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P e t i t i o n e r , t h e n d e f e n d a n t , wh i l e a d m i t t i n g s o m e a l l e g a t i o n s i n t h e

Complaint, denied that she borrowed money from respondent, and


Doles v Angeles a ve r r e d t h a t f r o m J u n e t o S e p t e m b e r 1 9 9 5 , s h e r e f e r r e d h e r f r i e n d s
G.R. No. 149353 | June 26, 2006 to respondent whom she knew to be engaged in the bu siness of
A u s t r i a - Ma r t i n e z , J . | G r o u p 2 l e n d i n g m o n e y i n e xc h a n g e f o r p e r s o n a l c h e c k s t h r o u g h h e r
capitalist Arsenio Pua.
P e t i t i o n e r : J o c e l yn B . D o l e s  H e r f r i e n d s ( Z e n a i d a R o m u l o , Th e r e s a Mo r a t i n , J u l i a
R e s p o n d e n t : Ma . A u r a T i n a A n g e l e s I n o c e n c i o , V i r g i n i a J a c o b , a n d E l i za b e t h T o m e l d e n ) b o r r o w e d
money from respondent and issued personal checks in
N a t u r e : P e t i t i o n f o r r e vi e w o n C e r t i o r a r i u n d e r R u l e 4 5 R o C p a ym e n t o f t h e l o a n ;
 Th e c h e c k s b o u n c e d f o r i n s u f f i c i e n c y o f f u n d s
To p i c : E f f e c t o f A g e n c y: I n t e g r a t i o n a n d E xt e n s i o n ; A u t h o r i t y t o A c t  Despite her efforts to assist respondent to collect from the
b o r r o we r s , s h e c o u l d n o l o n g e r l o c a t e t h e m ;
Facts  Because of this, respondent became furious and threatened
p e t i t i o n e r t h a t i f t h e a c c o u n t s we r e n o t s e t t l e d , a c r i m i n a l
O n A p r i l 1 , 1 9 9 7 , Ma . A u r a Ti n a A n g e l e s ( r e s p o n d e n t ) f i l e d w i t h t h e c a s e wi l l b e f i l e d a g a i n s t h e r ;
R TC a c o m p l a i n t f o r S p e c i f i c P e r f o r m a n c e w i t h D a m a g e s a g a i n s t  S h e wa s f o r c e d t o i s s u e e i g h t c h e c k s a m o u n t i n g t o P 3 5 0 , 0 0 0
J o c e l yn B . D o l e s ( p e t i t i o n e r ) t o a n s we r f o r t h e b o u n c e d c h e c k s o f t h e b o r r o w e r s s h e
referred;
Respondent alleged that petitioner was indebted to her in the  Prior to the issuance of the checks she informed respondent
concept of a personal loan amounting to P405,430.00 representing t h a t t h e y we r e n o t s u f f i c i e n t l y f u n d e d b u t t h e l a t t e r
the principal amount and interest; n o n e t h e l e s s d e p o s i t e d t h e c h e c k s a n d f o r wh i c h r e a s o n t h e y
 O n O c t o b e r 5 , 1 9 9 6 , b y vi r t u e o f a D e e d o f A b s o l u t e S a l e , were subsequently dishonored;
petitioner (seller) ceded to respondent (buyer), a parcel of  Respondent then threatened to init iate a criminal case
l a n d ( a n d i m p r o ve m e n t s ) wi t h a n a r e a o f 4 2 s q u a r e m e t e r s , a g a i n s t h e r f o r vi o l a t i o n o f B P 2 2 ;
c o ve r e d b y T C T N o . 3 8 2 5 3 2 , a n d l o c a t e d a t a s u b d i vi s i o n  S h e wa s f o r c e d b y r e s p o n d e n t t o e xe c u t e a n A b s o l u t e D e e d
p r o j e c t k n o wn a s C a m e l l a To w n h o m e s S o r r e n t e i n B a c o o r , o f S a l e o ve r h e r p r o p e r t y i n B a c o o r , C a vi t e , t o a vo i d c r i m i n a l
C a vi t e , i n o r d e r t o s a t i s f y h e r p e r s o n a l l o a n w i t h r e s p o n d e n t ; prosecution;
 Th i s p r o p e r t y w a s m o r t g a g e d t o N a t i o n a l H o m e Mo r t g a g e  Th e s a i d d e e d h a d n o va l i d c o n s i d e r a t i o n ;
F i n a n c e C o r p o r a t i o n ( N H MF C ) t o s e c u r e p e t i t i o n e r s l o a n
 She did not appear before a notary public;
o f P 3 3 7 , 0 5 0 . 0 0 wi t h t h a t e n t i t y ;
 Th e C o m m u n i t y Ta x C e r t i f i c a t e n u m b e r o n t h e d e e d wa s n o t
 As a condition for the sale, respondent shall assume the
hers and for which respondent may be prosecuted for
undue balance of the mortgage and pay the monthly
falsification and perjury;
a m o r t i za t i o n o f P 4 , 7 4 8 . 1 1 f o r t h e r e m a i n d e r o f t h e 2 5 ye a r s
 She suffered damages and lost rental as a result.
