G.R. No. 88602 - Vda. de Jacob vs. Court of Appeals

Dr. Alfredo E. Jacob was the registered owner of a parcel of land covered by Transfer Certificate of Title No. 1433 of the Register of Deeds of Naga City.
The subject land was located at Liboton, Naga City, with an area of approximately 3,376 square meters.
Jorge Centenera was named as attorney-in-fact of Dr. Jacob by a special power of attorney.
Bicol Savings & Loan Association and United Bicol Savings Bank were the mortgagee and bank-respondents in the related proceedings.
Tomasa Vda. de Jacob later became administratrix of the estate of Dr. Jacob and claimed to be an heir.

Appointment and authority of Jorge Centenera; execution of the special power of attorney

In 1972, Jorge Centenera was appointed as administrator of Hacienda Jacob until January 1, 1978 when Dr. Jacob revoked the special power of attorney executed in his favor.
Dr. Jacob requested that Centenera negotiate for a loan because of problems paying realty taxes, internal revenue taxes, and unpaid wages of farm laborers of the hacienda.
Dr. Jacob executed a special power of attorney, acknowledged before notary public Lorenzo Rosales, authorizing Centenera to mortgage and encumber certain described properties in favor of any banking institution, to receive loan proceeds, to sign and deliver mortgage and related documents, and to perform acts deemed to Dr. Jacob’s benefit and advantage.
The special power of attorney included authority to mortgage specified parcels covered by TCT No. 1433 and other described portions, and granted full power “to do and perform any and every act and thing whatever requisite or necessary or proper” as fully as Dr. Jacob could do if personally present.

In September 1972, Centenera secured a loan in the amount of P18,000.00 from Bicol Savings & Loan Association.
Centenera signed and executed the real estate mortgage and promissory note as attorney-in-fact of Dr. Jacob.
When the loan fell due in 1975, Centenera failed to pay, but arranged a restructuring using the same special power of attorney and property as security.
Centenera executed amended loan documents, consisting of an amended real estate mortgage and promissory note dated November 27, 1975, as attorney-in-fact of Dr. Jacob.
Again, when the loan matured, Centenera failed to pay and arranged another restructuring on November 23, 1976.
The mortgage was annotated on the title.
The proceeds of the restructurings were allegedly not actually given to Centenera because the transaction was allegedly only a renewal of the original loan, and the supposed proceeds were applied as payment for the loan, except that interest accrued for sixty (60) days was paid by Centenera.
Upon subsequent failure to pay at maturity, the bank sent a demand letter.

A copy of the demand letter was sent to Dr. Jacob, but no reply or denial was received by the bank.
The bank foreclosed the real estate mortgage and effected a provisional sale of the mortgaged property to the respondent bank.
On November 5, 1982, a definite deed of sale was executed in favor of the respondent bank as the sole and highest bidder.
Dr. Jacob died on March 9, 1979.
The foreclosure auction sale was effected after Dr. Jacob’s death, with the public auction sale made on May 11, 1979.
Without redemption being exercised within the prescribed period, Dr. Jacob’s title was cancelled.
Transfer Certificate of Title No. 14661 was issued on August 9, 1983 in favor of respondent bank.

Petition for writ of possession and issuance of writ; appeals and consolidations

Respondent bank filed a petition for the issuance of a writ of possession in the Regional Trial Court of Naga City, which petitioner opposed.
The trial court issued a writ of possession in a decision dated July 21, 1987, ordering the delivery of possession of the property covered by Transfer Certificate of Title No. 14661 to United Bicol Savings Bank, within thirty (30) days from finality, and directing the Provincial Sheriff to enforce the writ and place the bank in possession.
Petitioner appealed to the Court of Appeals.
The Court of Appeals affirmed the trial court decision in a decision dated June 27, 1989, without pronouncement as to costs.
Petitioner’s motion for reconsideration was denied in a resolution dated July 28, 1989.
Petitioner filed a petition for review docketed as G.R. No. 89544, asserting that the writ of possession may not validly issue because, from the admitted facts, the extrajudicial foreclosure and auction sale were patently void.
The petition in G.R. No. 88602 was consolidated with G.R. No. 89544 because the petitions were closely related.

Civil complaint to annul mortgage and related documents; trial court and Court of Appeals dispositions

While the action was pending in the trial court, Tomasa Vda. de Jacob, claiming to be an heir and later named administratrix, conducted her own investigation and filed a complaint in the Regional Trial Court of Camarines Sur.
The complaint alleged that the special power of attorney and the documents therein were forged, and that the loan, and/or real estate mortgages and promissory notes were null and void.
After trial, the Regional Trial Court rendered its decision on July 30, 1987, dismissing the complaint for lack of a cause of action and/or failure to prove the causes of action alleged.
The trial court granted counterclaims and ordered payment from the Estate of the late Dr. Alfredo Jacob in favor of the defendants.

For Bicol Savings and Loan Association: actual damages of P30,000.00, exemplary damages of P20,000.00, a...(Subscriber-Only)

Whether extrajudicial foreclosure of a mortgage may proceed after the death of the mortgagor

Whether a foreclosure under Act No. 3135, as amended can be prosecuted even after the mortgagor’s death, notwithstanding that the authority allegedly arose from a special power of attorney inserted in the mortgage deed.
Whether the special power of attorney used to execute the mortgage and documents could not extend beyond the mortgagor’s lifetime.

Whether the petition for issuance of a writ of possession may be barred by estoppel

Whether estoppel could bar the petition for issuance of a writ of possession after the mortgagor’s death and after foreclosure and sale.

Whether the pendency of a separate civil suit challenging the mortgage and related foreclosure prevents issuance of the writ of possession

Whether the separate civil action for annulment of the mortgage and related acts barred issuance of the writ of possession.

Ruling:

(Subscriber-Only)

Ratio:

(Subscriber-Only)

Unlock Full Case Digest