Formal Requirements of Agency
any knowledge of the alleged irregularity. She allegedly relied on the general power
Veloso v CA
FRANCISCO A. VELOSO, Petitioner, v. CA, AGLALOMA B. ESCARIO, assisted by her husband
GREGORIO L. ESCARIO, the REGISTER OF DEEDS -MANILA, Respondent.
DOCTRINE: The special power of attorney can be included in the general power when it is
specified therein the act or transaction for which the special power is required.
"Whether the instrument be denominated as "general power of attorney" or "special
power of attorney," what matters is the extent of the power or powers contemplated
upon the agent or attorney in fact. If the power is couched in general terms, then such
power cannot go beyond acts of administration. However, where the power to sell is
specific, it not being merely implied, much less couched in general terms, there can not be
any doubt that the attorney in fact may execute a valid sale. An instrument may be
captioned as "special power of attorney" but if the powers granted are couched in general
terms without mentioning any specific power to sell or mortgage or to do other specific
acts of strict dominion, then in that case only acts of administration may be deemed
conferred."
FACTS: TORRES, JR., J.:
 Petitioner Francisco Veloso owns a parcel of land in Tondo, Manila covered by a TCT
issued by the Registry of Deeds-Manila. He acquired the subject property before he
got married from Philippine Building Corporation. Hence, the property did not belong
to the conjugal partnership.
 The said title was subsequently canceled and a new one was issued in the name of
Aglaloma B. Escario.
 Subsequently, petitioner filed an action for annulment of documents, reconveyance
of property with damages and preliminary injunction alleging that he was the
absolute owner of the subject property and he never authorized anybody to sell it.
He alleged that when his wife left for abroad, he found out that his copy was missing.
 The transfer of property was supported by a General Power of Attorney and Deed
of Absolute Sale, executed by Irma Veloso, wife of the petitioner.
 Petitioner denied executing the power of attorney and alleged that his signature was
falsified. He also denied having known the supposed witnesses in the execution of
the power of attorney. Thus, he contended that the sale of the property, and the
subsequent transfer were null and void.
 Defendant Aglaloma Escario alleged that she was a buyer in good faith and denied
of attorney which was sufficient in form and substance and was duly notarized.
 Witness for the plaintiff Atty. Julian G. Tubig denied any participation in the execution
of the general power of attorney, and attested that he did not sign.
 RTC ruled in favor of Escaro as the lawful owner of the property as she was deemed
an innocent purchaser for value. The trial court ruled that there was no need for a
special power of attorney when the special power was already mentioned in the
general one.
 CA affirmed in toto the findings of the trial court.
ISSUE: Was the General Power of Attorney valid?
HELD: The assailed power of attorney was valid and regular on its face. It was notarized
and as such, it carries the evidentiary weight conferred upon it with respect to its due
execution. While it is true that it was denominated as a general power of attorney, a
perusal thereof revealed that it stated an authority to sell.
"2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands,
tenements and hereditaments …."
Thus, there was no need to execute a separate and special power of attorney since the
general power of attorney had expressly authorized the agent or attorney in fact the
power to sell the subject property.
The general power of attorney was accepted by the Register of Deeds when the title to
the subject property was canceled and transferred in the name of private Respondent.
RE FALSIFIED SIGNATURE:
SC found that the basis presented by the petitioner was inadequate to sustain his
allegation of forgery. Mere variance of the signatures cannot be considered as conclusive
proof that the same were forged. Forgery cannot be presumed.
RE INNOCENT PURCHASER FOR VALUE:
SC agrees with the conclusion of the lower court that private respondent was an innocent
purchaser for value. Respondent Aglaloma relied on the power of attorney presented by
petitioners wife, Irma. Being the wife of the owner and having with her the title of the
property, there was no reason for the private respondent not to believe in her authority.
Moreover, the power of attorney was notarized and as such, carried with it the
presumption of its due execution.
A purchaser in good faith is one who buys property of another, without notice that some
other person has a right to, or interest in such property and pays a full and fair price for
the same, at the time of such purchase, or before he has notice of the claim or interest of
some other person in the property. The questioned power of attorney and deed of sale,
were notarized and therefore, presumed to be valid and duly executed.
Atty. Tubig denied having notarized the said documents and alleged that his signature had
also been falsified. Just like the petitioner, witness Atty. Tubig merely pointed out that his
signature was different from that in the power of attorney and deed of sale.
Even granting for the sake of argument, that the petitioners signature was falsified and
consequently, the power of attorney and the deed of sale were null and void, such fact
would not revoke the title subsequently issued in favor of private respondent.
The right of an innocent purchaser for value must be respected and protected, even if
the seller obtained his title through fraud. The REMEDY of the person prejudiced is to
bring an action for damages against those who caused or employed the fraud, and if the
latter are insolvent, an action against the Treasurer of the Philippines may be filed for
recovery of damages against the Assurance Fund.
RE ESTOPPEL:
The trial court did not err in applying equitable estoppel in this case. The principle of
equitable estoppel states that where one or two innocent persons must suffer a loss, he
who by his conduct made the loss possible must bear it. From the evidence adduced, it
should be the petitioner who should bear the loss.
