Litonjua v. Fernandez Facts: Mrs.

Lourdes Alimario and Agapito Fisico who worked as brokers, offered to sell to the petitioners, Antonio K. Litonjua and Aurelio K. Litonjua, Jr., the parcels of land. the owners of the properties were represented by Mary Mediatrix Fernandez and Gregorio T. Eleosida, respectively. The brokers told the petitioners that they were authorized by respondent Fernandez to offer the property for sale. The petitioners and respondent Fernandez agreed that the petitioners would buy the property consisting of 36,742 square meters, for the price of P150 per square meter, or the total sum of P5,098,500. They also agreed that the owners would shoulder the capital gains tax, transfer tax and the expenses for the documentation of the sale. The petitioners and respondent Fernandez also agreed to meet on December 8, 1995 to finalize the sale. It was also agreed upon that on the said date, respondent Fernandez would present a special power of attorney executed by the owners of the property, authorizing her to sell the property for and in their behalf, and to execute a deed of absolute sale thereon. The petitioners would also remit the purchase price to the owners, through respondent Fernandez. However, only Agapito Fisico attended the meeting. He informed the petitioners that respondent Fernandez was encountering some problems with the tenants and was trying to work out a settlement with them.[7] After a few weeks of waiting, the petitioners wrote respondent Fernandez on January 5, 1995, demanding that their transaction be finalized by January 30, 1996. When the petitioners received no response from respondent Fernandez, the petitioners sent [9] her another Letter dated February 1, 1996, asking that the Deed of Absolute Sale covering the property be executed in accordance with their verbal agreement dated November 27, 1995. The petitioners also demanded the turnover of the subject properties to them within fifteen days from receipt of the said letter; otherwise, they would have no option but to protect their interest through legal means. Fernandez, however rejected the claims of the petitioner. On April 12, 1996, the petitioners filed the instant Complaint for specific performance with damages[13] against respondent Fernandez and the registered owners of the property. After trial on the merits, the trial court rendered judgment in favor of the petitioners . the appellate court promulgated its decision reversing and setting aside the judgment of the trial court and dismissing the petitioners complaint, as well as the respondents counterclaim.

petitioners contend that the perfection of the said contract is evidenced by the January 16, 1996 Letter of respondent Fernandez. The petitioners argue that the letter is a sufficient note or memorandum of the perfected contract, thus, removing it from the coverage of the statute of frauds. The letter specifically makes reference to a sale which respondent Fernandez agreed to initially, but which the latter withdrew because of the emergence of some people who claimed to be tenants on both parcels of land. The petitioners contention is bereft of merit. In its decision, the appellate court ruled that the Letter of respondent Fernandez dated January 16, 1996 is hardly the note or memorandum contemplated under Article 1403(2)(e) of the New Civil Code. In this case, we agree with the findings of the appellate court that there was no perfected contract of sale between the respondents-owners, as sellers, and the petitioners, as buyers. There is no documentary evidence on record that the respondents-owners specifically authorized respondent Fernandez to sell their properties to another, including the petitioners. Article 1878 of the New Civil Code provides that a special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration,[37] or to create or convey real rights over immovable property,[38] or for any other act of strict dominion.[39] Any sale of real property by one purporting to be the agent of the registered owner without any authority therefor in writing from the said owner is null and void.[40] The declarations of the agent alone are generally insufficient to establish the fact or extent of her authority.[41] In this case, the only evidence adduced by the petitioners to prove that respondent Fernandez was authorized by the respondents-owners is the testimony of petitioner Antonio Litonjua that respondent Fernandez openly represented herself to be the representative of the respondents-owner.

Fallo: - IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The decision of the appellate court is AFFIRMED IN TOTO. Costs against the petitioners. SO ORDERED.

