Philippine National Bank v. The Honorable Intermediate Appellate Court (First Civil Cases Division)

Summary

This case involves the doctrine of promissory estoppel in mortgage contracts. Romeo Alcedo allowed Leticia Sepe to mortgage his property as collateral for her sugar crop loan through a Special Power of Attorney. When Alcedo revoked this authority and notified PNB, the bank assured him in writing that his property would be excluded from future loans. Despite this assurance, PNB continued using Alcedo's property as collateral and eventually foreclosed when Sepe defaulted. The Supreme Court affirmed lower courts' decisions that PNB was estopped from foreclosing, applying the principle that parties cannot take inconsistent positions to others' prejudice. The Court held that while formal revocation of agency requires public documentation, private writings are valid between parties, and PNB's bad faith conduct rendered the foreclosure null and void.