VOL.

512,JANUARY24,2007 411
Escuetavs.Lim
*
G.R.No.137162.January24,2007.

CORAZON L. ESCUETA, assisted by her husband EDGAR

ESCUETA, IGNACIO E. RUBIO, THE HEIRS OF LUZ R.
BALOLOY,namely,ALEJANDRINOR.BALOLOYandBAYANI
R.BALOLOY,petitioners,vs.RUFINALIM,respondent.

Pleadings and Practice Admissions The factual admission in the

pleadingsonrecorddispenseswiththeneedtopresentevidencetoprovethe
admittedfact,andallproofssubmittedbythepartymakingsuchadmission
contrary thereto or inconsistent therewith should be ignored whether
objection is interposed by a party or not.An admission, verbal or
written, made by a party in the course of the proceedings in the same case,
does not require proof. The factual admission in the pleadings on record
[dispenses] with the need x x x to present evidence to prove the admitted
fact. It cannot, therefore, be controverted by the party making such
admission, and [is] conclusive as to them. All proofs submitted by them
contrary thereto or inconsistent therewith should be ignored whether
objectionisinterposedbyapartyornot.Besides,thereisnoshowingthata
palpablemistakehasbeencommittedintheiradmissionorthatnoadmission
hasbeenmadebythem.

Annulment of Judgments The 60day period for filing a petition for

annulment of judgment is reckoned from the time the party acquired
knowledge of the order, judgment or proceedings and not from the date he
actuallyreadthesame.Section3ofRule38oftheRulesofCourtstates:
SEC. 3. Time for filing petition contents and verification.A petition
providedforineitheroftheprecedingsectionsofthisRulemustbeverified,
filedwithinsixty(60)daysafterthepetitionerlearnsofthejudgment,final
order,orotherproceedingtobesetaside,andnotmorethansix(6)months
after such judgment or final order was entered, or such proceeding was
takenandmustbeaccompaniedwithaffidavitsshowingthefraud,accident,
mistake, or excusable negligence relied upon, and the facts constituting the
petitionersgoodandsubstantialcauseofactionordefense,asthecasemay
be. There is no reason for the Baloloys to ignore the effects of the above
citedrule.The60dayperiodisreckonedfrom
_______________

*FIRSTDIVISION.

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412 SUPREMECOURTREPORTSANNOTATED

Escuetavs.Lim

thetimethepartyacquiredknowledgeoftheorder,judgmentorproceedings
andnotfromthedateheactuallyreadthesame.

Agency The agent may appoint a substitute if the principal has not
prohibited him from doing so.Article 1892 of the Civil Code provides:
Art. 1892. The agent may appoint a substitute if the principal has not
prohibitedhimfromdoingsobutheshallberesponsiblefortheactsofthe
substitute: (1) When he was not given the power to appoint one x x x.
Applying the abovequoted provision to the special power of attorney
executed by Ignacio Rubio in favor of his daughter Patricia Llamas, it is
clearthatsheisnotprohibitedfromappointingasubstitute.Byauthorizing
Virginia Lim to sell the subject properties, Patricia merely acted within the
limits of the authority given by her father, but she will have to be
responsiblefortheactsofthesubagent,amongwhichispreciselythesale
ofthesubjectpropertiesinfavorofrespondent.

SameSalesAcontractexecutedbyanagentwithoutauthoritytosell
isnotvoidbutsimplyunenforceable.EvenassumingthatVirginiaLimhas
noauthoritytosellthesubjectproperties,thecontractsheexecutedinfavor
of respondent is not void, but simply unenforceable, under the second
paragraphofArticle1317oftheCivilCodewhichreads:Art.1317.xxxA
contractenteredintointhenameofanotherbyonewhohasnoauthorityor
legal representation, or who has acted beyond his powers, shall be
unenforceable,unlessitisratified,expresslyorimpliedly,bythepersonon
whose behalf it has been executed, before it is revoked by the other
contractingparty.

SameSameThe acceptance and encashment by the owner of a check

representing the purchase price of his property sold through his agent
constitute ratification of the contract of sale and produce the effects of an
expresspowerofagency.IgnacioRubiomerelydeniesthecontractofsale.
Heclaims,withoutsubstantiation,thatwhathereceivedwasaloan,notthe
down payment for the sale of the subject properties. His acceptance and
encashment of the check, however, constitute ratification of the contract of
sale and produce the effects of an express power of agency. [H]is action
necessarily implies that he waived his right of action to avoid the contract,
and, consequently, it also implies the tacit, if not express, confirmation of
thesaidsaleeffectedbyVirginiaLiminfavorofrespondent.

