Principal’s death voids power of attorney

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Persida Acosta

Persida Acosta

Dear PAO,
My brother tragically died last year. He left some substantial properties but he has neither a wife nor children and lived only with a close friend. I learned later on that his close friend sold some of my brother’s properties a month after his death. This close friend of my brother relies on a special power of attorney (SPA) executed by my brother while he was still alive authorizing his friend to dispose of some of his properties. The close friend of my brother insists the authority given to him by my brother is still valid despite my brother’s death. Is this correct? We are concerned because the remaining properties of my brother are being disposed of without our knowledge. As the remaining relatives of my brother, we’d like to know if my brother’s friend can legally rely on the said special power of attorney to dispose of my brother’s property even after his death. Thank you for your advice.                
Prado

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Dear Prado,
To answer your query, it is important that we first clarify the legal nature of the relationship between your brother and his close friend. Based on the existence of an SPA executed by your brother appointing his friend to have authority to act on his behalf, their legal relation is one of a principal–agent under a contract of agency covered by the Civil Code of the Philippines.

In a contract of agency, one party called the principal authorizes another person, called the agent, to act for and in his behalf in transactions with a third party (Civil Code of the Philippines, Article 1868). The SPA executed by your brother appointing his friend to act on his behalf is the express manifestation of their principal-agent relationship.

The scope of the authority given to an agent is limited to those provided and enumerated in the SPA. In connection to this, the period of effectivity of the authority given to an agent can be specified in the SPA. However, the absence of any provision indicating the period of effectivity of the SPA does not mean that the agency relation is permanent.

The law provides that an agency can be extinguished in a number of ways. One of the modes of extinguishing an agency is the death of the principal (Art. 1919, Civil Code of the Philippines). Jurisprudence further clarifies this rule by stating that any act of an agent after the death of his principal is void ab initio unless the agency was instituted for the common interest of the principal and the agent and if the death of the principal was unknown to the agent (Ramon Rallos v. CA, G.R. L-24332 January 31, 1978).

Notwithstanding the exceptions mentioned, the general rule is that the death of the principal extinguishes the authority given the agent. In other words, the authority given by your brother to his friend ceases immediately upon the death of the former. Thus, your brother’s friend has no legal rights anymore to act on his behalf. And since Art. 1317 of the Civil Code provides that no one can enter into a contract in the name of another without being authorized or being legally represented by the latter, it follows that transactions done by the said friend on your brother’s behalf after his death can be legally questioned as it was done without legal authority from your brother.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated. We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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