Spouses Ramos vs. Raul Obispo and Far East Bank and Trust Co.

G.R. No. 193804. February 27, 2013 Mortgage; accommodation mortgage; anctioned under !rtic"e 208# o$ t%e &i'i" &ode; accommodation mortgagor i ordinari"y not t%e reci(ient o$ t%e "oan; rea onab"e (rom(tne in attac)ing t%e 'a"idity o$ a mortgage; unrea onab"e de"ay may de"ay may amount to rati$ication. Fact * +etitioner Ni"o Ramo and re (ondent Rau" ,bi (o met eac% ot%er and became be t $riend -%i"e t%ey -ere -or)ing in .audi !rabia a contract -or)er . !$ter bot% %ad returned to t%e +%i"i((ine , Ramo continued to 'i it ,bi (o -%o %a a %ard-are tore. .ometime in !ugu t 199/, (etitioner e0ecuted a Rea" 1 tate Mortgage 2R1M3 in $a'or o$ re (ondent Far 1a t 4an) and 5ru t &om(any 2F145&36 Fair'ie- 4ranc%, o'er t%eir (ro(erty. 5%e notari7ed R1M ecured credit accommodation e0tended to ,bi (o. ,n e'en date, t%e R1M -a regi tered and annotated on t%e a$ore aid tit"e. ,n .e(tember 17, 1999, F145& recei'ed a "etter $rom (etitioner in$orming t%at ,bi (o, to -%om t%ey entru ted t%eir (ro(erty to be u ed a co""atera" $or a "oan in t%eir be%a"$, %ad in tead ecured a "oan and %ad $ai"ed to return t%eir tit"e de (ite $u"" (ayment by (etitioner . +etitioner "i)e-i e demanded t%at F145& $urni % t%em -it% document and (a(er (ertinent to t%e mortgage $ai"ing -%ic% t%ey -i"" be con trained to re$er t%e matter to t%eir "a-yer $or t%e $i"ing o$ a((ro(riate "ega" action again t ,bi (o and F145&. 5%ere being no action ta)en by F145&, (etitioner $i"ed on ,ctober 12, 1999 a com("aint $or annu"ment o$ rea" e tate mortgage -it% damage again t F145& and ,bi (o. +etitioner a""eged t%at t%ey igned t%e b"an) R1M $orm gi'en by ,bi (o -%o $aci"itated t%e "oan -it% F145&, and t%at t%ey ub e8uent"y recei'ed t%e "oan (roceed -%ic% t%ey (aid in $u"" t%roug% ,bi (o. 9it% t%eir "oan $u""y ett"ed, t%ey demanded t%e re"ea e o$ t%eir tit"e but ,bi (o re$u ed to ta") or ee t%em, a %e i no- %iding $rom t%em. :(on 'eri$ication -it% t%e Regi try o$ ;eed o$ <ue7on &ity, (etitioner aid t%ey -ere ur(ri ed to "earn t%at t%eir (ro(erty -a in $act mortgaged. +etitioner t%u (rayed t%at t%e R1M be dec"ared 'oid and cance""ed; t%at F145& be ordered to de"i'er to t%em a"" document (ertaining to t%e "oan and mortgage o$ ,bi (o; and t%at F145& and ,bi (o be ordered to (ay mora" damage and attorney= $ee . Ratio* 5%e 'a"idity o$ an accommodation mortgage i a""o-ed under !rtic"e 208# o$ t%e &i'i" &ode -%ic% (ro'ide t%at >?t@%ird (er on -%o are not (artie to t%e (rinci(a" ob"igation may ecure t%e "atter by ("edging or mortgaging t%eir o-n (ro(erty.A !n accommodation mortgagor, ordinari"y, i not %im e"$ a reci(ient o$ t%e "oan, ot%er-i e t%at -ou"d be contrary to %i de ignation a uc%. Bt bear tre ing t%at an accommodation mortgagor, ordinari"y, i not %im e"$ a reci(ient o$ t%e "oan, ot%er-i e t%at -ou"d be contrary to %i de ignation a uc%. 9e %a'e %e"d t%at it i not a"-ay nece ary t%at t%e accommodation mortgagor be

a((ri ed be$ore%and o$ t%e entire amount o$ t%e "oan nor %ou"d it $ir t be determined be$ore t%e e0ecution o$ t%e .(ecia" +o-er o$ !ttorney in $a'or o$ t%e debtor. 5%i i e (ecia""y true -%en t%e -ord u ed by t%e (artie indicate t%at t%e mortgage er'e a a continuing ecurity $or credit obtained a -e"" a $uture "oan a'ai"ment . Mortgagor de iring to attac) a mortgage a in'a"id %ou"d act -it% rea onab"e (rom(tne , and unrea onab"e de"ay may amount to rati$ication.

