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**Facts:**
1. **Initial Filing (January 27, 2005):** Sofia Tabuada and her co-petitioners commenced Civil Case No. 05-2842 against respondents Spouses Bernan and Eleanor Certeza, Eleanor Tabuada, Julieta Trabuco, and Laureta Redondo in the Regional Trial Court (RTC) of Iloilo City. The case sought to declare null and void a mortgage over a property allegedly belonging to them and included a plea for temporary restraining order (TRO) and a preliminary injunction.
2. **Service of Summons (January 31, 2005):** Summons were issued to the respondents. Eleanor Tabuada personally received the summons, but refused to acknowledge the receipt. Laureta Redondo’s summons was accepted by her husband, Emilio, while Julieta Trabuco’s was served through a neighbor. The Spouses Certeza received theirs personally.
3. **Default Motion (February 28, 2005):** Due to non-filing of answers by the respondents, petitioners moved to have them declared in default and sought judgment based on the complaint.
4. **Spouses Certeza’s Communication (March 3, 2005):** They informed the RTC of their awareness of ongoing settlement negotiations and expressed intention to file an answer.
5. **Motion to Admit Answer (March 21, 2005):** Eleanor Tabuada, Julieta Trabuco, and Laureta Redondo filed a motion with their proposed answer attached, but the RTC denied the motion on May 11, 2005, declaring all respondents in default.
6. **Motion to Set Aside Default (June 7, 2005):** Respondents’ motion was swiftly opposed by petitioners and denied by the RTC on June 30, 2005.
7. **Ex-Parte Hearing and Testimonies (September 9, 2005):** At the ex-parte hearing, Sofia Tabuada testified about the property ownership being attributed to her deceased husband’s mother, Loreta Tabuada, and introduced documentary evidence supporting her claims of ownership, including Loreta Tabuada’s death certificate and the property’s Transfer Certificate of Title (TCT).
8. **RTC’s Decision (January 18, 2006):** The RTC ruled in favor of the petitioners, annulling the mortgage and ruling for damages against respondents based on the lack of compliance with essential requisites for a real estate mortgage.
9. **Respondents’ Appeal:** The decision was appealed, and the Court of Appeals (CA) subsequently reversed the RTC’s judgment, dismissing the complaint for failure to adequately prove petitioner Sofia Tabuada’s legal relationship to the deceased Loreta Tabuada.
10. **Supreme Court Petition:** Following the adverse CA ruling, petitioners sought relief from the Supreme Court.
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**Issues:**
1. Whether there was sufficient evidence to establish the petitioner Sofia Tabuada’s legal relationship to the deceased Loreta Tabuada, thereby constituting legitimate claimants to the property mortgaged.
2. Whether the award of moral damages based on “disrespect to the dead” by impersonating Loreta Tabuada was legally proper.
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**Court’s Decision:**
1. **On Legal Relationship:** The Supreme Court found that a preponderance of evidence established Sofia Tabuada’s legal relationship to Loreta Tabuada. The Court emphasized that both testimonial and circumstantial evidence were sufficient, overruling the CA’s unduly restrictive focus on documentary proof alone. The presence and continued residence of the petitioners on the lot, along with other circumstantial evidence, sufficiently supported the claim to the property.
2. **On Mortgage Validity:** The Court reiterated that a valid mortgage requires the mortgagor to be the property owner. Since Loreta Tabuada had passed before the mortgage was executed by Eleanor Tabuada, who impersonated the deceased, the mortgage was null and void.
3. **On Good Faith of Sps. Certeza:** The Supreme Court held that the Spouses Certeza could not be considered mortgagees in good faith. The presence of the petitioners on the property, among other factors, should have prompted inquiry into the mortgagor’s authority.
4. **Reversal of Moral Damages:** The Court reversed the award for moral damages as the actions in question did not amount to legal disrespect to the dead, as defined within the context of Article 309 under the title of “Funerals” in the Civil Code.
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**Doctrine:**
– **Ownership and Authority in Mortgages:** A person executing a mortgage must either own the mortgaged property or be properly authorized. Lack of such status renders a mortgage null and void.
– **Proof of Legal Relationship:** Establishing a legal relationship can utilize various forms of evidence, including testimonial and circumstantial evidence, not strictly documentary evidence.
– **Moral Damages – Disrespect to the Dead:** The award of moral damages based on disrespect needs to align with the intended context of funerals and mourning, not fraudulently posthumous transactions.
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**Class Notes:**
– **Ownership for Mortgages (Art. 2085, Civil Code):** Absolute ownership or authorized disposal required.
– **Evidence in Civil Cases:** Preponderance of evidence may rely on testimonial and circumstantial evidence.
– **Moral Damages (Art. 309, Civil Code):** Limited to acts of disrespect occurring in relation to the funeral or mourners.
**Historical Background:**
The Philippines’ civil laws often arise from a rich jurisprudence balancing statutory provisions with case law, focusing on rights during property transactions and affirming stringent requirements on legal capacity and authority. This case elucidates legal reinforcement against unauthorized dispositions of property, echoing an enduring commitment to preserving family estates in Philippine society and legal tradition.
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