G.R. No. 2962, Macket et al. v. Camps, 7 Phil. 553 Febr ar! 27, "9#7 B. H. MACKE, ET AL.

, plai$ti%%s&appellees, vs. JOSE CAMPS, 'e%e$'a$t&appella$t. Manuel G. Gavieres for appellant. Gibbs & Gale for appellees. CARSON, J.: (he plai$ti%%s i$ this actio$, ). *. Macke a$' +. *. Cha$'ler, part$ers 'oi$, b si$ess $'er the %irm $ame o% Macke, Cha$'ler - Compa$!, alle,e that ' ri$, the mo$ths o% Febr ar! a$' March, "9#5, the! sol' to the 'e%e$'a$t a$' 'elivere' at his place o% b si$ess, k$o.$ as the /+ashi$,to$ Ca%e,/ vario s bills o% ,oo's amo $ti$, to P35".5#0 that the 'e%e$'a$t has o$l! pai' o$ acco $t o% sai' acco $ts the s m o% P"710 that there is still ' e them o$ acco $t o% sai' ,oo's the s m o% P"77.5#0 that be%ore i$stit ti$, this actio$ the! ma'e 'ema$' %or the pa!me$t thereo%0 a$' that 'e%e$'a$t ha' %aile' a$' re% se' to pa! the sai' bala$ce or a$! part o% it p to the time o% the %ili$, o% the complai$t. ). *. Macke 2is the .it$ess3, o$e o% the plai$ti%%s, testi%ie' that o$ the or'er o% o$e Ricar'o Flores, .ho represe$te' himsel% to be a,e$t o% the 'e%e$'a$t, he shippe' the sai' ,oo's to the 'e%e$'a$ts at the +ashi$,to$ Ca%e0 that Flores later ack$o.le',e' the receipt o% sai' ,oo's a$' ma'e vario s pa!me$ts thereo$ amo $ti$, i$ all to P"710 that o$ 'ema$' %or pa!me$t o% bala$ce o% the acco $t Flores i$%orme' him that he 'i' $ot have the $ecessar! % $'s o$ ha$', a$' that he .o l' have to .ait the ret r$ o% his pri$cipal, the 'e%e$'a$t, .ho .as at that time visiti$, i$ the provi$ces0 that Flores ack$o.le',e' the bill %or the ,oo's % r$ishe' a$' the cre'its bei$, the amo $t set o t i$ the complai$t0 that .he$ the ,oo's .ere or'ere' the! .ere or'ere' o$ the cre'it o% the 'e%e$'a$t a$' that the! .ere shippe' b! the plai$ti%%s a%ter i$4 ir! .hich satis%ie' the .it$ess as to the cre'it o% the 'e%e$'a$t a$' as to the a thorit! o% Flores to act as his a,e$t0 that the .it$ess al.a!s believe' a$' still believes that Flores .as the a,e$t o% the 'e%e$'a$t0 a$' that .he$ he .e$t to the +ashi$,to$ Ca%e %or the p rpose o% collecti$, his bill he %o $' Flores, i$ the abse$ce o% the 'e%e$'a$t i$ the provi$ces, appare$tl! i$ char,e o% the b si$ess a$' claimi$, to be the b si$ess ma$a,er o% the 'e%e$'a$t, sai' b si$ess bei$, that o% a hotel .ith a bar a$' resta ra$t a$$e5e'. 6 .ritte$ co$tract 'ate' Ma! 25, "9#1, .as i$tro' ce' i$ evi'e$ce, %rom .hich it appears that o$e Galmes, the %ormer o.$er o% the b si$ess $o. k$o. as the /+ashi$,to$ Ca%e,/ s bre$te' the b il'i$, .herei$ the b si$ess .as co$' cte', to the 'e%e$'a$t %or a perio' o% o$e !ear, %or the p rpose o% carr!i$, o$ that b si$ess, the 'e%e$'a$t obli,ati$, himsel% $ot to s blet or s bre$t the b il'i$, or the b si$ess .itho t the co$se$t o% the sai' Galmes. (his co$tract .as si,$e' b! the 'e%e$'a$t a$' the $ame o% Ricar'o Flores appears thereo$ as a .it$ess, a$' attache' thereto is a$ i$ve$tor! o% the % r$it re a$' %itti$,s .hich also is si,$e' b! the 'e%e$'a$t .ith the .or' /s blessee/ 2subarrendatario3 belo. the $ame, a$' at the %oot o% this i$ve$tor! the .or' /receive'/ 2recibo3 %ollo.e' b! the $ame /Ricar'o Flores,/ .ith the .or's /ma$a,i$, a,e$t/ 2el manejante encargado3 imme'iatel! %ollo.i$, his $ame. Galmes .as calle' to the sta$' a$' i'e$ti%ie' the above& 'escribe' 'oc me$t as the co$tract a$' i$ve$tor! 'elivere' to him b! the 'e%e$'a$t, a$' % rther state' that he co l' $ot tell .hether Flores .as .orki$, %or himsel% or %or some o$e else 7 that it to sa!, .hether Flores .as ma$a,i$, the b si$ess as a,e$t or s blessee. (he 'e%e$'a$t 'i' $ot ,o o$ the sta$' $or call a$! .it$esses, a$' relies .holl! o$ his co$te$tio$ that the %ore,oi$, %acts are $ot s %%icie$t to establish the %act that he receive' the ,oo's %or .hich pa!me$t is 'ema$'e'. 8$ the abse$ce o% proo% o% the co$trar! .e thi$k that this evi'e$ce is s %%icie$t to s stai$ a %i$'i$, that Flores .as the a,e$t o% the 'e%e$'a$t i$ the ma$a,eme$t o% the bar o% the +ashi$,to$ Ca%e .ith a thorit! to bi$' the 'e%e$'a$t, his pri$cipal, %or the pa!me$t o% the ,oo's me$tio$e' i$ the complai$t. (he co$tract i$tro' ce' i$ evi'e$ce s %%icie$tl! establishes the %act that the 'e%e$'a$t .as the o.$er o% b si$ess a$' o% the bar, a$' the title o% /ma$a,i$, a,e$t/ attache' to the si,$at re o% Flores .hich appears o$ that co$tract, to,ether .ith the %act that, at the time the p rchases i$ 4 estio$ .ere ma'e, Flores .as appare$tl! i$ char,e o% the b si$ess, per%ormi$, the ' ties s all! e$tr ste' to ma$a,i$, a,e$t, leave little room %or 'o bt that he .as there as a thori9e' a,e$t o% the 'e%e$'a$t. :$e .ho clothes a$other appare$t a thorit! as his a,e$t, a$' hol's him o t to the p blic as s ch, ca$ $ot be permitte' to 'e$! the a thorit! o% s ch perso$ to act as his a,e$t, to the pre; 'ice o% i$$oce$t thir' parties 'eali$, .ith s ch perso$ i$ ,oo' %aith a$' i$ the %ollo.i$, preass mptio$s or 'e' ctio$s, .hich the la. e5pressl! 'irects to be ma'e %rom partic lar %acts, are 'eeme' co$cl sive< 2"3 /+he$ever a part! has, b! his o.$ 'eclaratio$, act, or omissio$, i$te$tio$all! a$' 'eliberatel! le' a$other to believe a partic lar thi$, tr e, a$' to act po$ s ch belie%, he ca$ $ot, i$ a$! liti,atio$ arisi$, o t s ch 'eclaratio$, act, or omissio$, be permitte' to %alsi%! it/ 2s bsec. ", sec. 333, 6ct $o. "9#30 a$' $less the co$trar! appears, the a thorit! o% a$ a,e$t m st be pres me' to i$cl 'e all the $ecessar! a$' s al mea$s o%

carr!i$, his a,e$c! i$to e%%ect. 2"5 Co$$., 3170 9# N. C. "#"0 "5 =a. 6$$, 2170 13 Mich., 3610 93 N. >., 1950 ?7 8$'., "?7.3 (hat Flores, as ma$a,i$, a,e$t o% the +ashi$,to$ Ca%e, ha' a thorit! to b ! s ch reaso$able 4 a$tities o% s pplies as mi,ht %rom time to time be $ecessar! i$ carr!i$, o$ the b si$ess o% hotel bar ma! %airl! be pres me' %rom the $at re o% the b si$ess, especiall! i$ vie. o% the %act that his pri$cipal appears to have le%t him i$ char,e ' ri$, more or less prolo$,e' perio's o% abse$ce0 %rom a$ e5ami$atio$ o% the items o% the acco $t attache' to the complai$t, .e are o% opi$io$ that he .as acti$, .ithi$ the scope o% his a thorit! i$ or'eri$, these ,oo's are bi$'i$, o$ his pri$cipal, a$' i$ the abse$ce o% evi'e$ce to the co$trar!, % r$ish satis%actor! proo% o% their 'eliver! as alle,e' i$ the complai$t. (he ; ',me$t o% the trial co rt is a%%irme' .ith the costs o% his i$sta$ce a,ai$st the appella$t. 6%ter e5piratio$ o% t.e$t! 'a!s ; ',me$t .ill be re$'ere' i$ accor'a$ce here.ith, a$' te$ 'a!s therea%ter the case rema$'e' to the lo.er co rt %or proper actio$. @o or'ere'. Arellano, C.J., Torres and Willard, JJ., concur. Tracey, J., dissents.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-40242 December 15, 1982 DOMING CONDE, petitioner, vs. T!E !ONOR "LE COURT O# PPE LS, M NIL P CIENTE CORDERO, $o%e$&er '($& &() '(*e, NICET S LTER , R MON CONDE, $o%e$&er '($& &() '(*e, C T LIN T. CONDE, respondents. MELENCIO-!ERRER , J.: n appeal b! certiorari fro" the Decision of respondent #ourt of ppeals 1 $# %&.R. No. '()**% R+ affir"in, the -ud,"ent of the #ourt of First Instance of .e!te, /ranch I0, Tacloban #it! $#ivil #ase No. /%))1+, 2hich dis"issed petitioner3s #o"plaint for 4uietin, of Title and ordered her to vacate the propert! in dispute and deliver its possession to private respondents Ra"on #onde and #atalina #onde. The established facts, as found b! the #ourt of ppeals, sho2 that on 5 pril )6*(. Mar,arita #onde, /ernardo #onde and the petitioner Do"in,a #onde, as heirs of Santia,o #onde, sold 2ith ri,ht of repurchase, 2ithin ten $)1+ !ears fro" said date, a parcel of a,ricultural land located in Ma,hubas /urauen .e!te, $.ot ('1+, 2ith an appro7i"ate area of one $)+ hectare, to #asi"ira Pasa,ui, "arried to Pio ltera $hereinafter referred to as the lteras+, for P)89.11. The :Pacto de Retro Sale: further provided; ... $'+ if at the end of )1 !ears the said land is not repurchased, a ne2 a,ree"ent shall be "ade bet2een the parties and in no case title and o2nership shall be vested in the hand of the part! of the S<#OND P RT $the lteras+. 777 777 777 $<7hibit :/:+ On )5 pril )6'), the #adastral #ourt of .e!te ad-udicated .ot No. ('1 to the lteras :sub-ect to the ri,ht of rede"ption b! Do"in,a #onde, 2ithin ten $)1+ !ears countin, fro" pril 5, )6(*, after returnin, the a"ount of P)89.11 and the a"ounts paid b! the spouses in concept of land ta7 ... : $<7hibit :):+. Ori,inal #ertificate of Title No. N%9*' in the na"e of the spouses Pio ltera and #asi"ira Pasa,ui, sub-ect to said ri,ht of repurchase, 2as transcribed in the :Re,istration /oo=: of the Re,istr! of Deeds of .e!te on )' Nove"ber )698 $<7hibit :>:+. On >( Nove"ber )6'9, private respondent Paciente #ordero, son%in%la2 of the lteras, si,ned a docu"ent in the Visa!an dialect, the <n,lish translation of 2hich reads; M<MOR ND?M OF R<P?R#@ S< OV<R P R#<. OF . ND SO.D AIT@ R<P?R#@ S< A@I#@ DO#?M<NT &OT .OST A<, PIO .T<R and P #I<NT< #ORD<RO, both of le,al a,e, and residents of /urauen .e!te, Philippines, after havin, been dul! s2orn to in accordance 2ith la2 free fro" threats and inti"idation, do hereb! depose and sa!; ). That I, PIO .T<R bou,ht 2ith the ri,ht of repurchase t2o parcels of land fro" DOMIN& #OND<, /<RN RDO #OND< ND M R& RIT #OND<, all brother and sisters. >. That these t2o parcels of land 2ere all inherited b! the three. *. That the docu"ent of S .< AIT@ T@< RI&@T OF R<P?R#@ S< ,ot lost in spite of the dili,ent efforts to locate the sa"e 2hich 2as lost durin, the 2ar. '. That these t2o parcels of land 2hich 2as the sub-ect "atter of a Deed of Sale 2ith the Ri,ht of Repurchase consists onl! of one docu"ent 2hich 2as lost. 9. /ecause it is about ti"e to repurchase the land, I have allo2ed the representative of Do"in,a #onde, /ernardo #onde and Mar,arita #onde in the na"e of <?S</IO M RI..< to repurchase the sa"e. 8. No2, this ver! da! Nove"ber >(, )6'9, ) or Ae have received to,ether 2ith Paciente #ordero 2ho is "! son%in%la2 the a"ount of ON< @?NDR<D SI0TB%FIV< P<SOS $P)89. 11+ Philippine #urrenc! of le,al tender 2hich 2as the consideration in that sale 2ith the ri,ht of repurchase 2ith respect to the t2o parcels of land. That 2e further covenant to,ether 2ith Paciente #ordero 2ho is "! son%in%la2 that fro" this da! the said Do"in,a #onde, /ernardo #onde and Mar,arita #onde 2ill a,ain ta=e possession of the afore"entioned parcel of land because the! repurchased the sa"e fro" "e. If and 2hen their possession over the said parcel of land be disturbed b! other persons, I and Paciente #ordero 2ho is "! son%in%la2 2ill defend in behalf of the herein brother and sisters "entioned above, because the sa"e 2as alread! repurchased b! the". IN AITN<SS A@<R<OF, I or Ae have hereunto affi7ed our thu"b"ar= or si,nature to our respective

na"es belo2 this docu"ent or "e"orandu" this >(th da! of Nove"ber )6'9 at /urauen .e!te, Philippines, in the presence of t2o 2itnesses. PIO .T<R $S,d.+ P #I<NT< #ORD<RO AITN<SS<S; ). $S&D.+ T<ODORO #. &?I..ON To be noted is the fact that neither of the vendees%a%retro, Pio ltera nor #asi"ira Pasa,ui, 2as a si,nator! to the deed. Petitioner "aintains that because Pio ltera 2as ver! ill at the ti"e, Paciente #ordero e7ecuted the deed of resale for and on behalf of his father%in%la2. Petitioner further states that she redee"ed the propert! 2ith her o2n "one! as her co%heirs 2ere bereft of funds for the purpose. The pacto de retro docu"ent 2as eventuall! found. On *1 Cune )689 Pio ltera sold the disputed lot to the spouses Ra"on #onde and #atalina T. #onde, 2ho are also private respondents herein. Their relationship to petitioner does not appear fro" the records. Nor has the docu"ent of sale been e7hibited. #ontendin, that she had validl! repurchased the lot in Duestion in )6'9, petitioner filed, on )8 Canuar! )686, in the #ourt of First Instance of .e!te, /ranch I0, Tacloban #it!, a #o"plaint $#ivil #ase No. /%))1+, a,ainst Paciente #ordero and his 2ife Nicetas ltera, Ra"on #onde and his 2ife #atalina T. #onde, and #asi"ira Pasa,ui Pio ltera havin, died in )688+, for Duietin, of title to real propert! and declaration of o2nership. Petitioner3s evidence is that Paciente #ordero si,ned the Me"orandu" of Repurchase in representation of his father%in%la2 Pio ltera, 2ho 2as seriousl! sic= on that occasion, and of his "other%in%la2 2ho 2as in Manila at the ti"e, and that #ordero received the repurchase price of P89.11. Private respondents, for their part, adduced evidence that Paciente #ordero si,ned the docu"ent of repurchase "erel! to sho2 that he had no ob-ection to the repurchaseE and that he did not receive the a"ount of P)89.11 fro" petitioner inas"uch as he had no authorit! fro" his parents%in%la2 2ho 2ere the vendees%a%retro. fter trial, the lo2er #ourt rendered its Decision dis"issin, the #o"plaint and the counterclai" and orderin, petitioner :to vacate the propert! in dispute and deliver its peaceful possession to the defendants Ra"on #onde and #atalina T. #onde:. On appeal, the #ourt of ppeals upheld the findin,s of the #ourt a quo that petitioner had failed to validl! e7ercise her ri,ht of repurchase in vie2 of the fact that the Me"orandu" of Repurchase 2as si,ned b! Paciente #ordero and not b! Pio ltera, the vendee%a%retro, and that there is nothin, in said docu"ent to sho2 that #ordero 2as specificall! authoriFed to act for and on behalf of the vendee a retro, Pio ltera. Reconsideration havin, been denied b! the ppellate #ourt, the case is before us on revie2. There is no Duestion that neither of the vendees%a%retro si,ned the :Me"orandu" of Repurchase:, and that there 2as no for"al authoriFation fro" the vendees for Paciente #ordero to act for and on their behalf. Of si,nificance, ho2ever, is the fact that fro" the e7ecution of the repurchase docu"ent in )6'9, possession, 2hich heretofore had been 2ith the lteras, has been in the hands of petitioner as stipulated therein. .and ta7es have also been paid for b! petitioner !earl! fro" )6'5 to )686 inclusive $<7hibits :D: to :D%)9:E and :<:+. If, as opined b! both the #ourt a quo and the ppellate #ourt, petitioner had done nothin, to for"aliFe her repurchase, b! the sa"e to=en, neither have the vendees%a%retro done an!thin, to clear their title of the encu"brance therein re,ardin, petitioner3s ri,ht to repurchase. No ne2 a,ree"ent 2as entered into b! the parties as stipulated in the deed of pacto de retro, if the vendors a retro failed to e7ercise their ri,ht of rede"ption after ten !ears. If, as alle,ed, petitioner e7erted no effort to procure the si,nature of Pio ltera after he had recovered fro" his illness, neither did the lteras repudiate the deed that their son%in% la2 had si,ned. Thus, an i"plied a,enc! "ust be held to have been created fro" their silence or lac= of action, or their failure to repudiate the a,enc!. 2 Possession of the lot in dispute havin, been adversel! and uninterruptedl! 2ith petitioner fro" )6'9 2hen the docu"ent of repurchase 2as e7ecuted, to )686, 2hen she instituted this action, or for >' !ears, the lteras "ust be dee"ed to have incurred in laches. + That petitioner "erel! too= advanta,e of the abandon"ent of the land b! the lteras due to the separation of said spouses, and that petitioner3s possession 2as in the concept of a tenant, re"ain bare assertions 2ithout proof. Private respondents Ra"on #onde and #atalina #onde, to 2ho" Pio ltera sold the disputed propert! in )689, assu"in, that there 2as, indeed, such a sale, cannot be said to be purchasers in ,ood faith. O#T No. 9*' in the na"e of the lteras specificall! contained the condition that it 2as sub-ect to the ri,ht of repurchase 2ithin )1 !ears fro" )6*(. lthou,h the ten%!ear period had lapsed in )689 and there 2as no annotation of an! repurchase b! petitioner, neither had the title been cleared of that encu"brance. The purchasers 2ere put on notice that so"e other person could have a ri,ht to or interest in the propert!. It behooved Ra"on #onde and #atalina #onde to have loo=ed into the ri,ht of rede"ption inscribed on the title, and particularl! the "atter of possession, 2hich, as also ad"itted b! the" at the pre%trial, had been 2ith petitioner since )6'9. Private respondent "ust be held bound b! the clear ter"s of the Me"orandu" of Repurchase that he had si,ned 2herein he ac=no2led,ed the receipt of P)89.11 and assu"ed the obli,ation to "aintain the repurchasers in peaceful possession should the! be :disturbed b! other persons:. It 2as e7ecuted in the Visa!an dialect 2hich he understood. @e cannot no2 be

allo2ed to dispute the sa"e. :... If the contract is plain and uneDuivocal in its ter"s he is ordinaril! bound thereb!. It is the dut! of ever! contractin, part! to learn and =no2 its contents before he si,ns and delivers it.: 4 There is nothin, in the docu"ent of repurchase to sho2 that Paciente #ordero had si,ned the sa"e "erel! to indicate that he had no ob-ection to petitioner3s ri,ht of repurchase. /esides, he 2ould have had no personalit! to ob-ect. To uphold his oral testi"on! on that point, 2ould be a departure fro" the parol evidence rule 5 and 2ould defeat the purpose for 2hich the doctrine is intended. ... The purpose of the rule is to ,ive stabilit! to 2ritten a,ree"ents, and to re"ove the te"ptation and possibilit! of per-ur!, 2hich 2ould be afforded if parol evidence 2as ad"issible. , In su", althou,h the contendin, parties 2ere le,all! 2antin, in their respective actuations, the repurchase b! petitioner is supported b! the ad"issions at the pre%trial that petitioner has been in possession since the !ear )6'9, the date of the deed of repurchase, and has been pa!in, land ta7es thereon since then. The i"peratives of substantial -ustice, and the eDuitable principle of laches brou,ht about b! private respondents3 inaction and ne,lect for >' !ears, loo" in petitioner3s favor. A@<R<FOR<, the -ud,"ent of respondent #ourt of ppeals is hereb! R<V<RS<D and S<T SID<, and petitioner is hereb! declared the o2ner of the disputed propert!. If the ori,inal of O#T No. N%9*' of the Province of .e!te is still e7tant at the office of the Re,ister of Deeds, then said official is hereb! ordered to cancel the sa"e and, in lieu thereof, issue a ne2 Transfer #ertificate of Title in the na"e of petitioner, Do"in,a #onde. No costs. SO ORD<R<D. Teehankee (Chairman), Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur. #oo$-o$e) ) Tenth Division co"posed of C. Ra"on #. FernandeF, ponente concurred in b! CC. Ricardo #. Puno and /. S. de la Fuente. > rt. )(86, #ivil #ode. * rcuino vs. paris, >> S#R '15 $)68(+E Me-ia de .ucas vs. &a"ponia, )11 Phil. >5( $)698+. ' Tan Tua Sia vs. Bu /iao Sontua, 98 Phil. 5)) $)6*>+. 9 Sec. 5. <vidence of 2ritten a,ree"ents. Ahen the ter"s of an a,ree"ent have been reduced to 2ritin,, and, therefore, there can be, bet2een the parties and their successors in interest, no evidence of the ter"s of the a,ree"ent other than the contents of the 2ritin,, e7cept in the follo2in, cases; $a+ Ahere a "ista=e or i"perfection of the 2ritin,, or its failure to e7press the true intent and a,ree"ent of the parties, or the validit! of the a,ree"ent is put in issue b! the pleadin,sE $b+ Ahen there is an intrinsic a"bi,uit! in the 2ritin,. The ter" :a,ree"ent: includes 2ins. $.i" Bhi .u!a vs. #ourt of ppeals, 66 S#R 86> $)6(1+. 8 Tan Tua Sia vs. Bu /iao Sontua, supra.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 1055,2 Se.$ember 2/, 199+ LU0 PINED , M RILOU MONTENEGRO, 1IRGINI L RCON, DIN LOREN 2O, CELI C LUM" G 3-4 LUCI LONTO5, petitioners, vs. !ON. COURT O# PPE LS 3-4 T!E INSUL R LI#E SSUR NCE COMP N2, LIMITED, respondents. ariano V. !mpil, Jr. "or petitioners. Ramon #. Ca$uiao "or private respondent. D 1IDE, 6R., J.: This is an appeal b! certiorari to revie2 and set aside the Decision of the public respondent #ourt of ppeals in # %&.R. SP No. >>691 1 and its Resolution den!in, the petitioners3 "otion for reconsideration. 2 The challen,ed decision "odified the decision of the Insurance #o""ission in I# #ase No. RD%19(. + The petitioners 2ere the co"plainants in I# #ase No. RD%19(, an ad"inistrative co"plaint a,ainst private respondent Insular .ife ssurance #o"pan!, .td. $hereinafter Insular .ife+, 2hich 2as filed 2ith the Insurance #o""ission on >1 Septe"ber )6(6. 4 The! pra!ed therein that after due proceedin,s, Insular .ife :be ordered to pa! the clai"ants their insurance clai"s: and that :proper sanctionsGpenalties be i"posed on: it :for its deliberate, fec=less violation of its contractual obli,ations to the co"plainants, and of the Insurance #ode.: 5 Insular .ife3s "otion to dis"iss the co"plaint on the ,round that :the clai"s of co"plainants are all respectivel! be!ond the -urisdiction of the Insurance #o""ission as provided in Section ')8 of the Insurance #ode,: , havin, been denied in the Order of )' Nove"ber )6(6, /it filed its ans2er on 9 Dece"ber )6(6. 8 Thereafter, hearin,s 2ere conducted on various dates. On >1 Cune )661, the #o""ission rendered its decision 9 in favor of the co"plainants, the dispositive portion of 2hich reads as follo2s; A@<R<FOR<, this #o""ission "erel! orders the respondent co"pan! to; a+ Pa! a fine of FIV< @?NDR<D P<SOS $P911.11+ a da! fro" the receipt of a cop! of this Decision until actual pa!"ent thereofE b+ Pa! and settle the clai"s of DIN BO and .?#I .ONTOH, for P91,111.11 and P'1,111.11, respectivel!E c+ Notif! henceforth it should notif! individual beneficiaries desi,nated under an! &roup Polic!, in the event of the death of insured$s+, 2here the correspondin, clai"s are filed b! the Polic!holderE d+ Sho2 cause 2ithin ten da!s 2h! its other responsible officers 2ho have handled this case should not be sub-ected to disciplinar! and other ad"inistrative sanctions for deliberatel! releasin, to #apt. Nuval the chec= intended for spouses . R#ON, in the absence of an! Special Po2er of ttorne! for that "atter, and for ne,li,ence 2ith respect to the release of the other five chec=s. SO ORD<R<D. 10 In holdin, for the petitioners, the Insurance #o""ission "ade the follo2in, findin,s and conclusions; fter ta=in, into consideration the evidences IsicJ, testi"onial and docu"entar! for the co"plainants and the respondent, the #o""ission finds thatE First; The respondent erred in appreciatin, that the po2ers of attorne! e7ecuted b! five $9+ of the several beneficiaries conve! absolute authorit! to #apt. Nuval, to de"and, receive, receipt and ta=e deliver! of insurance proceeds fro" respondent Insular .ife. cursor! readin, of the Duestioned po2ers of authorit! 2ould disclosed IsicJ that the! do not contain in uneDuivocal and clear ter"s authorit! to #apt. Nuval to obtain, receive, receipt fro" respondent co"pan! insurance proceeds arisin, fro" the death of the sea"an%insured. On the contrar!, the said po2ers of attorne! are couched in ter"s 2hich could easil! arouse suspicion of an ordinar! "an. . . . Second; The testi"on! of the co"plainants3 rebuttal 2itness, Mrs. Trinidad larcon, 2ho declared in no uncertain ter"s that neither she nor her husband, e7ecuted a special po2er of attorne! in favor of #aptain Rosendo Nuval, authoriFin, hi" to clai", receive, receipt and ta=e deliver! of an! insurance proceeds fro" Insular .ife arisin, out of the death of their insuredGsea"an son, is not convincin,l! refuted. Third; Respondent Insular .ife did not observe Section )(1 of the Insurance #ode, 2hen it issued or released t2o chec=s in the a"ount of P)91,111.11 for the three "inor children $P91,111.11 each+ of co"plainant, Dina !o and another chec= of P'1,111.11 for "inor beneficiar! Marissa .onto=, dau,hter

of another co"plainant .ucia .onto=, there bein, no sho2in, of an! court authoriFation presented or the reDuisite bond posted. Section )(1 is Duotes IsicJ partl! as follo2s; . . . In the absence of a -udicial ,uardian, the father, or in the latter3s absence or incapacit!, the "other of an! "inor, 2ho is an insured or a beneficiar! under a contract of life, health or accident insurance, "a! e7ercise, in behalf of said "inor, an! ri,ht, under the polic!, 2ithout necessit! of court authorit! or the ,ivin, of a bond %here the interest o" the minor in the particular act involved does not e&ceed t%ent' thousand pesos . . . . 11 Insular .ife appealed the decision to the public respondent 2hich doc=eted the case as # %&.R. SP No. >>691. The appeal ur,ed the appellate court to reverse the decision because the Insurance #o""ission $a+ had no -urisdiction over the case considerin, that the clai"s e7ceeded P)11,111.11, $b+ erred in holdin, that the po2ers of attorne! relied upon b! Insular .ife 2ere insufficient to conve! absolute authorit! to #apt. Nuval to de"and, receive and ta=e deliver! of the insurance proceeds pertainin, to the petitioners, $c+ erred in not ,ivin, credit to the version of Insular .ife that the po2er of attorne! supposed to have been e7ecuted in favor of the larcons 2as "issin,, and $d+ erred in holdin, that Insular .ife 2as liable for violatin, Section )(1 of the Insurance #ode for havin, released to the survivin, "others the insurance proceeds pertainin, to the beneficiaries 2ho 2ere still "inors despite the failure of the for"er to obtain a court authoriFation or to post a bond. On )1 October )66), the public respondent rendered a decision, 12 the decretal portion of 2hich reads; A@<R<FOR<, the decision appealed fro" is "odified b! eli"inatin, therefro" the a2ard to Dina !o and .ucia .onto= in the a"ounts of P91,111.11 and P'1,111.11, respectivel!. 1+ It found the follo2in, facts to have been dul! established; It appears that on >* Septe"ber )6(*, Pri"e Marine Services, Inc. $PMSI, for brevit!+, a cre2in,G"annin, outfit, procured &roup PoIic! No. &%11'86' fro" respondent%appellant Insular .ife ssurance #o., .td. to provide life insurance covera,e to its sea%based e"plo!ees enrolled under the plan. On )5 Februar! )6(8, durin, the effectivit! of the polic!, si7 covered e"plo!ees of the PMSI perished at sea 2hen their vessel, MGV Ne"os, a &ree= car,o vessel, sun= so"e2here in <l Cadida, Morocco. The! 2ere survived b! co"plainants%appellees, the beneficiaries under the polic!. Follo2in, the tra,ic de"ise of their loved ones, co"plainants%appellees sou,ht to clai" death benefits due the" and, for this purpose, the! approached the President and &eneral Mana,er of PMSI, #apt. Roberto Nuval. The latter evinced 2illin,ness to assist co"plainants%appellees to recover Overseas Aor=ers Aelfare d"inistration $OAA + benefits fro" the PO< and to 2or= for the increase of their P NDIM N and other benefits arisin, fro" the deaths of their husbandsGsons. The! 2ere thus "ade to e7ecute, 2ith the e7ception of the spouses larcon, special po2ers of attorne! authoriFin, #apt. Nuval to, a"on, others, :follo2 up, as=, de"and, collect and receive: for their benefit inde"nities of su"s of "one! due the" relative to the sin=in, of MGV Ne"os. /! virtue of these 2ritten po2ers of attorne!, co"plainants%appellees 2ere able to receive their respective death benefits. ?n=no2n to the", ho2ever, the PMSI, in its capacit! as e"plo!er and polic!holder of the life insurance of its deceased 2or=ers, filed 2ith respondent%appellant for"al clai"s for and in behalf of the beneficiaries, throu,h its President, #apt. Nuval. "on, the docu"ents sub"itted b! the latter for the processin, of the clai"s 2ere five special po2ers of attorne! e7ecuted b! co"plainants%appellees. On the basis of these and other docu"ents dul! sub"itted, respondent%appellant dre2 a,ainst its account 2ith the /an= of the Philippine Islands on >5 Ma! )6(8 si7 $8+ chec=s, four for P>11,11.11 each, one for P91,111.11 and another for P'1,11.11, pa!able to the order of co"plainants%appellees. These chec=s 2ere released to the treasurer of PMSI upon instructions of #apt. Nuval over the phone to Mr. Mariano ?rbano, ssistant Depart"ent Mana,er for &roup d"inistration Depart"ent of respondent%appellant. #apt. Nuval, upon receipt of these chec=s fro" the treasurer, 2ho happened to be his son%in%la2, endorsed and deposited the" in his account 2ith the #o""ercial /an= of Manila, no2 /oston /an=. On * Cul! )6(6, after co"plainants%appellees learned that the! 2ere entitled, as beneficiaries, to life insurance benefits under a ,roup polic! 2ith respondent%appellant, the! sou,ht to recover these benefits fro" Insular .ife but the latter denied their clai" on the ,round that the liabilit! to co"plainants%appellees 2as alread! e7tin,uished upon deliver! to and receipt b! PMSI of the si7 $8+ chec=s issued in their na"es. 14 On the basis thereof, the public respondent held that the Insurance #o""ission had -urisdiction over the case on the ,round that althou,h so"e of the clai"s e7ceed P)11,111.11, the petitioners had as=ed for ad"inistrative sanctions a,ainst Insular

.ife 2hich are 2ithin the #o""ission3s -urisdiction to ,rantE hence, :there 2as "erel! a "is-oinder of causes of action . . . and, li=e "is-oinder of parties, it is not a ,round for the dis"issal of the action as it does not affect the other reliefs pra!ed for.: 15 It also re-ected Insular .ife3s clai" that the larcons had sub"itted a special po2er of attorne! 2hich the! $Insular .ife+ later "isplaced. On the other hand, the public respondent ruled that the po2ers of attorne!, <7hibits :): to :9,: relied upon b! Insular .ife 2ere sufficient to authoriFe #apt. Nuval to receive the proceeds of the insurance pertainin, to the beneficiaries. It stated; Ahen the officers of respondent%appellant read these 2ritten po2ers, the! "ust have assu"ed #apt. Nuval indeed had authorit! to collect the insurance proceeds in behalf of the beneficiaries 2ho dul! affi7ed their si,natures therein. The 2ritten po2er is specific enou,h to define the authorit! of the a,ent to collect an! su" of "one! pertainin, to the sin=in, of the fatal vessel. Respondent%appellant interpreted this po2er to include the collection of insurance proceeds in behalf of the beneficiaries concerned. Ae believe this is a reasonable interpretation even b! an officer of respondent%appellant unschooled in the la2. @ad respondent appellant, consulted its le,al depart"ent it 2ould not have received a contrar! vie2. There is nothin, in the la2 2hich "andates a specific or special po2er of attorne! to be e7ecuted to collect insurance proceeds. Such authorit! is not included in the enu"eration of rt. )(5( of the Ne2 #ivil #ode. Neither do 2e perceive collection of insurance clai"s as an act of strict do"inion as to reDuire a special po2er of attorne!. Moreover, respondent%appellant had no reason to doubt #apt. Nuval. Not onl! 2as he ar"ed 2ith a see"in,l! ,enuine authoriFation, he also appeared to be the proper person to deal 2ith respondent%appellant bein, the President and &eneral Mana,er of the PMSI, the polic!holder 2ith 2ho" respondent%appellant al2a!s dealt. The fact that there 2as a verbal a,ree"ent bet2een co"plainants% appellees and #apt. Nuval li"itin, the authorit! of the latter to clai"in, specified death benefits cannot pre-udice the insurance co"pan! 2hich relied on the ter"s of the po2ers of attorne! 2hich on their face do not disclose such li"itation. ?nder the circu"stances, it appearin, that co"plainants%appellees have failed to point to a positive provision of la2 or stipulation in the polic! reDuirin, a specific po2er of attorne! to be presented, respondents%appellant3s reliance on the 2ritten po2ers 2as in order and it cannot be penaliFed for such an act. 1, Insofar as the "inor children of Dina !o and .ucia .onto= 2ere concerned, it ruled that the reDuire"ent in Section )(1 of the Insurance #ode 2hich provides in part that; In the absence of a -udicial ,uardian, the father, or in the latter3s absence or incapacit!, the "other, of an! "inor, 2ho is an insured or a beneficiar! under a contract of life, health or accident insurance, "a! e7ercise, in behalf of said "inor, an! ri,ht under the polic!, 2ithout necessit! of court authorit! or the ,ivin, of a bond, 2here the interest of the "inor in the particular act involved does not e7ceed t2ent! thousand pesos. Such a ri,ht, "a! include, but shall not be li"ited to, obtainin, a polic! loan, surrenderin, the polic!, receivin, the proceeds of the polic!, and ,ivin, the "inor3s consent to an! transaction on the polic!. has been a"ended b! the Fa"il! #ode 1/ 2hich ,rants the father and "other -oint le,al ,uardianship over the propert! of their une"ancipated co""on child 2ithout the necessit! of a court appoint"entE ho2ever, 2hen the "ar=et value of the propert! or the annual inco"e of the child e7ceeds P91,111.11, the parent concerned shall be reDuired to put up a bond in such a"ount as the court "a! deter"ine. @ence, this petition for revie2 on certiorari 2hich 2e ,ave due course after the private respondent had filed the reDuired co""ent thereon and the petitioners their repl! to the co""ent. Ae rule for the petitioners. Ae have carefull! e7a"ined the specific po2ers of attorne!, <7hibits :): to :9,: 2hich 2ere e7ecuted b! petitioners .uF Pineda, .ucia /. .onto=, Dina !o, #elia #alu"a,, and Maril!n Montene,ro, respectivel!, on )' Ma! )6(8 18 and unifor"l! ,ranted to #apt. Rosendo Nuval the follo2in, po2ers; To follo2%up, as=, de"and, collect and receipt for "! benefit inde"nities or su" of "one! due "e relative to the sin=in, of M.V. N<MOS in the vicinit! of <l Cadida, #asablanca, Morocco on the evenin, of Februar! )5, )6(8E and To si,n receipts, docu"ents, pertinent 2aivers of inde"nities or other 2ritin,s of 2hatsoever nature 2ith an! and all third persons, concerns and entities, upon ter"s and conditions acceptable to "! said attorne!. Ae a,ree 2ith the Insurance #o""ission that the special po2ers of attorne! :do not contain in uneDuivocal and clear ter"s authorit! to #apt. Nuval to obtain, receive, receipt fro" respondent co"pan! insurance proceeds arisin, fro" the death of the sea"an%insured. On the contrar!, the said po2ers of attorne! are couched in ter"s 2hich could easil! arouse suspicion of an ordinar! "an.: 19 The holdin, of the public respondent to the contrar! is principall! pre"ised on its opinion that; ItJhere is nothin, in the la2 2hich "andates a specific or special po2er of attorne! to be e7ecuted to collect insurance proceeds. Such authorit! is not included in the enu"eration of art. )(5( of the Ne2 #ivil #ode. Neither do 2e perceive collection of insurance clai"s as an act of strict do"inion as to reDuire a special po2er of attorne!.

