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  • Ramos and Eliadora Ramos, Petitioners, vs. Raul Obispo and Far East Bank and Trust Company, Respondents. Villarama, J

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    Nadine Reyna Cantos
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    1) Nilo and Eliadora Ramos executed a real estate mortgage over their property in favor of Far East Bank as security for loans obtained by Raul Obispo. Ramos claimed they were unaware the mortgage secured over 1 million pesos and demanded its cancellation after paying off a smaller loan for Obispo. 2) The trial court ruled in favor of Ramos, but the Court of Appeals reversed, finding Ramos were accommodation mortgagors under the Civil Code. 3) The Supreme Court denied Ramos' petition, upholding their status as accommodation mortgagors who validly consented to secure Obispo's loans, even without knowledge of the full amount, and affirmed the

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    1) Nilo and Eliadora Ramos executed a real estate mortgage over their property in favor of Far East Bank as security for loans obtained by Raul Obispo. Ramos claimed they were unaware the mortgage secured over 1 million pesos and demanded its cancellation after paying off a smaller loan for Obispo. 2) The trial court ruled in favor of Ramos, but the Court of Appeals reversed, finding Ramos were accommodation mortgagors under the Civil Code. 3) The Supreme Court denied Ramos' petition, upholding their status as accommodation mortgagors who validly consented to secure Obispo's loans, even without knowledge of the full amount, and affirmed the

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    © All Rights Reserved
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    19 views2 pages

    Ramos and Eliadora Ramos, Petitioners, vs. Raul Obispo and Far East Bank and Trust Company, Respondents. Villarama, J

    Uploaded by

    Nadine Reyna Cantos
    1) Nilo and Eliadora Ramos executed a real estate mortgage over their property in favor of Far East Bank as security for loans obtained by Raul Obispo. Ramos claimed they were unaware the mortgage secured over 1 million pesos and demanded its cancellation after paying off a smaller loan for Obispo. 2) The trial court ruled in favor of Ramos, but the Court of Appeals reversed, finding Ramos were accommodation mortgagors under the Civil Code. 3) The Supreme Court denied Ramos' petition, upholding their status as accommodation mortgagors who validly consented to secure Obispo's loans, even without knowledge of the full amount, and affirmed the

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    of 2

    I.

    SHORT TITLE: Ramos v Obispo

    II. FULL TITLE: G.R. No. 193804 February 27, 2013 SPOUSES NILO
    RAMOS and ELIADORA RAMOS, Petitioners, vs. RAUL OBISPO
    and FAR EAST BANK AND TRUST COMPANY, Respondents.
    VILLARAMA, J.

    III. TOPIC: Pledge – Accommodation Mortgagor

    IV. STATEMENT OF FACTS:

    Ramos and Obispo executed a Real Estate Mortgage in favor of


    Far East Bank Trust Company over a property owned by Ramos. The
    notarized REM secured credit accommodations extended to Obispo in the
    amount of 1,159,096. The REM was registered and annotated on the Title.
    Sometime later, FEBTC received a letter from petitioners informing that
    Obispo, to whom they entrusted their property to be used as a collateral for
    a 250,000 loan in their behalf, had instead secured a loan for 1,159,096, and
    had failed to return their title despite full payment of the 3500,000 loan on
    their behalf and also demanded that FEBTC furnish them the documents
    related to the REM failing with they will be constrained to pursue legal action.

    FEBTC took no action, prompting petitioners to file a complaint for


    annulment of the REM with damages against FEBTC and Obispo, alleging that
    they signed the blank REM given b Obispo who made the loan with the bank,
    and received the loan which they fully paid through Obispo. The loan being
    settled, they demanded the release of their title, but Obispo refused to see
    or talk to them. Petitioners claim that they were surprised to learn that their
    property was mortgage for such large amount, and thus prayed for such
    cancellation. Respondents claim otherwise that petitioner agreed to execute
    the REM as security for the loans made by Obispo and since it remains
    unpaid, they should not be compelled to release the mortgage. Respondent
    likewise prayed that in any event that a judgment be rendered in favor of
    petitioners, Obispo should be made liable to answer for all the claims.

    V. STATEMENT OF THE CASE:

    The Trial Court ruled in favor of the petitioners granting the annulment
    of the real estate mortgage, rendering it null and void and ordered FEBTC to
    cancel all encumbrances on the subject property of the mortgage. FEBTC
    appealed to the CA which reversed the trial court’s decision and dismissed
    the complaint, holding that petitioners were third-party mortgagors under
    Article 2085 of the Civil Code and that they failed to present any evidence to
    prove their allegations, hence this petition

    VI. ISSUE:
    - WON the petitioners were accommodation mortgagors of respondent
    Obispo despite the fact that no consent to such effect was given by
    them and the preparation thereof was attended by fraudulent acts or
    misrepresentations.

    VII. RULING:

    - The validity of an accommodation mortgage is allowed under


    Article 2085 of the Civil Code which provides that third persons who
    are not parties to the principal obligation may secure the latter by
    pledging or mortgaging their own property. An accommodation
    mortgagor, ordinarily, is not himself a recipient of the loan, otherwise
    that would be contrary to his designation as such. We have held that it
    is not always necessary that the accommodation mortgagor be
    apprised beforehand of the entire amount of the loan nor should it first
    be determined before the execution of the Special Power of Attorney
    in favor of the debtor. This is especially true when the words used by
    the parties indicate that the mortgage serves as a continuing security
    for credit obtained as well as future loan availments. There being valid
    consent on the part of petitioners as accommodation mortgagors, no
    reversible error was committed by the CA in reversing the trial court’s
    decision which declared the REM as void and awarded damages to
    petitioners.

    VIII. DISPOSITIVE PORTION


    WHEREFORE, the petition for review on certiorari is DENIED for lack of
    merit.The Decision dated January 27, 2010 of the Court of Appeals in CA-G.R.
    CV No. 82378 is hereby AFFIRMED and UPHELD. With costs against the
    petitioners.

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