G.R. No. 163959 - Lopez vs. Court of Appeals

Case Summary (G.R. No. 163959)

Factual Background and Underlying Dispute

The dispute concerns the sale of a 14-hectare parcel of land in Antipolo City between the Lopez family (vendors) and Primex Corporation (vendee). Primex entered into a Deed of Conditional Sale (DCS) on September 12, 1989, agreeing to purchase the property for approximately ₱39.2 million. Primex alleged that it complied with payment obligations but refused to release additional funds after the Lopezes failed to deliver a valid certificate of title free from encumbrances as required by the DCS.

Primex filed a complaint for injunction, specific performance, and damages, asserting the title delivered was null and void based on prior Supreme Court rulings. The Lopezes countered that Primex breached the contract by refusing to pay despite their compliance. After extensive litigation at the Regional Trial Court and Court of Appeals, including reversals and remands, the parties eventually submitted a Compromise Agreement in 2012 to amicably resolve the case.

Issue on Agency and Authority Post-Death of the Principal

Central to the controversy was the validity of the Compromise Agreement entered into on behalf of the Lopezes by Atty. Sergio Angeles, who was both counsel and a petitioner. The heirs of the deceased Marcelino E. Lopez challenged the authority of Atty. Angeles to bind the Lopezes, arguing that his special power of attorney terminated upon the death of Marcelino Lopez on December 3, 2009. Since the Compromise Agreement was executed in 2012, more than two years after the death, the heirs contended that Atty. Angeles’ acts were void ab initio.

Legal Principles on Extinction of Agency Upon Death

Under Article 1868 and Article 1919 of the Civil Code, an agency contract is extinguished by the death of the principal, among other modes. The Supreme Court reiterated that any act by the agent after the principal’s death is void ab initio unless it falls under the narrow exceptions enumerated in Articles 1930 and 1931 of the Civil Code. These exceptions allow the agency to continue only if the agency was constituted in the common interest of both principal and agent or involves third parties who have accepted a stipulation in their favor, or if the agent is unaware of the principal’s death and acts in good faith. Such exceptions are construed strictly.

In this case, none of the exceptions applied; hence, Atty. Angeles’ authority terminated with Marcelino Lopez’s death, rendering the Compromise Agreement invalid. Furthermore, Atty. Angeles’ failure to disclose the principal’s death to the Court was deemed unprofessional and suggestive of an attempt to mislead the Court as to the agreement’s legality.

Court’s Ruling on the Invalidity of the Compromise Agreement

The Supreme Court set aside the March 7, 2012 resolution that had given effect to the Compromise Agreement and dismissed the petitions for review on certiorari on the ground of mootness. The Court declared the Compromise Agreement void and reinstated the appeal of the petitioners. It ruled that the special power of attorney executed by Marcelino Lopez was functus officio upon his death, and thus, had no continuing effect to authorize Atty. Angeles to act on behalf of the Lopezes in settling the case or withdrawing the petition.

Issues on the Finality of the Court of Appeals Decision

The petitioners also challenged the Court of Appeals’ declaration on January 23, 2007, that its decision was final and executory due to the petitioners’ failure to timely file a motion for reconsideration or appeal. The petitioners argued that since they had two counsels—Atty. Angeles and Atty. Martin Pantaleon—the deadline for reconsideration should be computed from Atty. Angeles’ receipt of the decision (February 23, 2007), rather than Atty. Pantaleon’s earlier receipt (January 30, 2007).

The Supreme Court upheld the Court of Appeals’ ruling, applying Section 2, Rule 13 of the Rules of Court which requires service upon counsel when a party appears by counsel. Service to either counsel is effective notice to the party. Since there was no notice of substitution or withdrawal of counsel, notice to Atty. Pantaleon commenced the reckoning of the deadline to seek reconsidera

Case Syllabus (G.R. No. 163959)

Nature and Summary of the Case

The case centers on a dispute involving a 14-hectare property located in Antipolo City, originally covered by an approved Homestead Patent, which was the subject of a Deed of Conditional Sale (DCS) executed between the petitioners (Lopez et al.) and respondent Primex Corporation (Primex).
Primex alleged full compliance with monetary obligations and readiness to pay an additional amount upon presentation of a valid title as required by the DCS.
The petitioners delivered Transfer Certificate of Title (TCT) No. 196256, which was invalidated by prior Supreme Court rulings due to its origin from a nullified Original Certificate of Title (OCT).
Primex refused to recognize the title and withheld payment, prompting legal action for specific performance and preliminary injunction by Primex, and subsequently a motion to dismiss for improper venue by defendants-appellees.
The legal proceedings evolved through the Regional Trial Court (RTC), Court of Appeals (CA), and ultimately the Supreme Court involving numerous motions, appeals, and decisions spanning several years.
A critical development was the entry into a Compromise Agreement filed in 2012, which was later challenged on grounds that Atty. Sergio Angeles, who entered the agreement on behalf of the petitioners, lacked authority due to the death of principal Marcelino Lopez.
The Supreme Court ruled the agency terminated with the principal's death, hence acts made post-death were void ab initio except under strictly construed exceptions under Articles 1930 and 1931 of the Civil Code.
The Court set aside the Compromise Agreement as void and reinstated the appeals, also affirming the CA decision of January 23, 2007, which ordered Primex to pay the balance of the purchase price with interests.

Factual Background and Procedural History

In 1989, Primex entered a DCS for a portion of a 14-hectare land; purchase price agreed at P280.00 per sq. meter totalling over P39 million.
Primex paid amounts as scheduled but rejected delivery of TCT No. 196256 due to invalid origins linked to G.R. No. 90380 invalidating relevant OCT and TCTs.
Threats of sale or mortgage on the property by petitioners ensued amid payment disputes, prompting Primex’s suit for injunction and damages.
Defendants filed a motion to dismiss citing improper venue and litis pendencia due to their earlier case for rescission filed elsewhere.
Trial court denied motion, and case ensued with defendants filing compulsory counterclaims seeking rescission, damages, and dismissal of Primex’s complaint.
During pendency, defendants delivered TCT No. 208538 corresponding to the exact parcel which Primex eventually accepted and a Deed of Absolute Sale was executed in 1992.
Despite this, multiple encumbrances and pending claims tied to the property caused continuous disputes.
Trial court favored defendants but was reversed by the Supreme Court, remanding for trial de novo.
RTC again ruled in favor of defendants, rescinding contracts and ordering mutual restitution.
Primex’s motion for execution of judgment deemed granted by RTC was annulled by CA.
The CA later reversed RTC’s rescission ruling, reinstating Primex’s obligation to pay full purchase price plus interest.
Disputes over t