RALLOS v FELIX GO CHAN & REALTY COPR.

, Munoz-Palma

Plaintiff: Ramon Rallos

Defendant: Felix Go Chan & Sons Realty Corporation
Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of the parcel of land in
issue. They executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing
him to sell such land for and in their behalf. After Concepcion died, Simeon Rallos sold the undivided
shares of his sisters Concepcion and Gerundia to Felix Go Chan & Sons Realty Corporation for the sum of
P10,686.90. New TCTs were issued to the latter.
Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed a complaint praying (1)
that the sale of the undivided share of the deceased Concepcion Rallos in lot 5983 be unenforceable, and
said share be reconveyed to her estate; (2) that the Certificate of 'title issued in the name of Felix Go
Chan & Sons Realty Corporation be cancelled and another title be issued in the names of the corporation
and the "Intestate estate of Concepcion Rallos" in equal undivided and (3) that plaintiff be indemnified by
way of attorney's fees and payment of costs of suit.

Issues: Whether or not the sale fell within the exception to the general rule that death extinguishes the
authority of the agent

Held/Ratio: Yes the sale is void. The court held that no one may contract in the name of another
without being authorized by the latter, or unless he has by law a right to represent him (Art. 1317 of the
Civil Code). Simons authority as agent was extinguished upon Concolacions death. The sale did not fall
under the exceptions to the general rule that death ipso jure extinguishes the authority of the agent. Art.
1930 inapplicable since SPA in favor of Simon Rallos was not coupled with interest and Art. 1931
inapplicable because Rallos knew of principal Concepcions death. For Art 1931 to apply, both
requirements must be present

Laws on agency, the terms of which are clear and unmistakable leaving no room for an interpretation
contrary to its tenor, should apply, the law provides that death of the principal ipso jure extinguishes the
authority of the agent to sell rendering the sale to a third person in good faith unenforceable unless at
the agent had no knowledge of the principals death at that time (exception under Art. 1931)

Dispositive: CA Decision reversed, CFI decision affirmed. Sale was null and void.

(Court discussed relevant principles first)

Relationship of Agency (concept arising from principles under Art 1317 and 1403)- one party, caged the
principal (mandante), authorizes another, called the agent (mandatario), to act for and in his behalf in
transactions with third persons.
-derivative in nature, power emanating from principal
-agents acts are acts of the principal

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

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