27/08/2025
SPECIAL POWER OF ATTORNEY ENDS UPON PRINCIPAL'S DEATHāSUPREME COURT
| The Supreme Court (SC) held that the effectiveness of a special power of attorney (SPA) automatically ends with the death of the principal or the person who granted the same, and any acts carried out by the agent afterward are generally void.
In a 13-page decision written by Associate Justice Henri Jean Paul Inting, the SC's Third Division held that Jessica Alova Uberas lost her authority to act on behalf of her father, Meliton Alova, upon his death in 1998, as the SPA had already been terminated.
In 1998, Meliton executed an SPA authorizing Jessica to manage his property but died later that year. In 2003, Uberas used the SPA to secure a credit line from San Miguel Foods, Inc. (SMFI) by mortgaging a property belonging to her late father.
When Uberas failed to pay for the poultry products she purchased using the credit line, SMFI initiated foreclosure proceedings on the property.
Both the Regional Trial Court (RTC) and the Court of Appeals (CA) found that Melitonās death ended the agency. The RTC, however, ruled that because the SPA bore the conformity of Felicidad, Melitonās wife, the mortgage was valid as to her Ā½ share of the conjugal property. The CA later invalidated the mortgage, ruling it was not executed on behalf of the spouses.
This prompted Uberas to elevate the case before the Supreme Court. In partially affirming the lower court's ruling, the SC held that the agency relationship between Uberas and her father had been terminated by his death.
It noted that an SPA is a type of contract of agency, which is inherently personal and ends with the death of either the principal or the agent. Meanwhile, the court upheld the validity of the mortgage and foreclosure sale with respect to Jessicaās undivided share in the property.
The SC held that under an SPA, which is a contract of agency, a principal authorizes an agent to act on his or her behalf in transactions with third parties. It further explained that since an agency is personal, representative, and derivative, the same terminates upon the death of either the principal or the agent.
Any act by the agent after the principalās death is void, unless it falls under two Civil Code exceptions:
ā¢ When the agency was created for the common interest of both the principal and the agent.
ā¢ When the agent was unaware of the principalās death and acted in good faith with a third party.
The court held that neither exception applied since Jessica was fully aware of her fatherās death, and the SPA was not created for their mutual benefit.
It also underscored that for an agentās act to bind a principal, the deed must be clearly executed in the principalās name. Here, Jessica signed the mortgage in her personal capacity, though she described herself as Melitonās attorney-in-fact. Thus, the mortgage was not executed in Melitonās name.
While the SC upheld the termination of the SPA, it partially ruled in favor of SMFI by declaring the mortgage and the subsequent foreclosure sale valid only with respect to Uberasā undivided share in the property.
It opined that when Uberas' father died, Uberas automatically became a co-owner of the property as an heir. Hence, when she signed the mortgage deed in her personal capacity, she effectively encumbered her own share to secure her debt to SMFI.
However, the Court clarified that the mortgage and foreclosure sale were not entirely void. Jessica, having become a co-owner of the property after her fatherās death, encumbered her share in the property to secure her obligation to SMFI.
