Commoner Lending Corporation v. Balandra
REITERATIONFacts
The Antecedents: Spouses Rafael Balandra and Alita Balandra mortgaged their conjugal property, covered by TCT No. T-126054, to The Commoner Lending Corporation (petitioner) to secure a ₱300,000.00 loan obtained by Alita. Rafael (respondent) filed a Complaint for Nullity of Documents and Damages, alleging that Alita forged his signature on a General Power of Attorney (GPA) dated February 25, 1997, which purportedly authorized her to mortgage the property. Rafael claimed he was out of the country on the date of the GPA's execution. Procedural History: The Regional Trial Court (RTC) found respondent's signature on the GPA to be a forgery and declared the Real Estate Mortgage (REM) void as to respondent's share, but valid for Alita's share, ordering petitioner to reimburse respondent for the value of his portion. Both parties moved for reconsideration, which the RTC denied. The Court of Appeals (CA) reversed the RTC Decision, declaring the REM, its foreclosure, and the subsequent certificate of sale null and void for want of respondent's consent, ordering the cancellation of the new title and reinstatement of the original title in the spouses' names, and the return of possession to the spouses. The Petition: Petitioner filed a Petition for Review on Certiorari before the Supreme Court, assailing the CA's Decision and Resolution. Petitioner argued that the CA erred in ruling the GPA was forged, in failing to recognize that respondent's subsequent payment ratified the mortgage, and in ruling that the REM did not redound to the benefit of the family.
Issue(s)
Whether or not the Court of Appeals gravely erred in ruling that the General Power of Attorney is forged. Whether or not the Court of Appeals gravely failed to recognize that the subsequent payment by the respondent of the balance of the loan ratified the mortgage. Whether or not the Court of Appeals erred in ruling that the Real Estate Mortgage did not redound to the benefit of the family.
Ruling
The Petition is meritorious. The Decision dated June 21, 2018, and the Resolution dated April 16, 2019, of the Court of Appeals in CA-G.R. CEB-CV No. 05257 are REVERSED and SET ASIDE. Accordingly, respondent Rafael Balandra's Complaint for Nullity of Documents and Damages in Civil Case No. 23890 is DISMISSED for lack of merit.
Ratio Decidendi
On the issue of forgery: The Court held that the petition primarily raises factual issues regarding the forgery of the General Power of Attorney (GPA). The findings of the RTC, affirmed by the CA, that respondent's signature was a forgery, based on the testimony of handwriting experts and the physical impossibility of respondent being present on the date of execution, are factual findings. As a rule, the Supreme Court does not re-evaluate evidence in a petition for review on certiorari. The Court found no exceptions applicable in this case, thus upholding the congruent findings of the lower courts that the signature on the GPA was a forgery. On the issue of ratification: The Court found that while the Real Estate Mortgage (REM) was executed based on a forged GPA and without the written consent of respondent, it is governed by Article 124 of the Family Code. This article states that an encumbrance of conjugal property without the consent of the other spouse is void, but it is construed as a continuing offer that can be perfected by the acceptance of the non-consenting spouse. In this case, respondent, instead of rejecting the offer, undertook to pay the outstanding loan obligation and made partial payments to prevent foreclosure. This conduct constituted an acceptance of the offer, thereby perfecting the previously unauthorized REM into a binding undertaking. The Court clarified that this type of void transaction under Article 124 is distinct from void contracts under Article 1409 of the Civil Code, as it is susceptible to perfection through acceptance. On the issue of whether the REM redounded to the benefit of the family: The Court did not explicitly rule on this issue as a separate point in its final disposition. However, its ruling that the REM was perfected through respondent's acceptance of the continuing offer rendered the issue moot. The Court emphasized that the reason for respondent's undertaking to pay the loan, whether to save the property or for other reasons, was immaterial, as his actions constituted acceptance of the offer to mortgage the conjugal property.
Main Doctrine
A Real Estate Mortgage executed by one spouse over conjugal property without the written consent of the other, made after the effectivity of the Family Code, is void but is considered a continuing offer that can be perfected into a binding contract upon acceptance by the non-consenting spouse, such as through undertaking to pay the loan and making partial payments.