1. Spouses Fernando and Lourdes Viloria vs. Continental Airlines, Inc.G.R. No. 188288 January 16, 2012

Business Organization – Partnership, Agency, Trust – Elements of Agency – Estoppel

FACTS:In 1997, while the spouses Viloria were in the United States, they approached Holiday Travel, a travel agency working for Continental Airlines, to purchase tickets from Newark to San Diego. The travel agent, Margaret Mager, advised the couple that they cannot travel by train because it is fully booked; that they must purchase plane tickets for Continental Airlines; that if they won’t purchase plane tickets; they’ll never reach their destination in time. The couple believed Mager’s representations and so they purchased two plane tickets worth $800.00.

Later however, the spouses found out that the train trip isn’t fully booked and so they purchased train tickets and went to their destination by train instead. Then they called up Mager to request for a refund for the plane tickets. Mager referred the couple to Continental Airlines. As the couple are now in the Philippines, they filed their request with Continental Airline’s office in Ayala. The spouses Viloria alleged that Mager misled them into believing that the only way to travel was by plane and so they were fooled into buying expensive tickets.

Continental Airlines refused to refund the amount of the ticket and so the spouses sued the airline company. In its defense, Continental Airlines claimed that the ticket sold to them by Mager is non-refundable; that, if any, they are not bound by the misrepresentations of Mager because there’s no agency existing between Continental Airlines and Mager.

The trial court ruled in favor of spouses Viloria but the Court of Appeals reversed the ruling of the RTC.

ISSUE: Whether or not a contract of agency exists between Continental Airlines and Mager.

HELD: Yes. All the elements of agency are present, to wit:

there is consent, express or implied of the parties to establish the relationship; the object is the execution of a juridical act in relation to a third person; the agent acts as a representative and not for himself, and the agent acts within the scope of his authority.

The first and second elements are present as Continental Airlines does not deny that it concluded an agreement with Holiday Travel to which Mager is part of, whereby Holiday Travel would enter into contracts of carriage with third persons on the airlines’ behalf. The third element is also present as it is undisputed that Holiday Travel merely acted in a representative capacity and it is Continental Airlines and not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel on its behalf. The fourth element is also present considering that Continental Airlines has not made any allegation that Holiday Travel exceeded the authority that was granted to it.

Continental Airlines also never questioned the validity of the transaction between Mager and the spouses. Continental Airlines is therefore in estoppels. Continental Airlines cannot be allowed to take an altogether different position and deny that Holiday Travel is its agent without condoning or giving imprimatur to whatever damage or prejudice that may result from such denial or retraction to Spouses Viloria, who relied on good faith on Continental Airlines’ acts in recognition of Holiday Travel’s authority. Estoppel is primarily based on the doctrine of good faith and the avoidance of harm that will befall an innocent party due to its injurious reliance, the failure to apply it in this case would result in gross travesty of justice.

2. Sally Yoshizaki vs. Joy Training Center of Aurora, Inc. GR 174978 Juky 31, 2013

FACTS:Respondent Joy Training Center of Aurora, Inc. (Joy Training) is a non-stock, non-profitreligious educational institution. It was the registered owner of a parcel of landdesignated as Lot No. 125-L and was covered by Transfer Certificate of Title (TCT) No.T-25334.[4]

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 YoshioYoshizaki. On the same date, a Deed of Absolute Sale[5] and a Deed of Sale of MotorVehicle[6] were executed in favor of the spouses Yoshizaki. The spouses Johnson weremembers 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-26052[7] was issued in the name of thespouses Yoshizaki.

On December 8, 1998, Joy Training, represented by its Acting Chairperson Reuben V.Rubio, filed an action for the Cancellation of Sales and Damages with prayer for theissuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction againstthe spouses Yoshizaki and the spouses Johnson before the Regional Trial Court of Baler,Aurora (RTC).

In the complaint, Joy Training alleged that the spouses Johnson sold its propertieswithout the requisite authority from the board of directors.[10] It assailed the validity ofa board resolution dated September 1, 1998[11] which purportedly granted the spousesJohnson the authority to sell its real properties. It averred that only a minority of theboard, composed of the spouses Johnson and Alexander Abadayan, authorized the salethrough the resolution.

After the presentation of their testimonial evidence, the spouses Yoshizaki formallyoffered in evidence photocopies of the resolution and certification, among others.[17] JoyTraining objected to the formal offer of the photocopied resolution and certification onthe ground that they were not the best evidence of their contents.[18] In anOrder[19] dated May 18, 2004, the RTC denied the admission of the offered copies.

