G.R. No. L-24765. August 29, 1969
PHILIPPINE NATIONAL BANK, PLAINTIFF-APPELLEE, VS. MAXIMO STA. MARIA, ET AL., DEFENDANT, VALERIANA, EMETERIA, TEOFILO, QUINTIN, ROSARIO AND LEONILA, ALL SURNAMED STA. MARIA, DEFE…
TEEHANKEE, J.:
In this appeal certified to this Court by the Court of Appeals as
involving purely legal issues, we hold that a special power of attorney to mortgage
real estate is limited to such authority to mortgage and does not bind the
grantor personally to other obligations contracted by the grantee, in the
absence of any ratification or other similar act that would estop the grantor
from questioning or disowning such other obligations contracted by the
grantee.
Plaintiff bank filed this action on February 10, 1961 against
defendant Maximo Sta. Maria and his six brothers and sisters,
defendants-appellants, Valeriana, Emeteria, Teofilo, Quintin, Rosario and
Leonila, all surnamed Sta. Maria, and the Associated Insurance & Surety
Co., Inc. as surety, for the collection of certain amounts representing unpaid
balances on two agricultural sugar crop loans due allegedly from defendants.[1]
The said sugar crop loans were obtained by defendant Maximo Sta.
Maria from plaintiff bank under a special power of attorney, executed in his
favor by his six brothers and sisters, defendants-appellants herein, to
mortgage a 16-odd hectare parcel of land, jointly owned by all of them, the
pertinent portion of which reads as follows:
“That we, VALERIANA, EMETERIA, TEOFILO, QUINTIN, ROSARIO and
LEONILA all surnamed STA. MARIA, sole heirs of our deceased parents CANDIDO
STA. MARIA and FRANCISCA DE LOS REYES, all of legal age, Filipinos, and
residents of Dinalupihan, Bataan, do hereby name, constitute and appoint Dr.
MAXIMO STA. MARIA, of legal age, married, and residing at Dinalupihan, Bataan
to be our true and lawful attorney of and in our place, name and stead to
mortgage, or convey as security to any bank, company or to any natural or
juridical person, our undivided shares over a certain parcel of land together
with the improvements thereon which parcel of land is more particularly described
as follows to wit:
“Situated in the barrio of Pinulot, municipality of Dinalupihan, Bataan, containing an
area of 16,7249 hectares and bounded as follows to wit: North by property of Alejandro Benito; on the
Northeast, by public land and property of
Tomas Tulop on the southeast, by property of Ramindo Agustin; on the southwest,
by properties of Jose V. Reyes and Emilio Reyes; and on the northwest, by
excluded portion claimed by Emilio Reyes.
of which parcel of land aforementioned we
are together with our said attorney who is our brother, the owners in equal
undivided shares as evidenced by Transfer Certificate of Title No. T-2785 of the
Registry of Deeds of Bataan dated Feb. 26th 1951.” (Exh. E)[2]
In addition, Valeriana Sta. Maria alone also executed in favor of
her brother, Maximo, a special power of attorney to borrow money and
mortgage any real estate owned by her, granting him the following
authority:
“For me and in my name to borrow money and make,
execute, sign and deliver mortgages of real estate now owned by me standing in
my name and to make, execute,
sign and deliver any and all promissory notes necessary in the
premises.” (EXH. E-1)[3]
By virtue of the two above powers, Maximo Sta. Maria applied for
two separate crop loans, for the 1952-1953 and 1953-1954 crop years, with
plaintiff bank, one in the amount of P15,000.00, of which only the sum of
P13,216.11 was actually extended by plaintiff, and the other in the amount of
P23,000.00, of which only the sum of P12,427.57 was actually extended by
plaintiff. As security for the two
loans, Maximo Sta. Maria executed in his own name in favor of plaintiff
bank two chattel mortgages on the standing crops, guaranteed by surety bonds
for the full authorized amounts of the loans executed by the Associated
Insurance & Surety Co., Inc. as surety with Maximo Sta. Maria as
principal. The records of the crop loan
application further disclose that among the securities given by Maximo for the
loans were a “2nd mortgage on 25,3023 Has. of sugar-land, including sugar
quota rights therein” including the parcel of land jointly owned by Maximo
and his six brothers and sisters herein for the 1952-1953 crop loan, with the
notation that the bank already held a first mortgage on the same properties for
the 1951-1952 crop loan of Maximo,[4]
and a 3rd mortgage on the same properties for the 1953-1954 crop loan.[5]
The trial court rendered judgment in favor of plaintiff and
against defendants thus:
“WHEREFORE, premises considered, judgment is hereby rendered
condemning the defendant Maximo R. Sta. Maria and his co-defendants Valeriana,
Quintin, Rosario, Emeteria, Teofilo, and Leonila all surnamed Sta. Maria and the
Associated Insurance and Surety Company, Inc., jointly and severally, to pay
the plaintiff, the Philippine National Bank, Del Carmen Branch, as follows:
“1. On the first cause of action, the sum of
P8,500.72 with a daily interest of P0.83
on P6,100.00 at 6% per annum beginning August 21, 1963 until fully paid;
“2. On the second cause of action, the sum of P14,299.79 with a daily
interest of P1.53 on P9,346.44 at 6% per annum, until fully paid; and
“3. On both causes of action the further sum equivalent
to 10% of the total amount due as attorney’s fee as of the date of the
execution of this decision, and the costs.”[6]
Defendant Maximo Sta. Maria and his surety, defendant Associate
Insurance & Surety Co., Inc. who did not resist the action, did not appeal the
judgment. This appeal has been taken by
his six brothers and sisters, defendants-appellants who reiterate in their
brief their main contention in their Answer to the complaint that under the
special power of attorney, Exh. E, they had not given their brother, Maximo,
the authority to borrow money but only to mortgage the real estate jointly
owned by them; and that if they are liable at all, their liability should not
go beyond the value of the property which they had authorized to be given as
security for the loans obtained by Maximo.
