Beruflich Dokumente
Kultur Dokumente
Santiago
FACTS: From September 1956 to October 1957, spouses Jose C. Zulueta
and Soledad Ramos (Zulueta spouses) obtained various loans from GSIS
totaling P3,117,000.00 secured by a real estate mortgage on several
parcels of land located in Pasig City and covered by Transfer Certificates of
Title (TCTs) Nos. 26105, 37177, and 50356 (the mother titles) in their
name.
The Zuluetas failed to pay their loans to defendant GSIS and the latter
foreclosed the real estate mortgages. On August 1974, the mortgaged
properties were sold at public auction with defendant GSIS being the
highest bidder. Not all lots covered by the mortgaged titles, however,
were sold. Ninety-one (91) lots were expressly excluded from the auction
since the lots were sufficient to pay for all the mortgage debts.
A Certificate of Sale was issued later on and an Affidavit of Consolidation
of Ownership was executed by defendant GSIS over Zuluetas lots,
including the lots, which as earlier stated, were already excluded from the
foreclosure. On March 1980, GSIS sold the foreclosed properties to
Yorkstown Development Corporation which sale was disapproved by the
Office of the President. The sold properties were returned to GSIS and the
land titles issued in favour of Yorkstown were subsequently cancelled.
Thereafter, GSIS began disposing the foreclosed lots including the
excluded ones.
On April 7, 1990, Representative Eduardo Santiago and then plaintiff
Antonio Vic Zulueta executed an agreement whereby Zulueta transferred
all his rights and interests over the excluded lots. Plaintiff Santiagos
lawyer wrote a demand letter dated May 11, 1989 to defendant GSIS
asking for the return of the eighty-one (81) excluded lots.
On May 7, 1990, Antonio Vic Zulueta, represented by Eduardo M.
Santiago, filed with the Regional Trial Court (RTC) of Pasig City, Branch
71, and a complaint for reconveyance of real estate against the
GSIS. Spouses Alfeo and Nenita Escasa, Manuel III and Sylvia G. Urbano,
and Marciana P. Gonzales and the heirs of Mamerto Gonzales moved to be
included as intervenors and filed their respective answers in
intervention. Subsequently, the petitioner, as defendant therein, filed its
answer alleging inter alia that the action was barred by the statute of
limitations and/or laches and that the complaint stated no cause of
action. Subsequently, Zulueta was substituted by Santiago as the plaintiff
in the complaint a quo. Upon the death of Santiago in 1996, he was
substituted by his widow as the plaintiff. After due trial, the RTC rendered
judgment against the petitioner ordering it to reconvey to the respondent,
Rosario Enriquez Vda. De Santiago, in substitution of her deceased
PNB VS BANATAO
FACTS: On
November 16, 1962, Banatao, et al. initiated an action
against Marciano Carag for the recovery of real property (disputed
property) situated at Malabac, Iguig, Cagayan. The disputed property
was a new land formation on the banks of the Cagayan River an
accretion that the plaintiffs-respondents claimed as the owners of the
adjoining lot. The defendants-respondents, on the other hand, were the
occupants of the disputed property.
While the case was pending, the defendants-respondents were able to
secure homestead patents) issued in their names. The OCTs were issued
in 1965 and 1966, and all bear the proviso that, in accordance with the
Public Land Act, the patented homestead shall neither be alienated nor
encumbered for five (5) years from the date of the issuance of the patent.
Armed with their OCTs, the defendants-respondents separately applied for
loans with the Philippine National Bank secured by real estate mortgages
on their respective titled portions of the disputed property and was
approved. PNB relied solely on the OCTs which, at the time, did not
contain any notice of lis pendens or annotation of liens and
encumbrances.
On February 22, 1968, the trial court decided the case in favor of
the plaintiffs-respondents and against defendant-respondent Carag, and
ordered the return of the disputed property to the plaintiffs-respondents.
Carag appealed the trial court decision to the Court of Appeals (CA).
