[G.R. No.

165133 : April 19, 2010]

SPOUSES JOSELINA ALCANTARA AND ANTONIO ALCANTARA, AND SPOUSES JOSEFINO RUBI AND
ANNIE DISTOR-RUBI, PETITIONERS, VS. BRIGIDA L. NIDO, AS ATTORNEY-IN-FACT OF REVELEN N.
SRIVASTAVA, RESPONDENT.

RESOLUTION

CARPIO, J.:

The Case

Spouses Antonio and Joselina Alcantara and Spouses Josefino and Annie Rubi (petitioners) filed this Petition
for Review[1] assailing the Court of Appeals' (appellate court) Decision[2] dated 10 June 2004 as well as the
Resolution[3] dated 17 August 2004 in CA-G.R. CV No. 78215. In the assailed decision, the appellate court
reversed the 17 June 2002 Decision[4] of Branch 69 of the Regional Trial Court of Binangonan, Rizal (RTC) by
dismissing the case for recovery of possession with damages and preliminary injunction filed by Brigida L.
Nido (respondent), in her capacity as administrator and attorney-in-fact of Revelen N. Srivastava (Revelen).

The Facts

Revelen, who is respondent's daughter and of legal age, is the owner of an unregistered land with an area of
1,939 square meters located in Cardona, Rizal. Sometime in March 1984, respondent accepted the offer of
petitioners to purchase a 200-square meter portion of Revelen's lot (lot) at P200 per square meter. Petitioners
paid P3,000 as downpayment and the balance was payable on installment. Petitioners constructed their houses
in 1985. In 1986, with respondent's consent, petitioners occupied an additional 150 square meters of the lot.
By 1987, petitioners had already paid P17,500[5] before petitioners defaulted on their installment payments.

On 11 May 1994, respondent, acting as administrator and attorney-in-fact of Revelen, filed a complaint for
recovery of possession with damages and prayer for preliminary injunction against petitioners with the RTC.

The RTC's Ruling

The RTC stated that based on the evidence presented, Revelen owns the lot and respondent was verbally
authorized to sell 200 square meters to petitioners. The RTC ruled that since respondent's authority to sell the
land was not in writing, the sale was void under Article 1874[6] of the Civil Code.[7] The RTC ruled that rescission
is the proper remedy.[8]

On 17 June 2002, the RTC rendered its decision, the dispositive portion reads:

WHEREFORE, judgment is rendered in favor of plaintiff and against the defendants, by -

1. Declaring the contract to sell orally agreed by the plaintiff Brigida Nido, in her capacity as
representative or agent of her daughter Revelen Nido Srivastava, VOID and
UNENFORCEABLE.

2. Ordering the parties, upon finality of this judgment, to have mutual restitution - the
defendants and all persons claiming under them to peacefully vacate and surrender to the
plaintiff the possession of the subject lot covered by TD No. 09-0742 and its derivative Tax
Declarations, together with all permanent improvements introduced thereon, and all
improvements built or constructed during the pendency of this action, in bad faith; and the
plaintiff, to return the sum of P17,500.00, the total amount of the installment on the land
paid by defendant; the fruits and interests during the pendency of the condition shall be
deemed to have been mutually compensated.

3. Ordering the defendants to pay plaintiff the sum of P20,000.00 as attorney's fees, plus
P15,000.00 as actual litigation expenses, plus the costs of suit.

SO ORDERED.[9]
The Appellate Court's Ruling

On 5 January 2004, petitioners appealed the trial court's Decision to the appellate court. In its decision dated
10 June 2004, the appellate court reversed the RTC decision and dismissed the civil case.[10]

The appellate court explained that this is an unlawful detainer case. The prayer in the complaint and amended
complaint was for recovery of possession and the case was filed within one year from the last demand letter.
Even if the complaint involves a question of ownership, it does not deprive the Municipal Trial Court (MTC) of
its jurisdiction over the ejectment case. Petitioners raised the issue of lack of jurisdiction in their Motion to
Dismiss and Answer before the RTC.[11] The RTC denied the Motion to Dismiss and assumed jurisdiction over
the case because the issues pertain to a determination of the real agreement between the parties and
rescission of the contract to sell the property.[12]

The appellate court added that even if respondent's complaint is for recovery of possession or accion
publiciana, the RTC still has no jurisdiction to decide the case. The appellate court explained:

Note again that the complaint was filed on 11 May 1994. By that time, Republic Act No. 7691 was already in
effect. Said law took effect on 15 April 1994, fifteen days after its publication in the Malaya and in the Time
Journal on 30 March 1994 pursuant to Sec. 8 of Republic Act No. 7691.

Accordingly, Sec. 33 of Batas Pambansa 129 was amended by Republic Act No. 7691 giving the Municipal Trial
Court the exclusive original jurisdiction over all civil actions involving title to, or possession of, real property,
or any interest therein where the assessed value of the property or interest therein does not exceed P20,000
or, in civil actions in Metro Manila, where such assessed value does not exceed P50,000, exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses and costs.

At bench, the complaint alleges that the whole 1,939- square meter lot of Revelen N. Srivastava is covered
by Tax Declaration No. 09-0742 (Exh. "B", p. 100, Records) which gives its assessed value of the whole lot of
P4,890.00. Such assessed value falls within the exclusive original prerogative or jurisdiction of the first level
court and, therefore, the Regional Trial Court a quo has no jurisdiction to try and decided the same.[13]

The appellate court also held that respondent, as Revelen's agent, did not have a written authority to enter
into such contract of sale; hence, the contract entered into between petitioners and respondent is void. A void
contract creates no rights or obligations or any juridical relations. Therefore, the void contract cannot be the
subject of rescission.[14]

Aggrieved by the appellate court's Decision, petitioners elevated the case before this Court.

Issues

Petitioners raise the following arguments:

1. The appellate court gravely erred in ruling that the contract entered into by respondent, in
representation of her daughter, and former defendant Eduardo Rubi (deceased), is void; and

2. The appellate court erred in not ruling that the petitioners are entitled to their counterclaims,
particularly specific performance.[15]

Ruling of the Court

We deny the petition.

Petitioners submit that the sale of land by an agent who has no written authority is not void but merely
voidable given the spirit and intent of the law. Being only voidable, the contract may be ratified, expressly or
impliedly. Petitioners argue that since the contract to sell was sufficiently established through respondent's
admission during the pre-trial conference, the appellate court should have ruled on the matter of the
counterclaim for specific performance.[16]

Respondent argues that the appellate court cannot lawfully rule on petitioners' counterclaim because there is
nothing in the records to sustain petitioners' claim that they have fully paid the price of the lot.[17] Respondent
points out that petitioners admitted the lack of written authority to sell. Respondent also alleges that there
was clearly no meeting of the minds between the parties on the purported contract of sale.[18]

Sale of Land through an Agent

Articles 1874 and 1878 of the Civil Code provide:

Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter
shall be in writing; otherwise, the sale shall be void.

Art. 1878. Special powers of attorney are necessary in the following cases:

x x x

(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either
gratuitously or for a valuable consideration;

xxx

Article 1874 of the Civil Code explicitly requires a written authority before an agent can sell an immovable
property. Based on a review of the records, there is absolutely no proof of respondent's written authority to
sell the lot to petitioners. In fact, during the pre-trial conference, petitioners admitted that at the time of the
negotiation for the sale of the lot, petitioners were of the belief that respondent was the owner of
lot.[19] Petitioners only knew that Revelen was the owner of the lot during the hearing of this case.
Consequently, the sale of the lot by respondent who did not have a written authority from Revelen is void. A
void contract produces no effect either against or in favor of anyone and cannot be ratified.[20]

A special power of attorney is also 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, respondent
cannot validly sell the lot to petitioners. Hence, any "sale" in favor of the petitioners is void.

Our ruling in Dizon v. Court of Appeals[21] is instructive:

When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void. Thus the authority of an agent to execute a contract for the
sale of real estate must be conferred in writing and must give him specific authority, either to conduct the
general business of the principal or to execute a binding contract containing terms and conditions which are
in the contract he did execute. A special power of attorney is necessary to enter into any contract by which
the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.
The express mandate required by law to enable an appointee of an agency (couched) in general terms to sell
must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act
mentioned. For the principal to confer the right upon an agent to sell real estate, a power of attorney must so
express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that
the language so used conveys such power, no such construction shall be given the document.

Further, Article 1318 of the Civil Code enumerates the requisites for a valid contract, namely:

1. consent of the contracting parties;

2. object certain which is the subject matter of the contract;
3. cause of the obligation which is established.

Respondent did not have the written authority to enter into a contract to sell the lot. As the consent of Revelen,
the real owner of the lot, was not obtained in writing as required by law, no contract was perfected.
Consequently, petitioners failed to validly acquire the lot.

General Power of Attorney

On 25 March 1994, Revelen executed a General Power of Attorney constituting respondent as her attorney-
in-fact and authorizing her to enter into any and all contracts and agreements on Revelen's behalf. The General
Power of Attorney was notarized by Larry A. Reid, Notary Public in California, U.S.A.

Unfortunately, the General Power of Attorney presented as "Exhibit C"[22] in the RTC cannot also be the basis
of respondent's written authority to sell the lot.

Section 25, Rule 132 of the Rules of Court provides:

Sec. 25. Proof of public or official record. -- An official record or an entry therein, when admissible for any
purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the
legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines,
with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign
country, the certificate may be made by a secretary of embassy or legation consul general, consul, vice consul,
or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in
which the record is kept, and authenticated by the seal of his office.

In Teoco v. Metropolitan Bank and Trust Company,[23] quoting Lopez v. Court of Appeals,[24] we explained:

From the foregoing provision, when the special power of attorney is executed and acknowledged before a
notary public or other competent official in a foreign country, it cannot be admitted in evidence unless it is
certified as such in accordance with the foregoing provision of the rules by a secretary of embassy or legation,
consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines
stationed in the foreign country in which the record is kept of said public document and authenticated by the
seal of his office. A city judge-notary who notarized the document, as in this case, cannot issue such
certification.[25]

Since the General Power of Attorney was executed and acknowledged in the United States of America, it
cannot be admitted in evidence unless it is certified as such in accordance with the Rules of Court by an officer
in the foreign service of the Philippines stationed in the United States of America. Hence, this document has
no probative value.

