No.
Case Escra
1 G.R. No. 107282 March 16, 1994
THE MANILA REMNANT CO.,
INC., petitioner,
vs.
HON. COURT OF APPEALS,
AND SPS. OSCAR C.
VENTANILLA AND CARMEN
GLORIA DIAZ, respondents.
digest
Garnishment is an attachment by means of which the plaintiff seeks to
subject to his claim property of the defendant in the hands of a third
person or money owed to such third person or garnishee to the
defendant.Garnishment is a species of attachment for reaching credits
belonging to the judgment debtor and owing to him from a stranger to
the litigation. It is an attachment by means of which the plaintiff seeks to
subject to his claim property of the defendant in the hands of a third
person or money owed by such third person or garnishee to the
defendant. The rules on attachment also apply to garnishment
proceedings.
Same; Same; When garnishment order shall be lifted.A garnishment
order shall be lifted if it is established that: (a) the party whose accounts
have been garnished has posted a counterbond or has made the requisite
cash deposit; (b) the order was improperly or irregularly issued as where
there is no ground for garnishment or the affidavit and/ or bend filed
therefor are defective or insufficient; (c) the property attached is exempt
from execution, hence exempt from preliminary attachment; or (d) the
judgment is rendered against the attaching or garnishing creditor.
Same; Same; Partial execution of judgment is not a ground for the
discharge of garnishment order. Neither does petitioners willingness to
reimburse render the garnishment order unnecessary.Partial execution
of the judgment is not included in the above enumeration of the legal
grounds for the discharge of a garnishment order. Neither does the
petitioners willingness to reimburse render the garnishment order
unnecessary. As for the counterbond, the lower court did not err when it
fixed the same at P500,000.00. As correctly pointed out by the
respondent court, that amount corresponds to the current fair market
value of the property in litigation and was a reasonable basis for
determining the amount of the counterbond.
Same; Upon refusal of the petitioner to execute absolute deed of sale, the
court may direct the act to be done at the cost of the disobedient party
by some other person appointed by the court and the act when so done
shall have the like effect as is done by the party.Regarding the refusal of
the petitioner to execute the absolute deed of sale, Section 10 of Rule 39
of the Rules of Court reads as follows: Sec. 10. Judgment for specific acts;
vesting titleIf a judgment directs a party to execute a conveyance of
land, or to deliver deeds or other documents, or to perform any other
specific act, and the party fails to comply within the time specified, the
court may direct the act to be done at the cost of the disobedient party
by some other person appointed by the court and the act when so done
shall have like effect as if done by the party. If real or personal property is
within the Philippines, the court in lieu of directing a conveyance thereof
may enter judgment divesting the title of any party and vesting it in
others and such judgment shall have the force and effect of a conveyance
executed in due form of law.
Civil Law; Consignation; Upon justified refusal of the petitioner to accept
payment of the balance of the contract price, the remedy of the
respondent is consignation.Against the unjustified refusal of the
petitioner to accept payment of the balance of the contract price, the
remedy of the respondents is consignation, conformably to the following
provisions of the Civil Code: Art. 1256. If the creditor to whom tender of
FACTS:
Petitioner Manila Remnant Co., Inc. is the owns parcels of land situated in Quezon City and
constituting the Capital Homes Subdivision Nos. I and II. Manila Remnant and A.U. Valencia & Co. Inc.
entered into a contract entitled "Confirmation of Land Development and Sales Contract" to formalize a
prior verbal agreement whereby A.U. Valencia and Co., Inc. was to develop the aforesaid subdivision for a
consideration of 15.5% commision. At that time the President of both A.U. Valencia and Co. Inc. and
Manila Remnant Co., Inc. was Artemio U. Valencia. Manila Remnant thru A.U. Valencia and Co. executed
two "contracts to sell" covering Lots 1 and 2 of Block 17 in favor of Oscar C. Ventanilla and Carmen Gloria
Diaz. Ten days after the signing of the contracts with the Ventanillas, Artemio U. Valencia, without the
knowledge of the Ventanilla couple, sold Lots 1 and 2 of Block 17 again, to Carlos Crisostomo, one of his
sales agents without any consideration. Artemio Valencia then transmitted the fictitious Crisostomo
contracts to Manila Remnant while he kept in his files the contracts to sell in favor of the Ventanillas. All
the amounts paid by the Ventanillas were deposited in Valencia's bank account. Upon orders of Artemio
Valencia, the monthly payments of the Ventanillas were remitted to Manila Remnant as payments of
Crisostomo for which the former issued receipts in favor of Crisostomo.
