1
Formal Requirements of Agency
Veloso v CA
FRANCISCO A. VELOSO, Petitioner, v. CA, AGLALOMA B. ESCARIO, assisted by her husband
GREGORIO L. ESCARIO, the REGISTER OF DEEDS -MANILA, Respondent.
DOCTRINE: The special power of attorney can be included in the general power when it is
specified therein the act or transaction for which the special power is required.
"Whether the instrument be denominated as "general power of attorney" or "special
power of attorney," what matters is the extent of the power or powers contemplated
upon the agent or attorney in fact. If the power is couched in general terms, then such
power cannot go beyond acts of administration. However, where the power to sell is
specific, it not being merely implied, much less couched in general terms, there can not be
any doubt that the attorney in fact may execute a valid sale. An instrument may be
captioned as "special power of attorney" but if the powers granted are couched in general
terms without mentioning any specific power to sell or mortgage or to do other specific
acts of strict dominion, then in that case only acts of administration may be deemed
conferred."
FACTS: TORRES, JR., J.:
 Petitioner Francisco Veloso owns a parcel of land in Tondo, Manila covered by a TCT
issued by the Registry of Deeds-Manila. He acquired the subject property before he
got married from Philippine Building Corporation. Hence, the property did not belong
to the conjugal partnership.
 The said title was subsequently canceled and a new one was issued in the name of
Aglaloma B. Escario.
 Subsequently, petitioner filed an action for annulment of documents, reconveyance
of property with damages and preliminary injunction alleging that he was the
absolute owner of the subject property and he never authorized anybody to sell it.
He alleged that when his wife left for abroad, he found out that his copy was missing.
 The transfer of property was supported by a General Power of Attorney and Deed
of Absolute Sale, executed by Irma Veloso, wife of the petitioner.
 Petitioner denied executing the power of attorney and alleged that his signature was
falsified. He also denied having known the supposed witnesses in the execution of
the power of attorney. Thus, he contended that the sale of the property, and the
subsequent transfer were null and void.
 Defendant Aglaloma Escario alleged that she was a buyer in good faith and denied
any knowledge of the alleged irregularity. She allegedly relied on the general power
of attorney which was sufficient in form and substance and was duly notarized.
 Witness for the plaintiff Atty. Julian G. Tubig denied any participation in the execution
of the general power of attorney, and attested that he did not sign.
 RTC ruled in favor of Escaro as the lawful owner of the property as she was deemed
an innocent purchaser for value. The trial court ruled that there was no need for a
special power of attorney when the special power was already mentioned in the
general one.
 CA affirmed in toto the findings of the trial court.
ISSUE: Was the General Power of Attorney valid?
HELD: The assailed power of attorney was valid and regular on its face. It was notarized
and as such, it carries the evidentiary weight conferred upon it with respect to its due
execution. While it is true that it was denominated as a general power of attorney, a
perusal thereof revealed that it stated an authority to sell.
"2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands,
tenements and hereditaments …."
Thus, there was no need to execute a separate and special power of attorney since the
general power of attorney had expressly authorized the agent or attorney in fact the
power to sell the subject property.
The general power of attorney was accepted by the Register of Deeds when the title to
the subject property was canceled and transferred in the name of private Respondent.
RE FALSIFIED SIGNATURE:
SC found that the basis presented by the petitioner was inadequate to sustain his
allegation of forgery. Mere variance of the signatures cannot be considered as conclusive
proof that the same were forged. Forgery cannot be presumed.
RE INNOCENT PURCHASER FOR VALUE:
SC agrees with the conclusion of the lower court that private respondent was an innocent
purchaser for value. Respondent Aglaloma relied on the power of attorney presented by
petitioners wife, Irma. Being the wife of the owner and having with her the title of the

property, there was no reason for the private respondent not to believe in her authority.
Moreover, the power of attorney was notarized and as such, carried with it the
presumption of its due execution.
A purchaser in good faith is one who buys property of another, without notice that some
other person has a right to, or interest in such property and pays a full and fair price for
the same, at the time of such purchase, or before he has notice of the claim or interest of
some other person in the property. The questioned power of attorney and deed of sale,
were notarized and therefore, presumed to be valid and duly executed.
Atty. Tubig denied having notarized the said documents and alleged that his signature had
also been falsified. Just like the petitioner, witness Atty. Tubig merely pointed out that his
signature was different from that in the power of attorney and deed of sale.
