Case Digest (G.R. No. 178451)
Facts:
Rural Bank of Cabadbaran, Inc. v. Jorgita A. Melecio‑Yap, et al., G.R. No. 178451, July 30, 2014, Supreme Court Second Division, Perlas‑Bernabe, J., writing for the Court.Petitioners: Rural Bank of Cabadbaran, Inc. (RBCI); Respondents: the Melecio heirs — Jorgita A. Melecio‑Yap, Lilia Melecio Pacifico (deceased, substituted), Reynaldo A. Melecio, Rosie Melecio‑Deloso, Sarah Melecio Palma‑Gil, and Erna Melecio‑Mantala (co‑owner and borrower). The property in dispute was a 3,044 sq.m. ancestral lot in Tolosa, Cabadbaran, Agusan del Norte, co‑owned by the Melecio heirs and administered by Erna.
On August 24, 1990, a notarized Special Power of Attorney (SPA) purportedly executed by the Melecio heirs authorized Erna to apply for a loan and mortgage the subject properties. Relying on that SPA, Erna obtained a commercial loan of P200,000 from RBCI (promissory note dated August 28, 1990) secured by a real estate mortgage registered at the Registry of Deeds and annotated on the tax declaration. Erna defaulted, and RBCI initiated extrajudicial foreclosure under Act No. 3135; it became the highest bidder in the August 26, 1992 auction. Following the redemption period, tax declarations were reissued in RBCI’s name and RBCI sought physical possession; a writ of possession was served and returned satisfied on April 11, 1996.
Respondents learned of the mortgage/foreclosure and, by letter dated October 11, 1995, denied authorizing the mortgage and alleged forgery of the SPA. On April 17, 1996 they filed Civil Case No. 4406 in the Regional Trial Court (RTC), Branch 33, Butuan City, seeking declaration of nullity of documents, recovery of possession and ownership, and damages against RBCI, Erna and others. Spouses Mantala (Erna and Bonifacio) were served abroad and declared in default. RBCI defended on the basis of the notarized SPA, presumption of regularity in foreclosure proceedings, and its status as a mortgagee in good faith; it also filed cross‑claims against Sps. Mantala.
At trial RBCI introduced the notarized SPA and Extra‑Judicial Adjudication documents; respondents denied executing them and produced witnesses who repudiated the notarization. On November 27, 2000 the RTC (Branch 33) ruled for RBCI: it held the mortgage and foreclosure valid, found respondents guilty of acquiescence and estoppel for delay in challenging the documents, and awarded compensatory, moral and exemplary damages against Sps. Mantala and legal costs. Respondents appealed.
The Court of Appeals (CA), in a Decision dated February 28, 2006 (CA‑G.R. CV No. 70933), reversed the RTC: it found the SPA and the Extra‑Judicial Adjudication documents to be forgeries, determined respondents had rebutted the presumption of regularity by clear and convincing evidence, held there was no constructive knowledge or notice justifying estoppel or acquiescence, declared the mortgage void as to the shares of the non‑consenting co‑owners but rec...(Pro-only)
Issues:
- Were the presumptions of regularity attaching to the notarized Special Power of Attorney and the Extra‑Judicial Adjudication documents rebutted by clear and convincing evidence?
- Are respondents barred by laches or estoppel from questioning the validity of the mortgage and foreclosure proceedings?
- Can RBCI be considered a mortgagee in good faith entitled to the protection of owne...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)