[ G.R. No. 23352. December 31, 1925 ] 48 Phil. 536
[ G.R. No. 23352. December 31, 1925 ]
THE PHILIPPINE SUGAR ESTATES DEVELOPMENT CO., LTD., INC., PLAINTIFF AND APPELLEE, VS. JUAN M. POIZAT ET AL., DEFENDANTS. GABRIELA ANDREA DE COSTER, APPELLANT. D E C I S I O N
STATEMENT
August 25, 1905, the appellant, with his consent, executed to and in favor of her husband, Juan M. Poizat, a general power of attorney, which, among other things, authorized him to do “in her name, place and stead, and making use of her rights and actions,” the following things:
“To loan or borrow any amount in cash or fungible things at the rate of interest, for the time, and under the conditions he may deem convenient, collecting or paying the principal or the interest, when they respectively should become due; executing and signing the corresponding public or private documents, and making these transactions with or without mortgage, pledge or personal securities.”
November 2, 1912, Juan M. Poizat applied for and obtained from the plaintiff a credit for the sum of 10,000 Pounds Sterling to be drawn on the “Banco Español del Rio de la Plata” in London not later than January, 1913. Later, to secure the payment of the loan, he executed a mortgage upon the real property of his wife, the material portions of which are as follows:
“This indenture entered into in the City of Manila, P. I., by and between Juan M. Poizat, merchant, of legal age, married and residing in the City of Manila, in his own behalf and in his capacity also as attorney in fact of his wife Doña Gabriela Andrea de Coster by virtue of the authority vested in him by the power of attorney duly executed and acknowledged in this City of Manila, etc.
“First. That in the name of Doña Gabriela Andrea de Coster, wife of Don Juan M. Poizat, there is registered on page 89 (back) of Book 3, temporary Binondo Section, property No. 685, inscription No. 3, Urban Property consisting of a house and six adjacent warehouses, all of strong material and constructed upon her own land, said property being Nos. 5, 3, and 1 of Calle Urbiztondo, and No. 13 of Calle Barraca in the District of Binondo in the City of Manila, etc.
“Second. That the marriage of Don Juan M. Poizat and Doña Gabriela Andrea de Coster being subsisting and undissolved, and with the object of constructing a new building over the land hereinabove described, the aforesaid house with the; six warehouses thereon constructed were demolished and in their stead a building was erected, by permission of the Department of Engineering and Public Works of this City issued November 10, 1902, said building being of strong material which, together with the land, now forms only one piece of real estate, etc.; which property must be the subject of a new description [registration] in which it must appear that the land belongs in fee simple and in full ownership as paraphernal property to the said Doña Gabriela Andrea de Coster and the new building thereon constructed to the conjugal partnership of Don Juan M. Poizat and the said Doña Gabriela Andrea de Coster, etc.
“Third. That the Philippine Sugar Estates Development Company, Ltd., having granted to Don Juan M. Poizat a credit of Ten Thousand Pounds Sterling with a mortgage upon the real property above described, etc.
“(a) That the Philippine Sugar Estates Development Company, Ltd., hereby grants Don Juan M. Poizat a credit in the amount of Ten Thousand Pounds Sterling which the said Mr. Poizat may use within the entire month of January of the coming year, 1913, upon the bank established in the City of London, England, known as ‘Banco Español del Rio de la Plata,’ which shall be duly advised, so as to place upon the credit of Mr. Poizat the said amount of Ten Thousand Pounds Sterling, after executing the necessary receipt therefor.
“(c) That Don Juan M. Poizat personally binds himself and also binds his principal Doña Gabriela Andrea de Coster to pay the Philippine Sugar Estates Development Company, Ltd., for the said amount of Ten Thousand Pounds Sterling at the yearly interest of 9 per cent which shall be paid at the end of each quarter, etc.
“(d) Don Juan M. Poizat also binds himself personally and his principal Doña Gabriela Andrea de Coster to return to the Philippine Sugar Estates Development Company, Ltd., the amount of Ten Thousand Pounds Sterling within four years from the date that the said Mr. Poizat shall receive the aforesaid sum as evidenced by the receipt that he shall issue to the ‘Banco Español del Rio de la Plata.’