which began on September 3, 1994;
 Th e p r o p e r t y w a s a t t h a t t i m e b e i n g o c c u p i e d b y a t e n a n t
R TC : S a l e i s vo i d f o r l a c k o f c o n s i d e r a t i o n
p a yi n g a m o n t h l y r e n t o f P 3 , 0 0 0 . 0 0 ;
 Angeles’ admission that the borrowers are Doles’
 U p o n ve r i f i c a t i o n wi t h t h e N H MF C , r e s p o n d e n t l e a r n e d t h a t
f r i e n d s a n d t h a t t h e c h e c k s i s s u e d i n p a ym e n t o f t h e
petitioner had incurred arrearages amounting to P26,744.09,
loan obligation negates the cause/consideration of the
i n c l u s i ve o f p e n a l t i e s a n d i n t e r e s t ;
contract of sale
 Upon informing the petitioner of her arrears, petitioner
 Th e p r o p e r t y i s n o t s o l e l y o w n e d b y D o l e s
denied that she incurred them and refused to pay the same;
 Despite repeated demand, petitioner refused to cooperate C A : g r a n t e d r e s p o n d e n t ’ s a p p e a l ; r e ve r s e d R TC d e c i s i o n
wi t h r e s p o n d e n t t o e xe c u t e t h e n e c e s s a r y d o c u m e n t s a n d
 Petitioner was the borrower and would re -lend the
o t h e r f o r m a l i t i e s r e q u i r e d b y t h e N H MF C t o e f f e c t t h e
amount borrowed from the respondent to her friends
t r a n s f e r o f t h e t i t l e o ve r t h e p r o p e r t y;
 V a l i d c o n s i d e r a t i o n  s u m o f m o n e y p e t i t i o n e r o we d
 P e t i t i o n e r c o l l e c t e d r e n t o ve r t h e p r o p e r t y f o r t h e m o n t h o f
respondent [check Held Issues 1&2 for specific
January 1997 and refused to remit the proceeds to
circumstances]
respondent; and that respondent suffered damages as a
r e s u l t a n d wa s f o r c e d t o l i t i g a t e .
( 3 ) p e t i t i o n e r h e r s e l f a d m i t t e d i n o p e n c o u r t t h a t s h e wa s r e -
l e n d i n g t h e m o n e y l o a n e d t o o t h e r i n d i vi d u a l s f o r p r o f i t ;
 Th e a l l e g e d t h r e a t / i n t i m i d a t i o n b y r e s p o n d e n t d i d n o t vi t i a t e ( 4 ) t h e d o c u m e n t a r y e vi d e n c e s h o ws t h a t t h e a c t u a l b o r r o we r s ,
consent, since it is considered just/legal if made to enforce the friends of petitioner, consider her as their creditor and
one’s claim through competent authority under A rt 1335 CC not the respondent.