In their answer, defendants-appellants had further contended that they
did not benefit whatsoever from the loans, and that the plaintiff bank’s only
recourse against them is to foreclose on the property which they had
authorized Maximo to mortgage.
We find the appeal of defendants appellants, except for defendant
Valeriana Sta. Maria who had executed another special power of attorney, Exh.
E-1, expressly authorizing Maximo to borrow money on her behalf, to be well taken.
1. Plaintiff bank has not
made out a cause of action against defendants-appellants (except Valeriana), so
as to hold them liable for the unpaid balances of the loans obtained by Maximo
under the chattel mortgages executed by him in his own name alone. In the early case of Bank of P.I. vs. de
Coster, this Court, in holding that the broad power of attorney given by
the wife to the husband to look after and protect the wife’s interests and to
transact her business did not authorize him to make her liable as a surety for
the payment of the pre-existing debt of a third person, cited the fundamental
construction rule that “where in an instrument powers and duties are
specified and defined, that all of such powers and duties are limited and
confined to those which are specified and defined, and that all other powers
and duties are excluded.”[7]
This is but in accord with the disinclination of courts to enlarge an authority granted beyond the powers
expressly given and those which incidentally flow or derive therefrom as being
usual or reasonably necessary and proper for the performance of such express
powers. Even before the filing of the
present, action this Court in the similar case of De Villa vs. Fabricante[8]
had already ruled that where the power of attorney given to the husband by the
wife was limited to a grant of authority to mortgage a parcel of land titled in
the wife’s name, the wife may not be held liable for the payment of the
mortgage debt contracted by the husband, as the authority to mortgage does not
carry with it the authority to contract obligation. This Court thus held in the said case:
“Appellant claims that the trial court erred in holding that only
Cesario A. Fabricante is liable to pay the mortgage debt and not his wife who
is exempt from liability. The trial
court said: ‘Only the defendant
Cesario A. Fabricante is liable for the payment of this amount because it does
not appear that the other defendant Maria G. de Fabricante had authorized
Cesario A. Fabricante to contract the debt also in her name. The power of attorney was not presented and
it is to be presumed that the power (of attorney) was limited to a grant of
authority to Cesario A. Fabricante to mortgage the parcel of land covered by
Transfer Certificate of Title in the name of Maria G. de Febricante.’
“We went over the contents of the deed of mortgage executed by
Cesario Fabricante in favor of Appellant on April 18, 1944, and there is
really nothing therein from which we may infer that Cesario was authorized by
his wife to contract the obligation in her name. The deed shows that the authority was limited
to the execution of the mortgage insofar as the property of the wife is
concerned. There is a difference between
authority to mortgage and
authority to contract obligation.
Since the power of attorney was not presented as evidence, the trial
court was correct in presuming that that power was merely limited to a grant
of authority to mortgage unless the contrary is shown.”[9]
2. The authority granted by
defendants-appellants (except Valeriana) unto their brother, Maximo, was merely
to mortgage the property jointly owned by them.
They did not grant Maximo any authority to contract for any loans in
their names and behalf. Maximo alone,
with Valeriana who authorized him to borrow money, must answer for said loans
and the other defendants-appellants’ only liability is that the real estate
authorized by them to be mortgaged would be subject to foreclosure and sale to
respond for the obligations contracted by Maximo. But they cannot be held personally liable for
the payment of such obligations, as erroneusly held by the trial court.
3. The fact that Maximo
presented to the plaintiff bank Valeriana’s additional special power of
attorney expressly authorizing him to borrow money, Exh. E-1, aside from the
authority to mortgage executed by Valeriana together with the other defendants-appellants
also in Maximo’s favor, lends support to our view that the bank was not
satisfied with the authority to mortgage alone.
