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VOL. 325, FEBRUARY 10, 2000

385

CityLite Realty Corporation vs. Court of Appeals

*

G.R. No. 138639. February 10, 2000.

CITYLITE REALTY CORPORATION, petitioner, vs.

COURT OF APPEALS and F.P. HOLDINGS & REALTY
CORP., METRO DRUG, INC., MELDIN AL G. ROY,
VIEWMASTER CONSTRUCTION CORP., and the
REGISTER OF DEEDS OF QUEZON CITY, respondents.
Civil Law Sales Agency 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.On the issue
of whether a contract of sale was perfected between petitioner
CITYLITE and respondent F.P. HOLDINGS acting through its
agent Meldin Al G. Roy of Metro Drug, Art. 1874 of the Civil Code
provides: 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
oth
_______________
*

SECOND DIVISION.

386

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SUPREME COURT REPORTS ANNOTATED

CityLite Realty Corporation vs. Court of Appeals

erwise, the sale shall be void. Petitioner anchors the authority of

Metro Drug and Meldin Al G. Roy on (a) the testimonies of
petitioners three (3) witnesses and the admissions of Roy and the
lawyer of Metro Drug (b) the sales brochure specifying Meldin Al
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G. Roy as a contact person (c) the guard posted at the property

saying that Metro Drug was the authorized agent and, (d) the
common knowledge among brokers that Metro Drug through
Meldin Al G. Roy was the authorized agent of F.P. HOLDINGS to
sell the property.
Same Same Same The Civil Code requires that an authority
to sell a piece of land shall be in writing.The Civil Code requires
that an authority to sell a piece of land shall be in writing. The
absence of authority to sell can be determined from the written
memorandum issued by respondent F.P. HOLDINGS President
requesting Metro Drugs assistance in finding buyers for the
property. The memorandum in part stated: We will appreciate
Metro Drugs assistance in referring to us buyers for the property.
Please proceed to hold preliminary negotiations with interested
buyers and endorse formal offers to us for our final evaluation and
appraisal.
Same Same Same For lack of a written authority to sell the
Violago Property on the part of Meldin Al G. Roy and/or Metro
Drug, the sale should be as it is declared null and void.This
obviously meant that Meldin Al G. Roy and/or Metro Drug was
only to assist F.P. HOLDINGS in looking for buyers and referring
to them possible prospects whom they were supposed to endorse
to F.P. HOLDINGS. But the final evaluation, appraisal and
acceptance of the transaction could be made only by F.P.
HOLDINGS. In other words, Meldin Al G. Roy and/or Metro Drug
was only a contact person with no authority to conclude a sale of
the property. In fact, a witness for petitioner even admitted that
Roy and/or Metro Drug was a mere broker, and Roys only job was
to bring the parties together for a possible transaction.
Consequently, we hold that for lack of a written authority to sell
the Violago Property on the part of Meldin Al G. Roy and/or
Metro Drug, the sale should be as it is declared null and void.
Therefore the sale could not produce any legal effect as to transfer
the subject property from its lawful owner, F.P. HOLDINGS, to
any interested party including petitioner CITYLITE.
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VOL. 325, FEBRUARY 10, 2000

387

CityLite Realty Corporation vs. Court of Appeals

PETITION for review on certiorari of a decision of the

Court of Appeals.
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The facts are stated in the opinion of the Court.

Padilla, Villanueva, Marasigan and Associates for
petitioner.
Antonio R. Bautista for F.P. Holdings.
Romulo, Mabanta, Buenaventura, Sayoc & De los
Angeles for Metro Drug, Inc. and Meldin Al G. Roy.
Alfonso M. Cruz Law Offices for Viewmaster
Construction Corp.
BELLOSILLO, J.:
This is a petition for review on certiorari filed by
CITYLITE REALTY CORPORATION (CITYLITE) seeking
to annul1 the 20 October 1998 Decision of the Court of
Appeals which reversed the Decision of the Regional Trial
Court of Quezon City in its Civil Case No. Q9211068
declaring that a contract of sale over the subject property
was perfected and that Metro Drug Inc. and
Meldin Al G.
2
Roy had the authority to sell the property.
Private respondent F.P. HOLDINGS AND REALTY
CORPORATION (F.P. HOLDINGS), formerly the Sparta
Holdings Inc., was the registered owner of a parcel of land
situated along E. Rodriguez Avenue, Quezon City, also
known as the Violago Property or the San Lorenzo Ruiz
Commercial Center, with an area of 71,754 square meters,
more or less, and covered by Transfer Certificate of Title
No. T19599. The property was offered for sale to the
general public through the
______________
1