Even granting for the sake of argument, that the petitioners signature was falsified and
consequently, the power of attorney and the deed of sale were null and void, such fact
would not revoke the title subsequently issued in favor of private respondent.
The right of an innocent purchaser for value must be respected and protected, even if
the seller obtained his title through fraud. The REMEDY of the person prejudiced is to
bring an action for damages against those who caused or employed the fraud, and if the
latter are insolvent, an action against the Treasurer of the Philippines may be filed for
recovery of damages against the Assurance Fund.
RE ESTOPPEL:
The trial court did not err in applying equitable estoppel in this case. The principle of
equitable estoppel states that where one or two innocent persons must suffer a loss, he
who by his conduct made the loss possible must bear it. From the evidence adduced, it
should be the petitioner who should bear the loss.
The fact remains that the Certificate of Title, as well as other documents necessary for the
transfer of title were in the possession of Irma, consequently leaving no doubt or any
suspicion on the part of the defendant as to her authority. Under Section 55 of Act 496,
Irma’s possession and production of the TCT to defendant operated as conclusive
authority from the plaintiff to the Register of Deeds to enter a new certificate.
ACCORDINGLY, the petition for review is hereby DENIED for lack of merit.
Estate of Lino Olaguer v Ongjoco
OLAGUER v. ONJUCO
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G.R. No. 173312; August 26, 2008
Ponente: J. Chico-Nazario
FACTS:
Lino Olaguer died on October 3, 1957 so Special Proceedings No. 528 for probate of will
was filed in the then Court of First Instance of Albay. Defendant Olivia P. Olaguer was
appointed as administrator pursuant to the will. Later, defendant Eduardo Olaguer was
appointed as co-administrator.
In the order of the probate court dated April 4, 1961, some properties of the estate were
authorized to be sold to pay obligations of the estate.
Relying upon the order, but without prior notice or permission from the Probate Court,
defendants Olivia P. Olaguer and Eduardo Olaguer on November 1, 1965 sold to Estanislao
Olaguer 10 parcels of land. The sale to was approved by the Probate Court on November
12, 1965.
On July 7, 1966, defendant Olivia P. Olaguer executed a Special Power of Attorney in favor
of defendant Jose A. Olaguer, authorizing the latter to "sell, mortgage, assign, transfer,
endorse and deliver" of 6 properties.
On July 7, 1966, Estanislao Olaguer executed a Special Power of Attorney in favor of Jose
A. Olaguer authorizing the latter to "sell, mortgage, assign, transfer, endorse and deliver"
the 9 properties.
By virtue of this Special Power of Attorney, on March 1, 1967, Jose A. Olaguer as Attorney-
in-Fact of Estanislao Olaguer mortgaged Lots 7589, 7593 and 7396 to defendant PNB as
security for a loan of 10,000 Pesos. The mortgage was foreclosed by the PNB on June 13,
1973 and the properties mortgage were sold at public auction to PNB. On December 10,
1990, the PNB transferred the properties to the Republic of the Philippines pursuant to
Exec. Order No. 407 dated June 14, 1990 for agrarian reform purposes.
On October 29, 1966, Estanislao Olaguer executed a General Power of Attorney in favor of
Jose A. Olaguer, authorizing the latter to exercise general control and supervision over all
of his business and properties, and among others, to sell or mortgage any of his
properties.

On December 29, 1966, Estanislao Olaguer sold to Jose A. Olaguer for 15,000 the 10
parcels of land he bought from Olivia P. Olaguer and Eduardo Olaguer.
On March 16, 1968, Estanislao Olaguer sold to Jose A. Olaguer for 1 Peso and other
valuable consideration 2 parcels of land which have a total area of 2.5 hectares.
On June 5, 1968, Estanislao Olaguer sold another 2 lots to Jose A. Olaguer for 1 Peso and
other valuable consideration.
On May 13, 1971, Jose A. Olaguer in his capacity as Attorney in-Fact of Estanislao Olaguer
sold to his son Virgilio Olaguer for 1 Peso and other valuable consideration.
On July 15, 1974, Jose A. Olaguer sold to his son Virgilio Olaguer Lot No. 4521 and Lot No.
4522 for 1,000 Pesos.
On September 16, 1978 Virgilio Olaguer executed a General Power of Attorney in favor of
Jose A. Olaguer authorizing the latter to exercise general control and supervision over all
of his business and properties and among others, to sell or mortgage the same.