Specific Performance

Petitioners are not entitled to claim for specific performance. It must be stressed that when specific
performance is sought of a contract made with an agent, the agency must be established by clear, certain and
specific proof.[26] To reiterate, there is a clear absence of proof that Revelen authorized respondent to sell her
lot.

Jurisdiction of the RTC

Section 33 of Batas Pambansa Bilang 129,[27] as amended by Republic Act No. 7691 provides:

Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts
in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall
exercise:

x x x

(3) Exclusive original jurisdiction in all civil actions which involve title to, possession of, real property, or any
interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand
pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty
thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation
expenses and costs: x x x

In Geonzon Vda. de Barrera v. Heirs of Vicente Legaspi,[28] the Court explained:

Before the amendments introduced by Republic Act No. 7691, the plenary action of accion publiciana was to
be brought before the regional trial court. With the modifications introduced by R.A. No. 7691 in 1994, the
jurisdiction of the first level courts has been expanded to include jurisdiction over other real actions where the
assessed value does not exceed P20,000, P50,000 where the action is filed in Metro Manila. The first level
courts thus have exclusive original jurisdiction over accion publiciana and accion reivindicatoriawhere the
assessed value of the real property does not exceed the aforestated amounts. Accordingly, the jurisdictional
element is the assessed value of the property.

Assessed value is understood to be "the worth or value of property established by taxing authorities on the
basis of which the tax rate is applied. Commonly, however, it does not represent the true or market value of
the property."

The appellate court correctly ruled that even if the complaint filed with the RTC involves a question of
ownership, the MTC still has jurisdiction because the assessed value of the whole lot as stated in Tax
Declaration No. 09-0742 is P4,890.[29] The MTC cannot be deprived of jurisdiction over an ejectment case
based merely on the assertion of ownership over the litigated property, and the underlying reason for this rule
is to prevent any party from trifling with the summary nature of an ejectment suit.[30]

The general rule is that dismissal of a case for lack of jurisdiction may be raised at any stage of the proceedings
since jurisdiction is conferred by law. The lack of jurisdiction affects the very authority of the court to take
cognizance of and to render judgment on the action; otherwise, the inevitable consequence would make the
court's decision a "lawless" thing.[31] Since the RTC has no jurisdiction over the complaint filed, all the
proceedings as well as the Decision of 17 June 2002 are void. The complaint should perforce be dismissed.

WHEREFORE, we DENY the petition. We AFFIRM the Decision and Resolution of the Court of Appeals in CA-
G.R. CV No. 78215.

SO ORDERED.

G.R. No. 129459 September 29, 1998

SAN JUAN STRUCTURAL AND STEEL FABRICATORS, INC., petitioner,

vs.
COURT OF APPEALS, MOTORICH SALES CORPORATION, NENITA LEE GRUENBERG, ACL
DEVELOPMENT CORP. and JNM REALTY AND DEVELOPMENT CORP., respondents.

PANGANIBAN, J.:

May corporate treasurer, by herself and without any authorization from he board of directors, validly
sell a parcel of land owned by the corporation?. May the veil of corporate fiction be pierced on the
mere ground that almost all of the shares of stock of the corporation are owned by said treasurer and
her husband?

The Case

These questions are answered in the negative by this Court in resolving the Petition for Review
on Certiorari before us, assailing the March 18, 1997 Decision 1 of the Court of Appeals 2 in CA GR CV
No. 46801 which, in turn, modified the July 18, 1994 Decision of the Regional Trial Court of Makati,
Metro Manila, Branch 633 in Civil Case No. 89-3511. The RTC dismissed both the Complaint and the
Counterclaim filed by the parties. On the other hand, the Court of Appeals ruled:

WHEREFORE, premises considered, the appealed decision is AFFIRMED WITH

MODIFICATION ordering defendant-appellee Nenita Lee Gruenberg to REFUND or
return to plaintiff-appellant the downpayment of P100,000.00 which she received from
plaintiff-appellant. There is no pronouncement as to costs. 4
The petition also challenges the June 10, 1997 CA Resolution denying reconsideration. 5

The Facts

The facts as found by the Court of Appeals are as follows:

Plaintiff-appellant San Juan Structural and Steel Fabricators, Inc.'s amended

complaint alleged that on 14 February 1989, plaintiff-appellant entered into an
agreement with defendant-appellee Motorich Sales Corporation for the transfer to it of
a parcel of land identified as Lot 30, Block 1 of the Acropolis Greens Subdivision
located in the District of Murphy, Quezon City. Metro Manila, containing an area of
Four Hundred Fourteen (414) square meters, covered by TCT No. (362909) 2876: that
as stipulated in the Agreement of 14 February 1989, plaintiff-appellant paid the
downpayment in the sum of One Hundred Thousand (P100,000.00) Pesos, the
balance to be paid on or before March 2, 1989; that on March 1, 1989. Mr. Andres T.
Co, president of plaintiff-appellant corporation, wrote a letter to defendant-appellee
Motorich Sales Corporation requesting for a computation of the balance to be paid:
that said letter was coursed through defendant-appellee's broker. Linda Aduca, who
wrote the computation of the balance: that on March 2, 1989, plaintiff-appellant was
ready with the amount corresponding to the balance, covered by Metrobank Cashier's
Check No. 004223, payable to defendant-appellee Motorich Sales Corporation; that
plaintiff-appellant and defendant-appellee Motorich Sales Corporation were supposed
to meet in the office of plaintiff-appellant but defendant-appellee's treasurer, Nenita
Lee Gruenberg, did not appear; that defendant-appellee Motorich Sales Corporation
despite repeated demands and in utter disregard of its commitments had refused to
execute the Transfer of Rights/Deed of Assignment which is necessary to transfer the
certificate of title; that defendant ACL Development Corp. is impleaded as a necessary
party since Transfer Certificate of Title No. (362909) 2876 is still in the name of said
defendant; while defendant JNM Realty & Development Corp. is likewise impleaded
as a necessary party in view of the fact that it is the transferor of right in favor of
defendant-appellee Motorich Sales Corporation: that on April 6, 1989, defendant ACL
Development Corporation and Motorich Sales Corporation entered into a Deed of
Absolute Sale whereby the former transferred to the latter the subject property; that by
reason of said transfer, the Registry of Deeds of Quezon City issued a new title in the
name of Motorich Sales Corporation, represented by defendant-appellee Nenita Lee
Gruenberg and Reynaldo L. Gruenberg, under Transfer Certificate of Title No. 3571;
that as a result of defendants-appellees Nenita Lee Gruenberg and Motorich Sales
Corporation's bad faith in refusing to execute a formal Transfer of Rights/Deed of
Assignment, plaintiff-appellant suffered moral and nominal damages which may be
assessed against defendants-appellees in the sum of Five Hundred Thousand
(500,000.00) Pesos; that as a result of defendants-appellees Nenita Lee Gruenberg
and Motorich Sales Corporation's unjustified and unwarranted failure to execute the
required Transfer of Rights/Deed of Assignment or formal deed of sale in favor of
plaintiff-appellant, defendants-appellees should be assessed exemplary damages in
the sum of One Hundred Thousand (P100,000.00) Pesos; that by reason of
defendants-appellees' bad faith in refusing to execute a Transfer of Rights/Deed of
Assignment in favor of plaintiff-appellant, the latter lost the opportunity to construct a
residential building in the sum of One Hundred Thousand (P100,000.00) Pesos; and
that as a consequence of defendants-appellees Nenita Lee Gruenberg and Motorich
Sales Corporation's bad faith in refusing to execute a deed of sale in favor of plaintiff-
appellant, it has been constrained to obtain the services of counsel at an agreed fee
of One Hundred Thousand (P100,000.00) Pesos plus appearance fee for every
appearance in court hearings.
In its answer, defendants-appellees Motorich Sales Corporation and Nenita Lee
Gruenberg interposed as affirmative defense that the President and Chairman of
Motorich did not sign the agreement adverted to in par. 3 of the amended complaint;
that Mrs. Gruenberg's signature on the agreement (ref: par. 3 of Amended Complaint)
is inadequate to bind Motorich. The other signature, that of Mr. Reynaldo Gruenberg,
President and Chairman of Motorich, is required: that plaintiff knew this from the very
beginning as it was presented a copy of the Transfer of Rights (Annex B of amended
complaint) at the time the Agreement (Annex B of amended complaint) was signed;
that plaintiff-appellant itself drafted the Agreement and insisted that Mrs. Gruenberg
accept the P100,000.00 as earnest money; that granting, without admitting, the
enforceability of the agreement, plaintiff-appellant nonetheless failed to pay in legal
tender within the stipulated period (up to March 2, 1989); that it was the understanding
between Mrs. Gruenberg and plaintiff-appellant that the Transfer of Rights/Deed of
Assignment will be signed only upon receipt of cash payment; thus they agreed that if
the payment be in check, they will meet at a bank designated by plaintiff-appellant
where they will encash the check and sign the Transfer of Rights/Deed. However,
plaintiff-appellant informed Mrs. Gruenberg of the alleged availability of the check, by
phone, only after banking hours.

On the basis of the evidence, the court a quo rendered the judgment appealed from[,]
dismissing plaintiff-appellant's complaint, ruling that:

The issue to be resolved is: whether plaintiff had the right to compel
defendants to execute a deed of absolute sale in accordance with the
agreement of February 14, 1989: and if so, whether plaintiff is entitled
to damage.

As to the first question, there is no evidence to show that defendant

Nenita Lee Gruenberg was indeed authorized by defendant
corporation. Motorich Sales, to dispose of that property covered by
T.C.T. No. (362909) 2876. Since the property is clearly owned by the
corporation. Motorich Sales, then its disposition should be governed
by the requirement laid down in Sec. 40. of the Corporation Code of
the Philippines, to wit:

Sec. 40, Sale or other disposition of assets. Subject to

the provisions of existing laws on illegal combination
and monopolies, a corporation may by a majority vote
of its board of directors . . . sell, lease, exchange,
mortgage, pledge or otherwise dispose of all or
substantially all of its property and assets including its
goodwill . . . when authorized by the vote of the
stockholders representing at least two third (2/3) of the
outstanding capital stock . . .

