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SECOND DIVISION
FLORENTINA BAUTISTASPILLE represented by her
Attorney-in-fact, Manuel B.
Flores, Jr.,
Petitioner,

- versus -

NICORP MANAGEMENT
AND DEVELOPMENT
CORPORATION, BENJAMIN
G. BAUTISTA and
INTERNATIONAL EXCHANGE
BANK,
Respondents.

G.R. No. 214057

Present:
LEONARDO-DE CASTRO,* J,
BRION, Acting Chairperson,*"
PERALTA***
'
MENDOZA, and
LEONEN, JJ.

Promulgated:

OCT 1 g 2015

x -----------------------------------------------------------------------------------------------------x

DECISION
MENDOZA, J.:
Before the Court is a petition for review on certiorari under Rule 45
of the Rules of Court assailing the March 19, 2014 Decision 1 and the August
18, 2014 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No.
97682, which reversed and set aside the May 24, 2010 Decision3 of the
Regional Trial Court, Branch 90, Dasmarifias, Cavite (RTC), in Civil Case
No. 0321-04, declaring a contract to sell null and void.
Per Special Order No. 2250, dated October 14, 2015.
Per Special Order No. 2222, dated September 29, 2015.
Per Special Order No. 2223, dated September 29, 2015.
1
Rollo, pp. 41-50. Penned by Associate Justice Elihu A. Ybanez with Associate Justices Japar B.
Dimaampao and Melchor Q.C. Sadang, concurring.
2
Id. at 52-53. Penned by Associate Justice Elihu A. Ybafl.ez with Associate Justices Japar B. Dimaampao
and Melchor Q.C. Sadang, concurring.
3
Id. at 297-308. Penned by Judge Perla V. Cabrera-Faller.

't

DECISION

G.R. No. 214057

The Facts:

Petitioner Florentina Bautista-Spille (petitioner) is the registered

owner of a parcel of land covered by Transfer Certificate of Title (TCT) No.
T-197, located in Imus City, Cavite, with an area of more or less 33,052
square meters (subject property).
On June 20, 1996, petitioner and her spouse, Harold E. Spille,
executed a document denominated as General Power of Attomey4 in favor of
her brother, respondent Benjamin Bautista (Benjamin), authorizing the latter
to administer all her businesses and properties in the Philippines. The said
document was notarized before the Consulate General of the Philippines,
New York, United States of America.
On August 13, 2004, Benjamin and NICORP Management and
Development Corporation (NJCORP) entered into a contract to sel1 5 which
pertained to the parcel of land covered by TCT No. T-197 for the agreed
amount of P15,000,000.00. In the said contract, NICORP agreed to give a
down payment equivalent to 20% of the purchase price and pay the
remaining balance in eight (8) months. It was also agreed that upon receipt
of the down payment, the TCT of the subject property would be deposited
with the International Exchange Bank (IE Bank) and placed in escrow. It
would only be released upon full payment of the agreed amount.
Furthermore, Benjamin was required to submit a special power of attorney
(SPA) covering the sale transaction, otherwise, the payment of the balance
would be suspended and a penalty of P150,000.00 every month would be
imposed.
Pursuant thereto, an Escrow Agreement, 6 dated October 13, 2004,
was executed designating IE Bank as the Escrow Agent, obliging the latter
to hold and take custody of TCT No. T-197, and to release the said title to
NICORP upon full payment of the subject property.
On October 14, 2004, NICORP issued a check in the amount of
P2,250,000.00, representing the down payment of the subject property. 7
Thereafter, the TCT was deposited with IE Bank and placed in escrow.

