Land Bank v. Poblete
REITERATIONFacts
The Antecedents: Respondent Barbara Sampaga Poblete (Poblete) obtained a loan from Kabalikat ng Pamayanan ng Nagnanais Tumulong at Yumaman Multi-Purpose Cooperative (Kapantay), mortgaging her land (Lot No. 29) covered by Original Certificate of Title (OCT) No. P-12026. Kapantay used the title as collateral for its loan with Petitioner Land Bank of the Philippines (Land Bank). Poblete agreed to sell Lot No. 29 to Angelito Joseph Maniego (Maniego) for ₱900,000.00, but a Deed of Absolute Sale was executed for ₱300,000.00 to reduce taxes. Maniego paid Kapantay's loan. Subsequently, Maniego applied for a loan with Land Bank, using OCT No. P-12026 as collateral. Land Bank allegedly conditioned the loan approval on the transfer of title to Maniego. A Deed of Absolute Sale dated August 11, 2000, purportedly signed by Poblete and her deceased husband, was used to obtain Transfer Certificate of Title (TCT) No. T-20151 in Maniego's name. Maniego then executed a Credit Line Agreement and Real Estate Mortgage over TCT No. T-20151 with Land Bank, and Land Bank released a ₱1,000,000.00 loan. Maniego defaulted, and Land Bank initiated foreclosure proceedings. Procedural History: Poblete filed a Complaint for Nullification of the Deed dated August 11, 2000, TCT No. T-20151, Reconveyance, and Damages, alleging forgery of her and her deceased husband's signatures and non-receipt of the sale consideration. The National Bureau of Investigation (NBI) report confirmed the signatures were forgeries. The Regional Trial Court (RTC) ruled in favor of Poblete, declaring the Deed dated August 11, 2000, and TCT No. T-20151 void, making the injunction against foreclosure permanent, ordering Maniego to return the OCT, and awarding attorney's fees. The RTC found Land Bank not a mortgagee in good faith for failing to exercise due diligence. The Court of Appeals (CA) affirmed the RTC decision. This Court denied Maniego's petition for review. Land Bank filed the present petition. The Petition: Land Bank seeks to reverse the CA's decision, arguing that TCT No. T-20151 is valid, that it is a mortgagee in good faith, and that Poblete is in pari delicto or estopped by laches.
Issue(s)
Whether TCT No. T-20151, issued in the name of Angelito Joseph Maniego, is valid. Whether Land Bank of the Philippines is a mortgagee in good faith. Whether respondent Barbara Sampaga Poblete is in pari delicto with Angelito Joseph Maniego. Whether respondent Poblete is estopped by laches due to her alleged negligence.
Ruling
The petition is denied. The Decision dated September 28, 2010, and the Resolution dated April 19, 2011, of the Court of Appeals in CA-G.R. CV No. 91666 are affirmed. The injunction against the foreclosure proceeding is made permanent.
Ratio Decidendi
On the validity of TCT No. T-20151: The Court affirmed the findings of the RTC and CA that the Deed of Absolute Sale dated August 11, 2000, was forged, as evidenced by the NBI report and the death certificate of Poblete's husband. A forged deed is a nullity and conveys no title. Furthermore, the evidence preponderantly showed that Maniego did not pay the agreed consideration for the sale. A deed of sale stating payment when none was made is void ab initio for lack of consideration. Consequently, TCT No. T-20151, issued pursuant to the void deed, is also void. This issue was already foreclosed by this Court's denial of Maniego's petition, which became final and executory. On Land Bank being a mortgagee in good faith: The Court held that Land Bank is not a mortgagee in good faith. While the rule that buyers or mortgagees dealing with Torrens titles are not required to go beyond the face of the title applies generally, it does not apply to banks, which are impressed with public interest and are expected to exercise a higher standard of diligence. Land Bank ignored that Kapantay had previously used Poblete's title as collateral and processed Maniego's loan application despite the title still being in Poblete's name. The Court noted that a bank's haste in granting a loan and failure to ascertain ownership and authority to mortgage cannot qualify it as an innocent mortgagee. The records did not show Land Bank investigated the property's actual occupants, focusing only on appraisal. The Court found that Land Bank's actions indicated a lack of the required diligence. On Poblete being in pari delicto: The Court found the principle of pari delicto inapplicable. This principle states that when two parties are equally at fault, the law leaves them as they are and denies recovery. Based on the factual findings of the RTC and CA, only Maniego was found to be at fault, not Poblete. Therefore, the rule of pari delicto could not be invoked to deny Poblete's claim. On estoppel and laches: The Court ruled that the issues of estoppel and laches could not be raised for the first time on appeal. These issues were not alleged in the complaint nor raised during the trial court proceedings. Allowing them at this stage would violate the basic rules of fair play, justice, and due process, as the opposing party would be deprived of the opportunity to present evidence to rebut these new issues.
Main Doctrine
A forged or fraudulent deed is a nullity and conveys no title. Where the deed of sale states that the purchase price has been paid but in fact has never been paid, the deed of sale is void ab initio for lack of consideration. Consequently, a certificate of title issued pursuant to a void deed is likewise void. Banks, being impressed with public interest, are required to exercise a higher standard of diligence than private individuals and cannot claim to be mortgagees in good faith if they fail to exercise such diligence.