Civil Law 2019 Case Digests

[DOCUMENT TITLE]
CIVIL LAW 2019 CASE DIGESTS | UB LAW
CASE COMPENDIUM

CIVIL LAW
2019 CASES

BY:

AMDENGAN, Pink Pearl
BUGATAN, Solomon
CAMACHO, Karen Ann
CARPIZO, Jonathan
CAMMAS, Fherlyne
LOZANO, Floro Jr.
PUCAN, Jessa Reen

ATTY. ARTEMIO F. BUSTAMANTE
Professor

May 2020
TABLE OF CONTENTS

1. JACINTO J. BAGAPORO vs. PEOPLE OF THE PHILIPPINES
2. KEIHIN-EVERETT FORWARDING CO., INC., vs. TOKIO MARINE MALAYAN
INSURANCE CO., INC. AND SUNFREIGHT FORWARDERS & CUSTOMS BROKERAGE,
INC.,
3. MARLYN MONTON NULLADA vs. THE HON. CIVIL REGISTRAR OF MANILA, AKIRA
ITO, SHIN ITO AND ALL PERSONS WHO HAVE OR CLAIM ANY INTEREST
4. HEIRS OF PAULA C. FABILLAR, AS REPRESENTED BY AUREO FABILLAR vs.
MIGUEL M. PALLER, FLORENTINA P. ABAYAN, AND DEMETRIA P. SAGALES
5. VDM TRADING, INC. AND SPOUSES LUIS AND NENA DOMINGO, REPRESENTED BY
THEIR ATTORNEY-IN-FACT, ATTY. F. WILLIAM L. VILLAREAL vs. LEONITA
CARUNGCONG AND WACK WACK TWIN TOWERS CONDOMINIUM ASSOCIATION,
INC.,
6. REPUBLIC OF THE PHILIPPINES vs. MILLER OMANDAM UNABIA
7. SOCORRO T. CLEMENTE, AS SUBSTITUTED BY SALVADOR T. CLEMENTE vs.
REPUBLIC OF THE PHILIPPINES (DEPARTMENT OF PUBLIC WORKS AND
HIGHWAYS, REGION IV-A)
8. D.M. CONSUNJI, INC. vs. REPUBLIC OF THE PHILIPPINES AND THE HEIRS
OF JULIAN CRUZ, REPRESENTED BY MACARIA CRUZ ESTACIO
9. MA. ANTONETTE LOZANO vs. JOCELYN K. FERNANDEZ
10. NICOMEDES AUGUSTO vs. ANTONIO CARLOTA DY
11. HEIRS OF DOMINADOR S. ASIS, JR., ET AL. vs. G.G. SPORTSWEAR MANUFACTURING
CORPORATION, ET AL.
12. LAND BANK OF THE PHILIPPINES vs. ESPERANZA BRIONES-BLANCO, ET AL.
13. KAREN NUÑEZ VITO, ET AL. vs. NORMA MOISES-PALMA
14. HUN HYUNG PARK vs. EUNG WON CHOI
15. CARMELITA V. DIZON vs. JOSE LUIS K. MATTI, JR.
16. DOMESTIC PETROLEUM RETAILER CORPORATION vs. MANILA INTERNATIONAL
AIRPORT AUTHORITY
17. SPOUSES LUIS G. BATALLA AND SALVACION BATALLA vs. PRUDENTIAL BANK, ET
AL.
18. ASUNCION Z. JURADO, ET AL. vs. SPOUSES VICENTE AND CARMEN CHAI
19. ANNIE TAN vs. GREAT ENTERPRISES, INC.
20. UNITRANS INTERNATIONAL FORWARDERS, INC. vs. INSURANCE COMPANY OF
NORTH AMERICA, ET AL.
21. LAND BANK OF THE PHILIPPINES vs. LUCY GRACE AND ELMA GLORIA FRANCO,
REPRESENTED BY ATTORNEY-IN-FACT
22. LILIBETH ESPINAS-LANUZA, ONEL ESPINAS, AS HEIRS OF LEOPOLDO ESPINAS,
AND THE MUNICIPAL ASSESSOR OF DARAGA, ALBAY VS. FELIX LUNA, JR., ET AL.
23. MELINDA M. MALABANAN VS. FRANCISCO MALABANAN, JR., ET AL.