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VOL.512,JANUARY24,2007 413

Escuetavs.Lim

SameSameEstoppelThedoctrineofestoppelisnotonlythatwhich
prohibits a party from assuming inconsistent positions, based on the
principle of election, but that which precludes him from repudiating an
obligation voluntarily assumed after having accepted benefits therefrom.
Similarly,theBaloloyshaveratifiedthecontractofsalewhentheyaccepted
and enjoyed its benefits. The doctrine of estoppel applicable to petitioners
here is not only that which prohibits a party from assuming inconsistent
positions, based on the principle of election, but that which precludes him
from repudiating an obligation voluntarily assumed after having accepted
benefits therefrom. To countenance such repudiation would be contrary to
equity,andwouldputapremiumonfraudormisrepresentation.

SameSameDoubleSales A second buyer of the property who may

havehadactualorconstructiveknowledgeofadefectinthesellerstitle,or
atleastwaschargedwiththeobligationtodiscoversuchdefect,cannotbea
registrantingoodfaith.ApplyingArticle1544oftheCivilCode,asecond
buyerofthepropertywhomayhavehadactualorconstructiveknowledgeof
suchdefectinthesellerstitle,oratleastwaschargedwiththeobligationto
discoversuchdefect,cannotbearegistrantingoodfaith.Suchsecondbuyer
cannot defeat the first buyers title. In case a title is issued to the second
buyer, the first buyer may seek reconveyance of the property subject of the
sale. Even the argument that a purchaser need not inquire beyond what
appearsinaTorrenstitledoesnotholdwater.Aperusalofthecertificatesof
title alone will reveal that the subject properties are registered in common,
notintheindividualnamesoftheheirs.

Same Same Earnest Money Earnest money constitutes an advance

paymenttobedeductedfromthetotalprice.Earnestmoneyhasbeengiven
byrespondent.[I]tshallbeconsideredaspartofthepriceandasproofof
the perfection of the contract. It constitutes an advance payment to be
deductedfromthetotalprice.

SameSameInacontractofsale,thevendorlosesownershipoverthe
property and cannot recover it until and unless the contract is resolved or
rescinded.Ignacio Rubio could no longer sell the subject properties to
Corazon Escueta, after having sold them to respondent. [I]n a contract of
sale,thevendorlosesownershipoverthepropertyandcannotrecoverituntil
and unless the contract is resolved or rescinded x x x. The records do not
showthatIgnacio

414

414 SUPREMECOURTREPORTSANNOTATED

Escuetavs.Lim

Rubioaskedforarescissionofthecontract.Whatheadducedwasabelated
revocation of the special power of attorney he executed in favor of Patricia
Llamas. In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the
rescissionofthecontractshallofrighttakeplace,thevendeemaypay,even
aftertheexpirationoftheperiod,aslongasnodemandforrescissionofthe
contracthasbeenmadeuponhimeitherjudiciallyorbyanotarialact.

PETITIONforreviewoncertiorariofthedecisionandresolutionof
theCourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
Angara,Abello,Concepcion,Regala&Cruzforpetitioner.
SantosPampolina,Jr.forEscueta,RubioandtheBaloloys.
NelsonA.LoyolaandDaniloArriendaforrespondentRufina
Lim.

AZCUNA,J.:
1
Thisisanappealby certiorari to annul and set aside the Decision
and Resolution of the Court of Appeals (CA) dated October 26,
1998andJanuary11,1999,respectively,inCAG.R.CVNo.48282,
entitledRufinaLimv.CorazonL.Escueta,etc.,etal.
2
Thefacts appearasfollows:

RespondentRufinaLimfiledanactiontoremovecloudon,orquiettitleto,
real property, with preliminary injunction and issuance of [a holddeparture
order] from the Philippines against Ignacio E. Rubio. Respondent amended
hercomplainttoincludespecificperformanceanddamages.

_______________

1RULESOFCOURT,Rule45.

2Rollo,pp.7073CADecision,pp.25.