 R e a r r e a r a g e s o f p e t i t i o n e r o n h e r m o n t h l y a m o r t i za t i o n w i t h
t h e N H MF C , t h e s a m e s h a l l b e d e e m e d p a r t o f t h e b a l a n c e o f  [ R e 1 , 3 , 4 ] B a s e d o n t h e f o l l o wi n g t e s t i m o n y o f t h e p e t i t i o n e r
p e t i t i o n e r s l o a n w i t h t h e N H MF C w/ c r e s p a g r e e d t o a s s u m e ; d u r i n g h e r c r o s s - e xa m i n a t i o n , C A c o n c l u d e d t h a t p e t i t i o n e r i s
 Th e P 3 , 0 0 0 . 0 0 r e p r e s e n t i n g t h e r e n t a l f o r J a n 1 9 9 7 t h e r e a l b o r r o we r a n d r e s p o n d e n t i s t h e r e a l l e n d e r :
supposedly collected by petitioner + the claim for damages o She has transacted with Angeles to refer her friends
a n d a t t o r n e ys f e e s , i s d e n i e d f o r i n s u f f i c i e n c y o f e vi d e n c e . to Angeles and to refer again to Arsenio Pua
o Her friends and Angeles did not meet personally
[ Ma y 2 9 , 2 0 0 1 ] P e t i t i o n e r f i l e d MR w / C A , a r g u i n g t h a t : o “W e a r e b o t h i n t e r m e d i a r i e s . A s e vi d e n c e d b y t h e
 respondent admitted in open court that she acted only as checks of the debtors they were deposited to the
agent/representative of Arsenio Pua, the principal financier name of Arsenio Pua because the money came from
and, hence, she had no legal capacity to sue petitioner; Arsenio Pua.”
 C A f a i l e d t o c o n s i d e r t h a t p e t i t i o n e r ’ s f a t h e r , w h o c o - o wn e d o Angeles knew that the money will go to Doles’ friends
t h e s u b j e c t p r o p e r t y , wa s n o t i m p l e a d e d a s a d e f e n d a n t n o r o D o l e s i s r e - l e n d i n g t h e m o n e y, a n d s h e h a s
was he indebted to the respondent and, hence, she cannot be c o m m i s s i o n ; 2 % t o To m e l d e n , 1 % J a c o b , I n o c e n c i o
made to sign the documents to effect the transfer of and friends none
o wn e r s h i p o ve r t h e e n t i r e p r o p e r t y.  B a s e d o n r e s p o n d e n t ’ s t e s t i m o n y, s h e i s e s t o p p e d t o d e n y
 C A D E N I E D ; Th u s , t h e p r e s e n t p e t i t i o n that she herself acted as agent of a certain Arsenio Pua, her
disclosed principal. She is also estopped to deny that
Issues petitioner acted as agent for the alleged debtors, the friends
1. W/N petitioner can be considered as a debtor of the whom she referred.
respondent NO o She admitted that Arsenio Pua is the principal
2 . W / N a n a g e n t wh o wa s n o t a u t h o r i ze d b y t h e p r i n c i p a l t o financier and the money came from him because she
c o l l e c t d e b t i n h i s b e h a l f c o u l d d i r e c t l y c o l l e c t p a ym e n t f r o m is “only representing him”
the debtor NO o S h e i s a wa r e t h a t D o l e s b o r r o we d f r o m h e r t o
3 . W / N t h e c o n t r a c t o f s a l e wa s e xe c u t e d f o r a c a u s e N O a c c o m m o d a t e s e ve r a l f r i e n d s
o Th e b o r r o w e d m o n e y “ g o e s d i r e c t t o J o c e l yn b e c a u s e
H e l d Th e P e t i t i o n i s m e r i t o r i o u s . I don’t know them”
o Th e f r i e n d s o f D o l e s w e r e a b l e t o o b t a i n a l o a n f r o m
Issues #1 and #2 Arsenio Pua through Angeles’ assistance for more
t h a n a ye a r
 Petitioner argues that since she is merely the agent or o Some of the checks bounced and Arsenio Pua got
r e p r e s e n t a t i ve o f t h e a l l e g e d d e b t o r s , s h e i s n o t a p a r t y t o mad at Angeles
t h e l o a n ; a n d t h a t t h e D e e d o f S a l e e xe c u t e d b e t we e n h e r  Under Art 1868 of the CC, the basis of agency is
a n d t h e r e s p o n d e n t i n t h e i r o wn n a m e s , w h i c h w a s p r e d i c a t e d r e p r e s e n t a t i o n . Th e q u e s t i o n o f wh e t h e r a n a g e n c y h a s b e e n
o n t h a t p r e - e xi s t i n g d e b t , i s vo i d f o r l a c k o f c o n s i d e r a t i o n . c r e a t e d i s o r d i n a r i l y a q u e s t i o n wh i c h m a y b e e s t a b l i s h e d
 Th e q u e s t i o n t h a t h a s t o b e r e s o l ve d f o r t h e m o m e n t i s e i t h e r b y d i r e c t o r c i r c u m s t a n t i a l e vi d e n c e .
