RALLOS v FELIX GO CHAN & REALTY COPR.

, Munoz-Palma Plaintiff: Ramon Rallos Defendant: Felix Go Chan & Sons Realty Corporation Facts: • • Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No. 11116 of the Registry of Cebu. They executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell such land for and in their behalf. After Concepcion died, Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia to Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. New TCTs were issued to the latter. Petitioner Ramon Rallos, administrator of the Intestate Estate of Concepcion filed a complaint praying (1) that the sale of the undivided share of the deceased Concepcion Rallos in lot 5983 be unenforceable, and said share be reconveyed to her estate; (2) that the Certificate of 'title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelled and another title be issued in the names of the corporation and the "Intestate estate of Concepcion Rallos" in equal undivided and (3) that plaintiff be indemnified by way of attorney's fees and payment of costs of suit.


CFI: [Plaintiff’s Complaint] • Sale of land was null and void insofar as the one-half pro-indiviso share of Concepcion Rallos • Ordered the issuance of new TCTs to respondent corporation and the estate of Concepcion in the proportion of ½ share each pro-indiviso and the payment of attorney’s fees and cost of litigation [Respondent filed cross claim against Simon Rallos(*Simon and Gerundia died during pendency of case)] • Juan T. Borromeo, administrator of the Estate of Simeon Rallos was ordered to pay defendant the price of the ½ share of the land (P5,343.45) plus attorney’s fees [Borromeo filed a third party complaint against Josefina Rallos, special administratrix of the Estate of Gerundia] • Dismissed without prejudice to filing either a complaint against the regular administrator of the Estate of Gerundia Rallos or a claim in the Intestate-Estate of Cerundia Rallos, covering the same subject-matter CA: CFI Decision reversed, upheld the sale of Concepcion’s share. MR: denied. Issues: 1) WON sale was valid although it was executed after the death of the principal, Concepcion. 2) WON sale fell within the exception to the general rule that death extinguishes the authority of the agent 3) WON agent’s knowledge of the principal’s death is a material factor. 4) WON petitioner must suffer the consequence of failing to annotate a notice of death in the title (thus there was good faith on the part of the Respondent vendee)

one party. A contract entered into in the name of another by one who has no authority or the legal representation or who has acted beyond his powers. 1930) if it has been constituted in the common interest of the latter and of the agent. unless it is ratified. by the person on whose behalf it has been executed. expressly or impliedly. 1317 of the Civil Code). Extinguishment o Generally: among others3. before it is revoked by the other contracting party. express or implied of the parties to establish the relationship. and the agent acts within the scope of his authority.5) WON good faith on the part of the respondent in this case should be treated parallel to that of an innocent purchaser for a value of a land. 2 The following contracts are unenforceable. By the death. • No one may contract in the name of another without being authorized by the latter.  (Art. caged the principal (mandante). 1930 inapplicable: SPA in favor of Simon Rallos was not coupled with interest o Art.been given no authority or legal representation or who has acted beyond his powers. Simon’s authority as agent was extinguished upon Concolacion’s death 2) The sale did not fall under the exceptions to the general rule that death ipso jure extinguishes the authority of the agent o Art. • or unless he has by law a right to represent him (Art. 3 See Art. civil interdiction.. or in the interest of a third person who has accepted the stipulation in his favor. the object is the execution of a juridical act in relation to a third person. -derivative in nature. 1931) agent acted without knowledge of the pricipal’s death and that the third person was in good faith (both these reqs should be present) • IN THE CASE AT BAR: 1) Sale was void. authorizes another. shall be unenforceable. insanity or insolvency of the principal or of the agent . or unless he has by law a right to represent him.death of the principal effects instantaneous and absolute revocation of the authority of the agent o Exceptions:  (Art. the agents acts as a representative and not for himself.. called the agent (mandatario). Held/Ratio: (Court discussed relevant principles first) Relationship of Agency (concept arising from principles under Art 13171 and 14032). power emanating from principal -agent’s acts are acts of the principal • (1) (2) (3) (4) Essential Elements: there is consent. 1919 . to act for and in his behalf in transactions with third persons. unless they are justified: (1) Those entered into in the name of another person by one who hi . . 1931 inapplicable: 1 no one may contract in the name of another without being authorized by the latter.

1931) Dispositive: CA Decision reversed. is to be strictly construed. Without knowledge of the revocation. by operation of law. both requirements must be present 3) Yes.  Simon Rallos knew (as can be inferred from his pleadings) of principal Concepcion’s death For Art 1931 to apply. are valid. the law provides that death of the principal ipso jure extinguishes the authority of the agent to sell rendering the sale to a third person in good faith unenforceable unless at the agent had no knowledge of the principal’s death at that time (exception under Art. if revocation was due to death of the principal: extinguishment. CFI decision affirmed. Respondent asserts that: there is no provision in the Code which provides that whatever is done by an agent having knowledge of the death of his principal is void even with respect to third persons who may have contracted with him in good faith and without knowledge of the death of the principal Court says: this contention ignored the ignores the existence of the general rule enunciated in Article 1919 that the death of the principal extinguishes the agency. Article 1931. • BUT. • If revocation was by the act of the principal: a general power which does not specify the persons to whom represents' on should be made. Sale was null and void. agent’s knowledge of principal’s death is material. the Civil Code does not impose a duty upon the heirs to notify the agent or others of the death of the principal. being an exception to the general rule. executed with third persons who contracted in good faith. should apply. is instantaneous without the need for notification to the parties concerned. it is the general opinion that all acts. 5) No. the terms of which are clear and unmistakable leaving no room for an interpretation contrary to its tenor. . • Laws on agency. 4) NO.