G.R. No. 129103 , September 3, 1999.
CLAUDIO DELOS REYES and LYDIA DELOS REYES, petitioners, vs. THE HON. COURT OF APPEALS and DALUYONG GABRIEL, substituted by his heirs, namely: MARIA LUISA G. ESTEBAN, MARIA RITA G. BARTOLOME & RENATO GABRIEL, respondents.

FACTS

Private respondent Daluyong Gabriel was the registered owner of a parcel of land in Tagum, Davao del Norte. As he resided in Metro Manila, his sister Maria Rita Gabriel de Rey acted as administratrix. Petitioner Lydia delos Reyes leased a 176-square-meter portion under a contract executed with Maria Rita on June 21, 1985. In 1985, Daluyong sent his son Renato Gabriel to Tagum to take over as administrator. The lease was novated, and a new six-year contract was executed between Renato (as lessor) and Lydia on September 26, 1985. In November 1987, during the lease, Lydia verbally agreed to buy 300 square meters (including the leased portion) from Daluyong’s property for P90,000.00. Lydia made installment payments to Renato, evidenced by official receipts signed by him, but no deed of sale was executed. Lydia then constructed a two-storey commercial building on the lot. Upon learning of the construction, Daluyong, through counsel, demanded that the spouses delos Reyes cease construction and vacate, asserting the construction was unauthorized and there was no lease. The spouses explained they acted in good faith based on assurances that Renato was the authorized administrator. Daluyong filed an action for recovery of the land (Civil Case No. 2326). The spouses delos Reyes filed a complaint for specific performance (Civil Case No. 2327) to compel Daluyong and his children to execute a deed of conveyance for the 300-square-meter portion. The cases were consolidated. The Regional Trial Court ruled in favor of the delos Reyes spouses, ordering the Gabriels to execute a deed of conveyance. On appeal, the Court of Appeals reversed the decision, ordering the delos Reyes spouses to vacate and turn over possession to the Gabriels. The delos Reyes spouses filed this petition for review.

ISSUE

Whether the sale of the 300-square-meter portion by Renato Gabriel to the petitioners is valid and enforceable against the registered owner, Daluyong Gabriel.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that the sale was not valid and enforceable against Daluyong Gabriel. Renato Gabriel had no authority, whether express, implied, or apparent, to sell the land. The evidence showed Daluyong’s instruction to Renato was merely to collect rentals, not to sell property. The official receipts for payments, while bearing the “Gabriel Building” letterhead and signed by Renato, did not prove Daluyong’s knowledge or consent to the sale. The Court found no evidence that Daluyong ratified the sale. The alleged sale, being verbal and without a written deed, also violated the Statute of Frauds. Furthermore, the petitioners could not invoke the principle of estoppel, as Daluyong did not perform any act or representation that led them to believe Renato had authority to sell. The Court also noted that the petitioners, as buyers, were not in good faith as they built a substantial structure without verifying Renato’s authority and without a written deed of sale. The Court of Appeals’ factual findings were upheld, as they were supported by evidence and there was no showing of grave abuse of discretion. The dispositive portion of the Court of Appeals’ decision, ordering the petitioners to vacate and turn over possession, was affirmed.