96 Phil 252

FACTS:

Macario Amigo and Anacleto Cagalitan executed in favor of their son, Marcelino Amigo, a power of attorney granting him the power “to lease, let, bargain, transfer, convey and sell, remise, release, mortgage and hypothecate, part or any of the properties . . . upon such terms and conditions, and under such covenants as he shall think fit.”

Marcelino Amigo, in his capacity as attorney-in-fact, executed a deed of sale of a parcel of land for a price of P3,000 in favor of Serafin Teves stipulating therein that the vendors could repurchase the land within a period of 18 months from the date of the sale and further stipulated that vendors would remain in possession of the land as lessees for a period of 18 months subject to the following terms and conditions:

(a) the lessees shall pay P180 as rent every six months from the date of the agreement;
(b) the period of the lease shall terminate on April 30, 1940;
(c) in case of litigation, the lessees shall pay P100 as attorney’s fees; and
(d) in case of failure to pay any rental as agreed upon, the lease shall automatically terminate and the right of ownership of vendee shall become absolute.

ISSUE:

Whether or not the sale was valid.

RULING:

Yes. Court of Appeals, after analyzing the extent and scope of the powers granted to Marcelino Amigo in the power of Attorney executed in his favor by his principals, found that such powers are broad enough to justify the execution of any contract concerning the lands covered by the authority even if this be a contract of lease.

The lease covenant embodied in the deed of sale for such is common in contracts involving sales of land with pacto de retro. The lease that a vendor executes on the property may be considered as a means of delivery or tradition by constitutum possessorium. Where the vendor a retro continues to occupy the land as lessee, by fiction of law, the possession is deemed to be constituted in the vendee by virtue of this mode of tradition. We may say therefore that this covenant regarding the lease of the land sold is germane to the contract of sale with pacto de retro.

*Case digest by Sherl Dianne S. Estoque, JD 3-, Andres Bonifacio Law School, SY 2019-2020