On March 29, 1973, while the case was pending before the trial court, the
bank extrajudicially foreclosed the property covered by OCT No. 24800
issued to the spouses Pedro Soriano and Paz Tagacay. The bank was
declared the highest bidder in the ensuing public auction. The spouses
Soriano failed to redeem the foreclosed property, resulting in the
consolidation of title in the banks name; and certificate was issued in the
name of the bank.
On
February 28, 1991, the plaintiffs-respondents and the
defendants-respondents entered into a compromise agreement whereby
ownership of virtually the northern half of the disputed property was
ceded to the plaintiffs-respondents, while the remaining southern half was
given to the defendants-respondents.
RULING: The Supreme Court resolves to dismiss the petition for the
following reasons.
SC contended that the main cause of action is the Recovery of
Realty and Reconveyance, the Annulment of Mortgage is only an
ancillary cause of action. In the decision approving the compromise
agreement it disposes and finally determined the Recovery of Realty and
Reconveyance.
The Supreme Court also ruled that the [defendants-respondents],
not being the absolute owners and not having been authorized to
mortgage the subject real property, could not validly mortgage the said
real property with [petitioner PNB]. However, SC are also not unmindful
of the [defendants-respondents'] liability to the bank. But such issue
could be dealt with in a separate and distinct action.
SC concluded that OCTs that the mortgages cannot but be void ab
initio on the faces of all the OCTs which contained:THE LAND HEREBY
ACQUIRED SHALL BE INALIENABLE AND SHALL NOT BE SUBJECT TO
[E]NCUMBRANCE FOR A PERIOD OF FIVE (5) YEARS NEXT FOLLOWING
THE DATE OF THIS PATENT,
In the present case, the annotation of the mortgage liens occurred
only months after the date of the issuance of the homestead patents.
In the present case that Supreme Court said that PNB cannot claim
that it is a mortgagee in good faith. The proscription against alienation or
encumbrance is unmistakable even on a cursory reading of the the OCTs.
Thus, one who contracts with a homestead patentee is charged with
knowledge of the law's proscriptive provision that must necessarily be
read into the terms of any agreement involving the homestead. Under the
circumstances, the PNB simply failed to observe the diligence required in
the handling of its transactions and thus made the fatal error of approving
the loans secured by mortgages of properties that cannot, in the first
place, be mortgaged.
On Compromise Agreement:
Further, the SC held that, A compromise agreement, as a contract,
is binding only upon the parties to the compromise, and not upon nonparties. This is the doctrine of relativity of contracts. Consistent with this
principle, a judgment based entirely on a compromise agreement is
binding only on the parties to the compromise the court approved, and
not upon the parties who did not take part in the compromise agreement
and in the proceedings leading to its submission and approval by the
court. Otherwise stated, a court judgment made solely on the basis of a
compromise agreement binds only the parties to the compromise, and
cannot bind a party litigant who did not take part in the compromise
agreement.
WHEREFORE, the Supreme Court DECLARED the mortgages
constituted on OCT Nos. 24800, 24801, 25217 and 25802 VOID and, for
this reason, DISMISSED the petition. SC AFFIRMED the approval of the
compromise agreement by the Court of Appeals and the disposition of the
case on the basis of compromise.
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LOPEZ VS. CA
FACTS: On June 2, 1959, petitioner Benito H. Lopez obtained a loan in
the amount of P20,000.00 from the Prudential Bank and Trust Company.
On the same date, he executed a promissory note for the same amount,
in favor of the said Bank, binding himself to repay the said sum one (1)
year after the said date, with interest at the rate of 10% per annum.
In addition to said promissory note, he executed Surety Bond No.
14164 in which he, as principal, and Philippine American General
Insurance Co., Inc. (PHILAMGEN) as surety, bound themselves jointly and
severally in favor of Prudential Bank for the payment of the sum of
P20,000.00.
