Georg Vs Holy Trinity

Georg v. Holy Trinity College, Inc., G.R. No.
190408 (July 20, 2016)
FACTS:
This petition for review seeks to reverse the 17 November 2009 Decision1 of the
Court of Appeals in CA-G.R. CV No. 89990 and reinstate the 29 November 2006
Decision of the Regional Trial Court (RTC), Branch 15, Tabaco City in Civil Case No.
T-2161.
The Holy Trinity College Grand Chorale and Dance Company was organized in 1987
by Sister Teresita Medalle (Sr. Medalle), the President of respondent Holy Trinity
College in Puerto Princesa City. In 2001, the Group was slated to perform in Greece,
Italy, Spain and Germany. Edward Enriquez (Enriquez), who allegedly represented Sr.
Medalle, contacted petitioner Benjie B. Georg to seek assistance for payment of the
Group's international airplane tickets. Petitioner is the Filipino wife of a German
national Heinz Georg. She owns a German travel agency named D Travellers
Reiseburo Georg. Petitioner, in turn, requested her brother, Atty. Benjamin Belarmino,
Jr. (Atty. Belarmino), to represent her in the negotiation with Enriquez.
On 24 April 2001, MOA was executed between petitioner, represented by Atty.

Belarmino, as first party-assignee; the Group, represented by Sr. Medalle, O.P. and
Attorney-in-Fact Enriquez as second-party assignor, and S.C. Roque Group of
Companies Holding Limited Corporation and S.C. Roque Foundation Incorporated,
represented by Violeta P. Buenaventura, as foundation-grantor.
Under the said Agreement, petitioner, through her travel agency, will advance the
payment of international airplane tickets in favor of the Group on the assurance of the
Group represented by Sr. Medalle through Enriquez that there is a confirmed financial
allocation from the foundation-grantor. The second-party assignor assigned said
amount in favor of petitioner. Petitioner paid for the Group's domestic and
international airplane tickets.
Petitioner claimed that the second-party assignor/respondent and the

