G.R. No. L-2220

FACTS:
Plaintiff-appellant W. M. Tipton sought to have a ten-year lease contract declared void. The lease was executed by the administrator of the San Lazaro Hospital over its property, commencing January 1, 1899. The defendant-appellee, Mariano Velasco Chua-Chingco, was the lessee. The administrator executed the lease without special authority to contract for such a term. The lower court found that the Government had collected rent for five years without objection, implying a ratification of the lease. The parties submitted the case on a stipulation of facts, and no evidence was presented on the alleged collection of rent by the Government.

ISSUE:
1. Whether the ten-year lease contract executed by the administrator of the San Lazaro Hospital without special authority is void.
2. Whether the Government, as the alleged owner, ratified the lease by collecting rent.
3. Whether the action to declare the contract void is barred by the statute of limitations.

RULING:
1. Yes, the lease is void for lack of authority. Following the doctrine in Tipton v. Martinez (5 Phil. 477), a lease for a term exceeding the administrator’s authority is void. The administrator lacked the special authority required to bind the property for a ten-year period.
2. No, there was no ratification by the Government. The Supreme Court found no evidence in the stipulation of facts to support the lower court’s finding that the Government collected rent and thereby ratified the contract. The record showed that rent was received by the hospital’s administrators, not by the Government itself. Furthermore, the administrators had no authority to ratify the void contract on behalf of the Government. Under Article 1259 of the Civil Code, only the person in whose name the contract was made (or their duly authorized agent) can ratify it.
3. No, the action is not barred by prescription. The four-year prescriptive period under Article 1301 of the Civil Code applies to voidable contracts under Article 1300, not to contracts executed without authority under Article 1259. The nullity of a contract executed without authority is permanent and can only be cured by ratification. The mere lapse of time does not validate it.

DISPOSITIVE PORTION:
The judgment was REVERSED. The lease was declared valid only for the first six years (January 1, 1899, to December 31, 1904) and void for the remaining four-year term. The defendant was ordered to return the land and its proceeds from January 1, 1905. The plaintiff was ordered to return any rent received for the same period, with legal interest. No costs were awarded. The case was remanded to the trial court.