Josefa S. Abalos v. Sps. Lomantong Darapa

Summary

DBP granted a loan to spouses Darapa and Dimakuta in 1962, secured by mortgage over land under Tax Declaration No. A-148. When spouses defaulted, DBP wrongfully foreclosed TCT No. T-1,997, which was not part of the original mortgage but had been delivered for a disapproved loan application. DBP later sold the land to Josefa Abalos. The Supreme Court affirmed lower courts' findings that the foreclosure was void ab initio, as the two properties were distinct lands with different locations, areas, and legal origins. The Court rejected DBP's defenses of estoppel, laches, and prescription, emphasizing that actions to nullify void contracts do not prescribe. This case demonstrates the importance of proper mortgage documentation and the consequences of wrongful foreclosure procedures.