Lopez v. Primex
REITERATIONFacts
The Antecedents: This case involves a dispute over the sale of a 14-hectare property in Antipolo City between petitioners (Lopez, et al.) and respondent Primex Corporation (Primex). Primex filed a complaint for injunction, specific performance, and damages, alleging that the vendors (defendants-appellees) failed to deliver a valid title to the property as required by their Deed of Conditional Sale (DCS). Specifically, the initial title provided, TCT No. 196256, was derived from OCT No. 537, which the Supreme Court had previously declared null and void. Primex refused to accept this title and make further payments, citing the defect and pending claims against the property. The defendants-appellees countered that Primex breached the DCS by refusing to pay, and that their concern over the title was a ploy to delay payment. Subsequently, TCT No. 208538 was delivered, and a Deed of Absolute Sale was executed. Primex had paid a substantial amount, but still raised concerns about pending claims and encumbrances on the property, evidenced by a lis pendens annotation. The trial court initially dismissed Primex's complaint, but the Court of Appeals (CA) remanded the case for trial de novo. After further proceedings, the RTC rendered a decision in favor of the defendants-appellees, rescinding the sale and ordering mutual restitution. The RTC granted a motion for execution pending appeal, which the CA annulled via certiorari. Procedural History: The CA, in a decision dated January 23, 2007, reversed the RTC's judgment, ordering Primex to pay petitioners the full balance of the purchase price with legal interest. Petitioners, represented by two counsels (Atty. Angeles and Atty. Pantaleon), filed a motion for reconsideration. Atty. Pantaleon received the CA decision on January 30, 2007, while Atty. Angeles received it on February 23, 2007. Atty. Pantaleon failed to file a motion for reconsideration within his deadline (February 14, 2007). Atty. Angeles filed a motion for reconsideration on March 6, 2007. The CA denied this motion for being filed out of time and declared its January 23, 2007 decision final and executory as of February 14, 2007. Petitioners appealed this denial to the Supreme Court. The Petition: The Supreme Court previously issued a resolution on March 7, 2012, noting a Compromise Agreement and Joint Motion to Dismiss and Withdraw Petition, and granting the motion, thereby dismissing the consolidated appeals on the ground of mootness. However, the heirs of the deceased petitioner Marcelino E. Lopez filed an Urgent Motion to Recall or Reconsider the March 7, 2012 Resolution. They argued that Atty. Sergio Angeles, one of petitioners and counsels, entered into the Compromise Agreement without valid authority because his special power of attorney had been extinguished by the death of Marcelino Lopez. The heirs also sought to cite Atty. Angeles and the Primex President for contempt. The Supreme Court, in its Resolution dated August 1, 2018, addressed two main issues: (1) the validity of the Compromise Agreement entered into by Atty. Angeles after the death of Marcelino Lopez, and (2) the CA's ruling on the finality and executory nature of its January 23, 2007 decision.
Issue(s)
Whether the Compromise Agreement entered into by Atty. Sergio Angeles, after the death of his principal Marcelino Lopez, is valid and binding. Whether the Court of Appeals erred in declaring its decision dated January 23, 2007, final and executory due to the late filing of the motion for reconsideration.
Ruling
The Supreme Court declared the Compromise Agreement VOID, set aside the resolution of March 7, 2012, and AFFIRMED the Court of Appeals' decision promulgated on January 23, 2007. The petitioners were ordered to pay the costs of suit.
Ratio Decidendi
On the validity of the Compromise Agreement: The Court held that an agency is extinguished by the death of the principal. Article 1919 of the Civil Code explicitly states that death is a mode of extinguishing agency. Consequently, any act performed by an agent after the death of the principal is void ab initio, unless it falls under the exceptions provided in Articles 1930 and 1931 of the Civil Code. In this case, Marcelino Lopez died on December 3, 2009. The Compromise Agreement was filed on February 2, 2012, more than two years after his death. Therefore, Atty. Angeles, as the agent, had ceased to have authority upon Marcelino Lopez's death. The special power of attorney executed by Marcelino Lopez in favor of Atty. Angeles became functus officio. Atty. Angeles' execution and submission of the Compromise Agreement on behalf of the Lopezes were thus void ab initio. Furthermore, Atty. Angeles' failure to disclose the death of Marcelino Lopez to the Court aggravated his lack of authority, suggesting an attempt to pass off the agreement as valid despite the termination of his agency. Consequently, the March 7, 2012 resolution granting the Joint Motion to Dismiss and Withdrawal of Petition, which was based on the void Compromise Agreement, was set aside, and the petitioners' appeal was reinstated. On the finality of the Court of Appeals' decision: The Court affirmed the CA's ruling that its decision dated January 23, 2007, had become final and executory. Under Section 2, Rule 13 of the Rules of Court, when a party appears by counsel, service must be made upon one of the counsels. Since the petitioners had two counsels, Atty. Angeles and Atty. Pantaleon, notice to either was effective notice to the petitioners. Atty. Pantaleon received the CA decision on January 30, 2007. This commenced the running of the period for filing a motion for reconsideration or perfecting an appeal. The petitioners, through Atty. Pantaleon, had until February 14, 2007, to file their motion for reconsideration. Their failure to do so within this period meant that the decision became final and executory as of that date. The subsequent filing of a motion for reconsideration by Atty. Angeles on March 6, 2007, was therefore out of time. The right to appeal is a statutory right that must be exercised in accordance with the rules; failure to perfect an appeal within the prescribed period results in the judgment becoming final and executory, precluding any further challenge.
Main Doctrine
An agency is extinguished by the death of the principal. Any act by the agent subsequent to the principal's death is void ab initio, unless exceptions under Articles 1930 and 1931 of the Civil Code apply. Furthermore, the failure to file a motion for reconsideration or appeal within the reglementary period renders the decision final and executory.