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[G.R. No. 167166.
ALLIED BANK vs. VILLANUEVA
Third Division
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated APR 11 2005.
G.R. No. 167166 (Allied Banking Corporation vs. Maricel Villanueva, Spouses Emerito Lavastida and Fara Laurel and Sps. Rodrigo C. Hernandez and Merlyn B. Hernandez.)
Before us is this petition for review of the November 2, 2004 decision [1] cralaw of the Court of Appeals in CA-G.R. CV. No. 70481, affirming with modification an earlier decision of the Regional Trial Court at Santa Cruz, Laguna, Branch 26, in an action for Specific Performance, Subdivision of a Parcel of Land and Damages, thereat commenced by respondent Maricel Villanueva against herein petitioner Allied Banking Corporation, the Spouses Emerito Lavastida and Fara Laurel and Spouses Rodrigo C. Hernandez and Merlyn B. Hernandez.
The case involves a 240-square meter residential lot, with a house erected thereon, located at Barangay Binan, Pagsanjan, Laguna and registered under TCT No.T-125876 in the name of the spouses Emerito Lavastida and Fara M. Laurel-Lavastida.
Fara worked as a househelp of the spouses Rodrigo C. Hernandez and Merlyn B. Hernandez who were engaged in money lending business.
Sometime in 1996, the Lavastida couple borrowed P90,000 from the spouses Hernandez. Upon
maturity, the loan ballooned to P146,579.50 due to interest imposed.
On
On the same day - P500,000
[4]
cralaw
extended them by said bank.
On P100,000
an undivided 140-square meter portion of the same lot to respondent Maricel
Villanueva on a warranty that it is free from any claim of third persons.
Sometime thereafter, Villanueva discovered the mortgage and confronted the Lavastidas about the encumbrance on the property.
On the strength of the Lavastidas' representation that Allied
Bank would release from the mortgage the portion of the property sold to her,
Villanueva paid Allied Bank the sum of P200,000
as evidenced by Receipt No. 467037 dated
Despite said payment, however, Allied Bank refused to release from the mortgage the 140-square meter portion sold to Villanueva, explaining that the spouses Hernandezs' loan secured by the mortgage still had an outstanding balance.
On
Hence, on
In her complaint, Villanueva basically sought the release of the
mortgage over the portion sold to her by the Lavastida couple on the ground
that she had already remitted to Allied Bank the sum of P200,000 in full payment of the loan secured by said mortgage.
In their answer, the spouses Hernandez alleged that Villanueva
had no cause of action against them as they were not privies to the contract of
sale between her and the Lavastida couple, adding that they were in fact
authorized by the Lavastidas to mortgage the property to Allied Bank in consideration
of the couple's outstanding loan of P146,579.50
with them (Hernandezes).
For its part, Allied Bank claims that it is a mortgagee for value
and in good faith and that even after Villanueva's payment of P200,000, the loan secured by the mortgage
still has an outstanding balance, so that it is justified in refusing to
release from mortgage the portion of the property sold to Villanueva.
Instead of filing an answer, the Lavastidas entered into a
compromise agreement with Villanueva, wherein they agreed to sell the remaining
portion of the property to Villanueva for P200,000,
the very amount remitted by the latter to Allied Bank to settle the loan
secured by the mortgage.
On
Thereafter, Villanueva filed a motion for summary judgment, to
which the other parties conformed. And, on
WHEREFORE, judgment is hereby rendered:
a)����� Ordering Allied Bank to execute the document releasing the property from the mortgage and to deliver the owner's duplicate copy of TCT No. T-125876 to plaintiff;
b)����� declaring the loan of the spouses Lavastida to the spouses Hernandez in the sum of P146,579.50 as barred; and
c)����� ordering all defendants to pay, jointly and severally, plaintiff the sum of P30,000.00 as attorney's fees.
SO ORDERED.
Explains the trial court in its decision, in response to Allied Bank's defense that it cannot be required to release the mortgage because there still exists an outstanding balance on the loan of the spouses Hernandez as secured by the mortgage;
This Court has taken notice however that the spouses Hernandez have had several loan transactions with Allied Bank dating as far back as 1995 (Exh. Q-1 to Q-16), or even prior to the execution by the spouses Lavastida of that special power of attorney in their favor, and as late as October 31, 1997, through their promissory note for the sum of P500,000.00 (Exh. 3). So it is necessary for this Court to identify which among these loan transactions was the one secured by the mortgage.
As the mortgage was executed on
Allied Bank points to a loan covered by a promissory note, dated October 31, 1997 (Exh. 3), as the principal obligation secured by the mortgage, but the date of execution of said note, more than seven (7) months after the issuance of the Special Power of Attorney, beclouds that identification. This Court is aware that mortgages maybe given to secure future advancements or loans, and from paragraph 3 of the mortgage documents (Exh. E), maybe gleaned the stipulation to secure future and other indebtedness of the spouses Hernandez. But the issue should first relate to the extent of authority granted the spouses Hernandez under said special power of attorney. The spring cannot rise higher than its source. Such that the authority of the spouses Hernandez to encumber said property should be understood in the light of the terms of the special power of attorney granted in their favor.
'As far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such is within the terms of the power of attorney, as written even if the agent has in fact exceeded the limits of his authority according to the understanding between the principal and his agent (Eugenio vs. Court of Appeals, 239 SCRA 207).'
Nowhere from the contents of said special power of attorney could be visualized the authority of the spouses Hernandez to encumber the property to secure future and other indebtedness.
On the contrary, the spouses Hernandez were only empowered to mortgage the property for any amount acceptable to them, and the words 'any amount' should be construed as to signify a single loan transaction. This transaction finds further support in the third undertaking of the spouses Hernandez in the same special power of attorney 'to receive the proceeds of the mortgage'. Additional loans or future credit accommodations, which are to be transacted sometime after execution of the mortgage, are therefore beyond the class of loans to be so secured.
