G.R. No.171692 (June 3, 2013)
Topics: Void sale on grounds of public policy
Summary:
Petitioners alleged that they are the owners of a parcel of land located in Sumpong, Malaybalay, Bukidnon covered by TCT No. T-25334. Petitioners prayed that the deed of sale dated July 23, 1997 be declared void ab initio.
Reynalda, as agent, executed the deed of sale dated July 23, 1997 in favor of respondent Rowena, as buyer, without the knowledge and consent of petitioners. Petitioners are entitled to the reconveyance of the subject land. Under Article 1898 of the Civil Code, the sale is void.
Doctrines:
Under Article 1898 of the Civil Code, the sale is void and petitioners are, thus, entitled to the reconveyance of the subject land.
Art. 1898. If the agent contracts in the name of the principal, exceeding the scope of his authority, and the principal does not ratify the contract, it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. In this case, however, the agent is liable if he undertook to secure the principal’s ratification.
Facts:
Petitioners alleged that they are the owners of a parcel of land located in Sumpong, Malaybalay, Bukidnon covered by TCT No. T-25334 in the name of petitioner Aurora; that they are natural born Filipino citizens but petitioner Delfin acquired American citizenship while his wife, petitioner Aurora, remained a Filipino citizen; that petitioner Aurora is the sister of Reynalda Visitacion (Reynalda); that on July 23, 1997, Reynalda sold the subject land to her daughter, Rowena Gay T. Visitacion Lopez (respondent Rowena), through a deed of sale for an unconscionable amount of P95,000.00 although said property had a market value of more than P2,000,000.00; that the subject sale was done without the knowledge and consent of petitioners; and that, for these fraudulent acts, respondents should be held liable for damages.
Petitioners prayed that (1) the deed of sale dated July 23, 1997 be declared void ab initio, (2) the subject land be reconveyed to petitioners, and (3) respondents be ordered to pay damages.
Issue:
Whether the sale is void on grounds of public policy
Ruling:
Yes. The Court held that (1) Reynalda, as agent, acted beyond the scope of her authority under the SPA when she executed the deed of sale dated July 23, 1997 in favor of respondent Rowena, as buyer, without the knowledge and consent of petitioners, and conveyed the subject land to respondent Rowena at a price not approved by petitioners, as principals and sellers, (2) respondent Rowena was aware of the limits of the authority of Reynalda under the SPA, and (3) petitioners did not ratify, impliedly or expressly, the acts of Reynalda. Under Article 1898 of the Civil Code, the sale is void and petitioners are, thus, entitled to the reconveyance of the subject land.