appointed (CIVIL CODE, Art. 1885);
• Advance necessary funds if there be a stipulation to do so (except when the principal is insolvent);
• Act in accordance with the Instructions of the principal, and in default thereof, to do all that a good father of a family would do (CIVIL CODE, Art. 1887); Exceptions (to the rule that the agent must not depart from the instructions of principal)
• There a Sudden emergency
• If the instructions are Ambiguous
• If the Departure is so Insubstantial that it does not affect the result and the principal suffers no damage thereby
• Not to carry out the agency if it would Manifestly result in loss or damage to the principal (CIVIL CODE, Art. 1888);
• Answer for damages if, there being a conflict between his interests and those of the principal, he prefers his own interests (CIVIL CODE, Art. 1889);
• Not to Loan to himself if he has been authorized to loan money at interest (CIVIL CODE, Art. 1890)
• Render an Account of his transactions and deliver to the principal whatever he may have received by virtue of the agency (If the agent fails to deliver and instead converts or appropriates for his own use the money or property belonging to his principal, he may be charged with ESTAFA.) (CIVIL CODE, Art. 1891)
• Be Responsible in certain cases for the act of the substitute appointed by him (CIVIL CODE, Art. 1892)
• Pay Interest on funds he has applied to his own use (CIVIL CODE, Art. 1896)

The Civil Code provides for additional requisites in special cases:

• A special power of attorney for a compromise agreement to be entered into by an agent on behalf of the principal [Art. 1878(3), CC]

Note: A special power to compromise does not authorize submission to arbitration. [Art. 1880, CC]

• A partner is an agent of the partnership for its business. A partner’s act apparently carrying on its business in the usual way binds the partnership, unless the partner lacks authority and the person dealing with the partner knows of that lack of authority. An act outside the usual course requires authorization by the other partners. [Art. 1818, CC]

Obligation of Agent who declines Agency

In case a person declines an 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 or take charge of the goods. (CIVIL CODE, Art. 1885)

Purpose

Extend the personality of the principal through the facility of the agent (Litonjua, Jr. v. Eternit Corp., G.R. No. 144805, June 6, 2006.)

When Agent has a right to disobey the Principals instructions

• When the instruction calls for the performance of illegal acts
• Where he is privileged to do so to protect his security in the subject matter of the agency

When obligation to account not applicable

• If the agent acted only as a middleman with the task of merely bringing together the vendor and the vendees.
• If the agent had informed the principal of the gift/bonus/profit he received from the purchaser and his principal did not object.
• An agent’s right of lien may permit retention of property as security, but does not eliminate the duty to render an account under Civil Code, Arts. 1891 and 1914.

Exceptions:

• If it is possible to substitute other material for that which was destroyed without substantial detriment to either party
• If the destroyed subject matter was not in fact essential to the contract
• A partial loss or destruction (agency may continue in existence as to other property not affected).

If the loss is due to a breach or wrongful act of the principal, he is liable for damages.

Rights of mortagor

To alienate the mortgaged property but the mortgage shall remain attached to the property. (NCC, Art. 2130)

Q: Bucton alleged that Concepcion borrowed the title to her house and lot on the pretext that she was going to show it to an interested buyer. However, Concepcion, instead, obtained a loan in the amount of P30,000.00 from Rural Bank of El Salvador (Rural Bank) as security for the loan, Concepcion mortgaged Bucton’s house and lot to Rural Bank in her personal capacity, using a forged SPA.

Would Bucton be bound by such a real estate mortgage if the Rural Bank, later on, forecloses the property, after Concepcion defaults in payment?

A: NO. The mere fact that the agent was authorized to mortgage the property is not sufficient to bind the principal unless the deed was executed and signed by the agent for and on behalf of his principal. The authorized agent failed to indicate in the mortgage that she was acting for and on behalf of her principal. The Real Estate Mortgage, explicitly shows on its face, that it was signed by Concepcion in her own name and in her own personal capacity. Thus, Bucton cannot be bound by the acts of Concepcion. (Bucton v. Rural Bank of El Salvador, G.R. No. 179625, February 24, 2014)

When Agent may incur Personal Liability

• When the agent expressly binds himself (CIVIL CODE, Art. 1897)
• When the agent exceeds his authority without giving the contracting party sufficient notice of his powers (CIVIL CODE, Art. 1897); or, under Article 1898, undertakes to secure the principal’s ratification (CIVIL CODE, Art. 1898)
• When an agent by his act prevents performance on the part of the principal
• When a person acts as an agent without authority or without a principal
• A person who purports to act as agent of an incapacitated principal

