I.
Nature, form and kinds
B. Article 1869
2. Implied
c. Failure to repudiate
NAGUIAT V CA [412 SCRA 591 (2003)]
Facts
Queano applied with Naguiat for a PhP 200K
loan, which the latter granted. Naguiat issued 2
checks, each for the amount of PhP 95K, to
Queano. The proceeds of these checks were to
constitute the loan Naguiat granted to Queano.
As security for the loan, Queano executed a
Deed of Real Estate Mortgage in favor of
Naguiat. She also surrendered the owner’s
duplicates of the properties’ titles to the latter,
and issued a promissory note for PhP 200K and
a postdated check for the same amount payable
to the order of Naguiat.
Queano’s check was dishonored for
insufficiency of funds, so Naguiat wrote her to
demand settlement of the loan. Queano and
Ruebenfeldt met with Naguiat. Queano told
Naguiat she did not receive the proceeds of the
loan, adding that the checks were retained by
Ruebenfeldt, purportedly Naguiat’s agent.
Naguiat applied for extrajudicial foreclosure of
the mortgage so the sheriff scheduled the
foreclosure sale. Queano filed for the annulment
of the mortgage deed with the Pasay City RTC,
which eventually stopped the auction sale.
RTC declared the deed null and void, and
ordered Naguiat to return the title duplicates. CA
affirmed in toto the RTC decision. Hence, the
present petition.
Issue/Held
W/N there was a contract of loan between the
parties – NO
Ratio
The presumption of truthfulness of the recitals in
a public document was defeated by the clear
and convincing evidence in this case that
pointed to the absence of consideration. Naguiat
did not present evidence to support her claim
that Queano received the loan proceeds. The
delivery of bills of exchange and mercantile
documents such as checks shall produce the
effect of payment only when they have been
cashed. Being a real contract, a loan contract is
perfected only upon the delivery of the object of
the contract (in this case, the loan proceeds).
On the existence of an agency relationship
between Naguiat and Ruebenfeldt
Ruebenfeldt served as Naguiat’s agent on the
loan application of Queano’s friend, Farralese,
and it was in connection with that transaction
that Queano came to know Naguiat. Naguiat
instructed Ruebenfeldt to withhold the issued
checks from Queano pending delivery by the
latter of additional collateral. Ruebenfeldt went
with Queano in the latter’s meeting with Naguiat,
and on that occasion, without Queano asking for
it, Ruebenfeldt drew a check for PhP 220K
payable to Naguiat, to cover for Queano’s
alleged liability under the loan agreement.
The CA recognized the existence of an “agency
by estoppel citing CC 1873.
Art. 1873. If a person specifically informs
another or states by public advertisement
that he has given a power of attorney to a
third person, the latter thereby becomes a
duly authorized agent, in the former case
with respect to the person who received the
special information, and in the latter case
with regard to any person.
The power shall continue to be in full force
until the notice is rescinded in the same
manner in which it was given. (n)
At the very least, because of the interaction
between Naguiat and Ruebenfeldt, Queano got
the impression that Ruebenfeldt was Naguiat’s
agent. Naguiat did nothing to correct Queano’s
impression.
One who clothes another with apparent
authority as his agent, and holds him out to
the public as such, cannot be permitted to
deny the authority of such person to act as
his agent, to the prejudice of innocent third
parties dealing with such person in good
faith, and in the honest belief that he is what
he appears to be.
Judgment
Petition denied, judgment affirmed.