415

VOL.512,JANUARY24,2007 415
Escuetavs.Lim
Inheramendedcomplaint,respondentaverredinteraliathatsheboughtthe
hereditaryshares(consistingof10lots)ofIgnacioRubio[and]theheirsof
Luz Baloloy, namely: Alejandrino, Bayani, and other coheirs that said
vendors executed a contract of sale dated April 10, 1990 in her favor that
Ignacio Rubio and the heirs of Luz Baloloy received [a down payment] or
earnest money in the amount of P102,169.86 and P450,000, respectively
that it was agreed in the contract of sale that the vendors would secure
certificates of title covering their respective hereditary shares that the
balanceofthepurchasepricewouldbepaidtoeachheiruponpresentationof
theirindividualcertificate[s]of[title]thatIgnacioRubiorefusedtoreceive
theotherhalfofthedownpaymentwhichisP[100,000]thatIgnacioRubio
refused and still refuses to deliver to [respondent] the certificates of title
covering his share on the two lots that with respect to the heirs of Luz
Baloloy,theyalsorefusedandstillrefusetoperformthedeliveryofthetwo
certificates of title covering their share in the disputed lots that respondent
was and is ready and willing to pay Ignacio Rubio and the heirs of Luz
Baloloy upon presentation of their individual certificates of title, free from
whateverlienandencumbrance
As to petitioner Corazon Escueta, in spite of her knowledge that the
disputed lots have already been sold by Ignacio Rubio to respondent, it is
alleged that a simulated deed of sale involving said lots was effected by
IgnacioRubioinherfavorandthatthesimulateddeedofsalebyRubioto
Escuetahasraiseddoubtsandcloudsoverrespondentstitle.
In their separate amended answers, petitioners denied the material
allegationsofthecomplaintandallegedinteraliathefollowing:
FortheheirsofLuzBaloloy(Baloloysforbrevity):
Respondent has no cause of action, because the subject contract of sale
hasnomoreforceandeffectasfarastheBaloloysareconcerned,sincethey
havewithdrawntheiroffertosellforthereasonthatrespondentfailedtopay
the balance of the purchase price as orally promised on or before May 1,
1990.
For petitioners Ignacio Rubio (Rubio for brevity) and Corazon Escueta
(Escuetaforbrevity):
Respondenthasnocauseofaction,becauseRubiohasnotenteredintoa
contractofsalewithherthathehasappointedhisdaughterPatriciaLlamas
tobehisattorneyinfactandnotinfavor

416

416 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim

of Virginia Rubio Laygo Lim (Lim for brevity) who was the one who
represented him in the sale of the disputed lots in favor of respondent that
theP100,000respondentclaimedhereceivedasdownpaymentforthelotsis
asimpletransactionbywayofaloanwithLim.
TheBaloloysfailedtoappearatthepretrial.Uponmotionofrespondent,
the trial court declared the Baloloys in default. They then filed a motion to
lifttheorderdeclaringthemindefault,whichwasdeniedbythetrialcourtin
an order dated November 27, 1991. Consequently, respondent was allowed
to adduce evidence ex parte. Thereafter, the trial court rendered a partial
decisiondatedJuly23,1993againsttheBaloloys,thedispositiveportionof
whichreadsasfollows:

IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of

[respondent]andagainst[petitioners,heirs]ofLuzR.Balolo[y],namely:Alejandrino
Baloloy and Bayani Baloloy. The [petitioners] Alejandrino Baloloy and Bayani
Baloloy are ordered to immediately execute an [Absolute] Deed of Sale over their
hereditaryshareinthepropertiescoveredbyTCTNo.74392andTCTNo.74394,after
paymenttothemby[respondent]theamountofP[1,050,000]orconsignationofsaid
amount in Court. [For] failure of [petitioners] Alejandrino Baloloy and Bayani
Baloloy to execute the Absolute Deed of Sale over their hereditary share in the
propertycoveredbyTCTNo.T74392andTCTNo.T74394infavorof[respondent],
theClerkofCourtisorderedtoexecutethenecessaryAbsoluteDeedofSaleinbehalf
oftheBaloloysinfavorof[respondent,]withaconsiderationofP[1,500,000].Further[,]
[petitioners] Alejandrino Baloloy and Bayani Baloloy are ordered to jointly and
severallypay[respondent]moraldamagesintheamountofP[50,000]andP[20,000]for
attorneys fees. The adverse claim annotated at the back of TCT No. T74392 and
TCTNo.T74394[,]insofarasthesharesofAlejandrinoBaloloyandBayaniBaloloy
areconcerned[,][is]orderedcancelled.
Withcostsagainst[petitioners]AlejandrinoBaloloyandBayaniBaloloy.
3
SOORDERED.

