Agency and Authority: Why a Written Mandate Is Paramount in Real Estate Sales

When a person buys land from someone who claims to represent the owner, the buyer must verify that the representative actually has written authority to sell. A recent Supreme Court ruling underscores this hard rule: without a written mandate, the sale is void, and even a general power of attorney executed abroad may not save the transaction if not properly authenticated.

The Case: Alcantara v. Nido

In Spouses Alcantara v. Nido (G.R. No. 165133, April 19, 2010), the petitioners bought a portion of a lot owned by Revelen Srivastava from her mother, Brigida Nido. The mother acted as administrator and attorney-in-fact. The buyers paid installments and built houses, but later defaulted. When Nido filed a case to recover possession, the buyers argued the sale should be upheld.

The Issue

The central question was whether a sale of land made by an agent without written authority from the owner is valid. The Court also examined whether the case was filed in the proper court.

The Ruling: Sale Through an Agent Without Written Authority Is Void

The Supreme Court ruled that the sale was void. Under Article 1874 of the Civil Code, when a sale of land is made through an agent, the agent's authority must be in writing; otherwise, the sale is void. The Court also cited Article 1878, which requires a special power of attorney to enter into any contract that transmits or acquires ownership of immovable property.

In this case, there was no proof that Nido had written authority to sell the lot. In fact, the buyers admitted they believed Nido was the owner at the time of negotiation. Because the owner's consent was not obtained in the manner required by law, no valid contract was perfected. A void contract produces no legal effect and cannot be ratified.

The General Power of Attorney Issue

Nido presented a General Power of Attorney executed in California, but the Court found it had no probative value. Under Section 25, Rule 132 of the Rules of Court, a document executed before a notary in a foreign country cannot be admitted in evidence unless certified by a Philippine consular official stationed in that country. Without such authentication, the document is inadmissible. This serves as a reminder that even a seemingly valid power of attorney must meet proper evidentiary requirements.

The Jurisdictional Issue

The Court also addressed a procedural matter. The complaint for recovery of possession was filed with the Regional Trial Court (RTC). Under Section 33 of Batas Pambansa Bilang 129, as amended by Republic Act No. 7691, first-level courts (Municipal Trial Courts) have exclusive original jurisdiction over real property cases where the assessed value does not exceed P20,000 (or P50,000 in Metro Manila). Since the property's assessed value was only P4,890, the RTC had no jurisdiction. All proceedings before it were void.

Practical Takeaways

• Always demand written proof of authority. Before buying land from a representative, require a special power of attorney that expressly authorizes the sale. Verbal assurances are not enough.
• A general power of attorney may not suffice. The authority must specifically mention the power to sell real property. General terms are not enough.
• Foreign documents need proper authentication. A power of attorney executed abroad must be certified by a Philippine consular official to be admissible in Philippine courts.
• Check the assessed value before filing suit. Filing a real property case in the wrong court can invalidate the entire proceeding. Verify the assessed value to determine which court has jurisdiction.
• A void contract cannot be ratified or enforced. If the sale is void for lack of written authority, the buyer cannot demand specific performance.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.