The Supreme Court has affirmed that a verbal agreement to sell land by one co-owner doesn’t automatically bind the other co-owners, especially without a written special power of attorney (SPA). This means a buyer can only acquire the share of the co-owner who agreed to the sale, not the entire property. This ruling protects the rights of co-owners and emphasizes the importance of proper legal documentation in real estate transactions. In essence, this case underscores that oral agreements, while potentially valid between the parties involved, cannot override the legal requirements for transferring ownership of real property, especially when multiple owners are involved.

Selling Shared Land: Can One Heir’s Promise Bind All?

This case revolves around a dispute over a parcel of land in Lipa City, Batangas, originally leased by Nena Recio from the Altamiranos. The central legal question is whether an oral agreement of sale between Reman Recio, Nena’s son, and Alejandro Altamirano, one of the heirs, could bind all the other Altamirano heirs to transfer the entire property. The Regional Trial Court (RTC) initially ruled in favor of Recio, ordering the Altamiranos to execute a deed of sale for the entire property. However, the Court of Appeals (CA) modified this decision, stating that the sale was only valid for Alejandro’s share due to the lack of written authority from the other heirs.

The Supreme Court agreed with the CA’s assessment, emphasizing the importance of a **special power of attorney (SPA)** in real estate transactions. It cited Articles 1874 and 1878 of the Civil Code, which explicitly require written authority for an agent to sell land on behalf of a principal. Article 1874 states:

“When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.”

Article 1878 reinforces this requirement by stating that special powers of attorney are necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired, whether gratuitously or for a valuable consideration. The Court emphasized that without a written SPA, Alejandro could not legally bind his co-heirs to the sale. The petitioner, Reman Recio, argued that Alejandro’s authority was implied because he represented a majority of the co-owners in other transactions and that the other Altamiranos had knowledge of the prior sale because of a notice of lis pendens. However, the Court found these arguments insufficient to overcome the statutory requirement of a written SPA.

Building on this principle, the Court distinguished between actual and apparent authority. Actual authority requires a clear delegation of power, while apparent authority arises from the actions of the principal that lead a third party to reasonably believe that the agent has authority. The Court stated:

“persons dealing with an assumed agency, whether the assumed agency be a general or special one, are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it.”

In other words, Recio had a responsibility to verify Alejandro’s authority to sell the entire property. Because Recio relied solely on Alejandro’s word without obtaining a copy of the SPA, he assumed the risk that Alejandro lacked the necessary authority. The court emphasized that there was no evidence presented of specific acts by the other Altamiranos indicating that they knew of, and consented to, Alejandro’s representation. Therefore, the sale was only valid with respect to Alejandro’s share in the property.

Furthermore, the Court upheld the CA’s ruling that the subsequent sale of the property to the Spouses Lajarca was valid only insofar as the shares of the other Altamiranos were concerned, exclusive of Alejandro’s share. Since the Spouses Lajarca were aware of the pending legal action (notice of lis pendens), they could not be considered buyers in good faith regarding Alejandro’s share. This ruling highlights the significance of due diligence in property transactions.

In essence, the Supreme Court’s decision underscores the importance of adhering to legal requirements in real estate transactions. Oral agreements, while potentially valid between the parties involved, cannot override the need for proper documentation, especially when multiple owners are involved. Purchasers must exercise due diligence to verify the authority of any agent claiming to represent property owners. As a result, the parties were declared to be co-owners of the property.

FAQs

What was the key issue in this case?	The key issue was whether an oral agreement to sell land by one co-owner could bind all the other co-owners without a written special power of attorney (SPA).
What is a special power of attorney (SPA)?	An SPA is a legal document authorizing a person (agent) to act on behalf of another (principal) in specific matters. In real estate, it is required for an agent to sell property owned by the principal.
What happens if a co-owner sells property without an SPA from the other co-owners?	The sale is only valid for the selling co-owner’s share in the property, not the entire property. The buyer becomes a co-owner with the other original co-owners.
What is a notice of lis pendens?	A notice of lis pendens is a legal notice filed in the registry of deeds to inform potential buyers that a property is subject to pending litigation. It serves as a warning to exercise caution before purchasing the property.
What does it mean to be a buyer in good faith?	A buyer in good faith is someone who purchases property without knowledge of any defects in the seller’s title or any adverse claims against the property. Buyers in good faith are typically protected by law.
How does the principle of apparent authority apply in this case?	The principle of apparent authority did not apply because there were no specific acts by the other co-owners that led Recio to reasonably believe that Alejandro had the authority to sell the entire property.
What is the significance of Articles 1874 and 1878 of the Civil Code?	These articles explicitly require written authority for an agent to sell land on behalf of a principal. This requirement aims to protect property owners from unauthorized sales and to ensure the integrity of real estate transactions.
What is the practical implication of this ruling for property buyers?	Property buyers must exercise due diligence to verify the authority of anyone claiming to represent property owners, especially when multiple owners are involved. Obtaining a copy of the SPA is crucial.

This case serves as a valuable reminder of the importance of adhering to legal requirements in real estate transactions and highlights the necessity of verifying the authority of agents to avoid costly legal disputes. Proper documentation and due diligence are essential to ensure a valid and enforceable sale.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Reman Recio vs. Heirs of the Spouses Aguedo and Maria Altamirano, G.R. No. 182349, July 24, 2013