Short answer. No. Article 1927 of the Civil Code protects you: an agency cannot be revoked if it is the means of fulfilling an obligation already contracted. If your authority to act as agent is the mechanism for recovering the debt owed to you, the principal cannot end that authority before the obligation is fulfilled.
What the law says
An agency cannot be revoked 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 from the management is unjustifiable.
Civil Code, Article 1927 — Irrevocable Agency (Agency Coupled With an Interest). Read the full provision →
The rule against revoking an agency that secures a debt
Article 1927 of the Civil Code makes three kinds of agency irrevocable. The second scenario — directly relevant to your situation — is where the agency is the means of fulfilling an obligation already contracted. If a debt existed before the agency was created, and the parties agreed that the agent would satisfy that debt through the exercise of the agency powers, then revoking the authority effectively prevents repayment. The law does not permit the debtor-principal to escape an existing obligation by removing the very tool that was meant to discharge it.
A common situation where this applies
Consider a creditor who is owed money by a debtor. Instead of paying in cash, the debtor authorizes the creditor to collect rents from the debtor's property until the debt is extinguished. The creditor becomes the agent for collection. If the debtor then tries to revoke that authority before the rents have covered the debt, the revocation fails. The agency survives until the obligation is performed. This arrangement is known in practice as an agency coupled with an interest — the agent's interest in the subject matter (collecting what is owed) is itself the reason the agency was created.
Why the obligation must be pre-existing
Article 1927 refers specifically to an obligation already contracted — that is, one that existed before the agency was granted, or at least one that the agency was designed from the start to fulfill. The purpose is to prevent the principal from granting an agency as a form of security or payment and then withdrawing it at will. If the agency arose purely for the convenience of the principal, with no pre-existing debt attached, the ordinary rules on revocability apply and the agency can generally be withdrawn. The timeline and intent behind the arrangement both matter.
Effect of a purported revocation
If a principal attempts to revoke an irrevocable agency, that revocation has no legal effect. The agent's authority to act continues, and third parties who deal with the agent in good faith are protected. The agent may continue to exercise the powers granted until the underlying obligation has been discharged. However, if the agent has exceeded the scope of the agency, or if the obligation has in fact been paid in another way, the protection ceases. Documenting the original agreement carefully — including the pre-existing obligation and the specific acts the agency was meant to accomplish — is important to establishing that the protections of Article 1927 apply.
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.
- International Exchange Bank now Union Bank of the Philippines vs. Sps. Jerome and Quinnie Briones and John Doe, G.R. No. 205657, March 29, 2017 — read the decision on LawPhil →
- Genevieve Lim vs. Florencio Saban, G.R. No. 163720, December 16, 2004 — read the decision on LawPhil →
- National Sugar Trading, etc. vs. Philippine National Bank, G.R. No. 151218, January 28, 2003 — read the decision on LawPhil →