Case Summary (G.R. No. 243296)

Case Overview

The case is a Petition for Review on Certiorari addressing the Decision and Resolution of the Court of Appeals (CA) regarding the status of Metropolitan Bank and Trust Company (Metrobank) as a mortgagee in good faith related to a disputed property transaction involving the Bautista family and the Balolong spouses.

Procedural Background

• Parties Involved:
  • Petitioners: Ceferino Bautista (substituted by Philip de Vera Bautista), Felisa Bautista, Nehemias Bautista
  • Respondents: Spouses Francis and Minda Balolong, Metrobank, and the Register of Deeds, Lingayen, Pangasinan
• Initial Filing: Petitioners filed a Complaint for cancellation of title, declaration of nullity of mortgage, and damages against the respondents in the Regional Trial Court (RTC) of San Carlos City, Pangasinan.
• Key Allegation: Petitioners alleged that a mortgage executed by Minda Balolong was fraudulent, as it was purportedly based on a sale transaction that they denied having participated in.

Facts of the Case

• Ownership: Petitioners were the registered owners of two parcels of land in Lingayen, Pangasinan.
• Fraudulent Activity: Minda Balolong, married to Francis Balolong, allegedly mortgaged the property without the knowledge or consent of the Bautista family, claiming her husband forged their signatures.
• Metrobank’s Involvement: Metrobank, after conducting due diligence, approved a loan for Minda and Francis secured by a mortgage on the Bautista property.

RTC Ruling

• Findings: The RTC declared the Deed of Absolute Sale void, confirmed the signatures were forgeries, and found Metrobank to be a mortgagee in good faith.
• Liability: Only Francis Balolong was held liable for damages to the petitioners due to fraud, ordered to pay Php 1,500,000.00, plus moral and exemplary damages, and attorney’s fees.
• Dismissal: The RTC dismissed the case against Minda and Metrobank.

CA Ruling

• Affirmation: The CA affirmed the RTC's ruling, asserting that Metrobank acted as a mortgagee in good faith after conducting necessary due diligence.
• Due Diligence: It was noted that Metrobank performed background checks, ocular inspections, and verified the authenticity of the title.

Issues Raised

1. Mortgagee in Good Faith: Whether CA erred in ruling that Metrobank qualified as a mortgagee in good faith.
2. Validity of Mortgage: Whether CA erred in upholding the mortgage's validity and the foreclosure process.

Supreme Court Ruling

• Legal Principle: The Court stated that the determination of whether Metrobank was a mortgagee in good faith is a factual matter, not typically subject to review under Rule 45.
• Due Diligence Standards: The Court reaffirmed that banks must exercise a higher degree of care compared to private individuals when dealing with registered lands.
• Court’s Findings: The Supreme Court found no misapprehensions in the facts established by the RTC and CA affirming Metrobank’s status as a mortgagee in good faith.

Key Legal Principles

• Mortgagee in Good Faith: A mortgagee can rely on the Certificate of Title, provided there are no suspicious indicators prompting further investigation.
• Due Diligence Requirements: Banks must conduct proper checks to ascertain the legitimacy of property titles and the borrower's capacity.

Key Takeaways...continue reading

Case Syllabus (G.R. No. 243296)

Case Overview

• The case involves a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
• It is aimed at assailing the Decision dated June 7, 2018, and the Resolution dated November 12, 2018, of the Court of Appeals (CA) in CA-G.R. CV No. 108449.
• The CA affirmed the Regional Trial Court (RTC) of San Carlos City, Pangasinan's finding that Metropolitan Bank and Trust Company (Metrobank) is a mortgagee in good faith.

Facts and Procedural Antecedents

• The case originated from a Complaint filed by Spouses Ceferino and Felisa Bautista, along with their son Nehemias Bautista, against Spouses Francis and Minda Balolong, Metrobank, and the Register of Deeds of Lingayen, Pangasinan.
• Spouses Bautista were the registered owners of two parcels of land in Lingayen, Pangasinan, covered by Transfer Certificate of Title (TCT) Nos. 139362 and 163938.
• In the 1980s, the Bautista family migrated to Canada, leaving the properties under the care of their daughter Minda, who later married Francis Balolong.
• A loan of PHP 1,500,000.00 was secured by a mortgage on Lot 1, which was falsely claimed to have been sold to Francis and Minda through fraud and forgery.
• The RTC found that the signatures on the Deed of Absolute Sale were forgeries and that Francis Balolong was convicted for f...continue reading