w h e t h e r t h i s d e b t c a n b e c o n s i d e r e d a s a va l i d c a u s e o r o Th e q u e s t i o n i s u l t i m a t e l y o n e o f i n t e n t i o n . A g e n c y
consideration for the sale. m a y e ve n b e i m p l i e d f r o m t h e wo r d s & c o n d u c t o f t h e
 CA cited four instances in the record to support its holding parties and the circumstances of the partic ular case.
that petitioner re-lends the amount borrowed from respondent o Th o u g h t h e f a c t o r e xt e n t o f a u t h o r i t y o f t h e a g e n t s
to her friends: may not, as a general rule, be established from the
( 1 ) t h e f r i e n d s o f p e t i t i o n e r n e ve r p r e s e n t e d t h e m s e l ve s t o declarations of the agents alone, if one professes to
r e s p o n d e n t a n d t h a t a l l t r a n s a c t i o n s we r e m a d e b y a n d act as agent for another, she ma y be estopped to
b e t we e n p e t i t i o n e r a n d r e s p o n d e n t den y her agenc y both as against the asserted
(2) the money passed through the bank accounts of petitioner principal and the third persons interested in the
and respondent; transaction in which he or she is engaged.
 In this case, petitioner knew that the financier of respondent their principals. Since the sale is predicated on that loan,
is Pua; and respondent knew that the borrowers are friends then the sale is void for lack of consideration.
of petitioner.
 Th e C A i s i n c o r r e c t w h e n i t c o n s i d e r e d t h e f a c t t h a t t h e Issue #3
supposed friends of [petitioner], the actual borrowers, did not  Th e s a l e m i g h t h a ve b e e n b a c k e d u p
p r e s e n t t h e m s e l v e s t o [ r e s p o n d e n t ] a s e vi d e n c e t h a t n e g a t e s b y a n o t h e r c o n s i d e r a t i o n : r e s p o n d e n t a ve r r e d i n h e r
the agency relationship. complaint and testified that the parties had agreed that as a
o It is sufficient that petitioner disclosed to c o n d i t i o n f o r t h e c o n ve y a n c e o f t h e p r o p e r t y t h e r e s p o n d e n t
respondent that the former was acting in behalf of shall assume the balance of the mortgage loan which
her principals, her friends whom she referred to p e t i t i o n e r a l l e g e d l y o w e d t o t h e N H MF C .
respondent. For an agenc y to arise, it is not o An assumption of a mortgage debt may constitute a
necessary that the principal personall y encounter va l i d c o n s i d e r a t i o n f o r a s a l e .
the third person with whom the agent interacts.  Although petitioner admitted at the time of trial that she
 The law in fact contemplates impersonal dealings where o wn e d t h e p r o p e r t y d e s c r i b e d i n t h e T C T, t h e T C T o n i t s f a c e
the principal need not personall y know or meet the third s h o ws t h a t t h e o wn e r o f t h e p r o p e r t y r e f e r s n e i t h e r t o t h e
p e r s o n w i t h w h o m h e r a g e n t t r a n s a c t s : p r e c i s e l y, t h e petitioner nor to her father, Teodorico Doles
purpose of agenc y is to extend the personality of the o Th e p r o p e r t y i s r e g i s t e r e d i n t h e n a m e o f H o u s e h o l d
principal th rough the facility of the agent. D e ve l o p m e n t C o r p o r a t i o n .