Id. at 80-81.
Id. at 82-85.
6
Id. at 124-128.
7
Annex of the Complaint, records, p. 25.
5

DECISION

G.R. No. 214057

When petitioner discovered the sale, her lawyer immediately sent

demand letters8 to NICO RP and Benjamin, both dated October 27, 2004, and
to IE Bank, dated October 28, 2004, informing them that she was opposing
the sale of the subject property and that Benjamin was not clothed with
authority to enter into a contract to sell and demanding the return of the
owner's copy of the certificate of title to her true and lawful attorney-in-fact,
Manuel B. Flores, Jr. (Flores). NICORP, Benjamin and IE Bank, however,
failed and refused to return the title of the subject property.
Consequently, petitioner filed a complaint9 before the RTC against
Benjamin, NI CORP and IE Bank for declaration of nullity of the contract to
sell, injunction, recovery of possession and damages with prayer for the
issuance of a temporary restraining order and/or preliminary injunction
because NICORP was starting the development of the subject property into a
residential subdivision and was planning to sell the lots to prospective
buyers. Petitioner denied receiving the down payment for the subject
property.
The RTC granted the writ of preliminary injunction in its Order, 10
dated January 24, 2005, enjoining NICORP and all persons acting on its
behalf from making or introducing improvements, subdividing and selling
any subdivided lot of the subject property.
In its Answer, 11 NI CORP asked for the dismissal of the case for lack
of a cause of action and averred that Benjamin was empowered to enter into
a contract to sell by virtue of the general power of attorney; that the said
authority was valid and subsisting as there was no specific instrument that
specifically revoked his authority; that assuming Bautista exceeded his
authority when he executed the contract to sell, the agreement was still valid
and enforceable as the agency was already "coupled with interest" because
of the partial payment in the amount of P3,000,000.00; and that the contract
could not just be revoked without NICORP being reimbursed of its down
payment and the costs for the initial development it had incurred in
developing the subject property into a residential subdivision.
For its part, IE Bank denied any liability and alleged that petitioner
had no cause of action against it. IE Bank asserted that, at the time of its
constitution as an escrow agent, Benjamin possessed the necessary authority
from petitioner; that because the contract to sell remained valid, it was duty8
9
10

11

Rollo, pp. 86-91.

Id. at 99-110.
Records, pp. 158-162.
Id. at 136-145.

DECISION

G.R. No. 214057

bound to observe its duties and obligations under the Escrow Agreement;
and that in the absence of any order from the court, it was proper for the
bank not to comply with petitioner's demand for the surrender of the
certificate of title. 12
Benjamin, on the other hand, did not file any responsive pleading.
Hence, he was declared in default in the RTC Order, 13 dated August 25,
2005.
On May 24, 2010, the RTC rendered its judgment, declaring the
contract to sell null and void. 14 It explained that the general power of
authority only pertained to acts of administration over petitioner's businesses
and properties in the Philippines and did not include authority to sell the
subject property. It pointed out that NI CORP was well aware of Benjamin's
lack of authority to sell the subject property as gleaned from the contract to
sell which required the latter to procure the SP A from petitioner and even
imposed a penalty of P150,000.00 per month if he would be delayed in
securing the SPA. The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiff and against the defendants,
declaring the Contract to Sell, dated October 13, 2004 between the
defendant Bautista and NICORP to be null and void, and the writ of
preliminary injunction is now made permanent, and further
ordering the defendants NICORP and International Exchange Bank
as follows (a) To return to the plaintiff the peaceful possession of
the subject property covered by Transfer
Certificate of Title No. T-197 of the Register of
Deeds of the Province of Cavite;
(b) To return to the plaintiff the Original Owner's
Duplicate of Title No. T-197 of the Register of
Deeds of the Province of Cavite;
(c) To pay to the plaintiff the amount
Php250,ooo.oo by way of attorney's fees; and

of

(d) The Costs of suit.

SO ORDERED. 15

12

Id.
Id.
14
Id.
15
Id.
13

at 130-135.
at 210.
at 641-652.
at 652.

DECISION

G.R. No. 214057

Aggrieved, NICORP appealed before the CA.