The fact remains that the Certificate of Title, as well as other documents necessary for the
transfer of title were in the possession of Irma, consequently leaving no doubt or any
suspicion on the part of the defendant as to her authority. Under Section 55 of Act 496,
Irma’s possession and production of the TCT to defendant operated as conclusive
authority from the plaintiff to the Register of Deeds to enter a new certificate.
ACCORDINGLY, the petition for review is hereby DENIED for lack of merit.
Estate of Lino Olaguer v Ongjoco
OLAGUER v. ONJUCO
G.R. No. 173312; August 26, 2008
Ponente: J. Chico-Nazario
FACTS:
Lino Olaguer died on October 3, 1957 so Special Proceedings No. 528 for probate of will
was filed in the then Court of First Instance of Albay. Defendant Olivia P. Olaguer was
appointed as administrator pursuant to the will. Later, defendant Eduardo Olaguer was
appointed as co-administrator.
In the order of the probate court dated April 4, 1961, some properties of the estate were
authorized to be sold to pay obligations of the estate.
Relying upon the order, but without prior notice or permission from the Probate Court,
defendants Olivia P. Olaguer and Eduardo Olaguer on November 1, 1965 sold to Estanislao
Olaguer 10 parcels of land. The sale to was approved by the Probate Court on November
12, 1965.
On July 7, 1966, defendant Olivia P. Olaguer executed a Special Power of Attorney in favor
of defendant Jose A. Olaguer, authorizing the latter to "sell, mortgage, assign, transfer,
endorse and deliver" of 6 properties.
On July 7, 1966, Estanislao Olaguer executed a Special Power of Attorney in favor of Jose
A. Olaguer authorizing the latter to "sell, mortgage, assign, transfer, endorse and deliver"
the 9 properties.
By virtue of this Special Power of Attorney, on March 1, 1967, Jose A. Olaguer as Attorney-
in-Fact of Estanislao Olaguer mortgaged Lots 7589, 7593 and 7396 to defendant PNB as
security for a loan of 10,000 Pesos. The mortgage was foreclosed by the PNB on June 13,
1973 and the properties mortgage were sold at public auction to PNB. On December 10,
1990, the PNB transferred the properties to the Republic of the Philippines pursuant to
Exec. Order No. 407 dated June 14, 1990 for agrarian reform purposes.
On October 29, 1966, Estanislao Olaguer executed a General Power of Attorney in favor of
Jose A. Olaguer, authorizing the latter to exercise general control and supervision over all
of his business and properties, and among others, to sell or mortgage any of his
properties.
On December 29, 1966, Estanislao Olaguer sold to Jose A. Olaguer for 15,000 the 10
parcels of land he bought from Olivia P. Olaguer and Eduardo Olaguer.
On March 16, 1968, Estanislao Olaguer sold to Jose A. Olaguer for 1 Peso and other
valuable consideration 2 parcels of land which have a total area of 2.5 hectares.
On June 5, 1968, Estanislao Olaguer sold another 2 lots to Jose A. Olaguer for 1 Peso and
other valuable consideration.
On May 13, 1971, Jose A. Olaguer in his capacity as Attorney in-Fact of Estanislao Olaguer
sold to his son Virgilio Olaguer for 1 Peso and other valuable consideration.
On July 15, 1974, Jose A. Olaguer sold to his son Virgilio Olaguer Lot No. 4521 and Lot No.
4522 for 1,000 Pesos.
On September 16, 1978 Virgilio Olaguer executed a General Power of Attorney in favor of
Jose A. Olaguer authorizing the latter to exercise general control and supervision over all
of his business and properties and among others, to sell or mortgage the same.
Olivia P. Olaguer and Eduardo Olaguer were removed as administrators of the estate and
on February 12, 1980, plaintiff Ma. Linda Olaguer Montayre was appointed administrator
by the Probate Court.
The decedent Lino Olaguer have had three marriages. He was first married to Margarita
Ofemaria who died April 6, 1925. His second wife was Gloria Buenaventura who died on
July 2, 1937. The third wife was the defendant Olivia P. Olaguer.
Jose Olaguer acting upon the general power of attorney sold 8 parcels of land to Emilio
Ongjoco.
On 28 January 1980, the Estate of Lino Olaguer filed an action for the Annulment of Sales
of Real Property and/or Cancellation of Titles in the then Court of First Instance of Albay.
The plaintiffs therein alleged that the sales of the following properties belonging to the
Estate of Lino Olaguer to Estanislao Olaguer were absolutely simulated or fictitious, the
plaintiffs likewise prayed that the resulting Transfer Certificates of Title issued to Jose
Olaguer, Virgilio Olaguer, Cipriano Duran and the PNB be annulled.
ISSUE:
Whether General Power of Attorney was sufficient to effect the sale of the subject
properties
HELD:
Yes, the general power of attorney was sufficient. The Supreme Court held that while the
law requires a special power of attorney, the general power of attorney was sufficient in
this case, as Jose A. Olaguer was expressly empowered to sell any of Virgilio's properties;
and to sign, execute, acknowledge and deliver any agreement therefor. Even if a
document is designated as a general power of attorney, the requirement of a special
power of attorney is met if there is a clear mandate from the principal specifically
authorizing the performance of the act. The special power of attorney can be included in
the general power when the act or transaction for which the special power is required is
specified therein.