If this be so, then the! could not have been "eant to be a ,eneral po2er of attorne! since <7hibits :): to :9: are special po%ers o" attorne'. The e7ecution b! the principals of special po%ers o" attorne', 2hich clearl! appeared to be in prepared for"s and onl! had to be filled up 2ith their na"es, residences, dates of e7ecution, dates of ac=no2led,"ent and others, e7cludes an! intent to ,rant a ,eneral po2er of attorne! or to constitute a universal a,enc!. /ein, special po2ers of attorne!, the! "ust be strictl! construed. #ertainl!, it 2ould be hi,hl! i"prudent to read into the special po2ers of attorne! in Duestion the po2er to collect and receive the insurance proceeds due the petitioners fro" &roup Polic! No. &%11'86'. Insular .ife =ne2 that a po2er of attorne! in favor of #apt. Nuval for the collection and receipt of such proceeds 2as a deviation fro" its practice 2ith respect to ,roup policies. Such practice 2as testified to b! Mr. Marciano ?rbano, Insular .ife3s ssistant Mana,er of the &roup d"inistrative Depart"ent, thus; TTB. # &?IO ; #an !ou e7plain to us 2h! in this case, the clai" 2as filed b! a certain #apt. Noval IsicJK AITN<SS; a The practice of our co"pan! in clai" pertainin, to ,roup insurance, the polic!holder is the one 2ho files the clai" for the beneficiaries of the deceased. t that ti"e, #apt. Noval IsicJ is the President and &eneral Mana,er of Pri"e Marine. D Ahat is the reason 2h! polic!holders are the ones 2ho file the clai" and not the desi,nated beneficiaries of the e"plo!ees of the polic!holdersK a Bes because ,roup insurance is nor"all! ta=en b! the e"plo!er as an e"plo!ee%benefit pro,ra" and as such, the benefit should be a2arded b! the polic!holder to "a=e it appear that the benefit reall! is ,iven b! the e"plo!er. 20 On cross%e7a"ination, ?rbano further elaborated that even pa!"ents, a"on, other thin,s, are coursed throu,h the polic!holder; D Ahat is the corporate concept of ,roup insurance insofar as Insular .ife is concernedK AITN<SS; a &roup insurance is a contract 2here a ,roup of individuals are covered under one "aster contract. The individual under2ritin, characteristics of each individual is not considered in the deter"ination of 2hether the individual is insurable or not. The contract is bet2een the polic!holder and the insurance co"pan!. In our case, it is Pri"e Marine and Insular .ife. Ae do not have contractual obli,ations 2ith the individual e"plo!eesE it is bet2een Pri"e Marine and Insular .ife. D !nd so it is part o" that concept that all inquiries, "ollo%(up, pa'ment o" claims, premium )illin$s, etc. should al%a's )e coursed thru the polic'holder* a Bes that is our practice. D !nd %hen 'ou sa' claim pa'ments should al%a's )e coursed thru the polic'holder, do 'ou require a po%er o" attorne' to )e presented )' the polic'holder or not* a Not necessaril!. D In other 2ords, under a ,roup insurance polic! li=e the one in this case, Insular .ife could pa! the clai"s to the polic!holder hi"self even 2ithout the presentation of an! po2er of attorne! fro" the desi,nated beneficiariesK 777 777 777 AITN<SS; a No. Sir. TTB. MPI.; D Ah!K Is this case, the present case different fro" the cases 2hich !ou ans2ered that no po2er of attorne! is necessar! in clai"s pa!"entsK AITN<SS; a Ae did not pa! Pri"e MarineE 2e paid the beneficiaries. D Aill !ou no2 tell the @onorable #o""ission 2h! !ou did not pa! Pri"e Marine and instead paid the beneficiaries, the desi,nated beneficiariesK 777 777 777 TTB. MPI.; I 2ill rephrase the Duestion. D Aill !ou tell the #o""ission 2hat circu"stances led !ou to pa! the desi,nated beneficiaries, the co"plainants in this case, instead of the polic!holder 2hen as !ou ans2ered a 2hile a,o, it is !our practice in ,roup insurance that clai"s pa!"ents, etc., are coursed thru the polic!holderK

AITN<SS; a It is coursed but, it is not paid to the polic!holder. D nd so in this case, !ou ,ave the chec=s to the polic!holder onl! coursin, the" thru said polic!holderK a That is ri,ht, Sir. D Not directl! to the desi,nated beneficiariesK a Bes, Sir. 21 This practice is usual in the ,roup insurance business and is consistent 2ith the -urisprudence thereon in the State of #alifornia L fro" 2hose la2s our Insurance #ode has been "ainl! patterned L 2hich holds that the e"plo!er% polic!holder is the a,ent of the insurer. &roup insurance is a co"parativel! ne2 for" of insurance. In the ?nited States, the first "odern ,roup insurance policies appear to have been issued in )6)) b! the <Duitable .ife ssurance Societ!. 22 &roup insurance is essentiall! a sin,le insurance contract that provides covera,e for "an! individuals. In its ori,inal and "ost co""on for", ,roup insurance provides life or health insurance covera,e for the e"plo!ees of one e"plo!er. The covera,e ter"s for ,roup insurance are usuall! stated in a "aster a,ree"ent or polic! that is issued b! the insurer to a representative of the ,roup or to an ad"inistrator of the insurance pro,ra", such as an e"plo!er. 2+The e"plo!er acts as a functionar! in the collection and pa!"ent of pre"iu"s and in perfor"in, related duties. .i=e2ise fallin, 2ithin the a"bit of ad"inistration of a ,roup polic! is the disburse"ent of insurance pa!"ents b! the e"plo!er to the e"plo!ees. 24 Most policies, such as the one in this case, reDuire an e"plo!ee to pa! a portion of the pre"iu", 2hich the e"plo!er deducts fro" 2a,es 2hile the re"ainder is paid b! the e"plo!er. This is =no2n as a contributor! plan as co"pared to a non% contributor! plan 2here the pre"iu"s are solel! paid b! the e"plo!er. lthou,h the e"plo!er "a! be the titular or na"ed insured, the insurance is actuall! related to the life and health of the e"plo!ee. Indeed, the e"plo!ee is in the position of a real part! to the "aster polic!, and even in a non%contributor! plan, the pa!"ent b! the e"plo!er of the entire pre"iu" is a part of the total co"pensation paid for the services of the e"plo!ee. 25 Put differentl!, the labor of the e"plo!ees is the true source of the benefits, 2hich are a for" of additional co"pensation to the". It has been stated that ever! proble" concernin, ,roup insurance presented to a court should be approached 2ith the purpose of ,ivin, to it ever! le,iti"ate opportunit! of beco"in, a social a,enc! of real conseDuence considerin, that the pri"ar! ai" is to provide the e"plo!er 2ith a "eans of procurin, insurance protection for his e"plo!ees and their fa"ilies at the lo2est possible cost, and in so doin,, the e"plo!er creates ,ood2ill 2ith his e"plo!ees, enables the e"plo!ees to carr! a lar,er a"ount of insurance than the! could other2ise, and helps to attract and hold a per"anent class of e"plo!ees. 2, In +l"strom vs. ,e% -ork .i"e /nsurance Compan', 2/ the #alifornia Supre"e #ourt e7plicitl! ruled that in ,roup insurance policies, the e"plo!er is the a,ent of the insurer. Thus; Ae are convinced that the e"plo!er is the a,ent of the insurer in perfor"in, the duties of ad"inisterin, ,roup insurance policies. It cannot be said that the e"plo!er acts entirel! for its o2n benefit or for the benefit of its e"plo!ees in underta=in, ad"inistrative functions. Ahile a reduced pre"iu" "a! result if the e"plo!er relieves the insurer of these tas=s, and this, of course, is advanta,eous to both the e"plo!er and the e"plo!ees, the insurer also en-o!s si,nificant advanta,es fro" the arran,e"ent. The reduction in the pre"iu" 2hich results fro" e"plo!er%ad"inistration per"its the insurer to realiFe a lar,er volu"e of sales, and at the sa"e ti"e the insurer3s o2n ad"inistrative costs are "ar=edl! reduced. 777 777 777 The "ost persuasive rationale for adoptin, the vie2 that the e"plo!er acts as the a,ent of the insurer, ho2ever, is that the e"plo!ee has no =no2led,e of or control over the e"plo!er3s actions in handlin, the polic! or its ad"inistration. n a,enc! relationship is based upon consent b! one person that another shall act in his behalf and be sub-ect to his control. It is clear fro" the evidence re,ardin, procedural techniDues here that the insurer%e"plo!er relationship "eets this a,enc! test 2ith re,ard to the ad"inistration of the polic!, 2hereas that bet2een the e"plo!er and its e"plo!ees fails to reflect true a,enc!. The insurer directs the perfor"ance of the e"plo!er3s ad"inistrative acts, and if these duties are not underta=en properl! the insurer is in a position to e7ercise "ore constricted control over the e"plo!er3s conduct. In ,eider vs. Continental !ssurance Compan', 28 2hich 2as cited in +l"strom, it 2as held that; ItJhe e"plo!er o2es to the e"plo!ee the dut' o" $ood "aith and due care in attendin, to the polic!, and that the e"plo!er should "a=e clear to the e"plo!ee an!thin, reDuired of hi" to =eep the polic! in effect, and the ti"e that the obli,ations are due. In its position as ad"inistrator of the polic!, 2e feel also that the e"plo!er should be considered as the a,ent of the insurer, and an' omission o" dut' to the e"plo!ee in its ad"inistration should be attri)uta)le to the insurer. The rulin, in +l"strom 2as subseDuentl! reiterated in the cases of 0ass vs. John 1ancock utual .i"e /nsurance Co. 29 and etropolitan .i"e /nsurance Co. vs. #tate 0oard o" +qualization. +0

In the li,ht of the above disDuisitions and after an e7a"ination of the facts of this case, 2e hold that PMSI, throu,h its President and &eneral Mana,er, #apt. Nuval, acted as the a,ent of Insular .ife. The latter is thus bound b! the "isconduct of its a,ent. Insular .ife, ho2ever, li=e2ise reco,niFed #apt. Nuval as the attorne!%in%fact of the petitioners. ?nfortunatel!, throu,h its official, Mr. ?rbano, it acted i"prudentl! and ne,li,entl! in the pre"ises b! rel!in, 2ithout Duestion on the special po2er of attorne!. In #tron$ vs. Repide, +1 this #ourt ruled that it is a"on, the established principles in the civil la2 of <urope as 2ell as the co""on la2 of "erican that third persons deal 2ith a,ents at their peril and are bound to inDuire as to the e7tent of the po2er of the a,ent 2ith 2ho" the! contract. nd in 1arr' +. 2eller +lectric Co. vs. Rodri$uez,+2 this #ourt, Duotin, echem on !$enc', ++ stated that; The person dealin, 2ith an a,ent "ust also act 2ith ordinar! prudence and reasonable dili,ence. Obviousl!, if he =no2s or has ,ood reason to believe that the a,ent is e7ceedin, his authorit!, he cannot clai" protection. So if the su,,estions of probable li"itations be of such a clear and reasonable Dualit!, or if the character assu"ed b! the a,ent is of such a suspicious or unreasonable nature, or if the authorit! 2hich he see=s to e7ercise is of such an unusual or i"probable character, as 2ould suffice to put an ordinaril! prudent "an upon his ,uard, the part! dealin, 2ith hi" "a! not shut his e!es to the real state of the case, but should either refuse to deal 2ith the a,ent at all, or should ascertain "rom the principal the true condition o" a""airs. $e"phasis supplied+ <ven ,rantin, for the sa=e of ar,u"ent that the special po2ers of attorne! 2ere in due for", Insular .ife 2as ,rossl! ne,li,ent in deliverin, the chec=s, dra2n in favor of the petitioners, to a part! 2ho is not the a,ent "entioned in the special po2er of attorne!. Nor can 2e a,ree 2ith the opinion of the public respondent that since the shares of the "inors in the insurance proceeds are less than P91,111.11, then under rticle >>9 of the Fa"il! #ode their "others could receive such shares 2ithout need of either court appoint"ents as ,uardian or the postin, of a bond. It is of the vie2 that said rticle had repealed the third para,raph of Section )(1 of the Insurance #ode. +4 The pertinent portion of rticle >>9 of the Fa"il! #ode reads as follo2s; rt. >>9. The father and the "other shall -ointl! e7ercise le,al ,uardianship over the propert! of their une"ancipated co""on child 2ithout the necessit! of a court appoint"ent. In case of disa,ree"ent, the father3s decision shall prevail, unless there is -udicial order to the contrar!. Ahere the "ar=et value of the propert! or the annual inco"e of the child e7ceeds P91,111, the parent concerned shall be reDuired to furnish a bond in such a"ount as the court "a! deter"ine, but not less than ten per centu" $)1M+ of the value of the propert! or annual inco"e, to ,uarantee the perfor"ance of the obli,ations prescribed for ,eneral ,uardians. It is clear fro" the said rticle that re,ardless of the value of the une"ancipated co""on child3s propert!, the father and "other ipso 3ure beco"e the le,al ,uardian of the child3s propert!. @o2ever, if the "ar=et value of the propert! or the annual inco"e of the child e7ceeds P91,111.11, a bond has to be posted b! the parents concerned to ,uarantee the perfor"ance of the obli,ations of a ,eneral ,uardian. It "ust, ho2ever, be noted that the second para,raph of rticle >>9 of the Fa"il! #ode spea=s of the :"ar=et value of the propert! or the annual inco"e of the child,: 2hich "eans, therefore, the a,,re,ate of the child3s propert! or annual inco"eE if this e7ceeds P91,111.11, a bond is reDuired. There is no evidence that the share of each of the "inors in the proceeds of the ,roup polic! in Duestion is the "inor3s onl! propert!. Aithout such evidence, it 2ould not be safe to conclude that, indeed, that is his onl! propert!. A@<R<FOR<, the instant petition is &R NT<D. The Decision of )1 October )66) and the Resolution of )6 Ma! )66> of the public respondent in # %&.R. SP No. >>691 are S<T SID< and the Decision of the Insurance #o""ission in I# #ase No. RD%19( is R<INST T<D. #osts a,ainst the private respondent. SO ORD<R<D. Cruz, 0ellosillo and 4uiason, JJ., concur. Gri5o(!quino, J., is on leave. 7 #oo$-o$e) ) nne7 :F: of PetitionE Rollo, 95%8'. Per ssociate Custice .uis . Cavellana, concurred in b! ssociate Custices Cor,e S. I"perial and Serafin V. #. &uin,ona. >. nne7 :I: of PetitionE /d., ('%(8. * nne7 :#: of PetitionE /d., *)%*(. ' Ori,inal Records $OR+, I# #ase No. RD%19(, )%*. 9 OR, I# #ase NO. RD%19(, *. 8 /d., )>. 5 /d., )9.

( /d., )5%)(. 6 /d., >)'%>>>. Per <duardo T. Malinis, ssistant Insurance #o""issioner and Officer%in%#har,e. )1 OR, I# #ase No. RD%19(, >>)%>>>. )) OR, I# #ase No. RD%19(, >)6%>>). )> nne7 :F: of PetitionE Rollo, 95%89. )* /d., 8'. )' Rollo, 9(%96. )9 Rollo, 81, citin, Section )), Rule * and Pacal vs. Ra"os, () Phil. *1 I)6'(J. )8 Rollo, 8>. )5 Public respondent cites no specific article. <videntl!, ho2ever, it refers to rticle >>9 of the Fa"il! #ode. )( OR, I# #ase No. RD%19(, 66%)1*. )6 OR, I# #ase No. RD%19(, >>1. >1 TSN, )8 Canuar! )661, '. >) TSN, )8 Canuar! )661, >9%>5. >> &R<&&, D.A., Group .i"e /nsurance, *rd ed., )681, 9%5. >* H<<TON, R.<. N AIDISS, .I., /nsurance .a%, ! Guide to 6undamental Principles, (.e$al 7octrines, and Commercial Practices), )6(( ed., O >.8$a+. >' Metropolitan .ife Insurance #o. vs. State /oard of <DualiFation, 89> P. >d $#al. Sup. #t. )6(>+. >9 H<<TON N AIDISS, supra. >8 Neider vs. #ontinental ssurance #o., *9 So. >d >*5 $.a. Sup. #t. )6'(+. >5 '*> P. >d 5*) $#al. Sup. #t. )658+. >( #upra. >6 9)( P. >d ))'5 $#al. Sup. #t. )65'+. *1 #upra. *) 8 Phil. 8(1 I)618J. *> '' Phil. )6, >8 I)66>J. ** Volu"e I, Section 59>. *' PD. No. 8)>, pro"ul,ated on )( Dece"ber )65', as a"ended, and thereafter codified pursuant to P.D. No. )'81, pro"ul,ated on )) Cune )65(.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-125/9 689: 2/, 1918 GREGORIO 6IMENE0, plaintiff%appellee, vs. PEDRO R "OT, NICOL S 6IMENE0 3-4 &er &8)b3-4 EMILIO RODRIGUE0, defendants. PEDRO R "OT, appellant. !ntonio 0en$son "or appellant. Jose Rivera "or appellee. STREET, J.; This action 2as instituted b! the plaintiff, &re,orio Ci"eneF, to recover fro" the defendant, Pedro Rabot, a parcel of land situated in the "unicipalit! of la"inos, in the Province of Pan,asinan, and described in the co"plaint as follo2s; ppro7i"ate area of three hectaresE bounded on the north and 2est 2ith land of Pedro Re!noso, on the south 2ith land of Nicolasa Ci"eneF, and on the east 2ith land of #ali7ta postol before, at present 2ith that of Cuan Monte"a!or and Si"on del /arrio. It is situated in Din"a!at Tancaran, barrio of los of this sa"e "unicipalit! of la"inos, Pan,asinan. Fro" a -ud,"ent rendered in favor of the plaintiff, Pedro Rabot has appealedE but his co%defendants, Nicolasa Ci"eneF and her husband, 2ho 2ere cited b! the defendant for the purpose of holdin, her liable upon her 2arrant! in case of his eviction, have not appealed. It is ad"itted that the parcel of land in Duestion, to,ether 2ith t2o other parcels in the sa"e localit! ori,inall! belon,ed of the heirs in the division of the estate of his father. It is further appears that 2hile &re,orio 2as sta!in, at Vi,an, in the Province of Ilocos Sur, durin, the !ear )6)), his propert! in la"inos 2as confided b! hi" to the care of his elder sister Nicolasa Ci"eneF. On Februar! 5 of that !ear he 2rote this sister a letter fro" Vi,an in 2hich he infor"ed her that he 2as pressed for "one! and reDuested her to sell one of his parcels of land and send hi" the "one! in order that he "i,ht pa! his debts. This letter contains no description of the land to be sold other than is indicated in the 2ords :one of "! parcels of land: $:uno de "is terrenos:+. ctin, upon this letter Nicolasa approached the defendant Pedro Rabot, and the latter a,reed to bu! the parcel in Duestion for the su" of P911. T2o hundred and fift! peso 2ere paid at once, 2ith the understandin, that a deed of conve!ance 2ould be e7ecuted 2hen the balance should be paid. Nicolasa ad"its havin, received this pa!"ent of P>91 at the ti"e statedE but there is no evidence that she sent an! of it to her brother. bout one !ear later &re,orio ca"e do2n to la"inos and de"anded that his sister should surrender this piece of land to hi", it bein, then in her possession. She refused upon so"e prete7t or other to do soE and as a result &re,orio, in con-unction 2ith others of his brothers and sisters, 2hose properties 2ere also in the hands of Nicolasa, instituted an action in the #ourt of First Instance for the purpose of recoverin, their land fro" her control. This action 2as decided favorabl! to the plaintiffs upon u,ust )>, )6)*E and no appeal 2as ta=en fro" the -ud,"ent. Mean2hile, upon Ma! *), )6)>, Nicolasa Ci"eneF e7ecuted and delivered to Pedro Rabot a deed purportin, to conve! to hi" the parcel of land 2hich is the sub-ect of this controvers!. The deed recites that the sale 2as "ade in consideration of the su" of P911, the pa!"ent of 2hich is ac=no2led,ed. Pedro Rabot 2ent into possession, and the propert! 2as found in his hands at the ti"e 2hen final -ud,"ent 2as entered in favor of the plaintiffs in the action above "entioned. It 2ill thus be seen that Pedro Rabot acDuired possession under the deed fro" Nicolasa durin, the pendenc! of the liti,ation appear that he 2as at the ti"e co,niFant of that circu"stance. In considerin, the Duestions presented b! this appeal one or t2o preli"inar! observations "a! be "ade. The first is that, as a "atter of for"alit!, a po2er of attorne! to conve! real propert! ou,ht to appear in a public docu"ent, -ust as an! other instru"ent intended to trans"it or conve! an interest in such propert! ou,ht to appear in a public docu"ent. $ rt. )>(1, #ivil #ode.+ /ut inas"uch as it is an established doctrine that a private docu"ent is co"petent to create, trans"it, "odif!, or e7tin,uish a ri,ht in real propert! $Thun,a #hui vs. 4ue /entec, > Phil. Rep., 98)E #outo Soriano vs. #ortes, ( Phil. Rep., '96+, it follo2s that a po2er of attorne! to conve! such propert!, even thou,h in the for" of a private docu"ent, 2ill operate 2ith effect. ,ain, supposin, that the letter contained adeDuate authorit! for Nicolasa to sell the propert! in Duestion, her action in conve!in, the propert! in her o2n na"e, 2ithout sho2in, the capacit! in 2hich she acted, 2as doubtless irre,ular. Nevertheless, such deed 2ould in an! event operate to bind her brother, the plaintiff in its character as a contract $.!on vs. Polloc=, 66 ?.S., 88(E >9 .. ed., >89+, and supposin, that the authorit! 2as sufficient, he could be co"pelled b! a proper -udicial proceedin, to e7ecute a docu"ent to carr! such contract into effect. $ rt. )>56, #ivil #ode.+ The principal Duestion for consideration therefore in the end resolves itself into this, 2hether the authorit! conferred on Nicolasa b! the letter of Februar! 5, )6)), 2as sufficient to enable her to bind her brother. The onl! provisions of la2 bearin, on this point are contained in article )5)* of the #ivil #ode and in section **9 of the #ode of #ivil Procedure. rticle )5)* of the #ivil #ode reDuires that the authorit! to alienate land shall be contained in an e7press "andateE 2hile

subsection 9 of section **9 of the #ode of #ivil Procedure sa!s that the authorit! of the a,ent "ust be in 2ritin, and subscribed b! the part! to be char,ed. Ae are of the opinion that the authorit! e7pressed in the letter is a sufficient co"pliance 2ith both reDuire"ents. It has been ur,ed here that in order for the authorit! to be sufficient under section **9 of the #ode of #ivil Procedure the authoriFation "ust contain a particular description of the propert! 2hich the a,ent is to be per"itted to sell. There is no such reDuire"ent in subsection 9 of section **9E and 2e do not believe that it 2ould be le,iti"ate to read such a reDuire"ent into it. The purpose in ,ivin, a po2er of attorne! is to substitute the "ind and hand of the a,ent for the "ind and hand of the principalE and if the character and e7tent of the po2er is so far defined as to leave no doubt as to the li"its 2ithin 2hich the a,ent is authoriFed to act, and he acts 2ithin those li"its, the principal cannot Duestion the validit! of his act. It is not necessar! that the particular act to be acco"plished should be predestinated b! the lan,ua,e of the po2er. The Duestion to be ans2ered al2a!s, after the po2er has been e7ercised, is rather this; Aas the act 2hich the a,ent perfor"ed 2ithin the scope of his authorit!K In the case before us, if the Duestion is as=ed 2hether the act perfor"ed b! Nicolasa Ci"eneF 2as 2ithin the scope of the authorit! 2hich had been conferred upon her, the ans2er "ust be obviousl! in the affir"ative. It should not escape observation that the proble" 2ith 2hich 2e are here concerned relates to the sufficienc! of the po2er of attorne! under subsection 9 of section **9 of the #ode of #ivil Procedure and not to the sufficienc! of the note or "e"orandu" of the contract, or a,ree"ent of sale, reDuired b! the sa"e subsection, in connection 2ith the first para,raph of the sa"e section. It is 2ell%settled in the -urisprudence of <n,land and the ?nited States that 2hen the o2ner, or his a,ent, co"es to "a=e a contract to sell, or a conve!ance to effect a transfer, there "ust be a description of the propert! 2hich is the sub-ect of the sale or conve!ance. This is necessar! of course to define the ob-ect of the contract. $/roc=2a! vs. Frost, '1 Minn., )99E #arr vs. Passaic .and etc. #o., )6 N. C. <D., '>'E .ippincott vs. /rid,e2ater, 99 N. C. <D., >1(E #rai, vs. Pelian, )*5 #al., )19E >1 #!c., >5).+ The ,eneral rule here applicable is that the description "ust be sufficientl! definite to identif! the land either fro" the recitals of the contract or deed or fro" e7ternal facts referred to in the docu"ent, thereb! enablin, one to deter"ine the identit! of the land and if the description is uncertain on its face or is sho2n to be applicable 2ith eDual plausibilit! to "ore than one tract, it is insufficient. The principle e"bodied in these decisions is not, in our opinion, applicable to the present case, 2hich relates to the sufficienc! of the authoriFation, not to the sufficienc! of the contract or conve!ance. It is unDuestionable that the deed 2hich Nicolasa e7ecuted contains a proper description of the propert! 2hich she purported to conve!. There is a"ple authorit! to the effect that a person "a! b! a ,eneral po2er of attorne! an a,ent to sell :all: the land possessed b! the principal, or all that he possesses in a particular cit!, count!, or state. $Roper vs.McFadden, '( #al., *'8E Ro2nd vs. Davidson, ))* .a., )1'5E #arson vs. Ra!, 9> N. #., 816E 5( ". Dec., >85E *) #!c., )>>6.+ It is also held that 2here a person authoriFes an a,ent to sell a far" $:"! far":+ in a certain count!, this is sufficient, if it be sho2n that such part! has onl! one far" in that countr!. $Marriner vs. Dennison, 5( #al., >1>.+ In .inton vs. Moorhead $>16 Pa. St., 8'8+, the po2er authoriFed the a,ent to sell or conve! :an! or all tracts, lots, or parcels: of land belon,in, to the plaintiff. It 2as held that this 2as adeDuate. In .!on vs. Polloc= $66 ?.S., 88(+, the o2ner in effect authoriFed an a,ent to sell ever!thin, he had in San ntonio Te7as. The authorit! 2as held sufficient. In .inan vs. Puno $*) Phil. Rep., >96+, the authorit! ,ranted 2as to the effect that the a,ent "i,ht ad"inister :the interests: possessed b! the principal in the "unicipalit! of Tarlac and to that end he 2as authoriFed to purchase, sell, collect, and pa!, etc. It 2as held that this 2as a sufficient po2er. In the present case the a,ent 2as ,iven the po2er to sell either of the parcels of land belon,in, to the plaintiff. Ae can see no reason 2h! the perfor"ance of an act 2ithin the scope of this authorit! should not bind the plaintiff to the sa"e e7tent as if he had ,iven the a,ent authorit! to sell :an! or all: and she had conve!ed onl! one. Fro" 2hat have been said it is evident that the lo2er court should have absolved the defendant Pedro Rabot fro" the co"plaint. Cud,"ent 2ill accordin,l! be reversed, 2ithout an! e7press ad-udication of costs this instance. So ordered. Torres, Johnson, alcolm, !vance5a and 6isher, JJ., concur.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-9,08 8%8)$ /, 1915 DIEGO LI< N, plaintiff%appellee, vs. M RCOS P. PUNO, ET L., defendants%appellants. ariano +scueta "or appellants. #. .opez "or appellee. 6O!NSON, J.; The facts upon 2hich the decision in this case depends are as follo2s; $)+ The the plaintiff, in the "onth of Ma!, )61(, and for a lon, ti"e prior thereto, 2as the o2ner of a certain parcel of land particularl! described in para,raph > of the co"plaint. $>+ That on the )8th da! of Ma!, )61(, the plaintiff e7ecuted the follo2in, docu"ent, 2hich conferred upon the defendant Marcos P. Puno the po2er, duties and obli,ations therein contained; I, Die,o .iQan, of a,e, "arried, a resident of Daet, Province of "bos #a"arines, Philippine Islands, and at the present ti"e te"poraril! residin, in this cit! of Tarlac, capital of the Province of Tarlac, P.I., set forth that I hereb! confer sufficient po2er, such as the la2 reDuires, upon Mr. Marcos P. Puno, li=e2ise a resident of this cit! of Tarlac, capital of the Province of Tarlac, in order that in "! na"e and representation he "a! ad"inister the interest I possess 2ithin this "unicipalit! of Tarlac, purchase, sell, collect and pa!, as 2ell as sue and be sued before an! authorit!, appear before the courts of -ustice and ad"inistrative officers in an! proceedin, or business concernin, the ,ood ad"inistration and advance"ent of "! said interests, and "a!, in necessar! cases, appoint attorne!s at la2 or attorne!s in fact to represent hi". The "eanin,, purport, and po2er conferred b! this docu"ent constitute the ver! ,ist of the present action. $*+ That in Cune, )6)), the defendant Puno, for the su" of P(11, sold and delivered said parcel of land to the other defendants. The plaintiff alle,es that the said docu"ent $<7hibit + did not confer upon the defendant Puno the po2er to sell the land and pra!ed that the sale be set asideE that the land be returned to hi", to,ether 2ith da"a,es. The defendants at first presented a de"urrer to the co"plaint, 2hich 2as overruled. To the order overrulin, the de"urrer the defendants dul! e7cepted. The! later ans2ered. In their ans2er the! first denied ,enerall! and speciall! all of the i"portant facts stated in the co"plaint. In their special ans2er or defense the! ad"itted the sale of the land b! Puno to the other defendants and alle,ed that the sa"e 2as a valid sale and pra!ed to be relieved fro" the liabilit! under the co"plaint, 2ith their costs. ?pon the issue thus presented the lo2er court decided; $)+ That the docu"ent <7hibit did not ,ive Puno authorit! to sell the landE $>+ that the sale 2as ille,al and voidE $*+ That defendants should return to the land to the plaintiffE and $'+ That the defendants should pa! to the plaintiff the su" of P),111 as da"a,es, P'11 of 2hich the defendant Puno should alone be responsible for, and to pa! the costs. Fro" that decision the defendants appealed to this court and "ade the follo2in, assi,n"ents of error; I. The lo2er court erred in overrulin, the de"urrer filed b! the appellants to the co"plaints. II. The lo2er court erred in holdin, that the appellant Marcos P. Puno 2as not authoriFed to sell the land in Duestion and that the sale e7ecuted b! the said Marcos P. Puno to the other appellants, <nriDue, Vicente, Duilina and Re"edios, surna"ed Ma,lano=, is null and void. III. The lo2er court erred in orderin, the appellee, Die,o .iQan, to return to the appellants, <nriDue, Vicente, Duilina, and Re"edios Ma,lano= the su" of P(11, the sellin, price of the land Duestion. III. nd, finall!, the lo2er court erred in sentencin, the appellants to pa! to the appellee the su" of P),111, the value of the products collected, and to pa! the costs. IV. nd, finall!, the lo2er court erred in sentencin, the appellant to pa! to the appellee the su" of P),111, the value of the products collected, and to pa! the costs. Aith reference to the first assi,n"ent of error, 2e are of the opinion that the facts stated in the opinion are sufficient to constitute a cause of action. Aith reference to the second assi,n"ent of error, the plaintiff alle,es that the po2er of attorne!, as contained in <7hibit , did not authoriFe the defendant Puno had full and co"plete po2er and authorit! to do 2hat he did. The lo2er court held that <7hibit onl! ,ave Puno po2er and authorit! to ad"inister the landE that he 2as not authoriFed to sell it. O"ittin, the purel! e7planator! parts of <7hibit , it reads as follo2s; :I, Die,o .iQan, ... set forth that I ... confer sufficient po2er, such as the la2 reDuires, upon Mr. Marcos P. Puno ... in order that in "! na"e and representation he "a! ad"inister ... purchase, sell, collect and pa! ... in an! proceedin, or business concernin, the ,ood ad"inistration and advance"ent of "! said interests, and "a!, in necessar! cases, appoint at la2 or attorne!s in fact to represent hi".:

#ontracts of a,enc! as 2ell as ,eneral po2ers of attorne! "ust be interpreted in accordance 2ith the lan,ua,e used b! the parties. the real intention of the parties is pri"aril! to be deter"ined fro" the lan,ua,e used. The intention is to be ,athered fro" the 2hole instru"ent. In case of doubt resort "ust be had to the situation, surroundin,s and relations of the parties. Ahenever it is possible, effect is to be ,iven to ever! 2ord and clause used b! the parties. It is to be presu"ed that the parties said 2hat the! intended to sa! and that the! used each 2ord or clause 2ith so"e purpose and that purpose is, if possible, to be ascertained and enforced. The intention of the parties "ust be sustained rather than defeated. If the contract be open to t2o constructions, one of 2hich 2ould uphold 2hile the other 2ould overthro2 it, the for"er is to be chosen. So, if b! one construction the contract 2ould be ille,al, and b! another eDuall! per"issible construction it 2ould be la2ful, the latter "ust be adopted. The acts of the parties in carr!in, out the contract 2ill be presu"ed to be done in ,ood faith. The acts of the parties 2ill be presu"ed to have been done in confor"it! 2ith and not contrar! to the intent of the contract. The "eanin, of ,enerals 2ords "ust be construed 2ith reference to the specific ob-ect to be acco"plished and li"ited b! the recitals "ade in reference to such ob-ect. Aith these ,eneral observations in "ind, ,let us e7a"ine the ter"s of the po2er conferred upon the defendant Puno $<7hibit + and ascertain, if possible, 2hat 2as the real intent of the plaintiff. The lo2er court held that the :onl! po2er conferred 2as the po2er to ad"inister.: Readin, the contract 2e find it sa!s that the plaintiff :I confer ... po2er ... that ... he "a! ad"inister ... purchase, sell, collect and pa! ... in an! proceedin, or business concernin, the ,ood ad"inistration and advance"ent of "! said interests.: The 2ords :ad"inister, purchase, sell,: etc., see" to be used coordinatel!. <ach has eDual force 2ith the other. There see"s to be no ,ood reason for sa!in, that Puno had authorit! to ad"inister and not to sell 2hen :to sell: 2as as advanta,eous to the plaintiff in the ad"inistration of his affairs as :to ad"inister.: To hold that the po2er 2as :to ad"inister: onl! 2hen the po2er :to sell: 2as eDuall! conferred 2ould be to ,ive to special 2ords of the contract a special and li"ited "eanin, to the e7clusion of other ,eneral 2ords of eDual i"port. The record contains no alle,ation on proof that Puno acted in bad faith or fraudulentl! in sellin, the land. It 2ill be presu"ed that he acted in ,ood faith and in accordance 2ith his po2er as he understood it. That his interpretation of his po2er, as ,athered fro" the contract $<7hibit +, is tenable cannot, 2e believe, be successfull! denied. In vie2 of that fact and vie2 of the fact that, so far as the record sho2s, the other defendants acted in ,ood faith, 2e are of the opinion that the contract, liberall! construed, as 2e thin= it should be, -ustifies the interpretation ,iven it b! Puno. In reachin, this conclusion, 2e have ta=en into account the fact that the plaintiff dela!ed his action to annul said sale fro" the "onth of Cune, )6)), until the )9th of Februar!, )6)*. Neither have 2e overloo=ed the fact in the brief of the appellants that the plaintiff has not returned, nor offered to return, nor indicated a 2illin,ness to return, the purchase price. $ rt. )*1( of the #ivil #odeE Mani=is vs. /las, No. 59(9.)+. In vie2 of all the fore,oin,, 2e are of the opinion that the lo2er court co""itted the error co"plained of in the second assi,n"ent, and, 2ithout discussin, the other assi,n"ents of error, 2e are of the opinion, and so hold, that the -ud,"ent of the lo2er court should be and is hereb! revo=ed and that the appellants should be relieved fro" all liabilit! under the co"plaint. Aithout an! findin, as to costs, it is so ordered. !rellano, C.J., Torres, Carson, and !raullo, JJ., concur.

