Case Summary (G.R. No. 118375)
Key Dates
- August 11, 1980: Loan application and execution of Deed of Real Estate Mortgage.
- September 11, 1980: Due date of promissory note and maturity of post-dated check.
- August 14, 1981: Scheduled extrajudicial foreclosure sale.
- August 11, 1981: Filing of cancellation suit before RTC.
- March 8, 1991: RTC decision declaring mortgage void.
- December 21, 1994: Court of Appeals affirmation.
- October 3, 2003: Supreme Court decision.
Applicable Law
- 1987 Philippine Constitution (Article VIII, Section 6 – Supreme Court’s appellate jurisdiction by certiorari under Rule 45).
- Rules of Court: Rule 45 (Review on Certiorari), Rule 130 (Evidence of Admissions).
- New Civil Code:
• Art. 1249 (Effect of delivery of checks).
• Art. 1873 (Agency by special information/public advertisement).
• Art. 1934 (Real contracts perfected upon delivery). - B.P. Blg. 22 (Dishonor of checks).
Procedural History
Aurora QueaAo obtained a purported P200,000 loan from Naguiat evidenced by two P95,000 checks (one indorsed, one issued) and a promissory note. QueaAo executed a real estate mortgage to secure the loan. Upon maturity, the P200,000 post-dated check bounced; QueaAo’s request to stop payment was denied. Naguiat initiated extrajudicial foreclosure, prompting QueaAo to file for cancellation of the mortgage before the Pasay City RTC. The RTC declared the mortgage void and ordered return of title duplicates. Naguiat appealed to the Court of Appeals, which affirmed. Naguiat then petitioned the Supreme Court for review on certiorari.
Issues
- Whether QueaAo actually received the loan proceeds covered by the checks.
- Whether the presumption of truth accorded to a notarized mortgage deed is overcome.
- Whether Ruebenfeldt’s statements bind Naguiat despite third-party status.
Supreme Court Ruling
Petitioner’s certiorari petition was denied; the decisions of the RTC and Court of Appeals were affirmed in toto.
Legal Analysis
- Scope of Review – Under Rule 45 of the Rules of Court and the 1987 Constitution, the Supreme Court may review only questions of law. Factual findings of lower courts are generally binding absent exceptional circumstances, none of which are present here.
- Rebuttable Presumption of Notarial Instruments – While a notarized deed enjoys a presumption of truth, it yields to clear and convincing evidence showing absence of consideration. The courts below found unrefuted proof that the checks were never cashed or deposited, negating the loan’s perfection.
- Effect of Checks as Payment – Pursuant to Art. 1249 and Art. 1934 of the Civil Code, a simple loan is perfected only upon delivery of the object (i.e., actual payment). Issuance of checks alone does not constitute delivery; payment occurs only upon encashment. Naguiat offered no bank records or returned checks to demonstrate actual payment.
- Agency by Estoppel – Naguiat’s reliance on Ruebenfeldt’s statements failed. Evidence showed Ruebenfeldt acted with ap
Case Syllabus (G.R. No. 118375)
Facts
- On August 11, 1980, Aurora QueaAo applied for a ₱200,000 loan from Celestina Naguiat.
- Naguiat indorsed Associated Bank Check No. 090990 (₱95,000) and issued Filmanbank Check No. 065314 (₱95,000) to QueaAo as the loan proceeds.
- QueaAo executed a Deed of Real Estate Mortgage dated August 11, 1980, surrendering title duplicates for two lots (TCNs 28631 and 28632, total 631 sqm).
- On the same date, QueaAo signed a promissory note for ₱200,000 at 12% interest, payable September 11, 1980.
- QueaAo issued a postdated Security Bank check (₱200,000) for September 11, 1980, which was dishonored for insufficient funds.
- Her September 12, 1980 stop-payment request was denied due to bank policy against stopping checks drawn on insufficient funds.
- QueaAo later alleged she never received the loan proceeds because Ruby Ruebenfeldt, purportedly Naguiat’s agent, retained the checks and was instructed to deliver them only upon additional collateral.
Procedural History
- Naguiat initiated extrajudicial foreclosure; sale scheduled August 14, 1981.
- QueaAo filed Civil Case No. 9330-P on August 11, 1981 before the Pasay RTC to annul the mortgage; auction stayed.
- March 8, 1991: RTC (Judge Manuel P. Dumatol) declared the mortgage void and ordered return of title duplicates.
- Naguiat appealed to the Court of Appeals, raising eleven assignments of error.
- December 21, 1994: CA affirmed the RTC decision in toto.
- Naguiat filed a Petition for Review on Certiorari under Rule 45 with the Supreme Court.
Issues
- Did QueaAo actually receive the l