Chapter 14: Contract of Adhesion c.

Contracts of adhesion are valid but might be occasionally struck down only if
Marcos Prieto v. Court of Appeals there was a showing that the dominant bargaining party left the weaker party
Bersamin, J. without any choice as to be completely deprived of an opportunity to bargain
effectively.
Marcos Prieto issued a special power of attorney in favor of Antonio Prieto, allowing the latter to d. Here, by the tenor of the letter, it can be said that Marcos was fully aware of its
contract a loan with the bank and to use Marcos’ property as collateral. A loan was contracted by meaning and the sense of its every word. Also, Marcos is a practicing lawyer, and
Antonio and the property was mortgaged. Antonio eventually failed to pay the bank, hence the therefore cannot be easliy taken as the weaker party.
property was foreclosed. Marcos sought to enjoin the bank from selling the property, arguing that e. A man’s voluntary act are admissible against him for it is fair to presume that it
Antonio was not authorized by him to contract such loan. The Court rejected his argument, point correspond to the truth, and it is his fault if they do not.
out that the special power of attorney was clear evidence of the authority. In addition, an f. It should be stressed that Marcos did not deny the letter.
acknowledgment letter sent by Marcos to the bank may be considered as ratifying Antonio’s act g. To conclude, the acknowledgment letter constitutes a ratification by Marcos of
of contracting the loan, assuming that he was unauthorized. Antonio’s act of contract the loan and mortgaging the property.
h. The Court additionally concludes that Antonio had Marcos’ authority to avail of a
DOCTRINE loan mortgage the property since he was clearly authorized to do so in the
A corporation has the right to sell delinquent stocks under Sec. 68 of the Corporation Code (the special power of attorney.
corresponding provisions in the Corporation Law (secs. 38 to 48) was applied in this case). If the 2. Whether or not the notice of appeal was filed on time.
contract for subscription does not specify dates for payment, the board of directors may at any a. NO. When the RTC denied his motion for reconsideration, Marcos only had two
time declare the unpaid subscription due and payable. If not paid, the unpaid stocks may be sold days left to file a notice of appeal. He only filed four days later.
by the corporation at a delinquent sale. b. The excuse he submitted—that his wife had an embryo implant—cannot be
considered without supporting evidence.
c. Nevertheless, an appeal is a statutory right and who seeks to avail of such right
FACTS must follow the statute.
1. Spouses Marcos and Susan Prieto (Marcos) issued a special power of attorney authorizing
the spouses Antonio and Monette Prieto (Antonio) to borrow money from Far East Bank DISPOSITIVE PORTION
and use as collateral a real estate property owned by the former. The property was located The decision of the lower court is hereby AFFIRMED.
in Bauang, La Union.
2. Antonio obtained a P5,000,000 loan from Far East, evidenced by promissory notes and
several mortgage contracts signed by him. DIGESTER: Horace
3. Antonio defaulted on the loan. Far East initiated an extrajudicial foreclosure and has set a
date for the sale of the mortgaged property.
4. Marcos filed a complaint for the nullity of the mortgage contracts, with a prayer for
injunction, alleging that the promissory notes and mortgage contracts were void for having
been signed by Antonio alone, who was unauthorized by the real owner of the property.
5. The RTC dismissed the complaint. It said that even assuming Antonio had no authority to
execute the mortgages, his action was ratified by Marcos as evidenced by an
acknowledgment letter penned by the latter and sent to Far East Bank.
6. The RTC eventually disallowed his notice of appeal for having been filed out of time. This
was affirmed by the Court of Appeals.
7. In his defense before the Court, Marcos claimed that the acknowledgment letter was a
contract of adhesion.
a. The acknowledgment letter addressed to Far East and signed by Marcos read:
“It is my understanding that your Bank has granted a …Loan in favor of
(Antonio) over my real property…This confirms that the said property/ies
was/were offered as collateral…with my consent, and that I agree with all
the terms and conditions of the mortgage…I further confirm that the
proceeds of the aforesaid Discounting Line line/loan was released to
(Antonio) for his own benefit.”

ISSUES with HOLDING

1. Whether or not the acknowledgment letter, if it is considered a contract of adhesion,
constitutes a valid defense to support Marcos’ argument that the loan and mortgage
were contracted without authority.
a. NO. The acknowledgment letter is not a contract of adhesion. It is a
unilateral act committed by Marcos voluntarily.
b. And even if it were a contract of adhesion, it shouldn’t automatically result in its
invalidation.