Professional Documents
Culture Documents
512,JANUARY24,2007 411
Escuetavs.Lim
*
G.R.No.137162.January24,2007.
*FIRSTDIVISION.
412
412 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim
thetimethepartyacquiredknowledgeoftheorder,judgmentorproceedings
andnotfromthedateheactuallyreadthesame.
Agency The agent may appoint a substitute if the principal has not
prohibited him from doing so.Article 1892 of the Civil Code provides:
Art. 1892. The agent may appoint a substitute if the principal has not
prohibitedhimfromdoingsobutheshallberesponsiblefortheactsofthe
substitute: (1) When he was not given the power to appoint one x x x.
Applying the abovequoted provision to the special power of attorney
executed by Ignacio Rubio in favor of his daughter Patricia Llamas, it is
clearthatsheisnotprohibitedfromappointingasubstitute.Byauthorizing
Virginia Lim to sell the subject properties, Patricia merely acted within the
limits of the authority given by her father, but she will have to be
responsiblefortheactsofthesubagent,amongwhichispreciselythesale
ofthesubjectpropertiesinfavorofrespondent.
SameSalesAcontractexecutedbyanagentwithoutauthoritytosell
isnotvoidbutsimplyunenforceable.EvenassumingthatVirginiaLimhas
noauthoritytosellthesubjectproperties,thecontractsheexecutedinfavor
of respondent is not void, but simply unenforceable, under the second
paragraphofArticle1317oftheCivilCodewhichreads:Art.1317.xxxA
contractenteredintointhenameofanotherbyonewhohasnoauthorityor
legal representation, or who has acted beyond his powers, shall be
unenforceable,unlessitisratified,expresslyorimpliedly,bythepersonon
whose behalf it has been executed, before it is revoked by the other
contractingparty.
413
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Escuetavs.Lim
SameSameEstoppelThedoctrineofestoppelisnotonlythatwhich
prohibits a party from assuming inconsistent positions, based on the
principle of election, but that which precludes him from repudiating an
obligation voluntarily assumed after having accepted benefits therefrom.
Similarly,theBaloloyshaveratifiedthecontractofsalewhentheyaccepted
and enjoyed its benefits. The doctrine of estoppel applicable to petitioners
here is not only that which prohibits a party from assuming inconsistent
positions, based on the principle of election, but that which precludes him
from repudiating an obligation voluntarily assumed after having accepted
benefits therefrom. To countenance such repudiation would be contrary to
equity,andwouldputapremiumonfraudormisrepresentation.
SameSameInacontractofsale,thevendorlosesownershipoverthe
property and cannot recover it until and unless the contract is resolved or
rescinded.Ignacio Rubio could no longer sell the subject properties to
Corazon Escueta, after having sold them to respondent. [I]n a contract of
sale,thevendorlosesownershipoverthepropertyandcannotrecoverituntil
and unless the contract is resolved or rescinded x x x. The records do not
showthatIgnacio
414
414 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim
Rubioaskedforarescissionofthecontract.Whatheadducedwasabelated
revocation of the special power of attorney he executed in favor of Patricia
Llamas. In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the
rescissionofthecontractshallofrighttakeplace,thevendeemaypay,even
aftertheexpirationoftheperiod,aslongasnodemandforrescissionofthe
contracthasbeenmadeuponhimeitherjudiciallyorbyanotarialact.
PETITIONforreviewoncertiorariofthedecisionandresolutionof
theCourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
Angara,Abello,Concepcion,Regala&Cruzforpetitioner.
SantosPampolina,Jr.forEscueta,RubioandtheBaloloys.
NelsonA.LoyolaandDaniloArriendaforrespondentRufina
Lim.
AZCUNA,J.:
1
Thisisanappealby certiorari to annul and set aside the Decision
and Resolution of the Court of Appeals (CA) dated October 26,
1998andJanuary11,1999,respectively,inCAG.R.CVNo.48282,
entitledRufinaLimv.CorazonL.Escueta,etc.,etal.
2
Thefacts appearasfollows:
RespondentRufinaLimfiledanactiontoremovecloudon,orquiettitleto,
real property, with preliminary injunction and issuance of [a holddeparture
order] from the Philippines against Ignacio E. Rubio. Respondent amended
hercomplainttoincludespecificperformanceanddamages.
_______________
1RULESOFCOURT,Rule45.
2Rollo,pp.7073CADecision,pp.25.
