Mactan-Cebu International Airport Authority v. Unchuan

c. Formal requirements on grant of powers to agent (Arts. 1874; 1878-1880) — Sale of land through an agent (Art. 1874)

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Case DigestWeek 2 - Formalities of Agency

Mactan-Cebu International Airport Authority v. Unchuan

G.R. No. 182537 · June 1, 2016 · Supreme Court

c. Formal requirements on grant of powers to agent (Arts. 1874; 1878-1880) — Sale of land through an agent (Art. 1874)

Petitioner: Mactan-Cebu International Airport AuthorityRespondent: Richard E. Unchuan

Gist

A man who claimed to be attorney-in-fact for his co-heirs sold their airport land to the government in 1958 without any special power of attorney. Decades later the Court held the sale void as to the co-owners who never consented — but valid as to the seller's own undivided share.

Core Doctrine

A special power of attorney is indispensable to a sale of registered land by an agent (Arts. 1874 and 1878), and its absence renders the sale void as to the principals. The nullity is partial, however: a co-owner who sells the whole property validly transfers his own pro indiviso share, since he may freely dispose of what belongs to him.

Facts

The registered owners of two lots situated in what is now the Mactan-Cebu International Airport were a group of co-heirs. (Lot No. 4810-A of 177,176 square metres and Lot No. 4810-B of 2,740 square metres, in Barrio Buaya, Lapu-Lapu City, under OCT No. RO-1173 in the names of the heirs of Eugenio Godinez — among them Atanacio himself, who was therefore selling his co-heirs' shares as well as his own.)
In 1958, Atanacio Godinez, representing himself as their attorney-in-fact, sold both lots in their entirety to the Civil Aeronautics Administration (CAA), predecessor of petitioner Mactan-Cebu International Airport Authority (MCIAA). (3 April 1958. CAA took possession on payment and held the lots as owner; a provincial voucher was later disbursed in Atanacio's favour, and in 1969 he and other former co-owners signed a Deed of Partition reciting that the lots "are owned by the Civil Aeronautics Administration, having bought the same from the original owners.")
In 1998, respondent Richard E. Unchuan purchased the same lots from the heirs of the registered owners and, upon discovering the earlier conveyance to the government, filed suit to declare the 1958 sale void and to recover the property. (He bought on 7 December 1998 through several deeds of sale; the suit followed only on 5 March 2004, as Civil Case No. 6120-L before the RTC of Lapu-Lapu City, Branch 27.)
MCIAA relied on the 1958 deed and on the government's long possession and use of the land as part of the airport complex.
Unchuan countered that Atanacio had no special power of attorney from the registered owners and that the sale was therefore void. (He added that no consideration was actually paid, that the deed bore no signature for CAA, and that his predecessors had merely tolerated the government's possession.)
Regional Trial Court — for Unchuan. The Regional Trial Court ruled for Unchuan. (3 March 2006: it voided the 1958 deed, declared him owner of 179,916 square metres, ordered MCIAA to vacate and to pay rentals of ₱20.00 per square metre per month, holding that Atanacio "was not clothed with a special power of attorney granting him authority to sell the disputed lots.")
Court of Appeals — affirmed. The Court of Appeals affirmed, emphasising that Atanacio lacked authority to sell without a special power of attorney. (29 November 2007, invoking Article 1874; it held the 1969 Deed of Partition "produced no legal effects and [was] not susceptible of ratification," and that neither prescription nor laches could cure a void contract.)

Issue

Whether the 1958 sale executed by Atanacio Godinez, without a special power of attorney from the registered owners, validly conveyed the lots to the government.

Ruling

Only in part. The Supreme Court held the sale void as to the shares of the co-owners who did not authorise it, but valid as to Atanacio Godinez's own pro indiviso share. Unchuan's ownership was affirmed as to the remainder, and the Court noted that the government must resort to expropriation if it wishes to acquire the rest.

Ratio

1. Selling Land for Another Requires a Special Power

Article 1878 (5) requires a special power of attorney to enter into any contract by which the ownership of an immovable is transmitted or acquired for a valuable consideration, and Article 1874 requires that, for a sale of land through an agent, the authority be in writing on pain of nullity. Atanacio produced neither.
His bare representation that he was the co-heirs' attorney-in-fact could not supply the missing authority: agency is never presumed, and the declarations of the supposed agent cannot establish his own power.

2. The Sale Is Void as to Non-Consenting Co-Owners

Consent is an essential requisite of a contract.
As to the co-owners who never authorised Atanacio, there was no consent at all, and the sale produced no effect upon their shares.
Their long silence did not cure the defect, since a void contract cannot be ratified and does not prescribe.

3. But Valid as to the Seller's Own Undivided Share

The nullity is not total.
Under Article 493, each co-owner has full ownership of his undivided part and may alienate it.
Atanacio needed no authority to dispose of what was already his.
The sale therefore effectively transferred his own pro indiviso interest to the government, and the Court excluded that share in computing the area adjudicated to Unchuan — leaving him with 149,930 square metres.

4. Possession by the Government Is Not a Substitute for Title

That the land had long been occupied and used for airport purposes did not convert a void sale into a valid one.
The proper course for the State is the exercise of eminent domain, with payment of just compensation to the registered owners or their successors.

Doctrine

Articles 1874 and 1878 (5) work together. Conveying an immovable for valuable consideration through an agent requires a special power of attorney, and that authority must be in writing; otherwise the sale is void.
Partial nullity in co-ownership. A co-owner who purports to sell the entire property conveys only his own undivided share; the sale is void as to the shares of co-owners who did not consent (Art. 493).
No prescription, no ratification. A void sale cannot be ratified and the action to declare its nullity does not prescribe; neither the passage of time nor the buyer's possession validates it.

Full Digest — Recitation Format

Full-length digest in the format required by the course digest prompt.

Classification: DIRECT · Ponente: Mendoza, J. (Second Division) · G.R. No. 182537, 1 June 2016

TOPIC/SUBTOPIC FOCUS: Week 2 — Formalities of Agency: (c) Formal requirements on grant of powers to agent — Sale of land through an agent (Article 1874), read with Article 1878(5).

TOPIC DOCTRINE CAPSULE. Article 1874 requires that where a sale of land or of any interest therein is made through an agent, "the authority of the latter shall be in writing; otherwise, the sale shall be void," and Article 1878(5) requires that the power be special — one expressly mentioning a sale or including a sale as a necessary ingredient of the act mentioned. The requirement is one of content as well as of form: a writing that does not clearly and unmistakably confer the power to sell an immovable does not satisfy it, and any reasonable doubt is resolved against the existence of the power. Because the sanction is nullity, the defect cannot be cured by later acknowledgments, confirmations, or the passage of time. The decision is to be checked against this capsule and followed where it differs.

