G.R. No. 137471 - Adriano vs. Pangili

Petitioner Guillermo Adriano is the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. 337942, located in Col. S. Cruz, Geronimo, Montalban, Rizal.
Respondent Romulo Pangilinan is a businessman engaged in buying, selling, and mortgaging real estate properties.

On November 23, 1990, petitioner entrusted the original owner’s copy of the TCT to Angelina Salvador, a distant relative, to help secure a mortgage loan.
Without the knowledge or consent of petitioner, Angelina Salvador mortgaged the subject property to respondent.
Petitioner later found out at the Registry of Deeds that a first real estate mortgage was annotated on the title involving a loan of ₱60,000.00 purportedly executed by him, which he repudiated as a forgery.
Petitioner demanded respondent to return or reconvey the title, but upon refusal, filed a civil case for nullification of the mortgage and reconveyance, and a separate criminal case for estafa through falsification of public documents against respondent and others.

Respondent claimed he acted in good faith, relying on documents including the owner’s duplicate title, tax declarations, vicinity plans, a residence certificate, and an ocular inspection of the property.
He testified that a person who introduced himself as Guillermo Adriano presented original documents and executed the mortgage with him.
Respondent described a principal-agent relationship between petitioner and Angelina Salvador (through entrusting the title to the latter for the loan purpose), claiming that Angelina had the authority to secure the mortgage.
Respondent argued that the mortgage was valid and that petitioner had no cause of action against him for reconveyance since the title remained with petitioner.

The Regional Trial Court declared the mortgage null and void, voided the annotations on the title, ordered reconveyance, and dismissed respondent’s counterclaim.
The Court of Appeals reversed the RTC ruling, holding that petitioner’s negligence in entrusting the title to Angelina Salvador caused the loss, applying the “bona fide purchaser for value” principle and attributing fault to petitioner for creating the enabling situation for fraud, despite concurrence of respondent’s negligence.
Petitioner appealed to the Supreme Court contesting the CA ruling.

Whether consent is a necessary factor in determining who must bear the loss when a mortgage contract is declared null and void due to forgery by an impostor mortgagor.
Whether the Motion for Reconsideration filed by petitioner before the Court of Appeals was properly denied.