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PNB v. STA. MARIA 29 SCRA 303 QUICK FACTS: [6 brothers and sisters executed PA in favor of Maximo Sta. Maria; power to mortgage does not include power to loan] Disinclination of courts to enlarge an authority granted beyond the powers expressly given and those incidentally flowing therefrom as being usual or reasonably necessary and proper for the performance of such express powers. The authority granted by defendants-appellants (except Valeriana) unto their brother, Maximo, was merely to mortgage the property jointly owned by them, not to contract for any loans in their names and behalf. Maximo alone, with Valeriana who authorized him to borrow money, must answer for them; other defendants-appellants' only liability is that the real estate authorized by them to be mortgaged would be subject to foreclosure and sale to respond for the obligations contracted by Maximo. But they cannot be held personally liable. Facts: The said sugar crop loans were obtained by defendant Maximo Sta. Maria from plaintiff bank under a special power of attorney, executed in his favor by his six brothers and sisters, defendants-appellants herein, to mortgage a 16-odd hectare parcel of land, jointly owned by all of them In addition, Valeriana Sta. Maria alone also executed in favor of her brother, Maximo, a special power of attorney to borrow money and mortgage any real estate owned by her Maximo Sta. Maria applied for two separate crop loans, for the 1952-1953 and 1953-1954 crop years, with plaintiff bank, one in the amount of P15,000.00, of which only the sum of P13,216.11 was actually extended by plaintiff, and the other in the amount of P23,000.00, of which only the sum of P12,427.57 was actually extended by plaintiff. As security for the two loans, Maximo Sta. Maria executed in his own name in favor of plaintiff bank two chattel mortgages on the standing crops, guaranteed by surety bonds for the full authorized amounts of the loans executed by the Associated Insurance & Surety Co., Inc. as surety with Maximo Sta. Maria as principal. Held: a special power of attorney to mortgage real estate is limited to such authority to mortgage and does not bind the grantor personally to other obligations contracted by the grantee, in the absence of any ratification or other similar act that would estop the grantor from questioning or disowning such other obligations contracted by the grantee. Ratio: 1. Plaintiff bank has not made out a cause of action against defendants-appellants (except Valeriana), so as to hold them liable for the unpaid balances of the loans obtained by Maximo under the chattel mortgages executed by him in his own name alone. This is but in accord with the disinclination of courts to enlarge an authority granted beyond the powers expressly given and those which incidentally flow or derive therefrom as being usual or reasonably necessary and proper for the performance of such express powers. 2. The authority granted by defendants-appellants (except Valeriana) unto their brother, Maximo, was merely to mortgage the property jointly owned by them. They did not grant Maximo any authority to contract for any loans in their names and behalf. Maximo alone, with Valeriana who authorized him to borrow money, must answer for said loans and the other defendants-appellants' only liability is that the real estate authorized by them to be mortgaged would be subject to foreclosure and sale to respond for the obligations contracted by Maximo. But they cannot be held personally liable for the payment of such obligations, as erroneously held by the trial court. 3. The fact that Maximo presented to the plaintiff bank Valeriana's additional special power of attorney expressly authorizing him to borrow money, Exh. E-1, aside from the authority to mortgage executed by Valeriana together with the other defendants-appellants also in Maximo's favor, lends 4. support to our view that the bank was not satisfied with the authority to mortgage alone. The outcome might be different if there had been an express ratification of the loans by defendants-appellants or if it had been shown that they had been benefited by the crop loans so as to put them in estoppel. Valeriana's liability for the loans secured by Maximo is not joint and several or solidary as adjudged by the trial court, but only joint, pursuant to the provisions of Article 1207 of the Civil Code that "the concurrence ... of two or more debtors in one and the same obligation does not imply that ... each one of the (debtors) is bound to render entire compliance with the prestation. BPI v. DE COSTER 47 PHIL 594 Facts: That on Dec. 29, 1921, for value, the defendant Gabriela Andrea de Coster y Roxas, having the consent and permission of her husband, and he acting as her agent, said defendants made to the plaintiff a certain promissory note for P292,000, payable one year after