Practice question
An owner gives a written special power to sell a specified parcel for at least PHP4 million. An agent instead mortgages it for PHP2 million and argues that the transaction is beneficial because the owner retains title. There is no separate mortgage authority or ratification. Which drafting and authority assessment is best?
- The retained title automatically makes the mortgage authorized
- The special power to sell does not include mortgage authority; a claimed benefit does not erase Article 1879's distinction
- Every advantageous act is authorized even if it is a different reserved power
- Only the lender's good intentions determine the principal's authority
- The price floor itself authorizes borrowing
Legal references
- https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html — Civil Code, Articles 1874, 1877–1881.
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