Let it be emphasized too that a mortgage on one's property to secure somebody else's credit accommodation would unduly restrict enjoyment of said property by the owner for an indefinite time and, hence, a construction (sic) of paragraph 3 of the mortgage instrument (Exh. E), that would operate against the interest of the spouses Lavastida by denying them enjoyment of their property endlessly runs counter to the constitutional right to property.
Moreover, the loan line of P500,000.00 supposedly secured by said
real estate mortgage, as identified in the Credit Approval Memorandum No. SCL CAM
No. 97-10-113, dated
xxx��� xxx������ xxx
3.� Partially secured by TCT No. 125876 with a loan value of P202,500.00 at 60% owned by sps. Emerito and Fara Laurel;
4.� Execution of Special Power of Attorney by Sps. Emerito and Fara Lavastida in favor of Sps. Rodrigo and Merlyn Hernandez;'
The foregoing characteristics of said loan line of P500,000.00 further buttress this Court's conclusion that the special power of attorney granted to the spouses Hernandez was limited to the power to mortgage for a single loan transaction only. This Credit Approval Memorandum specifically points to a particular loan line of P500,000.00, and a portion thereof only in the amount of P202,500.00 as the one secured by the mortgage which fact is corroborated by the spouses Hernandezes' admission in their Answer that only their initial loan of P200,000.00 was secured by the mortgage.
In time, petitioner Allied Bank moved for a reconsideration but
its motion was denied by the trial court in its Order of P500,000 loan line covered
by Promissory Note No.0127-97-02480 executed by the Hernandez couple in connection
therewith.
In the herein assailed decision
[8]
dated
WHEREFORE, the Appeal is DISMISSED, but the assailed decision is MODIFIED by DELETING the award of attorney's fees.
SO ORDERED.
With its motion for reconsideration having been denied by the appellate court in its resolution [9] cralaw of February 17, 2005, petitioner Allied Bank is now with us via the present recourse on its main submission that the appellate court erred in not finding that the subject mortgage is indivisible and that the bank is a mortgagee in good faith and for value.
We DENY.
Concededly, the spouses Lavastida were not induced fraudulently by the spouses Hernandez to execute a special power of attorney authorizing the latter to mortgage the subject property in "any amount acceptable to the spouses Hernandez and to receive the proceeds of the mortgage". Ordinarily, therefore, the real estate mortgage in question can only be extinguished if the amount of the loan secured by the mortgage is already paid.
Record shows, however, that the property in dispute was offered
in mortgage to petitioner Allied Bank only to secure the amount of P200,000 which respondent Maricel
Villanueva subsequently paid on
Admittedly, the spouses Hernandez, the mortgagors of the subject property, were not its true owners. They merely acted as agents of the Lavastidas by virtue of the special power of attorney executed by the latter in their favor. Hence, the validity and binding effect of the special power is limited. It binds the spouses Lavastida (as principals) only if the act of the spouses Hernandez (the agents) was within the scope of the authority given them as agents.
While the authority granted to the spouses Hernandez appears extensive, giving them in fact the prerogative to decide as to what amount the property may be offered to secure a loan, the two courts below are nonetheless correct in observing that the intention of the real owners, the spouses Lavastida, was merely to offer their property as a security for the single loan of the Hernandez couple and not to use it further as a collateral for whatever loans the Hernandezes may contract in the future. Offering the property as security for future loans of the spouses Hernandez would be prejudicial to the spouses Lavastida, as their property would be tied up to loans which did not even redound to their benefit.
Petitioner bank should have ascertained the extent of the
authority granted to the spouses Hernandez. This, it failed to do.
Consequently, the unauthorized act of the spouses Hernandez of offering the
property in mortgage to secure a credit line extended them by the petitioner
bank can not bind the Lavastidas. The mortgaged property can only answer for
the amount it was offered as security: P200,000.
Consequently, with said amount having been already paid by Villanueva,
petitioner Allied Bank has no more excuse to refuse the release of the mortgage
thereon.
Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. If he does not make such inquiry, he is chargeable with knowledge of the agent's authority, and his ignorance of that authority will not be any excuse. Persons dealing with an assumed agent, whether the assumed agency be general or special, are bound at their peril, if they hold the principal, to ascertain not only the fact of the agency but also the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it. [10] cralaw
In fine, we rule and so hold that the Court of Appeals committed
no reversible error in ruling that with the payment of the principal amount of P200,000, there was no more reason for
petitioner Allied Bank to refuse the release of the mortgage and to return the
title of the subject property to Villanueva who paid the principal amount of P200,000.
[11]
cralaw
WHEREFORE, the instant petition is DENIED.
Costs against petitioners.
SO ORDERED.
Very truly yours,
(Sgd.) LUCITA
ABJELINA-SORIANO
Clerk of Court
Endnotes:
[1] cralaw Penned by Associate Justice Vicente S.E. Veloso and concurred in by Associate Justices Roberto A. Barrios and Amelita G. Tolentino of the Special Tenth Division.
[2] cralaw Rollo, p. 59.
[3] cralaw Rollo, pp. 61-64.
[4] cralaw Rollo, p. 65.
[5] cralaw Rollo, p. 66-69.
[6] cralaw Rollo, pp. 125-134.
[7] cralaw Rollo, p. 161.
[8] cralaw Rollo, 18-32
[9] cralaw Rollo, p. 36.
[10] cralaw Bacaltos Coal Mines vs. Court of Appeals, 245 SCRA 460 [1995].
[11] cralaw -De los Santso vs. CA, 278 SCRA 629 [1995].
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