In the assailed decision, the CA reversed the RTC decision,
explaining that the general power of attorney executed by petitioner in favor
of Benjamin authorized the latter not only to perform acts of administration
over her properties but also to perform acts of dominion which included,
among others, the power to dispose the subject property.
Petitioner filed a motion for reconsideration, but it was denied in the
assailed CA Resolution, dated August 18, 2014.
Hence, this petition anchored on the following
GROUNDS
A. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ERROR IN HOLDING THAT THE GENERAL
POWER OF ATTORNEY EXECUTED BY PETITIONER
AUTHORIZED BENJAMIN BAUTISTA TO ENTER INTO
THE CONTRACT TO SELL WITH RESPONDENJ; IN
CONTRAVENTION
OF
THE
ESTABLISHED
PRONOUNCEMENT OF THE SUPREME COURTi IN
THE CASE OF LILLIAN N. MERCADO ET AL. vs.
ALLIED BANKING CORPORATION CG.R. NO. 1z14.60,
24JULY2ooz.
B. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ERROR IN APPLYING THE CASE OF ESTATE
OF LINO OLAGUER VS. ONGJOCO CG.R. NO. 173312,
26 AUGUST 2008) TO THE INSTANT CASE
CONSIDERING THAT THE ESTABLISHED FACTS
HEREIN ARE NOT IN ALL FOURS WITH THE FACTS
SURROUNDING THE DECISION IN THE OLAGUER
VS. ONGJOCO CASE.
C. THE HONORABLE COURT OF APPEALS ERRED IN
DISREGARDING (I)
RESPONDENT'S JUDICIAL
ADMISSION AS TO BENJAMIN BAUTISTA'S LACK OF
AUTHORITY TO ENTER INTO A CONTRACT TO SELL
THE SUBJECT PROPERTY, AND (II) RESPONDENT'S
KNOWLEDGE OF THE INSUFFICIENCY OF THE
GENERAL POWER OF ATTORNEY, INDICATING BAD
FAITH OF THE RESPONDENT.

DECISION

G.R. No. 214057

D. THE HONORABLE COURT OF APPEALS ERRED IN

HOLDING THAT THE TRIAL COURT ERRED IN
DECLARING THE CONTRACT TO SELL NULL AND
VOID. 16

Petitioner argues that the general power of attorney did not clothe
Benjamin with the authority to enter into a contract to sell the subject
property. She contends that the general power of attorney pertained to the
power to buy, sell, negotiate and contract over the business and personal
property but did not specifically authorize the sale of the subject property.
Petitioner asserts that the CA erred when it disregarded the stipulation
made by NICORP during the pre-trial proceedings as stated in the pre-trial
order that Benjamin "acted beyond the scope of his authority when he failed
to inform plaintiff personally as to his dealing or negotiation with NICO RP
and when he signed the Contract to Sell xxx." 17 According to petitioner,
such an admission was an indication that NICORP did not consider the
general power of authority as an SPA which would have authorized
Benjamin to enter into the contract to sell.
NICORP counters that the general power of attorney sufficiently
conferred authority on Benjamin to enter into the contract to sell. It asserts
that the written authority, while denominated as a general power of attorney,
expressly authorized him to sell the subject property. NICORP insists that it
was a buyer in good faith and was never negligent in ascertaining the extent
of his authority to sell the property. It explains that though the general power
of attorney sufficiently clothed Bautista with authority to sell the subject
property, it nonetheless required him to submit the SPA in order to comply
with the requirements of the Register of Deeds and the Bureau of Internal
Revenue.
The issue for resolution is whether or not Benjamin was authorized to
sell the subject property.
The Court's Ruling

The Court finds the petition meritorious.

In petitions for review on certiorari under Rule 45 of the Rules of
Civil Procedure, only questions of law may be raised by the parties and
16

17

Rollo, p. 17.
As quoted in the petition, id. at 26.