Republic of the PhilippinesSUPREME COURTManila FIRST DIVISION G.R. No. 193804 February 27, 2013

SPOUSES NI O R!MOS a"# E I!$OR! R!MOS, Petitioners, vs.R!U O%ISPO a"# F!R E!ST %!N& !N$ TRUST COMP!N', Respondents. D (I !R!M!, J.: !ISION

"ssailed in this petition for revie# on certiorari under Rule $% is the Decision& dated 'anuar( )*, )+&+ of the !ourt of "ppeals ,!"- in !"./.R. !V No. 0)1*0 #hich reversed and set aside the Decision ) dated 'anuar( )2, )++$ of the Re3ional Trial !ourt ,RT!- of 4ue5on !it(, 6ranch 0) in !ivil !ase No. 4.22.10200. The facts follo#7 Petitioner Nilo Ra8os and respondent Raul Obispo 8et each other and beca8e best friends #hile the( #ere #or9in3 in Saudi "rabia as contract #or9ers. "fter both had returned to the Philippines, Ra8os continued to visit Obispo #ho has a hard#are store. So8eti8e in "u3ust &22:, petitioners e;ecuted a Real state Mort3a3e ,R M- in favor of respondent Far ast 6an9 and Trust !o8pan( ,F 6T!-.Fairvie# 6ranch, over their propert( covered b( Transfer !ertificate of Title ,T!T- No. RT.:$$)) ,1:21*+- of the Re3istr( of Deeds of 4ue5on !it(. The notari5ed R M secured

credit acco88odations e;tended to Obispo in the a8ount of P&,&%2,+2:.++. On even date, the R M #as re3istered and annotated on the aforesaid title.1 On Septe8ber &*, &222, F 6T! received a letter fro8 petitioners infor8in3 that Obispo, to #ho8 the( entrusted their propert( to be used as collateral for a P)%+,+++.++ loan in their behalf, had instead secured a loan for P&,&%2,+2:.++, and had failed to return their title despite full pa(8ent b( petitioners of P)%+,+++.++. Petitioners li9e#ise de8anded that F 6T! furnish the8 #ith docu8ents and papers pertinent to the 8ort3a3e failin3 #hich the( #ill be constrained to refer the 8atter to their la#(er for the filin3 of appropriate le3al action a3ainst Obispo and F 6T!. $ There bein3 no action ta9en b( F 6T!, petitioners filed on October &), &222 a co8plaint for annul8ent of real estate 8ort3a3e #ith da8a3es a3ainst F 6T! and Obispo. Petitioners alle3ed that the( si3ned the blan9 R M for8 3iven b( Obispo #ho facilitated the loan #ith F 6T!, and that the( subse<uentl( received the loan proceeds of P)%+,+++.++ #hich the( paid in full throu3h Obispo. =ith their loan full( settled, the( de8anded the release of their title but Obispo refused to tal9 or see the8, as he is no# hidin3 fro8 the8. >pon verification #ith the Re3istr( of Deeds of 4ue5on !it(, petitioners said the( #ere surprised to learn that their propert( #as in fact 8ort3a3ed for P&,&%2,+2:.++. Petitioners thus pra(ed that the R M be declared void and cancelled? that F 6T! be ordered to deliver to the8 all docu8ents pertainin3 to the loan and 8ort3a3e of Obispo? and that F 6T! and Obispo be ordered to pa( 8oral da8a3es and attorne(@s fees.% In its "ns#er =ith !o8pulsor( !ounterclai8 and !ross.clai8, F 6T! averred that petitioners a3reed to e;ecute the R M over their propert( as partial securit( for the loans obtained b( Obispo #ith a total principal balance of P),%++,+++.++. Since the obli3ation secured b( the R M re8ains unpaid, F 6T! contended that it should not be co8pelled to release the 8ort3a3e on the subAect propert(. F 6T! further asserted that petitioners are 3uilt( of laches and their clai8 alread( barred b( estoppel. >nder its cross.clai8, F 6T! pra(ed that in the event of Aud38ent rendered in favor of petitioners, Obispo should be 8ade liable to ans#er for all the clai8s that 8a( be adAud3ed a3ainst it plus all da8a3es it suffered.:

