GR 129428; (February, 2003) (Digest)
G.R. No. 129428 ; February 27, 2003
BENJAMIN NAVARRO and ROSITA FORTEA, petitioners, vs. SECOND LAGUNA DEVELOPMENT BANK, and SPOUSES ISAAC GUZMAN and VILMA ESPORLAS, respondents.
FACTS
Petitioners Benjamin Navarro and Rosita Fortea were co-owners of a 1/6 share in a parcel of land in Alabang. Without their knowledge and consent, their co-owners, spouses Domalito Velasco and Esther Navarro, conspired with another sister, Luciana Navarro, to execute a falsified Deed of Absolute Sale covering the entire lot, making it appear petitioners sold their share. A new title was issued to the Velasco spouses, who then mortgaged the property to respondent Second Laguna Development Bank. Upon the Velasco spouses’ loan default, the bank foreclosed the mortgage. Petitioners later wrote letters to the bank, introducing themselves as attorneys-in-fact of Esther Navarro and offering to redeem the property, but they never questioned the validity of the sale or mortgage. After the foreclosure, the bank consolidated ownership and later sold the property to respondent spouses Isaac Guzman and Vilma Esporlas.
ISSUE
Whether the mortgage contract with the bank and the subsequent sale to the Guzman spouses are valid, thereby precluding petitioners from recovering their alleged share in the foreclosed property.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court upheld the validity of the mortgage and the subsequent sale. On the mortgage, the bank was a mortgagee in good faith. It exercised the diligence required of banking institutions by relying on the clean certificate of title presented by the Velasco spouses, which showed them as the absolute owners. There were no circumstances that should have aroused the bank’s suspicion about the title’s validity. On the sale to the Guzman spouses, petitioners are estopped from challenging it. Their letters to the bank, wherein they offered to redeem the property without ever asserting that the original sale was falsified or that the mortgage was invalid, induced the bank to believe they recognized these transactions. By their conduct, petitioners are barred from adopting an inconsistent position to the detriment of the bank and the subsequent innocent purchasers. Their failure to assert their rights for an unreasonable time constitutes laches.