This case has been cited 21 times or more.
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2015-11-10 |
PERLAS-BERNABE, J. |
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| "Simulation takes place when the parties do not really want the contract they have executed to produce the legal effects expressed by its wordings. Simulation or vices of declaration may be either absolute or relative."[22] Article 1345 of the Civil Code distinguishes an absolute simulation from a relative one; while Article 1346 discusses their effects, as follows: Art. 1345. Simulation of a contract may be absolute or relative. The former takes place when the parties do not intend to be bound at all; the latter when the parties conceal their true agreement. | |||||
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2015-08-26 |
MENDOZA, J. |
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| Further, the Court finds it unusual that Florentino did not indicate the TCT number in the mortgage contract, if indeed, one had already been issued in his favor. The TCT number is essential to identify the title covering the mortgaged land. Notwithstanding the said omission, Spouses Saraza still allowed the loan and entered into a mortgage agreement with Florentino. Considering the substantial loan involved in the agreement, Spouses Saraza should have undertaken the necessary steps to ascertain any flaw in the title of Florentino or to check his capacity to transfer any interest in the mortgaged land. Instead, Spouses Saraza closed their eyes on a fact which should put a reasonable man on guard as to the ownership of the property being presented as security for a loan. A person who deliberately ignores a significant fact that would create suspicion in an otherwise reasonable person is not an innocent purchaser (mortgagee) for value.[18] | |||||
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2014-10-15 |
LEONEN, J. |
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| Petitioner heirs then cited Cruz v. Bancom Finance Corporation for its holding that "[the bank] should not have simply relied on the face of the Certificate of Title to the property, as its ancillary function of investing funds required a greater degree of diligence. . . ."[79] | |||||
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2014-01-15 |
DEL CASTILLO, J. |
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| Before entering into a mortgage contract, banks are expected to exercise due diligence.[49] However, in this case, no evidence was presented to show that respondent did not exercise due diligence or that it was negligent in accepting the mortgage.[50] That petitioner was erroneously described as single and a Filipino citizen in the mortgage contract, when in fact he is married and an American citizen, cannot be attributed to respondent considering that the title of the mortgaged property was registered under "FRANCISCO LIM and FRANCO LIM, both Filipino citizens, of legal age, single." | |||||
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2013-02-25 |
CARPIO, J. |
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| There is indeed a situation where, despite the fact that the mortgagor is not the owner of the mortgaged property, his title being fraudulent, the mortgage contract and any foreclosure sale arising therefrom are given effect by reason of public policy.[26] 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] | |||||
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2012-01-25 |
BERSAMIN, J. |
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| We do not lose sight of the fact that METROBANK, a commercial bank dealing in real property, had the duty to observe due diligence to ascertain the existence and condition of the realty as well as the validity and integrity of the documents bearing on the realty.[46] Its duty included the responsibility of dispatching its competent and experience representatives to the realty to assess its actual location and condition, and of investigating who was its real owner.[47] Yet, it is evident that METROBANK did not diligently perform a thorough check on Tobias and the circumstances surrounding the realty he had offered as collateral. As such, it had no one to blame but itself. Verily, banks are expected to exercise greater care and prudence than others in their dealings because their business is impressed with public interest.[48] Their failure to do so constitutes negligence on its part.[49] | |||||
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2011-12-07 |
TOSINO v. SPS. ANDRES T. ROSARIO AND LENA DUQUE-ROSARIO AND BANCO FILIPINO SAVINGS AND MORTGAGE BANK
LEONARDO-DE CASTRO, J. |
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| While the defective cancellation of Entry Nos. 274471-274472 by Entry No. 520469 might not be evident to a private individual, the same should have been apparent to Banco Filipino. Banco Filipino is not an ordinary mortgagee, but is a mortgagee-bank, whose business is impressed with public interest. In fact, in one case, [82] the Court explicitly declared that the rule that persons dealing with registered lands can rely solely on the certificate of title does not apply to banks. In another case, [83] the Court adjudged that unlike private individuals, a bank is expected to exercise greater care and prudence in its dealings, including those involving registered lands. A banking institution is expected to exercise due diligence before entering into a mortgage contract. The ascertainment of the status or condition of a property offered to it as security for a loan must be a standard and indispensable part of its operations. | |||||