On 8otion of petitioners, Obispo #as declared in default for failure to file an( responsive pleadin3 despite due receipt of su88ons #hich he personall( received. "fter trial, the RT! rendered its Decision in favor of the petitioners and a3ainst the respondents, as follo#s7 =B R FOR , pre8ises considered, Aud38ent is hereb( rendered in favor of the plaintiffs and a3ainst defendants Raul '. Obispo and Far ast 6an9in3 Trust !o8pan( ,no# 6an9 of the Philippine Islands- as follo#s7 a- Declarin3 the real estate 8ort3a3e in favor of defendant Far ast 6an9 C Trust !o8pan( ,no# 6an9 of Philippine Islands- null and void? b- Orderin3 defendant F 6T! ,no# 6PI- to cancel the encu8brance on Transfer !ertificate of Title No. RT.:$$)) D1:21*+E and release and surrender the O#ners Duplicate cop( thereof to the herein plaintiffs? c- Orderin3 defendants Obispo and F 6T! ,6PI- to pa( the plaintiffs Aointl( and severall( the su8 of P)++,+++.++ as and b( #a( of 8oral da8a3es? d- Orderin3 defendants Obispo and F 6T! ,6PI- to pa( the plaintiffs, Aointl( and severall( the su8 of P%+,+++.++ as and b( #a( of attorne(@s fees, and the cost of suit. The cross.clai8 set forth b( defendant F 6T! ,6PI- a3ainst its co. defendant Obispo is hereb( ordered dis8issed for lac9 of 8erit. SO ORD R D.* F 6T! appealed to the !" #hich reversed the trial court@s decision and dis8issed the co8plaint, holdin3 that petitioners #ere third.part( 8ort3a3ors under "rticle )+0% of the !ivil !ode and that the( failed to present an( evidence to prove their alle3ations. The appellate court thus decreed7 =B R FOR , the assailed 'anuar( )2, )++$ Decision of the Re3ional Trial !ourt of 4ue5on !it(, 6ranch 0) in !ivil !ase No. 4.22.10200 is hereb( R V RS D and S T "SID and a ne# one is entered DISMISSIN/ the !o8plaint of plaintiffs.appellees

in !ivil !ase No. 4.22.10200. SO ORD R D.0 Petitioners filed a 8otion for reconsideration but it #as denied b( the !". Bence, this petition raisin3 the follo#in3 errors alle3edl( co88itted b( the appellate court #hen7 I IT S T "SID TB D !ISION D"T D '"N>"RF )2, )++$ R ND R D 6F 6R"N!B 0) OF TB R /ION"G TRI"G !O>RT OF 4> HON !ITF 6F >PBOGDIN/ TB V"GIDITF OF TB R "G ST"T MORT/"/ "ND R>GIN/ TB"T TB P TITION RS = R "!!OMMOD"TION MORT/"/ORS OF R SPOND NT R">G O6ISPO D SPIT TB F"!T TB"T NO !ONS NT TO S>!B FF !T ="S /IV N 6F TB M "ND TB PR P"R"TION TB R OF ="S "TT ND D 6F FR">D>G NT "!TS OR MISR PR S NT"TIONS? II IT DISR /"RD D IISTIN/ G"=S "ND !>RR NT '>RISPR>D N! IN NOT D !G"RIN/ TB R SPOND NT 6"NJ "S NOT " MORT/"/ IN /OOD F"ITB D SPIT TB !ONTR"RF FINDIN/ OF TB TRI"G !O>RT? and III IT DISR /"RD D IISTIN/ G"=S "ND S TTG D '>RISPR>D N! =B N IT GIJ =IS D G T D IN ITS DISP>T D D !ISION TB "="RD OF D"M"/ S, "TTORN F@S F S "ND !OST OF S>IT IN F"VOR OF TB P TITION RS.2 The petition has no 8erit. The validit( of an acco88odation 8ort3a3e is allo#ed under "rticle )+0% of the !ivil !ode #hich provides that KDtEhird persons #ho are not parties to the principal obli3ation 8a( secure the latter b( pled3in3 or 8ort3a3in3 their o#n propert(.K "n acco88odation 8ort3a3or, ordinaril(, is not hi8self a recipient of the loan,

other#ise that #ould be contrar( to his desi3nation as such. &+ In this case, petitioners denied havin3 e;ecuted an acco88odation 8ort3a3e and clai8ed to have e;ecuted the R M to secure onl( their P)%+,+++.++ loan and not the P&,&%2,+2:.++ personal indebtedness of Obispo. The( clai8ed it #as Obispo #ho filled up the R M for8 contrar( to their instructions and faulted F 6T! for bein3 ne3li3ent in not ascertainin3 the authorit( of Obispo and failin3 to furnish petitioners #ith copies of 8ort3a3e docu8ents. Obispo initiall( 3ave the8 P&++,+++.++ and the balance #as 3iven a fe# 8onths later. "fter supposedl( co8pletin3 pa(8ent of the a8ount of P)%+,+++.++ to Obispo, petitioners discovered that the R M secured a bi33er a8ount. 6ecause of the alle3ed fraud co88itted upon the8 b( Obispo #ho 8ade the8 si3n the R M for8 in blan9, petitioners sou3ht to have the R M annulled and their title over the 8ort3a3ed propert( released b( F 6T!. In other #ords, since their consent to the R M #as vitiated, Audicial declaration of its nullit( is in order. The RT! 3ranted relief to petitioners #hile the !" found the subAect R M as a valid third.part( or acco88odation 8ort3a3e due to petitioners@ failure to substantiate their alle3ations #ith the re<uisite <uantu8 of evidence. =e sustain the decision of the !". In civil cases, basic is the rule that the part( 8a9in3 alle3ations has the burden of provin3 the8 b( a preponderance of evidence. Moreover, parties 8ust rel( on the stren3th of their o#n evidence, not upon the #ea9ness of the defense offered b( their opponent. This principle e<uall( holds true, even if the defendant had not been 3iven the opportunit( to present evidence because of a default order. The e;tent of the relief that 8a( be 3ranted can onl( be as 8uch as has been alle3ed and proved #ith preponderant evidence re<uired under Section & of Rule &11 of the Revised Rules on vidence.&& Preponderance of evidence is the #ei3ht, credit, and value of the a33re3ate evidence on either side and is usuall( considered to be s(non(8ous #ith the ter8 K3reater #ei3ht of the evidenceK or K3reater #ei3ht of the credible evidence.K Preponderance of evidence is a phrase #hich, in the last anal(sis, 8eans probabilit( of the truth. It is evidence #hich is 8ore convincin3 to the court as #orthier of belief than that #hich is offered in opposition thereto. &)

