Alcantara vs. Nido

A sale of a piece of land or any interest therein through an agent is void unless the agent's authority is in writing, pursuant to Article 1874 of the Civil Code. A void contract produces no effect either against or in favor of anyone and cannot be ratified. Additionally, the exclusive original jurisdiction of first-level courts over real actions is determined by the assessed value of the property, and where the assessed value does not exceed ₱20,000 (or ₱50,000 in Metro Manila), the Municipal Trial Court, not the Regional Trial Court, has jurisdiction.

The petitioners are spouses who purchased a portion of an unregistered lot owned by Revelen N. Srivastava, the daughter of respondent Brigida L. Nido. Respondent acted as administrator and attorney-in-fact of Revelen in negotiating the sale. The dispute concerns the validity of the sale transaction and the proper court with jurisdiction over the action for recovery of possession. The applicable legal framework includes Article 1874 of the Civil Code, which requires written authority for an agent to sell land, and Section 33 of Batas Pambansa Bilang 129, as amended by Republic Act No. 7691, which expanded the jurisdiction of first-level courts over real actions based on the assessed value of the property.

Revelen N. Srivastava, the daughter of respondent Brigida L. Nido, owned an unregistered lot with an area of 1,939 square meters located in Cardona, Rizal. Sometime in March 1984, respondent accepted the offer of petitioners to purchase a 200-square meter portion of Revelen's lot at ₱200 per square meter. Petitioners paid ₱3,000 as downpayment, with the balance payable on installment. Petitioners constructed their houses on the lot in 1985. In 1986, with respondent's consent, petitioners occupied an additional 150 square meters of the lot. By 1987, petitioners had paid ₱17,500 before they defaulted on their installment payments.

On 11 May 1994, respondent, 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 with the Regional Trial Court. The RTC found that Revelen owned the lot and that respondent was verbally authorized to sell 200 square meters to petitioners. The RTC ruled that since respondent's authority to sell the land was not in writing, the sale was void under Article 1874 of the Civil Code, and that rescission was the proper remedy.

Petitioners appealed to the Court of Appeals, which reversed the RTC decision and dismissed the civil case. The appellate court held that the case was an unlawful detainer case, and that even if the complaint involved a question of ownership, it did not deprive the Municipal Trial Court of its jurisdiction over the ejectment case. The appellate court also noted that the complaint was filed on 11 May 1994, after Republic Act No. 7691 took effect on 15 April 1994, and that the assessed value of the whole lot of ₱4,890 fell within the exclusive original jurisdiction of the first-level court. The appellate court further held that respondent, as Revelen's agent, did not have written authority to enter into the contract of sale, making the contract void, and that a void contract cannot be the subject of rescission.

During the pre-trial conference, petitioners admitted that at the time of the negotiation for the sale of the lot, they believed respondent was the owner of the lot, and only learned that Revelen was the owner during the hearing of the case. On 25 March 1994, Revelen executed a General Power of Attorney constituting respondent as her attorney-in-fact, notarized by a Notary Public in California, U.S.A., but this document was not certified in accordance with the Rules of Court.

• Voidable, Not Void, Contract: Petitioners submitted that the sale of land by an agent who has no written authority is not void but merely voidable, given the spirit and intent of the law, and that being only voidable, the contract may be ratified, expressly or impliedly.
• Specific Performance: Petitioners argued that since the contract to sell was sufficiently established through respondent's admission during the pre-trial conference, the appellate court should have ruled on the matter of the counterclaim for specific performance.

• Counterclaim Not Sustainably Claimed: Respondent argued that the appellate court cannot lawfully rule on petitioners' counterclaim because there is nothing in the records to sustain petitioners' claim that they have fully paid the price of the lot.
• Lack of Written Authority and Meeting of Minds: Respondent pointed out that petitioners admitted the lack of written authority to sell, and alleged that there was clearly no meeting of the minds between the parties on the purported contract of sale.