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Inheramendedcomplaint,respondentaverredinteraliathatsheboughtthe
hereditaryshares(consistingof10lots)ofIgnacioRubio[and]theheirsof
Luz Baloloy, namely: Alejandrino, Bayani, and other coheirs that said
vendors executed a contract of sale dated April 10, 1990 in her favor that
Ignacio Rubio and the heirs of Luz Baloloy received [a down payment] or
earnest money in the amount of P102,169.86 and P450,000, respectively
that it was agreed in the contract of sale that the vendors would secure
certificates of title covering their respective hereditary shares that the
balanceofthepurchasepricewouldbepaidtoeachheiruponpresentationof
theirindividualcertificate[s]of[title]thatIgnacioRubiorefusedtoreceive
theotherhalfofthedownpaymentwhichisP[100,000]thatIgnacioRubio
refused and still refuses to deliver to [respondent] the certificates of title
covering his share on the two lots that with respect to the heirs of Luz
Baloloy,theyalsorefusedandstillrefusetoperformthedeliveryofthetwo
certificates of title covering their share in the disputed lots that respondent
was and is ready and willing to pay Ignacio Rubio and the heirs of Luz
Baloloy upon presentation of their individual certificates of title, free from
whateverlienandencumbrance
As to petitioner Corazon Escueta, in spite of her knowledge that the
disputed lots have already been sold by Ignacio Rubio to respondent, it is
alleged that a simulated deed of sale involving said lots was effected by
IgnacioRubioinherfavorandthatthesimulateddeedofsalebyRubioto
Escuetahasraiseddoubtsandcloudsoverrespondentstitle.
In their separate amended answers, petitioners denied the material
allegationsofthecomplaintandallegedinteraliathefollowing:
FortheheirsofLuzBaloloy(Baloloysforbrevity):
Respondent has no cause of action, because the subject contract of sale
hasnomoreforceandeffectasfarastheBaloloysareconcerned,sincethey
havewithdrawntheiroffertosellforthereasonthatrespondentfailedtopay
the balance of the purchase price as orally promised on or before May 1,
1990.
For petitioners Ignacio Rubio (Rubio for brevity) and Corazon Escueta
(Escuetaforbrevity):
Respondenthasnocauseofaction,becauseRubiohasnotenteredintoa
contractofsalewithherthathehasappointedhisdaughterPatriciaLlamas
tobehisattorneyinfactandnotinfavor
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416 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim
of Virginia Rubio Laygo Lim (Lim for brevity) who was the one who
represented him in the sale of the disputed lots in favor of respondent that
theP100,000respondentclaimedhereceivedasdownpaymentforthelotsis
asimpletransactionbywayofaloanwithLim.
TheBaloloysfailedtoappearatthepretrial.Uponmotionofrespondent,
the trial court declared the Baloloys in default. They then filed a motion to
lifttheorderdeclaringthemindefault,whichwasdeniedbythetrialcourtin
an order dated November 27, 1991. Consequently, respondent was allowed
to adduce evidence ex parte. Thereafter, the trial court rendered a partial
decisiondatedJuly23,1993againsttheBaloloys,thedispositiveportionof
whichreadsasfollows:
_______________
3Id.,pp.315316RTCPartialDecision,pp.45.
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Escuetavs.Lim
The Baloloys filed a petition for relief from judgment and order dated July
4,1994andsupplementalpetitiondatedJuly7,1994.Thiswasdeniedbythe
trialcourtinanorderdatedSeptember16,1994.Hence,appealtotheCourt
ofAppealswastakenchallengingtheorderdenyingthepetitionforrelief.
Trial on the merits ensued between respondent and Rubio and Escueta.
Aftertrial,thetrialcourtrendereditsassailedDecision,asfollows:
1. the appeal of the Baloloys from the Order denying the Petition for
Relief from Judgment and Orders dated July 4, 1994 and
Supplemental Petition dated July 7, 1994 is DISMISSED. The
OrderappealedfromisAFFIRMED.
2. the Decision dismissing [respondents] complaint is REVERSED
andSETASIDEandanewoneisentered.Accordingly,
a. thevalidityofthesubjectcontractofsaleinfavorof[respondent]is
upheld.
b. Rubio is directed to execute a Deed of Absolute Sale conditioned
upon the payment of the balance of the purchase price by
[respondent] within 30 days from the receipt of the entry of
judgmentofthisDecision.
_______________
4Records,p.122RTCDecision,p.8.
