G.R. No. 108854 - Krohn vs. Court of Appeals

In June–July 1998, petitioner Land Bank of the Philippines (LBP) granted respondent Maria Josefina G. Miranda and her co-borrowers three promissory notes totaling ₱2,400,000.00, secured by a real estate mortgage over TCT No. T-65757.
From the first loan release of ₱850,000.00, LBP deducted ₱5,700.82 as a “Mortgage Redemption Insurance” (MRI) premium.

Miranda never accomplished or submitted the MRI application forms; LBP Insurance Brokerage, Inc. (LIBI) did not issue any policy.
On August 20, 1998, co-borrower Robert Glenn D. Fox died. Believing the MRI would extinguish the debt, Miranda ceased payments.
LBP filed for extrajudicial foreclosure; the property was sold at auction on March 31, 2000 for ₱5,115,904.97, credited against the mortgage debt.

On March 19, 2001, Miranda sued to annul the foreclosure sale, cancel the mortgage and certificate of sale, and recover at least ₱300,000.00 in damages, ₱100,000.00 in attorney’s fees, and costs.
The Regional Trial Court (RTC) on June 21, 2010 denied the main relief but awarded Miranda ₱150,000.00 moral damages, ₱5,700.82 reimbursement, ₱100,000.00 attorney’s fees, and costs.
The Court of Appeals (CA) on February 24, 2015 affirmed the RTC decision and, on September 28, 2015, denied both parties’ motions for reconsideration.

Whether LBP is liable for moral damages, attorney’s fees, and costs on the basis that it acted as agent exceeding its authority under Civil Code Article 1897.
Whether an MRI contract was perfected and its proceeds applied to extinguish Miranda’s loan upon her co-borrower’s death.