Eulogio del Rosario, et. al. vs.

Abad and Abad (104 Phil 648)

FACTS:

Within the prohibitive period of five years, homesteader, Tiburcio del Rosario
mortgaged the property by obtaining a loan from Primitivo Abad in the sum of
P2,000 with interest at the rate of 12% per annum. Tiburcio executed an
“irrevocable special power of attorney coupled with interest” in favor of
the mortgagee, authorizing him to sell and convey the parcel of land.
However, he died in December 1945 leaving the debt unpaid.

Mortgagee, Primitivo Abad, acting as attorney-in-fact of Del rosario sold

the parcel of land to his son Teodorico Abad in consideration of the tokensum
of P1.00 and the payment of the mortgage debt of the late Tiburcio. Teodorico
took possession of the land, cancelled the original certificate of title and
registered the land under his name in a TCT.Furthermore, The heirs of Del
Rosario filed this case to recover the possession and ownership of the parcel
of land, damages, etc. which the lower court ruled for the heirs.

ISSUE:
1) WON the mortgage executed was valid?
2) WON the power of attorney executed by Del Rosario was coupled with
interest that will not terminate the agency upon the death of the principal?

HELD:
1) Yes. The mortgage on the improvements of the parcel of land executed
by del Rosario is valid as provided for in the Public Land Act.
What is prohibited is the encumbrance or alienation of lands acquired by
free patent or homestead.

2.) No. The power of attorney executed by del Rosario in favor of

Primitivo Abad providing, among others, that “it is coupled with an interest
in the subject matter thereof and are therefore irrevocable, and conferring
upon my said attorney full and ample power and authority to do and perform
all things reasonably necessary and proper for the due carrying out of the said
powers according to the true tenor and purport of the same” does not create
an agency coupled with an interest nor does it clothe the agency with an
irrevocable character.

A mere statement in the power of attorney that it is coupled with interest is not
enough. In what does such interest consist must be stated in the power of
attorney. The fact that Tiburcio had mortgaged the improvements of the parcel
of land to Abad, the agent is not such an interest as could render
irrevocable the power of attorney executed by the principal in favor of the
agent. As the agency was not coupled with interest, it was terminated upon
the death of del Reosario,and Primitivo Abad, the agent could no longer
validly convey the parcel of land to Teodorico Abad. Hence, the sale was
null and void.