Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 149353 June 26, 2006
JOCELYN B. DOLES, Petitioner,
vs.
M. UR T!N NGELES, Respondent.
D E C I S I O N
USTR!"MRT!NE#, J.:
This refers to the Petition for Reie! on Certiorari under Rule "#
of the Rules of Court $uestionin% the Decision
&
dated 'pril ()*
+))& of the Court of 'ppeals ,C'- in C.'../.R. CV No. 0012#*
!hich reersed the Decision dated 3ul4 +1* &112 of the Re%ional
Trial Court ,RTC-* 5ranch +&* Cit4 of Manila6 and the C'
Resolution
+
dated 'u%ust 0* +))& !hich denied petitioner7s
Motion for Reconsideration.
The antecedents of the case follo!8
On 'pril &* &119* Ma. 'ura Tina 'n%eles ,respondent- :led !ith
the RTC a co;plaint for Speci:c Perfor;ance !ith Da;a%es
a%ainst 3ocel4n 5. Doles ,petitioner-* doc<eted as Ciil Case No.
19.2+9&0. Respondent alle%ed that petitioner !as indebted to
the for;er in the concept of a personal loan a;ountin% to
P")#*"().)) representin% the principal a;ount and interest6
that on October #* &110* b4 irtue of a =Deed of 'bsolute
Sale=*
(
petitioner* as seller* ceded to respondent* as bu4er* a
parcel of land* as !ell as the i;proe;ents thereon* !ith an
area of "+ s$uare ;eters* coered b4 Transfer Certi:cate of
Title No. (2+#(+*
"
and located at a subdiision pro>ect <no!n as
Ca;ella To!nho;es Sorrente in 5acoor* Caite* in order to
satisf4 her personal loan !ith respondent6 that this propert4
!as ;ort%a%ed to National ?o;e Mort%a%e Finance
Corporation ,N?MFC- to secure petitioner7s loan in the su; of
P((9*)#).)) !ith that entit46 that as a condition for the
fore%oin% sale* respondent shall assu;e the undue balance of
the ;ort%a%e and pa4 the ;onthl4 a;orti@ation of P"*9"2.&&
for the re;ainder of the +# 4ears !hich be%an on Septe;ber (*
&11"6 that the propert4 !as at that ti;e bein% occupied b4 a
tenant pa4in% a ;onthl4 rent of P(*))).))6 that upon
eri:cation !ith the N?MFC* respondent learned that petitioner
had incurred arreara%es a;ountin% to P+0*9"".)1* inclusie of
penalties and interest6 that upon infor;in% the petitioner of her
arrears* petitioner denied that she incurred the; and refused to
pa4 the sa;e6 that despite repeated de;and* petitioner
refused to cooperate !ith respondent to eAecute the necessar4
docu;ents and other for;alities re$uired b4 the N?MFC to
eBect the transfer of the title oer the propert46 that petitioner
collected rent oer the propert4 for the ;onth of 3anuar4 &119
and refused to re;it the proceeds to respondent6 and that
respondent suBered da;a%es as a result and !as forced to
liti%ate.
Petitioner* then defendant* !hile ad;ittin% so;e alle%ations in
the Co;plaint* denied that she borro!ed ;one4 fro;
respondent* and aerred that fro; 3une to Septe;ber &11#* she
referred her friends to respondent !ho; she <ne! to be
en%a%ed in the business of lendin% ;one4 in eAchan%e for
personal chec<s throu%h her capitalist 'rsenio Pua. She alle%ed
that her friends* na;el4* Cenaida Ro;ulo* Theresa Moratin*
3ulia Inocencio* Vir%inia 3acob* and Eli@abeth To;elden*
borro!ed ;one4 fro; respondent and issued personal chec<s
in pa4;ent of the loan6 that the chec<s bounced for
insuDcienc4 of funds6 that despite her eBorts to assist
respondent to collect fro; the borro!ers* she could no lon%er
locate the;6 that* because of this* respondent beca;e furious
and threatened petitioner that if the accounts !ere not settled*
a cri;inal case !ill be :led a%ainst her6 that she !as forced to
issue ei%ht chec<s a;ountin% to P(#)*))) to ans!er for the
bounced chec<s of the borro!ers she referred6 that prior to the
issuance of the chec<s she infor;ed respondent that the4 !ere
not suDcientl4 funded but the latter nonetheless deposited the
chec<s and for !hich reason the4 !ere subse$uentl4
dishonored6 that respondent then threatened to initiate a
cri;inal case a%ainst her for iolation of Batas Pambansa Blg.
++6 that she !as forced b4 respondent to eAecute an ='bsolute
Deed of Sale= oer her propert4 in 5acoor* Caite* to aoid
cri;inal prosecution6 that the said deed had no alid
consideration6 that she did not appear before a notar4 public6
that the Co;;unit4 TaA Certi:cate nu;ber on the deed !as
not hers and for !hich respondent ;a4 be prosecuted for
falsi:cation and per>ur46 and that she suBered da;a%es and
lost rental as a result.
The RTC identi:ed the issues as follo!s8 :rst* !hether the Deed
of 'bsolute Sale is alid6 second6 if alid* !hether petitioner is
obli%ed to si%n and eAecute the necessar4 docu;ents to eBect
the transfer of her ri%hts oer the propert4 to the respondent6
and third* !hether petitioner is liable for da;a%es.
On 3ul4 +1* &112* the RTC rendered a decision the dispositie
portion of !hich states8
E?EREFORE* pre;ises considered* the Court hereb4 orders the
dis;issal of the co;plaint for insuDcienc4 of eidence. Eith
costs a%ainst plaintiB.
SO ORDERED.
The RTC held that the sale !as oid for lac< of cause or
consideration8
#
PlaintiB 'n%eles7 ad;ission that the borro!ers are the friends
of defendant Doles and further ad;ission that the chec<s
issued b4 these borro!ers in pa4;ent of the loan obli%ation
ne%ates FsicG the cause or consideration of the contract of sale
eAecuted b4 and bet!een plaintiB and defendant. Moreoer*
the propert4 is not solel4 o!ned b4 defendant as appearin% in
Entr4 No. 1)## of Transfer Certi:cate of Title No. (2+#(+
,'nneA '* Co;plaint-* thus8
=Entr4 No. 1)##. Special Po!er of 'ttorne4 in faor of 3ocel4n
Doles coerin% the share of Teodorico Doles on the parcel of
land described in this certi:cate of title b4 irtue of the special
po!er of attorne4 to ;ort%a%e* eAecuted before the notar4
public* etc.=
The rule under the Ciil Code is that contracts !ithout a cause
or consideration produce no eBect !hatsoeer. ,'rt. &(#+* Ciil
Code-.
Respondent appealed to the C'. In her appeal brief* respondent
interposed her sole assi%n;ent of error8
T?E TRI'H COIRT ERRED IN DISMISSIN/ T?E C'SE 'T 5'R ON
T?E /ROIND OF FsicG T?E DEED OF S'HE 5ETEEEN T?E
P'RTIES ?'S NO CONSIDER'TION OR INSIFFICIENCJ OF
EVIDENCE.
0
On 'pril ()* +))&* the C' pro;ul%ated its Decision* the
dispositie portion of !hich reads8
E?EREFORE* IN VIEE OF T?E FORE/OIN/* this appeal is
hereb4 /R'NTED. The Decision of the lo!er court dated 3ul4 +1*
&112 is REVERSED and SET 'SIDE. ' ne! one is entered
orderin% defendant.appellee to eAecute all necessar4
docu;ents to eBect transfer of sub>ect propert4 to plaintiB.
appellant !ith the arreara%es of the for;er7s loan !ith the
N?MFC* at the latter7s eApense. No costs.
SO ORDERED.
The C' concluded that petitioner !as the borro!er and* in turn*
!ould =re.lend= the a;ount borro!ed fro; the respondent to
her friends. ?ence* the Deed of 'bsolute Sale !as supported b4
a alid consideration* !hich is the su; of ;one4 petitioner
o!ed respondent a;ountin% to P")#*"().))* representin% both
principal and interest.
The C' too< into account the follo!in% circu;stances in their
entiret48 the supposed friends of petitioner neer presented
the;seles to respondent and that all transactions !ere ;ade
b4 and bet!een petitioner and respondent6
9
that the ;one4
borro!ed !as deposited !ith the ban< account of the
petitioner* !hile pa4;ents ;ade for the loan !ere deposited b4
the latter to respondent7s ban< account6
2
that petitioner herself
ad;itted in open court that she !as =re.lendin%= the ;one4
loaned fro; respondent to other indiiduals for pro:t6
1
and that
the docu;entar4 eidence sho!s that the actual borro!ers* the
friends of petitioner* consider her as their creditor and not the
respondent.
&)
Further;ore* the C' held that the alle%ed threat or inti;idation
b4 respondent did not itiate consent* since the sa;e is
considered >ust or le%al if ;ade to enforce one7s clai; throu%h
co;petent authorit4 under 'rticle &((#
&&
of the Ciil Code6
&+
that !ith respect to the arreara%es of petitioner on her ;onthl4
a;orti@ation !ith the N?MFC in the su; of P+0*9"".)1* the
sa;e shall be dee;ed part of the balance of petitioner7s loan
!ith the N?MFC !hich respondent a%reed to assu;e6 and that
the a;ount of P(*))).)) representin% the rental for 3anuar4
&119 supposedl4 collected b4 petitioner* as !ell as the clai; for
da;a%es and attorne47s fees* is denied for insuDcienc4 of
eidence.
&(
On Ma4 +1* +))&* petitioner :led her Motion for Reconsideration
!ith the C'* ar%uin% that respondent cate%oricall4 ad;itted in
open court that she acted onl4 as a%ent or representatie of
'rsenio Pua* the principal :nancier and* hence* she had no le%al
capacit4 to sue petitioner6 and that the C' failed to consider the
fact that petitioner7s father* !ho co.o!ned the sub>ect
propert4* !as not i;pleaded as a defendant nor !as he
indebted to the respondent and* hence* she cannot be ;ade to
si%n the docu;ents to eBect the transfer of o!nership oer the
entire propert4.
On 'u%ust 0* +))&* the C' issued its Resolution den4in% the
;otion on the %round that the fore%oin% ;atters had alread4
been passed upon.
On 'u%ust &(* +))&* petitioner receied a cop4 of the C'
Resolution. On 'u%ust +2* +))&* petitioner :led the present
Petition and raised the follo!in% issues8
I.
E?ET?ER OR NOT T?E PETITIONER C'N 5E CONSIDERED 'S '
DE5TOR OF T?E RESPONDENT.
II.
E?ET?ER OR NOT 'N '/ENT E?O E'S NOT 'IT?ORICED 5J
T?E PRINCIP'H TO COHHECT DE5T IN ?IS 5E?'HF COIHD
DIRECTHJ COHHECT P'JMENT FROM T?E DE5TOR.
III.
E?ET?ER OR NOT T?E CONTR'CT OF S'HE E'S EKECITED
FOR ' C'ISE.
&"
'lthou%h* as a rule* it is not the business of this Court to reie!
the :ndin%s of fact ;ade b4 the lo!er courts* >urisprudence has
reco%ni@ed seeral eAceptions* at least three of !hich are
present in the instant case* na;el48 !hen the >ud%;ent is
based on a ;isapprehension of facts6 !hen the :ndin%s of facts
of the courts a quo are conLictin%6 and !hen the C' ;anifestl4
oerloo<ed certain releant facts not disputed b4 the parties*
!hich* if properl4 considered* could >ustif4 a diBerent
conclusion.
&#
To arrie at a proper >ud%;ent* therefore* the
Court :nds it necessar4 to re.eAa;ine the eidence presented
b4 the contendin% parties durin% the trial of the case.
The Petition is ;eritorious.
The principal issue is !hether the Deed of 'bsolute Sale is
supported b4 a alid consideration.
&. Petitioner ar%ues that since she is ;erel4 the a%ent or
representatie of the alle%ed debtors* then she is not a part4 to
the loan6 and that the Deed of Sale eAecuted bet!een her and
the respondent in their o!n na;es* !hich !as predicated on
that pre.eAistin% debt* is oid for lac< of consideration.
Indeed* the Deed of 'bsolute Sale purports to be supported b4
a consideration in the for; of a price certain in ;one4
&0
and
that this su; indisputabl4 pertains to the debt in issue. This
Court has consistentl4 held that a contract of sale is null and
oid and produces no eBect !hatsoeer !here the sa;e is
!ithout cause or consideration.
&9
The $uestion that has to be
resoled for the ;o;ent is !hether this debt can be considered
as a alid cause or consideration for the sale.
To restate* the C' cited four instances in the record to support
its holdin% that petitioner =re.lends= the a;ount borro!ed fro;
respondent to her friends8 :rst* the friends of petitioner neer
presented the;seles to respondent and that all transactions
!ere ;ade b4 and bet!een petitioner and respondent6
&2
second6 the ;one4 passed throu%h the ban< accounts of
petitioner and respondent6
&1
third* petitioner herself ad;itted
that she !as =re.lendin%= the ;one4 loaned to other indiiduals
for pro:t6
+)
and fourth* the docu;entar4 eidence sho!s that
the actual borro!ers* the friends of petitioner* consider her as
their creditor and not the respondent.
+&
On the :rst* third* and fourth points* the C' cites the testi;on4
of the petitioner* then defendant* durin% her cross.
eAa;ination8
++
'tt4. Di@a8
$. Jou also ;entioned that 4ou !ere not the one indebted to
the plaintiBM
!itness8
a. Jes* sir.
'tt4. Di@a8
$. 'nd 4ou ;entioned the personsF*G na;el4* Eli@abeth
To;elden* Teresa Mora$uin* Maria Huisa Inocencio* Cenaida
Ro;ulo* the4 are 4our friendsM
!itness8
a. Inocencio and Mora$uin are ;4 friends !hile Fas toG 3acob
and To;eldenF*G the4 !ere >ust referred.
'tt4. Di@a8
$. 'nd 4ou hae transactFedG !ith the plaintiBM
!itness8
a. Jes* sir.
'tt4. Di@a8
$. Ehat is that transactionM
!itness8
a. To refer those persons to 'ura and to refer a%ain to 'rsenio
Pua* sir.
'tt4. Di@a8
$. Did the plaintiB personall4 see the transactions !ith 4our
friendsM
!itness8
a. No* sir.
'tt4. Di@a8
$. Jour friends and the plaintiB did not ;eet personall4M
!itness8
a. Jes* sir.
'tt4. Di@a8
$. Jou are inter;ediariesM
!itness8
a. Ee are both inter;ediaries. 's eidenced b4 the chec<s of
the debtors the4 !ere deposited to the na;e of 'rsenio Pua
because the ;one4 ca;e fro; 'rsenio Pua.
A A A A
'tt4. Di@a8
$. Did the plaintiB <ne! FsicG that 4ou !ill lend the ;one4 to
4our friends speci:call4 the one 4ou ;entioned FaG !hile a%oM
!itness8
a. Jes* she <no!s the ;one4 !ill %o to those persons.
'tt4. Di@a8
$. Jou are re.lendin% the ;one4M
!itness8
a. Jes* sir.
'tt4. Di@a8
$. Ehat pro:t do 4ou hae* do 4ou hae co;;issionM
!itness8
a. Jes* sir.
'tt4. Di@a8
$. ?o! ;uchM
!itness8
a. T!o percent to To;elden* one percent to 3acob and then
Inocencio and ;4 friends none* sir.
5ased on the fore%oin%* the C' concluded that petitioner is the
real borro!er* !hile the respondent* the real lender.
5ut as correctl4 noted b4 the RTC* respondent* then plaintiB*
;ade the follo!in% ad;ission durin% her cross eAa;ination8
+(
'tt4. Villacorta8
$. Eho is this 'rsenio PuaM
!itness8
a. Principal :nancier* sir.
'tt4. Villacorta8
$. So the ;one4 ca;e fro; 'rsenio PuaM
!itness8
a. Jes* because I a; onl4 representin% hi;* sir.
Other portions of the testi;on4 of respondent ;ust li<e!ise be
considered8
+"
'tt4. Villacorta8
$. So it is not actuall4 4our ;one4 but the ;one4 of 'rsenio
PuaM
!itness8
a. Jes* sir.
Court8
$. It is not 4our ;one4M
!itness8
a. Jes* Jour ?onor.
'tt4. Villacorta8
$. Is it not a fact Ms. Eitness that the defendant borro!ed fro;
4ou to acco;;odate so;ebod4* are 4ou a!are of thatM
!itness8
a. I a; a!are of that.
'tt4. Villacorta8
$. More or less she Facco;;odatedG seeral friends of the
defendantM
!itness8
a. Jes* sir* I a; a!are of that.
A A A A
'tt4. Villacorta8
$. 'nd these friends of the defendant borro!ed ;one4 fro;
4ou !ith the assurance of the defendantM
!itness8
a. The4 %o direct to 3ocel4n because I don7t <no! the;.
A A A A
'tt4. Villacorta8
$. 'nd is it not also a fact Mada; !itness that eer4ti;e that
the defendant borro!ed ;one4 fro; 4ou her friends !ho FareG
in need of ;one4 issued chec<FsG to 4ouM There !ere chec<s
issued to 4ouM
!itness8
a. Jes* there !ere chec<s issued.
'tt4. Villacorta8
$. 54 the friends of the defendant* a; I correctM
!itness8
a. Jes* sir.
'tt4. Villacorta8
$. 'nd because of 4our assistance* the friends of the defendant
!ho are in need of ;one4 !ere able to obtain loan to FsicG
'rsenio Pua throu%h 4our assistanceM
!itness8
a. Jes* sir.
'tt4. Villacorta8
$. So that occasion lasted for ;ore than a 4earM
!itness8
a. Jes* sir.
'tt4. Villacorta8
$. 'nd so;e of the chec<s that !ere issued b4 the friends of
the defendant bounced* a; I correctM
!itness8
a. Jes* sir.
'tt4. Villacorta8
$. 'nd because of that 'rsenio Pua %ot ;ad !ith 4ouM
!itness8
a. Jes* sir.
