Chua vs The Intermediate Appellate Court

G.R. No. 70909. January 5, 1994

FACTS:

Herrera executed a Contract of Lease in favor of  Tian On, whereby the former leased to the latter lots located in Cebu City for a term of 10 years, renewable for another 5 years. The contract contains a stipulation giving the lessee an option to buy the he leased property after the lease period as long as the lessee faithfully fulfills the terms and conditions of their contract

Tian On erected a residential house on the leased property. Within 4 years from the execution of the said contract of lease, Tian On sold the residential house and assign all the rights as a lessee to Chua Bok with the consent of Herrera.

When the Original Contract of lease expired, Chua Bok and Herrera, through her alleged attorney-in-fact executed another Contract of Lease. After the expiration of the contract of lease in question, the successor of Chua Bok continued the possession of the premises.

Herrera through her attorney-in-fact, Mrs. Luz Tormis, who was authorized with a special power of attorney, sold the lots in question to defendants-spouses, Vicente and Victoria Go.

Successors of Chua Bok filed a case seeking the annulment of the sale, alleging that the conveyance was in violation of their right of option to buy the leased premises as provided in the Contract of Lease.

RTC dismissed the complaint and ordered the complainants to vacate the lot. The CA affirmed the decision.

ISSUE:

Whether or not the contract of lease entered into by and between Chua Bok and Vicenta R. de Reynes, as attorney-in-fact of respondent Herrera is void

HELD:

Yes, the contract of lease is void because the contract was entered by the agent of lessor without special power of attorney.

Under Article 1878 of the New Civil Code, in pertinent part, provides that special power of attorney is necessary in the case “(8) To lease any real property to another person for than one year.”

In the case, the lease contract involves the lease of real property for a period of more than one year. The contract was entered into by the agent of the lessor and not the lessor herself. In such a case, the law requires that the agent be armed with a special power of attorney to lease the premises.

DISPOSITIVE PORTION:

WHEREFORE, the petition is DENIED..