San Miguel v. Gandionco

Summary

This case involves the validity of real estate mortgages executed by an attorney-in-fact under special powers of attorney. Property owners executed SPAs authorizing Roberto Gandionco to 'offer as collateral' their properties for his beer dealership with San Miguel Corporation. Roberto used these SPAs to execute actual mortgages, which SMC later foreclosed when Roberto defaulted on P7,000,000.00 obligations. The Regional Trial Court and Court of Appeals voided the mortgages, ruling that the SPAs only authorized offering properties as collateral, not mortgaging them. However, the Supreme Court reversed, holding that the SPA language coupled with 'full power and authority' provisions constituted sufficient authority to mortgage. The Court applied the doctrine of apparent authority, noting that property owners clothed Roberto with authority by executing SPAs and delivering original titles on multiple occasions. The decision establishes important precedent on the scope of authority under special powers of attorney and the application of apparent authority doctrine in mortgage transactions.