This case has been cited 1 times or more.
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2008-06-18 |
TINGA, J, |
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| Petitioner is engaged in the business of extending credit to the public and is, thus, expected to exercise due diligence in dealing with properties offered as security. In Expresscredit Financing Corporation v. Spouses Velasco,[18] the Court held that entities engaged in the business of offering real estate loans must exercise a higher degree of caution in accepting properties as security, thus:x x x To fulfill the requirement of good faith, it is imperative for a mortgagee of the land, in the possession of persons not the mortgagor, to inquire and investigate into the rights or title of those in possession.It is true that a person dealing with the owner of registered land is not bound to go beyond the certificate of title.He may rely on the notices of the encumbrances on the property annotated on the certificate of title or absence of any annotation.However, we note that the Garcia spouses are unlike other mortgagors.They are in the business of constructing and selling townhouses and are past masters in real estate transactions.Further, petitioner is in the business of extending credit to the public, including real estate loans.In both these businesses, it devolves upon both, greater charge than ordinary buyers or encumbrancers for value, who are not in such venture.It is standard in their business, as a matter of due diligence required of banks and financing companies, to ascertain whether the property being offered as security for the debt has already been sold to another to prevent injury to prior innocent buyers.They also have the resources to ascertain any encumbrances over the properties they are dealing with.[19] | |||||