Professional Documents
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183918
183918
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SECOND DIVISION
FRANCISCO LIM,
Petitioner,
G.R. No. 183918
-versus-
EQUITABLE PCI BANK, now
known as the BANCO DE ORO
UNIBANK, INC.,
*
Present:
CARPIO, Chairperson,
BRION,
DEL CASTILLO,
PEREZ, and
PERLAS-BERNABE, JJ.
Respondent.
.IAN 1 5 W14
x--------------------------------------------------------
DECISION
DEL CASTILLO, J.:
The basic rule is that he who alleges must prove his case.
This Petition for Review on Certiorari
1
under Rule 45 of the Rules of
Court assails the July 30, 2008 Decision
2
of the Court of Appeals (CA) in CA-
G.R. CV No. 85139.
Factual Antecedents
On November 17, 1988, petitioner Francisco Lim (petitioner) executed an
Irrevocable Special Power of Attorney
3
in favor of his brother, Franco Lim
(Franco), authorizing the latter to mortgage his share in the by
Transfer Certificate of Title (TCT) No. 57176,
4
which they
See CA rollo, p. 108.
Rollo, pp. 13-27.
2
Id. at 107-116; penned by Associate Justice Marlene Gonzales-Sison and concurred in by Associate Justices
Juan Q. Enriquez, Jr. and Isaias P. Dicdican.
3
Records, pp. 292-293.
4
Id. at 294-297.
5
Rollo, p. 108.
Decision G.R. No. 183918
2
On February 9, 1989, Banco De Oro Savings and Mortgage Bank released
a loan in the amount of P8.5 million by virtue of the said Irrevocable Special
Power of Attorney, which was entered in the Register of Deeds of San Juan,
Metro Manila.
6
On December 28, 1992, the loan was fully paid by Franco.
7
On June 14, 1996, petitioner, Franco, and their mother Victoria Yao Lim
(Victoria) obtained from respondent Equitable PCI Bank (respondent; formerly
Equitable Banking Corporation) a loan in the amount of P30 million in favor of
Sun Paper Products, Inc. To secure the loan, petitioner and Franco executed in
favor of respondent a Real Estate Mortgage
8
over the same property.
9
However,
when the loan was not paid, respondent foreclosed the mortgaged property.
10
On September 29, 1999, TCT No. 9470
11
and Tax Declaration No. 96-
31807
12
were issued in the name of respondent.
13
Thereafter, a Writ of Possession
14
in favor of respondent was issued by the
Regional Trial Court (RTC) of Pasig City, Branch 158, in LRC Case No. R-5818.
On January 11, 2001, petitioner filed before the RTC of Pasig a Motion for
the Issuance of Temporary Restraining Order (TRO)
15
and a Complaint
16
for
Cancellation of Special Power of Attorney, Mortgage Contract, Certificate of Sale,
TCT No. 9470, and Tax Declaration No. 96-31807, with Damages and Issuance
of Preliminary Mandatory Injunction, docketed as Civil Case No. 68214 and
raffled to Branch 267, against respondent, Franco, and Victoria. Petitioner alleged
that he did not authorize Franco to mortgage the subject property to respondent
and that his signatures in the Real Estate Mortgage and the Surety
Agreement
17
were forged.
On January 19, 2001, the RTC issued an Order
18
granting petitioners
Motion for the issuance of a TRO to prevent respondent from enforcing the Writ
of Possession. Thus:
6
Id.
7
Id.
8
Records, pp. 298-301.
9
Rollo, p. 108.
10
Id.
11
Records, pp. 42-43.
12
Id. at 44.
13
Rollo, p. 108.
14
Records, p. 70; penned by Judge Jose R. Hernandez.
15
Id. at 4-6.
16
Id. at 8-23.
17
Id. at 32-33.
