SECOND DIVISION

[G.R. No. 174978. July 31, 2013.]

SALLY YOSHIZAKI, petitioner, vs. JOY TRAINING CENTER OF
AURORA, INC., respondent.

DECISION

BRION, J :
p

We resolve the petition for review on certiorari 1 filed by petitioner Sally Yoshizaki
to challenge the February 14, 2006 Decision 2 and the October 3, 2006
Resolution 3 of the Court of Appeals (CA) in CA-G.R. CV No. 83773.
The Factual Antecedents
Respondent Joy Training Center of Aurora, Inc. (Joy Training) is a non-stock,
non-profit religious educational institution. It was the registered owner of a parcel
of land and the building thereon (real properties) located in San Luis Extension,
Purok No. 1, Barangay Buhangin, Baler, Aurora. The parcel of land was
designated as Lot No. 125-L and was covered by Transfer Certificate of
Title (TCT) No. T-25334. 4
On November 10, 1998, the spouses Richard and Linda Johnson sold the real
properties, a Wrangler jeep, and other personal properties in favor of the spouses
Sally and Yoshio Yoshizaki. On the same date, a Deed of Absolute Sale 5 and a
Deed of Sale of Motor Vehicle 6 were executed in favor of the spouses Yoshizaki.
The spouses Johnson were members of Joy Training's board of trustees at the
time of sale. On December 7, 1998, TCT No. T-25334 was cancelled and TCT
No. T-26052 7 was issued in the name of the spouses Yoshizaki.

On December 8, 1998, Joy Training, represented by its Acting Chairperson

Reuben V. Rubio, filed an action for the Cancellation of Sales and Damages with
prayer for the issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction against the spouses Yoshizaki and the spouses Johnson
before the Regional Trial Court of Baler, Aurora (RTC). 8 On January 4, 1999, Joy
Training filed a Motion to Amend Complaint with the attached Amended
Complaint. The amended complaint impleaded Cecilia A. Abordo, officer-incharge of the Register of Deeds of Baler, Aurora, as additional defendant. The
RTC granted the motion on the same date. 9

cEaDTA

In the complaint, Joy Training alleged that the spouses Johnson sold its
properties without the requisite authority from the board of directors.
the validity of a board resolution dated September 1, 1998

11

10

It assailed

which purportedly

granted the spouses Johnson the authority to sell its real properties. It averred
that only a minority of the board, composed of the spouses Johnson and
Alexander Abadayan, authorized the sale through the resolution. It highlighted
that the Articles of Incorporation provides that the board of trustees consists of
seven members, namely: the spouses Johnson, Reuben, Carmencita Isip,
Dominador Isip, Miraflor Bolante, and Abelardo Aquino.

12

Cecilia and the spouses Johnson were declared in default for their failure to file
an Answer within the reglementary period. 13 On the other hand, the spouses
Yoshizaki filed their Answer with Compulsory Counterclaims on June 23, 1999.
They claimed that Joy Training authorized the spouses Johnson to sell the parcel
of land. They asserted that a majority of the board of trustees approved the
resolution. They maintained that the actual members of the board of trustees
consist of five members, namely: the spouses Johnson, Reuben, Alexander, and
Abelardo. Moreover, Connie Dayot, the corporate secretary, issued acertification
dated February 20, 1998 14 authorizing the spouses Johnson to act on Joy
Training's behalf. Furthermore, they highlighted that the Wrangler jeep and other
personal

properties

were

registered

in

the

name

of

the

spouses

Johnson. 15 Lastly, they assailed the RTC's jurisdiction over the case. They

posited that the case is an intra-corporate dispute cognizable by the Securities

and Exchange Commission (SEC). 16

cADEIa

After the presentation of their testimonial evidence, the spouses Yoshizaki

formally offered in evidence photocopies of the resolution and certification,
among others. 17 Joy Training objected to the formal offer of the photocopied
resolution and certification on the ground that they were not the best evidence of
their contents. 18 In an Order 19 dated May 18, 2004, the RTC denied the
admission of the offered copies.
The RTC Ruling
The RTC ruled in favor of the spouses Yoshizaki. It found that Joy Training owned
the real properties. However, it held that the sale was valid because Joy Training
authorized the spouses Johnson to sell the real properties. It recognized that
there were only five actual members of the board of trustees; consequently, a
majority of the board of trustees validly authorized the sale. It also ruled that the
sale of personal properties was valid because they were registered in the
spouses Johnson's name. 20

DaHSIT

Joy Training appealed the RTC decision to the CA.