Form of Renunciation

It is not always necessary for the agent to renounce the agency expressly. He can do so impliedly, such as:

• Where he has conducted himself in a manner incompatible with his duties as agent
• When he abandons the object of his agency and acts for himself in committing a fraud upon his principals
• When he files a complaint against the principal and adopts an antagonistic attitude towards him

Appointment of Sub-Agent

• If the principal has not prohibited the agent from appointing a substitute, the Principal will be liable to 3rd persons for the acts of the sub-agent within the scope of his authority
• If there is a prohibition but nevertheless the agent appoints a sub-agent, all the sub- agent’s acts are void as to the principal and the agent will be personally liable as to third parties.
• If there is authority to appoint and sub-agent is not designated by the principal, the agent will be liable for all the acts of the sub-agent if the sub-agent is notoriously incompetent or insolvent.
• If there is authority to appoint and sub-agent is designated by the principal, the agent is released from any liability from the acts of the sub-agent and the principal shall be liable.
• If the principal has not prohibited substitution, the agent may appoint a substitute. The agent is responsible for the substitute’s acts when he lacked power to appoint one, or when he had that power without a designated substitute but appointed someone notoriously incompetent or insolvent. (CIVIL CODE, Art. 1892)

Acts that cannot be done through an agent

• Personal Acts (making of a will; exercise of right of suffrage; statements required to be made under oath; attending meetings of board of directors/trustees of a corporation; agents prohibited from appointing a substitute)
• Criminal Acts or Acts Not Allowed by Law (ownership of private agricultural lands by aliens through an agent; persons prohibited to acquire a property by reason of position or relation to the person cannot do the same through the mediation of another; participation in the commission of a crime a person cannot escape punishment on the ground that he was merely an agent)

Q: A constituted B as his agent. Can B appoint a substitute?

A: Yes. The agent may appoint a substitute or sub-agent if the principal has not prohibited him from doing so, but he shall be responsible for the acts of the substitute:

• When he was not given the power to appoint one;
• When he was given such power, but without designating the person, and the person appointed was notoriously incompetent or insolvent. (CIVIL CODE, Art. 1892)

If there is a prohibition, B cannot do so, unless he seeks the consent of the principal.

Can the heirs continue the agency?

General rule: Agency calls for personal services on the part of the agent; rights & obligations are not transmissible

Responsibility of Two (2) or More Agents Appointed Simultaneously

General rule: The responsibility of two or more agents is not solidary, even if they were appointed simultaneously, unless solidarity was expressly stipulated. (CIVIL CODE, Art. 1894)

Exception: When solidarity has been expressly stipulated, in which case, each of the agents becomes solidarily liable for (1) the non-fulfillment of the agency; and for (2) the fault or negligence of his fellow agent(s) (CIVIL CODE, Art. 1895)

Exception to the Exception: when one of the other agent/s acts beyond the scope of his authority innocent agent is not liable. (CIVIL CODE, Art. 1895)

Nature of Relationship between Principal and Agent

Fiduciary based on trust & confidence

• Agent is estopped from asserting an interest adverse to his principal, whether his own or that of an adverse party (Severino v. Severino, G.R. No. 18058, Jan. 16, 1923.)
• Agent must not use or disclose secret information (CIVIL CODE, Art. 1889)
• Agent must give notice of material facts (CIVIL CODE, Art. 1889)

NOTE: Theory of Imputed Knowledge

General Rule: Knowledge of the agent is imputed to the principal even though the agent never communicated it to his principal (Sunace International Management Services, Inc. v. NLRC, G.R. No. 161757, Jan. 25, 2006.)

Effect where 3rd Person aware of limits of agents power

If an agent contracts in the principal’s name beyond his authority, the contract is void under Article 1898 if the third party knew the limits of his powers and the principal does not ratify it. (Cervantes v. CA, G.R. No. 125128, March 2, 1999.)

Updated: A principal’s voluntary acts may justify a third party in presuming an agent’s authority, although a person dealing with an assumed agent must ascertain its extent (Ayala Land, Inc. v. ASB Realty Corporation, G.R. No. 210043, 26 September 2018).

Exceptions:

• Where the interests of the agent are adverse to those of the principal;
• The agent’s duty is not to disclose the information, as where he is informed by way of confidential information.
• Agent acts in bad faith or where the person claiming the benefit of the rule colludes with the agent to defraud the principal

When third persons can repudiate the contract

Before actual ratification by the principal, or before the principal has signified his willingness to ratify the agent’s acts.

Effect of the principal receiving the benefits of the transaction

He is deemed to have ratified it. A principal may not accept the benefits of a transaction and at the same time repudiate its burdens

May the agency be extinguished at will?

