Naguiat v. Court of Appeals
REITERATIONFacts
The Antecedents: Private respondent Aurora Queaño (Queaño) applied for a loan of ₱200,000.00 from petitioner Celestina Naguiat (Naguiat). Naguiat indorsed an Associated Bank check for ₱95,000.00 and issued a Filmanbank check for ₱95,000.00, both dated August 11, 1980, purportedly representing the loan proceeds. To secure the loan, Queaño executed a Deed of Real Estate Mortgage in favor of Naguiat and issued a promissory note for ₱200,000.00 payable on September 11, 1980. Queaño also issued a postdated Security Bank and Trust Company check for ₱200,000.00, payable to Naguiat. Upon presentment on its maturity date, the Security Bank check was dishonored for insufficiency of funds. Queaño subsequently requested a stop payment order, which was rejected. Queaño later claimed she did not receive the loan proceeds, stating the checks were retained by Ruby Ruebenfeldt, purportedly Naguiat's agent. Procedural History: Naguiat initiated extrajudicial foreclosure proceedings. Queaño filed a complaint before the Pasay City RTC seeking the annulment of the Real Estate Mortgage. The RTC declared the mortgage void and ordered Naguiat to return the owner's duplicate titles. Naguiat appealed to the Court of Appeals, which affirmed the RTC decision in toto. Naguiat then filed the present petition for review on certiorari. The Petition: Naguiat questions the findings of fact, particularly on whether Queaño received the loan proceeds, and challenges the admissibility of Ruebenfeldt's representations, invoking the rule on non-binding admissions of third persons.
Issue(s)
Whether the Supreme Court can review findings of fact in a petition for review on certiorari. Whether the presumption of truthfulness of a public document (Deed of Real Estate Mortgage) prevails over evidence showing absence of consideration. Whether the issuance of checks constitutes payment or perfection of a loan contract. Whether Ruebenfeldt's representations are admissible and binding on Naguiat.
Ruling
The petition is denied, and the assailed decision of the Court of Appeals is affirmed. The Deed of Real Estate Mortgage is declared null and void.
Ratio Decidendi
On the Supreme Court's power to review facts: The Supreme Court, in petitions for review on certiorari under Rule 45, is generally limited to questions of law and does not typically act as a trier of facts. Findings of fact by lower courts are accorded respect and are generally binding, unless the case falls under established exceptions such as grave abuse of discretion, misapprehension of facts, or conflicting findings. The present case does not fall under any of these exceptions, and the findings of the appellate and trial courts are supported by the evidence and applicable laws. On the presumption of truthfulness of a public document: While a notarized document like the Deed of Real Estate Mortgage enjoys a presumption of truthfulness, this presumption is rebuttable. The Court of Appeals correctly ruled that this presumption was defeated by clear and convincing evidence demonstrating the absence of consideration for the mortgage. The evidence showed that the loan proceeds, which formed the basis of the mortgage, were never actually received by the borrower. On the perfection of a loan contract and payment by checks: A loan contract is a real contract, perfected only upon the delivery of the object, which are the loan proceeds. The delivery of checks produces the effect of payment only when they have been cashed or through the fault of the creditor they have been impaired, as provided by Article 1249 of the Civil Code. In this case, Naguiat failed to submit any evidence, such as returned checks or bank records, to prove that the checks she issued or indorsed were actually encashed or deposited to Queaño's account. Therefore, the loan was never perfected, and the mortgage securing it is void for want of consideration. On the admissibility of Ruebenfeldt's representations: The Court of Appeals correctly held that Ruebenfeldt's representations were admissible and binding on Naguiat. While the general rule is that the acts of a third party do not prejudice a party (res inter alia acta), an exception exists when the third party is an authorized agent. Evidence supported an agency relationship, or at least agency by estoppel under Article 1873 of the Civil Code, where Naguiat's actions led Queaño to believe Ruebenfeldt was her agent. Regardless of the precise nature of the relationship, the crucial fact remains that the checks were never encashed, rendering the mortgage void.
Main Doctrine
A contract of loan, being a real contract, is perfected only upon the delivery of the object of the contract, which are the loan proceeds. The mere issuance of checks does not constitute payment unless they are encashed or deposited. Consequently, a mortgage securing a non-existent loan is void for want of consideration.