G.R. No. 247646, March 29, 2023
THE COMMONER LENDING CORPORATION, PETITIONER, VS. RAFAEL BALANDRA, RESPONDENT.

FACTS

Respondent Rafael Balandra and his wife Alita Balandra owned a parcel of land and house covered by TCT No. T-126054. The properties were mortgaged to petitioner Commoner Lending Corporation to secure a loan of ₱300,000.00 contracted by Alita. Respondent filed a Complaint for Nullity of Documents and Damages, alleging that Alita forged his signature on a General Power of Attorney (GPA) dated February 25, 1997, which authorized her to mortgage the properties. Respondent claimed he could not have signed the GPA on that date as he was abroad. Petitioner asserted it conducted a credit investigation, was shown the GPA, approved the loan, and released the funds. Upon default, petitioner extrajudicially foreclosed the mortgage. The Regional Trial Court (RTC) found the GPA forged and declared the Real Estate Mortgage (REM) valid only as to the one-half portion pertaining to Alita, treating the properties as conjugal. Both parties appealed. The Court of Appeals (CA) reversed the RTC, declared the REM null and void in its entirety for want of respondent’s consent, and ordered the cancellation of the new title in petitioner’s name and the reinstatement of the spouses’ original title.

ISSUE

The primary issues are: (1) the factual issue of whether the GPA was forged; and (2) the substantive issue of the legal characterization and validity of the REM constituted on conjugal property without the written consent of one spouse.

RULING

The Supreme Court granted the petition. On the factual issue, the Court upheld the concurrent findings of the RTC and CA that respondent’s signature on the GPA was a forgery, as this finding is binding and conclusive in a petition for review under Rule 45. On the substantive issue, the Court ruled that the REM, executed after the effectivity of the Family Code and without respondent’s written consent, is void under Article 124 of the Family Code. However, the Court held that such a void contract may be perfected as a binding contract upon acceptance by the non-consenting spouse. The Court found that respondent’s partial payments on the loan constituted a constructive ratification or acceptance of the mortgage contract, thereby curing the initial defect of lack of consent. Consequently, the REM was deemed valid and binding. The Court set aside the CA Decision and Resolution and reinstated the RTC Decision with modification, declaring the REM valid and binding due to respondent’s ratification.