Agent may do so but subject to the contractual obligations owing to the principal (i.e. fixed period of time for the agency or purpose not yet accomplished).

Conditions for Ratification

• The principal must have capacity and power to ratify
• He must have had knowledge of material facts
• He must ratify the acts in its entirety
• The act must be capable of ratification
• The act must be done on behalf of the principal
• To be effective, ratification need not be communicated or made known to the agent or the third party. The act or conduct of the principal rather than his communication is the key. But before ratification, the third party is free to revoke the unauthorized contract.

Distinction between Agency and Lease

Distinction between Agency to Sell and Sale

(Quiroga v. Parsons, G.R. No. 11491, Aug. 23, 1918; Spouses Viloria v. Continental Airlines, G.R. No. 188288, Jan. 16, 2012.) For verification: Quiroga v. Parsons Hardware Co., G.R. No. L-11491, Aug. 23, 1918.

Distinction between Agency and Contractor

(Shell v. Firemen’s Ins. Co., G.R. No. L-8169, Jan. 29, 1957.)

Distinction between Agency and Partnership

Expressly or Impliedly

• Conducted himself in a manner incompatible with his duties;
• Abandons the object of agency and acts for himself in committing a fraud upon his principal;
• He files a complaint against the principal and adopts an antagonistic attitude towards him
• The mere fact that the agent violates the principal instructions does not amount to renunciation, but that may render him liable for damages.

Effects of Ratification

• With respect to agent - relieves the agent from liability to the third party for the unauthorized transaction, and to his principal for acting without authority; may recover compensation
• With respect to principal - assumes responsibility for the unauthorized act, as if the agent had acted under original authority but not liable for acts outside the authority approved by his ratification
• With respect to 3rd persons - bound by ratification to the same extent as if the ratified act had been authorized; cannot raise the question of the agent’s authority to do the ratified act

NOTE: There is ratification when the principal sues to enforce the contract entered into by the unauthorized agent. However, there is no such ratification if the principal action is brought to avert a greater loss rather than to assert a gain. (Robinson v. Borse)

NOTE: The 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 compensation. (CIVIL CODE, Art. 1909)

Obligation Rules for Commission Agents

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, and usually selling in his own name.

Distinction between Commission Agent and Broker

Distinction between Ordinary Agent and Commission Agent

Obligations of a Commission Agent (RMCB)

• Responsible for the goods received by him, as described in the consignment, unless upon receiving them he should make a written statement of the damage and deterioration suffered by the same (CIVIL CODE, Art. 1903)
• If goods are of the same kind and mark but belonging to different owners, make a distinction by counter Marks and designate the merchandise respectively belonging to each principal (CIVIL CODE, Art. 1904)
• He cannot, without consent of the principal, sell on Credit; should he do, principal may demand payment in cash, but the commission agent entitled to any interest/benefit which may result from such sale (CIVIL CODE, Art.1905)
• If an agent receives guarantee commission (a del credere agent), he shall Bear the risk of collection and shall pay the principal the proceeds of the sale on the same terms agreed upon with the purchaser. (CIVIL CODE, Art. 1907) The agent shall be liable for damages if he does not collect the credits of his principal at the time when they become due and demandable, unless he proves, that he exercised due diligence for that purpose. (CIVIL CODE, Art. 1908)

OBLIGATIONS OF THE PRINCIPAL

Doctrine of Apparent Authority

When no employment relationship exists but it is shown that the hospital holds out to the patient that the doctor is its agent, it may be vicariously liable under Art. 2176.

Obligations of the Principal to the Agent (CARIP)

• Comply with all the obligations agent contracted in representation of the principal (CIVIL CODE, Art. 1910)
• Advance sums necessary for the execution of the agency when the agent requests them; if the agent advances those sums, reimburse them even if the undertaking was unsuccessful, provided the agent is free from fault, with interest from the date of the advance (CIVIL CODE, Art. 1912)
• Reimburse the agent for all advances made by him provided the agent is free from fault (CIVIL CODE, Art. 1912)
• Indemnify the agent for all the damages which the execution of the agency may have caused the latter without fault or negligence on his part (CIVIL CODE, Art. 1913)
• Pay the agent the compensation agreed upon or, if no amount was fixed and the agency is not gratuitous, reasonable compensation for the agent’s services (CIVIL CODE, Art. 1875)

B. Obligations of Agent and Principal (Civil Code, arts. 1864-1918)

Rules on Liability of Two (2) or more Principals

Requisites for Solidary Liability of Principals

• There are two (2) or more principals
• The principals have all concurred in the appointment of the same agent
• The agent is appointed for a common transaction or undertaking (CIVIL CODE, Art. 1915)

NOTE: The rule in Art. 1915 applies even when the appointments were made by the principals in separate acts, provided that they are for the same transaction. The solidarity arises from the common interest of the principals and not from the act of constituting the agency.

