MANILA — The Supreme Court (SC) has ruled that a Special Power of Attorney (SPA) automatically terminates upon the death of the person who granted it, and any acts carried out by the agent afterward are void unless they fall under limited exceptions provided by law.

In a decision penned by Associate Justice Henri Jean Paul B. Inting, the SC’s Third Division held that Jessica Alova Uberas lost her authority to act on behalf of her father, Meliton Alova, when he died in 1998.

Despite Meliton’s death, Jessica used the SPA in 2003 to secure a credit line from San Miguel Foods, Inc. (SMFI) through a mortgage on her late father’s property. After she defaulted on payments for poultry products, SMFI foreclosed on the property.

Both the Regional Trial Court and the Court of Appeals ruled that Meliton’s death ended the agency. However, the RTC recognized the mortgage as valid over the share of Meliton’s wife, Felicidad, while the CA invalidated it entirely.

On appeal, the SC partly ruled in SMFI’s favor. It upheld the termination of the SPA but validated the mortgage and foreclosure sale insofar as Jessica’s undivided share in the property was concerned, since she became a co-owner upon her father’s death.

The Court stressed that agency contracts are personal, representative, and derivative in nature, and end with the death of either the principal or the agent. It cited two exceptions under the Civil Code: when the agency is for the parties’ common interest, or when the agent, unaware of the principal’s death, transacts with a third party in good faith.

The SC noted that these exceptions did not apply, as Jessica was fully aware of her father’s death and the SPA was not made for mutual benefit. It also emphasized that the mortgage was signed by Jessica in her personal capacity and not in the name of her late father.

The ruling clarified that Felicidad’s marital conformity did not bind her as a principal under the SPA.