Special Power of Attorney

A Special Power of Attorney is a written document wherein one person (the "Principal") appoints and confers authority to another (the "Agent") to perform acts on behalf of the principal for one or more specific transactions. It is used as evidence of authority of the Agent to third persons with whom the Agent may be dealing with.

A Power of Attorney may generally be used to delegate any act that the Principal may do himself. However, acts that are required by law or public policy to be done by the Principal personally cannot be delegated to an Agent. Likewise, illegal acts cannot be delegated since the law prohibits illegal acts to be done by the Principal personally.

When an Agent acts on behalf of the Principal and within the authority given to him by the Principal in relation to a third party, the third party's liability is to the Principal and the liability to the third party is against the Principal and not the Agent. The Agent is generally not personally liable to third parties unless the Agent acts without authority such as when he exceeds the authority given to him by the Principal without giving said third party notice of his authorized acts or when he expressly binds himself to be liable to said third parties.

The Principal can also grant the Agent the authority to appoint a sub-agent or substitute to assist him in the performance of the acts on behalf of the Principal which the Agent has been authorized to do.

Types of Power of Attorney

A Power of Attorney can be general or special.

A General Power of Attorney can only be used to transact all the business of the principal. However, said transactions is limited to acts of administration.

A Special Power of Attorney is used when the Agent is authorized to act only in one or more specific transactions or to do one or more specific acts or to act only during a specific occasion. A Special Power of Attorney is necessary for the following acts:

• To make payments that are not usually considered acts of administration;
• To end an existing obligation by the creation of a new one by substituting the object of the obligation or the parties to the obligation;
• To enter into a compromise to avoid a litigation or to end one that has already started;
• To waive any obligations gratuitously (or freely);
• To enter into a contract where the ownership of a real property (e.g. land) is changed either gratuitously or with a consideration;
• To make gifts except customary ones for charity or those made to employees in the business managed by the Agent;
• To loan or borrow money unless the borrowing of money is urgent and indispensable for the preservation of the things which are under administration;
• To lease any real property to another person for more than one year;
• To bind the principal to render some service without compensation;
• To bind the principal in a contract of partnership;
• To bind the principal as a guarantor or surety;
• To create or convey real rights, such as mortgage, usufruct, easement, etc., over immovable property;
• To accept or repudiate an inheritance;
• To ratify or recognize obligations that were entered into before the agency;
• Any act of strict dominion such as selling or purchasing personal property.

Extinguishment of Agency

The agency ends:

• by revocation of the Principal;
• by withdrawal of the Agent;
• by the death, civil interdiction, insanity or insolvency of the principal or of the Agent;
• by the dissolution of the firm or corporation which entrusted or accepted the agency;
• by the accomplishment of the object or purpose of the agency;
• by the expiration of the period for which the agency was constituted.

Revocation by the Principal

The agency may generally be revoked at the will of the Principal except:

• when the agency is created not only for the interest of the Principal but also for the interest of third persons or for the mutual interest of both the Principal and the Agent;
• if the agency is the means of fulfilling an existing obligation;
• if the Agent is a partner who is appointed manager of a partnership in the contract of partnership and his removal from the management is unjustifiable.

The revocation of the agency may be express or implied such as when the principal appoints a new agent for the same business or transaction or when the principal directly manages the business entrusted to the Agent.

Notice of Revocation

Notice of the revocation to the Agent is necessary. However, if the Agent already knows that the agency has been terminated then express notice is not necessary.

Notice to third persons of the revocation of the agency is always necessary. The Principal must give a notice of the revocation to former clients and, if the purpose of the agency was to contract with specified person, to the specified persons. However, if the agency was for a general purpose then the notice of revocation in a newspaper of general circulation is sufficient notice to third persons.

How to use this document

This document can be completed by filling up the details of the Principal (name, citizenship, civil status, and address) and the Agent (name and address). The Principal must be of legal age (18 years old and above) to sign a Special Power of Attorney. Thereafter, the user must specifically describe the acts or transactions that the Agent is authorized to perform or enter into and choose whether the Power of Attorney will be valid only for a specific period of time. Finally, the names of two witnesses who will also sign the document should also be entered.

A Special Power of Attorney is valid even though it is not notarized except when notarization is required by statute (such as when the Special Power of Attorney was signed in a foreign country, in which case it must be notarized and certified as such in accordance with the rules of the foreign service of the Philippines stationed in said foreign country and authenticated by the seal of said foreign service).

In any case, this document also includes an Acknowledgment portion if the Principal chooses to notarize the document in the Philippines. To notarize a document, the Principal must personally appear before a notary public to acknowledge that he has voluntarily signed the document and that he signed the document as his free and voluntary act and deed. The Principal must also present a competent proof of identification that was issued by an official agency bearing the photograph and signature of the Principal.

Once the document is completed, the user should print at least three (3) copies of the document. The Principal should read the document and sign all copies of the document. The witnesses should also sign all the copies of the document after the Principal.

If the document will not be notarized, the Principal should give at least one (1) copy to the Agent so the Agent may use the same as evidence of his authority.

If the document will be notarized, the Principal should bring all the original copies of the document together with his competent proof of identification of identification to the notary public to acknowledge the execution of the document. The notary public will then affix his notarial seal on all copies of the document and keep one (1) original copy of the document.

Once notarized, the Principal should give at least one (1) copy to the Agent so the Agent may use the same as evidence of his authority.

Applicable Law

The Civil Code of the Philippines governs the law on agency. However, certain laws, such as the Rules of Court has certain provisions on the form of the Power of Attorney. Acknowledging a document before a notary public is governed by the 2004 Rules on Notarial Practice.

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