FACTS:

The case involves a dispute over a parcel of land in Kamuning, Quezon City. Spouses Juan and Conchita Gloria are the registered owners of the said property. However, after Juan's death in 1987, Conchita and their daughter Maria Lourdes Gloria-Payduan (Lourdes) filed a complaint before the RTC against Builders Savings and Loan Association, Inc. (Builders Savings), Benildo Biag, and Manuel F. Lorenzo. They alleged that Biag deceived them into surrendering the transfer certificate of title (TCT) to him under false pretenses. Biag then used the title to mortgage the property to Builders Savings. Conchita, who was sickly and senile at the time, was made to sign the loan and mortgage documents by Biag, who deceived her into believing that it was actually Lourdes who requested the documents. The loan and mortgage documents also contained the signature of Juan, who was already deceased at that time. As a result, the property was foreclosed and sold to Builders Savings. Petitioners sought to have the mortgage and promissory note declared null and void, the encumbrances in the title cancelled, the title returned to them, and damages awarded. Builders Savings, on the other hand, argued that Lourdes did not have the capacity to sue or the authority to file the case since she was not legally adopted by Spouses Juan and Conchita. They also claimed that Conchita voluntarily mortgaged the property and presented evidence to support their position. The RTC initially dismissed the complaint but later granted the motion for reconsideration filed by the petitioners.

In this case, the plaintiff, Conchita Gloria, alleged that her signature in the promissory note and the deed of real estate mortgage were unauthorized and that her husband had already passed away before the loan application was filed. The court cited previous cases that emphasized the need for banks to carefully examine the title of the applicant and conduct physical investigations of the property being offered as security before granting a loan. The court stated that there was a lack of proof that the defendant, Builders Savings and Loan Association, had investigated Conchita Gloria and the property being used as collateral. The court also referred to the Civil Code and previous cases which stated that if a forger mortgages another's property, the mortgage is void. The court found that the evidence showed negligence on the part of Builders and awarded Conchita Gloria moral damages in the amount of P200,000 and attorney's fees in the amount of P20,000. The court also declared the real estate mortgage and promissory note null and void, directed the cancellation of annotations on Conchita Gloria's title, and ordered Builders to return the title to her free from liens and encumbrances. The decision of the Court of Appeals, which found procedural infirmities and sought the dismissal of the complaint, was reversed and set aside.

The case involved a dispute over a real estate mortgage contract between Conchita Gloria and Builders Savings and Loan Association (BSLA). Conchita executed the mortgage contract as the mortgagor, and the mortgage was made to secure the debt obligations of Benildo, Conchita's husband.

Maria Lourdes Payduan, claiming to be a co-owner of the property, filed a complaint to nullify the real estate mortgage. She argued that she inherited a portion of the property from her deceased father, Juan, who was allegedly a co-owner with Conchita. Maria Lourdes claimed that she had a real interest in the property and should be considered a real party in interest to institute the action.

The court found that Maria Lourdes failed to establish her rights as an heir of Juan or prove that Juan had no other heirs who were not parties to the case. There was no evidence of a judicial or extrajudicial partition of Juan's estate. The court also noted that Maria Lourdes did not present any evidence to show that she had an interest over the subject property. Therefore, the court concluded that Maria Lourdes could not be considered a real party in interest to institute the action to nullify the mortgage.

In addition, the court noted that the verification and certification against non-forum shopping submitted by Maria Lourdes were defective. Conchita, as a co-plaintiff, did not sign the certification against non-forum shopping, resulting in her being dropped from the case as a plaintiff.

The court found that the evidence presented by the plaintiffs, particularly Maria Lourdes's testimony, was insufficient to support their complaint. Maria Lourdes relied on Conchita's statement that she was misled into signing the contract, but this was considered hearsay evidence without any showing that it fell within an exception to the hearsay evidence rule.

Based on these findings, the court dismissed the complaint of Conchita and Maria Lourdes, reversing the order of the regional trial court. Petitioners filed a motion for reconsideration, but it was denied by the Court of Appeals. Hence, the present petition.