G.R. No. =&299"7

Aecember 29, "92? B:@C M. D6(8G)6D, Plai$ti%%&6ppellee, vs. (68 *8NG C:., 'e%e$'a$t. P: @EN a$' P: C*8NG i$terve$ors&appella$ts. Dap $a$ a$' Dap $a$ %or i$terve$ors&appella$ts. Fice$te @otto %or appellee. F8==6&RC6=, B.< Po @ $ @ ! a$' Po Chi$, appeal to this co rt %rom the ; ',me$t o% the Co rt o% First 8$sta$ce o% Ma$ila, the 'ispositive part o% .hich is as %ollo.s< ". :r'eri$, the 'e%e$'a$ts Po @ $ @ ! a$' Po Chi$,, as lessees o% the realt!, to pa! the plai$ti%% the s m o% P2?,5##, .ith le,al i$terest %rom the %ili$, o% the complai$t.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 2. :r'eri$, the estate o% the 'ecease' Po (ecsi to pa! the 'e%e$'a$ts Po @ $ @ ! a$' Po Chi$,, that the! ma!, i$ t r$, pa! the plai$ti%% po$ this ; ',me$t the s m .hich represe$ts the re$ts o% te propert! $' l! collecte' %rom the occ pa$ts o% sai' propert! b! Po (ecsi .hile alive a$' b! his a'mi$istrator Po @ $ @ ! a%ter his 'eath, a$' $ot pai' to the plai$ti%% either b! Po (ecsi, %ather o% the 'e%e$'a$t Po @ $ @ !, or b! the latter, or b! 'e%e$'a$t Po Chi$,. @ai' s m th s collecte', accor'i$, to the testimo$! o% the 'e%e$'a$t Po @ $ @ ! 2p. "17, t. s. $.3 is P715, per mo$th, .hich, %or $i$etee$ mo$ths, amo $ts to P"1,"55. (he bala$ce o% the re$ts, that is, the 'i%%ere$ce bet.ee$ the s m o% P",5## %or .hich the propert! .as lease' b! the plai$ti%% to the 'e%e$'a$ts, a$' P715 .hich is the s m collecte' %rom the occ pa$ts o% the propert! each mo$th b! Po (ecsi a$' b! the a'mi$istrator o% his estate m st be %or the acco $t o% the 'e%e$'a$ts0 a$' cha$robles virt al la. librar! 3. :r'eri$, the 'e%e$'a$ts a$' the i$terve$or each to pa! o$e&thir' o% the costs o% the actio$. 8$ s pport o% their appeal the appella$ts assi,$ seve$tee$ errors .hich .e shall take p i$ the co rse o% this 'ecisio$.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he %ollo.i$, %acts have bee$ prove$ b! a prepo$'era$ce o% the evi'e$ce<cha$robles virt al la. librar! Gabi$o )arreto Po C;ap .as the o.$er, .ith a (orre$s title, o% the la$' i$ liti,atio$, .ith the improveme$ts thereo$. (his realt! .as s b;ect to a mort,a,e lie$ i$ %avor o% the Philippi$e Natio$al )a$k, e5ec te' o$ Ma! 5, "9"9, to sec re the pa!me$t o% the s m o% P6#,### .ith 7 per ce$t m i$terest per a$$ m. 2C5hibit 9.3 cha$robles virt al la. librar! :$ November 29, "92", Po (ecsi e5ec te' a ,e$eral po.er o% attor$e! i$ %avor o% his brother Gabi$o )arreto Po C;ap, empo.eri$, a$' a thori9i$, him to per%orm o$ his behal% a$' as la.% l a,e$t, amo$, other acts, the %ollo.i$,< /(o b !, sell or barter, assi,$ or a'mit i$ ac4 itta$ce, or i$ a$! other ma$$er to ac4 ire or co$ve! all sorts o% propert!, real a$' perso$al, b si$esses a$' i$' stries, cre'its, ri,hts a$' actio$ belo$,i$, to me, %or .hatever prices a$' $'er the co$'itio$s .hich he ma! stip late, pa!i$, a$' receivi$, pa!me$t i$ cash or i$ i$stallme$ts, a$' to e5ec te the proper i$str me$ts .ith the %ormalities provi'e' b! the la../ 2C5hibit 6.3 cha$robles virt al la. librar! :$ Aecember "5, "92", Po (ecsi e5ec te' a$ i$str me$t ack$o.le',e a$ i$'ebte'$ess to his brother Gabi$o )arreto Po C;ap i$ the s m o% P6?,###, the price o% the properties .hich the latter ha' sol' to him. 2C5hibit E&".3 :$ March 3", "923, Gabi$o )arreto Po C;ap e5ec te' seco$' mort,a,e o$ the a%oresai' la$' .ith its improveme$ts, i$ %avor o% 6$to$io M. *. =im;e$co %or the s m o% P"1#,### a$' i$terest at "# per ce$t m per a$$ m. 2C5hibit 9.3 cha$robles virt al la. librar! :$ 6pril "7, "923, Gabi$o )arreto Po C;ap, sol' the sai' la$' .ith its improveme$ts to his brother Po (ecsi %or the s m o% P"#,###, s b;ect to the same e$c mbra$ces. 2C5hibit 9.3cha$robles virt al la. librar! :$ November 22, "923, Gabi$o )arreto Po C;ap, maki$, se o% the po.er co$%erre' o$ him b! his brother Po (ecsi, sol' absol tel! a$' %orever to the herei$ plai$ti%%&appellee Bose M. Dati,bak, the a%oresai' la$' .ith its improveme$ts %or the s m o% P"#,###, me$tio$i$, i$ the i$str me$t e5ec te' to that e$' o$l! the mort,a,e lie$ o% P6#,### i$ %avor o% the Philippi$e Natio$al )a$k, a$' .itho t recor'i$, either his po.er o% attor$e! or the sale i$ the proper certi%icate o% title. Not.ithsta$'i$, sai' sale Po (ecsi remai$e' i$ possessio$ o% sai' propert!.cha$roblesvirt ala.librar! cha$robles virt al la. librar! :$ :ctober 22, "921, Po (ecsi lease' a part o% sai' la$' to E! Chia %or a perio's o% %ive !ears %rom :ctober ", "923. (he co$tract 'ra.$ p to that, e$' .as recor'e' i$ the proper certi%icate o% title. 2C5hibit 2 a$' 9.3 cha$robles virt al la. librar! :$ 6 , st 21, "921, Po (ecsi .rote to his brother Gabi$o )arreto Po C;ap complai$i$, that he ha' bee$ a%ter him so m ch %or the %or.ar'i$, o% the re$ts o% the propert! a$' e5plai$i$, his precario s %i$a$cial co$'itio$, telli$, him that he 'i' $ot collect the re$ts %or himsel%, a$' promisi$, to remit the bala$ce a%ter havi$, pai' all e5pe$ses o% repairs a$' clea$i$, p, to,ether .ith the vo chers, so he co l' $ot blame him %or a$!thi$,. 2C5hibits M a$' M&".3cha$robles virt al la. librar! 8$ November, "925, Po (ecsi, a$s.eri$, his brother Gabi$o )arreto Po C;ap, .rote to the latter telli$, him that i$ the mo$th o% :ctober, "925, he ha' se$t him a 'ra%t %or the s m o% P2,###, a$' .as there%ore s rprise' that he claime' sai' re$t. 8$ sai' repl! Po (ecsi also tol' his brother Gabi$o )arreto Po C;ap that i% he .a$te' to lease

the propert! i$ 4 estio$ to @mith )ell - Co., he sho l' $ot 'o so .itho t %irst co$s lti$, him, beca se i% someo$e o%%ere' him a hi,her re$t he .a$te' to e5ercise his ri,ht to lease it. 2C5hibits N a$' N&".3 cha$robles virt al la. librar! :$ Febr ar! 27, "925, the mort,a,e o$ the la$' i$ 4 estio$ i$ %avor o% 6$to$io M. *. =im;e$co %or P"1#,### .as ca$celle', the ca$cellatio$ bei$, recor'e' o$ the proper certi%icate o% title o$ B $e "", "927. 2C5hibit G a$' 9.3 Po (ecsi 'ie' o$ November 26, "926.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 8$ Aecember, "926, Po @ $ @ !, Po (ecsiHs so$, s bmitte' to Gavi$o )arreto Po C;ap a li4 i'atio$ o% acco $ts sho.i$, the re$ts collecte' o$ the propert! p to that mo$th. 2C5hibit P.3 cha$robles virt al la. librar! :$ Febr ar! "", "927, Po @ $ @ ! .as appoi$te' a'mi$istrator o% the estate o% his 'ecease' %ather, s bmitti$, a$ i$ve$tor! i$ .hich he i$cl 'e' the la$' i$ 'isc ssio$ as o$e o% the properties le%t b! his 'ecease' %ather, a$' obtai$i$, the tra$s%er o% the certi%icate o% title i$ his $ame as sai' a'mi$istrator.cha$roblesvirt ala.librar! cha$robles virt al la. librar! :$ Febr ar! "1, "927, Po @ $ >ao alias Po @ $ @ !, a$s.eri$, a letter %rom his $cle Gabi$o )arreto Po C;ap, tol' the latter that times .ere ba', beca se the price o% hemp ha' sl mpe', a$' the pla$tatio$s ha' s %%ere' 'ama,es, a$' be,,e' him to let him pa! the re$t later. 2C5hibits C a$' C&".3cha$robles virt al la. librar! :$ Febr ar! "", "927, Gabi$o )arreto Po C;ap e5ec te' a$ i$str me$t i$ %avor o% his so$ Po @ $ )oo, assi,$i$, to him all his ri,hts a$' actio$s i$ the cre'it o% P6?,### a,ai$st Po (ecsi. 2C5hibit E.3 cha$robles virt al la. librar! :$ Ma! 22, "927, Bose M. Dati,bak sol' the propert! i$ 4 estio$ to Po @ $ )oo %or s m o% P"#,###. 2C5hibit B.3 cha$robles virt al la. librar! :$ Ma! 27, "927, Po @ $ )oo $oti%ie' Po @ $ @ ! a$' Po Chi$, that he ha' p rchase' the la$' the! occ pie' a$' that %rom that 'ate the! .ere to 'eal .ith him co$cer$i$, the pa!me$t o% the re$ts thereo%. 2C5hibit 8.3 cha$robles virt al la. librar! Cver si$ce the propert! i$ 'isc ssio$ ha' bee$ sol' b! Gabi$o )arreto Po C;ap to Bose M. Dati,bak, the %ormer ha' a'mi$istrate' it, e$teri$, i$to a$ oral co$tract o% lease .ith Po (ecsi, .ho occ pie' it at a mo$thl! re$tal o% P",5##, pa!able i$ a'va$ce o$ the %irst 'a! o% each mo$th. =ater o$, .he$ Po (ecsi 'ie', Po @ $ @ !, as a'mi$istrator o% the estate o% his %ather Po (ecsi, co$ti$ e' re$ti$, sai' la$' o$ .hich stoo' Po Chi$,Hs store.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 6s Po (ecsi ha' $ot pai' a part o% the re$t ' e p to the time o% his 'eath, a$' Po @ $ @ !, his so$, the re$t ' e %rom his %atherHs 'eath $til Bose M. Dati,bak tra$s%erre' the o.$ership thereo% to Po @ $ )oo o$ Ma! 23, "927, the prese$t actio$ .as bro ,ht i$ the Co rt o% First 8$sta$ce o% Ma$ila %or the recover! o% sai' re$t .hich amo $ts to P15,2?#, %irst a,ai$st the commercial %irm (ai *i$, Co., a$' later a,ai$st the members o% sai' %irm, Po @ $ @ ! a$' Po Chi$,, b! a$ ame$'me$t to the ori,i$al complai$t.cha$roblesvirt ala.librar! cha$robles virt al la. librar! Po @ $ @ !, as the ; 'icial a'mi$istrator o% the estate o% his 'ecease' %ather Po (ecsi, %ile' a$ i$terve$tio$ pra!i$, that ; ',me$t be re$'ere' a,ai$st Bose M. Dati,bak, the plai$ti%%, 'eclari$, him $ot to be the o.$er o% the propert! 'escribe' i$ the seco$' para,raph o% the complai$t a$', there%ore, $ot e$title' to the re$ts o% the propert! i$ 4 estio$.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he %irst 4 estio$ to be 'etermi$e' i$ the prese$t appeal is o$e o% proce' re, a$' that it .hether or $ot the trial co rt ha' ; ris'ictio$ to tr! the case, o$ its merits.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he appella$ts co$te$' that the! as i$terve$ors, havi$, raise' the 4 estio$ o% o.$ership, the sol tio$ o% .hich is $ecessar! %or the 'etermi$atio$ o% the 4 estio$ o% re$t, the Co rt o% First 8$sta$ce o% Ma$ila ha' $o ; ris'ictio$ to tr! the case, the properties i$ 4 estio$ bei$, sit ate' i$ the m $icipalit! o% (acloba$, Provi$ce o% =e!te.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 6$ actio$ %or the recover! o% re$t is a perso$al actio$, a$' as s ch is tra$sitor! a$' ma! be i$stit te' i$ the provi$ce .here the 'e%e$'a$t or the plai$ti%% resi'es, at the electio$ o% the plai$ti%% 2sec. 377, 6ct No. "9#0 )o,a (a$ Chiao )oc vs. @a;o Feci$a, "" Phil., 1#93. +ith respect to the collectio$ o% re$ts, the$, the Co rt o% First 8$sta$ce o% Ma$ila ha' ; ris'ictio$ to tr! the actio$ i$stit te' to that e$'.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he 4 estio$ o% o.$ership .as raise' b! the i$terve$ors .ho thereb! s bmitte' to the ; ris'ictio$ o% the Co rt o% First 8$sta$ce o% Ma$ila a$', accor'i$, to the 'octri$e lai' 'o.$ i$ the case o% Ma$ila Railroa' Compa$! vs. 6ttor$e!&Ge$eral 22# Phil., 5233, a Co rt o% First 8$sta$ce havi$, % ll a$' $limite' ; ris'ictio$ over realt! sit ate' i$ the Philippi$e 8sla$'s, a Co rt o% First 8$sta$ce o% a provi$ce ma! tr! a case co$cer$i$, realt! sit ate' i$ a$other provi$ce so lo$, as $o ob;ectio$ is e$tere' to sai' co rtHs e5ercise o% its ; ris'ictio$. (he i$terve$ors havi$, s bmitte' to the ; ris'ictio$ o% the co rt b! %ili$, a thir'&part! claim, i$ .hich the! raise' the 4 estio$ o% o.$ership o% the premises, the re$t o% .hich it is so ,ht to recover, the! ca$$ot co$siste$tl! ob;ect to the e5ercise o% sai' ; ris'ictio$.cha$roblesvirt ala.librar! cha$robles virt al la. librar! *avi$, 'eci'e' the 4 estio$ o% the co rtHs ; ris'ictio$ .ith respect to the ve$ e, .e shall pass o$ to the 4 estio$ o% the o.$ership o% the la$' i$volve' herei$.cha$roblesvirt ala.librar! cha$robles virt al la. librar!

8$ %irst place, it is co$te$'e' b! the appella$ts that Gabi$o )arreto Po C;ap .as $ot a thori9e' $'er the po.er e5ec te' b! Po (ecsi i$ his %avor to sell sai' la$', %or the reaso$ that sai' po.er ha' bee$ e5ec te' be%ore Gabi$o )arreto Po C;ap sol' sai' la$' to his brother Po (ecsi.cha$roblesvirt ala.librar! cha$robles virt al la. librar! +e 'o $ot thi$k that o$ this poi$t the perti$e$t part o% the po.er o% attor$e! .e have 4 ote' above co l' ,ive rise to a$! 'o bt. (he po.er is ,e$eral a$' a thori9es Gabi$o Po C;ap to sell a$! ki$' o% realt! /belo$,i$,/ 2perte$e9ca$3 to the pri$cipal. (he se o% the s b; $ctive /perte$e9ca$/ 2mi,ht belo$,3 a$' $ot the i$'icative /perte$ece$/ 2belo$,3, mea$s that Po (ecsi mea$t $ot o$l! the propert! he ha' at the time o% the e5ec tio$ o% the po.er, b t also s ch as the mi,ht a%ter.ar's have ' ri$, the time it .as i$ %orce. 22 Corp s B ris, p. 6"1.3 cha$robles virt al la. librar! (he appella$ts also co$te$' that sai' po.er o% attor$e! $ot havi$, bee$ re,istere' i$ the re,istr! o% 'ee's, the a thorit! ,ra$te' therei$ to sell realt! re,istere' i$ accor'a$ce .ith the (orre$s s!stem is i$e%%ective, a$' the sale o% the propert! i$ 4 estio$ ma'e b! Gabi$o )arreto Po C;ap i$ %avor o% Bose M. Dati,bak b! virt e o% sai' po.er has $o more e%%ect tha$ that o% a co$tract to tra$s%er or sell.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 8$asm ch as i$ accor'a$ce .ith sectio$ 39 o% sai' 6ct No. 196, /Cver! applica$t receivi$, a certi%icate o% title i$ p rs a$ce o% a 'ecree o% re,istratio$, a$' ever! s bse4 e$t p rchaser o% re,istere' la$' .ho takes a certi%icate o% title %or val e i$ ,oo' %aith, shall hol' the same %ree o% all i$c mbra$ce e5cept $ote' o$ sai' certi%icate,/ ever! 'oc me$t .hich i$ a$! ma$$er a%%ects the re,istere' la$' is i$e%%ective $less it is recor'e' i$ the re,istr! o% 'ee's. ) t s ch i$e%%icac! o$l! re%ers to thir' perso$s .ho, i$ ,oo' %aith, ma! have ac4 ire' some ri,ht to the re,istere' la$'.cha$roblesvirt ala.librar! cha$robles virt al la. librar! +hile it is tr e that a po.er o% attor$e! $ot recor'e' i$ the re,istr! o% 'ee's is i$e%%ective i$ or'er tha$ a$ a,e$t or attor$e!&i$&%act ma! vali'l! per%orm acts i$ the $ame o% his pri$cipal, a$' that a$! act per%orme' b! the a,e$t b! virt e o% sai' .ith respect to the la$' is i$e%%ective a,ai$st a thir' perso$ .ho, i$ ,oo' %aith, ma! have ac4 ire' a ri,ht thereto, it 'oes, ho.ever, bi$' the pri$cipal to ack$o.le',e the acts per%orme' b! his attor$e!& i$&%act re,ar'i$, sai' propert! 2sec. 5#, 6ct No. 1963.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 8$ the prese$t case, .hile it is tr e that the $o$&re,istratio$ o% the po.er o% attor$e! e5ec te' b! Po (ecsi i$ %avor o% his brother Gabi$o )arreto Po C;ap preve$ts the sale ma'e b! the latter o% the liti,ate' la$' i$ %avor o% Bose M. Dati,bak %rom bei$, recor'e' i$ the re,istr! o% 'ee's, it is $ot i$e%%ective to compel (ecsi to ack$o.le',e sai' sale.cha$roblesvirt ala.librar! cha$robles virt al la. librar! From the %act that sai' po.er a$' sale .ere $ot recor'e' i$ the re,istr! o% 'ee's, a$' %rom the omissio$ o% a$! me$tio$ i$ the 'ee' o% sale o% the mort,a,e lie$ i$ %avor o% 6$to$io M. *. =im;e$co, a$' the lease o% a part o% sai' la$' i$ %avor o% E! Chia, the appella$ts 'e' ce that sai' sale is %ra ' le$t.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he recor' co$tai$s ma$! i$'icatio$ that Po (ecsi .as $ot $a.are o% sai' sale. *is several letters complai$i$, o% the pressi$, 'ema$'s o% his brother Gabi$o )arreto Po C;ap to se$' him the re$ts o% the la$', his promises to se$' them to him, a$' the remitta$ce o% the same .ere a tacit ack$o.le',me$t that he occ pie' the la$' i$ 4 estio$ $o lo$,er as a$ o.$er b t o$l! as lessee.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he appella$ts have trie' to e5plai$ the remitta$ce o% sai' re$ts to Gabi$o )arreto Po C;ap b! Po (ecsi, sa!i$, that the! .ere i$ pa!me$t o% a 'ebt .hich the latter o.e' the %ormer %or certai$ propert! .hich sai' Gabi$o )arreto Po C;ap ha' sol' to Po (ecsi. ) t there is $othi$, i$ a$! o% sai' letters to i$'icate that sai' re$ts .ere se$t o$ acco $t o% sai' 'ebt.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he appella$t 'e$! that there has bee$ a$! co$tract o% lease bet.ee$ Po (ecsi a$' Gabi$o )arreto Po C;ap o% the la$'s i$ 4 estio$, %or the reaso$ that there e5ists $o 'oc me$t to evi'e$ce it. (he evi'e$ce is clear that the re$ts .ere pa!able i$ a'va$ce o$ the %irst 'a! o% each mo$th. 8% this is so, the$ there is $o $ee' o% a co$tract to prove the e5iste$ce o% the lease.cha$roblesvirt ala.librar! cha$robles virt al la. librar! Epo$ the 'eath o% Po (ecsi o$ November 26, "926, his so$ Po @ $ @ ! s ccee'e' him it the possessio$ o% the la$' a$' .as appoi$te' a'mi$istrator o% his %atherHs estate o$ Febr ar! "", "927. :$ Febr ar! "1, "927, he .rote to his $cle, Gabi$o )arreto Po C;ap, i$ a$s.er to the latterHs letter to se$' him .hat he collecte' o% the re$ts o% the ho se, sa!i$, that the price o% hemp ha' s ''e$l! 'roppe', his motor boat ha' bee$ ,ro $'e', a$' his abaca pla$tatio$s ha' s %%ere' 'ama,es, promisi$, to se$' the re$ts later o$.cha$roblesvirt ala.librar! cha$robles virt al la. librar! Po (ecsi occ pie' the la$' as lesse %rom November 22, "923, $til his 'eath o$ November 26, "926, havi$, pai' p the re$ts accr e' $til :ctober 22, "925, a$' leavi$, $pai' the re$ts ' e a$' accr e' %rom that 'ate $til his 'eath, a the rate o% P",5## per mo$th. From the latter 'ate estate o% his %ather Po (ecsi, a$' co$ti$ e' to collect the re$ts o% sai' la$' %rom the lessees, amo $ti$, to P715.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 8t 'oes $ot clearl! appear %rom .hat 'ate the la$' .as lease' to the 'e%e$'a$ts Po @ $ @ ! a$' Po Chi$, %or the s m o% P",5## a mo$th. 8% Po (ecsi ha' re$te' it $til his 'eath, the$ the 'e%e$'a$ts Po @ $ @ ! a$' Po

Chi$, co l' $ot have re$te' it $til a%ter the 'eath o% Po (ecsi.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he ri,hts o% the s b&lessee E! Chia, .hose lease %or %ive !ears %rom :ctober ", "923, .as ' l! recor'e' i$ the re,istr! o% 'ee's, are vali', %or it 'oes $ot appear that he ha' o$l! k$o.le',e o% the sale o% the s blease' propert! i$ %avor o% Bose M. Dati,bak, .hich sale, as .e have sai', has $ot bee$ recor'e' i$ the re,istr! o% 'ee's a$' ca$$ot, there%ore, a%%ect the ri,hts o% thir' perso$s ac4 ire' i$ ,oo' %aith a$' ' l! re,istere'.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (o s mmari9e, the$< the sale ma'e o$ November 22, "923, b! Gabi$o )arreto Po C;ap, as attor$e!&i$&%act o% Po (ecsi, i$ %avor o% Bose M. Dati,bak o% the la$' i$ 4 estio$ is vali'0 a%ter sai' sale, Po (ecsi lease' the propert! sol', %rom Gabi$o )arreto Po C;ap, .ho a'mi$istere' it i$ the $ame o% Bose M. Dati,bak, at a re$tal o% P",5## per mo$th, pa!able i$ a'va$ce, leavi$, $pai' the re$ts accr e' %rom that 'ate $til his 'eath .hich occ rre' o$ November 26, "926, havi$, pai' the accr e' re$ts p to :ctober 22, "9250 %rom November 26, "926, the 'e%e$'a$ts Po @ $ @ ! a$' Po Chi$, lease' sai' la$' %or the s m o% P",5## per mo$th0 o$ Febr ar! "", "927, Po @ $ @ ! .as appoi$te' a'mi$istrator o% the estate o% his %ather Po (ecsi, a$' %ile' .ith the co rt a$ i$ve$tor! o% sai' estate i$cl 'i$, the la$' i$ 4 estio$0 a$' o$ Ma! 23, "927, Bose M. Dati,bak sol' the same propert! to Po @ $ )oo.cha$roblesvirt ala.librar! cha$robles virt al la. librar! (he claim %or re$ts ' e a$' $pai' b! Po (ecsi, 'ecease', a$' procee'i$,s %or the settleme$t o% .hose estate have bee$ i$stit te', sho l' be prese$te' to the committee o$ claims a$' appraisal appoi$te' i$ sai' i$testate procee'i$, i$ accor'a$ce .ith the provisio$s o% sectio$ 7#3 o% the Co'e o% Civil Proce' re a$' ca$$ot be collecte' b! a$ or'i$ar! actio$.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 6s to the re$ts accr e' a$' $pai' si$ce the 'eath o% Po (ecsi, his so$ Po @ $ @ !, as a'mi$istrator o% his propert!, havi$, i$cl 'e' sai' propert! i$ the i$ve$tor! o% the latter, the same is i$ c sto'ia le,is, a$' he$ce, the re$ts collecte' b! sai' a'mi$istrator o% sai' propert! are also i$ c sto'ia le,is. (he claim the$ o% Bose M. Dati,bak %or the re$ts accr e' a$' $pai' p to the 'ate .he$ sai' propert! .as sol' to Po @ $ )oo, as .ell as the accr e' a$' $pai' re$ts %rom the time the latter ac4 ire' it p to the prese$t 'ate, m st be prese$te' i$ the co rt taki$, co,$i9a$ce o% the i$testate procee'i$, %or the settleme$t o% Po (ecsiHs estate.cha$roblesvirt ala.librar! cha$robles virt al la. librar! For the %ore,oi$,, .e are o% opi$io$ a$' so hol'< 2"3 (hat Bose M. Dati,bak .as the absol te o.$er o% the propert! i$ co$trovers!, s b;ect to the e$c mbra$ces o$ the same appeari$, i$ the re,istr! o% 'ee's0 223 that his claim %or the re$ts o% the propert! i$ liti,atio$ accr e' a$' $pai' b! Po (ecsi be%ore his 'eath m st be prese$te' to the committee o$ claims a$' appraisal appoi$te' i$ the i$testate procee'i$,s %or the settleme$t o% the estate o% sai' Po (ecsi0 233 that the claim o% Bose M. Dati,bak %or the re$ts o% the sai' propert! collecte' b! Po @ $ @ !, as a'mi$istrator o% the porpert! o% the i$testate estate o% his %ather Po (ecsi, m st be prese$te' to the co rt havi$, co,$i9a$ce o% sai' i$testate procee'i$,s.cha$roblesvirt ala.librar! cha$robles virt al la. librar! )! virt e .hereo%, a$' .ith the mo'i%icatio$s above i$'icate', the ; ',me$t appeale' %rom is a%%irme', .itho t special pro$o $ceme$t as to costs. @o or'ere'.cha$roblesvirt ala.librar! cha$robles virt al la. librar! 6va$ceIa, C. B., Boh$so$, Fillamor, :stra$', Boh$s a$' Rom al'e9, BB., co$c r. cha$robles virt al la. librar! cha$robles virt al la. librar! cha$robles virt al la. librar! @eparate :pi$io$s cha$robles virt al la. librar! cha$robles virt al la. librar! M6=C:=M, B., 'isse$ti$,<cha$robles virt al la. librar! E$til the r les %ormall! a$$o ce' i$ )rio$es vs. Garcia 2J"9"9K3, 1# Phil., 6?3 relati$, to the approval o% bills o% e5ceptio$s, a$ a thorit! o%te$ %ollo.e', shall be reco$si'ere' a$' set asi'e, the sai' r les sho l' be ,ive$ i$'iscrimi$ate applicatio$ to all cases, a$' this bei$, 'o$e i$ the i$sta$t case, the petitio$ prese$te' o$ behal% o% the appellee sho l' be 'eci'e' i$ %avor o% the petitio$, .ith the res lt that the appeal sho l' be or'ere' 'ismisse'.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-,+89 No=ember 29, 1954 P STOR MIGO 3-4 6USTINO MIGO, petitioners, vs. SER #IN TE1ES, respondent. +nrique edina "or petitioner. Capistrano and Capistrano "or respondent. " UTIST NGELO, J.: This is a petition for revie2 of a decision of the #ourt of ppeals "odif!in, that of the court of ori,in in the sense that plaintiffs, no2 petitioners, should not be "ade to pa! the su" of P)11 as attorne!3s fees. This petition ste"s fro" an action filed b! petitioners in the #ourt of First Instance of Ne,ros Oriental pra!in, that -ud,"ent be rendered; $a+ declarin, that the contract entered into bet2een Marcelino M. "i,o and Sefarin Teves on October *1, )6*( is "erel! a contract of "ort,a,e and not a sale 2ith ri,ht to repurchaseE $b+ declarin, that even if said contract be one of sale 2ith ri,ht to repurchase, the offer to repurchase b! the vendors 2as "ade 2ithin the period a,reed uponE $c+ conde"nin, respondents to e7ecute a deed of reconve!anceE and $c+ conde"nin, respondents to restore the propert! to petitioners and to pa! P>,911 as da"a,es. The i"portant facts 2hich need to be considered for purposes of this petition as found b! the #ourt of ppeals "a! be briefl! su""ariFed as follo2s; On u,ust )), )6*5, Macario "i,o and nacleto #a,alitan e7ecuted in favor of their son, Marcelino "i,o, a po2er of attorne! ,rantin, to the latter, a"on, others, the po2er :to lease, let, bar,ain, transfer, conve! and sell, re"ise, release, "ort,a,e and h!pothecate, part or an! of the properties . . . upon such ter"s and conditions, and under such covenants as he shall thin= fit.: On October *1, )6*(, Marcelino "i,o, in his capacit! as attorne!%in%fact, e7ecuted a deed of sale of a parcel of land for a price of P*,111 in favor of Serafin Teves stipulatin, therein that the vendors could repurchase the land 2ithin a period of )( "onths fro" the date of the sale. In the sa"e docu"ent, it 2as also stipulated that vendors 2ould re"ain in possession of the land as lessees for a period of )( "onths sub-ect to the follo2in, ter"s and conditions; $a+ the lessees shall pa! P)(1 as rent ever! si7 "onths fro" the date of the a,ree"entE $b+ the period of the lease shall ter"inate on pril *1, )6'1E $c+ in case of liti,ation, the lessees shall pa! P)11 as attorne!3s feesE and $d+ in case of failure to pa! an! rental as a,reed upon, the lease shall auto"aticall! ter"inate and the ri,ht of o2nership of vendee shall beco"e absolute. On Cul! >1, )6*6, the spouses Macario "i,o and nacleta #a,alitan donated to their sons Custino "i,o and Pastor "i,o several parcels of land includin, their ri,ht to repurchase the land in liti,ation. The deed of donation 2as "ade in a public instru"ent, 2as dul! accepted b! the donees, and 2as re,istered in the Office of the Re,ister of Deeds. The vendors%lessees paid the rental correspondin, to the first si7 "onths, but not the rental for the subseDuent se"ester, and so on Canuar! (, )6'1, Serafin Teves, the vendee%lessor, e7ecuted an : ffidavit of #onsolidation of Title: in vie2 of the failure of the lessees to pa! the rentals as a,reed upon, and re,istered said affidavit in the Office of the Re,ister of Deeds of Ne,ros Oriental, 2ho, on Canuar! >(, )6'1, issued to Serafin Teves the correspondin, transfer of title over the land in Duestion. On March 6, )6'1, Custino "i,o and Pastor "i,o, as donees of the ri,ht to repurchase the land in Duestion, offered to repurchase the land fro" Serafin Teves b! tenderin, to hi" the pa!"ent of the rede"ption price but the latter refused on the ,round that the o2nership had alread! been consolidated in hi" as purchaser a retro. @ence, on pril >8, )6'1, before the e7piration of the )(th%"onth period stipulated for the rede"ption of the land, the donees instituted the present action. The issues posed b! petitioners are; $)+ The lease covenant contained in the deed of sale 2ith pacto de retroe7ecuted b! Marcelino "i,o as attorne!%in%fact in favor of Serafin Teves is not ,er"ane to, nor 2ithin the purvie2 of, the po2ers ,ranted to said attorne!%in%fact and, therefore, is ultra vires and null and voidE $>+ the penal clause stipulated in the lease covenant referrin, to the auto"atic ter"ination of the period of rede"ption is null and voidE and $*+ petitioners should be allo2ed to repurchase the land on eDuitable ,rounds considerin, the ,reat disproportion bet2een the rede"ption price and the "ar=et value of the land on the date the period of rede"ption is supposed to e7pire. Petitioners contend that, 2hile the attorne!%in%fact, Marcelino "i,o, had the po2er to e7ecute a deed of sale 2ith ri,ht to repurchase under the po2er of attorne! ,ranted to hi", ho2ever, the covenant of lease contained in said deed 2hereb! the vendors a,reed to re"ain in possession of the land as lessees is not ,er"ane to said po2er of attorne! and, therefore, Marcelino "i,o acted in e7cess of his po2ers as such attorne!%in%fact. The #ourt of ppeals, therefore, co""itted an error in not declarin, said covenant of lease ultra vires and null and void. The #ourt of ppeals, after anal!Fin, the e7tent and scope of the po2ers ,ranted to Marcelino "i,o in the po2er of ttorne! e7ecuted in his favor b! his principals, found that such po2ers are broad enou,h to -ustif! the e7ecution of an! contract concernin, the lands covered b! the authorit! even if this be a contract of lease. The court even 2ent further; even in the supposition that the po2er to ta=e the land under lease is not included 2ithin the authorit! ,ranted, petitioners cannot