"s to fraud, the rule is that he #ho alle3es fraud or 8ista9e affectin3 a transaction 8ust substantiate his alle3ation, since it is presu8ed that a person ta9es ordinar( care of his concerns and that private transactions have been fair and re3ular. &1 The !ourt has stressed ti8e and a3ain that alle3ations 8ust be proven b( )u**+,+e"- e.+#e",e because 8ere alle3ation is definitel( not evidence.&$ Moreover, fraud is not presu8ed L it 8ust be proved b( clear and convincin3 evidence.&% In this case, petitioners@ testi8onial evidence failed to convince that Obispo deceived the8 as to the debt secured b( the R M. Petitioners@ factual alle3ations are not fir8l( supported b( the evidence on record and even inconsistent #ith ordinar( e;perience and co88on sense. =hile petitioners ad8itted the( 9ne# it #as fro8 F 6T! the( #ill secure a loan, it #as unbelievable for the8 to si8pl( accept the P)%+,+++.++ loan proceeds #ithout seein3 an( docu8ent or voucher evidencin3 release of such a8ount b( the ban9 containin3 the details of the transaction such as 8onthl( a8orti5ation, interest rate and added char3es. It is difficult to believe petitioners@ si8plistic e;planation that the( re<uested docu8ents fro8 Obispo but the latter #ould not 3ive the8 an(. Such failure of Obispo to produce an( receipt or docu8ent at all co8in3 fro8 the ban9 should have, at the first instance, alerted the petitioners that so8ethin3 #as a8iss in the loan transaction for #hich the( voluntaril( e;ecuted the R M #ith their o#n propert( as collateral. Not onl( that, despite bein3 a#are of the absence of an( docu8ent to ascertain if Obispo indeed filled up the R M contract for8 in accordance #ith their instructions, petitioners accepted the supposed loan proceeds in the for8 of personal chec9s issued b( Obispo #ho clai8ed to have an account #ith F 6T!, instead of chec9s issued b( the ban9 itself. These alle3ed chec9s #ere not sub8itted in evidence b( the petitioners #ho could have easil( obtained copies or record provin3 their issuance and encash8ent. "nother disturbin3 fact is #h(, despite havin3 si3ned the R M contract in their na8e as 8ort3a3ors, petitioners did not 3o directl( to the ban9 to pa( their loan. One is also te8pted to as9 ho# petitioners could have possibl( arrived at the a8ount of a8orti5ation pa(8ents #ithout havin3 seen an( docu8ent fro8 F 6T! pertainin3 to their loan account. Such conduct of petitioners in not botherin3 to appear before the ban9 or directl(

