Invalid Special Power of Attorney (SPA) Conditions in Philippine Law
I. Overview
A Special Power of Attorney (SPA) is a written mandate in which a principal confers on an agent the authority to perform a specific act or series of acts on the principal’s behalf. While most SPAs are straightforward, many fail—or later become unenforceable—because the document itself, its contents, or subsequent events offend statutory rules, jurisprudential standards, or public-policy constraints. This article gathers, in one place, everything a Philippine practitioner or layperson needs to know about when an SPA is void, voidable, unenforceable, or simply ineffective.
II. Statutory Foundations
| Source | Key Rules Relevant to Invalidity |
|---|---|
| Civil Code (Arts. 1318, 1390–1409, 1878–1883, 1919–1920) | Requisites of contracts; enumeration of transactions that require an SPA; grounds for void, voidable, or unenforceable contracts; causes for extinction of agency. |
| Rules on Notarial Practice (2004, as amended) | Formalities for notarization; effect of defective notarization. |
| Property Registration Decree (PD 1529) & LRA circulars | Registration requirements for SPAs affecting real property. |
| RA 8239 (Philippine Passport Act) & Apostille Convention (2019) | Authentication of SPAs executed abroad. |
| Special statutes (e.g., Trust Receipts Law, Negotiable Instruments Law) | Where agency must meet additional formalities or is outright prohibited. |
III. General Requisites for a Valid SPA
- Capacity of the parties Principal must be at least 18 years old and of sound mind; agent must likewise have juridical capacity for the delegated act.
- Written form An SPA must always be in writing; notarization is mandatory for the acts listed in Article 1878 (e.g., sale or mortgage of real property, borrowing money, creating easements, making gifts, entering into a contract of partnership, compromising a lawsuit).
- Specificity The powers must be clearly and unmistakably stated. A general clause—“to do whatever is necessary”—does not suffice for Article 1878 transactions.
- Acceptance by agent (express or implied).
- Compliance with special laws Example: If the SPA involves government-issued securities, the form required by the Bureau of the Treasury must be used.
Failure in any of the above yields an SPA that is void or unenforceable from the outset.
IV. Conditions and Circumstances That Render an SPA Invalid or Ineffective
| Category | Illustrative Scenarios | Consequence |
|---|---|---|
| A. Defects in Form | – SPA covering sale of land is privately signed but not notarized. – Notary’s commission had expired when the SPA was signed. – The notarial page lacks competent evidence of identity. |
Void and produces no rights; registrations based on it may be cancelled. |
| B. Lack of Specific Authority | – SPA says “manage all affairs” but does not expressly allow the agent to sell a specific parcel. – Borrowing money without a clear sum or lender named. |
Agent’s act binds only himself; third parties are charged with notice of limits of authority. |
| C. Incapacity or Disability | – Principal was legally insane at signing. – Agent is a minor or under interdiction. – Corporate principal’s board resolution authorizing the SPA is absent. |
Contract is voidable (incapacity) or void (insanity); may be annulled. |
| D. Illicit or Impossible Object | – SPA authorizes agent to “pay bribes,” “smuggle goods,” or perform acts contrary to law or morals. | Void ab initio under Art. 1409. |
| E. Conditional Clauses Offensive to Law or Public Policy | – “This SPA can never be revoked for any reason.” (Contravenes Art. 1920 unless coupled with interest.) – “Principal waives any and all future claims for negligence.” |
Clause is void; may taint entire SPA if indivisible. |
| F. Falsification / Forgery | – Signature of principal forged. – Seal of notary counterfeit. |
Void; criminal liability attaches. |
| G. Failure of Authentication Abroad | – SPA signed in Dubai but not apostillized or consularized before use in PH. | Unenforceable until cured. |
| H. Lack of Registration Where Required | – SPA affecting Torrens-titled land not annotated on title but relied upon to register a deed of sale. | Register of Deeds may refuse; subsequent buyer in good faith may be protected. |
| I. Extinguishment by Operation of Law | – Death of the principal or agent (Art. 1919[1]). – Loss or destruction of the subject matter. – Dissolution or merger of a corporate principal (unless surviving corp. assumes obligation). |
Agency terminates automatically; acts after termination are void unless ratified. |
| J. Revocation or Renunciation | – Principal notifies agent (and third party) of revocation before agent’s act. – Agent renounces the agency. |
Subsequent acts have no effect. |