24. GENEROSO SEPE VS. HEIRS OF ANASTACIA KILANG, REP. BY HER CHILDREN
MARIA, DONATA, FELICIANA, DOMINGA AND SEVERO ALL SURNAMED
SOLIJON
25. SPOUSES ISIDRO R. SALITICO AND CONRADA C. SALITICO VS. HEIRS OF
RESURRECCION MARTINEZ FELIX, NAMELY: LUCIANO, ET AL.
26. ROLANDO D. CORTEZ VS. LUZ CORTEZ
27. HIPOLITO AGUSTIN AND IMELDA AGUSTIN VS. ROMANA DE VERA
28. BNL MANAGEMENT CORPORATION AND ROMEO DAVID vs. .REYNALDO UY, ET AL.
29. MARY CHRISTINE C. GO-YU vs. ROMEO A. YU
30. SPOUSES JOHN T. SY AND LENY N. SY, AND VALENTINO T. SY vs.
31. MA. LOURDES DE VERA-NAVARRO AND BENJAEMY HO TAN LANDHOLDINGS, INC.,
HEREIN REPRESENTED BY GRACE T. MOLINA, IN HER CAPACITY AS CORPORATE
SECRETARY
32. SPOUSES LUCIA A. OROZCO AND CRESENTE R. OROZCO (DECEASED),
SUBSTITUTED BY HIS HEIRS, NAMELY: JOCELYN O. GUJELING, ET AL. vs.
FLORANTE G. LOZANO, SR. (DECEASED), SUBSTITUTED BY HIS HEIRS, NAMELY:
EPIFANIA LOZANO, ET AL.
33. ROGACIANO L. OROPEZA AND AMELDA S. OROPEZA vs. ALLIED BANKING
CORPORATION AND REGISTER OF DEEDS FOR CITY OF DAVAO
34. PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK vs. WILLIAM GOLANGCO
CONSTRUCTION CORPORATION/WILLIAM GOLANGCO CONSTRUCTION
CORPORATION VS. PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK
35. SPOUSES ISIDRO R. SALITICO AND CONRADA C. SALITICO vs. HEIRS OF
RESURRECCION: MARTINEZ FELIX
36. MA. LUISA A. PINEDA vs. VIRGINIA ZUÑIGA VDA. DE VEGA
37. ROSETTE Y. LERIAS vs. COURT OF APPEALS
38. SPOUSES YU HWA PING AND MARY GAW VS. AYALA LAND, INC. HEIRS OF SPOUSES
ANDRES DIAZ AND JOSEFA MIA vs. AYALA LAND, INC.
39. JUANITA E. CAHAPISAN-SANTIAGO vs. JAMES PAUL A. SANTIAGO
40. SPOUSES BELINDA LIU AND HSI PIN LIO vs. MARCELINA ESPINOSA, ET AL.
41. SPS. JULIAN BELVIS, SR. AND CECILIA BELVIS, ET AL. vs. SPS. CONRADO V. EROLA
AND MARILYN EROLA, AS REPRESENTED BY MAUREEN FRIAS
42. JOAQUIN BERBANO, ET AL. vs. HEIRS OF ROMAN TAPULAO, NAMELY: ALBERT D.
TAPULAO, ET AL.
43. ROSEMARIE ERIBAL BOWDEN, REPRESENTED BY FLORENCIO C. ERIBAL, SR. vs.
DONALD WILLIAM ALFRED BOWDEN
44. LARA'S GIFTS & DECORS, INC., vs. MIDTOWN INDUSTRIAL SALES, INC.,
45. VIVE EAGLE LAND, INC. vs. NATIONAL HOME MORTGAGE FINANCE
CORPORATION
46. SPOUSES SALVADOR BATOLINIO AND AMOR P. BATOLINIO vs. SHERIFF JANET
YAP-ROSAS AND PHILIPPINE SAVINGS BANK
47. ELMER MONTERO vs. SANTIAGO MONTERO, JR. AND CHARLIE MONTERO
48. JESSICA LIO MARTINEZ vs. HEIRS OF REMBERTO F. LIM
49. SHEMBERG CORPORATION, MARKETING vs. CITIBANK
50. PHILIPPINE NATIONAL BANK VS ELENITA vs. ABELLO ET AL.
51. SPS. ANTHONY ROGELIO BERNARDO AND MA. MARTHA BERNARDO vs. UNION
BANK OF THE PHILIPPINES
52. HEIRS OF FERNANDO ET. AL vs. HEIRS OF RAMOS ET. AL
53. SPS. ERNESTO vs. YU AND ELSIE YU vs. EULOGIO A. TOPACIO, JR.
54. CAMARINES SUR TEACHERS AND EMPLOYEES ASSOCIATION vs. PROVINCE OF
CAMARINES SUR
55. NATIONAL POWER CORPORATION vs. DELTA P, INC
56. PEOPLE OF THE PHILIPPINES vs. BERNABE EULALIO
57. SPOUSES FRANCISCO vs. BATTUNG
58. PEOPLE vs. JEFFERSON MARON Y EMPLONA, JONATHAN ALMARIO Y CAYGO AND
NESTOR BULAHAN Y GUTIERREZ
59. EQUITABLE PCI BANK vs. MANILA ADJUSTERS & SURVEYORS, INC., ILOCOS SUR ,
FEDERATION OF FARMERS COOPERATIVE, INC.,ESTATE OF NG YEK KIONG and
ERNESTO COKAI
60. RICAFORT vs. BAUTISTA
61. ARCINUE vs. BAUN
62. HEIRS OF THE LATE SPOUSES VICTOR L. MONTEVILLA AND RESTITUTA C.
MONTEVILLA, REPRESENTED BY ATTY. ANITA C. MONTEVILLA vs. SPOUSES LEO A.
VALLENA AND MELBA G. VALLENA
63. PABLO. UY vs. HEIRS OF JULITA UY RENALES
64. ATTY. LEONARD FLORENT O. BULATAO vs. ZENAIDA C. ESTONACTOC

