64.villaluz v. Land Bank of The Philippines, 814 SCRA 466
64.villaluz v. Land Bank of The Philippines, 814 SCRA 466
64.villaluz v. Land Bank of The Philippines, 814 SCRA 466
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* THIRD DIVISION.
467
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468
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JARDELEZA, J.:
The Civil Code sets the default rule that an agent may
appoint a substitute if the principal has not prohibited him
from doing so. The issue in this petition for review on
certiorari,1
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469
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I
Sometime in 1996, Paula Agbisit (Agbisit), mother of
petitioner May S. Villaluz (May), requested the latter to
provide her with collateral for a loan. At the time, Agbisit
was the chairperson of Milflores Cooperative and she
needed P600,000 to P650,000 for the expansion of her
backyard cut flowers business.4 May convinced her
husband, Johnny Villaluz (collectively, the Spouses
Villaluz), to allow Agbisit to use their land, located in
Calinan, Davao City and covered by Transfer Certificate of
Title (TCT) No. T-202276, as collateral.5 On March 25,
1996, the Spouses Villaluz executed a Special Power of
Attorney6 in favor of Agbisit authorizing her to, among
others, “negotiate for the sale, mortgage, or other forms of
disposition a parcel of land covered by Transfer Certificate
of Title No. T-202276” and “sign in our behalf all
documents relating to the sale, loan or mortgage, or other
disposition of the aforementioned property.”7 The one-page
power of attorney neither specified the conditions under
which the special powers may be exercised nor stated the
amounts for which the subject land may be sold or
mortgaged.
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470
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471
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472
The law creates a presumption that an agent has the
power to appoint a substitute. The consequence of the
presumption is that, upon valid appointment of a
substitute by the agent, there ipso jure arises an agency
relationship between the principal and the substitute, i.e.,
the substitute becomes the agent of the principal. As a
result, the principal is bound by the acts of the substitute
as if these acts had been performed by the principal’s
appointed agent. Concomitantly, the substitute assumes an
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473
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474
III
Perhaps recognizing the correctness of the CA and the
RTC’s legal position, the Spouses Villaluz float a new
theory in their petition before us. They now seek to
invalidate the Real Estate Mortgage for want of
consideration. Citing Article 1409(3), which provides that
obligations “whose cause or object did not exist at the time
of the transaction” are void ab initio, the Spouses Villaluz
posit that the mortgage was void because the loan was not
yet existent when the mortgage was executed on June 21,
1996. Since the loan was released only on June 25, 1996,
the mortgage executed four days earlier was without
valuable consideration.
Article 1347 provides that “[a]ll things which are not
outside the commerce of men, including future things, may
be the object of a contract.” Under Articles 1461 and 1462,
things having a potential existence and “future goods,” i.e.,
those that are yet to be manufactured, raised, or acquired,
may be the objects of contracts of sale. The narrow
interpretation advocated by the Spouses Villaluz would
create a dissonance between Articles 1347, 1461, and 1462,
on the one hand, and Article 1409(3), on the other. A literal
interpretation of the phrase “did not exist at the time of the
transaction” in Article 1409(3) would essentially defeat the
clear intent and purpose of Articles 1347, 1461, and 1462 to
allow future things to be the objects of contracts. To resolve
this apparent conflict, Justice J.B.L. Reyes commented that
the phrase “did not exist” should be interpreted as “could
not come into existence” because the object may legally be a
future thing.23 We adopt this interpretation.
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23 The Lawyers Journal, Vol. XVI, January 31, 1951, p. 50, Tolentino,
Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol.
IV, p. 629 (1991); and Paras, Civil Code of the Philippines Annotated, Vol.
IV, p. 818 (2012).
475
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476
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29 Id., at p. 599.
30 Rollo, pp. 38-39.
31 Id., at p. 62.
32 Art. 1245. Dation in payment, whereby property is alienated to
the creditor in satisfaction of a debt in money, shall be governed by the
law of sales.
477
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478
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479
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