foundation-grantor have not paid and refused to pay their obligation under the MOA.
Petitioner prayed that they be ordered to solidarily pay the amount representing the
principal amount mentioned in the Agreement, moral, exemplary, and actual damages,
legal fees, and cost of suit.
Respondent argued that the MOA on which petitioner based its cause of action does not
state that respondent is a party. Neither was respondent obligated to pay the amount for
the European Tour of the Group nor did it consent to complying with the terms of the
MOA. Respondent asserted that the thumbmark of Sr. Medalle was secured without her
consent. Respondent maintained that since it was not a party to the MOA, it is not
bound by the provisions stated therein.
The RTC ruled in favor of petitioner. Court of Appeals relieved respondent of any
liability for petitioner's monetary claims. The Court of Appeals held that the record is
bereft of any showing that Sr. Medalle participated in the negotiation, perfection and
partial consummation of the contract whereby petitioner advanced the payment of
international and domestic tickets required for the Group's European tour. The Court of
Appeals found that petitioner had agreed to advance the payment based on the
following considerations: 1) the representation made by Enriquez that he was
respondent's employee/representative and that the funds were available for said tickets;
2) the supposed confirmation from Dietz that Enriquez was an employee/representative
of respondent and that she had been in contact with Sr. Medalle regarding the Group's
European tour; and 3) the assurance given by Fr. Vincent Brizuela that Sr. Medalle was,
indeed, respondent's President. Petitioner relied on the confirmation of Dietz and did
not even contact Sr. Medalle. The Court of Appeals held that petitioner failed to
exercise reasonable diligence in ascertaining the existence and extent of Enriquez's
authority to act for and in behalf of the Group or for that matter, respondent. The Court
of Appeals noted the absence of respondent's name in the MOA, thus it concluded that
respondent was clearly not a party to the MOA. Hence, this petition
ISSUES:
Whether or not respondent is liable under the Memorandum of Agreement
Whether or not the Doctrine of Apparent Authority applies in this case.
RULING:
1. Under Article 1330 of the Civil Code, consent may be vitiated by any of the
following: (1) mistake, (2) violence, (3) intimidation, (4) undue influence, and (5)
fraud. Under the same provision, the contract becomes voidable. Petitioner claims
that Sr. Medalle knew fully well the import of the MOA when she affixed her
thumbmark therein while respondent alleges that fraud was employed to induce Sr.
Medalle to affix her thumbmark. There is fraud when one party is induced by the
other to enter into a contract, through and solely because of the latter's insidious
words or machinations. But not all forms of fraud can vitiate consent. Under Article
1330, fraud refers to dolo causante or causal fraud, in which, prior to or
simultaneous with execution of a contract, one party secures the consent of the other
by using deception, without which such consent would not have been given.
Sr. Medalle claimed that she affixed her thumbmark on the MOA on the basis of
Enriquez's representation that her signature/thumbmark is necessary to facilitate the
release of the loan. As intended, the affixing of her thumbmark in fact caused the
immediate release of the loan. Petitioner's claim that the provisions of the MOA were
read to Sr. Medalle was found credible by the Court of Appeals. The Court of Appeals
discussed at length how proper care and caution was taken by Atty. Belarmino to verify
what the Groups's trip was all about and the extent of the authority of Sr. Medalle
regarding the project. It simply defies logic that Atty. Belarmino would employ fraud
just so Sr. Medalle could affix her thumbmark to facilitate the release of the loan
coming from Atty. Belarmino himself.
Respondent's denial of privity to the loan contract was based on the following reasons:
1) that respondent's name does not appear on the MOA; 2) that Sr. Medalle was no
longer the President of Holy Trinity College when she affixed her thumbmark on the
MOA; and 3) that Sr. Medalle was not authorized by respondent through a board
resolution to enter into such agreement.
School administration of the Holy Trinity College has control and supervision of the
Grand Chorale and Dance Company particularly in the selection and hiring of its
trainers but as to their termination as well. A fortiori, Jearold Loyola and Errol
Gallespen were formally severed per April 30, 2001 Letter of Sr. Estrella Tangan.
This clearly shows that indeed, the Holy Trinity College Grand Chorale and Dance
Company were both under the power of the school administration. Moreover, it is
also clear that the costumes were likewise financed by the school administration.
With the foregoing, the court is convinced that the indeed the Holy Trinity College
Grand Chorale and Dance Company do not have a life of its own and merely derive its
creation, existence and continued operation or performance at the hands of the school
administration. Without the decision of the school administration, the said Chorale and
Dance Company is completely inoperative.
Sr. Medalle, as President of Holy Trinity, is clothed with sufficient authority to enter
into a loan agreement. As held by the trial court, the Holy Trinity College's Board of
Trustees never contested the standing of the Dance and Chorale Group and had in
fact lent its support in the form of sponsoring uniforms or freely allowed the school
premises to be used by the group for their practice sessions.
2. Assuming arguendo that Sr. Medalle was not authorized by the Holy Trinity
College Board, the doctrine of apparent authority applies in this case.
The doctrine of apparent authority provides that a corporation will be estopped

from denying the agent's authority if it knowingly permits one of its officers or any
other agent to act within the scope of an apparent authority, and it holds him out to
the public as possessing the power to do those acts.
The existence of apparent authority may be ascertained through (1) the general
manner in which the corporation holds out an officer or agent as having the power
to act or, in other words, the apparent authority to act in general, with which it
clothes him; or (2) the acquiescence in his acts of a particular nature, with actual
or constructive knowledge thereof, whether within or beyond the scope of his
ordinary powers.
In this case, Sr. Medalle formed and organized the Group. She had been giving
financial support to the Group, in her capacity as President of Holy Trinity College. Sr.
Navarro admitted that the Board of Trustees never questioned the existence and
activities of the Group. Thus, any agreement or contract entered into by Sr. Medalle as
President of Holy Trinity College relating to the Group bears the consent and approval
of respondent. It is through these dynamics that we cannot fault petitioner for relying
on Sr. Medalle's authority to transact with petitioner.
Finding that Sr. Medalle possessed full mental faculty in affixing her thumbmark in
the MOA and that respondent is hereby bound by her actions, we reverse the ruling of
the Court of Appeals.

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Georg v. Holy Trinity College, Inc., G.R. No.

190408 (July 20, 2016)

On 24 April 2001, MOA was executed between petitioner, represented by Atty.

Petitioner claimed that the second-party assignor/respondent and the

Whether or not respondent is liable under the Memorandum of Agreement

Whether or not the Doctrine of Apparent Authority applies in this case.

The doctrine of apparent authority provides that a corporation will be estopped

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