Document Hierarchy: Special Power of Attorney vs Deed of Assignment in Philippine Law
1. Framework: Where Do These Documents Sit in the Legal Order?
| Level |
Source |
Sample Instruments |
Notes |
| 1 |
Constitution |
Bill of Rights provisions on property (Art III), non-impairment of contracts (Art III §10) |
Paramount law; contracts & private instruments are void when they contravene it. |
| 2 |
Statutes |
Civil Code, Notarial Practice Act of 2004, Local Government Code, Corporation Code, Securities Regulation Code, Property Registration Decree |
Provide the enabling rules for SPAs and Deeds of Assignment. |
| 3 |
Regulations & Circulars |
Supreme Court A.M. No. 02-8-13-SC (2004 Notarial Rules), SEC Memorandum Circulars on assignment of receivables, BIR revenue regs on tax implications |
Flesh out procedural details and obligations (stamp taxes, notarial fees, etc.). |
| 4 |
Judicial Decisions |
Spouses Abella v. Spouses Abella (G.R. 146375, 2004) on validity of SPA; Rural Bank of Davao City v. CA (G.R. 161913, 2010) on assignment of credits |
Interpret statutes; constitute part of the legal system (Art. 8 Civil Code). |
| 5 |
Private Instruments |
Special Power of Attorney; Deed of Assignment; contracts, promissory notes, etc. |
Binding only upon parties & successors, except when notarized/registered, which gives them public character and notice to third parties. |
Key point: Both an SPA and a Deed of Assignment occupy the same fifth-level rung; neither trumps the other by mere label. Priority depends on (a) notarization/registration, (b) date of execution, (c) good-faith reliance, and (d) statutory special requirements (e.g., Art. 1625 on notice to obligor for assignments).
2. Special Power of Attorney (SPA)
| Aspect |
Description |
| Nature |
A written, specific mandate whereby a principal authorizes an agent to do particular acts on the principal’s behalf. |
| Statutory basis |
Arts. 1868–1890 & Art. 1878 (enumerating acts requiring “special power”) of the Civil Code. |
| Form |
Written; notarization is essential if the act to be performed must appear in a public instrument (e.g., sale of real property, loan secured by mortgage). |
| Scope |
Limited to the exact powers granted; courts apply expressio unius est exclusio alterius. |
| Typical uses |
Sale or mortgage of specific land/condo unit; opening/closing a bank account; litigation authority to settle; borrowing money above ₱O.D. threshold; incorporation formalities. |
| Registration |
If the SPA deals with real property, file with the Registry of Deeds (Sec. 112, PD 1529) so it may be annotated on the title. |
| Revocation |
Freely revocable by the principal before the agent binds him to a third party (Arts. 1920, 1924 CC), except when coupled with an interest. Must use another notarized instrument and, to bind third parties in good faith, notice must be given. |
| Evidentiary weight |
Notarized SPA is a public document (Rule 132, §20 Rules of Court); admissible without proof of authenticity. A private SPA needs to be authenticated. |
3. Deed of Assignment
| Aspect |
Description |
| Nature |
A conveyance whereby an assignor transfers to an assignee ownership of, or beneficial rights to, a property, credit, leasehold, intellectual-property right, or contractual position. Operates as a contract of cession (credits) or as a conveyance (personal/real property). |
| Statutory basis |
Arts. 1624–1635 (assignment of credits), Arts. 1300-1304 (cession), PD 1529 §71 (assignment of real property), IP Code for IP assignments, Corp. Code §42 (assignment of shares), Securities Regulation Code §53 (asset-backed securitization). |
| Form |
Written for validity; notarization strongly advised so the document becomes a public instrument, mandatory if the property assigned is real or the assignment is to be recorded in registries (Intellectual Property Office, Land Registration Authority, SEC). |
| Effectivity vis-à-vis third parties |
(1) Date of deed determines priority as between multiple assignees (Arts. 1626–1627). (2) Notice or acceptance by the debtor/obligor is indispensable to bind the obligor (Art. 1626). |
| Registration |
– Real property: Register with Registry of Deeds.
– IP rights: Record with Intellectual Property Office.
– Receivables backing securities: Notify SEC; annotate on borrowers’ chattel mortgages if any. |
| Tax & fees |
DST on assignment of credit (Sec. 191 DST Code), CGT or VAT on assignment of real/personal property as applicable. |
| Revocability |
Generally irrevocable once perfected, unless parties insert a condition subsequent or there is fraud/illegality. |
4. Why Compare? ― Common Scenarios
| Scenario |
Document Normally Used |
Why |
| You need someone to sell your condo abroad |
SPA |
Acts of strict agency; title remains with principal until sale. |
| A bank buys a portfolio of consumer loans from a fintech |
Deed of Assignment |
Ownership of receivables is transferred en masse; no agency. |
| Startup founder wants co-founder to sign contracts on her behalf for 6 months |
SPA |
Delegation of personal authority, revocable. |
| Parent assigns royalty income from a song to a child |
Deed of Assignment |
Permanent conveyance of right to future royalties. |
| Mortgage lender demands written authority from overseas borrower’s spouse to sign mortgage |
SPA (Art. 1878 ¶g) |
Special power required to bind conjugal property. |
5. Hierarchy & Priority Between the Two
- Label is not determinative. Courts look at contents (Art. 1375 CC).