Olivia P. Olaguer and Eduardo Olaguer were removed as administrators of the estate and
on February 12, 1980, plaintiff Ma. Linda Olaguer Montayre was appointed administrator
by the Probate Court.
The decedent Lino Olaguer have had three marriages. He was first married to Margarita
Ofemaria who died April 6, 1925. His second wife was Gloria Buenaventura who died on
July 2, 1937. The third wife was the defendant Olivia P. Olaguer.
Jose Olaguer acting upon the general power of attorney sold 8 parcels of land to Emilio
Ongjoco.
On 28 January 1980, the Estate of Lino Olaguer filed an action for the Annulment of Sales
of Real Property and/or Cancellation of Titles in the then Court of First Instance of Albay.
The plaintiffs therein alleged that the sales of the following properties belonging to the
Estate of Lino Olaguer to Estanislao Olaguer were absolutely simulated or fictitious, the
plaintiffs likewise prayed that the resulting Transfer Certificates of Title issued to Jose
Olaguer, Virgilio Olaguer, Cipriano Duran and the PNB be annulled.
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ISSUE:
Whether General Power of Attorney was sufficient to effect the sale of the subject
properties
HELD:
Yes, the general power of attorney was sufficient. The Supreme Court held that while the
law requires a special power of attorney, the general power of attorney was sufficient in
this case, as Jose A. Olaguer was expressly empowered to sell any of Virgilio's properties;
and to sign, execute, acknowledge and deliver any agreement therefor. Even if a
document is designated as a general power of attorney, the requirement of a special
power of attorney is met if there is a clear mandate from the principal specifically
authorizing the performance of the act. The special power of attorney can be included in
the general power when the act or transaction for which the special power is required is
specified therein.
On its face, the written power of attorney contained the signature of Virgilio Olaguer and
was duly notarized. As such, the same is considered a public document and it has in its
favor the presumption of authenticity and due execution, which can only be contradicted
by clear and convincing evidence.
CITY LITE v CA
10 February 2000
Bellosillo, ponente
SHORT VERSION:
Only when the agent has written authority to sell realty can the sale be valid.
FACTS:
 FP Holdings and Realty Corp (respondent) was the registered owner of a 71754
sq m-parcel of land along E Rodriguez Ave, QC known as the “Violago Property”
or the “San Lorenzo Ruiz Commercial Center”.
o It was offered for sale to the general public through a sales brochure:
A parcel of land including buildings and other improvements
thereon located along E. Rodriguez Avenue, Quezon City, with a total

lot area of 71,754 square meters - 9,192 square meters in front, 23,332
square meters in the middle, and 39,230 square meters at the back.
But the total area for sale excludes 5,000 square meters covering the
existing chapel and adjoining areas which will be donated to the
Archdiocese of Manila thus reducing the total saleable area to 66,754
square meters. Asking price was P6,250.00/square meter with terms of
payment negotiable. Broker's commission was 2.0% of selling price,
net of withholding taxes and other charges. As advertised, contact
person was Meldin Al G. Roy, Metro Drug Inc., with address at 5/F
Metro House, 345 Sen. Gil Puyat Avenue, Makati City.
o The 9192 sq m- front portion was the subject of litigation.
 Meldin Roy (respondent) sent a sales brochure, location plane and copy of the
TCT to Atty Gelacio Mamaril, a lawyer and licensed real estate broker. Mamaril
passed on the documents to City-Lite’s Executive VP Antonio Teng and Legal
Counsel Atty Victor Villanueva.
o City-Lite conveyed its interest to purchase ½ of the front portion in a
letter send to Metro Drug (Attn: Meldin Roy). Roy also informed City-
Lite’s representative that it would take time to subdivide the lot and
FP Holdings wasn’t receptive to a ½ purchase.
o Atty Mamaril sent a letter to Metro Drug expressing City-Lite’s desire
to buy the entire front lot so long as the P6250/sq m asking price was
reduced and that payment be made in installments. Roy made a
counter offer in another letter: “1. The price shall beP6,250.00/square
meter or a total of P57,450,000.00; 2. The above purchase price shall
be paid to the owner as follows: (a) P15.0 Million downpayment; (b)
balance payable within six (6) months from date of downpayment
without interest. “
 City-Lite and Mamaril met with Roy to consummate the transaction; Roy agreed
to sell the property provided City-Lite submit its acceptance in writing to the
terms and conditions in Roy’s letter. Later that afternoon Mamaril and Teng
conveyed their formal acceptance of the terms.