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2011-11-28 |
DEL CASTILLO, J. |
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| Such is not the case in the present controversy however. As borne out by the records, Mahinay's Notice of Lis Pendens was duly annotated on the original copy of TCT No. 117531 as early as August 17, 1994. On the other hand, the Real Estate Mortgage upon which Sorensen based her alleged superior right was executed only on October 27, 1994 and inscribed at the back of said title only on the following day, October 28, 1994. The prior registration of Mahinay's Notice of Lis Pendens bound the whole world,[87] including Sorensen. It charged her with notice that the land being offered to her as security for the loan is under litigation and that whatever rights she may acquire by virtue of the Real Estate Mortgage are subject to the outcome of the case.[88] More importantly, it also gave Mahinay a preferential right over subsequent liens and encumbrances annotated on the title.[89] "It is settled that in this jurisdiction the maxim prior est in tempore, potior est in jure (he who is first in time is preferred in right) is followed in land registration.[90] Having registered his instrument ahead of Sorensen's Real Estate Mortgage, Mahinay's Notice of Lis Pendens takes precedence over the said Real Estate Mortgage. | |||||
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2009-11-25 |
NACHURA, J. |
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| Simulation takes place when the parties do not really want the contract they have executed to produce the legal effects expressed by its wordings.[20] This Court's pronouncement in Valerio v. Refresca[21] is instructive -- | |||||
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2008-02-29 |
VELASCO JR., J. |
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| In view of our resolution on the validity of the auction of the lot in favor of Metrobank, there is hardly a need to discuss at length whether or not Metrobank was a mortgagee in good faith. Suffice it to state for the nonce that where the mortgagee is a banking institution, the general rule that a purchaser or mortgagee of the land need not look beyond the four corners of the title is inapplicable.[20] Unlike private individuals, it behooves banks to exercise greater care and due diligence before entering into a mortgage contract. The ascertainment of the status or condition of the property offered as security and the validity of the mortgagor's title must be standard and indispensable part of the bank's operation.[21] A bank that failed to observe due diligence cannot be accorded the status of a bona fide mortgagee,[22] as here. | |||||
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2007-09-14 |
GARCIA, J. |
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| The unyielding rule is that persons dealing with property brought under the Torrens system of land registration have the right to rely on what appears on the certificate of title without inquiring further;[19] that in the absence of anything to excite or arouse suspicion that should impel a reasonably cautious person to make such further inquiry, a would-be mortgagee is without obligation to look beyond the certificate and investigate the title of the mortgagor. Such rule, however, does not apply to mortgagee-banks,[20] their business being one affected with public interest, holding as they do and keeping, in trust, money pertaining to the depositing public which they should guard with earnest. Unlike private individuals, it behooves banks to exercise greater care and prudence in their dealings, including those involving registered lands.[21] As we wrote in Cruz v. Bancom Finance Corporation,[22] "a banking institution is expected to exercise due diligence before entering into a mortgage contract. The ascertainment of the status or condition of a property offered to it as a security must be standard and indispensable part of its operations." A bank that failed to observe due diligence cannot be accorded the status of a bona fide mortgagee.[23] | |||||
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2006-07-17 |
GARCIA, J. |
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| In the case of Cruz v. Bancom Finance Corporation,[23] which is akin to this case the Court had this to say:Respondents claims that, being an innocent mortgagee, it should not be required to conduct an exhaustive investigation on the history of the mortgagor's title before it could extend a loan. | |||||
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2005-11-22 |
CORONA, J. |
