G.R. No. 121165 September 26, 2006
HON. DOMINADOR F. CARILO, et al., petitioners, vs. HON. COURT OF APPEALS, MARIA PAZ DABON and ROSALINDA DABON, respondents.

FACTS

Petitioner Maria Gonzales filed a complaint for specific performance against spouses Priscilla and Jose Manio concerning a lot owned by Aristotle Manio, Priscilla’s son. Gonzales alleged she paid a downpayment based on Priscilla’s special power of attorney. The Manios were declared in default, and the RTC rendered judgment ordering them to execute a deed of sale. After the decision became final, Gonzales deposited the balance, and the court eventually directed the Clerk of Court to execute the deed and ordered the Register of Deeds to issue a new title in Gonzales’s name after declaring the owner’s duplicate certificate void.
Respondents Maria Paz and Rosalinda Dabon subsequently filed a petition with the Court of Appeals for annulment of the RTC judgment. They claimed to have purchased the same lot directly from the registered owner, Aristotle Manio, and argued the judgment was void for lack of jurisdiction over them as real parties in interest. The CA granted the petition, annulling the RTC’s judgment and orders. It found the contract between Gonzales and Priscilla unenforceable under the Statute of Frauds due to the lack of a written authority from Aristotle for Priscilla to sell the land.

ISSUE

Whether the Court of Appeals correctly annulled the judgment of the Regional Trial Court.

RULING

Yes, the Court of Appeals correctly annulled the RTC judgment. The Supreme Court affirmed the CA’s ruling, emphasizing that the action for specific performance was fatally defective for failure to implead the indispensable party, Aristotle Manio, the registered owner of the property. An action to compel the execution of a deed of conveyance affects title to the land and must include the owner as a party. Priscilla Manio, who merely possessed a special power of attorney, was not the real party in interest. Consequently, the RTC never acquired jurisdiction over the subject matter, rendering its judgment void.
Furthermore, the contract of sale was unenforceable under the Statute of Frauds. Article 1874 of the Civil Code requires that an agent must have written authority to execute a contract for the sale of real estate. Priscilla’s alleged special power of attorney was not presented in evidence, and no written authority from Aristotle was ever shown. Therefore, the contract could not be enforced against the property or its rightful owner. The subsequent sale by Aristotle to the Dabons, who were innocent purchasers for value, must be upheld. The RTC’s orders, including the directive to issue a new title, were correctly annulled for having been issued without jurisdiction.