Lindain vs. Court of Appeals

A parent acting merely as legal administrator of a minor child’s property has no power to sell, alienate, or otherwise dispose of that property without judicial approval; court approval is indispensable regardless of the property’s value. The sale by the minors’ mother without such approval was therefore null and void.

Petitioners Elena, Oscar, Celia, Teresita, and Virgilio Lindain were the registered owners of a parcel of land covered by Transfer Certificate of Title No. NT-63540 while they were still minors. Their mother, Dolores Luluquisin, was a widow acting as their guardian. The dispute concerns the scope of a parent’s authority as legal administrator of a minor’s property under Article 320 of the New Civil Code and the Rules of Court on guardianship and administration. Respondents are the spouses Apolonia Valiente and Federico Ila.

Petitioners Elena, Oscar, Celia, Teresita, and Virgilio Lindain were, while still minors, the registered owners of a parcel of land covered by Transfer Certificate of Title No. NT-63540 (Exh. D-1). Their mother, Dolores Luluquisin, was then already a widow and acting as guardian of her minor children. On November 7, 1966, she sold the land for P2,000 under a Deed of Absolute Sale of Registered Land (Exh. 2) in favor of the spouses Apolonia Valiente and Federico Ila. The deed was registered in the Office of the Register of Deeds for the Province of Nueva Ecija, and Transfer Certificate of Title No. NT-66311 was issued to the vendees.

Respondents admitted that the property was sold to them by the minors’ mother, as evidenced by a Deed of Sale (Exh. B for the plaintiffs and Exh. 2 for the defendants). Although they were at first reluctant to buy because the sale would not be legal, the registered owners being all minors, they proceeded upon the advice of their counsel, the late Atty. Arturo B. Pascual, and the counsel of Dolores Luluquisin, Atty. Eustaquio Ramos, who notarized the documents. According to respondents, they were advised that the property could be sold without the written authority of the court because its value was less than P2,000. They bought the property and had it registered in their names under Certificate of Title No. 66311 (Exhibit C for the plaintiffs).

Petitioners contended that the sale of the lot by their mother to respondents was null and void because it was made without judicial authority and/or court approval. Respondents, on the other hand, contended that the sale was valid because the value of the property was less than P2,000, and that, considering the ages of petitioners—the youngest being 31 years old at the time of the filing of the complaint—their right to rescind the contract, which should have been exercised four years after reaching the age of majority, had already prescribed.

The dispute reached the courts when petitioners sued in 1987 to annul the sale and recover the registered land. The core factual premise material to the Supreme Court was that the sale had been executed by the mother while the registered owners were minors and without prior judicial approval.

• Lack of Judicial Approval: Petitioners contended that the sale of the lot by their mother to respondents is null and void because it was made without judicial authority and/or court approval.
• Error of the Court of Appeals: Petitioners alleged that the Court of Appeals erred in reversing the decision of the Regional Trial Court and in ordering the dismissal of their complaint in total disregard of the findings of fact of the trial court and contrary to the provisions of law on contracts and guardianship.

• Validity Due to Value Below P2,000: Respondents contended that the sale was valid because the value of the property was less than P2,000, relying on advice that the property could be sold without the written authority of the court.
• Prescription: Respondents contended that petitioners’ right to rescind the contract had already prescribed because it should have been exercised four years after reaching the age of majority, and the youngest petitioner was 31 years old at the time of the filing of the complaint.
• Good Faith: Respondents alleged that they were purchasers in good faith.

• Judicial Approval: Whether judicial approval was necessary for the sale of the minors’ property by their mother.
• Good Faith: Whether respondents were purchasers in good faith.
• Prescription: Whether petitioners’ action for reconveyance had prescribed.

• Judicial Approval: Yes. A parent acting merely as legal administrator of a minor’s property has no power to dispose of or alienate it without judicial approval; court approval is indispensable regardless of the property’s value.
• Good Faith: No. Respondents knew from the outset that the mother could not validly convey the minors’ property without court approval; they cannot be considered purchasers in good faith.
• Prescription: No. The action for reconveyance of real property prescribes after thirty years under Article 1141 of the Civil Code; the sale occurred in 1966 and suit was filed in 1987, so prescription had not set in.