dealin3 #ith it re3ardin3 their outstandin3 obli3ation stron3l( su33ests that there #as no such loan account in their na8e and it #as reall( Obispo #ho #as the borro#er and petitioners #ere 8erel( acco88odation 8ort3a3ors. 6ut assu8in3 for the 8o8ent that petitioners reall( entrusted to Obispo the re8ittance of their pa(8ents to F 6T!, it is difficult to co8prehend that the( continued 8a9in3 pa(8ents to hi8 despite the latter@s not havin3 co8plied at all #ith their repeated de8ands for the correspondin3 receipt fro8 the ban9. These de8ands for ban9 docu8ents apparentl( had 3one unheeded b( Obispo for about o"e year a"# -/ree 0o"-/) L the sa8e period before petitioners #ere able to 8a9e full pa(8ent. &: Such considerabl( lon3 period that petitioners re8ained indifferent and too9 no pro8pt action a3ainst their alle3ed defrauder, Obispo, trul( defies the nor8al reaction of ordinar( individuals 3ivin3 rise to the inference that it #as indeed Obispo #ho #as the borro#erMdebtor and petitioners #ere Aust acco88odation 8ort3a3ors. "ssu8in3 arguendo that the R M #as invalid on the 3round of vitiated consent and 8isrepresentation b( Obispo, petitioners@ unAustified failure to act #ithin a reasonable ti8e after Obispo repeatedl( failed to turn over the 8ort3a3e docu8ents, constitutes estoppel and #aiver to <uestion its defect or invalidit(. !orollaril(, 8ort3a3ors desirin3 to attac9 a 8ort3a3e as invalid should act #ith reasonable pro8ptness, and unreasonable dela( 8a( a8ount to ratification.&* "s to petitioners@ assertion that the( have settled their loan obli3ation b( pa(in3 P)%+,+++.++ to Obispo, #e note that said a8ount represents onl( the principal loan. Does this 8ean petitioners assu8ed that F 6T! 3ranted their loan free of interestN Or #as there an( special arran3e8ent #ith Obispo in consideration of the 8ort3a3e for the latter@s benefitN "3ain, #h( #as there no evidence of such chec9 pa(8ents alle3edl( 8ade b( petitioners to Obispo, presented in courtN This hiatus in petitioners@ evidence raises serious doubt on their principal alle3ation that the( never consented to the third.part( 8ort3a3e approved b( F 6T!, leadin3 to the conclusion that there #as, in fact, an a3ree8ent bet#een Obispo and petitioners to use the latter@s propert( as collateral for the for8er@s credit line #ith said ban9. It bears stressin3 that an acco88odation 8ort3a3or, ordinaril(, is

not hi8self a recipient of the loan, other#ise that #ould be contrar( to his desi3nation as such. =e have held that it is not al#a(s necessar( that the acco88odation 8ort3a3or be apprised beforehand of the entire a8ount of the loan nor should it first be deter8ined before the e;ecution of the Special Po#er of "ttorne( in favor of the debtor.&0 This is especiall( true #hen the #ords used b( the parties indicate that the 8ort3a3e serves as a continuin3 securit( for credit obtained as #ell as future loan avail8ents. Bere, petitioners as owners si3ned the R M as 8ort3a3ors and there is no evidence adduced that su33ests fraud or irre3ularit( in its e;ecution. Petitioners are not contractin3 parties #ho8 the la# considers i3norant or disadvanta3ed but for8er overseas #or9ers #ith sufficient education as to be #ell.a#are of the conse<uences of their personal decisions, consistent #ith the le3al presu8ption that a person ta9es ordinar( care of his concerns. Bence, it can be reasonabl( inferred fro8 the facts on record that it #as 8ore probable that petitioners allo#ed Obispo to use their propert( as additional collateral so as to avail of his e;istin3 credit line #ith F 6T! instead of petitioners directl( appl(in3 for a separate loan. =ith the dearth of evidence to bac9 up petitioners@ stor(, the !" found i8plausible the alle3ed le3al infir8ities in the e;ecution of the R M. The appellate court thus aptl( observed7 ; ; ; it #as defendant Obispo #ho obtained credit acco88odation fro8 defendant F 6T! #hich he secured #ith the 8ort3a3e of the subAect propert(. The propert( 8ort3a3ed #as o#ned b( plaintiffs. appellees, considered a third part( to the loan obli3ations of defendant Obispo #ith defendant.appellant F 6T!. It #as, thus, a situation reco3ni5ed b( the last para3raph of "rticle )+0% of the !ivil !ode ; ; ;. The Real state Mort3a3e ad8ittedl( si3ned b( plaintiffs.appellees, on its face, e;plicitl( states that it is for the securit( of Kcredit acco88odations obtained b( Raul De 'esus Obispo,K the principal of #hich is fi;ed at P&,&%2,+2:.++. =hile plaintiffs.appellees clai8 that the( sou3ht the help of defendant Obispo in securin3 the loan fro8 defendant.appellant F 6T!, and not to secure the loans obtained b( defendant Obispo hi8self, -/ey *a+1e# -o 2re)e"- a"y e.+#e",e, e3,e2- *or -/e+r bare a))er-+o", that the( indeed 3ave their title to defendant Obispo purportedl( to facilitate their loan #ith defendant.appellant F 6T!. It is a;io8atic that under the Rules on vidence a part(

