G.R. No. 149468 - Nacua-Jao vs. China Banking Corp.

Petitioner Marie Iole Nacua-Jao filed a complaint at the Regional Trial Court (Branch XV), Naic, Cavite.
The complaint was directed against multiple defendants: Spouses Jackson and Jennerie Gan, Lee Ching Hsien, and China Banking Corporation (CBC).
The relief prayed included recovery of property, declaration of nullity of deeds and title, cancellation of mortgage, damages, and attorney’s fees.

Petitioner alleged she is the lawful owner of Lot No. 561 in Ternate, Cavite, registered under Transfer Certificate of Title (TCT) No. T-525552.
In September 1995, before leaving Cebu, petitioner entrusted the owner’s duplicate copy of TCT No. T-525552 to Lee Ching Hsien.
In the following year, after demanding the return of the duplicate copy, petitioner discovered that Hsien had sold the property to the Gan spouses by virtue of a Deed of Sale dated January 19, 1996.
Subsequently, it was found that TCT No. T-525552 was cancelled and replaced by TCT No. T-602202 in the name of the Gan spouses.
The Gan spouses had later mortgaged the subject property to CBC as security for a loan amounting to Php1,600,000.00, with the mortgage duly annotated on TCT No. T-602202.

CBC filed a Motion to Dismiss the complaint on the ground of lack of a cause of action.
The Regional Trial Court (RTC) granted the Motion to Dismiss (Order dated December 11, 1997), dismissing the complaint against CBC.
Petitioner moved for reconsideration, alleging that the dismissal failed to consider her allegations of fraud and the conspiracy of the defendants, but the RTC denied the motion (Order dated April 19, 1999).

Petitioner elevated the case by filing a Petition for Certiorari with the Court of Appeals (CA).
The CA, in its Decision dated December 11, 2000, and Resolution dated July 17, 2001, denied both the petition and a subsequent Motion for Reconsideration by petitioner.
The CA’s findings noted that the complaint, particularly paragraph 15, allegedly stated a general conclusion of conspiracy and fraud without sufficient particulars, and that CBC’s status as a mortgagee in good faith was assumed without hearing.

The property was fraudulently transferred from petitioner to the Gan spouses on the basis of a falsified deed of sale.
The cancellation and replacement of the title was executed to benefit the fraudulent transaction.
The Gan spouses, by mortgaging the property to CBC, further compounded the fraudulent transfer.

Notably, the complaint contained an allegation that CBC “connived and conspired” with the Gan spouses to effect the sale and the subsequent mortgage of the property.

Whether or not the Court of Appeals erred in dismissing the case on the ground of lack of cause of action.
Whether or not the Court of Appeals erred in not appreciating the multiplicity of suits in dismissing the case.
Whether or not the Court of Appeals erred in not finding respondent China Banking Corporation as an indispensable or necessary party in the case.
Whether or not the Court of Appeals erred in finding that the complaint did not allege the particular acts of fraud.
Whether or not the Court of Appeals erred in presuming that respondent China Banking Corporation was a mortgagee in good faith without a proper inquiry.