On the same occasion, Lopez also executed in favor of Philamgen an
indemnity agreement whereby he agreed "to indemnify the Company and
keep it indemnified and hold the same harmless from and against any and
all damages, losses, costs, stamps, taxes, penalties, charges and
expenses of whatever kind and nature which the Company shall or may at
any time sustain or incur in consequence of having become surety upon
the bond." At the same time, Lopez executed a deed of assignment of
4,000 shares of the Baguio Military Institution entitled "Stock Assignment
Separate from Certificate.
On June 2, 1960, Lopez' obligation matured without it being settled.
Thus, the Prudential Bank made demands for payment. In turn,
Philamgen sent Lopez several written demands for the latter to pay his
note but Lopez did not comply with said demands. Hence, the Prudential
Bank sometime in August, 1961 filed a case against them to enforce
payment on the promissory note plus interest.
The complaint was thereafter dismissed. But when no payment was
still made by the principal debtor or by the surety, the Prudential Bank
filed on November 8, 1963 another complaint for the recovery of the
P20,000.00. obligation.
On December 9, 1963, Philamgen was forced to pay the Prudential Bank
the sum of P27,785.89 which included the principal loan and accumulated
interest and the Prudential Bank executed a subrogation receipt on the
same date.
ISSUES:
RULING: Contracts are not defined by the parties thereto but by the
principles of law. In determining the nature of a contract, the courts are
not bound by the name or title given to it by the contracting parties. In
the case at bar, the sum of P30,000.00, although denominated in the offer
to purchase as option money is actually in the nature of earnest
money or down payment when considered with the other terms of the
offer.
It is because when Mrs. Lim offered to buy the property the 10% so
called option money forms part of the purchase price as contemplated
under Art. 1482 of the Civil Code. It is clear then that the parties in this
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MONTANO VS LIM-ANG
FACTS: Delfin Montano brought to the Philippines from the United States
a Cadillac car which he registered in his name in the Motor Vehicles Office
and for which he obtained a certificate of registration.
On May 30, 1952, he sold the car to Jose Lim Ang and his wife
Teodora A. Gonzales for the sum of P28,000.00, payable in installments,
for which the latter executed a promissory note. Having paid part of the
price, said spouses executed on the same date a chattel mortgage on the
car in favor of Montano to guarantee the payment of the balance.
Because Montano did not want to transfer the registration certificate
to Jose Lim Ang before the registration of the mortgage, the latter was
registered in the office of the register of deeds on June 4, 1952, but
Montano failed to notify the Motor Vehicles Office of the execution of the
mortgage.
On June 12, 1952, Jose Lim Ang transferred the registration certificate to
Eugenio Villanueva. Villanueva sold the car to Amador D. Santos for
P25,000.00, transferring to the latter the registration certificate. On the
same date, Santos sold the car to the Manila Trading & Supply Company
for P25,000.00, and on the same date this company sold the car to Angel
M. Tinio for P26,000.00. Tinio made a down payment of P12,000.00 and
for the balance he executed a promissory note which he assumed to pay
in monthly installments. He also executed a chattel mortgage on the
same car to secure the payment of the promissory note.
This mortgage was registered both in the office of the register of
deeds as well as in the Motor Vehicles Office. After paying his obligation in
full, the mortgage executed by Tinio in favor of the Manila Trading &
Supply Company was cancelled, and as a consequence he secured the
transfer to his name of the certificate of registration from the Motor
Vehicles Office. None of the transferees took the trouble of investigating
from whom Jose Lim Ang had acquired the Cadillac car, and neither did
any of them investigate in the office of the register of deeds if there was
any encumbrance existing thereon.
Jose Lim Ang failed to pay the balance of the purchase price to
Montano in spite of the latter's demand and so on December 8, 1952
Montano requested the sheriff of Manila to sell the car in accordance with
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On the second issue, the Supreme Court hels that the issue raised is
not new. In a similar case3 decided by them they said: "A mortgage in
order to affect third persons should not only be registered in the Chattel
Mortgage Registry, but the same should also be recorded in the Motor
Vehicles Office as required by section 5(e) of the Revised Motor Vehicle
Law. And the failure of the respondent mortgagee to report the mortgage
executed in its favor had the effect of making said mortgage ineffective
against Borlough, who had his purchase registered in the said Motor
Vehicles Office."'
