Case Summary (A.M. No. 99-12-192-MTC)
Factual Background
In March 1984, petitioners contracted to purchase 200 sqm of Revelen’s lot at ₱200 per sqm, paying a ₱3,000 downpayment and agreeing to pay the balance in installments. They built houses in 1985 and, with respondent’s consent, occupied an additional 150 sqm in 1986. By 1987, petitioners had paid a total of ₱17,500 but later defaulted. On May 11, 1994, respondent filed a complaint in the Regional Trial Court (RTC) for recovery of possession with damages and a prayer for preliminary injunction.
RTC Decision (June 17, 2002)
The RTC found that Revelen owned the lot and that respondent’s verbal authority to sell 200 sqm was invalid under Civil Code Article 1874, which requires written authority for an agent to sell immovable property. It held the oral contract void and ordered mutual restitution: petitioners to vacate and surrender possession, respondent to return ₱17,500, and petitioners to pay ₱20,000 attorney’s fees, ₱15,000 litigation expenses, and costs of suit.
Court of Appeals Ruling (June 10, 2004)
The Court of Appeals (CA) reversed the RTC and dismissed the action. It classified the complaint as an unlawful detainer (acción publiciana), within the exclusive jurisdiction of the Municipal Trial Court (MTC) under Batas Pambansa Blg. 129, Section 33, as amended by Republic Act No. 7691, because the lot’s assessed value (₱4,890) fell below the ₱20,000 jurisdictional threshold. The CA further ruled the contract void for lack of written authority and, as void contracts create no rights or obligations, cannot be rescinded or enforced.
Issues on Appeal
- Whether the contract of sale executed by respondent without written authority was merely voidable or void.
- Whether petitioners’ counterclaim for specific performance was improperly disregarded.
- Whether the RTC had jurisdiction over the ejectment action.
Applicable Law
– 1987 Philippine Constitution (jurisdiction of courts)
– Civil Code Articles 1874 and 1878 (written authority for sale of immovables)
– Batas Pambansa Blg. 129 § 33, as amended by R.A. 7691 (jurisdictional thresholds)
– Rules of Court, Rule 45 (petition for review), Rule 132 § 25 (proof of foreign public records)
Supreme Court Ruling
The Supreme Court denied the petition and affirmed the CA’s decision and resolution.
Agency Authority and Contract Validity
Under Civil Code Article 1874, an agent’s authority to sell land must be in writing; absent such authority, the sale is void and produces no legal effect. Petitioners admitted respondent’s lack of written authority and believed she was owner. A void contract cannot be ratified, expressly or impliedly.
Invalid Power of Attorney
A General Power of Attorney executed by Revelen on March 25, 1994 in California lacked the required certification under Rule 132 § 25. It was neither attested by a Phil
...continue readingCase Syllabus (A.M. No. 99-12-192-MTC)
Facts
- Revelen N. Srivastava (of legal age) is the registered owner of an unregistered 1,939 sqm lot in Cardona, Rizal.
- In March 1984, petitioners offered to buy 200 sqm at ₱200 per sqm; paid ₱3,000 downpayment, balance on installment.
- Petitioners built houses in 1985; in 1986, with respondent’s consent, they occupied an additional 150 sqm.
- By 1987, petitioners had paid ₱17,500 but later defaulted on further payments.
- On May 11, 1994, respondent (as Revelen’s administrator and attorney-in-fact) filed before the RTC a complaint for recovery of possession with damages and prayer for preliminary injunction.
RTC Decision (Branch 69, Binangonan, Rizal)
- Found Revelen to be the lot’s owner; recognized only a verbal authority to sell by respondent.
- Held the oral contract to sell void under Civil Code Article 1874 (agent’s authority to sell immovable must be in writing).
- Decreed rescission of the sale: mutual restitution, vacatur of premises by petitioners, return of ₱17,500 down payment.
- Awarded respondent ₱20,000 attorney’s fees, ₱15,000 litigation expenses, and costs of suit.
- Rendered on June 17, 2002.