Case Summary (G.R. No. 163825)
Facts
Spouses Maglasang obtained a P1,070,000 loan from PCRB, secured by mortgage over Lot 12868-H-3-C owned by spouses Cortel. Two other loans by Maglasang were also secured by different properties. Before maturity, the mortgagors sought PCRB’s consent to sell Lot 12868-H-3-C and release it from the mortgage, alleging PCRB’s branch manager verbally agreed, subject to full payment of the primary loan. They sold the property to Banate, paid off that loan, and PCRB delivered the owner’s duplicate title—still bearing the mortgage—to facilitate transfer. PCRB thereafter refused to execute a Deed of Release of Mortgage.
Procedural History
RTC granted specific performance and damages, finding the mortgage contract a contract of adhesion and enforcing the verbal agreement with the branch manager. The Court of Appeals reversed, holding that the cross-collateral (dragnet) clause covered all loans and that the branch manager lacked authority to amend the written mortgage. Petitioners elevated the case to this Court via petition for review on certiorari under Rule 45.
Issues
- Whether the verbal agreement with PCRB’s branch manager novated or modified the original mortgage contract, particularly its cross-collateral stipulation.
- If no novation occurred, whether Banate may claim restitution of the amount paid on the ground of rescission.
Cross-Collateral Stipulation and Dragnet Clause
The mortgage instrument expressly secured “the loan… and such other loans or advances already obtained, or still to be obtained” by the mortgagors. This dragnet clause validly extends the security to all obligations within its four corners. Petitioners cannot compel release of one mortgage when other secured obligations remain unpaid.
Novation Principles
Novation requires four requisites: (1) valid prior obligation; (2) agreement of all parties to a new contract; (3) extinguishment of the old obligation; and (4) creation of a valid new obligation. The petitioners point to a verbal promise by the branch manager but fail to show PCRB’s board of directors consented to any new binding agreement. Consequently, no extinctive or modificatory novation took place.
Corporate Authority and Apparent Authority
Under the Corporation Code, only the board of directors exercises corporate powers. A branch manager’s authority to alter a written mortgage must be proven by evidence of actual or apparent authority, derived from corporate bylaws, board resolutions, custom, or ratification. Here, petitioners offered no proof of PCRB’s conduct holding out the branch manager as empowered to amend its mortgage contracts. The doctrine of apparent authority cannot be invoked absent principal-conduct that reasonably led a third party to rely in good faith.
Restitution Claim
The petitioners’ alternative prayer for restitution under Civil Code Article 2154 fails because no payment was made to PCRB by mistake. The purchase chec
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Factual Background
- On July 22, 1997, spouses Rosendo Maglasang and Patrocinia Monilar obtained from PCRB a P1,070,000.00 loan evidenced by a promissory note, payable January 18, 1998.
- To secure that “subject loan,” they mortgaged Lot 12868-H-3-C (275 sqm., Barangay Pitogo, Consolacion, Cebu City) owned by their daughter and son-in-law, spouses Cortel.
- The spouses Maglasang also had two other PCRB loans, each covered by separate promissory notes and secured by mortgages on other properties.
- In November 1997, the Maglasangs and the Cortels requested PCRB (through Branch Manager Pancrasio Mondigo) permission to sell the mortgaged property and to release it from the mortgage, asserting the other loans were separately secured.
- Mondigo allegedly consented verbally, conditioned on full payment of the subject loan.
- The premises sold to petitioner Violeta Banate for P1,750,000.00; proceeds were applied to the subject loan.
- PCRB delivered the owner’s duplicate certificate of title to Banate, who obtained a title in her name still bearing PCRB’s mortgage lien.
- Petitioners demanded a Deed of Release of Mortgage; PCRB refused.
- Petitioners also alleged PCRB caused a false, malicious news report accusing them of “surreptitious” transfer of ownership.
Procedural History
- June 27, 2001 (RTC, Branch 88, Consolacion, Cebu): granted petitioners’ complaint for specific performance and damages, ordering PCRB to execute the release deed and pay moral damages and attorney’s fees.
- December 19, 2003 (CA, CA-G.R. CV No. 74332): reversed the RTC decision.
- May 5, 2004 (CA): denied petitioners’ motion for reconsideration.
- December 12, 2008: Bangko Sentral ng Pilipinas closed PCRB and placed it under PDIC receivership.
- Petitioners filed a Rule 45 petition for review on certiorari before the Supreme Court.
Issues Presented
- Can the verbal agreement with PCRB’s branch