TL;DR
The Supreme Court clarified that when selling co-owned property through an agent, a written Special Power of Attorney (SPA) is crucial. Without an SPA, the sale is void for co-owners who didn’t authorize the agent, although valid for the agent’s share. This case underscores that lack of proper authorization in property sales leads to void contracts, affecting ownership and requiring potential expropriation by the government for public use land. Individuals buying property from agents must verify written authorization to ensure valid transactions and secure their property rights.
When Words Aren’t Enough: The Case of the Unauthorized Land Sale
This case revolves around a land dispute in Lapu-Lapu City, Cebu, concerning property now part of the Mactan-Cebu International Airport. Richard Unchuan claimed ownership of two lots, arguing that the prior sale of these lots to the Civil Aeronautics Administration (CAA), the predecessor of the Mactan-Cebu International Airport Authority (MCIAA), was invalid. Unchuan purchased the lots from heirs of the original registered owners, believing a prior sale to CAA was void due to lack of proper authorization. The central legal question is whether the sale to CAA was valid, considering the agent who facilitated the sale allegedly lacked a written Special Power of Attorney from all co-owners.
The Regional Trial Court (RTC) and Court of Appeals (CA) sided with Unchuan, declaring the sale to CAA void. They reasoned that Atanacio Godinez, who acted as the agent for the heirs in selling to CAA, did not possess a written Special Power of Attorney (SPA) as required by law. Philippine law, specifically Article 1874 of the Civil Code, mandates that when selling land through an agent, the agent’s authority must be in writing; otherwise, the sale is void. The courts found no evidence of such written authorization, concluding that Atanacio could not legally bind his co-owners to the sale. Furthermore, the RTC noted the Deed of Absolute Sale lacked the signature of the CAA Administrator, suggesting a lack of consent from the buyer as well. The lower courts ordered MCIAA to vacate the property and pay rentals to Unchuan.
MCIAA appealed to the Supreme Court, arguing that the lack of SPA was a mere technicality, and subsequent actions by the heirs ratified the sale. MCIAA presented additional evidence, including a Deed of Partition and a Joint Affidavit, suggesting the heirs acknowledged the sale. However, the Supreme Court upheld the CA’s decision with modifications. The Court reiterated the strict requirement of a written SPA for real estate sales through an agent, citing Dizon v. Court of Appeals, which emphasized that the agent’s authority must be expressly stated in writing. The Court stated:
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.
Because Atanacio lacked the written SPA, the sale was deemed void concerning the shares of the co-owners he represented without authorization. The Court clarified that a void contract cannot be ratified and is imprescriptible, meaning it can be challenged at any time. However, the Supreme Court made a crucial distinction: while the sale was void for the unauthorized co-owners, it remained valid for Atanacio’s own share in the co-owned property. Article 493 of the Civil Code grants each co-owner full ownership of their part and the right to alienate it.
Each co-owner shall have the full ownership of his part and the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it… But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.
Thus, Atanacio validly sold his undivided share to CAA, making CAA a co-owner. Unchuan, having purchased from Atanacio’s heirs later, could not acquire Atanacio’s already-sold share. The Court modified the lower courts’ rulings, recognizing Unchuan’s ownership of the property, but excluding Atanacio’s share. Given the public use of the land as an airport, the Supreme Court directed MCIAA to initiate expropriation proceedings to properly compensate the landowners, including Unchuan, for their respective shares, and to pay rentals until full payment is made. This decision highlights the importance of due diligence in property transactions, particularly verifying the agent’s written authority, and underscores the government’s power of eminent domain when private property serves public interest.
FAQs
| What was the central issue in this case? | The main issue was the validity of a land sale to the Civil Aeronautics Administration (CAA) where the agent representing the sellers allegedly lacked a written Special Power of Attorney (SPA). |
| What is a Special Power of Attorney (SPA) and why is it important in this case? | A Special Power of Attorney is a written document authorizing an agent to act on behalf of another person (principal) in specific matters. In real estate sales, Philippine law requires an SPA for an agent to validly sell land for the principal; without it, the sale is void. |
| What did the Supreme Court rule regarding the validity of the sale to CAA? | The Supreme Court ruled that the sale to CAA was void concerning the shares of co-owners who did not authorize Atanacio Godinez with a written SPA. However, the sale was valid for Atanacio’s own share as a co-owner. |
| What is the implication of co-ownership in this case? | Because the property was co-owned, Atanacio could only validly sell his individual share without proper authorization from other co-owners. The sale effectively made CAA a co-owner with the other heirs. |
| What action was MCIAA ordered to take by the Supreme Court? | MCIAA was ordered to initiate expropriation proceedings to acquire the remaining private shares of the land, including Unchuan’s portion, since the land is used for a public purpose (the airport). MCIAA must also pay rentals until the expropriation is finalized. |
| What is the practical takeaway from this case for property buyers and sellers? | Buyers must always verify that agents selling property on behalf of owners have a written Special Power of Attorney. Sellers using agents must ensure they provide proper written authorization to avoid void sales and legal complications. |
For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.
Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY VS. UNCHUAN, G.R. No. 182537, June 01, 2016
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