ALVINPATRIMONIO, 

Petitioner, 
vs.
NAPOLEON GUTIERREZ and OCTAVIO MARASIGAN III, Respondents.

G.R. No. 187769               June 4, 2014

LASCUÑA, ROSE ANN A.

Herein petitioner and respondent Guttierez entered into a business venture under the
name Slam Dunk Corporation. To start it up, petitioner pre-signed several check for the
expenses of the business. Although signed, however, there was no payee’s name, date or
amount indicated in the said checks. The blank checks were entrusted to Guttierez with
the instruction that he cannot fill them out without petitioner’s approval.

In 1993, without petitioner’s knowledge and consent, Guttierez borrowed money from
co-respondent Marasigan in the amount of 200,000php. The latter aceded to Guttierez’
request and gave him the amount. Simultaneously, Guttierez deliverd to Marasigan one of
the blank checks pre-signed by petitioner. However, the same was dishonored by the
bank on the reason of closed account.

Marasigan sought recovery from Guttierez, but to no avail. Hence, he sent several
demand letters to petitioner, but to no avail as well. Thus, he filed a criminal case under
BP 22 against petitioner. On the other hand, Petitioner filed with the Regional Trial Court
(RTC) a Complaint for Declaration of Nullity of Loan and Recovery of Damages against
Respondents, invoking that he never authorized the loan.

The trial court ruled in favor of Marasigan and found petitioner, in issuing the pre-signed
blank checks, had the intention of issuing the check even without his approval. On appeal
to the Court of Appeals (CA), the appellate court affirmed the decision of the RTC.
Hence, this present case.

Whether or not petitioner is liable to the loan contracted by Guttierez to Marasigan?

SUGGESTED ANSWER:
The court held no.

That under Article 1878, paragraph 7 of the Civil Code, a written authority is required
when the loan is contracted through an agent.

In the present case, the petitioner is not bound by the contract of loan since the records
reveal that Guttierez did not have any authority to borrow money in behalf of petitioner.
Records do not show that the petitioner executed any special power of attorney in favor
of Guttierez to borrow in his behalf, hence, the act of Guttierez is in violation of the said
provision, and thus, he should be the only one liable for the loan he was not able to settle.

In the present case, the petitioner is not bound by the contract of loan since the records
reveal that Guttierez did not have any authority to borrow money in behalf of petitioner.
Records do not show that the petitioner executed any special power of attorney in favor
of Guttierez to borrow in his behalf, hence, the act of Guttierez is in violation of the said
provision, and thus, he should be the only one liable for the loan he was not able to settle.