Rallos vs. Felix Go Chan - Sons Realty Corp.

(2) Rallos vs. Felix Go Chan & Sons Realty Corp.
18 SCRA 251
DOCTRINE: Agency is extinguished by the death of the principal or the agent, subject
to the exception in Article 1930 and 1931. Under Article 1931, an act done by the agent
after the death of his principal is valid and effective only under two conditions, viz:
(1) that the agent acted without knowledge of the death of the principal and (2) that the
third person who contracted with the agent himself acted in good faith . Good faith here
means that the third person was not aware of the death of the principal at the time he
contracted with said agent.
STATEMENT OF FACTS:
1. Concepcion and Gerundia are both surnamed Rallos. They were sisters and they
registered as co-owners a parcel of land. Later on, they executed a special
power of attorney in favor of their brother, Simeon, authorizing him to sell for and
in their behald the parcel of land. Concepcion died and Simeon sold the
undivided shares of both his sisters to Felix Go Chan & Sons Realty Corporation.
2. Ramon, as administrator of the Intestate Estate of Concepcion filed a complaint
arguing that the sale of the undivided share of the deceased is unenforceable
and that said share should be reconveyed to her estate; and that the Certificate
of title in the name of ‘Felix Go Chan & Sons Realty Corporation’ be cancelled
and another title be issued in the names of the corporation and the ‘Intestate
estate of Concepcion Rallos’. The trial court granted the petition.
3. Felix Go Chan & Sons Realty Corporation appealed and resolved it in their favor.
Ramon moved to reconsider but the same was denied.
STATEMENT OF ISSUE: Whether the sale of the undivided share of Concepcion is

valid although it was executed by the agent (Simeon) after the death of his principal
(Concepcion)
DECISION: No. It is a basic axiom in civil law embodied in our Civil Code that no one
may contract in the name of another without being authorized by the latter, or unless he
has by law a right to represent him. A contract entered into in the name of another by
one who has no authority or the legal representation or who has acted beyond his
powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the
person on whose behalf it has been executed, before it is revoked by the other
contracting party. This is also provided for in Article 1403 of the Civil Code.
It thus sprung the creation and acceptance of the relationship of agency whereby
the principal authorized the agent to act for and in his behalf in transactions with third
persons. The essential elements of agency are: (1) there is consent, express or implied
of the parties to establish the relationship; (2) the object is the execution of a juridical
act in relation to a third person; (3) the agents acts as a representative and not for
himself, and (4) the agent acts within the scope of his authority. The authority of the
agent to act emanates from the powers granted to him by his principal; his act is the act
of the principal if done within the scope of the authority.
However, under Article 1919 paragraph 3 of the Civil Code, agency is
extinguished by the death of the principal or the agent, subject to the exception in Article
1930 and 1931. In this case, Article 1931 is the provision relevant. Under this provision,
an act done by the agent after the death of his principal is valid and effective only under
two conditions, viz: (1) that the agent acted without knowledge of the death of the
principal and (2) that the third person who contracted with the agent himself acted in
good faith. Good faith here means that the third person was not aware of the death of
the principal at the time he contracted with said agent. These two requisites must
concur.
In the instant case, it cannot be questioned that the agent, Simeon Rallos, knew
of the death of his principal at the time he sold the parcel of land. Thus, the exception
laid in Article 1931 cannot be applicable in this case.

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(2) Rallos vs. Felix Go Chan & Sons Realty Corp.

STATEMENT OF ISSUE: Whether the sale of the undivided share of Concepcion is

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