18
Id. at 75-76; penned by Judge Florito S. Macalino
Decision G.R. No. 183918
3
WHEREFORE, considering that grave and irreparable injury will result
on [petitioner] before the application of injunctive relief can be heard on notice
and pursuant to Section 4, Rule 58 of the 1997 Rules of Civil Procedure, as
amended, let a Temporary Restraining Order (TRO) be issued upon posting by
[petitioner] of a bond executed to the party enjoined ([respondent] Equitable PCI
Bank) in the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00)
bond to be approved by the Court, to the effect that [petitioner] will pay to such
party all damages which [respondent and] defendants may sustain by reason of
the TRO if the Court should finally decide that the [petitioner] is not really
entitled thereto. Consequently, [respondent and] defendants, their agents, officers,
representatives and all persons acting on their behalf, are restrained from further
executing the Notice of Compliance and/or Writ of Possession.
SO ORDERED.
19
Respondent, for its part, filed an Answer Cum Motion to Dismiss
20
contending that the trial court has no jurisdiction to issue a TRO or a preliminary
injunction enjoining the implementation of the Writ of Possession issued by a co-
equal court.
21
Respondent also argued that it is not privy to the execution of the
Irrevocable Special Power of Attorney
22
and that since there is no allegation that
the foreclosure was defective or void, there is no reason to cancel TCT No. 9470
and Tax Declaration No. 96-31807.
23
On April 19, 2001, the RTC issued an Order
24
granting petitioners
application for injunctive relief, to wit:
WHEREFORE, considering that based from testimonial and
documentary evidence, there is sufficient reason to believe that grave and
irreparable injury will result on [petitioner] before the main case can be heard on
notice and pursuant to Section 4, Rule 58 of the 1997 Rules of Civil Procedure,
as amended, let a writ of preliminary injunction be issued upon posting by
[petitioner] of a bond executed to the party enjoined ([respondent] Equitable PCI
Bank) in the amount of THREE MILLION PESOS (Php3,000,000.00) bond to
be approved by the Court, to the effect that [petitioner] will pay to such party all
damages which [respondent and] defendants may sustain by reason of the said
writ if the Court should finally decide that the [petitioner] is not really entitled
thereto. Consequently, [respondent and] defendants, their agents, officers,
representatives and all persons acting on their behalf, are restrained from further
executing the Notice of Compliance and/or Writ of Possession.
SO ORDERED.
25
19
Id. at 76.
20
Id. at 87-92.
21
Id. at 88-89.
22
Id. at 89-90.
23
Id. at 90.
24
Id. at 201-204.
25
Id. at 204.
Decision G.R. No. 183918
4
Franco and Victoria, however, did not participate in the proceedings.
26
Ruling of the Regional Trial Court
On April 4, 2005, the RTC rendered a Decision
27
in favor of petitioner. It
ruled that petitioner was able to prove by preponderance of evidence that he did
not participate in the execution of the mortgage contract giving rise to the
presumption that his signature was forged.
28
The dispositive portion of the
Decision reads:
WHEREFORE, IN VIEW OF THE FOREGOING
CONSIDERATIONS, judgment is hereby rendered in favor of [petitioner]
Francisco Lim and against the [respondent] Equitable PCI Bank, Franco Limand
Victoria Yao Lim.
Accordingly, the Real Estate Mortgage Contract dated 14 June 1996
covered by Transfer Certificate of Title No. 57176; the Certificate of Sale dated
23 December 1997 covering the same title; TCT No. 9470 in the name of
[respondent] Bank; and Tax Declaration No. 96-31807 issued in the name of the
[respondent] Bank are hereby declared null and void and of no force and effect.
The writ of preliminary injunction which was issued by the Court as per
Order dated 19 April 2001 is hereby made permanent.
SO ORDERED.
29
Ruling of the Court of Appeals
On appeal, the CA reversed the RTC Decision. It ruled that petitioners
mere allegation that his signature in the mortgage contract was forged is not
sufficient to overcome the presumption of regularity of the notarized document.
30
Thus, the CA disposed of the case in this wise:
WHEREFORE, premises considered, the instant appeal is hereby
GRANTED. The assailed Decision of the Regional Trial Court is SET ASIDE.
The complaint filed by [petitioner] Francisco Limagainst [respondent] Equitable
PCI Banking Corporation is DISMISSED for lack of merit.
