Lopez vs. Court of Appeals

An agency is extinguished by the death of the principal, and any act by the agent subsequent to the principal's death is void ab initio, unless any of the exceptions expressly recognized in Articles 1930 and 1931 of the Civil Code is applicable; service of a court decision upon one of multiple counsels of record is effective notice to the party, commencing the period for filing a motion for reconsideration or perfecting an appeal.

The dispute centers on the sale of a 14-hectare property in Antipolo City between the petitioners (the Lopez group and Sergio F. Angeles) and respondent Primex Corporation. Primex, as vendee, entered into a Deed of Conditional Sale on September 12, 1989 with the petitioners as vendors, covering approximately 140,029 square meters at ₱280.00 per square meter, for a total purchase price of ₱39,208,120.00. The transaction spawned multiple proceedings, including Primex's complaint for specific performance and the petitioners' counterclaim for rescission, both litigated before the RTC of Pasig and eventually elevated to the Court of Appeals. Atty. Sergio Angeles served simultaneously as one of the petitioners and as counsel for the petitioners, holding a special power of attorney executed by Marcelino Lopez.

On September 12, 1989, Primex Corporation, as vendee, entered into a Deed of Conditional Sale with the petitioners as vendors over a 140,029-square-meter portion of land located along Sumilong Highway, Barrio La Paz, Antipolo, Rizal, covered by a homestead patent. The parties agreed on a purchase price of ₱280.00 per square meter, totaling ₱39,208,120.00. Primex claimed it had dutifully complied with its monetary obligations and was ready to pay another ₱2,000,000.00 upon presentation of a valid certificate of title in the name of the vendors, as sanctioned under the deed. The petitioners, however, delivered TCT No. 196256, which, while registered in the name of Marcelino Lopez and others, was derived from OCT No. 537 — a title declared null and void by the Supreme Court in G.R. No. 90380 dated September 13, 1990, together with all TCTs emanating from it. Primex refused to accept the title as sufficient compliance and withheld the scheduled payment.

On March 6, 1991, the petitioners threatened to sell or mortgage the property to third parties, prompting Primex to file a complaint for injunction, specific performance, and damages before the RTC of Pasig on April 29, 1991. The petitioners had earlier filed their own complaint for rescission of the conditional sale on April 18, 1991. After the petitioners' motion to dismiss on grounds of improper venue and litis pendencia was denied on December 9, 1991, they filed an Answer with Compulsory Counterclaim on February 7, 1992, asserting full compliance with the deed and characterizing Primex's title concern as a deliberate ploy to delay payment. During the pendency of the case, the petitioners delivered TCT No. 208538, which contained the exact portion sold, and on March 30, 1992, the parties executed a Deed of Absolute Sale. As of March 7, 1993, Primex had released payments amounting to ₱24,892,805.85, excluding a separate ₱4,150,000.00 loan extended to petitioner Rogelio Amurao. Primex nonetheless opposed dismissal, noting pending claims and the annotation of a lis pendens on the title, which carried over to TCT No. 216876 in Primex's name.

On May 17, 1995, the RTC declared Primex non-suited for failing to appear at the pre-trial hearing and allowed the petitioners to present evidence ex parte. The RTC rendered a Decision on August 11, 1995 in favor of the petitioners, ordering Primex to pay the balance of the purchase price plus interest, damages, and costs. Primex appealed to the CA, and on April 8, 1999, the Supreme Court's Special Sixth Division set aside the RTC decision and remanded the case for trial de novo. After retrial, the RTC rendered judgment on January 30, 2004, again in favor of the petitioners, dismissing Primex's complaint, declaring the Deed of Conditional Sale and Deed of Sale rescinded, and ordering mutual restitution. The RTC granted the petitioners' Motion for Execution Pending Appeal on March 15, 2004, but the CA annulled that special order on May 31, 2004.

On January 23, 2007, the CA reversed the RTC judgment and ordered Primex to pay the petitioners the full balance of the purchase price with legal interest of 6% per annum. The petitioners were then represented by two counsels: Atty. Sergio Angeles and Atty. Martin Pantaleon. Atty. Pantaleon received a copy of the CA decision on January 30, 2007, while Atty. Angeles received his copy on February 23, 2007. Atty. Pantaleon would have had until February 14, 2007 to file a Motion for Reconsideration but did not do so. Atty. Angeles filed a Motion for Reconsideration on March 6, 2007, which the CA denied as out of time, declaring the January 23, 2007 decision final and executory as of February 14, 2007. The petitioners elevated the matter to the Supreme Court, which gave due course on April 16, 2008.

