The effectiveness of a special power of attorney (SPA) automatically ends with the death of the person who granted it, and any acts carried out by the agent afterward are void—except under narrow exceptions provided by law, the Supreme Court (SC) has ruled.

In a decision dated May 7, 2025, penned by Associate Justice Henri Jean Paul B. Inting, the SC’s Third Division held that Jessica Alova Uberas (Jessica) lost her authority to act on behalf of her father, Meliton Alova (Meliton), 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.

Despite this, Jessica used the SPA in 2003 to secure a credit line from San Miguel Foods, Inc. (SMFI) by mortgaging her late father’s property. She used the credit line to purchase poultry products but failed to pay, prompting SMFI to foreclose on the property.

Both the Regional Trial Court (RTC) and the Court of Appeals (CA) found that Meliton’s death ended the agency. The RTC, however, ruled that because the SPA bore the conformity of Felicidad, Meliton’s wife, the mortgage was valid as to her ½ share of the conjugal property. The CA later invalidated the mortgage, ruling it was not executed on behalf of the spouses.

On appeal, the SC partly ruled in favor of SMFI, affirming that the SPA was terminated upon Meliton’s death but validating the mortgage and foreclosure sale with respect to Jessica’s undivided share in the property.

The Court explained 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. Because agency is personal, representative, and derivative, it terminates upon the death of either the principal or the agent.

Any act by the agent after the principal’s death is void, unless it falls under two Civil Code exceptions:

1. when the agency was for the parties’ common interest, and

2. when the agent, unaware of the death or termination, contracts with a third party in good faith.

In this case, the SC said, neither exception applied since Jessica was fully aware of her father’s death and the SPA was not created for their mutual benefit.

The Court also reiterated that for an agent’s act to bind a principal, the deed must be clearly executed in the principal’s name. Here, Jessica signed the mortgage in her personal capacity, though she described herself as Meliton’s attorney-in-fact. Thus, the mortgage was not executed in Meliton’s name.

Additionally, Felicidad could not be bound as a principal since she merely gave her marital conformity and was not a party to the SPA.

Still, the Court clarified that the mortgage and foreclosure sale were not entirely void. Jessica, having become a co-owner of the property after her father’s death, encumbered her share in the property to secure her obligation to SMFI. Therefore, the mortgage and foreclosure sale were valid only for Jessica’s share.