Short answer. No. The Civil Code says private or secret orders and instructions of the principal do not prejudice third persons who relied on the power of attorney or instructions actually shown to them. If the third party only saw the power of attorney and reasonably relied on it, your undisclosed limits generally cannot be used to avoid that contract.
What the law says
A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency. Private or secret orders and instructions of the principal do not prejudice third persons who have relied upon the power of attorney or instructions shown them.
Civil Code, Article 1902 — Third Person May Require the Power. Read the full provision →
The third party's right to see the authority
Article 1902 of the Civil Code gives a third person dealing with your agent the right to require presentation of the power of attorney, or of the instructions governing the agency, before contracting on your behalf. This exists so an outsider is not forced to take an agent's word for what he is authorized to do. Once that document or set of instructions is shown, the third person is entitled to treat it as an accurate statement of the agent's authority for purposes of the transaction.
Why your secret instructions do not bind them
The second sentence of the article is the operative rule here: "Private or secret orders and instructions of the principal do not prejudice third persons who have relied upon the power of attorney or instructions shown them." If you gave your agent limits that were never disclosed to the third party, and that third party relied on the power of attorney you actually showed, your undisclosed restrictions cannot be used against him. The law places the risk of an agent's undisclosed limitations on the principal who created them, not on the outsider who had no way to know about them.
What this protection depends on
This rule turns on actual, reasonable reliance on what was shown. It protects a third person who looked at the power of attorney or instructions you presented and dealt with your agent on that basis. It does not automatically extend to someone who never bothered to ask for that document at all, or who had independent knowledge that the agent was acting beyond what the shown authority allowed. The protection is tied to what the third party was actually shown and reasonably relied upon, not to reliance in the abstract.
What this means for you as principal
If your agent exceeded the secret instructions but stayed within what the power of attorney you presented actually authorized, the resulting contract with a third party who relied on that document generally stands. Your recourse in that situation runs against your agent, for exceeding the private instructions you gave him, rather than against the third party who dealt with him in good faith. Anyone appointing an agent and wanting instructions to actually limit third parties should ensure those instructions are the ones shown to the people the agent deals with, not kept private.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- The Consortium of Hyundai Engineering Co., Ltd. and Hyundai Corporation vs. National Grid Corporation of the Philippines, G.R. No. 214743, December 4, 2023 — read the decision on LawPhil →
- Caravan Travel and Tours International, Inc. vs. Ermilinda R. Abejar, G.R. No. 170631, February 10, 2016 — read the decision on LawPhil →