G.R. No. 148775, 13 January 2004

FACTS:

Petitioner Shopper’s Paradise Realty & Development Corporation, represented by its president, Veredigno Atienza, entered into a twenty-five year lease with Dr. Felipe C. Roque, now deceased, over a parcel of land, situated at Plaza Novaliches, Quezon City, in the name of Dr. Roque. Petitioner issued a check for reservation payment. Simultaneously, petitioner and Dr. Roque likewise entered into a memorandum of agreement for the construction, development and operation of a commercial building on the property.

The contract of lease and memorandum of agreement were both notarized but were not annotated due to the death of Dr. Roque. Respondent Efren Roque, one of the heirs of the deceased, dealt with the petitioners but never came to an agreement. Efren alleged that he was the owner of the subject property by virtue of a deed of donation inter vivos executed by his parents in 1978 and that Dr. Roque was only delegated with the administration of the property when the respondent left for the United States but the title of the property was not transferred in the name of the respondent until 1994.

ISSUE:

Whether the deceased was an authorized agent.

RULING:

A person dealing with registered land may thus safely rely on the correctness of the certificate of title issued therefore, and he is not required to go beyond the certificate to determine the condition of the property but, where such party has knowledge of a prior existing interest which is unregistered at the time he acquired a right thereto, his knowledge of that prior unregistered interest would have the effect of registration as regards to him.

The appellate court was not without substantial basis when it found petitioner to have had knowledge of the donation at the time it entered into the two agreements with Dr. Roque. During their negotiation, petitioner, through its representatives, was apprised of the fact that the subject property actually belonged to respondent.

It was not shown that Dr. Felipe C. Roque had been an authorized agent of respondent.

In a contract of agency, the agent acts in representation or in behalf of another with the consent of the latter. Article 1878 of the Civil Code expresses that a special power of attorney is necessary to lease any real property to another person for more than one year. The lease of real property for more than one year is considered not merely an act of administration but an act of strict dominion or of ownership. A special power of attorney is thus necessary for its execution through an agent.

*Case digest by Jhazeel Zhan Jebone, JD-IV, for Partnership and Agency, SY 2019-2020