_______________

3Id.,pp.315316RTCPartialDecision,pp.45.

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Escuetavs.Lim

The Baloloys filed a petition for relief from judgment and order dated July
4,1994andsupplementalpetitiondatedJuly7,1994.Thiswasdeniedbythe
trialcourtinanorderdatedSeptember16,1994.Hence,appealtotheCourt
ofAppealswastakenchallengingtheorderdenyingthepetitionforrelief.
Trial on the merits ensued between respondent and Rubio and Escueta.
Aftertrial,thetrialcourtrendereditsassailedDecision,asfollows:

IN VIEW OF THE FOREGOING, the complaint [and] amended complaint are

dismissed against [petitioners] Corazon L. Escueta, Ignacio E. Rubio[,] and the
Register of Deeds. The counterclaim of [petitioners] [is] also dismissed. However,
[petitioner]IgnacioE.Rubioisorderedtoreturntothe[respondent],RufinaLim[,]the
amountofP102,169.80[,]withinterestattherateofsixpercent(6%)perannumfrom
April10,[1990]untilthesameisfullypaid.Withoutpronouncementastocosts.
4
SOORDERED.
On appeal, the CA affirmed the trial courts order and partial
decision, but reversed the later decision. The dispositive portion of
itsassailedDecisionreads:

WHEREFORE, upon all the foregoing premises considered, this Court

rules:

1. the appeal of the Baloloys from the Order denying the Petition for
Relief from Judgment and Orders dated July 4, 1994 and
Supplemental Petition dated July 7, 1994 is DISMISSED. The
OrderappealedfromisAFFIRMED.
2. the Decision dismissing [respondents] complaint is REVERSED
andSETASIDEandanewoneisentered.Accordingly,

a. thevalidityofthesubjectcontractofsaleinfavorof[respondent]is
upheld.
b. Rubio is directed to execute a Deed of Absolute Sale conditioned
upon the payment of the balance of the purchase price by
[respondent] within 30 days from the receipt of the entry of
judgmentofthisDecision.

_______________

4Records,p.122RTCDecision,p.8.

418

418 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim

c. thecontractsofsalebetweenRubioandEscuetainvolvingRubios
shareinthedisputedpropertiesisdeclaredNULLandVOID.
d. Rubio and Escueta are ordered to pay jointly and severally the
[respondent] the amount of P[20,000] as moral damages and
P[20,000]asattorneysfees.

3. theappealofRubioandEscuetaonthedenialoftheircounterclaim
isDISMISSED.
5
SOORDERED.

Petitioners Motion for Reconsideration of the CA Decision was

denied.Hence,thispetition.
Theissuesare:

THE HONORABLE COURT OF APPEALS ERRED IN DENYING THE

PETITION FOR RELIEF FROM JUDGMENT FILED BY THE
BALOLOYS.

II

THE HONORABLE COURT OF APPEALS ERRED IN

REINSTATING THE COMPLAINT AND IN AWARDING MORAL
DAMAGES AND ATTORNEYS FEES IN FAVOR OF RESPONDENT
RUFINAL.LIMCONSIDERINGTHAT:

A. IGNACIOE.RUBIOISNOTBOUNDBYTHECONTRACTOF
SALEBETWEENVIRGINIALAYGOLIMANDRUFINALIM.
B. THE CONTRACT ENTERED INTO BETWEEN RUFINA LIM
ANDVIRGINIALAYGOLIMISACONTRACTTOSELLAND
NOTACONTRACTOFSALE.
C. RUFINALIMFAILEDTOFAITHFULLYCOMPLYWITHHER
OBLIGATIONS UNDER THE CONTRACT TO SELL
THEREBYWARRANTINGTHECANCELLATIONTHEREOF.

_______________

5Rollo,p.83CADecision,p.15.Allcapscopiedverbatim.

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VOL.512,JANUARY24,2007 419
Escuetavs.Lim

D. CORAZON L. ESCUETA ACTED IN UTMOST GOOD FAITH

IN ENTERING INTO THE CONTRACT OF SALE WITH
IGNACIOE.RUBIO.

III

THE CONTRACT OF SALE EXECUTED BETWEEN IGNACIO E.

RUBIOANDCORAZONL.ESCUETAISVALID.

IV

THEHONORABLECOURTOFAPPEALSERREDINDISMISSING
PETITIONERSCOUNTERCLAIMS.