• Validity of the Sale: Whether the sale of land through an agent without written authority is void or merely voidable.
• Admissibility of the General Power of Attorney: Whether the General Power of Attorney executed and notarized in the United States was admissible in evidence without the certification required by Section 25, Rule 132 of the Rules of Court.
• Specific Performance: Whether petitioners are entitled to their counterclaim for specific performance.
• Jurisdiction of the RTC: Whether the Regional Trial Court had jurisdiction over the complaint for recovery of possession given the assessed value of the property.

• Validity of the Sale: Void. The sale of the lot by respondent, who did not have written authority from Revelen, is void under Article 1874 of the Civil Code, and a void contract produces no effect and cannot be ratified.
• Admissibility of the General Power of Attorney: No. The General Power of Attorney executed and acknowledged in the United States cannot be admitted in evidence unless certified by an officer in the foreign service of the Philippines stationed in that country, in accordance with Section 25, Rule 132 of the Rules of Court; hence, it has no probative value.
• Specific Performance: No. Petitioners are not entitled to claim for specific performance because there is a clear absence of proof that Revelen authorized respondent to sell her lot, and the agency must be established by clear, certain, and specific proof.
• Jurisdiction of the RTC: No. The RTC lacked jurisdiction over the complaint because the assessed value of the property, ₱4,890, fell within the exclusive original jurisdiction of the Municipal Trial Court under Section 33 of Batas Pambansa Bilang 129, as amended by Republic Act No. 7691.

• Validity of the Sale: Article 1874 of the Civil Code explicitly requires a written authority before an agent can sell an immovable property. Based on a review of the records, there was absolutely no proof of respondent's written authority to sell the lot to petitioners. In fact, during the pre-trial conference, petitioners admitted that at the time of the negotiation for the sale of the lot, they believed respondent was the owner of the lot, and only learned that Revelen was the owner during the hearing of the case. Consequently, the sale of the lot by respondent who did not have written authority from Revelen is void. A void contract produces no effect either against or in favor of anyone and cannot be ratified. A special power of attorney is also necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired for a valuable consideration. Without an authority in writing, respondent cannot validly sell the lot to petitioners. The Court cited Dizon vs. Court of Appeals for the proposition that the authority of an agent to execute a contract for the sale of real estate must be conferred in writing and must give specific authority. Further, under Article 1318 of the Civil Code, the requisites for a valid contract include consent of the contracting parties, object certain, and cause of the obligation. Since respondent did not have written authority, the consent of Revelen, the real owner, was not obtained in writing as required by law, and no contract was perfected.

• Admissibility of the General Power of Attorney: The General Power of Attorney executed on 25 March 1994 and notarized by a Notary Public in California, U.S.A., cannot be the basis of respondent's written authority to sell the lot. Section 25, Rule 132 of the Rules of Court provides that an official record kept in a foreign country may be evidenced by a copy attested by the officer having legal custody, accompanied by a certificate that such officer has custody, and if the record is kept in a foreign country, the certificate may be made by a secretary of embassy or legation, consul general, consul, vice consul, or consular agent, or by any officer in the foreign service of the Philippines stationed in the foreign country, authenticated by the seal of his office. Citing Teoco vs. Metropolitan Bank and Trust Company and Lopez vs. Court of Appeals, the Court explained that when a special power of attorney is executed and acknowledged before a notary public in a foreign country, it cannot be admitted in evidence unless certified in accordance with the Rules of Court. Since the General Power of Attorney was executed and acknowledged in the United States, it cannot be admitted in evidence unless certified by an officer in the foreign service of the Philippines stationed there. Hence, the document has no probative value.

• Specific Performance: Petitioners are not entitled to claim for specific performance. When specific performance is sought of a contract made with an agent, the agency must be established by clear, certain, and specific proof. To reiterate, there is a clear absence of proof that Revelen authorized respondent to sell her lot.

