Armando v. Alano [Deceased]

Summary

This case involves a dispute over co-owned property where one co-owner mortgaged the entire property without the consent of the other. Brothers Armando and Agapito Alano co-owned property in Quezon City. After Agapito's death, his widow Lydia fraudulently registered the property solely in her family's name, excluding Armando's share. She later mortgaged the entire property to secure a loan from Maunlad Savings and Loan Association. Armando sued to reclaim his share and nullify the mortgage. The Supreme Court ruled that banks must exercise higher due diligence standards and found Maunlad Savings was not a mortgagee in good faith because it failed to properly investigate the property's ownership status. The Court applied Civil Code Article 493, holding that a co-owner can only mortgage his own share, making the mortgage void as to Armando's half-share.