G.R. No. 240311 , September 18, 2019
Philippine National Bank, Petitioner, vs. Felina Giron-Roque, Dr. Gloria M. Apostol and husband, Dr. Edward Apostol, Respondents.

FACTS

On April 7, 1995, respondent Felina Giron-Roque, a Filipino resident in the USA, obtained a credit line from petitioner Philippine National Bank (PNB) secured by a real estate mortgage. On February 10, 1997, she availed of a P50,000.00 loan (first loan). Sometime between April to August 1997, while Felina was in the USA, respondent Gloria Apostol purportedly filed a stand-by application for a further P120,000.00 loan (second loan). Felina later discovered that Gloria withdrew a check for P119,820.00 (subject check) for the second loan from her PNB account. PNB demanded payment for both loans. On December 10, 1998, Felina sent PNB a letter with a cashier’s check for P16,000.00 as full payment for the first loan, which PNB received on December 21, 1998. PNB returned the check, deeming it insufficient to cover both loans’ principal, interests, and penalties, and proceeded with the extrajudicial foreclosure of Felina’s mortgaged property. Felina filed a complaint against PNB and Spouses Apostol, claiming her signature on the subject check was forged and Gloria was not authorized to withdraw. The RTC ruled in Felina’s favor, declaring the foreclosure null and void, ordering PNB to reinstate her credit accommodation, and awarding attorney’s fees. The CA affirmed with modification, ordering Spouses Apostol to pay PNB P119,820.00 and deleting the attorney’s fees award. PNB’s petition for review was denied by the CA.

ISSUE

Whether the Court of Appeals correctly affirmed the nullification of the extrajudicial foreclosure proceedings covering Felina Giron-Roque’s real property.

RULING

The petition is without merit. The Supreme Court affirmed the CA’s decision with modification. The Court upheld the factual findings of the lower courts that Felina did not avail of the second loan as her signature on the subject check was forged, Gloria was not duly authorized, and PNB was remiss in its required diligence as a banking institution. Consequently, the second loan was void. Felina’s outstanding obligation was thus reduced to the first loan’s balance of P14,565.58 (including interests and penalties as of September 15, 1998). The Court found that Felina had tendered a P16,000.00 cashier’s check for this obligation, which PNB wrongfully refused. In the interest of substantial justice, the Court gave Felina a period of sixty (60) days to settle the remaining balance of P14,565.58 plus interests and penalties from September 15, 1998 to December 21, 1998. The annulment of the extrajudicial foreclosure was affirmed but made without prejudice to PNB’s availment of proper remedies should Felina fail to settle within the given period. The rest of the CA Decision stands.