The RTC ruled in favor of the spouses Yoshizaki. It found that Joy Training owned thereal properties. However, it held that the sale was valid because Joy Training authorizedthe spouses Johnson to sell the real properties.

The CA upheld the RTC’s jurisdiction over the case but reversed its ruling with respect tothe sale of real properties. It maintained that the present action is cognizable by the RTCbecause 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 theboard of trustees. It stated that under Section 25 of the Corporation Code, the basis fordetermining the composition of the board of trustees is the list fixed in the articles ofincorporation.

ISSUES:1) Whether or not the RTC has jurisdiction over the present case; and

2) Whether or not there was a contract of agency to sell the real properties between Joy Training and the spouses Johnson.

3) Whether or not there was a valid contract of sale of the real properties between Joy Training and the spouses Yoshizaki.

RULING:

We find the petition unmeritorious.

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

Jurisdiction over the subject matter is the power to hear and determine cases of thegeneral class to which the proceedings before a court belong.[28] It is conferred by law.The allegations in the complaint and the status or relationship of the parties determinewhich court has jurisdiction over the nature of an action.[29] The same test applies inascertaining whether a case involves an intra-corporate controversy.[30]

The CA correctly ruled that the RTC has jurisdiction over the present case.

The Supreme Court may review questions of fact in a petition for review oncertiorari when the findings of fact by the lower courts are conflicting

We are aware that the issues at hand require us to review the pieces of evidence presentedby the parties before the lower courts. As a general rule, a petition for review on certiorariprecludes this Court from entertaining factual issues; we are not duty-bound to analyzeagain 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 factsis warranted when the findings of the lower courts are conflicting.[32] Accordingly, wewill examine the relevant pieces of evidence presented to the lower court.

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

Article 1868 of the Civil Code defines a contract of agency as a contract whereby aperson “binds himself to render some service or to do something in representation or onbehalf of another, with the consent or authority of the latter.” It may be express, orimplied from the acts of the principal, from his silence or lack of action, or his failure torepudiate the agency, knowing that another person is acting on his behalf withoutauthority.

The special power of attorney mandated by law must be one that expressly mentions asale or that includes a sale as a necessary ingredient of the authorized act. Weunequivocably declared in Cosmic Lumber Corporation v. Court of Appeals[34] that aspecial power of attorney must express the powers of the agent in clear and unmistakablelanguage for the principal to confer the right upon an agent to sell real estate. When thereis any reasonable doubt that the language so used conveys such power, no suchconstruction shall be given the document.

In the present case, Sally presents three pieces of evidence which allegedly prove that JoyTraining specially authorized the spouses Johnson to sell the real properties: (1) TCT No.T-25334, (2) the resolution, (3) and the certification. We quote the pertinent portions ofthese documents for a thorough examination of Sally’s claimuote the pertinent portions ofthe said documents.. this Court becuse es. es Training did not e. TCT No. T-25334,entered in the Registry of Deeds on March 5, 1998, states:

A parcel of land x x x is registered in accordance with the provisions of the PropertyRegistration Decree in the name of JOY TRAINING CENTER OF AURORA,INC., Rep. by Sps. RICHARD A. JOHNSON and LINDA S. JOHNSON, both of legalage, U.S. Citizen, and residents of P.O. Box 3246, Shawnee, Ks 66203,U.S.A.[36](emphasis ours)

On the other hand, the fifth paragraph of the certification provides:

Further, Richard A. and Linda J[.] Johnson were given FULL AUTHORITY for ALLSIGNATORY purposes for the corporation on ANY and all matters and decisionsregarding the property and ministry here. They will follow guidelines set forth accordingto their appointment and ministerial and missionary training and in that, they willformulate and come up with by-laws which will address and serve as governing papersover the center and corporation. They are to issue monthly and quarterly statements to allmembers of the corporation.[37] (emphasis ours)

The resolution states:

We, the undersigned Board of Trustees (in majority) have authorized the sale of land andbuilding owned by spouses Richard A. and Linda J[.] Johnson (as described in the titleSN No. 5102156 filed with the Province of Aurora last 5th day of March, 1998. Theseproceeds are going to pay outstanding loans against the project and the dissolution of thecorporation shall follow the sale. This is a religious, non-profit corporation and no profitsor stocks are issued.[38] (emphasis ours)

The above documents do not convince us of the existence of the contract of agency to sellthe real properties. TCT No. T-25334 merely states that Joy Training is represented bythe spouses Johnson. The title does not explicitly confer to the spouses Johnson theauthority 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 spousesJohnson represented Joy Training in land registration.

