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Villa Garcia vs Bosque

Rosa Villa, widow of Enrique Bota instituted in the Court of First Instance of Manila filed a suit for the
recovery against the defendants Guillermo Garcia Bosque, Ruiz, R.G. France and F.H. Goulette.
It was alleged that the plaintiff was entitled from the sale of a printing establishment and bookstore
located at 89 Escolta, Manila. Acting through her attorney-in-fact, Manuel Pirretas y Monros. The trial
judge ruled in favor of the plaintiffs.
On appeal, it was found that Villa, owner of La For de Catalua (the said establishment) resided in
Barcelona, Spain since September 17, 1909 and its through Atty. Pirretas that the act of selling was
executed to the defendants Garcia Bosque and Ruiz with the following stipulations:
Php 15,000.00 to be paid on November 1,
Php 10,000.00 when the purchasers to take possession;
Php 15,000.00 at two years; and
Php 15,000.00 after 3 years
A total of Php 55,000.00 was the stipulated sum and if the sale was by installments, there would be an
interest of 7% per annum. In the same document France and Goulette obligated themselves as solidary
In 1920, Atty. Pirretas executed a document in January 22, 1920 purporting a substitution of agency to
Figueras Hermanos a mercantile entity transferring his legal representation and power conferred by
Villa. When the second installment comes, the purchasers negotiated with Alfredo Rocha, of Figueras
Hermanos, payment of Php 5,800.00 and 5 promissory notes payable when agreed upon.
However these notes were not paid promptly at maturity. Further, Garcia Bosque converted the business
establishment into a limited partnership and then to a corporation Bota Printing Company. Figueras
entered into an agreement reciting that Garcia Bosque was indebted to Villa in the amount of Php
attorney in fact Figuerras novated the debt of some of the purchasers).
Whether or not the act of Figueras as substitute agent of Atty. Pirretas was correct?
NO. The act of substitution conferred no authority. The Court ruled that there is nothing here that can be
construed to authorize Figueras to discharge any of the debtors without payment or to novate the contract
by which their obligation is created.
Where the terms of the power granted to the substituted attorney-in-fact was to the end that the principal-
seller may be able to collect the balance of the selling price of the printing establishment sold, such
substitute agent had no power to enter into new sales arrangements with the buyer, or to novate the terms
of the original sale.

Aznar vs Norris
Don Felix Fanlo presented to the Supreme Court a petition in which he alleged that a judgment for the
defendant was rendered by the Court of First Instance of Capiz, in a suit in which the petitioner was
plaintiff and one Rodriguez defendant;
that the petitioner received notice of the decision in the city of Manila the 18th of March, 1903; that on
the 25th of the same month a written notice of his exception to the said decision was mailed to the clerk
of the Court of First Instance of Capiz through the office of the clerk of the Court of Manila;
that on the 2d day of April, 1903, a draft of a bill of exceptions was mailed to the clerk of the Court of
First Instance of Capiz, which was duly received by the judge of the said court, who refused to allow or
sign the same.
Upon these facts the petitioner prayed that a writ of mandamus issue, in accordance with the provisions of
section 499 of the Code of Civil Procedure, requiring the respondent judge to state his reasons for
refusing to allow and sign the said bill of exceptions.
The public respondent alleged that certain documents presented as evidence at the trial in the Court of
First Instance were admitted without objection on the part of the petitioner.
The fact that the petitioner did not take any exceptions in the course of the trial is no obstacle to this
An exception to the final decision, although it may be only exception taken in the course of the trial, as in
present case, is sufficient to authorize the removal of the case by bill of exceptions to this court, provided
that the exception is taken as in this case within the period and in the manner prescribed by the law. The
contention of the respondent upon this point can not, therefore, be supported.
Nor can we assent to his contention with respect to the supposed lack of capacity on the part of the
attorney, Don Alfredo Chicote, to represent the petitioner at the trial. He was the petitioner's
attorney from the beginning, as appears from the complaint signed by him, and it does not appear
that the plaintiff has withdrawn from Seor Chicote his authority to continue to represent him in
the case.
The intervention in the case of the attorney, Don Jose Gay, does not in itself necessarily imply such a
result, because there is nothing to indicate that he did not act with Mr. Chicote by delegation from him, as
was stated at the hearing. At all events the utmost that could be said, even giving the utmost possible
scope to the supposition of the respondent, would be that the plaintiff reemployed Seor Chicote after
having employed Mr. Gay, and this the petitioner was certainly fully entitled to do under the law. Upon
this supposition there would be no ground for questioning Mr. Chicote's authority.
An attempt was made to serve notice of the decision upon this person and he refused to accept the notice,
stating that although he was as attorney in fact of Don Felix Fanlo, he believed he had no authority to
represent him in the case, as Seor Fanlo's lawyers were those who represented him, and that any notice
to be given should be given to them. From this answer it clearly appears that Don Vicente Alonso,
although he had a power of attorney from the petitioner, had not appeared for him and did not
desire to appear in the trial. This being so, it is obvious that he could not be obliged to receive a
notification against his will, nor was he the person called upon to except to the judgment, notice of
which it was improperly attempted to serve upon him.
In the present case the petitioner made no motion for a new trial, and consequently is not entitled to
conclude in his bill of exceptions the evidence taken at the trial, either oral or documentary. The court
could not review them, as has been stated, and therefore it would be entirely useless to bring them here.
Rural Bank of Caloocan vs CA
Maxima Castro, accompanied by Valencia, went to the Rural Bank of Caloocan to apply for a loan.
Valencia arranged everything about the loan with the bank. He supplied to the latter the personal data
required for Castro's loan application.

