G.R. No. 138639 February 10, 2000
CITY-LITE REALTY CORPORATION, petitioner, vs. COURT OF APPEALS and F.P. HOLDINGS & REALTY CORP., METRO DRUG INC., MELDIN AL G. ROY, VIEWMASTER CONSTRUCTION CORP., and the REGISTER OF DEEDS OF QUEZON CITY, respondents.

FACTS

F.P. Holdings and Realty Corporation owned a parcel of land in Quezon City. It circulated a sales brochure offering the property for sale, designating Meldin Al G. Roy of Metro Drug Inc. as the contact person. City-Lite Realty Corporation, through its representatives, expressed interest in purchasing the front portion of the lot. After negotiations, Roy sent a letter dated September 25, 1991, outlining the terms and conditions of the sale, including the price and payment schedule, and requested written acceptance by the following day. City-Lite submitted its written acceptance on September 26, 1991. However, F.P. Holdings refused to execute the deed of sale. City-Lite subsequently filed an adverse claim on the title.

ISSUE

Whether a contract of sale over the subject property was perfected between City-Lite and F.P. Holdings through the latter’s alleged agent, Meldin Al G. Roy of Metro Drug Inc.

RULING

No. The Supreme Court affirmed the Court of Appeals’ decision, ruling that no valid contract of sale was perfected due to the lack of a written authority from the owner, F.P. Holdings, in favor of Roy or Metro Drug to sell the land. Article 1874 of the Civil Code explicitly requires that the authority of an agent to sell a piece of land or any interest therein must be in writing; otherwise, the sale is void. The Court examined the evidence of authority presented by City-Lite, such as the sales brochure, testimonies, and common broker knowledge, and found them insufficient to satisfy the statutory writing requirement.
Crucially, the Court highlighted a written memorandum from F.P. Holdings’ president to Metro Drug, which stated that Metro Drug’s role was merely to assist in referring buyers and endorsing formal offers to F.P. Holdings for its “final evaluation and appraisal.” This document established that Roy/Metro Drug was only a broker or contact person with no power to conclude a binding sale. Their function was to bring parties together for a possible transaction, with the final acceptance reserved solely for the owner. Consequently, Roy’s counter-offer letter and City-Lite’s acceptance did not create a binding contract because Roy lacked the requisite written authority to bind F.P. Holdings. The purported sale was declared null and void and produced no legal effect.