DUNGO

#66 LOPEZ v. ALVENDIA

Obligations to Third Parties | Dec. 24, 1964 | Paredes, J.
FACTS:
 March 1957 - David and Adelaida Minsberg, private respondents bought a parcel of land
from Petitioners Lopez et al.
o March 25, 1957 – P990 first payment
o Apr. 1 – P1,100 to complete the downpayment
o Written contract was later executed: that upon completion of {2560 the certificate
of title would be issued to private respondents
 July 1958 – Minsbergs received from petitioners a written notice to the effect that if they
fail to pay the balance of P5560 in two weeks’ time, the P2k downpayment would be
forfeited and they would lose all their rights to the lovt
o Minsbergs paid the balance and then demanded the title, but Petitioners Lopez
failed to deliver the title
 1960 – Minsbergs began constructing their house on the lot, they asked for title again
but the petitioners merely issued a certification, stating that the Minsbergs have not paid
in full the purchase price of the lot
 Minsbers filed a case in the CFI presided by respondent Alvendia in who resolved the
case in their favor, ordering the defendants to deliver plaintiffs the certificate of title on
and damages
o Petitoners Lopez alleged that they were unable to deliver title upon demand
because the title of the whole subdivision was with the GSIS land, part of which
is the lot in question, having been mortgaged to secure a loan of P1,600,00 not
communicated to the Minsbergs
 Sept. 1962 – the Minsbergs presented a “Motion for Execution” it appearing that
although the title was delivered, one of the checks issued to cover P3500 damages was
dishonored by the drawee bank with the notation “no arrangement” when presented.
o Petitioners filed an opposition, contending they substantially complied with the
judgment, the non-cashing of the check was a mere oversight on the part of the
cashier of the bank A statement
 Deposited the value of the dishonored check to show good faith
 Respondent Judge Alvendia issued an order which held that defendants failed to comply
with the requirements in the previous decision that they pay the damages to plaintiffs
worth P3500 not later than Sept. 21, 1962, which would make them pay P10,000 instead
 Petitioners Lopez presented an Urgent MFR stating that at the time of issuance, delivery
and presentment of the dishonored check, there was already an arrangement between
petitioners and the Republic Bank through Atty. Eusebio Lopez Jr., that the dishonor was
due to an oversight, that upon learning of the dishonor, they informed the Minsbergs
through counsel, to redeposit or present for payment the check with the drawee bank,
that on Oct. 5, 1962 before the Issuance of execution, they deposited the full amount to
the Court
o Denied by Court, stating that delivery of promissory notes or bills of exchange
only produce effect once cased

ISSUE:
1. WoN petitioners Lopez are responsible for the oversight done by the bank’s cashier? -
YES
DUNGO

DISCUSSION:
1. Yes, the bank, having accepted the arrangement had constituted itself as the
agent to the petitioners.
 Petitioners attribute their failure to live up to the terms of the judgment to an alleged
oversight on the part of the cashier of the drawee bank in not cashing the check when
presented, and contend that by such “mere oversight”, that they have substantially
complied with the judgment
 From the decision to the date of their required compliance, 1 month transpired.
Petitioners could have made sure that the arrangement was known to the cashier who
did not state at all in his certification that there was an arrangement.
 The principal is responsible for the acts of the agent done within the scope of his
authority, and should bear the damages caused upon third parties.
 If the oversight lies in the bank, petitioners are free to sue bank for damages occasioned
thereby.

RELEVANCE:
This case shows that the principal is responsible for the acts of the agent done within the scope
of his authority, and should thus bear the damages caused upon third parties. The principal can
just then sue the agent if they want to recover.