Cosmic Lumber Corporation v. Court of Appeals

Summary

Cosmic Lumber Corporation appointed Paz G. Villamil-Estrada as attorney-in-fact to file ejectment cases against squatters. Without authority, Villamil-Estrada entered into a compromise agreement selling 333 square meters of corporate property to defendant Isidro Perez for P26,640.00. The Regional Trial Court approved this compromise, but Cosmic Lumber only discovered it years later when Perez sought to revive the judgment. The Supreme Court held that the attorney-in-fact lacked specific written authority to sell real property as required by the Civil Code, rendering the compromise agreement and resulting judgment void ab initio. The Court also found extrinsic fraud since the agent concealed the transaction from her principal. The decision established important precedents on agency authority requirements for real estate transactions and grounds for annulment of judgments based on void compromise agreements.