No such vote was obtained by defendant Nenita Lee Gruenberg for

that proposed sale[;] neither was there evidence to show that the
supposed transaction was ratified by the corporation. Plaintiff should
have been on the look out under these circumstances. More so,
plaintiff himself [owns] several corporations (tsn dated August 16,
1993, p. 3) which makes him knowledgeable on corporation matters.
 Regarding the question of damages, the Court likewise, does not find
substantial evidence to hold defendant Nenita Lee Gruenberg liable
considering that she did not in anyway misrepresent herself to be
authorized by the corporation to sell the property to plaintiff (tsn dated
September 27, 1991, p. 8).

In the light of the foregoing, the Court hereby renders judgment

DISMISSING the complaint at instance for lack of merit.

"Defendants" counterclaim is also DISMISSED for lack of basis.

(Decision, pp. 7-8; Rollo, pp. 34-35)

For clarity, the Agreement dated February 14, 1989 is reproduced hereunder:

AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Agreement, made and entered into by and between:

MOTORICH SALES CORPORATION, a corporation duly organized

and existing under and by virtue of Philippine Laws, with principal office
address at 5510 South Super Hi-way cor. Balderama St., Pio del Pilar.
Makati, Metro Manila, represented herein by its Treasurer, NENITA
LEE GRUENBERG, hereinafter referred to as the TRANSFEROR;

— and —

SAN JUAN STRUCTURAL & STEEL FABRICATORS, a corporation

duly organized and existing under and by virtue of the laws of the
Philippines, with principal office address at Sumulong Highway, Barrio
Mambungan, Antipolo, Rizal, represented herein by its President,
ANDRES T. CO, hereinafter referred to as the TRANSFEREE.

WITNESSETH, That:

WHEREAS, the TRANSFEROR is the owner of a parcel of land identified as Lot 30

Block 1 of the ACROPOLIS GREENS SUBDIVISION located at the District of Murphy,
Quezon City, Metro Manila, containing an area of FOUR HUNDRED FOURTEEN
(414) SQUARE METERS, covered by a TRANSFER OF RIGHTS between JNM Realty
& Dev. Corp. as the Transferor and Motorich Sales Corp. as the Transferee;

NOW, THEREFORE, for and in consideration of the foregoing premises, the parties
have agreed as follows:

1. That the purchase price shall be at FIVE THOUSAND TWO

HUNDRED PESOS (P5,200.00) per square meter; subject to the
following terms:

a. Earnest money amounting to ONE HUNDRED

THOUSAND PESOS (P100,000.00), will be paid upon
 the execution of this agreement and shall form part of
the total purchase price;

b. Balance shall be payable on or before March 2,

1989;

2. That the monthly amortization for the month of February 1989 shall
be for the account of the Transferor; and that the monthly amortization
starting March 21, 1989 shall be for the account of the Transferee;

The transferor warrants that he [sic] is the lawful owner of the above-described
property and that there [are] no existing liens and/or encumbrances of whatsoever
nature;

In case of failure by the Transferee to pay the balance on the date specified on 1, (b),
the earnest money shall be forfeited in favor of the Transferor.

That upon full payment of the balance, the TRANSFEROR agrees to execute a
TRANSFER OF RIGHTS/DEED OF ASSIGNMENT in favor of the TRANSFEREE.

IN WITNESS WHEREOF, the parties have hereunto set their hands this 14th day of
February, 1989 at Greenhills, San Juan, Metro Manila, Philippines.

MOTORICH SALES CORPORATION SAN JUAN STRUCTURAL & STEEL

FABRICATORS

TRANSFEROR TRANSFEREE

[SGD.] [SGD.]

By. NENITA LEE GRUENBERG By: ANDRES T. CO

Treasurer President

Signed In the presence of:

[SGD.] [SGD.]

————————————— ———————————6

In its recourse before the Court of Appeals, petitioner insisted:

1. Appellant is entitled to compel the appellees to execute a Deed of

Absolute Sale in accordance with the Agreement of February 14, 1989,

2. Plaintiff is entitled to damages. 7

As stated earlier, the Court of Appeals debunked petitioner's arguments and affirmed the Decision of
the RTC with the modification that Respondent Nenita Lee Gruenberg was ordered to refund P100,000
to petitioner, the amount remitted as "downpayment" or "earnest money." Hence, this petition before
us.8

The Issues

Before this Court, petitioner raises the following issues:

I. Whether or not the doctrine of piercing the veil of corporate fiction is

applicable in the instant case

II. Whether or not the appellate court may consider matters which the
parties failed to raise in the lower court

III. Whether or not there is a valid and enforceable contract between

the petitioner and the respondent corporation

IV. Whether or not the Court of Appeals erred in holding that there is a
valid correction/substitution of answer in the transcript of stenographic
note[s].

V. Whether or not respondents are liable for damages and attorney's

fees 9

The Court synthesized the foregoing and will thus discuss them seriatim as follows:

1. Was there a valid contract of sale between petitioner and Motorich?

2. May the doctrine of piercing the veil of corporate fiction be applied

to Motorich?

3. Is the alleged alteration of Gruenberg's testimony as recorded in the

transcript of stenographic notes material to the disposition of this case?

4. Are respondents liable for damages and attorney's fees?

The Court's Ruling

The petition is devoid of merit.

First Issue: Validity of Agreement

Petitioner San Juan Structural and Steel Fabricators, Inc. alleges that on February 14, 1989, it entered
through its president, Andres Co, into the disputed Agreement with Respondent Motorich Sales
Corporation, which was in turn allegedly represented by its treasurer, Nenita Lee Gruenberg. Petitioner
insists that "[w]hen Gruenberg and Co affixed their signatures on the contract they both consented to
be bound by the terms thereof." Ergo, petitioner contends that the contract is binding on the two
corporations. We do not agree.
True, Gruenberg and Co signed on February 14, 1989, the Agreement, according to which a lot owned
by Motorich Sales Corporation was purportedly sold. Such contract, however, cannot bind Motorich,
because it never authorized or ratified such sale.

A corporation is a juridical person separate and distinct from its stockholders or members. Accordingly,
the property of the corporation is not the property of its stockholders or members and may not be sold
by the stockholders or members without express authorization from the corporation's board of
directors. 10 Section 23 of BP 68, otherwise known as the Corporation Code of the Philippines,
provides;

Sec. 23. The Board of Directors or Trustees. — Unless otherwise provided in this
Code, the corporate powers of all corporations formed under this Code shall be
exercised, all business conducted and all property of such corporations controlled and
held by the board of directors or trustees to be elected from among the holders of
stocks, or where there is no stock, from among the members of the corporation, who
shall hold office for one (1) year and until their successors are elected and qualified.

Indubitably, a corporation may act only through its board of directors or, when authorized either by its
bylaws or by its board resolution, through its officers or agents in the normal course of business. The
general principles of agency govern the relation between the corporation and its officers or agents,
subject to the articles of incorporation, bylaws, or relevant provisions of law. 11 Thus, this Court has
held that "a corporate officer or agent may represent and bind the corporation in transactions with third
persons to the extent that the authority to do so has been conferred upon him, and this includes powers
which have been intentionally conferred, and also such powers as, in the usual course of the particular
business, are incidental to, or may be implied from, the powers intentionally conferred, powers added
by custom and usage, as usually pertaining to the particular officer or agent, and such apparent powers
as the corporation has caused persons dealing with the officer or agent to believe that it has
conferred." 12

Furthermore, the Court has also recognized the rule that "persons dealing with an assumed agent,
whether the assumed agency be a general or special one bound at their peril, if they would hold the
principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and
in case either is controverted, the burden of proof is upon them to establish it (Harry Keeler v.
Rodriguez, 4 Phil. 19)." 13 Unless duly authorized, a treasurer, whose powers are limited, cannot bind
the corporation in a sale of its assets. 14

In the case at bar, Respondent Motorich categorically denies that it ever authorized Nenita Gruenberg,
its treasurer, to sell the subject parcel of land. 15 Consequently, petitioner had the burden of proving
that Nenita Gruenberg was in fact authorized to represent and bind Motorich in the transaction.
Petitioner failed to discharge this burden. Its offer of evidence before the trial court contained no proof
of such authority. 16 It has not shown any provision of said respondent's articles of incorporation, bylaws
or board resolution to prove that Nenita Gruenberg possessed such power.

That Nenita Gruenberg is the treasurer of Motorich does not free petitioner from the responsibility of
ascertaining the extent of her authority to represent the corporation. Petitioner cannot assume that
she, by virtue of her position, was authorized to sell the property of the corporation. Selling is obviously
foreign to a corporate treasurer's function, which generally has been described as "to receive and keep
the funds of the corporation, and to disburse them in accordance with the authority given him by the
board or the properly authorized officers." 17

Neither was such real estate sale shown to be a normal business activity of Motorich. The primary
purpose of Motorich is marketing, distribution, export and import in relation to a general merchandising
business. 18Unmistakably, its treasurer is not cloaked with actual or apparent authority to buy or sell
real property, an activity which falls way beyond the scope of her general authority.

Art. 1874 and 1878 of the Civil Code of the Philippines provides:

Art. 1874. When a sale of a piece of land or any interest therein is through an agent,
the authority of the latter shall be in writing: otherwise, the sale shall be void.

Art. 1878. Special powers of attorney are necessary in the following case:

xxx xxx xxx

(5) To enter any contract by which the ownership of an immovable is transmitted or

acquired either gratuitously or for a valuable consideration;

xxx xxx xxx.

Petitioner further contends that Respondent Motorich has ratified said contract of sale because of its
"acceptance of benefits," as evidenced by the receipt issued by Respondent Gruenberg. 19 Petitioner
is clutching at straws.

