Case Digest (G.R. No. L-21362) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Development Bank of the Philippines v. Lourdes Gaspar Bautista, decided November 29, 1968 under G.R. No. L-21362, the mortgagor, Lourdes Gaspar Bautista, applied on May 31, 1949 for the government sale of a 12-hectare parcel in Barrio Sta. Barbara, San Jose, Nueva Ecija. On June 1, 1949 the Director of Lands issued Sales Patent No. V-132, and Original Certificate of Title No. P-389 was registered on June 3, 1949. Bautista then obtained a ₱4,000 loan from the Rehabilitation Finance Corporation (RFC), the predecessor of the Development Bank of the Philippines (DBP), executing a mortgage over Lot P-389 and a promissory note on July 16, 1949. After default, RFC foreclosed extrajudicially under Act No. 3135, acquiring the property at sheriff’s sale on June 27, 1951 and consolidating title on July 21–26, 1952 as TCT No. NT-12108. Meanwhile, Rufino and Juan Ramos filed Civil Case No. 870 in the Court of First Instance of Nueva Ecija, seeking annulment of the government’s title, Baut Case Digest (G.R. No. L-21362) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Application and issuance of title
- On or before May 31, 1949, Lourdes Gaspar Bautista applied to the Government for the sale of a 12-hectare, 44-are, 22-centare parcel of land in Bo. Sta. Barbara, San Jose, Nueva Ecija.
- On June 1, 1949, Director of Lands issued Sales Patent No. V-132 in her favor, and on June 3, 1949, the Register of Deeds of Nueva Ecija registered it as Original Certificate of Title No. P-389.
- Loan application and mortgage
- On July 16, 1949, Bautista applied for a ₱4,000 loan from the Rehabilitation Finance Corporation (RFC), predecessor of the Development Bank of the Philippines (DBP), offering O.C.T. No. P-389 as security.
- On the same date she executed a mortgage over O.C.T. No. P-389 and a promissory note for ₱4,000 in favor of RFC, upon which the loan proceeds were released.
- Default and extrajudicial foreclosure
- Bautista failed to pay amortizations; RFC foreclosed the mortgage under Act 3135, as amended, and at a sheriff’s auction on June 27, 1951, acquired the property as highest bidder. The total obligation then was ₱4,858.84.
- After the one-year redemption period expired, RFC consolidated ownership on July 21, 1952, and the Register of Deeds cancelled O.C.T. No. P-389 and issued T.C.T. No. NT-12108 in RFC’s name.
- Judicial annulment of titles
- Civil Case No. 870 was filed by Rufino and Juan Ramos in the Court of First Instance of Nueva Ecija against the Government and RFC, alleging ownership and seeking annulment of T.C.T. No. 2336 (Government), O.C.T. No. P-389 (Bautista) and T.C.T. No. NT-12108 (RFC).
- On June 27, 1955, the court rendered judgment declaring those certificates of title null and void. Bautista was not cited or made a party to that proceeding.
Issues:
- What right, if any, has a creditor that satisfied its mortgage claim by extrajudicial foreclosure and acquired the debtor’s title, when that title is later annulled in a judicial proceeding to which the debtor was not made a party?
- Can the Development Bank of the Philippines recover from the Director of Lands or the National Treasurer under the Assurance Fund when its claim against Bautista fails for lack of due process?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)