G.R. Nos. 222369 and 222502, November 16, 2020
Strong Fort Warehousing Corporation, Petitioner, vs. Remedios T. Banta, Respondent.

FACTS

Antonio Banta, married to respondent Remedios Banta, formed Metro Isuzu Corporation (MIC) and obtained loans from Westmont Bank in MIC’s name, evidenced by promissory notes signed by Antonio and purportedly by Remedios. On November 23, 1995, Antonio executed a Real Estate Mortgage (REM) covering conjugal properties to secure a ₱25 million loan. On February 6, 1997, the REM was amended to increase the loan to ₱36 million. Remedios filed a complaint (Civil Case No. 2907-MN) to nullify the REM, its amendment, and related loan documents, alleging her signatures were forged as she and Antonio had been separated since 1991. She submitted Questioned Documents Reports from the NBI and PNP Crime Laboratory stating the questioned signatures were not hers. After presenting her witnesses, Remedios caused a 3-year delay in filing her formal offer of evidence. The Court of Appeals ordered her formal offer expunged for unreasonable delay, which this Court affirmed. During the pendency of the appeal, trial continued. On rebuttal, Remedios re-presented the NBI and PNP reports, which the trial court admitted over Westmont Bank’s objection. Meanwhile, Remedios filed another complaint (Civil Case No. 4950-MN) to nullify a 2000 REM and related notes on the same forgery grounds. The trial court ruled in favor of Remedios in both cases, declaring the REMs void and the notes without legal effect as to her for lack of consent due to forgery. Westmont Bank appealed. Onshore Strategic Assets, Inc. and later petitioner Strong Fort Warehousing Corporation substituted Westmont Bank. The CA consolidated the appeals and affirmed the trial court’s nullification of the REMs and notes, finding forgery established by Remedios’ testimony, an admission by a bank officer, and the CA’s own independent examination of signatures. The CA also found Westmont Bank negligent for failing to conduct a credit investigation or verify the identity of the woman presented as Remedios.

ISSUE

The core issue is the validity of the real estate mortgage contracts, specifically whether the REMs and related loan documents are null and void due to the forgery of Remedios Banta’s signature, thereby vitiating her consent.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals Decision. The REMs and promissory notes are null and void with respect to Remedios Banta. Forgery was sufficiently proven. The testimony of the person whose signature is disputed has probative value under Rule 132 of the Rules of Court. Remedios’ clear and positive denial of her signatures, coupled with the admission of the bank’s witness (Susan) that the Remedios in court was not the person who signed the documents, constituted sufficient evidence of forgery. The Court’s own independent examination of the signatures confirmed the falsity. The expunction of the NBI and PNP reports for procedural delays did not preclude a finding of forgery based on other evidence. Consequently, the contracts are void for lack of consent. Furthermore, Westmont Bank was not a mortgagee in good faith; it failed to exercise the required diligence by approving the REMs without conducting a credit investigation on Remedios and without verifying the identity of the person presented as her. A bank is expected to exercise a higher degree of diligence. The mortgages, being constituted on conjugal properties without the wife’s consent, are void.