General Manager Karl Landahl, wrote Artemio Valencia informing him that Manila Remnant was
terminating its existing collection agreement with his firm on account of the considerable amount of
discrepancies and irregularities. As a consequence, Artemio Valencia was removed as President by the
Board of Directors of Manila Remnant. Therefore, Valencia stopped transmitting Ventanilla's monthly
installments. A.U. Valencia and Co. sued Manila Remnant to impugn the abrogation of their agency
agreement. The court ordered all lot buyers to deposit their monthly amortizations with the court. But
A.U. Valencia and Co. wrote the Ventanillas that it was still authorized by the court to collect the monthly
amortizations and requested them to continue remitting their amortizations with the assurance that said
payments would be deposited later in court.
Thereafter, the trial court issued an order prohibiting A.U. Valencia and Co. from collecting the monthly
installments. Valencia complied with the court's order of submitting the list of all his clients but said
list excluded the name of the Ventanillas. Manila Remnant caused the publication in the Times Journal of
a notice cancelling the contracts to sell of some lot buyers. To prevent the effective cancellation of their
contracts, Artemio Valencia filed a complaint for specific performance with damages against Manila
Remnant
The Ventanillas, believing that they had already remitted enough money went directly to Manila Remnant
and offered to pay the entire outstanding balance of the purchase price. Unfortunately, they discovered
from Gloria Caballes that their names did not appear in the records of A.U. Valencia and Co. as lot buyers.
Also, Manila Remnant refused the offer of the Ventanillas to pay for the remainder of the contract price.
The Ventanillas then commenced an action for specific performance, annulment of deeds and damages
against Manila Remnant, A.U. Valencia and Co. and Carlos Crisostomo.
The trial court found that Manila Remnant could have not been dragged into this suit without the
fraudulent manipulations of Valencia. Subsequently, Manila Remnant and A.U. Valencia and Co. elevated
the lower court's decision to the Court of Appeals through separate appeals. On October 13, 1987, the
Appellate Court affirmed in toto the decision of the lower court. Reconsideration sought by petitioner
Manila Remnant was denied, hence the instant petition.
ISSUE:
Whether or not petitioner Manila Remnant should be held solidarily liable together with A.U.
Valencia and Co. and Carlos Crisostomo for the payment of moral, exemplary damages and attorney's fees
in favor of the Ventanillas
HELD:
YES. In the case at bar, the Valencia realty firm had clearly overstepped the bounds of its authority
as agent and for that matter, even the law when it undertook the double sale of the disputed lots. Such
being the case, the principal, Manila Remnant, would have been in the clear pursuant to Article 1897 of the
Civil Code which states that "(t)he agent who acts as such is not personally liable to that party with whom
he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such
 payment has been made refuses without just cause to accept it, the
debtor shall be released from responsibility by the consignation of the
thing or sum due. x x x Art. 1258. Consignation shall be made by
depositing the things due at the disposal of the judicial authority, before
whom the tender of payment shall be proved, in a proper case, and the
announcement of the consignation in other cases. The consignation
having been made, the interested parties shall also be notified thereof.
Art. 1260. Once the consignation has been duly made, the debtor may ask
the judge to order the cancellation of the obligation.
Same; Same; Upon consignation of the sum due, trial court may enter
judgment canceling the title of the petitioner over the property and
transferring the same to the respondents.Accordingly, upon
consignation by the Ventanillas of the sum due, the trial court may enter
judgment canceling the title of the petitioner over the property and
transferring the same to the respondents. This judgments shall have the
same force and effect as a conveyance duly executed in accordance with
the requirements of the law. Manila Remnant Co., Inc. vs. Court of
Appeals, 231 SCRA 281, G.R. No. 107282 March 16, 1994
2
Actions; Appeals; Evidence; Factual findings of the trial court, when
[G.R. No. 153743. March 18, affirmed by the Court of Appeals, are binding on the Supreme Court.It
2005]
is a well-established principle that factual findings of the trial court, when
affirmed by the Court of Appeals, are binding on this Court. Petitioner has
NORMA B.
given this Court no cogent reason to deviate from this rule; on the
DOMINGO, petitioner,
contrary, the findings of the courts a quo are amply supported by the
vs. YOLANDA ROBLES; and
evidence on record.