| K. Subsequent Incompatibility | – Principal personally performs the act or grants SPA to another agent for the same act (Art. 1923). | Earlier SPA is impliedly revoked as to third parties with notice. |
V. Void, Voidable, Unenforceable, or Ineffective? How the Courts Classify Defects
| Defect | Classification | Effect | Remedy |
|---|---|---|---|
| Illegal object, absolute simulation, lack of authority for Art. 1878 act | Void | No rights created; cannot be ratified. | Action for declaration of nullity; imprescriptible. |
| Incapacity of principal or agent | Voidable | Valid until annulled; subject to four-year prescriptive period. | Action for annulment (Art. 1397). |
| No written instrument or authentication required by law | Unenforceable (Statute of Frauds) | Cannot be enforced without ratification. | Ratification (express or implied) cures defect. |
| Extinguished agency (death, revocation) | Ineffective as to acts done after termination | Act binds only the agent personally. | Third parties may invoke equitable estoppel if misled. |
VI. Selected Supreme Court Jurisprudence
| Case | G.R. No. | Key Holding on Invalid SPA |
|---|---|---|
| Spouses Abesamis v. Spouses Hernandez | 193945 (2020) | Sale of conjugal land void because SPA executed by husband lacked wife’s marital consent; not saved by subsequent ratification absent written authority. |
| Heirs of Malate v. G.S.I.S. | 203851 (2016) | SPA for real property sale must be notarized; private SPA is void and passes no title even to innocent purchasers. |
| Development Bank of the Phils. v. Court of Appeals | 119180 (1995) | Bank could not foreclose based on SPA where corporate board resolution was defective; agency deemed nonexistent. |
| Samala v. Court of Appeals | 122536 (1999) | Death of the principal automatically revoked SPA; buyer who relied on post-mortem deed had no protection. |
| Tuazon v. Heirs of Ramos | 150823 (2005) | SPA with blanket authority insufficient to mortgage land; specificity rule strictly applied. |
VII. Evidentiary & Procedural Considerations
- Original-document rule (Best-Evidence): Courts require the original notarized SPA or an authenticated copy.
- Self-authenticating effect of notarization: A duly notarized SPA enjoys presumption of regularity; the burden shifts to the challenger to prove forgery or defect.
- Need for actual notice of revocation: Under Art. 1921, a revocation does not prejudice a third party who acted in good faith without knowledge of the revocation.
- Registration with the Registry of Deeds gives constructive notice of both issuance and revocation when affecting real property.
VIII. Drafting & Due-Diligence Checklist
| ✔︎ | Question |
|---|---|
| - | Is the principal clearly identified and competent? Name, civil status, residence, government ID? |
| - | Does the agent have capacity and is he disinterested (to avoid self-dealing bars)? |
| - | Is the act one of those enumerated in Art. 1878? If so, are the exact powers spelled out? |
| - | Will the act be performed abroad? Plan apostille/consularization early. |
| - | Has the instrument been properly notarized (active commission, notarial register entry, IDs presented, thumbprints)? |
| - | Are there inherent expiry terms (fixed date, completion of task, completion of sale)? |
| - | Will the SPA be used in a registry or bank? Verify if they need specimen signatures or board resolutions. |
| - | For corporate principals: attach board resolution and secretary’s certificate. |
| - | Is there a safe mechanism for revocation (e.g., mandatory return of owner’s duplicate title, cancellation annotation)? |
IX. Practical Pointers for Third Parties
- Always Demand the Original – Photocopies mask forged notarial seals.
- Check the Notarial Roll Online – The Supreme Court e-roll lists commission dates and status.
- Inspect for Particularization – A power “to manage my property” does not include the power to sell it.
- Verify Post-Execution Events – Ask for a certified copy of death certificate of principal; confirm revocation notices.
- Secure Warranties in the Principal Contract – Seller should warrant the validity of the SPA; include indemnity clauses.
X. Conclusion
The validity of a Special Power of Attorney in the Philippines is highly formalistic. Anything short of strict compliance with statutory form, specificity, and procedural safeguards puts the instrument at risk of being declared void, voidable, or unenforceable. Moreover, even a perfectly drafted SPA can later become ineffective through events such as death, revocation, or corporate dissolution.
Given the stakes—title to land, large loans, settlement of lawsuits—lawyers and contracting parties must treat SPAs with the same rigor as the principal contracts they enable: vet the identities, insist on proper notarization, examine corporate authorities, register where the law requires, and track revocations. In Philippine practice, an ounce of diligence prevents a ton of litigation.