GR L 77502; (January, 1988) (Digest)
G.R. No. L-77502. January 15, 1988.
EMILIA B. SANTIAGO, plaintiff-appellant, vs. PIONEER SAVINGS AND LOAN BANK, ET. AL., defendants-appellees.
FACTS
Emilia Santiago, the registered owner of a parcel of land, executed a Special Power of Attorney (SPA) authorizing Construction Resources Corporation of the Philippines (CRCP) to borrow money and mortgage her property. Pursuant to this SPA, CRCP obtained a loan from FINASIA Investment and Finance Corporation, secured by a real estate mortgage over Santiago’s land, which was duly annotated on her title. The mortgage contract expressly allowed foreclosure upon default.
FINASIA later assigned this receivable, including the mortgage right, to Pioneer Savings & Loan Bank through a public instrument, which was also duly recorded. Upon CRCP’s default, Pioneer Bank initiated extrajudicial foreclosure. Santiago filed an action to declare the mortgage null, claiming she was unaware of the mortgage to the bank and had not authorized the foreclosure. She argued the notice of sale was defective for not being served on her personally.
ISSUE
Whether the trial court correctly dismissed Santiago’s complaint for declaration of nullity of the real estate mortgage and dissolved the preliminary injunction.
RULING
Yes, the dismissal was proper. While a motion to dismiss typically tests only the sufficiency of the allegations in the complaint, the rule admits an exception where, as here, documentary evidence is presented and admitted during the hearing on the application for a preliminary injunction, revealing facts that conclusively defeat the claim. Santiago’s counsel admitted the due execution of the SPA, the mortgage, and the subsequent assignments.
The SPA expressly authorized CRCP to mortgage the property. The mortgage validly contained a foreclosure stipulation. The assignment by FINASIA to Pioneer Bank was valid under Article 2128 of the Civil Code, as it was made in a public instrument and duly registered. Consequently, Pioneer Bank, as assignee, acquired the right to foreclose. Notice of the foreclosure sale by publication, as required by law, constitutes notice to the whole world, including the mortgagor. Santiago’s intended testimony about her lack of personal knowledge and her attempts to contact CRCP cannot override the clear terms of the incontrovertible public documents. Her proper recourse is an action against her agent, CRCP, for any violation of their agreement. The trial court did not err in dismissing the case for lack of cause of action.