SO ORDERED.
31
26
Rollo, p. 109.
27
Id. at 29-36; penned by Judge Florito S. Macalino.
28
Id. at 31.
29
Id. at 36.
30
Id. at 113-115.
31
Id. at 115.
Decision G.R. No. 183918
5
Issues
Hence, this recourse by petitioner raising the following questions:
Did the [CA] err when it held that no evidence was presented to support
Petitioners claimthat his signature was forged[?]
Corollary to the issue above, is the presentation of expert evidence indispensable
in order that forgery may be sufficiently proven in this case[?]
Did the [CA] err when it set aside the Decision rendered by the Trial Court on 04
April 2005 and forthwith dismissed the complaint filed by Francisco Lim against
Equitable PCI Banking Corporation for lack of merit[?]
Did Respondent Bank exercise the diligence required of it in the subject
mortgage transaction; if it did not, did Respondent Banks failure violate the
rights of Petitioner[?]
32
In a nutshell, the issues boil down to whether petitioner was able to prove
that his signature was forged.
Petitioners Arguments
Petitioner contends that his signature in the mortgage contract was forged
as he was not in the Philippines at the time of its execution.
33
He posits that the
presentation of expert witnesses is not required to prove forgery as the court may
make its own determination based on the evidence presented.
34
He claims that
respondent was negligent in approving the loan and in accepting the subject
property as security for the loan.
35
He also blames respondent for not conducting
a more in-depth inquiry before approving the loan since it was a take-out from a
mortgage
36
constituted in favor of Planters Development Bank.
37
Lastly, he
insists that respondent should have been alerted by the fact that the mortgage
contract was executed without the consent of his wife.
38
Respondents Arguments
Respondent, on the other hand, echoes the ruling of the CA that petitioners
mere denial is not enough to prove that his signature was forged.
39
Respondent
32
Id. at 168.
33
Id. at 169.
34
Id. at 169-171.
35
Id. at 171-174.
36
Id. at 78-81.
37
Id. at 171-172.
38
Id. at 171.
39
Id. at 207-209.
Decision G.R. No. 183918
6
points out that there was, in fact, no attempt on petitioners part to compare the
alleged forged signature with any of his genuine signatures.
40
Also, no evidence
was presented to show that respondent did not exercise due diligence when it
approved the loan and accepted the mortgage.
41
More important, petitioner cannot
feign ignorance of the execution and existence of the mortgage because he even
communicated with respondent to settle the loan and, when the property was
foreclosed, to repurchase the same.
42
Hence, petitioner is estopped from assailing
the validity of the mortgage contract.
43
Our Ruling
The Petition is bereft of merit.
Petitioner failed to prove that his
signature was forged.
Allegations of forgery, like all other allegations, must be proved by clear,
positive, and convincing evidence by the party alleging it.
44
It should not be
presumed
45
but must be established by comparing the alleged forged signature
with the genuine signatures.
46
Although handwriting experts are often offered as
witnesses, they are not indispensable because judges must exercise independent
judgment in determining the authenticity or genuineness of the signatures in
question.
47
In this case, the alleged forged signature was not compared with the
genuine signatures of petitioner as no sample signatures were submitted. What
petitioner submitted was another mortgage contract
48
executed in favor of Planters
Development Bank, which he claims was also forged by his brother. But except
for this, no other evidence was submitted by petitioner to prove his allegation of
forgery. His allegation that he was in the US at the time of the execution of the
mortgage contract is also not sufficient proof that his signature was forged.
Petitioner failed to prove negligence on
the part of respondent.
Likewise without merit is petitioners allegation of negligence on the part
of respondent.
40
Id. at 211-216.
41
Id. at 218-219.
42
Id. at 219-224.
43
Id. at 219-220.
44
Bautista v. Court of Appeals, 479 Phil. 787, 793 (2004).
45
Id.
46
Heirs of Severa P. Gregorio v. Court of Appeals, 360 Phil. 753,763 (1998).