I. Gist and Central Doctrine

This case is DIRECT as to the assigned Topic/Subtopic: the Court reproduced Article 1874 and Article 1878(5), quoted at length the Dizon v. Court of Appeals formulation of what a written authority to sell land must contain, and held the 1958 conveyance void as to every co-owner who had not signed it. The controversy arose from Lot No. 4810-A (177,176 square metres) and Lot No. 4810-B (2,740 square metres) in Barrio Buaya, Lapu-Lapu City, registered under OCT No. RO-1173 in the names of the heirs of Eugenio Godinez; on 3 April 1958 Atanacio Godinez, one of the co-owners, purporting to act as attorney-in-fact of all of them, sold both lots to the Republic through the Civil Aeronautics Administration, predecessor of MCIAA, and the lots now form part of the Mactan-Cebu International Airport; forty years later, on 7 December 1998, the surviving heirs sold to respondent Richard E. Unchuan, who sued to annul the 1958 deed. The Supreme Court PARTIALLY GRANTED the petition and AFFIRMED with MODIFICATION the Court of Appeals, holding the 1958 deed valid as to Atanacio's own undivided share but void as to the shares of the non-signing co-owners, reducing Unchuan's award from 179,916 to 149,930 square metres, directing MCIAA to initiate expropriation proceedings, and ordering rentals of ₱20.00 per square metre per month in the meantime. The single central doctrine dominant to the Topic/Subtopic is that "[w]ithout a special power of attorney specifying his authority to dispose of an immovable, Atanacio could not be legally considered as the representative of the other registered co-owners," so that his act "cannot be a valid source of obligation to bind all the other registered co-owners and their heirs" — and that the resulting nullity is impervious to ratification, prescription and laches. The co-ownership holding under Article 493 and the presumption-of-consideration holding under Section 3, Rule 131 are treated below as secondary.

II. Chronological Narration of Material Facts and Procedural Events

Lot No. 4810-A, with an area of 177,176 square metres, and Lot No. 4810-B, with an area of 2,740 square metres, both located in Barrio Buaya, Lapu-Lapu City, were covered by Original Certificate of Title No. RO-1173, registered in the names of the heirs of Eugenio Godinez — Teodora Tampus, Fernanda Godinez (wife of Iscolastico Epe), Tomasa Godinez (wife of Mateo Ibañez), Sotera Godinez (wife of Guillermo Pino), Atanasio (also Atanacio) Godinez (married to Florencia Pino), Juana Godinez (wife of Catalino Cuison), and Ambrosio Godinez (married to Mamerta Inot).
On 3 April 1958, Atanacio Godinez, "the supposed attorney-in-fact of all the registered owners and their heirs," executed a Deed of Absolute Sale conveying both lots to the Republic of the Philippines, represented by the Civil Aeronautics Administration. CAA took possession upon payment of the purchase price, and thereafter possessed the lots in the concept of owner; the properties were declared for taxation under Tax Declaration Nos. 00078 and 00092.
On 8 October 1958, an official communication was issued by the District Land Office of Cebu to the Provincial Treasurer of Cebu stating that Provincial Voucher No. 05358 was disbursed in favour of Atanacio.
On 21 July 1969, a Joint Affidavit of Confirmation of Sale of Allotted Shares Already Adjudicated and Quitclaim of a Portion of Lot No. 4810 was executed by heirs who had not signed the Deed of Partition, establishing "the fact of sale and conveyance of a portion of Lot 4810 by the heirs of JUANA GODINEZ" and "confirming voluntarily said conveyance."
On 17 September 1969, Atanacio, together with other former registered co-owners, signed a Deed of Partition of Lot No. 4810, Open Cadastre, reciting that Lot No. 4810-A and Lot No. 4810-B "are owned by the Civil Aeronautics Administration, having bought the same from the original owners."
By virtue of Republic Act No. 6958, "The Charter of Mactan-Cebu International Airport Authority," the Republic officially turned over the management of the lots to MCIAA.
On 9 October 1998, Atty. Sigfredo V. Dublin, legal manager of CAA, caused the annotation of an adverse claim on OCT No. RO-1173 in favour of MCIAA.
On 7 December 1998, respondent Richard E. Unchuan bought the two lots from the surviving heirs of the registered owners through several deeds of absolute sale executed through representation, covering aggregate shares of 29,986 square metres each for the branches of Atanacio, Fernanda, Sotera, Tomasa and Juana, and 5,997.20 square metres in four instances for the spouses Ambrosio Godinez and Mamerta Inot.
On 5 March 2004, Unchuan filed a complaint for Partial Declaration of Nullity of the Deed of Absolute Sale with Plea for Partition, Damages and Attorney's Fees before the RTC of Lapu-Lapu City, Branch 27 (Civil Case No. 6120-L), later amended to a complaint for Declaration of Nullity of Deed of Absolute Sale, Quieting of Title and/or Payment of Just Compensation, Rental and Damages and Attorney's Fees. He alleged that the registered owners and their heirs did not authorize Atanacio to sell their undivided shares; that no actual consideration was paid despite promises; that the deed did not bear the signature of the CAA representative; that there was no proof of approval by the Secretary of Public Works and Highways; and that his predecessors merely tolerated the possession of CAA and later MCIAA.
On 27 April 2004, MCIAA moved to dismiss on grounds of prescription, laches and estoppel; the RTC denied the motion. MCIAA's Very Urgent Motion for Compulsory Joinder of Indispensable Parties was denied by Order dated 5 November 2004, and its motion for reconsideration by Order dated 5 January 2005.
In its Answer, MCIAA averred that Atanacio, acting as representative of the heirs, sold the lots to the Republic on 3 April 1958; that CAA took possession upon payment; that the 1969 Deed of Partition corroborated the sale; and that the Republic had since possessed the lots as owner.
On 3 March 2006, the RTC ruled for Unchuan, declaring the 1958 deed void, declaring him true and legal owner of 179,916 square metres, ordering annotation and issuance of title in his name, directing MCIAA to vacate, and awarding rentals of ₱20.00 per square metre per month from the filing of the complaint. It held that Atanacio "was not clothed with a special power of attorney granting him authority to sell the disputed lots," that the documentation was never transmitted to CAA's Manila Office so the heirs received no payment, and that the absence of the CAA Administrator's signature showed want of consent.
On 29 November 2007, the CA affirmed, holding that Atanacio had no authority absent the special power of attorney "specifically executed for such purpose as required in Article 1874 of the New Civil Code"; that no evidence showed payment; that the Deed of Partition "produced no legal effects and [was] not susceptible of ratification"; and that prescription, estoppel and laches did not set in because a void contract may be questioned at any time.
MCIAA filed a Motion for Reconsideration dated 18 December 2007, a Supplemental Motion for Reconsideration dated 30 January 2008, and a Motion for New Trial dated 6 March 2008 incorporating three items of newly discovered evidence: a certified true copy of the 1958 Deed of Absolute Sale bearing the signature of then Administrator Urbano B. Caldoza; a certified true copy of the 21 July 1969 Joint Affidavit; and a certified true copy of the Provincial Voucher with attachments showing payment.
On 25 March 2008, the CA denied reconsideration, rejecting the extrinsic-fraud claim, holding the adverse-claim annotation "of no force and effect since the same was predicated on a void and inexistent contract," and treating the Deed of Partition recital as "at most ... a mistaken conclusion that the CAA validly purchased the subject lots," which "[n]either can ... be considered as a cure for the defect of lack of consent or authority."
On 1 June 2016, the Supreme Court rendered its Decision on the Rule 45 petition, partially granting it.

III. Arguments of the Parties

A. Petitioner (Mactan-Cebu International Airport Authority, through the Office of the Solicitor General)

On the issue tied to the Topic/Subtopic, the OSG argued that "the mere absence of a special power of attorney in favor of Atanacio Godinez does not necessarily mean that he was not authorized by his co-owners who even authorized and represented to CAA that Atanacio Godinez was their attorney-in-fact." It added, in the alternative, that "[e]ven granting for the sake of argument that Atanacio Godinez was not in fact authorized by the other registered co-owners to execute a deed conveying Lot Nos. 4810-A and 4810-B to CAA, such defect has nevertheless been cured when his co-owners subsequently executed on September 17, 1969 a public document denominated as Deed of Partition."

On the remaining assignments of error, the OSG contended that non-payment of consideration cannot be established by mere testimonial evidence and must be proved by clear, positive and convincing evidence; that private transactions are presumed fair and regular, the ordinary course of business is presumed followed, and government employees are presumed to have regularly performed their duties; that "the absence of the signature of Administrator Caldoza on the challenged Deed of Absolute Sale should, at best, be treated as a mere formal defect which should not affect the very substance of the contract," a contract of sale being consensual; that MCIAA's possession is justified by extraordinary prescription; that laches had set in against the original registered owners for failing to question the sale for forty-six years, and extends to Unchuan by privity; that the predecessors-in-interest are indispensable parties; and that extrinsic fraud was committed because Atty. Dublin withheld from the OSG the fact of the 9 October 1998 adverse-claim annotation, as well as the Deed of Absolute Sale bearing Administrator Caldoza's signature, the Joint Affidavit, the Extra-Judicial Declaration of Partition and Adjudication, and the Provincial Voucher dated 3 October 1958.

B. Respondent (Richard E. Unchuan)

Unchuan maintained that he is the legal and rightful owner of the two lots, having bought them from the surviving heirs of the registered owners through several deeds of absolute sale all dated 7 December 1998; that the 3 April 1958 Deed of Absolute Sale "was null and void because the registered owners and their heirs did not authorize Atanacio to sell their undivided shares in the subject lots in favor of CAA"; that no actual consideration was paid to the registered owners or their heirs despite promises that they would be paid; that the deed "did not bear the signature of the CAA representative"; that there was no proof that the Secretary of the Department of Public Works and Highways approved the sale; and that his predecessors-in-interest "merely tolerated the possession by CAA and, later, by MCIAA."

C. Common Ground / Stipulations

The decision proceeds on the undisputed premise that Atanacio was himself one of the registered co-owners and that he alone signed the 1958 deed; that no special power of attorney from the other co-owners was ever produced; and that the lots "now form part of the Mactan-Cebu International Airport" and are "being used for a public purpose."

IV. Issues

A. Main Issue (Topic/Subtopic-Centered)

Whether or not the 3 April 1958 Deed of Absolute Sale executed by Atanacio Godinez in favour of the Civil Aeronautics Administration validly conveyed the undivided shares of his fellow registered co-owners, where no special power of attorney authorizing him to dispose of the immovables was ever executed or produced — and, corollarily, whether the 1969 Deed of Partition and Joint Affidavit, in which the co-owners acknowledged and "confirm[ed] voluntarily" the sale, cured the want of written authority.

B. Secondary Issues

Whether the sale is void in its entirety, or valid to the extent of Atanacio's own pro indiviso share.
Whether consideration was paid for the 1958 transaction.
Whether Unchuan's action is barred by prescription, laches or estoppel, and whether MCIAA acquired title by extraordinary prescription.
Whether the predecessors-in-interest of Unchuan are indispensable parties.
Whether the CA erred in refusing to admit the additional evidence offered on motion for new trial, and whether extrinsic fraud deprived MCIAA of a fair trial.
What relief is proper where the land has been devoted to a public use.

C. Ancillary / Incidental Issues

Whether the absence of the CAA Administrator's signature on the 1958 deed vitiated it. The Court did not rest its holding on this point; having found the want of written authority dispositive as to the non-signing co-owners, it upheld the sale as to Atanacio's own share notwithstanding the signature question, and treated the presumption of regularity as sufficient on the matter of consideration.

V. Ruling / Disposition (Categorical, Issue-Mapped)

MAIN ISSUE — VOID as to the other co-owners; and NO, the later confirmations did not cure it. Verbatim: "The Court finds that the sale transaction executed between Atanacio, acting as an agent of his fellow registered owners, and the CAA was indeed void insofar as the other registered owners were concerned. They were represented without a written authority from them clearly in violation of the requirement under Articles 1874 and 1878 of the Civil Code." And: "The rule is that a void contract produces no effect either against or in favor of anyone and cannot be ratified."

Secondary Issue 1 — VALID as to Atanacio's own share. "[A]lthough the sale transaction insofar as the other heirs of the registered owners was void, the sale insofar as the extent of Atanacio's interest is concerned, remains valid."

Secondary Issue 2 — Consideration is PRESUMED PAID. "The Court does not accept either Unchuan's allegation that no payment was received for the transaction between Atanacio and CAA."

Secondary Issue 3 — NO. "Similarly, laches will not set in against a void transaction, as in this case, where the agent did not have a special power of attorney to dispose of the lots co-owned by the other registered owners. In fact, Article 1410 of the Civil Code specifically provides that an action to declare the inexistence of a void contract does not prescribe."

Secondary Issues 4 and 5 — not separately resolved in the Court's ruling; the disposition proceeds on the merits without disturbing the trial court's denial of compulsory joinder, and the Court accorded no curative effect to the additional documents, holding the deed void as to the non-signatories regardless.

Secondary Issue 6 — EXPROPRIATION plus interim rentals. "It being the situation, the government or the MCIAA should initiate expropriation proceedings so that the registered owners or successors-in-interest would be compensated for their undivided shares in the lots taken from them. In the meantime, MCIAA should pay rentals thereon, after these shall have been identified and segregated, at the rate of P20.00 per square meter to be reckoned from the filing of the complaint."

Dispositive portion, verbatim:

"WHEREFORE, the petition is PARTIALLY GRANTED. The November 29, 2007 Decision and the March 25, 2008 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 01306 are AFFIRMED with MODIFICATION. Accordingly, the dispositive portion of the decision should read as follows:

WHEREFORE, judgment is hereby rendered declaring that:

a. The Deed of Sale signed by Atanacio Godinez alienating the lands denominated as Lot No. 4810-A and Lot No. 4810-B in favor of MCIAA's predecessor-in-interest is VALID, insofar as his undivided share in the said lots is concerned, but VOID, insofar as the undivided shares of the other registered owners, who did not sign the deed, are concerned; and

b. Plaintiff Richard E. Unchuan is the true and legal owner of portions of Lot No. 4810-A and Lot No. 4810-B consisting of One Hundred Forty Nine Thousand Nine Hundred Thirty (149,930) Square Meters.

The Register of Deeds of Lapu-Lapu City is hereby ordered to annotate in OCT No. RO-1173 the respective rights of Richard E. Unchuan and the Mactan-Cebu International Airport Authority in the said property.

The Mactan-Cebu International Airport Authority is ordered to initiate expropriation proceedings over the undivided portions of Lots No. 4810-A and 4810-B covering the said 149,930 Square Meters.

In the meantime, Mactan-Cebu International Airport Authority is ordered to pay the sum of P20.00 per square meter per month as rental for the use of the property reckoned from the time of the filing of the complaint until its final payment for the same.

No pronouncement as to the cost of the suit.

SO ORDERED."

VI. Ratio Decidendi and Doctrines (Topic-Focused)

A. Ratio Decidendi (Decisive Reasoning)

Step 1 — The finding and its codal anchor. "The Court finds that the sale transaction executed between Atanacio, acting as an agent of his fellow registered owners, and the CAA was indeed void insofar as the other registered owners were concerned. They were represented without a written authority from them clearly in violation of the requirement under Articles 1874 and 1878 of the Civil Code," both of which the Court then reproduced: Article 1874 in full, and Article 1878(5) ("To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration").
Step 2 — What the writing must contain, quoted at length from Dizon v. Court of Appeals.
This passage is the doctrinal core of the case for Week 2(c), and it converts Article 1874 from a rule of form into a rule of content:

"When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. Thus the authority of an agent to execute a contract for the sale of real estate must be conferred in writing and must give him specific authority, either to conduct the general business of the principal or to execute a binding contract containing terms and conditions which are in the contract he did execute. A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required by law to enable an appointee of an agency (couched) in general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document."