After the bank approved the loan for the amount of P3,000.00, Castro, accompanied by the Valencia
spouses, signed a promissory note corresponding to her loan in favor of the bank. On the same day, the
Valencia spouses obtained from the bank an equal amount of loan for P3,000.00. They signed another
promissorynote (Exhibit "2") corresponding to their loan in favor of the bank and had Castro affixed
thereon her signature as co-maker.

Both loans were secured by a real-estate mortgage on Castro's house and lot. Later,the sheriff of Manila
sent a notice to Castro, saying that her property would be sold at public auction.

Castro claimed that she is a 70-year old widow who cannot read and write in English. According to her, she has
only finished second grade. She needed money in the amount of P3,000.00 to invest in the business of the
defendant spouses Valencia, who accompanied her to the bank to secure a loan of P3,000.00. While at the
bank, an employee handed to her several forms already prepared which she was asked to sign, with no
one explaining to her the nature and contents of the documents. She also alleged that it was only when she
received the letter from thesheriff that she learned that the mortgage contract which was an encumbrance
onher property was for P6.000.00 and not for P3,000.00 and that she was made tosign as co-maker of the
promissory note without her being informed. Castro filed a suit against petitioners contending that thru
mistake on her part orfraud on the part of Valencias she was induced to sign as co-maker of a
promissorynote and to constitute a mortgage on her house and lot to secure the questioned note.

WON the court correctly affirmed the lower court in declaring the promissory note (Exhibit 2) invalid
insofar as they affect respondent Castro vis-a-vispetitioner bank, and the mortgage contract (Exhibit 6)
valid up to the amount of P3,000.00 only.

HELD: Yes. While the Valencias defrauded Castro by making her sign the promissory note and the
mortgage contract, they also misrepresented to the bank Castro's personal qualifications in order to secure
its consent to the loan.

