Manila: The Supreme Court (SC) has determined that a Special Power of Attorney (SPA) ceases to be effective upon the death of the person who granted it, rendering any actions executed by the agent thereafter generally void.

According to Philippines News Agency, the SC’s Third Division made public a decision affirming that Jessica Alova Uberas’s authority to act on behalf of her father, Meliton Alova, ended with his death in 1998. Meliton had issued an SPA in 1998 permitting Jessica to manage his property, but after his passing that same year, she utilized the SPA in 2003 to obtain a credit line from San Miguel Foods, Inc. (SMFI) by mortgaging her deceased father’s property. The credit line was intended for purchasing poultry products; however, Jessica’s failure to repay led SMFI to foreclose on the property.

The Regional Trial Court (RTC) and the Court of Appeals (CA) both agreed that Meliton’s death terminated the agency. Nevertheless, the RTC concluded that the mortgage was valid concerning Felicidad, Meliton’s wife’s half share of the conjugal property due to her conformity with the SPA. Conversely, the CA invalidated the mortgage, stating it was not executed on behalf of the spouses.

SMFI’s appeal to the SC resulted in a partial ruling in its favor, affirming the termination of the agency while validating the mortgage and foreclosure sale with respect to Jessica’s undivided share in the property. The SC held that actions by an agent post-principal’s death are void unless the agency served a common interest or the agent unknowingly contracted with a third party in good faith.

The SC emphasized that for an agent’s actions to obligate the principal, the deed must be explicitly made, signed, and sealed in the principal’s name. In this instance, the mortgage bore Jessica’s personal signature, though she was described as Meliton’s attorney-in-fact. The mortgage was neither executed nor sealed in Meliton’s name, it observed.

The SC clarified that the mortgage and foreclosure sale were not entirely void, as Jessica automatically became a co-owner of the property following her father’s death. When she executed the mortgage, she encumbered her portion of the property to secure her obligation to SMFI, thereby making the mortgage and foreclosure sale valid solely for Jessica’s share.