Buason v Panuyas

May 25, 1959

MANUEL BUASON and LOLITA M. REYES, plaintiffs-appellants,
vs.
MARIANO PANUYAS, defendant-appellee.
PADILLA, J.:
SUMMARY: Eustaquio Bayuga was the agent of Sps. Dayao & Vega in selling their 14.8 hectares parcel of land after the termination of a case in their
favor. When Dayao died, his 4 children subsequently sold 12.8413 hectares of the land to Sps. Buason & Reyes who took possession. Subsequently,
Bayuga also sold 8 hectares of the land to Sps. Panuyas & Cruz. Thus, Buason filed a case to annul the Deed of Sale in favor of Panuyas contending
that the death of the principal ended the authority of the agent and so the sale made after principal’s death is not valid. HELD: The sale made by an
agent after the death of his principal is valid as to 3 rd persons in good faith. Panuyas and his wife had no knowledge of the previous sale and had a right
to rely on the face of the certificate of title of the registered owners and of the authority conferred by them upon the agent also recorded on the back of
the certificate of title.
DOCTRINE: It has not been shown that the agent knew of his principal's demise, and for that reason “ Anything done by the agent, without knowledge of
the death of the principal or of any other cause which extinguishes the agency, is valid and shall be fully effective with respect to third persons who may
have contracted with him in good faith” (NCC 1931).
FACTS:
 Sps. Buenaventura Dayao and Eugenia Vega acquired by homestead patent, a 14.8413 hectares parcel of land situated at Gabaldon, Muñoz,
Nueva Ecija covered by OCT
 Oct. 29, ’30: They executed a power of attorney authorizing Eustaquio Bayuga:
o to engage the services of an attorney to prosecute their case against Leonardo Gambito for annulment of a contract of sale of the
parcel of land
o and after the termination of the case in their favor, to sell it
o and from the proceeds of the sale, to deduct whatever expenses he had incurred in the litigation
 Mar. 14, ’34: Buenaventura Dayao died leaving his wife Eugenia Vega and children Pablo, Teodoro, Fortunata and Juliana, all surnamed Dayao.
 Mar. 21, ’39: His 4 children executed a deed of sale conveying 12.8413 hectares of the parcel of land to Sps. Manuel Buason and Lolita M. Reyes.
o Their mother Eugenia Vega affixed her thumb mark to the deed of sale as witness
 1939: Sps. Buason & Reyes took possession of the parcel of land through their tenants.
 July 18, ’44: Eustaquio Bayuga sold 8 hectares of the same parcel of land to Sps. Mariano Panuyas and Sotera B. Cruz.
 Eustaquio Bayuga died on 25 March 1946 and Eugenia Vega in 1954.
 Panuyas and Sps. Buason & Reyes claim ownership to the same parcel of land.
 Sps. Buason & Reyes brought an action for annulment of a deed of sale in favor of Panuyas, cancellation of TCT issued in latter’s name and his
wife, declaration that the sale in their favor is valid, recovery of possession of the parcel of land from Panuyas, damages, attorney's fees and costs.
o Prayed that the Deed of sale of that part of the parcel of land held by Panuyas executed by Eustaquio Bayuga in his favor and of his wife
be declared null and void and that TCT issued in their name be cancelled
 Panuyas claim that:
o He and his wife were buyers in good faith and for valuable consideration
o Sps. causes of action are barred by the statute of limitations
o Complaint states no cause of action
o Claim on which their action is based is unenforceable under the statute of frauds
o Sps. are guilty of laches.
o Filed counterclaim for damages (AD:5k, MD:10k) for bringing a clearly unfounded suit against him which depreciated the value of the
land and injured his good reputation
 CFI: Dismissed complaint. Sps. Buason & Reyes’ action is barred by the statute of limitations.
 Hence this appeal upon questions of law. Sps. Buason & Reyes argue that:
o Death of the principal on Mar. 14, ‘34 ended the authority of the agent (CC 1732; NCC 1919); thus the sale of 8 hectares of the parcel of
land by the agent to Panuyas and his wife was null and void.
ISSUE: Whether the sale by the agent to 3rd persons who had no knowledge of a previous sale after the death of the principal is valid? (YES)
RATIO:
 Sps. Buason & Reyes did not register the sale of 12.8413 hectares of the parcel of land in question executed in their favor by the Dayao children
after the death of their father.
 On the other hand, the power of attorney executed by Buenaventura Dayao authorizing Bayuga to sell the parcel of land was annotated or
inscribed on the back of the OCT, and the sale executed by Bayuga in favor of Panuyas and his wife under the power of attorney, was annotated or
inscribed on the back of the same OCT.
 It does not appear that Panuyas and his wife had actual knowledge of the previous sale.
 In the absence of such knowledge, they had a right to rely on the face of the certificate of title of the registered owners and of the authority
conferred by them upon the agent also recorded on the back of the certificate of title.
 As this is a case of double sale of land registered under the Land Registration Act, he who recorded the sale in the Registry of Deeds has a better
right than he who did not (CC 1473; NCC 1544).
Sale by Agent after Death of Principal: Valid as to 3rd Persons in Good Faith
 It has not been shown that the agent knew of his principal's demise, and for that reason CC 1738, or NCC 1931 applies.
o Anything done by the agent, without knowledge of the death of the principal or of any other cause which extinguishes the
agency, is valid and shall be fully effective with respect to third persons who may have contracted with him in good faith.
DISPOSITIVE: Judgment appealed from is affirmed.