MICHAEL MALABANAN
ROBLES, MARICON
MALABANAN ROBLES, Evidence; Notarial Law; Presumptions; A notarized instrument enjoys a
MICHELLE MALABANAN prima facie presumption of authenticity and due executionclear and
ROBLES, All Minors convincing evidence must be presented to overcome such legal
Represented by Their Mother, presumption.Petitioner claims that her signature and that of her
husband were forged in the Deed of Absolute Sale transferring the
YOLANDA
ROBLES, respondents. property from the Domingo spouses to respondent. Relying on the
general rule that a forged deed is void and conveys no title, she assails the
validity of the sale. It is a well-settled rule, however, that a notarized
instrument enjoys a prima facie presumption of authenticity and due
execution. Clear and convincing evidence must be presented to overcome
such legal presumption. Forgery cannot be presumed; hence, it was
incumbent upon petitioner to prove it. This, she failed to do.
Same; Bare allegations, unsubstantiated by evidence, are not equivalent
to proof.Petitioner also failed to convince the trial court that the person
with whom Respondent Yolanda Robles transacted was in fact not
Valentino Domingo. Except for her insistence that her husband was out of
the country, petitioner failed to present any other clear and convincing
evidence that Valentino was not present at the time of the sale. Bare
allegations, unsubstantiated by evidence, are not equivalent to proof.
Same; Sales; Presumptions; Without a clear and persuasive substantiation
of bad faith, a presumption of good faith in favor of the buyer stands.
Petitioner now stresses the issue of good faith on the part of
respondents. In the absence of a finding of fraud and a consequent
finding of authenticity and due execution of the Deed of Absolute Sale, a
party sufficient notice of his powers." However, the unique relationship existing between the principal and
the agent at the time of the dual sale must be underscored. Bear in mind that the president then of both
firms was Artemio U. Valencia, the individual directly responsible for the sale scam. Hence, despite the
fact that the double sale was beyond the power of the agent, Manila Remnant as principal was chargeable
with the knowledge or constructive notice of that fact and not having done anything to correct such an
irregularity was deemed to have ratified the same. More in point, we find that by the principle of estoppel,
Manila Remnant is deemed to have allowed its agent to act as though it had plenary powers.
Article 1911 of the Civil Code provides: "Even when the agent has exceeded his authority,
the principal is solidarily liable with the agent if the former allowed the latter to act as
though he had full powers." In such a situation, both the principal and the agent may be considered
as joint feasors whose liability is joint and solidary (Verzosa vs. Lim, 45 Phil. 416). In essence, therefore,
the basis for Manila Remnant's solidary liability is estoppel which, in turn, is rooted in the principal's
neglectfulness in failing to properly supervise and control the affairs of its agent and to adopt the needed
measures to prevent further misrepresentation. As a consequence, Manila Remnant is considered
estopped from pleading the truth that it had no direct hand in the deception employed by its agent. That
the principal might not have had actual knowledge of the agent's misdeed is of no moment.
Domingo vs. RoblesFacts:Petitioner wants to dispose her property located in Marikina. Bacani
volunteered to act as petitioner's agent inselling the lot. Petitioner delivered her owner's copy of
TCT to Bacani. Thereafter, the TCT was said to have beenlost. In its reconstitution, petitioner gave
Bacani all her receipts of payment for real estate taxes. Bacani also askedpetitioner to sign what
she recalled was a record of exhibits. Petitioner waited patiently but Bacani did not showup any
more. Later, petitioner visited the lot and was surprised to see the respondents starting to build a
house onthe subject lot.Verification with ROD revealed that the lost title has already been
reconstituted and cancelled with the registrationof deed of sale executed by the petitioner in favor
of the respondent. A transfer of certificate of title was alsoissued to the respondent.Petitioner
claimed not to have met any of the respondents nor having signed any sale over the property in
favor ofanybody. Petitioner alleged that the Deed of Absolute Sale is a forgery and therefore could
not validly transferownership of the lot to the respondents.Respondent contented that she is a
buyer in good faith and for value; that the lot was offered to them by Bacani,as the agent of the
petitioner. That after some time when they were already prepared to buy the lot, Bacaniintroduced
to them the supposed owners and agreed on the sale. Bacani and the introduced seller presented
aDeed of Absolute Sale
already signed by the petitioner needing only respondents signature. That she paid full purchase
price and the
original of the owner's duplicate of Transfer Certificate of Title was given to her.Petitioner filed a
case for the nullity
and reconveyance. RTC dismiss the complaint. CA affirmed lower courts
decision.Issue:Whether or not the petitioner is entitled to her claims.Held:No.Notarized instrument
enjoys a prima facie presumption of authenticity and due execution. Clear and convincingevidence
must be presented to overcome such legal presumption. Forgery cannot be presumed. Bare
allegations,unsubstantiated by evidence, are not equivalent to proof. ITC, it was incumbent upon
petitioner to prove herallegations. However, the petitioner failed to do so.The sale was admittedly
made with the aid of Bacani, petitioner's agent, who had with him the original of theowner's
duplicate Certificate of Title to the property, free from any liens or encumbrances. The signatures
ofSpouses Domingo, the registered owners, appear on the Deed of Absolute Sale. Petitioner's
husband met withRespondent Yolanda Robles and received payment for the property.The Torrens
 discussion of whether respondents were purchasers in good faith is Act requires, as a prerequisite to registration, the production of the owner's certificate of title
wholly unnecessary. Without a clear and persuasive substantiation of bad and theinstrument of conveyance. The registered owner who places in the hands of another an
faith, a presumption of good faith in their favor stands. executed document oftransfer of registered land effectively represents to a third party that the
holder of such document is authorized todeal with the property.
