G.R. No. L-10881, September 30, 1958
Padilla, J:

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.

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.

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

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.

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