FACTS:

Juan B. Dans and his wife Candida applied for a loan with the Development Bank of the Philippines (DBP), Basilan Branch. As the principal mortgagor, Dans was advised to obtain a mortgage redemption insurance (MRI) with the DBP Mortgage Redemption Insurance Pool (DBP MRI Pool). A loan of P300,000.00 was approved and released by DBP, and from the loan proceeds, DBP deducted P1,476.00 as payment for the MRI premium. Dans submitted the required documents for the MRI application. However, Dans died shortly after. The DBP MRI Pool then notified DBP that Dans was not eligible for MRI coverage due to his age. DBP informed Candida Dans of the disapproval of her late husband's MRI application and offered to refund the premium paid. However, Candida Dans refused and filed a complaint for "Collection of Sum of Money with Damages" against DBP and the insurance pool. The trial court ruled in favor of Candida Dans, ordering DBP to reimburse her the loan payment made, declare the mortgage debt fully paid, and award damages. The Court of Appeals affirmed the trial court's decision.

ISSUES:

1. Whether or not DBP is estopped from denying the insurance coverage of the deceased.

2. Whether or not the mortgage debt of the deceased should be considered fully paid.

RULING:

1. DBP is estopped from denying the insurance coverage of the deceased because it led him to apply for the MRI and collected the premium and service fee despite being aware of his age ineligibility.

2. The mortgage debt of the deceased should be considered fully paid because of the insurance coverage.

PRINCIPLES:

• Estoppel can be applied when a party is precluded from denying or asserting something due to its own actions, conduct, or statements.

• The mortgage debt can be deemed fully paid if there is insurance coverage that can be set off against the debt.