date, with interest of 9 per cent per annum, payable monthly. that to secure the payment thereof, the defendants Jean M. Poizat and J. M. Poizat and Co. executed a chattel mortgage to the plaintiff on the steamers Roger Poizat and Gabrielle Poizat, with the machinery and materials belonging to the Poizat Vegetable Oil Mills and certain merchandise; that at the same time and for the same purpose, the defendant Gabriela Andrea de Coster y Roxas, having the consent and permission of her husband, and he acting as her agent, they acknowledged and delivered to this plaintiff a mortgage on certain real property lying and being situated in the City of Manila. that the real property was subject to a prior mortgage in favor of La Orden de Dominicos or PP. Predicadores de la Provincia del Santisimo Rosario, hence it is made a party defendant That the promissory not in question is long past due and owing, thus the plaintiff brought action against the defendants. the court rendered judgment against the defendants Gabriela Andrea de Coster y Roxas, Jean M. Poizat and J. M. Poizat and Co. jointly and severally for P292,000, with interest at the rate of 9 per cent per annum from the 31st of August, 1923, P10,000 as attorney's fees, and P2,500 for and in account of insurance upon the steamer Gabrielle Poizat, with interest on that amount from February 9, 1924, at the rate of 9 per cent per annum, and costs; Wherefore, plaintiff prays for an order of the court to direct the sheriff of the City of Manila to take immediate possession of the property described in the chattel mortgage and sell the same according to the Chattel Mortgage Law; that the property described in the real mortgage or so much thereof as may be required to pay the amount due the plaintiff be sold according to law; that out of such sales plaintiff shall be paid the amount due and owing it; and that such defendants be adjudged to pay any remaining deficiency. May 3, 1924, on motion by the plaintiff, for failure to appear or answer, the defendants Gabriela Andrea de Coster y Roxas and Jean M. Poizat and J.M. Poizat & Co. were declared in default. The court rendered decision in favor of the plaintiffs On Aug. 26, 1924, Gabriela Andrea de Coster y Roxas, claimed that she had been residing in Paris, France from 1908 until April 30, 1924 and that sheonly found out about the case from the newspapers. She claims that she was never given any summons by the sheriff and that her husband exceeded his authority under the powers given to him under his power of attorney. She prayed that the judgement be annulled and set aside and the case be reopend and that she be permitted to file an answer, and that the case be tried on its merits, and that a final judgement be rendered, absolving her from all liability. ISSUES: 1. WON proper summons were made 2. WON Jean M. Poizat, husband of the defendant exceeded his authority as an agent of his wife
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HELD/RATIO: 1. No, In the ordinary course of business the wife is absent from the residence of husband on a pleasure trip or for business reasons or to visit friends or relatives that, in the nature of such things, the residence of the wife would continue and remain to be that of the husband. That is not this case. For sixteen years the residence of the husband was in the City of Manila, and the residence of the wife was in the City of Paris. 2. Yes, The following the specific powers of attorney that the wife gave her husband Paragraph 5 of the power of attorney authorizes the husband for in the name of his wife to "loan or borrow any sums of money or fungible things, etc." This should be construed to mean that the husband had power only to loan his wife's money and to borrow money for or on account of his wife as her agent and attorney in fact. That does not carry with it or imply that he had the legal right to make his wife liable as a surety for the preexisting debt of a third person. Paragraph 6 authorizes him to "enter into any kind of contracts whether civil or mercantile, giving due form thereof either by private documents or public deeds, etc." Paragraph 7 authorizes him to "draw, endorse, accept, issue and negotiate any drafts, bills of exchange, letters of credit, letters of payment, bills, vales, promissory notes, etc." The foregoing are the clauses in the power of attorney upon which the bank relies for the authority of the husband to execute promissory notes for and on behalf of his wife and as her agent. It will be noted that there is no provision in either of them which authorizes or empowers him to sign anything or to do anything which would make his wife liable as a surety for a pre-existing debt. It is fundamental rule of construction that 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 that all other powers and duties are excluded. It is very apparent from the face of the instrument that the whole