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Commercial Bank & Trust Company of the Philippines vs.

Republic Armored Car Service Corporation

Nos. L18223 & L18224. September 30, 1963.

COMMERCIAL BANK & TRUST COMPANY OF THE
PHILIPPINES,
plaintiffappellee,
vs.
REPUBLIC
ARMORED CAR SERVICE CORPORATION and
DAMASO PEREZ, ET AL., defendantsappellants.
Agency Principal and Agent Where principal was bound by
contract of loan executed by his agent Case at Bar.Where in
accordance with a power of attorney executed by the principal, the
agent was authorized to negotiate for a loan or various loans with
banking institutions, financing or insurance companies etc., m
such sum or sums, aforesaid agent may deem proper and
convenient to the interest of the principal, such general power of
attorney was held sufficient authority for the agent to obtain the
credits subject of the case at bar.
Same Where principal was jointly and severally liable for the
loans contracted by his agent.Where one named Ramon Racelis,
as agent of Damaso Perez (principal), executed a con
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Commercial Bank & Trust Company of the Philippines vs.

Republic Armored Car Service Corporation

tract of loan, signing the name Damaso Perez by Ramon Racelis,

and in the said contract Damaso Perez agreed jointly and
severally to be responsible for such loan, there would be no merit
in the contention that Damaso Perez was only liable as a
guarantor.

MOTION FOR NEW TRIAL in the Supreme Court.

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The facts are stated in the resolution of the Court.

RESOLUTION ON MOTION FOR NEW TRIAL
LABRADOR, J.:
Defendantappellant Damaso Perez has presented a motion
for new trial on the ground of newlydiscovered evidence. It
is claimed that movant was not aware of the nature of the
power of attorney that Ramon Racelis used, purportedly
signed by him, to secure the loans for the Republic
Armored Car Service Corporation and the Republic Credit
Corporation. In the motion it is claimed that a photostatic
copy of the power of attorney used by Ramon Racelis was
presented at the trial. This photostatic copy or a copy
thereof has not been submitted to Us, for this reason We
cannot rule upon his claim and contention that Ramon
Racelis had no authority to bind the movant as surety for
the loans obtained from the appellee Commercial Bank &
Trust Company. Not having before Us the supposed
photostatic copy of the power of attorney used to secure the
loans, there is no reason for Us to rule, in accordance with
his contention, that Racelis exceeded his authority in
securing the loans subject of the present actions.
The motion for reconsideration, however, presents a
copy of a power of attorney purportedly executed by movant
on October 22, 1952. It is not expressly mentioned that this
is the precise power of attorney that Ramon Racelis utilized
to secure the loans the collection of which is sought in these
cases. But assuming, for the sake of argument, that the
said power of attorney incorporated in the motion for
reconsideration was the one used to obtain the loans, We
find that the movants contention has no merit.
144

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SUPREME COURT REPORTS ANNOTATED

Commercial Bank & Trust Company of the Philippines vs.

Republic Armored Car Service Corporation

In accordance with the document, Racelis was authorized

to negotiate for a loan or various loans x x x with other
banking institution, financing corporation, insurance
companies or investment corporations, in such sum or
sums, aforesaid attorneyinfact Mr. Ramon Racelis, may
deem proper and convenient to my interests, x x x and to
execute any and all documents he deems requisite and
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necessary in order to obtain such loans, always having in

mind my best interest x x x We hold that this general
power of attorney to secure loans from any banking
institution was sufficient authority for Ramon Racelis to
obtain the credits subject of the present suits.
It will be noted furthermore that Racelis, as agent of
Damaso Perez, executed the documents evidencing the
loans signing the same Damaso Perez by Ramon Racelis,
and in the said contracts Damaso Perez agreed jointly and
severally to be responsible for the loans. As the document
as signed makes Perez jointly and severally responsible,
there is no merit in the contention that Perez was only
being held liable as a guarantor.
Furthermore, the promissory notes evidencing the loans
are attached to the complaint in G.R. Nos. L18223 and L
18224. If the movant Perez claims that Racelis had no
authority to execute the said promissory notes, the
authenticity of said documents should have been
specifically denied under oath in defendants answers in
the lower court. This was not done consequently Perez
could not and may not now claim that his agent did not
have authority to execute the loan agreements.
Motion for new trial is denied.
Padilla, Barrera, Paredes, Dizon, Regala and
Makalintal, JJ., concur.
Motion denied.
Notes.The ruling in the above case, holding the
principal liable for the contract entered into by his agent, is
analogous to the pronouncement made in Macias & Co. v.
Warner Barnes & Co., 43 Phil. 155, where it was held that
when it is clear that the agent is acting only in
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De Villanueva vs. Philippine National Bank

behalf of a disclosed principal, the agent cannot be held

personally liable on the contract entered into in such
manner.
A power of attorney of a special character, authorizing
an agent to borrow any amount of money which he deemed
necessary, cannot be interpreted as also authorizing the
agent to use the money as he pleased and in applying the
money borrowed to pay his personal obligations, he exceeds
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his authority. In such cases, it should be understood that

the agent is obliged to turn over the money to the
principals, or at least, place it at their disposal. (Hodges vs.
Salas, 63 Phil. 567).
________________

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