G.R. No. L-45038. April 30, 1987.
MANOTOK REALTY, INC., petitioner, vs. THE HON. COURT OF APPEALS and FELIPE MADLANGAWA, respondents.

FACTS

Private respondent Felipe Madlangawa claims to have occupied a parcel of land in the Clara de Tambunting de Legarda Subdivision since 1949, with permission from an overseer and an understanding to eventually purchase it. The owner, Clara Tambunting, died on April 2, 1950, placing her estate, including this paraphernal property, under custodia legis. On April 22, 1950, Madlangawa made a P1,500 deposit for the lot, received by Vicente Legarda, the deceased’s husband, with a receipt indicating a 240-square-meter lot at P30 per square meter, leaving a balance of P5,700. No further payments were made after 1950. Vicente Legarda was appointed special administrator of the estate on April 28, 1950. Petitioner Manotok Realty, Inc. later became the successful bidder and vendee of the entire Tambunting de Legarda Subdivision, including the disputed lot, through deeds of sale executed by the Philippine Trust Company as administrator of the estate in March 1959. The deed of sale contained provisions whereby Manotok assumed the risk of ejecting occupants and renounced the right to warranty against eviction concerning prior contracts of sale or promises to sell executed by the deceased or Vicente Legarda.

ISSUE

Whether the Court of Appeals erred in upholding the validity and enforceability against Manotok of the alleged sale by Vicente Legarda to Madlangawa, thereby ordering Manotok to accept payment of the balance and execute a deed of sale.

RULING

The Supreme Court reversed the Court of Appeals. The legal logic centers on the invalid nature of the alleged sale by Vicente Legarda. The property was the paraphernal property of Clara Tambunting. Upon her death on April 2, 1950, it became part of her estate under judicial custody (custodia legis). The deposit was received by Vicente Legarda on April 22, 1950, before his appointment as special administrator on April 28, 1950. At the time of the transaction, he had no authority—neither as owner nor as a court-appointed administrator—to validly sell estate property. The subsequent appointment did not retroactively validate the act. The law requires that sales of estate property be made under a probate court order (then Rule 89, Section 2 of the Rules of Court). No such order was ever secured. Therefore, the transaction did not bind the estate. While Manotok’s deed of sale with the Philippine Trust Company contained a clause respecting prior sales by Vicente Legarda, this could only refer to valid and authorized sales. Since the sale to Madlangawa was void for lack of authority, Manotok is not bound to honor it. Consequently, Madlangawa is ordered to surrender possession of the lot to Manotok and pay reasonable rentals for its use. Manotok is ordered to reimburse Madlangawa the P1,500 deposit with legal interest, which may be offset against the rentals due.