GR 148997; (July, 2007) (Digest)
G.R. No. 148997 ; July 12, 2007
CHINA BANKING CORPORATION, Petitioner, vs. MARIA VICTORIA IGONIA, HELEN IGONIA, ALBERTO IGONIA, EDWIN IGONIA, ALVIN IGONIA and SERGIO IGONIA, JR., Respondents.
FACTS
The respondents, children of Sergio Igonia, Sr., inherited a share in Lot 78-A from their grandmother, Teodora Pili. The property was co-owned with their mother, Luisa O. Igonia. Without the respondents’ knowledge or consent, Luisa, along with her daughter and son-in-law, the spouses Dizon, mortgaged the entire Lot 78-A to petitioner China Banking Corporation to secure a loan. Upon the borrowers’ default, the bank initiated extrajudicial foreclosure proceedings.
The respondents filed a complaint for Annulment of Title and Mortgage and Damages against Luisa, the bank, and the sheriff. They alleged that Luisa, through fraud, had the property registered solely in her name and that the mortgage was void as to their undivided shares, as they never authorized it. The bank filed a motion to dismiss the complaint against it for failure to state a cause of action, arguing that the allegations pertained solely to Luisa’s fraudulent acts.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s denial of the bank’s motion to dismiss the complaint for failure to state a cause of action.
RULING
The Supreme Court denied the petition and upheld the denial of the motion to dismiss. The ruling was based on procedural and substantive grounds. Procedurally, an order denying a motion to dismiss is interlocutory and generally not subject to certiorari unless a grave abuse of discretion is shown, which was absent here. The trial court, in resolving a motion to dismiss based on failure to state a cause of action, hypothetically admits the complaint’s material allegations. The respondents’ complaint sufficiently alleged that the bank was foreclosing on a mortgage that covered property to which the bank’s mortgagors did not have full title, potentially impairing the respondents’ co-ownership rights.
Substantively, the bank was correctly impleaded as a real party in interest under the Rules of Court. A real party in interest is one who stands to be benefited or injured by the judgment. The bank, as the mortgagee seeking to foreclose the property, has a direct stake in the outcome of the case seeking to annul that very mortgage and title. The validity of the mortgage and the subsequent foreclosure sale are central issues that directly affect the bank’s rights. Therefore, the complaint stated a cause of action against the bank, and the proper recourse for the bank was to file an answer and proceed to trial where all factual and legal issues could be fully ventilated.