1. Spouses Fernando and Lourdes Viloria vs. Continental Airlines, Inc.

G.R. No. 188288 January 16, 2012

Business Organization – Partnership, Agency, Trust – Elements of Agency – Estoppel

FACTS:
In 1997, while the spouses Viloria were in the United States, they approached Holiday Travel, a travel
agency working for Continental Airlines, to purchase tickets from Newark to San Diego. The travel agent,
Margaret Mager, advised the couple that they cannot travel by train because it is fully booked; that they
must purchase plane tickets for Continental Airlines; that if they won’t purchase plane tickets; they’ll
never reach their destination in time. The couple believed Mager’s representations and so they purchased
two plane tickets worth $800.00.

Later however, the spouses found out that the train trip isn’t fully booked and so they purchased train
tickets and went to their destination by train instead. Then they called up Mager to request for a refund for
the plane tickets. Mager referred the couple to Continental Airlines. As the couple are now in the
Philippines, they filed their request with Continental Airline’s office in Ayala. The spouses Viloria
alleged that Mager misled them into believing that the only way to travel was by plane and so they were
fooled into buying expensive tickets.

Continental Airlines refused to refund the amount of the ticket and so the spouses sued the airline
company. In its defense, Continental Airlines claimed that the ticket sold to them by Mager is non-
refundable; that, if any, they are not bound by the misrepresentations of Mager because there’s no agency
existing between Continental Airlines and Mager.

The trial court ruled in favor of spouses Viloria but the Court of Appeals reversed the ruling of the RTC.

ISSUE: Whether or not a contract of agency exists between Continental Airlines and Mager.

HELD: Yes. All the elements of agency are present, to wit:

there is consent, express or implied of the parties to establish the relationship;

the object is the execution of a juridical act in relation to a third person;
the agent acts as a representative and not for himself, and
the agent acts within the scope of his authority.

The first and second elements are present as Continental Airlines does not deny that it concluded an
agreement with Holiday Travel to which Mager is part of, whereby Holiday Travel would enter into
contracts of carriage with third persons on the airlines’ behalf. The third element is also present as it is
undisputed that Holiday Travel merely acted in a representative capacity and it is Continental Airlines and
not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel on its behalf.
The fourth element is also present considering that Continental Airlines has not made any allegation that
Holiday Travel exceeded the authority that was granted to it.

Continental Airlines also never questioned the validity of the transaction between Mager and the spouses.
Continental Airlines is therefore in estoppels. Continental Airlines cannot be allowed to take an altogether
different position and deny that Holiday Travel is its agent without condoning or giving imprimatur to
whatever damage or prejudice that may result from such denial or retraction to Spouses Viloria, who
relied on good faith on Continental Airlines’ acts in recognition of Holiday Travel’s authority. Estoppel is
primarily based on the doctrine of good faith and the avoidance of harm that will befall an innocent party
due to its injurious reliance, the failure to apply it in this case would result in gross travesty of justice.
2. Sally Yoshizaki vs. Joy Training Center of Aurora, Inc.
GR 174978 Juky 31, 2013

FACTS:
Respondent Joy Training Center of Aurora, Inc. (Joy Training) is a non-stock, non-profit
religious educational institution. It was the registered owner of a parcel of land
designated as Lot No. 125-L and was covered by Transfer Certificate of Title (TCT) No.
T-25334.[4]

On November 10, 1998, the spouses Richard and Linda Johnson sold the real properties,
a Wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio
Yoshizaki. On the same date, a Deed of Absolute Sale[5] and a Deed of Sale of Motor
Vehicle[6] were executed in favor of the spouses Yoshizaki. The spouses Johnson were
members of Joy Training’s board of trustees at the time of sale. On December 7, 1998,
TCT No. T-25334 was cancelled and TCT No. T-26052[7] was issued in the name of the
spouses Yoshizaki.

On December 8, 1998, Joy Training, represented by its Acting Chairperson Reuben V.

