G.R. No. L-52797 - People vs. Umaguing

On November 17, 1988, petitioner Francisco Lim executed an Irrevocable Special Power of Attorney in favor of his brother, Franco Lim, authorizing the latter to mortgage the petitioner’s share in the property covered by Transfer Certificate of Title (TCT) No. 57176, which the siblings co-owned.
Subsequently, on February 9, 1989, Banco De Oro Savings and Mortgage Bank released a loan amounting to P8.5 million secured by the said document, and the mortgage was duly registered in the Register of Deeds of San Juan, Metro Manila.
The loan was fully repaid by Franco on December 28, 1992.

On June 14, 1996, petitioner Francisco Lim, his brother Franco, and their mother Victoria Yao Lim, obtained a loan of P30 million from Equitable PCI Bank (now Banco de Oro Unibank, Inc.) in favor of Sun Paper Products, Inc.
To secure the loan, petitioner and Franco executed a Real Estate Mortgage over the same property.
Due to non-payment of the loan, respondent foreclosed the mortgaged property.
On September 29, 1999, new documents—TCT No. 9470 and Tax Declaration No. 96-31807—were issued in the name of the respondent, and a Writ of Possession was later issued by the RTC of Pasig City.

On January 11, 2001, petitioner filed a Motion for the Issuance of a Temporary Restraining Order (TRO) and a Complaint for Cancellation of the Special Power of Attorney, Mortgage Contract, Certificate of Sale, TCT No. 9470, and Tax Declaration No. 96-31807, and for damages, among other reliefs.
Petitioner asserted that he did not authorize his brother to mortgage the subject property and claimed that his signature on the mortgage and surety agreement was forged.
On January 19, 2001, the RTC granted petitioner’s motion for a TRO to restrain the respondent from enforcing the Writ of Possession, pending the resolution of the complaint.
Later, on April 19, 2001, the RTC issued an Order granting a writ of preliminary injunction upon the posting of a bond, thereby restraining respondent and its agents from further executing the foreclosure documents.

Notably, Franco and Victoria did not participate in the proceedings initiated by the petitioner.
The litigation progressed with the RTC rendering a decision on April 4, 2005, that ruled in favor of petitioner, declaring the mortgage contract, certificate of sale, TCT No. 9470, and Tax Declaration No. 96-31807 null and void, and making the preliminary injunction permanent.

On appeal, the CA reversed the RTC decision.
The CA held that petitioner’s mere allegation that his signature was forged was insufficient to overcome the presumption of regularity inherent in notarized documents, thereby setting aside the RTC Decision and dismissing the complaint for lack of merit.

Did the Court of Appeals err in holding that petitioner’s mere allegation of forgery of his signature on the mortgage contract was insufficient evidence to overcome the presumption of regularity?
Is the presentation of expert evidence absolutely indispensable to prove forgery in the absence of a direct comparison with genuine signatures?

Did the CA err in reversing the RTC decision that found in petitioner’s favor and in dismissing the complaint filed against the respondent?
Can petitioner’s claim of forgery be sustained in the absence of corroborative evidence and the submission of sample genuine signatures for comparison?

Did the respondent bank exercise the requisite diligence in the conduct of the mortgage transaction?
In the event that due diligence was not observed, did such failure constitute a violation of petitioner’s rights?

Is the allegation regarding the mischaracterization of petitioner’s civil status and citizenship material to the forgery issue?
Does the absence of the wife’s signature affect the validity of the mortgage for conjugal property reasons, and was this point adequately raised in the proceedings?