The lower courts should not have relied on the resolution and the certification inresolving the case. The spouses Yoshizaki did not produce the original documents duringtrial. They also failed to show that the production of pieces of secondary evidence fallsunder the exceptions enumerated in Section 3, Rule 130 of the Rules of Court.[40] Thus,the general rule – that no evidence shall be admissible other than the original documentitself when the subject of inquiry is the contents of a document – applies.[41]

Nonetheless, if only to erase doubts on the issues surrounding this case, we declare thateven if we consider the photocopied resolution and certification, this Court will stillarrive at the same conclusion.

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 actualmembers of the board. The second paragraph of Section 25[43] of the Corporation Codeexpressly provides that a majority of the number of trustees as fixed in the articles ofincorporation shall constitute a quorum for the transaction of corporate business.

The contract of sale is unenforceable

Necessarily, the absence of a contract of agency renders the contract of saleunenforceable;[46] Joy Training effectively did not enter into a valid contract of sale withthe spouses Yoshizaki. Sally cannot also claim that she was a buyer in good faith. Shemisapprehended the rule that persons dealing with a registered land have the legal right torely on the face of the title and to dispense with the need to inquire further, except whenthe party concerned has actual knowledge of facts and circumstances that would impel areasonably cautious man to make such inquiry.[47] This rule applies when the ownershipof 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 agentmust ascertain not only the fact of agency, but also the nature and extent of the agent’sauthority. Sally bought the real properties at her own risk; she bears the risk of injuryoccasioned by her transaction with the spouses Johnson.

CA decision affirmed, petition denied.

3. Spouses Joselina Alcantara and Antonio Alcantara and Spouses Josefino Rubi and Anne Distor-Rubi vs. Brigida Nido GR 165133 April 19, 2010

Facts: Revelen N. Srivastava is the owner of an unregistered land in Cardona, Rizal. Sometime in March 1984, respondent accepted the offer of petitioners to purchase a 200-square meter portion of Revelen's lot. Petitioners paid P3,000 as downpayment and the balance was payable on instalment.

Petitioners constructed their houses in 1985. In 1986, with respondent's consent, petitioners occupied an additional 150 square meters of the lot. By 1987, petitioners had already paid P17,500 before petitioners defaulted on their instalment payments. On 11 May 1994, Brigida L. Nido, acting as administrator and attorney-in-fact of Revelen, filed a complaint for recovery of possession with damages and prayer for preliminary injunction against petitioners.

Issue: Whether or not the contract entered into is valid.

Held: No, the contract entered into is null and void. The Supreme Court ruled that according to Article 1318 of the Civil Code, the requisitesfor a valid contract are: 1.) consent of the contracting parties; 2.) object certain which is the subject matter of the contract; 3.) cause of the obligation which is established.

In the case at bar, the respondent did not have the written authority to enter into acontract to sell the lot. As the consent of Revelen, the real owner of the lot, was not obtained in writing as by law, no contract was perfected. Hence, the petitioners failed to validly acquire the lot.

5. RALLOS v GO CHAN G.R. No. L-24332 January 31, 1978

Petitioner: RAMON RALLOS, Administrator of the Estate of CONCEPCION RALLOS Respodents: FELIX GO CHAN & SONS REALTY CORPORATION and COURT OF APPEALSPonente: MUÑOZ PALMA

FACTS:

BACKGROUND OF CASEThis is a case of an attorney-in-fact, Simeon Rallos, who after of his death of his principal, ConcepcionRallos, sold the latter's undivided share in a parcel of land pursuant to a power of attorney which theprincipal had executed in favor. The administrator of the estate went to court to have the sale declareduneanforceable and to recover the disposed share.

TC granted the relief prayed for, but upon appeal CA uphold the validity of the sale and the complaint.Hence, this Petition for Review on certiorari.

FACTS OF THE CASE: Concepcion and Gerundia both surnamed Rallos were sisters and registered co-owners of a parcel of landknown as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title No. 11116 of the Registry of Cebu. April 21, 1954: the sisters executed a special power of attorney in favor of their brother, Simeon Rallos, authorizing him to sell for and in their behalf lot 5983.March 3, 1955: Concepcion Rallos died.

