GONZALO TUASON VS DOLORES OROZCO

Juan de Vargas y Amaya, the husband of Dolores Orozco, executed a Power of

Attorney to Enrique Grupe, giving him the authority to dispose of a house and lot
in Malate. Grupe was further authorized to mortgage the same in order to satisfy
any amount advanced to Dolores Orozco, his wife.
Grupe and Orozco obtained a loan from Tuason secured by a mortgage on the
said property. The loan was for 3,500 pesos, with 2,200 pesos to be forwarded to
Orozco and 1,300 for Grupe. 1,300 pesos was covered by 13 shares in a certain
company as security while the house and lot covered the other 3,500 pesos. The
mortgage was registered and signed by Grupe and Orozco.
However, it was only upon institution of this case that Orozco denies receiving
the sum of 2,200 pesos and further assails that the debt was incurred by Grupe
in his personal capacity, thus, it cannot bind the principal.
Issue:
W/N Orozco is liable to pay the debt to Tuason
Held:
Yes, up to the extent of 2,200 pesos plus interest.
A debt thus incurred by the agent is binding directly upon the principal, provided
the former acted, as in the present case, within the scope of his authority.
Grupe was authorized by Vargas to mortgage the said property to satisfy any
amount advanced to his wife, Orozco. He was therefore, acting within the scope
of his authority when he obtained the debt. Furthermore, it has been accepted
that Orozco received the amount of 2,200 pesos when she signed the instrument
of debt and mortgage which was subsequently registered.
The fact that the agent has also bound himself to pay the debt does not relieve
from liability the principal for whose benefit the debt was incurred. The individual
liability of the agent constitutes in the present case a further security in favor of
the creditor and does not affect or preclude the liability of the principal. In the
present case the latters liability was further guaranteed by a mortgage upon his
property. The law does not provide that the agent cannot bind himself personally
to the fulfillment of an obligation incurred by him in the name and on behalf of
his principal. On the contrary, it provides that such act on the part of an agent
would be valid.