On its face, the written power of attorney contained the signature of Virgilio Olaguer and
was duly notarized. As such, the same is considered a public document and it has in its
favor the presumption of authenticity and due execution, which can only be contradicted
by clear and convincing evidence.
CITY LITE v CA
10 February 2000
Bellosillo, ponente
SHORT VERSION:
Only when the agent has written authority to sell realty can the sale be valid.
FACTS:
 FP Holdings and Realty Corp (respondent) was the registered owner of a 71754
sq m-parcel of land along E Rodriguez Ave, QC known as the “Violago Property”
or the “San Lorenzo Ruiz Commercial Center”.
o It was offered for sale to the general public through a sales brochure:
A parcel of land including buildings and other improvements
thereon located along E. Rodriguez Avenue, Quezon City, with a total
lot area of 71,754 square meters - 9,192 square meters in front, 23,332
 square meters in the middle, and 39,230 square meters at the back.
But the total area for sale excludes 5,000 square meters covering the
existing chapel and adjoining areas which will be donated to the
Archdiocese of Manila thus reducing the total saleable area to 66,754
square meters. Asking price was P6,250.00/square meter with terms of
payment negotiable. Broker's commission was 2.0% of selling price,
net of withholding taxes and other charges. As advertised, contact
person was Meldin Al G. Roy, Metro Drug Inc., with address at 5/F
Metro House, 345 Sen. Gil Puyat Avenue, Makati City.
o The 9192 sq m- front portion was the subject of litigation.
 Meldin Roy (respondent) sent a sales brochure, location plane and copy of the
TCT to Atty Gelacio Mamaril, a lawyer and licensed real estate broker. Mamaril
passed on the documents to City-Lite’s Executive VP Antonio Teng and Legal
Counsel Atty Victor Villanueva.
o City-Lite conveyed its interest to purchase ½ of the front portion in a
letter send to Metro Drug (Attn: Meldin Roy). Roy also informed City-
Lite’s representative that it would take time to subdivide the lot and
FP Holdings wasn’t receptive to a ½ purchase.
o Atty Mamaril sent a letter to Metro Drug expressing City-Lite’s desire
to buy the entire front lot so long as the P6250/sq m asking price was
reduced and that payment be made in installments. Roy made a
counter offer in another letter: “1. The price shall beP6,250.00/square
meter or a total of P57,450,000.00; 2. The above purchase price shall
be paid to the owner as follows: (a) P15.0 Million downpayment; (b)
balance payable within six (6) months from date of downpayment
without interest. “
 City-Lite and Mamaril met with Roy to consummate the transaction; Roy agreed
to sell the property provided City-Lite submit its acceptance in writing to the
terms and conditions in Roy’s letter. Later that afternoon Mamaril and Teng
conveyed their formal acceptance of the terms.
 However, FP Holdings refused to execute the corresponding deed of sale and
registered an adverse claim to the title of the property with the Register of
Deeds of QC, annotated in the memorandum of encumbrance in the TCT.
 FP Holdings filed a petition for the cancellation of the adverse claim against City-
Lite with the RTC QC; City-Lite caused the annotation of the first notice of lis
pendens which was recorded in the title of the property.
o RTC dismissed FP Holdings’ petition; FP Holdings caused a resurvey
and segregation of the property, asking and was granted separate
titles from the RD QC.
 City-Lite instituted a complaint against FP Holdings for specific performance and
damages and caused the annotation of the second notice of lis pendens.
o The property was transferred to Viewmaster Construction Co
(respondent) for which a TCT was issued; the lis pendens was carried
over to the new title.
o The RTC rendered a decision in favor of City-Lite ordering FP Holdings
to execute a deed of sale of the property and ordering the RD QC to
cancel Viewmaster’s TCT.
o The CA reversed an set aside the RTC judgment.
ISSUE:
 was there a contract of sale perfected between City-Lite and FP Holdings
through its agent Meldin Roy of Metro Drug?
REASONING:
 Art. 1874 of the Civil Code provided: "When the 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."
o Roy was FP Holdings’ authorized agent to sell the property, but the
NCC required that the authority be in writing.
 The absence of authority to sell could be determined from the written memo
issued by FP Holdings’ president requesting Metro Drug’s assistance in finding
buyers. The memo stated:
We will appreciate Metro Drug's assistance in referring to us buyers for the
property. Please proceed to hold preliminary negotiations with interested
buyers and endorse formal offers to us for our final evaluation and appraisal.
o This meant that Roy and/or Metro Drug were only to assist FP
Holdings, and FP Holdings were the only ones who could make the
final evaluation, appraisal and acceptance of any transaction.
o Roy and/or Metro Drug were only a contact person with no authority
to conclude a sale of the property. Consequently, the sale should be
null and void, and not produce any legal effect to transfer the property
from FP Holdings to any interested party.
RULING: appealed decision affirmed
Pineda v CA