Case Summary (G.R. No. 150730)
Relevant Facts
Maria Sales was registered as the owner of a 202-square meter property covered by Original Certificate of Title No. P-3225. Unfortunately, Maria passed away on August 27, 1986, and Bernardo Sales followed on January 1, 1997. A significant event occurred when a mortgage contract was supposedly executed on January 29, 1990, by Maria and Bernardo, despite Maria being deceased at the time. This contract was in favor of Dominador Alzona, with Estela Sales Pelongco signing as an instrumental witness. The mortgage was later foreclosed, and the property was sold to Ernesto Alzona during an auction on December 20, 1990.
Legal Proceedings
Following the auction, Ernesto Alzona obtained a certificate of sale and later a Transfer Certificate of Title No. T-261853 was issued in his name, canceling Maria's title. The petitioners filed an adverse claim on December 17, 1992, and subsequently, a complaint for annulment of mortgage and auction sale with reconveyance of title and damages in the Regional Trial Court (RTC) of San Pedro, Laguna on October 15, 1993. While the RTC ruled in favor of the Alzonas and dismissed the case against the Register of Deeds for lack of evidence, it found some grounds in favor of the petitioners against Estela, awarding them attorney's fees and moral damages.
Court of Appeals Ruling
The petitioners’ appeal to the Court of Appeals resulted in a decision that affirmed the RTC’s ruling but modified the judgment by removing the attorney’s fees awarded to the petitioners. A subsequent motion for reconsideration filed by the petitioners was also denied.
Legal Principles and Arguments
In the appeal to the Supreme Court, the petitioners argued that the principle of "innocent purchasers for value" should not apply since the mortgagees (Ernesto and Dominador) had knowledge that Maria Sales was deceased when the contract was executed. The petitioners contended that a mortgage requires the mortgagor to be the absolute owner of the property, as set forth in Article 2085 of the Civil Code. However, they recognized the existence of the "mortgagee in good faith" doctrine, which may protect mortgagees even if the mortgagor lacks ownership, contingent on the mortgagee’s diligence in verifying ownership.
Supreme Court Findings
The Supreme Court emphasized that the mortgagees acted in good faith and exercised due diligence in their dealings. Ernesto, the mortgagee, conducted credit investigations and verified details of the ownership and property status, meeting with the petitioners who falsely identified themselves as the owners during his visits. The Court held that the trial court and Court of Appeals' findings regarding the credibility of Ernesto
...continue readingCase Syllabus (G.R. No. 150730)
Background of the Case
- Petitioners are Mila Sales Llanto, Yolanda Sales Cabillo, Oscar Sales, Aquilina Sales, Francisco Sales, Alberto Sales, Gloria Sales Alipio, Eduardo Sales, Emerenciana Sales Algire, Elenita Sales Serrano, and Conrado Sales, children of Bernardo and Maria Sales.
- Respondents include Ernesto Alzona, Dominador Alzona, Estela Sales Pelongco, and the Register of Deeds of Calamba, Laguna.
- The case revolves around a parcel of land in Banlic, Cabuyao, Laguna, originally owned by Maria Sales, which was mortgaged under suspicious circumstances after her death.
Facts of the Case
- Maria Sales was the registered owner of the property, covered by Original Certificate of Title No. P-3225, which she acquired through a free patent.
- Maria passed away on August 27, 1986, followed by Bernardo on January 1, 1997.
- A real estate mortgage was allegedly executed on January 29, 1990, by the deceased Maria and her husband Bernardo, in favor of Dominador Alzona.
- Estela Sales Pelongco was an instrumental witness to this mortgage, despite the fact that Maria was already deceased.
- The mortgage was foreclosed due to the alleged failure to settle obligations, leading to a sale where Ernesto Alzona emerged as the highest bidder.
Judicial Proceedings
- An adverse claim to the property was recorded by petitioners on December 17, 1992.
- Petitioners filed a complaint for Annulment of Mortgage and Auction Sale, Reconveyance of Title, and Damages against the respondents.
- The Regional Trial Court (RTC) ruled in favor of the Alzon