The CA Ruling
The CA upheld the RTC's jurisdiction over the case but reversed its ruling with
respect to the sale of real properties. It maintained that the present action is
cognizable by the RTC because it involves recovery of ownership from third
parties.
It also ruled that the resolution is void because it was not approved by a majority
of the board of trustees. It stated that under Section 25 of the Corporation Code,
the basis for determining the composition of the board of trustees is the list fixed
in the articles of incorporation. Furthermore, Section 23 of the Corporation Code
provides that the board of trustees shall hold office for one year and until their
successors are elected and qualified. Seven trustees constitute the board since
Joy Training did not hold an election after its incorporation.

The CA did not also give any probative value to the certification. It stated that the
certification failed to indicate the date and the names of the trustees present in
the meeting. Moreover, the spouses Yoshizaki did not present the minutes that
would prove that the certification had been issued pursuant to a board
resolution. 21 The CA also denied 22 the spouses Yoshizaki's motion for
reconsideration, prompting Sally 23 to file the present petition.
The Petition
Sally avers that the RTC has no jurisdiction over the case. She points out that the
complaint was principally for the nullification of a corporate act. The transfer of
the SEC's original and exclusive jurisdiction to the RTC

24

does not have any

retroactive application because jurisdiction is a substantive matter.

She argues that the spouses Johnson were authorized to sell the parcel of land
and that she was a buyer in good faith because she merely relied on TCT No. T25334. The title states that the spouses Johnson are Joy Training's
representatives.

EDIHSC

She also argues that it is a basic principle that a party dealing with a registered
land need not go beyond the certificate of title to determine the condition of the
property. In fact, the resolution and the certification are mere reiterations of the
spouses Johnson's authority in the title to sell the real properties. She further
claims that the resolution and the certification are not even necessary to clothe
the spouses Johnson with the authority to sell the disputed properties.
Furthermore, the contract of agency was subsisting at the time of sale because
Section 108 of Presidential Decree No. (PD) 1529 requires that the revocation of
authority must be approved by a court of competent jurisdiction and no revocation
was reflected in the certificate of title. 25
The Case for the Respondent
In its Comment 26 and Memorandum, 27 Joy Training takes the opposite view that
the RTC has jurisdiction over the case. It posits that the action is essentially for
recovery of property and is therefore a case cognizable by the RTC. Furthermore,

Sally is estopped from questioning the RTC's jurisdiction because she seeks to
reinstate the RTC ruling in the present case.
Joy Training maintains that it did not authorize the spouses Johnson to sell its
real properties. TCT No. T-25334 does not specifically grant the authority to sell
the parcel of land to the spouses Johnson. It further asserts that the resolution
and the certification should not be given any probative value because they were
not admitted in evidence by the RTC. It argues that the resolution is void for
failure to comply with the voting requirements under Section 40 of the
Corporation Code. It also posits that the certification is void because it lacks
material particulars.
The Issues
The case comes to us with the following issues:

aSCDcH

1)Whether or not the RTC has jurisdiction over the present case;
and
2)Whether or not there was a contract of agency to sell the real
properties between Joy Training and the spouses Johnson.
3)As a consequence of the second issue, whether or not there was
a valid contract of sale of the real properties between Joy
Training and the spouses Yoshizaki.
Our Ruling
We find the petition unmeritorious.
The

RTC

disputes

has
concerning

jurisdiction
the

over
application

of the Civil Code

Jurisdiction over the subject matter is the power to hear and determine cases of
the general class to which the proceedings before a court belong.