Respondent is estopped to den4 that she herself acted as a%ent
of a certain 'rsenio Pua* her disclosed principal. She is also
estopped to den4 that petitioner acted as a%ent for the alle%ed
debtors* the friends !ho; she ,petitioner- referred.
This Court has aDr;ed that* under 'rticle &202 of the Ciil
Code* the basis of a%enc4 is representation.
+#
The $uestion of
!hether an a%enc4 has been created is ordinaril4 a $uestion
!hich ;a4 be established in the sa;e !a4 as an4 other fact*
either b4 direct or circu;stantial eidence. The $uestion is
ulti;atel4 one of intention.
+0
'%enc4 ;a4 een be i;plied fro;
the !ords and conduct of the parties and the circu;stances of
the particular case.
+9
Thou%h the fact or eAtent of authorit4 of
the a%ents ;a4 not* as a %eneral rule* be established fro; the
declarations of the a%ents alone* if one professes to act as
a%ent for another* she ;a4 be estopped to den4 her a%enc4
both as a%ainst the asserted principal and the third persons
interested in the transaction in !hich he or she is en%a%ed.
+2
In this case* petitioner <ne! that the :nancier of respondent is
Pua6 and respondent <ne! that the borro!ers are friends of
petitioner.
The C' is incorrect !hen it considered the fact that the
=supposed friends of FpetitionerG* the actual borro!ers* did not
present the;seles to FrespondentG= as eidence that ne%ates
the a%enc4 relationshipNit is suDcient that petitioner disclosed
to respondent that the for;er !as actin% in behalf of her
principals* her friends !ho; she referred to respondent. For an
a%enc4 to arise* it is not necessar4 that the principal personall4
encounter the third person !ith !ho; the a%ent interacts. The
la! in fact conte;plates* and to a %reat de%ree* i;personal
dealin%s !here the principal need not personall4 <no! or ;eet
the third person !ith !ho; her a%ent transacts8 precisel4* the
purpose of a%enc4 is to eAtend the personalit4 of the principal
throu%h the facilit4 of the a%ent.
+1
In the case at bar* both petitioner and respondent hae
undeniabl4 disclosed to each other that the4 are representin%
so;eone else* and so both of the; are estopped to den4 the
sa;e. It is eident fro; the record that petitioner ;erel4 refers
actual borro!ers and then collects and disburses the a;ounts
of the loan upon !hich she receied a co;;ission6 and that
respondent transacts on behalf of her =principal :nancier=* a
certain 'rsenio Pua. If their respectie principals do not actuall4
and personall4 <no! each other* such i%norance does not aBect
their >uridical standin% as a%ents* especiall4 since the er4
purpose of a%enc4 is to eAtend the personalit4 of the principal
throu%h the facilit4 of the a%ent.
Eith respect to the ad;ission of petitioner that she is =re.
lendin%= the ;one4 loaned fro; respondent to other indiiduals
for pro:t* it must be stressed that the manner in which the
parties designate the relationship is not controlling. If an act
done b4 one person in behalf of another is in its essential
nature one of a%enc4* the for;er is the a%ent of the latter
not!ithstandin% he or she is not so called.
()
The $uestion is to
be deter;ined b4 the fact that one represents and is actin% for
another* and if relations eAist !hich !ill constitute an a%enc4* it
will be an agency whether the parties understood the exact
nature of the relation or not.
(&
That both parties acted as ;ere a%ents is sho!n b4 the
undisputed fact that the friends of petitioner issued chec<s in
pa4;ent of the loan in the na;e of Pua. If it is true that
petitioner !as =re.lendin%=* then the chec<s should hae been
dra!n in her na;e and not directl4 paid to Pua.
Eith respect to the second point* particularl4* the :ndin% of the
C' that the disburse;ents and pa4;ents for the loan !ere
;ade throu%h the ban< accounts of petitioner and respondent*
suDce it to sa4 that in the nor;al course of co;;ercial
dealin%s and for reasons of conenience and practical utilit4 it
can be reasonabl4 eApected that the facilities of the a%ent*
such as a ban< account* ;a4 be e;plo4ed* and that a sub.
a%ent be appointed* such as the ban< itself* to carr4 out the
tas<* especiall4 !here there is no stipulation to the contrar4.
(+
In ie! of the t!o a%enc4 relationships* petitioner and
respondent are not pri4 to the contract of loan bet!een their
principals. Since the sale is predicated on that loan* then the
sale is oid for lac< of consideration.
+. ' further scrutin4 of the record sho!s* ho!eer* that the sale
;i%ht hae been bac<ed up b4 another consideration that is
separate and distinct fro; the debt8 respondent aerred in her
co;plaint and testi:ed that the parties had a%reed that as a
condition for the cone4ance of the propert4 the respondent
shall assu;e the balance of the ;ort%a%e loan !hich petitioner
alle%edl4 o!ed to the N?MFC.
((
This Court in the recent past
has declared that an assu;ption of a ;ort%a%e debt ;a4
constitute a alid consideration for a sale.
("
'lthou%h the record sho!s that petitioner ad;itted at the ti;e
of trial that she o!ned the propert4 described in the TCT*
(#
the
Court ;ust stress that the Transfer Certi:cate of Title No.
(2+#(+
(0
on its face sho!s that the o!ner of the propert4 !hich
ad;ittedl4 for;s the sub>ect ;atter of the Deed of 'bsolute
Sale refers neither to the petitioner nor to her father, Teodorico
Doles, the alleged co-owner. Rather* it states that the propert4
is re%istered in the na;e of =?ousehold Deelop;ent
Corporation.= 'lthou%h there is an entr4 to the eBect that the
petitioner had been %ranted a special po!er of attorne4
=coerin% the shares of Teodorico Doles on the parcel of land
described in this certi:cate*=
(9
it cannot be inferred fro; this
bare notation* nor fro; an4 other eidence on the record* that
the petitioner or her father held an4 direct interest on the
propert4 in $uestion so as to alidl4 constitute a ;ort%a%e
thereon
(2
and* !ith ;ore reason* to eBect the delier4 of the
ob>ect of the sale at the consu;;ation sta%e.
(1
Ehat is !orse*
there is a notation that the TCT itself has been =cancelled.=
")
In ie! of these ano;alies* the Court cannot entertain the
possibilit4 that respondent a%reed to assu;e the balance of the
;ort%a%e loan !hich petitioner alle%edl4 o!ed to the N?MFC*
especiall4 since the record is bereft of an4 factual :ndin% that
petitioner !as* in the :rst place* endo!ed !ith an4 o!nership
ri%hts to alidl4 ;ort%a%e and cone4 the propert4. 's the
co;plainant !ho initiated the case* respondent bears the
burden of proin% the basis of her co;plaint. ?ain% failed to
dischar%e such burden* the Court has no choice but to declare
the sale oid for lac< of cause. 'nd since the sale is oid* the
Court :nds it unnecessar4 to d!ell on the issue of !hether
duress or inti;idation had been foisted upon petitioner upon
the eAecution of the sale.
Moreoer* een assu;in% the ;ort%a%e alidl4 eAists* the Court
notes respondent7s alle%ation that the ;ort%a%e !ith the
N?MFC !as for +# 4ears !hich be%an Septe;ber (* &11".
Respondent :led her Co;plaint for Speci:c Perfor;ance in
&119. Since the +# 4ears had not lapsed* the pra4er of
respondent to co;pel petitioner to eAecute necessar4
docu;ents to eBect the transfer of title is pre;ature.
E?EREFORE* the petition is %ranted. The Decision and
Resolution of the Court of 'ppeals are RE$ERSED andSET
S!DE. The co;plaint of respondent in Ciil Case No. 19.2+9&0
is D!SM!SSED.
SO ORDERED.
SECOND DIVISION
%G.R. No. 11&356. June 19, 2000'
$!CTOR!S M!LL!NG CO., !NC., petitioner, vs.
COURT O( PPELS )n* CONSOL!DTED SUGR
CORPORT!ON, respondents.
D E C ! S ! O N
+U!SUMB!NG, J.,
5efore us is a petition for reie! on certiorari under Rule
"# of the Rules of Court assailin% the decision of the
Court of 'ppeals dated Februar4 +"* &11"* in C'./.R. CV
No. (&9&9* as !ell as the respondent courtOs resolution of
Septe;ber ()* &11" ;odif4in% said decision. 5oth
decision and resolution a;ended the >ud%;ent dated
Februar4 &(* &11&* of the Re%ional Trial Court of Ma<ati
Cit4* 5ranch &"9* in Ciil Case No. 1).&&2.
The facts of this case as found b4 both the trial and
appellate courts are as follo!s8
St. Therese Merchandisin% ,hereafter STM- re%ularl4
bou%ht su%ar fro; petitioner Victorias Millin% Co.* Inc.*
,VMC-. In the course of their dealin%s* petitioner issued
seeral Shippin% HistPDelier4 Receipts ,SHDRs- to STM as
proof of purchases. ';on% these !as SHDR No. &+&"M*
!hich %ae rise to the instant case. Dated October &0*
&121* SHDR No. &+&"M coers +#*))) ba%s of su%ar.
Each ba% contained #) <ilo%ra;s and priced at P0(2.))
per ba% as =per sales order VMC Mar<etin% No. )"+ dated
October &0* &121.=
F&G
The transaction it coered !as a
=direct sale.=
F+G
The SHDR also contains an additional note
!hich reads8 =sub>ect for ,sic- aailabilit4 of a ,sic- stoc<
at N'E'CO ,!arehouse-.=
F(G
On October +#* &121* STM sold to priate respondent
Consolidated Su%ar Corporation ,CSC- its ri%hts in SHDR
No. &+&"M for P &"*9#)*))).)). CSC issued one chec<
dated October +#* &121 and three chec<s postdated
Noe;ber &(* &121 in pa4;ent. That sa;e da4* CSC
!rote petitioner that it had been authori@ed b4 STM to
!ithdra! the su%ar coered b4 SHDR No. &+&"M.
Enclosed in the letter !ere a cop4 of SHDR No. &+&"M
and a letter of authorit4 fro; STM authori@in% CSC =to
!ithdra! for and in our behalf the re:ned su%ar coered
b4 Shippin% HistPDelier4 Receipt.Re:ned Su%ar ,SDR-
No. &+&" dated October &0* &121 in the total $uantit4 of
+#*))) ba%s.=
F"G
On October +9* &121* STM issued &0 chec<s in the total
a;ount of P(&*1))*))).)) !ith petitioner as pa4ee. The
latter* in turn* issued ODcial Receipt No. ((9"( dated
October +9* &121 ac<no!led%in% receipt of the said
chec<s in pa4;ent of #)*))) ba%s. 'side fro; SHDR No.
&+&"M* said chec<s also coered SHDR No. &+&(.
Priate respondent CSC surrendered SHDR No. &+&"M to
the petitionerOs N'E'CO !arehouse and !as allo!ed to
!ithdra! su%ar. ?o!eer* after +*))) ba%s had been
released* petitioner refused to allo! further !ithdra!als
of su%ar a%ainst SHDR No. &+&"M. CSC then sent
petitioner a letter dated 3anuar4 +(* &11) infor;in% it
that SHDR No. &+&"M had been =sold and endorsed= to it
but that it had been refused further !ithdra!als of su%ar
fro; petitionerOs !arehouse despite the fact that onl4
+*))) ba%s had been !ithdra!n.
F#G
CSC thus in$uired
!hen it !ould be allo!ed to !ithdra! the re;ainin%
+(*))) ba%s.
On 3anuar4 (&* &11)* petitioner replied that it could not
allo! an4 further !ithdra!als of su%ar a%ainst SHDR No.
&+&"M because STM had alread4 d!ithdra!n all the
su%ar coered b4 the cleared chec<s.
F0G
On March +* &11)* CSC sent petitioner a letter
de;andin% the release of the balance of +(*))) ba%s.
Seen da4s later* petitioner reiterated that all the su%ar
correspondin% to the a;ount of STMOs cleared chec<s
had been full4 !ithdra!n and hence* there !ould be no
;ore delieries of the co;;odit4 to STMOs account.
Petitioner also noted that CSC had represented itself to
be STMOs a%ent as it had !ithdra!n the +*))) ba%s
a%ainst SHDR No. &+&"M =for and in behalf= of STM.
On 'pril +9* &11)* CSC :led a co;plaint for speci:c
perfor;ance* doc<eted as Ciil Case No. 1).&&&2.
Defendants !ere Teresita N% S4 ,doin% business under
the na;e of St. Therese Merchandisin%- and herein
petitioner. Since the for;er could not be sered !ith
su;;ons* the case proceeded onl4 a%ainst the latter.
Durin% the trial* it !as discoered that Teresita N% /o
!ho testi:ed for CSC !as the sa;e Teresita N% S4 !ho
could not be reached throu%h su;;ons.
F9G
CSC* ho!eer*
did not bother to pursue its case a%ainst her* but instead
used her as its !itness.
CSCOs co;plaint alle%ed that STM had full4 paid
petitioner for the su%ar coered b4 SHDR No. &+&"M.
Therefore* the latter had no >usti:cation for refusin%
delier4 of the su%ar. CSC pra4ed that petitioner be
ordered to delier the +(*))) ba%s coered b4 SHDR No.
&+&"M and sou%ht the a!ard of P&*&)"*))).)) in
unreali@ed pro:ts* P(*)))*))).)) as eAe;plar4 da;a%es*
P+*+))*))).)) as attorne4Os fees and liti%ation eApenses.
PetitionerOs pri;ar4 defense a quo !as that it !as an
unpaid seller for the +(*))) ba%s.
F2G
Since STM had
alread4 dra!n in full all the su%ar correspondin% to the
a;ount of its cleared chec<s* it could no lon%er authori@e
further delier4 of su%ar to CSC. Petitioner also
contended that it had no priit4 of contract !ith CSC.
Petitioner eAplained that the SHDRs* !hich it had issued*
!ere not docu;ents of title* but ;ere delier4 receipts
issued pursuant to a series of transactions entered into
bet!een it and STM. The SHDRs prescribed delier4 of
the su%ar to the part4 speci:ed therein and did not
authori@e the transfer of said part4Os ri%hts and interests.
Petitioner also alle%ed that CSC did not pa4 for the SHDR
and !as actuall4 STMOs co.conspirator to defraud it
throu%h a ;isrepresentation that CSC !as an innocent
purchaser for alue and in %ood faith. Petitioner then
pra4ed that CSC be ordered to pa4 it the follo!in% su;s8
P&)*)))*))).)) as ;oral da;a%es6 P&)*)))*))).)) as
eAe;plar4 da;a%es6 and P&*#))*))).)) as attorne4Os
fees. Petitioner also pra4ed that cross.defendant STM be
ordered to pa4 it P&)*)))*))).)) in eAe;plar4 da;a%es*
and P&*#))*))).)) as attorne4Os fees.
Since no settle;ent !as reached at pre.trial* the trial
court heard the case on the ;erits.
's earlier stated* the trial court rendered its >ud%;ent
faorin% priate respondent CSC* as follo!s8
=E?EREFORE* in ie! of the fore%oin%* the Court
hereb4 renders >ud%;ent in faor of the plaintiB
and a%ainst defendant Victorias Millin% Co;pan48
=&- Orderin% defendant Victorias Millin% Co;pan4
to delier to the plaintiB +(*))) ba%s of re:ned
su%ar due under SHDR No. &+&"6
=+- Orderin% defendant Victorias Millin% Co;pan4
to pa4 the a;ount of P1+)*))).)) as unreali@ed
pro:ts* the a;ount of P2))*))).)) as eAe;plar4
da;a%es and the a;ount of P&*(#9*))).))* !hich
is &)Q of the ac$uisition alue of the undeliered
ba%s of re:ned su%ar in the a;ount of
P&(*#9)*))).))* as attorne4Os fees* plus the costs.
=SO ORDERED.=
F1G
It ;ade the follo!in% obserations8
=FTGhe testi;on4 of plaintiBOs !itness Teresita N%
/o* that she had full4 paid the purchase price of
P&#*1#)*))).)) of the +#*))) ba%s of su%ar
bou%ht b4 her coered b4 SHDR No. &+&" as !ell
as the purchase price of P&#*1#)*))).)) for the
+#*))) ba%s of su%ar bou%ht b4 her coered b4
SHDR No. &+&( on the sa;e date* October &0*
&121 ,date of the t!o SHDRs- is dul4 supported b4
EAhibits C to C.&# inclusie !hich are post.dated
chec<s dated October +9* &121 issued b4 St.
Therese Merchandisin% in faor of Victorias Millin%
Co;pan4 at the ti;e it purchased the #)*))) ba%s
of su%ar coered b4 SHDR No. &+&( and &+&". Said
chec<s appear to hae been honored and dul4
credited to the account of Victorias Millin%
Co;pan4 because on October +9* &121 Victorias
Millin% Co;pan4 issued oDcial receipt no. ("9("
in faor of St. Therese Merchandisin% for the
a;ount of P(&*1))*))).)) ,EAhibits 5 and 5.&-.
The testi;on4 of Teresita N% /o is further
supported b4 EAhibit F* !hich is a co;puter
printout of defendant Victorias Millin% Co;pan4
sho!in% the $uantit4 and alue of the purchases
;ade b4 St. Therese Merchandisin%* the SHDR no.
issued to coer the purchase* the oDcial reciept
no. and the status of pa4;ent. It is clear in EAhibit
OFO that !ith respect to the su%ar coered b4 SHDR
No. &+&" the sa;e has been full4 paid as indicated
b4 the !ord OclearedO appearin% under the colu;n
of Ostatus of pa4;ent.O
=On the other hand* the clai; of defendant
Victorias Millin% Co;pan4 that the purchase price
of the +#*))) ba%s of su%ar purchased b4 St.