CIVIL LAW
JACINTO J. BAGAPORO vs. PEOPLE OF THE PHILIPPINES
G.R. No. 211829 January 30, 2019

Facts:
Petitioner was indicted for Bigamy in an Information, which states that on or about the
September 11, 1991, in the Municipality of Calauag, province of Quezon, the accused Jacinto
Bagaporo, being then legally married to one Dennia Dumlao in a marriage ceremony
solemnized on March 10, 1986 at Quezon City by Judge Perfecto Laguio, Jr., and without
said marriage having been legally dissolved or annulled, did then and there willfully,
unlawfully and feloniously contract a second and subsequent marriage with Milagros
Lumas.

RTC found petitioner guilty beyond reasonable doubt of the crime of Bigamy. The CA
denied petitioner’s appeal. Petitioner insists that the elements of bigamy were not proven
in his case.

According to petitioner, it was the prosecution's burden to prove that his absent wife was
still alive when he contracted his second marriage.

Issue:
Whether judgment for presumptive death is necessary before contracting second marriage.

Ruling:
Yes. The requirement for a judgment of the presumptive death of the absent spouse is for
the benefit of the spouse present, as protection from the pains and the consequences of a
second marriage, precisely because he/she could be charged and convicted of bigamy if the
defense of good faith based on mere testimony is found incredible.

The consequences of an invalid marriage to the parties, to innocent parties and to society,
are so serious that the law may well take means calculated to ensure the procurement of
the most positive evidence of death of the first spouse or of the presumptive death of the
absent spouse after the lapse of the period provided for under the law. One such means is
the requirement of the declaration by a competent court of the presumptive death of an
absent spouse as proof that the present spouse contracts a subsequent marriage on a
well-grounded belief of the death of the first spouse. Indeed, "men readily believe what
they wish to be true," is a maxim of the old jurists. To sustain a second marriage and to
vacate a first because one of the parties believed the other to be dead would make the
existence of the marital relation determinable, not by certain extrinsic facts, easily capable
of forensic ascertainment and proof, but by the subjective condition of individuals. Only
with such proof can marriage be treated as so dissolved as to permit second marriages.