Issue/s: Held: -

WHETHER OR NOT THERE WAS A PERFECTED CONTRACT OF SALE BETWEEN THE PARTIES. WHETHER OR NOT THE CONTRACT FALLS UNDER THE COVERAGE OF THE STATUTE OF FRAUDS.

the petitioners assert that there was a perfected contract of sale between the petitioners as buyers and the respondents-owners, through respondent Fernandez, as sellers. The Veloso v. CA

Facts: Petitioner Francisco Veloso was the owner of a parcel of land. The title was registered in the name of Francisco A. Veloso, single,[3] on October 4, 1957.[4] The said title was subsequently canceled and a new one, Transfer Certificate of Title No. 180685, was issued in the name of Aglaloma B. Escario, married to Gregorio L. Escario, on May 24, 1988. On August 24, 1988, petitioner Veloso filed an action for annulment of documents, reconveyance of property with damages and preliminary injunction and/or restraining order. Petitioner alleged therein that he was the absolute owner of the subject property and he never authorized anybody, not even his wife, to sell it. He alleged that he was in possession of the title but when his wife, Irma, left for abroad, he found out that his copy was missing. He then verified with the Registry of Deeds of Manila and there he discovered that his title was already canceled in favor of defendant Aglaloma Escario. The transfer of property was supported by a General Power of Attorney[6] dated November 29, 1985 and Deed of Absolute Sale, dated November 2, 1987, executed by Irma Veloso, wife of the petitioner and appearing as his attorney-in-fact, and defendant Aglaloma Escario. .[7] Petitioner Veloso, however, denied having executed the power of attorney and alleged that his signature was falsified. He also denied having seen or even known Rosemarie Reyes and Imelda Santos, the supposed witnesses in the execution of the power of attorney. He vehemently denied having met or transacted with the defendant. Defendant Aglaloma Escario in her answer alleged that she was a buyer in good faith and denied any knowledge of the alleged irregularity. She allegedly relied on the general power of attorney of Irma Veloso which was sufficient in form and substance and was duly notarized. Francisco Veloso testified that he acquired the subject property from the Philippine Building Corporation, as evidenced by a Deed of Sale dated October 1, 1957.[10] He married Irma Lazatin on January 20, 1962.[11] Hence, the property did not belong to their conjugal partnership. In the decision of the trial court dated March 9, 1990,[12] defendant Aglaloma Escaro was adjudged the lawful owner of the property as she was deemed an innocent purchaser for value. Court of Appeals. The respondent court affirmed in toto the findings of the trial court.

Thus, there was no need to execute a separate and special power of attorney since the general power of attorney had expressly authorized the agent or attorney in fact the power to sell the subject property. The special power of attorney can be included in the general power when it is specified therein the act or transaction for which the special power is required.

Fallo: - ACCORDINGLY, the petition for review is hereby DENIED for lack of merit. SO ORDERED.

Issue/s: -

whether or not there was a valid sale of the subject property.

Held: An examination of the records showed that the assailed power of attorney was valid and regular on its face. It was notarized and as such, it carries the evidentiary weight conferred upon it with respect to its due execution. While it is true that it was denominated as a general power of attorney, a perusal thereof revealed that it stated an authority to sell, to wit: 2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands, tenements and hereditaments or other forms of real property, more specifically TCT No. 49138, upon such terms and conditions and under such covenants as my said attorney shall deem fit and proper.[16]

San Diego v. Nombre & Escanlar

Facts: On May 1, 1960, Nombre, in his capacity was judicial administrator of the intestate estate subject of the Sp. Proc. stated above, leased one of the properties of the estate (a fishpond identified as Lot No. 1617 of the cadastral survey of Kabankaban, Negros Occidental), to Pedro Escanlar, the other respondent. The terms of the lease was for three (3) years, with a yearly rental of P3,000.00 to expire on May 1, 1963, the transaction having been done, admittedly, without previous authority or approval of the Court where the proceedings was pending. On January 17, 1961, Nombre was removed as administrator by Order of the court and one Sofronio Campillanos was appointed in his stead. The appeal on the Order of Nombre's removal is supposedly pending with the Court of Appeals. Respondent Escanlar was cited for contempt, allegedly for his refusal to surrender the fishpond to the newly appointed administrator. On March 20, 1961, Campillanos filed a motion asking for authority to execute a lease contract of the same fishpond, in favor of petitioner herein, Moises San Diego, Sr., for 5 years from 1961, at a yearly rental of P5,000.00. Escanlar was not notified of such motion. The opposition notwithstanding, the Court on April 8, 1961, in effect declared that the contract in favor of Escanlar was null and void, for want of judicial authority and that unless he would offer the same as or better conditions than the prospective lessee, San Diego, there was no good reason why the motion for authority to lease the property to San Diego should not be granted. -