418
418 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim
c. thecontractsofsalebetweenRubioandEscuetainvolvingRubios
shareinthedisputedpropertiesisdeclaredNULLandVOID.
d. Rubio and Escueta are ordered to pay jointly and severally the
[respondent] the amount of P[20,000] as moral damages and
P[20,000]asattorneysfees.
3. theappealofRubioandEscuetaonthedenialoftheircounterclaim
isDISMISSED.
5
SOORDERED.
II
A. IGNACIOE.RUBIOISNOTBOUNDBYTHECONTRACTOF
SALEBETWEENVIRGINIALAYGOLIMANDRUFINALIM.
B. THE CONTRACT ENTERED INTO BETWEEN RUFINA LIM
ANDVIRGINIALAYGOLIMISACONTRACTTOSELLAND
NOTACONTRACTOFSALE.
C. RUFINALIMFAILEDTOFAITHFULLYCOMPLYWITHHER
OBLIGATIONS UNDER THE CONTRACT TO SELL
THEREBYWARRANTINGTHECANCELLATIONTHEREOF.
_______________
5Rollo,p.83CADecision,p.15.Allcapscopiedverbatim.
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Escuetavs.Lim
III
IV
THEHONORABLECOURTOFAPPEALSERREDINDISMISSING
PETITIONERSCOUNTERCLAIMS.
Briefly,theissueiswhetherthecontractofsalebetweenpetitioners
andrespondentisvalid.
Petitionersargue,asfollows:
First, the CA did not consider the circumstances surrounding
petitioners failure to appear at the pretrial and to file the petition
forreliefontime.
As to the failure to appear at the pretrial, there was fraud,
accidentand/orexcusableneglect,becausepetitionerBayaniwasin
theUnitedStates.Therewasnoserviceofthenoticeofpretrialor
order. Neither did the former counsel of record inform him.
Consequently, the order declaring him in default is void, and all
subsequentproceedings,orders,ordecisionarevoid.
Furthermore, petitioner Alejandrino was not clothed with a
power of attorney to appear on behalf of Bayani at the pretrial
conference.
Second, the sale by Virginia to respondent is not binding.
Petitioner Rubio did not authorize Virginia to transact business in
hisbehalfpertainingtotheproperty.TheSpecialPowerofAttorney
was constituted in favor of Llamas, and the latter was not
empowered to designate a substitute attorneyinfact. Llamas even
disowned her signature appearing on the Joint Special Power of
Attorney, which constituted Virginia as her true and lawful
attorneyinfactinsellingRubiosproperties.
420
420 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim
_______________
6RULESOFCOURT,Rule129,Sec.4.
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[dispenses] with
7
the need x x x to present evidence to prove the
admitted fact. It cannot, therefore, be controverted
8
by the party
makingsuchadmission,and[is]conclusive astothem.Allproofs
submittedbythemcontrarytheretoorinconsistenttherewithshould9
be ignored whether objection is interposed by a party or not.
Besides, there is no showing that a palpable mistake has been
committedintheiradmissionorthatnoadmissionhasbeenmadeby
them. 10
Pretrialismandatory. Thenoticesofpretrialhadbeensentto
boththeBaloloysandtheirformercounselofrecord.Beingserved
with notice, he is charged
11
with the duty of notifying the party
representedbyhim. Hemustseetoitthathisclientreceivessuch
12
notice and attends the pretrial. What the Baloloys and their
formercounselhaveallegedinsteadintheirMotiontoLiftOrderof
As In Default dated December 11, 1991 is the belated receipt of
BayaniBaloloysspecialpowerofattorneyinfavoroftheirformer
counsel,notthattheyhavenotreceivedthenoticeorbeeninformed
ofthescheduledpretrial.Nothavingraisedthegroundoflackofa
special power of attorney in their motion, they are now deemed to
havewaivedit.Certainly,theycannotraiseitatthislatestageofthe
proceedings. For lack of representation, Bayani Baloloy was
properlydeclaredindefault.
Section3ofRule38oftheRulesofCourtstates:
_______________
7LuzonDevelopmentBankv.Conquilla,G.R.No.163338,September21,2005,470
SCRA533,548.
8Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corp., G.R.
No. 152228, September 23, 2005, 470 SCRA 650, 667, citing Elayda v. Court of
Appeals,G.R.No.49327,July18,1991,199SCRA349,353.
9Republicv.Sarabia,G.R.No.157847,August25,2005,468SCRA142,150,citing
Santiagov.DelosSantos,G.R.No.20241,November22,1974,61SCRA146,149.
