REMAN RECIO, PETITIONER, VS. HEIRS OF THE SPOUSES AGUEDO AND MARIA ALTAMIRANO, NAMELY: ALEJANDRO, ADELAIDA, CATALINA, ALFREDO, FRANCISCO, ALL SURNAMED ALTAMIRANO; VIOLETA ALTAMI…

Recio versus Heirs of the Spouses Altamirano

The Case

This is a petition for review on certiorari brought by Reman Recio against the heirs of the spouses Aguedo and Maria Altamirano, together with the spouses Lauro and Marcelina Lajarca. The petitioner sues for specific performance and for the annulment of a later sale, asking the Supreme Court to restore in full the trial court's judgment in his favor. The case matters because it draws the line between two rules that students often blur: a co-owner may freely sell his own undivided share, but no one may sell another co-owner's share without a written special power of attorney. It is a compact lesson on agency, co-ownership, and the burden of proving authority.

Procedural History

Reman Recio filed a complaint for specific performance with damages before the Regional Trial Court of Lipa City, Branch 85. He later amended the complaint to implead the spouses Lajarca and to seek annulment of the sale made to them. The trial court ruled for the petitioner. It declared the later deed of sale void, ordered the cancellation of the Lajarca title and the reinstatement of the earlier title, directed the Altamiranos to execute a deed of absolute sale upon payment of the balance of 340,000 pesos, and awarded damages.

The spouses Lajarca appealed. The Court of Appeals affirmed with modification. It dismissed the complaint as against the other Altamiranos, held the oral sale valid only as to the aliquot share of Alejandro Altamirano, declared the Lajarca deed void only as to that share, and declared Recio a co-owner of the Lajarcas to the extent of Alejandro's former share, while affirming the damages. Recio's motion for reconsideration was denied. He then filed this petition for review on certiorari under Rule 45, and the case reached the Supreme Court.

Facts

In the 1950s, Nena Recio, mother of the petitioner, leased from the Altamirano heirs a parcel of land with improvements on 10 de Julio Street, now Esteban Mayo Street, in Lipa City, Batangas, with an area of about eighty-nine square meters and fifty square decimeters. She used the ground floor as a retail store for grains and the upper floor as the family residence. In 1988 the Altamiranos offered to sell the property to Nena for 500,000 pesos, and she accepted, but the sale did not push through through the fault of the Altamiranos. Nena nonetheless continued in possession with their consent.

The Altamiranos consolidated and subdivided their two parcels into three lots, and the subject property was covered by a new transfer certificate of title. In late 1994 the petitioner renewed his mother's option to buy and negotiated with Alejandro Altamirano, who introduced himself as representing the other heirs. An oral contract of sale was reached. In January 1995 the petitioner made partial payments totaling 110,000 pesos, acknowledged by Alejandro in a receipt dated January 24, 1995, and on April 14, 1995 he paid another 50,000 pesos, again acknowledged by receipt. He repeatedly offered to pay the remaining balance of 340,000 pesos, but Alejandro kept avoiding him. He then demanded a deed of absolute sale in exchange for full payment.

On February 24, 1997, the petitioner filed his complaint, and on March 14, 1997 he caused a notice of lis pendens to be annotated on the title. He then discovered that the property had been sold to the spouses Lajarca by a deed dated February 26, 1998, and that a new title had been issued in their name. He amended his complaint to include them and to seek annulment of that sale. At trial, Alejandro gave a brief testimony, excused himself, and never returned despite subpoenas. The Altamiranos presented no witness, and the Lajarcas waived their right to present evidence.

Issues

• Whether or not the oral contract of sale between Alejandro Altamirano and Reman Recio is valid.
• Whether or not Alejandro had authority to sell the shares of his co-heirs, absent a written special power of attorney.
• Whether or not the sale to the spouses Lajarca is valid, and to what extent.

Applicable Provisions

Article 1874 of the Civil Code provides:

When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.

This is the provision that defeats any claim that Alejandro could orally bind his co-heirs to the sale.

Article 1878 of the Civil Code provides:

Special powers of attorney are necessary in the following cases: (5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.

This confirms that a special power of attorney in writing was required before Alejandro could transmit any co-owner's interest in the land.

Ruling

On the first issue, the Court held the oral contract of sale valid. A valid sale requires a meeting of minds to transfer ownership in exchange for a price, a determinate subject matter, and a price certain in money. All were present: the subject was the lot covered by the title, and the price was 500,000 pesos. Alejandro issued receipts acknowledging the payments, delivered the lot, and waived the rentals, and he never refused the balance but merely avoided the petitioner.

On the second issue, the Court held that Alejandro had no authority to sell his co-heirs' shares. The requirement of a written special power of attorney is express, and the petitioner's arguments must fail. The notice of lis pendens did not supply the missing authority. The petitioner's reliance on Alejandro's supposed representation of a majority of the co-owners was misplaced, because those later transactions occurred after the sale to him. The Court quoted with approval the rule that persons dealing with an assumed agency are bound at their peril to ascertain the fact and extent of the authority, and that the burden of proof is on them. Apparent authority must arise from acts of the principal known and relied upon in good faith before the transaction, and here there were none.

On the third issue, the Court held that the sale between Alejandro and the petitioner is valid only as to Alejandro's aliquot share, since a co-owner may dispose of his undivided interest even without the consent of the others. The sale to the spouses Lajarca is likewise valid only as to the shares of the other Altamiranos, exclusive of Alejandro's share, and the Lajarcas were not buyers in good faith because they knew of the prior sale and the lis pendens. The Court found no reversible error in the decision of the Court of Appeals.

Doctrine

A co-owner may freely sell or dispose of his undivided share in a co-owned property, and such sale binds only that share. But a sale of a piece of land or any interest therein through an agent requires the agent's authority to be in writing, otherwise the sale is void, and a special power of attorney is necessary to enter into any contract transmitting ownership of an immovable. A person dealing with an assumed agent does so at his peril and bears the burden of proving the fact and extent of the authority. Apparent authority arises only from acts of the principal, known and relied upon in good faith before the transaction, not from the agent's own assurances or from later conduct.

Disposition

The petition was denied, and the decision of the Court of Appeals was affirmed; the petitioner prevailed only as to Alejandro's aliquot share, and the Lajarcas kept the shares of the other heirs.

Remember This

Memorize this line: a co-owner may sell his own undivided share, but he cannot sell his co-heirs' shares without a written special power of attorney, and the buyer who relies on bare assurances does so at his peril. Examiners use this case on agency to sell immovables under Articles 1874 and 1878, on apparent authority, and on the extent of a co-owner's power of disposition.