BPI VS DE COSTER

FACTS:

The Bank of the Philippine Islands (BPI) filed a complaint on March 10, 1924 against Gabriela Andrea de
Coster y Roxas, her husband Jean M. Poizat and their partnership J.M. Poizat & Co. for failure to deliver a
mortgage on a real property in Manila. The Court of First Instance (CFI) of Manila rendered (Civil Case
No. 25218) that the defendants (de Coster, et.al.) be jointly and severally liable for Php 292,000 with an
interest of 9% per annum and other damages. BPI filed later for the immediate possession of the
property and sell the same according to the Chattel Mortgage Law. On May 3, 1924, the defendants
failed to reply nor appear thus declared on default. Then on June 24, 1924 the Court rendered an
opinion that the property should be sold and the proceeds should be used for the satisfaction of
respective judgments.

August 26, 1924 de Coster filed a suit to absolve her from the liability and to request for the reopening of
the case because: (1) She resided in Paris from 1908 to April 30, 1924 and was not notified even by her
husband regarding the case; (2) Her husband executed the mortgage transactions without her consent.

ISSUE:

Whether or not the transactions entered by Poizat, as an agent of his wife valid?

HELD:

NO. Paragraph 5 of the power of attorney authorizes the husband for in the name of his wife to loan or
borrow any sums of money or fungible things, etc. This should be construed to mean that the husband
had power only to his wifes money and not to borrow money for or on account of his wife as her agent
and attorney-in-fact. That does not carry with it or imply that he had the legal right to make his wife
liable as a surety for the preexisting debt of a third person.

GERMANN & CO. VS DONALDSON, SIM & CO.

FACTS:

Max Leonard Tornow, a German national was the owner of Germann & Co. which operated in Berlin and
Manila. On February 5, 1900 he executed in Berlin an instrument constituting Fernando Kammerzell as
his true and lawful attorney with power to enter the firm name of Germann & Co. in the Commercial
Registry of Manila as a branch of the house of the company in Berlin, it being the purpose of this
power to invest said attorney with full legal powers and authorization to direct and administer in the
City of Manila for us and in our name a branch of our general commercial business of import and export
for which purpose he may make contracts of lease and employ suitable assistants, as well as sign every
kind of documents, accounts, and obligations connected with the business which may be necessary, take
charge in general of the receipt and delivery of merchandise connected with the business sign all
receipts for sums of money and collect them and exact their payment by legal means On October 27,
1900 Kammerzell executed a general power for suits in Manila and purporting to be a substitution in
favor of several attorneys of powers conferred upon Kammerzell in an instrument executed by Tornow.
Kammerzells instrument was authenticated will formalities of domestic laws while Tornows was not.

ISSUE:

Whether or not Kammerzell has the authority to institute suits for the recovery of sums of money?

HELD:

YES. The Court ruled that the clause conferring the power to exact the payment of sums of money by
legal means, provides that the power to exact the payment of debts due the concern by means of the
institution of suits for the recovery. The main object of the instrument is clearly to make him the
manager of the Manila branch with the same general authority. In absence of a clear language, it was
the intention of the principal to withhold from his agent a power essential to the efficient management
of the business.

DIRECTOR OF PUBLIC WORKS VS SING JUCO, ET. AL.

FACTS:
The Director of Public Works and Sing Juco together with Mariano de la Rama, Gonzalo Mariano
Tanboontien and Sing Bengco, owners of a land located at Point Llorente, at the mouth of Iloilo River,
near Iloilo City agreed to execute the governments plan for extensive harbor improvements. They signed
a contract on January 8, 1924 wherein they signified that the Bureau of Public Works (BPW) will dredge
within the area and will deposit the agreed materials.

Owners will pay in 5 annual installments and failure to pay any installment, the whole amount thereafter
to accrue. BPW required a bond and Mariano de la Rama signed the said bond under the name Casa
Viuda de Tan Toco. The dredging operation was conducted but no payment was received by the BPW.
The Director of BPW instituted a case for the recovery of the amount due to the government and to
enforce a real lien upon the property. On defense, Viuda de Tan Toco said that de la Rama signed without
authority.