47
Id. at 763-764.
48
Rollo, pp. 78-81.
Decision G.R. No. 183918
7
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.
The nature of the property was never
raised as an issue.
The absence of his wifes signature on the mortgage contract also has no
bearing in this case.
We are not unaware that all property of the marriage is presumed to be
conjugal, unless it is shown that it is owned exclusively by the husband or the
wife;
51
that this presumption is not overcome by the fact that the property is
registered in the name of the husband or the wife alone;
52
and that the consent of
both spouses is required before a conjugal property may be mortgaged.
53
However, we find it iniquitous to apply the foregoing presumption especially since
the nature of the mortgaged property was never raised as an issue before the RTC,
the CA, and even before this Court. In fact, petitioner never alleged in his
Complaint that the said property was conjugal in nature. Hence, respondent had
no opportunity to rebut the said presumption.
Worth mentioning, in passing, is the ruling in Philippine National Bank v.
Court of Appeals
54
to wit:
The well-known rule in this jurisdiction is that a person dealing with a
registered land has a right to rely upon the face of the torrens certificate of title
49
Cruz v. Bancom Finance Corporation, 429 Phil. 225, 239 (2002).
50
Rollo, pp. 114-115.
51
Dewara v. Lamela, G.R. No. 179010, April 11, 2011, 647 SCRA 483, 490.
52
Id.
53
Article 124 of the Family Code states that:
Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both
spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court
by the wife for proper remedy, which must be availed of within five years fromthe date of contract
implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of
the conjugal properties, the other spouse may assume sole powers of administration. These powers do not
include disposition or encumbrance without authority of the court or the written consent of the other spouse.
In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the
court before the offer is withdrawn by either or both offerors.
54
237 Phil. 426, 432-433 (1987).
Decision G.R. No. 183918
8
and to dispense with the need of inquiring further, except when the party
concerned has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry.
A torrens title concludes all controversy over ownership of the land
covered by a final [decree] of registration. Once the title is registered the owner
may rest assured without the necessity of stepping into the portals of the court or
sitting in the mirador de su casa to avoid the possibility of losing his land.
Article 160 of the Civil Code provides as follows:
Art. 160. All property of the marriage is presumed to
belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife.
The presumption applies to property acquired during the lifetime of the husband
and wife. In this case, it appears on the face of the title that the properties were
acquired by Donata Montemayor when she was already a widow. When the
property is registered in the name of a spouse only and there is no showing
as to when the property was acquired by said spouse, this is an indication
that the property belongs exclusively to said spouse. And this presumption
under Article 160 of the Civil Code cannot prevail when the title is in the
name of only one spouse and the rights of innocent third parties are
involved.
The PNB had a reason to rely on what appears on the certificates of title
of the properties mortgaged. For all legal purposes, the PNB is a mortgagee in
good faith for at the time the mortgages covering said properties were constituted
the PNB was not aware to any flaw of the title of the mortgagor. (Emphasis
supplied)
Petitioners allegation of forgery is
belied by the evidence.
Moreover, petitioners subsequent actions belie his allegation of forgery.
Before the expiration of the redemption period, petitioner sent respondent a letter
55
signifying his intention to reacquire the said property. He even visited the bank to
discuss the matter.
56
Clearly, his acts contradict his claim of forgery, which
appears to be an afterthought and a last-ditch effort to recover the said property.
All told, we find no error on the part of the CA in upholding the validity of
the mortgage contract.
57
55
Records, p. 427.
56
TSN dated Feb 20, 2001, pp. 16-17(Direct Testimony of Alfred Pineda).
57
Rollo, pp. 113-115.
Decision 9 G.R. No. 183918
WHEREFORE, the Petition is hereby DENIED. The July 30, 2008
Decision of the Court of Appeals in CA-G.R. CV No. 85139 is hereby
AFFIRMED.
SO ORDERED.
WE CONCUR:
MARIANO C. DEL CASTILLO
Associate Justice
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate Justice
JOS
Associate Justice
Decision 10 G.R. No. 183918
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice