This email came from a friend: “Pare, I have read your column today in the Freeman about the code of credit ethics. This is a great write-up. I will be sharing this info to my other circle of friends. Hope to see you soon. I have also a request to you: please give more tips on how to prevent bad debts.”
Thank you my friend for this inspiring message, I will surely deal with this topic in future columns. But for now, let me answer a text question I received sometime last week, the said texter would like to know: “When are Special Power of Attorneys (SPA) necessary?”
Well, I am not a lawyer, so I asked my mentor who I know is very knowledgeable in the subject matter. According to the foremost Credit & Collection guru Erling Sison, Special Powers of Attorney are necessary in the following cases:
(1) To make such payments as are not usually considered as acts of administration;
(2) To effect notations which put an end to obligations already in existence at the time the agency was constituted;
(3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.
(6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent;
(7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration;
(8) To lease any real property to another person for more than one year;
(9) To bind the principal to render some service without compensation;
(10) To bind the principal amount in a contract or partnership;
(11) To obligate the principal as a guarantor or surety;
(12) To create or convey real rights over immovable property;
(13) To accept or repudiate an inheritance;
(14) To ratify or recognize obligations contracted before the agency;
(15) Any other act of strict dominion. (Art. 1878, Civil Code).
Furthermore, according to Mr. Sison, there are several forms of Powers of Attorney:
1. Form 1-972 – General Power of Attorney; 2.Form 2-972 – Special Power of Attorney to Negotiate for a Loan; 3.Form 3-975 – Special Power of Attorney to Borrow Money, Mortgage Land, Satisfy Mortgage, etc.; 4.Form 4-977 – Special Power of Attorney to Manage Real Property; 5.Form 5-979 – Special Power of Attorney to Settle Personal Injury Claims;
6. Form 6-980 – Special Power of Attorney to Collect Claim; 7.Form 7-981 – Special Power of Attorney to Purchase House and Lot; 8.Form 8-983 – Special Power of Attorney to Sell Shares and Securities; 9.Form 9-985 – Appointment of Substitute Attorney-in-Fact; 10.Form 10-986 – Revocation of Power Attorney.
So there you go, I hope I was able to give some clarity to the query. By the way, if you have any questions pertaining to Credit & Collection (C&C) don’t hesitate to email or text me. I will try to answer them as far I could or if I don’t know the answer will research it for you.
(Mr. Ed F. Limtingco can be reached at 0917-7220521 or at elimtingco@cibi.net.ph)