G.R. No. 33796 - Philippine National Bank vs. Gil

The Philippine National Bank (PNB) initiated the suit seeking to recover from Estanislao Palma Gil and Leonila Palma Gil, the latter being related by marriage to Alejandro Inigo, the sum of P26,760 together with accumulated interest and attorney’s fees.
The claim was based on a promissory note dated January 7, 1926, and various mortgage documents executed on different dates.

On February 7, 1916, Estanislao Palma Gil executed a general power of attorney in favor of his son-in-law, Alejandro Inigo, authorizing him to obtain loans secured by real or personal property under favorable terms.
Utilizing this power of attorney, Inigo executed business dealings including obtaining credit from PNB and entering into mortgage agreements.

A renewal promissory note executed on January 7, 1926, called for a principal amount of P26,760, with an interest rate of 12% per annum from the date, and a fee of 10% for collection expenses.
Two mortgages were executed on February 11, 1919, where both Estanislao Palma Gil and Leonila Palma Gil (by her signature as Leonila Palma Gil de Inigo) appeared as mortgagors, and PNB was named as the mortgagee. These documents were signed “Estanislao Palma Gil, Por: A. Inigo, como apoderado, y, ademas, como marido de la otra deudora hipta.”
A third mortgage was executed on April 22, 1921, wherein Alejandro Inigo signed as mortgagor. This document, however, was not accompanied by any recitals indicating that Inigo acted in representation of Estanislao Palma Gil, and the property mortgaged belonged to Estanislao Palma Gil.

Interest payments on the promissory note were made up to November 29, 1926.
The central dispute arose regarding the validity and enforcement of the various documents, notably whether the acts of the agent (Alejandro Inigo) bound Estanislao Palma Gil and the extent of Leonila Palma Gil’s liability.

The lower Court of First Instance of Davao rendered a judgment in favor of the Philippine National Bank.
The defendants appealed, questioning certain conclusions of the trial court regarding validity and liability.

Whether the promissory note dated January 7, 1926, and the two mortgages executed on February 11, 1919, bindingly obligate Estanislao Palma Gil on the basis of actions performed by his agent, Alejandro Inigo, under the power of attorney.
Whether the mortgage executed on April 22, 1921, by Alejandro Inigo—without any indication that he acted on behalf of Estanislao Palma Gil—is valid as against the principal.
Whether Leonila Palma Gil should be held jointly and severally liable for the obligations arising under the promissory note, given that her signature appears only on the February 11, 1919, mortgages and not on the note itself.