SPS. VILLARUZ v. LBP

Sps. Villaruz v. LBP and Register of Deeds of Davao City

G.R. No. 192602

January 18, 2017

FACTS :

Paula Agbisit (Agbisit), mother of petitioner May S. Villaluz (May), requested the latter to provide her with collateral for a loan. At the time, Agbisit was the chairperson of Milflores Cooperative and she needed P600,000 to P650,000 for the expansion of her backyard cut flowers business. May convinced her husband, Johnny Villaluz to allow Agbisit to use their land, located in Calinan, Davao City and covered by Transfer Certificate of Title as collateral. Spouses Villaluz executed a Special Power of Attorney in favor of Agbisit authorizing her to, among others, "negotiate for the sale, mortgage, or other forms of disposition a parcel of land covered by TCT, The one-page power of attorney neither specified the conditions under which the special powers may be exercised nor stated the amounts for which the subject land may be sold or mortgaged. Unfortunately, Milflores Cooperative was unable to pay its obligations to Land Bank. Thus, Land Bank filed a petition for extra-judicial foreclosure sale with the Office of the Clerk of Court of Davao City. The Spouses Villaluz filed a complaint with the Regional Trial Court (RTC) of Davao City seeking the annulment of the foreclosure sale. The sole question presented before the RTC was whether Agbisit could have validly delegated her authority as attorney-in-fact to Milflores Cooperative.

On appeal, the CA affirmed the RTC Decision.

ISSUES:

WO/N agent has the power to appoint a substitute

RULING:

Although the law presumes that the agent is authorized to appoint a substitute, it also imposes an obligation upon the agent to exercise this power conscientiously.

The Spouses Villaluz understandably feel shorthanded because their property was foreclosed by reason of another person's inability to pay. However, they were not coerced to grant a special power of attorney in favor of Agbisit. Nor were they prohibited from prescribing conditions on how such power may be exercised. Absent such express limitations, the law recognizes Land Bank's right to rely on the terms of the power of attorney as written.

The decision was denied and the higher court Affirmed the CA decision dated September 22, 2009 and Resolution dated May 26, 2010.