 However, FP Holdings refused to execute the corresponding deed of sale and
registered an adverse claim to the title of the property with the Register of
Deeds of QC, annotated in the memorandum of encumbrance in the TCT.
 FP Holdings filed a petition for the cancellation of the adverse claim against City-
Lite with the RTC QC; City-Lite caused the annotation of the first notice of lis
pendens which was recorded in the title of the property.
o RTC dismissed FP Holdings’ petition; FP Holdings caused a resurvey
and segregation of the property, asking and was granted separate
titles from the RD QC.
 City-Lite instituted a complaint against FP Holdings for specific performance and
damages and caused the annotation of the second notice of lis pendens.
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o The property was transferred to Viewmaster Construction Co
(respondent) for which a TCT was issued; the lis pendens was carried
over to the new title.
o The RTC rendered a decision in favor of City-Lite ordering FP Holdings
to execute a deed of sale of the property and ordering the RD QC to
cancel Viewmaster’s TCT.
o The CA reversed an set aside the RTC judgment.
ISSUE:
 was there a contract of sale perfected between City-Lite and FP Holdings
through its agent Meldin Roy of Metro Drug?
REASONING:
 Art. 1874 of the Civil Code provided: "When the sale of a piece of land or any
interest therein is through an agent, the authority of the latter shall be in
writing; otherwise, the sale shall be void."
o Roy was FP Holdings’ authorized agent to sell the property, but the
NCC required that the authority be in writing.
 The absence of authority to sell could be determined from the written memo
issued by FP Holdings’ president requesting Metro Drug’s assistance in finding
buyers. The memo stated:
We will appreciate Metro Drug's assistance in referring to us buyers for the
property. Please proceed to hold preliminary negotiations with interested
buyers and endorse formal offers to us for our final evaluation and appraisal.
o This meant that Roy and/or Metro Drug were only to assist FP
Holdings, and FP Holdings were the only ones who could make the
final evaluation, appraisal and acceptance of any transaction.
o Roy and/or Metro Drug were only a contact person with no authority
to conclude a sale of the property. Consequently, the sale should be
null and void, and not produce any legal effect to transfer the property
from FP Holdings to any interested party.
RULING: appealed decision affirmed
Cosmic Lumber v CA
FACTS

* Cosmic Corporation, through its General Manager executed a Special Power of
Attorney appointing Paz G. Villamil-Estrada as attorney-in-fact to initiate, institute and file
any court action for the ejectment of third persons and/or squatters of the entire lot 9127
and 443 for the said squatters to remove their houses and vacate the premises in order
that the corporation may take material possession of the entire lot
* Paz G. Villamil Estrada, by virtue of her power of attorney, instituted an action
for the ejectment of private respondent Isidro Perez and recover the possession of a
portion of lot 443 before the RTC
* Estrada entered into a Compromise Agreement with Perez, the terms and
conditions such as:
“ In order for Perez to buy the said lot he is presently occupying, he has to pay to plaintiff
through Estada the sum of P26,640 computed at P80/square meter and that Cosmic
Lumber recognizes ownership and possession of Perez by virtue of this compromise
agreement over said portion of 333 sqm of lot 443 and whatever expenses of subdivision,
registration and other incidental expenses shall be shouldered by Perez
* although the agreement was approved by the trial court and the decision became final
and executory it was not executed within the 5 year period from date of its finality
allegedly due to the failure of Cosmic Lumber to produce the owner’s duplicate copy of
title needed to segregate from lot 443 the portion sold by the attorney-in-fact, Paz
Estrada to Perez under the compromise agreement
ISSUE: W/N there is a contract of agency between Cosmic Lumber, principal and Paz
Estrada, agent thus binding the principal over the compromise agreement made by the
agent to a third person, Perez in selling the portion of the said property
RULING: No
The authority granted Villamil-Estrada under the special power of attorney was
explicit and exclusionary: for her to institute any action in court to eject all persons found
on lots number 9127 and 443 so that Cosmic Lumber could take material possession
thereof and for this purpose, to appear at the pre-trial and enter into any stipulation of
facts and/or compromise agreement but only insofar as this was protective of the rights
and interests of Cosmic Lumber in the property
5
Nowhere in this authorization was Villamil-Estrada granted expressly or
impliedly any power to sell the subject property nor a portion thereof
Neither can a conferment of the power to sell be validly inferred from the
specific authority “to enter into a compromise agreement” because of the explicit
limitation fixed by the grantor that the compromise entered into shall only be “so far as it
shall protect the rights and interest of the corporation in the aforementioned lots”.