Decision penned by Justice Eloy R. Bello, Jr., concurred in by Justices

Salome A. Montoja and Ruben T. Reyes, 7th Div., Court of Appeals Rollo,
pp. 3452.
2

Decision penned by Judge Pedro M. Areola, RTCBr. 85, Quezon City.

388

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SUPREME COURT REPORTS ANNOTATED

CityLite Realty Corporation vs. Court of Appeals

circulation of a sales brochure containing the following

information:
A parcel of land including buildings and other
improvements thereon located along E. Rodriguez Avenue,
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Quezon City, with a total lot area of 71,754 square meters

9,192 square meters in front, 23,332 square meters in the
middle, and 39,230 square meters at the back. But the total
area for sale excludes 5,000 square meters covering the
existing chapel and adjoining areas which will be donated
to the Archdiocese of Manila thus reducing the total
saleable area to 66,754 square meters. Asking price was
P6,250.00/square meter with terms of payment negotiable.
Brokers commission was 2.0% of selling price, net of
withholding taxes and other charges. As advertised, contact
person was Meldin Al G. Roy, Metro Drug Inc., with
address at 5/F Metro House, 345 Sen. Gil Puyat Avenue,
Makati City.
The front portion consisting of 9,192 square meters is
the subject of this litigation.
On 22 August 1991 respondent Meldin Al G. Roy sent a
sales brochure, together with the location plan and copy of
the Transfer Certificate of Title No. T19599 of the Register
of Deeds of Quezon City, to Atty. Gelacio Mamaril, a
practicing lawyer and a licensed real estate broker. Atty.
Mamaril in turn passed on these documents to Antonio
Teng, Executive VicePresident, and Atty. Victor P.
Villanueva, Legal Counsel, of CITYLITE.
In a letter dated 19 September 1991 sent to Metro Drug
(ATTN: MELDIN AL ROY) after an initial meeting with
Meldin Al Roy that day, CITYLITE conveyed its interest to
purchase a portion or onehalf (1/2) of the front lot of the
Violago Property. Apparently, Roy subsequently informed
CITYLITEs representative that it would take time to
subdivide the lot and respondent F.P. HOLDINGS was not
receptive to the purchase of only half of the front lot. After
a few days, Atty. Mamaril wrote Metro Drug (ATTN:
MELDIN AL ROY) expressing CITYLITEs desire to buy
the entire front lot of the subject property instead of only
half thereof provided the asking price of P6,250.00/square
meter was reduced
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CityLite Realty Corporation vs. Court of Appeals

and that payment be in installment for a certain period.

Roy made a counter offer dated 25 September 1991 as
follows:
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Dear Atty. Mamaril,

This has reference to your letter dated September
24, 1991 in connection with the interest of your clients,
Mr. Antonio Teng/CityLite Realty Corporation and/or
any of their subsidiaries to buy a portion of the Violago
Property fronting E. Rodriguez Sr. Avenue with an
area of 9,192 square meters.
We are pleased to inform you that we are prepared
to consider the above offer subject to the following
major terms and conditions: 1. The price shall be
P6,250.00/square meter or a total of P57,450,000.00 2.
The above purchase price shall be paid to the owner as
follows: (a) P15.0 Million downpayment (b) balance
payable within six (6) months from date of
downpayment without interest. Should your client find
the above major terms and conditions acceptable,
please advise us in writing by tomorrow, September
26, 1991, so that we can start formal discussions on the
matter x x x x
Very truly yours,
MELDIN AL G. ROY
On 26 September 1991 CITYLITEs officers and Atty.
Mamaril met with Roy at the Manila Mandarin Hotel in
Makati to consummate the transaction. After some
discussions, the parties finally reached an agreement and
Roy agreed to sell the property to CITYLITE provided only
that the latter submit its acceptance in writing to the terms
and conditions of the sale as contained in his letter of 25
September 1991. Later that afternoon after meeting with
Roy at the Manila Mandarin Hotel, Atty. Mamaril and
Antonio Teng of CITYLITE conveyed their formal
acceptance of the terms and conditions set forth by Roy in
separate letters both dated 26 September 1991.
However, for some reason or another and despite
demand, respondent F.P. HOLDINGS refused to execute
the corresponding deed of sale in favor of CITYLITE of the
front lot of the property. Upon its claim of protecting its
interest as vendee of the property in suit, CITYLITE
registered an ad
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verse claim to the title of the property with the Register of

