GUTIERREZ HERMANOS, PLAINTIFF AND APPELLEE, VS. ENGRACIO ORENSE, DEFENDANT AND APPELLANT.

Appeal through bill of exceptions filed by counsel for the appellant from the
judgment rendered on April 14, 1913, by the Honorable P. M. Moir, judge, wherein
he sentenced the defendant to make immediate delivery of the property in
question, through a public instrument, by transferring and conveying to the
plaintiff all his rights in the property described in the complaint and to pay
it the sum of P780, as damages, and the costs of the suit.

On March 5, 1913, counsel for Gutierrez Hermanos filed a complaint,
afterwards amended, in the Court of First Instance of Albay against Engracio
Orense, in which he set forth that on and before February 14, 1907, the
defendant Orense had been the owner of a parcel of land, with the buildings and
improvements thereon, situated in the pueblo of Guinobatan, Albay, the location,
area and boundaries of which were specified in the complaint; that the said
property has up to date been recorded in the new property registry in the name
of the said Orense, according to certificate No. 5, with the boundaries therein
given; that, on February 14, 1907, Jose Duran, a nephew of the defendant, with
the latter’s knowledge and consent, executed before a notary a public instrument
whereby he sold and conveyed to the plaintiff company, for P1,500, the
aforementioned property, the vendor Duran reserving to himself the right to
repurchase it for the same price within a period of four years from the date of
the said instrument; that the plaintiff company had not entered into possession
of the purchased property, owing to its continued occupancy by the defendant and
his nephew, Jose Duran, by virtue of a contract of lease executed by the
plaintiff to Duran, which contract was in force up to February 14, 1911; that
the said instrument of sale of the property, executed by Jose Duran, was
publicly and freely confirmed and ratified by the defendant Orense in a verbal
declaration made by him on March 14, 1912, in the Court of First Instance of
Albay, to the effect that the said instrument of sale was executed by Duran with
the knowledge and consent of the defendant, Orense; that, in order to perfect
the title to the said property, the plaintiff had to demand of the defendant
that he execute in legal form a deed pf conveyance of the property, but that the
defendant Orense refused to do so, without any justifiable cause or reason,
wherefore he should be compelled to execute the said deed by an express order of
the court, for Jose Duran is notoriously insolvent and cannot reimburse the
plaintiff company for the price of the sale which he received, nor pay any sum
whatever for the losses and damages occasioned by the said sale, aside from the
fact that the plaintiff had suffered damage by losing the present value of the
property, which was worth P3,000; that, unless such deed of final conveyance
were executed in behalf of the plaintiff company, it would be injured by the
fraud perpetrated by the vendor, Duran, in connivance with the defendant; that
the latter had been occupying the said property since February 14, 1911, and
refused to pay the rental thereof, notwithstanding the demand made upon him for
its payment at the rate of P30 per month, the just and reasonable value for the
occupancy of the said property, the possession of which the defendant likewise
refused to deliver to the plaintiff company, in spite of the continuous demands
made upon him, the defendant, with bad faith and to the prejudice of the firm of
Gutierrez Hermanos, claiming to have rights of ownership and possession in the
said property. Therefore it was prayed that judgment be rendered by holding that
the land and improvements in question belong legitimately and exclusively to the
plaintiff, and ordering the defendant to execute in the plaintiff’s behalf the
said instrument of transfer and conveyance of the property and of all the right,
interest, title and share which the defendant has therein; that the defendant be
sentenced to pay P30 per month for damages and rental of the property from
February 14, 1911, to the date of the restitution of the property to the
plaintiff, and that, in case these remedies were not granted to the plaintiff,
the defendant be sentenced to pay to it the sum of P3,000 as damages, together
with interest thereon since the date of the institution of this suit, and to pay
the costs and other legal expenses.

The demurrer filed to the amended complaint was over-ruled, with exception on
the part of the defendant, whose counsel made a general denial of the
allegations contained in the complaint, excepting those, that were admitted, and
specifically denied paragraph 4 thereof to the effect that on February 14, 1907,
Jose Duran executed the deed of sale of the property in favor of the plaintiff
with the defendant’s knowledge and consent.

