b.

Bernardo’s death – June 1, 1997 (but he wasn’t mentioned in the

3 Llanto v. Alzona facts anymore even if it transpired during his life)
2. On January 29, 1990 a real estate mortgage covering the said lot was
GR 150730 | January 31, 2005 | Mortgagee in good faith | Rica executed by Maria and Bernardo with Dominador Alzona. Ernesto Alzona
Petitioner: Mila Sales Llanto, Yolanda Sales Cabillo, Oscar Sales, Acquilina Sales, was not part of the contract but was a co-mortgagee. Estela signed as an
instrumental witness.
Francisco Sales, Alberto Sales, Gloria Sales Alipio, Eduardo Sales, Emerciana
3. The alleged spouses failed to settle the obligation and so on December
Sales Algire, Elenita Sales Serrano, and Conrado Sales
Respondents: Ernesto Alzona, Dominador Alzona, Estela Sales Pelongco, and the 20, 1990 a foreclosure sale was held and Ernesto won as the highest
bidder. A certificate of sale was awarded to Ernesto.
Register of Deeds of Calamba, Laguna
4. On January 22, 1992, Ernesto filed for a consolidation of ownership over
the property and the OCT of Maria was cancelled.
Recit-Ready:
5. On December 17, 1992, petitioners caused the inscription of an adverse
claim on the title.
Maria and Bernardo Sales are the parents of petitioners and one respondent Estela.
6. On October 15, 1993, the petitioners filed for an annulment of mortgage
Maria owned a 202 sqm lot in Banlic, Cabuyao, Laguna wherein the family lived until
sale with reconveyance of title to which the respondents, except Estela
the death of Maria on August 27, 1986 and Bernardo on June 1, 1997. However on
filed an answer. Estela was declared in default.
January 29, 1990 a real estate mortgage covering the lot was entered into by Maria
7. On June 6, 1996, RTC ruled in favor of the Alzonas stating that they were
and Bernardo with the Alzonas who were engaged in the financing business. The
mortgagees in good faith but passed no judgment on other reliefs prayed
spouses defaulted and the mortgage was foreclosed. A foreclosure sale was made
for by Alzonas against the petitioners herein and Estela, and complaint
and Ernesto won as the highest bidder. After the lapse of the period to redeem,
against the RD.
Ernesto filed for a consolidation of ownership to which he was awarded a certificate
8. CA affirmed but deleted attorney’s fees.
of sale. The petitioners then filed a petition for annulment of mortgage sale with
9. To be used later in ratio: Ernesto Alzona’s Testimony of facts:
reconveyance of the title. The RTC and CA ruled in favor of the Alzonas ruling that
a. Ernesto went to the property in Brgy. Banlic, Cabuyao – 5 houses
the doctrine of mortgagee in good faith applies to them.
away from the junction going to Brgy. Mamatid and by the corner
is Rural Bank of Cabuyao.
The main issue in this case is w/n the doctrine of mortgagee in good faith applies to
b. Inquired from neighbors Felix Icepel and Auring Sales (daughter
the Alzonas. The SC held in the affirmative. The doctrine of mortgagee in good faith
in law of spouses, wife of Francisco who both pointed to the
states that for ordinary mortgagees, there is no obligation to look beyond the Torrens
direction of the property
title of the property if the title does not raise any suspicion. This is qualified to
c. On January 26, 1990 Ernesto met with the alleged couple
persons, natural and juridical, who are engaged in the real estate and/or financing
(impostors) in the house together with Estela and their other
business. These persons are required to exercise due diligence in ascertaining the
children.
status of the property and the identity of the owners. The SC ruled that Ernesto
d. Ernesto also allegedly conversed with Maria on Nov. 1989.
Alzona practiced due diligence as he went to the property, inquired form neighbors,
and even went to the house to meet the alleged couple. The Court further added
ISSUES:
that Ernesto could not be faulted for the fraud employed by Estela.

W/N the doctrine of mortgagee in good faith applies to the Alzonas (Yes)
FACTS:
RATIO:
1. Petitioners are 10/11 children of Maria and Bernardo Sales while the one
left is respondent Estela. Maria, the mother, owned a 202 sqm. Land in 1. The doctrine of mortgagee in good faith applies to the Alzonas.
Banlic, Cabuyao, Laguna under a free patent. The family lived here until a. Generally, a mortgagee does not need to go beyond the face of
Maria and Bernardo died. the title in ascertaining the status of the property and the identity
a. Maria’s death - August 27, 1986
 of the owners. Absent any suspicion in the title, there is no
obligation to further investigate.
b. This is qualified with respect to natural and juridical persons who
are engaged in the real estate or financing business such as the
Alzonas.
i. Such persons must exercise due diligence in
ascertaining the status of property and identity of
owners.
ii. Ernesto’s testimony proved that he exercised due
diligence and as such is a mortgagee in good faith.
iii. The fraud perpetrated by Estela and the others are on
them and Ernesto can no longer be faulted