Case Summary (G.R. No. 135022)
Factual Background
The ownership of the two parcels of land stems from Adriano Alonzo and Damiana Basibas, who had four children: Ambrosio, Hilarion, Hilario, and Gloria Alonzo. After Damiana's death, Adriano married Basilia Daatorin, with whom he had a daughter, Aurelia Alonzo. Following the death of several family members, in 1968, Aurelia executed a deed waiving her interest in the properties in favor of several family members, including Margarita, who was claimed to be the natural daughter of the deceased Ambrosio Alonzo. Subsequently, Margarita sold part of the property to spouses Florencio and Margarita Daa.
Actions Taken by Philippine National Bank
On June 4, 1968, PNB extended a loan of P3,500.00 secured by a mortgage on Lot 1983-B-3. The loan amount was increased over the years, and the Daa spouses defaulted on their payments. PNB foreclosed on the real estate mortgage and eventually became the highest bidder at the foreclosure sale, leading to the issuance of a new title under PNB's name.
Legal Actions by Respondents
The respondents, descendants of Hilario Alonzo, initiated an action before the Regional Trial Court seeking to annul the deed of sale between Margarita and the Daa spouses as well as the mortgage contract with PNB. They argued that Margarita was not a legitimate heir and that PNB acted in bad faith by granting the loan.
Trial Court Decision
On December 14, 1989, the trial court ruled in favor of the respondents. It ordered PNB to be indemnified by the Daa spouses and Margarita Nalda for the loan amount and interest equivalent to the property's proportionate share. The court also ordered the cancellation of PNB's title and the issuance of new titles in favor of the rightful heirs.
Appeal to the Court of Appeals
PNB appealed the decision, arguing that the trial court erred in not awarding the fair market value of the property instead of merely the loan amount plus interest. The Court of Appeals rendered a modified decision on September 14, 1992, affirming the trial court's order but removing the award for attorney's fees.
Allegations of Bad Faith Against PNB
The Court of Appeals scrutinized PNB's actions and found that the bank failed to exercise due diligence. The courts highlighted that PNB did not verify the legitimacy of Margarita's claim before lending and did not conduct an ocular inspection, which is standard banking practice.
Supreme Court Decision
Ultimately, PNB's appeal wa
...continue readingCase Syllabus (G.R. No. 135022)
Case Citation and Background
- Court: Supreme Court of the Philippines
- Date: February 06, 1996
- G.R. No.: 107109
- Division: First Division
- Parties: Philippine National Bank (Petitioner) vs. Court of Appeals, Silvestra Cerena, and Heirs of Hilarion Alonzo (Respondents)
Facts of the Case
- The spouses Adriano Alonzo and Damiana Basibas owned two parcels of land, Lot No. 1773 and Lot No. 1983, located in Tacloban, Leyte, covered by Original Certificate of Title No. 21293.
- They had four children: Ambrosio, Hilarion, Hilario, and Gloria Alonzo.
- After Damiana's death, Adriano married Basilia Daatorin, with whom he had a daughter, Aurelia Alonzo.
- Adriano died in 1933, and Ambrosio passed away in November 1936.
- On February 13, 1968, Aurelia Alonzo executed a deed waiving her interest in the lots in favor of Gloria, Hilarion, and Margarita (allegedly Ambrosio's natural daughter).
- Margarita sold a portion of the lots (700 square meters) to spouses Florencio and Margarita Daa on March 10, 1968.
- On June 4, 1968, PNB extended a time loan to the Daa spouses, secured by a real estate mortgage on Lot 1983-B-3.
- The loan amount increased multiple times, and the Daa spouses defaulted, leading to PNB's extrajudicial foreclosure of the mortgage.
- PNB purchased Lot 1983-B-3 at foreclosure for P114,005.00, and a new title (TCT No. T-27516) was issued in its name.
- The heirs of Hilarion Alonzo filed a case in the Regional Trial Court to annul the deed of sale and mortgage, claim