The Court's footnote 49 identifies the source as Dizon v. Court of Appeals, 444 Phil. 161, 165-166 (2003), citing Cosmic Lumber Corp. v. Court of Appeals, 332 Phil. 948, 957-958 (1996).
Step 3 — Application to Atanacio. "Without a special power of attorney specifying his authority to dispose of an immovable, Atanacio could not be legally considered as the representative of the other registered co-owners of the properties in question. Atanacio's act of conveying Lot No. 4810-A and Lot No. 4810-B cannot be a valid source of obligation to bind all the other registered co-owners and their heirs because he was not clothed with any authority to enter into a contract with CAA."
Step 4 — The consequence in the law of sales (Article 1475). "The other heirs could not have given their consent as required under Article 1475 of the New Civil Code because there was no meeting of the minds among the other registered co-owners who gave no written authority to Atanacio to transact on their behalf. Therefore, no contract was perfected insofar as the portions or shares of the other registered co-owners or their heirs were concerned."
The absence of written authority is thus translated into an absence of consent, and hence into non-perfection.
Step 5 — Rejection of the confirmations and acknowledgments. "Thus, the Court cannot give any weight either to the Deed of Partition of Lot No. 4810, Open Cadastre (subsequently executed by all the heirs of Ambrosio and Sotera Godinez to the effect that they had acknowledged the sale of the subject lots in favor of CAA) or to other documents (such as Joint Affidavit of Confirmation of Sale of Alloted Shares Already Adjudicated and Quitclaim of a Portion of Lot No. 4810, Open Cadastre) all of which gave the impression that they had ratified the sale of the subject lots in favor of CAA, MCIAA's predecessor-in-interest."
The reason is stated in the next sentence: "The rule is that a void contract produces no effect either against or in favor of anyone and cannot be ratified" (citing Roberts v. Papio).
Step 6 — Prescription, laches, estoppel (Article 1410). "Similarly, laches will not set in against a void transaction... In fact, Article 1410 of the Civil Code specifically provides that an action to declare the inexistence of a void contract does not prescribe."
Step 7 — The limit of the nullity (Article 493). The Court reproduced Article 493 and explained: "The quoted provision recognizes the absolute right of a co-owner to freely dispose of his pro indiviso share as well as the fruits and other benefits arising from that share, independently of the other co-owners. The sale of the subject lots affects only the seller's share pro indiviso, and the transferee gets only what corresponds to his grantor's share in the partition of the property owned in common. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property" (citing Fernandez v. Fernandez).
Applied: "By signing the deed of sale with the CAA, Atanacio effectively sold his undivided share in the lots in question. Thus, CAA became a co-owner of the undivided subject lots. Accordingly, Atanacio's heirs could no longer alienate anything in favor of Unchuan because he already conveyed his pro indiviso share to CAA."
Step 8 — Consideration presumed (Section 3, Rule 131). The Court identified as disputable presumptions "(1) private transactions have been fair and regular; (2) the ordinary course of business has been followed; and (3) there was sufficient consideration for a contract," and explained that "[a] presumption may operate against a challenger who has not presented any proof to rebut it."
Applied: "Atanacio, by affixing his signature on the deed of absolute sale, a disputable presumption arose that consideration was paid. A mere allegation that no payment was received is not sufficient to dispel such legal presumption," reinforced by "an official communication, dated October 8, 1958, from the District Land Office of Cebu to the Provincial Treasurer of Cebu stating that Provincial Voucher No. 05358 was disbursed in favor of Atanacio."
Step 9 — Arithmetic of the modification. "Unchuan is not entitled to the whole 179,916 square meters of the property... Atanacio's share should be excluded from the computation as his heirs were already precluded from further conveying what he, their predecessor-in-interest, had previously sold to CAA. Thus, Unchuan is only legally entitled to an unidentified 149,930 square meters of the property after excluding Atanacio's unidentified share of 29,986 square meters."
Step 10 — The public-use adjustment. "The Court notes that the lots in question were formerly undeveloped lands, but now form part of the Mactan-Cebu International Airport. It is, thus, being used for a public purpose. It being the situation, the government or the MCIAA should initiate expropriation proceedings..."

B. Doctrines / Rules / Principles Laid Down

Written and special authority is required to sell an immovable through an agent — the doctrinal takeaway for this Topic/Subtopic. Verbatim:

"They were represented without a written authority from them clearly in violation of the requirement under Articles 1874 and 1878 of the Civil Code."

And:

"Without a special power of attorney specifying his authority to dispose of an immovable, Atanacio could not be legally considered as the representative of the other registered co-owners of the properties in question."

The content standard for the written authority (Dizon v. Court of Appeals, as adopted). Verbatim:

"The express mandate required by law to enable an appointee of an agency (couched) in general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document."
Want of written authority equals want of consent, hence non-perfection (Article 1475). "The other heirs could not have given their consent as required under Article 1475... Therefore, no contract was perfected insofar as the portions or shares of the other registered co-owners or their heirs were concerned."
A void sale cannot be ratified by subsequent acknowledgment. Verbatim: "The rule is that a void contract produces no effect either against or in favor of anyone and cannot be ratified." Even a public instrument in which the co-owners recite that the buyer "owns" the property "having bought the same from the original owners" is, in the appellate court's phrase adopted here, "at most ... a mistaken conclusion" and "[n]either can ... be considered as a cure for the defect of lack of consent or authority."
Imprescriptibility (Article 1410) and unavailability of laches. "[L]aches will not set in against a void transaction... Article 1410 of the Civil Code specifically provides that an action to declare the inexistence of a void contract does not prescribe."
Partial validity where the agent is himself a co-owner (Article 493). "[A] sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property."
Disputable presumptions of regularity and consideration (Section 3, Rule 131). "A mere allegation that no payment was received is not sufficient to dispel such legal presumption."
Remedy where void-title land has been devoted to public use. Expropriation should be initiated, with rentals payable in the interim.

C. Distinctions / Limitations / Qualifications

The nullity is partial, and this is the case's distinctive contribution. Compare AF Realty v. Dieselman and Sps. Bautista v. Sps. Jalandoni, where the purported agents owned nothing and the sales fell entirely. Here the agent was himself a co-owner, so Article 493 preserved the conveyance pro tanto. The examinable formulation: Article 1874 voids the sale only to the extent that the signatory acted for others; it does not void what he could convey in his own right.
Article 1874 is a rule about the authority, and the Court reads it as a rule of content, not merely of medium. Under the Dizon passage, even a written general power will not do: the mandate must "expressly mention[] a sale or ... include[] a sale as a necessary ingredient of the act mentioned," in "clear and unmistakable language," with doubt resolved against the power. A student who answers only "the authority must be in writing" has stated half the rule.
Ratification is unavailable, but this is because the contract is void, not merely unauthorized. Note the contrast with Article 1317, paragraph 2, under which an unauthorized contract is unenforceable and may be ratified — the route taken in Silva v. Lo. The presence of a specific nullity provision displaces it.
The presumption of consideration was allowed to operate even against a void deed. The Court refused to find non-payment, resting on Section 3, Rule 131 and the Provincial Voucher communication. The point matters practically: the co-owners' remedy is expropriation compensation, not restitution of a price never received.
The Court did not resolve the extrinsic-fraud, new-trial, or indispensable-party assignments on their own terms. Its holding on want of authority made the additional documents immaterial, since none of them supplied the missing special power of attorney.
The disposition is equitable in form but does not restore possession. MCIAA was not ordered to vacate — as the RTC had ordered — but to expropriate and to pay rentals meanwhile, because the land now serves a public purpose.