'

DECISION

G.R. No. 214057

passed upon by this Court. It is not a function of this Court to analyze and
18
weigh the evidence presented by the parties all over again. This rule,
however, has several well-recognized exceptions, such as when the factual
19
findings of the CA and the trial court are conflicting or contradictory.
The well-established rule is when a sale of a parcel 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. Articles 1874 and 1878 of the Civil
Code explicitly provide:
Art. 1874. 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.
Art. 1878. Special powers of attorney are necessary in the

following cases:
(1)

x xx

(5) To enter into any contract by which the ownership of an

immovable is transmitted or acquired either gratuitously or for a
valuable consideration;

x x x . [Emphasis Supplied]
From the foregoing, it is clear that an SPA in the conveyance of real
rights over immovable property is necessary. 20 In Cosmic Lumber
Corporation v. Court ofAppeals, 21 the Court enunciated,
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. 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 appointee of an

agency (couched) in general terms to sell must be one that expressly
mentions a sale or that includes a sale as a necessary ingredient of
the act mentioned. For the principal to confer the right upon an

18

Dehesa-Inamarga v. Alano, 595 Phil. 294, 300 (2008).

Chua v. Soriano, 549 Phil. 578, 588-589 (2007).
20
Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc. , 479 Phil. 896, 912 (2004).
21
332 Phil. 948 (1996).
19

DECISION

G.R. No. 214057

agent to sell real estate, a power of attorney must so express the

powers of the agent in clear and unmistakable language. When there
is any reasonable doubt that the language so used conveys such
power, no such construction shall be given the document." 22
[Emphases Supplied]

To reiterate, such authority must be conferred in writing and must

express the powers of the agent in clear and unmistakable language in order
for the principal to confer the right upon an agent to sell the real property. 23
It is a general rule that a power of attorney must be strictly construed, and
courts will not infer or presume broad powers from deeds which do not
sufficiently include property or subject under which the agent is to deal. 24
Thus, when the authority is couched in general terms, without mentioning
any specific power to sell or mortgage or to do other specific acts of strict
dominion, then only acts of administration are deemed conferred. 25
In the case at bench, the only evidence adduced by NICORP to prove
Benjamin's authority to sell petitioner's property was the document
denominated as General Power of Attorney, dated June 20, 1996. The
pertinent portions of the said document reads:
KNOW ALL MEN BY THESE PRESENTS:
THAT I/WE FLORENTINA B. SPILLE, of legal age,
single/married to HAROLD E. SPILLE and residents of xx x do
hereby appoint, name and constitute BENJAMIN G. BAUTISTA
resident(s) of x x x to be my/our true and lawful attorney(s), to
administer and conduct all my/ our affairs and for that purpose in
my/our name(s) and on my/our behalf, to do and execute any or all
of the following acts, deeds and things to wit:
1.

22
23
24

25

To exercise administration, general control and

supervision over my/ our business and property in
the Philippines, and to act as my/ our general
representative(s) and agent(s) with full authority
to buy, sell, negotiate and contract for me/us and
my/ our behalf;

Id. at 957-958.
Yoshizaki v. Joy Training Center ofAurora, Inc., G.R. No. 174978, July 31, 2013, 702 SCRA, 631, 642.
Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc., supra note 20, at 913.
Veloso v. Court of Appeals, 329 Phil. 398, 405 (1996).

DECISION

2.

G.R. No. 214057

To ask, demand, sue for, recover and receive all

sums of money, debts, dues, goods, wares,
merchandise, chattels, effects and thing of
whatsoever nature or description, which now or
hereafter shall be or become due, owing, payable
or belonging to me/us in or by any right, title,
ways or means howsoever, and upon receipt
thereof or any part thereof, to make, sign, execute
and deliver such receipts, releases or other
discharges ;
xxx26