10RULESOFCOURT,Rule18,Sec.2.
11RULESOFCOURT,Rule18,Sec.3.
12IF.Regalado,REMEDIALLAWCOMPENDIUM286287(8threv.ed.,2002).
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422 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim
The evidence on record as far as this issue is concerned shows that Atty.
ArsenioVillalon,Jr.,theformercounselofrecordoftheBaloloysreceiveda
copy of the partial decision dated June 23, 1993 on April 5, 1994. At that
time, said former counsel is still their counsel of record. The reckoning of
the 60 day period therefore is the date when the said counsel of record
received a copy of the partial decision which was on April 5, 1994. The
petitionforreliefwasfiledbythenewcounselonJuly4,1994whichmeans
that 90 days have already lapsed or 30 days beyond the 60 day period.
Moreover, the records further show that the Baloloys received the partial
decisiononSeptember13,1993asevidencedbyRegistryreturncardswhich
bearthenumbers02597and02598signedbyMr.AlejandrinoBaloloy.
TheBaloloys[,]apparentlyinanattempttocurethelapseoftheaforesaid
reglementaryperiodtofileapetitionforrelieffromjudgment[,]includedin
its petition the two Orders dated May 6, 1994 and June 29, 1994. The first
Order denied Baloloys motion to fix the period within which plaintiffs
appellantspaythebalanceofthepurchaseprice.ThesecondOrderrefersto
the grant of partial execution, i.e. on the aspect of damages. These Orders
areonlyconsequencesofthepartialdecisionsubjectofthepetitionforrelief,
and thus, cannot be considered in the determination of the reglementary
periodwithinwhichtofilethesaidpetitionforrelief.
_______________
13Id.,atp.402.
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Escuetavs.Lim
Art. 1892. The agent may appoint a substitute if the principal has not
prohibitedhimfromdoingsobutheshallberesponsiblefortheactsofthe
substitute:
(1)Whenhewasnotgiventhepowertoappointonexxx.
_______________
14RULESOFCOURT,Rule38,Sec.1.
andAnuranv.Aquino,38Phil.29,3233,36(1918).
16 Sunico v. Villapando, 14 Phil. 352, 355 (1909), citing the old Code of Civil
Procedure,Sec.145,Subsec.1.
17Riliv.Chunaco,87Phil.545,546547(1950).
18Fernandezv.TanTiongTick,111Phil.773,7791SCRA1138,1144(1961).
19Seronav.CourtofAppeals,440Phil.508,521392SCRA35,45(2002).
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424 SUPREMECOURTREPORTSANNOTATED
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preciselythesaleofthesubjectpropertiesinfavorofrespondent.
Even assuming that Virginia Lim has no authority to sell the
subjectproperties,thecontractsheexecutedinfavorofrespondent
isnotvoid,butsimplyunenforceable,underthesecondparagraphof
Article1317oftheCivilCodewhichreads:
Art.1317.xxx
A contract entered into in the name of another by one who has no
authorityorlegalrepresentation,orwhohasactedbeyondhispowers,shall
beunenforceable,unlessitisratified,expresslyorimpliedly,bytheperson
on whose behalf it has been executed, before it is revoked by the other
contractingparty.
IgnacioRubiomerelydeniesthecontractofsale.Heclaims,without
substantiation, that what he received was a loan, not the down
payment for the sale of the subject properties. His acceptance and
encashment of the check, however, constitute ratification of the
contract20of sale and produce the effects of an express power of
agency. [H]isactionnecessarilyimpliesthathewaivedhisright
ofactiontoavoidthecontract,and,consequently,italsoimpliesthe
tacit, if not express, confirmation of the said sale effected by
VirginiaLiminfavorofrespondent.
Similarly, the Baloloys have ratified the contract of sale when
they accepted and enjoyed its benefits. The doctrine of estoppel
applicabletopetitionershereisnotonlythatwhichprohibitsaparty
from assuming inconsistent positions, based on the principle of
election, but that which precludes him from repudiating an
obligation voluntarily assumed after having accepted benefits
therefrom. To countenance such repudiation would be contrary 21
to
equity,andwouldputapremiumonfraudormisrepresentation.
_______________
20GutierrezHermanosv.Orense,28Phil.571,579(1914).
581(1968).
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Escuetavs.Lim
Indeed,VirginiaLimandrespondenthaveenteredintoacontractof
sale. Not only has the title to the subject properties passed to the
latterupondeliveryofthethingsold,butthereisalsonostipulation
in the contract that states the ownership is to be reserved
22
in or
retainedbythevendoruntilfullpaymentoftheprice.