D. Topic/Subtopic Integration (Mandatory)

The classification is DIRECT.
MCIAA v. Unchuan is the Week 2(c) case to cite for the content of the required writing and for the durability of the resulting nullity.
Its first contribution is the Dizon passage, which the Court adopted in full: it is not enough that authority be written, nor even that it be labelled a power of attorney.
It "must so express the powers of the agent in clear and unmistakable language," must "expressly mention[] a sale or ... include[] a sale as a necessary ingredient of the act mentioned," and "[w]hen there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document."
That sentence is the answer to the standard examination variant in which an SPA exists but is drawn in general terms.
Its second contribution is temporal: fifty-eight years after the sale, with the land long since built into an international airport, with the co-owners having twice signed instruments acknowledging and "confirming voluntarily" the conveyance, and with the government in undisturbed possession throughout, the defect of form was still fatal — "a void contract produces no effect either against or in favor of anyone and cannot be ratified," and under Article 1410 the action to declare its inexistence "does not prescribe."
Its third contribution is the qualification that keeps the doctrine from overreaching: because the signatory was a co-owner, Article 493 saved his own pro indiviso share, so that the buyer became a co-owner rather than a stranger. Recited together with [Sps. Bautista v. Sps.
Jalandoni](/agency-trust-partnership/week-02/sps-bautista-v-sps-jalandoni) — which supplies the evidentiary rule that the writing must be produced — this case completes the Article 1874 cluster: the authority must exist, be written, be special, be clear, be produced, and cannot be supplied afterwards.

VII. Separate Opinions

None. The Decision was penned by Mendoza, J., with Carpio, J. (Chairperson), Del Castillo, and Leonen, JJ., concurring; Brion, J., was on official leave. No separate concurring or dissenting opinion appears in the record.

Cited Laws & Provisions

Every statute, rule, and issuance the decision turns on — the text as written, and the work it does in this case.

Civil Code

Article 1874, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title X (Agency), Chapter 1 (Nature, Form and Kinds of Agency)

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. (n)

Why it is cited here

The ground of nullity, applied here to registered land: a sale through an agent without written authority is void.

What this case adds is that the nullity is partial, and the reason is worth holding. Article 1874 voids the sale only so far as it purports to dispose of someone else's property through an unauthorised agent. It has nothing to say about a share the seller owned outright.

Civil Code

Article 1878, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title X (Agency), Chapter 1 (Nature, Form and Kinds of Agency)

Special powers of attorney are necessary in the following cases:

(1) To make such payments as are not usually considered as acts of administration;

(2) To effect novations which put an end to obligations already in existence at the time the agency was constituted;

(3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired;

(4) To waive any obligation gratuitously;

(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;

(6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent;

(7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration;

(8) To lease any real property to another person for more than one year;

(9) To bind the principal to render some service without compensation;

(10) To bind the principal in a contract of partnership;

(11) To obligate the principal as a guarantor or surety;

(12) To create or convey real rights over immovable property;

(13) To accept or repudiate an inheritance;

(14) To ratify or recognize obligations contracted before the agency;

(15) Any other act of strict dominion. (n)

Why it is cited here

Paragraph (5)'s requirement of a special power to transmit ownership of an immovable, which the Court treats as indispensable to a sale of registered land by an agent.

Together with Article 1874 it is a double lock — written and special — and a purchaser dealing with an agent over titled land who checks neither has no one else to blame.

Civil Code

Article 1475, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title VI (Sales), Chapter 1 (Nature and Form of the Contract)

The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. (1450a)

Why it is cited here

The article that explains why the sale survives in part rather than failing entirely.

A contract of sale "is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price." Consent is the operative element — and consent is given by each seller for his own interest.

So where several co-owners are named but only one truly consented, there is a perfected sale as to that one's share and none as to the others'. A co-owner may freely dispose of his pro indiviso share, so his own consent is enough to transfer it; what he cannot do is supply the consent of his co-owners, and Article 1874 stops an agent from supplying it for them without written authority.

The result is a deed that is valid in part and void in part — an outcome that looks odd until you see that the two portions rest on different people's consent.

Civil Code

Article 1410, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title II (Contracts), Chapter 9 (Void and Inexistent Contracts)

The action or defense for the declaration of the inexistence of a contract does not prescribe.

Why it is cited here

The rule that keeps the void portion permanently vulnerable: "The action or defense for the declaration of the inexistence of a contract does not prescribe."

This is what distinguishes a void sale from a merely voidable or unenforceable one in practical terms. There is no window to run out, so a principal whose land was sold by an unauthorised agent is not defeated by delay, and a buyer holding under such a deed never acquires security by the passage of time.

Related notes: Article 493 · Article 1317 · Article 1410 · Article 1475 · Article 1874 · Article 1878 · Article 1879 · Sale of Land Through an Agent · Special Power of Attorney · Void Contracts · Ratification · Co-ownership · AF Realty v. Dieselman · Sps. Bautista v. Sps. Jalandoni · Litonjua v. Eternit (Week 2)

Source: Mactan-Cebu International Airport Authority v. Unchuan, G.R. No. 182537, 1 June 2016

Cited laws & provisions

Article 1874, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title X (Agency), Chapter 1 (Nature, Form and Kinds of Agency)

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. (n)

Why it is cited here

The ground of nullity, applied here to registered land: a sale through an agent without written authority is void.

Full entry below ↓

Article 1878, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title X (Agency), Chapter 1 (Nature, Form and Kinds of Agency)

Special powers of attorney are necessary in the following cases:

(1) To make such payments as are not usually considered as acts of administration;

(2) To effect novations which put an end to obligations already in existence at the time the agency was constituted;

(3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired;

(4) To waive any obligation gratuitously;

(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;

(6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent;

(7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration;

(8) To lease any real property to another person for more than one year;

(9) To bind the principal to render some service without compensation;

(10) To bind the principal in a contract of partnership;

(11) To obligate the principal as a guarantor or surety;

(12) To create or convey real rights over immovable property;

(13) To accept or repudiate an inheritance;

(14) To ratify or recognize obligations contracted before the agency;

(15) Any other act of strict dominion. (n)

Why it is cited here

Paragraph (5)'s requirement of a special power to transmit ownership of an immovable, which the Court treats as indispensable to a sale of registered land by an agent.

Together with Article 1874 it is a double lock — written and special — and a purchaser dealing with an agent over titled land who checks neither has no one else to blame.

Full entry below ↓

Article 1475, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title VI (Sales), Chapter 1 (Nature and Form of the Contract)

The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. (1450a)

Why it is cited here

The article that explains why the sale survives in part rather than failing entirely.

The result is a deed that is valid in part and void in part — an outcome that looks odd until you see that the two portions rest on different people's consent.

Full entry below ↓

Article 1410, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book IV (Obligations and Contracts), Title II (Contracts), Chapter 9 (Void and Inexistent Contracts)

The action or defense for the declaration of the inexistence of a contract does not prescribe.

Why it is cited here

The rule that keeps the void portion permanently vulnerable: "The action or defense for the declaration of the inexistence of a contract does not prescribe."

