Westmont Investment Corp. v. Francia, et. al.

FACTS:
Amos Francia was convinced by the bank manager of Westmont Bank to make an investment in
Westmont Investment. Since the interest rate offered was impressive, Amos was convinced, he
invited his siblings to join in the investment and so they invested an amount of P3.9 million.
When the investment matured, the Francia siblings demanded the retirement of their investment
but Westmont Investment advised them they have no funds. Westmont Investment then requested
for an extension. At the same time, Westmont Investment advised the Francias that their money
was borrowed by Pearlbank. When the extension asked by Westmont expired, they again were
not able to pay up and so the Francias sued Westmont Investment. In its defense, Westmont
Investment alleged that it was merely acting as an agent of Pearlbank; that Pearlbank authorized
Westmont Investment to borrow money on its behalf; that Westmont Investment merely brokered
a “loan transaction” between Pearlbank and the Francias. To support its claim, Westmont
provided documents showing that Pearlbank borrowed an amount equivalent to the investment of
the Francias.
RTC rendered a decision in favor of the Francias and held Wincorp solely liable to them.
CA affirmed the rulings of the RTC because the contract of agency and the fact that defendant-
appellee PearlBank actually received their money were never proven as Wincorp never presented
any evidence to prove that PearlBank is the actual borrower.
ISSUE:
Whether or not Westmont Investment is an agent of Pearlbank.
HELD:
The CA committed no reversible error in rendering the decision.
No. The evidence presented is not sufficient to prove that an agency existed between Pearlbank
and Westmont Investment. Hence, only Westmont Investment is liable to pay the Francias.
Pearlbank did not authorize Westmont Investment to borrow money for it. Neither was there a
ratification, expressly or impliedly, that it had authorized or consented to said transaction. In fact,
Pearlbank questioned Westmont Investment’s practice of naming Pearlbank as a “borrower” of
certain investments made by other investors with Westmont Investment. Also, the Francias had
no personal knowledge if Pearlbank was indeed the recipient/beneficiary of their investments.
The Francias have always maintained that they only transacted with Westmont Investment and
never with Pearlbank. The fact that the Francias impleaded Pearlbank in their suite is
understandable (it does not defeat their suit) because they only impleaded Pearlbank to protect
their interest when they found out that Westmont was already bankrupt.
 In a contract of agency, a person binds himself to render some service or to do something
in representation or on behalf of another with the latter’s consent. The elements of the
contract of agency are: (1) consent, express or implied, of the parties to establish the
relationship; (2) the object is the execution of a juridical act in relation to a third person;
 (3) the agent acts as a representative and not for himself; (4) the agent acts within the
scope of his authority
 Although the subject Confirmation Advices indicate the name of Pearlbank as the
purported borrower of the said investments, said documents do not bear the signature or
acknowledgment of Pearlbank or any of its officers.
 All the documents attached by Wincorp to its pleadings before the CA cannot be given
any weight or evidentiary value for the sole reason that these documents
were not formally offered as evidence in the trial court. Section 34. Offer of evidence —
The court shall consider no evidence which has not been formally offered.