“(e) As security for the payment of the said credit, in the case Mr. Poizat should receive the money, together with its interest the said Mr. Poizat in the dual capacity that he represents hereby constitutes a voluntary especial mortgage upon the Philippine Sugar Estates Development Company, Ltd., of the urban property above described, etc.
“(f) Don Juan M. Poizat in the capacity above mentioned binds himself, should he receive the amount of the credit, and while he may not return the said amount of Ten Thousand Pounds Sterling to the Philippine Sugar Estates Development Company, Ltd., to insure against fire the mortgaged property in an amount not less than One Hundred Thousand Pesos, etc.
“Fourth. Don Buenaventura Campa in the capacity that he holds hereby accepts this indenture in the form, manner, and condition executed by Don Juan M. Poizat by himself personally and in representation of his wife Doña Gabriela Andrea de Coster, in favor of the Philippine Sugar Estates Development Company, Ltd.
“In witness whereof, we have signed these presents in Manila, this November 2, 1912.
(Sgd.)
“JUAN M. POIZAT “THE PHILIPPINE SUGAR ESTATES DEVELOPMENT COMPANY, LTD. “The President “BUENAVENTURA CAMPA
“Signed in the presence of:
(Sgd.)
“MANUEL SAPSANO “JOSE SANTOS
“UNITED STATES OF AMERICA “PHILIPPINE ISLANDS “CITY OF MANILA
“In the City of Manila P. I., this November 2, 1912, before me Enrique Barrera y Caldes, a Notary Public for said city, personally appeared before me Don Juan M. Poizat and Don Buenaventura Campa, whom I know to be the persons who executed the foregoing document and acknowledged same before me as an act of their free will and deed; the first exhibited to me his certificate of registry No. 14237, issued in Manila, February 6, 1912, the second did not exhibit any cedula, being over sixty years old; this document bears No. 495, entered on page 80 of my Notarial registry.
“Before me: (Sgd.) “Dr. ENRIQUE BARRERA Y CALDES
" [NOTARIAL SEAL]
“Notary Public
“Up to the 31st of December, 1912”
For failure to pay the loan, on November 12, 1923, the plaintiff brought an action against the defendants, to fore- close the mortgage. In this action, the summons was served upon the defendant Juan M. Poizat only, who employed the services of Antonio A. Sanz to represent the defendants. The attorneys filed a general appearance for all of them, and later an answer in the nature of a general denial.
February 18, 1924, when the case was called for trial, Jose Galan y Blanco in open court admitted all of the allegations made in the complaint, and consented that judgment should be rendered as prayed for. Later, Juan M. Poizat personally, for himself and his codefendants, filed an exception to the judgment, and moved for a new trial, which was denied March 31, 1924.
August 22, 1924, execution was issued directing the sale of the mortgaged property to satisfy the judgment.
September 18, 1924, the property, which had an assessed value of P342,685, was sold to the plaintiff for the sum of P100,000.
September 23, 1924, and for the first time, the appellant personally appeared by her present attorney, and objected to the confirmation of the sale, among other things, upon the following grounds: That the mortgage in question was illegally executed, and is null and void, because the agent of this defendant was not authorized to execute it. That there was no consideration. That the plaintiff, with full knowledge that J. M. Poizat was acting beyond the scope of his authority, filed this action to subject the property of this defendant to the payment of the debt which, as to appellant, was not a valid contract. That the judgment was rendered by confession when the plaintiff and J. M. Poizat knew that Poizat was not authorized to confess judgment, and that the proceeding was a constructive fraud. That at the time the action was filed and the judgment rendered, this defendant was absent from the Philippine Islands, and had no knowledge of the execution of the mortgage. That after the judgment of foreclosure became final and the order of the sale of the property was made, that this defendant for the first time learned that the mortgage contract was tainted with fraud, and that she first knew and learned of such things on the 11th of September, 1924. That J. M. Poizat was not authorized to bind her property to secure the payment of his personal debts. That the plaintiff knew that the agent of the defendant was not authorized to bind her or her property. That the mortgage was executed to secure a loan of 10,000 Pounds, which was not made to this defendant or for her benefit, but was made to him personally and for the personal use and benefit of J. M. Poizat.