Therese Merchandisin% coered b4 SHDR No. &+&"
has not been full4 paid is supported onl4 b4 the
testi;on4 of 'rnulfo Caintic* !itness for defendant
Victorias Millin% Co;pan4. The Court notes that
the testi;on4 of 'rnulfo Caintic is ;erel4 a
s!eepin% barren assertion that the purchase price
has not been full4 paid and is not corroborated b4
an4 positie eidence. There is an insinuation b4
'rnulfo Caintic in his testi;on4 that the postdated
chec<s issued b4 the bu4er in pa4;ent of the
purchased price !ere dishonored. ?o!eer* said
!itness failed to present in Court an4 dishonored
chec< or an4 replace;ent chec<. Said !itness
li<e!ise failed to present an4 ban< record sho!in%
that the chec<s issued b4 the bu4er* Teresita N%
/o* in pa4;ent of the purchase price of the su%ar
coered b4 SHDR No. &+&" !ere dishonored.=
F&)G
Petitioner appealed the trial court7s decision to the Court
of 'ppeals.
On appeal* petitioner aerred that the dealin%s bet!een
it and STM !ere part of a series of transactions inolin%
onl4 one account or one %eneral contract of sale.
Pursuant to this contract* STM or an4 of its authori@ed
a%ents could !ithdra! ba%s of su%ar onl4 a%ainst cleared
chec<s of STM. SHDR No. +&+&"M !as onl4 one of ++
SHDRs issued to STM and since the latter had alread4
!ithdra!n its full $uota of su%ar under the said SHDR*
CSC !as alread4 precluded fro; see<in% delier4 of the
+(*))) ba%s of su%ar.
Priate respondent CSC countered that the su%ar
purchases inolin% SHDR No. &+&"M !ere separate and
independent transactions and that the details of the
series of purchases !ere contained in a sin%le state;ent
!ith a consolidated su;;ar4 of cleared chec< pa4;ents
and su%ar stoc< !ithdra!als because this a ;ore
conenient s4ste; than issuin% separate state;ents for
each purchase.
The appellate court considered the follo!in% issues8 ,a-
Ehether or not the transaction bet!een petitioner and
STM inolin% SHDR No. &+&"M !as a separate*
independent* and sin%le transaction6 ,b- Ehether or not
CSC had the capacit4 to sue on its o!n on SHDR No.
&+&"M6 and ,c- Ehether or not CSC as bu4er fro; STM of
the ri%hts to +#*))) ba%s of su%ar coeredb4 SHDR No.
&+&"M could co;pel petitioner to delier +(*))) ba%s
alle%edl4 un!ithdra!n.
On Februar4 +"* &11"* the Court of 'ppeals rendered its
decision ;odif4in% the trial courtOs >ud%;ent* to !it8
=E?EREFORE* the Court hereb4 !D"#"$% the
assailed >ud%;ent and orders defendant.appellant
to8
=&- Delier to plaintiB.appellee &+*#20 ba%s of
su%ar coered b4 SHDR No. &+&"M6
= +- Pa4 to plaintiB.appellee P91+*1&2.)) !hich is
&)Q of the alue of the undeliered ba%s of
re:ned su%ar* as attorne4s fees6
=(- Pa4 the costs of suit.
=SO ORDERED.=
F&&G
5oth parties then seasonabl4 :led separate ;otions for
reconsideration.
In its resolution dated Septe;ber ()* &11"* the appellate
court ;odi:ed its decision to read8
=E?EREFORE* the Court hereb4 ;odi:es the
assailed >ud%;ent and orders defendant.appellant
to8
=,&- Delier to plaintiB.appellee +(*))) ba%s of
re:ned su%ar under SHDR No. &+&"M6
=,+- Pa4 costs of suit.
=SO ORDERED.=
F&+G
The appellate court eAplained the rationale for the
;odi:cation as follo!s8
=There is ;erit in plaintiB.appelleeOs position.
=EAhibit RFO Ee relied upon in :Ain% the nu;ber of
ba%s of su%ar !hich re;ained undeliered as
&+*#20 cannot be ;ade the basis for such a
:ndin%. The rule is eAplicit that courts should
consider the eidence onl4 for the purpose for
!hich it !as oBered. &People v. 'balos, et al, ( )'
Rep 92(-. The rationale for this is to aBord the
part4 a%ainst !ho; the eidence is presented to
ob>ect thereto if he dee;s it necessar4. PlaintiB.
appellee is* therefore* correct in its ar%u;ent that
EAhibit RFO !hich !as oBered to proe that chec<s
in the total a;ount of P&#*1#)*))).)) had been
cleared. &#ormal !*er of $vidence for Plainti*,
+ecords p. ,-. cannot be used to proe the
proposition that &+*#20 ba%s of su%ar re;ained
undeliered.
=Testi;onial eidence &Testimonies of Teresita /g
0T%/, (1 !ctober (221, p. 334 and arianito 5.
%antos 0T%/, (6 !ctober (221, pp. (7, (-, and
374. presented b4 plaintiB.appellee !as to the
eBect that it had !ithdra!n onl4 +*))) ba%s of
su%ar fro; SHDR after !hich it !as not allo!ed to
!ithdra! an4;ore. Docu;entar4 eidence
,$xhibit ", "d., p. 6-, $xhibit 8, "d., p. -1. sho! that
plaintiB.appellee had sent de;and letters to
defendant.appellant as<in% the latter to allo! it to
!ithdra! the re;ainin% +(*))) ba%s of su%ar fro;
SHDR &+&"M. Defendant.appellant* on the other
hand* alle%ed that su%ar delier4 to the STM
corresponded onl4 to the alue of cleared chec<s6
and that all su%ar corresponded to cleared chec<s
had been !ithdra!n. Defendant.appellant did not
rebut plaintiB.appelleeOs assertions. It did not
present eidence to sho! ho! ;an4 ba%s of su%ar
had been !ithdra!n a%ainst SHDR No. &+&"M*
precisel4 because of its theor4 that all sales in
$uestion !ere a series of one sin%le transaction
and !ithdra!al of su%ar depended on the clearin%
of chec<s paid therefor.
='fter a second loo< at the eidence* Ee see no
reason to oerturn the :ndin%s of the trial court on
this point.=
F&(G
?ence* the instant petition* positin% the follo!in% errors
as %rounds for reie!8
=&. The Court of 'ppeals erred in not holdin% that
STMOs and priate respondentOs speciall4 infor;in%
petitioner that respondent !as authori@ed b4
bu4er STM to !ithdra! su%ar a%ainst SHDR No.
&+&"M =for and in our ,STM- behalf*= ,e;phasis in
the ori%inal- priate respondentOs !ithdra!in%
+*))) ba%s of su%ar for STM* and STMOs
e;po!erin% other persons as its a%ents to
!ithdra! su%ar a%ainst the sa;e SHDR No. &+&"M*
rendered respondent li<e the other persons* an
a%ent of STM as held in +allos v. #elix 9o )han :
+ealty )orp., 2& SCR' +#+* and precluded it fro;
subse$uentl4 clai;in% and proin% bein% an
assi%nee of SHDR No. &+&"M and fro; suin% b4
itself for its enforce;ent because it !as
conclusiel4 presu;ed to be an a%ent ,Sec. +* Rule
&(&* Rules of Court- and estopped fro; doin% so.
,'rt. &"(&* Ciil Code-.
= +. The Court of 'ppeals erred in ;anifestl4 and
arbitraril4 i%norin% and disre%ardin% certain
releant and undisputed facts !hich* had the4
been considered* !ould hae sho!n that petitioner
!as not liable* eAcept for 01 ba%s of su%ar* and
!hich !ould >ustif4 reie! of its conclusion of facts
b4 this ?onorable Court.
= (. The Court of 'ppeals ;isapplied the la! on
co;pensation under 'rts. &+91* &+2# and &0+0 of
the Ciil Code !hen it ruled that co;pensation
applied onl4 to credits fro; one SHDR or contract
and not to those fro; t!o or ;ore distinct
contracts bet!een the sa;e parties6 and erred in
den4in% petitionerOs ri%ht to setoB all its credits
arisin% prior to notice of assi%n;ent fro; other
sales or SHDRs a%ainst priate respondentOs clai;
as assi%nee under SHDR No. &+&"M* so as to
eAtin%uish or reduce its liabilit4 to 01 ba%s*
because the la! on co;pensation applies
precisel4 to t!o or ;ore distinct contracts
bet!een the sa;e parties ,e;phasis in the
ori%inal-.
=". The Court of 'ppeals erred in concludin% that
the settle;ent or li$uidation of accounts in EAh. RF7
bet!een petitioner and STM* respondentOs
ad;ission of its balance* and STMOs ac$uiescence
thereto b4 silence for al;ost one 4ear did not
render EAh. SFO an account stated and its balance
bindin%.
=#. The Court of 'ppeals erred in not holdin% that
the conditions of the assi%ned SHDR No. &+&"*
na;el4* ,a- its sub>ect ;atter bein% %eneric* and
,b- the sale of su%ar bein% sub>ect to its
aailabilit4 at the Na!aco !arehouse* ;ade the
sale conditional and preented STM or priate
respondent fro; ac$uirin% title to the su%ar6 and
the non.aailabilit4 of su%ar freed petitioner fro;
further obli%ation.
=0. The Court of 'ppeals erred in not holdin% that
the =clean hands= doctrine precluded respondent
fro; see<in% >udicial reliefs ,sic- fro; petitioner*
its onl4 re;ed4 bein% a%ainst its assi%nor.=
F&"G
Si;pl4 stated* the issues no! to be resoled are8
,&-....Ehether or not the Court of 'ppeals erred in
not rulin% that CSC !as an a%ent of STM and
hence* estopped to sue upon SHDR No. &+&"M as
an assi%nee.
,+-....Ehether or not the Court of 'ppeals erred in
appl4in% the la! on co;pensation to the
transaction under SHDR No. &+&"M so as to
preclude petitioner fro; oBsettin% its credits on
the other SHDRs.
,(-....Ehether or not the Court of 'ppeals erred in
not rulin% that the sale of su%ar under SHDR No.
&+&"M !as a conditional sale or a contract to sell
and hence freed petitioner fro; further
obli%ations.
,"-....Ehether or not the Court of 'ppeals
co;;itted an error of la! in not appl4in% the
=clean hands doctrine= to preclude CSC fro;
see<in% >udicial relief.
The issues !ill be discussed in seriatim.
'nent the ;rst issue* !e :nd fro; the records that
petitioner raised this issue for the :rst ti;e on appeal. It
is settled that an issue !hich !as not raised durin% the
trial in the court belo! could not be raised for the :rst
ti;e on appeal as to do so !ould be oBensie to the
basic rules of fair pla4* >ustice* and due process.
F&#G

Nonetheless* the Court of 'ppeals opted to address this
issue* hence* no! a ;atter for our consideration.
Petitioner heail4 relies upon STMOs letter of authorit4
allo!in% CSC to !ithdra! su%ar a%ainst SHDR No. &+&"M
to sho! that the latter !as STMOs a%ent. The pertinent
portion of said letter reads8
=This is to authori@e Consolidated Su%ar
Corporation or its representatie to !ithdra! for
and in our behalf ,stress supplied- the re:ned
su%ar coered b4 Shippin% HistPDelier4 Receipt T
Re:ned Su%ar ,SDR- No. &+&" dated October &0*
&121 in the total $uantit4 of +#* ))) ba%s.=
F&0G
The Ciil Code de:nes a contract of a%enc4 as follo!s8
='rt. (-7-. 54 the contract of a%enc4 a person
binds hi;self to render so;e serice or to do
so;ethin% in representation or on behalf of
another* !ith the consent or authorit4 of the
latter.=
It is clear fro; 'rticle &202 that the basis of a%enc4 is
representation.
F&9G
On the part of the principal* there ;ust
be an actual intention to appoint
F&2G
or an intention
naturall4 inferable fro; his !ords or actions6
F&1G
and on
the part of the a%ent* there ;ust be an intention to
accept the appoint;ent and act on it*
F+)G
and in the
absence of such intent* there is %enerall4 no a%enc4.
F+&G
One factor !hich ;ost clearl4 distin%uishes a%enc4
fro; other le%al concepts is control6 one person . the
a%ent . a%rees to act under the control or direction of
another . the principal. Indeed* the er4 !ord =a%enc4=
has co;e to connote control b4 the principal.
F++G
The
control factor* ;ore than an4 other* has caused the
courts to put contracts bet!een principal and a%ent in a
separate cate%or4.
F+(G
The Court of 'ppeals* in :ndin% that
CSC* !as not an a%ent of STM* opined8
=This Court has ruled that !here the relation of
a%enc4 is dependent upon the acts of the parties*
the la! ;a<es no presu;ption of a%enc4* and it is
al!a4s a fact to be proed* !ith the burden of
proof restin% upon the persons alle%in% the
a%enc4* to sho! not onl4 the fact of its eAistence*
but also its nature and eAtent &'ntonio vs.
$nrique< FC'G, #& O./. (#(0G. ?ere* defendant.
appellant failed to suDcientl4 establish the
eAistence of an a%enc4 relation bet!een plaintiB.
appellee and STM. The fact alone that it ,STM- had
authori@ed !ithdra!al of su%ar b4 plaintiB.
appellee =for and in our ,STMOs- behalf= should not
be e4ed as pointin% to the eAistence of an a%enc4
relation ...It should be ie!ed in the conteAt of all
the circu;stances obtainin%. 'lthou%h it !ould
see; STM represented plaintiB.appellee as bein%
its a%ent b4 the use of the phrase =for and in our
,STMOs- behalf= the ;atter !as cleared !hen on +(
3anuar4 &11)* plaintiB.appellee infor;ed
defendant.appellant that SHDFR No. &+&"M had
been =sold and endorsed= to it b4 STM ,EAhibit I*
Records* p. 92-. Further* plaintiB.appellee has
sho!n that the +#* ))) ba%s of su%ar coered b4
the SHDR No. &+&"M !ere sold and transferred b4
STM to it ...' conclusion that there !as a alid sale
and transfer to plaintiB.appellee ;a4* therefore*
be ;ade thus capacitatin% plaintiB.appellee to sue
in its o!n na;e* !ithout need of >oinin% its
i;puted principal STM as co.plaintiB.=
F+"G
In the instant case* it appears plain to us that priate
respondent CSC !as a bu4er of the SHDFR for;* and not
an a%ent of STM. Priate respondent CSC !as not sub>ect
to STMOs control. The $uestion of !hether a contract is
one of sale or a%enc4 depends on the intention of the
parties as %athered fro; the !hole scope and eBect of
the lan%ua%e e;plo4ed.
F+#G
That the authori@ation %ien
to CSC contained the phrase =for and in our ,STMOs-
behalf= did not establish an a%enc4. Ilti;atel4* !hat is
decisie is the intention of the parties.
F+0G
That no a%enc4
!as ;eant to be established b4 the CSC and STM is
clearl4 sho!n b4 CSCOs co;;unication to petitioner that
SHDR No. &+&"M had been =sold and endorsed= to it.
F+9G

The use of the !ords =sold and endorsed= ;eans that
STM and CSC intended a contract of sale* and not an
a%enc4. ?ence* on this score* no error !as co;;itted b4
the respondent appellate court !hen it held that CSC !as
not STMOs a%ent and could independentl4 sue petitioner.
On the second issue, proceedin% fro; the theor4 that the
transactions entered into bet!een petitioner and STM are
but serial parts of one account* petitioner insists that its
debt has been oBset b4 its clai; for STMOs unpaid
purchases* pursuant to 'rticle &+91 of the Ciil Code.
F+2G

?o!eer* the trial court found* and the Court of 'ppeals
concurred* that the purchase of su%ar coered b4 SHDR
No. &+&"M !as a separate and independent transaction6
it !as not a serial part of a sin%le transaction or of one
account contrar4 to petitionerOs insistence. Eidence on
record sho!s* !ithout bein% rebutted* that petitioner had
been paid for the su%ar purchased under SHDR No.
&+&"M. Petitioner clearl4 had the obli%ation to delier
said co;;odit4 to STM or its assi%nee. Since said su%ar
had been full4 paid for* petitioner and CSC* as assi%nee
of STM* !ere not ;utuall4 creditors and debtors of each
other. No reersible error could thereb4 be i;puted to
respondent appellate court !hen* it refused to appl4
'rticle &+91 of the Ciil Code to the present case.
Re%ardin% the third issue, petitioner contends that the
sale of su%ar under SHDR No. &+&"M is a conditional sale
or a contract to sell* !ith title to the su%ar still re;ainin%
!ith the endor. Note!orth4* SHDR No. &+&"M contains
the follo!in% ter;s and conditions8
=It is understood and a%reed that b4 pa4;ent b4
bu4erPtrader of re:ned su%ar andPor receipt of this
docu;ent b4 the bu4erPtrader personall4 or
throu%h a representatie* title to re;ned sugar is
transferred to buyer=trader and delivery to him=it
is deemed e*ected and completed ,stress
supplied- and bu4erPtrader assu;es full
responsibilit4 thereforeU=
F+1G
The afore$uoted ter;s and conditions clearl4 sho! that
petitioner transferred title to the su%ar to the bu4er or his
assi%nee upon pa4;ent of the purchase price. Said ter;s
clearl4 establish a contract of sale* not a contract to sell.
Petitioner is no! estopped fro; alle%in% the contrar4.
The contract is the la! bet!een the contractin% parties.
F()G
'nd !here the ter;s and conditions so stipulated are
not contrar4 to la!* ;orals* %ood custo;s* public polic4
or public order* the contract is alid and ;ust be upheld.
F(&G
?ain% transferred title to the su%ar in $uestion*
petitioner is no! obli%ed to delier it to the purchaser or
its assi%nee.
's to the fourth issue, petitioner sub;its that STM and
priate respondent CSC hae entered into a conspirac4
to defraud it of its su%ar. This conspirac4 is alle%edl4
eidenced b48 ,a- the fact that STMOs sellin% price to CSC
!as belo! its purchasin% price6 ,b- CSCOs refusal to
pursue its case a%ainst Teresita N% /o6 and ,c- the
authorit4 %ien b4 the latter to other persons to !ithdra!
su%ar a%ainst SHDR No. &+&"M after she had sold her
ri%hts under said SHDR to CSC. Petitioner pra4s that the
doctrine of =clean hands= should be applied to preclude
CSC fro; see<in% >udicial relief. ?o!eer* despite careful
scrutin4* !e :nd here the records bare of conincin%
eidence !hatsoeer to support the petitionerOs
alle%ations of fraud. Ee are no! constrained to dee;
this ;atter purel4 speculatie* bereft of concrete proof.