no2 i"pu,n the validit! of the lease covenant because such ri,ht devolves upon the principals, 2ho are the onl! one 2ho can clai" that their a,ent has e7ceeded the authorit! ,ranted to hi", and because said principals had tacitl! ratified the act done b! said a,ent. Ae find no plausible reason to disturb this findin,s of the #ourt of ppeals. The sa"e, in our opinion, is in consonance 2ith the evidence presented and 2ith the conclusions that should be dra2n fro" said evidence. This can be sho2n fro" a "ere e7a"ination of the po2er of attorne! $<7hibit D.+ cursor! readin, thereof 2ould at once reveal that the po2er ,ranted to the a,ent is so broad that it practicall! covers the celebration of an! contract and the conclusion of an! covenant or stipulation. Thus, a"on, the po2ers ,ranted are; to bar,ain,contract, a$ree "or, purchase, receive, and =eep lands, tene"ents, heredita"ents, and accept the seiFin, and possessin, of all lands,: or :to lease, let, bar,ain, trans"er, conve' and sell, re"ise, release, "ort,a,e and h!pothecate . . . upon such terms and conditions, and under such covenants as he shall think "it.: $<"phasis supplied+. Ahen the po2er of attorne! sa!s that the a,ent can enter into an! contract concernin, the land, or can sell the land under an! ter" or condition and covenant he "a! thin= fit, it undoubtedl! "eans that he can act in the sa"e "anner and 2ith the sa"e breath and latitude as the principal could concernin, the propert!. The fact that the a,ent has acted in accordance 2ith the 2ish of his principals can be inferred fro" their attitude in donatin, to the herein petitioners the ri,ht to redee" the land under the ter"s and conditions appearin, in the deed of sale e7ecuted b! their a,ent. On the other hand, 2e find nothin, unusual in the lease covenant e"bodied in the deed of sale for such is co""on in contracts involvin, sales of land 2ith pacto de retro. The lease that a vendor e7ecutes on the propert! "a! be considered as a "eans of deliver! or tradition b! constitutum possessorium. Ahere the vendor a retrocontinues to occup! the land as lessee, b! fiction of la2, the possession is dee"ed to be constituted in the vendee b! virtue of this "ode of tradition $)1 Manresa, 'th ed. p.)>'+. Ae "a! sa! therefore that this covenant re,ardin, the lease of the land sold is ,er"ane to the contract of sale 2ith pacto de retro. Ahile the lease covenant "a! be onerous or "a! 2or= hardship on the vendor because of its clause providin, for the auto"atic ter"ination of the period of rede"ption, ho2ever, the sa"e is not contrar! to la2, "orals, or public order, 2hich "a! serve as basis for its nullification. Rather than obno7ious are oppressive , it is a clause co""on in a sale 2ith pacto de retro, and as such it received the sanction of our courts. s an instance, 2e "a! cite the case of Vitu$ 7imatulac vs. Coronel, '1 Phil., 8(8, 2hich, because of its direct bearin, on our case, 2e 2ill presentl! discuss. In that case, Di"atulac sold a piece of land to Dolores #oronel for the su" of P6,111, reservin, the privile,e to repurchase 2ithin the period of 9 !ears. The contract contained a provision L :co""onl! found in contracts of this character: L convertin, the vendor into a lessee of the vendee at an a,reed rental, pa!able annuall! in the "onths of Canuar! and Februar!, and per"ittin, the vendor to retain possession of the propert! as lessee until the ti"e allo2ed for its repurchase. It 2as also stipulated that in the event the vendor should fail to pa! the a,reed rental for an! !ear of the five, the ri,ht to repurchase 2ould be lost and the o2nership consolidated in the vendee. The vendor fails to perfor" this obli,ation and continued in arrears in the pa!"ent of rent for at least three !ears, and ta=in, advanta,e of the clause b! 2hich the consolidation of the propert! 2as accelerated, the vendee i"pleaded the vendor in a civil action to co"pel hi" to surrender the propert!. This case, ho2ever, 2as settled b! a co"pro"ise b! virtue of 2hich the vendor a,reed to place the propert! at the disposal of the vendee so that the latter "a! appl! to products of the land to the pa!"ent of the rent. .ater, the vendor offered to redee" the propert! under the contract of sale 2ith pacto de retro, the period of rede"ption not havin, as !et e7pired. The vendee refused the offer on the ,round that her title to the propert! had alread! been consolidated. This #ourt declared the lease covenant contained in the contract as la%"ul, althou,h it found that the act of the vendee in ta=in, possession of the land b! 2a! of co"pro"ise constituted a 2aiver of the penal provision relative to the acceleration of the period of rede"ption. On this point, the #ourt said; It is undeniable that the clause in the contract of sale 2ith pacto de retro of Cune *1, )6)), providin, for e7tinction of the ri,ht of the plaintiff to repurchase in case he should default in the pa!"ent of the rent for an! !ear 2as la2ful. The parties to a contract of this character "a! le,iti"atel! fi7 an! period to please, not in e7cess of ten !ears, for the rede"ption of the propert! b! the vendorE and no sufficient reason occurs to us 2h! the deter"ination of the ri,ht of rede"ption "a! not be "ade to depend upon the delinDuenc! of the vendor L no2 beco"e lessee%in the pa!"ent of the stipulated rent. The Supre"e #ourt of Spain sustains the affir"ative of this proposition $decision of Canuar! )(,)611+E and althou,h such a provision, bein, of a penal nature, "a! involve hardships to the lessee, the conseDuence are not 2orse than such as follo2 fro" "an! other for"s of a,ree"ent to 2hich contractin, parties "a! la2full! attach their si,natures. Nevertheless, ad"ittin, the validit! of such a provision, it is not be e7pected that an! court 2ill be reluctant to relieve fro" its effects 2herever this can be done consistentl! 2ith established principles of la2. Ae have not failed to ta=e notice of the #ourt3s 2arnin, that :ad"ittin, the validit! of such a provision, it is not to be e7pected that an! court 2ill be reluctant to relieve fro" its effects 2herever this can be done consistentl! 2ith established principles of la2.: Ae onl! 2ish that in this case, as in the Di"atulac case, a 2a! "a! be found consistent 2ith la2 2hereb! 2e 2ould relieve the petitioners fro" the effects of the penal clause under consideration, but, to our re,ret, none 2e have found, for respondent has been alert and Duic= enou,h to assert his ri,ht b! consolidatin, his o2nership 2hen the first chance to do so has presented itself. @e has sho2n no vacillation, nor offered an! co"pro"ise 2hich "a! dee" as a

2aiver or a -ustification for forfeitin, the privile,e ,iven hi" under the penal clause. The onl! alternative left is to enforce it as stipulated in the a,ree"ent. Petitioners also contend that as the assessed value of the land in )6*(, 2hen the contract 2as celebrated, 2as P',>(1, the sellin, price of P*,111 a,reed upon is considered as not 2ritten, and petitioners should be allo2ed to e7ercise the ri,ht to repurchase on eDuitable considerations. nd in support of this contention, counsel presented evidence to sho2 that the "ar=et price of the land in )6'1, the !ear the period of rede"ption 2as supposed to e7pire 2as fourteen ti"es "ore than the "one! paid for it b! respondent such that, if that should be ta=en as basis, the value of the land 2ould be P'*,11'.91. Ahile this contention "a! have so"e basis 2hen considered 2ith reference to an absolute contract of sale, it loses 2ei,ht 2hen applied to a contract of sale 2ith pacto de retro, 2here the price is usuall! less than in absolute sale for the reason that in a sale 2ith pacto de retro, the vendor e7pects to re%acDuire or redee" the propert! sold. nother fla2 2e find is that all the evidence presented refers to sales 2hich 2ere e7ecuted in )6'1 and )6') and none 2as presented pertainin, to )6*(, or its nei,hborhood, 2hen the contract in Duestion 2as entered into. nd the "ain reason 2e find for not entertainin, this clai" is that it involves a Duestion of fact and as the #ourt of ppeals has found that the price paid for the land is not unreasonable as to -ustif! the nullification of the sale, such findin,, in appeal b! certiorari, is final and conclusive upon this #ourt. Findin, no error in the decision appealed fro", the sa"e is hereb! affir"ed, 2ithout pronounce"ent as to costs. Pa)lo, 0en$zon, Padilla, ontema'or, Re'es, !., Ju$o and Concepcion, JJ., concur.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-2454+ 689: 12, 192, ROS 1ILL MONN , plaintiff%appellee, vs. GUILLERMO G RCI "OS>UE, ET L., defendants. GUILLERMO G RCI "OS>UE, #. !. GOULETTE, 3-4 R. G. #R NCE, appellants. +i$uren and Razon "or the appellant Garcia 0osque. 0en3. #. 8hnick "or the appellants 6rance and Goulette. 6isher, 7e9itt, Perkins and 0rad' and John R. c6ie, 3r., "or appellee. STREET, J.: This action 2as instituted in the #ourt of First Instance of Manila b! Rosa Villa ! Monna, 2ido2 of <nriDue /ota, for the purpose of recoverin, fro" the defendants, &uiller"o &arcia /osDue and Cose Ro"ar RuiF, as principals, and fro" the defendants R. &. France and F. @. &oulette, as solidar! sureties for said principals, the su" of P>1,916.5), 2ith interest, as a balance alle,ed to be due to the plaintiff upon the purchase price of a printin, establish"ent and boo=store located at (6 <scolta, Manila, 2hich had been sold to /osDue and RuiF b! the plaintiff, actin, throu,h her attorne! in fact, one Manuel Pirretas ! Monros. The defendant RuiF put in no appearance, and after publication -ud,"ent b! default 2as entered a,ainst hi". The other defendants ans2ered 2ith a ,eneral denial and various special defenses. ?pon hearin, the cause the trial -ud,e ,ave -ud,"ent in favor of the plaintiff, reDuirin, all of the defendants, -ointl! and severall!, to pa! to the plaintiff the su" of P)6,>*1.1), as capital, 2ith stipulated interest at the rate of 5 per centu" per annu", plus the further su" of P),>56.51 as interest alread! accrued and unpaid upon the date of the institution of the action, 2ith interest upon the latter a"ount at the rate of 8 per centu" per annu". Fro" this -ud,"ent &uiller"o &arcia /osDue, as principal, and R. &. France and F.@. &oulette, as sureties. appealed. It appears that prior to Septe"ber )5, )6)6, the plaintiff, Rosa Villa ! Monna, viuda de <. /ota, 2as the o2ner of a printin, establish"ent and boo=store located at (6 <scolta, Manila, and =no2n as .a 6lor de Cataluna, Viuda de +. 0ota, 2ith the "achiner!, "otors, binder!, t!pe "aterial furniture, and stoc= appurtenant thereto. ?pon the date stated, the plaintiff, then and no2 a resident of /arcelona, Spain, actin, throu,h Manuel Pirretas, as attorne! in fact, sold the establish"ent above% "entioned to the defendants &uiller"o &arcia /osDue and Cose Po"ar RuiF, residents of the #it! of Manila, for the stipulated su" of P99,111, pa!able as follo2s; Fifteen thousand pesos $P)9,111+ on Nove"ber ), ne7t ensuin, upon the e7ecution of the contract, bein, the date 2hen the purchasers 2ere to ta=e possessionE ten thousand pesos $P)1,111+ at one !ear fro" the sa"e dateE fifteen thousand pesos $P)9,111+ at t2o !earsE and the re"ainin, fifteen thousand pesos $P)9,111+ at the end of three !ears. /! the contract of sale the deferred install"ents bear interest at the rate of 5 per centu" per annu". In the sa"e docu"ent the defendants France and &oulette obli,ated the"selves as solidar! sureties 2ith the principals /osDue and RuiF, to ans2er for an! balance, includin, interest, 2hich should re"ain due and unpaid after the dates stipulated for pa!"ent of said install"ents, e7pressl! renouncin, the benefit of e7haustion of the propert! of the principals. The first install"ent of P)9,111 2as paid confor"abl! to a,ree"ent. In the !ear )6>1, Manuel Pirretas ! Monros, the attorne! in fact of the plaintiff, absented hi"self fro" the Philippine Islands on a prolon,ed visit to SpainE and in conte"plation of his departure he e7ecuted a docu"ent, dated Canuar! >>, )6>1, purportin, to be a partial substitution of a,enc!, 2hereb! he transferred to :the "ercantile entit! Fi,ueras @er"anos, or the person, or persons, havin, le,al representation of the sa"e,: the po2ers that had been previousl! conferred on Pirretas b! the plaintiff :in order that,: so the docu"ent runs, :the! "a! be able to effect the collection of such su"s of "one! as "a! be due to the plaintiff b! reason of the sale of the boo=store and printin, establish"ent alread! "entioned, issuin, for such purpose the receipts, vouchers, letters of pa!"ent, and other necessar! docu"ents for 2hatever the! shall have received and collected of the character indicated.: Ahen the ti"e ca"e for the pa!"ent of the second install"ent and accrued interest due at the ti"e, the purchasers 2ere unable to co"pl! 2ith their obli,ation, and after certain ne,otiations bet2een said purchasers and one lfredo Rocha, representative of Fi,ueras @er"anos, actin, as attorne! in fact for the plaintiff, an a,ree"ent 2as reached, 2hereb! Fi,ueras @er"anos accepted the pa!"ent of P9,(11 on Nove"ber )1, )6>1, and received for the balance five pro"issor! notes pa!able, respectivel!, on Dece"ber ), )6>1, Canuar! ), )6>), Februar! ), )6>), March ), )6>), and pril ), )6>). The first three of these notes 2ere in the a"ount of P),111 each, and the last t2o for P>,111 each, "a=in, a total of P5,111. It 2as further"ore a,reed that the debtors should pa! 6 per centu" per annu" on said deferred install"ents, instead of the 5 per centu" "entioned in the contract of sale. These notes 2ere not paid pro"ptl! at "aturit! but the balance due upon the" 2as finall! paid in full b! /osDue on Dece"ber >', )6>). bout this ti"e the o2ners of the business .a 6lor de Catalu5a, appear to have converted it into a li"ited partnership under the st!le of &uiller"o &arcia /osDue, S. en #.E: and presentl! a corporation 2as for"ed to ta=e over the business under the na"e :/ota Printin, #o"pan!, Inc.: /! a docu"ent e7ecuted on pril >), )6>>, the partnership appears to have conve!ed

all its assets to this corporation for the purported consideration of P)9,111, Mean2hile the seven notes representin, the unpaid balance of the second install"ent and interest 2ere failin, due 2ithout bein, paid. Induced b! this dilatoriness on the part the debtor and supposedl! ani"ated b! a desire to ,et the "atter into better shape, M. T. Fi,ueras entered into the a,ree"ent attached as <7hibit ) to the ans2er of /osDue. In this docu"ent it is recited that &uiller"o &arcia /osDue. S. en #., is indebted to Rosa Villa, viuda de <. /ota, in the a"ount of P*>,111 for 2hich R. &. France and F. @. &oulette are bound as -oint and several sureties, and that the partnership "entioned had transferred all its assets to the /ota Printin, #o"pan!, Inc., of 2hich one &eor,e ndre2s 2as a principal stoc=holder. It is then stipulated that France and &oulette shall be relieved fro" all liabilit! on their contract as sureties and that in lieu thereof the creditor, DoQa Rosa Villa ! Monna, accepts the /ota Printin, #o"pan!, Inc., as debtor to the e7tent of P>1,111, 2hich indebtedness 2as e7pressl! assu"ed b! it, and &eor,e ndre2s as debtor to the e7tent of P)>,111, 2hich he undertoo= to pa! at the rate of P>11 per "onth thereafter. To this contract the na"e of the partnership &uiller"o &arcia /osDue, S. en #., 2as affi7ed b! &uiller"o &arcia /osDue 2hile the na"e of the /ota Printin, #o"pan!, Inc., 2as si,ned b! &. ndre2s, the latter also si,nin, in his individual capacit!. The na"e of the plaintiff 2as affi7ed b! M.T. Fi,ueras in the follo2in, st!le; :p.p. Rosa Villa, viuda de <. /ota, M. T. Fi,ueras, part! of the second part.: No Duestion is "ade as to the authenticit! of this docu"ent or as to the intention of Fi,ueras to release the suretiesE and the latter rel! upon the dischar,e as co"plete defense to the action. The defendant /osDue also relies upon the sa"e a,ree"ent as constitutin, a novation such as to relieve hi" fro" personal liabilit!. ll of the defendants further"ore "aintain that even supposin, that M. T. Fi,ueras authorit! to novate the ori,inal contract and dischar,e the sureties therefro", nevertheless the plaintiff has ratified the a,ree"ent b! acceptin, part pa!"ent of the a"ount due thereunder 2ith full =no2led,e of its ter"s. In her a"ended co"plaint the plaintiff asserts that Fi,ueras had no authorit! to e7ecute the contract containin, the release $<7hibit )+ and that the sa"e had never been ratified b! her. The Duestion thus raised as to 2hether the plaintiff is bound b! <7hibit ) constitutes the "ain controvers! in the case, since if this point should be deter"ined in the affir"ative the plaintiff obviousl! has no ri,ht of action a,ainst an! of the defendants. Ae accordin,l! address ourselves to this point first. The partial substitution of a,enc! $<7hibit / to a"ended co"plaint+ purports to confer on Fi,ueras @er"anos or the person or persons e7ercisin, le,al representation of the sa"e all of the po2ers that had been conferred on Pirretas b! the plaintiff in the ori,inal po2er of attorne!. This ori,inal po2er of attorne! is not before us, but assu"in,, as is stated in <7hibit /, that this docu"ent contained a ,eneral po2er to Pirretas to sell the business =no2n as .a 6lor de Catalu5a upon conditions to be fi7ed b! hi" and po2er to collect "one! due to the plaintiff upon an! account, 2ith a further po2er of substitution, !et it is obvious upon the face of the act of substitution $<7hibit /+ that the sole purpose 2as to authoriFe Fi,ueras @er"anos to collect the balance due to the plaintiff upon the price of .a 6lor de Catalu5a, the sale of 2hich had alread! been affected b! Pirretas. The 2ords of <7hibit / on this point are Duite e7plicit $:to the end that the said lad! "a! be able to collect the balance of the sellin, price of the Printin, <stablish"ent and /oo=store above%"entioned, 2hich has been sold to Messrs. /osDue and Po"ar:+. There is nothin, here that can be construed to authoriFe 6i$ueras 1ermanos to dischar,e an! of the debtors 2ithout pa!"ent or to novate the contract b! 2hich their obli,ation 2as created. On the contrar! the ter"s of the substitution sho2s the li"ited e7tent of the po2er. further note2orth! feature of the contract <7hibit ) has reference to the personalit! of the purported attorne! in fact and the "anner in 2hich the contract 2as si,ned. ?nder the <7hibit / the substituted authorit! should be e7ercised b! the "ercantile entit! Fi,ueras @er"anos or the person dul! authoriFed to represent the sa"e. In the actual e7ecution of <7hibit ), M. T. Fi,ueras intervenes as purpoted attorne! in fact 2ithout an!thin, 2hatever to sho2 that he is in fact the le,al representative of Fi,ueras @er"anos or that he is there actin, in such capacit!. The act of substitution conferred no authorit! 2hatever on M. T. Fi,ueras as an individual. In vie2 of these defects in the ,rantin, and e7ercise of the substituted po2er, 2e a,ree 2ith the trial -ud,e that the <7hibit ) is not bindin, on the plaintiff. Fi,ueras had no authorit! to e7ecute the contract of release and novation in the "anner atte"ptedE and apart fro" this it is sho2n that in releasin, the sureties Fi,ueras acted contrar! to instructions. For instance, in a letter fro" Fi,ueras in Manila, dated March ', )6>>, to Pirretas, then in /arcelona, the for"er stated that he 2as atte"ptin, to settle the affair to the best advanta,e and e7pected to put throu,h an arran,e"ent 2hereb! DoQa Rosa 2ould receive P>1,111 in cash, the balance to be paid in install"ents, :2ith the ,uarant! of France and &oulette.: In his repl! of pril >6 to this letter, Pirretas e7presses the confor"it! of DoQa Rosa in an! ad-ust"ent of the clai" that Fi,ueras should see fit to "a=e, based upon pa!"ent of P>1,111 in cash, the balance in install"ents, pa!able in the shortest practicable periods, it bein, understood, ho2ever, that the ,uarant! of Messrs. France and &oulette should re"ain intact. ,ain, on Ma! 6, Pirretas repeats his assurance that the plaintiff 2ould be 2illin, to accept P>1,111 do2n 2ith the balance in interest%bearin, install"ents :2ith the ,uarant! of France and &oulette.: Fro" this it is obvious that Fi,ueras had no actual authorit! 2hatever to release the sureties or to "a=e a novation of the contract 2ithout their additional ,uarant!. /ut it is asserted that the plaintiff ratified the contract $<7hibit )+ b! acceptin, and retainin, the su" of P)',111 2hich, it is asserted, 2as paid b! the /ota Printin, #o., Inc., under that contract. In this connection it should be noted that 2hen the fir" of &uiller"o &arcia /osDue, S. en #., conve!ed all it assets on pril >), )6>> to the ne2l! for"ed corporation, /ota Printin, #o., Inc., the latter obli,ated itself to pa! al the debts of the partnership, includin, the su" of P*>,111 due to the plaintiff. On pril >*, thereafter, /osDue, actin, for the /ota Printin, #o., Inc., paid to Fi,ueras the su" of P(,111 upon the

third install"ent due to the plaintiff under the ori,inal contract of sale, and the sa"e 2as credited b! Fi,ueras accordin,l!. On Ma! )8 a further su" of P9,111 2as si"ilarl! paid and creditedE and on Ma! >9, a further su" of P>11 2as li=e2ise paid, "a=in, P)',111 in all. No2, it 2ill be re"e"bered that in the contract $<7hibit )+, e7ecuted on Ma! )5, )6>>, the /ota Printin, #o., Inc., undertoo= to pa! the su" of P>1,11E and the parties to the a,ree"ent considered that the su" of P)*,(11 then alread! paid b! the /ota Printin, #o., Inc., should be treated as a partial satisfaction of the lar,er su" of P>1,111 2hich the /ota Printin, #o., Inc., had obli,ated itself to pa!. In the li,ht of these facts the proposition of the defendants to the effect that the plaintiff has ratified <7hibit ) b! retainin, the su" of P)',111, paid b! the /ota Printin, #o., Inc., as above stated, is untenable. /! the assu"ption of the debts of its predecessor the /ota Printin, #o., Inc., had beco"e a pri"ar! debtor to the plaintiffE and she therefore had a ri,ht to accept the pa!"ents "ade b! the latter and to appl! the sa"e to the satisfaction of the third install"ent of the ori,inal indebtedness. Nearl! all of this "one! 2as so paid prior to the e7ecution of <7hibit ) and althou,h the su" of P>11 2as paid a fe2 da!s later, 2e are of the opinion that the plaintiff 2as entitled to accept and retain the 2hole, appl!in, it in the "anner above stated. In other 2ords the plaintiff "a! la2full! retain that "one! not2ithstandin, her refusal to be bound b! <7hibit ). contention sub"itted e7clusivel! in behalf of France and &oulette, the appellant sureties, is that the! 2ere dischar,ed b! the a,ree"ent bet2een the principal debtor and Fi,ueras @er"anos, as attorne! in fact for the plaintiff, 2hereb! the period for the pa!"ent of the second install"ent 2as e7tended, 2ithout the assent of the sureties, and ne2 pro"issor! notes for unpaid balance 2ere e7ecuted in the "anner alread! "entioned in this opinion. The e7ecution of these ne2 pro"issor! notes undoubtedl! constituted and e7tension of ti"e as to the obli,ation included therein, such as 2ould release a suret!, even thou,h of the solidar! t!pe, under article )(9) of the #ivil #ode. Nevertheless it is to be borne in "ind that said e7tension and novation related onl! to the second install"ent of the ori,inal obli,ation and interest accrued up to that ti"e. Further"ore, the total a"ount of these notes 2as after2ards paid in full, and the! are not no2 the sub-ect of controvers!. It results that the e7tension thus effected could not dischar,e the sureties fro" their liabilit! as to other install"ents upon 2hich alone the! have been sued in this action. The rule that an e7tension of ti"e ,ranted to the debtor b! the creditor, 2ithout the consent of the sureties, e7tin,uishes the latter3s liabilit! is co""on both to Spanish -urisprudence and the co""on la2E and it is 2ell settled in <n,lish and "erican -urisprudence that 2here a suret! is liable for different pa!"ents, such as install"ents of rent, or upon a series of pro"issor! notes, an e7tension of ti"e as to one or "ore 2ill not affect the liabilit! of the suret! for the others. $*> #!c., )68E @op=ir= vs. Mc#onico, ) /roc=., >>1E )> Fed. #as., No. 8868E #oe vs. #assid!, 5> N. B., )**E #ohn vs. SpitFer, )>6 N. B. Supp., )1'E Shephard .and #o. vs. /ani,an, *8 R. I., )E I. C. #ooper Rubber #o. vs. Cohnson, )** Tenn., 98>E /lee=er vs. Cohnson, )61, N. A. )1)1.+ The contention of the sureties on this point is therefore untenable. There is one stipulation in the contract $<7hibit + 2hich, at first su,,ests a doubt as to propriet! of appl!in, the doctrine above stated to the case before us. Ae refer to cause $ "+ 2hich declares that the non%fulfill"ent on the part of the debtors of the stipulation 2ith respect to the pa!"ent of an! install"ent of the indebtedness, 2ith interest, 2ill ,ive to the creditor the ri,ht to treat and declare all of said install"ents as i""ediatel! due. If the stipulation had been to the effect that the failure to pa! an! install"ent 2hen due 2ould ipso facto cause to other install"ents to fall due at once, it "i,ht be plausibl! contended that after default of the pa!"ent of one install"ent the act of the creditor in e7tendin, the ti"e as to such install"ent 2ould interfere 2ith the ri,ht of the suret! to e7ercise his le,al ri,hts a,ainst the debtor, and that the suret! 2ould in such case be dischar,ed b! the e7tension of ti"e, in confor"it! 2ith articles )(9) and )(9> of the #ivil #ode. /ut it 2ill be noted that in the contract no2 under consideration the stipulation is not that the "aturit! of the later install"ents shall be ipso "acto accelerated b! default in the pa!"ent of a prior install"ent, but onl! that it shall ,ive the creditor a ri,ht to treat the subseDuent install"ents as due, and in this case it does not appear that the creditor has e7ercised this election. On the contrar!, this action 2as not instituted until after all of the install"ents had fallen due in confor"it! 2ith the ori,inal contract. It results that the stipulation contained in para,raph $ "+ does not affect the application of the doctrine above enunciated to the case before us. Finall!, it is contended b! the appellant sureties that the! 2ere dischar,ed b! a fraud practiced upon the" b! the plaintiff in failin, to reDuire the debtor to e7ecute a "ort,a,e upon the printin, establish"ent to secure the debt 2hich is the sub-ect of this suit. In this connection t is insisted that at the ti"e France and &oulette entered into the contract of suret!ship, it 2as represented to the" that the! 2ould be protected b! the e7ecution of a "ort,a,e upon the printin, establish"ent b! the purchasers /osDue and Po"ar. No such "ort,a,e 2as in fact e7ecuted and in the end another creditor appears to have obtained a "ort,a,e upon the plant 2hich is ad"itted to be superior to the clai" of the plaintiff. The failure of the creditor to reDuire a "ort,a,e is alle,ed to operate as a dischar,e of the sureties. Aith this insistence 2e are unable to a,ree, for the reason that the proof does not sho2, in our opinion, that the creditor, on her attorne! in fact, 2as a part! to an! such a,ree"ent. On the other hand it is to be collected fro" the evidence that the su,,estion that a "ort,a,e 2ould be e7ecuted on the plant to secure the purchase price and that this "ort,a,e 2ould operate for the protection of the sureties ca"e fro" the principal and not fro" an! representative of the plaintiff. s a result of our e7a"ination of the case 2e find no error in the record pre-udicial to an! of the appellants, and the -ud,"ent appealed fro" 2ill be affir"ed, So ordered, 2ith costs a,ainst the appellants. !vance5a, C. J., Villamor, 8strand, Johns, Romualdez and Villa(Real, JJ., concur.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-+0181 689: 12, 1929 T!E DIRECTOR O# PU"LIC ?OR5S, plaintiff%appellee, vs. SING 6UCO, ET L., defendants. SING 6UCO, SING "ENGCO 3-4 P!ILIPPINE N TION L " N5, appellants. Roman J. .acson "or appellant ,ational 0ank. #oriano and ,epomuceno "or appellants #in$ Juco and #in$ 0en$co. !ttorne'(General Jaranilla "or appellee. STREET, J.: Fro" Torrens certificate of title No. )*96 relatin, to land in the "unicipalit! of Iloilo, it appears that on Septe"ber >(, )6>1, the title of the propert! described therein 2as o2ned, in undivided shares, b! Mariano de la Ra"a, &onFalo Mariano Tanboontien, Sin, Cuco and Sin, /en,co. The interest vested b! said certificate in Mariano de la Ra"a 2as subseDuentl! transferred to sale to <nriDue <nchaus. It further appears that on Nove"ber >*, )1>1, the o2ners of the propert! covered b! the said certificate conve!ed it b! 2a! of a "ort,a,e to the Philippine National /an= for the purpose of securin, a credit in current account in a "ount not in e7cess of P)51,111, 2ith interest at a rate of )> percent per annu". The indebtedness covered b! this "ort,a,e has not been satisfied, and upon the date of the decision of the court belo2 it a"ounted to the su" of P)51,111, plus interest at )> percent per annu" fro" Nove"ber >', )6>1. The land above referred to contains an area of nearl! )8 hectares, or to be e7act, )9(,9(6.'' sDuare "eters accordin, to the certificate. It is located on :Point .lorente: at the "outh of Iloilo river, near the #it! of Iloilo, and it is of so lo2 a level that, prior to the i"prove"ent to 2hich reference is to be "ade, it 2as sub-ect to freDuent floodin,. In )6>), the &overn"ent of the Philippine Islands 2as plannin, e7tensive harbor i"prove"ents in this vicinit!, reDuirin, e7tensive dred,in, b! the /ureau of Public Aor=s in the "outh of said river. The conduct of these dred,in, operations "ade it necessar! for the Director of Public Aor=s to find a place of deposit for the dirt and "ud ta=en fro" the place, or places, dred,ed. s the land alread! referred to 2as lo2 and easil! accessible to the spot 2here dred,in, 2as to be conducted, it 2as obviousl! for the interest of the &overn"ent and the said o2ners of the land that the "aterial ta=en out b! the dred,es should be deposited on the said propert!. ccordin,l!, after preli"inar! ne,otiations to this effect have been conducted, a contract 2as "ade bet2een the Director of Public Aor=s, representin, the &overn"ent of the Philippine Islands, and the four o2ners, M. de la Ra"a, Sin, Cuco, &. M. Tanboontien, and Sen, /en,co, of 2hich, as "odified b! so"e respects b! subseDuent a,ree"ent, the follo2in, features are note2orth!. $)+ The /ureau of Public Aor=s a,reed to deposit the "aterial to be dred,ed b! it fro" the Iloilo River, in connection 2ith the conte"pted i"prove"ent, upon the lot of the land, alread! described as covered b! certificate No. )*96, at a price to be deter"ined at the actual cost of the fillin,, 2ith certain surchar,es to be deter"ined b! the Director of Public Aor=s. It 2as conte"plated in the ori,inal draft of the contract that the /ureau 2ould be able to furnish so"e >91,111 cubic "eters of dred,ed "aterial for fillin, in the land, 2as li"ited to the "aterial 2hich should be dred,ed fro" the river as a result of the proposed i"prove"ent. To this stipulation the four o2ners of the propert! assented on March )', )6>). $>+ Aith respect to the co"pensation it 2as a,reed that the a"ount due should be deter"ined b! the Director of Public Aor=s, under certain conditions "entioned in the contract, of an a"ount of not less that >1 nor "ore than 59 centavos per cubic "eter. It 2as further a,reed that, 2hen the 2or= should be finished, the cost thereof should be paid b! the o2ners in 9 annual install"ents and that for failure to pa! such install"ent the 2hole of the a"ount thereafter to accrue should beco"e at once due. This contract 2as noted in the Torrens certificate of title on Canuar! (, )6>'. In connection 2ith the "a=in, of the contract above"entioned, the, Director of Public Aor=s reDuired a bond to be supplied b! the o2ners in the penal a"ount of P)91,111, appro7i"atel! t2ice the esti"ated cost of the fillin,, conditioned for the pa!"ent of the a"ount due fro" the o2ners. This bond 2as e7ecuted conte"poraneousl! 2ith the "ain contractE and in connection there2ith it should be noted that one of the na"es appearin, upon said contract 2as that of :#asa Viuda de Tan Toco,: purportin, to be si,ned b! M. de la Ra"a. The dred,in, operation 2ere conducted b! the /ureau of Public Aor=s in substantial acco"plice, 2e find, 2ith the ter"s of said a,ree"entE and after the account 2ith the o2ners 2ere liDuidated and the a"ount due fro" the" deter"ined, de"and 2as "ade upon the" for the pa!"ent of the first install"ent. No such pa!"ent 2as, ho2ever, "ade as a conseDuence this action 2as instituted b! the Director of Public Aor=s on October )', )6>8, for the purpose of recoverin, the a"ount due to the &overn"ent under the contract fro" the ori,inal o2ners of the propert! fro" the sureties 2hose na"es 2ere si,ned to the contract of suret!ship, and to enforce the obli,ation as a real lien upon the propert!. In said action the Philippine National /an= 2as "ade a part! defendant, as havin, an interest under its prior "ort,a,e upon the propert!, 2hile <nriDue <nchaus 2as "ade defendant as successor in interest of M. de la Ra"a, and Tan On, SFe 2ido2 of Tan Toco, 2as also "ade defendant b! reason of her supposed liabilit! derived fro" the act of De la Ra"a in si,nin, the fir" :#asa Viuda de