CIVIL LAW REVIEW 2019 - 2020 1

KEIHIN-EVERETT FORWARDING CO., INC., vs. TOKIO MARINE MALAYAN INSURANCE

CO., INC. AND SUNFREIGHT FORWARDERS & CUSTOMS BROKERAGE, INC.,
G.R. No. 212107 January 28, 2019

Facts:
In 2005, Honda Trading ordered 80 bundles of Aluminum Alloy Ingots from PT Molten. It
were loaded in two container vans and was received in Jakarta, Indonesia by Nippon
Express for shipment to Manila. The entire shipment was insured with Tokio Marine
Honda Trading also engaged the services of the petitioner to clear and withdraw the cargo
from the pier and to transport the same to its warehouse at the Laguna Technopark in
Binan,Laguna. Meanwhile, petitioner had an accreditation agreement with Sunfreight
Forwarders whereby the latter undertook to render common carrier services for the
former and to transport inland goods within the PH

The shipment arrived in Manila on Nov 3, 2005 and was offloaded and temporarily stored
at the CY Area of the Manila International Port pending release by the customs authority.
On Nov 8, the shipment was caused to be released from the pier by the petitioner and
turned over to Sunfreight for deliver to Honda Trading. En route to the latter's warehouse,
the truck carrying the containers was hijacked and only one container reached the
warehouse. As a consequence, Honda Trading suffered losses in the total amount of php
2,000,000.00 representing 40 bundles of Aluminum Alloy Ingots

Tokio Marine after paying Honda Trading claim for the loss commenced a suit against
petitioner, maintaining that it had been subrogated to all the rights and causes of action
pertaining to Honda Trading. Petitioner denied liability for the lost shipment on the ground
that the loss occurred while the same was in possession of Sunfreight. It filed a third-party
complaint against Sunfreight, who, in turn denied liability on the ground that it was not
privy to the contract between the petitioner and Honda Trading.

RTC ruled that Keihin and Sunfreight were jointly and severally liable to pay Tokio Marine.
It found that the driver of the Sunfreight as the cause of the evil caused and Sunfreight was
liable under Art 2180 of the Civil Code.

The CA modified RTC's ruling insofar as the solidary liability. Because of lack of privifry,
Sunfreight cannot be held jointly and severally liable and the petitioner has only right for
reimbursement against Sunfreight.

Issues:
1. Whether liability of Keihin-Everett and Sunfreight Forwarders are solidary.
2. Whether KEIHIN-EVERETT is liable to Tokio Marine
3. Whether KEIHIN-EVERETT has to be reimbursed by Sunfreight.

Ruling:

1. No. There is solidary liability only when the obligation expressly so states, when the
law so provides, or when the nature of the obligation so requires. Under article 2194

of the Civil Code, liability of two or more persons is solidary in quasi-delicts. But in
this case, Keihin-Everett's liability to Honda Trading (to which Tokio Marine had
been subrogated as an insurer) stemmed not from quasi-delict, but from its breach
of contract of carriage. Sunfreight Forwarders was only impleaded in the case when
Keihin-Everett filed a third-party complaint against it. As mentioned earlier, there
was no direct contractual relationship between Sunfreight Forwarders and Honda
Trading. Accordingly, there was no basis to directly hold Sunfreight Forwarders
liable to Honda Trading for breach of contract. If at all, Honda Trading can hold
Sunfreight Forwarders for quasi-delict, which is not the action filed in the instant
case.

2. Yes. Notwithstanding that the cargoes were in the possession of Sunfreight when
they were hijacked, Keilhin is not absolved from its liability as a common carrier. It
was Keilhin which was engaged by Honda Trading to clear and withdraw cargoes
and transport and deliver the same to its warehouse. As correctly said by CA, there
was no privity of contract between HT and Sunfreight. Hence, Keilhin as the
common carrier, remained responsible to Honda Trading for the lost cargoes.

Keihin-Everett is not absolved from its liability as a common carrier, Keihin-Everett
seems to have overlooked that it was the one whose services were engaged by
Honda Trading to clear and withdraw the cargoes from the pier and to transport
and deliver the same to its warehouse. As a Common carrier, Keihin-Everett is
mandated to observe extraordinary diligence in the vigilance over the goods it
transports. In the event that the goods are lost, destroyed or deteriorated, it is
presumed to have been at fault or to have acted negligently, unless it proves that it
observed extraordinary diligence.