Briefly,theissueiswhetherthecontractofsalebetweenpetitioners
andrespondentisvalid.
Petitionersargue,asfollows:
First, the CA did not consider the circumstances surrounding
petitioners failure to appear at the pretrial and to file the petition
forreliefontime.
As to the failure to appear at the pretrial, there was fraud,
accidentand/orexcusableneglect,becausepetitionerBayaniwasin
theUnitedStates.Therewasnoserviceofthenoticeofpretrialor
order. Neither did the former counsel of record inform him.
Consequently, the order declaring him in default is void, and all
subsequentproceedings,orders,ordecisionarevoid.
Furthermore, petitioner Alejandrino was not clothed with a
power of attorney to appear on behalf of Bayani at the pretrial
conference.
Second, the sale by Virginia to respondent is not binding.
Petitioner Rubio did not authorize Virginia to transact business in
hisbehalfpertainingtotheproperty.TheSpecialPowerofAttorney
was constituted in favor of Llamas, and the latter was not
empowered to designate a substitute attorneyinfact. Llamas even
disowned her signature appearing on the Joint Special Power of
Attorney, which constituted Virginia as her true and lawful
attorneyinfactinsellingRubiosproperties.

420

420 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim

Dealing with an assumed agent, respondent should ascertain not

onlythefactofagency,butalsothenatureandextentoftheformers
authority. Besides, Virginia exceeded the authority for failing to
comply with her obligations under the Joint Special Power of
Attorney.
The amount encashed by Rubio represented not the down
payment,butthepaymentofrespondentsdebt.Hisacceptanceand
encashment of the check was not a ratification of the contract of
sale.
Third,thecontractbetweenrespondentandVirginiaisacontract
tosell,notacontractofsale.Therealcharacterofthecontractisnot
the title given, but the intention of the parties. They intended to
reserve ownership of the property to petitioners pending full
payment of the purchase price. Together with taxes and other fees
due on the properties, these are conditions precedent for the
perfectionofthesale.Evenassumingthatthecontractisambiguous,
thesamemustberesolvedagainstrespondent,thepartywhocaused
thesame.
Fourth, Respondent failed to faithfully fulfill her part of the
obligation.Thus,RubiohadtherighttosellhispropertiestoEscueta
who exercised due diligence in ascertaining ownership of the
propertiessoldtoher.Besides,apurchaserneednotinquirebeyond
whatappearsinaTorrenstitle.
Thepetitionlacksmerit.Thecontractofsalebetweenpetitioners
andrespondentisvalid.
Bayani Baloloy was represented by his attorneyinfact,
Alejandrino Baloloy. In the Baloloys answer to the original
complaint and amended complaint, the allegations relating to the
personalcircumstancesoftheBaloloysareclearlyadmitted.
Anadmission,verbalorwritten,madebyapartyinthecourse 6
of the proceedings in the same case, does not require proof. The
factualadmissioninthepleadingsonrecord

_______________

6RULESOFCOURT,Rule129,Sec.4.

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VOL.512,JANUARY24,2007 421
Escuetavs.Lim

[dispenses] with
7
the need x x x to present evidence to prove the
admitted fact. It cannot, therefore, be controverted
8
by the party
makingsuchadmission,and[is]conclusive astothem.Allproofs
submittedbythemcontrarytheretoorinconsistenttherewithshould9
be ignored whether objection is interposed by a party or not.
Besides, there is no showing that a palpable mistake has been
committedintheiradmissionorthatnoadmissionhasbeenmadeby
them. 10
Pretrialismandatory. Thenoticesofpretrialhadbeensentto
boththeBaloloysandtheirformercounselofrecord.Beingserved
with notice, he is charged
11
with the duty of notifying the party
representedbyhim. Hemustseetoitthathisclientreceivessuch
12
notice and attends the pretrial. What the Baloloys and their
formercounselhaveallegedinsteadintheirMotiontoLiftOrderof
As In Default dated December 11, 1991 is the belated receipt of
BayaniBaloloysspecialpowerofattorneyinfavoroftheirformer
counsel,notthattheyhavenotreceivedthenoticeorbeeninformed
ofthescheduledpretrial.Nothavingraisedthegroundoflackofa
special power of attorney in their motion, they are now deemed to
havewaivedit.Certainly,theycannotraiseitatthislatestageofthe
proceedings. For lack of representation, Bayani Baloloy was
properlydeclaredindefault.
Section3ofRule38oftheRulesofCourtstates:

_______________

7LuzonDevelopmentBankv.Conquilla,G.R.No.163338,September21,2005,470

SCRA533,548.
8Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corp., G.R.

