G.R. No. 976 - People vs. Abad

Philippine National Bank (PNB) as petitioner and Venancio C. Reyes, Jr. (respondent) were adversaries in an action to annul a real estate mortgage and certificate of sale.
Venancio and Lilia C. Reyes were married in 1973 under the Conjugal Partnership of Gains regime.

The spouses acquired three parcels in Malolos, Bulacan: TCT Nos. T-52812 and T-52813 registered in “Felicidad Pascual and Lilia C. Reyes, married to Venancio Reyes,” and TCT No. T-53994 in “Lilia C. Reyes, married to Venancio Reyes.”
On August 25, 1994, the three lots were mortgaged to PNB to secure a P1,100,000.00 loan, which was increased to P3,000,000.00 on October 6, 1994.

After the Reyes spouses defaulted, PNB initiated extrajudicial foreclosure; the auction was held on September 19, 1997, where PNB was the highest bidder and obtained a certificate of sale.
On September 22, 1998, Venancio filed a complaint to annul the mortgage and certificate of sale, later amended to include Lilia and the Provincial Sheriff of Bulacan.

Venancio alleged his signature on the loan and mortgage documents was forged and that he did not consent to the encumbrance of the conjugal properties.
The RTC of Malolos (Branch 81) on May 27, 2009 annulled the mortgage and certificate of sale for lack of spousal consent and ordered Lilia to reimburse PNB ₱3,324,771.18 with interest; the Court of Appeals affirmed on August 22, 2013, and denied reconsideration on May 5, 2014.
PNB then filed a petition for review on certiorari before the Supreme Court, contending the mortgage was valid, the conjugal partnership bound, and that respondent’s cause was barred by laches.

Whether the Court of Appeals erred in declaring the real estate mortgage void for want of the non-contracting spouse’s consent.
Whether the conjugal partnership of gains may be held liable for the loan contracted unilaterally by Lilia C. Reyes.
Whether respondent is guilty of laches or estoppel, thus barring his action to annul the mortgage and certificate of sale.