Rubio, filed an action for the Cancellation of Sales and Damages with prayer for the
issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction against
the spouses Yoshizaki and the spouses Johnson before the Regional Trial Court of Baler,
Aurora (RTC).

In the complaint, Joy Training alleged that the spouses Johnson sold its properties
without the requisite authority from the board of directors.[10] It assailed the validity of
a board resolution dated September 1, 1998[11] which purportedly granted the spouses
Johnson the authority to sell its real properties. It averred that only a minority of the
board, composed of the spouses Johnson and Alexander Abadayan, authorized the sale
through the resolution.

After the presentation of their testimonial evidence, the spouses Yoshizaki formally
offered in evidence photocopies of the resolution and certification, among others.[17] Joy
Training objected to the formal offer of the photocopied resolution and certification on
the ground that they were not the best evidence of their contents.[18] In an
Order[19] dated May 18, 2004, the RTC denied the admission of the offered copies.

The RTC ruled in favor of the spouses Yoshizaki. It found that Joy Training owned the
real properties. However, it held that the sale was valid because Joy Training authorized
the spouses Johnson to sell the real properties.

The CA upheld the RTC’s jurisdiction over the case but reversed its ruling with respect to
the sale of real properties. It maintained that the present action is cognizable by the RTC
because it involves recovery of ownership from third parties.

It also ruled that the resolution is void because it was not approved by a majority of the
board of trustees. It stated that under Section 25 of the Corporation Code, the basis for
determining the composition of the board of trustees is the list fixed in the articles of
incorporation.
ISSUES:
1) Whether or not the RTC has jurisdiction over the present case; and

2) Whether or not there was a contract of agency to sell the real properties between Joy Training and
the spouses Johnson.

3) Whether or not there was a valid contract of sale of the real properties between Joy Training
and the spouses Yoshizaki.

RULING:

We find the petition unmeritorious.

The RTC has jurisdiction over disputes concerning the application of the Civil Code

Jurisdiction over the subject matter is the power to hear and determine cases of the
general class to which the proceedings before a court belong.[28] It is conferred by law.
The allegations in the complaint and the status or relationship of the parties determine
which court has jurisdiction over the nature of an action.[29] The same test applies in
ascertaining whether a case involves an intra-corporate controversy.[30]

The CA correctly ruled that the RTC has jurisdiction over the present case.

The Supreme Court may review questions of fact in a petition for review on
certiorari when the findings of fact by the lower courts are conflicting

We are aware that the issues at hand require us to review the pieces of evidence presented
by the parties before the lower courts. As a general rule, a petition for review on certiorari
precludes this Court from entertaining factual issues; we are not duty-bound to analyze
again and weigh the evidence introduced in and considered by the lower courts.
However, the present case falls under the recognized exception that a review of the facts
is warranted when the findings of the lower courts are conflicting.[32] Accordingly, we
will examine the relevant pieces of evidence presented to the lower court.

There is no contract of agency between Joy Training and the spouses Johnson to sell the
parcel of land with its improvements

Article 1868 of the Civil Code defines a contract of agency as a contract whereby a
person “binds himself to render some service or to do something in representation or on
behalf of another, with the consent or authority of the latter.” It may be express, or
implied from the acts of the principal, from his silence or lack of action, or his failure to
repudiate the agency, knowing that another person is acting on his behalf without
authority.

