Case Summary (G.R. No. 113843)
Background and Court Proceedings
Initially, the complaint sought the recovery of P292,000, backed by the aforementioned security. The Dominican Fathers, holders of a prior mortgage on the same property, were included as defendants. Following a default judgment against Gabriela de Coster and her husband on May 3, 1924, Gabriela filed a motion on August 26, 1924, to set aside the judgment, asserting her lack of liability regarding the debts and mortgages due to her husband’s representation.
Reversal of Default Judgment
The appellate court granted Gabriela's request to file an answer, allowing the matter to be heard on its merits. After proceedings in the lower court, Gabriela was eventually absolved of liability, prompting the bank to appeal, citing several errors in the trial court's findings.
Errors Assigned by Appellant
The Bank of the Philippine Islands contended that the trial court mistakenly ruled that Gabriela and her attorney did not possess full knowledge of the facts when they ratified the debts, and that the note was merely a substitution of preexisting debt. The bank argued that the power of attorney granted to the husband authorized him to secure loans for the partnership where both he and Gabriela were involved.
Appellant's Motion for New Trial
Post-appeal, the plaintiff filed a motion for a new trial on August 31, 1926, based on newly discovered evidence—a written instrument executed by both Gabriela and Jean Poizat on May 27, 1924. The motion was contested by Gabriela, arguing that the evidence was not "newly discovered," as it had been in the bank's possession for years.
Examination of "Newly Discovered" Evidence
The court found the evidence was neither new nor undiscovered. The bank had failing diligence, having held the instrument amongst its records and failed to present it during earlier proceedings. Thus, the appellate court denied the motion for a new trial based on this evidence.
Trial Court Findings on Merits
On the merits, the lower court ruled in favor of Gabriela, determining that she was not liable on the promissory note due to lack of consideration. The evidence pointed out that the note was intended as a consolidation of prior debts without actual funding being disbursed in her favor.
Legal Authority and Interpretation of Power of Attorney
The central issue was whether the power of attorney granted to Jean M. Poizat included the authority to bind Gabriela into a not
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Statement of the Case
- The original complaint was filed on March 10, 1924, seeking to recover P292,000 based on a promissory note dated December 29, 1921, which was due one year after.
- The note bore an interest rate of 9% per annum and was secured by a chattel mortgage on two steamers (Roger Poizat and Gabrielle Poizat) and a real mortgage on property in Manila, which was already subject to a prior mortgage held by the Dominican Fathers.
- The Dominican Fathers intervened on April 24, 1924, seeking foreclosure of their mortgage, leading to Gabriela Andrea de Coster y Roxas and her husband being declared in default for not answering.
- On August 26, 1924, Gabriela filed a motion to set aside the default judgment, asserting she was not legally liable for the note or mortgages as she did not authorize her husband’s actions.
- The lower court denied this motion, but the appellate court reversed the decision on March 16, 1925, allowing Gabriela to file her answer and defend against the claim on its merits.
Background of the Case
- Following the appellate court's reversal, Gabriela filed her answer, while the plaintiff introduced a separate defense claiming that Gabriela and her attorney had ratified the execution of the note and mortgages.
- Gabriela denied these allegations, leading to a trial where the lower court ruled in favor of Gabriela, absolving her from liability related to the note and mortgages.
- The plaintiff appealed, raising multiple errors regarding the court's findings on kno