Among other things, the mortgage in question, marked Exhibit B, was introduced in evidence, and made a part of the record.
All of such objections to the confirmation of the sale were overruled, from which Gabriela Andrea de Coster appealed and assigns the following errors:
“I. The lower court erred in finding that Juan M. Poizat was, under the power of attorney which he had from Gabriela Andrea de Coster, authorized to mortgage her paraphernal property as security for a loan made to him personally by the Philippine Sugar Estates Development Co., Ltd.;
“II. The lower court erred in not finding that under the power of attorney, Juan M. Poizat had no authority to make Gabriela Andrea de Coster jointly liable with him for a loan of 10,000 Pounds made by the Philippine Sugar Estates Development Co., Ltd., to him;
“III. The lower court erred in not finding that the Philippine Sugar Estates Development Co., Ltd., had knowledge and notice of the lack of authority of Juan M. Poizat to execute the mortgage deed Exhibit A of the plaintiff;
“IV. The lower court erred in holding that Gabriela Andrea de Coster was duly summoned in this case; and in holding that Attorney Jose Galan y Blanco could lawfully represent her or could, without proof of express authority, confess judgment against Gabriela Andrea de Coster;
‘‘V. The court erred in holding that the judgment in this case has become final and res judicata;
“VI. The court erred in approving the judicial sale made by the sheriff at an inadequate price;
“VII. The lower court erred in not declaring these proceedings, the judgment and the sale null and void.
JOHNS, J.:
For the reasons stated in the decision of this court in the Bank of the Philippine Islands vs. De Coster (47 Phil., 594), the alleged service of the summons in the foreclosure suit upon the appellant was null and void. In fact, it was made on J. M. Poizat only, and there is no claim or pretense that any service of summons was ever made upon her. After service was made upon him, the attorneys in question entered their appearance for all of the defendants in the action, including the appellant upon whom no service was ever made, and filed an answer for them. Later, in open court, it was agreed that judgment should be entered for the plaintiff as prayed for in its complaint.
The appellant contends that the appearance made by the attorneys for her was collusive and fraudulent, and that it was made without her authority, and there may be some truth in that contention. It is very apparent that the attorneys made no effort to protect or defend her legal rights, but under our view of the case, that question is not material to this decision.
The storm center of this case is the legal force and effect of the real mortgage in question, by whom and for whom it was executed, and upon whom is it binding, and whether or not it is null and void as to the appellant.
It is admitted that the appellant gave her husband, J. M. Poizat, the power of attorney in question, and that it is in writing and speaks for itself. If the mortgage was legally executed by her attorney in fact for her and in her name as her act and deed, it would be legal and binding upon her and her property. If not so executed, it is null and void.
It appears upon the face of the instrument that J. M. Poizat, as the husband of the wife, was personally a party to the mortgage, and that he was the only person who signed the mortgage. It does not appear from his signature that he signed it for his wife or as her agent or attorney in fact, and there is nothing in his signature that would indicate that in the signing of it by him, he intended that his signature should bind his wife. It also appears from the acknowledgment of the instrument that he executed it as his personal act and deed only, and there is nothing to show that he acknowledged it as the agent or attorney in fact of his wife, or as her act and deed.
