pursuant to Article 1874 of the Civil Code, when the 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

Essentially, the issue here is whether or not the verbal agreement which petitioners entered into with private respondent Renato Gabriel in 1987 involving the sale of the three hundred (300) square meter portion of land registered in the name of Renato's late father Daluyong Gabriel is a valid and enforceable contract of sale of real property.

By law ¹⁵ a contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. It is a consensual contract which is perfected by mere consent. ¹⁶ Once perfected, the contract is generally binding in whatever form (i.e. written or oral) it may have been entered into ¹⁷ provided the three (3) essential requisites for its validity prescribed under Article 1318 supra, are present. Foremost of these requisites is the consent and the capacity to give consent of the parties to the contract. The legal capacity of the parties is an essential element for the existence of the contract because it is an indispensable condition for the existence of consent. ¹⁸ There is no effective consent in law without the capacity to give such consent. In other words, legal consent presupposes capacity. ¹⁹ Thus, there is said to be no consent, and consequently, no contract when the agreement is entered into by one in behalf of another who has never given him authorization therefor ²⁰ unless he has by law a right to represent the latter. ²¹ It has also been held that if the vendor is not the owner of the property at the time of the sale, the sale is null and void, ²² because a person can sell only what he owns or is authorized to sell. ²³ One exception is when a contract entered into in behalf of another who has not authorized it, subsequently confirmed or ratified the same in which case, the transaction becomes valid and binding against him and he is estopped to question its legality. ²⁴

The trial court held that the oral contract of sale was valid and enforceable stating that while it is true that at the time of the sale, Renato Gabriel was not the owner and that it was Daluyong Gabriel who was the registered owner of the subject property, Daluyong Gabriel knew about the transaction and tacitly authorized his son Renato Gabriel (whom he earlier designated as administrator of his 5,010 square meter registered property) to enter into it. The receipt by Renato Gabriel of the P90,000.00 paid by petitioner spouses as purchase price of subject portion of land ²⁵ and also of the amount of P14,000.00 paid by petitioners as advance rental fee for the lease of one hundred seventy six (176) square meters thereof, in accordance with the then still existing Contract of Lease (Exh. 10) entered into by Renato Gabriel as Lessor and Lydia delos Reyes as lessee on September 26, 1985 which was to expire only on June 15, 1991 was also known not only to Daluyong Gabriel but also to his late wife Fe Salazar Gabriel and his two other children, Maria Luisa Gabriel Esteban and Maria Rita Gabriel Bartolome. And even assuming that Daluyong Gabriel did not expressly authorize Renato Gabriel to enter into such contract of sale with petitioners in 1988, he (Daluyong Gabriel) confirmed/ratified the same by his contemporaneous conduct and actuations shown during his lifetime. More importantly, the trial court noted that Daluyong never presented Renato during the entire proceedings, despite evidence ²⁶ which tends to show that Renato Gabriel was not missing nor were his whereabouts unknown as Daluyong wanted to impress the trial court, but had all the while been staying at the Daluyong Gabriel residence at 185 I. Lopez St., Mandaluyong City but was deliberately prevented (by Daluyong) from testifying or shedding light on the transactions involved in the two cases then at bar. Hence, the decision of the trial court ordered Daluyong Gabriel, Renato Gabriel, Maria Luisa G. Esteban and Maria Rita G. Bartolome to execute a Deed of Conveyance and other necessary documents in favor of petitioners covering subject area of 300 square meters to be taken from the 5,010 square meters covered by TCT No. T-17932 under the name of Daluyong Gabriel which portion is actually occupied by petitioners Delos Reyes couple.

The Court of Appeals, on the other hand, ruled that the contract of sale cannot be upheld, mainly because Renato Gabriel, as vendor, did not have the legal capacity to enter and to give consent to the agreement, he, being neither the authorized agent (of Daluyong Gabriel) nor the owner of the property subject of the sale. It was pointed out that three theories were advanced by appellees to prove that the transaction they had with Renato concerning the sale of the portion in question was regular, valid and enforceable. First theory is that Renato acted as the duly authorized representative or agent of Daluyong. Second, that the portion in dispute was already given to Renato as his share, hence, he validly sold the same to appellees. And third, that the portion being litigated was part of Renato's inheritance from the estate of her deceased mother which he validly disposed of to appellees. These reasons, according to the appellate court, cannot go together, or even complement each other, to establish the regularity, validity or enforceability of the sale made by Renato. It could not be possible for Renato to have acted in three different capacities — as agent, owner, and heir — when he dealt with appellees, as the legal consequences for each situation would be different. Thus, it was incumbent upon appellees to explain what actually convinced them to buy the land from Renato, and because they failed to do so, no proper basis can be found to uphold the alleged sale made by Renato as it cannot be determined with certainty in what capacity Renato acted. And even assuming that he (Renato) already succeeded to whatever hereditary right or participation he may have over the estate of his father, he is still considered a co-owner with his two sisters of the subject property and that prior to its partition, Renato cannot validly sell or alienate a specific or determinate part of the property owned in common. Besides, the entire lot covered by TCT No. T-17932 was subsequently donated by Daluyong Gabriel to his daughter Marie Rita G. Bartolome on October 1, 1990 and is now covered by TCT No. T-68674 in her name. ²⁷ Hence, the appellate court's decision ordered appellees (petitioners) spouses Claudio and Lydia delos Reyes to immediately vacate the 300 square meter portion of that land covered by TCT No. T-17932 which they are occupying and to turn-over possession thereof to the appellants, private respondents herein.