Adopting this view in our case the inevitable conclusion is that as
between Montano whose mortgage over the car was not recorded in the
Motor Vehicles Office and Angel M. Tinio who notified said office of his
purchase and registered the car in his name, the latter is entitled to
preference considering that the mere registration of the chattel mortgage
in the office of the register of deeds is in itself not sufficient to hold it
binding against third persons.
WHEREFORE, the decision appealed from is affirmed insofar as it orders
defendants Jose Lim Ang and his wife Teodora A. Gonzales to pay Delfin
Montano the sum of P6,000.00, plus 12% interest thereon per annum
from August 15, 1952 until it is fully paid.
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constituting the pledge or mortgage should have the free disposal of their
property, and in the absence thereof, they should be legally authorized for
the purpose. It also cited the 1954 case of Parqui v. PNB,[3] wherein the
mortgage was declared null and void since the registration thereof was
procured by the presentation of a forged deed.
ISSUE: Whether or not the mortgage lien, in favor of Cabuhat, over the
subject property is valid.
RULING: Yes. It is well-settled that even if the procurement of a
certificate of title was tainted with fraud and misrepresentation, such
defective title may be the source of a completely legal and valid title in
the hands of an innocent purchaser for value.
Just as an innocent purchaser for value may rely on what appears in
the certificate of title, a mortgagee has the right to rely on what appears
in the title presented to him, and in the absence of anything to excite
suspicion, he is under no obligation to look beyond the certificate and
investigate the title of the mortgagor appearing on the face of the said
certificate. Furthermore, it is a well-entrenched legal principle that when
an innocent mortgagee who relies upon the correctness of a certificate of
title consequently acquires rights over the mortgaged property, the courts
cannot disregard such rights.
Article 2085 of the Civil Code, which requires that the mortgagor
must have free disposal of the property, or at least have legal authority to
do so, admits of exceptions. In quite a number of instances, this Court
has ruled that the said provision does not apply where the property
involved is registered under the Torrens System.
Furthermore, Section 39 of Act No. 496 provides that every person
receiving a certificate of title in pursuance of a decree of registration, and
every subsequent purchaser (or mortgagee) of registered land who takes
a certificate of title for value in good faith, shall hold the same free of all
encumbrance except those noted on said certificate.
In the case at bar, there is no doubt that petitioner was an innocent
mortgagee for value. When Mary Ann mortgaged the subject property,
she presented to petitioner Flordeliza an owners duplicate certificate of
title that had been issued by the Register of Deeds. The title was neither
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forged nor fake. Petitioner had every right to rely on the said title which
showed on its face that Mary Ann was the registered owner. There was
no reason to suspect that Mary Anns ownership was defective. Besides,
even if there had been a cloud of doubt, Flordeliza would have found upon
verification with the Register of Deeds that Mary Ann was the titled owner
and that the original title on file with the said office was free from any lien
or encumbrance, and that no adverse claim of ownership was annotated
thereon.
Petitioners reliance on the clean title of Mary Ann was reinforced by
the fact that the latter had previously mortgaged the same property to a
bank which accepted the property as collateral on the strength of the
same owners duplicate copy of the title presented by Mary Ann.
Certainly, petitioner Flordeliza cannot be expected or obliged to inquire
whether the said owners duplicate copy presented to her was regularly or
irregularly issued, when by its very appearance there was no reason to
doubt its validity.
In accepting such a mortgage, petitioner was not required to make further
investigation of the title presented to her to bind the property being given
as security for the loan.
The Decision of the CA is SET ASIDE, and the Decision of the RTC of
Cavite City, is REINSTATED in all aspects.
