G.R. No. 174978, 31 July 2013

FACTS:

Respondent Joy Training is a non-stock, non-profit religious educational institution. The spouses Richard and Linda Johnson, members of the Board of Trustees of the former, sold the real properties, a Wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio Yoshizaki.

Joy Training filed an action for the Cancellation of Sales and Damages with prayer for the issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction against the spouses Yoshizaki and the spouses Johnson. In the complaint, Joy Training alleged that the spouses Johnson sold its properties without the requisite authority from the board of directors. It assailed the validity of a board resolution which purportedly granted the spouses Johnson the authority to sell its real properties; and that only a minority of the board authorized the sale through the resolution.

Petitioner avers that the RTC has no jurisdiction over the case and points out that the complaint was principally for the nullification of a corporate act. The transfer of the SEC’s original and exclusive jurisdiction to the RTC does not have any retroactive application because jurisdiction is a substantive matter. On the other hand, Joy Training takes the opposite view that the RTC has jurisdiction over the case. It posits that the action is essentially for recovery of property and is therefore a case cognizable by the RTC.

ISSUE:

Whether the RTC has jurisdiction over the present case, and whether there is a contract of agency between the spouses Johnson and Joy Training.

RULING:

The RTC has jurisdiction over disputes concerning the application of the Civil Code.

The CA correctly ruled that the RTC has jurisdiction over the present case. Joy Training seeks to nullify the sale of the real properties on the ground that there was no contract of agency between Joy Training and the spouses Johnson. This was beyond the ambit of the SEC’s original and exclusive jurisdiction prior to the enactment of Republic Act No. 8799 which only took effect on August 3, 2000. The determination of the existence of a contract of agency and the validity of a contract of sale requires the application of the relevant provisions of the Civil Code. It is a well-settled rule that “disputes concerning the application of the Civil Code are properly cognizable by courts of general jurisdiction.” Indeed, no special skill requiring the SEC’s technical expertise is necessary for the disposition of this issue and of this case.

There is no contract of agency between Joy Training and the spouses Johnson to sell the parcel of land with its improvements.

As a general rule, a contract of agency may be oral. However, it must be written when the law requires a specific form.33 Specifically, Article 1874 of the Civil Code provides that the contract of agency must be written for the validity of the sale of a piece of land or any interest therein. Otherwise, the sale shall be void. A related provision, Article 1878 of the Civil Code, states that special powers of attorney are necessary to convey real rights over immovable properties. The special power of attorney mandated by law must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the authorized act.

The above documents do not convince us of the existence of the contract of agency to sell the real properties. TCT No. T-25334 merely states that Joy Training is represented by the spouses Johnson. The title does not explicitly confer to the spouses Johnson the authority to sell the parcel of land and the building thereon. Moreover, the phrase “Rep. by Sps. RICHARD A. JOHNSON and LINDA S. JOHNSON” only means that the spouses Johnson represented Joy Training in land registration.

*Case Digest by Meriam Rika R. Wong, JD – 4, Andres Bonifacio College, SY 2019-2020