The special power of attorney mandated by law must be one that expressly mentions a
sale or that includes a sale as a necessary ingredient of the authorized act. We
unequivocably declared in Cosmic Lumber Corporation v. Court of Appeals[34] that a
special power of attorney must express the powers of the agent in clear and unmistakable
language for the principal to confer the right upon an agent to sell real estate. When there
is any reasonable doubt that the language so used conveys such power, no such
construction shall be given the document.
In the present case, Sally presents three pieces of evidence which allegedly prove that Joy
Training specially authorized the spouses Johnson to sell the real properties: (1) TCT No.
T-25334, (2) the resolution, (3) and the certification. We quote the pertinent portions of
these documents for a thorough examination of Sally’s claimuote the pertinent portions of
the said documents.. this Court becuse es. es Training did not e. TCT No. T-25334,
entered in the Registry of Deeds on March 5, 1998, states:

A parcel of land x x x is registered in accordance with the provisions of the Property

Registration Decree in the name of JOY TRAINING CENTER OF AURORA,
INC., Rep. by Sps. RICHARD A. JOHNSON and LINDA S. JOHNSON, both of legal
age, U.S. Citizen, and residents of P.O. Box 3246, Shawnee, Ks 66203,
U.S.A.[36](emphasis ours)

On the other hand, the fifth paragraph of the certification provides:

Further, Richard A. and Linda J[.] Johnson were given FULL AUTHORITY for ALL
SIGNATORY purposes for the corporation on ANY and all matters and decisions
regarding the property and ministry here. They will follow guidelines set forth according
to their appointment and ministerial and missionary training and in that, they will
formulate and come up with by-laws which will address and serve as governing papers
over the center and corporation. They are to issue monthly and quarterly statements to all
members of the corporation.[37] (emphasis ours)

The resolution states:

We, the undersigned Board of Trustees (in majority) have authorized the sale of land and
building owned by spouses Richard A. and Linda J[.] Johnson (as described in the title
SN No. 5102156 filed with the Province of Aurora last 5th day of March, 1998. These
proceeds are going to pay outstanding loans against the project and the dissolution of the
corporation shall follow the sale. This is a religious, non-profit corporation and no profits
or stocks are issued.[38] (emphasis ours)

The above documents do not convince us of the existence of the contract of agency to sell
the real properties. TCT No. T-25334 merely states that Joy Training is represented by
the spouses Johnson. The title does not explicitly confer to the spouses Johnson the
authority to sell the parcel of land and the building thereon. Moreover, the phrase “Rep.
by Sps. Richard A. Johnson and LINDA S. JOHNSON”[39] only means that the spouses
Johnson represented Joy Training in land registration.

The lower courts should not have relied on the resolution and the certification in
resolving the case. The spouses Yoshizaki did not produce the original documents during
trial. They also failed to show that the production of pieces of secondary evidence falls
under the exceptions enumerated in Section 3, Rule 130 of the Rules of Court.[40] Thus,
the general rule – that no evidence shall be admissible other than the original document
itself when the subject of inquiry is the contents of a document – applies.[41]

Nonetheless, if only to erase doubts on the issues surrounding this case, we declare that
even if we consider the photocopied resolution and certification, this Court will still
arrive at the same conclusion.
We adhere to the CA’s position that the basis for determining the board of trustees’
composition is the trustees as fixed in the articles of incorporation and not the actual
members of the board. The second paragraph of Section 25[43] of the Corporation Code
expressly provides that a majority of the number of trustees as fixed in the articles of
incorporation shall constitute a quorum for the transaction of corporate business.

The contract of sale is unenforceable

Necessarily, the absence of a contract of agency renders the contract of sale

unenforceable;[46] Joy Training effectively did not enter into a valid contract of sale with
the spouses Yoshizaki. Sally cannot also claim that she was a buyer in good faith. She
misapprehended the rule that persons dealing with a registered land have the legal right to
rely on the face of the title and to dispense with the need to inquire further, except when
the party concerned has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry.[47] This rule applies when the ownership
of a parcel of land is disputed and not when the fact of agency is contested.

At this point, we reiterate the established principle that persons dealing with an agent
must ascertain not only the fact of agency, but also the nature and extent of the agent’s
authority. Sally bought the real properties at her own risk; she bears the risk of injury
occasioned by her transaction with the spouses Johnson.

CA decision affirmed, petition denied.