The Civil Code, on lease, provides: If a lease is to be recorded in the Registry of Property, the following persons cannot constitute the same without proper authority, the husband with respect to the wife's paraphernal real estate, the father or guardian as to the property of the minor or ward, and the manager without special power. (Art. 1647). The same Code, on Agency, states: Special powers of attorneys are necessary in the following cases: (8) To lease any real property to another person for more than one year. (Art. 1878) We believe that the Court of Appeals was correct in sustaining the validity of the contract of lease in favor of Escanlar, notwithstanding the lack of prior authority and approval. The law and prevailing jurisprudence on the matter militates in favor of this view. While it may be admitted that the duties of a judicial administrator and an agent (petitioner alleges that both act in representative capacity), are in some respects, identical, the provisions on agency (Art. 1878, C.C.), should not apply to a judicial administrator. A judicial administrator is appointed by the Court. He is not only the representative of said Court, but also the heirs and creditors of the estate (Chua Tan v. Del Rosario, 57 Phil. 411). A judicial administrator before entering into his duties, is required to file a bond. These circumstances are not true in case of agency. The agent is only answerable to his principal.

Fallo: - WHEREFORE, the decision appealed from should be, as it is hereby affirmed, in all respects, with costs against petitioner Moises San Diego, Sr.

Issue/s: The controlling issue in this case is the legality of the contract of lease entered into by the former administrator Nombre, and Pedro Escanlar on May 1, 1960. Whether a judicial administrator can validly lease property of the estate without prior judicial authority and approval", and "whether the provisions of the New Civil Code on Agency should apply to judicial administrators."

Held: . It has been held that even in the absence of such special powers, a contract or lease for more than 6 years is not entirely invalid; it is invalid only in so far as it exceeds the six-year limit (Enrique v. Watson Company, et al., 6 Phil. 84). No such limitation on the power of a judicial administrator to grant a lease of property placed under his custody is provided for in the present law. Under Article 1647 of the present Civil Code, it is only when the lease is to be recorded in the Registry of Property that it cannot be instituted without special authority. Thus, regardless of the period of lease, there is no need of special authority unless the contract is to be recorded in the Registry of Property. As to whether the contract in favor of Escanlar is to be so recorded is not material to our inquiry.

Acenas v. Sison:

Fallo: - WHEREFORE, the decision dated March 7, 1960 of the lower court is modified in the sense that defendant Teofilo Sison is not liable and that defendant Angela Sison alone is liable to the plaintiffs for the amount adjudged in the decision. No costs.

Facts: Angela Sison executed a promissory note, promising to pay Emma S. Acenas the sum of P8,160 in 26 installments, the first falling due on November 30, 1956 and the last on November 30, 1960. The note provided that failure to pay two consecutive installments would make the balance due and demandable. Mrs. Sison was able to pay up to August 31, 1957 only. Upon her failure to pay the balance of the note, alleged to be in the sum of P8,391.60, she was sued. Her husband, Teofilo Sison, was joined as a defendant pursuant to Article 113 of the Civil Code. In their answer, Mr. Sison denied liability on the ground that he had not signed the promissory note. counsel for the defendants moved for the postponement of the hearing hereof in view of the absence of his clients and that he needs time within which to confer with them for the purpose of amicably settling this case. On the other hand, when the court indicated to the defendant's counsel that there seems to be no defense on the part of the defendants in this case, and that it would be for the best interest of the latter if the case is terminated by way of judgment on the pleadings or confession of judgment, counsel for defendants offered no objection and asked that confession of judgment by the defendants may be entered in this case provided that the corresponding writ of execution thereof should not be issued until June 30, 1960, to which counsel for the plaintiffs agreed. In view thereof, and upon motion of counsel for defendants The Trial Court Ruled in favor of Acenas. Their motion for reconsideration and new trial having been denied, defendants appealed directly to this Court. Appellant Teofilo Sison contends that his lawyer agreed to a judgment on the pleadings but not to a confession of judgment; that he never authorized his lawyer to confess judgment for him and that at any rate he was not liable on the note of his wife.

Issue/s: Was the counsel for the Sisons authorized to enter a judgement of confession?

Held; We hold therefore that it was error for the trial court to accept the confession made by counsel without ascertaining his authority to do so, at least with respect to Teofilo Sison. With respect to Angela Sison, however, the judgment will be maintained, there being no claim in this appeal that the confession of judgment made in her behalf was unauthorized. In fact her liability is admitted here.

