WESTMONT INVESTMENT vs.

FRANCIA,
JR.
G.R. No. 194128, December 7, 2011
J. Mendoza

FACTS
Francias filed Complaint for Collection of Sum
of Money and Damages arising from their
investments against Wincorp and Pearlbank
before RTC.
Wincorp and Pearlbank filed separate
Motions to Dismiss; both were anchored on
ground that Francias failed to state a cause
of action.
RTC issued order dismissing MD of both for
lack of merit. Wincorp filed Answer,
Pearlbank filed Answer with Counterclaim
and Crossclaim (against Wincorp).
On the pre-trial order issued by the RTC
parties agreed that (1) plaintiffs do not
have personal knowledge as to WON
Pearlbank indeed borrowed funds allegedly
invested by plaintiff from Wincorp and (2)
that the alleged confirmation advices which
indicate Pearlbank as alleged borrower of
the funds allegedly invested by plaintiffs in
Wincorp do not bear signature or
acknowledgement of Pearlbank.
In 1999, Amos Francia was convinced by the
bank manager of Westmont Bank to make
an investment in Wincorp. Since the
interest rate offered was impressive, 3% to
5% higher than regular bank investment,
Amos was convinced.
He invited his siblings to join in the
investment and so they invested P1.4M &
P2.5M with net interest rate of 11% over
43-day spread.
When the investment matured, the Francia
siblings demanded the retirement of their
investment but Wincorp rolled-over their
placements
and
issued
Confirmation
Advices for another 34 days.
At the same time, Wincorp 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. Pearlbank was
impleaded in the complaint.
Wincorp was unable to present their
evidence; denied their Motion to Postpone
by RTC and considered to have waived its
right to present evidence. RTC ruled in
favour of Francias and held that Wincorp is

solely liable to them. Wincorp filed MR

denied.
CA affirmed ruling of RTC.
ISSUE
WON CA is correct in finding Wincorp solely
liable to pay the Francias.

HELD
YES
Sec.34, Rule 132 of Rules on Evidence court
shall consider no evidence which has not
been formally offered. The purpose for
which the evidence is offered must be
specified.
Attached documents in MR (RTC) cannot be
given any probative weight or credit
because the documents were not formally
offered as evidence in trial court.
Established by the oral evidence and
confirmed
by
Confirmation
Advices,
Francias failed to get their investment after
43 days and was rolled over for another 34
days; Wincorp never negated these saying
it merely acted as an agent of Francias and
Pearlbank is the actual borrower.
Contract of agency and that Pearlbank
received Francias money were never
proven. The fact that Pearlbank was printed
in
Confirmation
Advices
does
not
automatically makes it liable to Francias as
nothing therein shows that Pearlbank
adhered or acknowledged that it is the
actual borrower.
Question of law; findings of CA are final &
conclusive.
In contract of agency, a person binds himself
to render some service or to something in
representation or on behalf of another with
the authority or consent of the latter.
Elements of coa: (1) consent, express or
implied; (2) object is the execution of a
juridical act in relation to a third person; (3)
agents act as a representative and not for
himself; (4) agent acts within the scope of
his authority.
Principal-agent relationship between Francias
and Wincorp was not duly established by
evidence. The record does not show that
Wincorp merely brokered loan transaction
between Francias and Pearlbank and the
latter was the actual recipient of the
money. Pearlbank did not authorize

Wincorp to borrow money for it. Neither

was there a ratification, expressly or
implied. There was not even a promissory
note validly and duly executed by
Pearlbank which would in any way serve as
evidence of borrowing.
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 suit 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.

PETITION DENIED.