GR 237506; (July, 2020) (Digest)
G.R. No. 237506 , July 28, 2020
SAN MIGUEL CORPORATION, PETITIONER, VS. LEONARA FRANCISCO VDA. DE TRINIDAD, SPS. TEODORICO F. TRINIDAD AND SUSANA COSME-TRINIDAD, SPS. GEMMA F. TRINIDAD-GANDIONGCO AND ALFREDO M. GANDIONGCO, JR., SPS. MANUEL F. TRINIDAD AND RUBI REMIGIO TRINIDAD AND SPS. GRACE F. TRINIDAD-MALOLOS AND BISMARK D. MALOLOS, ROBERTO N. GANDIONCO, RESPONDENTS.
FACTS
Respondents are co-owners of four parcels of land in Las Piñas City. Respondent Roberto N. Gandionco, a brother-in-law, opened a beer dealership with petitioner San Miguel Corporation (SMC), which required collateral. Respondents lent their certificates of title to Roberto and executed similarly-worded Special Powers of Attorney (SPAs) authorizing him “To offer as collateral, security or property bond with [SMC]” the specified properties. Roberto, using these SPAs, executed Real Estate Mortgages (REMs) over two of the properties in favor of SMC to secure his beer stock obligations. When Roberto’s checks were dishonored, SMC extra-judicially foreclosed the mortgages. Respondents later discovered the mortgages, revoked the SPAs, and filed a complaint to annul the mortgages and foreclosure sale. The Regional Trial Court (RTC) voided the REMs and foreclosure, finding Roberto exceeded his authority which was only “to offer” the properties as collateral, not to mortgage them. The Court of Appeals (CA) affirmed the RTC but deleted the awards for moral damages and attorney’s fees. SMC appealed, arguing the SPAs included authority to mortgage and that its cross-claim against Roberto should not have been dismissed.
ISSUE
1. Whether the Special Powers of Attorney granted to Roberto N. Gandionco included the authority to mortgage the subject properties.
2. Whether the Court of Appeals erred in denying SMC’s cross-claim against Roberto Gandionco.
RULING
1. On the authority to mortgage: The Supreme Court GRANTED the petition in part. It held that the SPAs’ clear and unambiguous language authorizing Roberto “to offer as collateral, security or property bond with SMC” the subject properties, coupled with the grant of “full power and authority whatsoever requisite necessary to be done,” constituted sufficient authority to enter into a contract of mortgage. The Court applied the plain meaning rule, stating that the term “to offer as collateral” logically includes the act of constituting the property as collateral through a mortgage, as a mere offer without the power to conclude the contract would be meaningless. The SPAs were intended to authorize Roberto to secure his obligations with SMC using the properties, which necessarily involved executing the mortgage documents. Therefore, the REMs and the subsequent foreclosure were valid.
2. On the cross-claim: The Supreme Court REMANDED the case to the RTC to determine the exact amount of Roberto Gandionco’s outstanding liability to SMC. The Court found that while Roberto was declared in default, SMC still had the burden to prove the existence and amount of his liability. The Certificate of Sale from the foreclosure alone was insufficient to prove the actual debt. Thus, for the purpose of determining Roberto’s liability, the case was remanded to the trial court.
Dispositive Portion: The CA Decision was AFFIRMED with MODIFICATION. The REMs and foreclosure were declared VALID. The case was REMANDED to the RTC to determine Roberto Gandionco’s liability to SMC.