Tan Toco: as a suret! on bond. It 2as note2orth! that in the co"plaint it 2as as=ed that, in the enforce"ent of the ,overn"ent3s lien, the propert! should be sold :sub-ect to the first "ort,a,e in favor of the Philippine National /an=.: To this co"plaint different defenses 2ere set up, as follo2s; On behalf of the o2ners of the propert!, it 2as contended that the ,overn"ent has not co"plied 2ith that contract, in that dred,ed "aterial deposited on the land had not been sufficient in Duantit! to raise the level of the land above hi,h 2ater, and that, as a conseDuence, the land had not been "uch benefited. It is therefore asserted that the o2ners of the propert! are not obli,ated to pa! the fillin, operation. These defendants sou,ht to recover further da"a,es b! 2a! of cross%co"plaint for the sa"e supposed breach of contract on the part of the &overn"ent. On the part of Viuda de Tan Toco the defense 2as interposed that the na"e :#asa Viuda de Tan Toco: si,ned to the contract of suret!ship b! Mariano de la Ra"a 2as si,ned 2ithout authorit!E 2hile on the part of the Philippine National /an= 2as asserted that the "ort,a,e credit pertainin, to the ban= is superior to the &overn"ents lien for i"prove"ent, and b! 2a! of counterclai" the ban= as=ed that its "ort,a,e be foreclosed for the a"ount of its "ort,a,e credit, and that the four "ort,a,ors, Sin, Cuco, Sin, /en,co, M. de la Ra"a and &.M. Tanboontien, be reDuired to pa! the a"ount due to the ban=, and that in case of their failure to do so the "ort,a,ed propert! should be sold and the proceeds paid preferentiall! to the ban= upon its "ort,a,e. ?pon hearin, the cause the trial court, i,norin, that part of the ori,inal co"plaint 2herein the &overn"ent see=s to enforce its lien in subordination to its first "ort,a,e, "ade pronounce"ents; $)+ Declarin, Sin, Cuco, Sin, /en,co, M. de la Ra"a and &. M. Tanboontien indebted to the &overn"ent in the a"ount of P51, 6*(, 2ith interest fro" the date of the filin, of the co"plaint, and reDuirin, the" to pa! the said su" to the plaintiffE $>+ Declarin,, in effect, that the lien of the &overn"ent for the filin, i"prove"ent 2as superior to the "ort,a,e of the Philippine National /an=E and finall! $*+ Declarin, the defendant Tan On, SFe, Viuda de Tan Toco, personall! liable upon the contract of suret!ship, in case the four principal obli,ors should not satisf! their indebtedness to the &overn"ent, or if the land should not sell enou,h to satisf! the sa"e. Fro" this -ud,"ent various parties defendant appealed as follo2s; ll of the defendants, e7cept the Philippine National /an=, appealed fro" so "uch of the decision as held that the defendant o2ners and si,natories to the contract of suret!ship has not been released b! non%perfor"ance of the contract on the part of the /ureau of Public Aor=s, and fro" the refusal of the court to ,ive to the defendant o2ners da"a,es for breach of contract on the part of the &overn"ent. On the part of Tan On, SFe, Viuda de Tan Toco, error is assi,ned to the action of the court in holdin, said defendant liable upon the contract of suret!ship. Finall!, the Philippine National /an= appealed fro" so "uch of the decision as ,ave the lien of the &overn"ent for i"prove"ent priorit! over the "ort,a,ee e7ecuted in favor of the ban=. Dealin, 2ith these contentions in the order indicated, 2e find the contention of the appellants $e7cept the Philippine National /an=+, to the effect that the Director of Public Aor=s has failed to co"pl! 2ith the obli,ations i"posed upon the ,overn"ent b! the contract, is 2holl! untenable. /! said contract, the &overn"ent 2as not obli,ated to raise the land on 2hich the dred,ed "aterial 2as deposited to an! specified level. The &overn"ent onl! obli,ated itself upon said land the "aterial should be dred,ed fro" the "outh of the Iloilo River in the course of the i"prove"ent underta=en b! the &overn"ent in and near that place. ?nder the ori,inal contract as ori,inall! drafted, the &overn"ent a,reed to furnish >91,111 cubic "eters, "ore or less, of dred,ed "aterialE but on Mar. )', )6>), the o2ners of the propert! indicated their acceptance of a "odification of the contract effected b! the Director of Public Aor=s and the Secretar! of #o""erce and #o""unications, in 2hich it 2as "ade clear that the "aterial to be supplied 2ould be such onl! as should be dred,ed fro" the river as a result of the proposed i"prove"ent. In the endorse"ent of the Director of Public Aor=s, thus accepted b! the o2ners, it 2as "ade clear that the /ureau of Public Aor=s did not underta=e to furnish "aterial to co"plete the fillin, of the land to an! specified level. Proof sub"itted on the part of the o2ners tends to sho2 that parts of the filled land are still sub-ect to inundation in rain! 2eatherE and it is contended, that the o2ners have, for this reason, been able to sell in lots the propert! to individual occupants. the su" of P)9,111, 2hich is clai"ed upon this account, as da"a,es b! the o2ners, is the a"ount of interest alle,ed to have been accrued upon their invest"ent, o2in, to their inabilit! to place the land advanta,eousl! upon the "ar=et. The clai" is, as alread! su,,ested, untenable. There has been no breach on the part of the &overn"ent in fulfillin, the contract. In fact it appears that the &overn"ent deposited in the period covered b! the contract >*8,'81 cubic "eters, and after the a"ount thus deposited had been reduced b! >),('1 cubic "eters, o2in, to the natural process of dr!in,, the /ureau of Public Aor=s further deposited 9*,111 cubic "eters on the sa"e land. In this connection, the district en,ineer testified that the fillin, 2hich has been char,ed to the o2ners at P51,6*( actuall! cost the &overn"ent the a"ount of P((,>65.(9. The char,e "ade for the 2or= 2as evidentl! co"puted on a ver! "oderate basisE and the o2ners of the propert! have no -ust ,round of co"plaint 2hatever. The contention of Tan On, SFe, 2ido2 of Tan Toco, to the effect that she 2as not, and is not, bound b! the contract of suret!ship, is our pinion, 2ell%founded. It 2ill be re"e"bered that said contract purports to have been si,ned b! Mariano de la Ra"a, actin, for this defendant under the po2er of attorne!. /ut the &overn"ent has e7hibited no po2er of attorne! 2hich 2ould authoriFe the creation, b! the attorne!%in%fact, of an obli,ation in the nature of suret!ship bindin, upon this principal.

It is true that the &overn"ent introduced in evidence > docu"ents e7hibitin, po2ers of attorne!, conferred b! these docu"ents $<7hibit H, identical 2ith <7hibit 9+ Mariano de la Ra"a 2as ,iven the po2er 2hich reads as follo2s; . . . and also for "e and in "! na"e to si,n, seal and e7ecute, and as "! act and deed deliver, an! lease or an! other deed for the conve!in, an! real or personal propert! or the other "atter or thin, 2herein I a" or "a! be personall! interested or concerned. nd I do hereb! further authoriFe and e"po2er "! said attorne! to substitute and point an! other attorne! or attorne!s under hi" for the purposes aforesaid, and the sa"e a,ain and pleasure to revo=eE and ,enerall! for "e and in "! na"e to do, perfor", and e7ecute all and an! other la2ful and reasonable acts and thin,s 2hatsoever as full! and effectuall! as I, the said Tan On, SFe "i,ht or could do if personall! present. In another docu"ent, $<7hibits . and M+, e7ecuted in favor of the sa"e Mariano de la Ra"a b! his uncle Tan .ien #o, attorne!%in%fact of Tan On, SFe, 2ith po2er of substitution, there appears the follo2in,; . . . and also for her and for her na"e to si,n, seal and e7ecute, and as her act and deed deliver, an! lease, release, bar,ain, sale, assi,n"ent, conve!ance or assurance, an! other deed for the conve!in, an! real or personal propert! or other "atter or thin, 2herein she or "a! be personall! interested or concerned. Neither of these po2ers officiall! confers upon Mariano de la Ra"a the po2er to bind a principal b! a contract of suret!ship. The clauses noted relate "ore specificall! to the e7ecution of contracts relatin, to propert!E and the "ore ,eneral 2ords at the close of the Duoted clauses should be interpreted, under the ,eneral rule e3usdem $eneris, as referrin, to the contracts of li=e character. Po2er to e7ecute a contract so e7ceptional a nature as a contract of suret!ship or ,uarant! cannot be inferred fro" the ,eneral 2ords contained in these po2ers. In article )(>5 of the #ivil #ode it is declared that ,uarant! shall not be presu"edE it "ust be e7pressed and cannot be e7tended be!ond its specified li"its. /! analo,! a po2er of attorne! to e7ecute a contract of ,uarant! should not be inferred fro" va,ue or ,eneral 2ords, especiall! 2hen such 2ords have their ori,in and e7planation in particular po2ers of a 2holl! different nature. It results that the trial court 2as in error in ,ivin, personal -ud,"ent a,ainst Tan On, SFe upon the bond upon 2hich she 2as sued in this case. Ae no2 proceed to consider the last i"portant disputed Duestion involved in this case, 2hich is, 2hether the indebtedness o2in, to the &overn"ent under the contract for fillin, the parcel of land alread! "entioned is entitled to preference over the "ort,a,e credit due to the Philippine National /an=, as the trial -ud,e held, or 2hether on the contrar!, the latter clai" is entitled to priorit! over the clai" of the &overn"ent ?pon enterin, into the discussion of the feature of the case it is 2ell to recall the fact that the ban=3s "ort,a,e 2as re,istered in the office of the Re,ister of Deeds of the province of Iloilo on Nove"ber >8, )6>1, 2hile the filin, contract 2as re,istered on Canuar! (, )6>', that is to sa!, there is a priorit! of "ore than three !ears, in point of ti"e, in the inscription of the "ort,a,e credit under the fillin, contract 2as "ade an e7press lien upon the propert! 2hich 2as the sub-ect of i"prove"ent. In the brief sub"itted in behalf of the ban= it appears to be assu"ed that the &overn"ent credit under the fillin, contract is a true refectionar! credit $ credito re"acionario+ under subsection > of rticle )6>* of the #ivil #ode. It "a! be observed, ho2ever, that in a precise and technical sense, this credit is not e7actl! of the nature of the refectionar! credit as =no2n to the civil la2. In the civil la2 the refectionar! credit is pri"aril! an indebtedness incurred in the repair or reconstruction of so"ethin, previousl! "ade, such repair or reconstruction bein, "ade necessar! b! the deterioration or destruction as it for"erl! e7isted. The conception does not ordinaril! include an entirel! ne2 2or=, thou,h Spanish -urisprudence appears to have sanctioned this broader conception in certain cases as "a! be ,athered fro" the decision in the +nciclopedia Juridica +spanola $vol. >8, pp. (((%(61+ s. v.Re"accionario. The Duestion 2hether the credit 2e are considerin, falls precisel! under the conception of the refectionar! credit in the civil la2 is in this case acade"ic rather than practical, for the reason that b! the e7press ter"s of the fillin, contract the credit 2as constituted a lien upon the i"proved propert!. /ut assu"in,, as "i,ht be tenable in the state of -urisprudence, that said credit is a refectionar! credit en-o!in, preference under subsection * or article )6>* of the #ivil code , then the "ort,a,e credit "ust be ,iven priorit! under subsection > of the article )6>5 of the sa"e code, for the reason that the "ort,a,e 2as re,istered first. Possibl! the si"pler vie2 of the situation is to consider the &overn"ent3s ri,ht under the stipulation e7pressl! "a=in, the credit a lien upon the propert!, for it 2as certainl! la2ful for the parties to the fillin, contract to declare the credit a lien upon the propert! to be i"proved L to the e7tent hereinafter define L 2hether the credit precisel! fulfills the conception of refectionar! credit or not. In this aspect 2e have before us a co"petition bet2een the real lien created b! the fillin, contract of the later re,istration. The true solution to the proble" is, in our opinion, not open to doubtE and a,ain the result is that priorit! "ust be conceded to the "ort,a,e. The "ort,a,e 2as created b! the la2ful o2ners at a ti"e 2hen no other co"petin, interest e7isted in the propert!. The lien of the "ort,a,e therefore attached to the fee, or unli"ited interest of the o2ners in the propert!. On the other hand, the lien created b! the fillin, contract 2as created after the "ort,a,e had been "ade and re,istered, and therefore, after the o2ners of the propert! had parted 2ith the interest created b! the "ort,a,e. The &overn"ent3s lien o2es its ori,in to the contract, and derives its efficac! fro" the volition of the contractin, parties. /ut no part! can b! contract create a ri,ht in another intrinsicall! ,reater than that 2hich he hi"self possess. The o2ners, at the ti"e this contract 2as "ade, 2ere o2ners of the eDuit! of rede"ption onl! and not of the entire interest in the propert!, and the lien created b! the contract could onl! operate upon the eDuit! of rede"ption.

In this connection, 2e observed that, as the ne2 "aterial 2as deposited fro" the &overn"ent dred,es upon the propert! in Duestion, it beca"e an inte,ral part of the soil and an irre"ovable fi7tureE and the deposit havin, been "ade under contract bet2een the &overn"ent and the o2ners of the eDuit! of rede"ption, 2ithout the concurrence of the "ort,a,e creditor in said contract the latter could not be pre-udiced thereb!. The trial court, in declarin, that the &overn"ent3s lien should have preference over the "ort,a,e, see"s to have proceeded upon the idea that, at the ti"e the "ort,a,e 2as created, the ne2 soil had !et been deposited under the fillin, contract and that as a conseDuence the "ort,a,e lien should not been considered as attachin, to the value added b! deposit of the additional "aterial. This proposition, ho2ever, overloo=s the fact that the deposited "aterial beca"e an irre"ovable fi7ture, b! the act and intention of the parties to the fillin, contract, and the lien of the "ort,a,e undoubtedl! attached to the incre"ent thus spread over and affi7ed to the "ort,a,ed land. If the idea 2hich prevailed in the trial court should be accepted as la2 upon this point, the result 2ould be that a "ort,a,e creditor could, b! the act of stran,ers, be entirel! proved out of his propert! b! "a=in, of i"prove"ents to 2hich he has not assented. This cannot be accepted as ,ood la2. Ae "a! add that the case cannot, on this point, be resolved favorabl! to the contention of the Director of Public Aor=s, upon the authorit! of ?nson vs. ?rDui-o, Puluoa,a and <scubi $91 Phil., )81+, for the reason that upon the deposit of the dred,ed "aterial on the land such "aterial lost its identit!. In the case cited the "achiner! in respect to 2hich the vendor3s preference 2as upheld b! this court retained its separate e7istence and re"ained perfectl! capable of identification at all ti"es. Fro" 2hat it has been said it results that the appealed -ud,"ent "ust be affir"ed, and the sa"e is hereb! affir"ed, in dis"issin,, in effect, the cross%co"plaint filed b! so"e of the defendants a,ainst the plaintiff, the Director of Public Aor=s. Such -ud,"ent is further affir"ed in its findin,s, 2hich are not dispute, 2ith respect to the a"ount of the &overn"ent3s clai" under the fillin, contract and the a"ount of "ort,a,e credit of the ban=, as it is also affir"ed in respect to the -oint and several -ud,"ent entered in favor of the plaintiff a,ainst Sin, Cuco, Sin, /en,co, Tanboontien and Mariano de la Ra"a Tanbunco $alias Mariano de la Ra"a+ for the a"ount due to the &overn"ent Said -ud,"ent, ho2ever, "ust be reversed and the sa"e is bein, reversed in so far as it holds that Tan On, SFe, Viuda de Tan Toco, is liable upon the contract of suret!ship, and she is hereb! absolved fro" the co"plaint. The -ud,"ent "ust also be reversed in so far as it declares that the &overn"ent3s lien under the fillin, contract is entitled to priorit! over the ban=3s "ort,a,e. On the contrar! it is hereb! declared that the ban=3s credit is entitled to priorit! out of the proceeds of the foreclosure sale, the residue, if an!, to be applied to the &overn"ent3s lien created b! the fillin, contract and other2ise in accordance 2ith la2. For further proceedin,s in confor"it! 2ith this opinion, the cause is hereb! re"anded to the cause of ori,in, 2ithout pronounce"ents as to costs. So ordered. Johnson, Villamor, Johns, Romualdez, and Villa(Real, JJ., concur. alcolm and 8strand, JJ., also voted as indicated in the dispositive part o" their decision, )ut their names are not si$ned to opinion o%in$ to their a)sence o" leave at the time o" their promul$ation.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-2+181 M3rc& 1,, 1925 T!E " N5 O# T!E P!ILIPPINE ISL NDS, plaintiff%appellee, vs. G "RIEL NDRE DE COSTER 2 RO@ S, ET L., defendants. L ORDEN DE DOMINICOS or PP. PREDIC DORES DE L PRO1INCI DEL S NTISIMO ROS RIO,defendants%appelleesE G "RIEL NDRE DE COSTER 2 RO@ S, defendant%appellant. !ntonio . 8pisso "or appellant. !raneta and :ara$oza "or the )ank as appellee. Per"ecto Ga)riel "or the 7ominican Corporation as appellee. ST T<M<NT March )1, )6>', the plaintiff filed a co"plaint in 2hich it 2as alle,ed that it 2as a do"estic ban=in, corporation 2ith its principal office and place of business in the #it! of ManilaE that the defendant &abriela ndrea de #oster ! Ro7as 2as the 2ife of the defendant Cean M. PoiFat, both of 2ho" 2ere residents of the #it! of ManilaE that the defendant C. M. PoiFat and #o. 2as a dul! re,istered partnership 2ith its principal office and place of business in the #it! of ManilaE that the defendant .a Orden de Do"inicos or PP. Predicadores de la Provincia del Santisi"o Rosario 2as a reli,ious corporation dul! or,aniFed and e7istin, under the la2s of the Philippine Islands 2ith its principal office and place of business in the #it! of ManilaE that on Dece"ber >6, )6>), for value, the defendant &abriela ndrea de #oster ! Ro7as, havin, the consent and per"ission of her husband, and he actin, as her a,ent, said defendants "ade to the plaintiff a certain pro"issor! note for P>6>,111, pa!able one !ear after date, 2ith interest of 6 per cent per annu", pa!able "onthl!, in 2hich, a"on, other thin,s, it is provided that in the event of a suit or action, the defendants should pa! the further su" of P)1,111, as attorne!3s feesE that the note in Duestion 2as a -oint and several noteE that to secure the pa!"ent thereof, the defendants Cean M. PoiFat and C. M. PoiFat and #o. e7ecuted a chattel "ort,a,e to the plaintiff on the stea"ers Ro$er Poizat and Ga)rielle Poizat, 2ith the "achiner! and "aterials belon,in, to the PoiFat Ve,etable Oil Mills and certain "erchandiseE that at the sa"e ti"e and for the sa"e purpose, the defendant &abriela ndrea de #oster ! Ro7as, havin, the consent and per"ission of her husband, and he actin, as her a,ent, the! ac=no2led,ed and delivered to this plaintiff a "ort,a,e on certain real propert! l!in, and bein, situated in the #it! of Manila, 2hich is specificall! described in the "ort,a,eE that the real propert! 2as sub-ect to a prior "ort,a,e in favor of .a Orden de Do"inicos or PP. Predicadores de la Provincia del Santisi"o Rosario, hence it is "ade a part! defendantE that the note in Duestion is lon, past due and o2in,. The plaintiff havin, brou,ht action a,ainst the defendants on the note in the #ourt of First Instance of the #it! of Manila, civil case No. >9>)(E that in such case the court rendered -ud,"ent a,ainst the defendants &abriela ndrea de #oster ! Ro7as, Cean M. PoiFat and C. M. PoiFat and #o. -ointl! and severall! for P>6>,111, 2ith interest at the rate of 6 per cent per annu" fro" the *)st of u,ust, )6>*, P)1,111 as attorne!3s fees, and P>,911 for and in account of insurance upon the stea"er Ga)rielle Poizat, 2ith interest on that a"ount fro" Februar! 6, )6>', at the rate of 6 per cent per annu", and costsE that the said defendants have not paid the -ud,"ent or an! part thereof, and that the full a"ount of the debt secured b! the "ort,a,ed on the propert! described in the co"plaint is no2 due and o2in,. Aherefore, plaintiff pra!s for an order of the court to direct the sheriff of the #it! of Manila to ta=e i""ediate possession of the propert! described in the chattel "ort,a,e and sell the sa"e accordin, to the #hattel Mort,a,e .a2E that the propert! described in the real "ort,a,e or so "uch thereof as "a! be reDuired to pa! the a"ount due the plaintiff be sold accordin, to la2E that out of such sales plaintiff shall be paid the a"ount due and o2in, itE and that such defendants be ad-ud,ed to pa! an! re"ainin, deficienc!. #opies of the chattel and real "ort,a,e are attached to, and "ade a part of, the co"plaint and "ar=ed, respectivel!, <7hibits and /. On pril >', )6>', the .a Orden de Do"inicos or PP. Predicadores de la Provincia del Santisi"o Rosario appeared in the suit and filed the follo2in, plea; The defendant corporation, .a Orden de Do"inicos or PP. Predicadores de la Provincia del Santisi"o Rosario, for ans2er to the co"plaint, sho2s; I. That the encu"brance above%"entioned, but not deter"ined in para,raph V of the co"plaint, consistin, of a first "ort,a,e in favor of the aforesaid reli,ious corporation on the propert! described in para,raph IV of the sa"e co"plaint is P)>9,111 2ith interest of )1 per cent per annu"E II. That the "ort,a,ors Cean M. PoiFat and &abriela ndrea de #oster ! Ro7as, have not paid the principal or the interest stipulated and a,reed upon fro" the )8th of Dece"ber, )6>) up to the present dateE III. The interest due up to the *1th of pril of the present !ear )6>' a"ounts to a total su" of P>5,6>9.*'. Aherefore, it is pra!ed that the credit above%"entioned be ta=en into account 2hen the second "ort,a,e is foreclosed.

Ma! *, )6>', on "otion of the plaintiff, for failure to appear or ans2er, the defendants &abriela ndrea de #oster ! Ro7as and Cean M. PoiFat and C.M. PoiFat N #o. 2ere declared in default. Aithout ,ivin, an! notice of the defendants Cean M. PoiFat, C.M. PoiFat N #o. and &abriela ndrea de #oster ! Ro7as, and after the introduction of evidence on the part of the plaintiff and the defendant Do"inican Fathers, on Cune >', )6>', the court rendered an opinion in substance and to the effect that the plaintiff should have -ud,"ent as pra!ed for in its co"plaint, and that the Do"inican Fathers should have -ud,"ent for the a"ount of their clai", and that the propert! should be sold and the proceeds applied to satisf! the respective -ud,"ents. bout u,ust >8, althou,h her attorne!, the defendant &abriela ndrea de #oster ! Ro7as filed a "otion in 2hich she recites that she is the le,iti"ate 2ife of the defendant Cean M. PoiFatE that she had been absent fro" the Philippine Islands and residin, in the #it! of Paris fro" the !ear )61( to pril *1, )6>', 2hen she returned to ManilaE that at that ti"e of the filin, of the co"plaint and the issuance of the su""ons, she 2as absent fro" the Philippine IslandsE that the su""ons 2as delivered b! the sheriff of the #it! of Manila to her husband, and that throu,h his "alicious ne,li,ence, default 2as ta=en and -ud,"ent entered for the respective a"ountsE that she never had an! =no2led,e of the actual facts until the latter part of Cul!, )6>', 2hen, throu,h the local ne2spapers, she learned that a default -ud,"ent had been rendered a,ainst her on Cul! >(, )6>'E that 2hen she first =ne2 of that fact, she 2as unable to obtain the rendition of accounts, because her husband had left the Philippine Islands t2o da!s previous and ,one to @on,=on,E that she then 2ent to @on,=on, and learned that her husband had left there under a false na"e and had ,one to the port of Sin,apore fro" 2hence he 2ent to other places un=no2n to thus defendantE that she then returned to Manila, and that in u,ust, )6>', she ca"e into possession of docu"ents sho2in, the ille,all! of the notes and "ort,a,e in DuestionE that she has a ,ood and le,al defense to the action, 2hich involves the validit! of the order of the Do"inican Fathers in this, that their "ort,a,e does not ,uarantee an! loan "ade to this defendantE that it is a securit! onl! ,iven for a credit of a third personE that the "ort,a,e 2as e7ecuted 2ithout the "arital consent of the 2ifeE and that he did not have na! authorit! to "a=e her liable as suret! on the debt of a third personE that as re,ards the notes to the plaintiff; First, it does not represent an! "one! paid to the defendant b! the ban=E second, that it is e7clusivel! the personal debt of the defendants Cean M. PoiFat and C.M. PoiFat N #o., third, that it 2as e7ecuted b! her husband, because the ban= desired "ore securit! for the pa!"ent of her husband3s debt to the ban=E fourth, that it 2as e7ecuted b! her husband in e7cess of the po2ers ,iven to hi" under his po2er of attorne!E fifth, that it 2as e7ecuted as the result of collusion bet2een the ban= and the defendant liable for the obli,ation of a third person. That as to the "ort,a,e; First, it 2as e7ecuted to secure a void obli,ationE second, it does not ,uarantee an! loan "ade to this defendantE third, it 2as e7ecuted to secure a void liti,ationE second, it does not ,uarantee an! loan "ade to third defendantE third, it 2as e7ecuted 2ithout the e7press "arital consent 2hich the la2 reDuiresE fourth, it 2as e7ecuted throu,h collusion. That if the -ud,"ent is not set aside, the defendant 2ill suffer irreparable in-ur!E that throu,h surprise and ne,li,ence, for 2hich she 2as not responsible, this defendant 2as prevented fro" defendin, herself in this actionE that this is a case 2hich co"es under section ))* of the #ode of #ivil Procedure. She pra!s that the -ud,"ent annulled and set aside and the case be reopened, and that she be per"itted to file an ans2er, and that the case be tried on its "erits, and that a final -ud,"ent be rendered, absolvin, her fro" all liabilit!. The "otion 2as based upon, and supported b!, the affidavit of the defendant 2ife, to 2hich 2as attached a lar,e nu"ber of e7hibits all of 2hich tended to support the "otion. fter counter sho2in,s b! the ban= and the Do"inican Fathers and the ar,u"ents of respective counsel, the "otion to set aside and vacate the -ud,"ent 2as denied. "otion for a reconsideration 2as then "ade, and the "otion of the defendant to file an ans2er and "a=e a defense 2as a,ain denied. The defendant &abriela ndrea de #oster ! Ro7as appeals, assi,nin, the follo2in, errorsE P RT I S TO T@< C?RISDI#TION I. The lo2er court erred in holdin, that it had acDuired -urisdiction on the defendant &abriela ndrea de #oster ! Ro7as, $)+ There havin, been no service of the su""ons on her in the "anner reDuired b! section *68 of the #ode of #ivil Procedure, she bein, absent fro" the Philippine Islands at the ti"e of the filin, of the co"plaint and of the issuance of the su""ons in this case, and a resident of Paris, France, 2here she had lived per"anentl! and continuousl! for fifteen !ears prior thereof, and $>+ There havin, been no se rive b! publication in the "anner reDuired b! section *6( of the #ode of #ivil Procedure. II. The lo2er court erred in considerin, that in a case %here the %i"e is the onl' necessar' part' , service of the su""ons on the husband, at a place 2hich is not :the usual place of residence: of the 2ife and 2here the 2ife has never lived or resided, is sufficient to ,ive the court -urisdiction on the person and propert! of the 2ife and to render -ud,"ent b! default a,ainst her. III. The court erred in ad"ittin, and considerin, evidence, outside of the sheriff3s return, of the fact that the husband of the defendant &abriela ndrea de #oster ! Ro7as 2as her attorne! in fact 2ith po2er to appear for the defendant in court.

IV. The court erred in holdin, that the non%appearance of an a,ent of the defendant 2hen service of the su""ons has been "ade on hi" not as the a,ent of the defendant but in other capacit!, 2ill entitle the plaintiff 2ho has "isstated the "aterial -urisdictional facts of the co"plaint to a -ud,"ent b! default a,ainst the principal. V. The lo2er court erred in refusin, to vacate a -ud,"ent b! default a,ainst the defendant &abriela ndrea de #oster ! Ro7as rendered on a defective su""ons, served in a "anner not provided for b! the la2, and in a case 2here the co"plaint sho2s that plaintiff has no ri,ht of action. P RT II S TO T@< M<RITS OF T@< D<F<NS< I. The lo2er court erred, 2ith abuse of discretion, in holdin, that the ne,li,ence, if an!, of C.M. PoiFat in not appearin, on behalf of the defendant &abriela ndrea de #oster ! Ro7as, can be i"puted to this defendant, 2ithout redress, and to the advanta,e of the plaintiff ban= 2ho in collusion 2ith said C.M. PoiFat caused the latter to contract be!ond the scope of his po2ers as a,ent of this defendant the obli,ation 2hich is the sub-ect "atter of this case. II. The lo2er court erred in holdin, that the relief on the part of C.M. PoiFat that there 2as no defense a,ainst the clai" of the plaintiff on an obli,ation contracted b! said C.M. PoiFat apparentl! as a,ent of the defendant &abriela ndrea de #oster ! Ro7as, but in truth be!ond the scope of his authorit!, and 2ith =no2led,e on the part of the plaintiff ban= that he 2as so actin, be!ond his po2ers, 2as such an error 2as can be i"puted to this defendant, and a,ainst 2hich she can obtain no redress. III. The lo2er court erred in not holdin, that a principal is not liable for an obli,ation contracted b! his a,ent be!ond his po2er even 2hen both the creditor and the a,ent believed that the latter 2as actin, 2ithin the scope of his po2ers. IV. The lo2er court erred in holdin, that because the a,ent of the defendant &abriela ndrea de #oster ! Ro7as had po2er to appear for her in court, his non%appearance could render this defendant liable to a -ud,"ent b! default, 2hen the record sho2s that there 2as no service of the su""ons in accordance 2ith an! of the for"s of service provided b! la2. V. The lo2er court erred in holdin, that C.M. PoiFat 2as su""oned as a,ent of hi 2ife, the defendant &abriela ndrea de #oster ! Ro7as, and 2as, in that capacit!, notified of all the decisions rendered in this case, there bein, nothin, in the record to support the truth of such findin,. VI. The lo2er court erred in holdin, that in contractin, the obli,ations in favor of the plaintiff /an= of the Philippine Islands and of the defendant Orden de PP. Predicadores de la Provincia del Santisi"o Rosario, the a,ent of the defendant &abriela ndrea de #oster ! Ro7as acted 2ithin the scope of his po2ers. VII. The lo2er court erred in not holdin, that the plaintiff /an= of the Philippine Islands and the defendant Orden de PP. Predicadores de la Provincia del Santisi"o Rosario had =no2led,e of the fact that C.M. PoiFat in contractin, the respective obli,ations in their favor, pretendin, to act as a,ent of the defendant &abriela ndrea de #oster ! Ro7as, 2as actin, be!ond the scope of his po2ers as such a,ent. VIII. The lo2er court erred in "a=in, the follo2in, state"ent; :It is ho2ever alle,ed, b! the petitioner, that these loans 2ere obtained to pa! debts, of stran,ers. <ven so, this 2ould not render the loan obtained b! the attorne! in fact null and void. The circu"stance that the a,ent used the "one!, borro2ed b! hi" 2ithin the scope of his po2ers, to purposes for 2hich he 2as not authoriFed b! his principal, "a! entitle the latter to de"and fro" hi" the correspondin, liabilit! for the da"a,es suffered, but it cannot pre-udice the creditor and cause the nullit! of the loan. /ut, even ad"ittin, that the "one! borro2ed 2as used b! PoiFat to pa! debts 2hich did not belon, to his principal, even then, he 2ould have acted 2ithin his po2ers, since his principal, to,ether 2ith the po2er to borro2 "one!, had ,iven her a,ent po2er to loan an! a"ount of "one!, and the pa!"ent of the debts of a stran,er 2ould a"ount to a loan "ade b! the a,ent on behalf of his principal to the person or entit! 2hose debt 2as paid 2ith the "one! obtained fro" the creditors.: I0. The lo2er court erred in appl!in, to this case the principle involved in the case of Palanca vs. S"ith, /ell and #o., 6 Phil., )*). 0. The court erred in suppl!in, fro" its o2n i"a,ination facts 2hich did not ta=e place, of 2hich there is no evidence in the record, and 2hich the parties never clai"ed to have e7isted, and then dra2 the conclusion that if under those h!pothetical facts the transaction bet2een C.M. PoiFat and the /an= of the Philippine Islands "i,ht have been le,al, then the transaction as it actuall! too= place 2as also le,al. 0I. The lo2er court erred in holdin, that defendant has not alle,ed an! of the ,rounds enu"erated in section ))* of the #ode of #ivil Procedure. 0II. The lo2er court erred in holdin, that this defendant%appellant has no "eritorious defense a,ainst the Do"inican Order and the /an= of the Philippine Islands. 0III. The lo2er court erred in ta=in, into consideration <7hibit appearin, at pa,es )98%)89 of the bill of e7ceptions.