No. 152228, September 23, 2005, 470 SCRA 650, 667, citing Elayda v. Court of
Appeals,G.R.No.49327,July18,1991,199SCRA349,353.
9Republicv.Sarabia,G.R.No.157847,August25,2005,468SCRA142,150,citing

Santiagov.DelosSantos,G.R.No.20241,November22,1974,61SCRA146,149.
 10RULESOFCOURT,Rule18,Sec.2.

11RULESOFCOURT,Rule18,Sec.3.

12IF.Regalado,REMEDIALLAWCOMPENDIUM286287(8threv.ed.,2002).

422

422 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim

SEC. 3. Time for filing petition contents and verification.A petition

providedforineitheroftheprecedingsectionsofthisRulemustbeverified,
filedwithinsixty(60)daysafterthepetitionerlearnsofthejudgment,final
order,orotherproceedingtobesetaside,andnotmorethansix(6)months
after such judgment or final order was entered, or such proceeding was
takenandmustbeaccompaniedwithaffidavitsshowingthefraud,accident,
mistake, or excusable negligence relied upon, and the facts constituting the
petitionersgoodandsubstantialcauseofactionordefense,asthecasemay
be.

There is no reason for the Baloloys to ignore the effects of the

abovecitedrule.The60dayperiodisreckonedfromthetimethe
partyacquiredknowledgeoftheorder,judgmentorproceedingsand
13
not from the date he actually read the same. As aptly putbythe
appellatecourt:

The evidence on record as far as this issue is concerned shows that Atty.
ArsenioVillalon,Jr.,theformercounselofrecordoftheBaloloysreceiveda
copy of the partial decision dated June 23, 1993 on April 5, 1994. At that
time, said former counsel is still their counsel of record. The reckoning of
the 60 day period therefore is the date when the said counsel of record
received a copy of the partial decision which was on April 5, 1994. The
petitionforreliefwasfiledbythenewcounselonJuly4,1994whichmeans
that 90 days have already lapsed or 30 days beyond the 60 day period.
Moreover, the records further show that the Baloloys received the partial
decisiononSeptember13,1993asevidencedbyRegistryreturncardswhich
bearthenumbers02597and02598signedbyMr.AlejandrinoBaloloy.
TheBaloloys[,]apparentlyinanattempttocurethelapseoftheaforesaid
reglementaryperiodtofileapetitionforrelieffromjudgment[,]includedin
its petition the two Orders dated May 6, 1994 and June 29, 1994. The first
Order denied Baloloys motion to fix the period within which plaintiffs
appellantspaythebalanceofthepurchaseprice.ThesecondOrderrefersto
the grant of partial execution, i.e. on the aspect of damages. These Orders
areonlyconsequencesofthepartialdecisionsubjectofthepetitionforrelief,
and thus, cannot be considered in the determination of the reglementary
periodwithinwhichtofilethesaidpetitionforrelief.

_______________
 13Id.,atp.402.

423

VOL.512,JANUARY24,2007 423
Escuetavs.Lim

Furthermore, no fraud, accident, mistake, or excusable negligence

14
existsinorderthatthepetitionforreliefmaybegranted. Thereis
noproofofextrinsicfraudthatpreventsapartyfromhavingatrial
15
xxxorfrompresentingallofhiscasetothecourt oranaccident
xxxwhichordinaryprudencecouldnothaveguardedagainst,and
byreasonofwhichthepartyapplyinghasprobablybeenimpairedin
16
his rights.
17
There is also no proof of either a mistake x x x of
law or an excusable negligence caused by failure to receive
noticeofxxxthetrialxxxthatitwouldnotbenecessaryforhim
totakeanactivepartinthecasexxxbyrelyingonanotherperson
to attend to the case for him, when such other person x x x was
chargeable with that duty x x x, or 18
by other circumstances not
involvingfaultofthemovingparty.
Article1892oftheCivilCodeprovides:

Art. 1892. The agent may appoint a substitute if the principal has not
prohibitedhimfromdoingsobutheshallberesponsiblefortheactsofthe
substitute:
(1)Whenhewasnotgiventhepowertoappointonexxx.

