G.R. No. 202364, 30 August 2017


Ricarcen was a family corporation. Marilyn R. Soliman (Marilyn) was its president from 2001 to August 2003. The other members of the board of directors during that time were Marilyn’s mother, Erlinda Villanueva, her brother, her aunt, and her sisters.

Marilyn, acting on Ricarcen’s behalf as its president, took out a loans from Calubad. This loan was secured by a real estate mortgage.

To prove her authority to execute the three (3) mortgage contracts in Ricarcen’s behalf, Marilyn presented Calubad with a Board Resolution dated October 15, 2001.

Ricarcen, after firing Marilyn filed its Complaint for Annulment of Real Estate Mortgage and Extrajudicial Foreclosure of Mortgage and Sale with Damages against Marilyn, Calubad, and employees of the Registry of Deeds of Quezon City and of the Regional Trial Court of Quezon City.

Ricarcen claimed that it never authorized its former president Marilyn to obtain loans from Calubad or use the Quezon City property as collateral for the loans. Calubad, on the other hand, asserted that he exercised the necessary diligence required under the circumstances by requiring Marilyn to submit the necessary documents to prove her authority from Ricarcen. Calubad likewise argued that even if Ricarcen did not authorize Marilyn, it was already estopped from denying her authority since the loan proceeds had been released and Ricarcen had benefited from them.


Whether Marilyn, as President, has authority to enter into contracts for and in Ricarcen’s behalf.


Yes. As the former president of Ricarcen, it was within Marilyn’s scope of authority to act for and enter into contracts in Ricarcen’s behalf. Her broad authority from Ricarcen can be seen with how the corporate secretary entrusted her with blank yet signed sheets of paper to be used at her discretion.She also had possession of the owner’s duplicate copy of the land title covering the property mortgaged to Calubad, further proving her authority from Ricarcen.

The doctrine of apparent authority provides that even if no actual authority has been conferred on an agent, his or her acts, as long as they are within his or her apparent scope of authority, bind the principal. However, the principal’s liability is limited to third persons who are reasonably led to believe that the agent was authorized to act for the principal due to the principal’s conduct.

Hence, Calubad could not be faulted for continuing to transact with Marilyn, even agreeing to give out additional loans, because Ricarcen clearly clothed her with apparent authority. Likewise, it reasonably appeared that Ricarcen’s officers knew of the mortgage contracts entered into by Marilyn in Ricarcen’s behalf as proven by the issued Banco De Oro checks as payments for the monthly interest and the principal loan.

Ricarcen claimed that it never granted Marilyn authority to transact with Calubad or use the Quezon City property as collateral for the loans, but its actuations say otherwise.

It appears as if Ricarcen and its officers gravely erred in putting too much trust in Marilyn. However, Calubad, as an innocent third party dealing in good faith with Marilyn, should not be made to suffer because of Ricarcen’s negligence in conducting its own business affairs.

*Case Digest by Nikki P. Ebillo, JD-4, Andres Bonifacio Law School, SY 2019-2020