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    Edilberto Cruz, Et Al. vs. Bancom Finance Corporation (Now Unionbank OF THE PHILIPPINES), G.R. No. 147788, 19 March 2002

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    Heather Dunlap
    Bancom Finance Corporation (now Unionbank of the Philippines) foreclosed on a mortgage over an agricultural land owned by Edilberto Cruz and Simplicio Cruz after the mortgagor Norma Sulit defaulted on her loan payments. The Cruz brothers filed a complaint for reconveyance of the land, arguing that Sulit fraudulently acquired the land's title. The Supreme Court ruled that as a mortgagee-bank, Bancom was expected to exercise greater care and diligence in verifying the mortgagor's title to the land before granting the loan. While certificate of title holders are generally protected, one who loses land through fraud can recover it, provided no innocent third parties will be harmed.

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    Edilberto Cruz, Et Al. vs. Bancom Finance Corporation (Now Unionbank OF THE PHILIPPINES), G.R. No. 147788, 19 March 2002

    Uploaded by

    Heather Dunlap
    81 views1 page
    Bancom Finance Corporation (now Unionbank of the Philippines) foreclosed on a mortgage over an agricultural land owned by Edilberto Cruz and Simplicio Cruz after the mortgagor Norma Sulit defaulted on her loan payments. The Cruz brothers filed a complaint for reconveyance of the land, arguing that Sulit fraudulently acquired the land's title. The Supreme Court ruled that as a mortgagee-bank, Bancom was expected to exercise greater care and diligence in verifying the mortgagor's title to the land before granting the loan. While certificate of title holders are generally protected, one who loses land through fraud can recover it, provided no innocent third parties will be harmed.

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    Bancom Finance Corporation (now Unionbank of the Philippines) foreclosed on a mortgage over an agricultural land owned by Edilberto Cruz and Simplicio Cruz after the mortgagor Norma Sulit defaulted on her loan payments. The Cruz brothers filed a complaint for reconveyance of the land, arguing that Sulit fraudulently acquired the land's title. The Supreme Court ruled that as a mortgagee-bank, Bancom was expected to exercise greater care and diligence in verifying the mortgagor's title to the land before granting the loan. While certificate of title holders are generally protected, one who loses land through fraud can recover it, provided no innocent third parties will be harmed.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    81 views1 page

    Edilberto Cruz, Et Al. vs. Bancom Finance Corporation (Now Unionbank OF THE PHILIPPINES), G.R. No. 147788, 19 March 2002

    Uploaded by

    Heather Dunlap
    Bancom Finance Corporation (now Unionbank of the Philippines) foreclosed on a mortgage over an agricultural land owned by Edilberto Cruz and Simplicio Cruz after the mortgagor Norma Sulit defaulted on her loan payments. The Cruz brothers filed a complaint for reconveyance of the land, arguing that Sulit fraudulently acquired the land's title. The Supreme Court ruled that as a mortgagee-bank, Bancom was expected to exercise greater care and diligence in verifying the mortgagor's title to the land before granting the loan. While certificate of title holders are generally protected, one who loses land through fraud can recover it, provided no innocent third parties will be harmed.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    EDILBERTO CRUZ, ET AL. vs.

    BANCOM FINANCE CORPORATION (NOW UNIONBANK


    OF THE PHILIPPINES), G.R. No. 147788, 19 March 2002
    Facts:In 1978, Norma Sulit offered to purchase an agricultural land owned by
    brothers Rev. Fr.Edilberto Cruz and Simplicio Cruz. The asking price was P700,000,
    but Sulit only had P25,000,which Fr. Cruz accepted as earnest money. Sulit failed to
    pay the balance.Capitalizing on the close relationship of a Candelaria Sanchez with
    the brothers, Sulit succeededin having Cruz execute a document of sale of the land
    in favor of Sanchez for P150,000.Pursuant to the sale, Sulit was able to transfer the
    title of the land in her name.Evidence show that aside from the P150,000, Sanchez
    undertook to pay the brothers the amountof P655,000, representing the balance of
    the actual price of the land. Later, in a SpecialAgreement, Sulit assumed Sanchezs
    obligation to pay said amount. Unbeknownst to the Cruz brothers, Sulit managed to
    obtain a loan from Bancom secured by a mortgage over the land.Upon failure on the
    part of Sulit to pay the balance, the Cruz brothers filed this complaint
    for reconveyance of the land.Meanwhile, Sulit defaulted in her payment to the bank
    so her mortgage was foreclosed. Bancomwas declared the highest bidder and was
    issued a certificate of title over the land.
    Issue: whether or not Bancom was a mortgagee in good faith.
    Ruling: NO.As a general rule, every person dealing with registered land may safely
    rely on the correctness of the certificate of title and is no longer required to look
    behind the certificate in order todetermine the actual owner.This rule is, however,
    subject to the right of a person deprived of land through fraud to bring anaction for
    reconveyance, provided the rights of innocent purchasers for value and in good
    faithare not prejudiced. An innocent purchaser for value or any equivalent phrase
    shall be deemed,under Section 38 of the Act 496, to include an innocent lessee,
    mortgagee or any other encumbrancer for value.Bancom claims that, being an
    innocent mortgagee, it should not be required to conduct anexhaustive
    investigation on the history of the mortgagors title before it could extend a
    loan.Bancom, however, is not an ordinary mortgagee; it is a mortgagee-bank. As
    such, unlike privateindividuals, it is expected to exercise greater care and prudence
    in its dealings, including thoseinvolving registered lands. A banking institution is
    expected to exercise due diligence beforeentering into a mortgage contract. The
    ascertainment of the status or condition of a propertyoffered to it as security for a
    loan must be a standard and indispensable part of its operation

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