[AGENCY] [Tuason v. Orozco]

Agency | B2015 CASES

Tuason v. Orozco February 10, 1906 Mapa alycat SUMMARY: Vargas, husband of Dolores Orozco, executed a Power of Attorney in favor of Enrique Grupe, authorizing the latter: (1) to dispose of all his property, particularly, a house and lot; and (2) to mortgage the house for the purpose of securing the payment of any amount advanced to Dolores. Grupe and Orozco obtained a loan from Gonzalo Tuason. The instrument evidencing the debt was duly recorded in the Registry of Property, and it appears therefrom that Grupe, as attorney in fact for Vargas, received from Tuason a loan of P2,200 and delivered the same to the Orozco; and that to secure its payment, he mortgaged the property of Vargas with Orozco’s consent. But Orozco denies having received the loan. DOCTRINE: A debt this incurred by the agent is binding directly upon the principal, provided the former acted, as in the present case, within the scope of his authority. (Art. 1727) The fact that the agent has also bound himself to pay the debt does not relieve from liability the principal for whose benefit the debt was incurred. The individual liability of the agent constitutes only a further security in favor of the creditor. The law does not provide that the agent cannot bind himself personally to the fulfillment of an obligation incurred by him in the name and on behalf of his principal. (Art. 1725) FACTS: In 1888, (principal) Juan Vargas, husband of defendant Dolores Orozco, executed a Power of Attorney in favor of (agent) Enrique Grupe, authorizing the latter: (1) to dispose of all his property, in particular, a house and lot situated at 24 Calle Nueva, Malate; and (2) to mortgage the house for the purpose of securing the payment of any amount advanced to Dolores. In January 1980, Enrique Grupe and Dolores Orozco obtained a loan from plaintiff Gonzalo Tuason. The instrument evidencing the debt was duly recorded in the Registry of Property, and it appears therefrom that Enrique Grupe, as attorney in fact for Vargas, received from Tuason a loan of P2,200 and delivered the same to the defendant; and that to secure its payment, he mortgaged the property of Vargas with Orozco’s consent. But Orozco denies having received the loan. ISSUE + RATIO:

Orozco’s denial cannot overcome the proof to the contrary in the agreement. Orozco was one of the parties to the January 1980 instrument and signed it. This implied an admission on her part that the statements relating to her in the agreement are true. She also personally intervened in the execution of the mortgage and stated in the deed that the mortgage has been created with her knowledge and consent. The lien was created precisely on the assumption that she had received the amount for the purpose of securing its payment. In addition to this, she wrote a letter to the attorneys of Tuason promising to pay the debt. Thirteen years have elapsed since she signed the mortgage deed. During all this time, she never denied having received the money. On the contrary, she promised to settle. The only explanation is that she actually received the money. The fact that Orozco received the money from Grupe, her husband’s agent, and not from Tuason himself does not affect the validity of the mortgage. Nowhere does it appear in the Power that the money was to be delivered to her by the creditor himself. The important thing was that she should have received the money. Orozco claims that the instrument is evidence of a debt personally incurred by Grupe for his own benefit, and not incurred for the benefit of Vargas. This contention cannot be sustained. The agreement was signed by Grupe as attorney in fact for Vargas. A debt this incurred by the agent is binding directly upon the principal, provided the former acted, as in the present case, within the scope of his authority. (Art. 1727) The fact that the agent has also bound himself to pay the debt does not relieve from liability the principal for whose benefit the debt was incurred. The individual liability of the agent constitutes only a further security in favor of the creditor. The law does not provide that the agent cannot bind himself personally to the fulfillment of an obligation incurred by him in the name and on behalf of his principal. (Art. 1725) The mortgage being valid and duly recorded in the Registry of Property, directly subjects the property to the fulfillment of the obligation for the security of which it was created. It is of no importance whether or not Grupe bound himself personally to pay the debt in question. The right in rem arising from the mortgage would have justified the creditor in bringing his action directly against the property encumbered, had he chosen to foreclose the mortgage rather than to sue Grupe. RULING: Orozco is ordered to pay Tuason.