0IV. The lo2er court erred in den!in, the "otion filed b! this defendant%appellant. 0V. The lo2er court has acted throu,hout these proceedin,s 2ith a clear abuse of discretion. 6O!NS, J.: Ae 2ill decide the case of the ban= first The petition of the appellant states under oath; II. That this defendant has been absent fro" the Philippine Islands and residin, in the #it! of Paris, France, since the !ear )61( $)616+, up to pril *1, )6>', on 2hich date she arrived in this #it! of Manila, Philippine Islands. III. That at the ti"e 2hen the co"plaint in this case 2as filed and the su""ons issued, she 2as still absent fro" the Philippine Islands and had no =no2led,e either of the filin, of this action or of the facts 2hich led to it. ?nder oath the plaintiff, throu,h its actin, president, sa!s; I%II. That it ad"its the alle,ations contained in para,raphs I and II of the aforesaid "otion. III. That it ad"its the first part of this para,raph, to 2it; That at the ti"e that the co"plaint in the above entitled case 2as filed, the defendant &abriela ndrea de #oster ! Ro7as 2as absent fro" the Philippine Islands. Para,raph 8 of section *68 of the #ode of #ivil Procedure provides; In all other cases, to the defendant personall!, or b! leavin, a cop! at his usual place of residence, in the hands of so"e person resident therein of sufficient discretion to receive the sa"e. /ut service upon a corporation, as provided in subsections one and t2o, "a! be "ade b! leavin, the cop! at the office of the proper officer thereof if such officer cannot be found. The return of the sheriff as to the service is as follo2s; On this date I have served a cop! of the 2ithin su""ons, and of the co"plaint attached, upon Cean M. PoiFat, personall!, and the copies correspondin, to C.M. PoiFat and #o., a co"pan! dul! or,aniFed under the la2s of the Philippine Islands, b! deliverin, said copies to its President Mr. Cean M. PoiFat, personall!, and the copies correspondin, to &abriela ndrea de #oster ! Ro7as, b! leavin, the sa"e in the place of her usual residence in the #it! of Manila and in the hands of her husband, Mr. C.M. PoiFat, a person residin, therein and of sufficient discretion to receive it, personall!. Done at Manila, P.I., this )*th da! of March, )6>'. RI# RDO S?MM<RS #heri"" o" anila /! &R<&ORIO & R#I I hereb! certif! that on this date I have delivered a cop! of this su""ons and of the co"plaint correspondin, to the :.a Orden de Do"inicos or PP. Predicadores de la Provincia del Santisi"o Rosario,: throu,h Father Pedro Pratt, Procurador &eneral of said Orden de Do"inicos or PP. Predicadores de la Provincia del Santisi"o Rosario, personall!. Manila, P.I., pril ), )6>'. RI# RDO S?MM<RS #heri"" o" anila /! SIM<ON D. S<RD<R It 2ill be noted that the service of su""ons and co"plaint 2as "ade on this defendant on the )*th da! of March, )6>', and that it is a stipulated fact that since the !ear )61( and up to pril *1, )6>', she 2as :residin, in the #it! of Paris, France.: <ven so, it is contended that the service 2as valid b! reason of the fact that it 2as "ade at the usual place of residence and abode of the defendant husband, and that le,all! the residence of the 2ife is that of the husband. That contention is in direct conflict 2ith the ad"ission of the plaintiff that since the !ear )61( and up to pril *1, )6>', the 2ife 2as residin, in the #it! of Paris. The residence of the 2ife in the #it! of Paris covered a period of si7teen !ears. It "a! be that 2here in the ordinar! course of business the 2ife is absent fro" the residence of husband on a pleasure trip or for business reasons or to visit friends or relatives that, in the nature of such thin,s, the residence of the 2ife 2ould continue and re"ain to be that of the husband. That is not this case. For si7teen !ears the residence of the husband 2as in the #it! of Manila, and the residence of the 2ife 2as in the #it! of Paris. ?pon the ad"itted facts, 2e are clearl! of the opinion that the residence of the husband 2as not the usual place of residence of the 2ife. &ivin, full force and effect to the le,al presu"ption that the usual place of residence of the 2ife is that of her husband, that presu"ption is overco"e b! the ad"itted fact that the 2ife 2as :residin, in the #it! of Paris, France, since the !ear )61( up to pril *1, )6>'.: Aithout placin, a li"itation upon the len,th of ti"e sufficient to overco"e the le,al presu"ption, suffice it to sa! that si7teen !ears is a"pl! sufficient. It follo2s that the substituted service atte"pted to be "ade under the provisions of section *68 of the #ode of #ivil Procedure is null and void, and that b! such service the court never acDuired -urisdiction of the person of the defendant 2ife. In that event the plaintiff contends that under his po2er of attorne!, the husband 2as the ,eneral a,ent of the 2ife 2ith authorit! to accept service of process for her and in her na"e, and that b! reason of the fact that the husband 2as dul!

served and that he failed or ne,lected to appear or ans2er, his actions and conduct 2ere bindin, on the defendant 2ife. /e that as it "a!, there is nothin, in the record tendin, to sho2 that the husband accepted service of an! process for or on account of his 2ife or as her a,ent, or that he 2as actin, for or representin, her in his failure and ne,lect to appear or ans2er. The first appearance in court of the defendant 2ife 2as "ade 2hen she filed the "otion of u,ust >8, )6>', in 2hich she pra!s in le,al effect that the -ud,"ent a,ainst her be annulled and set aside and the case reopened, and that she be per"itted to file an ans2er and to have the case tried on its "erits. That 2as a ,eneral appearance as distin,uished fro" a special appearance. Ahen she filed that "otion as=in, to be relieved fro" the le,al force and effect of the -ud,"ent, she sub"itted herself to the -urisdiction of the court. If, in the first instance, she had "ade a special appearance to Duestion onl! the -urisdiction of the court, and had not appeared for an! other or different purpose, another and a different Duestion 2ould have been presented. @avin, "ade a ,eneral appearance for one purpose, she is no2 in court for all purposes. It is an ele"entar! rule of la2 that as a condition precedent, to entitle a part! to relief fro" a -ud,"ent :ta=en a,ainst hi" throu,h his "ista=e, inadvertence, surprise or e7cusable ne,lect,: that, a"on, other thin,s, he "ust sho2 to the court that he has a "eritorious defense. /ased upon that le,al principle the ban= contends that no such a sho2in, has been "ade b! the defendant 2ife. That involves the le,al construction of the po2er of attorne! 2hich, it is ad"itted, the 2ife ,ave to her husband on u,ust >9, )61*, 2hich, a"on, other thin,s "aterial to this opinion, recites that she ,ave to hi"; Such full and a"ple po2er as reDuired or necessar!, to the end that he "a! perfor" on "! behalf, and in "! na"e and availin, hi"self of all "! ri,hts and actions, the follo2in, acts; 9. .oan or borro2 an! su"s of "one! or fun,ible thin,s at the rate of interest and for the ti"e and under the conditions 2hich he "i,ht dee" convenient, collectin, or pa!in, the capital or the interest on their respective due datesE e7ecutin, and si,nin, the correspondin, public or private docu"ents related thereto, and "a=in, all these transactions 2ith or 2ithout "ort,a,es, pled,es or personal ,uarant!. 8. <nter into an! =ind of contracts 2hether civil or "ercantile, ,ivin, due for" thereof either b! private docu"ents or public deeds 2ith all clauses and reDuisites provided b! la2 for their validit! and effect, havin, due re,ard to the nature of each contract. 5. Dra2, endorse, accept, issue and ne,otiate an! drafts, bills of e7chan,e, letters of credit, letters of pa!"ent, bills, vales, pro"issor! notes and all =inds of docu"ents representative of valueE pa!in, or collectin, the value thereof on their respective due dates, or protestin, the" for non%acceptance or non%pa!"ent, utiliFin, in this case the ri,hts ,ranted b! the #ode of #o""erce no2 in force, in order to collect the value thereof, interests, e7penses and da"a,es a,ainst 2ho"soever should be liable therefor. (. Institute before the co"petent courts the correspondin, action in -ustification of the possession 2hich I have or "i,ht have over an! real estate, filin, the necessar! pleadin,s, evidencin, the" b! "eans of docu"entar! or oral testi"on! ad"issible b! la2E acceptin, notices and su""ons, and institutin, all necessar! proceedin,s for the ter"ination thereof and the conseDuent inscription of said action in the correspondin, office of the Re,ister of Deeds, in the sa"e "anner in 2hich I "i,ht do if personall! present and actin,. 6. Represent "e in all cases before the "unicipal courts, -ustice of the peace courts, courts of first instance, supre"e court and all other courts of re,ular or an! other special -urisdiction, appearin, before the" in an! civil or cri"inal proceedin,s, institutin, and filin, cri"inal and ordinar! civil actions, clai"s in intestate and testa"entar! proceedin,s, insolvencies and other actions provided b! la2E filin, co"plaints, ans2ers, counterclai"s, cross co"plaints, cri"inal co"plaints and such other pleadin,s as "i,ht be necessar!E filin, de"urrers, ta=in, and offerin, -udicial ad"issions, docu"entar!, e7pert, oral evidence, and others provided b! la2, ob-ectin, to and opposin, 2hatever contrar! actions are ta=en, offered and presentedE acceptin, notices, citations and su""ons and ac=no2led,in, their receipt to the proper -udicial officials. )1. For to the end stated above and the incidents related thereto, I confer on hi" a"ple and co"plete po2er, bindin, "!self in the "ost sole"n "anner as reDuired b! la2 to reco,niFe as e7istin, and valid all that he "i,ht do b! virtue hereof. It is ad"itted that on Dece"ber >6, )6>), the defendant husband si,ned the na"e of the defendant 2ife to the pro"issor! note in Duestion, and that to secure the pa!"ent of the note, upon the sa"e date and as attorne! in fact for his 2ife, the husband si,ned the real "ort,a,e in Duestion in favor of the ban=, and that the "ort,a,e 2as dul! e7ecuted. /ased upon such ad"issions, the ban= vi,orousl! contends that the defendant 2ife has not sho2n a "eritorious defense. In fact that it appears fro" her o2n sho2in, that she does not have a le,al defense. It "ust be ad"itted that upon the face of the instru"ents, that fact appears to be true. To "eet that contention, the defendant 2ife points out, first, that the note in Duestion is a -oint and several note, and, second, that it appears fro" the evidence, 2hich she sub"itted, that she is nothin, "ore than an acco""odation "a=er of the note. She also sub"its evidence 2hich tends to sho2; First. That prior to Cul! >9, )6>), Cean M. PoiFat 2as personall! indebted to the /an= of the Philippine Islands in the su" of P>61,191.1> $<7hibit @, pa,e 88, bill of e7ceptions+E Second. That on Cul! >9, )6>), the personal indebtedness of Cean M. PoiFat 2as converted into si7 pro"issor! notes a,,re,atin, the su" of P*1(,'9(.9( of 2hich P)8,)(1 2ere paid, leavin, an outstandin, balance of

P>6>,>5(.9( $<7hibits D, <, F, &, @ and I, pa,es 59%(1, bill of e7ceptions+E Third. That on Dece"ber >6, )6>), the above pro"issor! notes 2ere cancelled and substituted b! a -oint and several note si,ned b! Cean M. PoiFat in his personal capacit! and as a,ent of &abriela ndrea de #oster ! Ro7as and as "e"ber of the fir" C.M. PoiFat and #o. In other 2ords, that under the po2er of attorne!, the husband had no authorit! for and on behalf of the 2ife to e7ecute a -oint and several note or to "a=e her liable as an acco""odation "a=er. That the debt in Duestion 2as a pree7istin, debt of her husband and of the fir" of C.M. PoiFat and #o., to 2hich she 2as not a part!, and for 2hich she 2as under no le,al obli,ation to pa!. That she never borro2ed an! "one! fro" the ban=, and that previous to the si,nin, of the note, she never had an! dealin,s 2ith the ban= and 2as not indebted to the ban= in an! a"ount. That the old, ori,inal debts of her husband and C.M. PoiFat and #o. to the ban=, to 2hich she 2as not a part!, 2ere all ta=en up and "er,ed in the ne2 note of Dece"ber >6, )6>), in Duestion, and that at the ti"e the note 2as si,ned, she did not borro2 an! "one!, and that no "one! 2as loaned b! the ban= to the "a=ers of the note. ssu"in, such facts to be true, it 2ould be a valid defense b! the defendant 2ife to the pa!"ent of the note. There is no clai" or pretense that the ban= 2as "isled or deceived. If it had "ade an actual loan of P>6>,111 at the ti"e the note 2as e7ecuted, another and a different Duestion 2ould be presented. In the ordinar! course of its business, the ban= =ne2 that not a dollar 2as loaned or borro2ed on the stren,th of the note. It 2as ,iven at the ur,ent and pressin, de"and of the ban= to obtain securit! for the si7 different notes 2hich it held a,ainst C.M. PoiFat and #o. and Cean M. PoiFat of date Cul! >9, )6>), a,,re,atin, about P>6>,111, and at the ti"e it 2as ,iven, those notes 2ere ta=en up and "er,ed in the note of Dece"ber >6, )6>), no2 in Duestion. ?pon the record before us, there is no evidence that the defendant 2ife 2as a part! to the notes of Cul! >9, )6>), or that she 2as under an! le,al liabilit! to pa! the". The note and "ort,a,e in Duestion sho2 upon their face that at the ti"e the! 2ere e7ecuted, the husband 2as attorne! in fact for the defendant 2ife, and the ban= =ne2 or should have =no2n the nature and e7tent of his authorit! and the li"itations upon his po2er. Bou 2ill search the ter"s and provisions of the po2er of attorne! in vain to find an! authorit! for the husband to "a=e his 2ife liable as a suret! for the pa!"ent of the pree7istin, debt of a third person. Para,raph 9 of the po2er of attorne! above Duoted authoriFes the husband for in the na"e of his 2ife to :loan or borro2 an! su"s of "one! or fun,ible thin,s, etc.: This should be construed to "ean that the husband had po2er onl! to loan his 2ife3s "one! and to borro2 "one! for or on account of his 2ife as her a,ent and attorne! in fact. That does not carr! 2ith it or i"pl! that he had the le,al ri,ht to "a=e his 2ife liable as a suret! for the pree7istin, debt of a third person. Para,raph 8 authoriFes hi" to :enter into an! =ind of contracts 2hether civil or "ercantile, ,ivin, due for" thereof either b! private docu"ents or public deeds, etc.: Para,raph 5 authoriFes hi" to :dra2, endorse, accept, issue and ne,otiate an! drafts, bills of e7chan,e, letters of credit, letters of pa!"ent, bills, vales, pro"issor! notes, etc.: The fore,oin, are the clauses in the po2er of attorne! upon 2hich the ban= relies for the authorit! of the husband to e7ecute pro"issor! notes for and on behalf of his 2ife and as her a,ent. It 2ill be noted that there is no provision in either of the" 2hich authoriFes or e"po2ers hi" to si,n an!thin, or to do an!thin, 2hich 2ould "a=e his 2ife liable as a suret! for a pree7istin, debt. It is funda"ental rule of construction that 2here in an instru"ent po2ers and duties are specified and defined, that all of such po2ers and duties are li"ited and confined to those 2hich are specified and defined, and that all other po2ers and duties are e7cluded. Para,raph ( of the po2er of attorne! authoriFes the husband to institute, prosecute and defend all actions or proceedin,s in a court of -ustice, includin, :acceptin, notices and su""ons.: There is nothin, in the record tendin, to sho2 that the husband accepted the service of an! notice or su""ons in the action on behalf of the ban=, and even so, if he had, it 2ould not be a defense to open up and vacate a -ud,"ent under section ))* of the #ode of #ivil Procedure. The sa"e thin, is true as to para,raph 6 of the po2er of attorne!. The fact that an a,ent failed and ne,lected to perfor" his duties and to represent the interests of his principal is not a bar to the principal obtainin, le,al relief for the ne,li,ence of her a,ent, provided that the application for such a relief is dul! and properl! "ade under the provisions of section ))*. It is ver! apparent fro" the face of the instru"ent that the 2hole purpose and intent of the po2er of attorne! 2as to e"po2er and authoriFe the husband to loo= after and protect the interests of the 2ife and for her and in her na"e to transact an! and all of her business. /ut no2here does it provide or authoriFe hi" to "a=e her liable as a suret! for the pa!"ent of the pree7istin, debt of a third person. @ence, it follo2s that the husband 2as not authoriFed or e"po2ered to si,n the note in Duestion for and on behalf of the 2ife as her act and deed, and that as to her the note is void for 2ant of po2er of her husband to e7ecute it. The sa"e thin, is true as to the real "ort,a,e to the ban=. It 2as ,iven to secure the note in Duestion and 2as not ,iven for an! other purpose. The real propert! described in the "ort,a,e to the ban= 2as and is the propert! of the 2ife. The note bein, void as to her, it follo2s that as to her the real "ort,a,e to the ban= is also void for 2ant of po2er to e7ecute it. It appears that before the "otion in Duestion 2as filed, there 2ere certain ne,otiations bet2een the ban= and the attorne! for

the 2ife 2ith a vie2 of a co"pro"ise or settle"ent of the ban=3s clai" a,ainst her, and that durin, such ne,otiations, there 2as so"e evidence or ad"issions on the part of her attorne! that she 2as liable for the ban=3s clai". It no2 contends that as a result of such ne,otiations and ad"issions, the 2ife is estopped to den! her liabilit!. but it also appears that durin, such ne,otiations, both the 2ife and her attorne! did not have an! =no2led,e of the actual facts, and that she 2as then i,norant of the defense upon 2hich she no2 relies. /e that as it "a!, such ne,otiations 2ere "ore or less in the nature of a co"pro"ise 2hich 2as re-ected b! the ban=, and it appears that in an! event both the 2ife and her attorne! did not have an! =no2led,e of the facts upon 2hich the! no2 rel! as a defense. There is no clai" or pretense that the debt in Duestion 2as contracted for or on account of the :usual dail! e7penses of the fa"il!, incurred b! the 2ife or b! her order, 2ith the tacit consent of the husband,: as provided for in article )*8> of the #ivil #ode. Neither is there an! evidence tendin, to sho2 that the 2ife 2as le,all! liable for an! portion of the ori,inal debt evidence b! the note in Duestion. This decision as to the ban= on this "otion is based on the assu"ption that the facts are true as set forth and alle,ed in the petition to set aside and vacate the -ud,"ent as to the 2ife, but 2e are not "a=in, an! findin, as to the actual truth of such facts. That re"ains for the defendant 2ife to prove such alle,ed facts 2hen the case is tried on its "erits. It follo2s that the opinion of the lo2er court in refusin, to set aside and vacate the -ud,"ent of the plaintiff ban= a,ainst the defendant 2ife is reversed, and that -ud,"ent is vacated and set aside, and as to the ban= the case is re"anded to the lo2er court, 2ith leave for the 2ife to file an ans2er to plaintiff3s cause of action, and to have the case tried on its "erits and for an! further proceedin,s not inconsistent 2ith this opinion. s to the -ud,"ent in favor of the Do"inican Fathers, it appears that their plea above Duoted in the state"ent of facts 2as filed on pril >', )6>'. In that plea the! sa! that the! have a first "ort,a,e on the propert! described in para,raph IV of the co"plaint for P)>9,111 2ith interest at )1 per cent per annu". That the "ort,a,ors Cean M. PoiFat and &abriela ndrea de #oster ! Ro7as have not paid the principal or the stipulated interest fro" Dece"ber )8, )6>), to date, 2hich up to the *1th da! of pril, )6>', a"ounts to P>5,6>9.*'. Aherefore, it is pra!ed that the credit above%"entioned be ta=en into account 2hen the second "ort,a,e is foreclosed. No other plea of an! =ind, nature or description 2as filed b! it. The record sho2s that a cop! of this alle,ed plea 2as served upon the attorne!s for the plaintiff ban=. There is nothin, in the record 2hich sho2s or tends to sho2 that a cop! of it 2as ever served on either one of the defendants. Neither is there an! evidence that either of the defendants ever appeared in the ori,inal action. In fact, -ud,"ent 2as rendered a,ainst the" b! default. ?nder such a state of facts, the -ud,"ent in favor of the Do"inican Fathers cannot be sustained. In the first place, the plea above Duoted filed on pril >', )6>', 2ould not be sufficient to sustain a -ud,"ent. It does not even as= for a -ud,"ent of the foreclosure of its "ort,a,e. In the second place, no cop! of the plea 2as ever served upon either of the defendants, 2ho 2ere the real parties in interest, and a,ainst 2ho" a -ud,"ent 2as rendered for the full a"ount of the note and the foreclosure of the "ort,a,e. Such a proceedin, cannot be sustained on an! le,al principle. ?nless 2aived, a defendant has a le,al ri,ht to service of process, to his da! in court and to be heard in his defense. Fro" 2hat has been said, it follo2s that, if the transaction bet2een the Do"inican Fathers and Cean M. PoiFat as attorne! in fact for his 2ife 2as an ori,inal one and the P)>9,111 2as actuall! loaned at the ti"e the note and "ort,a,e 2ere e7ecuted and the "one! 2as in ,ood faith delivered to the husband as the a,ent and attorne! in fact of the 2ife, it 2ould then be a valid e7ercise of the po2er ,iven to the husband, re,ardless of the Duestion as to 2hat he "a! have done 2ith the "one!. Para,raph 9 of the po2er of attorne! specificall! authoriFes hi" to borro2 "one! for and on account of his 2ife and her na"e, :and "a=in, all these transactions 2ith or 2ithout "ort,a,es, pled,es or personal ,uarant!.: It follo2s that the -ud,"ent of the lo2er court in favor of .a Orden de Do"inicos or PP. Predicadores de la Provincia del Santisi"o Rosario is reversed, 2ithout pre-udice to its ri,ht to either file an ori,inal suit to foreclose its "ort,a,e or to file a ,ood and sufficient plea as intervenor in the instant suit, settin, forth the facts upon 2hich it relies for a -ud,"ent on its note and the foreclosure of its "ort,a,e, copies of 2hich should be served upon the defendants. Neither part! to recover costs. So ordered. 8strand and Romualdez, JJ., concur. Johnson and alcolm, JJ., concur in the result. Se.3r3$e O.(-(o-) 1ILL MOR, J., concurrin, and dissentin,; I concur in the result reached b! the court in orderin, the re"andin, of the case for further proceedin,s, for in "! opinion, the defendant%appellant, a,ainst 2ho" a -ud,"ent b! default 2as rendered, has the ri,ht, under section ))* of the #ode of #ivil Procedure, to have said -ud,"ent set aside and to be ,iven an opportunit! to appear, havin, alle,ed facts 2hich, if proven, 2ould constitute a ,ood defense, but I dissent fro" the opinion of the "a-orit! in so far as it atte"pts to decide certain features of the case raised b! the defendant%appellant, 2ithout 2aitin, for the outco"e of the ne2 trial 2herein the other parties "ust naturall! have the sa"e opportunit! to present their defenses a,ainst the facts alle,ed b! the appellant. In "! opinion, the "erits of the Duestion should not no2 be discussed 2ithout ,ivin, the trial court an opportunit! to pass upon the alle,ations and evidence of the parties liti,ant.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-4+9 No=ember 11, 1901 GERM NN A CO., plaintiff%appellees, vs. DON LDSON, SIM A CO., defendants%appellants. 6ernando de la Cantera, "or appellants. 6rancisco 8rti$as, "or appellees. L DD, J.: This is an incident of 2ant of personalit! of the plaintiff3s attorne!. The action is to recover a su" clai"ed to be due for frei,ht under a charter part!. It 2as brou,ht b! virtue of a ,eneral po2er for suits, e7ecuted in Manila October >5, )611, b! Fernando Ha""erFell, and purportin, to be a substitution in favor of several attorne!s of po2ers conferred upon Ha""erFell in an instru"ent e7ecuted in /erlin, &er"an!, Februar! 9, )611, b! Ma7 .eonard Torno2, the sole o2ner of the business carried on in /erlin and Manila under the na"e of &e"ann N #o. The first%na"ed instru"ent 2as authenticated b! a notar! 2ith the for"alities reDuired b! the do"estic la2s. The other 2as not so authenticated. /oth Torno2 and Ha""erFell are citiFens of &er"an!. Torno2 is a resident of /erlin and Ha""erFell of Manila. The defendants clai" that the ori,inal po2er is invalid under article )>(1, No. 9, of the #ivil #ode, 2hich provides that po2ers for suits "ust be contained in a public instru"ent. No clai" is "ade that the docu"ent 2as not e7ecuted 2ith the for"alities reDuired b! the &er"an la2 in the case of such an instru"ent. Ae see no reason 2h! the ,eneral principle that the for"al validit! of contracts is to be tested b! the la2s of the countr! 2here the! are e7ecuted should not appl!. $#ivil #ode, art. )).+ The defendants also clai" that the ori,inal po2er can not be construed as conferrin, upon Ha""erFell authorit! to institute or defend suits, fro" 2hich contention, if correct, it 2ould of course follo2 that the dele,ated po2er is invalid. In support of this contention reliance is placed upon article )5)* of the #ivil #ode, b! 2hich it is provided that :an a,enc! stated in ,eneral ter"s onl! includes acts of ad"inistration,: and that :in order to co"pro"ise, alienate, "ort,a,e, or to e7ecute an! other act of strict o2nership an e7press co""ission is reDuired.: It has been ar,ued b! counsel for the plaintiff that these provisions of the do"estic la2 are not applicable to the case of an a,enc! conferred, as 2as that in Duestion, b! one forei,ner upon another in an instru"ent e7ecuted in the countr! of 2hich both 2ere citiFens. Ae shall not pass upon this Duestion, since 2e are clearl! of opinion that the instru"ent contains an e7plicit ,rant of a po2er broad enou,h to authoriFe the brin,in, of the present action, even assu"in, the applicabilit! of the do"estic la2 as clai"ed b! the defendants.la2phil.net /! this instru"ent Torno2 constitutes Ha""erFell his :true and la2ful attorne! 2ith full po2er to enter the fir" na"e of &er"ann N #o. in the #o""ercial Re,istr! of the cit! of Manila as a branch of the house of &er"ann N #o. in /erlin, it bein, the purpose of this po2er to invest said attorne! 2ill full le,al po2ers and authoriFation to direct and ad"inister in the cit! of Manila for us and in our na"e a branch of our ,eneral co""ercial business of i"portant and e7portation, for 2hich purpose he "a! "a=e contracts of lease and e"plo! suitable assistants, as 2ell as si,n ever! =ind of docu"ents, accounts, and obli,ations connected 2ith the business 2hich "a! be necessar!, ta=e char,e in ,eneral of the receipt and deliver! of "erchandise connected 2ith the business, si,n all receipts for su"s of "one! and collect the" and e7act their pa!"ent b! le,al "eans, and in ,eneral e7ecute all the acts and thin,s necessar! for the perfect carr!in, on of the business co""itted to his char,e in the sa"e "anner as 2e could do ourselves if 2e 2ere present in the sa"e place.: Ae should not be inclined to re,ard in institution of a suit li=e the present, 2hich appears to be brou,ht to collect a clai" accruin, in the ordinar! course of the plaintiff3s business, as properl! belon,in, to the class of acts described in article )5)* of the #ivil #ode as acts :of strict o2nership.: It see"s rather to be so"ethin, 2hich is necessaril! a part of the "ere ad"inistration of such a business as that described in the instru"ent in Duestion and onl! incidentall!, if at all, involvin, a po2er to dispose of the title to propert!. /ut 2hether re,arded as an act of strict o2nership or not, it appears to be e7pressl! and speciall! authoriFed b! the clause conferrin, the po2er to :e7act the pa!"ent: of su"s of "one! :b! le,al "eans.: This "ust "ean the po2er to e7act the pa!"ent of debts due the concern b! "eans of the institution of suits for their recover!. If there could be an! doubt as to the "eanin, of this lan,ua,e ta=en b! itself, it 2ould be re"oved b! a consideration of the ,eneral scope and purpose of the instru"ent in 2hich it occurs. $See #ivil #ode, art. )>(8.+ The "ain ob-ect of the instru"ent is clearl! to "a=e Ha""erFell the "ana,er of the Manila branch of the plaintiff3s business, 2ith the sa"e ,eneral authorit! 2ith reference to its conduct 2hich his principal 2ould hi"self possess if he 2ere personall! directin, it. It can not be reasonabl! supposed, in the absence of ver! clear lan,ua,e to that effect, that it 2as the intention of the principal to 2ithhold fro" his a,ent a po2er so essential to the efficient "ana,e"ent of the business entrusted to his control as that to sue for the collection of debts. !rellano, C.J., Torres, Cooper, 9illard, and apa, JJ., concur.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-+29// No=ember 1/, 19+0 T!E MUNICIP L COUNCIL O# ILOILO, plaintiff%appellee, vs. 6OSE E1 NGELIST , ET L., defendants%appellees. T N ONG S0E 1D . DE T N TOCO, appellant. Trenas ; .aserna "or de"endant(appellant. Provincial 6iscal 0lanco o" /loilo "or plainti""(appellees. 6elipe -smael "or appellee auricio Cruz ; Co. ,o appearance "or other appellees. 1ILL -RE L, J.: This is an appeal ta=en b! the defendant Tan On, SFe Vda. de Tan Toco fro" the -ud,"ent of the #ourt of First Instance of Iloilo, providin, as follo2s; Aherefore, -ud,"ent is hereb! rendered, declarin, valid and bindin, the deed of assi,n"ent of the credit e7ecuted b! Tan Toco3s 2ido2, throu,h her attorne!%in%fact Tan /untion,, in favor of late ntero SorianoE li=e2ise the assi,n"ent e7ecuted b! the latter durin, his lifeti"e in favor of the defendant Mauricio #ruF N #o., Inc., and the plaintiff is hereb! ordered to pa! the said Mauricio #ruF N #o., Inc., the balance of P*1,688.'1E the plaintiff is also ordered to deposit said su" in a local ban= 2ithin the period of ninet! da!s fro" the ti"e this -ud,"ent shall beco"e final, at the disposal of the aforesaid Mauricio #ruF N #o. Inc., and in case that the plaintiff shall not "a=e such deposit in the "anner indicated, said a"ount shall bear the le,al interest of si7 percent per annu" fro" the date 2hen the plaintiff shall fail to "a=e the deposit 2ithin the period herein set forth, until full! paid. Aithout special pronounce"ent of costs. In support of its appeal, the appellant assi,ns the follo2in, alle,ed errors as co""itted b! the trial court in its decision, to 2it; ). The lo2er court erred in re-ectin, as evidence <7hibit '% , Tan Toco, and <7hibit '%/, Tan Toco. >. The lo2er court erred in sustainin, the validit! of the deed of assi,n"ent of the credit, <7hibit >%#ruF, instead of findin, that said assi,n"ent "ade b! Tan /untion, to ttorne! ntero Soriano 2as null and void. *. The lo2er court erred in upholdin, the assi,n"ent of that credit b! ntero Soriano to Mauricio #ruF N #o., Inc., instead of declarin, it null and void. '. The court belo2 erred in holdin, that the balance of the credit a,ainst the "unicipalit! of Iloilo should be ad-udicated to the appellant herein, Tan Toco3s 2ido2. 9. The lo2er court erred in den!in, the "otion for a ne2 trial filed b! the defendant%appellant. The facts of the case are as follo2s; On March >1, )6>', the #ourt of First Instance of Iloilo rendered -ud,"ent in civil case No. *9)' thereof, 2herein the appellant herein, Tan On, SFe Vda. de Tan Toco 2as the plaintiff, and the "unicipalit! of Iloilo the defendant, and the for"er sou,ht to recover of the latter the value of a strip of land belon,in, to said plaintiff ta=en b! the defendant to 2iden a public streetE the -ud,"ent entitled the plaintiff to recover P'>,688.'1, representin, the value of said strip of land, fro" the defendant $<7hibit +. On appeal to this court $&. R. No .>>8)5+ ) the -ud,"ent 2as affir"ed on Nove"ber >(, )6>' $<7hibit /+. fter the case 2as re"anded to the court of ori,in, and the -ud,"ent rendered therein had beco"e final and e7ecutor!, ttorne! Cose <van,elista, in his o2n behalf and as counsel for the ad"inistratri7 of Cose Ma . rro!o3s intestate estate, filed a clai" in the sa"e case for professional services rendered b! hi", 2hich the court, actin, 2ith the consent of the appellant 2ido2, fi7ed at )9 per cent of the a"ount of the -ud,"ent $<7hibit >> L Soriano+. t the hearin, on said clai", the clai"ants appeared, as did also the Philippine National /an=, 2hich pra!ed that the a"ount of the -ud,"ent be turned over to it because the land ta=en over had been "ort,a,ed to it. ntero Soriano also appeared clai"in, the a"ount of the -ud,"ent as it had been assi,ned to hi", and b! hi", in turn, assi,ned to Mauricio #ruF N #o., Inc. fter hearin, all the adverse clai"s on the a"ount of the -ud,"ent the court ordered that the attorne!3s lien in the a"ount of )9 per cent of the -ud,"ent, be recorded in favor of ttorne! Cose <van,elista, in his o2n behalf and as counsel for the ad"inistratri7 of the deceased Cose Ma . rro!o, and directed the "unicipalit! of Iloilo to file an action of interpleadin, a,ainst the adverse clai"ants, the Philippine National /an=, ntero Soriano, Mauricio #ruF N #o., Cose <van,elista and Cose rro!o, as 2as done, the case bein, filed in the #ourt of First Instance of Iloilo as civil case No. 551>. fter due hearin,, the court rendered the decision Duoted fro" at the be,innin,. On March >6, )6>(, the "unicipal treasurer of Iloilo, 2ith the approval of the auditor of the provincial treasurer of Iloilo

and of the <7ecutive /ureau, paid the late ntero Soriano the a"ount of P8,111 in part pa!"ent of the -ud,"ent "entioned above, assi,ned to hi" b! Tan /oon Tion,, actin, as attorne!%in%fact of the appellant herein, Tan On, SFe Vda. de Tan Toco. On Dece"ber )(, )6>(, the "unicipal treasurer of Iloilo deposited 2ith the cler= of the #ourt of First Instance of Iloilo the a"ount of P8,111 on account of the -ud,"ent rendered in said civil case No. *9)'. In pursuance of the resolution of the court belo2 orderin, that the attorne!3s lien in the a"ount of )9 per cent of the -ud,"ent be recorded in favor of ttorne! Cose <van,elista, in his o2n behalf and as counsel for the late Cose Ma. rro!o, the said cler= of court delivered on the sa"e date to said ttorne! Cose <van,elista the said a"ount of P8,111. t the hearin, of the instant case, the codefendants of ttorne! Cose <van,elista a,reed not to discuss the pa!"ent "ade to the latter b! the cler= of the #ourt of First Instance of Iloilo of the a"ount of P8,111 "entioned above in consideration of said la2!er3s 2aiver of the re"ainder of the )9 per cent of said -ud,"ent a"ountin, to P'''.86. Aith these t2o pa!"ents of P8,111 each "a=in, a total of P)>,111, the -ud,"ent for P'>,688.'' a,ainst the "unicipalit! of Iloilo 2as reduced to P*1,688.'1, 2hich 2as ad-udicated b! said court to Mauricio #ruF N #o. This appeal, then, is confined to the clai" of Mauricio #ruF N #o. as alle,ed assi,nee of the ri,hts of the late ttorne! ntero Soriano b! virtue of the said -ud,"ent in pa!"ent of professional services rendered b! hi" to the said 2ido2 and her coheirs. The onl! Duestion to be decided in this appeal is the le,alit! of the assi,n"ent "ade b! Tan /oon Tion, as attorne!%in%fact of the appellant Tan On, SFe Viuda de Tan Toco, to ttorne! ntero Soriano, of all the credits, ri,hts and interests belon,in, to said appellant Tan On, SFe Viuda de Tan Toco b! virtue of the -ud,"ent rendered in civil case No .*9)' of the #ourt of First Instance of Iloilo, entitled Viuda de Tan Toco vs. The Municipal #ouncil of Iloilo, ad-udicatin, to said 2ido2 the a"ount of P'>,688.'1, plus the costs of court, a,ainst said "unicipal council of Iloilo, in consideration of the professional services rendered b! said attorne! to said 2ido2 of Tan Toco and her coheirs, b! virtue of the deed <7hibit >. The appellant contends, in the first place, that said assi,n"ents 2as not "ade in consideration of professional services b! ttorne! ntero Soriano, for the! had alread! been satisfied before the e7ecution of said deed of assi,n"ent, but in order to facilitate the collection of the a"ount of said -ud,"ent in favor of the appellant, for the reason that, bein, #hinese, she had encountered "an! difficulties in tr!in, to collect.la2phil.net In support of her contention on this point, the appellant alle,es that the pa!"ents ad"itted b! the court in its -ud,"ent, as "ade b! Tan Toco3s 2ido2 to ttorne! ntero Soriano for professional services rendered to her and to her coheirs, a"ountin, to P>,611, "ust be added to the P511 evidenced b! <7hibits '% , Tan Toco, and '%/ Tan Toco, respectivel!, 2hich e7hibits the court belo2 re-ected as evidence, on the ,round that the! 2ere considered as pa!"ents "ade for professional services rendered, not b! ntero Soriano personall!, b! the fir" of Soriano N rro!o. ,lance at these receipts sho2s that those a"ounts 2ere received b! ttorne! ntero Soriano for the fir" of Soriano N rro!o, 2hich is borne out b! the sta"p on said receipts readin,, :/efete Soriano N rro!o,: and the "anner in 2hich said attorne! receipted for the", :Soriano N rro!o, )' . Soriano.: Therefore, the appellant3s contention that the a"ounts of P>11 and P911 evidence b! said receipts should be considered as pa!"ents "ade to ttorne! ntero Soriano for professional services rendered b! hi" personall! to the interests of the 2ido2 of Tan Toco, is untenable. /esides, if at the ti"e of the assi,n"ents to the late ntero Soriano his professional services to the appellant 2ido2 of Tan Toco had alread! been paid for, no reason can be ,iven 2h! it 2as necessar! to 2rite hi" "one! in pa!"ent of professional services on March )', )6>( $<7hibit 9%& Tan Toco+ and Dece"ber )9, of the sa"e !ear $<7hibit 9%@ Tan Toco+ after the deed of assi,n"ent, $<7hibit >%#ruF+ dated Septe"ber >5, )6>5, had been e7ecuted. In vie2 of the fact that the a"ounts involved in the cases prosecuted b! ttorne! ntero Soriano as counsel for Tan Toco3s 2ido2, so"e of 2hich cases have been appealed to this court, run into the hundreds of thousands of pesos, and considerin, that said attorne! had 2on several of those cases for his clients, the su" of P)1,111 to date paid to hi" for professional services is 2holl! inadeDuate, and sho2s, even if indirectl!, that the assi,n"ents of the appellant3s ri,hts and interests "ade to the late ntero Soriano and deter"ined in the -ud,"ent afore"entioned, 2as "ade in consideration of the professional services rendered b! the latter to the aforesaid 2ido2 and her coheirs. The defendant%appellant also contends that the deed of assi,n"ent <7hibit >%#ruF 2as dra2n up in contravention of the prohibition contained in article )'96, case 9, of the #ivil #ode, 2hich reads as follo2s; RT. )'96. The follo2in, persons cannot ta=e b! purchase, even at a public or -udicial auction, either in person or throu,h the "ediation of another; 777 777 777 9. Custices, -ud,es, "e"bers of the depart"ent of public prosecution, cler=s of superior and inferior courts, and other officers of such courts, the propert! and ri,hts in liti,ation before the court 2ithin 2hose -urisdiction or territor! the! perfor" their respective duties .This prohibition shall include the acDuisition of such propert! b! assi,n"ent. ctions bet2een co%heirs concernin, the hereditar! propert!, assi,n"ents in pa!"ent of debts, or to secure the propert! of such persons, shall be e7cluded fro" this rule.