- Public vs. private instrument. A notarized Deed of Assignment may prevail over a private SPA executed earlier, if third parties rely in good faith on the notarized deed.
- Registration/annotation. Between two notarized documents affecting the same real property, the one first registered takes priority (PD 1529 §53: “Prior tempore, potior jure”).
- Agency vs. conveyance of title. If the agent under an SPA conveys the property to A, but prior thereto the principal had already assigned it to B via a Deed of Assignment (and B had notified the debtor/registered the deed), B’s title is superior; the agent could have nothing more to convey than what remained with the principal (nemo dat quod non habet).
- Good-faith protection (Art. 1397, Torrens System). A buyer/assignee in good faith relying on a clean title and a duly annotated SPA may be protected even if the SPA is later revoked without notice, but malice or unregistered adverse claims defeat that protection.
6. Formal Requirements Checklist
| Requirement |
SPA |
Deed of Assignment |
| Written form |
Yes (Art. 1874 if real property) |
Yes (Art. 1624) |
| Notarization |
De facto required if underlying act requires public instrument or to confer public character |
Strongly advised; mandatory if registrable property |
| Specific authority / description |
Must specify each act (Art. 1878) |
Must describe property/credit and consideration |
| Acceptance/consent of third party |
Not needed (agency is between principal & agent) |
Debtor/obligor must be notified or accept to bind him (Art. 1626) |
| Registration |
Optional except for real property or trust dealings |
Required for real/IP property or SEC-regulated assignments |
| Documentary stamps |
₱100 for each SPA (Sec. 195 DST) |
0.5% of consideration on assignment of credits; CGT/VAT rules for property |
| Revocation filing |
File notarized revocation; annotate at registry if SPA earlier annotated |
Not applicable (binding conveyance) |
7. Drafting & Practice Tips
- Use precise verbs. “Sell,” “mortgage,” “lease,” “assign,” “endorse”; avoid “dispose of” unless you intend full breadth.
- Insert safeguards. Requiring counter-signature, board resolutions, or dual consulship can mitigate unauthorized acts.
- Embed a “coupled with an interest” clause when the agent has advanced funds; this limits unilateral revocation (Art. 1927).
- Always include a dating clause and sign on every page; pagination mismatches are a red flag in notarization audits.
- For assignments of receivables, annex the schedule of accounts and require the assignor to deliver original promissory notes (for transfer of possession under the Negotiable Instruments Law).
- Tax clearances. Obtain BIR CAR for assignments of real property or shares to avoid later registration blockage.
- Cross-check marital consent. Conjugal or community property dispositions need written spousal consent (Family Code § 96).
- Record revocations of SPAs with the same notary/registry to give constructive notice; many fraud cases hinge on outdated SPAs still circulating.
8. Common Pitfalls
- Blank-space notarization. Invalidates the document; disciplinary action vs. notary.
- Foreign-executed SPA without apostille/authentication. Unenforceable until consularized or apostilled and then re-notarized locally.
- Assignments intended as mortgages. Substance over form: courts treat a so-called “absolute deed” as an equitable mortgage if loan factors exist (Spouses Abella).
- Failure to notify the debtor. Debtor who pays the assignor in good faith is discharged (Art. 1626).
- Undated SPA. Barred from registration; easily challenged for fraud.
- Using a general SPA for acts requiring special authority. Sale of realty, compromise, partition, or making gifts are void without specific authority (Art. 1878).
9. Frequently-Asked Questions
| Q |
A |
| Can a Deed of Assignment substitute for an SPA? |
Only if the true intent is to transfer the asset outright. If the plan is for another person merely to act in your name, use an SPA. |
| Which is stronger in court, an SPA or a Deed of Assignment? |
Neither inherently; whichever is (a) notarized, (b) earlier, (c) registered/annotated, and (d) relied on in good faith usually prevails. |
| May one document combine both? |
Yes, e.g., “I assign to Bank X my receivables and authorize Bank X to collect them.” Courts look at substance; dual nature is permissible. |
| How long is an SPA valid? |
Until expressly revoked, until the principal (or agent) dies or becomes incapacitated, or until its stated expiry. If coupled with an interest, it may survive the principal’s death. |
| Is BIR DST due on an SPA used abroad? |
DST is due if the SPA will be used in the Philippines or affects property here; otherwise, it can be stamped “For use abroad only” and may be exempt. |
10. Conclusion
In Philippine practice, a Special Power of Attorney is essentially delegated authority while a Deed of Assignment is a transfer of ownership or rights. They share the same plane in the hierarchy of private documents, but priority—and therefore legal safety—depends on meticulous compliance with form, notarization, registration, and notice. Understanding the statutory hooks (particularly Civil Code Arts. 1624-1635 and 1868-1890) and procedural overlays (Notarial Rules, PD 1529, revenue regulations) ensures that either instrument fulfills its role without exposing the parties to avoidable disputes.