In the context of special investiture of powers to Villamil-Estrada, alienation by
sale of an immovable certainly cannot be deemed protective of the right of Cosmic
Lumber to physically possess the same, more so when the land was being sold for a price
of P80/sqm , very much less than its assessed value of P250/sqm and considering further
that plaintiff never received the proceeds of the sale
When the sale of a piece of land or any interest thereon is through an agent, the
authority of the latter shall be in writing; otherwise, the sale should be void. Thus, the
authority of an agent to execute a contract for the sale of real estate must be conferred in
writing and must give him specific authority, either to conduct the general business of the
principal or to execute a binding contract containing terms and conditions which are in
the contract he did execute
For the principal to confer the right upon an agent to sell real estate, a power of
attorney must so express the powers of the agent in clear and unmistakable language
It is therefore clear that by selling to Perez a portion of Cosmic Lumber’s land
through a compromise agreement, Villamil-Estrada acted without or in obvious authority.
The sale ipso jure is consequently void and so is the compromise agreement. This being
the case, the judgment based thereon is necessarily void
When an agent is engaged in the perpetration of a fraud upon his principal for
his own exclusive benefit, he is not really acting for the principal but is really acting for
himself, entirely outside the scope of his agency
Shopper’s Paradise Realty v. Roque
SHOPPER'S PARADISE REALTY & DEVELOPMENT CORPORATION, petitioner, vs. EFREN
ROQUE, respondent.
DECISION

VITUG, J p:
On 23 December 1993, petitioner Shopper's Paradise Realty & Development Corporation,
represented its president, Veredigno Atienza, entered into a twenty-five year lease with
Dr. Felipe C. Roque, now deceased, over a parcel of land, with an area of two thousand
and thirty six (2,036) square meters, situated at Plaza Novaliches, Quezon City, covered by
Transfer of Certificate of Title (TCT) No. 30591 of the Register of Deeds of Quezon City in
the name of Dr. Roque. Petitioner issued to Dr. Roque a check for P250,000.00 by way of
"reservation payment." Simultaneously, petitioner and Dr. Roque likewise entered into a
memorandum of agreement for the construction, development and operation of a
commercial building complex on the property. Conformably with the agreement,
petitioner issued a check for another P250,000.00 "downpayment" to Dr. Roque.
The contract of lease and the memorandum of agreement, both notarized, were to be
annotated on TCT No. 30591 within sixty (60) days from 23 December 1993 or until 23
February 1994. The annotations, however, were never made because of the untimely
demise of Dr. Felipe C. Roque. The death of Dr. Roque on 10 February 1994 constrained
petitioner to deal with respondent Efren P. Roque, one of the surviving children of the late
Dr. Roque, but the negotiations broke down due to some disagreements. In a letter, dated
3 November 1994, respondent advised petitioner "to desist from any attempt to enforce
the aforementioned contract of lease and memorandum of agreement". On 15 February
1995, respondent filed a case for annulment of the contract of lease and the
memorandum of agreement, with a prayer for the issuance of a preliminary injunction,
before Branch 222 of the Regional Trial Court of Quezon City. Efren P. Roque alleged that
he had long been the absolute owner of the subject property by virtue of a deed of
donation inter vivos executed in his favor by his parents, Dr. Felipe Roque and Elisa Roque,
on 26 December 1978, and that the late Dr. Felipe Roque had no authority to enter into
the assailed agreements with petitioner. The donation was made in a public instrument
duly acknowledged by the donor-spouses before a notary public and duly accepted on the
same day by respondent before the notary public in the same instrument of donation. The
title to the property, however, remained in the name of Dr. Felipe C. Roque, and it was
only transferred to and in the name of respondent sixteen years later, or on 11 May 1994,
under TCT No. 109754 of the Register of Deeds of Quezon City. Respondent, while he
resided in the United States of America, delegated to his father the mere administration
of the property. Respondent came to know of the assailed contracts with petitioner only
after retiring to the Philippines upon the death of his father. DcTSHa
On 9 August 1996, the trial court dismissed the complaint of respondent; it explained:
6
"Ordinarily, a deed of donation need not be registered in order to be valid between the
parties. Registration, however, is important in binding third persons. Thus, when Felipe
Roque entered into a lease contract with defendant corporation, plaintiff Efren Roque
(could) no longer assert the unregistered deed of donation and say that his father, Felipe,
was no longer the owner of the subject property at the time the lease on the subject
property was agreed upon.