#ho alle3es a fact has the burden of provin3 it. " 8ere alle3ation is not evidence, and he #ho alle3es has the burden of provin3 his alle3ation #ith the re<uisite <uantu8 of evidence. It 8a( be ar3ued that havin3 received the a8ount of P)%+,+++.++, plaintiffs.appellees beca8e parties to the principal obli3ation and as such, the provision of the last para3raph of "rticle )+0% no lon3er applies. =hile it is undisputed that plaintiffs.appellees received the a8ount of P)%+,+++.++, the record, ho#ever, reveals that the( received the said a8ount not fro8 defendant F 6T! but fro8 defendant Obispo. It could be inferred that the P)%+,+++.++ 3iven b( defendant Obispo to plaintiffs.appellees #as so8e for8 of re8uneration in lendin3 their title to hi8 as securit( for his credit line #ith defendant.appellant F 6T!. ;;;; Fro0 a11 +"#+,a-+o"), -/e *a+1ure o* #e*e"#a"- Ob+)2o -o 2ay /+) 1oa" re)u1-e# -o -/e 2re4u#+,e o* 21a+"-+**)5a22e11ee) 6/+,/ 0ay /a.e 1e# -/e0 -o #+)o6" -/e Rea1 E)-a-e Mor-7a7e -/ey e3e,u-e# +" *a.or o* #e*e"#a"-5a22e11a"- FE%TC -o a,,o00o#a-e -/e 1oa" o* #e*e"#a"- Ob+)2o .&2 , 8phasis supplied"t this Auncture, #e underscore ane# that the !ourt has al#a(s 8aintained its i8partialit( as earl( as in the case of Vales v. Villa,)+ and has #arned liti3ants that7 ; ; ; The la# furnishes no protection to the inferior si8pl( because he is inferior an( 8ore than it protects the stron3 because he is stron3. The la# furnishes protection to both ali9e L to one no 8ore or less than the other. It 8a9es no distinction bet#een the #ise and the foolish, the 3reat and the s8all, the stron3 and the #ea9. The foolish 8a( lose all the( have to the #ise? but that does not 8ean that the la# #ill 3ive it bac9 to the8 a3ain. !ourts cannot follo# one ever( step of his life and e;tricate hi8 fro8 bad bar3ains, protect hi8 fro8 un#ise invest8ents, relieve hi8 fro8 one.sided contracts, or annul the effects of foolish acts. ; ; ;)& There bein3 valid consent on the part of petitioners as acco88odation 8ort3a3ors, no reversible error #as co88itted b( the !" in reversin3 the trial court@s decision #hich declared the R M as void and a#arded da8a3es to petitioners.

" preponderance of the evidence is essential to establish the invalidit( of a 8ort3a3e, and it has been said that clear and convincin3 proof is necessar( to sho# fraud, duress, or undue influence.)) "n( relevant and 8aterial evidence other#ise co8petent is ad8issible on the issue of the validit( of a 8ort3a3e.)1 Petitioners utterl( failed to present relevant evidence to support their factual clai8s and offered no e;planation #hatsoever. Such o8ission is fatal to their cause. 89EREFORE, the petition for revie# on certiorari is $ENIE$ for lac9 of 8erit. The Decision dated 'anuar( )*, )+&+ of the !ourt of "ppeals in !"./.R. !V No. 0)1*0 is hereb( !FFIRME$ a"# UP9E $.
1wphi1

=ith costs a3ainst the petitioners. SO ORD R D. M!RTIN S. (I = !ON!>R7 M!RI! OUR$ES P. !. SERENO!hief 'ustice!hairperson TERESIT! :. EON!R$O5$E C!STRO "ssociate 'ustice %IEN(ENI$O . RE'ES"ssociate 'ustice ! RTIFI!"TION !R!M!, :R."ssociate 'ustice

UC!S P. %ER "ssociate 'u

Pursuant to Section &1, "rticle VIII of the !onstitution, I certif( that the conclusions in the above Decision had been reached in consultation before the case #as assi3ned to the #riter of the opinion of the !ourtOs Division. M!RI! OUR$ES P. !. SERENO!hief 'ustice Foo-"o-e) Rollo, pp. 11.$). Penned b( "ssociate 'ustice Priscilla '. 6alta5ar.Padilla #ith "ssociate 'ustices "ndres 6. Re(es, 'r. and "rcan3elita M. Ro8illa.Gonto9 concurrin3.
&

Id. at *:.01. Penned b( 'ud3e Severino 6. De !astro, 'r. Records, pp. &:$.&:2. Id. at &*+.&*&. Id. at 1.*. Id. at &*.)&. Rollo, p. 01. Id. at $&. Id. at &:.&*. Sps. Belo v. Philippine National Bank, $+% Phil. 0%&, 0*+ ,)++&-.

