Case Digest (G.R. No. 179909)
Facts:
Far East Bank and Trust Company (now Bank of the Philippine Islands) and Rolando Borja, Deputy Sheriff, petitioners, filed this Rule 45 petition (G.R. No. 179909) decided January 25, 2010 by the Supreme Court First Division, Villarama, Jr., J., writing for the Court. Respondents are Sps. Ernesto and Leonor C. Cayetano.
Respondent Leonor C. Cayetano executed a special power of attorney in favor of her daughter, Teresita C. Tabing, authorizing Tabing to contract a loan of not more than P300,000 and to mortgage two lots in Barangay Carolina, Naga City (TCT Nos. 12304 and 11621). Tabing obtained a P100,000 loan from petitioner secured by two promissory notes and a real estate mortgage over the subject lots. The mortgage instrument, however, was signed by Tabing and her husband in their individual capacities and did not state that Tabing was acting for or in behalf of Cayetano.
Petitioner proceeded with extrajudicial foreclosure for nonpayment. A notice of public auction scheduled for September 18, 1991 was sent to respondents; respondents’ counsel merely requested postponement by letter, and did not file an annulment action or otherwise timely oppose the sale. The auction was held and the properties were sold to petitioner for P160,000; after the redemption period lapsed, petitioner consolidated title and obtained new titles in its name.
On September 10, 1996 Tabing, purportedly on behalf of Cayetano, offered to repurchase the properties; petitioner refused the offered terms and suggested a bidding. Thereafter, on December 18, 1996 respondents filed a complaint in the RTC of Naga City for annulment of mortgage and extrajudicial foreclosure, damages, and cancellation of petitioner’s titles.
The Regional Trial Court (Branch 61, Naga City) rendered judgment in favor of respondents, declaring the real estate mortgage void and unenforceable against Cayetano because the agent did not execute the mortgage in the name of the principal, and finding there was noncompliance with the publication requirement of extrajudicial foreclosure under Act No. 3135. The trial court nevertheless held that the loan remained enforceable against the spouses Tabing personally.
The Court of Appeals, in CA-G.R. CV No. 76382, affirmed the RTC’s central ruling that the mortgage did not bind the principal where the agent signed ...(Subscriber-Only)
Issues:
- Is the principal bound by a real estate mortgage executed by an authorized agent who signed the mortgage in the agent’s own name without indicating that the agent was acting for and in behalf of the...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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