September 12, 1955, Simeon Rallos sold the undivided shares of his sisters Concepcion and Gerundia in lot 5983 to Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. The deed of sale wasregistered in the Registry of Deeds of Cebu, TCT No. 11118 was cancelled, and a new transfer certificateof Title No. 12989 was issued in the named of the vendee.

FILING OF ACTION

May 18, 1956: Ramon Rallos as administrator of the Intestate Estate of Concepcion Rallos filed a complaint praying that:

1. Sale of the undivided share of the deceased Concepcion Rallos in lot 5983 be unenforceable, andsaid share be reconveyed to her estate.

2. Certificate of 'title issued in the name of Felix Go Chan & Sons Realty Corporation be cancelledand another title be issued in the names of the corporation and the "Intestate estate ofConcepcion Rallos" in equal undivided and

3. Plaintiff be indemnified by way of attorney's fees and payment of costs of suit. Named party defendants were Felix Go Chan & Sons Realty Corporation, Simeon Rallos, and the Register of Deeds of Cebu, but subsequently, the latter was dropped from the complaint.

The complaint was amended twice; defendant Corporation's Answer contained a crossclaim against its co-defendant, Simon Rallos while the latter filed third-party complaint against his sister, Gerundia Rallos.

While the case was pending in the trial court, both Simon and his sister Gerundia died and they weresubstituted by the respective administrators of their estates.

TC RULING (lateronwasafirmedbySC)On Plaintiffs Complaint —

1. Declaring the deed of sale null and void insofar as the one-half pro-indiviso share of ConcepcionRallos in the property in question, — Lot 5983 of the Cadastral Survey of Cebu — is concerned;

2. Ordering the Register of Deeds of Cebu City to cancel Transfer Certificate of Title No.12989covering Lot 5983 and to issue in lieu thereof another in the names of FELIX GO CHAN & SONSREALTY CORPORATION and the Estate of Concepcion Rallos in the proportion of one-half (1/2)share each pro-indiviso;

3. Ordering Felix Go Chan & Sons Realty Corporation to deliver the possession of an undivided one-half (1/2) share of Lot 5983 to the herein plaintiff;

4. Sentencing the defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, topay to plaintiff in concept of reasonable attorney's fees the sum of P1,000.00; and

5. Ordering both defendants to pay the costs jointly and severally.

On GO CHANTS Cross-Claim: 1. Sentencing the co-defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, topay to defendant Felix Co Chan & Sons Realty Corporation P5,343.45, representing the price ofone-half (1/2) share of lot 5983;

2. Ordering co-defendant Juan T. Borromeo, administrator of the Estate of Simeon Rallos, to pay inconcept of reasonable attorney's fees to Felix Go Chan & Sons Realty Corporation P500.00

On Third-Party Complaint of defendant Juan T. Borromeo administrator of Estate of Simeon Rallos, against

Josefina Rallos special administratrix of the Estate of Gerundia Rallos: Dismissing the third-party complaint without prejudice to filing either a complaint against theregular administrator of the Estate of Gerundia Rallos or a claim in the Intestate-Estate ofCerundia Rallos, covering the same subject-matter of the third-party complaint, at bar.

CA RULING

Felix Go Chan & Sons Realty Corporation appealed to CA from the TC judgment insofar as it set aside the sale of the one-half (1/2) share of Concepcion Rallos. The appellate tribunal, resolved the appeal in favour of the appellant corporation sustaining the sale in question. The appellee administrator, Ramon Rallos, moved for a reconsider of the decision but the same was denied

ISSUE:Is the sale of the undivided share of Concepcion Rallos in lot 5983 valid although it was executed by the agent after the death of his principal? – NO

HELD:

IN VIEW OF ALL THE FOREGOING, We set aside the decision of respondent appellate court, and We affirm en totothe judgment rendered by then Hon. Amador E. Gomez of the Court of First Instance of Cebu with costs againstrespondent realty corporation at all instances.

RATIO:CERTAIN PRINCIPLES OF LAW RELEVANT TO AGENCY

It is a basic axiom in civil law embodied in our Civil Code that no one may contract in the name of anotherwithout being authorized by the latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or the legal representation or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly,by the person on whose behalf it has been executed, before it is revoked by the other contracting party.

