Professional Documents
Culture Documents
CA
FACTS
Pet Adoracion Lustan is the registered owner of a parcel
of land in Calinog, Iloilo containing an area of 10.0057
hectares. She leased the property to private resp
Nicolas Parangan for a term of ten (10) years and an
annual rent of P1k.
During the period of lease, Parangan was regularly
extending loans in small amounts to petitioner to
defray her daily expenses and to finance her daughter's
education.
On July 29, 1970, petitioner executed a SPA in favor of
Parangan to secure an agricultural loan from private
resp PNB with the aforesaid lot as collateral.
On February 18, 1972, a second SPA was executed by
Lustan by virtue of which, Parangan was able to
secure 4 additional loans, to wit: the sums of 24k, 38k,
38.6k and 25k. The last three loans were without the
knowledge of herein Lustan and all the proceeds
therefrom were used by Parangan for his own benefit.
Lustan signed a Deed of Pacto de Retro Sale in favor of
Parangan which was superseded by the Deed of
Definite Sale dated May 4, 1979 which Lustan signed
upon Parangan's representation that the same merely
evidences the loans extended by him unto the former.
For fear that her property might be prejudiced by the
continued borrowing of Parangan, she demanded the
return of her certificate of title. Instead of complying
with the request, Parangan asserted his rights over the
property which allegedly had become his by virtue of
the aforementioned Deed of Definite Sale. Under said
document, Lustan conveyed the subject property and
all the improvements thereon unto Parangan absolutely
for and in consideration of 75k.
ISSUE Whether petitioner's property is liable to PNB for
the loans contracted by Parangan by virtue of the SPA.
HELD: YES, the mortgages can be enforced against
Lustan. It is admitted that pet is the owner of the parcel
of land mortgaged to PNB on 5 occasions by virtue of
the SPA executed by pet in favor of Parangan. Pet argues
that the last three mortgages were void for lack of
authority. She totally failed to consider that said SPA are
a continuing one and absent a valid revocation duly
furnished to the mortgagee, the same continues to have
force and effect as against third persons who had no
knowledge of such lack of authority.