3. Spouses Joselina Alcantara and Antonio Alcantara and Spouses Josefino Rubi and
Anne Distor-Rubi vs. Brigida Nido GR 165133 April 19, 2010

Facts:
Revelen N. Srivastava is the owner of an unregistered land in Cardona, Rizal. Sometime in March 1984,
respondent accepted the offer of petitioners to purchase a 200-square meter portion of Revelen's lot.
Petitioners paid P3,000 as downpayment and the balance was payable on instalment.

Petitioners constructed their houses in 1985. In 1986, with respondent's consent, petitioners occupied an
additional 150 square meters of the lot. By 1987, petitioners had already paid P17,500 before petitioners
defaulted on their instalment payments. On 11 May 1994, Brigida L. Nido, acting as administrator and
attorney-in-fact of Revelen, filed a complaint for recovery of possession with damages and prayer for
preliminary injunction against petitioners.

Issue: Whether or not the contract entered into is valid.

Held:
No, the contract entered into is null and void.

The Supreme Court ruled that according to Article 1318 of the Civil Code, the requisites
for a valid contract are: 1.) consent of the contracting parties; 2.) object certain which is the subject matter
of the contract; 3.) cause of the obligation which is established.

In the case at bar, the respondent did not have the written authority to enter into a
contract to sell the lot. As the consent of Revelen, the real owner of the lot, was not obtained in writing as
by law, no contract was perfected. Hence, the petitioners failed to validly acquire the lot.
5. RALLOS v GO CHAN
G.R. No. L-24332
January 31, 1978

Petitioner: RAMON RALLOS, Administrator of the Estate of CONCEPCION RALLOS

Respodents: FELIX GO CHAN & SONS REALTY CORPORATION and COURT OF APPEALS
Ponente: MUÑOZ PALMA

FACTS:

BACKGROUND OF CASE
This is a case of an attorney-in-fact, Simeon Rallos, who after of his death of his principal, Concepcion
Rallos, sold the latter's undivided share in a parcel of land pursuant to a power of attorney which the
principal had executed in favor. The administrator of the estate went to court to have the sale declared
uneanforceable and to recover the disposed share.

TC granted the relief prayed for, but upon appeal CA uphold the validity of the sale and the complaint.
Hence, this Petition for Review on certiorari.

FACTS OF THE CASE:

Concepcion and Gerundia both surnamed Rallos were sisters and registered co-owners of a parcel of land
known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No.
11116 of the Registry of Cebu. April 21, 1954: the sisters executed a special power of attorney in favor of
their brother, Simeon Rallos, authorizing him to sell for and in their behalf lot 5983.
March 3, 1955: Concepcion Rallos died.

September 12, 1955, Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia in
lot 5983 to Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. The deed of sale was
registered in the Registry of Deeds of Cebu, TCT No. 11118 was cancelled, and a new transfer certificate
of Title No. 12989 was issued in the named of the vendee.

FILING OF ACTION

May 18, 1956: Ramon Rallos as administrator of the Intestate Estate of Concepcion Rallos filed a
complaint praying that:

1. Sale of the undivided share of the deceased Concepcion Rallos in lot 5983 be unenforceable, and
said share be reconveyed to her estate.

2. Certificate of 'title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelled
and another title be issued in the names of the corporation and the "Intestate estate of
Concepcion Rallos" in equal undivided and

3. Plaintiff be indemnified by way of attorney's fees and payment of costs of suit.

Named party defendants were Felix Go Chan & Sons Realty Corporation, Simeon Rallos, and the
Register of Deeds of Cebu, but subsequently, the latter was dropped from the complaint.

The complaint was amended twice; defendant Corporation's Answer contained a crossclaim against its co-
defendant, Simon Rallos while the latter filed third-party complaint against his sister, Gerundia Rallos.
While the case was pending in the trial court, both Simon and his sister Gerundia died and they were
substituted by the respective administrators of their estates.