-.ERE(ORE, the instant petition is DENIED for lac< of
;erit. Costs a%ainst petitioner.
SO ORDERED.
Bellosillo, &)hairman.
SECOND D!$!S!ON
LURENO T. NGELES,

Pe/0/0one1,





" 2e13u3 "
P.!L!PP!NE NT!ONL R!L-YS
4PNR5 ND RODOL(O (LORES,
%1'
Re36on*en/
3.
G.R. No. 150127

Present8

PINO* >.* )hairperson,
S'NDOV'H./ITIERREC*
CORON'*
'CCIN'* and
/'RCI'* >>.

Pro;ul%ated8


'u%ust (&* +))0
A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . .A
D E C ! S ! O N
GRC!, J.
Inder consideration is this petition for reie! under Rule
"# of the Rules of Court assailin% and see<in% to set aside the
follo!in% issuances of the Court of 'ppeals ,C'- in)'-9.+. )?
/o. ,@17A, to !it8
&. Decision
F+G
dated 3une "* +))&*
aDr;in% an earlier decision of the Re%ional
Trial Court ,RTC- of Vue@on Cit4* 5ranch 91*
!hich dis;issed the co;plaint for speci:c
perfor;ance and da;a%esthereat
co;;enced b4 the petitioner a%ainst the
herein respondents6 and
+. Resolution
F(G
dated Septe;ber &9*
+))&* den4in% the petitionerOs ;otion for
reconsideration.
The facts8

On Ma4 #* &12)* the respondent Philippine National
Rail!a4s ,PNR- infor;ed a certain /audencio Ro;ualde@
,Ro;ualde@* hereinafter- that it has accepted the latter7soBer
to bu4* on an W'S IS* E?ERE ISX basis* the PNR7s
scrapPunsericeable rails located in Del Car;en and Hubao*
Pa;pan%a at P&*()).)) and P+*&)).)) per ;etric ton*
respectiel4* for the total a;ount of P10*0)).)). 'fter pa4in%
the stated purchase price* Ro;ualde@ addressed a letter to
'tt4. Cipriano Di@on* PNR7s 'ctin% Purchasin% '%ent.5earin%
date Ma4 +0* &12)* the letter reads8

Dear 'tt4. Di@on8
This is to infor; 4ou as President of San 3uanico
Enterprises* that I hae authori@ed the bearer* HICETTE R.
EI3'NCO of /o. (717 'ragon %t.
* Sta. Cru@* Manila* to be ;4 la!ful representatie
in the !ithdra!al of the scrapPunsericeable rails
a!arded to ;e.
For this reason* I hae %ien her the
ORI/IN'H COPJ of the 'E'RD* dated Ma4 #* &12)
and O.R. No. 29)02## dated Ma4 +)* &12) !hich
!ill indicate ;4 !aier of ri%hts* interests and
participation in faor of HICETTE R. EI3'NCO.
Than< 4ou for 4our cooperation
Ver4 trul4
4ours
,S%d.-
/audencio Ro;ualde
The Hi@ette R. Ei>anco ;entioned in the letter !as Hi@ette
Ei>anco. 'n%eles* petitionerOs no! deceased !ife. That er4
sa;e da4 Y Ma4 +0* &12) Y Hi@ette re$uested thePNR to
transfer the location of !ithdra!al for the reason that the
scrapPunsericeable rails located in Del Car;en and Hubao*
Pa;pan%a !ere not read4 for haulin%. The PNR %ranted said
re$uest and allo!ed Hi@ette to !ithdra! scrapPunsericeable
rails in Murcia* Capas and San Mi%uel* Tarlac instead. ?o!eer*
the PNR subse$uentl4 suspended the !ithdra!al in ie! of
!hat it considered as docu;entar4 discrepancies coupled b4
reported pilfera%es of oer P#))*))).)) !orth of PNR scrap
properties in Tarlac.
Conse$uentl4* the spouses 'n%eles de;anded the refund
of the a;ount of P10*))).)). The PNR* ho!eer* refused to
pa4* alle%in% that as per delier4 receipt dul4 si%ned b4 Hi@ette*
#".0#2 ;etric tons of unsericeable rails had alread4 been
!ithdra!n !hich* at P+*&)).)) per ;etric ton* !ere !orth
P&&"*92&.2)* an a;ount that eAceeds the clai; for refund.
On 'u%ust &)* &122* the spouses 'n%eles :led suit
a%ainst the PNR and its corporate secretar4* Rodolfo Flores*
a;on% others* for speci:c perfor;ance and da;a%es before
the Re%ional Trial Court of Vue@on Cit4. In it* the4 pra4ed
that PNR be directed to delier "0 ;etric tons of
scrapPunsericeable rails and to pa4 the; da;a%es and
attorne4Os fees
Issues hain% been >oined follo!in% the :lin% b4 PNR* et
al.* of their ans!er* trial ensued. Mean!hile* Hi@ette E. 'n%eles
passed a!a4 and !as substituted b4 her heirs* a;on% !ho; is
her husband* herein petitioner Haureno T. 'n%eles.
On 'pril &0* &110* the trial court* on the postulate that the
spouses 'n%eles are not the real parties.in.interest* rendered
>ud%;ent dis;issin% their co;plaint for lac< of cause of action.
's held b4 the court* Hi@ette !as ;erel4 a representatie of
Ro;ualde@ in the !ithdra!al of scrap or unsericeable rails
a!arded to hi; and not an assi%nee to the latterOs ri%hts !ith
respect to the a!ard.
'%%rieed* the petitioner interposed an appeal !ith the
C'* !hich* as stated at the threshold hereof* in its decision of
3une "* +))&* dis;issed the appeal and aDr;ed that of the trial
court. The aDr;ator4 decision !as reiterated b4 the C' in its
resolution of Septe;ber &9* +))&* den4in% the petitioner7s
;otion for reconsideration.
?ence* the petitioner7s present recourse on the
sub;ission that the C' erred in aDr;in% the trial courtOs
holdin% that petitioner and his spouse* as plaintiBs a quo* had
no cause of action as the4 !ere not the real parties.in.interest
in this case.
Ee DENJ the petition.
't the cruA of the issue is the ;atter of ho! the
afore$uoted Ma4 +0* &12) letter of Ro;ualde@ to 'tt4. Di@on of
the PNR should be ta<en8 !as it ;eant to desi%nate* or has it
the eBect of desi%natin%* Hi@ette E. 'n%eles as a ;ere a%ent or
as an assi%nee of his ,Ro;ualde@Os- interest in the scrap rails
a!arded to San 3uanico EnterprisesM The C'7s conclusion*
aDr;ator4 of that of the trial court* is that Hi@ette !as not an
assi%nee* but ;erel4 an a%ent !hose authorit4 !as li;ited to
the !ithdra!al of the scrap rails* hence* !ithout personalit4 to
sue.

Ehere a%enc4 eAists* the third part4Os ,in this case*
PNROs- liabilit4 on a contract is to the principal and not to the
a%ent and the relationship of the third part4 to the principal is
the sa;e as that in a contract in !hich there is no a%ent.
Nor;all4* the a%ent has neither ri%hts nor liabilities as a%ainst
the third part4. ?e cannot thus sue or be sued on the contract.
Since a contract ;a4 be iolated onl4 b4 the parties thereto as
a%ainst each other* the real part4.in.interest* either as plaintiB
or defendant in an action upon that contract ;ust* %enerall4*
be a contractin% part4.
The le%al situation is* ho!eer* diBerent !here an a%ent
is constituted as an assi%nee. In such a case* the a%ent ;a4* in
his o!n behalf* sue on a contract ;ade for his principal* as
an assi%nee of such contract. The rule re$uirin% eer4 action to
be prosecuted in the na;e of the real part4.in.interest
reco%ni@es the assi%n;ent of ri%hts of action and also
reco%ni@es
that !hen one has a ri%ht assi%ned to hi;* he is then the real
part4.in.interest and ;a4 ;aintain an action upon such clai;
or ri%ht.
F"G
Ipon scrutin4 of the sub>ect Ro;ualde@Os letter to 'tt4.
Cipriano Di@on dated Ma4 +0* &12)* it is at once apparent that
Hi@ette !as to act >ust as a WrepresentatieX of Ro;ualde@ in
the W!ithdra!al of rails*X and not an assi%nee. For perspectie*
!e reproduce the contents of said letter8
This is to infor; 4ou as President of San
3uanico Enterprises* that I hae )u/8o109e* the
bearer* HICETTE R. EI3'NCO A A A /o :e ;<
=)>?u= 1e61e3en/)/02e 0n /8e >0/8*1)>)= o?
/8e 3@1)6Aun3e120@e):=e 1)0=3 )>)1*e* /o ;e.
(o1 /803 1e)3on* I hae %ien her the
ORI/IN'H COPJ of the 'E'RD* dated Ma4 #* &12)
and O.R. No. 29)02## dated Ma4 +)* &12) !hich
!ill indicate ;4 !aier of ri%hts* interests and
participation in faor of HICETTE R. EI3'NCO.
,E;phasis added
If Hi@ette !as !ithout le%al standin% to sue and appear in
this case* there is ;ore reason to hold that her petitioner
husband* either as her con>u%al partner or her heir* is also
!ithout such standin%.
Petitioner ;a<es ;uch of the fact that the ter;s Wa%entX
or Wattorne4.in.factX !ere not used in the Ro;ualde@ letter
aforestated. It bears to stress* ho!eer* that the
!ordsWprincipalX and Wa%ent*X are not the onl4 ter;s used to
desi%nate the parties in an a%enc4 relation. The a%ent ;a4 also
be called an attorne4* proA4* dele%ate or* as
here*representative.
It cannot be oer e;phasi@ed that Ro;ualde@Os use of the
actie erb Wauthori@ed*X instead of Wassi%ned*X indicated an
intent on his part to <eep and retain his interest in the sub>ect
;atter. Stated a bit diBerentl4* he intended to li;it Hi@ette7s
role in the scrap transaction to bein% the representatie of his
interest therein
Petitioner sub;its that the second para%raph of the
Ro;ualde@ letter* statin% . WI hae %ien FHi@etteG the ori%inal
cop4 of the a!ard A A A !hich !ill indicate ;4 !aier of ri%hts*
interests and participation in faor of Hi@ette R. Ei>ancoX .
clari:es that Hi@ette !as intended to be an assi%nee* and not a
;ere a%ent.
Ee are not persuaded. 's it !ere* the petitioner
conenientl4 o;itted an i;portant phrase precedin% the
para%raph !hich !ould hae put the !hole ;atter in conteAt.
The phrase is W(o1 /803 1e)3on*X and the antecedent thereof is
his ,Ro;ualde@- hain% appointed Hi@ette as his representatie
in the ;atter of the !ithdra!al of the scrap ite;s. In :ne* the
<e4 phrase clearl4 cone4s the idea that Hi@ette !as %ien the
ori%inal cop4 of the contract a!ard to enable her to !ithdra!
the rails as Ro;ualde@7s authori@ed representatie.
'rticle &(9" of the Ciil Code proides that the arious
stipulations of a contract shall be read and interpreted
to%ether* attributin% to the doubtful ones that sense !hich ;a4
result fro; all of the; ta<en >ointl4. In :ne* the real intention of
the parties is pri;aril4 to be deter;ined fro; the lan%ua%e
used and %athered fro; the !hole instru;ent. Ehen put into
the conteAt of the letter as a !hole* it is abundantl4 clear that
the ri%hts !hich Ro;ualde@ !aied or ceded in faor of Hi@ette
!ere those in furtherance of the a%enc4 relation that he had
established for the !ithdra!al of the rails.
't an4 rate* an4 doubt as to the intent of Ro;ualde@
%enerated b4 the !a4 his letter !as couched could be clari:ed
b4 the acts of the ;ain pla4ers the;seles. 'rticle &(9& of the
Ciil Code proides that to >ud%e the intention of the
contractin% parties* their conte;poraneous and subse$uent
acts shall be principall4 considered. In other !ords* in case of
doubt* resort ;a4 be ;ade to the situation* surroundin%s* and
relations of the parties.
The fact of a%enc4 !as* as the trial court aptl4
obsered*
F#G
con:r;ed in subse$uent letters fro; the 'n%eles
spouses in !hich the4 the;seles refer to Hi@ette as
Wauthori@ed representatieX of San 3uanico Enterprises. Mention
;a4 also be ;ade that the !ithdra!al receipt !hich Hi@ette had
si%ned indicated that she !as doin% so in a representatie
capacit4. One professin% to act as a%ent for another is estopped
to den4 his a%enc4 both as a%ainst his asserted principal and
third persons interested in the transaction !hich he en%a%ed in.

Ehether or not an a%enc4 has been created is a $uestion
to be deter;ined b4 the fact that one represents and is actin%
for another. The appellate court* and before it* the trial court*
had pere;ptoril4 deter;ined that Hi@ette* !ith respect to the
!ithdra!al of the scrap in $uestion* !as actin% for Ro;ualde@.
'nd !ith the ie! !e ta<e of this case* there !ere substantial
pieces of eidence adduced to support this deter;ination. The
desired reersal ur%ed b4 the petitioner cannot* accordin%l4* be
%ranted. For* factual :ndin%s of the trial court* adopted and
con:r;ed b4 the C'* are* as a rule* :nal and conclusie and
;a4 not be disturbed on appeal.
F0G
So it ;ust be here.
Petitioner ;aintains that the Ro;ualde@ letter in $uestion
!as not in the for; of a special po!er of attorne4* i;pl4in% that
the latter had not intended to ;erel4 authori@e his !ife* Hi@ette*
to perfor; an act for hi; ,Ro;ualde@-. The contention is
specious. In the absence of statute* no for; or ;ethod of
eAecution is re$uired for a alid po!er of attorne46 it ;a4 be in
an4 for; clearl4 sho!in% on its face the a%ent7s authorit4.
F9G
' po!er of attorne4 is onl4 but an instru;ent in !ritin%
b4 !hich a person* as principal* appoints another as his a%ent
and confers upon hi; the authorit4 to perfor; certain speci:ed
acts on behalf of the principal. The !ritten authori@ation itself is
the po!er of attorne4* and this is clearl4 indicated b4 the fact
that it has also been called a Wletter of attorne4.X Its pri;ar4
purpose is not to de:ne the authorit4 of the a%ent as bet!een
hi;self and his principal but to eidence the authorit4 of the
a%ent to third parties !ith !ho; the a%ent deals.
F2G
The letter
under consideration is suDcient to constitute a po!er of
attorne4. EAcept as ;a4 be re$uired b4 statute* a po!er of
attorne4 is alid althou%h no notar4 public interened in its
eAecution.
F1G
' po!er of attorne4 ;ust be strictl4 construed and
pursued. The instru;ent !ill be held to %rant onl4 those po!ers
!hich are speci:ed therein* and the a%ent ;a4 neither %o
be4ond nor deiate fro; the po!er of attorne4.
F&)G
ConteAtuall4*
all that Hi@ette !as authori@ed to do !as to withdraw the
unsericeablePscrap railin%s. 'llo!in% her authorit4 to sue
therefor* especiall4 in her o!n na;e* !ould be to read
so;ethin% not intended* let alone !ritten in the Ro;ualde@
letter.
Finall4* the petitionerOs clai; that Hi@ette paid the a;ount
of P10*))).)) to the PNR appears to be a ;ere afterthou%ht6 it
ou%ht to be dis;issed outri%ht under the estoppel principle. In
earlier proceedin%s* petitioner hi;self ad;itted in his co;plaint
that it !as Ro;ualde@ !ho paid this a;ount.
-.ERE(ORE* the petition is DEN!ED and the assailed
decision of the C' is ((!RMED.
Costs a%ainst the petitioner SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
T?IRD DIVISION
G.R. No. 160346 uBu3/ 25, 2009
PUR!T P.UD, SOLEDD P.UD, )n* !N LEE CST!LL
41e61e3en/e* :< Mo/8e1 )n* //o1ne<"0n"()@/ $!RG!N!
CST!LL5, Petitioners*
s.
COURT O( PPELS, SPOUSES !SGN! BELRM!NO )n*
LET!C! OCMPO, EU(EM! SN GUST!N"MGS!NO,
#EN!D SN GUST!N"M@CRE, M!LGROS SN
GUST!N"(ORTMN, M!NER$ SN GUST!N"TC!NSON,
(ERD!NND SN GUST!N, RUL SN GUST!N,
!SBEL!T SN GUST!N"LUSTENBERGER )n* $!RG!L!O
SN GUST!N, Respondents.
D E C I S I O N
NC.UR, J.:
For our resolution is a petition for reie! on certiorari assailin%
the 'pril +(* +))( Decision
&
and October 2* +))( Resolution
+
of
the Court of 'ppeals ,C'- in C'./.R. CV No. #1"+0. The
appellate court* in the said decision and resolution* reersed
and set aside the 3anuar4 &"* &112 Decision
(
of the Re%ional
Trial Court ,RTC-* !hich ruled in faor of petitioners.
The dispute ste;;ed fro; the follo!in% facts.
Durin% their lifeti;e* spouses Pedro San '%ustin and '%atona
/enil !ere able to ac$uire a +"0.s$uare ;eter parcel of land
situated in 5aran%a4 'nos* Hos 5aZos* Ha%una and coered b4
Ori%inal Certi:cate of Title ,OCT- No. O.,&0##- ).&#.
"
'%atona
/enil died on Septe;ber &(* &11) !hile Pedro San '%ustin died
on Septe;ber &"* &11&. 5oth died intestate* suried b4 their
ei%ht ,2- children8 respondents Eufe;ia* Raul* Ferdinand*
Cenaida* Mila%ros* Minera* Isabelita and Vir%ilio.
