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    LBP Vs Poblete

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    Jay Kent Roiles
    The Supreme Court affirmed the decisions of the lower courts ruling that: 1) Land Bank is not a mortgagee in good faith because they did not exercise due diligence in verifying the title before approving the loan, despite being required to observe a higher standard of care. 2) The sale transaction between Poblete and Maniego was made in a fraudulent manner, as the deed of sale stating the purchase price was paid was void due to lack of actual payment, and the subsequent title transfer was based on a forged deed.

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    LBP Vs Poblete

    Uploaded by

    Jay Kent Roiles
    211 views2 pages
    The Supreme Court affirmed the decisions of the lower courts ruling that: 1) Land Bank is not a mortgagee in good faith because they did not exercise due diligence in verifying the title before approving the loan, despite being required to observe a higher standard of care. 2) The sale transaction between Poblete and Maniego was made in a fraudulent manner, as the deed of sale stating the purchase price was paid was void due to lack of actual payment, and the subsequent title transfer was based on a forged deed.

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    LBP vs Poblete

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    The Supreme Court affirmed the decisions of the lower courts ruling that: 1) Land Bank is not a mortgagee in good faith because they did not exercise due diligence in verifying the title before approving the loan, despite being required to observe a higher standard of care. 2) The sale transaction between Poblete and Maniego was made in a fraudulent manner, as the deed of sale stating the purchase price was paid was void due to lack of actual payment, and the subsequent title transfer was based on a forged deed.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    211 views2 pages

    LBP Vs Poblete

    Uploaded by

    Jay Kent Roiles
    The Supreme Court affirmed the decisions of the lower courts ruling that: 1) Land Bank is not a mortgagee in good faith because they did not exercise due diligence in verifying the title before approving the loan, despite being required to observe a higher standard of care. 2) The sale transaction between Poblete and Maniego was made in a fraudulent manner, as the deed of sale stating the purchase price was paid was void due to lack of actual payment, and the subsequent title transfer was based on a forged deed.

    Copyright:

    © All Rights Reserved
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    of 2

    Facts:

    Petitioner Land Bank of the Philippines (Land Bank) is a banking institution organized and existing under Philippine laws. Respondent
    Barbara Sampaga Poblete (Poblete) is the registered owner of a parcel of land, known as Lot No. 29, with an area of 455 square
    meters, located in Buenavista, Sablayan, Occidental Mindoro, under Original Certificate of Title (OCT) No. P-12026. In October 1997,
    Poblete obtained a ₱300,000.00 loan from Kabalikat ng Pamayanan ng Nagnanais Tumulong at Yumaman Multi-Purpose Cooperative
    (Kapantay). Poblete mortgaged Lot No. 29 to Kapantay to guarantee payment of the loan. Kapantay, in turn, used OCT No. P-12026
    as collateral under its Loan Account No. 97-CC-013 with Land Bank-Sablayan Branch.

    In November 1998, Poblete decided to sell Lot No. 29 to pay her loan. She instructed her son-in-law Domingo Balen (Balen) to look
    for a buyer. Balen referred Angelito Joseph Maniego (Maniego) to Poblete. According to Poblete, Maniego agreed to buy Lot No. 29
    for ₱900,000.00, but Maniego suggested that a deed of absolute sale for ₱300,000.00 be executed instead to reduce the taxes. Thus,
    Poblete executed the Deed of Absolute Sale dated 9 November 1998 (Deed dated 9 November 1998) with ₱300,000.00 as
    consideration.5 In the Deed dated 9 November 1998, Poblete described herself as a "widow." Poblete, then, asked Balen to deliver
    the Deed dated 9 November 1998 to Maniego and to receive the payment in her behalf. Balen testified that he delivered the Deed
    dated 9 November 1998 to Maniego. However, Balen stated that he did not receive from Maniego the agreed purchase price. Maniego
    told Balen that he would pay the amount upon his return from the United States. In an Affidavit dated 19 November 1998, Poblete
    stated that she agreed to have the payment deposited in her Land Bank Savings Account. 6

    Based on a Certification issued by Land Bank-Sablayan Branch Department Manager Marcelino Pulayan on 20 August
    1999,7 Maniego paid Kapantay’s Loan Account No. 97-CC-013 for ₱448,202.08. On 8 June 2000, Maniego applied for a loan of
    ₱1,000,000.00 with Land Bank, using OCT No. P 12026 as collateral. Land Bank alleged that as a condition for the approval of the
    loan, the title of the collateral should first be transferred to Maniego.