Dungo v. Lopena:

Facts: On September 10, 1959, herein petitioner Anastacio Dugo and one Rodrigo S. Gonzales purchased 3 parcel of land from the respondents Adriano Lopena and Rosa Ramos for the total price of P269,804.00. Of this amount P28.000.00 was given as down payment with the agreement that the balance of P241,804.00 would be paid in 6 monthly installments. To secure the payment of the balance Anastacio Dugo and Rodrigo S. Gonzales, the vendees, on September 11, 1958, executed over the same 3 parcels of land Deed of Real Estate Mortgage in favor of the respondent Adriano Lopena and Rosa Ramos. The vendees defaulted on the first installment. It resulted then that on November 7, 1959, the vendors, herein respondents Adriano Lopena and Rosa Ramos, filed a complaint for the foreclosure of the aforementioned real estate mortgage. Before the cases could be tried, a compromise agreement dated January 15, 1960 was submitted to the lower court for approval. It was signed by herein respondents Adriano Lopena and Rosa Ramos on one hand, and Rodrigo S. Gonzales, on the other. It was not signed by the herein petitioner. However, Rodrigo S. Gonzales represented that his signature was for both himself and the herein petitioner. Moreover, Anastacio Dugo's counsel of record, Atty. Manuel O. Chan, the same lawyer who signed and submitted for him the answer to the complaint, was present at the preparation of the compromise agreement and this counsel affixed his signature thereto. When Anastacio Dugo (herein petitioner) and Rodrigo S. Gonzales failed to pay the balance of their indebtedness on June 30, 1960, herein respondents Lopena and Ramos filed on July 5, 1960, a Motion for the Sale of Mortgaged Property. Although this last motion was filed ex parte, Anastacio Dugo and Rodrigo S. Gonzales were notified of it by the lower court. Neither of them, however, despite the notice, filed any opposition thereto. As a result, the lower court granted the above motion on July 19, 1960, and ordered the sale of the mortgaged property. On August 25, 1960, the 3 parcels of land above-mentioned were sold by the Sheriff at a public auction where at herein petitioners, together with the plaintiffs of the other two cases won as the highest bidders. The said sheriff's sale was later confirmed by the lower court on August 30, 1960. On August 31, 1960, Anastacio Dugo filed a motion to set aside all the proceedings on the ground that the compromise agreement dated January 15, 1960 was void ab initio with respect to him because he did not sign the same. Consequently, he argued, all subsequent proceedings under and by virtue of the compromise agreement, including the foreclosure sale of August 25, 1960, were void and null as regards him. This motion to set aside, however, was denied by the lower court in its order of December 14, 1960.

Petitioner Anastacio Dugo insists that the Compromise Agreement was void ab initio and could have no effect whatsoever against him because he did not sign the same. Furthermore, as it was void, all the proceedings subsequent to its execution, including the Order approving it, were similarly void and could not result to anything adverse to his interest. However, although the Civil Code expressly requires a special power of attorney in order that one may compromise an interest of another, it is neither accurate nor correct to conclude that its absence renders the compromise agreement void. In such a case, the compromise is merely unenforceable. This results from its nature is a contract. It must be governed by the rules and the law on contracts. ART. 1403. The following contracts are unenforceable, unless they are ratified: (1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; Logically, then, the next inquiry in this case should be whether the herein petitioner, Anastacio Dugo had or had not ratified the compromise agreement. If he had, then the compromise agreement was legally enforced against him; otherwise, he should be sustained in his contention that it never bound him, nor ever could it be made to bind him. The ratification of the compromise agreement was conclusively established by the Tri-Party Agreement of May 1960. It is to be noted that the compromise agreement was submitted to and approved by the lower court January 15, 1960. Besides, this Court has not overlooked the fact that which indeed Anastacio Dugo was not a signatory to the compromise agreement, the principal provision of the said instrument was for his benefit. Originally, Anastacio Dugo's obligation matured and became demandable on October 10, 1959. However, the compromise agreement extended the date of maturity to June 30, 1960. More than anything, therefore, the compromise agreement operated to benefit the herein petitioner because it afforded him more time and opportunity to fulfill his monetary obligations under the contract. If only for this reason, this Court believes that the herein petitioner should not be heard to repudiate the said agreement. Lastly, the compromise agreement stated "that, should the defendants fail to pay the said mortgage indebtedness, judgment of foreclosure shall thereafter be entered against the said defendants.

