G.R. No. 118509 December 1, 1995

LIMKETKAI SONS MILLING, INC., petitioner, vs.COURT OF APPEALS, BANK OF THE PHILIPPINE ISLANDS and NATIONAL BOOK STORE, respondents.

FACTS:

May 14, 1976, Philippine Remnants Co., Inc. constituted BPI as its trustee to manage,

administer, and sell its real estate property a 33,056-square meter lot at Barrio Bagong Ilog,

Pasig.

On June 23, 1988, Pedro Revilla, Jr., a licensed real estate broker was given formal authority

by BPI to sell the lot for P1,000.00 per square meter. This arrangement was concurred in by

the owners of the Philippine Remnants.

Broker Revilla contacted Alfonso Lim of petitioner company who agreed to buy the land.

On July 9, 1988, Revilla formally informed BPI that he had procured a buyer, herein

petitioner,

On July 11, 1988, petitioner's officials, Alfonso Lim and Albino Limketkai, went to BPI to

confirm the sale. They were entertained by Vice-President Merlin Albano and Asst. Vice-

President Aromin. The Tparties finally agreed that the lot would be sold at P1,000.00 per

square meter to be paid in cash. Since the authority to sell was on a first come, first served

and non-exclusive basis, it may be mentioned at this juncture that there is no dispute over

petitioner's being the first comer and the buyer to be first served.

Notwithstanding the final agreement to pay P1,000.00 per square meter on a cash basis,

Alfonso Lim asked if it was possible to pay on terms. He wrote BPI through Merlin Albano

embodying the payment initially of 10% and the remaining 90% within a period of 90 days.

Two or three days later, petitioner learned that its offer to pay on terms had been frozen.

Alfonso Lim went to BPI on July 18, 1988 and tendered the full payment of P33,056,000.00

to Albano. The payment was refused because Albano stated that the authority to sell that

particular piece of property in Pasig had been withdrawn from his unit. The same check was

tendered to BPI Vice-President Nelson Bona who also refused to receive payment.

An action for specific performance with damages was thereupon filed on August 25, 1988 by

petitioner against BPI. In the course of the trial, BPI informed the trial court that it had sold

the property under litigation to NBS on July 14, 1989.

The Regional Trial Court of the National Capital Judicial Region stationed in Pasig rendered

judgement in favor of rendered judgment on favor or petitioner -- Declaring the Deed of Sale

of the property covered by T.C.T. No. 493122 in the name of the Bank of the Philippine

Islands, situated in Barrio Bagong Ilog, Pasig, Metro Manila, in favor of National Book Store,

Inc., null and void.

On Appeal Respondents, however, contend that. Vice-Presidents Aromin and Albano had no

authority to bind BPI on this particular transaction. The CA reversed the trial court's decision

and dismissed petitioner's complaint for specific performance and damages

ISSUE: W/N bank officials involved in the transaction authorized by BPI to enter into the questioned

contract.

HELD: Yes, Vice-Presidents Aromin and Albano had the authority to bind BPI in this particular

transaction.

Rolando Aromin was BPI Assistant Vice-President and Trust Officer. He directly supervised the BPI

Real Property Management Unit. He had been in the Real Estate Division since 1985 and was the

head supervising officer of real estate matters. Aromin had been with the BPI Trust Department

since 1968 and had been involved in the handling of properties of beneficial owners since 1975

Exhibit 10 of BPI, the February 15, 1989 letter from Senior Vice-President Edmundo Barcelon, while

purporting to inform Aromin of his poor performance, is an admission of BPI that Aromin was in

charge of Torrens titles, lease contracts, problems of tenants, insurance policies, installment

receivables, management fees, quitclaims, and other matters involving real estate transactions. His

immediate superior, Vice-President Merlin Albano had been with the Real Estate Division for only

one week but he was present and joined in the discussions with petitioner.

There is nothing to show that Alfonso Lim and Albino Limketkai knew Aromin before the incident.

Revilla brought the brothers directly to Aromin upon entering the BPI premises. Aromin acted in a

perfectly natural manner on the transaction before him with not the slightest indication that he was

acting ultra vires. This shows that BPI held Aromin out to the public as the officer routinely handling

real estate transactions and, as Trust Officer, entering into contracts to sell trust properties.

Respondents state and the record shows that the authority to buy and sell this particular trust

property was later withdrawn from Trust Officer Aromin and his entire unit. If Aromin did not have

any authority to act as alleged, there was no need to withdraw authority which he never possessed.

Accordingly a banking corporation is liable to innocent third persons where the representation is

made in the course of its business by an agent acting within the general scope of his authority

The position and title of Aromin alone, not to mention the testimony and documentary evidence

about his work, leave no doubt that he had full authority to act for BPI in the questioned transaction.

There is no allegation of fraud, nor is there the least indication that Aromin was acting for his own

ultimate benefit. BPI later dismissed Aromin because it appeared that a top official of the bank was

personally interested in the sale of the Pasig property and did not like Aromin's testimony. Aromin

was charged with poor performance but his dismissal was only sometime after he testified in court.

More than two long years after the disputed transaction, he was still Assistant Vice-President of BPI.

Everything in the record points to the full authority of Aromin to bind the bank, except for the self-

serving memoranda or letters later produced by BPI that Aromin was an inefficient and undesirable

officer and who, in fact, was dismissed after he testified in this case. Aromin's alleged inefficiency is

not proof that he was not fully clothed with authority to bind BPI.