G.R. No. 206486 - Republic vs. Maria Basa Express Jeepney Operators and Drivers Association, Inc.

Petitioner: Planters Development Bank (PDB), now China Bank Savings, Inc.
Respondent: Fatima D.G. Fuerte.
Other parties: Spouses Oscar and Angelita Abel (defendants-appellees), Arsenio J. Jison (original mortgagor), Patricia Tan (financier).

2010: Fuerte agreed to finance a loan of Php 5,000,000.00 to Arsenio J. Jison, secured by a Real Estate Mortgage (REM) dated April 13, 2010, over a parcel in Pasay City (TCT No. 4224).
Jison defaulted on the loan.
Spouses Abel proposed to assume Jison's loan and pay Fuerte Php 10,000,000.00 for the cancellation of the April 13, 2010 REM and transfer of the property.
PDB granted Spouses Abel a loan of Php 26,000,000.00 on June 29, 2010, intended partly to cover the payment to Fuerte; Php 3,000,000.00 released as initial drawdown.
July 13, 2010: Fuerte executed a Cancellation/Release of Mortgage.
July 19, 2010: Jison executed a Deed of Absolute Sale to Spouses Abel for Php 20,000,000.00.
PDB issued a Letter of Guaranty dated July 23, 2010, promising to release within seven working days manager's checks to Fuerte (Php 10,000,000.00) and Patricia Tan (Php 7,000,000.00) upon transfer of ownership and annotation of mortgage on the new TCT.
July 26, 2010: Cancellation of previous mortgage recorded; new TCT No. 151615 issued to Spouses Abel.
August 5, 2010: REM constituted by Spouses Abel over the property to secure loan from PDB, annotated on new TCT.
August 9, 2010: PDB received a letter from Atty. Rodinil Bugay alerting about the death of Arsenio Jison since 1970, fraud in representation, and pending intestate estate proceedings.
Adverse Claim executed on August 6, 2010 by Ma. Liza Agnes Jison Calangan, an heir, was duly annotated on the new TCT on August 10, 2010.

Fuerte demanded release of Php 10,000,000.00 from PDB and Spouses Abel, but was refused.
Fuerte filed Complaint for Specific Performance with Prayer for Damages against PDB and Spouses Abel at RTC Pasig City, Civil Case No. 73363-PSG.
RTC dismissed claim against PDB, ordered Spouses Abel to pay Fuerte Php 10,000,000.00 plus attorney's fees.
Fuerte appealed to CA; CA partly granted appeal, reversed RTC dismissal of claim against PDB and ordered PDB to pay Fuerte Php 10,000,000.00 plus interest and fees, and ordered Spouses Abel to reimburse PDB.

PDB contended that its obligation was conditional upon the presentation of a clean TCT free from liens/encumbrances except PDB mortgage.
PDB argued the presence of Calangan's adverse claim and a Notice of Lis Pendens constituted such encumbrances, preventing compliance with conditions for releasing funds.
PDB claimed the title transfer to Spouses Abel and consequent mortgage annotation were legally questionable due to Arsenio Jison's death in 1970 and validity of sale.
Fuerte, relying on the Letter of Guaranty, asserted that conditions for release of funds had been met.

Patricia Tan filed a separate similar claim against PDB involving Php 7,000,000.00 from the same Letter of Guaranty in RTC Makati, Civil Case No. 13-541.
The Tan case's RTC decision favoring Tan was reversed by CA; a separate Supreme Court petition was filed (G.R. No. 243369).

Did the Court of Appeals err in ruling that all terms and conditions in the July 23, 2010 Letter of Guaranty by PDB were met such that PDB was obliged to release Php 10,000,000.00 to Fuerte?