G.R. No. 137686, 8 February 2000


Marife O. Niño knows the five (5) parcels of land described in paragraph 6 of the petition which are located in Bombon, Camarines Sur and that they are the ones possessing them which were originally owned by her grandparents, During the lifetime of her grandparents, respondents mortgaged the said five (5) parcels of land and two (2) others to the petitioner Rural Bank of Milaor as shown by the Deed of Real Estate Mortgage and the Promissory Note.

Her grandparents were not able to redeem the mortgaged properties consisting of seven (7) parcels of land and so the mortgage was foreclosed and thereafter ownership thereof was transferred to the petitioner bank. Out of the seven (7) parcels that were foreclosed, five (5) of them are in the possession of the respondents because these five (5) parcels of land described in paragraph 6 of the petition were sold by the petitioner bank to the parents of Marife O. Niño as evidenced by a Deed of Sale executed in January 1988.

The aforementioned five (5) parcels of land subject of the deed of sale, have not been, however transferred in the name of the parents of Merife O. Niño after they were sold to her parents by the petitioner bank because according to the Assessor’s Office the five (5) parcels of land, subject of the sale, cannot be transferred in the name of the buyers as there is a need to have the document of sale registered with the Register of Deeds of Camarines Sur. The Register of Deeds, however, informed her that the document of sale cannot be registered without a board resolution of the petitioner Bank. Marife Niño then went to the bank, showed to if the Deed of Sale, the tax declaration and receipt of tax payments and requested the petitioner for a board resolution so that the property can be transferred to the name of Renato Ocfemia the husband of petitioner Francisca Ocfemia and the father of the other respondents having died already.

The petitioner bank refused her request for a board resolution and made many alibis. Because of this, Marife O. Niño brought the matter to her lawyer and the latter wrote a letter on December 22, 1995 to the petitioner bank inquiring why no action was taken by the board of the request for the issuance of the resolution considering that the bank was already fully paid for the consideration of the sale since January 1988 as shown by the deed of sale itself.

On January 15, 1996 the petitioner bank answered respondents’ lawyer’s letter informing the latter that the request for board resolution ha[d] already been referred to the board of directors of the petitioner bank with another request that the latter should be furnished with a certified machine copy of the receipt of payment covering the sale between the respondents and the petitioner. This request of the petitioner bank was already complied with by Marife O. Niño even before she brought the matter to her lawyer.

After several days from receipt of the letter when Marife O. Niño went to the petitioner again and reiterated her request, the manager of the petitioner bank told her that they could not issue the required board resolution as the petitioner bank had no records of the sale. Because of this Merife O. Niño already went to their lawyer and had this petition filed..

The trial court granted the Petition. As noted, the CA affirmed the RTC Decision.


1. Question of Jurisdiction of the Regional Trial Court. — Has a Regional Trial Court original jurisdiction over an action involving title to real property with a total assessed value of less than P20,000.00?
2. Question of Law. — May the board of directors of a rural banking corporation be compelled to confirm a deed of absolute sale of real property owned by the corporation which deed of sale was executed by the bank manager without prior authority of the board of directors of the rural banking corporation?


The present Petition has no merit.

First Issue: Jurisdiction of the Regional Trial Court

The well-settled rule is that jurisdiction is determined by the allegations of the complaint. In the present case, the Petition shows that the respondents did not raise any question involving the title to the property, the Petition for Mandamus filed by respondents before the trial court prayed that petitioner-bank be compelled to issue a board resolution confirming the Deed of Sale covering five parcels of unregistered land, which the bank manager had executed in their favor. The RTC has jurisdiction over such action pursuant to Section 21 of BP 129, which provides: Regional Trial Courts shall exercise original jurisdiction; (1) in the issuance of writ of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction which may be enforced in any part of their respective regions; and (2) In actions affecting ambassadors and other public ministers and consuls.

Second Issue: Authority of the Bank Manager

Respondents initiated the present proceedings, so that they could transfer to their names the subject five parcels of land; and subsequently, to mortgage said lots and to use the loan proceeds for the medical expenses of their ailing mother. For the property to be transferred in their names, however, the register of deeds required the submission of a board resolution from the bank confirming both the Deed of Sale and the authority of the bank manager, Fe S. Tena, to enter into such transaction. Petitioner refused.

Respondents based their action before the trial court on the Deed of Sale, the substance of which was alleged in and a copy thereof was attached to the Petition for Mandamus. The Deed named Fe S. Tena as the representative of the bank. Petitioner, however, failed to specifically deny under oath the allegations in that contract. In fact, it filed no answer at all, for which reason it was declared in default. In failing to file its answer specifically denying under oath the Deed of Sale, the bank admitted the due execution of the said contract. Such admission means that it acknowledged that Tena was authorized to sign the Deed of Sale on its behalf. Thus, defenses that are inconsistent with the due execution and the genuineness of the written instrument are cut off by an admission implied from a failure to make a verified specific denial.

In any event, the bank acknowledged, by its own acts or failure to act, the authority of Fe S. Tena to enter into binding contracts. After the execution of the Deed of Sale, respondents occupied the properties in dispute and paid the real estate taxes due thereon. If the bank management believed that it had title to the property, it should have taken some measures to prevent the infringement or invasion of its title thereto and possession thereof.

In this light, the bank is estopped from questioning the authority of the bank manager to enter into the contract of sale. If a corporation knowingly permits one of its officers or any other agent to act within the scope of an apparent authority, it holds the agent out to the public as possessing the power to do those acts; thus, the corporation will, as against anyone who has in good faith dealt with it through such agent, be estopped from denying the agent’s authority.

Unquestionably, petitioner has authorized Tena to enter into the Deed of Sale. Accordingly, it has a clear legal duty to issue the board resolution sought by respondent’s. Having authorized her to sell the property, it behooves the bank to confirm the Deed of Sale so that the buyers may enjoy its full use. In this light, the Court finds it proper to assess the bank treble costs, in addition to the award of damages.

*Case Digest by Paul C. Gandola, Refresher, Andres Bonifacio Law School, SY 2019-2020