Same; Same; Land Titles; The registered owner who places in the hands of
another an executed document of transfer of registered land effectively
represents to a third party that the holder of such document is authorized
to deal with the property.The sale was admittedly made with the aid of
Bacani, petitioners agent, who had with him the original of the owners
duplicate Certificate of Title to the property, free from any liens or
encumbrances. The signatures of Spouses Domingo, the registered
owners, appear on the Deed of Absolute Sale. Petitioners husband met
with Respondent Yolanda Robles and received payment for the property.
The Torrens Act requires, as a prerequisite to registration, the production
of the owners certificate of title and the instrument of conveyance. The
registered owner who places in the hands of another an executed
document of transfer of registered land effectively represents to a third
party that the holder of such document is authorized to deal with the
property. Domingo vs. Robles, 453 SCRA 812, G.R. No. 153743 March 18,
2005
3 G.R. No. 88539 October 26,
1993
Civil Law; Agency; One who clothes another with apparent authority as FACTS: Kue Cuison is a sole proprietorship engaged in the purchase and sale of newsprint, bond paper
KUE CUISON, doing business his agent and holds him out to the public as such cannot be permitted to and scrap.
under the firm name and deny the authority of such person to act as his agent to the prejudice of
style"KUE CUISON PAPER innocent third parties dealing with such person in good faith and in the Valiant Investment Associates delivered various kinds of paper products to a certain Tan. The deliveries
SUPPLY," petitioner, honest belief that he is what he appears to be.As to the merits of the were made by Valiant pursuant to orders allegedly placed by Tiac who was then employed in the Binondo
vs. case, it is a well-established rule that one who clothes another with office of petitioner. Upon delivery, Tan paid for the merchandise by issuing several checks payable to cash
THE COURT OF APPEALS, apparent authority as his agent and holds him out to the public as such at the specific request of Tiac. In turn, Tiac issued nine (9) postdated checks to Valiant as payment for the
VALIANT INVESTMENT cannot be permitted to deny the authority of such person to act as his paper products. Unfortunately, sad checks were later dishonored by the drawee bank.
ASSOCIATES, respondents. agent, to the prejudice of innocent third parties dealing with such person
Thereafter, Valiant made several demands upon petitioner to pay for the merchandise in question,
in good faith and in the honest belief that he is what he appears to be
claiming that Tiac was duly authorized by petitioner as the manager of his Binondo office, to enter into the
(Macke, et al. v. Camps, 7 Phil. 553 [1907]; Philippine National Bank v. questioned transactions with Valiant and Tan. Petitioner denied any involvement in the transaction
Court of Appeals, 94 SCRA 357 [1979]). From the facts and the evidence entered into by Tiac and refused to pay Valiant.
on record, there is no doubt that this rule obtains. The petition must
therefore fail. Left with no recourse, private respondent filed an action against petitioner for the collection of sum of
money representing the price of the merchandise. After due hearing, the trial court dismissed the
Same; Same; Even when the agent has exceeded his authority, the complaint against petitioner for lack of merit. On appeal, however, the decision of the trial court was
principal is solidarily liable with the agent if the former allowed the latter modified, but was in effect reversed by the CA. CA ordered petitioner to pay Valiant with the sum plus
to act as though he had full powers.Taken in this light, petitioner is interest, AF and costs.
liable for the transaction entered into by Tiu Huy Tiac on his behalf. Thus,
even when the agent has exceeded his authority, the principal is solidarily ISSUE: WON Tiac possessed the required authority from petitioner sufficient to hold the latter liable for
liable with the agent if the former allowed the latter to act as though he the disputed transaction
had full powers (Article 1911 Civil Code), as in the case at bar.

