G.R. No. 178451 - RURAL BANK OF CABADBARAN, INC., VS. JORGITA A. MELECIO-YAP, LILIA MELECIO PACIFICO (DECEASED, SUBSTITUTED BY HER ONLY CHILD ERLL* ISAAC M. PACIFICO, JR.), REYNALDO A. MELECIO, ROSIE MELECIO DELOSO, AND SARAH MELECIO PALMA-GIL.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, the RTC declared Sps. Mantala liable to both respondents and RBCI, and adjudged them jointly and solidarily liable to pay: (a) respondents compensatory damages in the amount of P1,000,000.00 with 12% interest rate for the loss of the family ancestral house and lot foreclosed by RBCI, as well as moral and exemplary damages in the amounts of P250,000.00 and P100,000.00, respectively, and attorney's fees and litigation expenses in the sum of P70,000.00; (b) RBCI attorney's fees and litigation expenses in the total amount of P70,000.00; and (c) the costs of suit. [40] Dissatisfied, respondents appealed to the CA. The CA Ruling In a Decision [41] dated February 28, 2006, the CA reversed the RTC Decision, finding that Erna had no authority to mortgage the subject properties to RBCI since the SPA was actually a forgery, and, hence, null and void. [42] It held that while a notarized document generally carries the evidentiary weight conferred upon it with respect to its due execution, respondents, nonetheless, were able to rebut by clear, positive and convincing evidence that their signatures on the contested SPA were forged. [43] The CA reached the same conclusion with respect to the Extra-Judicial Adjudication Documents, and likewise declared the same invalid. [44] Moreover, contrary to the findings of the RTC, the CA held that there was no constructive knowledge of the falsification, noting that the respondents were not furnished by RBCI with any notice relative to the loan obligation nor impleaded in the foreclosure proceedings and the ex-parte petition for writ of possession. [45] In this relation, the CA pointed out that acquiescence cannot validate or ratify an inexistent or void document nor can estoppel lie against respondents who had no deliberate intent to mislead. [46] In view of the foregoing, the CA declared the real estate mortgage executed on the strength of the falsified SPA as an invalid encumbrance of respondents individual shares over the subject properties which cannot be bound by the subsequent foreclosure proceedings conducted. Nevertheless, it held that a valid transaction was executed between RBCI and Erna to the extent of the latters 1/6 share in the subject properties which portion respondents, as co-owners, may redeem. [47] Further, the CA ordered a remand of the case ( a ) to determine the exact extent of the respective rights, interests, shares, and participation of respondents and RBCI over the subject properties, ( b ) thereafter, to effect a final division, adjudication, and partition in accordance with law, and ( c ) to re-compute the loan obligation, inclusive of interests, penalties, and other charges due against Sps. Mantala. [48] Finally, the CA deleted the awards of moral and exemplary damages, attorney's fees, and litigation expenses for lack of factual and legal bases [49] and ordered Sps. Mantala to pay the costs. [50] RBCIs motion for reconsideration was denied by the CA in a Resolution [51] dated