As the first special defense, counsel for the defendant alleged that the
facts set forth in the complaint with respect to the execution of the deed did
not constitute a cause of action, nor did those alleged in the other form of
action for the collection of P3,000, the value of the realty.

As the second special defense, he alleged that the defendant was the lawful
owner of the property claimed in the complaint, as his ownership was recorded in
the property registry, and that, since his title had been registered under the
proceedings in rem prescribed by Act No. 496, it was conclusive against
the plaintiff and the pretended rights alleged to have been acquired by Jose
Duran prior to such registration could not now prevail; that the defendant had
not executed any written power of attorney nor given any verbal authority to
Jose Duran in order that the latter might, in his name and representation, sell
the said property to the plaintiff company; that the defendant’s knowledge of
the said sale was acquired long after the execution of the contract of sale
between Duran and Gutierrez Hermanos, and that prior thereto the defendant did
not intentionally and deliberately perform any act such as might have induced
the plaintiff to believe that Duran was empowered and authorized by the
defendant and which would warrant him in acting to his own detriment, under the
influence of that belief. Counsel therefore prayed that the defendant be
absolved from the complaint and that the plaintiff be sentenced to pay the costs
and to hold his peace forever.

After the hearing of the case and an examination of the evidence introduced
by both parties, the court rendered the judgment aforementioned, to which
counsel for the defendant excepted and moved for a new trial. This motion was
denied, an exception was taken by the defendant and, upon presentation of the
proper bill of exceptions, the same was approved, certified and forwarded to the
clerk of this court.

This suit involves the validity and efficacy of the sale under right of
redemption of a parcel of land and a masonry house with a nipa roof
erected thereon, effected by Jose Duran, a nephew of the owner of the property,
Engracio Orense, for the sum of P1,500 by means of a notarial instrument
executed and ratified on February 14, 1907.

After the lapse of the four years stipulated for the redemption, the
defendant refused to deliver the property to the purchaser, the firm of
Gutierrez Hermanos, and to pay the rental thereof at the rate of P30 per month
for its use and occupation since February 14, 1911, when the period for its
repurchase terminated. His refusal was based on the allegations that he had been
and was then the owner of the said property, which was registered in his name in
the property registry; that he had not executed any written power of attorney to
Jose Duran, nor had he given the latter any verbal authorization to sell the
said property to the plaintiff firm in his name; and that, prior to the
execution of the deed of sale, the defendant performed no act such as might have
induced the plaintiff to believe that Jose Duran was empowered and authorized by
the defendant to effect the said sale.

The plaintiff firm, therefore, charged Jose Duran, in the Court of First
Instance of the said province, with estafa, for having represented himself in
the said deed of sale to be the absolute owner of the aforesaid land and
improvements, whereas in reality they did not belong to him, but to the
defendant Orense. However, at the trial of the case Engracio Orense, called as a
witness, being interrogated by the fiscal as to whether he had consented to
Duran’s selling the said property under right of redemption to the firm of
Gutierrez Hermanos, replied that he had. In view of this statement by the
defendant, the court acquitted Jose Duran of the charge of estafa.

As a result of the acquittal of Jose Duran, based on the explicit testimony
of his uncle, Engracio Orense, the owner of the property, to the effect that he
had consented to his nephew Duran’s selling the property under right of
repurchase to Gutierrez Hermanos, counsel for this firm filed a complaint
praying, among other remedies, that the defendant Orense be compelled to execute
a deed for the transfer and conveyance to the plaintiff company of all the
right, title and interest which Orense had in the property sold, and to pay to
the same the rental of the property due from February 14, 1911.

Notwithstanding the allegations of the defendant, the record in this case
shows that he did give his consent in order that his nephew, Jose Duran, might
sell the property in question to Gutierrez Hermanos, (and that he did thereafter
confirm and ratify the sale by means of a public instrument executed before a
notary.

It having been proven at the trial that he gave his consent to the said sale,
it follows that the defendant conferred verbal, or at least implied, power of
agency upon his nephew Duran, who accepted it in the same way by selling the
said property. The principal must therefore fulfill all the obligations
contracted by the agent, who acted within the scope of his authority. (Civil
Code, arts, 1709, 1710 and 1727.)

