Katigbak v. Tai Hing Co.
REITERATIONFacts
The Antecedents: Gabino Barreto Po Ejap owned land with improvements, subject to a mortgage. Po Tecsi, through a power of attorney granted to Gabino, acquired the property. Gabino, using the power of attorney, sold the land to Jose M. Katigbak. Po Tecsi remained in possession and leased a portion of the land. Po Tecsi later complained about demands for rent from Gabino, explaining his financial condition and promising to remit the balance after expenses. Po Tecsi also asserted his right to lease the property if a better offer arose. Po Tecsi died, and his son, Po Sun Suy, was appointed administrator of his estate. Po Sun Suy submitted accountings of collected rents and included the land in the inventory of his father's estate. Po Sun Suy and Po Ching leased the land. Jose M. Katigbak later sold the property to Po Sun Boo. Procedural History: The plaintiff, Jose M. Katigbak, filed an action for the recovery of unpaid rents against Tai Hing Co., later amended to include Po Sun Suy and Po Ching. Po Sun Suy, as administrator, intervened, praying for the dismissal of the complaint, asserting Katigbak was not the owner and thus not entitled to rents. The Court of First Instance of Manila ordered Po Sun Suy and Po Ching to pay P28,500 in rents, ordered the estate of Po Tecsi to pay for rents unduly collected, and divided the costs. The Petition: Po Sun Suy and Po Ching appealed the judgment, assigning seventeen errors.
Issue(s)
Whether the Court of First Instance of Manila had jurisdiction to try the case on its merits, considering the property's location in Tacloban, Leyte. Whether Gabino Barreto Po Ejap was authorized under the power of attorney to sell the land. Whether the power of attorney, not being registered, rendered the sale ineffective. Whether the sale was fraudulent due to non-registration and omission of encumbrances. Whether the claim for rents due from the deceased Po Tecsi should be presented to the committee on claims and appraisal. Whether the rents collected by Po Sun Suy, as administrator, were in custodia legis.
Ruling
The Supreme Court affirmed the judgment of the Court of First Instance of Manila with modifications. It held that the Court of First Instance of Manila had jurisdiction over the case as an action for rent is a personal and transitory action. The Court also upheld the validity of the sale made by Gabino Barreto Po Ejap to Jose M. Katigbak, finding that the power of attorney was sufficient to bind Po Tecsi, despite non-registration. However, the Court ruled that claims for rents accrued and unpaid by the deceased Po Tecsi must be presented to the committee on claims and appraisal in the intestate proceedings. Similarly, rents collected by Po Sun Suy as administrator were deemed in custodia legis and must be claimed in the intestate proceedings.
Ratio Decidendi
On the jurisdiction of the Court of First Instance of Manila: The Court held that an action for the recovery of rent is a personal action, which is transitory in nature. Therefore, it can be instituted in the province where either the defendant or the plaintiff resides, at the plaintiff's election. The Court of First Instance of Manila had jurisdiction to try the action for rent. Furthermore, the intervenors, by raising the question of ownership, submitted themselves to the jurisdiction of the Court of First Instance of Manila. A Court of First Instance possesses full and unlimited jurisdiction over realty in the Philippines, and can try cases concerning realty in another province if no objection to jurisdiction is raised. The intervenors' submission to jurisdiction precluded their objection to it. On the authority of Gabino Barreto Po Ejap to sell the land: The Court found that the power of attorney granted by Po Tecsi to Gabino Barreto Po Ejap was general and authorized the sale of any kind of realty belonging to the principal. The use of the subjunctive "pertenezcan" (might belong) indicated that Po Tecsi intended to grant authority over properties he might acquire during the power's validity, not just those he owned at the time of its execution. Therefore, Gabino was authorized to sell the land. On the effect of non-registration of the power of attorney and sale: The Court clarified that while a power of attorney not registered in the registry of deeds makes acts performed by the agent ineffective against third persons who acquire rights in good faith and duly registered, it does not invalidate the act as between the principal and the agent. In this case, the non-registration of the power of attorney and the sale prevented their registration in the Torrens system, but it did not compel Po Tecsi to acknowledge the sale. However, Po Tecsi's subsequent actions, such as complaining about rent demands and promising to remit rents, constituted a tacit acknowledgment of the sale and his status as a lessee, not an owner. On the alleged fraud in the sale: The Court found no evidence of fraud. The non-registration of the power of attorney and sale, and the omission of certain encumbrances in the deed, were explained by the fact that Po Tecsi's subsequent actions indicated his awareness of the sale and his acknowledgment of his lessee status. His letters to Gabino Barreto Po Ejap, complaining about rent demands and promising remittances, demonstrated that he occupied the land not as an owner but as a lessee. The remittances of rent were not proven to be payments for a debt, as alleged by the appellants. On the claim for rents due from the deceased Po Tecsi: The Court ruled that claims for rents accrued and unpaid by the deceased Po Tecsi must be presented to the committee on claims and appraisal appointed in the intestate proceedings for the settlement of his estate, in accordance with Section 703 of the Code of Civil Procedure. Such claims cannot be collected through an ordinary action. On the rents collected by Po Sun Suy as administrator: The Court held that since Po Sun Suy, as administrator of his father's estate, included the land in question in the inventory, the property was in custodia legis. Consequently, the rents collected by the administrator from the property were also in custodia legis. Therefore, any claim for these rents by Jose M. Katigbak must be presented in the court handling the intestate proceedings of Po Tecsi's estate.
Main Doctrine
An action for the recovery of rent is a personal action, and as such is transitory and may be instituted in the province where the defendant or the plaintiff resides. A power of attorney not registered in the registry of deeds is ineffective as to third persons who in good faith acquire rights to registered land, but it binds the principal to acknowledge the acts performed by his attorney-in-fact. Claims for rents accrued and unpaid by a deceased person must be presented to the committee on claims and appraisal in the intestate proceedings, and rents collected by an administrator of an estate are in custodia legis.