ApplyingArticle1544oftheCivilCode,asecondbuyerofthe
property who may have had actual or constructive knowledge of
such defect in the sellers title, or at least was charged with the
obligation to discover such defect, cannot be a registrant in good
faith.Suchsecondbuyercannotdefeatthefirstbuyerstitle.Incase
a title is issued to the second buyer, the first buyer23
may seek
reconveyance of the property subject of the sale. Even the
argumentthatapurchaserneednotinquirebeyondwhatappearsina
Torrenstitledoesnotholdwater.Aperusalofthecertificatesoftitle
alone will reveal that the subject properties are registered in
common,notintheindividualnamesoftheheirs.
Nothinginthecontractpreventstheobligationofthevendorto
24
convey title from becoming effective or gives the vendor the
righttounilaterallyresolvethecontractthemomentthebuyerfails
25
topaywithinafixedperiod. Petitionersthemselveshavefailedto
deliver their individual certificates of title, for which reason it is
obviousthatrespondent
_______________
22Salazarv.CourtofAppeals,327Phil.944,955258SCRA317,325(1996),citing
Pingolv.CourtofAppeals,G.R.No.102909,September6,1993,226SCRA118,126
Visayan Sawmill Co., Inc. v. Court of Appeals,G.R. No. 83851, March 3, 1993, 219
SCRA378,389Jacintov.Kaparaz,G.R. No. 81158, May 22, 1992, 209 SCRA 246,
254andLuzonBrokerageCo.,Inc.v.MaritimeBuildingCo.,Inc.,150Phil.114,125
12643SCRA93,104(1972).
23Coronelv.CourtofAppeals,331Phil.294,311263SCRA15(1996).
24Salazarv.CourtofAppeals,supraatp.955p.325.
25AdelfaProperties,Inc.v.CourtofAppeals,310Phil.623,637240SCRA565,
577(1995),citingPingolv.CourtofAppeals,supraatp.127.
426
426 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim
cannotbeexpectedtopaythestipulatedtaxes,fees,andexpenses.
[A]lltheelementsofavalidcontractofsaleunderArticle1458
oftheCivilCodearepresent,suchas:(1)consentormeetingofthe
minds(2)determinatesubjectmatterand(3)pricecertaininmoney
26
oritsequivalent. Ignacio Rubio, the Baloloys, and their coheirs
sold their hereditary shares for a price certain to which respondent
agreedtobuyandpayforthesubjectproperties.Theofferandthe
acceptanceareconcurrent,sincethemindsofthecontractingparties
27
meetinthetermsoftheagreement.
In fact,earnestmoney has been given by respondent. [I]t shall
beconsideredaspartofthepriceandasproofoftheperfectionof
28
the contract. It constitutes
29
an advance payment to be deducted
fromthetotalprice.
Article1477ofthesameCodealsostatesthat[t]heownership
of the thing sold shall be transferred
30
to the vendee upon actual or
constructive delivery thereof. In the present case, there is actual
deliveryasmanifestedbyactssimultaneouswithandsubsequentto
thecontractofsalewhenrespondentnotonlytookpossessionofthe
subjectpropertiesbutalso
_______________
26Dignosv.CourtofAppeals,G.R.No.59266,February29,1988,158SCRA375,
382383,inrelationtoArticle1475oftheCivilCode,whichprovides:
Art.1475.Thecontractofsaleisperfectedatthemomentthereisameetingofmindsuponthe
thingwhichistheobjectofthecontractandupontheprice.
From that moment, the parties may reciprocally demand performance, subject to the
provisionsofthelawgoverningtheformofcontracts.
27AdelfaProperties,Inc.v.CourtofAppeals,supraatp.641,quotingMcMillanv.
PhiladelphiaCo.,28A.220,220221,159Pa.St.142,December30,1893.
28CIVILCODE,Art.1482.
29AdelfaProperties,Inc.v.CourtofAppeals,supraatp.646.
30Dignosv.CourtofAppeals,supraatp.383.
427
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Escuetavs.Lim
Puno(C.J.,Chairperson),SandovalGutierrez,Coronaand
Garcia,JJ.,concur.
Petitiondenied,judgmentandresolutionaffirmed.
o0o
_______________
31Salazarv.CourtofAppeals,supra.
32CIVILCODE,Art.1592.
428
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