3. Keihin-Everett has a right to be reimbursed based on its Accreditation Agreement
with Sunfreight Forwarders. By accrediting Sunfreight Forwarders to render
common carrier services to it, Keihin-Everett in effect entered into a contract of
carriage with a fellow common carrier, Sunfreight Forwarders.

It is undisputed that the cargoes were lost when they were in the custody of
Sunfreight Forwarders. Hence, under Article 173536 of the Civil Code, the
presumption of fault on the part of Sunfreight Forwarders as common carrier arose.
Since Sunfreight Forwarders failed to prove that it observed extraordinary diligence
in the performance of its obligation to Keihin-Everett, it is liable to the latter for
breach of contract. Consequently, Keihin-Everett is entitled to be reimbursed by
Sunfreight Forwarders due to the latter's own breach occasioned by the loss and
damage to the cargoes under its care and custody.


MARLYN MONTON NULLADA vs. THE HON. CIVIL REGISTRAR

OF MANILA, AKIRA ITO, SHIN ITO AND ALL PERSONS
WHO HAVE OR CLAIM ANY INTEREST
G.R. No. 224548 January 23, 2019

Facts:
The action arose from a Petition for registration and/or recognition of foreign divorce
decree and cancellation of entry of marriage that was filed under Rule 108 of the Rules of
Court, in relation to Article 26 of the Family Code, by Marlyn in 2014 with the RTC of
Manila. She claimed that on July 29, 1997, she and Akira got married in Katsushika-Ku,
Tokyo, Japan. The union of Marlyn and Akira resulted in the birth of a child, Shin Ito. Their
relationship, however, eventually turned sour and so they later decided to obtain a divorce
by mutual agreement. In 2009, Akira and Marlyn secured a divorce decree in Japan. The
Divorce Certificate that was issued by the Embassy of Japan in the Philippines was issued
under the name of petitioner.

Petitioner sought recognition of the divorce decree in the Philippines by filing with the RTC
a petition, which said court found to be in due form and substance.

During the trial, petitioner presented the following pieces of evidence:
1. Report of Marriage that was issued by the Embassy of the Republic of the
Philippines in Japan on the registration with the embassy of Akira and Marlyn’s
marriage on July 29, 1997 in Japan;
2. Authentication Certificate of the Report of Marriage;
3. Divorce Certificate issued by the Embassy of Japan in the Philippines on the basis
of the Official Family Register issued by the Head of Katsushika-ku, Tokyo, Japan;
4. Authentication Certificate of the Divorce Certificate;
5. Acceptance Certificate; and,
6. Excerpts of the Japanese Civil Code

Akira did not file and Answer to the petition, notwithstanding summons by publication.
The Republic also did not offer any evidence to rebut the case of Marlyn.

The Regional Trial Court denied the petition ratiocinating that “the fact that Marlyn also
agreed to the divorce and jointly filed for it with Akira barred the application of the second
paragraph of Article 26 of the Family Code, which would have otherwise allowed a Filipino
spouse to remarry after the alien spouse had validly obtained a divorce… the Filipino
spouse cannot invoke the intention of equity behind the law when he or she is an initiator
or active participant in procuring the divorce.” Petitioner’s motion for reconsideration was
denied, which prompted her to file a petition for review on certiorari.

Issue:
Whether or not Article 26, paragraph 2 of the Family Code has a restrictive application so
as to apply only in cases where it is the alien spouse who sought the divorce, and not when
the divorce was mutually agreed upon by the spouses.


Ruling:
No. This question of law was directly resolved by the Court in the recent case of Republic of
the Philippines v. Marelyn Tanedo Manalo.

The facts in Manalo are similar to the circumstances in this case. In the said case, the
recognition of the divorce decree in the Philippines was rejected by the RTC where the
petition for recognition and enforcement of a foreign judgment was filed, as the trial court
cited Article 15 of the New Civil Code and reasoned that as a rule, “the Philippine law ‘does
not afford Filipinos the right to file for a divorce, whether they are in the country or living
abroad, if they are married to Filipinos or to foreigners, or if they celebrated their marriage
in the Philippines or in another country. On appeal to the Court of Appeals, the RTC
decision was overturned. The appellate court held that Article 26 of the Family Code should
apply even if it was Manalo who filed the divorce. The decree made the Japanese spouse no
longer married to Manalo; he then had the capacity to remarry. It would be unjust to still
deem Manalo married to the Japanese who, in turn, was no longer married to her. The fact
that it was Manalo who filed the divorce was inconsequential. This ruling of the CA was
then affirmed by the Court in Manalo upon a petition for review on certiorari that was filed
by the Republic of the Philippines.

