Qrourt: L/epuhlic of Tbe Llbilippines
Qrourt: L/epuhlic of Tbe Llbilippines
Qrourt: L/epuhlic of Tbe Llbilippines
PPINES
PUBLIC IMFORMAT!ON OFFICE
~upreme
;fftilanila
Qrourt N 1rJ !@
FIRST DIVISION
x-------------------------------i----------------------------------------~-
1
I DECISION
TIJAM, J.:
~
Decision 2 G.R. No. 197831
The Antecedents
The facts are largely undisputed. The Spouses Lee obtained a loan
from PNB initially in the amount of P400,000.00 but which was later on
increased to P7,500,000.00 under a Revolving Credit Line. 5 To cover the
increased credit accommodation, the Spouses Lee offered additional
securities which included a parcel of land registered in the name of the
Spouses Anay located at Iponan, Cagayan de Oro City with an area of 5,503
square meters and covered by Transfer Certificate of Title (TCT) No. T-
25805. For this purpose, the Spouses Anay executed a Special Power of
Attorney (SPA) in favor of the Spouses Lee, authorizing the latter to use the
subject property as security for the loan. 6
The Spouses Anay filed a Complaint against the Spouses Lee and
PNB for annulment of the SP A, foreclosure proceedings and the Sheriffs
Certificate of Sale on the ground of vitiated consent. It appears that the
Spouses Lee urged Marietta Anay Cabinatan (Marietta), a daughter of the
Spouses Anay, to let them borrow the latter's property to be used as
additional security to cover their increased loan with the PNB. 8 Marietta
could not refuse since the Spouses Lee were her employers. At that time, the
Spouses Anay were both of old age, weak, hard of hearing and could barely
see. 9 So much so that Marietta had to move her father's hand to sign' 0 and
5
Id. at 8-9 and 26.
6
Id. at 9 and 26.
7
Id. at 9 and 26-27.
8
Id. at 69.
9 ~
Id. at 71.
~
0
' Id. at 73.
Decision 3 G.R. No. 197831
had to hold her mother's hand while affixing her thumbmark on the SPA. 11
The contents of the SP A were neither explained to the poor couple as
Marietta summarily told them to "just sign" the SP A. 12 The Spouses Anay
also did not receive any amount out of the loan obtained by the Spouses Lee
from PNB. 13 Dolores Lee herself similarly testified as to the same factual
circumstances and further testified that she does not mind losing all her
properties as she was bothered by her conscience because they only
borrowed the Spouses Anay's property. 14 In all, the RTC reached the
conclusion that the Spouses Anay's consent to the SPA were vitiated, if not
totally absent and thus disposed:
The nullity of Exhs. "D" and "F" affects only the mortgaged and
foreclosed property of Angel and Buenvenida Anay covered by TCT No.
T-25805.
Exhs. "D" and "F" remain VALID and BINDING as to the other
properties enumerated and specified in said exhibits, particularly those
owned by Francisco and Dolores Lee who acknowledged their
indebtedness to PNB.
NO PRONOUNCEMENT AS TO COST.
SO ORDERED. 15
11
Id. at 70.
12
Id. at 71.
13
14
Id. at 74.
Id. at 71.
/
15
Id at 80-81.
\}\
Decision 4 G.R. No. 197831
In its Appeal, 17 PNB reasoned that the cancellation of its title, TCT
No. T-120269, as a result of the nullity of the SPA, constitutes a collateral
attack which is proscribed under Section 48 18 of Presidential Decree No.
1529.' 9 It is also the PNB's position that the Spouses Lee should be made
liable for restitution and damages considering the overwhelming evidence of
their bad faith. 20
Settled is the fact that the Spouses Anay's consent to the SP A was
vitiated. This, as much, was not contested by PNB. Nevertheless, PNB seeks
protection as mortgagee in good faith as it allegedly had no hand in the fraud
or bad faith perpetrated by the Spouses Lee in securing the SP A.
16
Id. at 86.
17
Id. at 87-100.
18
Section 48. Certificate not subject to collateral attack. A certificate of title shall not be subject
to collateral attack. It cannot be altered, modified, or canceled except in a direct proceeding in accordance
with law.
19
PROPERTY REGISTRATION DECREE.
20
Rollo, p. 106.
21
Id. at 107.
~
22
Id, at 109.
Decision 5 G.R. No. 197831
It having been established that the SPA was secured through vitiated
consent and there being no ratification on the part of the Spouses Anay, the
23
Erena v. Querrer-Kauffman, 525 Phil. 381, 403 (2006).
24
PNB v. Heirs of Militar, 504 Phil. 634 (2005), citing Sps. Uy v. Court of Appeals, 411 Phil. 788
(2001).
25
Bank of Commerce v. Spouses San Pablo, Jr., 550 Phil. 805, 821 (2007).
26
Rollo, pp. 72- 73.
27
Id. at 73.
28
See Land Bank of the Philippines v. Poblete, 704 Phil. 610 (2013). /
~
Decision 6 G.R. No. 197831
SPA is, consequently void. As such, the SP A cannot be the basis of a valid
mortgage contract, nor of the subsequent foreclosure and consolidation of
title in favor of PNB. 29
Despite the foregoing, PNB insists that its certificate of title cannot be
indirectly attacked. The Complaint a quo does not constitute an indirect
attack on PNB's title which was irregularly and illegally issued to begin
with. 30 On the contrary, since the RTC acquired jurisdiction not only over the
subject matter of the case but also over the parties thereto, it was
unnecessary to institute a separate action to nullify PNB's title insofar as the
property of the Spouses Anay is concemed. 31 Considering further that it was
not shown that PNB had transferred the subject property to an innocent
purchaser for value, it is but proper that the subject property be retained by
the Spouses Anay. 32
SO ORDERED.
~/
rPaJl,,.-1-;\ ~ k ~
TiAf'ES'ITA J. LEONARDO-DE CASTRO
Associate Justice
Acting Chairperson
29
Lao v. Villones-Lao, 366 Phil. 49 (1999).
30
See Gregorio Araneta University Foundation v. RTC of Kalookan City, Br. 120, et al., 599 Phil.
677 (2009).
i1 Id.
32
See .Bank of Commerce v. Spouses San Pablo, Jr., supra note 25.
Decision 7 G.R. No. 197831
~~;, i
ATITESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case ~as assigned to the writer of the opinion of the
Court's Division. I
CERTIFICATION
ANTONIO T. CA
Senior Associate Justice
(Per Section 12, R.A. 296,
The Judiciary Act of 1948, as amended)