Fallo: - WHEREFORE, the petition for certiorari and mandamus filed by the herein petitioner is hereby dismissed. The order of the lower court dismissing the appeal is her by affirmed, with costs.

Issue/s: Was the compromise agreement of January 15, 1960, the Order of the same date approving the same, and, all the proceedings subsequent thereto, valid or void insofar as the petitioner herein is concerned?

Held:

Lim Pin v. Liao Tan

Facts: subject matter of the petition, is a compromise agreement entered into between the petitioner, represented by her son, George Hung and the private respondent Conchita Liao Tan both parties assisted by their respective counsel, during the October 19, 1977 hearing of Civil Case No. 11716 for unlawful detainer. The complaint for unlawful detainer was filed in the court a quo on August 12, 1977 by the private respondents against the petitioner. Spouses Conchita Liao Tan and Tan Cho Hua alleged in their complaint for unlawful detainer that the plaintiff Conchita Liao Tan, as owner of a parcel of registered land with improvements located at Francisco Street, Caloocan City, had leased a portion of it, more particularly known as 91 Francisco Street, Caloocan City to defendant Lim Pin on a month to month basis but that the latter starting April, 1977 had not paid the agreed rental stipulated for such month and the succeeding months thereafter despite demand, the defendant refused to vacate the leased premises. the defendant Lim Pin, filed her Answer denying the material allegations of the complaint and protesting the alleged highly "unconscionable and unreasonable" increase of rental demanded by plaintiffs. Through the initiative of the court a quo, the subject compromise agreement was formulated and executed and it finally became the basis of the October 19, 1977 judgment in Civil Case No. 11716. A writ of execution was issued by the respondent court on the same date. Pursuant to the writ of execution, the City Sheriff of Caloocan City, Metro Manila served a "Notice of Ejectment" and "Notice to Levy", both dated February 3, 1978, which were received by the plaintiff on February 3, 1978. Hence, this petition.

Article 1878 is found in Title X of the Civil Code on Agency. It states that a special power of attorney is necessary to compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired. Section 23 of Rule 138 on Attorneys and Admission to the Bar governs the authority of attorneys to bind their clients and provides that "Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing, and in taking appeal, and in an matters of ordinary Judicial Procedure, but they cannot, without special authority, compromise their clients' litigation or receive anything in discharge of their clients' claims but the full amount in cash." The requirements of a special power of attorney in Article 1878 of the Civil Code and of a special authority in Rule 138 of the Rules of Court refer to the nature of the authorization and not its form. The requirements are met if there is a clear mandate from the principal specifically authorizing the performance of the act. We are satisfied from the records of this case that Judge Cancio C. Garcia took the necessary precautionary measures and acted on the basis of satisfactory evidence when he allowed the compromise agreement to be executed by George Hung the petitioner's son.

Fallo: - WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. The temporary restraining order issued by this Court dated February 8, 1978 is LIFTED. The judgment appealed from is AFFIRMED with costs against the petitioner. SO ORDERED.

Issue/s: Was the representation by Hung and the Counsel in the compromise valid?

Held: the petitioner argues that the respondent Judge should not have allowed her son George Hung and her then counsel, Atty. Pastor Mamaril in her absence to enter into the October 19, 1977 compromise agreement with the private respondent Conchita Liao Tan assisted by her counsel. She further argues that "... considering that such compromise agreement would impose onerous obligations upon Petitioner, such as a tremendous increase of rentals in the premises being leased from Private Respondents from P1,500.00 a month to P5,000.00 a month," and that said agreement contained admissions by petitioner, the respondent Judge should have required a written authority and power of attorney from her son and counsel. Her objections to the validity of the compromise agreement are premised on Article 1878 of the Civil Code and Rule 138, Section 23 of the Rules of Court.