• Jurisdiction of the RTC: Section 33 of Batas Pambansa Bilang 129, as amended by Republic Act No. 7691, grants Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts exclusive original jurisdiction in all civil actions which involve title to, possession of, real property, or any interest therein where the assessed value of the property does not exceed ₱20,000, or in Metro Manila, ₱50,000. Citing Geonzon Vda. de Barrera vs. Heirs of Vicente Legaspi, the Court explained that with the modifications introduced by R.A. No. 7691 in 1994, the first level courts have exclusive original jurisdiction over accion publiciana and accion reivindicatoria where the assessed value of the real property does not exceed the aforestated amounts. The jurisdictional element is the assessed value of the property. The appellate court correctly ruled that even if the complaint filed with the RTC involves a question of ownership, the MTC still has jurisdiction because the assessed value of the whole lot as stated in Tax Declaration No. 09-0742 is ₱4,890. The MTC cannot be deprived of jurisdiction over an ejectment case based merely on the assertion of ownership over the litigated property. The general rule is that dismissal of a case for lack of jurisdiction may be raised at any stage of the proceedings since jurisdiction is conferred by law. Since the RTC had no jurisdiction over the complaint filed, all the proceedings as well as the Decision of 17 June 2002 are void, and the complaint should perforce be dismissed.

• Sale of Land Through an Agent Without Written Authority is Void — Under Article 1874 of the Civil Code, when a 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. A void contract produces no effect either against or in favor of anyone and cannot be ratified. The Court applied this doctrine to hold that respondent's sale of the lot to petitioners was void for lack of written authority, and that the contract could not be the subject of rescission or specific performance.

• Special Power of Attorney Required for Sale of Immovable Property — Under Article 1878(5) of the Civil Code, a special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required by law to enable an agent to sell real estate must expressly mention a sale or include a sale as a necessary ingredient of the act mentioned, and the power of attorney must express the powers of the agent in clear and unmistakable language.

• Admissibility of Foreign Public Documents — Under Section 25, Rule 132 of the Rules of Court, an official record kept in a foreign country may be evidenced by a copy attested by the officer having legal custody, accompanied by a certificate from a secretary of embassy or legation, consul general, consul, vice consul, or consular agent, or by any officer in the foreign service of the Philippines stationed in the foreign country, authenticated by the seal of his office. A document notarized in a foreign country that fails to comply with this certification requirement has no probative value.

• Jurisdiction Over Real Actions Based on Assessed Value — Under Section 33 of Batas Pambansa Bilang 129, as amended by Republic Act No. 7691, first-level courts have exclusive original jurisdiction over accion publiciana and accion reivindicatoria where the assessed value of the real property does not exceed ₱20,000, or ₱50,000 in Metro Manila. The jurisdictional element is the assessed value of the property, and the MTC cannot be deprived of jurisdiction over an ejectment case based merely on the assertion of ownership over the litigated property.

• "When a 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." — This is the statutory text of Article 1874 of the Civil Code, which the Court applied as the controlling rule to declare the sale void for lack of written authority.

• "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 shall 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." — This passage from Dizon vs. Court of Appeals, quoted by the Court, articulates the requirement of written and specific authority for an agent to sell real estate, and is the canonical formulation of the doctrine applied in this case.

• "From the foregoing provision, when the special power of attorney is executed and acknowledged before a notary public or other competent official in a foreign country, it cannot be admitted in evidence unless it is certified as such in accordance with the foregoing provision of the rules by a secretary of embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept of said public document and authenticated by the seal of his office." — This passage from Teoco vs. Metropolitan Bank and Trust Company, quoting Lopez vs. Court of Appeals, explains the certification requirement for foreign public documents, which the Court applied to exclude the General Power of Attorney from evidence.

