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“To obligate the principal as a guarantor or surety.

” It was argued that the original power of attorney


included a wide range of powers (including the general power of
G.R. No. L-24543 July 12, 1926 Pirretas to sell the business upon conditions fixed by Pirretas, as
ROSA VILLA MONNA, plaintiff-appellee, vs. GUILLERMO well as the power of substitution to collect balance due to Rosa).
GARCIA BOSQUE, ET AL., defendants. GUILLERMO However, the Court has also said that the substitution agreement
GARCIA BOSQUE, F. H. GOULETTE, and R. G. between Pirretas and FH were explicit – the sole purpose of the
FRANCE, appellants. substitution was only to “collect the balance of the selling price of
the Printing Establishment and Bookstore above-mentioned,
FACTS: which has been sold to Messrs. Bosque and Pomar”. Nothing
Rosa, widow of E. Bota, was the owner of a printing can be construed to authorize Figueras to discharge debtors or
establishment in Escolta, known as La Flor de Cataluna, Viuda novate the contract. On the other hand, the substitution
de E. Bota. Rosa, acting through her attorney-in-fact, Manuel agreement is very much explicit in limiting the powers of
Pirretas, sold the store to Guillermo Bosque and Jose Ruiz for Figueras.
P55,000.00, payable in four installments of P15,000.00 upon
execution of the contract, P10,000.00 one year after the date of Furthermore, it was the mercantile entity Figueras
execution, P10,000.00 for the 2nd year and P15,000.00 on the Hermanos (or its legal representatives) who were given the
3rd year. Interest rate is set to be 7% per annum. France and capacity to exercise the substituted power. M. T. Figueras
Goulette obligated themselves as solidary sureties for Bosque. intervenes as purported attorney in fact without anything
First installment was paid in order. whatever to show that he is in fact the legal representative of
Figueras Hermanos or that he is there acting in such capacity.
Manuel, the attorney-in-fact, went to a prolonged visit The act of substitution conferred no authority whatever on M. T.
to Spain, and in consideration of that trip, he made a document Figueras as an individual. The argument of Bosque that Rosa
purporting to be a partial substitution of agency, to Figueras had ratified the novation of the contract through acceptance of
Hermanos, a mercantile entity so that "they may be able to effect the amount was also disregarded by the Court, stating that the
the collection of money as may be due to the plaintiff by reason Bota Printing Company became a primary debtor for Guillermo et
of the sale of the bookstore" al. Rosa could therefore accept the payment of the debt despite
Rosa’s refusal to be bound by the supposed novation of the
When the time to collect the 2nd year installment contract of debt of Guillermo.
became due, Bosque was unable to comply. After several
negotiations with Alfredo Rocha, representative of Figueras France and Goulette, the appellant sureties,
Hermanos, an agreement was reached – Figueras will accept P5, contended they were discharged by the agreement between the
800.00 plus three promissory notes payable each month from principal debtor and Figueras Hermanos, as attorney in fact for
December 1920 to April 1921. The notes were not paid promptly the plaintiff, whereby the period for the payment of the second
by Bosque but the balance due to them was paid in full on installment was extended, without the assent of the sureties, and
December 24, 1921. new promissory notes for unpaid balance were executed in the
manner already mentioned. Such execution undoubtedly
About this time the owners of La Flor de Cataluña constituted an extension of time as to the obligation included
appear to have converted it into a limited partnership under the therein, such as would release a surety, even though of the
style of Guillermo Garcia Bosque, S. en C.;" and presently a solidary type, under article 1851 of the Civil Code. Nevertheless,
corporation was formed to take over the business under the this court held that the said extension and novation related only
name "Bota Printing Company, Inc.". The partnership appears to to the second installment of the original obligation and interest
have conveyed all its assets to this corporation for the purported accrued up to that time. Furthermore, the total amount of these
consideration of P15, 000.00. Meanwhile the seven notes notes was afterwards paid in full, and they are not now the
representing the unpaid balance of the second installment and subject of controversy. It results that the extension thus effected
interest were failing due without being paid. could not discharge the sureties from their liability as to other
A certain M. T. Figueras later enters into an agreement with installments upon which alone they have been sued in this action.
Bosque, stating as follows: (a) Guillermo was indebted to Rosa
in the amount of P32, 000 for which R. G. France and F. H. Finally, it is contended by the appellant sureties that
Goulette are bound as joint and several sureties, and that the they were discharged by a fraud practiced upon them by the
partnership mentioned had transferred all its assets to the Bota plaintiff in failing to require the debtor to execute a mortgage
Printing Company, Inc., of which George Andrews was a upon the printing establishment to secure the debt which is the
principal stockholder; (b) France and Goulette shall be relieved subject of this suit. With this insistence we are unable to agree,
from all liability on their contract as sureties and that in lieu of for the reason that the proof does not show, in our opinion, that
Guillermo, France and Goulette, the Bota Printing Company, Inc., the creditor, on her attorney in fact, was a party to any such
as debtor to the extent of P20, 000, which indebtedness was agreement. On the other hand it is to be collected from the
expressly assumed by it, and George Andrews as debtor to the evidence that the suggestion that a mortgage would be executed
extent of P12, 000, will undertake to pay Rosa. on the plant to secure the purchase price and that this mortgage
would operate for the protection of the sureties came from the
Rosa is now alleging that Figueras had no authority to principal and not from any representative of the plaintiff.
execute the contract containing the release of Guillermo et al
from their liability, and that she had not ratified the same. As a result of our examination of the case we find no
Guillermo et al argue otherwise, using the agreement as a error in the record prejudicial to any of the appellants, and the
novation releasing him from personal liability. judgment appealed from will be affirmed, So ordered.

ISSUE: Whether the plaintiff is bound to the agreement by


Figueras.

HELD: NO. The court first looks at the partial substitution of


agency made by Manuel Pirretas, conferring on Figueras
Hermanos or the person or persons exercising legal
representation of FH all of the powers that had been conferred
on Pirretas by the plaintiff in the original power of attorney.

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