Full entry below ↓

Facts

The registered owners of two lots situated in what is now the Mactan-Cebu International Airport were a group of co-heirs. (Lot No. 4810-A of 177,176 square metres and Lot No. 4810-B of 2,740 square metres, in Barrio Buaya, Lapu-Lapu City, under OCT No. RO-1173 in the names of the heirs of Eugenio Godinez — among them Atanacio himself, who was therefore selling his co-heirs' shares as well as his own.)
In 1958, Atanacio Godinez, representing himself as their attorney-in-fact, sold both lots in their entirety to the Civil Aeronautics Administration (CAA), predecessor of petitioner Mactan-Cebu International Airport Authority (MCIAA). (3 April 1958. CAA took possession on payment and held the lots as owner; a provincial voucher was later disbursed in Atanacio's favour, and in 1969 he and other former co-owners signed a Deed of Partition reciting that the lots "are owned by the Civil Aeronautics Administration, having bought the same from the original owners.")
In 1998, respondent Richard E. Unchuan purchased the same lots from the heirs of the registered owners and, upon discovering the earlier conveyance to the government, filed suit to declare the 1958 sale void and to recover the property. (He bought on 7 December 1998 through several deeds of sale; the suit followed only on 5 March 2004, as Civil Case No. 6120-L before the RTC of Lapu-Lapu City, Branch 27.)
MCIAA relied on the 1958 deed and on the government's long possession and use of the land as part of the airport complex.
Unchuan countered that Atanacio had no special power of attorney from the registered owners and that the sale was therefore void. (He added that no consideration was actually paid, that the deed bore no signature for CAA, and that his predecessors had merely tolerated the government's possession.)
Regional Trial Court — for Unchuan. The Regional Trial Court ruled for Unchuan. (3 March 2006: it voided the 1958 deed, declared him owner of 179,916 square metres, ordered MCIAA to vacate and to pay rentals of ₱20.00 per square metre per month, holding that Atanacio "was not clothed with a special power of attorney granting him authority to sell the disputed lots.")
Court of Appeals — affirmed. The Court of Appeals affirmed, emphasising that Atanacio lacked authority to sell without a special power of attorney. (29 November 2007, invoking Article 1874; it held the 1969 Deed of Partition "produced no legal effects and [was] not susceptible of ratification," and that neither prescription nor laches could cure a void contract.)

Issue

Whether the 1958 sale executed by Atanacio Godinez, without a special power of attorney from the registered owners, validly conveyed the lots to the government.

Ruling

Ratio

1. Selling Land for Another Requires a Special Power

Article 1878 (5) requires a special power of attorney to enter into any contract by which the ownership of an immovable is transmitted or acquired for a valuable consideration, and Article 1874 requires that, for a sale of land through an agent, the authority be in writing on pain of nullity. Atanacio produced neither.
His bare representation that he was the co-heirs' attorney-in-fact could not supply the missing authority: agency is never presumed, and the declarations of the supposed agent cannot establish his own power.

2. The Sale Is Void as to Non-Consenting Co-Owners

Consent is an essential requisite of a contract.
As to the co-owners who never authorised Atanacio, there was no consent at all, and the sale produced no effect upon their shares.
Their long silence did not cure the defect, since a void contract cannot be ratified and does not prescribe.

3. But Valid as to the Seller's Own Undivided Share

The nullity is not total.
Under Article 493, each co-owner has full ownership of his undivided part and may alienate it.
Atanacio needed no authority to dispose of what was already his.
The sale therefore effectively transferred his own pro indiviso interest to the government, and the Court excluded that share in computing the area adjudicated to Unchuan — leaving him with 149,930 square metres.

4. Possession by the Government Is Not a Substitute for Title

That the land had long been occupied and used for airport purposes did not convert a void sale into a valid one.
The proper course for the State is the exercise of eminent domain, with payment of just compensation to the registered owners or their successors.

Doctrine

Articles 1874 and 1878 (5) work together. Conveying an immovable for valuable consideration through an agent requires a special power of attorney, and that authority must be in writing; otherwise the sale is void.
Partial nullity in co-ownership. A co-owner who purports to sell the entire property conveys only his own undivided share; the sale is void as to the shares of co-owners who did not consent (Art. 493).
No prescription, no ratification. A void sale cannot be ratified and the action to declare its nullity does not prescribe; neither the passage of time nor the buyer's possession validates it.

Full Digest — Recitation Format

Full-length digest in the format required by the course digest prompt.

Classification: DIRECT · Ponente: Mendoza, J. (Second Division) · G.R. No. 182537, 1 June 2016

I. Gist and Central Doctrine

II. Chronological Narration of Material Facts and Procedural Events

Lot No. 4810-A, with an area of 177,176 square metres, and Lot No. 4810-B, with an area of 2,740 square metres, both located in Barrio Buaya, Lapu-Lapu City, were covered by Original Certificate of Title No. RO-1173, registered in the names of the heirs of Eugenio Godinez — Teodora Tampus, Fernanda Godinez (wife of Iscolastico Epe), Tomasa Godinez (wife of Mateo Ibañez), Sotera Godinez (wife of Guillermo Pino), Atanasio (also Atanacio) Godinez (married to Florencia Pino), Juana Godinez (wife of Catalino Cuison), and Ambrosio Godinez (married to Mamerta Inot).
On 3 April 1958, Atanacio Godinez, "the supposed attorney-in-fact of all the registered owners and their heirs," executed a Deed of Absolute Sale conveying both lots to the Republic of the Philippines, represented by the Civil Aeronautics Administration. CAA took possession upon payment of the purchase price, and thereafter possessed the lots in the concept of owner; the properties were declared for taxation under Tax Declaration Nos. 00078 and 00092.
On 8 October 1958, an official communication was issued by the District Land Office of Cebu to the Provincial Treasurer of Cebu stating that Provincial Voucher No. 05358 was disbursed in favour of Atanacio.
On 21 July 1969, a Joint Affidavit of Confirmation of Sale of Allotted Shares Already Adjudicated and Quitclaim of a Portion of Lot No. 4810 was executed by heirs who had not signed the Deed of Partition, establishing "the fact of sale and conveyance of a portion of Lot 4810 by the heirs of JUANA GODINEZ" and "confirming voluntarily said conveyance."
On 17 September 1969, Atanacio, together with other former registered co-owners, signed a Deed of Partition of Lot No. 4810, Open Cadastre, reciting that Lot No. 4810-A and Lot No. 4810-B "are owned by the Civil Aeronautics Administration, having bought the same from the original owners."
By virtue of Republic Act No. 6958, "The Charter of Mactan-Cebu International Airport Authority," the Republic officially turned over the management of the lots to MCIAA.
On 9 October 1998, Atty. Sigfredo V. Dublin, legal manager of CAA, caused the annotation of an adverse claim on OCT No. RO-1173 in favour of MCIAA.
On 7 December 1998, respondent Richard E. Unchuan bought the two lots from the surviving heirs of the registered owners through several deeds of absolute sale executed through representation, covering aggregate shares of 29,986 square metres each for the branches of Atanacio, Fernanda, Sotera, Tomasa and Juana, and 5,997.20 square metres in four instances for the spouses Ambrosio Godinez and Mamerta Inot.
On 5 March 2004, Unchuan filed a complaint for Partial Declaration of Nullity of the Deed of Absolute Sale with Plea for Partition, Damages and Attorney's Fees before the RTC of Lapu-Lapu City, Branch 27 (Civil Case No. 6120-L), later amended to a complaint for Declaration of Nullity of Deed of Absolute Sale, Quieting of Title and/or Payment of Just Compensation, Rental and Damages and Attorney's Fees. He alleged that the registered owners and their heirs did not authorize Atanacio to sell their undivided shares; that no actual consideration was paid despite promises; that the deed did not bear the signature of the CAA representative; that there was no proof of approval by the Secretary of Public Works and Highways; and that his predecessors merely tolerated the possession of CAA and later MCIAA.
On 27 April 2004, MCIAA moved to dismiss on grounds of prescription, laches and estoppel; the RTC denied the motion. MCIAA's Very Urgent Motion for Compulsory Joinder of Indispensable Parties was denied by Order dated 5 November 2004, and its motion for reconsideration by Order dated 5 January 2005.
In its Answer, MCIAA averred that Atanacio, acting as representative of the heirs, sold the lots to the Republic on 3 April 1958; that CAA took possession upon payment; that the 1969 Deed of Partition corroborated the sale; and that the Republic had since possessed the lots as owner.
On 3 March 2006, the RTC ruled for Unchuan, declaring the 1958 deed void, declaring him true and legal owner of 179,916 square metres, ordering annotation and issuance of title in his name, directing MCIAA to vacate, and awarding rentals of ₱20.00 per square metre per month from the filing of the complaint. It held that Atanacio "was not clothed with a special power of attorney granting him authority to sell the disputed lots," that the documentation was never transmitted to CAA's Manila Office so the heirs received no payment, and that the absence of the CAA Administrator's signature showed want of consent.
On 29 November 2007, the CA affirmed, holding that Atanacio had no authority absent the special power of attorney "specifically executed for such purpose as required in Article 1874 of the New Civil Code"; that no evidence showed payment; that the Deed of Partition "produced no legal effects and [was] not susceptible of ratification"; and that prescription, estoppel and laches did not set in because a void contract may be questioned at any time.
MCIAA filed a Motion for Reconsideration dated 18 December 2007, a Supplemental Motion for Reconsideration dated 30 January 2008, and a Motion for New Trial dated 6 March 2008 incorporating three items of newly discovered evidence: a certified true copy of the 1958 Deed of Absolute Sale bearing the signature of then Administrator Urbano B. Caldoza; a certified true copy of the 21 July 1969 Joint Affidavit; and a certified true copy of the Provincial Voucher with attachments showing payment.
On 25 March 2008, the CA denied reconsideration, rejecting the extrinsic-fraud claim, holding the adverse-claim annotation "of no force and effect since the same was predicated on a void and inexistent contract," and treating the Deed of Partition recital as "at most ... a mistaken conclusion that the CAA validly purchased the subject lots," which "[n]either can ... be considered as a cure for the defect of lack of consent or authority."
On 1 June 2016, the Supreme Court rendered its Decision on the Rule 45 petition, partially granting it.