• Judicial Approval: Article 320 of the New Civil Code, already in force when the transaction occurred, provides that the father, or in his absence the mother, is the legal administrator of the property of the child under parental authority, and that if the property is worth more than P2,000, the parent shall give a bond subject to the approval of the Court of First Instance. The Court held that a parent acting merely as legal, as distinguished from judicial, administrator does not have the power to dispose of or alienate the property of the minor children without judicial approval. The powers and duties of the widow as legal administrator under Rule 84 of the Rules of Court, entitled “General Powers and Duties of Executors and Administrators,” are only powers of possession and management. Her power to sell, mortgage, encumber, or otherwise dispose of the property of her minor children must proceed from the court, as provided in Rule 89, which requires court authority and approval. In Visaya vs. Suguitan, the Court held that a mother as legal administrator had no power to compromise her minor children’s claims, because compromise is always deemed equivalent to an alienation (transigere est alienare) and is an act of strict ownership beyond mere administration; Article 2032 of the New Civil Code requires court approval in compromises entered into by guardians, parents, absentee’s representatives, and administrators or executors of decedent’s estates. This restriction contrasts with Article 1810 of the old Civil Code, which empowered parents to enter into such compromises without court approval unless the amount involved was in excess of 2,000 pesetas; at present, court approval is indispensable regardless of the amount involved. In Badillo vs. Ferrer, the Court stated that a surviving widow had no authority or acted beyond her powers in conveying to vendees the undivided share of her minor children in property, as her powers as natural guardian covered only matters of administration and could not include the power of disposition; she should have first secured court approval before alienation. That ruling reiterated Inton vs. Quintana. The Court of Appeals applied Ortañez vs. Dela Cruz to uphold the sale because the value was less than P2,000, but the Supreme Court set aside that decision and reinstated the trial court, holding that judicial approval was required. The sale by the mother without judicial authority was therefore null and void.
• Good Faith: The private respondents’ allegation that they are purchasers in good faith is not credible, because they knew from the very beginning that their vendor, petitioners’ mother, without court approval could not validly convey to them the property of her minor children. Knowing her lack of judicial authority to enter into the transaction, the private respondents acted in bad faith when they went ahead and bought the land anyway. One who acquires or purchases real property with knowledge of a defect in the title of his vendor cannot claim that he acquired title thereto in good faith as against the owner of the property or for an interest therein, as held in Gatioan vs. Gaffud.
• Prescription: The minors’ action for reconveyance has not yet prescribed, because real actions over immovables prescribe after thirty years under Article 1141 of the Civil Code. Since the sale took place in 1966, the action to recover the property had not yet prescribed when petitioners sued in 1987.

• Legal Administrator vs. Judicial Administrator — A parent acting as legal administrator of a minor child’s property has only powers of possession and management; the power to sell, mortgage, encumber, or otherwise dispose of the property must proceed from the court under Rule 89. Judicial approval is indispensable regardless of the property’s value. Applied here, the mother’s sale without court approval was void.
• Compromise as Alienation (Transigere Est Alienare) — A compromise is equivalent to an alienation and is an act of strict ownership beyond mere administration; under Article 2032 of the New Civil Code, court approval is necessary for compromises entered into by guardians, parents, absentee’s representatives, and administrators or executors of decedent’s estates. The Court relied on this principle in Visaya vs. Suguitan to demonstrate the mother’s lack of power as legal administrator.
• Purchaser in Bad Faith — One who acquires or purchases real property with knowledge of a defect in the vendor’s title cannot claim good faith as against the owner of the property or one with an interest therein. Applied here, respondents knew that the mother lacked judicial authority to convey the minors’ property.
• Prescription of Real Actions — Real actions over immovables prescribe after thirty years under Article 1141 of the Civil Code. Applied here, the action for reconveyance filed in 1987 over a sale made in 1966 had not prescribed.
• Validity of Sale Without Judicial Approval — A sale of a minor’s real property by a parent without judicial authority is null and void. Applied here, the deed of sale was annulled, the existing certificate of title was cancelled, and a new title was ordered issued in petitioners’ names.

