Mactan-Cebu International Airport Authority v. Unchuan
REITERATIONFacts
The Antecedents: Respondent Richard Unchuan (Unchuan) filed a complaint against petitioner Mactan-Cebu International Airport Authority (MCIAA) for declaration of nullity of a deed of absolute sale, quieting of title, and/or payment of just compensation, rental, and damages. Unchuan alleged he was the rightful owner of Lot Nos. 4810-A and 4810-B, which he bought from the heirs of Eugenio Godinez through several deeds of absolute sale dated December 7, 1998. He claimed that Atanacio Godinez, the supposed attorney-in-fact of the registered owners and their heirs, had previously sold these lots to the Civil Aeronautics Administration (CAA), predecessor of MCIAA, through a Deed of Absolute Sale dated April 3, 1958. Unchuan asserted this sale was void because the registered owners and heirs did not authorize Atanacio to sell their shares, no consideration was paid, and the deed lacked CAA's signature and approval from the Department of Public Works and Highways. Procedural History: MCIAA moved to dismiss the complaint on grounds of prescription, laches, and estoppel, which the Regional Trial Court (RTC) denied. MCIAA's subsequent motions for compulsory joinder of indispensable parties and for reconsideration were also denied. The RTC ruled in favor of Unchuan, declaring the Deed of Sale by Atanacio Godinez void, recognizing Unchuan as the true owner of the lots, ordering MCIAA to vacate, and to pay rentals. The Court of Appeals (CA) affirmed the RTC decision, holding that Atanacio lacked the authority to act as agent without a special power of attorney and that no evidence of payment was adduced. The CA also ruled that prescription, estoppel, or laches were unavailing as the contract was void. MCIAA's motion for reconsideration and motion for new trial, which presented newly discovered evidence, were denied by the CA. The Petition: MCIAA filed a petition for review on certiorari, assailing the CA's affirmation of the RTC decision. MCIAA argued that the RTC erred in declaring Atanacio unauthorized to convey the lots, in finding no payment of consideration, in declaring the deed of sale void, in holding that Unchuan's predecessors-in-interest were not indispensable parties, and in ruling that the cause of action was not barred by prescription, laches, and estoppel. MCIAA also argued that the CA erred in not admitting the additional evidence it sought to introduce.
Issue(s)
Whether the Deed of Absolute Sale executed by Atanacio Godinez in favor of the Civil Aeronautics Administration (CAA) is valid, and whether Atanacio Godinez was authorized to sell the subject lots on behalf of the other registered owners and their heirs. Whether the sale was supported by valid consideration. Whether the action is barred by prescription, laches, or estoppel. Whether the newly discovered evidence presented by MCIAA should have been admitted. Determination of ownership shares and compensation due to the parties.
Ruling
The Supreme Court partially granted the petition, affirming the CA decision with modification. The Court declared the Deed of Sale executed by Atanacio Godinez as valid only with respect to his undivided share in the lots but void concerning the undivided shares of the other registered owners who did not give their written consent. Consequently, Unchuan was declared the legal owner of 149,930 square meters of the property, excluding Atanacio's share. MCIAA was ordered to initiate expropriation proceedings for the remaining portion and to pay rentals at P20.00 per square meter per month from the filing of the complaint until final payment.
Ratio Decidendi
On the validity of the Deed of Absolute Sale and Atanacio's authority: The Court reiterated that under Articles 1874 and 1878 of the Civil Code, the authority of an agent to sell a piece of land or any interest therein must be in writing; otherwise, the sale is void. Since Atanacio Godinez did not possess a special power of attorney specifically authorizing him to sell the subject lots on behalf of his co-owners, his act of conveying their shares was void. The Court emphasized that a void contract cannot be ratified. However, applying Article 493 of the Civil Code, a co-owner has the right to dispose of their undivided share. Therefore, the sale was valid only with respect to Atanacio's own share, making CAA a co-owner of the subject lots. The subsequent Deed of Partition and other documents acknowledging the sale were given no weight as they were predicated on a void contract concerning the other heirs' shares. On the consideration for the sale: The Court did not accept Unchuan's allegation that no payment was received. It invoked the disputable presumptions under Section 3, Rule 131 of the Rules of Court, including that private transactions are fair and regular, ordinary course of business has been followed, and there was sufficient consideration. The Court noted that a mere allegation of non-payment is insufficient to overcome these legal presumptions. Furthermore, an official communication from the District Land Office of Cebu indicated a disbursement in favor of Atanacio, supporting the presumption of payment. On prescription, laches, and estoppel: The Court affirmed the CA's ruling that prescription, laches, or estoppel are unavailing against a void contract. It cited Article 1410 of the Civil Code, which states that an action to declare the inexistence of a void contract does not prescribe. Since the sale was void concerning the shares of the other co-owners due to Atanacio's lack of authority, their right to question it subsisted. The Court clarified that while the sale was void as to the other heirs' shares, it was valid as to Atanacio's share, and thus, the heirs of Atanacio could no longer alienate what he had already conveyed. On the admission of newly discovered evidence: The Court found no reversible error in the CA's denial of MCIAA's motion for new trial. The CA had already considered the essence of the newly discovered evidence in its previous rulings, particularly regarding the validity of the sale and the issue of consent. The CA also addressed the claim of extrinsic fraud, finding no clear and convincing evidence that MCIAA was prevented from presenting its case fairly due to the alleged omission of its counsel. The Court reiterated that even if there was a belated annotation of an adverse claim, it was of no force and effect since it was predicated on a void contract. On the ownership and compensation: Based on the partial validity of the sale, the Court modified the RTC and CA rulings. Unchuan was declared the legal owner of 149,930 square meters, representing the shares of the heirs who did not authorize Atanacio. Atanacio's share of 29,986 square meters was excluded from Unchuan's entitlement. The Court recognized that the lots were being used for a public purpose (Mactan-Cebu International Airport) and directed MCIAA to initiate expropriation proceedings to compensate the registered owners or their successors-in-interest for their undivided shares. In the interim, MCIAA was ordered to pay rentals for the use of the property.
Main Doctrine
A sale of a piece of land or any interest therein through an agent requires the agent's authority to be in writing; otherwise, the sale is void. However, a co-owner may validly sell their undivided share in a property, making the buyer a co-owner, but this does not affect the rights of other co-owners who did not consent to the sale.