Same; Estoppel; A party cannot be allowed to go back on his own acts and
representations to the prejudice of the other party who in good faith HELD:
relied upon them.Tiu Huy Tiac, therefore, by petitioners own
representations and manifestations, became an agent of petitioner by
estoppel. Under the doctrine of estoppel, an admission or representation
is rendered conclusive upon the person making it, and cannot be denied YES
or disproved as against the person relying thereon (Article 1431, Civil
Code of the Philippines). A party cannot be allowed to go back on his own
acts and representations to the prejudice of the other party who, in good
faith, relied upon them. As to the merits of the case, it is a well-established rule that one who clothes another with apparent
authority as his agent and holds him out to the public as such cannot be permitted to deny the authority of

4 G.R. No. 137686 February
8, 2000
RURAL BANK OF MILAOR
(CAMARINES SUR), petitioner,
vs.
FRANCISCA OCFEMIA,
ROWENA BARROGO, MARIFE
O. NIO, FELICISIMO
OCFEMIA, RENATO OCFEMIA
JR, and WINSTON
OCFEMIA, respondents.
Same; Same; Same; As between two innocent parties, the one who made
it possible for the wrong to be done should be the one to bear the
resulting loss.Finally, although it may appear that Tiu Huy Tiac
defrauded his principal (petitioner) in not turning over the proceeds of
the transaction to the latter, such fact cannot in any way relieve nor
exonerate petitioner of his liability to private respondent. For it is an
equitable maxim that as between two innocent parties, the one who
made it possible for the wrong to be done should be the one to bear the
resulting loss. Cuison vs. Court of Appeals, 227 SCRA 391, G.R. No. 88539
October 26, 1993
Civil Law; Agency; Estoppel; A bank is liable to innocent third persons
where representation is made in the course of its normal business by an
agent even though such agent is abusing her authority.Tena had
previously transacted business on behalf of the bank, and the latter had
acknowledged her authority. A bank is liable to innocent third persons
where representation is made in the course of its normal business by an
agent like Manager Tena, even though such agent is abusing her
authority. Clearly, persons dealing with her could not be blamed for
believing that she was authorized to transact business for and on behalf
of the bank.
Same; Same; Same; Bank is estopped from questioning the authority of
the bank manager to enter into the contract of sale.In this light, the
bank is estopped from questioning the authority of the bank manager to
enter into the contract of sale. If a corporation knowingly permits one of
its officers or any other agent to act within the scope of an apparent
authority, it holds the agent out to the public as possessing the power to
such person to act as his agent, to the prejudice of innocent third parties dealing with such person in good
faith and in the honest belief that he is what he appears to be
It matters not whether the representations are intentional or merely negligent so long as innocent, third
persons relied upon such representations in good faith and for value. Article 1911 of the Civil Code
provides:
Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the
former allowed the latter to act as though he had full powers.
The above-quoted article is new. It is intended to protect the rights of innocent persons. In such a
situation, both the principal and the agent may be considered as joint tortfeasors whose liability is joint
and solidary.
It is evident from the records that by his own acts and admission, petitioner held out Tiac to the public as
the manager of his store in Binondo. More particularly, petitioner explicitly introduced to Villanueva,
Valiants manager, as his (petitioners) branch manager as testified to by Villanueva. Secondly, Tan, who
has been doing business with petitioner for quite a while, also testified that she knew Tiac to be the
manager of the Binondo branch. Even petitioner admitted his close relationship with Tiu Huy Tiac when
he said that they are like brothers There was thus no reason for anybody especially those transacting
business with petitioner to even doubt the authority of Tiac as his manager in the Binondo branch.
Tiac, therefore, by petitioners own representations and manifestations, became an agent of petitioner by
estoppel, an admission or representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon (Article 1431, Civil Code of the Philippines). A
party cannot be allowed to go back on his own acts and representations to the prejudice of the other party
who, in good faith, relied upon them. Taken in this light,. petitioner is liable for the transaction entered
into by Tiac on his behalf. Thus, even when the agent has exceeded his authority, the principal is solidarily
liable with the agent if the former allowed the latter to fact as though he had full powers (Article 1911 Civil
Code), as in the case at bar.
