Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82061:56104&catid=1572&Itemid=566
Timestamp: 2019-04-21 05:04:39+00:00

Document:
G.R. No. 174978, July 31, 2013 - SALLY YOSHIZAKI, Petitioner, v. JOY TRAINING CENTER OF AURORA, INC., Respondent.
SALLY YOSHIZAKI, Petitioner, v. JOY TRAINING CENTER OF AURORA, INC., Respondent.
We resolve the petition for review on certiorari1 filed by petitioner Sally Yoshizaki to challenge the February 14, 2006 Decision2 and the October 3, 2006 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 83773.
On November 10, 1998, the spouses Richard and Linda Johnson sold the real properties, a Wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio Yoshizaki. On the same date, a Deed of Absolute Sale5 and a Deed of Sale of Motor Vehicle6 were executed in favor of the spouses Yoshizaki. The spouses Johnson were members of Joy Training’s board of trustees at the time of sale. On December 7, 1998, TCT No. T-25334 was cancelled and TCT No. T-260527 was issued in the name of the spouses Yoshizaki.
After the presentation of their testimonial evidence, the spouses Yoshizaki formally offered in evidence photocopies of the resolution and certification, among others.17 Joy Training objected to the formal offer of the photocopied resolution and certification on the ground that they were not the best evidence of their contents.18 In an Order19 dated May 18, 2004, the RTC denied the admission of the offered copies.
Joy Training appealed the RTC decision to the CA.
The CA upheld the RTC’s jurisdiction over the case but reversed its ruling with respect to the sale of real properties. It maintained that the present action is cognizable by the RTC because it involves recovery of ownership from third parties.
It also ruled that the resolution is void because it was not approved by a majority of the board of trustees. It stated that under Section 25 of the Corporation Code, the basis for determining the composition of the board of trustees is the list fixed in the articles of incorporation. Furthermore, Section 23 of the Corporation Code provides that the board of trustees shall hold office for one year and until their successors are elected and qualified. Seven trustees constitute the board since Joy Training did not hold an election after its incorporation.
The CA did not also give any probative value to the certification. It stated that the certification failed to indicate the date and the names of the trustees present in the meeting. Moreover, the spouses Yoshizaki did not present the minutes that would prove that the certification had been issued pursuant to a board resolution.21 The CA also denied22 the spouses Yoshizaki’s motion for reconsideration, prompting Sally23 to file the present petition.
Sally avers that the RTC has no jurisdiction over the case. She 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 RTC24 does not have any retroactive application because jurisdiction is a substantive matter.
She argues that the spouses Johnson were authorized to sell the parcel of land and that she was a buyer in good faith because she merely relied on TCT No. T-25334. The title states that the spouses Johnson are Joy Training’s representatives.
In its Comment26 and Memorandum,27 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. Furthermore, Sally is estopped from questioning the RTC’s jurisdiction because she seeks to reinstate the RTC ruling in the present case.
Joy Training maintains that it did not authorize the spouses Johnson to sell its real properties. TCT No. T-25334 does not specifically grant the authority to sell the parcel of land to the spouses Johnson. It further asserts that the resolution and the certification should not be given any probative value because they were not admitted in evidence by the RTC. It argues that the resolution is void for failure to comply with the voting requirements under Section 40 of the Corporation Code. It also posits that the certification is void because it lacks material particulars.
Whether or not there was a contract of agency to sell the real properties between Joy Training and the spouses Johnson.
As a consequence of the second issue, whether or not there was a valid contract of sale of the real properties between Joy Training and the spouses Yoshizaki.
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 “[d]isputes concerning the application of the Civil Code are properly cognizable by courts of general jurisdiction.”31 Indeed, no special skill requiring the SEC’s technical expertise is necessary for the disposition of this issue and of this case.
We are aware that the issues at hand require us to review the pieces of evidence presented by the parties before the lower courts. As a general rule, a petition for review on certiorari precludes this Court from entertaining factual issues; we are not duty-bound to analyze again and weigh the evidence introduced in and considered by the lower courts. However, the present case falls under the recognized exception that a review of the facts is warranted when the findings of the lower courts are conflicting.32 Accordingly, we will examine the relevant pieces of evidence presented to the lower court.
Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person “binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.” It may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority.
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 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”39 only means that the spouses Johnson represented Joy Training in land registration.
Nonetheless, if only to erase doubts on the issues surrounding this case, we declare that even if we consider the photocopied resolution and certification, this Court will still arrive at the same conclusion.
The resolution which purportedly grants the spouses Johnson a special power of attorney is negated by the phrase “land and building owned by spouses Richard A. and Linda J[.] Johnson.”42 Even if we disregard such phrase, the resolution must be given scant consideration. We adhere to the CA’s position that the basis for determining the board of trustees’ composition is the trustees as fixed in the articles of incorporation and not the actual members of the board. The second paragraph of Section 2543 of the Corporation Code expressly provides that a majority of the number of trustees as fixed in the articles of incorporation shall constitute a quorum for the transaction of corporate business.
Necessarily, the absence of a contract of agency renders the contract of sale unenforceable;46 Joy Training effectively did not enter into a valid contract of sale with the spouses Yoshizaki. Sally cannot also claim that she was a buyer in good faith. She misapprehended the rule that persons dealing with a registered land have the legal right to rely on the face of the title and to dispense with the need to inquire further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry.47 This rule applies when the ownership of a parcel of land is disputed and not when the fact of agency is contested.
At this point, we reiterate the established principle that persons dealing with an agent must ascertain not only the fact of agency, but also the nature and extent of the agent’s authority. 48 A third person with whom the agent wishes to contract on behalf of the principal may require the presentation of the power of attorney, or the instructions as regards the agency.49 The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover on his own peril the authority of the agent.50 Thus, Sally bought the real properties at her own risk; she bears the risk of injury occasioned by her transaction with the spouses Johnson.
WHEREFORE, premises considered, the assailed Decision dated February 14, 2006 and Resolution dated October 3, 2006 of the Court of Appeals are hereby AFFIRMED and the petition is hereby DENIED for lack of merit.
* In lieu of Associate Justice Mariano C. del Castillo per Raffle dated July 31, 2013.
1 Dated November 20, 2006 and filed under Rule 45 of the Rules of Court; rollo, pp. 36-68.
2 Id. at 9-30; penned by Associate Justice Mariano C. del Castillo (now a Member of this Court), and concurred in by Associate Justices Conrado M. Vasquez, Jr. and Magdangal M. de Leon.
23 Yoshio was not included as a petitioner because he died prior to the filing of the petition for review on certiorari before the Supreme Court.
28Reyes v. Diaz, 73 Phil. 484, 486 (1941).
29Ty v. Court of Appeals, 408 Phil. 792, 798 (2001); and Viray v. Court of Appeals, G.R. No. 92481, November 9, 1990, 191 SCRA 308, 321, citing Republic v. Sebastian, No. L-35621, July 30, 1976, 72 SCRA 222.
30Vitaliano N. Aguirre II, et al. v. FQB+7, Inc., et al., G.R. No. 170770, January 9, 2013.
31Nautica Canning Corporation v. Yumul, 510 Phil. 197, 209 (2005).
32Medina v. Asistio, Jr., G.R. No. 75450, November 8, 1990, 191 SCRA 218, 223-224.
33 CIVIL CODE, Article 1869.
34 G.R. No. 114311, November 29, 1996, 265 SCRA 168, 176.
35Pahud v. Court of Appeals, G.R. No. 160346, August 25, 2009, 597 SCRA 13, 22.
44 CIVIL CODE, Article 1876.
45 CIVIL CODE, Article 1877.
46 CIVIL CODE, Article 1403.
47 Naawan Community Rural Bank, Inc. v. Court of Appeals, 443 Phil. 56, 65-66 (2003).
48Country Bankers Insurance Corporation v. Keppel Cebu Shipyard, G.R. No. 166044, June 18, 2012, 673 SCRA 427, 451.
49 CIVIL CODE, Article 1902.
50 CIVIL CODE, Article 1403.

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