G.R. No. 164968 - GLORIA OCAMPO AND TERESITA TAN, VS. LAND BANK OF THE PHILIPPINES, URDANETA, PANGASINAN BRANCH AND EX OFFICIO PROVINCIAL SHERIFF OF PANGASINAN.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, Ocampo and Tan constituted a real estate mortgage [10] over two parcels of unregistered land owned by Ocampo, as evidenced by Tax Declaration (TD) Nos. 6958 and 6959 [11] (subsequently canceled and replaced by TD No. 317-A). [12] The mortgage was executed on September 6, 1991 and delivered by Ocampo and Tan to the Land Bank, together with the TDs and survey plan of the properties. Land Bank, in turn, registered the mortgage with the Register of Deeds of Lingayen, Pangasinan. Meanwhile, Ocampo filed with the RTC, Branch 49, Urdaneta, Pangasinan, a case for the registration of the subject properties, docketed as Land Registration Case No. U-1116. Land Bank filed therein a Motion, [13] praying for the RTC to take into consideration the mortgage over the properties, and to register the same in Ocampo's name bearing the said encumbrance. On August 15, 1991, Ocampo signed debit advices amounting to P100,000.00 as partial payment of the quedan loan. [14] After the maturity of the remaining three (3) promissory notes on October 2, 1991, Ocampo failed to pay the balance for her quedan loan. Thus, the Land Bank filed with Quedancor a claim for guarantee payment. It also filed with the RTC, Branch 46, Urdaneta, Pangasinan, a criminal case for estafa [15] against Ocampo for disposing the stocks of palay covered by the grains warehouse receipts, docketed as Criminal Case No. U-7373. As regards the 20% portion of the quedan loan, Land Bank filed on March 27, 2000 a petition [16] for extrajudicial foreclosure of real estate mortgage pursuant to Act No. 3135, as amended. On April 4, 2000, the Ex Officio Provincial Sheriff of Pangasinan issued a Notice of Extrajudicial Sale, [17] setting the sale at public auction on May 30, 2000, a copy of which was furnished to, and received by, Ocampo. On May 25, 2000, Ocampo and Tan filed with the RTC a Complaint [18] for Declaration of Nullity and Damages with Application for a Writ of Preliminary Injunction against the Land Bank of the Philippines and the Ex Officio Provincial Sheriff of Pangasinan, praying [19] that after due notice and hearing on the merits, the RTC: (1) declare the deed of real estate mortgage null and void; (2) declare the extrajudicial foreclosure proceedings and notice of extrajudicial sale, null and void; (3) make the writ of preliminary injunction permanent; and (4) order the defendants to pay, jointly and severally, moral damages in an amount to be fixed by the RTC, plus attorney's fees, expenses of litigation, among others. In their Complaint, Ocampo and Tan claimed that the real estate mortgage is a forgery, because Land Bank did not inform them that the properties would be used to secure the payment of a P2,000,000.00 loan, which they never applied for, much less received its proceeds. They also claimed that Tan could not have mortgaged the properties since she does not own the same. During the trial, [20] Ocampo narrated that, on August 29, 1991, she went to the Land Bank to apply