Short answer. No. The Civil Code treats the power to sell and the power to mortgage as separate special powers — a special power to sell excludes the power to mortgage. If your document only authorized a sale, your agent has no authority under it to mortgage the property, and a mortgage he signs on that basis does not bind you.
What the law says
A special power to sell excludes the power to mortgage; and a special power to mortgage does not include the power to sell.
Civil Code, Article 1879 — Sell vs. Mortgage. Read the full provision →
Each special power is read narrowly
Article 1879 is short but strict: a special power to sell excludes the power to mortgage; and a special power to mortgage does not include the power to sell. These are treated as two distinct acts of disposition, each requiring its own express authorization. A document that grants your agent a special power of attorney to sell your property, and says nothing about mortgaging it, does not implicitly give him the lesser or related power to encumber it instead — the law reads the grant strictly, along the lines of what it actually says.
Why the law separates the two so sharply
Selling and mortgaging have different consequences for you as owner. A sale transfers ownership outright for whatever the agent negotiates; a mortgage keeps ownership with you but exposes the property to foreclosure if the underlying obligation is not paid. Because the risks are different, the authority to take one action does not carry over to the other — the principal who signs a power of attorney is entitled to know that his agent's authority stops exactly where the document stops, rather than being read broadly to cover whatever the agent finds convenient.
What this means for you if it already happened
If your agent mortgaged the property under an authority that was limited to selling it, that act was outside what the document empowered him to do. The starting point in that situation is to look closely at the exact wording of the power of attorney you signed — what it authorizes, in what terms, and whether it says anything at all about encumbering the property — since the mortgage's validity against you depends on whether the document actually covers it.
What to check before you grant authority
Because each act needs its own special power, the safest course when appointing an agent to deal with real property is to state precisely which acts you are authorizing — sale, mortgage, lease, or something else — rather than relying on general language and assuming it covers everything. If you want to prevent this exact problem going forward, review any existing power of attorney you have granted and confirm it lists only the specific acts you actually intend the agent to perform, and revoke or replace it if it does not.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Luzviminda Palo vs. Spouses Rey C. Baquirquir, G.R. No. 228919, August 23, 2023 — read the decision on LawPhil →
- Spouses Benito Baysa and Victoria Baysa vs. Spouses Fidel Plantilla and Susan Plantilla, etc, G.R. No. 159271, July 13, 2015 — read the decision on LawPhil →