Title
Vda. de Jacob vs. Court of Appeals
Case
G.R. No. 88602
Decision Date
Apr 6, 1990
Dr. Jacob's estate contested a mortgage foreclosure, alleging SPA forgery. SC upheld the foreclosure, writ of possession, and damages, ruling mortgagee rights survive mortgagor's death.

Case Digest (G.R. No. 88602)
Expanded Legal Reasoning Model

Facts:

  • Parties and Background
    • Petitioner: Tomasa Vda. de Jacob, acting as the special administratrix of the estate of the deceased Dr. Alfredo E. Jacob.
    • Respondents:
      • The Honorable Court of Appeals.
      • Bicol Savings & Loan Association (and subsequently United Bicol Savings Bank).
      • Jorge Centenera and Atty. Lorenzo C. Rosales, who were involved as attorney-in-fact and notarial officer, respectively.
    • Dispute Context:
      • The central controversy involves whether an extrajudicial foreclosure and subsequent sale may proceed after the mortgagor’s death.
      • Petitioner also challenges whether the issuance of a writ of possession is barred by estoppel.
  • Mortgage, Special Power of Attorney, and Loan Transactions
    • Ownership and Property Details:
      • Dr. Alfredo E. Jacob was the registered owner of a parcel of land in Naga City covered by Transfer Certificate of Title No. 1433.
      • The property, located at Liboton, Naga City, measured approximately 3,376 square meters.
      • Additional parcels in Tinago, Naga City, were also involved as part of the mortgage contracts.
    • Execution of the Special Power of Attorney:
      • In 1972, Dr. Jacob granted Jorge Centenera a special power of attorney authorizing him to mortgage and/or hypothecate the property for loan purposes.
      • The document detailed powers including negotiating loans, executing promissory notes, and signing mortgage documents.
    • Loan Arrangements and Restructurings:
      • Based on the special power of attorney, Centenera secured a loan amounting to P18,000.00 from Bicol Savings & Loan Association in September 1972.
      • When the initial loan fell due in 1975, Centenera restructured the loan through an amended real estate mortgage and promissory note dated November 27, 1975.
      • A further restructuring occurred on November 23, 1976 with similar documents executed, although the proceeds were applied to renew the original loan rather than disbursed anew.
      • Despite payment of accrued interest for sixty days, Centenera failed to settle the principal on maturity, prompting the bank to issue a demand letter.
  • Foreclosure and Post-Mortem Proceedings
    • Initiation of Foreclosure:
      • Following the demand letter, the bank proceeded with an extrajudicial foreclosure of the property.
      • A provisional sale was carried out, culminating in a public auction sale.
      • On November 5, 1982, a definite deed of sale was executed in favor of the respondent bank.
    • Title Transfer and Writ of Possession:
      • The title in Dr. Jacob’s name was cancelled and, on August 9, 1983, Transfer Certificate of Title No. 14661 was issued in favor of the respondent bank.
      • A petition for the issuance of a writ of possession was filed by the respondent bank in the Regional Trial Court of Naga City.
      • A writ of possession was subsequently issued on July 21, 1987, directing the delivery of possession to the respondent bank.
  • Litigation and Procedural Developments
    • Initial Lawsuit for Annulment:
      • Petitioner filed an action in the Regional Trial Court alleging that the special power of attorney and the related documents were forged, rendering the mortgage and subsequent loan documents null and void.
      • After trial, the RTC dismissed the complaint for lack of a cause of action, awarding damages and attorney’s fees to the respondents.
    • Appeal and Appellate Findings:
      • The Court of Appeals affirmed the RTC decision in its May 30, 1989 ruling, rejecting the petitioner’s appeal on merit.
      • Petitioner later filed a petition for review (G.R. No. 88602) raising two main issues: the validity of foreclosure after the mortgagor’s death and the excessive award of damages.
    • Consolidation of Petitions:
      • A second petition for review (G.R. No. 89544) was consolidated with G.R. No. 88602 as both raised similar issues regarding the foreclosure and the writ of possession.
  • Arguments Presented
    • Petitioner’s Contentions:
      • Asserted that the extrajudicial foreclosure and subsequent sale were invalid because they occurred after Dr. Jacob’s death (March 9, 1979).
      • Argued that the authority granted under the special power of attorney did not extend beyond the lifetime of the mortgagor, thereby nullifying the foreclosure proceedings conducted post-mortem.
    • Respondent’s Position:
      • Relied on Section 7, Rule 86 of the Rules of Court, which permits a mortgagee to foreclose extrajudicially even after the death of the mortgagor.
      • Emphasized that the right to foreclose derives from statutory and contractual rights independent of the special power of attorney.

Issues:

  • Validity of Extrajudicial Foreclosure Post-Death
    • Whether an extrajudicial foreclosure may lawfully proceed after the death of the mortgagor, given that the special power of attorney expressly empowered the foreclosure only during the lifetime of the mortgagor.
  • Issuance of the Writ of Possession
    • Whether the petition for the issuance of a writ of possession is barred by estoppel and should be set aside due to the purported invalidity of the foreclosure proceedings.
  • Appellate Determination on Damages
    • Whether the appellate court’s findings on the excessive and unfounded award of damages should be revisited, considering the arguments raised by the petitioner.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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