G.R. No. L-9188, December 4, 1914
GUTIERREZ HERMANOS, plaintiff-appellee, vs. ENGRACIO ORENSE, defendant-appellant.

FACTS:
On February 14, 1907, Jose Duran, nephew of the defendant Engracio Orense, executed a notarial deed selling a parcel of land with improvements in Guinobatan, Albay, to Gutierrez Hermanos for P1,500, with a right of repurchase within four years. The property was registered in Orense’s name. Gutierrez Hermanos did not take possession, instead leasing the property back to Duran until the redemption period expired on February 14, 1911. After the period lapsed without redemption, Orense refused to deliver the property or pay rent, claiming he was the registered owner and had not authorized the sale.

Subsequently, Gutierrez Hermanos charged Jose Duran with estafa. During the criminal trial, Orense testified under oath that he had consented to Duran’s sale of the property. Based on this testimony, Duran was acquitted. Gutierrez Hermanos then filed this civil action to compel Orense to execute a deed of final conveyance and to pay rental damages from February 14, 1911.

ISSUE:
Whether the defendant Engracio Orense is bound by the contract of sale with right of repurchase executed by his nephew, Jose Duran, despite the lack of a written power of attorney.

RULING:
Yes. The Supreme Court affirmed the trial court’s judgment ordering Orense to execute the deed of conveyance and pay damages.

The Court held that Orense’s sworn testimony in the criminal case, wherein he admitted he consented to the sale, constituted a valid ratification of the contract executed by Duran. Under the Civil Code, a contract executed in the name of another without authorization is void, but it is cured by subsequent ratification. Orense’s ratification retroactively validated the sale and extinguished any action for nullity.

Furthermore, the Court ruled that Orense’s repeated admissions in both the criminal and civil cases legally excused the lack of a written authority. His consent conferred an implied power of agency upon Duran, and as principal, Orense was bound by the acts of his agent. The Torrens title in Orense’s name did not invalidate the duly ratified contract.

The judgment was affirmed with costs against the appellant.