On February 21, 2012, the parties submitted a Compromise Agreement with Joint Motion to Dismiss and Withdrawal of Petition. On March 7, 2012, the Supreme Court noted the Compromise Agreement, granted the Joint Motion, and denied the petitions on the ground of mootness. The heirs of Marcelino Lopez, who had died on December 3, 2009, thereafter filed oppositions, contending that Atty. Angeles no longer possessed authority to enter into the Compromise Agreement because the special power of attorney in his favor had ceased upon Marcelino Lopez's death. Atty. Angeles had not disclosed the death of Marcelino Lopez to the Court.

• Lack of Authority of Atty. Angeles: The heirs of Marcelino Lopez argued that Atty. Angeles had no authority to enter into and submit the Compromise Agreement because the special power of attorney executed by Marcelino Lopez in his favor had ceased to have force and effect upon the latter's death on December 3, 2009.
• Timeliness of Motion for Reconsideration: The petitioners submitted that the CA erred in declaring its decision final and executory, maintaining that Atty. Angeles had until March 10, 2007 within which to file the Motion for Reconsideration, which he timely filed on March 6, 2007.
• Non-Disclosure of Death: The heirs contended that Atty. Angeles' failure to disclose the death of Marcelino Lopez to the Court reflected an attempt to pass off the Compromise Agreement as genuine and valid despite the extinction of his authority.

• Finality of the CA Decision: Respondent Primex Corporation moved to declare the CA's January 23, 2007 decision final and executory and to remand the case to the RTC for execution, the petitioners' Motion for Reconsideration having been filed out of time.
• Authority of Atty. Angeles: Atty. Angeles asserted that he had been authorized by the Lopezes to enter into the Compromise Agreement and that his authority formed part of the original pre-trial records of the RTC.

• Authority of Agent After Death of Principal: Whether Atty. Angeles retained authority to enter into the Compromise Agreement on behalf of the deceased Marcelino Lopez and his successors-in-interest after the principal's death on December 3, 2009.
• Finality of the CA Decision: Whether the CA erred in declaring its January 23, 2007 decision final and executory on the ground that the Motion for Reconsideration was filed out of time, where the petitioners were represented by two counsels who received the decision on different dates.

• Authority of Agent After Death of Principal: No. The Compromise Agreement was void ab initio because the special power of attorney was extinguished upon the death of Marcelino Lopez on December 3, 2009, more than two years before the agreement was executed, and no exception under Articles 1930 or 1931 of the Civil Code was applicable.
• Finality of the CA Decision: No. The CA correctly declared its decision final and executory, service upon one of two counsels of record being effective notice to the party, commencing the reglementary period for filing a Motion for Reconsideration from the date of such service.

• Authority of Agent After Death of Principal: Under Article 1919 of the Civil Code, agency is extinguished by the death of either the principal or the agent. The Court, relying on Rallos vs. Felix Go Chan & Sons Realty Corporation, declared that because death of the principal extinguished the agency, any act of the agent after the death of the principal is void ab initio unless the act falls under the exceptions in Article 1930 (agency constituted in the common interest of principal and agent, or in the interest of a third person who has accepted the stipulation) or Article 1931 (act done by the agent without knowledge of the principal's death, valid as to third persons in good faith). These exceptions are strictly construed. Marcelino Lopez died on December 3, 2009, and the Compromise Agreement was filed on February 21, 2012 — more than two years later. Atty. Angeles thus ceased to be the agent upon the principal's death, rendering the special power of attorney functus officio. His execution and submission of the Compromise Agreement and withdrawal of the petition on behalf of the Lopezes were void and of no effect. The omission to disclose the death of Marcelino Lopez aggravated the want of authority and engendered suspicion that Atty. Angeles sought to pass off the agreement as valid.

• Finality of the CA Decision: Under Section 2, Rule 13 of the Rules of Court, if a party has appeared by counsel, service shall be made upon counsel or one of them. Where a party is represented by multiple counsels and no notice of withdrawal or substitution has been made, notice to either counsel is effective notice to the party. The CA could not be expected to ascertain whether counsel of record had been changed. Atty. Pantaleon received the CA decision on January 30, 2007, which commenced the running of the period for seeking reconsideration or perfecting an appeal, notwithstanding that Atty. Angeles had yet to receive his copy. The petitioners thus had until February 14, 2007 to act but filed their Motion for Reconsideration only on March 6, 2007 — 35 days from notice. A party who fails to assail an adverse decision through the proper remedy within the prescribed period loses the right to do so, and the decision becomes final and binding. The perfection of appeal in the manner and within the period prescribed by law is mandatory and jurisdictional; failure to perfect renders the judgment final and executory. The right to appeal is a mere statutory right that must be strictly complied with.