&+

Heirs of Pedro De u!"an v.Perona , /.R. No. &%))::, 'ul( ), )+&+, :)) S!R" :%1, ::&.::), citin3 a#udo v. $raders Ro%al Bank, /.R. No. &%&+20, March )&, )++:, $0% S!R" &+0, &&2.&)+.
&&

&hua v. 'est"ont Bank, /.R. No. &0):%+, Februar( )*, )+&), ::* S!R" %:, :0, citin3 (ulogio v. )peles, /.R. No. &:*00$, 'anuar( )+, )++2, %*: S!R" %:&, %*&.%*).
&)

R VIS D R>G S OF !O>RT, Rule &1&, Sec. 1,p-? Dut*h Bo% Philippines, +n*. v. Seniel, /.R. No. &*+++0, 'anuar( &2, )++2, %*: S!R" )1&, )$+, citin3 ,e"ita v. ,asongsong, /.R. No. &%+2&), Ma( )0, )++*, %)1 S!R" )$$, )%:.)%*? and ,angahas v. &ourt of )ppeals, 1:$ Phil. &1, )& ,&222-.
&1

Real v. Sangu Philippines, +n*., /.R. No. &:0*%*, 'anuar( &2, )+&&, :$+ S!R" :*, 0%, citin3 eneral ,illing &orporation v. &asio, /.R. No. &$2%%), March &+, )+&+, :&% S!R" &1, 1).11.
&$

,indanao State -niversit% v. Ro.lett +ndustrial and &onstru*tion &orporation, /.R. No. &10*++, 'une 2, )++$, $1& S!R" $%0, $:*.
&% &:

TSN, Ma( &:, )++), pp. 0.2, &).&1. %2 !.'.S. P &$0, p. &20. Sps. Belo v. Philippine National Bank, supra note &+.

&*

&0

&2

Rollo, pp. 10.$+. 1% Phil. *:2, *0*.*00 ,&2&:-.

)+

/*a"po v. 0and Bank of the Philippines, /.R. No. &:$2:0, 'ul( 1, )++2, %2& S!R" %:), %**.%*0.
)& ))

%2 !.'.S. P &$2, p. &22. Id.

)1

The Ga#phil ProAect . "rellano Ga# Foundation

$ISSENTING OPINION SERENO, J.: I respectfull( dissent. =hile the ponen*ia affir8s the findin3s of fact of the !ourt of "ppeals and concludes that petitioner.spouses a3reed to 8ort3a3e their propert( to secure ObispoOs debt, I vote to uphold the trial courtOs factual conclusion that petitioner.spouses si3ned the 8ort3a3e contract in blan9 and #ere defrauded b( Obispo, as the( #ere una#are that their propert( #ould be used as collateral for his personal loan. The disparit( in our factual findin3s revolves around the issue of #hether petitioner.spouses intended to be bound as acco88odation 8ort3a3ors #ith respect to ObispoOs credit line #ith Far ast 6an9 C Trust co. ,F 6T!-. Intent, bein3 a state of 8ind, is rarel( susceptible of direct proof and 8ust ordinaril( be inferred fro8 the partiesO circu8stances, conduct and un3uarded e;pressions.& =hile the ponen*ia is correct in pointin3 out that the facts, as narrated b( petitioner.spouses, are be(ond the nor8al occurrence of events, their narration is not entirel( incredible and i8plausible. To 8( 8ind, the( have successfull( painted an unfortunate but co88on picture of individuals #ho have placed their full trust in the #ron3 part( and ended up bein3 defrauded in the end.

Findin3 that there is a dearth of evidence to bac9 up their stor(, the ponen*ia refuses to 3ive credence to the testi8onies of petitioner. spouses. I believe, ho#ever, that their un#averin3 testi8onies, both on direct and cross.e;a8ination, suffice to establish their clai8s. Ti8e and a3ain, this !ourt has upheld convictions in cri8inal cases based on the sole, uncorroborated testi8on( of a sin3le #itness? there is no reason #h( #e cannot si8ilarl( rel( on clear and convincin3 testi8onial evidence in a civil case. In an( event, #hile it 8a( be ar3ued that there 8a( be reasonable doubt as to the actual occurrences in the instant case, a readin3 of the records fir8l( establishes that F 6T! failed to e;ercise the e;traordinar( dili3ence re<uired fro8 it as a ban9in3 institution. Durin3 trial, the ban9 officer #ho served as an instru8ental #itness to the real estate 8ort3a3e contract, and #ho had the dut( to #itness its e;ecution, ad8itted that petitioner.spouses did not si3n the contract in his presence, to #it7 47 Mr. =itness, on this real estate 8ort3a3e there are t#o ,)si3natures appearin3 under the #ords KSi3ned in the presence ofK. Do (ou 9no# these t#o ,)- si3naturesN "7 Fes, sir. The si3nature of our 8ana3er at that ti8e, Vir3inia !le8eno, sir. 47 Four si3nature is on the leftN "7 Fes, sir. 47 "nd on the ri3ht isN "7 The si3nature of our 8ana3er sir. ;;;; 47 No#, #hen (ou received the Mort3a3e !ontract, a0 I ,orre,-/a- S2ou)e) Ra0o) #+# "o- )+7" -/e Mor-7a7e Co"-ra,- +" your 2re)e",e because (ou had 9no#n the8N "7 'e), )+r. T/e )+7"a-ure ;)+,< 6ere -/ere a1rea#y. 47 'ust ans#er (es or no. "7 Fes, sir.

