Oliver vs.

Philippine Savings Bank, Castro asserted that, upon Oliver's instruction, a

total of P7 million was withdrawn from the latter's
788 SCRA 189 account and was then deposited to the account of
one Ben Lim (Lim) on the same date. Lim was a
FACTS: businessman who borrowed money from Oliver.
Castro knew him because he was also a depositor
Oliver alleged that sometime in 1997, she made an
and borrower of PSBank San Pedro Branch.
initial deposit of P12 million into her PSBank
account. During that time, Castro convinced her to RTC: Oliver's assertion that the withdrawal was
loan out her deposit as interim or bridge financing made without her consent prevailed in the absence
for the approved loans of bank borrowers who were of any proof to the contrary. The cash savings
waiting for the actual release of their loan proceeds. withdrawal slips should have been offered in
evidence by either PSBank or Castro to settle the
Under this arrangement, Castro would first show issue of whether the amount of P7 million was
the approved loan documents to Oliver. Thereafter, actually withdrawn by Oliver or by her authorized
Castro would withdraw the amount needed from representative or agent.
Oliver's account. Upon the actual release of the
loan by PSBank to the borrower, Castro would then CA: Reversed RTC’s decision
charge the rate of 4% a month from the loan ISSUE: WHETHER THERE WAS A CONTRACT
proceeds as interim or bridge financing interest. OF AGENCY BETWEEN OLIVER AND CASTRO.
Together with the interest income, the principal
amount previously withdrawn from Oliver's bank RULING: YES.
account would be deposited back to her account. There was an implied agency between Oliver and
Meanwhile, Castro would earn a commission of Castro; the loans were properly acquired
10% from the interest.
A contract of agency may be inferred from all the
Their arrangement went on smoothly for months. dealings between Oliver and Castro. Agency can
Due to the frequency of bank transactions, Oliver be express or implied from the acts of the principal,
even entrusted her passbook to Castro. from his silence or lack of action, or his failure to
Castro stopped rendering an accounting for Oliver. repudiate the agency knowing that another, person
The latter then demanded the return of her is acting on his behalf without authority. The
passbook. When Castro showed her the passbook question of whether an agency has been created is
sometime in late January or early February 1999, ordinarily a question which may be established in
she noticed several erasures and superimpositions the same way as any other fact, either by direct or
therein. She became very suspicious of the many circumstantial evidence. The question is ultimately
erasures pertaining to the December 1998 entries one of intention.
so she requested a copy of her transaction history In this case, Oliver and Castro had a business
register from PSBank. agreement wherein Oliver would obtain loans from
When her transaction history register was shown to the bank, through the help of Castro as its branch
her, Oliver was surprised to discover that the manager; and after acquiring the loan proceeds,
amount of P4,491,250.00 (estimated at P4.5 Castro would lend the acquired amount to
million) was entered into her account on December prospective borrowers who were waiting for the
21, 1998. While a total of P7 million was withdrawn actual release of their loan proceeds. Oliver would
from her account on the same day, Oliver asserted gain 4% to 5% interest per month from the loan
that she neither applied for an additional loan of proceeds of her borrowers, while Castro would
P4.5 million nor authorized the withdrawal of P7 earn a commission of 10% from the interests.
million. Clearly, an agency was formed because Castro
bound herself to render some service in
Oliver applied for another loan in the amount of representation or on behalf of
P4.5 million as evidenced by a promissory note. Oliver, in the furtherance of their business pursuit.
For months, the agency between Oliver and Castro 1998. When compared with Oliver's passbook, the
benefited both parties. Oliver, through Castro's latter showed that the next transaction from
representations, was able to obtain loans, relend December 16, 1998 was on December 28, 1998. It
them to borrowers, and earn interests; while Castro was also obvious to the naked eye that the
acquired commissions from the transactions. Oliver December 28, 1998 entry in the passbook was
even gave altered.
Castro her passbook to facilitate the transactions.

Accordingly, the laws on, agency apply to their

relationship. Article 1881 of the New Civil Code
provides that the agent must act within the scope of
his authority. He may do such acts as may be
conducive to the accomplishment of the purpose of
the agency. Thus, as long as the agent acts within
the scope of the authority given by his principal, the
actions of the former shall bind the latter.
Oliver claims that the P4.5 million loan, released on
December 21, 1998, and the P1,396,310.45 loan,
released on January 5, 1999, were not acquired
with her consent. Castro and PSBank, on the other
hand, countered that these loans were obtained
with Oliver's full consent.
The Court finds that the said loans were acquired
with Oliver's authority. The promissory notes and
the release tickets for the said loans bore her
signatures. She failed to prove that her signatures
appearing on the loan documents were forged.
Hence, the loan documents were reliable and these
proved that the loans were processed by Castro
within the scope of her authority.

P7 million was improperly withdrawn; agent acted

beyond her scope of authority
Although it was proven that Oliver authorized the
loans, in the aggregate amount of P5,888,149.33,
there was nothing in the records which proved that
she also allowed the withdrawal of P7 million from
her bank account. Oliver vehemently denied that
she gave any authority whatsoever to either Castro
or PSBank to withdraw the said amount.
Castro's lack of authority to withdraw the P7 million
on behalf of Oliver became more apparent when
she altered the passbook to hide such transaction.
It must be remembered that Oliver entrusted her
passbook to
Castro. In the transaction history register for her
account, it was clear that there was a series of
dealings from December 17, 1998 to December 23,