As a general rule, the acts of corporate officers within the scope of their authority are binding on the
corporation. But when these officers exceed their authority, their actions "cannot bind the corporation,
unless it has ratified such acts or is estopped from disclaiming them." 20

In this case, there is a clear absence of proof that Motorich ever authorized Nenita Gruenberg, or
made it appear to any third person that she had the authority, to sell its land or to receive the earnest
money. Neither was there any proof that Motorich ratified, expressly or impliedly, the contract.
Petitioner rests its argument on the receipt which, however, does not prove the fact of ratification. The
document is a hand-written one, not a corporate receipt, and it bears only Nenita Gruenberg's
signature. Certainly, this document alone does not prove that her acts were authorized or ratified by
Motorich.

Art. 1318 of the Civil Code lists the requisites of a valid and perfected contract: "(1) consent of the
contracting parties; (2) object certain which is the subject matter of the contract; (3) cause of the
obligation which is established." As found by the trial court 21 and affirmed by the Court of
Appeals, 22 there is no evidence that Gruenberg was authorized to enter into the contract of sale, or
that the said contract was ratified by Motorich. This factual finding of the two courts is binding on this
Court. 23 As the consent of the seller was not obtained, no contract to bind the obligor was perfected.
Therefore, there can be no valid contract of sale between petitioner and Motorich.

Because Motorich had never given a written authorization to Respondent Gruenberg to sell its parcel
of land, we hold that the February 14, 1989 Agreement entered into by the latter with petitioner is void
under Article 1874 of the Civil Code. Being inexistent and void from the beginning, said contract cannot
be ratified. 24

Second Issue:
Piercing the Corporate Veil Not Justified

Petitioner also argues that the veil of corporate fiction of Motorich should be pierced, because the
latter is a close corporation. Since "Spouses Reynaldo L. Gruenberg and Nenita R. Gruenberg owned
all or almost all or 99.866% to be accurate, of the subscribed capital stock" 25 of Motorich, petitioner
argues that Gruenberg needed no authorization from the board to enter into the subject contract. 26 It
adds that, being solely owned by the Spouses Gruenberg, the company can treated as a close
corporation which can be bound by the acts of its principal stockholder who needs no specific authority.
The Court is not persuaded.

First, petitioner itself concedes having raised the issue belatedly, 27 not having done so during the trial,
but only when it filed its sur-rejoinder before the Court of Appeals. 28 Thus, this Court cannot entertain
said issue at this late stage of the proceedings. It is well-settled the points of law, theories and
arguments not brought to the attention of the trial court need not be, and ordinarily will not be,
considered by a reviewing court, as they cannot be raised for the first time on appeal. 29 Allowing
petitioner to change horses in midstream, as it were, is to run roughshod over the basic principles of
fair play, justice and due process.

Second, even if the above mentioned argument were to be addressed at this time, the Court still finds
no reason to uphold it. True, one of the advantages of a corporate form of business organization is the
limitation of an investor's liability to the amount of the investment. 30 This feature flows from the legal
theory that a corporate entity is separate and distinct from its stockholders. However, the statutorily
granted privilege of a corporate veil may be used only for legitimate purposes. 31 On equitable
considerations, the veil can be disregarded when it is utilized as a shield to commit fraud, illegality or
inequity; defeat public convenience; confuse legitimate issues; or serve as a mere alter ego or
business conduit of a person or an instrumentality, agency or adjunct of another corporation. 32

Thus, the Court has consistently ruled that "[w]hen the fiction is used as a means of perpetrating a
fraud or an illegal act or as vehicle for the evasion of an existing obligation, the circumvention of
statutes, the achievement or perfection of a monopoly or generally the perpetration of knavery or
crime, the veil with which the law covers and isolates the corporation from the members or
stockholders who compose it will be lifted to allow for its consideration merely as an aggregation of
individuals." 33

We stress that the corporate fiction should be set aside when it becomes a shield against liability for
fraud, illegality or inequity committed on third persons. The question of piercing the veil of corporate
fiction is essentially, then, a matter of proof. In the present case, however, the Court finds no reason
to pierce the corporate veil of Respondent Motorich. Petitioner utterly failed to establish that said
corporation was formed, or that it is operated, for the purpose of shielding any alleged fraudulent or
illegal activities of its officers or stockholders; or that the said veil was used to conceal fraud, illegality
or inequity at the expense of third persons like petitioner.

Petitioner claims that Motorich is a close corporation. We rule that it is not. Section 96 of the
Corporation Code defines a close corporation as follows:

Sec. 96. Definition and Applicability of Title. — A close corporation, within the meaning
of this Code, is one whose articles of incorporation provide that: (1) All of the
corporation's issued stock of all classes, exclusive of treasury shares, shall be held of
record by not more than a specified number of persons, not exceeding twenty (20); (2)
All of the issued stock of all classes shall be subject to one or more specified
restrictions on transfer permitted by this Title; and (3) The corporation shall not list in
any stock exchange or make any public offering of any of its stock of any class.
Notwithstanding the foregoing, a corporation shall be deemed not a close corporation
when at least two-thirds (2/3) of its voting stock or voting rights is owned or controlled
by another corporation which is not a close corporation within the meaning of this
Code. . . . .
The articles of incorporation 34 of Motorich Sales Corporation does not contain any provision stating
that (1) the number of stockholders shall not exceed 20, or (2) a preemption of shares is restricted in
favor of any stockholder or of the corporation, or (3) listing its stocks in any stock exchange or making
a public offering of such stocks is prohibited. From its articles, it is clear that Respondent Motorich is
not a close corporation. 35 Motorich does not become one either, just because Spouses Reynaldo and
Nenita Gruenberg owned 99.866% of its subscribed capital stock. The "[m]ere ownership by a single
stockholder or by another corporation of all or capital stock of a corporation is not of itself sufficient
ground for disregarding the separate corporate personalities." 36 So, too, a narrow distribution of
ownership does not, by itself, make a close corporation.

Petitioner cites Manuel R. Dulay Enterprises, Inc. v. Court of Appeals 37 wherein the Court ruled that ".
. . petitioner corporation is classified as a close corporation and, consequently, a board resolution
authorizing the sale or mortgage of the subject property is not necessary to bind the corporation for
the action of its president." 38 But the factual milieu in Dulay is not on all fours with the present case.
In Dulay, the sale of real property was contracted by the president of a close corporation with the
knowledge and acquiescence of its board of directors. 39 In the present case, Motorich is not a close
corporation, as previously discussed, and the agreement was entered into by the corporate treasurer
without the knowledge of the board of directors.

The Court is not unaware that there are exceptional cases where "an action by a director, who singly
is the controlling stockholder, may be considered as a binding corporate act and a board action as
nothing more than a mere formality." 40 The present case, however, is not one of them.

As stated by petitioner, Spouses Reynaldo and Nenita Gruenberg own "almost 99.866%" of
Respondent Motorich. 41Since Nenita is not the sole controlling stockholder of Motorich, the
aforementioned exception does not apply. Granting arguendo that the corporate veil of Motorich is to
be disregarded, the subject parcel of land would then be treated as conjugal property of Spouses
Gruenberg, because the same was acquired during their marriage. There being no indication that said
spouses, who appear to have been married before the effectivity of the Family Code, have agreed to
a different property regime, their property relations would be governed by conjugal partnership of
gains. 42 As a consequence, Nenita Gruenberg could not have effected a sale of the subject lot
because "[t]here is no co-ownership between the spouses in the properties of the conjugal partnership
of gains. Hence, neither spouse can alienate in favor of another his or interest in the partnership or in
any property belonging to it; neither spouse can ask for a partition of the properties before the
partnership has been legally dissolved." 43

Assuming further, for the sake of argument, that the spouses' property regime is the absolute
community of property, the sale would still be invalid. Under this regime, "alienation of community
property must have the written consent of the other spouse or he authority of the court without which
the disposition or encumbrance is void." 44 Both requirements are manifestly absent in the instant case.

Third Issue: Challenged Portion of TSN Immaterial

Petitioner calls our attention to the following excerpt of the transcript of stenographic notes (TSN):

Q Did you ever represent to Mr. Co that you were authorized by the
corporation to sell the property?

A Yes, sir. 45

Petitioner claims that the answer "Yes" was crossed out, and, in its place was written a "No" with an
initial scribbled above it. 46 This, however, is insufficient to prove that Nenita Gruenberg was authorized
to represent Respondent Motorich in the sale of its immovable property. Said excerpt be understood
in the context of her whole testimony. During her cross-examination. Respondent Gruenberg testified:

Q So, you signed in your capacity as the treasurer?

[A] Yes, sir.

Q Even then you kn[e]w all along that you [were] not authorized?

A Yes, sir.

Q You stated on direct examination that you did not represent that you
were authorized to sell the property?

A Yes, sir.

Q But you also did not say that you were not authorized to sell the
property, you did not tell that to Mr. Co, is that correct?

A That was not asked of me.

Q Yes, just answer it.

A I just told them that I was the treasurer of the corporation and it [was]
also the president who [was] also authorized to sign on behalf of the
corporation.

Q You did not say that you were not authorized nor did you say that
you were authorized?

A Mr. Co was very interested to purchase the property and he offered

to put up a P100,000.00 earnest money at that time. That was our first
meeting. 47

Clearly then, Nenita Gruenberg did not testify that Motorich had authorized her to sell its property. On
the other hand, her testimony demonstrates that the president of Petitioner Corporation, in his great
desire to buy the property, threw caution to the wind by offering and paying the earnest money without
first verifying Gruenberg's authority to sell the lot.

