Case Digest (G.R. No. 194983)
Facts:
Philippine National Bank v. Antonio Bacani, G.R. No. 194983, June 20, 2018, Supreme Court Second Division, Reyes, Jr., J., writing for the Court.Philippine National Bank (PNB) was the petitioner; Antonio Bacani, Rodolfo Bacani, Rosalia Vda. De Bayaua, Jose Bayaua and Jovita Vda. De Bayaua (collectively, the respondents) were the occupants/former owners of the subject parcel in Centro East, Santiago, Isabela covered by TCT No. 114296, originally registered in the name of respondent Rodolfo Bacani. Rodolfo and his wife obtained an Php 80,000 loan from PNB, which led to an extrajudicial foreclosure and sale on September 9, 1986; PNB was the highest bidder and its certificate of sale was registered on October 10, 1986. After the one-year statutory redemption period elapsed without redemption, Rodolfo’s title was cancelled and PNB’s TCT No. T‑185028 was issued on June 6, 1989.
On November 29, 1989, PNB issued SEL Circular No. 8‑7/89, announcing a policy giving former owners priority to reacquire foreclosed assets “on negotiated basis without public bidding,” subject to enumerated conditions (price based on bank’s claim or fair market value, cash preference, downpayment and financial capacity requirements, 90‑day exercise period upon notice, etc.). Beginning in 1991 the Spouses Bacani made repeated written offers to repurchase the property (offers ranged from Php150,000 to Php350,000, and at one point Php200,000 cash plus Php100,000 in installments), but PNB rejected their proposals on grounds the offers were below PNB’s total claim and the property’s appraised fair market value.
PNB thereafter listed the property for public auction (Invitation to Bid published; floor price stated at Php4,000,000). Despite the published auction, PNB sold the property by negotiated sale on January 30, 1996 to Renato de Leon for Php1,500,000; title was issued to Renato (TCT No. 261643). Renato filed an ejectment case and obtained possession; the respondents’ houses were demolished. On March 19, 1997 the respondents filed in the Regional Trial Court (RTC), Civil Case No. 35‑2365, seeking annulment of the sale and Renato’s title and claiming damages, alleging PNB schemed to preclude the Spouses Bacani’s repurchase.
The RTC, after trial, ruled for the respondents in a Decision dated March 1, 2004: it annulled Renato’s TCT No. T‑261643, ordered PNB to reconvey the land to the Spouses Bacani upon payment of Php217,646.50 (PNB’s total claim), and awarded damages and attorney’s fees against PNB, its branch manager, and Renato. The RTC found PNB acted in bad faith by negotiating with the Spouses Bacani but then selling the property by negotiated sale on the eve of the auction, and held Renato was not a purchaser in good faith given the published Invitation to Bid.
PNB appealed to the Court of Appeals (CA). In a Decision dated September 30, 2010 the CA affirmed the RTC, finding the sale fraudulent, noting the Spouses Bacani’s time de...(Pro-only)
Issues:
- After the statutory redemption period expired, did the Spouses Bacani retain an enforceable right to repurchase the foreclosed property by virtue of PNB SEL Circular No. 8‑7/89?
- Was the sale of the subject property to Renato voidable for fraud and did the CA properly cancel Renato’s title and impose a constructive trust?
- Could the CA properly treat the Spouses Bacani’s bank time deposit as proof of their financial capacity (or as option/down pa...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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