G.R. No. 171628
"x x x.
Clearly, while the credit investigator conducted an ocular inspection of the property as well as a “neighborhood checking” and found the subject property occupied by the mortgagor Lydia and her children,[53] he, however, failed to ascertain whether the property was occupied by persons other than the mortgagor. Had he done so, he would have discovered that the subject property is co-owned by petitioner and the heirs of his brother. Since Maunlad Savings and Loan Association, Inc. was remiss in its duty in ascertaining the status of the property to be mortgaged and verifying the ownership thereof, it is deemed a mortgagee in bad faith. Consequently, the real estate mortgage executed in its favor is valid only insofar as the share of the mortgagor Lydia in the subject property. We need not belabor that under Article 493[54] of the Civil Code, a co-owner can alienate only his pro indiviso share in the co-owned property, and not the share of his co-owners.
x x x."