This case involves a dispute over a property located in Quezon City, Philippines. Lourdes, the petitioner, filed a complaint against the respondent, alleging that the subject property was conjugal property belonging to her father Juan and her mother Conchita. According to Lourdes, when Juan died in 1987, she became a co-owner of the property as a compulsory heir. Lourdes claimed that she had the necessary interest to prosecute the case because she was a co-owner of the subject property. She argued that the Court of Appeals (CA) erred in requiring her to obtain a declaration of heirship before pursuing the case. Lourdes also argued that the issue of lack of verification was never raised by the respondent and should not have been considered by the CA. She further contended that the subject real estate mortgage and promissory note were null and void because they were executed by Juan in 1991, when he actually passed away in 1987. The petitioners asked the court to annul the CA's decision and reinstate the Regional Trial Court's (RTC) order. On the other hand, the respondent failed to comment on the petition despite directives from the court.

ISSUES:

1. Whether Lourdes has a rightful claim to the subject property as the daughter of Juan and Conchita.

2. Whether a prior declaration of heirship is necessary before heirs may commence an action arising from any right of their predecessor, such as one for annulment of mortgage.

3. Whether the failure of the other co-owners to sign the verification and certification against forum shopping is fatal to the petition.

4. Whether a co-owner may bring an action for ejectment, forcible entry, or any kind of action for the recovery of possession of the subject properties, even without joining all the other co-owners as co-plaintiffs.

5. Whether the mortgage and promissory note executed by an unauthorized person, who also falsified the loan and mortgage documents, are null and void.

6. Whether the registered owner of the real property being mortgaged should have raised a red flag and induced the mortgagee to make inquiries into and confirm the authority of the mortgagor.

RULING:

1. Lourdes has a rightful claim to the subject property as the daughter of Juan and Conchita. The evidence provided, including a Certification of Birth and Lourdes' own testimony, establishes her as the natural child of Juan and Conchita.

2. A prior declaration of heirship is not necessary before heirs may commence an action arising from any right of their predecessor, such as one for annulment of mortgage. The right of heirs to assert their rights to the property of the deceased is established under the Civil Code and/or Code of Civil Procedure, even without a judicial declaration of heirship.

3. The failure of the other co-owners to sign the verification and certification against forum shopping is not fatal to the petition. In a case involving co-owners of property, the signing by only one or some of them constitutes substantial compliance with the rule.

4. Yes, a co-owner may bring an action for ejectment, forcible entry, or any kind of action for the recovery of possession of the subject properties, even without joining all the other co-owners as co-plaintiffs. Each co-owner has the right to bring such an action for the benefit of all co-owners.

5. Yes, the mortgage and promissory note executed by an unauthorized person, who also falsified the loan and mortgage documents, are null and void. The documents were simulated and had forged signatures, rendering them null and void from the beginning.

6. The Court granted the petition and annulled the decision and resolution of the Court of Appeals. The trial court's order in Civil Case No. Q-93-16621 was reinstated.

PRINCIPLES:

• No judicial declaration of heirship is necessary in order for an heir to assert their right to the property of the deceased.

• The transmission of title to the property owned by a person who dies intestate passes immediately to their heirs, subject to claims of administration.

• In a case involving co-owners of property where said property is the subject matter of the suit, the failure of the other co-owners to sign the verification and certification against forum shopping is not fatal, as the signing by only one or some of them constitutes substantial compliance with the rule.

• Substantial compliance may be applied when there is a commonality of interest among the parties involved in the controversy.

• A co-owner may bring an action for the recovery of possession of a property even without joining all the other co-owners as co-plaintiffs.

• A forged or fraudulent deed is a nullity and conveys no title.

• In a real estate mortgage contract, it is essential that the mortgagor be the absolute owner of the property to be mortgaged; otherwise, the mortgage is void.

• When the person applying for a loan is other than the registered owner of the real property being mortgaged, the mortgagee does not acquire any right or title to the property.

• The registered owner of a real property being mortgaged should raise a red flag and induce the mortgagee to make inquiries into and confirm the authority of the mortgagor.