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    DBP Vs CA

    Uploaded by

    Lee Somar
    1) The spouses Piñeda mortgaged their land to DBP as collateral for a loan but failed to pay it back, so DBP foreclosed on the property. DBP became the new owner but the certificate of sale stated a 5-year redemption period. 2) Within this period, the spouses tried to redeem the property but DBP refused, consolidated its title, and took possession of the land. It was later ruled the foreclosure was void under a new law. 3) The Supreme Court ruled DBP acted in good faith, as the redemption period was actually only 1 year by law. Without consolidating title, the spouses could not have asserted their right to repurchase.

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    DBP Vs CA

    Uploaded by

    Lee Somar
    221 views1 page
    1) The spouses Piñeda mortgaged their land to DBP as collateral for a loan but failed to pay it back, so DBP foreclosed on the property. DBP became the new owner but the certificate of sale stated a 5-year redemption period. 2) Within this period, the spouses tried to redeem the property but DBP refused, consolidated its title, and took possession of the land. It was later ruled the foreclosure was void under a new law. 3) The Supreme Court ruled DBP acted in good faith, as the redemption period was actually only 1 year by law. Without consolidating title, the spouses could not have asserted their right to repurchase.

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    5. DBP vs CA

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    1) The spouses Piñeda mortgaged their land to DBP as collateral for a loan but failed to pay it back, so DBP foreclosed on the property. DBP became the new owner but the certificate of sale stated a 5-year redemption period. 2) Within this period, the spouses tried to redeem the property but DBP refused, consolidated its title, and took possession of the land. It was later ruled the foreclosure was void under a new law. 3) The Supreme Court ruled DBP acted in good faith, as the redemption period was actually only 1 year by law. Without consolidating title, the spouses could not have asserted their right to repurchase.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    221 views1 page

    DBP Vs CA

    Uploaded by

    Lee Somar
    1) The spouses Piñeda mortgaged their land to DBP as collateral for a loan but failed to pay it back, so DBP foreclosed on the property. DBP became the new owner but the certificate of sale stated a 5-year redemption period. 2) Within this period, the spouses tried to redeem the property but DBP refused, consolidated its title, and took possession of the land. It was later ruled the foreclosure was void under a new law. 3) The Supreme Court ruled DBP acted in good faith, as the redemption period was actually only 1 year by law. Without consolidating title, the spouses could not have asserted their right to repurchase.

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    © All Rights Reserved
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    of 1

    DBP v CA G.R. No. 111737.

    October 13, 1999

    acquisition any flaw, which invalidates it. Good faith is always presumed,

    Parties:

    and upon him who alleges bad faith on the part of a possessor rests the

    DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE

    burden of proof. It was therefore incumbent on the spouses to prove that

    HONORABLE COURT OF APPEALS AND SPOUSES TIMOTEO and SELFIDA

    DBP was aware of the flaw in its title (i.e. the nullity of the foreclosure).

    S. PIEDA, respondents.

    This, they failed to do.

    Facts:

    The spouses contention that DBPs bad faith stems from the fact that DBP

    Spouses Pieda are the registered owners of a 238,406 square

    consolidated title over the disputed property despite the statement in the

    meter land in Capiz. On March 7, 1972, they mortgaged it to DBP to

    Sheriffs Certificate of Sale to the effect that said land was subject to a five

    secure their agricultural loan in the amount of P20,000.00. They

    year redemption period is wrong. The period of redemption of

    failed to comply with the terms and conditions of the mortgage.

    extrajudicially foreclosed land is provided under Section 6 of ACT No. 3135

    DBP extrajudicially foreclosed on February 2, 1977, as the highest

    which provides for one year.

    bidder, the Sheriff Certificate of Sale was executed in its favor. Such

    Sec. 6. In all cases in which an extrajudicial sale is made under the

    certificate contained the following provision: This property is sold

    special power hereinbefore referred to, the debtor, his successors in

    subject to the redemption within five (5) years from the date of

    interest or any judicial creditor or judgment creditor of said debtor, or any

    registration of this instrument and in the manner provided for by law

    person having a lien on the property subsequent to the mortgage or deed

    applicable to this case

    of trust under which the property is sold, may redeem the same at any time

    On April 25, 1977, the certificate of sale was registered in the

    within the term of one year from and after the date of sale; and such

    Register of Deeds of Capiz and on March 10, 1978, DBP

    redemption shall be governed by the provisions of section four hundred

    consolidated its title over the foreclosed property by executing an

    and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil

    Affidavit of Consolidation of Ownership. A Final Deed of Sale was

    Procedure, in so far as these are not inconsistent with the provisions of this

    executed in favour of DBP and it took possession of the foreclosed

    Act.

    property and appropriated the produce thereof.

    If no redemption is made within one year, the purchaser is entitled as a

    On July 5, 1978, the Ministry of Justice issued Opinion No. 92 which

    matter of right to consolidate and to possess the property. Moreover, it was

    declared that lands covered by P.D. No. 27, including present subject

    in consonance with Section 4 of the mortgage contract between DBP and

    property, may not be the object of foreclosure proceedings.

    the spouses where they agreed to the appointment of DBP as receiver to

    The spouses then offered to redeem the foreclosed property by

    take charge and to hold possession of the mortgage property in case of

    offering P10,000.00 which was accepted by DBP.

    foreclosure. DBPs acts cannot therefore be tainted with bad faith.

    On November 11, 1981, DBP sent the spouses a letter informing

    The Supreme Court further held that without the act of DBP consolidating

    them that pursuant to P.D. 27they cannot repurchase the property

    title in its name, the spouses would not be able to assert their right to

    because it was tenanted. However, Ramon Buenaflor, acting for DBP

    repurchase granted under the aforementioned section.

    sent a letter to the Register of Deeds to cancel the title issued in the

    In the case of Maneclang vs. Baun, the Court held that when a contract of

    name of DCP and reissue such in the name of the spouses. They

    sale is void, the possessor is entitled to keep the fruits during the period for

    were advised by the Registry to file a petition in court which DBP did.

    which it held the property in good faith. Good faith of the possessor

    In 1982, the court declared the foreclosure and sale null and void

    ceases when an action to recover possession of the property is filed

    and the title of the spouses was revived.

    against him and he is served summons therefore. In the present case,

    On December 21, 1981, Spouses Pieda filed complaint against

    DBP was served summons on June 30, 1982. By that time, it was no

    DBP for cancellation of certificate of title and/or specific performance

    longer in possession of the disputed land as possession thereof was given

    contending that DBP, in evident bad faith, caused the consolidation

    back to the spouses after the foreclosure of DBP was declared null and

    of its title to the parcel of land in question in spite of the fact that the

    void on February 22, 1982. Therefore, any income collected by DBP after

    5-year redemption period expressly stated in the Sheriffs Certificate

    it consolidated its title and took possession of the property on May 30,

    of Sale had not yet lapsed and that their offer to redeem the

    1978 up to February 22, 1982 belongs to DBP as a possessor in good faith

    foreclosed property was made well within said period of redemption.

    since its possession was never legally interrupted.

    The RTC ruled in favour of the spouses.

    Upon DBPs appeal to CA, CA affirmed RTC decision.

    Issue: Was DBP in bad faith when it took possession of the disputed lot?
    Ruling:
    No. The Supreme Court held that DBP was not in bad faith. A possessor in
    good faith is one who is not aware that there exists in his title or mode of

    PETITION GRANTED

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