So;eti;e in &11+* Eufe;ia* Ferdinand and Raul eAecuted a
Deed of 'bsolute Sale of Indiided Shares
#
cone4in% in faor
of petitioners ,the Pahuds* for breit4- their respectie shares
fro; the lot the4 inherited fro; their deceased parents for
P#+#*))).)).
0
Eufe;ia also si%ned the deed on behalf of her
four ,"- other co.heirs* na;el48 Isabelita on the basis of a
special po!er of attorne4 eAecuted on Septe;ber +2* &11&*
9
and also for Mila%ros* Minera* and Cenaida but !ithout their
apparent !ritten authorit4.
2
The deed of sale !as also not
notari@ed.
1
On 3ul4 +&* &11+* the Pahuds paid P(#*91+.(& to the Hos 5aZos
Rural 5an< !here the sub>ect propert4 !as ;ort%a%ed.
&)
The
ban< issued a release of ;ort%a%e and turned oer the o!ner7s
cop4 of the OCT to the Pahuds.
&&
Oer the follo!in% ;onths* the
Pahuds ;ade ;ore pa4;ents to Eufe;ia and her siblin%s
totalin% toP(#)*))).)).
&+
The4 a%reed to use the re;ainin%
P29*#)).))
&(
to defra4 the pa4;ent for taAes and the eApenses
in transferrin% the title of the propert4.
&"
Ehen Eufe;ia and her
co.heirs drafted an eAtra.>udicial settle;ent of estate to
facilitate the transfer of the title to the Pahuds* Vir%ilio refused
to si%n it.
&#
On 3ul4 2* &11(* Vir%ilio7s co.heirs :led a co;plaint
&0
for >udicial
partition of the sub>ect propert4 before the RTC of Cala;ba*
Ha%una. On Noe;ber +2* &11"* in the course of the
proceedin%s for >udicial partition* a Co;pro;ise '%ree;ent
&9
!as si%ned !ith seen ,9- of the co.heirs a%reein% to sell their
undiided shares to Vir%ilio forP9))*))).)). The co;pro;ise
a%ree;ent !as* ho!eer* not approed b4 the trial court
because 'tt4. Di;etrio ?ilbero* la!4er for Eufe;ia and her siA
,0- co.heirs* refused to si%n the a%ree;ent because he <ne! of
the preious sale ;ade to the Pahuds.
&2
lawphil.net
On Dece;ber &* &11"* Eufe;ia ac<no!led%ed hain% receied
P9))*))).)) fro; Vir%ilio.
&1
Vir%ilio then sold the entire propert4
to spouses Isa%ani 5elar;ino and Heticia Oca;po ,5elar;inos-
so;eti;e in &11". The 5elar;inos i;;ediatel4 constructed a
buildin% on the sub>ect propert4.
'lar;ed and be!ildered b4 the on%oin% construction on the lot
the4 purchased* the Pahuds i;;ediatel4 confronted Eufe;ia
!ho con:r;ed to the; that Vir%ilio had sold the propert4 to the
5elar;inos.
+)
'%%rieed* the Pahuds :led a co;plaint in
interention
+&
in the pendin% case for >udicial partition.(avvphil
'fter trial* the RTC upheld the alidit4 of the sale to petitioners.
The dispositie portion of the decision reads8
E?EREFORE* the fore%oin% considered* the Court orders8
&. the sale of the 9P2 portion of the propert4 coered b4 OCT
No. O ,&0##- O.&# b4 the plaintiBs as heirs of deceased Sps.
Pedro San '%ustin and '%atona /enil in faor of the
Interenors.Third Part4 plaintiBs as alid and enforceable* but
obli%atin% the Interenors.Third Part4 plaintiBs to co;plete the
pa4;ent of the purchase price of P"(9*#)).)) b4 pa4in% the
balance of P29*#)).)) to defendant Fe ,sic- San '%ustin
Ma%sino. Ipon receipt of the balance* the plaintiB shall
for;ali@e the sale of the 9P2 portion in faor of the
InterenorFsG.Third Part4 plaintiBs6
+. declarin% the docu;ent entitled =Sala4sa4 sa Pa%san%.a4on
sa 5ilihan= ,EAh. =+.a=- si%ned b4 plaintiB Eufe;ia San '%ustin
attached to the unapproed Co;pro;ise '%ree;ent ,EAh. =+=-
as not a alid sale in faor of defendant Vir%ilio San '%ustin6
(. declarin% the sale ,EAh. ="=- ;ade b4 defendant Vir%ilio San
'%ustin of the propert4 coered b4 OCT No. O ,&0##-.O.&#
re%istered in the na;es of Spouses Pedro San '%ustin and
'%atona /enil in faor of Third.part4 defendant Spouses Isa%ani
and Heticia 5elar;ino as not a alid sale and as ineAistent6
". declarin% the defendant Vir%ilio San '%ustin and the Third.
Part4 defendants spouses Isa%ani and Heticia 5elar;ino as in
bad faith in bu4in% the portion of the propert4 alread4 sold b4
the plaintiBs in faor of the Interenors.Third Part4 PlaintiBs and
the Third.Part4 Defendant Sps. Isa%ani and Heticia 5elar;ino in
constructin% the t!o.Fstore4G buildin% in ,sic- the propert4
sub>ect of this case6 and
#. declarin% the parties as not entitled to an4 da;a%es* !ith
the parties shoulderin% their respectie responsibilities
re%ardin% the pa4;ent of attorne4F7Gs fees to their respectie
la!4ers.
No pronounce;ent as to costs.
SO ORDERED.
++
Not satis:ed* respondents appealed the decision to the C'
ar%uin%* in the ;ain* that the sale ;ade b4 Eufe;ia for and on
behalf of her other co.heirs to the Pahuds should hae been
declared oid and ineAistent for !ant of a !ritten authorit4 fro;
her co.heirs. The C' 4ielded and set aside the :ndin%s of the
trial court. In disposin% the issue* the C' ruled8
E?EREFORE* in ie! of the fore%oin%* the Decision dated
3anuar4 &"* &112* rendered b4 the Re%ional Trial Court of
Cala;ba* Ha%una* 5ranch 1+ in Ciil Case No. +)&&.1(.C for
3udicial Partition is hereb4 REVERSED and SET 'SIDE* and a ne!
one entered* as follo!s8
,&- The case for partition a;on% the plaintiBs.appellees and
appellant Vir%ilio is no! considered closed and ter;inated6
,+- Orderin% plaintiBs.appellees to return to interenors.
appellees the total a;ount the4 receied fro; the latter* plus
an interest of &+Q per annu; fro; the ti;e the co;plaint FinG
interention !as :led on 'pril &+* &11# until actual pa4;ent of
the sa;e6
,(- Declarin% the sale of appellant Vir%ilio San '%ustin to
appellants spouses* Isa%ani and Heticia 5elar;inoF*G as alid
and bindin%6
,"- Declarin% appellants.spouses as bu4ers in %ood faith and for
alue and are the o!ners of the sub>ect propert4.
No pronounce;ent as to costs.
SO ORDERED.
+(
Petitioners no! co;e to this Court raisin% the follo!in%
ar%u;ents8
I. The Court of 'ppeals co;;itted %rae and reersible error
!hen it did not appl4 the second para%raph of 'rticle &(&9 of
the Ne! Ciil Code insofar as rati:cation is concerned to the
sale of the "P2 portion of the sub>ect propert4 eAecuted b4
respondents San '%ustin in faor of petitioners6
II. The Court of 'ppeals co;;itted %rae and reersible error in
holdin% that respondents spouses 5elar;inos are in %ood faith
!hen the4 bou%ht the sub>ect propert4 fro; respondent Vir%ilio
San '%ustin despite the :ndin%s of fact b4 the court a $uo that
the4 !ere in bad faith !hich clearl4 contraenes the presence
of lon% line of case la!s upholdin% the tas< of %iin% ut;ost
!ei%ht and alue to the factual :ndin%s of the trial court durin%
appeals6 FandG
III. The Court of 'ppeals co;;itted %rae and reersible error
in holdin% that respondents spouses 5elar;inos hae superior
ri%hts oer the propert4 in $uestion than petitioners despite the
fact that the latter !ere prior in possession thereb4 ;isappl4in%
the proisions of 'rticle &#"" of the Ne! Ciil Code.
+"
The focal issue to be resoled is the status of the sale of the
sub>ect propert4 b4 Eufe;ia and her co.heirs to the Pahuds. Ee
:nd the transaction to be alid and enforceable.
'rticle &29" of the Ciil Code plainl4 proides8
'rt. &29". Ehen a sale of a piece of land or an4 interest therein
is throu%h an a%ent* the authorit4 of the latter shall be in
!ritin%6 other!ise* the sale shall be oid.
'lso* under 'rticle &292*
+#
a special po!er of attorne4 is
necessar4 for an a%ent to enter into a contract b4 !hich the
o!nership of an i;;oable propert4 is trans;itted or ac$uired*
either %ratuitousl4 or for a aluable consideration. Such
strin%ent statutor4 re$uire;ent has been eAplained in Cos;ic
Hu;ber Corporation . Court of 'ppeals8
+0
FTGhe authorit4 of an a%ent to eAecute a contract FofG sale of
real estate ;ust be conferred in !ritin% and ;ust %ie hi;
speci:c authorit4* either to conduct the %eneral business of the
principal or to eAecute a bindin% contract containin% ter;s and
conditions !hich are in the contract he did eAecute. ' special
po!er of attorne4 is necessar4 to enter into an4 contract b4
!hich the o!nership of an i;;oable is trans;itted or
ac$uired either %ratuitousl4 or for a aluable consideration. The
eApress ;andate re$uired b4 la! to enable an appointee of an
a%enc4 ,couched- in %eneral ter;s to sell ;ust be one that
eApressl4 ;entions a sale or that includes a sale as a necessar4
in%redient of the act ;entioned. For the principal to confer the
ri%ht upon an a%ent to sell real estate* a po!er of attorne4 ;ust
so eApress the po!ers of the a%ent in clear and un;ista<able
lan%ua%e. Ehen there is an4 reasonable doubt that the
lan%ua%e so used cone4s such po!er* no such construction
shall be %ien the docu;ent.
+9
In seeral cases* !e hae repeatedl4 held that the absence of a
!ritten authorit4 to sell a piece of land is* ipso >ure* oid*
+2
precisel4 to protect the interest of an unsuspectin% o!ner fro;
bein% pre>udiced b4 the un!arranted act of another.
5ased on the fore%oin%* it is not diDcult to conclude* in
principle* that the sale ;ade b4 Eufe;ia* Isabelita and her t!o
brothers to the Pahuds so;eti;e in &11+ should be alid onl4
!ith respect to the "P2 portion of the sub>ect propert4. The sale
!ith respect to the (P2 portion* representin% the shares of
Cenaida* Mila%ros* and Minera* is oid because Eufe;ia could
not dispose of the interest of her co.heirs in the said lot absent
an4 !ritten authorit4 fro; the latter* as eAplicitl4 re$uired b4
la!. This !as* in fact* the rulin% of the C'.
Still* in their petition* the Pahuds ar%ue that the sale !ith
respect to the (P2 portion of the land should hae been dee;ed
rati:ed !hen the three co.heirs* na;el48 Mila%ros* Minera* and
Cenaida* eAecuted their respectie special po!er of attorne4s
+1
authori@in% Eufe;ia to represent the; in the sale of their
shares in the sub>ect propert4.
()
Ehile the sale !ith respect to the (P2 portion is oid b4 eApress
proision of la! and not susceptible to rati:cation*
(&
!e
neertheless uphold its alidit4 on the basis of the co;;on la!
principle of estoppel.
'rticle &"(& of the Ciil Code proides8
'rt. &"(&. Throu%h estoppel an ad;ission or representation is
rendered conclusie upon the person ;a<in% it* and cannot be
denied or disproed as a%ainst the person rel4in% thereon.
True* at the ti;e of the sale to the Pahuds* Eufe;ia !as not
ar;ed !ith the re$uisite special po!er of attorne4 to dispose of
the (P2 portion of the propert4. Initiall4* in their ans!er to the
co;plaint in interention*
(+
Eufe;ia and her other co.heirs
denied hain% sold their shares to the Pahuds. Durin% the pre.
trial conference* ho!eer* the4 ad;itted that the4 had indeed
sold 9P2 of the propert4 to the Pahuds so;eti;e in &11+.
((
Thus* the preious denial !as superseded* if not accordin%l4
a;ended* b4 their subse$uent ad;ission.
("
Moreoer* in their
Co;;ent*
(#
the said co.heirs a%ain ad;itted the sale ;ade to
petitioners.
(0
Interestin%l4* in no instance did the three ,(- heirs concerned
assail the alidit4 of the transaction ;ade b4 Eufe;ia to the
Pahuds on the basis of !ant of !ritten authorit4 to sell. The4
could hae easil4 :led a case for annul;ent of the sale of their
respectie shares a%ainst Eufe;ia and the Pahuds. Instead*
the4 opted to re;ain silent and left the tas< of raisin% the
alidit4 of the sale as an issue to their co.heir* Vir%ilio* !ho is
not pri4 to the said transaction. The4 cannot be allo!ed to rel4
on Eufe;ia* their attorne4.in.fact* to i;pu%n the alidit4 of the
:rst transaction because to allo! the; to do so !ould be
tanta;ount to %iin% pre;iu; to their sister7s dishonest and
fraudulent deed. Indeniabl4* therefore* the silence and
passiit4 of the three co.heirs on the issue bar the; fro;
;a<in% a contrar4 clai;.
It is a basic rule in the la! of a%enc4 that a principal is sub>ect
to liabilit4 for loss caused to another b4 the latter7s reliance
upon a deceitful representation b4 an a%ent in the course of his
e;plo4;ent ,&- if the representation is authori@ed6 ,+- if it is
!ithin the i;plied authorit4 of the a%ent to ;a<e for the
principal6 or ,(- if it is apparentl4 authori@ed* re%ardless of
!hether the a%ent !as authori@ed b4 hi; or not to ;a<e the
representation.
(9
54 their continued silence* Cenaida* Mila%ros and Minera hae
caused the Pahuds to beliee that the4 hae indeed clothed
Eufe;ia !ith the authorit4 to transact on their behalf. Clearl4*
the three co.heirs are no! estopped fro; i;pu%nin% the
alidit4 of the sale fro; assailin% the authorit4 of Eufe;ia to
enter into such transaction.
'ccordin%l4* the subse$uent sale ;ade b4 the seen co.heirs to
Vir%ilio !as oid because the4 no lon%er had an4 interest oer
the sub>ect propert4 !hich the4 could alienate at the ti;e of
the second transaction.
(2
Ne;o dat $uod non habet. Vir%ilio*
ho!eer* could still alienate his &P2 undiided share to the
5elar;inos.
The 5elar;inos* for their part* cannot ar%ue that the4
purchased the propert4 fro; Vir%ilio in %ood faith. 's a %eneral
rule* a purchaser of a real propert4 is not re$uired to ;a<e an4
further in$uir4 be4ond !hat the certi:cate of title indicates on
its face.
(1
5ut the rule eAcludes those !ho purchase !ith
<no!led%e of the defect in the title of the endor or of facts
suDcient to induce a reasonable and prudent person to in$uire
into the status of the propert4.
")
Such purchaser cannot close
his e4es to facts !hich should put a reasonable ;an on %uard*
and later clai; that he acted in %ood faith on the belief that
there !as no defect in the title of the endor. ?is ;ere refusal
to beliee that such defect eAists* or his obious ne%lect b4
closin% his e4es to the possibilit4 of the eAistence of a defect in
the endor7s title* !ill not ;a<e hi; an innocent purchaser for
alue* if after!ards it turns out that the title !as* in fact*
defectie. In such a case* he is dee;ed to hae bou%ht the
propert4 at his o!n ris<* and an4 in>ur4 or pre>udice occasioned
b4 such transaction ;ust be borne b4 hi;.
"&
In the case at bar* the 5elar;inos !ere full4 a!are that the
propert4 !as re%istered not in the na;e of the i;;ediate
transferor* Vir%ilio* but re;ained in the na;e of Pedro San
'%ustin and '%atona /enil.
"+
This fact alone is suDcient
i;petus to ;a<e further in$uir4 and* thus* ne%ate their clai;
that the4 are purchasers for alue in %ood faith.
"(
The4 <ne!
that the propert4 !as still sub>ect of partition proceedin%s
before the trial court* and that the co;pro;ise a%ree;ent
si%ned b4 the heirs !as not approed b4 the RTC follo!in% the
opposition of the counsel for Eufe;ia and her siA other co.
heirs.
""
The 5elar;inos* bein% transferees pendente lite* are
dee;ed bu4ers in ;ala :de* and the4 stand eAactl4 in the
shoes of the transferor and are bound b4 an4 >ud%;ent or
decree !hich ;a4 be rendered for or a%ainst the transferor.
"#
Further;ore* had the4 eri:ed the status of the propert4 b4
as<in% the nei%hborin% residents* the4 !ould hae been able to
tal< to the Pahuds !ho occup4 an ad>oinin% business
establish;ent
"0
and !ould hae <no!n that a portion of the
propert4 had alread4 been sold. 'll these eAistin% and readil4
eri:able facts are suDcient to su%%est that the 5elar;inos
<ne! that the4 !ere bu4in% the propert4 at their o!n ris<.
E?EREFORE* pre;ises considered* the 'pril +(* +))( Decision
of the Court of 'ppeals as !ell as its October 2* +))( Resolution
in C'./.R. CV No. #1"+0* are REVERSED and SET 'SIDE.
'ccordin%l4* the 3anuar4 &"* &112 Decision of 5ranch 1+ of the
Re%ional Trial Court of Cala;ba* Ha%una is REINST'TED !ith the
MODIFIC'TION that the sale ;ade b4 respondent Vir%ilio San
'%ustin to respondent spouses Isa%ani 5elar;ino and Heticia
Oca;po is alid onl4 !ith respect to the &P2 portion of the
sub>ect propert4. The trial court is ordered to proceed !ith the
partition of the propert4 !ith dispatch.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 144705 June 7, 2006
EDURDO $. L!NTONJU, JR. )n* NTON!O C. L!TONJU,
Petitioners*
s.
