2014 Civil Law, Q30

Joe Miguel, a well-known treasure hunter in Mindanao, executed a Special Power of Attorney (SPA) appointing his nephew, John Paul, as his attorney-infact. John Paul was given the power to deal with treasure-hunting activities on Joe Miguel’s land and to file charges against those who may enter it without the latter’s authority. Joe Miguel agreed to give John Paul forty percent (40%) of the treasure that may be found on the land.
Thereafter, John Paul filed a case for damages and injunction against Lilo for illegally entering Joe Miguel’s land. Subsequently, he hired the legal services of Atty. Audrey agreeing to give the latter thirty percent (30%) of Joe Miguel’s share in whatever treasure that may be found in the land.
Dissatified however with the strategies implemented by John Paul, Joe Miguel unilaterally revoked the SPA granted to John Paul.
Is the revocation proper? (4%)

Quick check

Under Article 1927 of the Civil Code, when is an agency contract an exception to the general rule of revocability at will?

What constitutes an agency coupled with an interest under the doctrine laid down in Republic v. Evangelista?

Why is Joe Miguel's unilateral revocation of the Special Power of Attorney granted to John Paul legally improper?

Under Philippine civil law, what is the general rule regarding the revocability of a contract of agency by the principal?

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What is the legal effect of a principal's attempt to unilaterally revoke an agency coupled with an interest without legal cause?

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1. Irrevocable Agency Rules
Under Article 1927 of the Civil Code, an agency cannot be revoked at the will of the principal 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 is unjustifiable. As an exception to the general rule that agency is revocable at will, an agency coupled with an interest creates a vested legal right in favor of the agent or third persons, making unilateral revocation by the principal legally ineffective.

2. Agency Interest Doctrine
In Republic v. Evangelista, the Supreme Court emphasized that an agency is coupled with an interest when it is created for the mutual benefit of both the principal and the agent, or for the benefit of third persons who contracted with the agent. When an attorney-in-fact is granted a direct property interest in the subject matter or when third-party contracts depend on the continued existence of the power of attorney, the principal loses the absolute power to unilaterally terminate the agency relationship without legal cause.

3. Third Party Protection
When an attorney-in-fact legitimately contracts with third parties pursuant to a power of attorney coupled with an interest, those third-party contracts acquire legal protection against arbitrary revocation. For instance, retaining legal counsel whose compensation is tied to the agency's subject matter creates an enforceable interest. Unilateral revocation of the special power of attorney by the principal under such circumstances violates contractual stability and public policy, rendering the attempted revocation null and void.

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