TC RULING (lateronwasafirmedbySC)
On Plaintiffs Complaint —

1. Declaring the deed of sale null and void insofar as the one-half pro-indiviso share of Concepcion
Rallos in the property in question, — Lot 5983 of the Cadastral Survey of Cebu — is concerned;

2. Ordering the Register of Deeds of Cebu City to cancel Transfer Certificate of Title No.12989
covering Lot 5983 and to issue in lieu thereof another in the names of FELIX GO CHAN & SONS
REALTY CORPORATION and the Estate of Concepcion Rallos in the proportion of one-half (1/2)
share each pro-indiviso;

3. Ordering Felix Go Chan & Sons Realty Corporation to deliver the possession of an undivided one-
half (1/2) share of Lot 5983 to the herein plaintiff;

4. Sentencing the defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, to
pay to plaintiff in concept of reasonable attorney's fees the sum of P1,000.00; and

5. Ordering both defendants to pay the costs jointly and severally.

On GO CHANTS Cross-Claim:
1. Sentencing the co-defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, to
pay to defendant Felix Co Chan & Sons Realty Corporation P5,343.45, representing the price of
one-half (1/2) share of lot 5983;

2. Ordering co-defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, to pay in
concept of reasonable attorney's fees to Felix Go Chan & Sons Realty Corporation P500.00

On Third-Party Complaint of defendant Juan T. Borromeo administrator of Estate of Simeon Rallos,

against

Josefina Rallos special administratrix of the Estate of Gerundia Rallos:

Dismissing the third-party complaint without prejudice to filing either a complaint against the
regular administrator of the Estate of Gerundia Rallos or a claim in the Intestate-Estate of
Cerundia Rallos, covering the same subject-matter of the third-party complaint, at bar.

CA RULING

Felix Go Chan & Sons Realty Corporation appealed to CA from the TC judgment insofar as it set aside
the sale of the one-half (1/2) share of Concepcion Rallos. The appellate tribunal, resolved the appeal in
favour of the appellant corporation sustaining the sale in question. The appellee administrator, Ramon
Rallos, moved for a reconsider of the decision but the same was denied

ISSUE:
Is the sale of the undivided share of Concepcion Rallos in lot 5983 valid although it was executed by the
agent after the death of his principal? – NO
HELD:

IN VIEW OF ALL THE FOREGOING, We set aside the decision of respondent appellate court, and We
affirm en toto
the judgment rendered by then Hon. Amador E. Gomez of the Court of First Instance of Cebu with costs
against
respondent realty corporation at all instances.

RATIO:
CERTAIN PRINCIPLES OF LAW RELEVANT TO AGENCY

It is a basic axiom in civil law embodied in our Civil Code that no one may contract in the name of
another
without being authorized by the latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or the legal representation or
who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly,
by the person on whose behalf it has been executed, before it is revoked by the other contracting party.

Agency is basically personal representative, and derivative in nature. The authority of the agent to act
emanates from the powers granted to him by his principal; his act is the act of the principal if done within
the scope of the authority. Qui facit per alium facit se. "He who acts through another acts himself".

There are various ways of extinguishing agency, but here we are concerned only with one cause — death
of the principal. Paragraph 3 of Art. 1919 of the Civil Code which was taken from Art. 1709 of the
Spanish

Civil Code provides:

ART.1919.Agency is extinguished.
3.By the death, civil interdiction,insanity or insolvency of the principal or of the agent;.

By reason of the very nature of the relationship between Principal and agent, agency is
extinguished by the death of the principal or the agent. This is the law in this jurisdiction.

Manresa commenting on Art. 1709 of the Spanish Civil Code explains that the rationale for the law is
found in the juridical basis of agency, which is representation, them being an integration of the
personality of the principal and that of the agent. It is not possible for the representation to
continue to exist once the death of either is establish.