Finally, although it may appear that Tiac defrauded his principal (petitioner) in not turning over the
proceeds of the transaction to the latter, such fact cannot in any way relieve nor exonerate petitioner of his
liability to private respondent. For it is an equitable maxim that as between two innocent parties, the one
who made it possible for the wrong to be done should be the one to bear the resulting loss
FACTS: Several parcels of land were mortgaged by the respondents during the lifetime of the
respondents grandparents to the Rural bank of Milaor as shown by the Deed of Real Estate Mortgage and
the Promissory Note. Spouses Felicisimo Ocfemia and Juanita Ocfemia, one of the respondents, were not
able to redeem the mortgaged properties consisting of seven parcels of land and so the mortgage was
foreclosed and thereafter ownership was transferred to the petitioner bank. Out of the seven parcels of
land that were foreclosed, five of them are in the possession of the respondents because these five parcels
of land were sold by the petitioner bank to the respondents as evidenced by a Deed of Sale. However, the
five parcels of land cannot be transferred in the name of the parents of Merife Nino, one of the
respondents, because there is a need to have the document of sale registered. The Register of deeds,
however, said that the document of sale cannot be registered without the board resolution of the petitioner
bank confirming both the Deed of sale and the authority of the bank manager, Fe S. Tena, to enter such
transaction.
The petitioner bank refused her request for a board resolution and made many alibis. Respondents
initiated the present proceedings so that they could transfer to their names the subject five parcel of land
and subsequently mortgage said lots and to use the loan proceeds for the medical expenses of their ailing
mother.
ISSUE: May the Board of Directors of a rural banking corporation be compelled to confirm a deed of

5 G.R. No.
160346 August 25,
2009
PURITA PAHUD, SOLEDAD
PAHUD, and IAN LEE
CASTILLA (represented by
Mother and Attorney-in-Fact
VIRGINIA
CASTILLA), Petitioners,
vs.
COURT OF APPEALS,
SPOUSES ISAGANI
BELARMINO and LETICIA
OCAMPO, EUFEMIA SAN
AGUSTIN-MAGSINO, ZENAIDA
SAN AGUSTIN-McCRAE,
MILAGROS SAN AGUSTIN-
FORTMAN, MINERVA SAN
AGUSTIN-ATKINSON,
FERDINAND SAN AGUSTIN,
RAUL SAN AGUSTIN,
ISABELITA SAN AGUSTIN-
LUSTENBERGER and VIRGILIO
SAN AGUSTIN, Respondents.
do those acts; thus, the corporation will, as against anyone who has in
good faith dealt with it through such agent, be estopped from denying
the agents authority. Rural Bank of Milaor (Camarines Sur) vs. Ocfemia,
325 SCRA 99, G.R. No. 137686 February 8, 2000
Civil Law; Agency; Special Power of Attorney; A special power of attorney
is necessary for an agent to enter into a contract by which the ownership
of an immovable property is transmitted or acquired, either gratuitously
or for a valuable consideration.Under Article 1878, a special power of
attorney is necessary for an agent to enter into a contract by which the
ownership of an immovable property is transmitted or acquired, either
gratuitously or for a valuable consideration. Such stringent statutory
requirement has been explained in Cosmic Lumber Corporation v. Court
of Appeals, 265 SCRA 168 (1996).
Same; Same; Same; Absence of a written authority to sell a piece of land
is, ipso jure, void, precisely to protect the interest of an unsuspecting
owner from being prejudiced by the unwarranted act of another.We
have repeatedly held that the absence of a written authority to sell a
piece of land is, ipso jure, void, precisely to protect the interest of an
unsuspecting owner from being prejudiced by the unwarranted act of
another.
Same; Sales; A purchaser of a real property is not required to make any
further inquiry beyond what the certificate of title indicates on its face.
But the rule excludes those who purchase with knowledge of the defect in
the title of the vendor or of facts sufficient to induce a reasonable and
prudent person to inquire into the status of the property.The
Belarminos, for their part, cannot argue that they purchased the property
from Virgilio in good faith. As a general rule, a purchaser of a real
property is not required to make any further inquiry beyond what the
certificate of title indicates on its face. But the rule excludes those who
purchase with knowledge of the defect in the title of the vendor or of
facts sufficient to induce a reasonable and prudent person to inquire into
the status of the property. Such purchaser cannot close his eyes to facts
which should put a reasonable man on guard, and later claim that he
acted in good faith on the belief that there was no defect in the title of
the vendor. His mere refusal to believe that such defect exists, or his
obvious neglect by closing his eyes to the possibility of the existence of a
defect in the vendors title, will not make him an innocent purchaser for
value, if afterwards it turns out that the title was, in fact, defective. In
such a case, he is deemed to have bought the property at his own risk,
and any injury or prejudice occasioned by such transaction must be borne
by him Pahud vs. Court of Appeals, 597 SCRA 13, G.R. No. 160346 August
25, 2009
absolute sale of real property owned by the corporation which deed of sale was executed by the bank
manager without prior authority of the board of directors of the rural banking corporation?
