Case Digest (G.R. No. 192602)
Facts:
Spouses May S. Villaluz and Johnny Villaluz, Jr. v. Land Bank of the Philippines and the Register of Deeds for Davao City, G.R. No. 192602, January 18, 2017, Supreme Court Third Division, Jardeleza, J., writing for the Court.In 1996, Paula Agbisit (mother of petitioner May) asked May to provide collateral for a loan for the expansion of her business. The Spouses Villaluz executed a one‑page Special Power of Attorney dated March 25, 1996 in favor of Agbisit authorizing her to "negotiate for the sale, mortgage, or other forms of disposition" of the land covered by TCT No. T‑202276 and to "sign in our behalf all documents relating to the sale, loan or mortgage, or other disposition" of the property; the SPA contained no express prohibition against Agbisit appointing a substitute nor any limits as to amounts.
Agbisit, by a separate SPA dated June 19, 1996, appointed Milflores Cooperative as her attorney‑in‑fact to obtain a loan and execute a real mortgage in favor of Land Bank of the Philippines. On June 21, 1996 Milflores Cooperative (as representative) executed a Real Estate Mortgage in favor of Land Bank covering the Villaluz property as security for a P3,000,000 loan; a Deed of Assignment of Produce/Inventory was likewise executed on June 24, 1996 as additional collateral. Land Bank released a first tranche of about P995,500 on June 25, 1996 and the balance on October 4, 1996.
Milflores Cooperative defaulted and Land Bank conducted an extrajudicial foreclosure sale in which it became the sole bidder; the Spouses Villaluz learned of the scheduled sale in August 2003 and subsequently filed a complaint in the Regional Trial Court (RTC) of Davao City to annul the foreclosure. The RTC held that under Article 1892 of the Civil Code an agent may appoint a substitute unless prohibited and found the delegation by Agbisit to Milflores Cooperative valid; it dismissed the complaint.
The Court of Appeals (CA) affirmed in a Decision dated September 22, 2009 (CA‑G.R. CV No. 01307), concluding that the SPA contained no prohibition on appointing a sub‑agent and applying the presumption under Article 1892. After the CA denied reconsideration, the Spouses Villaluz filed a petition for review on certiorari before the Supreme Court seeking to set aside the CA Decision and Resolution, arguing (a) that the mortgage was void for lack of consideration because the loan proceeds were rel...(Pro-only)
Issues:
- Did the agent (Agbisit) validly appoint a substitute (Milflores Cooperative) so that the mortgage executed by the substitute is binding on the principal (Spouses Villaluz)?
- Was the Real Estate Mortgage void for want of consideration because the loan proceeds were released after the mortgage was executed?
- Did the Deed of Assignment of produce/inventory extinguish the Special Power of Attorney or operate as payment/e...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)