The mortgage recites that it was entered into by and between Juan M. Poizat in his own behalf and as attorney in fact of his wife. That the record title of the mortgaged property is registered in the name of his wife, Doña Gabriela Andrea de Coster. That they were legally married, and that the marriage between them has never been dissolved. That with the object of constructing a new building on the land, the six warehouses thereon were demolished, and that a new building was erected. That the property is the subject of a new registration in which it must be made to appear that the land belongs in fee simple and in full ownership as the paraphernal property of the wife, and that the new building thereon is the property of the conjugal partnership. “That the Philippine Sugar Estates Development Company, Ltd., having granted to Don Juan M. Poizat a credit of 10,000 Pounds Sterling with the mortgage upon the real property above described,” that the Development Company “hereby grants Don Juan M. Poizat a Credit in the amount of 10,000 Pounds Sterling which the said Mr. Poizat may use, etc.” That should he personally or on behalf of his wife use the credit he acknowledges, that he and his principal are indebted to the Development Company in the sum of 10,000 Pounds Sterling which “they deem to have received as a loan from the said commercial entity.” That he binds himself and his wife to pay that amount with a yearly interest of 9 per cent, payable quarterly. That as security for the payment of said credit in the case Mr. Poizat should receive the money at any time, with its interest, “the said Mr. Poizat in the dual capacity that he represents hereby constitutes a voluntary especial mortgage.” That Don Juan M. Poizat “in the capacity above mentioned binds himself, should he receive the amount of the credit.”
It thus appears that at the time the power of attorney and the mortgage were executed, Don Juan M. Poizat and Gabriela Andrea de Coster were husband and wife, and that the real property upon which the mortgage was executed was her sole property before her marriage, and that it was her paraphernal property at the time the mortgage was executed, and that the new building constructed on the land was the property of the conjugal partnership.
The instrument further recites that the Development Company “hereby grants Don Juan M. Poizat a credit in the amount of 10,000 Pounds Sterling which the said Mr. Poizat may use within the entire month of January of the coming year, 1913.” In other words, it appears upon the face of the mortgage that the loan was made to the husband with authority to use the money for his sole use and benefit. With or without a power of attorney, the signature of the husband would be necessary to make the instrument a valid mortgage upon the property of the wife, even though she personally signed the mortgage.
It is contended that the instrument upon its face shows that its. purpose and intent was to bind the wife. But it also shows upon its face that the credit was granted to Don Juan M. Poizat which he might use within the “entire month of January.”
Any authority which he had to bind his wife should be confined and limited to his power of attorney.
Giving to it the very broadest construction, he would not have any authority to mortgage her property, unless the mortgage was executed for her “and in her name, place or stead,” and as her act and deed. The mortgage in question was not so executed. It was signed by Don Juan M. Poizat in his own name, his own proper person, and by him only, and it was acknowledged by him in his personal capacity, and there is nothing in either the signature or acknowledgment which shows or tends to show that it was executed for or on behalf of his wife or “in her name, place or stead.”
It is contended that the instrument shows upon its face that it was intended to make the wife liable for his debt, and to mortgage her property to secure its payment, and that his personal signature should legally be construed as the joint or dual signature of both the husband and that of the wife as her agent. That is to say, construing the recitals in the mortgage and the instrument as a whole, his lone personal signature should be construed in a double capacity and binding equally and alike both upon the husband and the wife. No authority has been cited, and none will ever be found to sustain such a construction.
As the husband of the wife, his signature was necessary to make the mortgage valid. In other words, to make it valid, it should have been signed by the husband in his own proper person and by him as attorney in fact for his wife, and it should have been executed by both husband and wife, and should have been so acknowledged.
There is no principle of law by which a person can become liable on a real mortgage which she never executed either in person or by attorney in fact. It should be noted that this is a mortgage upon real property, the title to which cannot be divested except by sale on execution or the formalities of a will or deed. For such reasons, the law requires that a power of attorney to mortgage or sell real property should be executed with all of the formalities required in a deed. For the same reason that the personal signature of Poizat, standing alone, would not convey the title of his wife in her own real property, such a signature would not bind her as a mortgagor in real property, the title to which was in her name.
We make this broad assertion that upon the facts shown in the record, no authority will ever be found to hold the wife liable on a mortgage of her real property which was executed in the form and manner in which the mortgage in question was executed.
The real question involved is fully discussed in Mechem on Agency, volume 1, page 784, in which the author says:
“It is to be observed that the question here is not how authority to execute sealed instruments is to be conferred, but how such an authority is to be executed. It is assumed that the agent was authorized to bind his principal, but the question is, has he done so.”