Paragraph 2 of Article 26 speaks of "a divorce x x x validly obtained abroad by the alien
capacitating him or her to remarry." Based on a clear and plain reading of the provision, it
only requires that there be a divorce validly obtained abroad. The letter of the law does not
demand that the alien spouse should be the one who initiated the proceeding wherein the
divorce decree was granted. It does not distinguish whether the Filipino spouse is the
petitioner or the respondent in the foreign divorce proceeding. The Court is bound by the
words of the statute; neither can we put words in the mouths of the lawmakers. "The
legislature is presumed to know that meaning of the words, to have used words advisedly,
and to have expressed its intent by the use of such words as are found in the statute. Verba
legis non est recedendum, or from the words of a statute there should be no departure."

HEIRS OF PAULA C. FABILLAR, AS REPRESENTED BY AUREO FABILLAR vs. MIGUEL M.
PALLER, FLORENTINA P. ABAYAN, AND DEMETRIA P. SAGALES
G.R. No. 231459 January 21, 2019

Facts:
The instant case stemmed from an Amended Complaint or Recovery of Ownership,
Possession, and Damages filed by respondents against Spouses Custodio and Paula
(collectively, the Custodios) before MCTC Samar, involving a 3.1003 hectare of parcel of
agricultural coconut land situated in Giporlos, Eastern Samar, with an assessed value of P
950.00. Respondents claimed that the subject land was a portion of a bigger parcel of land
originally owned by their grandfather, Marcelino Paller (Marcelino). After the death of
Marcelino, his children partitioned the properties and took possession of their respective
shares. Respondent Demetria, daughter of Ambrosio, mortgaged the subject land to Felix
R. Aide with right to repurchase. Upon her return from Manila in 2000, she redeemed the

same but discovered that the Custodios took possession of the land and refused to vacate
therefrom despite demands.

In their Answer, the Custodios claimed to be legitimate and compulsory heirs of Marcelino
who can validly and legally possess the subject land which has not been partitioned, and
thus, commonly owned by his heirs. They further averred that Ambrosio is not a child of
Marcelino and, as such, has no right to claim the subject land.

To support respondents' claim that Ambrosio is a child of Marcelino and Susana Paller, they
presented before the MCTC a copy of Ambrosio's baptismal certificate indicating that his
father was Marcelino. however, his mother was reflected therein as "Talampona Duevo".
On the other hand, to establish their acquisition of the two (2)-hectare portion, they
adduced a copy of the unnotarized deed of sale dated May 3, 1959 in waray dialect
denominated as "Documento Hin Pag Guibotongan Hin Cadayunan" (unnotarized deed of
sale) purportedly covering the sale of the said portion by Juan to respondents' mother,
Sabina, who, however, was described therein as married to "Marcos Paller" Marcos, not to
Ambrosio. To explain the discrepancies in the names reflected in the above documents,
Miguel explained that "Ambrosio" and "Talampona" are the real names, and that "Marcos"
and "Susana" were mere aliases.

Issue:
Whether Ambrosio's baptismal certificate can be considered as competent proof of the
claimed filiation with Marcelino.

Ruling:
No. In the absence of the record of birth and admission of legitimate filiation, Article 172 of
the Family Code provides that filiation shall be proved by any other means allowed by the
Rules of Court and special laws. Such other proof of one's filiation may be a baptismal
certificate, a judicial admission, a family Bible in which his name has been entered,
common reputation respecting his pedigree, admission by silence, the testimonies of
witnesses, and other kinds of proof admissible under Rule 130 of the Rules of Court.

