G.R. No. 164693 : March 23, 2011.




On 25 June 1962, petitioner DBP, granted a loan to respondent spouses Lomantong Darapa and Sinab Dimakuta (spouses) who executed therefore a real and chattel mortgage contract which covered a lot situated at poblacion, Linamon, Lanao del Norte which lot is covered by Tax Declaration No. A-148 and the equity rights therein declared under the name of Sinab Dimakuta. The assignment of the spouses equity rights over the land covered by Tax Declaration No. A-148 in DBPs favor was embedded in the Deed of Assignment of Rights and Interests. In 1970, the spouses applied for the renewal and increase of their loan using SinabDimakutas (Dimakuta) Transfer Certificate of Title (TCT) No. T-1,997 as additional collateral.The DBP disapproved the loan application without returning, however, Dimakutas TCT.

When the spouses failed to pay their loan, DBP extrajudicially foreclosed the mortgages, which, unknown to the spouses, included the TCT No. T-1,997. They failed to redeem the land, but the bank assured them of its return. In 1994, however, a bank officer told them that the land has already been bought by Abalos.

On 20 August 1994, the spouses filed with the RTC of Iligan City, a Complaint for Annulment of Title, Recovery of Possession and Damages, against DBP and Abalos. The spouses averred that TCT No. T-1,997 was not one of the mortgaged properties, and, thus, its foreclosure by DBP and its eventual sale to Abalos was null and void. On the other hand, DBP countered that TCT No. T-1,997 had its roots in Tax Declaration No. A-148, which the spouses mortgaged with the DBP in 1962 as evidenced by the Real Estate Mortgage and the Deed of Assignment.Abalos averred that she was an innocent purchaser for value.

The RTC annulled the DBPs foreclosure sale of the land under TCT No. T-1,997 and its sale to Abalos. Only DBP appealed. The CA denied, stating that DBP had no right to foreclose the land under TCT No. T-1,997, it not having been mortgaged.

ISSUES: Whether or not the foreclosure of the land under TCT No. T-1,997 is valid


The petition is unmeritorious.

REMEDIAL LAW: Questions of law.

A petition for review on certiorari filed with this Court under Rule 45 of the Rules of Civil Procedure shall, as a general rule, raise only questions of law. The DBPs insistence that TCT No. T-1,997 is the same land covered by Tax Declaration No. A-148 is to ask the Court to evaluate evidence passed upon by the RTC and the Court of Appeals.To grant this petition will entail the Court's review and determination of the weight, credence, and probative value of the evidence presented at the trial courtmatters which are factual and outside the ambit of Rule 45.

In any event, the records reveal that the land covered by TCT No. T-1,997 was not among the properties, the spouses mortgaged with the DBP in 1962. The 1962 mortgage contract and its accompanying deed of assignment show that the land covered by Tax Declaration No. A-148 is located in Linamon, Lanao del Norte. On the other hand, the land covered by TCT No. T-1,997 is situated inBarrio Buru-an, Municipality of Iligan, Lanao del Norte. Several witnesses also testified to the dissimilarity of identities of the parcels of land. These blatant inconsistencies make the DBPs contention incredulous.

CIVIL LAW: Estoppel; laches; prescription.

The Court also finds unmeritorious the DBPs contention that the spouses cause of action is barred byestoppel, laches and prescription.In Pacific Mills, Inc. v. Court of Appeals, the requisites of estoppel are as follows: (a) conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon, or at least influenced by the other party; and (c) knowledge, actual or constructive, of the factual facts. Facts evincing these requisites are absent here.

Laches has been defined as neglect or omission to assert a right, taken in conjunction with lapse of time and other circumstances causing prejudice to an adverse party, as will operate as a bar in equity. The records show that here, it was rather DBPs tactic which delayed the institution of the action.

The DBP contends that the prescriptive period for the reconveyance of fraudulently registered real property is 10 years reckoned from the date of the issuance of the certificate of title. However, the 10-year prescriptive period does not apply to an action to nullify a contract which isvoidab initio, as in the present petition.Article 1410 of the Civil Code categorically states that an action for the declaration of the inexistence of a contract does not prescribe.

Petition is DENIED.