GR 105188; (January 1998) (Digest)
G.R. No. 105188 January 23, 1998
MYRON C. PAPA, Administrator of the Testate Estate of Angela M. Butte, petitioner, vs. A.U. VALENCIA and CO. INC., FELIX PEÑARROYO, SPS. ARSENIO B. REYES & AMANDA SANTOS, and DELFIN JAO, respondents.
FACTS
Petitioner Myron C. Papa, as attorney-in-fact of Angela M. Butte, sold a parcel of land to respondent Felix Peñarroyo through respondent A.U. Valencia and Co., Inc. on June 15, 1973. The property was mortgaged to a bank. Angela M. Butte died, and the bank refused to release the title unless all mortgaged properties were redeemed. Peñarroyo annotated an adverse claim on the title. Upon the title’s release in April 1977, it was discovered the mortgage rights had been assigned to the Estate of Ramon Papa, Jr. Petitioner, as administrator of Butte’s estate, collected rentals from the property. Respondents Valencia and Peñarroyo filed a complaint for specific performance to compel delivery of title and accrued rentals. Respondent Delfin Jao intervened, alleging he bought the same lot from Peñarroyo. Petitioner filed a third-party complaint against spouses Arsenio B. Reyes and Amanda Santos, who acquired the property at a tax auction. The trial court ordered petitioner to redeem the property from the Reyes spouses, execute a deed of sale in favor of Peñarroyo, and for Peñarroyo to execute a deed in favor of Jao. The Court of Appeals affirmed with modification, ordering petitioner to deliver the title or authorize its cancellation and reissuance in Peñarroyo’s name. Petitioner appealed, arguing the sale was not consummated as he did not encash the check for the balance, that he could not be held personally liable, and that indispensable parties were not joined.
ISSUE
1. Whether the sale was consummated despite petitioner’s claim of not encashing the check for the balance of the purchase price.
2. Whether petitioner can be held personally liable for his actions as attorney-in-fact and administrator.
3. Whether the estates of Angela M. Butte and Ramon Papa, Jr. are indispensable parties.
RULING
1. Yes. The Supreme Court held that the sale was consummated. Petitioner’s claim of non-encashment was unsupported by evidence. Respondent Peñarroyo testified that petitioner received P45,000.00 and issued receipts. Under Article 1249 of the Civil Code, the delivery of a check produces the effect of payment only when cashed or impaired by the creditor’s fault. The presumption is that the check was encashed, especially since petitioner did not deny payment by check but merely alleged he could no longer recall the transaction. The contract of sale was perfected upon agreement on the object and price, and ownership transferred upon actual or constructive delivery, which occurred here.
2. No, petitioner cannot be held personally liable. The action was brought against him in his capacity as the administrator of the Testate Estate of Angela M. Butte, not in his personal capacity. As administrator, he is a representative party under the Rules of Court.
3. No, the estates are not indispensable parties. Under Rule 3, Section 3 of the Rules of Court, an executor or administrator may sue or be sued without joining the estate (the beneficiary). The estate of Angela M. Butte is not an indispensable party. The estate of Ramon Papa, Jr. is also not indispensable, as any subsisting mortgage rights it holds may still be enforced regardless of the change in ownership. The Court of Appeals’ decision was affirmed. The petition was denied.