PHILIPPINE NATIONAL BANK vs SPOUSES BERNARD and CRESENCIA

MARANON

(G.R. No. 189316, June 1, 2013)

FACTS:

Spouses Montealegre applied a loan to PNB as a security for the loan,

they mortgaged a parcel of land situated at Cuadra-Smith Streets,
Downtown, Bacolod erected with a building leased by various
tenants.

When Spouses Montealegre failed to pay the loan, PNB initiated

foreclosure proceedings on the mortgaged properties, including the
subject lot and sold in the auction, the bank emerged as the highest
bidder.

Spouses Maraon filed before the RTC a complaint for Annulment of

Title, Re-conveyance and Damages against Spouses Montealegre
and PNB. The former alleged that they are the true registered owners
of the subject lot and Montealegre falsified Deed of Sale bearing their
forged signatures to effect the transfer of title to the property in her
name.

PNB contended that it is a mortgagee in good faith and for value and
that its mortgage lien on the property was registered thus valid and
binding against the whole world.

The RTC ruled in favor of Spouses Maraon on the ground that the
deed of sale was falsified and forged the signature of the true owner
of the subject land. Hence, the sale is null and void as such it did not
transfer any right or title in law. The case was not elevated for an
appeal of the decision.

Thereafter, Spouses Maraon filed for the Withdrawal of Deposited

Rentals before RTC for having been adjudged as the real owner of the
subject lot. The RTC granted the motion. However, PNB move for
reconsideration alleging that with the expiration of the redemption
period, PNB is now the owner of the subject lot hence, entitled to its
fruits but the motion was denied by the trial court and the judgement
was affirmed in the Court of Appeals. Hence, this Petition.

ISSUE:

Whether or not PNB is entitled to the fruits of the foreclosed mortgaged

property of Spouses Maranon?

RULING:

NO. The Court ruled Spouses Maranon has the right to the rents on the
foreclosed property because the rent is a civil fruit that belongs to the
owner of the property producing it by right of accession.

In Castro, Jr. v. CA, the Court explained that Article 2127 is predicated
on the presumption that the ownership of accessions and accessories
also belongs to the mortgagor as the owner of the principal.

In this case, the rightful recipient of the disputed rent should be the
owner of the lot at the time the rent accrued. It is beyond question
that spouses Maranon never lost ownership over the subject lot, and
that technically, there is no juridical tie created by a valid mortgage
contract that binds PNB to the subject lot because the mortgagors
Montealegre were not the true owners which the rule that
improvements shall follow the principal in a mortgage under Article
2127 of the Civil Code does not apply under the premises.

PNBs lien as a mortgagee in good faith pertains to the subject lot

alone and not on the erected building which was not foreclosed and
still remained to be a property of Maranon.

Thus, PNBs claim for the rents paid by the tenants has no basis.