The principal is not bound by the acts of the authorized agent where the latter failed to indicate in the mortgage that she was acting for and in behalf of her principal, and the REM explicitly shows on its face that it was signed by agent in her own name and personal capacity. The third-party bank has no one to blame but itself. Not only did it act with undue haste when it granted and released the loan, but it also acted negligently in preparing the REM as it failed to indicate that the agent was signing it for and on behalf of the principal. (Bucton v. Rural Bank of El Salvador, Inc., G.R. No. 179625, Feb. 24, 2014.)

Agents Right of Retention

• Specific (only for those goods connected with the agency); and
• Until the principal effects the reimbursement and pays the indemnity (CIVIL CODE, Art. 1914)

Difference from a Broker

A broker brings parties together and parties agree to enter into a contract. A broker is not necessarily an agent of either party, and negotiate contracts relative to property in behalf of others and for a compensation/fee. He is described merely as a go-between between the parties in Litonjua . Eternit Corp. (G.R. No. 144805, June 8, 2006.), and does not have authority to bind the parties. Thus, in Litonjua, the Court said that a real estate broker (not an agent) is one who negotiates the sale of real properties his authority is to find a buyer (or seller) who wishes to purchase (or sell) a property on terms agreed upon by the parties. He has no authority to bind the parties in the contract of sale. His authority is to find a buyer (or seller) and not to sell the property. Thus, there is no need of a special power of attorney under Art 1878.

Principals Liabilities for Expenses

General rule: Principal is liable for the expenses incurred by the agent.

Efficient Procuring Cause

When there is a close proximate and causal connection between the efforts and labor of the agent and the principal’s sale of property. (Manotok Brothers v. CA, G.R. No. 94753, Apr. 7, 1993.)

Exceptions (AFUS):

• 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.
• When the expenses were due to the Fault of the agent.
• When the agent incurred them with knowledge that an Unfavorable result would ensue, if the principal was not aware thereof.
• When it was Stipulated that the expenses would be borne by the agent, or that the latter would be allowed only a certain sum. (CIVIL CODE, Art.1918)

Q: Will a broker be paid if the transaction was effected after the expiration of his authority?

A: The broker should be paid his commission where he is the efficient procuring cause in bringing the sale. He is the efficient procuring cause when there is a close proximate and causal connection between the efforts and labor of the agent and the principal’s sale of property (Manotok Brothers, Inc. v. Court of Appeals, G.R. No. 94753, April 7, 1993.)

NOTE: Procuring cause refer to a cause originating a series of events which, without break in their continuity, resulting in the accomplishment of the prime objective of the broker employment, i.e. to produce a purchaser ready, willing, and able to buy on the owner’s terms. To be regarded as the procuring cause to be entitled to a commission, a broker’s effort must have been the foundation on which the negotiations resulting in a sale began. (Medrano v. CA, G.R. No. 150678, Feb. 18, 2005.)

Law on Double Agency

Solidary Liability of Multiple Principals Appointing an Agent for a Common Transaction

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 (CIVIL CODE, Art. 1915).

Requisites for Principal to be bound by act of Agent (CIVIL CODE, Art. 1897)

Requisites for Principal to be bound by act of Agent (CIVIL CODE, Arts. 1881 and 1910)

• The agent must act on behalf of the principal
• The agent must act within the scope of his authority

Principals Liability for Damages despite Revocation

• If the agency was constituted for a fixed period, the principal shall be liable for damages occasioned by the wrongful discharge of the agent before the expiration of the period fixed
• Even if there was no time fixed for the continuance of the agency, but the agent can prove that the principal acted in bad faith by revoking the agency in order to avoid the payment of commission about to be earned, the principal can be held liable for damages (Villanueva supra at 209-210 (citing Diolosa v. CA, 130 SCRA 350, July 16, 1984 & Valenzuela v. CA, 191 SCRA 1, Oct. 19, 1990.)).

Between persons who are absent

General rule: Acceptance not deemed implied from the silence of the agent. (CIVIL CODE, Art.1872)

Exceptions:

• When the principal transmits his power of attorney to the agent who receives it without any objection
• 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 (CIVIL CODE, Art.1872)

Effect of Extinguishment without Notice

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. In Bitte, the buyer had notice of the revocation. (CIVIL CODE, Art. 1922; Bitte v. Spouses Jonas, G.R. No. 212256, Dec. 9, 2015.)