"The registration of the Deed of Donation after the execution of the lease contract did not
affect the latter unless he had knowledge thereof at the time of the registration which
plaintiff had not been able to establish. Plaintiff knew very well of the existence of the
lease. He, in fact, met with the officers of the defendant corporation at least once before
he caused the registration of the deed of donation in his favor and although the lease
itself was not registered, it remains valid considering that no third person is involved.
Plaintiff cannot be the third person because he is the successor-in-interest of his father,
Felipe Roque, the lessor, and it is a rule that contracts take effect not only between the
parties themselves but also between their assigns and heirs (Article 1311, Civil Code) and
therefore, the lease contract together with the memorandum of agreement would be
conclusive on plaintiff Efren Roque. He is bound by the contract even if he did not
participate therein. Moreover, the agreements have been perfected and partially
executed by the receipt of his father of the downpayment and deposit totaling to
P500,000.00."1
The trial court ordered respondent to surrender TCT No. 109754 to the Register of Deeds
of Quezon City for the annotation of the questioned Contract of Lease and Memorandum
of Agreement.
On appeal, the Court of Appeals reversed the decision of the trial court and held to be
invalid the Contract of Lease and Memorandum of Agreement. While it shared the view
expressed by the trial court that a deed of donation would have to be registered in order
to bind third persons, the appellate court, however, concluded that petitioner was not a
lessee in good faith having had prior knowledge of the donation in favor of respondent,
and that such actual knowledge had the effect of registration insofar as petitioner was
concerned. The appellate court based its findings largely on the testimony of Veredigno
Atienza during cross-examination, viz:
"Q. Aside from these two lots, the first in the name of Ruben Roque and the second, the
subject of the construction involved in this case, you said there is another lot which was
part of the development project?

"A. Yes, this was the main concept of Dr. Roque so that the adjoining properties of his two
sons, Ruben and Cesar, will comprise one whole. The other whole property belongs to
Cesar.
"Q. You were informed by Dr. Roque that this property was given to his three (3) sons;
one to Ruben Roque, the other to Efren, and the other to Cesar Roque?
"A. Yes.
"Q. You did the inquiry from him, how was this property given to them?
"A. By inheritance.
"Q. Inheritance in the form of donation?
"A. I mean inheritance.
"Q. What I am only asking you is, were you told by Dr. Felipe C. Roque at the time of your
transaction with him that all these three properties were given to his children by way of
donation?
"A. What Architect Biglang-awa told us in his exact words: "Yang mga yan pupunta sa mga
anak. Yong kay Ruben pupunta kay Ruben. Yong kay Efren palibhasa nasa America siya,
nasa pangalan pa ni Dr. Felipe C. Roque."
"xxx xxx xxx
"Q. When was the information supplied to you by Biglang-awa? Before the execution of
the Contract of Lease and Memorandum of Agreement?
"A. Yes. EHTADa
"Q. That being the case, at the time of the execution of the agreement or soon before, did
you have such information confirmed by Dr. Felipe C. Roque himself?
"A. Biglang-awa did it for us.
"Q. But you yourself did not?
"A. No, because I was doing certain things. We were a team and so Biglang-awa did it for
us.
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"Q. So in effect, any information gathered by Biglang-awa was of the same effect as if
received by you because you were members of the same team?
"A. Yes." 2
In the instant petition for review, petitioner seeks a reversal of the decision of the Court
of Appeals and the reinstatement of the ruling of the Regional Trial Court; it argues that
the presumption of good faith it so enjoys as a party dealing in registered land has not
been overturned by the aforequoted testimonial evidence, and that, in any event,
respondent is barred by laches and estoppel from denying the contracts.
The existence, albeit unregistered, of the donation in favor of respondent is undisputed.
