LAW ON AGENCY

Civil Law; Contracts; Agency; In a sale of parcel of land or any interest

therein made through an agent, a special power of attorney is essential;
Authority must be in writing, otherwise the sale shall be void.
Same; Same; Same; A special power of attorney is necessary to enter into
any contract by which the ownership of an immovable is transmtted or
acquired for valuable consideration.
Same;Same;Same; Requisites of a valid and perfected contract- Article
1318 of the Civil Code lists of the requisites of a valid and perfected contract,
namely:" (1) consent of the contracting parties; (2) object certain which is the
subject matter of the contracts ;(3) cause of the obligation which is
established".
-----------------------------------------------------------------------------------------------------------------Reporter: Geraldo, Dina D. LLB-3

G.R. No. 127094, 2002 February 6 (376 SCRA 222)

ALEJANDRIA PINEDA and SPOUSES ADEODATO DUQUE, JR., and
EVANGELINE MARY JANE DUQUE, petitioners, vs. COURT OF APPEALS
and SPOUSES NELSON BAEZ and MERCEDES BAEZ, respondents
The Case:
The case is an appeal via certiorari from the decision of the Court of Appeals,
[1] affirming that of the Regional Trial Court, Quezon City, Branch 76,
declaring that the Baez spouses are the lawful owners of the property in
question and the petitioners could not convey title to the Duque spouses who
were buyers in bad faith.

Facts:

- On January 11, 1983, the appellees and the petitioner, Pineda, executed an
"Agreement to Exchange Real Properties ". The appellees exchanging
their property at White Plains with that of the Pinedas located in California.
- At the time of the execution of the agreement, the White Plains property
was mortgaged with the GSIS, while the California property also had a

mortgaged obligation.
- As stated in the exchange agreement, Pineda paid the appellees the total
amount of $12, 000.
- On December 18, 1984, unknown to the appellees, Pineda and the spouses
Duque executed an "Agreement to Sell" over the White Plains property,
whereby Pineda sold the property to the appellants for the amount of P1.6M.
- Pineda paid the mortgage of the White Plains property and requested the
appellees for a written authority for the release of the title from GSIS. The
appellees gave Pineda the authority with the understanding that Pineda will
deliver the title to the appellees.
- Upon their return to the Philippines sometime in March 1985, the appellees
discovered that the spouses Duque were occupying the White Plains property.
They talked with Doque who showed interest in buying the property and the
latter mentioned that they gave money to Mrs. Pineda to facilitate the
redemption of her property in the US.
-On July 1987, they discovered from the Register of Deeds that the title over
the White Plains property was cancelled
and new one was issued in the
name of Alejandra Pineda and they also discovered a fictitious deed of sale
dated September 5, 1979 in the name of Pineda.
- In a civil case filed by the appellees, the trial court declared them as the
absolute owners of the property located in White Plains.
Issue:
Whether petitioners validly acquired the subject property.

Held:

We deny the petition. The issue raised is factual. In an appeal via certiorari,
we may not review the findings of fact of the Court of Appeals.
Nevertheless, it appears that the Baez spouses were the original owners of
the parcel of land and improvements located at 32 Sarangaya St., White
Plains, Quezon City. On January 11, 1983, the Baez spouses and petitioner
Pineda executed an agreement to exchange real properties. However, the
exchange did not materialize.
Petitioner Pinedas "sale" of the property to petitioners Duque was not

authorized by the real owners of the land, respondent Baez. The

Civil Code provides that in a sale of a parcel of land or any interest
therein made through an agent, a special power of attorney is
essential. This authority must be in writing; otherwise the sale shall
be void. In his testimony, petitioner Adeodato Duque confirmed that
at the time he "purchased" respondents property from Pineda, the
latter had no Special Power of Authority to sell the property.
A special power of attorney is necessary to enter into any contract
by which the ownership of an immovable is transmitted or acquired
for a valuable consideration.
Without an authority in writing,
petitioner Pineda could not validly sell the subject property to
petitioners Duque. Hence, any "sale" in favor of petitioners Duque
is void. Further, Article 1318 of the Civil Code lists the requisites of
a valid and perfected contract, namely: (1) consent of the
contracting parties; (2) object certain which the subject matter of
the contract; (3) cause of the obligation which is established. Pineda
was not authorized to enter into a contract to sell the property. As
the consent of the real owner of the property was not obtained, no
contract was perfected.
Consequently, petitioner Duque failed to validly acquire the subject
property.