Deeds of Quezon City which was annotated in the
Memorandum of Encumbrance of Transfer Certificate of
Title No. T19599 under Entry No. PE1001 dated 27
September 1991.
On 30 September 1991 CITYLITEs counsel demanded
in writing that Metro Drug (ATTN: MELDIN AL G. ROY)
comply with its commitment to CITYLITE by executing
the proper deed of conveyance of the property under pain of
court action. On 4 October 1991 F.P. HOLDINGS filed a
petition for the cancellation of the adverse claim against
CITYLITE with the Regional Trial Court of Quezon City,
docketed as LRC Case No. 9110257, which was raffled to
Br. 84.
On 8 October 1991 Edwin Fernandez, President of F.P.
HOLDINGS, in a move to amicably settle with CITYLITE,
met with the latters officers during which he offered
properties located in Caloocan City and in Quezon
Boulevard, Quezon City, as substitute for the property, but
CITYLITE refused the offer because it did not suit its
business needs. With the filing of the petition of F.P.
HOLDINGS for the cancellation of the adverse claim,
CITYLITE caused the annotation of the first notice of lis
pendens which was recorded in the title of the property
under Entry No. 4605.
On 2 December 1991 the RTCBr. 84 of Quezon City
dismissed F. P. HOLDINGS petition declaring that CITY
LITEs adverse claim had factual basis and was not sham
and frivolous. Meanwhile, F.P. HOLDINGS caused the
resurvey and segregation of the property and asked the
Register of Deeds of Quezon City to issue separate titles
which the latter did on 17 January 1992 by issuing
Transfer Certificate of Title No. T51671.
Following the dismissal of F.P. HOLDINGS petition for
the cancellation of the adverse claim, CITYLITE instituted
a complaint against F.P. HOLDINGS originally for specific
performance and damages and caused the annotation of the
second notice of lis pendens on the new certificate of title.
After the annotation of the second lis pendens, the property
was
transferred
to
defendant
VIEWMASTER
CONSTRUCTION CORP. (VIEWMASTER) for which
Transfer Certificate of
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VOL. 325, FEBRUARY 10, 2000

391

CityLite Realty Corporation vs. Court of Appeals

Title No. T52398 was issued. However the notice of lis

pendens was carried over and annotated on the new
certificate of title.
In view of the conveyance during the pendency of the
suit, the original complaint for specific performance and
damages was amended with leave of court to implead
VIEWMASTER as a necessary party and the Register of
Deeds of Quezon City as nominal defendant with the
additional prayer for the cancellation of VIEWMASTERs
certificate of title. The case was thereafter raffled to Br. 85
of the Regional Trial Court of Quezon City.
On 4 October 1995 the court a quo rendered its decision
in favor of CITYLITE ordering F.P. HOLDINGS to execute
a deed of sale of the property in favor of CITYLITE for the
total consideration of P55,056,250.00 payable as follows:
P15 Million as downpayment to be payable immediately
upon execution of the deed of sale and the balance within
six (6) months from downpayment, without interest. The
court also directed the Register of Deeds of Quezon City to
cancel Transfer Certificate of Title No. T52398 or any
subsequent title it had issued affecting the subject
property, and to issue a new one in the name of CITYLITE
upon the presentation of the deed of sale and other
requirements for the transfer. It likewise ordered the
defendants, except VIEWMASTER and the Register of
Deeds of Quezon City, to pay CITYLITE jointly and
severally P800,000.00 by way of nominal damages,
P250,000.00 for attorneys fees, and to pay the costs.
On 30 October 1995 VIEWMASTER filed a motion for
reconsideration of the decision of the lower court
questioning its ruling that a perfected contract of sale
existed between CITYLITE and F.P. HOLDINGS as there
was no definite agreement over the manner of payment of
the purchase price, citing in 3support thereof Toyota Shaw
Inc. v. Court of Appeals . However the motion for
reconsideration was denied.
_______________
3

G.R. No. 116650, 23 May 1995, 244 SCRA 320.

