GR 39037; (October, 1933) (Digest)
G.R. No. 39037; October 30, 1933
THE PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. PAZ AGUDELO Y GONZAGA, ET AL., defendants. PAZ AGUDELO Y GONZAGA, appellant.
FACTS
Defendant Paz Agudelo y Gonzaga granted her nephew, Mauro A. Garrucho, a special power of attorney to sell, alienate, and mortgage her real properties. Garrucho, using this authority but acting in his personal name and not as an agent, obtained loans from the Philippine National Bank (PNB) and executed promissory notes and mortgage deeds over Agudelo’s properties as security. He later consolidated these loans into a single P21,000 promissory note secured by a mortgage on Agudelo’s lots. Agudelo later acquired another mortgaged lot from her niece, Amparo A. Garrucho, and executed an affidavit acknowledging the existing mortgage lien on that specific lot. When the loans were not paid, PNB sued to foreclose the mortgages. The trial court held Agudelo liable for the debt and ordered foreclosure.
ISSUE
Whether Paz Agudelo y Gonzaga is personally liable for the loans contracted and the mortgages constituted by Mauro A. Garrucho.
RULING
No. The Supreme Court reversed the trial court. Garrucho, although holding a power of attorney, negotiated the loans and executed the promissory notes in his personal capacity, not as Agudelo’s agent. The power of attorney did not expressly authorize him to contract loans. Therefore, the obligation was personal to Garrucho and did not bind Agudelo as principal. Agudelo’s subsequent affidavit constituted only a subsidiary acknowledgment of the mortgage lien on the single lot she acquired from her niece, not an assumption of the personal loan obligation. Since the principal obligor (Garrucho) was absolved from the complaint and PNB did not appeal that absolution, the accessory (subsidiary) obligation could not stand alone. The complaint against Agudelo was dismissed.
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