G.R. No. 102603 January 18, 1993
SPOUSES VILLAMOR DONATO and LUZONIA O. DONATO, petitioners, vs. THE COURT OF APPEALS and HEIRS OF ROSARIO FONTANILLA, represented by RODOLFO RARANG, respondents.

FACTS

The land in dispute is an unregistered riceland, Lot 5145, CAD 325-D of the Alaminos Cadastre, which was the paraphernal property of the late Rosario Fontanilla. Upon her death in 1971, it was inherited by her children, the private respondents (Heirs of Rosario Fontanilla). Between 1957 and 1967, Rosario and her children migrated to Davao City. The petitioners, Spouses Donato, are the registered owners of a different, adjacent parcel, Lot 5303, CAD 325-D, covered by TCT No. 5535, which they purchased from the Rural Bank of Urbiztondo in 1982. Believing the land they purchased was Lot 5145, the petitioners occupied it in 1982. The private respondents filed a complaint for recovery of possession, claiming the petitioners were occupying their inherited property, Lot 5145, which was distinct from the petitioners’ titled Lot 5303. The petitioners defended their claim by asserting that Lot 5145 was the same as Lot 5303, and that their ownership originated from a 1967 Deed of Sale executed by Basilio Rarang (Rosario’s brother) in favor of Jose Ochave, based on a Special Power of Attorney (SPA) allegedly executed by Rosario in favor of Basilio. The trial court ruled for the private respondents, declaring the SPA void for non-compliance with Article 1874 of the Civil Code (authority of an agent to sell land must be in writing) and noting fatal defects in the document (e.g., not signed by the notary, acknowledged by the agent instead of the principal, first page unsigned, signature date of agent preceding the principal’s signature date). The Court of Appeals affirmed the trial court’s decision in toto.

ISSUE

The core issue is whether the petitioners have a valid claim of ownership over Lot 5145, which hinges on the validity of the Special Power of Attorney executed by Rosario Fontanilla in favor of Basilio Rarang, which authorized the sale of the land.

RULING

The Supreme Court DISMISSED the petition and AFFIRMED the decision of the Court of Appeals. The Court upheld the trial court’s finding that the Special Power of Attorney was null and void due to fatal defects and non-compliance with the legal requirement that the authority of an agent to sell land must be in writing. Consequently, the subsequent Deed of Sale executed by Basilio Rarang was also void. The petitioners, as registered owners of the distinct Lot 5303, were estopped from claiming they acquired the different Lot 5145 through their purchase from the bank. The Court also rejected the petitioners’ claim of ownership by acquisitive prescription, finding them in bad faith, and the claim of laches against the private respondents, who acted promptly upon discovering the encroachment. The findings of fact of the trial court, affirmed by the Court of Appeals, were deemed conclusive.