RALLOS v FELIX GO CHAN & REALTY COPR.

, Munoz-Palma
Plaintiff: Ramon Rallos
Defendant: Felix Go Chan & Sons Realty Corporation
Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of the parcel
of land in issue. They executed a special power of attorney in favor of their brother, Simeon
Rallos, authorizing him to sell such land for and in their behalf. After Concepcion died,
Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia to Felix Go
Chan & Sons Realty Corporation for the sum of P10,686.90. New TCTs were issued to the
latter.
Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed a
complaint praying (1) that the sale of the undivided share of the deceased Concepcion
Rallos in lot 5983 be unenforceable, and said share be reconveyed to her estate; (2) that the
Certificate of 'title issued in the name of Felix Go Chan & Sons Realty Corporation be
cancelled and another title be issued in the names of the corporation and the "Intestate
estate of Concepcion Rallos" in equal undivided and (3) that plaintiff be indemnified by way
of attorney's fees and payment of costs of suit.
Issues: Whether or not the sale fell within the exception to the general rule that death
extinguishes the authority of the agent
Held/Ratio: Yes the sale is void. The court held that no one may contract in the name of
another without being authorized by the latter, or unless he has by law a right to represent
him (Art. 1317 of the Civil Code). Simons authority as agent was extinguished upon
Concolacions death. The sale did not fall under the exceptions to the general rule that
death ipso jure extinguishes the authority of the agent. Art. 1930 inapplicable since SPA in
favor of Simon Rallos was not coupled with interest and Art. 1931 inapplicable because
Rallos knew of principal Concepcions death. For Art 1931 to apply, both requirements must
be present
Laws on agency, the terms of which are clear and unmistakable leaving no room for an
interpretation contrary to its tenor, should apply, the law provides that death of the principal
ipso jure extinguishes the authority of the agent to sell rendering the sale to a third person
in good faith unenforceable unless at the agent had no knowledge of the principals death at
that time (exception under Art. 1931)
Dispositive: CA Decision reversed, CFI decision affirmed. Sale was null and void.
(Court discussed relevant principles first)
Relationship of Agency (concept arising from principles under Art 1317 and 1403)- one
party, caged the principal (mandante), authorizes another, called the agent (mandatario), to
act for and in his behalf in transactions with third persons.
-derivative in nature, power emanating from principal
-agents acts are acts of the principal

(1)
(2)
(3)
(4)

Essential Elements:
there is consent, express or implied of the parties to establish the relationship;
the object is the execution of a juridical act in relation to a third person;
the agents acts as a representative and not for himself, and
the agent acts within the scope of his authority.

Extinguishment

Generally: among others, By the death, civil interdiction, insanity or insolvency

of the principal or of the agent
- death of the principal effects instantaneous and absolute revocation
of the authority of the agent
Exceptions:
(Art. 1930) if it has been constituted in the common interest of the
latter and of the agent, or in the interest of a third person who has
accepted the stipulation in his favor.
(Art. 1931) agent acted without knowledge of the pricipals death
and that the third person was in good faith (both these reqs should be
present)