Case Digest (G.R. No. 131679) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Cavite Development Bank and Far East Bank and Trust Company v. Spouses Cyrus Lim and Lolita Chan Lim, G.R. No. 131679, decided February 1, 2000 under the 1987 Constitution, petitioners Cavite Development Bank (CDB) and Far East Bank and Trust Company (FEBTC) extended a P90,000.00 loan to Rodolfo Guansing on June 15, 1983, secured by a mortgage on Lot No. 63 Calavite Street, La Loma, Quezon City under TCT No. 300809. Upon Guansing’s default, CDB foreclosed the mortgage and purchased the property as highest bidder on March 15, 1984; title was consolidated in CDB’s name as TCT No. 355588 on March 2, 1987. On June 16, 1988, private respondent Lolita Chan Lim, through broker Remedios Gatpandan, offered to purchase the property for P300,000.00, paying P30,000.00 as “option money,” which CDB accepted. Thereafter, Lim learned that the original title under TCT No. 300809 had been cancelled by final judgment of Branch 83, RTC, Quezon City on March 23, 1984 in Civil Case No. Q-39732, re Case Digest (G.R. No. 131679) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and subject property
- Petitioners Cavite Development Bank (CDB) and Far East Bank and Trust Company (FEBTC) are Philippine banking institutions.
- Private respondents Spouses Cyrus Lim and Lolita Chan Lim sought to purchase a parcel of land at No. 63 Calavite Street, La Loma, Quezon City.
- Mortgage and foreclosure of Rodolfo Guansing’s title
- On June 15, 1983, Rodolfo Guansing obtained a P90,000 loan from CDB, mortgaging the property covered by TCT No. 300809.
- After default, CDB foreclosed the mortgage; at the March 15, 1984 sale CDB was highest bidder; no redemption followed and on March 2, 1987 CDB acquired title (TCT No. 355588).
- Offer to Purchase and discovery of prior title
- On June 16, 1988, Lolita Lim, via broker, offered to buy the property for P300,000—paying 10% (P30,000) as “option money” and conditioning on clearing illegal occupants.
- Lim later learned Rodolfo’s title was fraudulently derived from his father Perfecto Guansing, whose original title (TCT No. 91148) was restored and TCT No. 300809 cancelled by final RTC decision of March 23, 1984.
- Judicial proceedings
- August 29, 1989: Lims filed a complaint for specific performance and damages against CDB and FEBTC (Civil Case No. Q-89-2863 RTC, Branch 96), later impleading the Register of Deeds.
- March 10, 1993: RTC ruled in favor of Lims, finding a perfected contract of sale, impossibility of performance, and petitioners’ liability; awarded return of P30,000 plus interest, P250,000 moral damages, P50,000 exemplary damages, P30,000 attorney’s fees, and costs.
- October 14, 1997: CA affirmed; December 9, 1997: CA denied reconsideration; this petition for review on certiorari ensued.
Issues:
- Whether the written Offer to Purchase and payment of P30,000 constituted a perfected contract of sale or a mere option contract.
- Whether the subsequent cancellation of Rodolfo’s title rendered performance of the sale impossible, voiding the contract under the nemo dat principle.
- Whether CDB and FEBTC qualify as mortgagees in good faith and are thus protected by Torrens indefeasibility.
- What remedies and damages private respondents are entitled to under the Civil Code given the void contract and petitioners’ fault.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)