• "Under the law, a parent, acting merely as the legal (as distinguished from judicial) administrator of the property of his/her minor children, does not have the power to dispose of, or alienate, the property of said children without judicial approval." — This is the ratio decidendi: it states the core rule that a parent’s legal administration does not include the power of disposition without court approval.
• "The powers and duties of the widow as legal administrator of her minor children's property as provided in Rule 84 by the Rules of Court entitled, "General Powers and Duties of Executors and Administrators" are only powers of possession and management. Her power to sell, mortgage, encumber or otherwise dispose of the property of her minor children must proceed from the court, as provided in Rule 89 which requires court authority and approval." — This defines the scope of a parent’s legal administration and identifies Rule 89 as the source of the requirement of court authority and approval.
• "One who acquires or purchases real property with knowledge of a defect in the title of his vendor cannot claim that he acquired title thereto in good faith as against the owner of the property or for an interest therein (Gatioan vs. Gaffud, 27 SCRA 706)." — This states the controlling rule on good faith and explains why respondents could not be considered purchasers in good faith.
• "The minors' action for reconveyance has not yet prescribed for "real actions over immovables prescribe after thirty years" (Art. 1141, Civil Code)." — This resolves the prescription issue and applies the thirty-year prescriptive period for real actions over immovables.

• Ortañez vs. Dela Cruz, O.G., Vol. 60, No. 24, pp. 3434, 3438-3439 — Cited by the Court of Appeals for the rule that judicial permission may be dispensed with when the property is worth less than P2,000; the Supreme Court set aside the Court of Appeals decision and reinstated the trial court, holding that court approval is indispensable regardless of amount.
• Visaya vs. Suguitan, G.R. No. L-8300, November 18, 1955 — Relied upon; held that a mother as legal administrator of her minor children’s property had no power to compromise their claims because compromise is equivalent to alienation and an act of strict ownership beyond mere administration; court approval is indispensable regardless of the amount involved.
• Badillo vs. Ferrer, 152 SCRA 407, 409 — Cited; held that a surviving widow had no authority or acted beyond her powers in conveying the undivided share of her minor children, as her powers as natural guardian covered only administration and did not include disposition; she should have first secured court approval before alienation.
• Inton vs. Quintana, 81 Phil. 97 — Cited as the ruling reiterated in Badillo vs. Ferrer.
• Gatioan vs. Gaffud, 27 SCRA 706 — Cited; held that one who acquires or purchases real property with knowledge of a defect in the vendor’s title cannot claim good faith as against the owner or one with an interest therein.

• Article 320, New Civil Code — Provides that the father, or in his absence the mother, is the legal administrator of the property of the child under parental authority; if the property is worth more than P2,000, the parent shall give a bond subject to the approval of the Court of First Instance. The Court cited it as the governing provision but held that a parent as legal administrator cannot dispose of the minor’s property without judicial approval.
• Rule 84, Rules of Court — Entitled “General Powers and Duties of Executors and Administrators.” The Court cited it to explain that the widow’s powers as legal administrator are only powers of possession and management.
• Rule 89, Rules of Court — Requires court authority and approval for the sale, mortgage, encumbrance, or other disposition of the minor’s property. The mother’s sale without such approval was void.
• Article 2032, New Civil Code — Provides that court approval is necessary in compromises entered into by guardians, parents, absentee’s representatives, and administrators or executors of decedent’s estates. Cited in Visaya vs. Suguitan to show that compromise is alienation and requires court approval.
• Article 1810, old Civil Code — Empowered parents to enter into compromises without court approval unless the amount involved exceeded 2,000 pesetas. The Court contrasted it with the present rule that court approval is indispensable regardless of amount.
• Article 1141, Civil Code — Real actions over immovables prescribe after thirty years. Applied to hold that the minors’ action for reconveyance, filed in 1987 over a 1966 sale, had not prescribed.

Cruz, Medialdea and Bellosillo, JJ., concur.