The prohibition contained in this para,raph shall include la2!ers and solicitors 2ith respect to an! propert! or ri,hts involved in an! liti,ation in 2hich the! "a! ta=e part b! virtue of their profession and office. It does not appear that the ttorne! ntero Soriano 2as counsel for the herein appellant in civil case No. *9)' of the #ourt of First Instance of Iloilo, 2hich she instituted a,ainst the "unicipalit! of Iloilo, Iloilo, for the recover! of the value of a strip of land e7propriated b! said "unicipalit! for the 2idenin, of a certain public street. The onl! la2!ers 2ho appear to have represented her in that case 2ere rro!o and <van,elista, 2ho filed a clai" for their professional fees .Ahen the appellant3s credit, ri,ht, and interests in that case 2ere assi,ned b! her attorne!%in%fact Tan /oon Tion,, to ttorne! ntero Soriano in pa!"ent of professional services rendered b! the latter to the appellant and her coheirs in connection 2ith other cases, that particular case had been decided, and the onl! thin, left to do 2as to collect the -ud,"ent. There 2as no relation of attorne! and client, then, bet2een ntero Soriano and the appellant, in the case 2here that -ud,"ent 2as renderedE and therefore the assi,n"ent of her credit, ri,ht and interests to said la2!er did not violate the prohibition cited above. s to 2hether Tan /oon Tion, as attorne!%in%fact of the appellant, 2as e"po2ered b! his principal to "a=e as assi,n"ent of credits, ri,hts and interests, in pa!"ent of debts for professional services rendered b! la2!ers, in para,raph VI of the po2er of attorne!, <7hibit 9%#ruF, Tan /oon Tion, is authoriFed to e"plo! and contract for the services of la2!ers upon such conditions as he "a! dee" convenient, to ta=e char,e of an! actions necessar! or e7pedient for the interests of his principal, and to defend suits brou,ht a,ainst her. This po2er necessaril! i"plies the authorit! to pa! for the professional services thus en,a,ed. In the present case, the assi,n"ent "ade b! Tan /oon Tion,, as ttorne!%in%fact for the appellant, in favor of ttorne! ntero Soriano for professional services rendered in other cases in the interests of the appellant and her coheirs, 2as that credit 2hich she had a,ainst the "unicipalit! of Iloilo, and such assi,n"ent 2as eDuivalent to the pa!"ent of the a"ount of said credit to ntero Soriano for professional services. Aith re,ard to the failure of the other attorne!%in%fact of the appellant, Tan Montano, authoriFed b! <7hibit ) L Tan Toco, to consent to the deed of assi,n"ent, the latter bein, also authoriFed to pa!, in the na"e and behalf of the principal, all her debts and the liens and encu"brances her propert!, the ver! fact that different letters of attorne! 2ere ,iven to each of these t2o representatives sho2s that it 2as not the principal3s intention that the! should act -ointl! in order to "a=e their acts valid. Further"ore, the appellant 2as a2are of that assi,n"ent and she not onl! did not repudiate it, but she continued e"plo!in, ttorne! ntero Soriano to represent her in court. For the fore,oin, considerations, the court is of opinion and so holds; $)+ That an a,ent of attorne!%in %fact e"po2ered to pa! the debts of the principal, and to e"plo! la2!ers to defend the latter3s interests, is i"pliedl! e"po2ered to pa! the la2!er3s fees for services rendered in the interests of said principal, and "a! satisf! the" b! an assi,n"ent of a -ud,"ent rendered in favor of said principalE $>+ that 2hen a person appoints t2o attorne!s%in%fact independentl!, the consent of the one 2ill not be reDuired to validate the acts of the other unless that appears positivel! to have been the principal3s attentionE and $*+ that the assi,n"ent of the a"ount of a -ud,"ent "ade b! a person to his attorne!, 2ho has not ta=en an! part in the case 2herein said -ud,"ent 2as rendered, "ade in pa!"ent of professional services in other cases, does not contravene the prohibition of article )'96, case 9, of the #ivil #ode. /! virtue 2hereof, and findin, no error in the -ud,"ent appealed fro", the sa"e is affir"ed in its entiret!, 2ith costs a,ainst the appellant. So ordered. vanceQa, #.C., Cohnson, Street, Malcol", Villa"or, Ostrand, Cohns and Ro"ualdeF, CC., concur. #oo$-o$e) ) Viuda de Tan Toco vs. Municipal #ouncil of Iloilo, not reported.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-22450 December +, 1924 2U C!UC5, M C5 2UENG, 3-4 DING MOON, plaintiffs%appellees, vs. B5ONG LI PO,B defendant%appellant. J. 9. 6errier "or appellant. G. +. Camp)ell "or appellees. OSTR ND, J.: The defendant is a do"estic corporation or,aniFed in accordance 2ith the la2s of the Philippine Islands and en,a,ed in the publication of a #hinese ne2spaper st!led 2on$ .i Po. Its articles of incorporation and b!%la2s are in the usual for" and provide for a board of directors and for other officers a"on, the" a president 2hose dut! it is to :si,n all contracts and other instru"ents of 2ritin,.: No special provision is "ade for a business or ,eneral "ana,er. So"e ti"e durin, the !ear )6)6 one #. #. #hen or T. #. #hen 2as appointed ,eneral business "ana,er of the ne2spaper. Durin, the "onth of Dece"ber of that !ear he entered into an a,ree"ent 2ith the plaintiffs b! 2hich the latter bound the"selves to do the necessar! printin, for the ne2spaper for the su" of P9(1 per "onth as alle,ed in the co"plaint. ?nder this a,ree"ent the plaintiffs 2or=ed for the defendant fro" Canuar! ), )6>1, until Canuar! *), )6>), 2hen the! 2ere dischar,ed b! the ne2 "ana,er, Tan Tian @on,, 2ho had been appointed in the "eanti"e, #. #. #hen havin, left for #hina. The letter of dis"issal stated no special reasons for the dischar,e of the plaintiffs. The plaintiffs thereupon brou,ht the present action alle,in,, a"on, other thin,s, in the co"plaint that their contract of e"plo!"ent 2as for a ter" of three !ears fro" the first da! of Canuar!, )6>1E that in the case of their dischar,e b! the defendant 2ithout -ust cause before the e7piration of the ter" of the contract, the! 2ere to receive full pa! for the re"ainin, portion of the ter"E that the! had been so dischar,ed 2ithout -ust cause and therefore as=ed -ud,"ent for da"a,es in the su" of P>1,((1. In its a"ended ans2er the defendant denies ,enerall! and specificall! the alle,ations of the co"plaint and sets up five special defenses and counterclai"s. The first of these is to the effect that #. #. #hen, the person 2hose na"e appears to have been si,ned to the contract of e"plo!"ent 2as not authoriFed b! the defendant to e7ecute such a contract in its behalf. The second special defense and counterclai" is to the effect that durin, the "onth of Canuar!, )6>), the plaintiffs purposel! dela!ed the issuance of defendant3s ne2spaper on three separate and distinct occasions causin, da"a,e and in-ur! to the defendant in the a"ount of P*11. ?nder the third special defense and counterclai" it is alle,ed that the plaintiffs failed, ne,lected, and refused to prepare e7tra pa,es for the Canuar! ), )6>), issue of the defendant3s ne2spaper and thus co"pelled the defendant to secure the preparation of said e7tra pa,es b! other persons at a cost of P))1. In the fourth special defense and counterclai" the defendant alle,ed that the plaintiffs ne,lected and failed to correct errors in advertise"ents appearin, in defendant3s ne2spaper, althou,h their attention 2as specificall! called to such errors and the! 2ere reDuested to "a=e the corrections, as a result of 2hich certain advertisers 2ithdre2 their patrona,e fro" the paper and refused to pa! for the advertise"ents, thus causin, a loss to the defendant of P)81.91. For its fifth special defense and counterclai" the defendant alle,ed that the plaintiffs ne,lected and refused to do certain -ob printin, such ne,lect and refusal causin, in-ur! and da"a,e to the defendant in the su" of P)91. t the trial of the case the plaintiffs presented in evidence <7hibit 2hich purports to be a contract bet2een #hen and the plaintiffs and 2hich provides that in the event the plaintiffs should be dischar,ed 2ithout cause before the e7pirations of the ter" of three !ears fro" Canuar! ), )6>1, the! 2ould be ,iven full pa! for the une7pired portion of the ter" :even if the said paper has to fall into ban=ruptc!.: The contract is si,ned b! the plaintiffs and also bears the si,nature :#. #. #hen, "ana,er of 2on$ .i Po.: The authenticit! of the latter si,nature is Duestioned b! the defendant, but the court belo2 found that the evidence upon this point preponderate in favor of the plaintiffs and there appears to be no sufficient reason to disturb this findin,. The trial court further found that the contract had been i"pliedl! ratified b! the defendant and rendered -ud,"ent in favor of the plaintiffs for the su" of P)*,*'1, 2ith interest fro" the date of the filin, of the co"plaint and the costs. Fro" this -ud,"ent the defendant appeals to this court and "a=es ei,hteen assi,n"ents of error. The fourth and seventeenth assi,n"ents relate to defendant3s special defense and counterclai"sE the su" and substance of the other assi,n"ents is that the contract on 2hich the action is based 2as not si,ned b! #. #. #henE that, in an! event, #. #. #hen had no po2er or authorit! to bind the defendant corporation b! such contractE and that there 2as no ratification of the contract b! the corporation. /efore enterin, upon a discussion of the Duestions raised b! the assi,n"ents of error, 2e "a! dra2 attention to a "atter 2hich as not been "entioned either b! counsel or b! the court belo2, but 2hich, to prevent "isunderstandin,, should be briefl! e7plained; It is averred in the co"plaint that it is acco"panied b! a cop! of the contract bet2een the parties $<7hibit

+ 2hich cop!, b! the ter"s of the co"plaint, is "ade a part thereof. The cop! is not set forth in the bill of e7ceptions and aside fro" said avern"ent, there is no indication that the cop! actuall! acco"panied the co"plaint, but an e7a"ination of the record of the case in the #ourt of First Instance sho2s that a translation of the contract 2as attached to the co"plaint and served upon the defendant. s this translation "a! be considered a cop! and as the defendant failed to den! its authenticit! under oath, it 2ill perhaps be said that under section )1* of the #ode of #ivil Procedure the o"ission to so den! it constitutes an ad"ission of the ,enuineness and due e7ecution of the docu"ent as 2ell as of the a,ent3s authorit! to bind the defendant. $Merchant vs. International /an=in, #orporation, 8 Phil., *)'.+ In ordinar! circu"stances that 2ould be true. /ut this case appears to have been tried upon the theor! that the rule did not appl!E at least, it 2as 2holl! overloo=ed or disre,arded b! both parties. The plaintiffs at the be,innin, of the trial presented a nu"ber of 2itnesses to prove the due e&ecution o" the document as %ell as the a$ent<s authorit'= no o)3ections %ere made to the de"endant<s evidence in re"utation and no e&ceptions taken E and the "atter is not "entioned in the decision of the trial court. The ob-ect of the rule is :to relieve a part! of the trouble and e7pense of provin, in the first instance an alle,ed fact, the e7istence or none7istence of 2hich is necessaril! 2ithin the =no2led,e of the adverse part!, and of the necessit! $to his opponent3s case+ of establishin, 2hich such adverse part! is notified b! his opponent3s pleadin,.: $Ner! .i"% #hin,co vs. Terarira!, 9 Phil., at p. )>'.+la2phi).net The plaintiff "a!, of course, 2aive the rule and that is 2hat he "ust be considered to have done in the present case b! introducin, evidence as to the e7ecution of the docu"ent and failin, to ob-ect to the defendant3s evidence in refutationE all this evidence is no2 co"petent and the case "ust be decided thereupon. Moreover, the Duestion as to the applicabilit! of the rule is not even su,,ested in the briefs and is not properl! this court. In these circu"stances it 2ould, indeed, be ,rossl! unfair to the defendant if this court should ta=e up the Duestion on its o2n "otion and "a=e it decisive of the case, and such is not the la2. Nothin, of 2hat has here been said is in conflict 2ith for"er decisions of this courtE it 2ill be found upon e7a"ination that in all cases 2here the applicabilit! of the rule has been sustained the part! invo=in, it has relied on it in the court belo2 and conducted his case accordin,l!. The principal Duestion presented b! the assi,n"ents of error is 2hether #hen had the po2er to bind the corporation b! a contract of the character indicated. It is conceded that he had no e7press authorit! to do so, but the evidence is conclusive that he, at the ti"e the contract 2as entered into, 2as in effect the ,eneral business "ana,er of the ne2spaper 2on$ .i Po and that he, as such, had char,e of the printin, of the paper, and the plaintiff "aintain that he, as such ,eneral business "ana,er, had i"plied authorit! to e"plo! the" on the ter"s stated and that the defendant corporation is bound b! his action. The ,eneral rule is that the po2er to bind a corporation b! contract lies 2ith its board of directors or trustees, but this po2er "a! either e7pressl! or i"pliedl! be dele,ated to other officers or a,ents of the corporation, and it is 2ell settled that e7cept 2here the authorit! of e"plo!in, servants and a,ent is e7pressl! vested in the board of directors or trustees, an officer or a,ent 2ho has ,eneral control and "ana,e"ent of the corporation3s business, or a specific part thereof, "a! bind the corporation b! the e"plo!"ent of such a,ent and e"plo!ees as are usual and necessar! in the conduct of such business. /ut the contracts of e"plo!"ent "ust be reasonable. $)'a #. C., '*).+ In re,ard to the len,th of the ter" of e"plo!"ent, #orpus Curis sa!s; In the absence of e7press li"itations, a "ana,er has authorit! to hire an e"plo!ee for such a period as is custo"ar! or proper under the circu"stances, such as for a !ear, for the season, or for t2o season. /ut unless he is either e7pressl! authoriFed, or held out as havin, such authorit!, he cannot "a=e a contract of e"plo!"ent for a lon, future period, such as for three !ears, althou,h the contract is not rendered invalid b! the "ere fact that the e"plo!"ent e7tends be!ond the ter" of the "ana,er3s o2n e"plo!"ent. . . . $)' a #. C., '*).+ Fro" 2hat has been said, there can be no doubt that #hen, as ,eneral "ana,er of the 2on$ .i Po, had i"plied authorit! to bind the defendant corporation b! a reasonable and usual contract of e"plo!"ent 2ith the plaintiffs, but 2e do not thin= that the contract here in Duestion can be so considered. Not onl! is the ter" of e"plo!"ent unusuall! lon,, but the conditions are other2ise so onerous to the defendant that the possibilit! of the corporation bein, thro2n into insolvenc! thereb! is e7pressl! conte"plated in the sa"e contract. This fact in itself 2as, in our opinion, sufficient to put the plaintiffs upon inDuir! as to the e7tent of the business "ana,er3s authorit!E the! had not the ri,hts to presu"e that he or an! other sin,le officer or e"plo!ee of the corporation had i"plied authorit! to enter into a contract of e"plo!"ent 2hich "i,ht brin, about its ruin. Neither do 2e thin= that the contention that the corporation i"pliedl! ratified the contract is supported b! the evidence. The contention is based principall! on the fact that Te Hi" @ua, the president of the corporation for the !ear )6>1, ad"itted on the 2itness stand that he sa2 the plaintiffs 2or= as printers in the office of the ne2spaper. @e denied, ho2ever, an! =no2led,e of the e7istence of the contract and asserted that it 2as never presented neither to hi" nor to the board of directors. /efore a contract can be ratified =no2led,e of its e7istence "ust, of course, be brou,ht ho"e to the parties 2ho have authorit! to ratif! it or circu"stances "ust be sho2n fro" 2hich such =no2led,e "a! be presu"ed. No such =no2led,e or circu"stances have been sho2n here. That the president of the corporation sa2 the plaintiffs 2or=in, in its office is of little si,nificanceE there 2ere other printers 2or=in, there at that ti"e and as the president had nothin, to do 2ith their e"plo!"ent, it 2as hardl! to be e7pected that be 2ould inDuire into the ter"s of their contracts. Moreover, a

ratification b! hi" 2ould have been of no availE in order to validate a contract, a ratification b! the board of directors 2as necessar!. The fact that the president 2as reDuired b! the b!%la2s to si,n the docu"ents evidencin, contracts of the corporation, does not "ean that he had po2er to "a=e the contracts. In his decision his @onor, the learned -ud,e of the court belo2 appears to have placed so"e 2ei,ht on a notice inserted in the Canuar! )'th issue of the 2on$ .i Po b! T. #. #hen and 2hich, in translation, reads as follo2s; To Aho" It Ma! #oncern; nnounce"ent is hereb! ,iven that thereafter all contracts, a,ree"ents and receipts are considered to be null and void unless dul! si,ned b! T. #. #hen, &eneral Mana,er of this paper. $S,d.+ #@<N BO? M N General ana$er o" this paper $The evidence sho2s that #hen Bou Man and T. #. #hen is one and the sa"e person.+ @is @onor evidentl! overesti"ated the i"portance of this notice. It 2as published nearl! a "onth after the contract in Duestion is alle,ed to have been entered into and can therefore not have been one of the circu"stances 2hich led the plaintiffs to thin= that #hen had authorit! to "a=e the contract. It "a! further be observed that the notice confers no special po2ers, but is, in effect, onl! an assertion b! #hen that he 2ould reco,niFe no contracts, a,ree"ents, and receipts not dut! si,ned b! hi". It "a! be presu"ed that the contracts, a,ree"ents, and receipts 2ere such as 2ere ordinaril! "ade in the course of the business of "ana,in, the ne2spaper. There is no evidence to sho2 that the notice 2as ever brou,ht to the attention of the officers of the defendant corporation. The defendant3s counterclai"s have not been sufficientl! established b! the evidence. The -ud,"ent appealed fro" is reversed and the defendant corporation is absolved fro" the co"plaint. No costs 2ill be allo2ed. So ordered. Johns, !vance5a and Romualdez, JJ., concur.

Republic of the Philippines SUPREME COURT Manila <N / N# G.R. No. L-+881, No=ember +, 19++ INSUL R DRUG CO., INC., plaintiff%appellee, vs. T!E P!ILIPPINE N TION L " N5, ET L., defendants. T!E P!ILIPPINE N TION L " N5, appellant. Camus and 7el$ado "or appellant. 6ranco and Reinoso "or appellee. M LCOLM, J.: This is an appeal ta=en b! Philippine National /an= fro" a -ud,"ent of the #ourt of First Instance of Manila reDuirin, ban= to pa! to the Insular Dru, #o., Inc., the su" of P)(,>(9.6> 2ith le,al interest and costs. The record consists of the testi"on! of lfred Von rend, President and Mana,er of the Insular Dru, #o., Inc., and of e7hibits obtained fro" the Philippine National /an= sho2in, transactions of ?.<. Foerster 2ith the ban=. The Philippine National /an= 2as content to sub"it the case 2ithout presentin, evidence in its behalf. The "ea,re record and the state"ent of facts a,reed upon b! the attorne!s for the contendin, parties disclose the follo2in, facts; The Insular Dru, #o., Inc., is a Philippine corporation 2ith offices in the #it! of Manila. ?.<. Foerster 2as for"erl! a sales"an of dru, co"pan! for the Islands of Pana! and Ne,ros. Foerster also acted as a collector for the co"pan! . @e 2as instructed to ta=e the chec=s 2hich ca"e to his hands for the dru, co"pan! to the Iloilo branch of the #hartered /an= of India, ustralia and #hina and deposit the a"ounts to the credit of the dru, co"pan!. Instead, Foerster deposited chec=s, includin, those of Cuan .lorente, Dolores Salcedo, <stanislao Salcedo, and a fourth part!, 2ith the Iloilo branch of the Philippine National /an=. The chec=s 2ere in that ban= placed in the personal account of Foerster. So"e of the chec=s 2ere dra2n a,ainst the /an= of Philippine National /an=. fter the indorse"ent on the chec=s 2as 2ritten :Received pa!"ent prior indorse"ent ,uaranteed b! Philippine National ban=, Iloilo /ranch, n,el Padilla, Mana,er.: The indorse"ent on the chec=s too= various for"s, so"e bein, :Insular Dru, #o"pan!, Inc., /!; $S,d.+ ?. Foerster, ,ent. $S,d.+ ?. Foerster: other bein, :Insular Dru, #o., Inc., /!; $S,d.+ #ar"en <. de Foerster, ,ent $S,d.+ #ar"en <. de Foerster:E others :Insular Dru, #o., Inc., /!; $S,d.+ #ar"en <. de Foerster, #ar"en <. de Froster:E others :$S,d.+ #ar"en <. de Foerster, $S,d.+ #ar"en <. de Foerster:E one $S,d.+ ?. Foerster. $S,d.+ ?. Foerster:E othersE :Insular Dru, #o., Inc., #ar"en <. de Foerster, /!; $S,d.+ V. /acaldo,: etc. In this connection it should be e7plained that #ar"en <. de Foerster 2as his steno,rapher. s a conseDuence of the indorse"ents on chec=s the a"ounts therein stated 2ere subseDuentl! 2ithdra2n b! ?. <., Foerster and #ar"en <. de Foerster. <ventuall! the Manila office of the dru, co"pan! investi,ated the transactions of Foerster. ?pon the discover! of ano"alies, Foerster co""itted suicide. /ut there is no evidence sho2in, that the ban= =ne2 that Foerster 2as "isappropriatin, the funds of his principal. The Insular Dru, #o"pan! clai"s that it never received the face value of )*> chec=s here in the Duestion coverin, a total of P)(,>(9.6>.la2phil.net There is no Philippine authorit! 2hich directl! fits the proven facts. The case of Fulton Iron Aor=s #o., vs. #hina /an=in, #orporation $I)6*1J, 99 Phil., >1(+, "entioned b! both parties rest on a different states of facts. @o2ever, there are ele"entar! principles ,overnin, the relationship bet2een a ban= and its custo"ers 2hich are controllin,. In first place, the ban= ar,ues that the dru, co"pan! 2as never defrauded at all. Ahile the evidence on the e7tent of the loss suffered b! the dru, co"pan! is not nearl! as clear as it should be, it is a sufficient ans2er to state that no such special defense 2as relied upon b! the ban= in the trial court. The dru, co"pan! sa2 fit to stand on the proposition that chec=s dra2n in its favor 2ere i"properl! and ille,all! cashed b! the ban= for Foerster and placed in his personal account, thus "a=in, it possible for Foerster to defraud the dru, co"pan!, and the ban= did not tr! to ,o bac= of this proposition. The ne7t point relied upon b! the ban=, to the effect that Foerster had i"plied authorit! to indorse all chec=s "ade out in the na"e of the Insular Dru, #o., Inc., has even less force. Not onl! did the ban= per"it Foerster to indorse chec=s and then place the" to his personal account, but it 2ent farther and per"itted Foerster3s 2ife and cler= to indorse the chec=s. The ri,ht of an a,ent to indorse co""ercial paper is a ver! responsible po2er and 2ill not be li,htl! inferred. sales"an 2ith authorit! to collect "one! belon,in, to his principal does not have the i"plied authorit! to indorse chec=s received in pa!"ent. n! person ta=in, chec=s "ade pa!able to a corporation, 2hich can act onl! b! a,ent does so at his peril, and "ust sa"e b! the conseDuences if the a,ent 2ho indorses the sa"e is 2ithout authorit!. $ rcade Realt! #o. vs. /an= of #o""erce I)6)6J, )(1 #al., *)(E Standard Stea" Specialt! #o., vs. #orn <7chan,e /an= I)6)5J, >>1 N.B., >5(E People vs. /an= of North "erica I)(56J, 59 N.B., 9'5E &raha" vs. ?nited States Savin,s Institution I)(51J, '8 Mo., )(8.+ Further spea=in, to the errors specified b! the ban=, it is sufficient to state that no trust fund 2as involvedE that the fact that ban= acted in ,ood faith does not relieve it fro" responsibilit!E that no proof 2as adduced, ad"ittin, that Foerster had ri,ht to indorse the chec=s, indicative of ri,ht of his 2ife and cler= to do the sa"e , and that the chec=s dra2n on the /an= of the

Philippine Islands can not be differentiated fro" those dra2n on the Philippine National /an= because of the indorse"ent b! the latter. In brief, this is a case 2here )*> chec=s "ade out in the na"e of the Insular Dru, #o., Inc., 2ere brou,ht to the branch office of the Philippine National /an= in Iloilo b! Foerster, a sales"an of the dru, co"pan!, Foerster3s 2ife, and Foerster3s cler=. The ban= could tell b! the chec=s the"selves that the "one! belon,ed to the Insular Dru, #o., Inc., and not to Foerster or his 2ife or his cler=. Ahen the ban= credited those chec=s to the personal account of Foerster and per"itted Foerster and his 2ife to "a=e 2ithdra2als 2ithout there bein, "ade authorit! fro" the dru, co"pan! to do so, the ban= "ade itself responsible to the dru, co"pan! for the a"ounts represented b! the chec=s. The ban= could relieve itself fro" responsibilit! b! pleadin, and provin, that after the "one! 2as 2ithdra2n fro" the ban= it passed to the dru, co"pan! 2hich thus suffered no loss, but the ban= has not done so. Much "ore could be said about this case, but it suffices to state in conclusion that ban= 2ill have to stand the loss occasioned b! the ne,li,ence of its a,ents. Overrulin, the errors assi,ned, -ud,"ent of the trial court 2ill be affir"ed, the costs of this instance to be paid b! appellant. Villa(Real, 1ull, /mperial, and 0utte, JJ., concur.

6GCNC> A8GC@(@ ". R6==:@ F >6NGC: F6C(@< L >a$,co se$t Rallos a letter i$viti$, the latter to be the co$si,$or i$ b !i$, a$' selli$, lea% tobacco a$' other $ative pro' cts. (erms a$' co$'itio$s .ere also co$tai$e' i$ the letter. L 6ccepti$, the i$vitatio$, Rallos procee'e' to 'o a co$si'erable b si$ess .ith >a$,co trho ,h the sai' Colla$tes, as his %actor, se$'i$, to him as a,e$t %or >a$,co a ,oo' 'eal o% pro' ce to be sol' o$ commissio$. L Rallos se$t to the sai' Colla$tes, as a,e$t %or >a$,co, 2"? b $'les o% tobacco i$ the lea% to be sol' o$ commissio$, as ha' bee$ other pro' ce previo sl!. L (he sai' Colla$tes receive' sai' tobacco a$' sol' it %or the s m o% P",711. (he char,es %or s ch sale .ere P2#6.96, leavi$, i$ the ha$'s o% sai' Colla$tes the s m o% ",537.#? belo$,i$, to Rallos. (his s m .as, appare$tl!, co$verte' to his o.$ se b! sai' a,e$t. L 8t appears, ho.ever, that prior to the se$'i$, o% sai' tobacco >a$,co ha' severe' his relatio$s .ith Colla$tes a$' that the latter .as $o lo$,er acti$, as his %actor. (his %act .as $ot k$o.$ to Rallos0 a$' it is co$ce'e' i$ the case that $o $otice o% a$! ki$' .as ,ive$ b! >a$,co o% the termi$atio$ o% the relatio$s bet.ee$ >a$,co a$' his a,e$t, Colla$tes. L >a$,co th s re% se' to pa! the sai' s m po$ 'ema$' o% Rallos, placi$, s ch re% sal po$ the ,ro $' that at the time the sai' tobacco .as receive' a$' sol' b! Colla$tes, he .as acti$, perso$all! a$' $ot as a,e$t o% >a$,co. 8@@EC< +MN Colla$tes is a$ a,e$t o% >a$,co. 8% so, >a$,co as pri$cipal m st re% $' to Rallos the sai' s m bro ,ht b! the sale o% the pro' ce RE=8NG< >es >a$,co, as pri$cipal is liable. *avi$, a'vertise' the %act that Colla$tes .as his a,e$t a$' havi$, ,ive$ special $otice to Rallos o% that %act, a$' havi$, ,ive$ them a special i$vitatio$ to 'eal .ith s ch a,e$t, it .as the ' t! o% >a$,co o$ the termi$atio$ o% the relatio$ship o% the pri$cipal a$' a,e$t to ,ive ' e a$' timel! $otice thereo% to Rallos. Faili$, to 'o so, he is respo$sible to them %or .hatever ,oo's ma! bee$ i$ ,oo' %aith a$' .itho t $e,li,e$ce se$t to the a,e$t .itho t k$o.le',e, act al or co$str ctive, o% the termi$atio$ o% s ch relatio$ship 2. ). *. M6CDC C( 6= F B:@C C6MP@ F6C(@< L ). *. Macke a$' +.*. Cha$'ler, part$ers 'oi$, b si$ess $'er thee %irm $ame o% Macke, Cha$'ler 6$' Compa$!, alle,e that ' ri$, the mo$ths o% Febr ar! a$' March "9#5, the! sol' to Bose Camps a$' 'elivere' at his place o% b si$ess, k$o.$ as the <+ashi$,to$ Ca%N,O vario s bills o% ,oo's amo $ti$, to P35".5#0 that Camps has o$l! pai' o$ acco $t o% sai' ,oo's the s m o% P"710 that there is still ' e them o$ acco $t o% sai' ,oo's the s m o% P"77.5# L Plai$ti%%s ma'e 'ema$' %or the pa!me$t %rom 'e%e$'a$t a$' that the latter %aile' a$' re% se' to pa! the sai' bala$ce or a$! part o% it L Macke, o$e o% the plai$ti%%s, testi%ie' that o$ the or'er o% o$e Ricar'o Flores, .ho represe$te' himsel% to be the a,e$t o% Bose Camps, he shippe' the sai' ,oo's to the 'e%e$'a$t at the +ashi$,to$ Ca%N0 that Flores 2a,e$t3 later ack$o.le',e' the receipt o% the sai' ,oo's a$' ma'e vario s pa!me$ts thereo$ amo $ti$, i$ all to P"710 that believes that Flores is still the a,e$t o% Camps0 a$' that .he$ he .e$t to the +ashi$,to$ Ca%N %or the p rpose o% collecti$, his bill he %o $' Flores, i$ the abse$ce o% Camps, appare$tl! i$ char,e o% the b si$ess a$' claimi$, to be the b si$ess ma$a,er o% Camps, sai' b si$ess bei$, that o% a hotel .ith a bar a$' resta ra$t a$$e5e'. L 6 .ritte$ co$tract .as i$tro' ce' as evi'e$ce, %rom .hich it appears that o$e Galmes, the %ormer o% P+ashi$,to$ Ca%NO s bre$te' the b il'i$, .herei$ the b si$ess .as co$' cte', to Camps %or " !ear %or the p rpose o% carr!i$, o$ that b si$ess, Camps obli,ati$, himsel% $ot to s blet or s bre$t the b il'i$, or the b si$ess .itho t the co$se$t o% the sai' Galmes. L(his co$tract .as si,$e' b! Camps a$' the $ame o% Ricar'o Flores as a .it$ess a$' attache' thereo$ is a$ i$ve$tor! o% the % r$it re a$' %itti$,s .hich also is si,$e' b! Camps .ith the .or' Ps blesseeO belo. the $ame, a$' at the %oot o% this i$ve$tor! the .or' Preceive'O

%ollo.e' b! the $ame PRicar'o FloresO .ith the .or's Pma$a,i$, a,e$tO imme'iatel! %ollo.i$, his $ame. 8@@EC< +MN Ricar'ol Flores .as the a,e$t o% Camps R li$,< >es Cvi'e$ce is s %%icie$t to s stai$ a %i$'i$, that Flores is the a,e$t o% Camps i$ the ma$a,eme$t o% the bar o% the +ashi$,to$ Ca%N .ith a thorit! to bi$' Camps, his pri$cipal, %or the pa!me$t o% the ,oo's (he co$tract s %%icie$tl! establishes the %act that Camps .as the o.$er o% the b si$ess a$' o% the bar, a$' the title o% Pma$a,i$, a,e$tO attache' to the si,$at re o% Flores .hich appears o$ that co$tract, to,ether .ith the %act that at the time the p rchases .ere ma'e, Flores .as appare$tl! i$ char,e o% the b si$ess per%ormi$, the ' ties s all! i$tr ste' to a ma$a,i$, a,e$t leave little room %or 'o bt that he .as there as the a thori9e' a,e$t o% Camps. 6,e$c! b! Cstoppel &&& :$e .ho clothes a$other .ith appare$t a thorit! as his a,e$t, a$' hol's him o t to the p blic as s ch, ca$ $ot be permitte' to 'e$! the a thorit! o% s ch perso$ to act as his a,e$t, to the pre; 'ice o% i$$oce$t thir' perso$s 'eali$, .ith s ch perso$ i$ ,oo' %aith a$' i$ the ho$est belie% that he is .hat he appears to be. Cstopple&&&& P+he$ever a part! has, b! his o.$ 'eclaratio$, act or omissio$, i$te$tio$all! a$' 'eliberatel! le' a$other to believe a partic lar thi$, tr e, a$' to act po$ s ch belie%, he ca$ $ot, i$ a$! liti,atio$ arisi$, o t o% s ch 'eclaratio$, act, or omissio$ be permitte' to %alsi%!0 a$' $less the co$trar! appears, the a thorit! o% the a,e$t m st be pres me' to i$cl 'e all the $ecessar! a$' s al mea$s o% carr!i$, his a,e$c! i$to e%%ect. 3. R8: > :=6)6RR8C(6 6NA M:=8N6 F >E (CC - C:. F6C(@< LPlai$ti%%, Rio is a copart$er$ership or,a$i9e' a$' e5isti$, $'er the la.s o% the Phil 8sla$'s. (he 'e%e$'a$t, > (ec a$' Co is a 'omestic corporatio$ a$' the 'e%e$'a$t, Calvi$ is o% a,e a$' a resi'e$t o% Ma$ila L Rio alle,es that > (ec - Co, .hich .as the$ a limite' part$ership, a thori9e' its a,e$t, B.F. Moli$a to %i$' a p rchaser or a lessee o% a tract o% la$' belo$,i$, to it locate' o$ Calle Felas4 e9, (o$'o, Ma$ila. L +ithi$ the time ,ive$ the a,e$t %o $' a p rchaser i$ the $ame o% plai$ti%% 2Rio3 .hich o%%ere' to p rchase the la$' %or the s m o% P 1#,### a$' that Molli$a, its a,e$t, ma'e k$o.$ its o%%er to the respo$'e$t compa$! .hich re% se' to accept it L > (ec o%%ere' to sell the la$' %or P12,### i$stea', o% .hich P7,### .as to be pai' o$ the si,$i$, o% the co$tract, a$' the bala$ce Ri.ithi$ t.o !ears, .ith i$terest o% ?Q a$' the remai$i$, P25,### at the e$' o% the seco$' !ear, all to be sec re' b! a %irst mort,a,e L Rio accepte' the o%%er b t > (ec compa$! ma'e several e5c ses a$' re% se' to carr! o t the a,reeme$t L (hat 'e%e$'a$t, Calvi$, .ith % ll k$o.le',e o% the %acts a$' .ithi$ the speci%ie' perio', %ra ' le$tl! co$spiri$, .ith > (ec, e$tere' i$to a co$tract b! .hich he p rchase' the propert! %rom the compa$!. L )! reaso$ thereo%, Rio s %%ere' 'ama,es i$ the s m o% P"2,### a$' pra!s that the sale to Calvi$ be 'eclare' $ ll a$' voi', a$' or'eri$, compa$! to compl! .ith the co$tract a$' to e5ec te a 'ee' to Rio a$' to pa! 'ama,es o% P"2,### 8@@EC< +MN the co$tract o% p rchase a$' sale o% real propert! is voi' P $less the a thorit! o% the a,e$t be i$ .riti$, a$' s bscribe' b! the part! so ,ht to be char,e'O RE=8NG< >es Moli$a, the a,e$t, co l' $ot e$%orce the speci%ic per%orma$ce o% C5hibit ). (here is $o evi'e$ce i$ the recor' o% a$! .ritte$ co$tract bet.ee$ Rio a$' > (ec %or the sale a$' p rchase o% the real propert! C5hibit ) 2letter ,ivi$, a thorit! to B. Moli$a as a,e$t o% > (ec a$' i% the latter shall $ot take a'va$ta,e o% selli$, it .ithi$ the time ,ive$, the a thorit! ,ive$ shall be ca$celle'3 is $othi$, more tha$ a$ a thorit! to sell +hile C5hibit ) mi,ht be co$str e' as %i5i$, the price o% the sale o% the parcel o% la$', it 'oes $ot speci%! the terms a$' co$'itio$s po$ .hich the sale .as to be ma'e @i$ce C5hibit ) alrea'! e5pire', that %act .o l' 'estro! the le,al %orce a$' e%%ect o% C5hibit C 2speci%ie' a$' 'e%i$e' the terms a$' co$'itio$s o% a$! sale ma'e b! Moli$a 8$ the abse$ce o% a re$e.al or e5te$sio$ i$ .riti$, si,$e' b! the part! to be char,e' or its a,e$t, Moli$a ha' $o a thorit! to sell the propert! po$ a$! terms a$' co$'itio$s a%ter the stip late' perio'.

