G.R. No. 214057 October 19, 2015
FLORENTINA BAUTISTA-SPILLE represented by her Attorney-in-fact, Manuel B. Flores, Jr., Petitioner vs. NICORP MANAGEMENT AND DEVELOPMENT CORPORATION, BENJAMIN G. BAUTISTA and INTERNATIONAL EXCHANGE BANK, Respondents

FACTS

Petitioner Florentina Bautista-Spille is the registered owner of a parcel of land in Imus City, Cavite. On June 20, 1996, she and her spouse executed a General Power of Attorney (GPA) in favor of her brother, respondent Benjamin Bautista, authorizing him to administer all her businesses and properties in the Philippines. On August 13, 2004, Benjamin and respondent NICORP Management and Development Corporation entered into a Contract to Sell covering the said property for P15,000,000.00. The contract required Benjamin to submit a Special Power of Attorney (SPA) for the transaction. An Escrow Agreement was executed with respondent International Exchange Bank (IE Bank) as escrow agent, and NICORP issued a down payment check. Upon discovering the sale, petitioner, through counsel, sent demand letters opposing the sale and demanding the return of the title, claiming Benjamin had no authority to sell. When respondents refused, petitioner filed a complaint for declaration of nullity of the contract to sell, injunction, recovery of possession, and damages. The Regional Trial Court (RTC) declared the Contract to Sell null and void, ruling the GPA only pertained to acts of administration and did not include authority to sell. The Court of Appeals (CA) reversed the RTC, holding the GPA authorized Benjamin to perform acts of dominion, including sale. Petitioner filed this petition.

ISSUE

Whether or not Benjamin Bautista was authorized under the General Power of Attorney to sell the subject property.

RULING

No. The Supreme Court granted the petition, reversed the CA decision, and reinstated the RTC decision. The Court ruled that the General Power of Attorney did not confer upon Benjamin the authority to sell the subject immovable property. Under Articles 1874 and 1878 of the Civil Code, a sale of land or any interest therein through an agent requires the agent’s authority to be in writing in the form of a Special Power of Attorney; otherwise, the sale is void. The GPA authorized Benjamin “to administer all my businesses and properties,” which constitutes a general power limited to acts of administration and does not encompass acts of strict dominion like selling the property. The Court noted that NICORP itself recognized the insufficiency of the GPA by stipulating in the Contract to Sell that Benjamin must procure an SPA, indicating it knew he lacked the specific authority to convey the property. Consequently, the Contract to Sell was declared null and void. The Court also held NICORP was a builder in bad faith with no right to reimbursement for improvements. Respondents were ordered to return possession and the owner’s duplicate title to petitioner and to pay attorney’s fees and costs.