III. Arguments of the Parties

A. Petitioner (Mactan-Cebu International Airport Authority, through the Office of the Solicitor General)

B. Respondent (Richard E. Unchuan)

C. Common Ground / Stipulations

IV. Issues

A. Main Issue (Topic/Subtopic-Centered)

B. Secondary Issues

Whether the sale is void in its entirety, or valid to the extent of Atanacio's own pro indiviso share.
Whether consideration was paid for the 1958 transaction.
Whether Unchuan's action is barred by prescription, laches or estoppel, and whether MCIAA acquired title by extraordinary prescription.
Whether the predecessors-in-interest of Unchuan are indispensable parties.
Whether the CA erred in refusing to admit the additional evidence offered on motion for new trial, and whether extrinsic fraud deprived MCIAA of a fair trial.
What relief is proper where the land has been devoted to a public use.

C. Ancillary / Incidental Issues

V. Ruling / Disposition (Categorical, Issue-Mapped)

Secondary Issue 2 — Consideration is PRESUMED PAID. "The Court does not accept either Unchuan's allegation that no payment was received for the transaction between Atanacio and CAA."

Dispositive portion, verbatim:

"WHEREFORE, the petition is PARTIALLY GRANTED. The November 29, 2007 Decision and the March 25, 2008 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 01306 are AFFIRMED with MODIFICATION. Accordingly, the dispositive portion of the decision should read as follows:

WHEREFORE, judgment is hereby rendered declaring that:

a. The Deed of Sale signed by Atanacio Godinez alienating the lands denominated as Lot No. 4810-A and Lot No. 4810-B in favor of MCIAA's predecessor-in-interest is VALID, insofar as his undivided share in the said lots is concerned, but VOID, insofar as the undivided shares of the other registered owners, who did not sign the deed, are concerned; and

b. Plaintiff Richard E. Unchuan is the true and legal owner of portions of Lot No. 4810-A and Lot No. 4810-B consisting of One Hundred Forty Nine Thousand Nine Hundred Thirty (149,930) Square Meters.

The Register of Deeds of Lapu-Lapu City is hereby ordered to annotate in OCT No. RO-1173 the respective rights of Richard E. Unchuan and the Mactan-Cebu International Airport Authority in the said property.

The Mactan-Cebu International Airport Authority is ordered to initiate expropriation proceedings over the undivided portions of Lots No. 4810-A and 4810-B covering the said 149,930 Square Meters.

In the meantime, Mactan-Cebu International Airport Authority is ordered to pay the sum of P20.00 per square meter per month as rental for the use of the property reckoned from the time of the filing of the complaint until its final payment for the same.

No pronouncement as to the cost of the suit.

SO ORDERED."

VI. Ratio Decidendi and Doctrines (Topic-Focused)

A. Ratio Decidendi (Decisive Reasoning)

Step 1 — The finding and its codal anchor. "The Court finds that the sale transaction executed between Atanacio, acting as an agent of his fellow registered owners, and the CAA was indeed void insofar as the other registered owners were concerned. They were represented without a written authority from them clearly in violation of the requirement under Articles 1874 and 1878 of the Civil Code," both of which the Court then reproduced: Article 1874 in full, and Article 1878(5) ("To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration").
Step 2 — What the writing must contain, quoted at length from Dizon v. Court of Appeals.
This passage is the doctrinal core of the case for Week 2(c), and it converts Article 1874 from a rule of form into a rule of content:

"When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. Thus the authority of an agent to execute a contract for the sale of real estate must be conferred in writing and must give him specific authority, either to conduct the general business of the principal or to execute a binding contract containing terms and conditions which are in the contract he did execute. A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required by law to enable an appointee of an agency (couched) in general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document."