The trial court and the appellate court have not erred in holding that the non-registration
of a deed of donation does not affect its validity. As being itself a mode of acquiring
ownership, donation results in an effective transfer of title over the property from the
donor to the donee. 3 In donations of immovable property, the law requires for its validity
that it should be contained in a public document, specifying therein the property donated
and the value of the charges which the donee must satisfy. 4 The Civil Code provides,
however, that "titles of ownership, or other rights over immovable property, which are
not duly inscribed or annotated in the Registry of Property (now Registry of Land Titles
and Deeds) shall not prejudice third persons." 5 It is enough, between the parties to a
donation of an immovable property, that the donation be made in a public document but,
in order to bind third persons, the donation must be registered in the Registry of Property
(Registry of Land Titles and Deeds). 6 Consistently, Section 50 of Act No. 496 (Land
Registration Act), as so amended by Section 51 of P.D. No. 1529 (Property Registration
Decree), states:
"SECTION 51. Conveyance and other dealings by registered owner. — An owner of
registered land may convey, mortgage, lease, charge or otherwise deal with the same in
accordance with existing laws. He may use such forms of deeds, mortgages, leases or
other voluntary instruments as are sufficient in law. But no deed, mortgage, lease, or
other voluntary instrument, except a will purporting to convey or affect registered land
shall take effect as a conveyance or bind the land, but shall operate only as a contract
between the parties and as evidence of authority to the Register of Deeds to make
registration.
"The act of registration shall be the operative act to convey or affect the land insofar as
third persons are concerned, and in all cases under this Decree, the registration shall be
 8

made in the office of the Register of Deeds for the province or city where the land
lies."(emphasis supplied)
A person dealing with registered land may thus safely rely on the correctness of the
certificate of title issued therefor, and he is not required to go beyond the certificate to
determine the condition of the property 7 but, where such party has knowledge of a prior
existing interest which is unregistered at the time he acquired a right thereto, his
knowledge of that prior unregistered interest would have the effect of registration as
regards to him. 8
The appellate court was not without substantial basis when it found petitioner to have
had knowledge of the donation at the time it entered into the two agreements with Dr.
Roque. During their negotiation, petitioner, through its representatives, was apprised of
the fact that the subject property actually belonged to respondent.
to convey the impression that the facts are otherwise than, and inconsistent with, those
which the party subsequently attempts to assert; 2) an intent or, at least, an expectation,
that this conduct shall influence, or be acted upon by, the other party; and 3) the
knowledge, actual or constructive, by him of the real facts. 11 With respect to the party
claiming the estoppel, the conditions he must satisfy are: 1) lack of knowledge or of the
means of knowledge of the truth as to the facts in question; 2) reliance, in good faith,
upon the conduct or statements of the party to be estopped; and 3) action or inaction
based thereon of such character as to change his position or status calculated to cause
him injury or prejudice. 12 It has not been shown that respondent intended to conceal the
actual facts concerning the property; more importantly, petitioner has been shown not to
be totally unaware of the real ownership of the subject property. aEHADT
Altogether, there is no cogent reason to reverse the Court of Appeals in its assailed
decision.

It was not shown that Dr. Felipe C. Roque had been an authorized agent of respondent. WHEREFORE, the petition is DENIED, and the decision of the Court of Appeals declaring
the contract of lease and memorandum of agreement entered into between Dr. Felipe C.
In a contract of agency, the agent acts in representation or in behalf of another with the
Roque and Shopper's Paradise Realty & Development Corporation not to be binding on
consent of the latter. 9 Article 1878 of the Civil Code expresses that a special power of
respondent is AFFIRMED. No costs.
attorney is necessary to lease any real property to another person for more than one year.
The lease of real property for more than one year is considered not merely an act of SO ORDERED.
administration but an act of strict dominion or of ownership. A special power of attorney
is thus necessary for its execution through an agent.

The Court cannot accept petitioner's argument that respondent is guilty of laches. Laches,
in its real sense, is the failure or neglect, for an unreasonable and unexplained length of
time, to do that which, by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned or declined to assert
it. 10

Respondent learned of the contracts only in February 1994 after the death of his father,
and in the same year, during November, he assailed the validity of the agreements.
Hardly, could respondent then be said to have neglected to assert his case for an
unreasonable length of time.

Neither is respondent estopped from repudiating the contracts. The essential elements of
estoppel in pais, in relation to the party sought to be estopped, are: 1) a clear conduct
amounting to false representation or concealment of material facts or, at least, calculated