Understanding Your Special Power of Attorney: Why it Ends When You Do

A Special Power of Attorney (SPA) is essentially a written permission slip that allows a person you trust (your agent) to act on your behalf in specific legal or financial matters. It is a useful tool for things like selling property, handling bank transactions, or managing business deals if you are unable to do so yourself.

SPA is a contract of agency wherein you, the principal, authorizes an agent to act on your behalf in transactions with third persons.

However, it is crucial to understand a key limitation: the power of this document ends immediately upon your (principal’s) death.

Article 1930 of the Civil Code provides that, as a general rule, any act by the agent after the principal’s death is void, unless it falls under two exceptions: (1) when the agency was for the parties’ common interest, and (2) when the agent, unaware of the death or agency’s end, contracted with a third party in good faith.

The recent case of San Miguel Foods, Inc. vs. Felicidad D. Alova and Decelyn Alova Pution, G.R. No. 260071, May 07, 2025 highlighted this rule. In the case, a person used an SPA to mortgage a property after the owner had already passed away. The court ruled that because an SPA is a personal agreement, the agent's authority to act on behalf of the deceased person ended the moment the owner died.

The court decided that the mortgage was not valid for the entire property, as the agent was not authorized to act for the deceased. This shows that any actions an agent takes with a Special Power of Attorney after the principal's death are generally void and will not bind the deceased person's estate.

This case serves as an important reminder: While an SPA is a powerful tool, its validity is tied to the life of the person who granted it. For anyone using an SPA, or a third party dealing with an agent, it is essential to be cautious and verify that the principal is still living to avoid complications.

For assistance with SPAs, mortgages, and property matters in general, you can contact Cunanan Law Office at +63 976 385 6705 or send us an e-mail at inquiries@mpeclaw.com.