• Extinguishment of Agency by Death of Principal — Under Article 1919 of the Civil Code, agency is extinguished by the death of the principal or the agent. Any act by the agent subsequent to the principal's death is void ab initio, unless the act falls under the exceptions in Article 1930 (agency constituted in the common interest of the principal and the agent, or in the interest of a third person who has accepted the stipulation in his favor) or Article 1931 (act done by the agent without knowledge of the principal's death, valid and fully effective as to third persons who contracted in good faith). The exceptions are strictly construed. In this case, the special power of attorney became functus officio upon Marcelino Lopez's death on December 3, 2009, rendering the Compromise Agreement executed more than two years later void and of no effect.

• Service on Multiple Counsels of Record — Under Section 2, Rule 13 of the Rules of Court, where a party is represented by two or more counsels, service upon one of them is effective notice to the party. In the absence of any notice of withdrawal or substitution of counsel, the court is not expected to ascertain whether counsel of record has been changed. Service on one counsel commences the reglementary period for seeking reconsideration or perfecting an appeal, notwithstanding that another counsel has yet to receive a copy.

• Finality of Judgment and Jurisdictional Nature of Appeal — The perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional. Failure to perfect the appeal renders the judgment final and executory. A motion for reconsideration filed out of time cannot toll the finality of the decision. The right to appeal is neither a natural nor constitutional right but a mere statutory privilege that must be strictly exercised in accordance with the rules.

• "An agency is extinguished by the death of the principal. Any act by the agent subsequent to the principal's death is void ab initio, unless any of the exceptions expressly recognized in Article 1930 and Article 1931 of the Civil Code is applicable." — This is the opening pronouncement of the resolution, stating the controlling legal principle that governs the entire disposition on the validity of the Compromise Agreement.

• "Considering that Atty. Angeles had ceased to be the agent upon the death of Marcelino Lopez, Atty. Angeles' execution and submission of the Compromise Agreement in behalf of the Lopezes by virtue of the special power of attorney executed in his favor by Marcelino Lopez were void ab initio and of no effect. The special power of attorney executed by Marcelino Lopez in favor of Atty. Angeles had by then become functus officio." — This passage applies the doctrine of extinguishment of agency to the specific facts, establishing the ratio decidendi for voiding the Compromise Agreement.

• "The perfection of appeal in the manner and within the period set by law is not only mandatory but jurisdictional, and the failure to perfect the same renders the judgment final and executory." — This articulates the jurisdictional character of the period for appeal, a principle frequently cited in Philippine remedial law jurisprudence.

• Rallos vs. Felix Go Chan & Sons Realty Corporation, G.R. No. L-24332, January 31, 1978, 81 SCRA 251 — Controlling precedent establishing that any act of the agent after the death of the principal is void ab initio unless falling under the exceptions in Articles 1930 and 1931 of the Civil Code. Followed and applied in this case.
• Damasco vs. Arrieta, No. L-18879, January 31, 1963, 7 SCRA 224 — Cited for the proposition that notice to one of multiple counsels is effective notice to the party.
• Lee vs. Romillo, Jr., G.R. No. L-60937, May 28, 1988, 161 SCRA 589 — Cited for the rule that the court cannot be expected to ascertain whether counsel of record has been changed, and that service on counsel of record is effective notice.
• Lebin vs. Mirasol, G.R. No. 164255, September 7, 2011, 657 SCRA 35 — Cited for the principle that the right to appeal is neither a natural nor constitutional right but a mere statutory right that must be exercised in accordance with prescribed procedures.
• Prieto vs. Court of Appeals, G.R. No. 158597, June 18, 2012, 673 SCRA 371 — Cited for the jurisdictional nature of the perfection of appeal.

• Article 1868, Civil Code — Defines the contract of agency, 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. Applied to characterize the relationship between Marcelino Lopez (principal) and Atty. Sergio Angeles (agent) under the special power of attorney.
• Article 1919, Civil Code — Enumerates the modes of extinguishing agency, including the death, civil interdiction, insanity, or insolvency of the principal or of the agent. Applied as the statutory basis for ruling that the agency was extinguished upon Marcelino Lopez's death on December 3, 2009.
• Article 1930, Civil Code — Provides that the agency remains in full force and effect even after the death of the principal if it has been constituted in the common interest of the principal and the agent, or in the interest of a third person who has accepted the stipulation in his favor. Examined as a potential exception but found inapplicable to the facts.
• Article 1931, Civil Code — Provides that anything done by the agent without knowledge of the principal's death is valid and fully effective with respect to third persons who may have contracted with him in good faith. Examined as a potential exception but found inapplicable, as Atty. Angeles knew of the death but failed to disclose it.
• Section 2, Rule 13, Rules of Court — Provides that if a party has appeared by counsel, service shall be made upon counsel or one of them. Applied to hold that service of the CA decision on Atty. Pantaleon was effective notice to the petitioners, commencing the period for filing a Motion for Reconsideration.

Velasco, Jr., Leonen, and Gesmundo, JJ., concurred. Martires, J., was on leave.