Agency is basically personal representative, and derivative in nature. The authority of the agent to actemanates from the powers granted to him by his principal; his act is the act of the principal if done withinthe scope of the authority. Qui facit per alium facit se. "He who acts through another acts himself".

There are various ways of extinguishing agency, but here we are concerned only with one cause — deathof the principal. Paragraph 3 of Art. 1919 of the Civil Code which was taken from Art. 1709 of the Spanish

Civil Code provides:

ART.1919.Agency is extinguished.3.By the death, civil interdiction,insanity or insolvency of the principal or of the agent;.

By reason of the very nature of the relationship between Principal and agent, agency isextinguished by the death of the principal or the agent. This is the law in this jurisdiction.

Manresa commenting on Art. 1709 of the Spanish Civil Code explains that the rationale for the law is found in the juridical basis of agency, which is representation, them being an integration of thepersonality of the principal and that of the agent. It is not possible for the representation tocontinue to exist once the death of either is establish.

Pothier agrees with Manresa that by reason of the nature of agency, death is a necessary cause for itsextinction. Laurent says that the juridical tie between the principal and the agent is severed ipso jure uponthe death of either without necessity for the heirs of the fact to notify the agent of the fact of death of theformer

The same rule prevails at common law — the death of the principal effects instantaneous and absoluterevocation of the authority of the agent unless the Power be coupled with an interest. This is the prevalentrule in American Jurisprudence where it is well-settled that a power without an interest conferred upon anagent is dissolved by the principal's death, and any attempted execution of the power afterward isnot binding on the heirs or representatives of the deceased.

CASE AT BAR Is the general rule provided for in Article 1919 that the death of the principal or of the agent extinguishesthe agency, subject to any exception, and if so, is the instant case within that exception? That is thedeterminative point in issue in this litigation.

It is the contention of respondent corporation which was sustained by respondent court thatnotwithstanding the death of the principal Concepcion Rallos the act of the attorney-in-fact, Simeon Rallosin selling the former's sham in the property is valid and enforceable inasmuch as the corporation acted in good faith in buying the property in question.

Articles 1930 and 1931 of the Civil Code provide the exceptions to the general rule afore-mentioned.Article 1930 is not involved because admittedly the special power of attorney executed in favor of Simeon Rallos was not coupled with an interest.

Article 1931 is the applicable law. Under this provision, an act done by the agent after the death of hisprincipal is valid and effective only under two conditions

1. That the agent acted without knowledge of the death of the principal and 2. That the third person who contracted with the agent himself acted in good faith.

Good faith here means that the third person was not aware of the death of the principal at the time hecontracted with said agent.

These two requisites must concur the absence of one will render the act of the agent invalid andunenforceable.

Article 1931, being an exception to the general rule, is to be strictly construed, it is not to be given aninterpretation or application beyond the clear import of its terms for otherwise the courts will be involvedin a process of legislation outside of their judicial function. On the basis of the established knowledge of Simon Rallos concerning the death of his principalConcepcion Rallos, Article 1931 of the Civil Code is inapplicable

In the instant case, it cannot be questioned that the agent, Simeon Rallos, knew of the death of hisprincipal at the time he sold the latter's share in Lot No. 5983 to respondent corporation. The knowledgeof the death is clearly to be inferred from the pleadings filed by Simon Rallos before the trial court.

That Simeon Rallos knew of the death of his sister Concepcion is also a finding of fact of the court a quo and of respondent appellate court when the latter stated that Simon Rallos 'must have known of the death of his sister, and yet he proceeded with the sale of the lot in the name of both his sisters Concepcion and Gerundia Rallos without informing appellant (the realty corporation) of the death of the former.

On the basis of the established knowledge concerning the death of principal, Article 1931 of CC isinapplicable. The law expressly requires for its application lack of knowledge on the part of the agent ofthe death of his principal; it is not enough that the third person acted in good faith.

Buason&Reyesv.Panuyas: sustained the validity, of a sale made after the death of the principal becauseit was not shown that the agent knew of his principal's demise.

Herera, et al., v. Luy Kim Guan, et al.: plaintiffs presented no proof and there is no indication in therecord, that the agent Luy Kim Guan was aware of the death of his principal at the time he sold theproperty. The death of the principal does not render the act of an agent unenforceable, where the latterhad no knowledge of such extinguishment of the agency.

