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    Erena v. Querrer-Kauffman

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    Bernadette Pedro
    1) The case involved a disputed real estate mortgage on a property owned by Vida Dana Querrer-Kauffman. Without Querrer-Kauffman's knowledge or consent, her title documents were stolen and used to forge a mortgage with Rosana Ereña as the mortgagee. 2) Both lower courts found that the signatures on the mortgage documents were forged and that Querrer-Kauffman was the rightful owner. However, the RTC still upheld the mortgage, finding that Ereña was a mortgagee in good faith. 3) The CA reversed, stating that under Articles 2085(2) and 1409(2) of the Civil Code, the

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    Erena v. Querrer-Kauffman

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    Bernadette Pedro
    379 views3 pages
    1) The case involved a disputed real estate mortgage on a property owned by Vida Dana Querrer-Kauffman. Without Querrer-Kauffman's knowledge or consent, her title documents were stolen and used to forge a mortgage with Rosana Ereña as the mortgagee. 2) Both lower courts found that the signatures on the mortgage documents were forged and that Querrer-Kauffman was the rightful owner. However, the RTC still upheld the mortgage, finding that Ereña was a mortgagee in good faith. 3) The CA reversed, stating that under Articles 2085(2) and 1409(2) of the Civil Code, the

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    1) The case involved a disputed real estate mortgage on a property owned by Vida Dana Querrer-Kauffman. Without Querrer-Kauffman's knowledge or consent, her title documents were stolen and used to forge a mortgage with Rosana Ereña as the mortgagee. 2) Both lower courts found that the signatures on the mortgage documents were forged and that Querrer-Kauffman was the rightful owner. However, the RTC still upheld the mortgage, finding that Ereña was a mortgagee in good faith. 3) The CA reversed, stating that under Articles 2085(2) and 1409(2) of the Civil Code, the

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    379 views3 pages

    Erena v. Querrer-Kauffman

    Uploaded by

    Bernadette Pedro
    1) The case involved a disputed real estate mortgage on a property owned by Vida Dana Querrer-Kauffman. Without Querrer-Kauffman's knowledge or consent, her title documents were stolen and used to forge a mortgage with Rosana Ereña as the mortgagee. 2) Both lower courts found that the signatures on the mortgage documents were forged and that Querrer-Kauffman was the rightful owner. However, the RTC still upheld the mortgage, finding that Ereña was a mortgagee in good faith. 3) The CA reversed, stating that under Articles 2085(2) and 1409(2) of the Civil Code, the

    Copyright:

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    of 3

    CREDIT TRANSACTIONS DIGESTS

    SBU LAW A.Y. 2020-2021


    MODULE No. 6

    Case No. 5 G.R NO. 165853


    Erena v. Querrer-Kauffman
    DATE: June 22, 2006

    TOPIC: Real Estate Mortgage

    DOCTRINE: Doctrine of "mortgagee in good faith" is based on the rule that all persons dealing with
    the property covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required to
    go beyond what appears on the face of the title. The public interest in upholding the indefeasibility
    of a certificate of title, as evidence of lawful ownership of the land or of any encumbrance thereon,
    protects a buyer or mortgagee who, in good faith, relied upon what appears on the face of the
    certificate of title.

    FACTS: Vida Dana Querrer-Kauffman is the owner of a residential lot with a house constructed thereon located at
    Las Piñas City. The owner’s duplicate copy of the title as well as the tax declaration covering the property, were kept
    in a safety deposit box in the house.

    Sometime in February 1997, as she was going to the United States, Kauffman entrusted her minor daughter, Vida
    Rose, to her live-in partner, Eduardo Victor. She went back to the Philippines to get her daughter and again left for
    the U.S. on the same day. Later on, Victor also left for the U.S. and entrusted the house and the key thereto to his
    sister, Mira Bernal.

    On October 25, 1997, Kauffman asked her sister, Evelyn Pares, to get the house from Bernal so that the property could
    be sold. Pares did as she was told. Kauffman then sent the key to the safety deposit box to Pares, but Pares did not
    receive it. Kauffman then asked Pares to hire a professional locksmith who could open the safe. When the safe was
    broken open, however, Pares discovered that the owner’s duplicate title and the tax declarations, including pieces of
    jewelry were missing.

    Kauffman learned about this on October 29, 1997 and returned to the Philippines. She and Pares went to the Register
    of Deeds of Las Piñas City and found out that the lot had been mortgaged to Rosana Ereña. It appeared that a "Vida
    Dana F. Querrer" had signed the Real Estate Mortgage as owner-mortgagor, together with Jennifer V. Ramirez,
    Victor’s daughter, as attorney-in-fact.

    Kauffman and Pares were able to locate Bernal who, when asked, confirmed that Ramirez had taken the contents of
    the safety deposit box. When Kauffman told Bernal that she would file a case against them, Bernal cried and asked
    for forgiveness. Bernal admitted that Jennifer Ramirez had been in a tight financial fix and pleaded for time to return
    the title and the jewelry.

    Kauffman however still filed a complaint against Ereña, Bernal and Ramirez for the nullification of Real Estate
    Mortgage and Damages. Ereña countered that she was a mortgagee in good faith.

    LOWER COURT RULINGS

    RTC RULING: RTC rendered judgment in favor of the defendants and ordered the dismissal of the complaint. The
    court ruled that, although the plaintiff adduced proof that she owned the property and that her signatures on the
    Special Power of Attorney and in the Real Estate Mortgage were forged, nevertheless, defendant Ereña adduced
    evidence that she was a mortgagee in good faith. The court declared that the woman who pretended to be the plaintiff
    and lawful owner of the property had in her possession the original copy of the owner's duplicate of title. The
    defendant thus relied in good faith on the title after ascertaining with the Register of Deeds the identity of Vida Dana
    CREDIT TRANSACTIONS DIGESTS
    SBU LAW A.Y. 2020-2021
    MODULE No. 6

    Querrer as the registered owner of the property, who turned out to be an impostor. In fact, the defendant still had
    possession of the owner's duplicate of the title when she received the complaint and summons.

    CA RULING: CA rendered judgment in favor of Kauffman. It held that in ruling as it did, the RTC disregarded the
    clear provisions of the Civil Code, particularly Articles 2085 (2) and 1409 (2). The appellate court relied on the Court's
    ruling in Insurance Services & Commercial Traders, Inc. v. Court of Appeals and ratiocinated, thus:

    Thus, it has been uniformly held that (I)n a real estate mortgage contract, it is essential that the mortgagor be the
    absolute owner of the property to be mortgaged; otherwise, the mortgage is void. (Robles v. Court of Appeals, G.R.
    No. 12309, Mar. 14, 2000). This was simply in line with the basic requirement in our laws that the mortgagor be
    the absolute owner of the property sought to be mortgaged (Lorbes v. Court of Appeals, G.R No. 139884, Feb. 15,
    2001). This is in anticipation of a possible foreclosure sale should the mortgagor default in the payment of the loan,
    and a foreclosure sale, though essentially a "forced sale," is still a sale in accordance with Art. 1458 of the Civil
    Code. Being a sale, the rule that the seller must be the owner of the thing sold also applies in a foreclosure sale
    (Cavite Development Bank v. Cyrus Lim, G.R. No. 131679, Feb. 1, 2000).

    ISSUE/S: Whether or not the Real Estate Mortgage is valid – NO

    ARGUMENTS

    PETITIONER (ROSANA EREÑA): RESPONDENT (VIDA DANA QUERRER-


    KAUFFMAN):
    Petitioner avers that respondent failed to prove that she
    is the owner of the property, and points out that the Respondent avers that, contrary to petitioner's claim, the
    documentary evidence shows that the negotiator over the issues raised in the instant petition are factual in nature.
    property is Vida Dana Querrer and not Vida Dana Moreover, based on the evidence on record, both the trial
    Querrer-Kaufffman. There is thus no factual basis for the and appellate courts are one in declaring that she is the
    CA's finding that the Real Estate Mortgage was a forged lawful registered owner of the property, and that such
    deed. Considering that respondent, as the plaintiff below, findings are conclusive on this Court.
    failed to adduce clear and convincing evidence that the
    signature on the Real Estate Mortgage is a forgery, the
    signature over the printed name in the said document
    must be the genuine signature of Vida Dana Querrer, the
    registered owner of the property. Even assuming that
    respondent was the lawful owner of the property and the
    signature in the Real Estate Mortgage is a forgery,
    petitioner insists that she is a mortgagee in good faith.

    SC RULING:

    According to Article 2085 (2), a pledgor or mortgagor has to be absolute owner of the thing pledged or
    mortgaged for a contract of pledge and mortgage to be valid. Both the trial court and the appellate courts
    found that Kauffman is the true owner of the property and that the signatures on the Special Power of
    Attorney and Real Estate Mortgage are not her genuine signatures. The evidence on record shows that
    Ramirez and her husband used an impostor who claimed she was the owner of the property. This impostor
    was the one who signed the Real Estate Mortgage and showed to Ereña the owner's duplicate copy of the
    title. When the instrument presented for registration is forged, even if accompanied by the owner's duplicate
    title, the registered owner does not lose his title and neither does the mortgagee acquire any right to the
    property. In such case, the mortgagee based on a forged instrument is not even a purchaser or a mortgagee
    for value protected by law. Ereña is not a mortgagee in good faith. The doctrine of mortgagee in good faith
    does not apply to a situation where the title is still in the name of the rightful owner and the mortgagor is a
    different person pretending to be the owner. In such case, the mortgagee is not an innocent mortgagee for
    CREDIT TRANSACTIONS DIGESTS
    SBU LAW A.Y. 2020-2021
    MODULE No. 6

    value and the registered owner will generally not lose his title.

    ADDITIONAL NOTES

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