ETERN!T CORPORT!ON 4no> ETERTON MULT!"
RESOURCES CORPORT!ON5, ETEROUTREMER, S.. )n*
(R EST BNC D TRUST COMPNY, Respondents.
D E C I S I O N
CLLEJO, SR., J.:
On appeal ia a Petition for Reie! on Certiorari is the Decision
&
of the Court of 'ppeals ,C'- in C'./.R. CV No. #&)++* !hich
aDr;ed the Decision of the Re%ional Trial Court ,RTC-* Pasi%
Cit4* 5ranch &0#* in Ciil Case No. #"229* as !ell as the
Resolution
+
of the C' den4in% the ;otion for reconsideration
thereof.
The Eternit Corporation ,EC- is a corporation dul4 or%ani@ed and
re%istered under Philippine la!s. Since &1#)* it had been
en%a%ed in the ;anufacture of roo:n% ;aterials and pipe
products. Its ;anufacturin% operations !ere conducted on ei%ht
parcels of land !ith a total area of "9*+(( s$uare ;eters. The
properties* located in Mandalu4on% Cit4* Metro Manila* !ere
coered b4 Transfer Certi:cates of Title Nos. "#&&&9* "#&&&2*
"#&&&1* "#&&+)* "#&&+&* "#&&++* "#&&+" and "#&&+# under
the na;e of Far East 5an< [ Trust Co;pan4* as trustee. Ninet4
,1)Q- percent of the shares of stoc<s of EC !ere o!ned b4
Eteroutre;er S.'. Corporation ,ES'C-* a corporation or%ani@ed
and re%istered under the la!s of 5el%iu;.
(
3ac< /lanille* an
'ustralian citi@en* !as the /eneral Mana%er and President of
EC* !hile Claude Frederic< DelsauA !as the Re%ional Director
for 'sia of ES'C. 5oth had their oDces in 5el%iu;.
In &120* the ;ana%e;ent of ES'C %re! concerned about the
political situation in the Philippines and !anted to stop its
operations in the countr4. The Co;;ittee for 'sia of ES'C
instructed Michael 'da;s* a ;e;ber of EC7s 5oard of Directors*
to dispose of the ei%ht parcels of land. 'da;s en%a%ed the
serices of realtorPbro<er Hauro /. Mar$ue@ so that the
properties could be oBered for sale to prospectie bu4ers.
/lanille later sho!ed the properties to Mar$ue@.
Mar$ue@ thereafter oBered the parcels of land and the
i;proe;ents thereon to Eduardo 5. Hiton>ua* 3r. of the Hiton>ua
[ Co;pan4* Inc. In a Hetter dated Septe;ber &+* &120*
Mar$ue@ declared that he !as authori@ed to sell the properties
for P+9*)))*))).)) and that the ter;s of the sale !ere sub>ect
to ne%otiation.
"
Eduardo Hiton>ua* 3r. responded to the oBer. Mar$ue@ sho!ed
the propert4 to Eduardo Hiton>ua* 3r.* and his brother 'ntonio \.
Hiton>ua. The Hiton>ua siblin%s oBered to bu4 the propert4 for
P+)*)))*))).)) cash. Mar$ue@ apprised /lanille of the
Hiton>ua siblin%s7 oBer and rela4ed the sa;e to DelsauA in
5el%iu;* but the latter did not respond. On October +2* &120*
/lanille teleAed DelsauA in 5el%iu;* in$uirin% on his positionP
counterproposal to the oBer of the Hiton>ua siblin%s. It !as onl4
on Februar4 &+* &129 that DelsauA sent a teleA to /lanille
statin% that* based on the =5el%ianPS!iss decision*= the :nal
oBer !as =IS]&*)))*))).)) and P+*#))*))).)) to coer all
eAistin% obli%ations prior to :nal li$uidation.=
#
Mar$ue@ furnished Eduardo Hiton>ua* 3r. !ith a cop4 of the teleA
sent b4 DelsauA. Hiton>ua* 3r. accepted the counterproposal of
DelsauA. Mar$ue@ conferred !ith /lanille* and in a Hetter dated
Februar4 +0* &129* con:r;ed that the Hiton>ua siblin%s had
accepted the counter.proposal of DelsauA. ?e also stated that
the Hiton>ua siblin%s !ould con:r; full pa4;ent !ithin 1) da4s
after eAecution and preparation of all docu;ents of sale*
to%ether !ith the necessar4 %oern;ental clearances.
0
The Hiton>ua brothers deposited the a;ount of
IS]&*)))*))).)) !ith the Securit4 5an< [ Trust Co;pan4*
Er;ita 5ranch* and drafted an Escro! '%ree;ent to eApedite
the sale.
9
So;eti;e later* Mar$ue@ and the Hiton>ua brothers in$uired
fro; /lanille !hen the sale !ould be i;ple;ented. In a teleA
dated 'pril ++* &129* /lanille infor;ed DelsauA that he had
;et !ith the bu4er* !hich had %ien hi; the i;pression that
=he is prepared to press for a satisfactor4 conclusion to the
sale.=
2
?e also e;phasi@ed to DelsauA that the bu4ers !ere
concerned because the4 !ould incur eApenses in ban<
co;;it;ent fees as a conse$uence of prolon%ed period of
inaction.
1
Mean!hile* !ith the assu;ption of Cora@on C. '$uino as
President of the Republic of the Philippines* the political
situation in the Philippines had i;proed. Mar$ue@ receied a
telephone call fro; /lanille* adisin% that the sale !ould no
lon%er proceed. /lanille follo!ed it up !ith a Hetter dated Ma4
9* &129* con:r;in% that he had been instructed b4 his principal
to infor; Mar$ue@ that =the decision has been ta<en at a 5oard
Meetin% not to sell the properties on !hich Eternit Corporation
is situated.=
&)
DelsauA hi;self later sent a letter dated Ma4 ++* &129*
con:r;in% that the ES'C Re%ional ODce had decided not to
proceed !ith the sale of the sub>ect land* to !it8
Ma4 ++* &129
Mr. H./. Mar$ue@
H./. Mar$ue@* Inc.
((" Ma<ati Stoc< EAchan%e 5ld%.
0909 '4ala 'enue
Ma<ati* Metro Manila
Philippines
Dear Sir8
Re8 Hand of Eternit Corporation
I !ould li<e to con:r; oDciall4 that our /roup has decided not
to proceed !ith the sale of the land !hich !as proposed to 4ou.
The Co;;ittee for 'sia of our /roup ;et recentl4 ,;eetin%
eer4 siA ;onths- and eAa;ined the position as far as the
Philippines are ,sic- concerned. Considerin% FtheG ne! political
situation since the departure of MR. M'RCOS and a certain
stabili@ation in the Philippines* the Co;;ittee has decided not
to stop our operations in Manila. In fact* production has started
a%ain last !ee<* and ,sic- to reco%ni@e the participation in the
Corporation.
Ee re%ret that !e could not ;a<e a deal !ith 4ou this ti;e* but
in case the polic4 !ould chan%e at a later state* !e !ould
consult 4ou a%ain.
A A A
Jours sincerel4*
,S%d.-
C.F. DEHS'IK
cc. To8 3. /H'NVIHHE ,Eternit Corp.-
&&
Ehen apprised of this deelop;ent* the Hiton>uas* throu%h
counsel* !rote EC* de;andin% pa4;ent for da;a%es the4 had
suBered on account of the aborted sale. EC* ho!eer* re>ected
their de;and.
The Hiton>uas then :led a co;plaint for speci:c perfor;ance
and da;a%es a%ainst EC ,no! the Eterton Multi.Resources
Corporation- and the Far East 5an< [ Trust Co;pan4* and ES'C
in the RTC of Pasi% Cit4. 'n a;ended co;plaint !as :led* in
!hich defendant EC !as substituted b4 Eterton Multi.Resources
Corporation6 5enito C. Tan* Ruperto V. Tan* Stoc< ?a T. Tan and
Deo%racias /. Eufe;io !ere i;pleaded as additional
defendants on account of their purchase of ES'C shares of
stoc<s and !ere the controllin% stoc<holders of EC.
In their ans!er to the co;plaint* EC and ES'C alle%ed that
since Eteroutre;er !as not doin% business in the Philippines* it
cannot be sub>ect to the >urisdiction of Philippine courts6 the
5oard and stoc<holders of EC neer approed an4 resolution to
sell sub>ect properties nor authori@ed Mar$ue@ to sell the sa;e6
and the teleA dated October +2* &120 of 3ac< /lanille !as his
o!n personal ;a<in% !hich did not bind EC.
On 3ul4 (* &11#* the trial court rendered >ud%;ent in faor of
defendants and dis;issed the a;ended co;plaint.
&+
The fallo of
the decision reads8
E?EREFORE* the co;plaint a%ainst Eternit Corporation no!
Eterton Multi.Resources Corporation and Eteroutre;er* S.'. is
dis;issed on the %round that there is no alid and bindin% sale
bet!een the plaintiBs and said defendants.
The co;plaint as a%ainst Far East 5an< and Trust Co;pan4 is
li<e!ise dis;issed for lac< of cause of action.
The counterclai; of Eternit Corporation no! Eterton Multi.
Resources Corporation and Eteroutre;er* S.'. is also dis;issed
for lac< of ;erit.
&(
The trial court declared that since the authorit4 of the
a%entsPrealtors !as not in !ritin%* the sale is oid and not
;erel4 unenforceable* and as such* could not hae been
rati:ed b4 the principal. In an4 eent* such rati:cation cannot
be %ien an4 retroactie eBect. PlaintiBs could not assu;e that
defendants had a%reed to sell the propert4 !ithout a clear
authori@ation fro; the corporation concerned* that is* throu%h
resolutions of the 5oard of Directors and stoc<holders. The trial
court also pointed out that the supposed sale inoles
substantiall4 all the assets of defendant EC !hich !ould result
in the eentual total cessation of its operation.
&"
The Hiton>uas appealed the decision to the C'* alle%in% that =,&-
the lo!er court erred in concludin% that the real estate bro<er in
the instant case needed a !ritten authorit4 fro; appellee
corporation andPor that said bro<er had no such !ritten
authorit46 and ,+- the lo!er court co;;itted %rae error of la!
in holdin% that appellee corporation is not le%all4 bound for
speci:c perfor;ance andPor da;a%es in the absence of an
enablin% resolution of the board of directors.=
&#
The4 aerred
that Mar$ue@ acted ;erel4 as a bro<er or %o.bet!een and not
as a%ent of the corporation6 hence* it !as not necessar4 for hi;
to be e;po!ered as such b4 an4 !ritten authorit4. The4 further
clai;ed that an a%enc4 b4 estoppel !as created !hen the
corporation clothed Mar$ue@ !ith apparent authorit4 to
ne%otiate for the sale of the properties. ?o!eer* since it !as a
bilateral contract to bu4 and sell* it !as e$uialent to a
perfected contract of sale* !hich the corporation !as obli%ed to
consu;;ate.
In repl4* EC alle%ed that Mar$ue@ had no !ritten authorit4 fro;
the 5oard of Directors to bind it6 neither !ere /lanille and
DelsauA authori@ed b4 its board of directors to oBer the
propert4 for sale. Since the sale inoled substantiall4 all of the
corporation7s assets* it !ould necessaril4 need the authorit4
fro; the stoc<holders.
On 3une &0* +)))* the C' rendered >ud%;ent aDr;in% the
decision of the RTC.
&0
The Hiton>uas :led a ;otion for
reconsideration* !hich !as also denied b4 the appellate court.
The C' ruled that Mar$ue@* !ho !as a real estate bro<er* !as a
special a%ent !ithin the purie! of 'rticle &29" of the Ne! Ciil
Code. Inder Section +( of the Corporation Code* he needed a
special authorit4 fro; EC7s board of directors to bind such
corporation to the sale of its properties. DelsauA* !ho !as
;erel4 the representatie of ES'C ,the ;a>orit4 stoc<holder of
EC- had no authorit4 to bind the latter. The C' pointed out that
DelsauA !as not een a ;e;ber of the board of directors of EC.
Moreoer* the Hiton>uas failed to proe that an a%enc4 b4
estoppel had been created bet!een the parties.
In the instant petition for reie!* petitioners aer that
I
T?E COIRT OF 'PPE'HS ERRED IN ?OHDIN/ T?'T T?ERE E'S
NO PERFECTED CONTR'CT OF S'HE.
II
T?E 'PPEHH'TE COIRT COMMITTED /R'VE ERROR OF H'E IN
?OHDIN/ T?'T M'RVIEC NEEDED ' ERITTEN 'IT?ORITJ
FROM RESPONDENT ETERNIT 5EFORE T?E S'HE C'N 5E
PERFECTED.
III
T?E COIRT OF 'PPE'HS ERRED IN NOT ?OHDIN/ T?'T
/H'NVIHHE 'ND DEHS'IK ?'VE T?E NECESS'RJ 'IT?ORITJ
TO SEHH T?E SI53ECT PROPERTIES* OR 'T T?E VERJ HE'ST*
EERE \NOEIN/HJ PERMITTED 5J RESPONDENT ETERNIT TO DO
'CTS EIT?IN T?E SCOPE OF 'N 'PP'RENT 'IT?ORITJ* 'ND
T?IS ?EHD T?EM OIT TO T?E PI5HIC 'S POSSESSIN/ POEER
TO SEHH T?E S'ID PROPERTIES.
&9
Petitioners ;aintain that* based on the facts of the case* there
!as a perfected contract of sale of the parcels of land and the
i;proe;ents thereon for =IS]&*)))*))).)) plus
P+*#))*))).)) to coer obli%ations prior to :nal li$uidation.=
Petitioners insist that the4 had accepted the counter.oBer of
respondent EC and that before the counter.oBer !as !ithdra!n
b4 respondents* the acceptance !as ;ade <no!n to the;
throu%h real estate bro<er Mar$ue@.
Petitioners assert that there !as no need for a !ritten authorit4
fro; the 5oard of Directors of EC for Mar$ue@ to alidl4 act as
bro<erP;iddle;anPinter;ediar4. 's bro<er* Mar$ue@ !as not an
ordinar4 a%ent because his authorit4 !as of a special and
li;ited character in ;ost respects. ?is onl4 >ob as a bro<er !as
to loo< for a bu4er and to brin% to%ether the parties to the
transaction. ?e !as not authori@ed to sell the properties or to
;a<e a bindin% contract to respondent EC6 hence* petitioners
ar%ue* 'rticle &29" of the Ne! Ciil Code does not appl4.
In an4 eent* petitioners aer* !hat is i;portant and decisie
!as that Mar$ue@ !as able to co;;unicate both the oBer and
counter.oBer and their acceptance of respondent EC7s counter.
oBer* resultin% in a perfected contract of sale.
Petitioners posit that the testi;onial and docu;entar4
eidence on record a;pl4 sho!s that /lanille* !ho !as the
President and /eneral Mana%er of respondent EC* and DelsauA*
!ho !as the Mana%in% Director for ES'C 'sia* had the
necessar4 authorit4 to sell the sub>ect propert4 or* at least* had
been allo!ed b4 respondent EC to hold the;seles out in the
public as hain% the po!er to sell the sub>ect properties.
Petitioners identi:ed such eidence* thus8
&. The testi;on4 of Mar$ue@ that he !as chosen b4 /lanille as
the then President and /eneral Mana%er of Eternit* to sell the
properties of said corporation to an4 interested part4* !hich
authorit4* as hereinaboe discussed* need not be in !ritin%.
+. The fact that the NE/OTI'TIONS for the sale of the sub>ect
properties spanned SEVER'H MONT?S* fro; &120 to &1296
(. The COINTER.OFFER ;ade b4 Eternit throu%h /H'NVIHHE to
sell its properties to the Petitioners6
". The /OOD F'IT? of Petitioners in beliein% Eternit7s oBer to
sell the properties as eidenced b4 the Petitioners7
'CCEPT'NCE of the counter.oBer6
#. The fact that Petitioners DEPOSITED the price of FISG
]&*)))*))).)) !ith the Securit4 5an< and that an ESCROE
a%ree;ent !as drafted oer the sub>ect properties6
0. /lanille7s teleA to DelsauA in$uirin% =E?EN EE
,Respondents- EIHH IMPHEMENT 'CTION TO 5IJ 'ND SEHH=6
9. More i;portantl4* EAhibits =/= and =?= of the Respondents*
!hich eidenced the fact that Petitioners7 oBer !as alle%edl4
RE3ECTED b4 both /lanille and DelsauA.
&2
Petitioners insist that it is incon%ruous for /lanille and DelsauA
to ;a<e a counter.oBer to petitioners7 oBer and thereafter
re>ect such oBer unless the4 !ere authori@ed to do so b4
respondent EC. Petitioners insist that DelsauA con:r;ed his
authorit4 to sell the properties in his letter to Mar$ue@* to !it8
Dear Sir*
Re8 Hand of Eternit Corporation
I !ould li<e to con:r; oDciall4 that our /roup has decided not
to proceed !ith the sale of the land !hich !as proposed to 4ou.
The Co;;ittee for 'sia of our /roup ;et recentl4 ,;eetin%
eer4 siA ;onths- and eAa;ined the position as far as the
Philippines are ,sic- concerned. Considerin% the ne! political
situation since the departure of MR. M'RCOS and a certain
stabili@ation in the Philippines* the Co;;ittee has decided not
to stop our operations in ManilaF.G FIGn fact production started
a%ain last !ee<* and ,sic- to reor%ani@e the participation in the
Corporation.
Ee re%ret that !e could not ;a<e a deal !ith 4ou this ti;e* but
in case the polic4 !ould chan%e at a later sta%e !e !ould
consult 4ou a%ain.