purpose and intent of the power of attorney was to empower and authorize the husband to look after and protect the interests of the wife and for her and in her name to transact any and all of her business. But nowhere does it provide or authorize him to make her liable as a surety for the payment of the pre-existing debt of a third person. Hence, it follows that the husband was not authorized or empowered to sign the note in question for and on behalf of the wife as her act and deed, and that as to her the note is void for want of power of her husband to execute it. The same thing is true as to the real mortgage to the bank. It was given to secure the note in question and was not given for any other purpose. The real property described in the mortgage to the bank was and is the property of the wife. The note being void as to her, it follows that as to her the real mortgage to the bank is also void for want of power to execute it. Yes, the case is remanded to the lower court, with leave for the wife to file an answer to plaintiff's cause of action, and to have the case tried on its merits and for any further proceedings not inconsistent with this opinion. HODGES v. SALAS 63 PHIL 567 FACTS: On September 2, 1923, the defendants executed a power of attorney in favor of their brother-in-law Felix S. Yulo to enable him to obtain a loan and secure it with a mortgage on the real property described in transfer certificate of title No. 3335. The power of attorney was registered in the registry of deeds of the Province of Occidental Negros and the pertinent clauses thereof read as follows: Acting under said power of attorney, Felix S. Yulo obtained a loan of P28,000 from the plaintiff, binding his principals jointly and severally, to pay it within ten (10) years, together with
ISSUES/HELD: FIRST ISSUE: WON THE CASE IS ONLY A PERSONAL ACTION (BECAUSE ONLY ORAL EVIDENCE WAS OFFERED)- NO Section 284 of the Code of Civil Procedure requires the contents of a writing to be proven by the writing itself, except in cases therein specified. Section 313, No. 6, provides that official or public documents must be proven by presenting the original or a copy certified by the legal keeper thereof. According to this, the plaintiff was obliged to present the original or a certified copy of the mortgage deed showing the registration thereof, as well as the owner's transfer certificate of title. Both would have been the best evidence to prove the registration of the mortgage and the notation thereof on the back of the title. Had the defendants objected to the oral evidence offered, there is no doubt that it would have been rejected as incompetent. But it is universally accepted that when secondary or incompetent evidence is presented and accepted without any objection on the part of the other party, the latter is bound thereby and the court is obliged to grant it, the probatory value it deserves. SECOND ISSUE: WON THE LOAN AND MORTGAGE WERE USURIOUS AND ILLEGAL- NO We have examined Exhibits 8 to 17 of the defendants, which are the evidence offered to establish the fact that compound interest had been charged, and we have, without any difficulty, arrived at the conclusion that the plaintiff has really charged said unauthorized and unstipulated interest. If there is any doubt on this fact, it is dispelled by Exhibit 10, in the handwriting of the plaintiff himself, wherein it appears that the sum of P33.60 was charged by him on account of interest on unpaid interest. But the fact of charging illegal interest that may be charged, does not make the loan or the mortgage usurious because the transactions took place subsequent to the execution of said contracts and the latter do not appear to be void ab initio Said interest should be applied first to the payment of the stipulated and unpaid interest and, later, to that of the capital. Section 5 of Act No. 2655, as amended by section 3 of Act No. 3291, expressly permit a creditor to charge in advance interest corresponding to not more than one year, whatever the duration of the loan. What is prohibited is the charging in advance of interest for more than one year. Section 6 reiterates said rule in exempting a creditor found guilty of usury from the obligation to return the interest and commissions collected by him in advance, provided said interest and commissions are not for a period of more than one year and the rate of interest does not exceed the maximum limit fixed by law. THIRD ISSUE: WON THE ACTION FOR THE USURY IS BARRED BY STATUTE OF LIMITATIONS- YES, BUT HE FAILED TO ALLEGE IT It is true that according to the evidence more than two years have already elapsed from the time the defendants paid and the plaintiff received the usurious interest to the registration of the cross-complaint, but the plaintiff cannot successfully invoke the defense of prescription because he failed to allege it in his reply to the cross-complaint.
