- Petitioner
- Rural Bank of Cabadbaran
- Respondent
- Jorgita A. Melecio-Yap
- Citation
- G.R. No. 178451
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Perlas-Bernabe, J.
- Decided
- July 30, 2014
Summary
This case involves a dispute over the validity of a real estate mortgage executed by one co-owner without proper authorization from other co-owners. Erna Melecio-Mantala, one of six heirs to inherited property, allegedly obtained a Special Power of Attorney from her co-owner siblings to mortgage their ancestral property to Rural Bank of Cabadbaran, Inc. When the loan defaulted and the bank foreclosed, the other heirs claimed the SPA was forged. The Supreme Court found the SPA was indeed forged due to irregular notarization and lack of witness testimony, but ruled that Erna could validly mortgage her own undivided 1/6 share under Article 493 of the Civil Code. The Court emphasized that co-owners cannot dispose of the entire property without consent from other co-owners, and that banking institutions must exercise greater diligence in verifying loan documentation. The decision protects co-ownership rights while recognizing that individual co-owners can deal with their own undivided interests in commonly-owned property.