TITLE:
Even if Paz Tuason have
GREGORIO ARANETA, INC., plaintiff-appellant, vs. PAZ TUASON DE PATERNO
and JOSE VIDAL, defendants-appellants. G.R. No. L-2886; August 22, 1952
SUBJECT OF THE CASE:
This is an appeal by plaintiff Gregorio Araneta Inc. and the mortgagor Jose Vidal
of the judgment of Judge Rodas in declaring that the mortgage remained intact
and subsisting.
FACTS OF THE CASE:
Paz Tuason de Paterno, who is the registered owner of an approximately
40,703 square meter land, obtained from Jose Vidal several loans totalling
P90,098 and constituted a first mortgage on the aforesaid property to secure the
debt. In January and April, 1943, she obtained additional loans of P30,000 and
P20,000 upon the same security. On each of the last-mentioned occasions the
previous contract of mortgage was renewed and the amounts received were
consolidated. In the first novated contract the time of payment was fixed at two
years and in the second and last at four years.
In 1943 Paz Tuason decided to sell the entire property for the net amount
of P400,000 to Gregorio Araneta, who at that time Jose Araneta was said to be the
president of the same. Allegedly, Jose Araneta also acted as agent of Paz Tuason
for the sale of the latter’s land. Thus, the result of the negotiations was the
execution on October 19, 1943, of a contract called "Promesa de Compra y
Venta". This contract also stated that Paz Tuason would sell to Gregorio Araneta,
Inc. for the said amount of P400,000 the entire estate except for the mortgage to
Jose Vidal.
Paz Tuason had offered to Vidal the check for P143,150 in full settlement of
her mortgage obligation, but the mortgagee had refused to receive that check or
to cancel the mortgage. A case was filed against Vidal but the action never came
on for trial and the record and the checks were destroyed during the war
operations in January or February, 1945; and neither was the case reconstituted
afterward. After liberation, an instant action was begun by Gregorio Araneta, Inc.
to compel Paz Tuason to deliver to the plaintiff a clear title to the lots described
free from all liens and encumbrances, and a deed of cancellation of the mortgage
to Vidal. Vidal came into the case in virtue of a summon issued by order of the
court, and filed a cross-claim against Paz Tuazon to foreclose his mortgage.
The lower court's judgment was that deed of sale between Araneta and
Tuason was invalid., unless Vidal's mortgage was cancelled.
ISSUE: Whether or not Jose Araneta acted as agent of Paz Tuason de Paterno.
HELD:
No. Jose Araneta did not act as agent of Paz Tuason.
known that Jose Araneta is the same as Gregorio Arantea Inc., she would still go
with sale of her property as Jose Araneta did not by way of being an agent
performed such act of being an agent for the sale was between the corporation
and not that of with Jose. Otherwise, greed would have set in in the heart of Jose,
would Jose have been the agent as well as the purchaser of the property of Paz,
than to respect their trusted and respected relationship as principal and agent.
Moreover, Jose Araneta was not given any authority to make a binding
contract. He was not given the confidence to administer, and act in behalf of Paz
so there was no betrayal of thrust as Jose acted only as a middle-man tasked only
to look for a buyer and not to administer any sale between any prospective
buyers. Adding to this, Jose was not to make the terms of payment. Therefore,
Jose Araneta was left with no power or discretion whatsoever, which he could
abuse to his advantage and to the owner's prejudice. He is not entrusted as an
agent for the agent’s incapacity to buy principal’s property rests in the fact that
the agent and principal form one juridical person.
DOCTRINE:
ART. 1459. The following persons can not acquire by purchase, even at public or
judicial auction, neither in person nor by an agent:
2. Agents, the property the administration or sale of which may have
been intrusted to them.
Agency is defined in article 1709 in broad term,
In the opinion of Manresa(10 Manresa 4th ed. 100), agent in the sense there used
is one who accepts another's representation to perform in his name certain acts
of more or less transcendency.
Scaevola (Vol. 23, p. 403) says that the agent's in capacity to buy his principal's
property rests in the fact that the agent and the principal form one juridicial
person. In this connection Scaevola observes that the fear that greed might get
the better of the sentiments of loyalty and disinterestedness which should
animate an administrator or agent, is the reason underlying various classes of
incapacity enumerated in article 1459. And as American courts commenting on
similar prohibition at common law put it, the law does not trust human nature to
resist the temptations likely to arise of antagonism between the interest of the
seller and the buyer.
So the ban of paragraph 2 of article 1459 connotes the idea of trust and
confidence; the relationship does not involve considerations of good faith and
integrity the prohibition should not and does not apply. To come under the
prohibition, the agent must be in a fiduciary with his principal.
Art. 1491. Para. 2- the following persons can not acquire by purchase, even at a
pulic or judicial auction , either in person or through the mediation of another:
(2) Agents, the property whose administration or sale may have been entrusted
to them, unless the consent of the principal have been given.

LORA, JERRYCHAM ADAOAG

2ND YEAR LLB. Agents and Partnership