HELD: YES. The bank acknowledges, by its own acts or failure to act, the authority of Fe S. Tena to enter
into binding contracts. After the execution of the Deed of Sale, respondents occupied the properties in
dispute and paid the real estate taxes. If the bank management believed that it had title to the property, it
should have taken measured to prevent the infringement and invasion of title thereto and possession
thereof. Likewise, Tena had previously transacted business on behalf of the bank, and the latter had
acknowledged her authority. A bank is liable to innocent third persons where representation is made in
the course of its normal business by an agent like Manager Tena even though such agent is abusing her
authority. Clearly, persons dealing with her could not be blamed for believing that she was authorized to
transact business for and on behalf of the bank.
spouses Pedro San Agustin and Agatona Genil were able to acquire a 246-square meter parcel of
landsituated in Barangay Anos,- Both died intestate, survived by their eight (8) children: respondents
Eufemia, Raul, Ferdinand, Zenaida,Milagros, Minerva, Isabelita and Virgilio.-1
992,
Eufemia, Ferdinand and Raul executed a Deed of Absolute Sale of UndividedShares
5
conveying in favor of petitioners
(
the Pahuds
, for brevity) their respective shares from the lotthey inherited from their deceased parents
for P525,000.00-
Eufemia also signed the deed on behalf of
her four (4) other co-heirs
, namely:
Isabelita on the basis of a special power of attorney executed onSeptember 28, 1991 and also for
Milagros, Minerva, and Zenaida but without their apparent writtenauthority.
8
The deed of sale was also not notarized.- When Eufemia and her co-heirs drafted an extra-judicial
settlement of estate to facilitate the transfer of thetitle to the Pahuds,
Virgilio refused to sign it.
15
-
Virgilios co
-heirs filed a complaint
16
for judicial partition of the subject property before the RTCIn the course of the proceedings for judicial
partition, a Compromise Agreement
17
was signed withseven (7) of the co-heirs agreeing to sell their undivided shares to Virgilio for
P700,000.00.
-The trial court did however, not approve compromise agreement
. Eufemia and her six (6) co-heirs, refused to sign the agreement because he knew of the previous sale
made to the Pahud.
-On December 1, 1994, Eufemia acknowledged having received P700,000.00 from Virgilio.
Virgilio then sold the entire property to spouses Isagani Belarmino and Leticia Ocampo (Belarminos)-
Belarminos immediately constructed a building on the subject property.-Pahuds immediately confronted
Eufemia who confirmed to them that Virgilio had sold the property to theBelarminos.-Pahuds filed a
complaint in intervention
in the pending case for judicial partition.
1avvphil
After trial, the RTC upheld the validity of the sale to petitioners-sale of the 7/8 portion of the property

6 Casor vs. rickards 5 phil 639
1.DEPOSIT; AGENT AND PRINCIPAL.When money is received as a
deposit by an agent, and that money is by the agent turned over to his
principal, with notice that it is the money of the depositor, the principal is
bound to deliver it to the depositor, even if his agent was not authorized
to receive such deposits.
2.BOOKS IN EVIDENCE.When a witness has testified that he has seen
cover -declaring the defendant Virgilio San Agustin and the Third-Party defendants spouses Isagani
andLeticia Belarmino as in bad faith in buying the portion of the property already sold by the
plaintiffsrespondents appealed the decision to the CA arguing, in the main, that the sale made by Eufemia
for and onbehalf of her other co-heirs to the Pahuds should have been declared void and inexistent for
want of awritten auth-REVERSED and SET ASIDE, and a new one entered, as follows:Declaring the sale
of appellant Virgilio San Agustin to appellants spouses, Isagani and Leticia Belarmino[,]as valid and
binding
Issue: The status of the sale of the subject property by Eufemia and her co-heirs to the Pahuds Article
1874 of the Civil Code plainly provides: Art. 1874. When a sale of a piece of land or any interest therein
is through an agent, the authority of thelatter shall be in writing; otherwise, the sale shall be void. Also,
under Article 1878,
a special power of attorney is necessary for an agent to enter into a contract bywhich the ownership of
an immovable property is transmitted or acquired, either gratuitously or for avaluable consideration. A
special power of attorney is necessary to enter into any contract by which the ownership of an
immovableis transmitted or acquired either gratuitously or for a valuable considerationFor the principal to
confer the right upon an agent to sell real estate, a power of attorney must so expressthe powers of the
agent in clear and unmistakable language
Based on the foregoing, it is not difficult to conclude, in principle, that the sale made by Eufemia,
Isabelitaand her two brothers to the Pahuds sometime in 1992 should be valid only with respect to the
4/8 portion of the subject property. The sale with respect to the 3/8 portion, representing the shares
of Zenaida, Milagros,and Minerva, is void because Eufemia could not dispose of the interest of her co-
heirs in the said lot absentany written authority from the latter, as explicitly required by law. This was, in
fact, the ruling of the CA.
