Case Digest (G.R. No. 118349)
Facts:
This case, Philippine National Bank vs. Tan Ong Sze, Viuda de Tan Toco, arose from a legal dispute involving property ownership and the validity of a mortgage executed by the defendant’s attorney-in-fact. The defendant, Tan Ong Sze, was the owner of two parcels of land in Iloilo, specifically identified as lots Nos. 279 and 572, with title evidenced by certificate No. 329. On September 14, 1916, she executed a power of attorney in Amoy, China, before the United States Vice Consul, appointing Tan Bunco as her attorney-in-fact. The power of attorney granted Bunco comprehensive authority to act on her behalf regarding all matters related to her property, including signing leases and executing deeds for conveying real and personal property.In 1922, the attorney-in-fact executed a promissory note (Exhibit B) in Iloilo on May 23 and a corresponding mortgage (Exhibit E) to the Philippine National Bank to secure payment for that note. The key question arose around whether Bunco's
Case Digest (G.R. No. 118349)
Facts:
- Parties Involved
- Philippine National Bank – Plaintiff and Appellee.
- Tan Ong Sze, Widow de Tan Toco – Defendant and Appellant.
- Subject Matter and Property
- The defendant was the owner of two parcels of land located in the City and Province of Iloilo.
- The properties are identified as lots Nos. 279 and 572 of the Iloilo cadastral survey.
- Ownership evidenced by Certificate of Title No. 329, dated September 14, 1916.
- Execution of the Power of Attorney
- The defendant executed a power of attorney in Amoy, China before the United States Vice Consul.
- The instrument, referenced as Exhibit K, appointed Tan Bunco as her attorney-in-fact.
- The language granted the authority “to sign, seal and execute, and as my act and deed, deliver any lease, any other deed for conveying any real or personal property” (with an acknowledged clerical or translation error regarding the phraseology).
- The intended wording clarified that the agent was empowered “for the conveying of real or personal property,” emphasizing a limited scope meant for executing conveyances only.
- Plaintiff’s Cause of Action
- The complaint is founded upon a promissory note (Exhibit B) purportedly executed on May 23, 1922, by the attorney-in-fact under the said power of attorney.
- A mortgage (Exhibit E) was executed by the agent to secure the payment of the promissory note, raising the issue of whether this execution fell within the authority granted.
- Central Legal Question
- The case squarely presents whether the power vested in the attorney-in-fact extended beyond executing conveyances to include borrowing money and encumbering real property by executing a mortgage.
- Whether the alleged drafting and translation error in the power of attorney affects the interpretation of the agent’s powers.
Issues:
- Interpretation of the Power of Attorney
- Does the language “to sign, seal and execute, and as my act and deed, deliver any lease, any other deed for conveying any real or personal property” imply the authority to borrow money or to encumber property by mortgage?
- How does the noted clerical or translation error impact this interpretation?
- Implied Powers of an Agent
- Can an agent’s power to convey real property be extended by implication to include the power to mortgage such property?
- Is it proper to read into the instrument any authority to execute a promissory note which secures a loan by mortgaging property?
- Ratification by the Principal
- Did the defendant, through her conduct or actions, ratify or approve the acts of her agent in executing the promissory note and mortgage?
- Was there any legal evidence in the record indicating the defendant’s knowledge of or acquiescence to the transaction?
- Impact of Precedents and Legal Authorities
- How do prior U.S. and English cases inform the interpretation of a power of attorney regarding the authority to mortgage?
- To what extent are the conclusions of these authorities controlling in the present case?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)