Case Digest (G.R. No. 213241)
Facts:
Philippine National Bank v. Juan F. Vila, G.R. No. 213241, August 01, 2016, Supreme Court Third Division, Perez, J., writing for the Court.Petitioner Philippine National Bank (PNB) is a universal bank. In 1986 Spouses Reynaldo Cormsta and Erlinda Gamboa Cornista (the Spouses Cornista) obtained a loan from Traders Royal Bank and mortgaged a 451-sq.m. parcel (Lot 555-A-2, TCT No. 131498) as security. Traders Bank foreclosed for default and, after complying with notice and publication, offered the property at public auction on December 23, 1987, where respondent Juan F. Vila was declared highest bidder; a Certificate of Sale was recorded January 13, 1988. Vila took possession, paid real property taxes, and was issued a Certificate of Final Sale on February 11, 1989 after the redemption period lapsed.
Despite that, the Spouses Cornista redeemed the property by tendering P50,000 and obtained a Certificate of Redemption dated March 14, 1989, which was annotated on the title. Vila then filed Civil Case No. V-0242 (Jan. 10, 1992) to nullify the redemption, and a Notice of Lis Pendens was recorded on the title (Oct. 19, 1992). The RTC rendered judgment in favor of Vila on February 3, 1995, ordering cancellation of the Redemption; the Court of Appeals affirmed on October 19, 1997 and the decision became final and executory on November 19, 1997. A writ of execution issued December 14, 1997 returned unsatisfied because the subject title was no longer under the Spouses Cornista.
Investigation revealed that the Spouses Cornista had, on September 28, 1992, mortgaged the same parcel to PNB (REM recorded Entry No. 758171), i.e., about a month before the lis pendens was annotated. After default, PNB foreclosed, became highest bidder at public sale, and consolidated ownership: TCT No. 131498 in the Spouses’ names was cancelled and a new TCT No. 216771 in PNB’s name was issued. Vila then filed Civil Case No. V-0567 in the RTC of Villasis, Pangasinan, against the Spouses Cornista and PNB seeking nullification of TCT No. 216771 and damages.
At trial the RTC received documentary and testimonial evidence and, on June 22, 2011, found in favor of Vila, ruling that PNB was not a mortgagee in good faith because it failed to exercise the higher degree of diligence required of banks (no credible proof of ocular inspection; the property was in Vila’s possession and he paid taxes). The RTC declared the REM and subsequent deed of sale null and void, ordered cancellation of TCT No. 216771 and issuance of a new title in Vila’s name, and awarded moral and exemplary damages and attorney’s fees against PNB. The RTC denied reconsideration in a resolution dated June 13, 2014.
The Court of Appeals, in a Decision dated December 18, 2013, affirmed the RTC, holding that ba...(Pro-only)
Issues:
- Whether or not PNB is a mortgagee in good faith.
- Whether or not PNB is liable for damages....(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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