Fourth Issue:
Damages and Attorney's Fees

Finally, petitioner prays for damages and attorney's fees, alleging that "[i]n an utter display of malice
and bad faith, respondents attempted and succeeded in impressing on the trial court and [the] Court
of Appeals that Gruenberg did not represent herself as authorized by Respondent Motorich despite
the receipt issued by the former specifically indicating that she was signing on behalf of Motorich Sales
Corporation. Respondent Motorich likewise acted in bad faith when it claimed it did not authorize
Respondent Gruenberg and that the contract [was] not binding, [insofar] as it [was] concerned, despite
receipt and enjoyment of the proceeds of Gruenberg's act." 48 Assuming that Respondent Motorich
was not a party to the alleged fraud, petitioner maintains that Respondent Gruenberg should be held
liable because she "acted fraudulently and in bad faith [in] representing herself as duly authorized by
[R]espondent [C]orporation." 49

As already stated, we sustain the findings of both the trial and the appellate courts that the foregoing
allegations lack factual bases. Hence, an award of damages or attorney's fees cannot be justified. The
amount paid as "earnest money" was not proven to have redounded to the benefit of Respondent
Motorich. Petitioner claims that said amount was deposited to the account of Respondent Motorich,
because "it was deposited with the account of Aren Commercial c/o Motorich Sales
Corporation." 50 Respondent Gruenberg, however, disputes the allegations of petitioner. She testified
as follows:

Q You voluntarily accepted the P100,000.00, as a matter of fact, that

was encashed, the check was encashed.

A Yes. sir, the check was paid in my name and I deposit[ed] it.

Q In your account?

A Yes, sir. 51

In any event, Gruenberg offered to return the amount to petitioner ". . . since the sale did not
push through." 52

Moreover, we note that Andres Co is not a neophyte in the world of corporate business. He has been
the president of Petitioner Corporation for more than ten years and has also served as chief executive
of two other corporate entities. 53 Co cannot feign ignorance of the scope of the authority of a corporate
treasurer such as Gruenberg. Neither can he be oblivious to his duty to ascertain the scope of
Gruenberg's authorization to enter into a contract to sell a parcel of land belonging to Motorich.

Indeed, petitioner's claim of fraud and bad faith is unsubstantiated and fails to persuade the Court.
Indubitably, petitioner appears to be the victim of its own officer's negligence in entering into a contract
with and paying an unauthorized officer of another corporation.

As correctly ruled by the Court of Appeals, however, Nenita Gruenberg should be ordered to return to
petitioner the amount she received as earnest money, as "no one shall enrich himself at the expense
of another." 54 a principle embodied in Article 2154 of Civil Code. 55 Although there was no binding
relation between them, petitioner paid Gruenberg on the mistaken belief that she had the authority to
sell the property of Motorich. 56 Article 2155 of Civil Code provides that "[p]ayment by reason of a
mistake in the contruction or application of a difficult question of law may come within the scope of the
preceding article."

WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED.

SO ORDERED.

G.R. No. 214057, October 19, 2015

FLORENTINA BAUTISTA-SPILLE REPRESENTED BY HER ATTORNEY-IN-FACT, MANUEL B. FLORES,
JR., Petitioner, v. NICORP MANAGEMENT AND DEVELOPMENT CORPORATION, BENJAMIN G.
BAUTISTA AND INTERNATIONAL EXCHAN BANK, Respondents.

DECISION

MENDOZA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the March
19, 2014 Decision1 and the August 18, 2014 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 97682,
which reversed and set Regional Trial Court, Branch aside the May 24, 2010 Decision3 of the Regional Trial
Court, Branch 90, Dasmari�as, Cavite (RTC), in Civil Case No. 0321-04, declaring a contract to sell null and
void.

The Facts:

Petitioner Florentina Bautista-Spille (petitioner) is the registered owner of a parcel of land covered by Transfer
Certificate of Title (TCT) No. T-197, located in Imus City, Cavite, with an area of more or less 33,052 square
meters (subject property).

On June 20, 1996, petitioner and her spouse, Harold E. Spille, executed a document denominated as General
Power of Attorney4 in favor of her brother, respondent Benjamin Bautista (Benjamin), authorizing the latter
to administer all her businesses and properties in the Philippines. The said document was notarized before the
Consulate General of the Philippines, New York, United States of America.

On August 13, 2004, Benjamin and NICORP Management and Development Corporation (NICORP) entered
into a contract to sell5 which pertained to the parcel of land covered by TCT No. T-197 for the agreed amount
of P15,000,000.00. In the said contract, NICORP agreed to give a down payment equivalent to 20% of the
purchase price and pay the remaining balance in eight (8) months. It was also agreed that upon receipt of the
down payment, the TCT of the subject property would be deposited with the International Exchange Bank (IE
Bank) and placed in escrow. It would only be released upon full payment of the agreed amount. Furthermore,
Benjamin was required to submit a special power of attorney (SPA) covering the sale transaction, otherwise,
the payment of the balance would be suspended and a penalty of P150,000.00 every month would be imposed.

Pursuant thereto, an Escrow Agreement,6 dated October 13, 2004, was executed designating IE Bank as the
Escrow Agent, obliging the latter to hold and take custody of TCT No. T-197, and to release the said title to
NICORP upon full payment of the subject property.

On October 14, 2004, NICORP issued a check in the amount of P2,250,000.00, representing the down payment
of the subject property.7 Thereafter, the TCT was deposited with IE Bank and placed in escrow.

When petitioner discovered the sale, her lawyer immediately sent demand letters8 to NICORP and Benjamin,
both dated October 27, 2004, and to IE pank, dated October 28, 2004, informing them that she was opposing
the sale of the subject property and that Benjamin was not clothed with authority to enter into a contract to
sell and demanding the return of the owner's copy of the certificate of title to her true and lawful attorney-in-
fact, Manujel B. Flores, Jr. (Flores). NICORP, Benjamin and IE Bank, however, failed and refused to return the
title of the subject property.

Consequently, petitioner filed a complaint9 before the RTC against Benjamin, NICORP and IE Bank for
declaration of nullity of the contract to sell, pjunction, recovery of possession and damages with prayer for
the issuance of a temporary restraining order and/or preliminary injunction because NICORP was starting the
development of the subject property into a residential subdivision and was planning to sell the lots to
prospective buyers. Petitioner denied receiving the down payment for the subject property.

The RTC granted the writ of preliminary injunction in its Order,10 dated January 24, 2005, enjoining NICORP
and all persons acting on its behalf from making or introducing improvements, subdividing and selling any
subdivided lot of the subject property.

In its Answer,11 NICORP asked for the dismissal of the case for lack of a cause of action and averred that
Benjamin was empowered to enter into a contract to sell by virtue of the general power of attorney; that the
said authority was valid and subsisting as there was no specific instrument that specifically revoked his
authority; that assuming Bautista exceeded his authority when he executed the contract to sell, the agreement
was still valid and enforceable as the agency was already "coupled with interest" because of the partial
payment in the amount of P3,000,000.00; and that the contract could not just be revoked without NICORP
being reimbursed of its down payment and the costs for the initial development it had incurred in developing
the subject property into a residential subdivision.

For its part, IE Bank denied any liability and alleged that petitioner had no cause of action against it. IE Bank
asserted that, at the time of its constitution as an escrow agent, Benjamin possessed the necessary authority
from petitioner; that because the contract to sell remained valid, it was duty-bound to observe its duties and
obligations under the Escrow Agreement; and that in the absence of any order from the court, it was proper
for the bank not to comply with petitioner's demand for the surrender of the certificate of title.12

Benjamin, on the other hand, did not file any responsive pleading. Hence, he was declared in default in the
RTC Order,13 dated August 25, 2005.

On May 24, 2010, the RTC rendered its judgment, declaring the contract to sell null and void.14 It explained
that the general power of authority only pertained to acts of administration over petitioner's businesses and
properties in the Philippines and did not include authority to sell the subject property. It pointed out that
NICORP was well aware of Benjamin's lack of authority to sell the subject property as gleaned from the contract
to sell which required the latter to procure the SPA from petitioner and even imposed a penalty of P150,000.00
per month if he would be delayed in securing the SPA. The dispositive portion of the RTC decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the
defendants, declaring the Contract to Sell, dated October 13, 2004 between the defendant Bautista and
NICORP to be null and void, and the writ of preliminary injunction is now made permanent, and further ordering
the defendants NICORP and International Exchange Bank as follows -

(a) To return to the plaintiff the peaceful possession of the subject property
covered by Transfer Certificate of Title No. T-197 of the Register of Deeds
of the Province of Cavite;

(b) To return to the plaintiff the Original Owner's Duplicate of Title No. T-197
of the Register of Deeds of the Province of Cavite;

(c) To pay to the plaintiff the amount of Php250,000.00 by way of attorney's

fees; and

(d) The Costs of suit.

SO ORDERED.15
Aggrieved, NICORP appealed before the CA.

In the assailed decision, the CA reversed the RTC decision, explaining that the general power of attorney
executed by petitioner in favor of Benjamin authorized the latter not only to perform acts of administration
over her properties but also to perform acts of dominion which included, among others, the power to dispose
the subject property.

Petitioner filed a motion for reconsideration, but it was denied in the assailed CA Resolution, dated August 18,
2014.

Hence, this petition anchored on the following

GROUNDS
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR IN HOLDING THAT THE GENERAL
POWER OF ATTORNEY EXECUTED BY PETITIONER AUTHORIZED BENJAMIN BAUTISTA TO ENTER
INTO THE CONTRACT TO SELL WITH RESPONDENT IN CONTRAVENTION OF THE ESTABLISHED
PRONOUNCEMENT OF THE SUPREME COURT IN THE CASE OF LILLIAN N. MERCADO ET AL. VS.
ALLIED BANKING CORPORATION (G.R. NO. 171460, 24 JULY 2007.
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR IN APPLYING THE CASE
OF ESTATE OF LINO OLAGUER VS. ONGJOCO (G.R. NO. 173312, 26 AUGUST 2008) TO THE INSTANT
CASE CONSIDERING THAT THE ESTABLISHED FACTS HEREIN ARE NOT IN ALL FOURS WITH THE
FACTS SURROUNDING THE DECISION IN THE OLAGUER VS. ONGJOCO CASE.

