CABILTES, JOIELYN B.

BSA-1

Case: DBP v. Vda. De Moll

G.R. No.: L25802
Date: January 31, 1972

Facts:
The Development Bank of the Philippines (DBP) filed a petition for the extrajudicial foreclosure
of a real estate mortgage executed by Marcelino De Moll in favor of DBP. The mortgage secured
a loan granted by DBP to De Moll. The mortgage property was sold at a public auction, and DBP
emerged as the highest bidder. However, prior to the foreclosure sale, Flaviano Castillo, a third-
party claimant, alleged that he had purchased the property from Marcelino De Moll during his
lifetime. Castillo argued that the mortgage executed by De Moll in favor of DBP was invalid
since De Moll no longer owned the property when the mortgage was made.

Issue:
The main issue in this case was whether the mortgage executed by Marcelino De Moll in favor
of DBP was valid despite the claim of Flaviano Castillo as a subsequent purchaser of the
property.

Ruling:
The Supreme Court ruled in favor of DBP and upheld the validity of the mortgage. The Court
held that a registered mortgage is binding on third parties, even if the mortgagor subsequently
sells the property to another person. The registration of the mortgage provides constructive
notice to the whole world, and any subsequent buyer of the property is deemed to have
knowledge of the mortgage and its terms. The Court emphasized that a third-party claimant must
show legal grounds to invalidate the mortgage, which Castillo failed to do. Therefore, the Court
upheld the foreclosure and confirmed DBP as the rightful owner of the property.

Conclusion:
DBP v. Vda. De Moll (G.R. No. L25802) is a Supreme Court decision that affirmed the validity
of a registered mortgage executed by Marcelino De Moll in favor of the Development Bank of
the Philippines. The Court held that the mortgage remained valid and enforceable, despite a
subsequent claim by a third-party buyer of the mortgaged property. The decision emphasized the
binding effect of a registered mortgage on third parties and the requirement for a claimant to
provide legal grounds to invalidate the mortgage.