Thus,as a result of the fraud upon Castro and the misrepresentation to the bank inflicted by the Valencias both Castro and
the bank committed mistake in giving their consents to the contract. In other words, substantial mistake vitiated their
consents given. For if Castro had been aware of what she signed and the bank of the true qualifications of
the loan applicants, it is evident that they would not have given their consents to the contracts.
The authority of the Valencias was only to follow-up Castro's loan application with the bank. They were
not authorized to borrow for her. If her act had been understood by the Bank to be a grant of an
authority to the Valencia to borrow in her behalf, it should have required a special power of
attorney executed by Castro in their favor. Since the bank did not, it can rightly assume that it did not
entertain the notion that the Valencia spouses were in any manner acting as an agent of Castro.
Vda de Chua vs IAC
Herminigilda Herrera executed a Contract of Lease (Exh. "A") in favor of Tian On (sic) (or Sy Tian On)
whereby the former leased to the latter Lots. Nos. 620 and 7549 containing an area of 151 square meters,
located at Manalili Street (now V. Gullas Street) Cebu City, for a term of ten (10) years, renewable for
another five (5) years. The contract of lease (Exh. "A") contains a stipulation giving the lessee an option
to buy the leased property
In accordance with the said contract of lease, the lessee, Tian On, erected a residential house on the leased
premises. Within four (4) years from the execution of the said contract of lease (Exh. "A"), the lessee, Sy
Tian On, executed a Deed of Absolute Sale of Building (Exh. "B") in favor of Chua Bok, the predecessor-
in-interest of the plaintiffs herein.
Under the contract, Chua Bok was assigned the lease and promises and bind himself to abide by all the
terms and conditions thereof. It is also under the contract that Herrera who is represented herein by her
attorney-in-fact, Vicenta R. de Reynes, honors the annulment of the lease made by Sy Tian On in favor of
Chua Bok.
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.
The plaintiffs filed the instant case seeking the annulment of the said sale between Herminigilda Herrera
and spouses Vicente and Victoria Go, alleging that the conveyance was in violation of the plaintiffs' right
of option to buy.
The trial court ruled to eject the plaintiffs from the property, but awarded damages. It held that the
contract of lease entered into was void on account that it was made through an agent which is not
empowered under a special power of attorney to enter into a contract of lease.
The plaintiff petitioners sought recourse with the SC.
WON the contract of lease is valid.
(1.) No, it is invalid. 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
Article 1878 of the New Civil Code, in pertinent part, provides: Special Power of Attorney are necessary
in the following cases: (8) To lease any real property to another person for more than one year.
It is true that respondent Herrera allowed petitioners to occupy the leased premises after the expiration of
the lease contract (Exh. "C") and under Article 1670 of the Civil Code of the Philippines, a tacit renewal
of the lease is deemed to have taken place. However, as held in Dizon v., a tacit renewal is limited only
to the terms of the contract which are germane to the lessee's right of continued enjoyment of the
property and does not extend to alien matters, like the option to buy the leased premises.

Veloso vs CA
Petitioner Francisco Veloso owns a parcel of land in Tondo, Manila covered by a TCT issued by the
Registry of Deeds-Manila. He acquired the subject property before he got married from
Philippine Building Corporation. Hence, the property did not belong to the conjugal partnership.

The said title was subsequently canceled and a new one was issued in the name of Aglaloma B. Escario.
Subsequently, petitioner filed an action for annulment of documents, reconveyance of property with
damages and preliminary injunction alleging that he was the absolute owner of the subject property
and he never authorized anybody to sell it.

He alleged that when his wife left for abroad, he found out that his copy was missing.The transfer of
property was supported by a General Power of Attorney and Deed of Absolute Sale, executed by
Irma Veloso, wife of the petitioner.

Petitioner denied executing the power of attorney and alleged that his signature was falsified. He also
denied having known the supposed witnesses in the execution of the power of attorney. Thus,
he contended that the sale of the property, and the subsequent transfer were null and void.

Defendant Aglaloma Escario alleged that she was a buyer in good faith and denied any knowledge of the
alleged irregularity. She allegedly relied on the general power of attorney which was sufficient in form
and substance and was duly notarized.

Witness for the plaintiff Atty. Julian G. Tubig denied any participation in the execution of the general
power of attorney, and attested that he did not sign.

RTC ruled in favor of Escaro as the lawful owner of the property as she was deemed an innocent
purchaser for value. The trial court ruled that there was no need for a special power of attorney
when the special power was already mentioned in the general one

WON the General Power of Attorney valid

YES. Documents acknowledged before a notary have the evidentiary weight with respect to their due
execution. The questioned GPA and deed of sale, were notarized and therefore, presumed to be valid and duly executed.

While it is true that it was denominated as a GPA, a perusal thereof revealed that it stated an authority to sell.
Thus, there was no need for a separate SPA as the document expressly authorized the agent to sell the
subject property.

The SPA can be included in the GPA when it is specified therein the act or transaction for which the special power is required.
As to the issue of forgery, the Court ruled that mere variance of the signatures is not
conclusive proof of forgery for forgery cannot be presumed.

Even granting that petitioners signature was falsified, and the GPA and deed of sale void, such would not revoke title
subsequently issued in favor of private respondent, an innocent purchaser for value, one relying on the notarized GPA
presented by petitioners wife.

