Case Digest (G.R. No. 96357)
Facts:
Planters Development Bank v. Hon. Court of Appeals, Spouses Domingo P. Uy and Sy Siu Ken, G.R. No. 96357, May 29, 1991, the Supreme Court First Division, Gancayco, J., writing for the Court.The property dispute arose from two parcels in Barangay Lambakin, Marilao, Bulacan, co-owned in equal undivided shares by brothers Domingo Uy and Manuel Uy and their respective spouses. Manuel Uy and his wife Mely Tan were officers (president and treasurer) of Sonice Enterprises, Inc. On May 12, 1983, Manuel and Mely caused execution of a falsified Deed of Absolute Sale purporting to convey Domingo’s one-half interest to Manuel; based on that document, Transfer Certificates of Title in Manuel’s name were issued on May 18, 1983.
Relying on those titles, Planters Development Bank granted a P5,000,000 loan to Manuel and Mely (as officers of Sonice) secured by a joint real estate and chattel mortgage covering the two parcels and their improvements. After default, the bank foreclosed extrajudicially, became the highest bidder at public auction, and acquired consolidated titles when the mortgagors failed to redeem.
Upon discovery that Domingo’s signature had been forged, Domingo and his wife Sy Siu Ken filed a complaint in the Regional Trial Court (RTC), Malolos, Bulacan, seeking annulment of the sale and mortgage insofar as they affected Domingo’s one-half share. On August 28, 1987 the RTC declared the forged deed and the transfer certificates void insofar as they affected Domingo’s share, annulled the mortgage and foreclosure as to that share, ordered issuance of new titles to Domingo’s share, and awarded damages and attorney’s fees.
The bank appealed to the Court of Appeals (CA), which on May 30, 1990 affirmed the RTC decision and denied the bank’s motion for reconsideration in a December 4, 1990 resolution. The bank then filed a petition for review on certiorari with the Supreme Court. The CA had faulted the bank for failing to inquire into the circumstances of the transfer; the bank maintained it was a mortgagee in good faith who reasonably relied on...(Pro-only)
Issues:
- Is the Deed of Absolute Sale purporting to convey Domingo Uy’s share void?
- Is the mortgage and the extrajudicial foreclosure void as to Domingo Uy’s one-half share?
- Was Planters Development Bank a mortgagee in good faith entitled to rely on the mortgagors’ apparent title?
- Does the possibility of collusion between the Uy brothers defeat ...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)