While the sale with respect to the 3/8 portion is void by express provision of law and not
susceptibleto ratification,
we nevertheless uphold its validity on the basis of the common law principle ofestoppel.
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person
makingit, and cannot be denied or disproved as against the person relying thereon.True, at the time of the
sale to the Pahuds, Eufemia was not armed with the requisite special power of attorney to dispose of the
3/8 portion of the property.however, they admitted that they had indeed sold 7/8 of the property to the
Pahuds sometime in1992.
33
Thus, the previous denial was superseded, if not accordingly amended, by their
subsequentadmission.hey opted to remain silent and left the task of raising the validity of the sale as an
issue to their co-heir,Virgilio, who is not privy to the said transactionBy their continued silence, Zenaida,
Milagros and Minerva have caused the Pahuds to believe that theyhave indeed clothed Eufemia with the
authority to transact on their behalf. Clearly, the three co-heirs arenow estopped from impugning the
validity of the sale from assailing the authority of Eufemia to enter intosuch transaction.Belaraminos
cannot argued that they purchased the property in good faith.
WHEREFORE, premises considered, the April 23, 2003 Decision of the Court of Appeals as well
as itsOctober 8, 2003 Resolution in CA-G.R. CV No. 59426, are REVERSED and SET ASIDE.sale made
by respondent Virgilio San Agustin to respondent spouses Isagani Belarmino and LeticiaOcampo is valid
only with respect to the 1/8 portion of the subject property
CASON V. RICKARDS AND SMITH BELL
When money is received as a deposit by an agent, andthat money is by the agent turned over to his
principal,with notice that it is the money of the depositor, theprincipal is bound to deliver it to the depositor,
even ifhis agent was not authorized to received such deposits.FACTS
:
Rickards was the agent in Dagupan of Smith Belland Co. He received from Cason as a deposit
P2,000.xx.When he left the employ of Smith Bell and Co., them oney was deli vered to another
agent of Sm ith Bell andCo. in the area. Furthermore, he notified Smith Bell thatit was the money of
the books of the defendant, and if produced they would prove the liability
of the latter, the failure of the defendant to present his books in evidence
strongly corroborates the testimony of the witness.
3.JUDGMENT; REVERSAL; DISCRETION OF THE COURT.When the record
requires a reversal of the judgment below, this court may, in its
discretion, enter final judgment, or it may remand the case to the lower
court for a new trial in whole or in part. Cason vs. Rickards, 5 Phil. 611,
No. 2437 February 13, 1906
Cason.
During trial, Rickards testified that a few days after hereceived the P2,000. xx he received from
her a n order o rwarrant upon the Spanish treasury for the sum ofP4,200.xx. He then wrote Smith Bell
asking if it could becollected. It was sent to Manila and collected throughHongkong and Shanghai Bank
and paid all of it out in thebusiness of Smith Bell and Co. P4,200.xx less 5%commision for collection, of
which commission, SmithBell and Co. received the benefit. The books which werethen produced in
court by Sm ith Bell and Co. containedan entry or entries of the receipt by Smith Bell of
thisP4,200.xx. Rickards testified that he received expressdirections in regard to this particular
transaction.Smith Bell and Co. did not present as witness any oftheir employees or agents. They also did
present theirbooks which according to Rickards would corroborate histestimony. Their lone witness was a
bookkeeper ofHongkong and Shanghai Bank. The witness could nottestify to whom the cash was paid but
said that based onthe books of the bank, Rickards received P4,200.xx. .The lower court found in
favor of Sm ith Bell and Co.,relieving it from its responsibility of P4,200.xx.
ISSUE
:
1. W/N the positive testimony of Rickards can beovercom e by the t estim ony of the
bookkeeper.
2. W /N Rickards m ay be held li able for the m oneyof Cason
HELD
:Judgem ent of the lower court cannot be affirm edand m ust be reversed. The case is
rem anded back.
Smith Bell could demonstrate the falsity of thetestimony of Rickards by producing the books which it
didnot. Rickards being an agent and someone who explicitlyturned over the money to Smith Bell as he left
cannot bem ade liable to Cason.