Being the wife of the owner and having with her the title to the property, there was no reason for private
respondent not to believe in her authority.

PNB vs Sta Maria
Two Special Powers of Attorney were executed in favor of Maximo Sta. Maria.

The 1
SPA was executed by his 6 siblings to mortgage a 16-oddhectare parcel of land

The 2
SPA was executed by Valeriana Sta. Maria to borrow money and mortgage any real estate owned
by her.

Maximo obtained two separate loans from PNB, one in the amount of 15K but only 13,216.11 was
extended by PNB and 23K where only P12,427.57 was extended.

Two chattel mortgages on standing crops were executed by him in favor of PNB- guaranteed by surety
bonds by Associated Insurance and Surety Co. The records of crop load show other securities given such
as the land jointly owned by his bros and sis.

February 10, 1961- PNB filed for collection of unpaid balances on two agricultural sugar crop loans
against Maximo and his siblings. RTC ruled in favor of PNB. Only the 6 siblings appealed judgment.

Siblings contention: They only authorized Maximo to mortgage land and not borrow money and that
they did not benefit from the loans obtained by Maximo. Therefore, they should be only liable to the
value of property which they authorized to be given as security for loans.

WON siblings are only liable for value of land.

Yes, except for Valeriana who issued a separate SPOA authorizing Maximo to borrow money on her

In Bank of P. I. v. De Coster, "where in an instrument powers and duties are specified and defined, that all
of such powers and duties are limited and confined to those which are specified and defined, and all other
powers and duties are excluded.

In De Villa vs. Fabricante, where the power of attorney given to the husband by the wife was limited to a
grant of authority to mortgage a parcel of land titled in the wife's name, the wife may not be held liable
for the payment of the mortgage debt contracted by the husband, as the authority to mortgage does not
carry with it the authority to contract obligation.

Maximo and Valeriana are the only ones liable for the loans and that the other siblings liability only
corresponds to real estate mortgage and the foreclosure and sale of mortgage.

Maximos argument that "a mortgage is simply an accessory contract, and that to effect the mortgage, a
loan has to be secured" falls, far short of the mark. Maximo had indeed secured the loan on his own
account and the defendants-appellants had authorized him to mortgage their respective undivided shares
of the real property jointly owned by them as security for the loan. But that was the extent of their
authority land consequent liability, to have the real property answer for the loan incase of non-

The outcome might be different if there had been anexpress ratification of the loans by defendants-
appellantsor if it had been shown that they had been benefited bythe crop loans so as to put them in

De Villa vs Fabricante
Plaintiff filed this action before the Court of First Instance of Camarines Sur to foreclose the mortgage
executed by defendants covering two parcels of land situated in the same province. As defendants failed
to answer the complaint, they were declared in default, and forthwith, plaintiff presented his evidence.
Thereupon, the trial court rendered decision against the defendant Fabricante.
Appellant claims that the trial court erred in holding that only Cesario A. Fabricante is liable to pay the
mortgage debt and not his wife who is exempt from liability. The trial court said: "Only the defendant
Cesario A. Fabricante is liable for the payment of this amount because it does not appear that the
other defendant Maria G. de Fabricante had authorized Cesario A. Fabricante to contract the debt
also in her name.
The power of attorney was not presented and it is to be presumed that the power was limited to a grant of
authority to Cesario A. Fabricante to mortgage the parcel of land covered by Transfer Certificate of Title
in the name of Maria G. de Fabricante."
WON the wife of the defendant is liable for the debt contracted by the husband.
NO. We went over the contents of the deed of mortgage executed by Cesario Fabricante in favor of
appellant on April 18, 1944, and there is really nothing therein from which we may infer that Cesario was
authorized by his wife to contract the obligation in her name.
The deed shows that the authority was limited to the execution of the mortgage insofar as the property of
the wife is concerned. There is a difference between authority to mortgage and authority to contract
obligation. Since the power of attorney was not presented as evidence, the trial court was correct in
presuming that the power was merely limited to a grant of authority to mortgage unless the contrary is
Where the power of attorney given to the husband by the wife was limited to a grant of authority to
mortgage a parcel of land titled in the wife's name, the wife may not be held liable for the payment of the
mortgage debt contracted by the husband, as the authority to mortgage does not carry with it the authority
to contract obligation.

