Case Digest: METROPOLITAN BANK AND TRUST COMPANY, et al. v. JOSE B. TAN, et al.

METROPOLITAN BANK AND TRUST COMPANY, et al. v. JOSE B. TAN, et al.

509 SCRA 383 (2006)

Absent any evidence that the property is conjugal, lack of consent by one spouse does not automatically render the mortgage void.

Upon application of the Metropolitan Bank and Trust Company (Metrobank) for extra-judicial foreclosure of mortgage, the Office of the Provincial Sheriff issued a “Sheriff‘s Notice of Sale” setting on the sale at public auction of four mortgaged parcels of land registered in the name of Jose B. Tan. Before the scheduled public auction, Spouses Jose B. Tan and Eliza Go Tan filed a complaint against Metrobank for removal of cloud on the title in question and injunction before the Regional Trial Court of Misamis Oriental.

Eliza Go Tan avers that she never gave her consent or conformity to encumber the title in question. The real estate mortgages are null and void because Jose B. Tan had already fully paid the obligations secured by the mortgages. On the other hand, Metrobank alleged that the Spouses Tan, together with their two sons, obtained a credit line from which they made availments from time to time. Consequently, the line was gradually increased.

The RTC rendered judgment in favor of Spouses Tan. Metrobank appealed before the Court of Appeals. By Decision the CA affirmed the trial court‘s decision and accordingly dismissed the appeal. A Motion for Reconsideration was filed but the same has been dismissed. Hence, this petition.

ISSUE:

Whether or not the lack of respondent Eliza Go Tan‘s consent to the mortgage covering the title in question would render the encumbrance void

HELD:

As for the claim that respondent Eliza Go Tan did not give her consent to the mortgage of the title in question, the same is belied by her signature on Real Estate Mortgage which is annotated as Entry No. 174644 at the back of the title. Her bare denial that the signature was forged, without more, does not lie.

In any event, lack of respondent Eliza Go Tan‘s consent to the mortgage covering the title in question would not render the encumbrance void under the second paragraph of Article 124 of the Family Code. For proof is wanting that the property covered by the title is conjugal — that it was acquired during respondents‘ marriage which is what would give rise to the presumption that it is conjugal property. The statement in the title that the property is “registered in accordance with the provisions of Section 103 of the Property Registration Decree in the name of JOSE B. TAN, of legal age, married to Eliza Go Tan” does not prove or indicate that the property is conjugal.

The presumption under Article 116 of the Family Code that properties acquired during the marriage are presumed to be conjugal cannot apply in the instant case. Before such presumption can apply, it must first be established that the property was in fact acquired during the marriage. In other words, proof of acquisition during the marriage is a condition sine qua non for the operation of the presumption in favor of conjugal ownership. No such proof was offered nor presented in the case at bar.