G.R. No. 173168 - PHILIPPINE AMANAH BANK (NOW AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILIPPINES, ALSO KNOWN AS ISLAMIC BANK), VS. EVANGELISTA CONTRERAS.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, the RTC declared its September 13, 1993 decision final and executory. The respondent filed a petition for relief from judgment [12] before the RTC, claiming that he had been prevented from moving for the timely reconsideration of the trial courts decision or to appeal this decision on time due to the excusable negligence arising from the death of his wife on September 13, 1993. He explained that his counsel, Atty. Bienvenido Valmorida, only informed him of the trial courts adverse decision thirty-seven (37) days from his counsel's receipt of the decision. The respondent also claimed that the petitioner bank was not a lender in good faith since it knew that the Ilogon spouses did not own the mortgaged property. In its order [13] dated July 1, 1994, the RTC denied the respondents petition for relief from judgment for lack of merit. The respondent appealed to the CA and the appeal was docketed as CA-G.R. CV No. 47053. In its decision of May 4, 2004, the CA set aside the RTCs July 1, 1994 order, and declared the real estate mortgage null and void. It also ordered the petitioner bank to reconvey the land covered by TCT No. T-63331 to the respondent within sixty (60) days from entry of judgment. It further directed the petitioner bank to pay the equivalent monetary value of the land based on the price of the property at the public auction, with 6% interest per annum from the date of the sheriffs auction sale or the amount of the sale of the lot by the bank to third persons plus 6% interest per annum, in the event that the property had already been conveyed by the petitioner bank to third persons. The CA held that while the respondent was late in filing his motion for reconsideration, the rules of procedure should be relaxed since the matters he raised in his petition were meritorious. It disagreed with the RTCs ruling that the respondent did not present any evidence that the petitioner bank had knowledge of the defect in Calinicos title to the mortgaged land. According to the CA, the petitioner bank knew that there were conflicting claims over the land, and that the OCT of this land carried a prohibition of any encumbrance on the lot for five (5) years. It added that the petitioner bank failed to exercise diligence in ascertaining the ownership of the land, and ignored the respondents representations that Calinicos title was defective and was only for loan purposes. The Ilogon spouses and the petitioner bank moved to reconsider this decision, but the CA denied their motion in its resolution dated May 26, 2006. The Petition for Review on Certiorari In the present petition, the petitioner bank alleged that the respondents petition for relief from judgment is unmeritorious as it was filed only after the lapse of ninety-one (91) days from his (respondents) notice of the adverse judgment. The bank also claimed that the failure of the respondents counsel to file a timely motion for reconsideration from the RTCs judgment did not cons