Commercial Bank v. Republic Armored Car
REITERATIONFacts
The Antecedents: Commercial Bank & Trust Company of the Philippines (plaintiff-appellee) filed actions against Republic Armored Car Service Corporation and Damaso Perez, et al. (defendants-appellants) to collect on loans. Damaso Perez (movant) filed a motion for new trial, claiming he was unaware of the nature of the power of attorney purportedly signed by him, which Ramon Racelis used to secure loans for Republic Armored Car Service Corporation and Republic Credit Corporation. Procedural History: The case reached the Supreme Court on appeal from a lower court ruling. Damaso Perez subsequently filed a motion for new trial based on newly discovered evidence, specifically a power of attorney allegedly executed by him. The Appeal: Defendant-appellant Damaso Perez sought a new trial, arguing that Ramon Racelis lacked the authority to bind him as surety for the loans obtained from the appellee. He claimed he was unaware of the nature of the power of attorney used by Racelis. The motion was accompanied by a copy of a power of attorney purportedly executed by Perez on October 22, 1952. The core of Perez's argument was that Racelis exceeded his authority in securing the loans.
Issue(s)
Whether the power of attorney executed by Damaso Perez sufficiently authorized Ramon Racelis to secure the loans subject of the present actions. Whether Damaso Perez could claim that Ramon Racelis exceeded his authority when the authenticity of the loan documents was not specifically denied under oath in the lower court.
Ruling
The motion for new trial is denied. The Supreme Court held that the power of attorney was sufficient to authorize the loans and that the failure to deny the authenticity of the loan documents under oath precluded Perez from raising the issue of exceeded authority.
Ratio Decidendi
On Issue 1: The Supreme Court found that the power of attorney, even if not explicitly stated as the one used, was sufficient to authorize Ramon Racelis to secure the loans. The document granted Racelis the authority to negotiate for loans from various financial institutions in such sums as he deemed proper and convenient for the interests of the principal, and to execute all necessary documents. The Court interpreted this as a general power to secure loans from any banking institute, which encompassed the credits subject of the suits. Furthermore, the Court noted that the documents evidencing the loans were signed by Racelis as agent for Perez, explicitly making Perez "jointly and severally" responsible, negating any claim that Perez was merely a guarantor. On Issue 2: The Court held that if Damaso Perez claimed that Ramon Racelis had no authority to execute the promissory notes evidencing the loans, the authenticity of these documents should have been specifically denied under oath in his answer in the lower court. Since this was not done, Perez could not subsequently claim that his agent did not have the authority to execute the loan agreements. This procedural failure meant that Perez was deemed to have admitted the authenticity of the documents and, by extension, the authority of Racelis to enter into such agreements on his behalf.
Main Doctrine
The Supreme Court reiterated that a general power of attorney granting an agent broad authority to negotiate and secure loans from any banking institution is sufficient to authorize the agent to enter into such loan agreements on behalf of the principal. Moreover, the Court emphasized that if a principal is made jointly and severally liable in a contract, they cannot subsequently claim to be merely a guarantor. The ruling also stressed the procedural requirement that the authenticity of documents, such as promissory notes, must be specifically denied under oath in the lower court; failure to do so means the principal is deemed to have admitted the authenticity and the agent's authority to execute them.