TITLE:

GREGORIO ARANETA, INC., plaintif-appellant, vs. PAZ TUASON DE PATERNO

and JOSE VIDAL, defendants-appellants. G.R. No. L-2886; Auu!" 22, #$%2

SU&JECT O' T(E CASE:
This is an appeal by plaintif Gregorio Araneta Inc. and the mortgagor Jose Vidal
of the jdgment of Jdge !odas in declaring that the mortgage remained intact
and sbsisting.
'ACTS O' T(E CASE:
"a# Tason de "aterno, $ho is the registered o$ner of an appro%imately
&',(') s*are meter land, obtained from Jose Vidal several loans totalling
"+','+, and constitted a -rst mortgage on the aforesaid property to secre the
debt. In Janary and April, .+&), she obtained additional loans of ")',''' and
"/',''' pon the same secrity. 0n each of the last-mentioned occasions the
previos contract of mortgage $as rene$ed and the amonts received $ere
consolidated. In the -rst novated contract the time of payment $as -%ed at t$o
years and in the second and last at for years.
In .+&) "a# Tason decided to sell the entire property for the net amont
of "&'',''' to Gregorio Araneta, $ho at that time Jose Araneta $as said to be the
president of the same. Allegedly, Jose Araneta also acted as agent of "a# Tason
for the sale of the latter1s land. Ths, the reslt of the negotiations $as the
e%ection on 0ctober .+, .+&), of a contract called 2"romesa de 3ompra y
Venta2. This contract also stated that "a# Tason $old sell to Gregorio Araneta,
Inc. for the said amont of "&'',''' the entire estate e%cept for the mortgage to
Jose Vidal.
"a# Tason had ofered to Vidal the chec4 for ".&),.5' in fll settlement of
her mortgage obligation, bt the mortgagee had refsed to receive that chec4 or
to cancel the mortgage. A case $as -led against Vidal bt the action never came
on for trial and the record and the chec4s $ere destroyed dring the $ar
operations in Janary or 6ebrary, .+&57 and neither $as the case reconstitted
after$ard. After liberation, an instant action $as begn by Gregorio Araneta, Inc.
to compel "a# Tason to deliver to the plaintif a clear title to the lots described
free from all liens and encmbrances, and a deed of cancellation of the mortgage
to Vidal. Vidal came into the case in virte of a smmon issed by order of the
cort, and -led a cross-claim against "a# Ta#on to foreclose his mortgage.
The lo$er cort8s jdgment $as that deed of sale bet$een Araneta and
Tason $as invalid., nless Vidal8s mortgage $as cancelled.
ISSUE: 9hether or not Jose Araneta acted as agent of "a# Tason de "aterno.
(ELD:
:o. Jose Araneta did not act as agent of "a# Tason. ;ven if "a# Tason have
4no$n that Jose Araneta is the same as Gregorio Arantea Inc., she $old still go
$ith sale of her property as Jose Araneta did not by $ay of being an agent
performed sch act of being an agent for the sale $as bet$een the corporation
and not that of $ith Jose. 0ther$ise, greed $old have set in in the heart of Jose,
$old Jose have been the agent as $ell as the prchaser of the property of "a#,
than to respect their trsted and respected relationship as principal and agent.
<oreover, Jose Araneta $as not given any athority to ma4e a binding
contract. =e $as not given the con-dence to administer, and act in behalf of "a#
so there $as no betrayal of thrst as Jose acted only as a middle-man tas4ed only
to loo4 for a byer and not to administer any sale bet$een any prospective
byers. Adding to this, Jose $as not to ma4e the terms of payment. Therefore,
Jose Araneta $as left $ith no po$er or discretion $hatsoever, $hich he cold
abse to his advantage and to the o$ner8s prejdice. =e is not entrsted as an
agent for the agent1s incapacity to by principal1s property rests in the fact that
the agent and principal form one jridical person.
DOCTRINE:
A!T. .&5+. The follo$ing persons can not ac*ire by prchase, even at pblic or
jdicial action, neither in person nor by an agent>
2. A)n"!, "*) +,o+),"- "*) ad./n/!",a"/on o, !a0) o1 2*/3* .a- *a4)
5))n /n",u!")d "o "*)..
Agency is de-ned in article .('+ in broad term,
In the opinion of <anresa?.' <anresa &th ed. .''@, agent in the sense there sed
is one $ho accepts another8s representation to perform in his name certain acts
of more or less transcendency.
Acaevola ?Vol. /), p. &')@ says that the agent8s in capacity to by his principal8s
property rests in the fact that the agent and the principal form one jridicial
person. In this connection Acaevola observes that the fear that greed might get
the better of the sentiments of loyalty and disinterestedness $hich shold
animate an administrator or agent, is the reason nderlying varios classes of
incapacity enmerated in article .&5+. And as American corts commenting on
similar prohibition at common la$ pt it, the la$ does not trst hman natre to
resist the temptations li4ely to arise of antagonism bet$een the interest of the
seller and the byer.
Ao the ban of paragraph / of article .&5+ connotes the idea of trst and
con-dence7 the relationship does not involve considerations of good faith and
integrity the prohibition shold not and does not apply. To come nder the
prohibition, the agent mst be in a -dciary $ith his principal.
Art. .&+.. "ara. /- the follo$ing persons can not ac*ire by prchase, even at a
plic or jdicial action , either in person or throgh the mediation of another>
?/@ Agents, the property $hose administration or sale may have been entrsted
to them, nless the consent of the principal have been given.
B0!A, J;!!C3=A< ADA0AG
/
:D
C;A! BBE. Agents and "artnership