Patrimonio vs.

Gutierrez

Facts:

The petitioner and the respondent Napoleon Gutierrez (Gutierrez) entered

into a business venture under the name of Slam Dunk Corporation (Slum Dunk), a
production outfit that produced mini-concerts and shows related to basketball. In
the course of their business, the petitioner pre-signed several checks to answer for
the expenses of Slam Dunk; however, these checks had no payee’s name, date or
amount.

The blank checks were entrusted to Gutierrez with the specific instruction
not to fill them out without previous notification to and approval by the petitioner.
Without the petitioner’s knowledge and consent, Gutierrez went to Marasigan to
secure a loan in the amount of ₱200,000.00 and Gutierrez simultaneously delivered
to Marasigan one of the blank checks the petitioner pre-signed with Pilipinas Bank
in the amount of "₱200,000.00. When Marasigan deposited the check, it was
dishonored for the reason "ACCOUNT CLOSED" and so Marasigan sought recovery
from Gutierrez and petitioner asking for the payment of ₱200,000.00.

Issue:

Was there a contract of loan perfected in this case? (Between Patrimonio and
Marasigan)

Ruling:

No. In this case there is abuse of trust and confidence of a friend. (Gutierrez
to Patriminio). In relation to a contract of agency (Art. 878 of the Civil Code) – it was
held that the contract of loan entered into by Gutierrez on behalf of Patrimonio
should be null and void, and therefore, petitioner is not bound to the contract of
loan. Patrimonio did not authorize Gutierrez whether verbally or in writing to
borrow money on his behalf nor was he aware of any transaction.
Also, the issuance of pre-signed checks in favour of Gutierrez cannot be considered
as an authority granting him to enter into a contract of loan with Marasigan.