PNB vs.

SPOUSES REBLANDO
GR No. 194014, September 12, 2012
FACTS:
The Philippine National Bank seeks for the reversal of the decision on a real
estate mortgage obtained by Alejandro and Myrna Reblando. The Regional Trial
Court and the Courtof Appeals both agreed that the REM was null and
void.The facts show that the Alejandros obtained a P150,000 loan from PNB
which was secured by REM over 2parcels of land, one of which registered
under the name of Leticia Reblando-Bartolome, who executed a Special Power
of Attorney granting Alejandro to secure a loan not exceeding (150,000 and the
other one covered by Tax Declaration No. 59006 and designated as Cadastral
Lot No. 10 which was formerly in the name of Ministry of Human Settlements
and later replaced under Alejandro’s name.A few years later, the parties
executed an Amendment to Real Estate Mortgage reflecting an increase to
P260,000 . Barely 2 weeks, the parties executed a second “Amendments to
REM” with an increase to P312,000.Alejandro and the Bliss Development
Corporation entered in a Contract to sell over a dwelling unit. Reblandos
defaulted in the payment of their obligation which prompted PNB to extra
judicially foreclose the mortgage. Reblandos received the notice but ignored it.
PNB was the lone bidder, therefore he obtained the lots.The Reblandos failed to
redeem the properties within the period which made PNB to consolidate its
ownership.The RTC granted the PNB’S ex parte petition. But the Reblandos
asks for the nullity of the mortgage because Lot No. 10 does not belong to
them at the execution of the REM, it was owned by the Ministry of Human
Settlement. The RTC declared the REM as null and void. Same result was
given by the CA.
ISSUE:
Whether the mortgage constituted over Lot No. 10 valid?
HELD:
YES, Article 2085 of the Civil Code provides that a mortgage contract, to be
valid, must have the following requisites: (a) that it be constituted to secure the
fulfillment of a principal obligation. (b)that the mortgagor be the absolute
owner of the thing mortgaged, and (c) that the persons constituting the
mortgage have free disposal of their property, and in the absence of free
disposal, that they be legally authorized for the purpose. The presence
requisite absolute ownership is the contentious determinative issue.
The records, are bereft of evidence, other than respondents bare and self-
serving assertion, to support their contention about being more applicants in a
social housing project at the time and that Lot No. 10 was , indeed government
property. And as may be noted, TD No. 38950 over Lot No. 10 in the name of
the Ministry of Human Settlements, which should otherwise lend proof to the
Ministry ownership of the lot had, as of 1990 ,already been cancelled; and in
lieu of it, TD No. 59006 was issued in Alejandro’s name, two (2) years prior to
the constitution of the REM. Well –settled is the rule that” (b) are and
unsubstantiated allegation do not constitute substantial evidence and have no
probative value. “Therefore the mortgage is valid.