This case has been cited 2 times or more.
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2012-04-18 |
SERENO, J. |
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| Thus, the encumbrances thereon are not null and void, as these do not fall within the ambit of the prohibition. This being the case, it cannot be said that the banks were in bad faith for accepting the encumbered properties that did not originate from a free patent. In any event, at the time of the mortgage, the Rural Banks Act (Republic Act No. 720), as amended by Republic Act No. 5939,[40] already allows banks to accept free patents as security for loan obligations.[41] | |||||
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2008-02-29 |
VELASCO JR., J. |
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| In view of our resolution on the validity of the auction of the lot in favor of Metrobank, there is hardly a need to discuss at length whether or not Metrobank was a mortgagee in good faith. Suffice it to state for the nonce that where the mortgagee is a banking institution, the general rule that a purchaser or mortgagee of the land need not look beyond the four corners of the title is inapplicable.[20] Unlike private individuals, it behooves banks to exercise greater care and due diligence before entering into a mortgage contract. The ascertainment of the status or condition of the property offered as security and the validity of the mortgagor's title must be standard and indispensable part of the bank's operation.[21] A bank that failed to observe due diligence cannot be accorded the status of a bona fide mortgagee,[22] as here. | |||||