That is the question here,
Upon that point, there is a full discussion in the following sections, and numerous authorities are cited:
“SEC. 1093. Deed by agent must purport to be made and sealed in the name of the principal.—It is a general rule in the law of agency that in order to bind the principal by a deed executed by an agent, the deed must upon its face purport to be made, signed and sealed in the name of the principal. If, on the contrary, though the agent describes himself as ‘agent,’ or though he add the word ‘agent’ to his name, the words of grant, covenant and the like, purport upon the face of the instrument to be his, and the seal purports to be his seal, the deed will bind the agent if any one and not the principal.
“SEC. 1101. Whose deed is a given deed—How question determined.—In determining whether a given deed is the deed of the principal, regard may be had, First, to the party named as grantor. Is the deed stated to be made by the principal or by some other person? Secondly, to the granting clause. Is the principal or the agent the person who purports to make the grant? Thirdly, to the covenants, if any. Are these the covenants of the principal? Fourthly, to the testimonium clause. Who is it who is to set his name and seal in testimony of the grant? Is it the principal or the agent? And Fifthly, to the signature and seal. Whose signature and seal are these? Are they those of the principal or of the agent?
“If upon such an analysis the deed does not upon its face purport to be the deed of the principal, made, signed, sealed and delivered in his name and as his deed, it cannot take effect as such.
“Sec. 1102. Not enough to make deed the principal’s that the agent is described as such.—It is not enough merely that the agent was in fact authorized to make the deed, if he has not acted in the name of the principal. Nor is it ordinarily sufficient that he describes himself in the deed as acting by virtue of a power of attorney or otherwise, or for or in behalf, or as attorney, of the principal, or as a committee, or as trustee of a corporation, etc.; for these expressions are usually but descriptio personae, and if, in fact, he has acted in his own name and set his own hand and seal, the causes of action thereon accrue to and against him personally and not to or against the principal, despite these recitals.
“Sec. 1103. Not principal’s deed, where agent appears as grantor and signer.—Neither can the deed ordinarily be deemed to be the deed of the principal where the agent is the one who is named as the grantor or maker, and he is also the one who signs and seals it. * * *
“Sec. 1108. * * * But however clearly the body of the deed may show an intent that it shall be the act of the principal, yet unless it is executed by his attorney for him, it is not his deed, but the deed of the attorney or of no one. The most usual and approved form of executing a deed by attorney is by his writing the name of the principal and adding ‘by A B his attorney’ or ‘by his attorney A B.’ * * *”
That is good law. Applying it to the facts, under his power of attorney, Don Juan M. Poizat may have had authority to borrow money and mortgage the real property of his wife, but the law specifies how and in what manner it must be done, and the stubborn fact remains that, as to the transaction in question, that power was never exercised. The mortgage in question was executed by him and him only, and for such reason, it is not binding upon the wife, and as to her, it is null and void.
It follows that the whole decree against her and her paraphernal property and the sale of that property to satisfy the mortgage are null and void, and that any title she may have had in or to her paraphernal property remains and is now vested in the wife as fully and as absolutely as if the mortgage had never been executed, the decree rendered or the property sold. As to Don Juan M. Poizat, the decree is valid and binding, and remains in full force and effect.
It is an undisputed fact, which appears in the mortgage itself, that the land in question was the paraphernal property of the wife, but after the marriage, the old buildings on the property were torn down and a new building constructed and, in the absence of evidence to the contrary, it must be presumed that the new building is conjugal property of the husband and wife (Civil Code, art. 1404). As such, it is subject to the debts of the conjugal partnership for the payment or security of which the husband has the power to mortgage or otherwise encumber the property (Civil Code, art. 1413).
It is very probable that this particular question was not fully presented to or considered by the lower court.
The mortgage as to the paraphernal property of the wife is declared null and void ab initio, and as to her personally, the decree is declared null and void, and as to her paraphernal property, the sale is set aside and vacated, and held for naught, leaving it free and clear from the mortgage, decree and sale, and in the same condition as if the mortgage had never been executed, with costs in favor of the appellant. So ordered.
Johnson, Malcolm, Ostrand, and Romualdez, JJ., concur.