Power of Attorney

Instrument in writing by which the principal appoints his agent and confers authority to do specific acts on behalf of the principal. Its primary purpose is to evidence the agent’s authority to third parties with whom the agent deals (Wee v. De Castro, G.R. No. 176405, 2008.)

Construction of Power of Attorney (Olaguer v. Purugganan, Jr., G.R. No. 158907, Feb. 12, 2007.)

General rule: Strictly construed to grant only those specified powers.

Exception: When strict construction will defeat the very purpose of the power

Cases Where Special Power of Attorney is Necessary

• To make such Payments as are not usually considered as acts of administration;
• To Effect novations which put an end to obligations already in existence at the time the agency was constituted;
• To Compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action, or to abandon a prescription already acquired;
• To Waive any obligation gratuitously;
• To Enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;
• To Make gifts, except customary ones for charity or those made to employees in the business managed by the agent;
• To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration;
• To Lease any real property to another person for more than one year;
• To Bind the principal to render some service without compensation;
• To Bind the principal in a contract of partnership;
• To Obligate the principal as a guarantor or surety;
• To Create or convey real rights over immovable property;
• To Accept or repudiate an inheritance;
• To Ratify or recognize obligations contracted before the agency;
• Any Other act of strict dominion. (CIVIL CODE, Art. 1878)

NOTE: A Special Power of Attorney is not required merely to execute a Deed of Partition because partition, by itself, is not a conveyance of ownership. (Heirs of Ureta v. Heirs of Ureta, G.R. No. 165748, Sept. 14, 2011.)

NOTE: A Special Power of Attorney is strictly construed. Hence, the act under Article 1878 sought to be authorized must be clearly stated.

Accordingly, the power of administration does not include acts of disposition or encumbrance, which are acts of strict ownership. Similarly, an authority to sell or dispose does not include the authority to administer. (Aggabao v. Parulan, G.R. No. 165803, Sept. 1, 2010.)

NOTE: A Special Power of Attorney must express the powers of the agent in clear and unmistakable language for the principal to confer the right upon an agent (Yoshizaki v. Joy Training Center of Aurora, Inc., G.R. No. 174978, July 31, 2013.)

However, Article 1878 does not state that the authority be in writing. As long as the mandate is express, such authority may either be oral or written. The requirement under Article 1878 refers to the nature of authorization and not to its form (Patrimonio v. Gutierrez, G.R. No. 187769, June 4, 2014.).

The special power of attorney can be included in the general power when it specifies therein the act or transaction for which the special power is required.

Q: A borrowed money from C on behalf of B without Bs knowledge. C sought to recover from A, but to no avail. He thereafter sent several demand letters to B asking for the payment. B now contends that he should not be held liable because there was no loan between him and C since he did not give a special power of attorney for the borrowing of money. Is B correct?

A: Yes, if A borrowed without B’s express authority; B’s lack of knowledge when A borrowed does not, by itself, establish that no express authority existed. Art. 1878 of the NCC provides that a special power of attorney is necessary in order to loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration. Such authorization, however, need not be in writing. As long as the mandate is express, such authority may be either oral or written. (Patrimonio v. Gutierrez, G.R. No. 187769, June 4, 2014.)

Powers not included in the power to mortgage

• To sell (CIVIL CODE, Art. 1879)
• To execute a second mortgage
• To mortgage for the agent or an 3rd person’s benefit, nle clearly indicated

Rationale:

• A principal may authorize his agent to compromise because of his confidence in the latter’s discretion to protect his rights and obtain for him the best deal.
• If the transaction were left in the hands of an arbitrator, said arbitrator may not enjoy the trust of the principal.
• The agent must act within the scope of his authority. He may do such acts as may be conducive to the accomplishment of the purpose of the agency. (CIVIL CODE, Art. 1881)

NOTE:

• If a person specially informs another or states by public advertisement that he has given a power of attorney to a third 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 (CIVIL CODE, Art.1873).
• Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers (CIVIL CODE, Art. 1911)

Instances creating an Agency by Operation of Law

Duties and effects arising when an agency is declined, withdrawn from, or terminated

• The agent must finish the business already begun on the death of the principal, should delay entail any danger (CIVIL CODE Art. 1884, par. 2)
• In case a person declines an 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 or take charge of the goods (CIVIL CODE, Art. 1885)
• 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 (CIVIL CODE, Art. 1929).
• 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 (CIVIL CODE, Art. 1931).
• If the agent dies, the heirs must notify the principal thereof, and in the meantime adopt such measures as the circumstances may demand in the interest of the latter (CIVIL CODE, Art. 1932)