TB !O>RT7 The( did not . . . "TTF. VIGG"V RT7 T/a- S2ou)e) Ra0o) #+# "o- )+7" +" /+) 2re)e",e, your 9o"or, a"# /e a")6ere# ye).) , 8phases suppliedFurther8ore, the ban9 officer testified that it is the ban9@s standard procedure that the real estate 8ort3a3e for8 is presented to hi8 for si3nature after the 8ort3a3ors have acco8plished it, after #hich he for#ards the docu8ent to respondent ban9@s le3al depart8ent. Bis testi8on( sho#s7 47 Mr. =itness, #hat is the ban9 procedure that is bein3 done #ith respect to the e;ecution and sub8ission of the real estate 8ort3a3eN "7 The docu8ent has to be filled up and si3ned b( the 8ort3a3ors before it #as presented to us for our si3nature and then #e sent it to our le3al depart8ent. 47 Is this the standard procedure that is follo#edN "7 Fes, sir.1 The si3nature of the ban9 officer as an instru8ental #itness to the real estate 8ort3a3e #as not intended to be an idle cere8on( or an e8pt( 8echanical act. 6( actin3 as #itness to the instru8ent, he #as attestin3 to the fact that the 8ort3a3ors actuall( si3ned the docu8ent in his presence. That he could ta9e his role as an instru8ental #itness li3htl( leads to the conclusion that F 6T! #as re8iss in its dut( to e;ercise the dili3ence re<uired fro8 it as a ban9in3 institution. That this procedure #as the standard practice of respondent ban9 in processin3 loans and 8ort3a3es seals the tin din3 of ne3li3ence on its part. In Philippine $rust &o"pan% v. &ourt of )ppeals ,$ #e have ruled that because the business of ban9s is i8bued #ith public interest, the( are e;pected to e;ercise 8ore care and prudence than private individuals, even in cases involvin3 re3istered lands.

6an9s, therefore, have the dut( of provin3 that the( have e;ercised e3-raor#+"ary #+1+7e",e in approvin3 the 8ort3a3e contract in <uestion.% Bad F 6T! been dili3ent enou3h, it could have prevented the unfortunate incident in <uestion. "s lender and 8ort3a3ee, it had the dut( to ascertain #hether petitioner.spouses had reall( a3reed to beco8e acco88odation 8ort3a3ors #ith respect to respondent ObispoOs loan. It could have re<uired petitioner.spouses to personall( appear and si3n the 8ort3a3e contract before its representatives. It could have re<uired Obispo to present a special po#er of attorne( to prove that he had been authori5ed to constitute a third.part( 8ort3a3e over petitioner.spousesO real propert(. It could even have 8ade a phone call to petitioner. spouses to verif( #hether the( did intend to 8ort3a3e their propert( to secure ObispoOs debt. "ll these safe3uards respondent ban9 failed to observe. Instead, it per8itted its ban9 officers to act as instru8ental #itnesses, even if the 8ort3a3ors had not actuall( e;ecuted the 8ort3a3e contract in the officersO presence. : It chose to rel( solel( on the si3ned 8ort3a3e contract, as #ell as the transfer certificate of title #hich #as in petitioner.spousesO na8es, #hich #ere brou3ht to the ban9 b( Obispo #ithout iota of evidence that he #as authori5ed to do so. In situations such as these, I believe that the interests of societ( #ould best be served if the econo8ic ris9 of the transaction is placed on the ne3li3ent ban9. 6an9s pla( a central role in the econo8ic life of our societ(, and it is not #ithout reason that #e have placed upon the8 the burden of e;ercisin3 e;traordinar( dili3ence #hen dealin3 #ith other econo8ic actors. Thus, I vote to GR!NT the instant Petition for Revie#, SET !SI$E and RE(ERSE the assailed Decision and Resolution of the !ourt of "ppeals in !"./.R. !V No. 0)1*0, and REINST!TE the Decision of the Re3ional Trial !ourt, 6ranch 0), 4ue5on !it(, in !ivil !ase No. 4.22.10200. M!RI! OUR$ES P. !. SERENO!hief 'ustice Foo-"o-e) 1eeder +nternational 0ine. Pte., 0id v. &ourt of )ppeals, )*$ Phil. &&$1 , &22& -.
&

TSN, $ Dece8ber )++1, pp. 11&.11)? 11%.11:. Id. at 11).111. /.R. No. &%+1&0, )) Nove8ber )+ I +, :1% S!R" %&0, %1+. Id. TSN, $ Dece8ber )++1, p. 11%.