Land Bank of The Philippines V Belle Corp

Land Bank of the Philippines v.
Belle Corporation
 respondent is the registered owner in possession of four (4) parcels of land at

Barangay Sungay, Tagaytay City,
 Belle corp. received a demand letter from Bautista's counsel which ordered the
immediate stoppage of its occupation and use of a substantial portion of the land
that she purportedly owns.
 Bautista claimed that respondent had illegally constructed a road on said
property without her prior notice or permission. Before a response could be sent,
Bautista caused the posting of a signboard on the entrance access road to
Tagaytay Highlands International Golf Club and the Country Club of Tagaytay
Highlands, notifying the public that she owns the land and will enforce her rights
and entry and/or exit to her property without her prior consent and approval will
be strictly prohibited.
 While trial is pending, the respondent filed a Motion for Leave to File Amended
Petition impleading petitioner as indispensable party. Bautista mortgaged to
petitioner the land in order to secure a loan amounting to 10,000,000.00.
Bautista defaulted in her obligation resulting in the foreclosure of the property.
 Petitioner claims to be an innocent mortgagee. Prior to the approval of the loan
to Liezl Garments’ application, its representative verified the status of the
collateral, which revealed that the subject property was registered in the name
of Bautista and that the same is free and clear of any lien or encumbrance. Also,
upon ocular inspection, no adverse ownership or interest was found.
 The CA ruled in favor of Belle corp. and ordered:
o Cancellation of the TCT
o ordered Bautista and Liezel's Garments, Inc. to jointly pay petitioner
16,327,991.40, the amount for which the disputed property was sold to
petitioner at public auction.
o Florosa A. Bautista and Land Bank to jointly and severally pay petitioner-
appellant Belle Corporation the amount of One Hundred Thousand Pesos
(P100,000.00) by way of attorney's fees.
Ruling
Land bank is not an innocent mortgagee
 After encountering a dead end in the DENR's Land Management Section' Region
IV and the Tax Mapping Section of the Tagaytay City Assessor's Office, it
manifestly failed to inquire further on the identity of possible adverse claimants
and the status of their occupancy. Had petitioner earnestly probed, by simply
talking to Bautista or asking the possessors/owner of adjacent lots as regards
the presence of the traversing access road, it. could have. easily discovered the
opposing claim of respondent, which is a known real estate developer in the
area.
Bautista is not a joint debtor w/ Liezl Garments
 Bautista is considered as a third-party or accommodation mortgagor. She

mortgaged her property to stand as security for the indebtedness of Liezel 's
Garments, Inc. She is not a party to the principal obligation but merely secured
the latter by mortgaging her own property. In fact, it was only Dolores E.
Bautista, theh the President and General Manager of Liezel's Garments, Inc.,
who was the sole signatory of the Omnibus Credit Line Agreement dated August
16, 1994 and August 30, 199561 as well as the promissory note dated June 30,
1995 and September 30, 1995.
o the liability of the third-party mortgagors extends only to the property
mortgaged. Should there be any deficiency, the creditor has recourse on
the principal debtor.
o Neither petitioner nor Liezel's Garments, Inc. presented proof that
Bautista is a director, officer or employee of Liezel's Garments, Inc.
Although Bautista acted as such, it is a basic rule that a corporation is a
juridical entity which is vested with a legal personality separate and
distinct from those acting for and in its behalf and from the people
comprising it, who, in general, are not personally liable for obligations
incurred by the corporation unless the veil of corporate fiction is pierced
to justify that it is used as a means to perpetrate fraud or an illegal act, or
as a vehicle for the evasion of an existing obligation, the circumvention of
statutes, or to confuse legitimate issues.

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Land Bank of The Philippines V Belle Corp

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Land Bank of the Philippines v.

 respondent is the registered owner in possession of four (4) parcels of land at

Land bank is not an innocent mortgagee

Bautista is not a joint debtor w/ Liezl Garments

 Bautista is considered as a third-party or accommodation mortgagor. She

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