Pothier agrees with Manresa that by reason of the nature of agency, death is a necessary cause for its
extinction. Laurent says that the juridical tie between the principal and the agent is severed ipso jure upon
the death of either without necessity for the heirs of the fact to notify the agent of the fact of death of the
former

The same rule prevails at common law — the death of the principal effects instantaneous and absolute
revocation of the authority of the agent unless the Power be coupled with an interest. This is the prevalent
rule in American Jurisprudence where it is well-settled that a power without an interest conferred upon an
agent is dissolved by the principal's death, and any attempted execution of the power afterward is
not binding on the heirs or representatives of the deceased.
CASE AT BAR
 Is the general rule provided for in Article 1919 that the death of the principal or of the agent
extinguishes
the agency, subject to any exception, and if so, is the instant case within that exception? That is the
determinative point in issue in this litigation.

 It is the contention of respondent corporation which was sustained by respondent court that
notwithstanding the death of the principal Concepcion Rallos the act of the attorney-in-fact, Simeon
Rallosin selling the former's sham in the property is valid and enforceable inasmuch as the corporation
acted in good faith in buying the property in question.

 Articles 1930 and 1931 of the Civil Code provide the exceptions to the general rule afore-mentioned.
Article 1930 is not involved because admittedly the special power of attorney executed in favor of
Simeon Rallos was not coupled with an interest.

 Article 1931 is the applicable law. Under this provision, an act done by the agent after the death of his
principal is valid and effective only under two conditions

1. That the agent acted without knowledge of the death of the principal and
2. That the third person who contracted with the agent himself acted in good faith.

 Good faith here means that the third person was not aware of the death of the principal at the time he
contracted with said agent.

 These two requisites must concur the absence of one will render the act of the agent invalid and
unenforceable.

 Article 1931, being an exception to the general rule, is to be strictly construed, it is not to be given an
interpretation or application beyond the clear import of its terms for otherwise the courts will be involved
in a process of legislation outside of their judicial function. On the basis of the established knowledge of
Simon Rallos concerning the death of his principal
Concepcion Rallos, Article 1931 of the Civil Code is inapplicable

 In the instant case, it cannot be questioned that the agent, Simeon Rallos, knew of the death of his
principal at the time he sold the latter's share in Lot No. 5983 to respondent corporation. The knowledge
of the death is clearly to be inferred from the pleadings filed by Simon Rallos before the trial court.

 That Simeon Rallos knew of the death of his sister Concepcion is also a finding of fact of the court a
quo and of respondent appellate court when the latter stated that Simon Rallos 'must have known of the
death of his sister, and yet he proceeded with the sale of the lot in the name of both his sisters Concepcion
and Gerundia Rallos without informing appellant (the realty corporation) of the death of the former.

 On the basis of the established knowledge concerning the death of principal, Article 1931 of CC is
inapplicable. The law expressly requires for its application lack of knowledge on the part of the agent of
the death of his principal; it is not enough that the third person acted in good faith.

 Buason&Reyesv.Panuyas: sustained the validity, of a sale made after the death of the principal because
it was not shown that the agent knew of his principal's demise.
 Herera, et al., v. Luy Kim Guan, et al.: plaintiffs presented no proof and there is no indication in the
record, that the agent Luy Kim Guan was aware of the death of his principal at the time he sold the
property. The death of the principal does not render the act of an agent unenforceable, where the latter
had no knowledge of such extinguishment of the agency.

The fact that no notice of the death of the principal was registered on the certificate of title of the
property in the Office of the Register of Deeds, is not fatal to the cause of the estate of the principal

 Another argument advanced by respondent court is that the vendee acting in good faith relied on the
power of attorney which was duly registered on the original certificate of title recorded in the Register of
Deeds of the province of Cebu, that no notice of the death was aver annotated on said certificate of title
by the heirs of the principal and accordingly they must suffer the consequences of such omission.

 A revocation by an act of the principal as a mode of terminating an agency is distinctive from

revocation by
operation of law such as death of the principal, which is similar to the case at bar.