PNB vs Tan Ong Sze
The defendant Tan Ong Sze received from the plaintiff bank a loan of P300,000, for which she executed
and delivered to the plaintiff her certain promissory . The defendant executed to the plaintiff a
mortgage on certain real property in the City and Province of Iloilo. For failure to pay, the plaintiff filed a
collection case against the defendant.
The defendant argued that the genuineness and execution of both the note and the mortgage and of
the debt are doubtful, as no power of attorney was presented by the bank to bind herein defendant to
the debt and mortgage contract.
It was discovered that when the defendant was in China, she executed before the consul of the US an
SPA in favor of a certain Tan Buco. Under the SPA, it was stated therein that Buco was to be the lawful
attorney of the shop Hock Bee (Chinese characters) at Iloilo, Philippine Islands, . . . and is empowered
sign, seal and execute, and as my act and deed, deliver, any lease, any other deed for the conveying
and real or personal property or other matter or thing wherein I am or may be personally interested
or concerned.
The trial court ruled in favor of the Bank.
WON under his power the attorney-in-fact, Buco had the authority to execute the promissory note or to
execute the mortgage on real property to secure its payment.
(1.) The authorities are overwhelming that the power to sell and convey does not carry with it or imply
the power to borrow money or to execute a mortgage on real property.
A power of attorney, like any other instrument, is to be construed according to the natural import of its
language; and the authority which the principal has conferred upon his agent is not to be extended by
implication beyond the natural and ordinary significance of the terms in which that authority has been

Veloso vs La Urbana

Veloso was the owner of some portions of certain parcels of lands. Her brother in law, Jose Maria del Mar
forged two powers of attorney supposedly made by Veloso and her husband which gave him the authority
to mortgage their interests/participation in the said properties. These powers of attorney were registered in
the registry of deeds.
Using the powers of attorney, he mortgaged the participations to La Previsoa Filipina but he subsequently
transferred the mortgage to La Urbana with whom he executed another deed of mortgage for an additional
loan. When he violated the conditions of mortgage, La Urbana foreclosed the mortgage and sold it at a
public auction. It was only then that Velasco found out about the fraudulent transactions.
WON mortgage is valid
No, mortgage is null and void. Even though Del Mar had powers of attorney, La Urbana should have
exerted effort to ascertain the genuineness of the instruments. Every person dealing with an agent has the
responsibility to ascertain the authority of an agent.
Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of
the agent. If he does not make such inquiry, he is chargeable with knowledge of the agents authority,
and his ignorance of that authority will not be any excuse.
Persons dealing with an assumed agent, whether the assumed agency be a general or special one, are
bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but also
the nature and extent of the authority, and in case either is controverted, the burden of proof is upon
them to establish it.

Amigo vs Teves
On August 11, 1937, Macario Amigo and Anacleto Cagalitan executed a power of attorney for
their son Marcelino Amigo granting the power to lease, let, bargain, transfer, convey and sell,
remise, release, mortgage and hypothecate, part of any of the properties upon such terms and
conditions and under such covenants as he shall think fit. On October 30, 1938, Marcelino
executed a deed of sale of a land at Php 3,000.00 in favor of Serapin Teves with a repurchase
stipulation of 18 months from the date of sale. On July 20, 1939 the spouses donated to their sons
Justino and Pastor several lands including their right to repurchase the said land (sold to Teves).
The deed of donation was registered in the Register of Deeds. On March 9, 1940 Justino and
Pastor offered to repurchase the land from Teves but the latter refused because ownership had
already been consolidated in him as purchaser a retro. Petitioners contended that Marcelino
Amigo acted in excess of his powers because the covenant of lease contained in the said deed is
not germane to the said power
Whether or not Marcelino Amigo acted in excess of his power?
NO. The Court find no plausible reason xxx a cursory reading thereof would at once reveal that
the power granted to the agent is so broad that if practically covers the celebration of any
contract and the conclusion of any covenant or stipulation. When the power of attorney says that
the agent can enter into any contract concerning the land or can sell the land under any term or
condition and covenant he may think fit, it undoubtedly means that he can act in the same
manner and with the same breadth and latitude as the principal could concern the property.