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ISSUE/HELD: Was the land validly acquired by Katigbak? Yes. Appellant: Po Ejap was not authorized under the power of attorney to sell the particular land because it was acquired by Po Tecsi after the execution of the power of attorney. Court: The power is general and authorizes Po Ejap to sell any kind of realty belonging to Po Tecsi. This includes not only the properties that Po Tecsi already owned at the time of the execution of the power, but also such as he might afterwards have during the time it was in force. Appellant: The power was not registered in the registry of deeds, and the authority granted to sell is therefore ineffective. Court: While it is true that a power of authority not recorded in the registry of deeds is ineffective in order that an agent or attorney-in-fact may validly perform acts in the name of his principal, and that any act performed by the agent by virtue of said power with respect to the land is ineffective against a third person who, in good faith, may have acquired a right thereto, it does, however, bind the principal to acknowledge the acts performed by his attorney-in-fact regarding said property. o The record contains many indications that Po Tecsi was not unaware of the sale. Letters, remittance of rent were a tacit acknowledgment that he occupied that land in question no longer as an owner but only as lessee. Appellants tried to explain that this was in payment of the P68,000 debt, but nothing in the letter said so. Po Sun Suy, when Po Tecsi died, also acknowledged that he was occupying as a lessee when he sent a letter to Po Ejap explaining why he could not pay rent. Extra: lease of Uy Chua valid because it was recorded, and it does not appear that he had any knowledge of the sale. CHUA v. IAC 229 SCRA 99 o Sometime in 1950, private respondent Herminigilda HERRERA executed a Contract of Lease in favor of SY TIAN ON, whereby the former leased to the latter a parcel of land located somewhere at Cebu City for a term of 10 years, renewable for another 5 years o The contract of lease contains a stipulation giving the lessee an option to buy the leased property and that the lessor guarantees to leave the possession of said property to the lessee for a period of 10 years or as long as the lessee faithfully fulfills the terms and conditions of their contract o Eventually, the lessee (TIAN ON) erected a residential house on the leased premises. Within 4 years from the execution of the said contract of lease, the lessee (TIAN ON), executed a Deed of Absolute Sale of the building in favor of CHUA BOK, the predecessor-in-interest of the petitioners herein, whereby the TIAN sold to CHUA the aforesaid residential house for and in consideration of the sum of P8,000 o In said Deed of Absolute Sale, TIAN also assigned all his rights and privileges as a lessee of the lot on which the said building is constructed together with its corresponding obligations as contained in the Contract of Lease executed in 1950 between him and the lot owner, HERRERA, to CHUA o Moreover, the same Deed of Absolute Sale contained a stipulation that the sale was made with the knowledge and express consent of the lot-owner and lessor (HERRERA) who was represented by her attorney-in-fact (a certain DE REYNES) where she also honored the annulment of the lease made by TIAN in favor of CHUA o Thereafter, CHUA and his family (herein petitioners) resided in the said residential building and they faithfully and religiously paid the rentals thereof
ISSUES/HELD Was the compromise agreement, the Order of the same date approving the same, and, all the proceedings subsequent thereto, valid or void insofar as Dungo is concerned? YES Dugo - the Compromise Agreement was void ab initio and could have no effect whatsoever against him because he did not sign the same. Furthermore, as it was void, all the proceedings subsequent to its execution, including the Order approving it, were similarly void and could not result to anything adverse to his interest.chanroblesvirtualawlibrary chanrobles virtual law library It is true that a compromise is, in itself, a contract. ART. 2028. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. Moreover, under Art. 18783 of the Civil Code, a third person cannot bind another to a compromise agreement unless he, the third person, has obtained a special power of attorney for that purpose from the party intended to be bound. Although the Civil Code expressly requires a special power of attorney in order that one may compromise an interest of another, it is neither accurate nor correct to conclude that its absence renders the compromise agreement void. In such a case, the compromise is merely unenforceable. It must be governed by the rules and the law on contracts. ART. 1403. The following contracts are unenforceable, unless they are ratified: Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
That, the plaintiffs, have agreed to give the defendants up to June 30, 1960 to pay the mortgage indebtedness in each of the said cases; That, should the defendants fail to pay the said mortgage indebtedness, judgments of foreclosure shall thereafter be entered against the said defendants; That, the defendants hereby waive the period of redemption provided by law after entry of judgments; That, in the event of sale of the properties involved in these three cases, the defendants agree that the said properties shall be sold at one time at public auction, that is, one piece of property cannot be sold without the others.
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WHEREAS, the PAYOR, hereby submits and binds herself to the force and effect of the Order dated January 15, 1960, of the Court of First Instance of Pasig, Rizal, Branch VI, which order is hereby made an integral part of this agreement as ANNEX "A"; WHEREAS, the PAYOR with due knowledge and consent of the DEBTOR, hereby proposes to pay the aforesaid indebtedness in the sum of P503,000.00 to the CREDITOR for and in behalf of the DEBTOR. 3 ART. 1878. Special powers of attorney are necessary in the following cases: (3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired;
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WHEREAS, the MAYOR, hereby submits and binds herself to the force and effect of the order dated January 15, 1960, of the Court of First Instance of Pasig, Rizal, Branch which order is hereby made an integral part of this agreement as Annex "A".
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ISSUE: Whether the compromise agreement entered into by the corporations lawyer is valid. Held/Ratio: No. 1. Special powers of attorney are necessary, among other cases, in the following: to compromise and to renounce the right to