Case Summary (G.R. No. 165133)
Petitioners (Purchasers) — Facts of Acquisition and Possession
In March 1984 petitioners accepted an offer to purchase a 200‑sq.m. portion of Revelen’s lot at P200 per square meter. They paid P3,000 as downpayment and agreed to pay the balance in installments. They constructed houses in 1985 and, with respondent’s consent, occupied an additional 150 sq.m. in 1986. By 1987 petitioners had paid P17,500, after which they defaulted on further installments.
Respondent (Seller/Agent) — Commencement of Litigation
On 11 May 1994 respondent, in her capacity as administrator and attorney‑in‑fact of Revelen, filed a complaint for recovery of possession with damages and a prayer for preliminary injunction against petitioners in the Regional Trial Court (RTC).
Key Dates (Procedural Milestones)
Material factual dates: March 1984 (negotiation/offering), 1985 (houses constructed), 1986 (additional occupation), by 1987 (payments totaling P17,500). Procedural dates appearing in the record: complaint filed 11 May 1994; RTC decision rendered 17 June 2002; Court of Appeals decision rendered 10 June 2004.
Applicable Law and Authorities
Constitutional basis: 1987 Philippine Constitution (case falls after 1990). Statutory and doctrinal sources relied upon in the decision: Civil Code Articles 1874 and 1878 (authority in writing required for sale of immovables through an agent; special powers of attorney), Article 1318 (requisites for a valid contract); Batas Pambansa Blg. 129, Section 33, as amended by Republic Act No. 7691 (jurisdictional thresholds of first‑level courts in real property cases); Section 25, Rule 132, Rules of Court (admissibility/certification of foreign public records). Jurisprudence cited in the decision is also applied (cases referenced in the record).
RTC Ruling — Void Sale; Rescission; Mutual Restitution Ordered
The RTC found that Revelen was the owner and that respondent had only verbal authority to sell. Applying Article 1874, the RTC held the sale void for lack of written authority and ruled rescission was the proper remedy. The RTC ordered mutual restitution: defendants to vacate and surrender possession and plaintiff to return P17,500; it also awarded P20,000 attorney’s fees, P15,000 litigation expenses, and costs.
Court of Appeals Ruling — Jurisdictional Defect and Void Contract
The Court of Appeals reversed and dismissed the case. It characterized the action as one for recovery of possession (accíon publiciana / unlawful detainer) filed within one year of demand and held that, by reason of Republic Act No. 7691 (amending BP 129 Sec. 33), jurisdiction over such real actions where assessed value is below statutory thresholds lies with the Municipal Trial Court (MTC) / first‑level courts. The CA relied on the tax declaration showing an assessed value of P4,890 for the whole lot and therefore concluded the RTC lacked jurisdiction. The CA also held the contract void for lack of written authority and observed that a void contract creates no rights or obligations and cannot be the subject of rescission.
Issues Raised on Petition for Review
Petitioners argued that the contract was at most voidable (not void) and could be ratified, and that the appellate court should have addressed petitioners’ counterclaims for specific performance. Respondent contended that petitioners failed to prove full payment and had admitted the lack of written authorization; respondent also contended there was no meeting of the minds.
Legal Rule on Sale of Immovables Through an Agent
Article 1874 of the Civil Code requires that authority of an agent to sell immovable property be in writing; otherwise the sale is void. Article 1878 specifies that special powers of attorney are necessary to enter into contracts transferring ownership of immovables. Article 1318 enumerates the requisites for a valid contract (consent, a certain object, and cause). Where the owner’s written consent is absent, no perfected contract of sale exists.
Application: Absence of Written Authority and Voidness of the Sale
The Court found no documentary proof of written authority from Revelen authorizing respondent to sell. Petitioners admitted during pre‑trial that they believed respondent was the owner and only learned Revelen was the owner during the hearing. In these circumstances the Court applied the rule that an agent’s authority to sell immovable property must be in writing and that, lacking such written authority, the purported sale is void and produces no juridical effects. A void contract cannot be ratified. The decision relies on prior decisions cited in the record to reinforce this principle.
General Power of Attorney Executed in the United States — Evidentiary Effect
A General Power of Attorney executed and notarized in California on 25 March 1994 (Exhibit C) was offered by respondent. The Court applied Section 25, Rule 132 of the Rules of Court, which requires that a public record kept in a foreign country be evidenced by a copy attested by the officer having custody of the record or, if the record is kept abroad, be accompanied by a certificate from specified Philippine foreign service officers (secretary of embassy, consul general, etc.) and authenticated by the seal of office. The exhibit lacked the required certification and therefore had no probative value under the Rules and relevant jurisprudence cited in the record.