28

It is

conferred by law. The allegations in the complaint and the status or relationship
of the parties determine which court has jurisdiction over the nature of an

action. 29 The same test applies in ascertaining whether a case involves an intracorporate controversy. 30
The CA correctly ruled that the RTC has jurisdiction over the present case. Joy
Training seeks to nullify the sale of the real properties on the ground that there
was no contract of agency between Joy Training and the spouses Johnson. This
was beyond the ambit of the SEC's original and exclusive jurisdiction prior to the
enactment of Republic Act No. 8799 which only took effect on August 3, 2000.
The determination of the existence of a contract of agency and the validity of a
contract of sale requires the application of the relevant provisions of the Civil
Code. It is a well-settled rule that "[d]isputes concerning the application of the
Civil Code are properly cognizable by courts of general jurisdiction."

31

Indeed, no

special skill requiring the SEC's technical expertise is necessary for the
disposition of this issue and of this case.
The

Supreme

questions

of

review
findings

IDTcHa

Court
fact

on
of

may

in

petition

certiorari
fact

by

review

when
the

lower

for
the
courts

are conflicting
We are aware that the issues at hand require us to review the pieces of evidence
presented by the parties before the lower courts. As a general rule, a petition for
review on certiorari precludes this Court from entertaining factual issues; we are
not duty-bound to analyze again and weigh the evidence introduced in and
considered by the lower courts. However, the present case falls under the
recognized exception that a review of the facts is warranted when the findings of
the lower courts are conflicting. 32 Accordingly, we will examine the relevant
pieces of evidence presented to the lower court.
There

is

no

between

Joy

spouses

Johnson

land with its improvements

contract

of

Training
to

sell

agency

and
the

parcel

the
of

Article 1868 of the Civil Code defines a contract of agency as a contract whereby
a person "binds himself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the latter."
It may be express, or implied from the acts of the principal, from his silence or
lack of action, or his failure to repudiate the agency, knowing that another person
is acting on his behalf without authority.
As a general rule, a contract of agency may be oral. However, it must be written
when the law requires a specific form.

33

Specifically, Article 1874 of the Civil

Code provides that the contract of agency must be written for the validity of the
sale of a piece of land or any interest therein. Otherwise, the sale shall be void. A
related provision, Article 1878 of the Civil Code, states that special powers of
attorney are necessary to convey real rights over immovable properties.

TSAHIa

The special power of attorney mandated by law must be one that expressly
mentions a sale or that includes a sale as a necessary ingredient of the
authorized act. We unequivocably declared in Cosmic Lumber Corporation v.
Court of Appeals 34 that a special power of attorney must express the powers
of the agent in clear and unmistakable language for the principal to confer the
right upon an agent to sell real estate. When there is any reasonable doubt that
the language so used conveys such power, no such construction shall be given
the document. The purpose of the law in requiring a special power of attorney in
the disposition of immovable property is to protect the interest of an unsuspecting
owner from being prejudiced by the unwarranted act of another and to caution the
buyer to assure himself of the specific authorization of the putative agent.

35

In the present case, Sally presents three pieces of evidence which allegedly
prove that Joy Training specially authorized the spouses Johnson to sell the real
properties: (1) TCT No. T-25334, (2) the resolution, (3) and the certification.
We quote the pertinent portions of these documents for a thorough examination
of Sally's claim. TCT No. T-25334, entered in the Registry of Deeds on March 5,
1998, states:

A parcel of land . . . is registered in accordance with the provisions of

the Property Registration Decree in the name of JOY TRAINING
CENTER OF AURORA, INC., Rep. by Sps. RICHARD A. JOHNSON
and LINDA S. JOHNSON, both of legal age, U.S. Citizen, and
residents of P.O. Box 3246, Shawnee, Ks 66203, U.S.A.