THE HONORABLE COURT OF APPEALS ERRED IN DISREGARDING (I) RESPONDENT'S JUDICIAL

ADMISSION AS TO BENJAMIN BAUTISTA'S LACK OF AUTHORITY TO ENTER INTO A CONTRACT TO
SELL THE SUBJECT PROPERTY, AND (II) RESPONDENT'S KNOWLEDGE OF THE INSUFFICIENCY OF
THE GENERAL POWER OF ATTORNEY, INDICATING BAD FAITH OF THE RESPONDENT.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE TRIAL COURT ERRED IN
DECLARING THE CONTRACT TO SELL NULL AND VOID.16
Petitioner argues that the general power of attorney did not clothe Benjamin with the authority to enter into
a contract to sell the subject property. She contends that the general power of attorney pertained to the power
to buy, sell, negotiate and contract over the business and personal property but did not specifically authorize
the sale of the subject property.

Petitioner asserts that the CA erred when it disregarded the stipulation made by NICORP during the pre-trial
proceedings as stated in the pre-trial order that Benjamin "acted beyond the scope of his authority when he
failed to inform plaintiff personally as to his dealing or negotiation with NICORP and when he signed the
Contract to Sell xxx."17 According to petitioner, such an admission was an indication that NICORP did not
consider the general power of authority as an SPA which would have authorized Benjamin to enter into the
contract to sell.

NICORP counters that the general power of attorney sufficiently conferred authority on Benjamin to enter into
the contract to sell. It asserts that the written authority, while denominated as a general power of attorney,
expressly authorized him to sell the subject property. NICORP insists that it was a buyer in good faith and was
never negligent in ascertaining the extent of his authority to sell the property. It explains that though the
general power of attorney sufficiently clothed Bautista with authority to sell the subject property, it
nonetheless required him to submit the SPA in order to comply with the requirements of the Register of Deeds
and the Bureau of Internal Revenue.

The issue for resolution is whether or not Benjamin was authorized to sell the subject property.

The Court's Ruling

The Court finds the petition meritorious.

In petitions for review on certiorari under Rule 45 of the Rules of Civil Procedure, only questions of law may
be raised by the parties and passed upon by this Court. It is not a function of this Court to analyze and weigh
the evidence presented by the parties all over again.18 This rule, however, has several well-recognized
exceptions, such as when the factual findings of the CA and the trial court are conflicting or contradictory. 19

The well-established rule is when a sale of a parcel of land or any interest therein is through an agent, the
authority of the latter shall be in writing, otherwise the sale shall be void. Articles 1874 and 1878 of the Civil
Code explicitly provide:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter
shall be in writing; otherwise, the sale shall be void.

Art. 1878. Special powers of attorney are necessary in the following cases: c hanRoble svirtual Lawlib rary

(1) x xx

(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired
either gratuitously or for a valuable consideration;

xxx. [Emphasis Supplied]

From the foregoing, it is clear that an SPA in the conveyance of real rights over immovable property is
necessary.20 In Cosmic Lumber Corporation v. Court of Appeals,21 the Court enunciated,
When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void. Thus, the authority of an agent to execute a contract for the
sale of real estate must be conferred in writing and must give him specific authority, either to conduct the
general business of the principal or to execute a binding contract containing terms and conditions which are
in the contract he did execute. A special power of attorney is necessary to enter into any contract by
which the ownership of an immovable is transmitted or acquired either gratuitously or for a
valuable consideration. The express mandate required by law to enable an appointee of an agency
(couched) in general terms to sell must be one that expressly mentions a sale or that includes a sale as a
necessary ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real
estate, a power of attorney must so express the powers of the agent in clear and unmistakable
language. When there is any reasonable doubt that the language so used conveys such power, no
such construction shall be given the document.22

[Emphases Supplied]
To reiterate, such authority must be conferred in writing and must express the powers of the agent in clear
and unmistakable language in order for the principal to confer the right upon an agent to sell the real
property.23 It is a general rule that a power of attorney must be strictly construed, and courts will not infer or
presume broad powers from deeds which do not sufficiently include property or subject under which the agent
is to deal.24 Thus, when the authority is couched in general terms, without mentioning any specific power to
sell or mortgage or to do other specific acts of strict dominion, then only acts of administration are deemed
conferred.25c ralawred

In the case at bench, the only evidence adduced by NICORP to prove Benjamin's authority to sell petitioner's
property was the document denominated as General Power of Attorney, dated June 20, 1996. The pertinent
portions of the said document reads:
KNOW ALL MEN BY THESE PRESENTS: chanRoblesvi rtua lLawl ibra ry

THAT I/WE FLORENTINA B. SPILLE, of legal age, single/married to HAROLD E. SPILLE and residents of x x x
do hereby appoint, name and constitute BENJAMIN G. BAUTISTA resident(s) of x x x to be my/our true and
lawful attorney(s), to administer and conduct all my/our affairs and for that purpose in my/our name(s) and
on my/our behalf, to do and execute any or all of the following acts, deeds and things to wit:

1. To exercise administration, general control and supervision over my/our business and
property in the Philippines, and to act as my/our general representative(s) and agent(s) with
full authority to buy, sell, negotiate and contract for me/us and my/our behalf;
ChanRoblesVi rtua lawlib rary

2. To ask, demand, sue for, recover and receive all sums of money, debts, dues, goods, wares,
merchandise, chattels, effects and thing of whatsoever nature or description, which now or
hereafter shall be or become due, owing, payable or belonging to me/us in or by any right,
title, ways or means howsoever, and upon receipt thereof or any part thereof, to make, sign,
execute and deliver such receipts, releases or other discharges; ChanRobles Vi rtua lawlib rary

xxx26

Doubtless, there was no perfected contract to sell between petitioner and NICORP. Nowhere in the General
Power of Attorney was Benjamin granted, expressly or impliedly, any power to sell the subject property or a
portion thereof. The authority expressed in the General Power of Attorney was couched in very broad terms
covering petitioner's businesses and properties. Time and again, this Court has stressed that the power of
administration does not include acts of disposition, which are acts of strict ownership. As such, an authority
to dispose cannot proceed from an authority to administer, and vice versa, for the two powers may only be
exercised by an agent by following the provisions on agency of the Civil Code.27

In the same vein, NICORP cannot be considered a purchaser in good faith. The well-settled rule is that a
person dealing with an assumed agent is bound to ascertain not only the fact of agency but also the nature
and extent of the agent's authority.28 The law requires a higher degree of prudence from one who buys from
a person who is not the registered owner. He is expected to examine all factual circumstances necessary for
him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land.29 In
ascertaining good faith, or the lack of it, which is a question of intention, courts are necessarily controlled by
the evidence as to the conduct and outward acts by which alone the inward motive may, with safety, be
determined. Good faith, or want of it, is not a visible, tangible fact that can be seen or touched, but rather a
state or condition of mind which can only be judged by actual or fancied token or signs.30
Here, the Court agrees with the RTC that NICORP was fully aware that Benjamin was not properly authorized
to enter into any transaction regarding the sale of petitioner's property. In fact, in the contract to sell, NICORP
required Benjamin to secure the SPA from petitioner within ninety (90) days from the execution of the contract
and even imposed a substantial amount of penalty in the amount of P150,000.00 a month in case of non-
compliance plus suspension of payment of the balance of the contract price.

Petitioner's explanation that it obliged Benjamin to secure the SPA in order to comply with the requirements
of the Register of Deeds and the Bureau of Internal Revenue is bereft of merit. NICORP is a real estate
company which is familiar with the intricacies of the realty business. Moreover, there was no evidence that
petitioner ratified Benjamin's act of selling the subject property. On the contrary, immediately after the
execution of the contract to sell, petitioner wrote NICORP, IE Bank and Benjamin to inform them of her
opposition to the sale of the subject property and of his lack of authority to sell it and demand the return of
the certificate of title. Clearly, NICORP was negligent in its dealings with Bautista.

In sum, the Court agrees with the findings and conclusion of the RTC. The consent of petitioner in the contract
to sell was not obtained, hence, not enforceable. Furthermore, because NICORP is considered a builder in bad
faith, it has no right to be refunded the value of whatever improvements it introduced on the subject
property.31cha nro blesvi rtua llawli bra ry

WHEREFORE, the petition is GRANTED. The March 19, 2014 Decision and the August 18, 2014 Resolution
of the Court of Appeals in CA-G.R. CV No. 97682 are REVERSED and SET ASIDE. The May 24, 2010 Decision
of the Regional Trial Court, Branch 90, Dasmari�as, Cavite, is REINSTATED.

SO ORDERED.

G.R. No. 129103 September 3, 1999

CLAUDIO DELOS REYES and LYDIA DELOS REYES, petitioners,

vs.
THE HON. COURT OF APPEALS and DALUYONG GABRIEL, substituted by his heirs, namely:
MARIA LUISA G. ESTEBAN, MARIA RITA G. BARTOLOME & RENATO GABRIEL, respondents.

GONZAGA-REYES, J.:

In this petition for review on certiorari, petitioners seek to set aside the Decision 1 of the Court of
Appeals 2 in CA-G.R. CV No. 36955 reversing the consolidated Decision 3 of the Regional Trial Court,
Branch I, Tagum, Davao del Norte in Civil Case Nos. 2326 and 2327.

This petition was originally filed with the Court on June 16, 1997. In a Resolution (of the Third Division)
dated October 13, 1997, 4 the petition was denied for failure to show that the respondent Court of Appeals
committed any reversible error. However, the motion for reconsideration filed by petitioners on November
14, 1997 was granted by the Court in its Resolution dated December 03, 1997 5 and the petition was
reinstated.

The antecedents are:

1. Private respondent Daluyong Gabriel, (who died on September 14, 1995 and was
substituted herein by his children RENATO GABRIEL, MARIA LUISA B. ESTEBAN
and MARIA RITA G. BARTOLOME) was the registered owner under Transfer
Certificate of Title No. T-17932 of the Registry of Deeds of Tagum, Davao del Norte of
a 5,010 square meter parcel of land situated in Barrio Magugpo, Tagum, Davao del
Norte, 6 having acquired the same by hereditary succession sometime in 1974 as one of
the children and heirs of the late Maximo Gabriel.

