I.
Nature, form and kinds B. Article 1869 2. Implied c. Failure to repudiate
NAGUIAT V CA [412 SCRA 591 (2003)] Facts Queano applied with Naguiat for a PhP 200K On the existence of an agency relationship loan, which the latter granted. Naguiat issued 2 between Naguiat and Ruebenfeldt checks, each for the amount of PhP 95K, to Ruebenfeldt served as Naguiat’s agent on the Queano. The proceeds of these checks were to loan application of Queano’s friend, Farralese, constitute the loan Naguiat granted to Queano. and it was in connection with that transaction As security for the loan, Queano executed a that Queano came to know Naguiat. Naguiat Deed of Real Estate Mortgage in favor of instructed Ruebenfeldt to withhold the issued Naguiat. She also surrendered the owner’s checks from Queano pending delivery by the duplicates of the properties’ titles to the latter, latter of additional collateral. Ruebenfeldt went and issued a promissory note for PhP 200K and with Queano in the latter’s meeting with Naguiat, a postdated check for the same amount payable and on that occasion, without Queano asking for to the order of Naguiat. it, Ruebenfeldt drew a check for PhP 220K payable to Naguiat, to cover for Queano’s Queano’s check was dishonored for alleged liability under the loan agreement. insufficiency of funds, so Naguiat wrote her to demand settlement of the loan. Queano and The CA recognized the existence of an “agency Ruebenfeldt met with Naguiat. Queano told by estoppel citing CC 1873. Art. 1873. If a person specifically informs Naguiat she did not receive the proceeds of the another or states by public advertisement loan, adding that the checks were retained by that he has given a power of attorney to a Ruebenfeldt, purportedly Naguiat’s agent. Naguiat applied for extrajudicial foreclosure of the mortgage so the sheriff scheduled the foreclosure sale. Queano filed for the annulment of the mortgage deed with the Pasay City RTC, which eventually stopped the auction sale. RTC declared the deed null and void, and ordered Naguiat to return the title duplicates. CA affirmed in toto the RTC decision. Hence, the present petition. Issue/Held W/N there was a contract of loan between the parties – NO Ratio The presumption of truthfulness of the recitals in a public document was defeated by the clear and convincing evidence in this case that pointed to the absence of consideration. Naguiat did not present evidence to support her claim that Queano received the loan proceeds. The delivery of bills of exchange and mercantile documents such as checks shall produce the effect of payment only when they have been cashed. Being a real contract, a loan contract is perfected only upon the delivery of the object of the contract (in this case, the loan proceeds).
third person, the latter thereby becomes a duly authorized agent, in the former case with respect to the person who received the special information, and in the latter case with regard to any person.
The power shall continue to be in full force until the notice is rescinded in the same manner in which it was given. (n)
At the very least, because of the interaction between Naguiat and Ruebenfeldt, Queano got the impression that Ruebenfeldt was Naguiat’s agent. Naguiat did nothing to correct Queano’s impression. One who clothes another with apparent authority as his agent, and holds him out to the public as such, cannot be permitted to deny the authority of such person to act as his agent, to the prejudice of innocent third parties dealing with such person in good faith, and in the honest belief that he is what he appears to be. Judgment Petition denied, judgment affirmed.