36

(emphasis

ours)
On the other hand, the fifth paragraph of the certification provides:

acCDSH

Further, Richard A. and Linda J[.] Johnson were given FULL

AUTHORITY for ALL SIGNATORY purposes for the corporation on
ANY and all matters and decisions regarding the property and
ministry here. They will follow guidelines set forth according to their
appointment and ministerial and missionary training and in that, they will
formulate and come up with by-laws which will address and serve as
governing papers over the center and corporation. They are to issue
monthly

and

quarterly

statements

to

all

members

of

the

corporation. 37 (emphasis ours)

The resolution states:

We, the undersigned Board of Trustees (in majority) have authorized
the sale of land and building owned by spouses Richard A. and
Linda J[.] Johnson(as described in the title SN No. 5102156 filed with
the Province of Aurora last 5th day of March 1998. These proceeds are
going to pay outstanding loans against the project and the dissolution of
the corporation shall follow the sale. This is a religious, non-profit
corporation and no profits or stocks are issued.38 (emphasis ours)

The above documents do not convince us of the existence of the contract of

agency to sell the real properties. TCT No. T-25334 merely states that Joy
Training is represented by the spouses Johnson. The title does not explicitly
confer to the spouses Johnson the authority to sell the parcel of land and the
building thereon. Moreover, the phrase "Rep. by Sps. RICHARD A. JOHNSON

and LINDA S. JOHNSON" 39 only means that the spouses Johnson represented
Joy Training in land registration.
The lower courts should not have relied on the resolution and the certification in
resolving the case. The spouses Yoshizaki did not produce the original
documents during trial. They also failed to show that the production of pieces of
secondary evidence falls under the exceptions enumerated in Section 3, Rule
130 of the Rules of Court.

40

Thus, the general rule that no evidence shall be

admissible other than the original document itself when the subject of inquiry is
the contents of a document applies. 41

TEDAHI

Nonetheless, if only to erase doubts on the issues surrounding this case, we

declare that even if we consider the photocopied resolution and certification, this
Court will still arrive at the same conclusion.
The resolution which purportedly grants the spouses Johnson a special power of
attorney is negated by the phrase "land and building owned by spouses
Richard A. and Linda J[.] Johnson." 42 Even if we disregard such phrase, the
resolution must be given scant consideration. We adhere to the CA's position that
the basis for determining the board of trustees' composition is the trustees as
fixed in the articles of incorporation and not the actual members of the board. The
second paragraph of Section 25 43 of the Corporation Code expressly provides
that a majority of the number of trustees as fixed in the articles of
incorporation shall constitute a quorum for the transaction of corporate
business.
Moreover, the certification is a mere general power of attorney which comprises
all of Joy Training's business.
"[a]n

agency

couched

44

in

Article 1877 of the Civil Code clearly states that

general

terms

comprises

only

acts

of

administration, even if the principal should state that he withholds no power

or that the agent may execute such acts as he may consider appropriate, or
even though the agency should authorize a general and unlimited
management." 45
The contract of sale is unenforceable

Necessarily, the absence of a contract of agency renders the contract of sale

unenforceable; 46 Joy Training effectively did not enter into a valid contract of sale
with the spouses Yoshizaki. Sally cannot also claim that she was a buyer in good
faith. She misapprehended the rule that persons dealing with a registered land
have the legal right to rely on the face of the title and to dispense with the need to
inquire further, except when the party concerned has actual knowledge of facts
and circumstances that would impel a reasonably cautious man to make such
inquiry. 47 This rule applies when the ownership of a parcel of land is
disputed and not when the fact of agency is contested.

ESDHCa

At this point, we reiterate the established principle that persons dealing with an
agent must ascertain not only the fact of agency, but also the nature and extent of
the agent's authority. 48 A third person with whom the agent wishes to contract on
behalf of the principal may require the presentation of the power of attorney, or
the instructions as regards the agency. 49 The basis for agency is representation
and a person dealing with an agent is put upon inquiry and must discover on his
own peril the authority of the agent.

50

Thus, Sally bought the real properties at

her own risk; she bears the risk of injury occasioned by her transaction with the
spouses Johnson.
WHEREFORE, premises considered, the assailed Decision dated February 14,
2006 and Resolution dated October 3, 2006 of the Court of Appeals are
herebyAFFIRMED and the petition is hereby DENIED for lack of merit.
SO ORDERED.
|||

(Yoshizaki v. Joy Training Center of Aurora, Inc., G.R. No. 174978, July 31,

2013)