2. Because Daluyong Gabriel together with his family was then residing in
Mandaluyong, Metro Manila, his sister Maria Rita Gabriel de Rey acted as
administratrix of the said parcel of land and took charge of collecting the rentals for
those portions which have been leased to certain tenants/lessees. One of these
lessees is LYDIA DE LOS REYES who by virtue of a Contract of Lease executed on
June 21, 1985 by and between Maria Rita G. de Rey as lessor and Lydia de los Reyes
as lessee, leased a portion of One Hundred Seventy Six (176) square meters for a
term of one year beginning June 15, 1985 renewable upon agreement of the parties
at the rental rate of Two Hundred (P200.00) pesos, per month. 7

3. Sometime in 1985 Daluyong Gabriel sent his son Renato Gabriel to Tagum reportedly
with instructions to take over from Maria Rita G. de Rey as administrator of the said parcel
of land. Upon agreement of the parties, the June 21, 1985 Contract of Lease covering the
one hundred seventy-six square meter portion of land was novated and replaced by a
Contract of Lease executed on September 26, 1985 by and between RENATO GABRIEL
as Lessor and Lydia de los Reyes as Lessee. 8 The term of the lease was changed to six
(6) years from and after June 15, 1985 or up to June 15, 1991; receipt of the payment in
advance of the total rental amount of Fourteen Thousand Four Hundred (P14,400.00)
Pesos was acknowledged by Lessor Renato Gabriel.

4. Sometime in November 1987, during the effectivity of the lease contract, Lydia de
los Reyes verbally agreed to buy two hundred fifty (250) square meters (including the
176 square meters leased by her), and thereafter an additional fifty (50) square meters
or a total of three hundred (300) square meters of Daluyong Gabriel's registered
property, at three hundred pesos (P300.00) per square meter or for a total amount of
P90,000.00. Receipt of the payment of the purchase price made in several installments
by Lydia de los Reyes was acknowledged by Renato Gabriel as evidenced by official
receipts issued and signed by him dated November 25, 1987, November 26, 1987,
January 8, 1988, February 10, 1988, February 15, 1988 and February 29, 1988 all
bearing the letter head "Gabriel Building." No deed of sale was executed covering the
transaction. Purchaser Lydia de los Reyes however proceeded with the construction
of a two-storey commercial building on the said 300 square meter lot after obtaining a
building permit from the Engineer's Office in Tagum.

5. Acting on the information given by his daughter Maria Luisa Gabriel Esteban upon
the latter's return from a trip to Tagum that spouses Claudio and Lydia de los Reyes
were constructing a two-storey building on a portion of his land, Daluyong Gabriel,
through his lawyer, sent a letter on August 30, 1989 to the De los Reyes couple
demanding that they cease and desist from continuing with their construction and to
immediately vacate the premises, asserting that the construction was unauthorized
and that their occupancy of the subject portion was not covered by any lease
agreement.

6. On September 20, 1989, spouses Claudio and Lydia de los Reyes through counsel
sent their letter reply explaining that the De los Reyeses are the innocent party who
entered into the lease agreement and subsequent sale of subject portion of land in
good faith and upon the assurance made by the former administratrix, Maria Rita G.
Rey, her nephew Tony Rey, Mrs. Fe S. Gabriel and Mr. Daluyong Gabriel himself that
 Renato Gabriel is the new administrator authorized to enter into such agreements
involving the subject property.

7. Dissatisfied with the explanation, Daluyong Gabriel commenced an action on

November 14, 1989 against spouses Claudio and Lydia de los Reyes for the recovery
of the subject portion of land before the Regional Trial Court, Branch 1, Tagum, Davao
del Norte docketed as Civil Case No. 2326. In his complaint Daluyong maintained that
his son Renato was never given the authority to lease nor to sell any portion of his land
as his instruction to him (Renato) was merely to collect rentals.

8. Spouses Claudio and Lydia delos Reyes countered that the sale to them of the
subject portion of land by Renato Gabriel was with the consent and knowledge of
Daluyong, his wife Fe and their other children, and filed before the same trial court a
complaint for specific performance, docketed as Civil Case No. 2329 against Daluyong
and his children, namely Renato Gabriel, Maria Luisa Gabriel Esteban and Maria Rita
Gabriel Bartolome praying that the defendants therein be ordered to execute the
necessary deed of conveyance and other pertinent documents for the transfer of the
300 square meter portion they previously bought from Renato.

9. Civil Case Nos. 2326 and 2327 were heard jointly and on September 10, 1991 the
trial court rendered a consolidated decision, the dispositive portion 9 of which reads:

WHEREFORE premises considered, Daluyong Gabriel, Renato Gabriel, Maria Luisa

Esteban and Maria Rita G. Bartolome are hereby ordered to execute a Deed of
Conveyance and other necessary documents in favor of Claudio delos Reyes and
Lydia delos Reyes over an area of 300 square meters from TCT No T-17932
comprising of 5,010 square meters located at Tagum, Davao which portion is presently
occupied by Delos Reyes couple.

SO ORDERED.

10. On appeal by the Gabriels, the Court of Appeals reversed and set aside the
decision of the Regional Trial Court and rendered a new one "ORDERING appellee
spouses Claudio and Lydia delos Reyes to immediately vacate the 300 square meter
portion of that land covered by TCT No. T-17932 which they presently occupy and to
turn over possession thereof to the appellants. . . . ." 10

Not satisfied with the decision of the Court of Appeals, petitioners came to this Court by way of petition for
review, alleging that:

a. The Court of Appeals gravely abused its discretion

in overlooking facts extant in the record;

b. The Court of Appeals erred in not finding the

document of sale and receipts (exhibits for the herein
Petitioners), as valid and enforceable;

c. The Court of Appeals erred in its apprehension and

appreciation of the undisputed facts for the Petitioners;

d. The Court of Appeals erred in making speculative

conclusions on the facts of the case;
 e. The Court of Appeals erred in reversing the Decision
of the Regional Trial Court based on credible, relevant
and material evidence adduced by the Petitioners in
the lower court. 11

Petitioners aver that respondent Court of Appeals gravely abused its discretion when it totally disregarded
the oral and documentary evidence adduced by appellees, and in giving credence to the oral testimonies
of appellants, which are replete with inconsistencies and contradictions. Petitioners cite specifically Exhibits
"1" to "19" consisting of a contract of lease involving the subject property and certain official receipts with
the letterhead "Gabriel Building" showing payments received (by Renato Gabriel) for the lease and/or sale
of portions of subject real property of Daluyong Gabriel e.g. sale by installment of portion (700 square
meters) of land to spouses Ruben Carriedo and Abdula Sanducan (Exhs. 13, 14, 15 & 16) and lease (Exhs.
3-3-BBBB, 5, 6 & 7) and sale (Exhs. 8, 9, 10, 11 & 12) of land made by Renato Gabriel to petitioners-
spouses. In other words, respondent Court of Appeals "gravely abused its discretion" in the
misapprehension and misappreciation of the facts of the case and in going beyond the issues involved
contrary to the admissions of both the appellants and appellees. And since the appellate court's findings of
facts contradict that of the trial court a thorough review thereof by the Supreme Court is necessary.

In their Comment, private respondents restated their arguments to support the appellate court's
conclusion that the alleged sale made by Renato Gabriel to the petitioners in 1987 without authority
from Daluyong Gabriel is not valid and therefore unenforceable. 1âw phi 1.nêt

Petitioners submitted their Reply to the Comment contending that the assailed decision of the Court
of Appeals is "patently fallacious" in that while petitioners' payment to Renato Gabriel of the amount
of P90,000.00 as purchase price of the three hundred (300) square meter portion of subject land was
neither denied nor controverted, the appellate court's decision failed to order private respondent
Renato Gabriel to refund or reimburse petitioners the said amount together with the value of the
improvements and the two-storey commercial building which petitioners constructed thereon in
violation of Articles 2142, 2143 and 2154 of the Civil Code and the time-honored principle of substantial
justice and equity.

Petitioners allege further that even if Renato Gabriel was not (yet) the owner of the subject portion of
land when he sold the same to petitioners, after the death of his parents Daluyong and Fe Gabriel, he,
as heir, inherited and succeeded to the ownership of said portion of land by operation of law thereby
rendering valid and effective the sale he executed in favor of petitioners. Petitioners also maintain that
on the basis of the facts proven and admitted during the trial, Daluyong Gabriel appears to have not
only authorized his son Renato Gabriel to sell the subject portion of land but also ratified the transaction
by his contemporaneous conduct and actuations shown during his lifetime.

In their respective memorandum submitted by petitioners and private respondents, substantially the
same arguments/contentions were raised. Petitioners maintain that the sale is valid or validated
pursuant to Articles 1433 and 1434 of the Civil Code and identified the legal issues involved as follows:

1. Whether or not the sale by respondent Renato Gabriel of the land

registered in the name of his deceased father Daluyong Gabriel, during
the lifetime of the latter, in favor of the herein petitioners, by operation
of law, automatically vests title on the latter under the principle of
estoppel as provided for in Arts. 1433 and 1434 of the New Civil Code;

2. Whether or not the sale by Renato Gabriel of the land registered in

the name of his deceased father during the lifetime of the latter, to the
herein petitioners is null and void. 12
On the other hand, private respondents contend that the petition has no legal or factual basis. It is argued
that petitioners changed their theory of the case in that while in the regional trial court, petitioners claim that
the subject property was sold to them by the late Daluyong Gabriel through his son Renato Gabriel, in the
instant petition, they claim that it was Renato Gabriel who sold the property to them and that although at
that time, Renato was not yet the owner of the property, he is nonetheless obligated to honor the sale and
to convey the property to the petitioners because after the death of Daluyong Gabriel, Renato became the
owner of the subject property by way of hereditary succession. According to private respondents, litigants
are barred from changing their theory, more especially so in the appeal, and that the only issue to be
resolved in the instant petition is whether or not Renato Gabriel can be compelled to convey the subject
property to petitioners. Private respondents maintain that Renato Gabriel cannot be compelled to convey
subject property (to petitioners) because the land never passed on to Renato either before or after the death
of Daluyong Gabriel and that the whole property is now owned by Ma. Rita G. Bartolome per Transfer
Certificate of Title No. T-68674 entered in the Registry of Deeds of Davao del Norte on January 10,
1991. 13 In short, Renato Gabriel cannot convey that which does not belong to him. 14

Essentially, the issue here is whether or not the verbal agreement which petitioners entered into with private
respondent Renato Gabriel in 1987 involving the sale of the three hundred (300) square meter portion of
land registered in the name of Renato's late father Daluyong Gabriel is a valid and enforceable contract of
sale of real property.