1. GE(8CRRCR *CRM6N:@ F :RCN@C F6C(@< L :re$se ha' bee$ the o.$er o% a parcel o% la$', .ith the b il'i$, a$' improveme$ts thereo$ sit ate' i$ the p eblo o% 6lba!, a$' ha' bee$ re,istere' $'er his $ame L Bose A ra$, a $ephe. o% :re$se, .ith the latterSs k$o.le',e a$' co$se$t, e5ec te' be%ore a $otar! a p blic i$str me$t .hereb! he sol' a$' co$ve!e' to G tierre9 *erma$os, %or P ",5## the a%oreme$tio$e' propert! .ith A ra$ havi$, the ri,ht to rep rchase %or the same price .ithi$ 1 !ears L Plai$ti%% ha' $ot e$tere' i$to possessio$ o% the la$' si$ce it is bei$, occ pie' b! :re$se a$' A ra$, b! virt e o% a co$tract o% lease e5ec te' b! plai$ti%% to A ra$ L @ai' i$str me$t o% sale o% propert!, e5ec te' b! A ra$ .as p blicl! a$' %reel! co$%irme' a$' rati%ie' b! :re$se i$ a verbal 'eclaratio$ ma'e b! him to the e%%ect that the i$str me$t .as e5ec te' b! his $ephe. .ith his k$o.le',e a$' co$se$t L 8$ or'er to per%ect the title to sai' propert!, plai$ti%% ha' to 'ema$' :re$se that he e5ec te i$ le,al %orm a 'ee' o% co$ve!a$ce o% the parcel o% la$' b t the latter re% se' to 'o so, .itho t a$! ; sti%iable ca se or reaso$, a$' he sho l' be compelle' to e5ec te sai' 'ee' beca se his $ephe. is $otorio sl! i$solve$t a$' ca$$ot reimb rse plai$ti%% compa$! %or the price o% sale .hich he receive' L A ra$ %aile' to e5ercise his ri,ht o% rep rchase a$' :re$se also re% se' to 'eliver the propert! a$' to pa! re$tal thereo% 8@@EC< ". +MN the sale e5ec te' b! A ra$, $ephe. o% :re$se, i$ %avor o% that :re$se p blicl! rati%ie' a$' co$%irme' the sai' sale 2. +MN a co$tract o% a,e$c!, e5press or implie' .as prese$t i$ this case RE=8NG< >C@ (: ):(* Cvi'e$ce sho.s that :re$se 'i' ,ive his co$se$t i$ or'er that his $ephe., A ra$ mi,ht sell the propert! to plai$ti%% compa$! a$' that he 'i' co$%irm a$' rati%! the sale b! mea$s o% p blic i$str me$t e5ec te' be%ore a $otar! 8t %ollo.s that :re$se co$%erre' verbal, or at least implie', po.er o% a,e$c! po$ his $ephe. A ra$, .ho accepte' it i$ the same .a! b! selli$, the sai' propert! (he pri$cipal m st % l%ill all the obli,atio$s co$tracte' b! the a,e$t, .ho acte' .ithi$ the scope o% his a thorit! Cve$ i% sai' co$se$t .as ,ra$te' s bse4 e$tl! to the sale, it is 4 estio$able that :re$se, the o.$er o% the propert!, approve' the actio$ o% his $ephe., .ho i$ this case acte' as the ma$a,er o% his $cleSs b si$ess a$' :re$seSs rati%icatio$ pro' ce' the e%%ects o% a$ e5press a thori9atio$ to make the sai' sale P6 co$tract e5ec te' i$ the $ame o% a$other b! o$e .ho has $either his a thori9atio$ $or le,al represe$tatio$ shall be voi', $less it sho l' be rati%ie' b! the perso$ i$ .hose $ame it .as e5ec te' be%ore bei$, revoke' b! the other co$tracti$, part!O (he sale o% the sai' propert! ma'e b! A ra$ to G tierre9 *erma$os .as i$'ee' $ ll a$' voi' %rom the be,i$$i$,, b t a%ter.ar's became per%ectl! vali' a$' c re' o% the 'e%ect o% $ llit! it bore at its e5ec tio$ b! the co$%irmatio$ solem$l! ma'e b! the sai' o.$er po$ his stati$, $'er oath to the ; ',e that he himsel% co$se$te' to his $ephe.Ss maki$, the sai' sale 5. B8MCNCR F R6):( F6C(@< L Gre,orio Bime$e9 %ile' this actio$ to recover %rom Rabot, a parcel o% la$' sit ate' i$ 6lami$os, Pa$,asi$a$ L (he propert! i$ 4 estio$, to,ether .ith t.o other parcels i$ the same localit! ori,i$all! belo$,e' to Bime$e9, havi$, bee$ assi,$e' to him as o$e o% the heirs i$ the 'ivisio$ o% the estate o% his %ather L 8t % rther appears that .hile Gre,orio Bime$e9 .as sta!i$, at Fi,a$, 8locos @ r, his propert! i$ 6lami$os .as co$%i'e' b! him to the care o% his el'er sister Nicolasa Bime$e9. L *e .rote his sister a letter %rom Fi,a$ i$ .hich he i$%orme' her that he .as presse' %or mo$e! a$' re4 este' her to sell o$e o% his parcels o% la$' a$' se$' him the mo$e! i$ or'er that he mi,ht pa! his 'ebts. (he letter co$tai$s $o 'escriptio$ o% the la$' to be sol' other tha$ is i$'icate' i$ the .or's Po$e o% m! parcels o% la$'O. L 6cti$, po$ this letter, Nicolasa approache' Rabot a$' the latter a,ree' to b ! the propert! %or the s m o% P5##. P25# .as pai' at o$ce, .ith the $'ersta$'i$, that a 'ee' o% co$ve!a$ce .o l' be e5ec te'

.he$ the bala$ce sho l' be pai'. L Nicolasa a'mits havi$, receive' this pa!me$t b t there is $o evi'e$ce that she se$t it to her brother L 6%ter o$e !ear, Gre,orio Bime$e9 .e$t back to 6lami$os a$' 'ema$'e' that his sister s rre$'er the piece o% la$' to him, it bei$, the$ i$ her possessio$. L @he re% se' po$ some prete5t or other to 'o so a$' as a res lt, plai$ti%% i$stit te' a$ actio$ to recover the la$' %rom her co$trol L Mea$.hile, Nicolasa e5ec te' a$' 'elivere' to Rabot a 'ee' p rporti$, to co$ve! to him the parcel o% la$' 8@@EC< +MN the a thorit! co$%erre' o$ Nicolasa b! the letter .as s %%icie$t to e$able her to bi$' her brother o% the sale ma'e i$ %avor o% Rabot RE=8NG< >es 6s a matter o% %ormalit!, a po.er o% attor$e! to co$ve! real propert! o ,ht to appear i$ a p blic 'oc me$t, ; st as a$! other i$str me$t i$te$'e' to tra$smit or co$ve! a$ i$terest i$ s ch propert! o ,ht to appear i$ a p blic 'oc me$t 6rt. "7"3 o% the Civil Co'e re4 ires that the a thorit! to alie$ate la$' shall be co$tai$e' i$ a$ e5press ma$'ate @ bsectio$ 5 o% sectio$ 335 o% Co'e o% Civil Proce' re sa! that the a thorit! o% the a,e$t m st be i$ .riti$, a$' s bscribe' b! the part! to be char,e' @C< the a thorit! e5presse' i$ the letter is a s %%icie$t complia$c. tih both re4 ireme$ts (he p rpose i$ ,ivi$, a po.er o% attor$e! is to s bstit te the mi$' a$' ha$' o% the a,e$t %or the mi$' a$' ha$' o% the pri$cipal0 a$' i% the character a$' e5te$t o% the po.er is so 'e%i$e' as to leave $o 'o bt as to the limits .ithi$ .hich the a,e$t is a thori9e' to act, a$' he acts .ithi$ those limits, the pri$cipal ca$$ot 4 estio$ the vali'it! o% his act (he ,e$eral r le here applicable is that the 'escriptio$ m st be s %%icie$tl! 'e%i$ite to i'e$ti%! the la$' either %rom the recitals o% the co$tract or 'ee' or %rom e5ter$al %acts re%erre' to i$ the 'oc me$t, thereb! e$abli$, o$e to 'etermi$e the i'e$tit! o% the la$' a$' i% the 'escriptio$ is $certai$ o$ its %ace or is sho.$ to be applicable .ith e4 al pla sibilit! to more tha$ o$e tract, it is i$s %%icie$t. 6. C:@M8C =EM)CR C:RP:R6(8:N F C6 F6C(@ L Cosmic Corporatio$, thro ,h its Ge$eral Ma$a,er e5ec te' a @pecial Po.er o% 6ttor$e! appoi$ti$, Pa9 G. Fillamil&Cstra'a as attor$e!&i$&%act to i$itiate, i$stit te a$' %ile a$! co rt actio$ %or the e;ectme$t o% thir' perso$s a$'Mor s4 atters o% the e$tire lot 9"27 a$' 113 %or the sai' s4 atters to remove their ho ses a$' vacate the premises i$ or'er that the corporatio$ ma! take material possessio$ o% the e$tire lot L Pa9 G. Fillamil Cstra'a, b! virt e o% her po.er o% attor$e!, i$stit te' a$ actio$ %or the e;ectme$t o% private respo$'e$t 8si'ro Pere9 a$' recover the possessio$ o% a portio$ o% lot 113 be%ore the R(C L Cstra'a e$tere' i$to a Compromise 6,reeme$t .ith Pere9, the terms a$' co$'itio$s s ch as< P 8$ or'er %or Pere9 to b ! the sai' lot he is prese$tl! occ p!i$,, he has to pa! to plai$ti%% thro ,h Csta'a the s m o% P26,61# comp te' at P?#Ms4 are meter a$' that Cosmic = mber reco,$i9es o.$ership a$' possessio$ o% Pere9 b! virt e o% this compromise a,reeme$t over sai' portio$ o% 333 s4m o% lot 113 a$' .hatever e5pe$ses o% s b'ivisio$, re,istratio$ a$' other i$ci'e$tal e5pe$ses shall be sho l'ere' b! Pere9 L altho ,h the a,reeme$t .as approve' b! the trial co rt a$' the 'ecisio$ became %i$al a$' e5ec tor! it .as $ot e5ec te' .ithi$ the 5 !ear perio' %rom 'ate o% its %i$alit! alle,e'l! ' e to the %ail re o% Cosmic = mber to pro' ce the o.$erSs ' plicate cop! o% title $ee'e' to se,re,ate %rom lot 113 the portio$ sol' b! the attor$e!&i$& %act, Pa9 Cstra'a to Pere9 $'er the compromise a,reeme$t 8@@EC< +MN there is a co$tract o% a,e$c! bet.ee$ Cosmic = mber, pri$cipal a$' Pa9 Cstra'a, a,e$t th s bi$'i$, the pri$cipal over the compromise a,reeme$t ma'e b! the a,e$t to a thir' perso$, Pere9 i$ selli$, the portio$ o% the sai' propert! RE=8NG< No (he a thorit! ,ra$te' Fillamil&Cstra'a $'er the special po.er o% attor$e! .as e5plicit a$' e5cl sio$ar!< %or her to i$stit te a$! actio$ i$ co rt to e;ect all perso$s %o $' o$ lots $ mber 9"27 a$' 113 so that Cosmic = mber co l' take material possessio$ thereo% a$' %or this p rpose, to appear at the pre&trial a$' e$ter i$to a$!

stip latio$ o% %acts a$'Mor compromise a,reeme$t b t o$l! i$so%ar as this .as protective o% the ri,hts a$' i$terests o% Cosmic = mber i$ the propert! No.here i$ this a thori9atio$ .as Fillamil&Cstra'a ,ra$te' e5pressl! or implie'l! a$! po.er to sell the s b;ect propert! $or a portio$ thereo% Neither ca$ a co$%erme$t o% the po.er to sell be vali'l! i$%erre' %rom the speci%ic a thorit! Pto e$ter i$to a compromise a,reeme$tO beca se o% the e5plicit limitatio$ %i5e' b! the ,ra$tor that the compromise e$tere' i$to shall o$l! be Pso %ar as it shall protect the ri,hts a$' i$terest o% the corporatio$ i$ the a%oreme$tio$e' lotsO. 8$ the co$te5t o% special i$vestit re o% po.ers to Fillamil&Cstra'a, alie$atio$ b! sale o% a$ immovable certai$l! ca$$ot be 'eeme' protective o% the ri,ht o% Cosmic = mber to ph!sicall! possess the same, more so .he$ the la$' .as bei$, sol' %or a price o% P?#Ms4m , ver! m ch less tha$ its assesse' val e o% P25#Ms4m a$' co$si'eri$, % rther that plai$ti%% $ever receive' the procee's o% the sale +he$ the sale o% a piece o% la$' or a$! i$terest thereo$ is thro ,h a$ a,e$t, the a thorit! o% the latter shall be i$ .riti$,0 other.ise, the sale sho l' be voi'. (h s, the a thorit! o% a$ a,e$t to e5ec te a co$tract %or the sale o% real estate m st be co$%erre' i$ .riti$, a$' m st ,ive him speci%ic a thorit!, either to co$' ct the ,e$eral b si$ess o% the pri$cipal or to e5ec te a bi$'i$, co$tract co$tai$i$, terms a$' co$'itio$s .hich are i$ the co$tract he 'i' e5ec te For the pri$cipal to co$%er the ri,ht po$ a$ a,e$t to sell real estate, a po.er o% attor$e! m st so e5press the po.ers o% the a,e$t i$ clear a$' $mistakable la$, a,e 8t is there%ore clear that b! selli$, to Pere9 a portio$ o% Cosmic = mberSs la$' thro ,h a compromise a,reeme$t, Fillamil&Cstra'a acte' .itho t or i$ obvio s a thorit!. (he sale ipso ; re is co$se4 e$tl! voi' a$' so is the compromise a,reeme$t. (his bei$, the case, the ; ',me$t base' thereo$ is $ecessaril! voi' +he$ a$ a,e$t is e$,a,e' i$ the perpetratio$ o% a %ra ' po$ his pri$cipal %or his o.$ e5cl sive be$e%it, he is $ot reall! acti$, %or the pri$cipal b t is reall! acti$, %or himsel%, e$tirel! o tsi'e the scope o% his a,e$c! 7. R6C( F C6 F6C(@< L Petitio$ers Cesar a$' Clviira Raet 2the spo ses Raet3 a$' petitio$ers Re5 a$' C'$a Mitra 2@po ses Mitra3 $e,otiate' .ith 6mparo Gat s co$cer$i$, the possibilit! o% b L!i$, the ri,hts o% the latter to certai$ $its at the =as Fillas 'e @to. Ni$o @ b'ivisio$ i$ Me!ca !a$, ) laca$. L (his s b'ivisio$ .s 'evelope' b! private respo$'e$t Phil Fille Aevelopme$t a$' *o si$, Corporatio$ 2PFA*C3 primaril! %or parties 4 ali%ie' to obtai$ loa$s %rom the Gover$me$t @ervice 8$s ra$ce @!stem 2G@8@3. L @po ses Raet a$' @po ses Mira pai' Gat s the total amo $ts o% P1#,### a$' P35,### respectivel! %or .hich the! .ere iss e' receipts b! Gat s i$ her o.$ $ame L )oth spo ses applie' 'irectl! .ith PFA*C %or the p rchase o% $its i$ the sai' s b'ivisio$. 6s the! .ere $ot G@8@ members, the! looke' %or members .ho co l' act as accommo'atio$ parties b! allo.i$, them to se their policies. PFA*C .o l' process the applicatio$s %or the p rchase o% the $its po$ the approval b! the G@8@ o% petitio$ersS loa$ applicatio$ L @po ses Raet prese$te' G@8@ polic! o% Cr$esto Casi'si', .hile the spo ses Mitra that o% Ae$a =im. (he %ormer pai' P32,653 .hile the latter pai' P27,### to PFA*C o$ the $'ersta$'i$, that these acco $ts .o l' be cre'ite' to the p rchase prices o% the $its .hich .ill be 'etermi$e' a%ter the approval o% their loa$ applicatio$s .ith the G@8@. L@po ses Raet .ere allo.e' to occ p! the $it b ilt o$ =ot 1, )lock 67, Phase 16 o% the s b'ivisio$ .hile @po ses Mitra .ere ,ive$ the $it o$ =ot 7, )lock 6", Phase 16 thereo% L G@8@, ho.ever, 'isapprove' the loa$ applicatio$s o% both spo ses. (he! .ere a'vise' b! PFA*C to seek other so rces o% %i$a$ci$, b t .ere still allo.e' to remai$ i$ the sai' premises L Fail re o% both spo ses to raise mo$e!, PFA*C 'ema$'e' them to vacate the $its the! .ere occ p!i$, a$' e;ectme$t cases .ere %ile' a,ai$st them 8@@EC< +MN there .ere per%ecte' co$tracts o% sale bet.ee$ petitio$ers a$' private respo$'e$t PFA*C i$volvi$, the $its i$ 4 estio$ RE=8NG< No @C< Parties i$ this case ha' $ot reache' a$! a,reeme$t .ith re,ar' to the sale o% the $its i$ 4 estio$ Recor's 'o $ot sho. the total costs o% the $its i$ 4 estio$ a$' the pa!me$t schemes there%ore. (he %i, res re%erre' to b! both spo ses .ere mere estimates ,ive$ to them b! Gat s. (he partiesS tra$sactio$s th s, lacke' the re4 isites resse$tial %or the per%ectio$ o% co$tracts )oth spo ses 'ealt .ith Gat s .ho .as $ot the a,e$t o% PFA*C. (he crimi$al case %or esta%a a,ai$st

her .as 'ismisse' beca se it .as %o $' o t that she $ever represe$ete' hersel% to be a$ a,e$t o% PFA*C )oth spo ses k$e. %rom the be,i$$i$, that Gat s .as $e,otiati$, .ith them i$ her o.$ behal% a$' $ot as a$ a,e$t o% PFA*C (here is th s $o basis %or the %i$'i$, o% *=ER) 6rbiter that Gat s .as the a,e$t o% PFA*C .ith respect to the tra$sactio$s i$ 4 estio$ @i$ce PFA*C ha' $o k$o.le',e o% the %i, res Gat s ,ave to both spo ses as estimates o% the costs o% the $its, it co l' $ot have rati%ie' the same at the time the latter applie' %or the p rchase o% the $its. PFA*C .as to e$ter i$to a,reeme$ts co$cer$i$, s b;ect $its .ith both spo ses o$l! po$ approval o% their loa$ applicatio$s .ith G@8@ .hich %aile' to materiali9e (here are $o .ritte$ co$tracts to evi'e$ce the alle,e' sales. 8% both spo ses a$' PFA*C ha' i$'ee' e$tere' i$to co$tracts i$volvi$, sai' $its, it is rather stra$,e that co$tracts o% s ch importa$ce have $ot bee$ re' ce' i$ .riti$, ?. C8(>&=8(C RC6=(> C:RP:R6(8:N F C6 F6C(@ L Private Respo$'e$t F.P. *ol'i$,s a$' Realt! Corporatio$ 2F.P. *ol'i$,s3, %ormerl! the @parta *ol'i$,s 8$c, .as the re,istere' o.$er o% a parcel o% la$' sit ate' alo$, C. Ro'ri, e9 6ve$ e, T e9o$ Cit! also k$o.$ as the PFiola,o Propert!O or the P@a$ =ore$9o R i9 Commercial Ce$ter,O .ith a$ area o% 7",751 s4m L (he propert! .as o%%ere' %or sale to the ,e$eral p blic thro ,h the circ latio$ o% a sales broch re co$tai$i$, the 'escriptio$ o% the propert! a$' the aski$, price o% P6,25#Ms4m .ith terms o% pa!me$t $e,otiable. 8$ a''itio$, brokerSs commissio$ .as 2Q o% selli$, price, $et o% .ithhol'i$, ta5es a$' other char,es. Co$tact perso$ .as Mel'i$ 6l G. Ro!, Metro Ar , 8$c. L (he %ro$t portio$ co$sisti$, o% 9,"92 s4m is the s b;ect o% this liti,atio$ L 6l G. Ro! se$t a sales broch re, to,ether .ith the locatio$ pla$ a$' cop! o% the (C( to 6tt!. Gelacio Mamaril, a practici$, la.!er a$' a lice$se' real estate broker. Mamaril passe' i$ t r$ passe' o$ these 'oc me$ts to 6$to$io (e$,, C5ec tive Fice Presi'e$t, a$' 6tt! Fictor Filla$ eva, =e,al Co $sel o% Cit!&=ite L Cit!&=ite co$ve!e' its i$terest to p rchase a portio$ or o$e&hal% 2"M23 o% the %ro$t lot o% the PFiola,o Propert!O 6ppare$tl!, Ro! s bse4 e$tl! i$%orme' Cit!&=iteSs represe$tative that it .o l' take time to s b'ivi'e the lot a$' F.P. *:=A8NG@ .as $ot receptive to the p rchase o% o$l! hal% o% the %ro$t lot L 6tt!. Mamaril .rote Metro Ar , 26l G. Ro!3 e5pressi$, Cit!&=iteSs 'esire to b ! the e$tire %ro$t lot o% the s b;ect propert! i$stea' o% o$l! hal% thereo% provi'e' the aski$, price o% P6,25#Ms4m .as re' ce' a$' that pa!me$t be i$ i$stallme$t %or a certai$ perio' L (he parties reache' a$ a,reeme$t a$' Ro! a,ree' to sell the propert! to Cit!&=ite provi'e' o$l! the latter s bmit its accepta$ce i$ .riti$, to the terms a$' co$'itio$s o% the sale L For some reaso$ or a$other a$' 'espite 'ema$', F.P. *:=A8NG@ re% se' to e5ec te the correspo$'i$, 'ee' o% sale i$ %avor o% Cit!&=ite o% the %ro$t lot o% the propert! L (rial co rt r le' i$ %avor o% Cit!&=ite or'eri$, F.P. *:=A8NG@ to e5ec te a 'ee' o% sale o% the propert! i$ %avor o% the %ormer %or the total co$si'eratio$ o% P55,#56,25# pa!able as %ollo.s< P"5 M as 'o.$pa!me$t to be pa!able imme'iatel! po$ e5ec tio$ o% the 'ee' o% sale a$' the bala$ce .ithi$ 6 mo$ths %rom 'o.$pa!me$t .itho t i$terest L C6 reverse' (CSs 'ecisio$ 8@@EC< +MN there .as a per%ecte' co$tract o% sale bet.ee$ Cit!&=ite a$' respo$'e$t F.P. *:=A8NG@ beca se o% a lack o% 'e%i$ite a,reeme$t o$ the ma$$er o% pa!i$, the p rchase price a$' that Metro Ar , a$' Mel'i$ 6l G. Ro! .ere $ot a thori9e' to sell the propert! to Cit!&=ite, a$' that the a thorit! o% Ro! .as o$l! limite' to that o% mere liaiso$ or co$tact perso$ RE=8NG< No, Ro! mere co$tact perso$ 6rt. "?71 o% NCC< P+he$ the sale o% a piece o% la$' or a$! i$terest therei$ is thro ,h a$ a,e$t, the a thorit! o% the latter shall be i$ .riti$,, other.ise, the sale shal be voi'.O (he abse$ce o% a thorit! to sell ca$ be 'etermi$e' %rom the .ritte$ memora$' m iss e' b! respo$'e$t F.P. *:=A8NG@ Presi'e$t re4 esti$, Metro Ar ,Ss assista$ce i$ %i$'i$, b !ers %or the propert! Memora$' m i$'icates that Mel'i$ G. Ro! a$'Mor Metro Ar , .as o$l! to assist F.P. *ol'i$,s i$ looki$, %or b !ers a$' re%erri$, to them possible prospects .hom the! .ere s ppose' to e$'orse to F.P. *ol'i$,s. ) t the %i$al eval atio$, appraisal a$' accepta$ce o% the tra$sactio$ co l' be ma'e o$l! b! F.P. *ol'i$,s. 8$ other .or's, Ro! a$'Mor Metro Ar , .as o$l! a co$tact perso$ .ith $o a thorit! to co$cl 'e a sale

o% the propert! Ro! a$'Mor Metro Ar , .as a mere broker a$' Ro!Ms o$l! ;ob .as to bri$, parties the parties to,ether %or a possible tra$sactio$ @C< %or lack o% a .ritte$ a thorit! to sell the PFiola,o Propert!O o$ the part o% Ro! a$'Mor Metro Ar ,, the sale sho l' be as it is 'eclare' $ ll a$' voi' 9. @8MM8C F *. )R:ACD F6C(@< L @immie %ile' a$ actio$ a,ai$st )ro'ek to recover the s m o% ",35# pesos %or services per%orme' b! the %ormer %or )ro'ek i$ the p rchase o% a U i$terest i$ the la $ch calle' Fre' =. Aorr. L Cvi'e$ce sho.s that )ro'ek .as the o.$er o% U i$terest i$ the sai' la $ch prior to the time o% the alle,e' co$tract a$' that o$e 6.B. +ashb r$ .as the o.$er o% the other hal%. L @immie claims that he e$tere' i$to a co$tract .ith )ro'ek b! the terms o% .hich he .as to p rchase the hal% i$terest o.$e' b! sai' +ashb r$ %or a s m $ot to e5cee' 3,5## pesos. L*e % rther claims that he .as to receive %or s ch services a s m e4 al to the 'i%%ere$ce bet.ee$ 3,5## pesos a$' .hatever s m less tha$ that amo $t %or .hich he co l' p rchase the sai' la $ch L*e % rther claims that b! virt e o% this a,reeme$t he e$tere' i$to a co$tract .ith the sai' +ashb r$ to pa! to the latter the s m o% 2,"5# pesos a$' that there .as ' e %rom )ro'ek to him the 'i%%ere$ce bet.ee$ 3,5## pesos a$' 2,"5# pesos, or the s m o% ",35# pesos L8$%erior co rt r le' i$ %avor the plai$ti%%, @immie 8@@EC< +MN there .as a co$tract o% a,e$c! bet.ee$ )ro'ek a$' @immie, the latter to p rchase the sai' la $ch %or the pri$cipal, )ro'ek RE=8NG< >C@ +here )ro'ek e$ters i$to a co$tract thro ,h his a thori9e' a,e$t Aorr, .ith @immie to p rchase propert!, a,reei$, to pa! a %i5e' price %or s ch propert!, allo.i$, @immie, a s m e4 al to the 'i%%ere$ce bet.ee$ this %i5e' price a$' .hatever s m less tha$ that %or .hich @immie is able to p rchase the propert!, a$' @immie has complete' the co$tract o% sale a$' there is $othi$, le%t to be 'o$e e5cept the pa!me$t o% the sai' propert!, a$' the$ )ro'ek closes sai' co$tract .itho t the i$terve$tio$ o% @immie, the %ormer is liable to the latter %or a$ amo $t e4 al to the 'i%%ere$ce bet.ee$ the act al p rchase price o% sai' propert! a$' the .hich )ro'ek a,ree' to pa! %or the same "#. 6GEN6 F. =6RCN6 F6C(@< L (his actio$ is bro ,ht to recover the s m o% P29,6## o$ t.o ca ses a,ai$st the a'mi$istrator o% the estate o% the 'ecease' Maria$o =are$a L Epo$ his %irst ca se o% actio$, plai$ti%% claims the s m o% P9,6##, the alle,e' val e o% services re$'ere' b! him to sai' 'ecease' as his a,e$t i$ char,e o% the 'ecease'Ss ho ses sit ate' i$ Ma$ila L E$'er the seco$' ca se o% actio$, plai$ti%% alle,es that o$e o% the b il'i$,s belo$,i$, to the 'ecease' a$' 'escribe' i$ his complai$t .as b ilt b! him .ith the co$se$t o% the 'ecease', a$' %or that reaso$ he is e$title' to recover the s m 'isb rse' b! him i$ its co$str ctio$, amo $ti$, to P2#,### L Cvi'e$ce sho.s that plai$ti%% re$'ere' services to the 'ecease', co$sisti$, i$ the collectio$ o% the re$ts ' e %rom the te$a$ts occ p!i$, the 'ecease'Ss ho ses i$ Ma$ila a$' atte$'i$, to the repair o% sai' ho ses .he$ $ecessar!. *e also took s ch steps as .ere $ecessar! to e$%orce the pa!me$t o% re$ts a$' all that .as re4 ire' to protect the i$terests o% the 'ecease' i$ co$$ectio$ .ith sai' ho ses L Cvi'e$ce also sho.s that at the time he re$'ere' his services, he 'i' $ot receive a$! compe$satio$, ho.ever it is a %act that ' ri$, sai' perio', plai$ti%% occ pie' a ho se belo$,i$, to the 'ecease' .itho t pa!i$, a$! re$t at all L Epo$ the %irst ca se o% actio$, the trial co rt hel' that the compe$satio$ %or services o% plai$ti%% .as the ,rat ito s se a$' occ patio$ o% some o% the ho ses o% the 'ecease' b! the plai$ti%% a$' his %amil! L 6s to the seco$' ca se, the co rt hel' that the plai$ti%% 'i' $ot have a$! so rce o% i$come that co l' pro' ce him s ch a lar,e s m o% mo$e! as that i$veste' i$ the co$str ctio$ o% the ho se0 a$' the %act that the 'ecease' ha' more tha$ the $ecessar! amo $t to b il' the ho se

8@@EC< +MN there .as a co$tract o% a,e$c! bet.ee$ plai$ti%% a$' respo$'e$t e$titli$, the %ormer compe$satio$ %or services re$'ere' i$ %avor o% the latter RE=8NG< N: Plai$ti%% i$sists that, as his services as a,e$t o% the 'ecease' M =are$a havi$, bee$ re$'ere', a$ obli,ato$ to compe$sate them m st $ecessaril! arise. (he trial co rt hel' that the compe$satio$ %or the services o% the plai$ti%% .as the ,rat ito s se a$' occ patio$ o% some o% the ho ses o% sai' 'ecease' b! plai$ti%% a$' his %amil! 8% it .ere tr e that the plai$ti%% a$' the 'ecease' ha' a$ $'ersta$'i$, to the e%%ect that plai$ti%% .as to receive compe$satio$ asi'e %rom the se a$' occ patio$ o% the ho ses o% the 'ecease', it ca$$ot be e5plai$e' ho. the plai$ti%% co l' have re$'ere' services as he 'i' %or ? !ears .itho t receivi$, a$' claimi$, a$! compe$satio$ %rom the 'ecease'.