Applying the abovequoted provision to the special power of

attorneyexecutedbyIgnacioRubioinfavorofhisdaughterPatricia
Llamas, it is clear that she is not prohibited from appointing a
substitute.ByauthorizingVirginiaLimtosellthesubjectproperties,
Patriciamerelyactedwithinthelimitsoftheauthoritygivenbyher
father, 19but she will have to be responsible for the acts of the sub
agent, amongwhichis

_______________

14RULESOFCOURT,Rule38,Sec.1.

15Paluayv.CourtofAppeals,355 Phil. 94, 102103 293 SCRA 358, 365 (1998)

andAnuranv.Aquino,38Phil.29,3233,36(1918).
16 Sunico v. Villapando, 14 Phil. 352, 355 (1909), citing the old Code of Civil
Procedure,Sec.145,Subsec.1.
17Riliv.Chunaco,87Phil.545,546547(1950).

18Fernandezv.TanTiongTick,111Phil.773,7791SCRA1138,1144(1961).

19Seronav.CourtofAppeals,440Phil.508,521392SCRA35,45(2002).

424
424 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim

preciselythesaleofthesubjectpropertiesinfavorofrespondent.
Even assuming that Virginia Lim has no authority to sell the
subjectproperties,thecontractsheexecutedinfavorofrespondent
isnotvoid,butsimplyunenforceable,underthesecondparagraphof
Article1317oftheCivilCodewhichreads:

Art.1317.xxx
A contract entered into in the name of another by one who has no
authorityorlegalrepresentation,orwhohasactedbeyondhispowers,shall
beunenforceable,unlessitisratified,expresslyorimpliedly,bytheperson
on whose behalf it has been executed, before it is revoked by the other
contractingparty.

IgnacioRubiomerelydeniesthecontractofsale.Heclaims,without
substantiation, that what he received was a loan, not the down
payment for the sale of the subject properties. His acceptance and
encashment of the check, however, constitute ratification of the
contract20of sale and produce the effects of an express power of
agency. [H]isactionnecessarilyimpliesthathewaivedhisright
ofactiontoavoidthecontract,and,consequently,italsoimpliesthe
tacit, if not express, confirmation of the said sale effected by
VirginiaLiminfavorofrespondent.
Similarly, the Baloloys have ratified the contract of sale when
they accepted and enjoyed its benefits. The doctrine of estoppel
applicabletopetitionershereisnotonlythatwhichprohibitsaparty
from assuming inconsistent positions, based on the principle of
election, but that which precludes him from repudiating an
obligation voluntarily assumed after having accepted benefits
therefrom. To countenance such repudiation would be contrary 21
to
equity,andwouldputapremiumonfraudormisrepresentation.

_______________

20GutierrezHermanosv.Orense,28Phil.571,579(1914).

21SauraImport&ExportCo.,Inc.v.Solidum,133 Phil. 505, 512 24 SCRA 574,

581(1968).

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VOL.512,JANUARY24,2007 425
Escuetavs.Lim

Indeed,VirginiaLimandrespondenthaveenteredintoacontractof
sale. Not only has the title to the subject properties passed to the
latterupondeliveryofthethingsold,butthereisalsonostipulation
in the contract that states the ownership is to be reserved
22
in or
retainedbythevendoruntilfullpaymentoftheprice.
ApplyingArticle1544oftheCivilCode,asecondbuyerofthe
property who may have had actual or constructive knowledge of
such defect in the sellers title, or at least was charged with the
obligation to discover such defect, cannot be a registrant in good
faith.Suchsecondbuyercannotdefeatthefirstbuyerstitle.Incase
a title is issued to the second buyer, the first buyer23
may seek
reconveyance of the property subject of the sale. Even the
argumentthatapurchaserneednotinquirebeyondwhatappearsina
Torrenstitledoesnotholdwater.Aperusalofthecertificatesoftitle
alone will reveal that the subject properties are registered in
common,notintheindividualnamesoftheheirs.
Nothinginthecontractpreventstheobligationofthevendorto
24
convey title from becoming effective or gives the vendor the
righttounilaterallyresolvethecontractthemomentthebuyerfails
25
topaywithinafixedperiod. Petitionersthemselveshavefailedto
deliver their individual certificates of title, for which reason it is
obviousthatrespondent

_______________

22Salazarv.CourtofAppeals,327Phil.944,955258SCRA317,325(1996),citing

Pingolv.CourtofAppeals,G.R.No.102909,September6,1993,226SCRA118,126
Visayan Sawmill Co., Inc. v. Court of Appeals,G.R. No. 83851, March 3, 1993, 219
SCRA378,389Jacintov.Kaparaz,G.R. No. 81158, May 22, 1992, 209 SCRA 246,
254andLuzonBrokerageCo.,Inc.v.MaritimeBuildingCo.,Inc.,150Phil.114,125
12643SCRA93,104(1972).
23Coronelv.CourtofAppeals,331Phil.294,311263SCRA15(1996).