By law 15 a contract of sale is perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price. It is a consensual contract which is perfected by mere
consent. 16 Once perfected, the contract is generally binding in whatever form (i.e. written or oral) it may
have been entered into 17 provided the three (3) essential requisites for its validity prescribed under Article
1318 supra, are present. Foremost of these requisites is the consent and the capacity to give consent of
the parties to the contract. The legal capacity of the parties is an essential element for the existence of the
contract because it is an indispensable condition for the existence of consent. 18 There is no effective
consent in law without the capacity to give such consent. In other words, legal consent presupposes
capacity. 19 Thus, there is said to be no consent, and consequently, no contract when the agreement is
entered into by one in behalf of another who has never given him authorization therefor 20 unless he has by
law a right to represent the latter. 21 It has also been held that if the vendor is not the owner of the property
at the time of the sale, the sale is null and void, 22 because a person can sell only what he owns or is
authorized to sell. 23 One exception is when a contract entered into in behalf of another who has not
authorized it, subsequently confirmed or ratified the same in which case, the transaction becomes valid and
binding against him and he is estopped to question its legality. 24

The trial court held that the oral contract of sale was valid and enforceable stating that while it is true that
at the time of the sale, Renato Gabriel was not the owner and that it was Daluyong Gabriel who was the
registered owner of the subject property, Daluyong Gabriel knew about the transaction and tacitly
authorized his son Renato Gabriel (whom he earlier designated as administrator of his 5,010 square meter
registered property) to enter into it. The receipt by Renato Gabriel of the P90,000.00 paid by petitioner
spouses as purchase price of subject portion of land 25 and also of the amount of P14,000.00 paid by
petitioners as advance rental fee for the lease of one hundred seventy six (176) square meters thereof, in
accordance with the then still existing Contract of Lease (Exh. 10) entered into by Renato Gabriel as Lessor
and Lydia delos Reyes as lessee on September 26, 1985 which was to expire only on June 15, 1991 was
also known not only to Daluyong Gabriel but also to his late wife Fe Salazar Gabriel and his two other
children, Maria Luisa Gabriel Esteban and Maria Rita Gabriel Bartolome. And even assuming that Daluyong
Gabriel did not expressly authorize Renato Gabriel to enter into such contract of sale with petitioners in
1988, he (Daluyong Gabriel) confirmed/ratified the same by his contemporaneous conduct and actuations
shown during his lifetime. More importantly, the trial court noted that Daluyong never presented Renato
during the entire proceedings, despite evidence 26 which tends to show that Renato Gabriel was not missing
nor were his whereabouts unknown as Daluyong wanted to impress the trial court, but had all the while
been staying at the Daluyong Gabriel residence at 185 I. Lopez St., Mandaluyong City but was deliberately
prevented (by Daluyong) from testifying or shedding light on the transactions involved in the two cases then
at bar. Hence, the decision of the trial court ordered Daluyong Gabriel, Renato Gabriel, Maria Luisa G.
Esteban and Maria Rita G. Bartolome to execute a Deed of Conveyance and other necessary documents
in favor of petitioners covering subject area of 300 square meters to be taken from the 5,010 square meters
covered by TCT No. T-17932 under the name of Daluyong Gabriel which portion is actually occupied by
petitioners Delos Reyes couple.

The Court of Appeals, on the other hand, ruled that the contract of sale cannot be upheld, mainly
because Renato Gabriel, as vendor, did not have the legal capacity to enter and to give consent to the
agreement, he, being neither the authorized agent (of Daluyong Gabriel) nor the owner of the property
subject of the sale. It was pointed out that three theories were advanced by appellees to prove that
the transaction they had with Renato concerning the sale of the portion in question was regular, valid
and enforceable. First theory is that Renato acted as the duly authorized representative or agent of
Daluyong. Second, that the portion in dispute was already given to Renato as his share, hence, he
validly sold the same to appellees. And third, that the portion being litigated was part of Renato's
inheritance from the estate of her deceased mother which he validly disposed of to appellees. These
reasons, according to the appellate court, cannot go together, or even complement each other, to
establish the regularity, validity or enforceability of the sale made by Renato. It could not be possible
for Renato to have acted in three different capacities — as agent, owner, and heir — when he dealt
with appellees, as the legal consequences for each situation would be different. Thus, it was incumbent
upon appellees to explain what actually convinced them to buy the land from Renato, and because
they failed to do so, no proper basis can be found to uphold the alleged sale made by Renato as it
cannot be determined with certainty in what capacity Renato acted. And even assuming that he
(Renato) already succeeded to whatever hereditary right or participation he may have over the estate
of his father, he is still considered a co-owner with his two sisters of the subject property and that prior
to its partition, Renato cannot validly sell or alienate a specific or determinate part of the property
owned in common. Besides, the entire lot covered by TCT No. T-17932 was subsequently donated by
Daluyong Gabriel to his daughter Marie Rita G. Bartolome on October 1, 1990 and is now covered by
TCT No. T-68674 in her name. 27 Hence, the appellate court's decision ordered appellees (petitioners)
spouses Claudio and Lydia delos Reyes to immediately vacate the 300 square meter portion of that land
covered by TCT No. T-17932 which they are occupying and to turn-over possession thereof to the
appellants, private respondents herein.

As a general rule, the findings of fact of the Court of Appeals are binding upon this Court. 28 When such
findings of fact are the same and confirmatory of those of the trial court, they are final and conclusive and
may not be reviewed on appeal. 29 In such cases, the authority of the Supreme Court is confined to
correcting errors of law, if any, that might have been committed below. 30 In the instant case, it is noted that
the trial court and the Court of Appeals are not at variance in their factual findings that sometime in 1988,
an oral contract of sale was entered into by Renato Gabriel, (as vendor) with petitioners De los Reyes
couple (as vendees) involving a 300 square meter portion of a 5,010 square meter parcel of land located
in Barrio Magugpo, Tagum, Davao del Norte owned and registered under Transfer Certificate of Title No.
T-17932 in the name of Daluyong Gabriel, father of Renato. Thus, this Court is tasked to review and
determine whether or not respondent Court of Appeals committed an error of law 31 in its legal conclusion
that at the time the parties entered into said oral agreement of sale, Renato Gabriel as the purported vendor,
did not have the legal capacity to enter and/or to give consent to the sale.

We agree with the conclusion of the Court of Appeals that Renato Gabriel was neither the owner of
the subject property nor a duly designated agent of the registered owner (Daluyong Gabriel) authorized
to sell subject property in his behalf, and there was also no sufficient evidence adduced to show that
Daluyong Gabriel subsequently ratified Renato's act. In this connection it must be pointed out that
pursuant to Article 1874 of the Civil Code, when the sale of a piece of land or any interest therein is
through an agent, the authority of the latter shall be in writing; otherwise the sale shall be void. In other
words, for want of capacity (to give consent) on the part of Renato Gabriel, the oral contract of sale
lacks one of the essential requisites for its validity prescribed under Article 1318, supra and is therefore
null and void ab initio.
Petitioners' contention that although at the time of the alleged sale, Renato Gabriel was not yet the
owner of the subject portion of land, after the death of Daluyong Gabriel, he (Renato) became the
owner and acquired title thereto by way of hereditary succession which title passed by operation of
law to petitioners pursuant to Article 1434 of the Civil Code 32 is not tenable. Records show that on
October 1, 1990 Daluyong Gabriel donated the entire lot covered by TCT No. T-17932 to his daughter Maria
Rita G. Bartolome and the property is now covered by TCT No. T-68674 in her name. This means that
when Daluyong Gabriel died on September 14, 1995, he was no longer the owner of the subject property.
Accordingly, Renato Gabriel never acquired ownership or title over any portion of said property as one of
the heirs of Daluyong Gabriel.

However, respondent Court of Appeals failed to consider the undisputed fact pointed out by the trial
court that petitioners had already performed their obligation under subject oral contract of sale, i.e.
completing their payment of P90,000.00 representing the purchase price of the 300 square meter
portion of land. As was held in "Nool vs. Court of Appeals" 33 if a void contract has been performed, the
restoration of what has been given is in order. The relationship between parties in any contract even if
subsequently voided must always be characterized and punctuated by good faith and fair dealing. 34 Hence,
for the sake of justice and equity, and in consonance with the salutary principle of non-enrichment at
another's expense, 35 private respondent Renato Gabriel, should be ordered to refund to petitioners the
amount of P90,000.00 which they have paid to and receipt of which was duly acknowledged by him. It is
the policy of the Court to strive to settle the entire controversy in a single proceeding leaving no root or
branch to bear the seeds of future litigation especially where the Court is in a position to resolve the dispute
based on the records before it and where the ends of justice would not likely be subserved by the remand
thereof, to the lower Court. The Supreme Court is clothed with ample authority to review matters, even
those not raised on appeal if it finds that their consideration is necessary in arriving at a just disposition of
the case. 36

However, petitioners' claim for the refund to them of P1,000,000.00 representing the alleged value and cost
of the two-storey commercial building they constructed on subject portion of land cannot be favorably
considered as no sufficient evidence was adduced to prove and establish the same.

WHEREFORE, the decision of the Court of Appeals dated April 30, 1997 in CA-G.R. CV No. 36955 is
hereby AFFIRMED in so far as it declared the oral contract of sale entered into by Renato Gabriel of
portion of the 5,010 square meter parcel of land registered in the name of Daluyong Gabriel in favor
of petitioners, null and void. Renato Gabriel is hereby ordered to refund to petitioners the amount of
P90,000.00 which was given in payment for subject land. No pronouncement as to costs.

SO ORDERED.