PNB v. Sta. Maria

Facts: - Plaintiff bank filed this action on February 10, 1961 against defendant Maximo Sta. Maria and his six brothers and sisters, defendants-appellants, Valeriana, Emeteria, Teofilo, Quintin, Rosario and Leonila, all surnamed Sta. Maria, and the Associated Insurance & Surety Co., Inc. as surety, for the collection of certain amounts representing unpaid balances on two agricultural sugar crop loans due allegedly from defendants. - The said sugar crop loans were obtained by defendant Maximo Sta. Maria from plaintiff bank under a special power of attorney, executed in his favor by his six brothers and sisters, defendants-appellants herein, to mortgage a 16-odd hectare parcel of land, jointly owned by all of them - As security for the two loans, Maximo Sta. Maria executed in his own name in favor of plaintiff bank two chattel mortgages on the standing crops, guaranteed by surety bonds for the full authorized amounts of the loans executed by the Associated Insurance & Surety Co., Inc. as surety with Maximo Sta. Maria as principal. - The records of the crop loan application further disclose that among the securities given by Maximo for the loans were a "2nd mortgage on 25.3023 Has. of sugarland, including sugar quota rights therein" including, the parcel of land jointly owned by Maximo and his six brothers and sisters herein for the 1952-1953 crop loan, with the notation that the bank already held a 4 first mortgage on the same properties for the 1951-1952 crop loan of Maximo, and a 3rd 5 mortgage on the same properties for the 1953-1954 crop loan. - The trial court rendered judgment in favor of plaintiff and against defendants - Defendant Maximo Sta. Maria and his surety, defendant Associated Insurance & Surety Co., Inc. who did not resist the action, did not appeal the judgment. This appeals been taken by his six brothers and sisters, defendants-appellants who reiterate in their brief their main contention in their answer to the complaint that under this special power of attorney, Exh. E, they had not given their brother, Maximo, the authority to borrow money but only to mortgage the real estate jointly owned by them; and that if they are liable at all, their liability should not go beyond the value of the property which they had authorized to be given as security for the loans obtained by Maximo.

mortgage executed by Valeriana together with the other defendants-appellants also in Maximo's favor, lends support to our view that the bank was not satisfied with the authority to mortgage alone. For otherwise, such authority to borrow would have been deemed unnecessary and a surplusage. And having failed to require that Maximo submit a similar authority to borrow, from the other defendants-appellants, plaintiff, which apparently was satisfied with the surety bond for repayment put up by Maximo, cannot now seek to hold said defendants-appellants similarly liable for the unpaid loans. Fallo: - WHEREFORE, the judgment of the trial court against defendants-appellants Emeteria, Teofilo, Quintin, Rosario and Leonila, all surnamed Sta. Maria is hereby reversed and set aside, with costs in both instances against plaintiff. The judgment against defendant-appellant Valeriana Sta. Maria is modified in that her liability is held to be joint and not solidary, and the award of attorney's fees is reduced as set forth in the preceding paragraph, without costs in this instance.

Issue/s: - Was there a valid authorization to Maximo to contract personal loans?

Held: -

The authority granted by defendants-appellants (except Valeriana) unto their brother, Maximo, was merely to mortgage the property jointly owned by them. They did not grant Maximo any authority to contract for any loans in their names and behalf. Maximo alone, with Valeriana who authorized him to borrow money, must answer for said loans and the other defendants-appellants' only liability is that the real estate authorized by them to be mortgaged would be subject to foreclosure and sale to respond for the obligations contracted by Maximo. But they cannot be held personally liable for the payment of such obligations, as erroneously held by the trial court. . The fact that Maximo presented to the plaintiff bank Valeriana's additional special power of attorney expressly authorizing him to borrow money, Exh. E-1, aside from the authority to

Commercial Bank v. Republic Armored Car

Facts: - Defendant-appellant Damaso Perez has presented a motion for new trial on the ground of newly discovered evidence. It is claimed that movant was not aware of the nature of the power of attorney that Ramon Racelis used, purportedly signed by him, to secure the loans for the Republic Armored Car Service Corporation and the Republic Credit Corporation. - It is not expressly mentioned that this is the precise power of attorney that Ramon Racelis Utilized to secure the loans the collection of which is sought in these cases. - But assuming, for the sake of argument, that the said power of attorney incorporated in the motion for reconsideration was the one used to obtain the loans. We find that the movant's contention has no merit. In accordance with the document, Racelis was authorized to negotiate for a loan or various loans .. with other being institution, financing corporation, insurance companies or investment corporations, in such sum or sums, aforesaid Attorney-in-fact Mr. Ramon Racelis, may deem proper and convenient to my interests, ... and to execute any and all documents he deems requisite and necessary in order to obtain such loans, always having in mind best interest; ... We hold that this general power attorney to secure loans from any banking institute was sufficient authority for Ramon Racelis to obtain the credits subject of the present suits. -