• "Before the amendments introduced by Republic Act No. 7691, the plenary action of accion publiciana was to be brought before the regional trial court. With the modifications introduced by R.A. No. 7691 in 1994, the jurisdiction of the first level courts has been expanded to include jurisdiction over other real actions where the assessed value does not exceed ₱20,000, ₱50,000 where the action is filed in Metro Manila. The first level courts thus have exclusive original jurisdiction over accion publiciana and accion reivindicatoria where the assessed value of the real property does not exceed the aforestated amounts. Accordingly, the jurisdictional element is the assessed value of the property." — This passage from Geonzon Vda. de Barrera vs. Heirs of Vicente Legaspi, quoted by the Court, establishes the rule that the assessed value of the property is the jurisdictional element for real actions, which the Court applied to affirm the dismissal of the complaint for lack of RTC jurisdiction.

• Dizon vs. Court of Appeals, 444 Phil. 161 (2003) — Cited as instructive authority for the rule that the authority of an agent to execute a contract for the sale of real estate must be conferred in writing and must give specific authority, and that a special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired.

• Teoco vs. Metropolitan Bank and Trust Company, G.R. No. 162333, 23 December 2008, 575 SCRA 82 — Cited for the rule that a special power of attorney executed and acknowledged before a notary public in a foreign country cannot be admitted in evidence unless certified in accordance with Section 25, Rule 132 of the Rules of Court.

• Lopez vs. Court of Appeals, 240 Phil. 811 (1987) — Quoted in Teoco for the same proposition regarding the certification requirement for foreign public documents.

• Geonzon Vda. de Barrera vs. Heirs of Vicente Legaspi, G.R. No. 174346, 12 September 2008, 565 SCRA 192 — Cited for the rule that first-level courts have exclusive original jurisdiction over accion publiciana and accion reivindicatoria where the assessed value of the real property does not exceed the amounts stated in Section 33 of Batas Pambansa Bilang 129, as amended by Republic Act No. 7691.

• Roberts vs. Papio, G.R. No. 166714, 9 February 2007, 515 SCRA 346 — Cited for the proposition that a void contract produces no effect either against or in favor of anyone and cannot be ratified.

• Litonjua, Jr. vs. Eternit Corporation, G.R. No. 144805, 8 June 2006, 490 SCRA 204 — Cited for the rule that when specific performance is sought of a contract made with an agent, the agency must be established by clear, certain, and specific proof.

• Sudaria vs. Quiambao, G.R. No. 164305, 20 November 2007, 537 SCRA 689 — Cited for the rule that the MTC cannot be deprived of jurisdiction over an ejectment case based merely on the assertion of ownership over the litigated property.

• Municipality of Sta. Fe vs. Municipality of Aritao, G.R. No. 140474, 21 September 2007, 533 SCRA 586 — Cited for the general rule that dismissal of a case for lack of jurisdiction may be raised at any stage of the proceedings since jurisdiction is conferred by law.

• Article 1874, Civil Code — Provides that when a 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. The Court applied this provision to declare the sale of the lot to petitioners void for lack of respondent's written authority.

• Article 1878(5), Civil Code — Requires a special power of attorney to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. The Court applied this provision to hold that respondent could not validly sell the lot without written authority.

• Article 1318, Civil Code — Enumerates the requisites for a valid contract: consent of the contracting parties, object certain which is the subject matter of the contract, and cause of the obligation which is established. The Court applied this provision to hold that no contract was perfected because the consent of Revelen, the real owner, was not obtained in writing as required by law.

• Section 25, Rule 132, Rules of Court — Provides the requirements for proof of public or official records, including the certification requirement for records kept in foreign countries. The Court applied this provision to exclude the General Power of Attorney from evidence for lack of the required certification.

• Section 33, Batas Pambansa Bilang 129, as amended by Republic Act No. 7691 — Grants Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts exclusive original jurisdiction in all civil actions which involve title to, possession of, real property, or any interest therein where the assessed value of the property does not exceed ₱20,000, or ₱50,000 in Metro Manila. The Court applied this provision to hold that the RTC lacked jurisdiction over the complaint because the assessed value of the property was ₱4,890.

• Brion, J.
• Del Castillo, J.
• Abad, J.
• Perez, J.