Title
Bank of the Philippine Islands vs. De Coster y Roxas
Case
G.R. No. 25642
Decision Date
Nov 12, 1926
BPI sued Gabriela de Coster over a ₱292,000 promissory note and mortgages. Court ruled Gabriela not liable, as note paid partnership debts she wasn’t part of, and ratification lacked full knowledge.
Font Size:

Case Digest (G.R. No. 25642)

Facts:

Parties Involved:

  • Plaintiff and Appellant: The Bank of the Philippine Islands (BPI).
  • Defendants: Gabriela Andrea de Coster y Roxas, her husband Jean M. Poizat, and J.M. Poizat & Company.

Background:

  • On December 29, 1921, a promissory note for ₱292,000, payable one year after date, with 9% annual interest, was executed. The note was secured by:
    • A chattel mortgage on the steamers "Roger Poizat" and "Gabrielle Poizat," machinery, materials, and merchandise of Poizat Vegetable Oil Mills.
    • A real mortgage on property in Manila, subject to a prior mortgage in favor of the Dominican Fathers.
  • The mortgages were executed on the same date as the note.

Legal Proceedings:

  • On March 10, 1924, BPI filed a complaint to recover the amount of the promissory note.
  • On April 24, 1924, the Dominican Fathers sought to foreclose their prior mortgage. BPI, Gabriela, and Jean Poizat were made defendants. On May 3, 1924, Gabriela and Jean were declared in default.
  • On August 26, 1924, Gabriela appeared for the first time, filing a motion to set aside the default judgment. The lower court denied the motion, but the Supreme Court reversed this decision on March 16, 1925 (G.R. No. 23181), allowing Gabriela to file an answer and defend the case on its merits.
  • After the case was remanded, Gabriela filed an answer, denying liability and challenging the validity of the note and mortgages. BPI filed a further defense, alleging that Gabriela and her attorney, Antonio Opisso, ratified the note and mortgages with full knowledge of the facts.
  • The lower court ruled in favor of Gabriela, absolving her from liability. BPI appealed, raising four errors in the lower court’s decision.
  • On August 31, 1926, BPI filed a motion for a new trial based on newly discovered evidence, specifically a written instrument executed by Jean Poizat and Gabriela on May 27, 1924, acknowledging the validity of the note and mortgages.

Key Allegations:

  • BPI claimed that the note and mortgages were validly executed and that Gabriela, through her husband’s power of attorney, ratified them.
  • Gabriela argued that she was not liable for the note, as it was executed to pay the preexisting debts of J.M. Poizat & Company, a partnership she was not part of.

Issue:

  • (Unlock)

Ruling:

  • (Unlock)

Ratio:

  1. Ratification and Knowledge of Facts: The Court found no evidence that Gabriela or her counsel had full knowledge of the facts at the time of the alleged ratification. The preponderance of evidence supported Gabriela’s claim that she was unaware of the true nature of the transaction.

  2. Promissory Note as Evidence of a Loan: The Court held that the note did not evidence a loan to Gabriela. The note was executed to pay the preexisting debts of J.M. Poizat & Company, a partnership Gabriela was not part of. The bank did not part with any new funds at the time of the note’s execution.

  3. Power of Attorney: The power of attorney granted to Jean Poizat did not authorize him to lend Gabriela’s credit to the partnership. The Court emphasized that the power of attorney was limited to managing Gabriela’s property and did not extend to making her liable for the partnership’s debts.

  4. Validity of the Note and Mortgage: The Court declared the promissory note and mortgage null and void as to Gabriela. The note was executed without her authority and did not benefit her directly or indirectly.

In conclusion, the Court upheld the lower court’s decision, affirming Gabriela’s lack of liability for the note and mortgages.


Jur is an AI-powered legal research platform in the Philippines for case digests, summaries, and jurisprudence. AI-generated content may contain inaccuracies; please verify independently.