Case Digest (G.R. No. 177803)
Facts:
Spouses Emiliano L. Jalbay, Sr. and Mamerta C. Jalbay v. Philippine National Bank, G.R. No. 177803, August 03, 2015, Supreme Court Third Division, Peralta, J., writing for the Court.The property involved is a 257-square-meter lot in Del-Nacia Ville No. 4, Sauyo Road, Novaliches, Quezon City, originally registered in the names of the Spouses Jalbay. The Transfer Certificate of Title (TCT) covering the lot was destroyed in the 1988 fire that gutted the Quezon City Register of Deeds; upon reconstitution the title was issued in the name of Emiliano Jalbay, married to Mamerta C. Jalbay, and because the spouses were abroad the reconstituted title was released to their daughter, Virginia Agus.
In 1993 Virginia Agus and her husband, Danilo Agus (the Spouses Agus), applied for a loan from PNB, Ermita Branch, allegedly to finance their garments business (VJA Garments). As security they presented the TCT for the subject lot and caused a real estate mortgage to be constituted, representing the property as owned by Emiliano Jalbay, Jr., and Teresita Jalbay-Cinco. The Spouses Agus defaulted; PNB foreclosed the mortgage and emerged as highest bidder at public auction.
While on a short visit to the Philippines the Spouses Jalbay learned about the mortgage, foreclosure and auction and filed Civil Case No. Q-97-30800 in the Regional Trial Court (RTC), Quezon City, Branch 100, seeking declaration that the real estate mortgage and foreclosure were void for lack of the registered owners’ consent and to enjoin consolidation of ownership by PNB. On April 3, 2003 the RTC declared the mortgage null and void and the foreclosure without force and effect.
PNB and the Spouses Agus appealed to the Court of Appeals (CA). On November 29, 2006 the CA reversed the RTC and dismissed the complaint; i...(Pro-only)
Issues:
- Was PNB a mortgagee in good faith entitled to rely on the certificate of title and the foreclosure, or was the mortgage void for lack of consent by the registered owners (i.e., did PNB exercise the required diligence as a bank)?
- If the mortgagee-in-good-faith doctrine applies to banks, did the circumstances here permit PNB to be ...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)