ISSUE:
Whether or not Viuda de Tan Toco is not liable for the act done by de la Rama?

HELD:
A power of attorney to execute a contract of guaranty should not be inferred from the use of vague or
general words, especially where such words have their origin and explanation in particular powers of a
different nature. In article 1827 of the Civil Code it is declared that suretyship (including guaranty) shall
not be presumed; that it must be expressed, and cannot be extended beyond its specified limits. By
analogy a power of attorney should be construed harmony with the same rule, in so far as relates to the
creation of the obligation of guaranty.

Mariano de la Rama by his uncle Tan Lien Co, attorney-in-fact of Tan Ong Sze, with power of substitution,
there appears the following:

. . . and also for her and for her name to sign, seal and execute, and as her act and deed deliver,
any lease, release, bargain, sale, assignment, conveyance or assurance, any other deed for the
conveying any real or personal property or other matter or thing wherein she or may be
personally interested or concerned.

Neither of these powers officially confers upon Mariano de la Rama the power to bind a principal by a
contract of suretyship. The clauses noted relate more specifically to the execution of contracts relating to
property; and the more general words at the close of the quoted clauses should be interpreted, under
the general rule ejusdem generis, as referring to the contracts of like character. Power to execute a
contract so exceptional a nature as a contract of suretyship or guaranty cannot be inferred from the
general words contained in these powers.

BPI VS DE COSTER

FACTS:

Defendant Gabriela Andrea de Coster y Roxas executed a Special Power of Attorney in favor of her
husband. This authority gave Jean M. Poizat (agent husband) the power to loan and borrow money in
her behalf. The agent was able to obtain a loan from BPI, secured by a chattel mortgage on the steamers
of his company, Poizat Vegetable Oil Mills and a real mortgage over a property, which is also subject to
another mortgage in favor of La Orden de Dominicos. Defendants defaulted on their obligations to BPI
and La Orden de Dominicos. Thus, both creditors prayed for the forclosure of the mortgaged properties.
RTC declared the defendants in default for their failure to appear and ruled in favor of he plaintiffs. De
Coster alleges that she never had any knowledge of the actual facts until she read about her default in
the newspapers, since she was not in the Philippines when the summons were served; that her husband
fled the country; that the mortgages executed by her agenthusband was without marital consent; and
that he did not have any authority to make her liable as surety on the debt of a third personit being a
personal debt of her husband and his company.

ISSUE:

W/N the principal-wife, Gabriela De Coster y Roxas, is liable for the mortgage executed by her
agenthusband, Jean Poizat

HELD:

NO. The note and mortgage show upon their face that at the time they were executed, the agent-
husband was attorney-in-fact for the defendant wife, and the bank knew or should have known the
nature and extent of his authority and the limitations upon his power. Par. 5 of the Power of Attorney
authorizes the agenthusband for and in the name of his wife to loan or borrow any sums of money or
fungible things, etc. This is taken to mean that he only had the power to loan his wifes money and to
borrow money for or on account of his wife as her agent and attorney-in-fact. It does not carry with it or
imply that he had the legal right to make his wife liable as a surety for the preexisting debt of a third
person. It is fundamental rule of construction that where in an instrument powers and duties are
specified and defined, that all of such powers and duties are limited and confined to those which are
specified and defined, and that all other powers and duties are excluded. The fact that the agent-
husband failed and neglected to perform his duties and to represent the interests of his principal is NOT
a bar to the principal obtaining legal relief for the negligence of her agent. It is apparent from the face of
the instrument that the whole purpose and intent of the power of attorney was to empower and
authorize the agent-husband to look after and protect the interests of the wife and for her and in her
name to transact any and all of her business. But nowhere does it provide or authorize him to make her
liable as a surety for the payment of the preexisting debt of a third person.

Thus, the agent-husband does not have the authority to sign the note and to execute the mortgage for
and on behalf of the wife as her act and deed, and that as to her the note is void for want of power of
her husband to execute it.