DELOS SANTOS v. ABEJON

Erlinda Dinglasan Delos Santos and her daughters, namely, Virginia, Aurea, and Bingbing all surnamed Delos Santos Vs. Alberto Abejon and the estate of Teresita Dinglasan Abejon
G.R. No. 215820
March 20, 2017

FACTS:

Respondents filed Complaint for Cancellation of Title with collection of sum of money against Petitioners before the RTC. The complaint alleged that Erlinda and her late husband Pedro Delos Santos (Pedro) borrowed money from the former's sister, Teresita, as evidenced by a Promissory Note. As security for the loan, Erlinda and Pedro mortgaged their property, covered by Transfer Certificate of Title. which mortgage was annotated on the title. After Pedro died, Erlinda ended up being unable to pay the loan, and as such, agreed to sell the subject land to Teresita. They executed a Deed of Sale and a Release of Mortgage, and eventually issued in the name of "Teresita, Abejon.”

In defense, petitioners denied any participation relative to the spurious Deed of Sale, and instead, maintained that it was Teresita who fabricated the same and caused its registration before the Register of Deeds of Makati City. They likewise asserted that Erlinda and Pedro never sold the subject land to Teresita, and that they did not receive any demand for the payment, representing the loan, representing the construction cost of the building. Finally, they claimed that the improvements introduced by Teresita on the subject land were all voluntary on her part.

The RTC ruled that respondents should be reimbursed for the amount of the loan, as well as the expenses incurred for the construction of the three (3)-storey building in view of petitioners' categorical admission of their indebtedness to her, as well as the construction of the building from which they derived benefit being the actual occupants of the property.

The CA ruled that since petitioners admitted their indebtedness to Teresita during the pre-trial proceedings, respondents should be allowed to recover the amount representing the same, including the appropriate interest.

ISSUE:

WON the CA correctly held that petitioners should be held liable to respondents.

RULING: Petitioners admitted the existence of the loan obligation as well as respondents' right to collect on the same, it does not necessarily follow that respondents should collect the loan amount from petitioners, as concluded by both the RTC and the CA. It must be pointed out that such loan was contracted by Erlinda, who is only one out of the four herein petitioners, and her deceased husband, Pedro, during the latter's lifetime and while their marriage was still subsisting.

Both the RTC and the CA erred in holding petitioners liable to respondents for the loan obligation.