Case Digest (G.R. No. 110053)
Facts:
Development Bank of the Philippines v. Court of Appeals, Celebrada Mangubat and Abner Mangubat, G.R. No. 110053, October 16, 1995, Second Division, Regalado, J., writing for the Court.Petitioner Development Bank of the Philippines (DBP) sold to respondents spouses Celebrada and Abner Mangubat a parcel of unregistered land (Lot 1, PSU-142380, Toytoy, Garchitorena, Camarines Sur) by a Deed of Absolute Sale dated July 20, 1981; the deed contained a waiver of the seller’s warranty against eviction. The property’s chain of title showed former private ownership (donation, sale to Pacifico Chica) but Chica had mortgaged the land to DBP to secure a P6,000 loan (mortgage dated April 27, 1965), defaulted, and DBP acquired the property at extrajudicial foreclosure auction on September 9, 1970 (certificate of sale September 17, 1970; entered in Book of Unregistered Property September 23, 1970).
After an offer-cum-acceptance on price (P25,500), the Mangubats executed the sale (July 20, 1981) and later applied for an industrial tree-planting loan. The Bureau of Forest Development certified on October 29, 1981 that the property was timberland and thus inalienable; nonetheless DBP approved a P140,000 loan on the understanding DBP would seek release of the land from the Ministry of Natural Resources. To secure the loan the Mangubats executed a real estate mortgage dated March 17, 1982 and registered under Act No. 3344; DBP released loan proceeds in tranches and had disbursed P118,540 when further releases were withheld pending government release of the land.
On July 7, 1983 the Mangubats filed a complaint in the Regional Trial Court (Civil Case No. RTC 83-152, Branch 22, Naga City) seeking annulment of the Deed of Absolute Sale on the ground the land was timberland and thus inalienable, and alleging fraud and misrepresentation by DBP. DBP denied bad faith, pleaded ownership by virtue of its extrajudicial foreclosure purchase, and in its answer raised defenses and counterclaims including a demand for the unpaid loan balance. On May 25, 1990 the trial court annulled the deed and ordered DBP to return the P25,500 purchase price with interest, reimburse taxes and relocation-survey expenses, and to pay P50,000 in damages, P10,000 attorney’s fees, and costs.
DBP appealed to the Court of Appeals (CA-G.R. CV No. 28311). The Court of Appeals, in a decision promulgated September 9, 1992 (motion for reconsideration denied April 7, 1993), modified the trial court by deleting the awards for damages, attorney’s fees, litigation expenses and costs but otherwise affirmed. DBP filed a petition for review on certiorari with the Supreme Court raising two main issues...(Pro-only)
Issues:
- Should respondents Celebrada and Abner Mangubat be ordered to pay petitioner DBP the loan obligation of P118,540.00?
- Should petitioner DBP be required to reimburse respondents the purchase price and P11,980.00 for taxes and relocation-...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
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Doctrine:
- (Pro-only)