    On 14 August 2000, pursuant to a Deed of Absolute Sale dated 11 August 2000 (Deed dated 11 August 2000), 8 the Register of Deeds
    of Occidental Mindoro issued Transfer Certificate of Title (TCT) No. T-20151 in Maniego’s name. On 15 August 2000, Maniego and
    Land Bank executed a Credit Line Agreement and a Real Estate Mortgage over TCT No. T- 20151. On the same day, Land Bank
    released the ₱1,000,000.00 loan proceeds to Maniego. Subsequently, Maniego failed to pay the loan with Land Bank. On 4 November
    2002, Land Bank filed an Application for Extra-judicial Foreclosure of Real Estate Mortgage stating that Maniego’s total indebtedness
    amounted to ₱1,154,388.88.

    On 2 December 2002, Poblete filed a Complaint for Nullification of the Deed dated 11 August 2000 and TCT No. T-20151,
    Reconveyance of Title and Damages with Prayer for Temporary Restraining Order and/or Issuance of Writ of Preliminary Injunction.
    Named defendants were Maniego, Land Bank, the Register of Deeds of Occidental Mindoro and Elsa Z. Aguirre in her capacity as
    Acting Clerk of Court of RTC San Jose, Occidental Mindoro. In her Complaint, Poblete alleged that despite her demands on Maniego,
    she did not receive the consideration of ₱900,000.00 for Lot No. 29. She claimed that without her knowledge, Maniego used the Deed
    dated 9 November 1998 to acquire OCT No. P-12026 from Kapantay. Upon her verification with the Register of Deeds, the Deed
    dated 11 August 2000 was used to obtain TCT No. T-20151. Poblete claimed that the Deed dated 11 August 2000 bearing her and
    her deceased husband’s, Primo Poblete, supposed signatures was a forgery as their signatures were forged. As proof of the forgery,
    Poblete presented the Death Certificate dated 27 April 1996 of her husband and Report No. 294-502 of the Technical Services
    Department of the National Bureau of Investigation showing that the signatures in the Deed dated 11 August 2000 were forgeries.
    Accordingly, Poblete also filed a case for estafa through falsification of public document against Maniego and sought injunction of the
    impending foreclosure proceeding.

    On 7 January 2003, Land Bank filed its Answer with Compulsory Counterclaim and Cross-claim. Land Bank claimed that it is a
    mortgagee in good faith and it observed due diligence prior to approving the loan by verifying Maniego’s title with the Office of the
    Register of Deeds. Land Bank likewise interposed a cross-claim against Maniego for the payment of the loan, with interest, penalties
    and other charges. Maniego, on the other hand, separately filed his Answer. Maniego denied the allegations of Poblete and claimed
    that it was Poblete who forged the Deed dated 11 August 2000. He also alleged that he paid the consideration of the sale to Poblete
    and even her loans from Kapantay and Land Bank.

    Issues:

    1. Whether or not land bank is a mortgagee in good faith.


    2. Whether or not the sale was made in fraudulent manner.
    Ruling:

    The RTC and CA decision were affirmed by the SC.

    1. No, land bank is not entitled in good faith because they did not exercise due diligent.

    This is the doctrine of "the mortgagee in good faith" based on the rule that buyers or mortgagees dealing with property
    covered by a Torrens Certificate of Title are not required to go beyond what appears on the face of the title. 27 However, it
    has been consistently held that this rule does not apply to banks, which are required to observe a higher standard of
    diligence.28 A bank whose business is impressed with public interest is expected to exercise more care and prudence in its
    dealings than a private individual, even in cases involving registered lands. 29 A bank cannot assume that, simply because
    the title offered as security is on its face free of any encumbrances or lien, it is relieved of the responsibility of taking further
    steps to verify the title and inspect the properties to be mortgaged.30

    Applying the same principles, we do not find Land Bank to be a mortgagee in good faith.

    2. Yes, the transaction is made in fraudulent manner.

    That a forged or fraudulent deed is a nullity and conveys no title.17 Moreover, 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.18 Since the
    Deed dated 11 August 2000 is void, the corresponding TCT No. T-20151 issued pursuant to the same deed is likewise void.
    In Yu Bun Guan v. Ong,19 the Court ruled that there was no legal basis for the issuance of the certificate of title and the CA
    correctly cancelled the same when the deed of absolute sale was completely simulated, void and without effect. In Ereña v.
    Querrer-Kauffman,20 the Court held that when the instrument presented for registration is forged, even if accompanied by
    the owner’s duplicate certificate of title, the registered owner does not thereby lose his title, and neither does the mortgagee
    acquire any right or title to the property. In such a case, the mortgagee under the forged instrument is not a mortgagee
    protected by law.21

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