SPS. OSMUNDO and ANGELINA CANLAS v.

CA, ASIAN SAVINGS BANK, MAXIMO CONTRERAS and VICENTE

MAOSCA / 2000 / Purisima / Petition for review on certiorari of a CA decision

FACTS:

August, 1982: Osmundo S. Canlas executed a Special Power of Attorney authorizing Vicente Maosca to mortgage 2
parcels of land situated in BF Homes Paranaque in the name of his wife Angelina Canlas.
Subsequently, Osmundo Canlas agreed to sell the lands to Maosca for P850K, P500K payable within 1 week, and the
balance serves as his investment in the business. Maosca issued 2 checks P40K and P460K. The P460K lacked sufficient

funds.
September 3, 1982: Maosca mortgage to Atty. Manuel Magno the parcels of lands for P100K with the help of

impostors who misrepresented themselves as the Spouses Canlas.

September 29, 1982: Maosca was granted a loan by the respondent Asian Savings Bank (ASB) for P500K with
the parcels of land as security and with the help of the same impostors. The loan was left unpaid resulting in a extrajudicially

foreclosure on the lots.

January 15, 1983: Canlas wrote a letter informing ASB that the mortgage was without their authority. He also

requested the sheriff Contreras to hold or cancel the auction. Both parties refused.
The spouses Canlas filed a case for annulment of deed of real estate mortgage with prayer for the issuance of a writ of

preliminary injunction
RTC: restrained the sheriff from issuing a Certificate of Sheriffs Sale and annulled the mortgage

CA: reversed holding Canlas estopped for coming to the bank with Maosca and letting himself be introduced
as Leonardo Rey

ISSUE: W/N the ASB had was negligent due to the doctrine of last clear chance
HELD: YES. Petition is GRANTED

Article 1173. The fault or negligence of the obligor consist in the omission of that diligence which is required by the nature
of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence

shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply
The degree of diligence required of banks is more than that of a good father of a family

not even a single identification card was exhibited by the said impostors to show their true identity

acted simply on the basis of the residence certificates bearing signatures which tended to match the signatures affixed on a

previous deed of mortgage to Atty. Magno

previous deed of mortgage did not bear the tax account number of the spouses as well as the

Community Tax Certificate of Angelina Canlas

doctrine of last clear chance

where both parties are negligent but the negligent act of one is appreciably later in point of time than that of the other, or
where it is impossible to determine whose fault or negligence brought about the occurrence of the incident, the one who had
the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences arising

therefrom
the antecedent negligence of a person does not preclude recovery of damages caused by the supervening negligence of the

latter, who had the last fair chance to prevent the impending harm by the exercise of due diligence
Antecedent Negligence: Osmundo Canlas was negligent in giving Vicente Maosca the opportunity to perpetrate the

fraud, by entrusting him the owner's copy of the transfer certificates of title of subject parcels of land
Supervening Negligence: Failing to perform the simple expedient of faithfully complying with the requirements
for banks to ascertain the identity of the persons transacting with them - ASB bears the loss

Canlas went to ASB with Maosca and he was introduced as Leonardo Rey. He didn't correct Maosca. However, he
did not know that the lots were being used as a security for he was there to make sure that Maosca pays his debt so he

cannot be estopped from assailing the validity of the mortgage

But being negligent in believing the misrepresentation by Maosca that he had other lots and that the lot were not to be

used as a security, Canlas was negligent and undeserving of Attorney's fees.

the contract of mortgage sued upon was entered into and signed by impostors who misrepresented themselves as the
spouses Osmundo Canlas and Angelina Canlas = complete nullity

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LAST CLEAR CHANCE DOCTRINE APPLICABLE; ASB MUST SUFFER RESULTING LOSS
LONG DEFINITION. Where both parties are negligent, but the negligent act of one is appreciably later in point
of time than that of the other, or where it is impossible to determine whose fault or negligence brought about the occurrence
of the incident, the one who had the last clear opportunity to avoid the impending harm but failed to do so, is chargeable
with the consequence arising therefrom

SHORT DEFINITION. The antecedent negligence of a person does not preclude recovery of damages caused by
the supervening negligence of the latter, who had the last fair chance to prevent the impending harm by the exercise of due
diligence.

Assuming Canlas was negligent, what was his fault? He gave Maosca the opportunity to perpetrate the fraud by
entrusting to the latter TCTs of the parcels of land (even though Maosca did not pay yet!). HOWEVER, ASB had the last clear
chance to prevent the fraud, by faithfully complying with the bank requirement of ascertaining the identity of persons
transacting with them.

Canlas negligence made him undeserving of an award of attorneys fees.

PROPERTY LESSON: A CONTRACT OF MORTGAGE MUST BE CONSTITUTED ONLY BY THE PROPERTYS
ABSOLUTE OWNER, SO A MORTGAGE CONSTITUTED BY AN IMPOSTOR IS VOID