In the ;eanti;e* I re;ain
Jours sincerel4*
C.F. DEHS'IK
&1
Petitioners further e;phasi@e that the4 acted in %ood faith
!hen /lanille and DelsauA !ere <no!in%l4 per;itted b4
respondent EC to sell the properties !ithin the scope of an
apparent authorit4. Petitioners insist that respondents held
the;seles to the public as possessin% po!er to sell the sub>ect
properties.
54 !a4 of co;;ent* respondents aer that the issues raised b4
the petitioners are factual* hence* are proscribed b4 Rule "# of
the Rules of Court. On the ;erits of the petition* respondents
EC ,no! EMC- and ES'C reiterate their sub;issions in the C'.
The4 ;aintain that /lanille* DelsauA and Mar$ue@ had no
authorit4 fro; the stoc<holders of respondent EC and its 5oard
of Directors to oBer the properties for sale to the petitioners* or
to an4 other person or entit4 for that ;atter. The4 assert that
the decision and resolution of the C' are in accord !ith la! and
the eidence on record* and should be aDr;ed in toto.
Petitioners aer in their subse$uent pleadin%s that respondent
EC* throu%h /lanille and DelsauA* confor;ed to the !ritten
authorit4 of Mar$ue@ to sell the properties. The authorit4 of
/lanille and DelsauA to bind respondent EC is eidenced b4
the fact that /lanille and DelsauA ne%otiated for the sale of
1)Q of stoc<s of respondent EC to Ruperto Tan on 3une &* &119.
/ien the si%ni:cance of their positions and their duties in
respondent EC at the ti;e of the transaction* and the fact that
respondent ES'C o!ns 1)Q of the shares of stoc< of
respondent EC* a for;al resolution of the 5oard of Directors
!ould be a ;ere cere;onial for;alit4. Ehat is i;portant*
petitioners ;aintain* is that Mar$ue@ !as able to co;;unicate
the oBer of respondent EC and the petitioners7 acceptance
thereof. There !as no ti;e that the4 acted !ithout the
<no!led%e of respondents. In fact* respondent EC neer
repudiated the acts of /lanille* Mar$ue@ and DelsauA.
The petition has no ;erit.
'nent the :rst issue* !e a%ree !ith the contention of
respondents that the issues raised b4 petitioner in this case are
factual. Ehether or not Mar$ue@* /lanille* and DelsauA !ere
authori@ed b4 respondent EC to act as its a%ents relatie to the
sale of the properties of respondent EC* and if so* the
boundaries of their authorit4 as a%ents* is a $uestion of fact. In
the absence of eApress !ritten ter;s creatin% the relationship
of an a%enc4* the eAistence of an a%enc4 is a fact $uestion.
+)
Ehether an a%enc4 b4 estoppel !as created or !hether a
person acted !ithin the bounds of his apparent authorit4* and
!hether the principal is estopped to den4 the apparent
authorit4 of its a%ent are* li<e!ise* $uestions of fact to be
resoled on the basis of the eidence on record.
+&
The :ndin%s
of the trial court on such issues* as aDr;ed b4 the C'* are
conclusie on the Court* absent eidence that the trial and
appellate courts i%nored* ;isconstrued* or ;isapplied facts and
circu;stances of substance !hich* if considered* !ould !arrant
a ;odi:cation or reersal of the outco;e of the case.
++
It ;ust be stressed that issues of facts ;a4 not be raised in the
Court under Rule "# of the Rules of Court because the Court is
not a trier of facts. It is not to re.eAa;ine and assess the
eidence on record* !hether testi;onial and docu;entar4.
There are* ho!eer* reco%ni@ed eAceptions !here the Court
;a4 dele into and resole factual issues* na;el48
,&- Ehen the conclusion is a :ndin% %rounded entirel4 on
speculations* sur;ises* or con>ectures6 ,+- !hen the inference
;ade is ;anifestl4 ;ista<en* absurd* or i;possible6 ,(- !hen
there is %rae abuse of discretion6 ,"- !hen the >ud%;ent is
based on a ;isapprehension of facts6 ,#- !hen the :ndin%s of
fact are conLictin%6 ,0- !hen the Court of 'ppeals* in ;a<in% its
:ndin%s* !ent be4ond the issues of the case and the sa;e is
contrar4 to the ad;issions of both appellant and appellee6 ,9-
!hen the :ndin%s of the Court of 'ppeals are contrar4 to those
of the trial court6 ,2- !hen the :ndin%s of fact are conclusions
!ithout citation of speci:c eidence on !hich the4 are based6
,1- !hen the Court of 'ppeals ;anifestl4 oerloo<ed certain
releant facts not disputed b4 the parties* !hich* if properl4
considered* !ould >ustif4 a diBerent conclusion6 and ,&)- !hen
the :ndin%s of fact of the Court of 'ppeals are pre;ised on the
absence of eidence and are contradicted b4 the eidence on
record.
+(
Ee hae reie!ed the records thorou%hl4 and :nd that the
petitioners failed to establish that the instant case falls under
an4 of the fore%oin% eAceptions. Indeed* the assailed decision
of the Court of 'ppeals is supported b4 the eidence on record
and the la!.
It !as the dut4 of the petitioners to proe that respondent EC
had decided to sell its properties and that it had e;po!ered
'da;s* /lanille and DelsauA or Mar$ue@ to oBer the properties
for sale to prospectie bu4ers and to accept an4 counter.oBer.
Petitioners li<e!ise failed to proe that their counter.oBer had
been accepted b4 respondent EC* throu%h /lanille and
DelsauA. It ;ust be stressed that !hen speci:c perfor;ance is
sou%ht of a contract ;ade !ith an a%ent* the a%enc4 ;ust be
established b4 clear* certain and speci:c proof.
+"
Section +( of 5atas Pa;bansa 5ilan% 02* other!ise <no!n as
the Corporation Code of the Philippines* proides8
SEC. +(. The 5oard of Directors or Trustees. Y Inless other!ise
proided in this Code* the corporate po!ers of all corporations
for;ed under this Code shall be eAercised* all business
conducted and all propert4 of such corporations controlled and
held b4 the board of directors or trustees to be elected fro;
a;on% the holders of stoc<s* or !here there is no stoc<* fro;
a;on% the ;e;bers of the corporation* !ho shall hold oDce
for one ,&- 4ear and until their successors are elected and
$uali:ed.
Indeed* a corporation is a >uridical person separate and distinct
fro; its ;e;bers or stoc<holders and is not aBected b4 the
personal ri%hts*
obli%ations and transactions of the latter.
+#
It ;a4 act onl4
throu%h its board of directors or* !hen authori@ed either b4 its
b4.la!s or b4 its board resolution* throu%h its oDcers or a%ents
in the nor;al course of business. The %eneral principles of
a%enc4 %oern the relation bet!een the corporation and its
oDcers or a%ents* sub>ect to the articles of incorporation* b4.
la!s* or releant proisions of la!.
+0
Inder Section (0 of the Corporation Code* a corporation ;a4
sell or cone4 its real properties* sub>ect to the li;itations
prescribed b4 la! and the Constitution* as follo!s8
SEC. (0. Corporate po!ers and capacit4. Y Eer4 corporation
incorporated under this Code has the po!er and capacit48
A A A A
9. To purchase* receie* ta<e or %rant* hold* cone4* sell* lease*
pled%e* ;ort%a%e and other!ise deal !ith such real and
personal propert4* includin% securities and bonds of other
corporations* as the transaction of a la!ful business of the
corporation ;a4 reasonabl4 and necessaril4 re$uire* sub>ect to
the li;itations prescribed b4 the la! and the Constitution.
The propert4 of a corporation* ho!eer* is not the propert4 of
the stoc<holders or ;e;bers* and as such* ;a4 not be sold
!ithout eApress authorit4 fro; the board of directors.
+9
Ph4sical
acts* li<e the oBerin% of the properties of the corporation for
sale* or the acceptance of a counter.oBer of prospectie bu4ers
of such properties and the eAecution of the deed of sale
coerin% such propert4* can be perfor;ed b4 the corporation
onl4 b4 oDcers or a%ents dul4 authori@ed for the purpose b4
corporate b4.la!s or b4 speci:c acts of the board of directors.
+2
'bsent such alid dele%ationPauthori@ation* the rule is that the
declarations of an indiidual director relatin% to the aBairs of
the corporation* but not in the course of* or connected !ith* the
perfor;ance of authori@ed duties of such director* are not
bindin% on the corporation.
+1
Ehile a corporation ;a4 appoint a%ents to ne%otiate for the
sale of its real properties* the :nal sa4 !ill hae to be !ith the
board of directors throu%h its oDcers and a%ents as authori@ed
b4 a board resolution or b4 its b4.la!s.
()
'n unauthori@ed act of
an oDcer of the corporation is not bindin% on it unless the latter
rati:es the sa;e eApressl4 or i;pliedl4 b4 its board of
directors. 'n4 sale of real propert4 of a corporation b4 a person
purportin% to be an a%ent thereof but !ithout !ritten authorit4
fro; the corporation is null and oid. The declarations of the
a%ent alone are %enerall4 insuDcient to establish the fact or
eAtent of hisPher authorit4.
(&
54 the contract of a%enc4* a person binds hi;self to render
so;e serice or to do so;ethin% in representation on behalf of
another* !ith the consent or authorit4 of the latter.
(+
Consent of
both principal and a%ent is necessar4 to create an a%enc4. The
principal ;ust intend that the a%ent shall act for hi;6 the a%ent
;ust intend to accept the authorit4 and act on it* and the
intention of the parties ;ust :nd eApression either in !ords or
conduct bet!een the;.
((
'n a%enc4 ;a4 be eApressed or i;plied fro; the act of the
principal* fro; his silence or lac< of action* or his failure to
repudiate the a%enc4 <no!in% that another person is actin% on
his behalf !ithout authorit4. 'cceptance b4 the a%ent ;a4 be
eApressed* or i;plied fro; his acts !hich carr4 out the a%enc4*
or fro; his silence or inaction accordin% to the circu;stances.
("
'%enc4 ;a4 be oral unless the la! re$uires a speci:c for;.
(#
?o!eer* to create or cone4 real ri%hts oer i;;oable
propert4* a special po!er of attorne4 is necessar4.
(0
Thus* !hen
a sale of a piece of land or an4 portion thereof is throu%h an
a%ent* the authorit4 of the latter shall be in !ritin%* other!ise*
the sale shall be oid.
(9
In this case* the petitioners as plaintiBs belo!* failed to adduce
in eidence an4 resolution of the 5oard of Directors of
respondent EC e;po!erin% Mar$ue@* /lanille or DelsauA as its
a%ents* to sell* let alone oBer for sale* for and in its behalf* the
ei%ht parcels of land o!ned b4 respondent EC includin% the
i;proe;ents thereon. The bare fact that DelsauA ;a4 hae
been authori@ed to sell to Ruperto Tan the shares of stoc< of
respondent ES'C* on 3une &* &119* cannot be used as basis for
petitioners7 clai; that he had li<e!ise been authori@ed b4
respondent EC to sell the parcels of land.
Moreoer* the eidence of petitioners sho!s that 'da;s and
/lanille acted on the authorit4 of DelsauA* !ho* in turn* acted
on the authorit4 of respondent ES'C* throu%h its Co;;ittee for
'sia*
(2
the 5oard of Directors of respondent ES'C*
(1
and the
5el%ianPS!iss co;ponent of the ;ana%e;ent of respondent
ES'C.
")
's such* 'da;s and /lanille en%a%ed the serices of
Mar$ue@ to oBer to sell the properties to prospectie bu4ers.
Thus* on Septe;ber &+* &120* Mar$ue@ !rote the petitioner
that he !as authori@ed to oBer for sale the propert4
forP+9*)))*))).)) and the other ter;s of the sale sub>ect to
ne%otiations. Ehen petitioners oBered to purchase the propert4
for P+)*)))*))).))* throu%h Mar$ue@* the latter rela4ed
petitioners7 oBer to /lanille6 /lanille had to send a teleA to
DelsauA to in$uire the position of respondent ES'C to
petitioners7 oBer. ?o!eer* as ad;itted b4 petitioners in their
Me;orandu;* DelsauA !as unable to repl4 i;;ediatel4 to the
teleA of /lanille because DelsauA had to !ait for con:r;ation
fro; respondent ES'C.
"&
Ehen DelsauA :nall4 responded to
/lanille on Februar4 &+* &129* he ;ade it clear that* based on
the =5el%ianPS!iss decision= the :nal oBer of respondent ES'C
!as IS]&*)))*))).)) plus P+*#))*))).)) to coer all eAistin%
obli%ations prior to :nal li$uidation.
"+
The oBer of DelsauA
e;anated onl4 fro; the =5el%ianPS!iss decision*= and not the
entire ;ana%e;ent or 5oard of Directors of respondent ES'C.
Ehile it is true that petitioners accepted the counter.oBer of
respondent ES'C* respondent EC !as not a part4 to the
transaction bet!een the;6 hence* EC !as not bound b4 such
acceptance.
Ehile /lanille !as the President and /eneral Mana%er of
respondent EC* and 'da;s and DelsauA !ere ;e;bers of its
5oard of Directors* the three acted for and in behalf of
respondent ES'C* and not as dul4 authori@ed a%ents of
respondent EC6 a board resolution eincin% the %rant of such
authorit4 is needed to bind EC to an4 a%ree;ent re%ardin% the
sale of the sub>ect properties. Such board resolution is not a
;ere for;alit4 but is a condition sine $ua non to bind
respondent EC. 'd;ittedl4* respondent ES'C o!ned 1)Q of the
shares of stoc<s of respondent EC6 ho!eer* the ;ere fact that
a corporation o!ns a ;a>orit4 of the shares of stoc<s of
another* or een all of such shares of stoc<s* ta<en alone* !ill
not >ustif4 their bein% treated as one corporation.
"(
It bears stressin% that in an a%ent.principal relationship* the
personalit4 of the principal is eAtended throu%h the facilit4 of
the a%ent. In so doin%* the a%ent* b4 le%al :ction* beco;es the
principal* authori@ed to perfor; all acts !hich the latter !ould
hae hi; do. Such a relationship can onl4 be eBected !ith the
consent of the principal* !hich ;ust not* in an4 !a4* be
co;pelled b4 la! or b4 an4 court.
""
The petitioners cannot fei%n i%norance of the absence of an4
re%ular and alid authorit4 of respondent EC e;po!erin%
'da;s* /lanille or DelsauA to oBer the properties for sale and
to sell the said properties to the petitioners. ' person dealin%
!ith a <no!n a%ent is not authori@ed* under an4 circu;stances*
blindl4 to trust the a%ents6 state;ents as to the eAtent of his
po!ers6 such person ;ust not act ne%li%entl4 but ;ust use
reasonable dili%ence and prudence to ascertain !hether the
a%ent acts !ithin the scope of his authorit4.
"#
The settled rule is
that* persons dealin% !ith an assu;ed a%ent are bound at their
peril* and if the4 !ould hold the principal liable* to ascertain not
onl4 the fact of a%enc4 but also the nature and eAtent of
authorit4* and in case either is controerted* the burden of
proof is upon the; to proe it.
"0
In this case* the petitioners
failed to dischar%e their burden6 hence* petitioners are not
entitled to da;a%es fro; respondent EC.
It appears that Mar$ue@ acted not onl4 as real estate bro<er for
the petitioners but also as their a%ent. 's %leaned fro; the
letter of Mar$ue@ to /lanille* on Februar4 +0* &129* he
con:r;ed* for and in behalf of the petitioners* that the latter
had accepted such oBer to sell the land and the i;proe;ents
thereon. ?o!eer* !e a%ree !ith the rulin% of the appellate
court that Mar$ue@ had no authorit4 to bind respondent EC to
sell the sub>ect properties. ' real estate bro<er is one !ho
ne%otiates the sale of real properties. ?is business* %enerall4
spea<in%* is onl4 to :nd a purchaser !ho is !illin% to bu4 the
land upon ter;s :Aed b4 the o!ner. ?e has no authorit4 to bind
the principal b4 si%nin% a contract of sale. Indeed* an authorit4
to :nd a purchaser of real propert4 does not include an
authorit4 to sell.
"9
E$uall4 barren of ;erit is petitioners7 contention that
respondent EC is estopped to den4 the eAistence of a principal.
a%enc4 relationship bet!een it and /lanille or DelsauA. For an
a%enc4 b4 estoppel to eAist* the follo!in% ;ust be established8
,&- the principal ;anifested a representation of the a%ent7s
authorit4 or <no!lin%l4 allo!ed the a%ent to assu;e such
authorit46 ,+- the third person* in %ood faith* relied upon such
representation6 ,(- rel4in% upon such representation* such third
person has chan%ed his position to his detri;ent.
"2
'n a%enc4
b4 estoppel* !hich is si;ilar to the doctrine of apparent
authorit4* re$uires proof of reliance upon the representations*
and that* in turn* needs proof that the representations predated
the action ta<en in reliance.
"1
Such proof is lac<in% in this case.
In their co;;unications to the petitioners* /lanille and
DelsauA positiel4 and une$uiocall4 declared that the4 !ere
actin% for and in behalf of respondent ES'C.
Neither ;a4 respondent EC be dee;ed to hae rati:ed the
transactions bet!een the petitioners and respondent ES'C*
throu%h /lanille* DelsauA and Mar$ue@. The transactions and
the arious co;;unications inter se !ere neer sub;itted to
the 5oard of Directors of respondent EC for rati:cation.
IN HI/?T OF 'HH T?E FORE/OIN/* the petition is DENIED for
lac< of ;erit. Costs a%ainst the petitioners.
SO ORDERED.
SECOND D!$!S!ON
%G.R. No. 165133 , 610= 19, 2010'
SPOUSES JOSEL!N LCNTR ND NTON!O
LCNTR, ND SPOUSES JOSE(!NO RUB! ND NN!E
D!STOR"RUB!, PET!T!ONERS, $S. BR!G!D L. N!DO, S
TTORNEY"!N"(CT O( RE$ELEN N. SR!$ST$,
RESPONDENT.
R E S O L U T ! O N
CRP!O, J.,
T8e C)3e
Spouses 'ntonio and 3oselina 'lcantara and Spouses 3ose:no
and 'nnie Rubi ,petitioners- :led this Petition for Reie!
