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Naguiat v. Court of Appeals, G.R. No. 118375, 412 SCRA 591, October 3, 2003

[DIGEST] Naguiat v. Court of Appeals, G.R. No. 118375, 412 SCRA 591, October 3, 2003 Concept: Agency, Agency by Estoppel Subject: Civil Law, Commercial Law

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13 views2 pages

Naguiat v. Court of Appeals, G.R. No. 118375, 412 SCRA 591, October 3, 2003

[DIGEST] Naguiat v. Court of Appeals, G.R. No. 118375, 412 SCRA 591, October 3, 2003 Concept: Agency, Agency by Estoppel Subject: Civil Law, Commercial Law

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Dennise
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We take content rights seriously. If you suspect this is your content, claim it here.
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CELESTINA NAGUIAT v.

COURT OF APPEALS and AURORA


QUEAÑO
G.R. No. 118375 | 412 SCRA 591 | October 3, 2003

Facts:

Aurora Queaño (Queaño) applied with Celestina Naguiat (Naguiat) for a loan
in the amount of Two Hundred Thousand Pesos (P200,000.00). The proceeds of the
loans were constituted in cheques granted by Naguiat in favor of Queaño.

To secure the loan, Queaño executed a Deed of Real Estate Mortgage (Deed)
in favor of Naguiat, and surrendered to the latter the owner’s duplicates of the titles
covering the mortgaged properties. When the cheques were presented, the
receiving bank dishonored them for insufficiency of funds.

Queaño received a letter from Naguiat’s lawyer, demanding settlement of the


loan. Queaño told Naguiat that she did not receive the proceeds of the loan, adding
that the checks were retained by Ruebenfeldt, who purportedly was Naguiat’s
agent.

Naguiat applied for the extrajudicial foreclosure of the mortgage. The RTC
rendered judgment, declaring the Deed null and void, and ordering Naguiat to
return to Queaño the owner’s duplicates of her titles to the mortgaged lots.

Naguiat questioned the admissibility of various representations and


pronouncements of Ruebenfeldt, invoking the rule on the nonbinding effect of the
admissions of third persons.

Issue: Whether or not Ruebenfeldt was an agent of Naguiat.

Ruling: Yes. Ruebenfeldt was an agent of Naguiat.

The Court ruled that the existence of an agency relationship between Naguiat
and Ruebenfeldt is supported by ample evidence.

Ruebenfeldt was not a stranger or an unauthorized person. Naguiat instructed


Ruebenfeldt to withhold from Queaño the checks she issued. Ruebenfeldt served as
agent of Naguiat on the loan application of Queaño’s friend, Marilou Farralese, and
it was in connection with that transaction that Queaño came to know Naguiat. It was
also Ruebenfeldt who accompanied Queaño in her meeting with Naguiat and on that
occasion, on her own and without Queaño asking for it.

There is an existence of an “agency by estoppel” as provided for uder Art.


1873 of the Civil Code. As a consequence of the interaction between Naguiat and
Ruebenfeldt, Queaño got the impression that Ruebenfeldt was the agent of Naguiat,
but Naguiat did nothing to correct Queaño’s impression. One who clothes another
with apparent authority as his agent, and holds him out to the public as such,
cannot be permitted to deny the authority of such person to act as his agent, to the
prejudice of innocent third parties dealing with such person in good faith, and in the
honest belief that he is what he appears to be.

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