When Do You Need a Special Power of Attorney?
Quick answer
You need a special power of attorney (SPA) when someone acts for you in one of the acts listed in Article 1878 of the Civil Code. They include selling, buying or donating land, mortgaging land, borrowing or lending money, leasing real property for more than one year, settling a case by compromise, and accepting or giving up an inheritance. A general authority to "manage" your affairs does not cover these acts. For a sale of land, the authority must also be in writing, or the sale is void.
What is a special power of attorney?
In agency, the person who gives the authority is the principal, and the person who acts for him is the agent. Article 1877 says an agency "couched in general terms comprises only acts of administration", even if the principal says he withholds no power. For the acts in Article 1878, the law requires a special power: an authority that names the act.
The term is also explained in special power of attorney.
Which acts need a special power?
Article 1878 lists fifteen. These are the ones most people meet:
(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration; (6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent; (7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration; (8) To lease any real property to another person for more than one year;
The list also includes:
- making payments that are not usual acts of administration (item 1);
- compromising, submitting to arbitration or giving up an appeal (item 3);
- waiving an obligation for free (item 4);
- binding the principal as a guarantor or surety (item 11);
- creating or conveying real rights over immovable property, such as a mortgage (item 12);
- accepting or repudiating an inheritance (item 13);
- ratifying obligations made before the agency (item 14);
- "Any other act of strict dominion" (item 15).
For the full list, see the Article 1878 page.
What extra rule applies to selling land?
The authority must be in writing. Article 1874 says:
When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.
In Spouses Alcantara v. Nido (2010), there was no proof of the agent's written authority to sell the lot. The buyers argued that the sale was only voidable and could be ratified. The Court affirmed the ruling that the sale was void.
The authority must also clearly cover a sale. In Pahud v. Court of Appeals (2009), the Court quoted an earlier ruling: the mandate must be "one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned." In that case the Court still held some co-heirs bound by a sale on the ground of estoppel, because they had admitted the sale and stayed silent. That outcome rested on the facts of the case and is not a general cure for a missing SPA.
Does the SPA have to be notarized?
Article 1358(3) says a power to administer property, "or any other power which has for its object an act appearing or which should appear in a public document", must appear in a public document. Since a sale or mortgage of land should appear in a public document, an SPA for it must itself be in a public document. See Does a deed of sale need to be notarized?
For Filipinos abroad, notarization of documents is a consular service of Philippine embassies and consulates. The appointment process is in the guide to embassy appointments abroad. This page does not cover consular, apostille or notarial requirements.
What if the agent acts without authority?
A contract made in someone's name by a person "who has been given no authority or legal representation, or who has acted beyond his powers" is unenforceable unless the principal ratifies it (Article 1403, item 1). But a sale of land through an agent without written authority is void under Article 1874, as in Nido.
How does this work in real life?
These are made-up examples to show how the rules work. They are not advice for any real case.
Arnel works in Dubai and wants his sister to sell his lot in Batangas. He gives her a written special power of attorney that expressly authorizes her to sell that lot (Articles 1874 and 1878(5)). Without written authority, a sale signed by his sister would be void under Article 1874.
Arnel's earlier authority only says his sister may "manage my properties". That general authority does not let her sell or mortgage the lot, borrow money in his name, or lease the lot for more than one year (Article 1878, items 5, 7, 8 and 12).
Grace's father has died and the heirs plan an extrajudicial settlement. Grace cannot attend. Accepting or giving up her share of the inheritance through someone else needs a special power (item 13). See Extrajudicial settlement of estate.
When do you need a lawyer?
Talk to a lawyer before you sign an SPA that lets someone sell or mortgage your property, borrow money in your name or settle a case for you, and before you buy land from someone who signs as an agent. A lawyer can check that the authority clearly covers the act and the property. If your property was sold by someone without your written authority, talk to a lawyer as soon as possible.
If you cannot afford a lawyer, see Free legal help in the Philippines.
Which provisions does this answer rest on?
Frequently asked questions
What is a special power of attorney (SPA)?
It is an authority given by a person (the principal) to another (the agent) to do specific acts in the principal's name. Article 1878 of the Civil Code lists the acts that need this special power.
Do I need an SPA for my sibling to sell my land while I work abroad?
Yes. Article 1878(5) requires a special power for any contract that transfers ownership of land, and Article 1874 requires the agent's authority to sell land to be in writing. Without it, the sale is void.
Is a general power of attorney enough to sell property?
No. In Pahud v. Court of Appeals (2009), the Supreme Court quoted an earlier ruling that an authority couched in general terms must expressly mention a sale, or include a sale as a necessary ingredient of the act mentioned, before the agent can sell.
Do I need an SPA for someone to borrow money for me?
Yes. Article 1878(7) requires a special power to loan or borrow money, unless borrowing is urgent and indispensable to preserve things under the agent's administration.
Does an SPA for land need to be notarized?
Article 1358(3) says a power whose object is an act that appears or should appear in a public document must itself appear in a public document. A sale of land is such an act. This page does not cover the notarial or consular rules themselves.
What happens if an agent sells land without written authority?
The sale is void (Article 1874). In Spouses Alcantara v. Nido (2010), the Supreme Court affirmed a ruling that such a sale was void, not merely voidable, so it could not be ratified.
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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