Emergency Recit: Queano applied for a loan with Naguiat. Naguiat indorsed to Queano 2 checks for said loan.

In return Queano executed a Real Estate Mortgage in favour of Naguiat. After receiving a letter from Naqguiats lawyer demanding the settlement of the loan, Queano and Ruebenfeldt (supposedly Naguiats agent) telling the latter that she was not able to receive the proceeds of the loan. Queano thus filed a case for the annulment of the mortgage. The mortgage was declared null and void by the lower courts, hence this petition. Naguiat cites the rule that public documents enjoy the presumption of validity and truthfulness of its contents. However, the presumption of the truthfulness of the contents in a public document was defeated by the clear and convincing evidence that pointed to the absence of consideration. No evidence was presented by Naguiat proving that the checks she issued were actually encashed or deposited. The mere issuance of checks does not result to the perfection of a loan. A loan is a real contract and is perfected only upon the delivery of the object of the contract. Facts: Case for review on certiorari under Rule 45 with regards a decision of the RTC rendering a Real Estate Mortgage (REM) made by Aurora Queano in favour of Celestina Naguiat void. Queano applied with Naguiat for a loan worth P200,000. Naguiat indorsed to Queano 2 checks for the amount of P95,000 each. Queano executed a REM in favour of Naguiat and surrendered to the latter duplicates of the titles covering the mortgage. She also issued a promissory note (with 12% interest per annum) and a post-dated check for the amount of P200,000 payable to the order of Naguiat. Queano received a letter from Naguiats lawyers demanding the settlement of the loan. Queano and Ruebenfeldt, who was supposedly Naguiats agent, met with the Naguiat telling the latter that she was not able to receive the proceeds of the loan and that said checks remained with Ruebenfeldt. Naguiat applied for the extrajudicial foreclosure of the mortgage. However, Queano filed a case for the annulment of the mortgage. The RTC declared that the mortgage was null and void. Naguiat appealed with the CA. However, the CA affirmed the RTC decision. Hence, this petition.

Issues: Held: Wherfore, the petition is denied and the assailed decision [of the CA] is affirmed. Costs against petitioner. Ratio: W/N Queano had actually received the loan proceeds which where supposed to be covered by the 2 checks indorsed by Naguiat W/N the various representations and pronouncements made by Ruebenfeldt are admissible

*The resolution of the issue involves the determination of facts. Rule 45, which governs petitions of certiorari, only questions of law can be raised as the SC is not a trier of facts. The findings of the lower courts with regards to the facts of the case are generally binding upon the SC. Issue 1: Naguiat cites the rule that public documents enjoy the presumption of validity and truthfulness of its contents. The CA, however, is correct in ruling that the presumption of the truthfulness of the contents in a public document was defeated by the clear and convincing evidence that pointed to the absence of consideration. No evidence was presented by Naguiat proving that the checks she issued were actually encashed or deposited. The mere issuance of checks does not result to the perfection of a loan. A loan is a real contract and is perfected only upon the delivery of the object of the contract (according to the Civil Code, the delivery of checks shall produce the effect of payment only when they have been cashed).

Issue 2: The CA recognized the existence of an agency of estoppel. Ruebenfeldt was not a stranger or an unauthorized person. Naguiat instructed Ruebenfeldt to withhold the checks from Queano until the delivery of additional collateral by the latter. Ruebenfeldt served as the agent of Naguiat in a loan application made by Queanos friend, leading to their meeting. And it was also Ruebenfeldt who drew the check payable to Naguiat to cover Queanos alleged liability. As a consequence of the interaction between Naguiat and Ruebenfeldt, Queano got the impression that Ruebenfeldt was the agent of Naguiat, but Naguiat did nothing to correct this impression. One who clothes another with apparent authority as an agent, cannot be permitted to deny the authority of such person to the prejudice of innocent third parties dealing with such person in good faith.