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did not go directly to the bank to pay their loan. One is also tempted to
ask how petitioners could have possibly arrived at the amount of
amortization payments without having seen any document from FEBTC
pertaining to their loan account. Such conduct of petitioners in not
bothering to appear before the bank or directly dealing with it regarding
their outstanding obligation strongly suggests that there was no such loan
account in their name and it was really Obispo who was the borrower and
petitioners were merely accommodation mortgagors.
They stressed that an accommodation mortgagor, ordinarily, is not
himself a recipient of the loan, otherwise that would be contrary to his
designation as such. We have held that it is not always necessary that the
accommodation mortgagor be apprised beforehand of the entire amount
of the loan nor should it first be determined before the execution of the
Special Power of Attorney in favor of the debtor.
This is especially true when the words used by the parties indicate
that the mortgage serves as a continuing security for credit obtained as
well as future loan availments. Here, petitioners as owners signed the
REM as mortgagors and there is no evidence adduced that suggests fraud
or irregularity in its execution.
From all indications, the failure of defendant Obispo to pay his loan
resulted to the prejudice of plaintiffs-appellees which may have led them
to disown the Real Estate Mortgage they executed in favor of defendantappellant FEBTC to accommodate the loan of defendant Obispo.
There being valid consent on the part of petitioners as
accommodation mortgagors, no reversible error was committed by the CA
in reversing the trial courts decision which declared the REM as void and
awarded damages to petitioners.
WHEREFORE, the SC held that the petition for review on certiorari is
DENIED for lack of merit. The Decision dated January 27, 2010 of the
Court of Appeals in CA-G.R. CV No. 82378 is AFFIRMED and UPHELD.
With costs against the petitioners.
SO ORDERED.
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"One who purchases real estate with knowledge of a defect or lack of title
in his vendor cannot claim that he has acquired title thereto in good faith
as against the true owner of the land of an interest therein; and the same
rule must be applied to one who has knowledge of facts which should
have put him upon such inquiry and investigation as might be necessary
to acquaint him with the defects in the title of his vendor. A purchaser
cannot close his eyes to facts, which should put a reasonable man upon
his guard, and then claim that he acted in good faith under the belief that
there was no defect in the title of the vendor. His mere refusal to believe
that such defect exists, or his willful closing of his eyes to the possibility
of the existence of a defect in his vendor's title, will not make him an
innocent purchaser for value, if it afterwards develops that the title was in
fact defective and it appears that he had such notice of the defect as
would have led to its discovery had he acted with that measure of
precaution which may reasonably be required of a prudent man in a like
situation."
Cantrade attempted to settle its indebtedness with a check that
bounced. Cantrade offered a security registered under the names of third
persons. When a special power of attorney allegedly signed by the
Salvaleons was presented to the petitioner's counsel, the latter approved
the same, without investigation as to the true owners who were residing
within the same vicinity. As ruled by respondent court, an ordinarily
prudent man would have inquired into the authenticity of the title, its
location, and the owners. Petitioner's failure to investigate betrays its
good faith. We, therefore, find that petitioner cannot be an innocent
purchaser.
WHEREFORE, the SC instantly DENIED petition. The Decision and
Resolution of the Court of Appeals in CA G.R. CV No. 15737 are hereby
AFFIRMED. Costs against petitioner.
SO ORDERED.
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deemed chosen upon the filing of the suit for collection or upon the filing
of the complaint in an action for foreclosure of mortgage. As to
extrajudicial foreclosure, such remedy is deemed elected by the mortgage
creditor upon filing of the petition not with any court of justice but with
the Office of the Sheriff of the province where the sale is to be made.
In the case at bar, petitioner only has one cause of action which is nonpayment of the debt. Nevertheless, alternative remedies are available for
its enjoyment and exercise. Petitioner then may opt to exercise only one
of two remedies so as not to violate the rule against splitting a cause of
action.
Accordingly, applying the foregoing rules, we hold that petitioner, by
the expediency of filing four civil suits before foreign courts, necessarily
abandoned the remedy to foreclose the real estate mortgages constituted
over
the
properties
of
third-party
mortgagor
and
herein
private
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