The fact that no notice of the death of the principal was registered on the certificate of title of theproperty in the Office of the Register of Deeds, is not fatal to the cause of the estate of the principal

Another argument advanced by respondent court is that the vendee acting in good faith relied on thepower of attorney which was duly registered on the original certificate of title recorded in the Register ofDeeds of the province of Cebu, that no notice of the death was aver annotated on said certificate of titleby the heirs of the principal and accordingly they must suffer the consequences of such omission.

A revocation by an act of the principal as a mode of terminating an agency is distinctive from revocation byoperation of law such as death of the principal, which is similar to the case at bar.

Revocation by an act of principal as mode of termination(quotingManresa):If the agency has been granted for the purpose of contracting with certain persons, therevocation must be made known to them. But if the agency is general in nature, withoutreference to particular person with whom the agent is to contract, it is sufficient that theprincipal exercise due diligence to make the revocation of the agency publicity known. In thiscase, all acts, executed with third persons who contracted in good faith, without knowledge ofthe revocation, are valid.

Revocation by operation of law (applicabletocase):By reason of the very nature of the relationship between principal and agent, agency isextinguished ipso jure upon the death of either principal or agent.

Although a revocation of a power of attorney to be effective must be communicated to theparties concerned, yet a revocation by operation of law, such as by death of the principal is, as arule, instantaneously effective inasmuch as "by legal fiction the agent's exercise of authority isregarded as an execution of the principal's continuing will.

With death, the principal's will ceases or is the of authority is extinguished.

The Civil Code does not impose a duty on the heirs to notify the agent of the death ofthe principal. What the Code provides in Article 1932 is that, if the agent die his heirs mustnotify the principal thereof, and in the meantime adopt such measures as thecircumstances may demand in the interest of the latter.

Whatever conflict of legal opinion was generated by Cassidayv. McKenzie in American jurisprudence,no such conflict exists in our own

One last point raised by respondent corporation in support of the appealed decision is an 1842 ruling ofthe Supreme Court of Pennsylvania in Cassiday v. McKenzie wherein payments made to an agent after the death of the principal were held to be "good", "the parties being ignorant of the death".

Cassiday v McKenzie: that a payment may be good today, or bad tomorrow, from the accidentcircumstance of the death of the principal, which he did not know, and which by no possibility could heknow? It would be unjust to the agent and unjust to the debtor. In the civil law, the acts of the agent,done bona fide in ignorance of the death of his principal are held valid and binding upon the heirs of thelatter. The same rule holds in the Scottish law, and I cannot believe the common law is so unreasonable...

The above-cited case represents the minority view in American jurisprudence and stands alone amongcommon law authorities as later on stated in ClaytonvMeretand TraversvCrane

Our statute, the Civil Code, expressly provides for two exceptions to the general rule that death of theprincipal revokes ipso jure the agency, to wit: (1) that the agency is coupled with an interest (Art 1930),and (2) that the act of the agent was executed without knowledge of the death of the principal and thethird person who contracted with the agent acted also in good faith (Art. 1931).

Exception No. 2 is the doctrine followed in Cassiday, and again we stress the indispensable requirement that the agent acted without knowledge or notice of the death of the principal. In the case before Us, the agent Ramon Rallos executed the sale notwithstanding notice of the death of his principal.

Accordingly, the agent's act is unenforceable against the estate of his principal. The case is covered expressly by a provision of law on agency and cannot be interpreted contrary to itstenor or paralleled to that of laws on land registration

Holding that the good faith of a third person in said with an agent affords the former sufficient protection, respondent court drew a "parallel" between the instant case and that of an innocent purchaser for value of a land, stating that if a person purchases a registered land from one who acquired it in bad faith — even to the extent of foregoing or falsifying the deed of sale in his favor — the registered owner has no recourse against such innocent purchaser for value but only against the forger.

Respondent cites case of Blondeau,etal.,v. Nanoand Valejo which stated that an executed transfer ofregistered lands placed by the registered owner thereof in the hands of another operates as arepresentation to a third party that the holder of the transfer is authorized to deal with the land. Asbetween two innocent persons, one of whom must suffer the consequence of a breach of trust, the onewho made it possible by his act of coincidence bear the loss.

The Blondeau decision, however, is not on all fours with the case before Us because here We areconfronted with one who admittedly was an agent of his sister and who sold the property of the latterafter her death with full knowledge of such death. The situation is expressly covered by a provision of lawon agency the terms of which are clear and unmistakable leaving no room for an interpretation contrary toits tenor, This is in the same manner that the ruling in Blondeau found a basis in Section 55 of the LandRegistration Law.