Doubtless, there was no perfected contract to sell between petitioner

and NICORP. Nowhere in the General Power of Attorney was Benjamin
granted, expressly or impliedly, any power to sell the subject property or a
portion thereof. The authority expressed in the General Power of Attorney
was couched in very broad terms covering petitioner's businesses and
properties. Time and again, this Court has stressed that the power of
administration does not include acts of disposition, which are acts of strict
ownership. As such, an authority to dispose cannot proceed from an
authority to administer, and vice versa, for the two powers may only be
exercised by an agent by following the provisions on agency of the Civil
Code. 27
In the same vein, NICORP cannot be considered a purchaser in good
faith. The well-settled rule is that a person dealing with an assumed agent is
bound to ascertain not only the fact of agency but also the nature and extent
of the agent's authority. 28 The law requires a higher degree of prudence from
one who buys from a person who is not the registered owner. He is expected
to examine all factual circumstances necessary for him to determine if there
are any flaws in the title of the transferor, or in his capacity to transfer the
land. 29 In ascertaining good faith, or the lack of it, which is a question of
intention, courts are necessarily controlled by the evidence as to the conduct
and outward acts by which alone the inward motive may, with safety, be
determined. Good faith, or want of it, is not a visible, tangible fact that can
be seen or touched, but rather a state or condition of mind which can only be
judged by actual or fancied token or signs. 30

26

Rollo, p. 80.
Aggabao v. Paru/an, 644 Phil. 26, 37 (2010).
28
Lintonjua v. Fernandez, 471 Phil. 440, 458 (2004).
29
Abadv. Guimba, 503 Phil. 321, 331-332 (2005).
30
Philippine National Bank v. Militar, 526 Phil. 788, 798 (2006).
27

DECISION

10

G.R. No. 214057

Here, the Court agrees with the RTC that NICORP was fully aware
that Benjamin was not properly authorized to enter into any transaction
regarding the sale of petitioner's property. In fact, in the contract to sell,
NICORP required Benjamin to secure the SPA from petitioner within ninety
(90) days from the execution of the contract and even imposed a substantial
amount of penalty in the amount of P150,000.00 a month in case of noncompliance plus suspension of payment of the balance of the contract price.
Petitioner's explanation that it obliged Benjamin to secure the SPA in
order to comply with the requirements of the Register of Deeds and the
Bureau of Internal Revenue is bereft of merit. NICORP is a real estate
company which is familiar with the intricacies of the realty business.
Moreover, there was no evidence that petitioner ratified Benjamin's act of
selling the subject property. On the contrary, immediately after the execution
of the contract to sell, petitioner wrote NI CORP, IE Bank and Benjamin to
inform them of her opposition to the sale of the subject property and of his
lack of authority to sell it and demand the return of the certificate of title.
Clearly, NICORP was negligent in its dealings with Bautista.
In sum, the Court agrees with the findings and conclusion of the RTC.
The consent of petitioner in the contract to sell was not obtained, hence, not
enforceable. Furthermore, because NICORP is considered a builder in bad
faith, it has no right to be refunded the value of whatever improvements it
introduced on the subject property. 31
WHEREFORE, the petition is GRANTED. The March 19, 2014
Decision and the August 18, 2014 Resolution of the Court of Appeals in
CA-G.R. CV No. 97682 are REVERSED and SET ASIDE. The May 24,
2010 Decision of the Regional Trial Court, Branch 90, Dasmarifias, Cavite,
is REINSTATED.
SO ORDERED.

JOSE

31

Arts. 449 and 546, Civil Code.

CA~NDOZA

Ass~~:J~~ke

11

DECISION

G.R. No. 214057

WE CONCUR:

~~~~

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

Q~lft~
ARTURO D. BRION
Associate Justice
Acting Chairperson

./

MARVIC M.V.F. LEONEN

Associate Justice
,{

ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

Gti~o~~

Associate Justice
Acting Chairperson, Second Division

DECISION

12

G.R. No. 214057

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the
Division Acting Chairperson's Attestation, I certify that the conclusions in
the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice