BANKING.docx

00 exemplary damages and p10000000 attorneys fees and

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P50,000.00 exemplary damages and P100,000.00 attorney's fees and litigation expenses. Costs against defendant Philippine National Bank. SO ORDERED." 18 chanroblesvirtuallawlibrary In a Resolution 19 dated 13 June 2014, the RTC refused to reconsider its earlier decision and thereby denied the Motion for Reconsideration interposed by PNB. On appeal, the CA Decision 20 dated 18 December 2013 affirmed the RTC ruling. In failing to exercise greater care and diligence in approving the loan of the Spouses Cornista without first ascertaining if there were any defects in their title, the appellate court held that PNB could not be afforded the status of a mortgagee in good faith. It went further by declaring that [a] bank whose business is impressed with public interest is expected to exercise more care and
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prudence in its dealings than a private individual, even in cases involving registered lands. A bank cannot assume that, simply because the title offered as security is on its face free of any encumbrances of lien, it is relieved of the responsibility of taking further steps to verify the title and inspect the properties to be mortgaged. 21 The CA thus disposed: ChanRoblesVirtualawlibrary " WHEREFORE , the instant appeal is DENIED . The assailed Decision dated June 22, 2011 and the Resolution dated August 11, 2011 of the Regional Trial Court of Villasis, Pangasinan, Branch 50, in Civil Case No, V-0567 are hereby AFFIRMED ." 22 chanroblesvirtuallawlibrary On 13 June 2014, the CA issued a Resolution 23 denying the Motion for Reconsideration of the PNB prompting the bank to seek recourse before the Court via instant Petition for Review on Certiorari . For Our resolution are the following issues: ChanRoblesVirtualawlibrary The Issues I. WHETHER OR NOT PNB IS A MORTGAGEE IN GOOD FAITH; II WHETHER OR NOT PNB IS LIABLE FOR DAMAGES. 24 chanroblesvirtuallawlibrary The Court's Ruling We resolve to deny the petition. In general, the issue of whether a mortgagee is in good faith cannot be entertained in a Rule 45 petition. This is because the ascertainment of good faith or the lack thereof, and the determination of negligence are factual matters which lay outside the scope of a petition for review on certiorari . Good faith, or the lack of it, is a question of intention. In ascertaining intention, courts are necessarily controlled by the evidence as to the conduct and outward facts by which alone the inward motive may, with safety, be determined. 25 cralawred A recognized, exception to the rule is when there are conflicting findings of fact by the CA and the RTC. 26 In the case at bar, RTC and the CA agreed on their findings. The RTC, which possessed the first hand opportunity to observe the demeanor of the witnesses and admit the documentary evidence, found that PNB accepted outright the collateral offered by the Spouses Cornista without making farther inquiry as to the real status of the subject property. Had the bank been prudent and diligent enough in ascertaining the condition of the
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