Case on receivership

Alfeo Vivas, on his behalf and on behalf of the Shareholders of the Eurocredit Community Bank, Petitioner, vs. The Monetary Board of the BSP and the PDIC, Respondents.

GR No. 191424; August 7, 2013

Facts: The Monetary Board placed the Eurocredit Community Bank under Prompt Corrective Action framework on account of the findings of serious findings and supervisory concerns. Vivas moved for the reconsideration of such action. ECBI also unjustly refused to allow the BSP examiners from inspecting its books and records. The MB issued Resolution No. 276 placing ECBI under receivership, because of its inability to pay its liabilities, insufficient realizable assets and violation of cease and desist order of the MB for acts constituting unsound banking practices. Vivas argued that the MB committed grave abuse of discretion for placing ECBI under receivership without prior notice and hearing, pursuant to RA 7353, Sec. 11.

Issue:  Whether or not the MB committed grave abuse of discretion in placing ECBI under receivership without notice and hearing.

Ruling:     No, the MB did not gravely abuse its discretion. The ECBI was given every chance to be heard and improve its financial standing. Moreover, the MB has the power to forbid a bank from doing business and place it under receivership without prior notice and hearing, when the circumstances warrant it. Under RA 7653, the MB was given with more power of closure and placement of a bank in receivership for insolvency or if the continuance in the business would result in the loss of depositors or creditors. The ‘close now, hear later” doctrine was justified on practical and legal considerations to preclude unwarranted dissipation of the bank’s assets and as valid exercise of police power to protect creditors, depositors, stockholders and the general public.

Case on indefeasibility of torrens titles

Spouses Alfonso and Maria Angeles Cusi, Petitioners, vs. Lilia V. Domingo, Respondent.

G.R. No. 195825; February 27, 2013

Ramona Liza L. De Vera, Petitioner, vs. Lilia V. Domingo and Spouses Radella and Alfred Sy, Respondents

G.R. No. 195871

Facts: Lilia Domingo owned a certain real property which was vacant and unfenced. After some time, a construction activities were being undertaken on her property without her knowledge and more so, without her consent. She soon was able to discover a series of anomalous transactions involving her property. It turned out that Radella Sy was able to execute a falsified deed of sale and thereafter, acquired a valid title to the property. Sy then divided the property into two and sold each half to spouses De Vera and Spouses Cusi, and both buyers were able to have valid titles to the property on their names. All of the said transactions took place without the knowledge of the real owner Lilia Domingo. Upon learning of the circumstances, Domingo filed a case at the RTC seeking annulment or cancellation of the titles issued. The RTC rendered a decision, affirmed by the CA in favor of Lilia Domingo.

Issue:  What is the effect of acquiring a real property under the Torrens System of Land Registration?

Ruling:  Under the Torrens system of land registration, the State is required to maintain a register of landholdings that guarantees indefeasible title to those included in the register. The State issues an official certificate of title to attest to the fact that the person named is the owner of the property described therein, subject to such liens and encumbrances as thereon noted or what the law warrants or reserves. One of the guiding tenets underlying the Torrens system is the curtain principle, in that one does not need to go behind the certificate of title because it contains all the information about the title of its holder. This principle dispenses with the need of proving ownership by long complicated documents kept by the registered owner, which may be necessary under a private conveyancing system, and assures that all the necessary information regarding ownership is on the certificate of title. Consequently, the avowed objective of the Torrens system is to obviate possible conflicts of title by giving the public the right to rely upon the face of the Torrens certificate and, as a rule, to dispense with the necessity of inquiring further; on the part of the registered owner, the system gives him complete peace of mind that he would be secured in his ownership as long as he has not voluntarily disposed of any right over the covered land.

           

The petitioners were shown to have been deficient in their vigilance as buyers of the property. It was not enough for them to show that the property was unfenced and vacant; otherwise, it would be too easy for any registered owner to lose her property, including its possession, through illegal occupation. In view of the foregoing, the court affirmed the decision of the lower courts and restores to Domingo her rights of dominion over the property.
           

PNB vs Maranon GR 189316

Case on rent and mortgage.

Philippine National Bank, Petitioner, vs.

 Spouses Bernard and Cresencia Maranon, Respondents

G.R.  No. 189316, July 01, 2013

Facts:  The case is a petition for review on certiorari under Rule 45 of the Rules of Court. The antecedent events being the Spouses Maranon, owner of a piece of real property, erected with a building occupied by various tenants. Said subject property was among the properties mortgaged by spouses Montealegre to PNB as a security for a loan. Spouses Montealegre, through a falsified Deed of Sale, acquired title to the property and used the property’s title which was purportedly registered in the name of Emelie Montealegre. However, due to failure to pay the loan, said property was foreclosed by PNB, and upon auction, was thereafter acquired by the same bank, PNB. Spouses Maranon filed before the RTC a complaint for Annulment of Title, Reconveyance and Damages against spouses Montealegre. Judgment of RTC was rendered in favour of spouses Maranon, and also stipulated that the Real Estate Mortgage lien of PNB shall stay and be respected. Such decision prompted PNB to also seek for entitlement to the fruits of the property such as rentals paid by the tenants.

Issue:  Whether or not is PNB entitled to fruits of the disputed property.

Ruling:  No. Rent is a civil fruit that belongs to the owner of the property producing it by right of accession. The rightful recipient of the disputed rent in this case should be thus the owner of the lot at the time the rent accrued. It is beyond question that spouses Maranon never lost ownership over the subject lot, and that technically, there is no juridical tie created by a valid mortgage contract that binds PNB to the subject lot because the mortgagors Montealegre were not the true owners. PNB’s lien as a mortgagee in good faith pertains to the subject lot alone and not on the erected building which was not foreclosed and still remained to be a property of Maranon. Thus, PNB’s claim for the rents paid by the tenants has no basis.