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CHAPTER 4Modes of Extinguishment of Agency

Article 1919. Agency is extinguished:

(1) By its revocation;

(2) By the withdrawal of the agent;

(3) By the death, civil interdiction, insanity or insolvencyof the principal or of the agent;

(4) By the dissolution of the firm or corporation whichentrusted or accepted the agency;

(5) By the accomplishment of the object or purpose ofthe agency;

(6) By the expiration of the period for which the agencywas constituted. (1732a)

Article 1920. The principal may revoke the agency at will, andcompel the agent to return the document evidencing theagency. Such revocation may be express or implied. (1733a)

Article 1921. If the agency has been entrusted for thepurpose of contracting with specified persons, its revocationshall not prejudice the latter if they were not given noticethereof. (1734)

Article 1922. If the agent had general powers, revocation ofthe agency does not prejudice third persons who acted in goodfaith and without knowledge of the revocation. Notice of therevocation in a newspaper of general circulation is a sufficientwarning to third persons. (n)

Article 1923. The appointment of a new agent for the samebusiness or transaction revokes the previous agency from theday on which notice thereof was given to the former agent,without prejudice to the provisions of the two preceding

articles. (1735a)

Article 1924. The agency is revoked if the principal directlymanages the business entrusted to the agent, dealing directlywith third persons. (n)

Article 1925. When two or more principals have granted apower of attorney for a common transaction, any one of themmay revoke the same without the consent of the others. (n)

Article 1926. A general power of attorney is revoked by aspecial one granted to another agent, as regards the specialmatter involved in the latter. (n)

Article 1927. An agency cannot be revoked if a bilateralcontract depends upon it, or if it is the means of fulfilling anobligation already contracted, or if a partner is appointedmanager of a partnership in the contract of partnership and hisremoval from the management is unjustifiable. (n)

Article 1928. The agent may withdraw from the agency bygiving due notice to the principal. If the latter should suffer anydamage by reason of the withdrawal, the agent must indemnifyhim therefor, unless the agent should base his withdrawal uponthe impossibility of continuing the performance of the agencywithout grave detriment to himself. (1736a)

Article 1929. The agent, even if he should withdraw from theagency for a valid reason, must continue to act until the

principal has had reasonable opportunity to take the necessarysteps to meet the situation. (1737a)

Article 1930. The agency shall remain in full force and effecteven after the death of the principal, if it has been constitutedin the common interest of the latter and of the agent, or in theinterest of a third person who has accepted the stipulation inhis favor. (n)

Article 1931. Anything done by the agent, without knowledgeof the death of the principal or of any other cause whichextinguishes the agency, is valid and shall be fully effective

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with respect to third persons who may have contracted withhim in good faith. (1738)

Article 1932. If the agent dies, his heirs must notify theprincipal thereof, and in the meantime adopt such measures asthe circumstances may demand in the interest of the latter.

(1739)

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TITLE VTRUSTS (n)

CHAPTER 1General Provisions

Article 1440. A person who establishes a trust is called thetrustor; one in whom confidence is reposed as regards propertyfor the benefit of another person is known as the trustee; andthe person for whose benefit the trust has been created isreferred to as the beneficiary.

Article 1441. Trusts are either express or implied. Expresstrusts are created by the intention of the trustor or of the

parties. Implied trusts come into being by operation of law.

Article 1442. The principles of the general law of trusts,insofar as they are not in conflict with this Code, the Code ofCommerce, the Rules of Court and special laws are herebyadopted.

CHAPTER 2Express Trusts

Article 1443. No express trusts concerning an immovable orany interest therein may be proved by parol evidence.

Article 1444. No particular words are required for the creationof an express trust, it being sufficient that a trust is clearlyintended.

Article 1445. No trust shall fail because the trustee appointeddeclines the designation, unless the contrary should appear inthe instrument constituting the trust.

Article 1446. Acceptance by the beneficiary is necessary.Nevertheless, if the trust imposes no onerous condition upon

the beneficiary, his acceptance shall be presumed, if there isno proof to the contrary.

CHAPTER 3Implied Trusts

Article 1447. The enumeration of the following cases ofimplied trust does not exclude others established by thegeneral law of trust, but the limitation laid down in article 1442shall be applicable.

Article 1448. There is an implied trust when property is sold,and the legal estate is granted to one party but the price ispaid by another for the purpose of having the beneficialinterest of the property. The former is the trustee, while thelatter is the beneficiary. However, if the person to whom thetitle is conveyed is a child, legitimate or illegitimate, of the onepaying the price of the sale, no trust is implied by law, it being

disputably presumed that there is a gift in favor of the child.

Article 1449. There is also an implied trust when a donation ismade to a person but it appears that although the legal estateis transmitted to the donee, he nevertheless is either to haveno beneficial interest or only a part thereof.

Article 1450. If the price of a sale of property is loaned or paidby one person for the benefit of another and the conveyance ismade to the lender or payor to secure the payment of the debt,a trust arises by operation of law in favor of the person to

whom the money is loaned or for whom its is paid. The lattermay redeem the property and compel a conveyance thereof tohim.

Article 1451. When land passes by succession to any personand he causes the legal title to be put in the name of another,a trust is established by implication of law for the benefit of thetrue owner.

Article 1452. If two or more persons agree to purchaseproperty and by common consent the legal title is taken in thename of one of them for the benefit of all, a trust is created by

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force of law in favor of the others in proportion to the interestof each.

Article 1453. When property is conveyed to a person inreliance upon his declared intention to hold it for, or transfer itto another or the grantor, there is an implied trust in favor of

the person whose benefit is contemplated.

Article 1454. If an absolute conveyance of property is madein order to secure the performance of an obligation of thegrantor toward the grantee, a trust by virtue of law isestablished. If the fulfillment of the obligation is offered by thegrantor when it becomes due, he may demand thereconveyance of the property to him.

Article 1455. When any trustee, guardian or other personholding a fiduciary relationship uses trust funds for thepurchase of property and causes the conveyance to be made

to him or to a third person, a trust is established by operationof law in favor of the person to whom the funds belong.

Article 1456. If property is acquired through mistake or fraud,the person obtaining it is, by force of law, considered a trusteeof an implied trust for the benefit of the person from whom theproperty comes.

Article 1457. An implied trust may be proved by oralevidence.

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