For otherwise, such authority to borrow would have been deemed
unnecessary and a surplusage. And having
failed to require that Maximo submit a similar authority to borrow, from the
other defendants-appellants, plaintiff, which apparently was satisfied with
the surety bond for repayment put up by Maximo, cannot now seek to hold said
defendants-appellants similarly liable for the unpaid loans. Plaintiff’s argument that “a mortgage is
simply an accessory contract, and that to effect the mortgage, a loan has to be
secured”[10]
falls far short of the mark. Maximo had
indeed secured the loan on his own account, and the defendants-appellants had
authorized him to mortgage their respective undivided shares of the real
property jointly owned by them as security for the loan. But that was the extent of their authority
and consequent liability, to have the real property answer for the loan in case
of non-payment. It is not unusual in
family and business circles that one would allow his property or an undivided
share in real estate to be mortgaged by another as security, either as an
accommodation or for valuable consideration, but the grant of such authority
does not extend to assuming personal liability, much less solidary liability,
for any loan secured by the grantee in the absence of express authority so
given by the grantor.
4. The outcome might be
different if there had been an express ratification of the loans by
defendants-appellants or if it had been shown that they had been benefited by
the crop loans so as to put them in estoppel.
But the burden of establishing such ratification or estoppel falls
squarely upon plaintiff bank. It has not
only failed to discharge this burden, but the record stands undisputed that
defendant-appellant Quintin Sta. Maria testified that he and his co-defendants
executed the authority to mortgage “to accommodate (my) brother Dr.
Maximo Sta. Maria .. and because he is my brother, I signed it to accommodate
him as security for whatever he may apply as loan. Only for that land, we gave him as security”
and that “we brothers did not receive any centavo as benefit.”[11]
The record further shows plaintiff bank itself admitted during the trial that
defendants-appellants “did not profit from the loan” and that they
“did not receive any money (the loan proceeds) from (Maximo)”[12]
No estoppel therefore can be claimed by plaintiff as against
defendants-appellants.
5. Now, as to the extent of
defendant Valeriana Sta. Maria’s liability to plaintiff. As already stated above, Valeriana stands liable
not merely on the mortgage of her share in the property, but also for the loans
which Maximo had obtained from plaintiff bank, since she had expressly granted
Maximo the authority to incur such loans.
(Exh. E-1). Although the question
has not been raised in appellants’ brief, we hold that Valeriana’s liability
for the loans secured by Maximo is not joint and several or solidary
as adjudged by the trial court, but only joint, pursuant to the
provisions of Article 1207 of the Civil Code that “(T)he concurrence . .
. of two or more debtors in one and the same obligation does not imply that . .
each one of the (debtors) is bound to render entire compliance with the
prestation. There is a solidary
liability only when the obligation expressly so states, or when the law or the
nature of the obligation requires solidarity.” It should be noted that in
the additional special power of attorney, Exh. E-1, executed by Valeriana, she
did not grant Maximo the authority to bind her solidarily with him on any loans
he might secure thereunder.
6. Finally, as to the 10%
award of attorney’s fees, this Court believes that considering the resources of
plaintiff bank and the fact that the principal debtor, Maximo Sta. Maria, had not
contested the suit, an award of five (5%) per cent of the balance due on the
principal, exclusive of interests, i.e. a balance of P6,100.00 on the first
cause of action and a balance of P9,346.44 on the second cause of action, per
the bank’s statements of August 20, 1963, (Exhs. Q-1 and BB-1, respectively)
should be sufficient.
WHEREFORE, the judgment of the trial court against
defendants-appellants EMETERIA, TEOFILO, QUINTIN, ROSARIO and LEONILA, all
surnamed STA. MARIA is hereby reversed and set aside, with costs in both
instances against plaintiff. The
judgment against defendant-appellant VALERIANA STA. MARIA is modified in that
her liability is held to be joint and not solidary, and the award of attorney’s
fees is reduced as set forth in the preceding paragraph, without costs in this
instance.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro,
Fernando, Capistrano, and Barredo, JJ., concur.
Reyes, J.B.L., J., is on
official leave.
[1]
The original complaint included
apparently another sister by the name of Elena, Rec. on App., p. 2, but this is
the only mention of Elena in the record.
She appears not to have been summoned and no answer was filed in her
behalf. No judgment was rendered against
Elena; she did not execute the power of attorney in question, and for all
purposes, she is not a party hereto.
[2]
Rec. on App., pp. 14-15, emphasis supplied.
[3]
Rec. on App., pp. 19-20, emphasis supplied.
[4]
Exh. A.
[5]
Exh. R.
[6]
Rec. on Appeal, pp. 156-157.
[7]
49 Phil. 574 (1926); 47 Phil. 594, 613 (1925).
[8]
105 Phil. 672, (April 30, 1959).
[9]
Id., at 673-674, emphasis supplied.
[10]
Appellee’s Brief, p. 15.
[11]
T.S.N., August 12, 1963, pp. 40-41.
[12]
T.S.N., August 23, 1963, p. 55.