Tolentino v. Philippine Postal Savings Bank

Facts: Marylou Tolentino filed a complaint for the collection of a sum of money against PPSBI. She alleged that Enrique, on behalf of Shekinah Construction, obtained a loan from PPSBI for the purpose  of developing a low-cost housing project. The loan stipulated that PPSBI shall initially release 50% of the loan to Enrique, with the remaining balance to be released upon the completion of a certain percentage of the housing project. Marylou was in the business of short-term private lending. In order to hasten the completion of the project, Enrique borrowed from Marylou. It was payable in 60 days with 5% interest per month. PPSBI Loans and Evaluations Manager, Amante, issued a letter stating that PPSBI would remit the amount in favor of Marylou within 60 days from her loan to Enrique. Later, Enrique and Marylou executed a Deed of Assignment, with the conformity of Amante, acting on behalf of PPSBI, in which Enrique agreed to assign the loan proceeds of Shekinah Construction to Marylou. Marylou was released to Enrique. Upon the lapse of 60 days, PPSBI did not pay the agreed amount to Marylou.  Marylou further learned that PPSBI allegedly released the amount to Enrique-not to her.  Marylou demanded payment from PPSBI but her request remained unheeded.

RTC dismissed the complaint. CA granted Marylou’s appeal. Both parties moved for reconsideration but both were denied. 

Issue: Whether or not PPSBI is liable to Marylou.

Held: Yes. As a contract within the authorized functions of the bank, PPSBI cannot now claim that the actions of Amante only bind him in his personal capacity.  Under the doctrine of apparent authority, Marylou can rightfully rely on the representations of Amante. Of particular relevance herein are our pronouncements in BPI Family Savings Bank. Inc. v. First Metro Investment Corporation, citing Prudential  Bank v. Court of Appeals and Francisco v. Government Service Insurance System:

We have held that if a corporation knowingly permits its officer, or any other agent, to perform acts within the scope of an apparent authority, holding him out to the public as possessing power to do those acts, the corporation will, as against any person who has dealt in good faith with the corporation through such agent, be estopped from denying such authority.