F&G
assailin% the Court of 'ppealsO ,appellate court- Decision
F+G
dated &) 3une +))" as !ell as the Resolution
F(G
dated &9 'u%ust
+))" in C'./.R. CV No. 92+&#. In the assailed decision* the
appellate court reersed the &9 3une +))+ Decision
F"G
of 5ranch
01 of the Re%ional Trial Court of 5inan%onan* Ri@al ,RTC- b4
dis;issin% the case for recoer4 of possession !ith da;a%es
and preli;inar4 in>unction :led b4 5ri%ida H. Nido ,respondent-*
in her capacit4 as ad;inistrator and attorne4.in.fact of Reelen
N. Sriastaa ,Reelen-.
T8e ()@/3
Reelen* !ho is respondentOs dau%hter and of le%al a%e* is the
o!ner of an unre%istered land !ith an area of &*1(1 s$uare
;eters located in Cardona* Ri@al. So;eti;e in March &12"*
respondent accepted the oBer of petitioners to purchase a +)).
s$uare ;eter portion of ReelenOs lot ,lot- at P+)) per s$uare
;eter. Petitioners paid P(*))) as do!npa4;ent and the
balance !as pa4able on install;ent. Petitioners constructed
their houses in &12#. In &120* !ith respondentOs consent*
petitioners occupied an additional &#) s$uare ;eters of the lot.
54 &129* petitioners had alread4 paid P&9*#))
F#G
before
petitioners defaulted on their install;ent pa4;ents.
On && Ma4 &11"* respondent* actin% as ad;inistrator and
attorne4.in.fact of Reelen* :led a co;plaint for recoer4 of
possession !ith da;a%es and pra4er for preli;inar4 in>unction
a%ainst petitioners !ith the RTC.
T8e RTCE3 Ru=0nB
The RTC stated that based on the eidence presented* Reelen
o!ns the lot and respondent !as erball4 authori@ed to sell +))
s$uare ;eters to petitioners. The RTC ruled that since
respondentOs authorit4 to sell the land !as not in !ritin%* the
sale !as oid under 'rticle &29"
F0G
of the Ciil Code.
F9G
The RTC
ruled that rescission is the proper re;ed4.
F2G
On &9 3une +))+* the RTC rendered its decision* the dispositie
portion reads8
E?EREFORE* >ud%;ent is rendered in faor of plaintiB and
a%ainst the defendants* b4 .
& Declarin% the contract to sell orall4 a%reed b4 the
plaintiB 5ri%ida Nido* in her capacit4 as representatie or
a%ent of her dau%hter Reelen Nido Sriastaa* VOID and
INENFORCE'5HE.
+ Orderin% the parties* upon :nalit4 of this >ud%;ent* to
hae ;utual restitution . the defendants and all persons
clai;in% under the; to peacefull4 acate and surrender to
the plaintiB the possession of the sub>ect lot coered b4 TD
No. )1.)9"+ and its deriatie TaA Declarations* to%ether
!ith all per;anent i;proe;ents introduced thereon* and
all i;proe;ents built or constructed durin% the pendenc4
of this action* in bad faith6 and the plaintiB* to return the
su; of P&9*#)).))* the total a;ount of the install;ent on
the land paid b4 defendant6 the fruits and interests durin%
the pendenc4 of the condition shall be dee;ed to hae been
;utuall4 co;pensated.
( Orderin% the defendants to pa4 plaintiB the su; of
P+)*))).)) as attorne4Os fees* plus P&#*))).)) as actual
liti%ation eApenses* plus the costs of suit.
SO ORDERED.
F1G
T8e 66e==)/e Cou1/E3 Ru=0nB
On # 3anuar4 +))"* petitioners appealed the trial courtOs
Decision to the appellate court. In its decision dated &) 3une
+))"* the appellate court reersed the RTC decision and
dis;issed the ciil case.
F&)G
The appellate court eAplained that this is an unla!ful detainer
case. The pra4er in the co;plaint and a;ended co;plaint !as
for recoer4 of possession and the case !as :led !ithin one
4ear fro; the last de;and letter. Een if the co;plaint inoles
a $uestion of o!nership* it does not deprie the Municipal Trial
Court ,MTC- of its >urisdiction oer the e>ect;ent case.
Petitioners raised the issue of lac< of >urisdiction in their Motion
to Dis;iss and 'ns!er before the RTC.
F&&G
The RTC denied the
Motion to Dis;iss and assu;ed >urisdiction oer the case
because the issues pertain to a deter;ination of the real
a%ree;ent bet!een the parties and rescission of the contract
to sell the propert4.
F&+G
The appellate court added that een if respondentOs co;plaint
is for recoer4 of possession or accion publiciana* the RTC still
has no >urisdiction to decide the case. The appellate court
eAplained8
Note a%ain that the co;plaint !as :led on && Ma4 &11". 54
that ti;e* Republic 'ct No. 901& !as alread4 in eBect. Said la!
too< eBect on &# 'pril &11"* :fteen da4s after its publication in
the Mala4a and in the Ti;e 3ournal on () March &11" pursuant
to Sec. 2 of Republic 'ct No. 901&.
'ccordin%l4* Sec. (( of 5atas Pa;bansa &+1 !as a;ended b4
Republic 'ct No. 901& %iin% the Municipal Trial Court the
eAclusie ori%inal >urisdiction oer all ciil actions inolin% title
to* or possession of* real propert4* or an4 interest therein !here
the assessed alue of the propert4 or interest therein does not
eAceed P+)*))) or* in ciil actions in Metro Manila* !here such
assessed alue does not eAceed P#)*)))* eAclusie of interest*
da;a%es of !hateer <ind* attorne4Os fees* liti%ation eApenses
and costs.
't bench* the co;plaint alle%es that the !hole &*1(1. s$uare
;eter lot of Reelen N. Sriastaa is coered b4 TaA Declaration
No. )1.)9"+ ,EAh. =5=* p. &))* Records- !hich %ies its
assessed alue of the !hole lot of P"*21).)). Such assessed
alue falls !ithin the eAclusie ori%inal prero%atie or
>urisdiction of the :rst leel court and* therefore* the Re%ional
Trial Court a $uo has no >urisdiction to tr4 and decided the
sa;e.
F&(G
The appellate court also held that respondent* as ReelenOs
a%ent* did not hae a !ritten authorit4 to enter into such
contract of sale6 hence* the contract entered into bet!een
petitioners and respondent is oid. ' oid contract creates no
ri%hts or obli%ations or an4 >uridical relations. Therefore* the
oid contract cannot be the sub>ect of rescission.
F&"G
'%%rieed b4 the appellate courtOs Decision* petitioners
eleated the case before this Court.
!33ue3
Petitioners raise the follo!in% ar%u;ents8
" The appellate court %rael4 erred in rulin% that the
contract entered into b4 respondent* in representation of her
dau%hter* and for;er defendant Eduardo Rubi ,deceased-* is
oid6 and
# The appellate court erred in not rulin% that the
petitioners are entitled to their counterclai;s* particularl4
speci:c perfor;ance.
F&#G
Ru=0nB o? /8e Cou1/
Ee den4 the petition.
Petitioners sub;it that the sale of land b4 an a%ent !ho has no
!ritten authorit4 is not oid but ;erel4 oidable %ien the spirit
and intent of the la!. 5ein% onl4 oidable* the contract ;a4 be
rati:ed* eApressl4 or i;pliedl4. Petitioners ar%ue that since the
contract to sell !as suDcientl4 established throu%h
respondentOs ad;ission durin% the pre.trial conference* the
appellate court should hae ruled on the ;atter of the
counterclai; for speci:c perfor;ance.
F&0G
Respondent ar%ues that the appellate court cannot la!full4 rule
on petitionersO counterclai; because there is nothin% in the
records to sustain petitionersO clai; that the4 hae full4 paid
the price of the lot.
F&9G
Respondent points out that petitioners
ad;itted the lac< of !ritten authorit4 to sell. Respondent also
alle%es that there !as clearl4 no ;eetin% of the ;inds bet!een
the parties on the purported contract of sale.
F&2G
Sale of Land through an Agent
'rticles &29" and &292 of the Ciil Code proide8
'rt. &29". Ehen a sale of a piece of land or an4 interest therein
is throu%h an a%ent* the authorit4 of the latter shall be in
!ritin%6 other!ise* the sale shall be oid.
'rt. &292. Special po!ers of attorne4 are necessar4 in the
follo!in% cases8
A A A
,#- To enter into an4 contract b4 !hich the o!nership of an
i;;oable is trans;itted or ac$uired either %ratuitousl4 or for
a aluable consideration6
A A A
'rticle &29" of the Ciil Code eAplicitl4 re$uires a !ritten
authorit4 before an a%ent can sell an i;;oable propert4.
5ased on a reie! of the records* there is absolutel4 no proof of
respondentOs !ritten authorit4 to sell the lot to petitioners. In
fact* durin% the pre.trial conference* petitioners ad;itted that
at the ti;e of the ne%otiation for the sale of the lot* petitioners
!ere of the belief that respondent !as the o!ner of lot.
F&1G
Petitioners onl4 <ne! that Reelen !as the o!ner of the lot
durin% the hearin% of this case. Conse$uentl4* the sale of the
lot b4 respondent !ho did not hae a !ritten authorit4 fro;
Reelen is oid. ' oid contract produces no eBect either
a%ainst or in faor of an4one and cannot be rati:ed.
F+)G
' special po!er of attorne4 is also necessar4 to enter into an4
contract b4 !hich the o!nership of an i;;oable is
trans;itted or ac$uired for a aluable consideration. Eithout an
authorit4 in !ritin%* respondent cannot alidl4 sell the lot to
petitioners. ?ence* an4 =sale= in faor of the petitioners is oid.
Our rulin% in Di<on v. )ourt of 'ppeals
F+&G
is instructie8
Ehen the sale of a piece of land or an4 interest thereon is
throu%h an a%ent* the authorit4 of the latter shall be in !ritin%6
other!ise* the sale shall be oid. Thus the authorit4 of an a%ent
to eAecute a contract for the sale of real estate ;ust be
conferred in !ritin% and ;ust %ie hi; speci:c authorit4* either
to conduct the %eneral business of the principal or to eAecute a
bindin% contract containin% ter;s and conditions !hich are in
the contract he did eAecute. ' special po!er of attorne4 is
necessar4 to enter into an4 contract b4 !hich the o!nership of
an i;;oable is trans;itted or ac$uired either %ratuitousl4 or
for a aluable consideration. The eApress ;andate re$uired b4
la! to enable an appointee of an a%enc4 ,couched- in %eneral
ter;s to sell ;ust be one that eApressl4 ;entions a sale or that
includes a sale as a necessar4 in%redient of the act ;entioned.
For the principal to confer the ri%ht upon an a%ent to sell real
estate* a po!er of attorne4 ;ust so eApress the po!ers of the
a%ent in clear and un;ista<able lan%ua%e. Ehen there is an4
reasonable doubt that the lan%ua%e so used cone4s such
po!er* no such construction shall be %ien the docu;ent.
Further* 'rticle &(&2 of the Ciil Code enu;erates the
re$uisites for a alid contract* na;el48
0 consent of the contractin% parties6
9 ob>ect certain !hich is the sub>ect ;atter of the contract6
2 cause of the obli%ation !hich is established.
Respondent did not hae the !ritten authorit4 to enter into
a contract to sell the lot. 's the consent of Reelen* the real
o!ner of the lot* !as not obtained in !ritin% as re$uired b4
la!* no contract !as perfected. Conse$uentl4* petitioners
failed to alidl4 ac$uire the lot
General Power of Attorney
On +# March &11"* Reelen eAecuted a /eneral Po!er of
'ttorne4 constitutin% respondent as her attorne4.in.fact and
authori@in% her to enter into an4 and all contracts and
a%ree;ents on ReelenOs behalf. The /eneral Po!er of 'ttorne4
!as notari@ed b4 Harr4 '. Reid* Notar4 Public in California*
I.S.'.
Infortunatel4* the /eneral Po!er of 'ttorne4 presented as
=EAhibit C=
F++G
in the RTC cannot also be the basis of
respondentOs !ritten authorit4 to sell the lot.
Section +#* Rule &(+ of the Rules of Court proides8
Sec. +#. Proof of public or oBcial record. .. 'n oDcial record or
an entr4 therein* !hen ad;issible for an4 purpose* ;a4 be
eidenced b4 an oDcial publication thereof or b4 a cop4
attested b4 the oDcer hain% the le%al custod4 of the record* or
b4 his deput4* and acco;panied* if the record is not <ept in the
Philippines* !ith a certi:cate that such oDcer has the custod4.
If the oDce in !hich the record is <ept is in a forei%n countr4*
the certi:cate ;a4 be ;ade b4 a secretar4 of e;bass4 or
le%ation consul %eneral* consul* ice consul* or consular a%ent
or b4 an4 oDcer in the forei%n serice of the Philippines
stationed in the forei%n countr4 in !hich the record is <ept* and
authenticated b4 the seal of his oDce.
In Teoco v. etropolitan BanC and Trust )ompany*
F+(G
$uotin%
5ope< v. )ourt of 'ppeals*
F+"G
!e eAplained8
Fro; the fore%oin% proision* !hen the special po!er of
attorne4 is eAecuted and ac<no!led%ed before a notar4 public
or other co;petent oDcial in a forei%n countr4* it cannot be
ad;itted in eidence unless it is certi:ed as such in accordance
!ith the fore%oin% proision of the rules b4 a secretar4 of
e;bass4 or le%ation* consul %eneral* consul* ice consul* or
consular a%ent or b4 an4 oDcer in the forei%n serice of the
Philippines stationed in the forei%n countr4 in !hich the record
is <ept of said public docu;ent and authenticated b4 the seal of
his oDce. ' cit4 >ud%e.notar4 !ho notari@ed the docu;ent* as
in this case* cannot issue such certi:cation.
F+#G
Since the /eneral Po!er of 'ttorne4 !as eAecuted and
ac<no!led%ed in the Inited States of ';erica* it cannot be
ad;itted in eidence unless it is certi:ed as such in accordance
!ith the Rules of Court b4 an oDcer in the forei%n serice of the
Philippines stationed in the Inited States of ';erica. ?ence*
this docu;ent has no probatie alue
Specifc Performance
Petitioners are not entitled to clai; for speci:c perfor;ance. It
;ust be stressed that !hen speci:c perfor;ance is sou%ht of a
contract ;ade !ith an a%ent* the a%enc4 ;ust be established
b4 clear* certain and speci:c proof.
F+0G
To reiterate* there is a
clear absence of proof that Reelen authori@ed respondent to
sell her lot.
Jurisdiction of the !"
Section (( of Batas Pambansa Bilang &+1*
F+9G
as a;ended b4
Republic 'ct No. 901& proides8
Section ((. >urisdiction of etropolitan Trial )ourts, unicipal
Trial )ourts and unicipal )ircuit Trial )ourts in )ivil )ases. .
Metropolitan Trial Courts* Municipal Trial Courts and Municipal
Circuit Trial Courts shall eAercise8
A A A
,(- EAclusie ori%inal >urisdiction in all ciil actions !hich
inole title to* possession of* real propert4* or an4 interest
therein !here the assessed alue of the propert4 or interest
therein does not eAceed T!ent4 thousand pesos ,P+)*))).))-
or* in ciil actions in Metro Manila* !here such assessed alue
does not eAceed Fift4 thousand pesos ,P#)*))).))- eAclusie of
interest* da;a%es of !hateer <ind* attorne4Os fees* liti%ation
eApenses and costs8 A A A
In 9eon<on ?da. de Barrera v. Deirs of ?icente 5egaspi*
F+2G
the
Court eAplained
5efore the a;end;ents introduced b4 Republic 'ct No. 901&*
the plenar4 action ofaccion publiciana !as to be brou%ht before
the re%ional trial court. Eith the ;odi:cations introduced b4
R.'. No. 901& in &11"* the >urisdiction of the :rst leel courts
has been eApanded to include >urisdiction oer other real
actions !here the assessed alue does not eAceed P+)*)))*
P#)*))) !here the action is :led in Metro Manila. The :rst leel
courts thus hae eAclusie ori%inal >urisdiction oer
accionpubliciana and accion reivindicatoria !here the assessed
alue of the real propert4 does not eAceed the aforestated
a;ounts. 'ccordin%l4* the >urisdictional ele;ent is the assessed
alue of the propert4.
'ssessed alue is understood to be =the !orth or alue of
propert4 established b4 taAin% authorities on the basis of !hich
the taA rate is applied. Co;;onl4* ho!eer* it does not
represent the true or ;ar<et alue of the propert4.=
The appellate court correctl4 ruled that een if the co;plaint
:led !ith the RTC inoles a $uestion of o!nership* the MTC still
has >urisdiction because the assessed alue of the !hole lot as
stated in TaA Declaration No. )1.)9"+ is P"*21).
F+1G
The MTC
cannot be depried of >urisdiction oer an e>ect;ent case based
;erel4 on the assertion of o!nership oer the liti%ated
propert4* and the underl4in% reason for this rule is to preent
an4 part4 fro; triLin% !ith the su;;ar4 nature of an e>ect;ent
suit.
F()G
The %eneral rule is that dis;issal of a case for lac< of
>urisdiction ;a4 be raised at an4 sta%e of the proceedin%s since
>urisdiction is conferred b4 la!. The lac< of >urisdiction aBects
the er4 authorit4 of the court to ta<e co%ni@ance of and to
render >ud%;ent on the action6 other!ise* the ineitable
conse$uence !ould ;a<e the courtOs decision a =la!less= thin%.
F(&G
Since the RTC has no >urisdiction oer the co;plaint :led* all
the proceedin%s as !ell as the Decision of &9 3une +))+ are
oid. The co;plaint should perforce be dis;issed.
-.ERE(ORE, !e DENY the petition. Ee ((!RM the Decision
and Resolution of the Court of 'ppeals in C'./.R. CV No. 92+&#.
SO ORDERED.