Bicol Savings v. CA

Facts: - Juan de Jesus was the owner of a parcel of land, containing an area of 6,870 sq. ms., more or less, situated in Naga City. On 31 March 1976, he executed a Special Power of Attorney in favor of his son, Jose de Jesus, "To negotiate, mortgage my real property in any bank either private or public entity preferably in the Bicol Savings Bank, Naga City, in any amount that may be agreed upon between the bank and my attorney-in-fact." - By virtue thereof, Jose de Jesus obtained a loan of twenty thousand pesos (P20,000.00) from petitioner bank on 13 April 1976. To secure payment, Jose de Jesus executed a deed of mortgage on the real property referred to in the Special Power of Attorney - Juan de Jesus died in the meantime on a date that does not appear of record. - By reason of his failure to pay the loan obligation even during his lifetime, petitioner bank caused the mortgage to be extrajudicially foreclosed on 16 November 1978. In the subsequent public auction, the mortgaged property was sold to the bank as the highest bidder to whom a Provisional Certificate of Sale was issued. - Private respondents herein, including Jose de Jesus, who are all the heirs of the late Juan de Jesus, failed to redeem the property within one year from the date of the registration of the Provisional Certificate of Sale on 21 November 1980. Hence, a Definite Certificate of Sale was issued in favor of the bank on 7 September 1982. - On 31 January 1983 private respondents herein filed a Complaint with the then Court of First Instance of Naga City for the annulment of the foreclosure sale or for the repurchase by them of the property. That Court, noting that the action was principally for the annulment of the Definite Deed of Sale issued to petitioner bank, dismissed the case, ruling that the title of the bank over the mortgaged property had become absolute upon the issuance and registration of the said deed in its favor in September 1982. The Trial Court also held that herein private respondents were guilty of laches by failing to act until 31 January 1983 when they filed the instant Complaint. - On appeal, the Trial Court was reversed by respondent Court of Appeals. In so ruling, the Appellate Court applied Article 1879 of the Civil Code and stated that since the special power to mortgage granted to Jose de Jesus did not include the power to sell, it was error for the lower Court not to have declared the foreclosure proceedings -and auction sale held in 1978 null and void because the Special Power of Attorney given by Juan de Jesus to Jose de Jesus was merely to mortgage his property, and not to extrajudicially foreclose the mortgage and sell the mortgaged property in the said extrajudicial foreclosure. The Appellate Court was also of the opinion that petitioner bank should have resorted to judicial foreclosure. Issue: - Is the power to extrajudically foreclose a property included in the power to mortgage? Held: -

precipitated by the default of a mortgagor. Absent that default, no foreclosure results. The stipulation granting an authority to extrajudicially foreclose a mortgage is an ancillary stipulation supported by the same cause or consideration for the mortgage and forms an essential or inseparable part of that bilateral agreement. The power to foreclose is not an ordinary agency that contemplates exclusively the representation of the principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's own protection. It matters not that the authority to extrajudicially foreclose was granted by an attorney-in-fact and not by the mortgagor personally. The stipulation in that regard, although ancillary, forms an essential part of the mortgage contract and is inseparable therefrom.

Fallo: - WHEREFORE, the Decision of respondent Court of Appeals in CA-G.R. CV No. 02213 is SET ASIDE, and the extrajudicial foreclosure of the subject mortgaged property, as well as the Deeds of Sale, the registration thereof, and the Writ of Possession in petitioner bank's favor, are hereby declared VALID and EFFECTIVE.

Article 1879 of the Civil Code, relied on by the Appellate Court in ruling against the validity of the extrajudicial foreclosure sale, reads: Art. 1879. A special power to sell excludes the power to mortgage; and a special power to mortgage does not include the power to sell. We find the foregoing provision inapplicable herein. The sale proscribed by a special power to mortgage under Article 1879 is a voluntary and independent contract, and not an auction sale resulting from extrajudicial foreclosure, which is