24Salazarv.CourtofAppeals,supraatp.955p.325.

25AdelfaProperties,Inc.v.CourtofAppeals,310Phil.623,637240SCRA565,

577(1995),citingPingolv.CourtofAppeals,supraatp.127.

426

426 SUPREMECOURTREPORTSANNOTATED
Escuetavs.Lim

cannotbeexpectedtopaythestipulatedtaxes,fees,andexpenses.
[A]lltheelementsofavalidcontractofsaleunderArticle1458
oftheCivilCodearepresent,suchas:(1)consentormeetingofthe
minds(2)determinatesubjectmatterand(3)pricecertaininmoney
26
oritsequivalent. Ignacio Rubio, the Baloloys, and their coheirs
sold their hereditary shares for a price certain to which respondent
agreedtobuyandpayforthesubjectproperties.Theofferandthe
acceptanceareconcurrent,sincethemindsofthecontractingparties
27
meetinthetermsoftheagreement.
 In fact,earnestmoney has been given by respondent. [I]t shall
beconsideredaspartofthepriceandasproofoftheperfectionof
28
the contract. It constitutes
29
an advance payment to be deducted
fromthetotalprice.
Article1477ofthesameCodealsostatesthat[t]heownership
of the thing sold shall be transferred
30
to the vendee upon actual or
constructive delivery thereof. In the present case, there is actual
deliveryasmanifestedbyactssimultaneouswithandsubsequentto
thecontractofsalewhenrespondentnotonlytookpossessionofthe
subjectpropertiesbutalso

_______________

26Dignosv.CourtofAppeals,G.R.No.59266,February29,1988,158SCRA375,

382383,inrelationtoArticle1475oftheCivilCode,whichprovides:

Art.1475.Thecontractofsaleisperfectedatthemomentthereisameetingofmindsuponthe
thingwhichistheobjectofthecontractandupontheprice.
From that moment, the parties may reciprocally demand performance, subject to the
provisionsofthelawgoverningtheformofcontracts.

27AdelfaProperties,Inc.v.CourtofAppeals,supraatp.641,quotingMcMillanv.

PhiladelphiaCo.,28A.220,220221,159Pa.St.142,December30,1893.
28CIVILCODE,Art.1482.

29AdelfaProperties,Inc.v.CourtofAppeals,supraatp.646.

30Dignosv.CourtofAppeals,supraatp.383.

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VOL.512,JANUARY24,2007 427
Escuetavs.Lim

allowed their use as parking terminal for jeepneys and buses.

Moreover,theexecutionitselfofthecontractofsaleisconstructive
delivery.
Consequently, Ignacio Rubio could no longer sell the subject
propertiestoCorazonEscueta,afterhavingsoldthemtorespondent.
[I]nacontractofsale,thevendorlosesownershipovertheproperty
and cannot recover 31
it until and unless the contract is resolved or
rescinded x x x. The records do not show that Ignacio Rubio
asked for a rescission of the contract. What he adduced was a
belated revocation of the special power of attorney he executed in
favor of Patricia Llamas. In the sale of immovable property, even
thoughitmayhavebeenstipulatedthatuponfailuretopaytheprice
atthetimeagreedupontherescissionofthecontractshallofright
take place, the vendee may pay, even after the expiration of the
period,aslongasnodemandforrescissionofthecontracthasbeen
32
madeuponhimeitherjudiciallyorbyanotarialact.
 WHEREFORE, the petition is DENIED. The Decision and
Resolution of the Court of Appeals in CAG.R. CV No. 48282,
dated October 26, 1998 and January 11, 1999, respectively, are
herebyAFFIRMED.Costsagainstpetitioners.
SOORDERED.

Puno(C.J.,Chairperson),SandovalGutierrez,Coronaand
Garcia,JJ.,concur.

Petitiondenied,judgmentandresolutionaffirmed.

Note.In the double sale of real property, the buyer who is in

possessionofaTorrenstitleandhadthedeedofsaleregisteredmust
prevail.(Tanvs.CourtofAppeals,295SCRA247[1998])

o0o

_______________

31Salazarv.CourtofAppeals,supra.

32CIVILCODE,Art.1592.

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