G.R. No. 240311 - Philippine National Bank vs. Giron-Roque

In April 1995, Felina, a Filipino resident of the United States, secured a credit line from Philippine National Bank (PNB) amounting to P230,000.00. This facility was secured by a real estate mortgage over a property registered under Transfer Certificate of Title No. T-45548.
On February 10, 1997, Felina availed herself of a first loan in the amount of P50,000.00 from the credit line through a promissory note with a due date set for August 9, 1997.

While Felina was in the United States (sometime between April and August 1997), she purportedly filed, through Gloria M. Apostol, a stand-by application to avail of a second loan of P120,000.00 from her credit line.
In connection with this second loan, a withdrawal transaction was effected when Gloria withdrew a check (the “subject check”) for P119,820.00 from Felina’s account.
Felina later claimed that the signature on the subject check was forged and that Gloria was not duly authorized to withdraw from her PNB account.

On December 10, 1998, Felina sent a letter accompanied by a cashier’s check for P16,000.00, intended as full payment for the first loan.
PNB, however, returned the check on December 22, 1998, arguing that the amount was insufficient to cover the loans, including interest and penalties, especially in light of the disputed second loan.
Subsequently, PNB proceeded with extrajudicial foreclosure of Felina’s mortgaged property, thereby intensifying the dispute.

Nullification of the extrajudicial foreclosure sale;
Reinstatement of her unused credit accommodation; and
A declaration that the second loan, along with its associated interests and penalties, was null and void.

In her complaint, Felina further asserted that the cash tendered (P16,000.00) should be accepted as full payment of the only valid loan availed.
Spouses Apostol, particularly Dr. Gloria M. Apostol and her husband Dr. Edward Apostol, defended their actions, maintaining that Gloria had the proper authorization to withdraw from Felina’s account.
PNB contended that it had exercised the required due diligence in permitting the withdrawal and that Felina’s payment did not constitute a valid full tender in light of the pending dispute over the second loan.

Declaring the extrajudicial foreclosure null and void;
Ordering PNB to reinstate Felina’s unused credit accommodation; and
Awarding attorney’s fees (P100,000.00) in Felina’s favor, without addressing the validity of her tender for the first loan.

The motion for reconsideration by PNB filed with the RTC was denied (Order dated November 29, 2012).
The Court of Appeals (CA) Decision (dated October 27, 2017) affirmed the RTC ruling with modifications by:

Reiterating that the second loan was void due to the forged subject check and unauthorized withdrawal;
Ordering that the spouses pay PNB the amount of P119,820.00, which pertained to the second loan; and
Deleting the attorney’s fees previously awarded to Felina.

Both PNB and Felina moved for reconsideration of the CA decision (Resolution dated June 13, 2018), but such motions were denied, leading to the current petition by PNB for review.

Whether the Court of Appeals correctly affirmed the nullification of the extrajudicial foreclosure proceedings over Felina’s mortgaged property.

The determination centers on the validity of the second loan transaction, given the alleged forgery of Felina’s signature on the subject check and the lack of proper authorization for Gloria to transact on Felina’s behalf.
Whether affirming the nullity of the extrajudicial foreclosure, in light of the second loan being invalid, required a separate pronouncement concerning Felina’s tender of payment for the first loan.