392

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CityLite Realty Corporation vs. Court of Appeals

In the challenged Decision of 20 October 1998 the Court of

Appeals reversed and set aside the judgment of the
Regional Trial Court of Quezon City. On 10 May 1999 the
Court of Appeals denied CITYLITEs motion to reconsider
its decision.
Petitioner CITYLITE is now before us assailing the
Court of Appeals for declaring that no contract of sale was
perfected between it and respondent F.P. HOLDINGS
because of lack of a definite agreement on the manner of
paying the purchase price and that respondents Metro
Drug and Meldin Al G. Roy were not authorized to sell the
property to CITYLITE, and that the authority of Roy was
only limited to that of a mere liaison or contact person.
We cannot sustain petitioner. On the issue of whether a
contract of sale was perfected between petitioner CITY
LITE and respondent F.P. HOLDINGS acting through its
agent Meldin Al G. Roy of Metro Drug, Art. 1874 of the
Civil Code provides: 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.
Petitioner anchors the authority of Metro Drug and Meldin
Al G. Roy on (a) the testimonies of petitioners three (3)
witnesses and the admissions of Roy and the lawyer of
Metro Drug (b) the sales brochure specifying Meldin Al G.
Roy as a contact person (c) the guard posted at the
property saying that Metro Drug was the authorized agent
and, (d) the common knowledge among brokers that Metro
Drug through Meldin Al G. Roy was the authorized agent
of F.P. HOLDINGS to sell the property. However, and more
importantly, the Civil Code requires that an authority to
sell a piece of land shall be in writing. The absence of
authority to sell can be determined from the written
memorandum issued by respondent F.P. HOLDINGS
President requesting Metro Drugs assistance in finding
buyers for the property. The memorandum in part stated:
We will appreciate Metro Drugs assistance in referring to
us buyers for the property. Please proceed to hold
preliminary negotiations with interested buyers and
endorse formal offers to us for our final evaluation and
appraisal. This obviously meant that Meldin Al G. Roy
and/or Metro Drug was only to
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CityLite Realty Corporation vs. Court of Appeals

assist F.P. HOLDINGS in looking for buyers and referring

to them possible prospects whom they were supposed to
endorse to F.P. HOLDINGS. But the final evaluation,
appraisal and acceptance of the transaction could be made
only by F.P. HOLDINGS. In other words, Meldin Al G. Roy
and/or Metro Drug was only a contact person with no
authority to conclude a sale of the property. In fact, a
witness for petitioner even4 admitted that Roy and/or Metro
Drug was a mere broker, and Roys only job was to bring5
the parties together for a possible transaction.
Consequently, we hold that for lack of a written authority
to sell the Violago Property on the part of Meldin Al G.
Roy and/or Metro Drug, the sale should be as it is declared
null and void. Therefore the sale could not produce any
legal effect as to transfer the subject property from its
lawful owner, F.P. HOLDINGS, to any interested party
including petitioner CITYLITE.
WHEREFORE, the appealed Decision of the Court of
Appeals being in accord with law and the evidence is
AFFIRMED. Costs against petitioner CITYLITE REALTY
CORPORATION.
SO ORDERED.
Mendoza, Quisumbing, Buena and De Leon, Jr., JJ.,
concur.
Judgment affirmed.
Note.For the validity of a sale involving land, the
agent should have an authorization in writing. (Raet vs.
Court of Appeals, 295 SCRA 677 [1998])
o0o
______________
4

TSN, 10 March 1994, pp. 2931.

Paras, Civil Code of the Philippines Annotated, Vol. V, p. 634, citing

Pac. Com. Co v. Yatco, 68 Phil. 398.

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