The Court's footnote 49 identifies the source as Dizon v. Court of Appeals, 444 Phil. 161, 165-166 (2003), citing Cosmic Lumber Corp. v. Court of Appeals, 332 Phil. 948, 957-958 (1996).
Step 3 — Application to Atanacio. "Without a special power of attorney specifying his authority to dispose of an immovable, Atanacio could not be legally considered as the representative of the other registered co-owners of the properties in question. Atanacio's act of conveying Lot No. 4810-A and Lot No. 4810-B cannot be a valid source of obligation to bind all the other registered co-owners and their heirs because he was not clothed with any authority to enter into a contract with CAA."
Step 4 — The consequence in the law of sales (Article 1475). "The other heirs could not have given their consent as required under Article 1475 of the New Civil Code because there was no meeting of the minds among the other registered co-owners who gave no written authority to Atanacio to transact on their behalf. Therefore, no contract was perfected insofar as the portions or shares of the other registered co-owners or their heirs were concerned."
The absence of written authority is thus translated into an absence of consent, and hence into non-perfection.
Step 5 — Rejection of the confirmations and acknowledgments. "Thus, the Court cannot give any weight either to the Deed of Partition of Lot No. 4810, Open Cadastre (subsequently executed by all the heirs of Ambrosio and Sotera Godinez to the effect that they had acknowledged the sale of the subject lots in favor of CAA) or to other documents (such as Joint Affidavit of Confirmation of Sale of Alloted Shares Already Adjudicated and Quitclaim of a Portion of Lot No. 4810, Open Cadastre) all of which gave the impression that they had ratified the sale of the subject lots in favor of CAA, MCIAA's predecessor-in-interest."
The reason is stated in the next sentence: "The rule is that a void contract produces no effect either against or in favor of anyone and cannot be ratified" (citing Roberts v. Papio).
Step 6 — Prescription, laches, estoppel (Article 1410). "Similarly, laches will not set in against a void transaction... In fact, Article 1410 of the Civil Code specifically provides that an action to declare the inexistence of a void contract does not prescribe."
Step 7 — The limit of the nullity (Article 493). The Court reproduced Article 493 and explained: "The quoted provision recognizes the absolute right of a co-owner to freely dispose of his pro indiviso share as well as the fruits and other benefits arising from that share, independently of the other co-owners. The sale of the subject lots affects only the seller's share pro indiviso, and the transferee gets only what corresponds to his grantor's share in the partition of the property owned in common. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property" (citing Fernandez v. Fernandez).
Applied: "By signing the deed of sale with the CAA, Atanacio effectively sold his undivided share in the lots in question. Thus, CAA became a co-owner of the undivided subject lots. Accordingly, Atanacio's heirs could no longer alienate anything in favor of Unchuan because he already conveyed his pro indiviso share to CAA."
Step 8 — Consideration presumed (Section 3, Rule 131). The Court identified as disputable presumptions "(1) private transactions have been fair and regular; (2) the ordinary course of business has been followed; and (3) there was sufficient consideration for a contract," and explained that "[a] presumption may operate against a challenger who has not presented any proof to rebut it."
Applied: "Atanacio, by affixing his signature on the deed of absolute sale, a disputable presumption arose that consideration was paid. A mere allegation that no payment was received is not sufficient to dispel such legal presumption," reinforced by "an official communication, dated October 8, 1958, from the District Land Office of Cebu to the Provincial Treasurer of Cebu stating that Provincial Voucher No. 05358 was disbursed in favor of Atanacio."
Step 9 — Arithmetic of the modification. "Unchuan is not entitled to the whole 179,916 square meters of the property... Atanacio's share should be excluded from the computation as his heirs were already precluded from further conveying what he, their predecessor-in-interest, had previously sold to CAA. Thus, Unchuan is only legally entitled to an unidentified 149,930 square meters of the property after excluding Atanacio's unidentified share of 29,986 square meters."
Step 10 — The public-use adjustment. "The Court notes that the lots in question were formerly undeveloped lands, but now form part of the Mactan-Cebu International Airport. It is, thus, being used for a public purpose. It being the situation, the government or the MCIAA should initiate expropriation proceedings..."

B. Doctrines / Rules / Principles Laid Down

Written and special authority is required to sell an immovable through an agent — the doctrinal takeaway for this Topic/Subtopic. Verbatim:

"They were represented without a written authority from them clearly in violation of the requirement under Articles 1874 and 1878 of the Civil Code."

And:

"Without a special power of attorney specifying his authority to dispose of an immovable, Atanacio could not be legally considered as the representative of the other registered co-owners of the properties in question."

The content standard for the written authority (Dizon v. Court of Appeals, as adopted). Verbatim:

"The express mandate required by law to enable an appointee of an agency (couched) in general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned. For the principal to confer the right upon an agent to sell real estate, a power of attorney must so express the powers of the agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document."
Want of written authority equals want of consent, hence non-perfection (Article 1475). "The other heirs could not have given their consent as required under Article 1475... Therefore, no contract was perfected insofar as the portions or shares of the other registered co-owners or their heirs were concerned."
A void sale cannot be ratified by subsequent acknowledgment. Verbatim: "The rule is that a void contract produces no effect either against or in favor of anyone and cannot be ratified." Even a public instrument in which the co-owners recite that the buyer "owns" the property "having bought the same from the original owners" is, in the appellate court's phrase adopted here, "at most ... a mistaken conclusion" and "[n]either can ... be considered as a cure for the defect of lack of consent or authority."
Imprescriptibility (Article 1410) and unavailability of laches. "[L]aches will not set in against a void transaction... Article 1410 of the Civil Code specifically provides that an action to declare the inexistence of a void contract does not prescribe."
Partial validity where the agent is himself a co-owner (Article 493). "[A] sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property."
Disputable presumptions of regularity and consideration (Section 3, Rule 131). "A mere allegation that no payment was received is not sufficient to dispel such legal presumption."
Remedy where void-title land has been devoted to public use. Expropriation should be initiated, with rentals payable in the interim.

C. Distinctions / Limitations / Qualifications

The nullity is partial, and this is the case's distinctive contribution. Compare AF Realty v. Dieselman and Sps. Bautista v. Sps. Jalandoni, where the purported agents owned nothing and the sales fell entirely. Here the agent was himself a co-owner, so Article 493 preserved the conveyance pro tanto. The examinable formulation: Article 1874 voids the sale only to the extent that the signatory acted for others; it does not void what he could convey in his own right.
Article 1874 is a rule about the authority, and the Court reads it as a rule of content, not merely of medium. Under the Dizon passage, even a written general power will not do: the mandate must "expressly mention[] a sale or ... include[] a sale as a necessary ingredient of the act mentioned," in "clear and unmistakable language," with doubt resolved against the power. A student who answers only "the authority must be in writing" has stated half the rule.
Ratification is unavailable, but this is because the contract is void, not merely unauthorized. Note the contrast with Article 1317, paragraph 2, under which an unauthorized contract is unenforceable and may be ratified — the route taken in Silva v. Lo. The presence of a specific nullity provision displaces it.
The presumption of consideration was allowed to operate even against a void deed. The Court refused to find non-payment, resting on Section 3, Rule 131 and the Provincial Voucher communication. The point matters practically: the co-owners' remedy is expropriation compensation, not restitution of a price never received.
The Court did not resolve the extrinsic-fraud, new-trial, or indispensable-party assignments on their own terms. Its holding on want of authority made the additional documents immaterial, since none of them supplied the missing special power of attorney.
The disposition is equitable in form but does not restore possession. MCIAA was not ordered to vacate — as the RTC had ordered — but to expropriate and to pay rentals meanwhile, because the land now serves a public purpose.

D. Topic/Subtopic Integration (Mandatory)

The classification is DIRECT.
MCIAA v. Unchuan is the Week 2(c) case to cite for the content of the required writing and for the durability of the resulting nullity.
Its first contribution is the Dizon passage, which the Court adopted in full: it is not enough that authority be written, nor even that it be labelled a power of attorney.
It "must so express the powers of the agent in clear and unmistakable language," must "expressly mention[] a sale or ... include[] a sale as a necessary ingredient of the act mentioned," and "[w]hen there is any reasonable doubt that the language so used conveys such power, no such construction shall be given the document."
That sentence is the answer to the standard examination variant in which an SPA exists but is drawn in general terms.
Its second contribution is temporal: fifty-eight years after the sale, with the land long since built into an international airport, with the co-owners having twice signed instruments acknowledging and "confirming voluntarily" the conveyance, and with the government in undisturbed possession throughout, the defect of form was still fatal — "a void contract produces no effect either against or in favor of anyone and cannot be ratified," and under Article 1410 the action to declare its inexistence "does not prescribe."
Its third contribution is the qualification that keeps the doctrine from overreaching: because the signatory was a co-owner, Article 493 saved his own pro indiviso share, so that the buyer became a co-owner rather than a stranger. Recited together with [Sps. Bautista v. Sps.
Jalandoni](/agency-trust-partnership/week-02/sps-bautista-v-sps-jalandoni) — which supplies the evidentiary rule that the writing must be produced — this case completes the Article 1874 cluster: the authority must exist, be written, be special, be clear, be produced, and cannot be supplied afterwards.