Specific Performance Claim — Req
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Case Caption, Citation and Procedural Posture
- Reported at 632 Phil. 343, Second Division, G.R. No. 165133, April 19, 2010; resolution authored by Justice Carpio.
- Petition for Review under Rule 45 of the Rules of Court by petitioners Spouses Joselina and Antonio Alcantara and Spouses Josefino and Annie Rubi, assailing the Court of Appeals Decision dated 10 June 2004 and Resolution dated 17 August 2004 in CA-G.R. CV No. 78215.
- The appellate court had reversed the Regional Trial Court (Branch 69, Binangonan, Rizal) Decision of 17 June 2002 which favored respondent Brigida L. Nido, acting as administrator and attorney-in-fact of Revelen N. Srivastava.
- The case involves respondent’s complaint for recovery of possession with damages and prayer for preliminary injunction against petitioners, and related counterclaims by petitioners.
Facts as Found in the Record
- Revelen N. Srivastava is the owner of an unregistered lot of 1,939 square meters in Cardona, Rizal.
- In March 1984 respondent (Brigida L. Nido), acting in her capacity relative to Revelen, accepted petitioners’ offer to purchase a 200-square meter portion of Revelen’s lot at P200.00 per square meter.
- Petitioners paid P3,000.00 as downpayment; the balance was payable in installments.
- Petitioners constructed their houses in 1985 upon the portion they occupied.
- In 1986, with respondent’s consent, petitioners occupied an additional 150 square meters of the lot.
- By 1987, petitioners had paid P17,500.00 in total installments before defaulting on further payments.
- On 11 May 1994 respondent, as administrator and attorney-in-fact of Revelen, filed a complaint for recovery of possession with damages and prayer for preliminary injunction with the RTC.
Trial Court (RTC) Findings and Disposition (17 June 2002 Decision)
- RTC found that Revelen owned the lot and that respondent was verbally authorized to sell 200 square meters to petitioners, but that respondent’s authority to sell was not in writing.
- RTC held that absence of written authority rendered the sale void under Article 1874 of the Civil Code.
- RTC concluded that rescission was the proper remedy and ordered mutual restitution.
- Dispositive portion ordered:
- Declaration that the orally agreed contract to sell executed by Brigida Nido as representative or agent of Revelen N. Srivastava is VOID and UNENFORCEABLE.
- Upon finality, defendants and those claiming under them to vacate and surrender 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 the action in bad faith; and plaintiff to return P17,500.00, the total installment paid by defendant; fruits and interests during pendency deemed mutually compensated.
- Ordering defendants to pay plaintiff P20,000.00 as attorney’s fees, plus P15,000.00 as actual litigation expenses, plus costs of suit.
- RTC Judge Paterno G. Tiamson authored the RTC decision.
Appellate Court Ruling (Court of Appeals, 10 June 2004)
- Petitioners appealed the RTC decision to the Court of Appeals; on 10 June 2004 the appellate court reversed the RTC and dismissed the civil case.
- The appellate court characterized the action as unlawful detainer (ejectment/accion publiciana) and found it was filed within one year from the last demand letter (complaint filed 11 May 1994).
- The appellate court held that even if the complaint involves a question of ownership, such does not deprive the Municipal Trial Court (MTC) of jurisdiction over ejectment cases.
- The appellate court raised jurisdictional bar: Republic Act No. 7691 (effective 15 April 1994, published 30 March 1994) amended Section 33 of Batas Pambansa Bilang 129, granting Municipal Trial Courts exclusive original jurisdiction over civil actions involving title or possession where assessed value does not exceed P20,000 (P50,000 in Metro Manila), exclusive of interest, damages, attorney’s fees, litigation expenses and costs.
- The appellate court noted that Tax Declaration No. 09-0742 (Exh. “B”) showed assessed value of the whole 1,939-square meter lot as P4,890.00, which falls within the MTC’s exclusive jurisdiction; therefore the Regional Trial Court had no jurisdiction to try the case.
- The appellate court further ruled that respondent lacked written authority to sell; hence the contract was void and created no rights, obligations, or juridical relations — thus incapable of being rescinded.
- Court of Appeals’ decision authored by Associate Justice Conrado M. Vasquez, Jr., with Associate Justices Rebecca De Guia-Salvador and Jose C. Reyes, Jr., concurring.
Issues Raised on Petition for Review to the Supreme Court
- Petitioners contended:
- The appellate court erred in ruling that the contract entered into by respondent as representative of Revelen is void.
- The appellate court erred in not ruling that petitioners were entitled to their counterclaims, particularly specific performance.
- Respondent countered that:
- There is nothing in the records to sustain petitioners’ claim of full payment of the price.
- Petitioners admitted absence of written authority and lack of meeting of the minds precluding a valid contract.
Governing Legal Provisions and Authorities Quoted
- Article 1874, Civil Code: “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; otherw