Case Summary (G.R. No. 30831)
Factual Background
The defendant, Tan Ong Sze, is identified as the owner of two parcels of land in Iloilo, detailed under certificate of title No. 329. In September 1916, she executed a power of attorney in Amoy, China, before a United States Vice Consul, appointing Tan Bunco as her attorney-in-fact. This document granted him broad authority over her property, explicitly allowing him to sign, seal, and execute leases and other deeds for conveying real or personal property. Importantly, the language of the power of attorney is noted to contain a clerical error concerning the conveyance of real property, leading to a key legal question concerning its interpretation.
Legal Question Presented
The primary legal issue arises from whether the authority granted through the power of attorney allowed Tan Bunco to execute a promissory note and mortgage on behalf of Tan Ong Sze. The promissory note, executed on May 23, 1922, under the aforementioned power of attorney, became central to the bank's claims against the defendant. The court needed to determine if the terms of the power of attorney extended to the authority to borrow money and to execute a mortgage as security for that loan.
Power of Attorney Interpretation
The lower court, in an exhaustive review, held that the power to convey real property included the authority to mortgage that property. This interpretation was contested based on extensive legal precedent indicating that a power to sell does not inherently confer a power to mortgage. The legal provisions cited, including principles from the Cyclopedia of Law and Procedure, emphasize that authority to mortgage should be explicitly stated and is not to be implied from general sales authority.
Findings on Authority
Citing established legal doctrines, the court reviewed numerous decisions from various jurisdictions that support the principle that authority to sell property does not encompass an implicit authority to mortgage. Specific legal principles were mentioned, indicating that authority to borrow money must be expressed with clarity, given the significant risks it presents to the principal. The lower court's reasoning was found not to align with established legal standards that emphasize the limitation of agency powers.
Ratification of Actions
The trial court further suggested that the defendant's actions implied ratification of her agent's behaviors concerning the mortgage and note. However, upon thorough review of the record, the higher court found no substantive evidence indicating the defendant was ever aware of these actions or ratified them. This finding was pivot
...continue readingCase Syllabus (G.R. No. 30831)
Case Background
- The defendant, Tan Ong Sze, was the owner of two parcels of land in Iloilo, identified as lots Nos. 279 and 572 of the Iloilo cadastral survey, and evidenced by certificate of title No. 329.
- On September 14, 1916, Tan Ong Sze 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 allowed Tan Bunco to act on behalf of Tan Ong Sze, including signing, sealing, executing, and delivering leases or deeds concerning real or personal property.
Power of Attorney Provisions
- The power of attorney contained provisions that explicitly authorized Tan Bunco to:
- Sign, seal, execute, and deliver leases and other deeds related to real or personal property.
- Substitute and appoint other attorneys for the same purpose.
- Perform all lawful acts as if Tan Ong Sze were personally present.
- A clerical error was identified in the power of attorney regarding the language used about conveying property, which should have specified "for the conveying of real or personal property."
Plaintiff's Claims
- The Philippine National Bank (plaintiff) filed a complaint based on a promissory note executed by Tan Bunco on May 23, 1922, under the authority granted by t