 I n t h e c a s e a t b a r , b o t h p e t i t i o n e r a n d r e s p o n d e n t h a ve o Although there is an entry to the effect that the
undeniably disclosed to each other that they are representing p e t i t i o n e r h a d b e e n g r a n t e d a s p e c i a l p o we r o f
someone else, and so both of them are estopped to deny the a t t o r n e y c o ve r i n g t h e s h a r e s o f Te o d o r i c o D o l e s o n
same. If their respective principals do not actuall y and the parcel of land described in this certificate , it
personall y know each other, such ignorance does not cannot be inferred that the petitioner or her father
affect their juridical standing as agents, especially since held any direct interest on the property in question so
t h e ve r y p u r p o s e o f a g e n c y i s t o e x t e n d t h e p e r s o n a l i t y o f a s t o va l i d l y c o n s t i t u t e a m o r t g a g e t h e r e o n a n d t o
the principal through the facility of the agent . e f f e c t t h e d e l i ve r y o f t h e o b j e c t o f t h e s a l e a t t h e
 Re: admission of petitioner that she is re -lending the money consummation stage.
for profit, it must be stressed that the manner in which the o W ha t i s wo r s e , t h e r e i s a n o t a t i o n t h a t t h e T C T i t s e l f
parties designate the relationship is not controlling . has been cancelled.
o If an act done by one person in behalf of another is in o I n vi e w o f t h e s e a n o m a l i e s , t h e C o u r t c a n n o t e n t e r t a i n
i t s e s s e n t i a l n a t u r e o n e o f a g e n c y, t h e f o r m e r i s t h e the possibility that respondent agreed to assume the
a g e n t o f t h e l a t t e r n o t wi t h s t a n d i n g s / h e i s n o t s o b a l a n c e o f t h e m o r t g a g e l o a n wh i c h p e t i t i o n e r
called. a l l e g e d l y o w e d t o t h e N H MF C .
o If one represents and is acting for another, and if  As the complainant who initiated the case, respondent bears
r e l a t i o n s e xi s t wh i c h w i l l c o n s t i t u t e a n a g e n c y, i t w i l l t h e b u r d e n o f p r o vi n g t h e b a s i s o f h e r c o m p l a i n t . H a vi n g
be an agency whether the parties understood the failed to discharge such burden, the Court has no choice but
exact nature of the relation or not. t o d e c l a r e t h e s a l e vo i d f o r l a c k o f c a u s e .
o I f i t i s t r u e t h a t p e t i t i o n e r wa s r e - l e n d i n g , t h e n t h e  E ve n a s s u m i n g t h e m o r t g a g e va l i d l y e xi s t s , r e s p o n d e n t s
c h e c k s s h o u l d h a ve b e e n d r a wn i n h e r n a m e a n d n o t a l l e g a t i o n i s t h a t t h e m o r t g a g e wi t h t h e N H MF C w a s f o r 2 5
directly paid to Pua. ye a r s w h i c h b e g a n S e p t e m b e r 3 , 1 9 9 4 . R e s p o n d e n t f i l e d h e r
 W it h r e s p e c t t o C A ’ s f i n d i n g t h a t t h e d i s b u r s e m e n t s a n d Complaint for Specific Performance in 1997. Since the 25
p a ym e n t s f o r t h e l o a n w e r e m a d e t h r o u g h t h e b a n k a c c o u n t s ye a r s h a d n o t l a p s e d , t h e p r a y e r o f r e s p o n d e n t t o c o m p e l
of petitioner and respondent: in the normal course of p e t i t i o n e r t o e xe c u t e n e c e s s a r y d o c u m e n t s t o e f f e c t t h e
c o m m e r c i a l d e a l i n g s a n d f o r r e a s o n s o f c o n ve n i e n c e a n d transfer of title is premature.
p r a c t i c a l u t i l i t y i t c a n b e r e a s o n a b l y e xp e c t e d t h a t t h e
facilities of the agent, such as a bank account, may be W HE R E F O R E , t h e p e t i t i o n i s g r a n t e d . Th e D e c i s i o n a n d
e m p l o ye d , a n d t h a t a s u b - a g e n t b e a p p o i n t e d , s u c h a s t h e Resolution of the Court of Appeals are REVERSED and SET
bank itself, to carry out the task, especially where there is no A S I D E . Th e c o m p l a i n t o f r e s p o n d e n t i n C i vi l C a s e N o . 9 7 - 8 2 7 1 6
s t i p u l a t i o n t o t h e c o n t r a r y. is DISMISSED.SO ORDERED.
 I n vi e w o f t h e t w o a g e n c y r e l a t i o n s h i p s , p e t i t i o n e r a n d
respondent are not privy to the contract of loan between