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| Litex had neither absolute ownership, free disposal nor the authority to freely dispose of the articles. Litex could not have subjected them to a chattel mortgage. Their inclusion in the mortgage was void[7] and had no legal effect.[8] There being no valid mortgage, there could also be no valid foreclosure or valid auction sale.[9] Thus, DBP could not be considered either as a mortgagee or as a purchaser in good faith.[10] | |||||
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2005-10-14 |
AUSTRIA-MARTINEZ, J. |
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| As enunciated in Cruz vs. Bancom:[33] | |||||
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2005-08-11 |
CHICO-NAZARIO, J. |
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| If it were true that money indeed changed hands on 11 September 1989 as evidenced by the assailed deed of sale, then, at the very least, Edmundo, as buyer, would definitely not have forgotten personally handing P3,109,425.00 to the seller, Ricardo, Sr. It goes against ordinary human experience for a person to simply forget the details of the day when he became poorer by P3,109,425.00 cash. The only logical conclusion is that there was actually no consideration for the said sale. Verily, a deed of sale in which the stated consideration has not in fact been paid is a false contract that is void ab initio.[39] Likewise, "a contract of purchase and sale is null and void and produces no effect whatsoever where it appears that [the] same is without cause or consideration which should have been the motive thereof, or the purchase price appears thereon as paid but which in fact has never been paid by the purchaser to the vendor." [40] | |||||
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2004-01-15 |
QUISUMBING, J. |
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| We find for respondents. Petitioners' arguments are less than persuasive, to say the least. As a rule, when the terms of a contract are clear and unambiguous as to the intention of the contracting parties, the literal meaning of its stipulations shall control. It is only when the words appear to contravene the evident intention of the parties that the latter shall prevail over the former. The real nature of a contract may be determined from the express terms of the agreement and from the contemporaneous and subsequent acts of the parties thereto.[16] When they have no intention to be bound at all, the purported contract is absolutely simulated and void. Hence, the parties may recover what they gave under the simulated contract. If, on the other hand, the parties state a false cause in the contract to conceal their real agreement, the contract is relatively simulated and the parties' real agreement may be held binding between them.[17] | |||||
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2003-02-27 |
SANDOVAL-GUTIERREZ, J. |
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| In Rural Bank of Compostela vs. Court of Appeals,[8] this Court held that the rule that persons dealing with registered lands can rely solely on the certificate of title does not apply to banks because their business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amounts to lack of good faith. Thus, in Cruz vs. Bancom Finance Corporation,[9] this Court stressed that a mortgagee-bank is expected to exercise greater care and prudence before entering into a mortgage contract, even those involving registered lands. The ascertainment of the status or condition of a property offered to it as security for a loan must be a standard and indispensable part of its operations. | |||||
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2002-07-11 |
PANGANIBAN, J. |
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| "fn">[35] Consequently, neither has petitioner -- the buyer and mortgagee of the same lot -- ever acquired any title thereto.[36] Significantly, no evidence was presented by petitioner to controvert these allegations put forward by respondents. Clearly then, on the basis of the evidence presented, respondents possess the right to prevent petitioner from consolidating the title in its name. The first requisite -- the existence of a right to be protected -- is thus present.[37] Second Requisite:Violation of Applicant's Right | |||||
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2002-04-25 |
PANGANIBAN, J. |
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| We are not convinced that the Deed of Sale was simulated. The primary consideration in determining the true nature of a contract is the intention of the parties.[15] Such intention is determined from the express terms of their agreement as well as from their contemporaneous and subsequent acts.[16] When they have no intention to be bound at all, the purported contract is absolutely simulated and void.[17] When they conceal their true agreement, it is not completely void and they are bound to their real agreement, provided it is not prejudicial to a third person and is not intended for any purpose that is contrary to law, morals, good customs, public order or public policy.[18] A duly executed contract carries with it the presumption of validity. The party who impugns its regularity has the burden of proving its simulation. | |||||