As a general rule, the findings of fact of the Court of Appeals are binding upon this Court. ²⁸ When such findings of fact are the same and confirmatory of those of the trial court, they are final and conclusive and may not be reviewed on appeal. ²⁹ In such cases, the authority of the Supreme Court is confined to correcting errors of law, if any, that might have been committed below. ³⁰ In the instant case, it is noted that the trial court and the Court of Appeals are not at variance in their factual findings that sometime in 1988, an oral contract of sale was entered into by Renato Gabriel, (as vendor) with petitioners De los Reyes couple (as vendees) involving a 300 square meter portion of a 5,010 square meter parcel of land located in Barrio Magugpo, Tagum, Davao del Norte owned and registered under Transfer Certificate of Title No. T-17932 in the name of Daluyong Gabriel, father of Renato. Thus, this Court is tasked to review and determine whether or not respondent Court of Appeals committed an error of law ³¹ in its legal conclusion that at the time the parties entered into said oral agreement of sale, Renato Gabriel as the purported vendor, did not have the legal capacity to enter and/or to give consent to the sale.

We agree with the conclusion of the Court of Appeals that Renato Gabriel was neither the owner of the subject property nor a duly designated agent of the registered owner (Daluyong Gabriel) authorized to sell subject property in his behalf, and there was also no sufficient evidence adduced to show that Daluyong Gabriel subsequently ratified Renato's act. In this connection it must be pointed out that pursuant to Article 1874 of the Civil Code, when the 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. In other words, for want of capacity (to give consent) on the part of Renato Gabriel, the oral contract of sale lacks one of the essential requisites for its validity prescribed under Article 1318, supra and is therefore null and void ab initio.

Petitioners' contention that although at the time of the alleged sale, Renato Gabriel was not yet the owner of the subject portion of land, after the death of Daluyong Gabriel, he (Renato) became the owner and acquired title thereto by way of hereditary succession which title passed by operation of law to petitioners pursuant to Article 1434 of the Civil Code ³² is not tenable. Records show that on October 1, 1990 Daluyong Gabriel donated the entire lot covered by TCT No. T-17932 to his daughter Maria Rita G. Bartolome and the property is now covered by TCT No. T-68674 in her name. This means that when Daluyong Gabriel died on September 14, 1995, he was no longer the owner of the subject property. Accordingly, Renato Gabriel never acquired ownership or title over any portion of said property as one of the heirs of Daluyong Gabriel.

However, respondent Court of Appeals failed to consider the undisputed fact pointed out by the trial court that petitioners had already performed their obligation under subject oral contract of sale, i.e. completing their payment of P90,000.00 representing the purchase price of the 300 square meter portion of land. As was held in "Nool vs. Court of Appeals" ³³ if a void contract has been performed, the restoration of what has been given is in order. The relationship between parties in any contract even if subsequently voided must always be characterized and punctuated by good faith and fair dealing. ³⁴ Hence, for the sake of justice and equity, and in consonance with the salutary principle of non-enrichment at another's expense, ³⁵ private respondent Renato Gabriel, should be ordered to refund to petitioners the amount of P90,000.00 which they have paid to and receipt of which was duly acknowledged by him. It is the policy of the Court to strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation especially where the Court is in a position to resolve the dispute based on the records before it and where the ends of justice would not likely be subserved by the remand thereof, to the lower Court. The Supreme Court is clothed with ample authority to review matters, even those not raised on appeal if it finds that their consideration is necessary in arriving at a just disposition of the case. ³⁶

However, petitioners' claim for the refund to them of P1,000,000.00 representing the alleged value and cost of the two-storey commercial building they constructed on subject portion of land cannot be favorably considered as no sufficient evidence was adduced to prove and establish the same.

G.R. No. 129103 September 3, 1999

CLAUDIO DELOS REYES and LYDIA DELOS REYES, petitioners,
vs.
THE HON. COURT OF APPEALS and DALUYONG GABRIEL, substituted by his heirs, namely: MARIA LUISA G. ESTEBAN, MARIA RITA G. BARTOLOME & RENATO GABRIEL, respondents.