 Revocation by an act of principal as mode of termination(quotingManresa):

If the agency has been granted for the purpose of contracting with certain persons, the
revocation must be made known to them. But if the agency is general in nature, without
reference to particular person with whom the agent is to contract, it is sufficient that the
principal exercise due diligence to make the revocation of the agency publicity known. In this
case, all acts, executed with third persons who contracted in good faith, without knowledge of
the revocation, are valid.

 Revocation by operation of law (applicabletocase):

By reason of the very nature of the relationship between principal and agent, agency is
extinguished ipso jure upon the death of either principal or agent.

Although a revocation of a power of attorney to be effective must be communicated to the

parties concerned, yet a revocation by operation of law, such as by death of the principal is, as a
rule, instantaneously effective inasmuch as "by legal fiction the agent's exercise of authority is
regarded as an execution of the principal's continuing will.

With death, the principal's will ceases or is the of authority is extinguished.

The Civil Code does not impose a duty on the heirs to notify the agent of the death of
the principal. What the Code provides in Article 1932 is that, if the agent die his heirs must
notify the principal thereof, and in the meantime adopt such measures as the
circumstances may demand in the interest of the latter.

Whatever conflict of legal opinion was generated by Cassidayv. McKenzie in American jurisprudence,
no such conflict exists in our own

 One last point raised by respondent corporation in support of the appealed decision is an 1842 ruling of
the Supreme Court of Pennsylvania in Cassiday v. McKenzie wherein payments made to an agent after
the death of the principal were held to be "good", "the parties being ignorant of the death".
 Cassiday v McKenzie: that a payment may be good today, or bad tomorrow, from the accident
circumstance of the death of the principal, which he did not know, and which by no possibility could he
know? It would be unjust to the agent and unjust to the debtor. In the civil law, the acts of the agent,
done bona fide in ignorance of the death of his principal are held valid and binding upon the heirs of the
latter. The same rule holds in the Scottish law, and I cannot believe the common law is so unreasonable...

 The above-cited case represents the minority view in American jurisprudence and stands alone among
common law authorities as later on stated in ClaytonvMeretand TraversvCrane

 Our statute, the Civil Code, expressly provides for two exceptions to the general rule that death of the
principal revokes ipso jure the agency, to wit: (1) that the agency is coupled with an interest (Art 1930),
and (2) that the act of the agent was executed without knowledge of the death of the principal and the
third person who contracted with the agent acted also in good faith (Art. 1931).

 Exception No. 2 is the doctrine followed in Cassiday, and again we stress the indispensable
requirement that the agent acted without knowledge or notice of the death of the principal. In the case
before Us, the agent Ramon Rallos executed the sale notwithstanding notice of the death of his principal.

Accordingly, the agent's act is unenforceable against the estate of his principal.
The case is covered expressly by a provision of law on agency and cannot be interpreted contrary to its
tenor or paralleled to that of laws on land registration

 Holding that the good faith of a third person in said with an agent affords the former sufficient
protection, respondent court drew a "parallel" between the instant case and that of an innocent purchaser
for value of a land, stating that if a person purchases a registered land from one who acquired it in bad
faith — even to the extent of foregoing or falsifying the deed of sale in his favor — the registered owner
has no recourse against such innocent purchaser for value but only against the forger.

 Respondent cites case of Blondeau,etal.,v. Nanoand Valejo which stated that an executed transfer of
registered lands placed by the registered owner thereof in the hands of another operates as a
representation to a third party that the holder of the transfer is authorized to deal with the land. As
between two innocent persons, one of whom must suffer the consequence of a breach of trust, the one
who made it possible by his act of coincidence bear the loss.

 The Blondeau decision, however, is not on all fours with the case before Us because here We are
confronted with one who admittedly was an agent of his sister and who sold the property of the latter
after her death with full knowledge of such death. The situation is expressly covered by a provision of law
on agency the terms of which are clear and unmistakable leaving no room for an interpretation contrary to
its tenor, This is in the same manner that the ruling in Blondeau found a basis in Section 55 of the Land
Registration Law.