Even should it be held that the said consent was granted subsequently to the
sale, it is unquestionable that the defendant, the owner of the property,
approved the action of his nephew, who in this case acted as the manager of his
uncle’s business, and Orense’s ratification produced the effect of an express
authorization to make the said sale. (Civil Code, arts. 1888 and 1892.)

Article 1259 of the Civil Code prescribes: “No one can contract in the name
of another without being authorized by him or without having his legal
representation according to law.

“A contract executed in the name of another by one who has neither his
authorization nor legal representation shall be void, unless it should be
ratified by the person in whose name it was executed before being revoked by the
other contracting party.”

The sworn statement made by the defendant, Orense, while testifying as a
witness at the trial of Duran for estafa, virtually confirms and ratifies the
sale of his property effected by his nephew, Duran, and, pursuant to article
1313 of the Civil Code, remedies all defects which the contract may have
contained from the moment of its execution.

The sale of the said property made by Duran to Gutierrez Hermanos was indeed
null and void in the beginning, but afterwards became perfectly valid and cured
of the defect of nullity it bore at its execution by the confirmation solemnly
made by the said owner upon his stating under oath to the judge that he himself
consented to his nephew Jose Duran’s making the said sale. Moreover, pursuant to
article 1309 of the Code, the right of action for nullification that could have
been brought became legally extinguished from the moment the contract was
validly confirmed and ratified, and, in the present case, it is unquestionable
that the defendant did confirm the said contract of sale and consent to its
execution.

On the testimony given by Engracio Orense at the trial of Duran for estafa,
the latter was acquitted, and it would not be just that the said testimony,
expressive of his consent to the sale of his property, which determined the
acquittal of his nephew, Jose Duran, who then acted as his business manager, and
which testimony wiped out the deception that in the beginning appeared to have
been practiced by the said Duran, should not now serve in passing upon the
conduct of Engracio Orense in relation to the firm of Gutierrez Hermanos in
order to prove his consent to the sale of his property, for, had it not been for
the consent admitted by the defendant Orense, the plaintiff would have been the
victim of estafa.

If the defendant Orense acknowledged and admitted under oath that he had
consented to Jose Duran’s selling the property in litigation to Gutierrez
Hermanos, it is not just nor is it permissible for him afterward to deny that
admission, to the prejudice of the purchaser, who gave P1,500 for the said
property.

The contract of sale of the said property contained in the notarial
instrument of February 14, 1907, is alleged to be invalid, null and void under
the provisions, of paragraph 5 of section 335 of the Code of Civil Procedure,
because the authority which Orense may have given to Duran to make the said
contract of sale is not shown to have been in writing and signed by Orense, but
the record discloses satisfactory and conclusive proof that the defendant Orense
gave his consent to the contract of sale executed in a public instrument by his
nephew Jose Duran. Such consent was proven in a criminal action by the sworn
testimony of the principal and presented in this civil suit by other sworn
testimony of the same principal and by other evidence to which the defendant
made no objection. Therefore the principal is bound to abide by the consequences
of his agency as though it had actually been given in writing. (Conlu
vs. Araneta and Guanko, 15 Phil. Rep., 387; Gallemit vs.
Tabiliran, 20 Phil. Rep., 241; Kuenzle & Streiff vs. Jiongco, 22
Phil. Rep., 110.)

The repeated and successive statements made by the defendant Orense in two
actions, wherein he affirmed that he had given his consent to the sale of his
property, meet the requirements of the law and legally excuse the lack of
written authority, and, as they are a full ratification of the acts executed by
his nephew Jose Duran, they produce the effects of an express power of
agency.

The judgment appealed from is in harmony with the law and the merits of the
case, and the errors assigned thereto have been duly refuted by the foregoing
considerations, so it should be affirmed.

The judgment appealed from is hereby affirmed, with the costs against the
appellant.

Arellano, C. J., Johnson, Carson, Moreland, and Araullo,
JJ., concur.