However, it is jurisprudentially settled that a baptismal certificate has evidentiary value to
prove filiation only if considered alongside other evidence of filiation. Because the putative
parent has no hand in the preparation of a baptismal certificate, the same has scant
evidentiary value if taken in isolation; while it may be considered a public document, "it can
only serve as evidence of the administration of the sacrament on the date specified, but not
the veracity of the entries with respect to the child's paternity." As such, a baptismal
certificate alone is not sufficient to resolve a disputed filiation, and the courts must peruse
other pieces of evidence instead of relying only on a canonical record.


VDM TRADING, INC. AND SPOUSES LUIS AND NENA DOMINGO, REPRESENTED BY
THEIR ATTORNEY-IN-FACT, ATTY. F. WILLIAM L. VILLAREAL, PETITIONERS, v.
LEONITA CARUNGCONG AND WACK WACK TWIN TOWERS CONDOMINIUM
ASSOCIATION, INC., RESPONDENTS.
G.R. No. 206709, February 06, 2019

Facts:
VDM TRADING, INC. – owner of the Unit 2208B-1 (the Unit) at Wack Wack Twin Towers
CondominiumSpouses Luis Domingo and Nena Domingo – majority stockholder of VDM
and actual occupants of the unit; complainant Respondents: Spouses Carungcong – Owner
of Unit 2308B-1, the unit directly above the unit of sps Domingo Tan – actual occupant of
Unit 2308B-1 Wack Wack Twin Towers Condominium While spouses Domingo were in the
US, Nena’s sister, Nancy Lagman-Castillo discovered that soapy water was heavily
penetrating through the ceiling of the unit which persisted for several days. The matter was
reported to the counsel of Spouses Domingo, Atty. Villareal who allegedly met with Wack
Wack’s Acting Property Manager, Cruz who supposedly revealed that she conducted an
inspection on the unit and found that the leak came from the unit owned by Spouses
Carungcong as leased by Tan. Cruz explained that Unit 2308B-1’s balcony, which was being
utilized as a laundry area, had unauthorized piping and plumbing works installed therein,
which were in violation of Wack Wack’s rules and regulations, as well as the building’s
original plans. Atty. Villareal conducted his own inspection of the Unit in the presence of
Lagman-Castillo and Cruz, and noted damages on the following: (1) ceilings and walls,
including the wall paper and panel board; (2) cabinets and other improvements on the wall;
(3) narra flooring, which showed warping and permanent discoloration; (4) bed, mattress,
sheets, and covers; (5) curtains, which showed signs of shrinking and deterioration; (6)
personal clothing, articles of personal use, and important documents inside the cabinet;
and (7) miscellaneous damages.

For this reason, on behalf of the petitioners Sps. Domingo, Atty. Villareal sent a letter5
dated December 16, 1998, demanding that respondents Wack Wack and Carungcong make
restoration works and/or pay for the damages caused upon the Unit. Wack Wack and
Carungcong made no action.

Subsequently, repair works on the Unit were referred to M. Laher Construction (M. Laher)
for a quotation. Luis, M. Laher stated that the estimated cost in repairing the Unit's balcony,
master bedroom, dining and living room, and the children's room amounted to
P490,635.00. Afterwards, several demand letters8 were sent by the counsel of the
petitioners Sps. Domingo to respondents Wack Wack, Carungcong, Tan, and Golden Dragon
for the payment of the amount quoted by M. Laher, but to no avail. Hence, the petitioners
Sps. Domingo were constrained to file their Complaint.

Issue:
Whether or not the respondents are liable for damages.


Ruling:
No. Firstly, the instant petition raises pure questions of fact. For this reason alone, the
instant Petition warrants dismissal. By alleging that damage was caused to their property
by virtue of the respondents' individual and collective fault and/or negligence, the
petitioners' cause of action is anchored on quasi delict. According to Article 2176 of the
Civil Code, whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict.

A quasi-delict has the following elements:
a) the damage suffered by the plaintiff;
b) the act or omission of the defendant supposedly constituting fault or negligence; and
c) the causal connection between the act and the damage sustained by the plaintiff, or
proximate cause.

A perusal of the evidence on record shows that the foregoing elements of a quasi-delict are
absent insofar as respondents Carungcong and Wack Wack are concerned.

The full extent of the damage caused to the petitioners' Unit was not sufficiently proven.
Aside from the purely self-serving testimony of Atty. Villareal, the sole witness of the
petitioners who is also the petitioners' counsel, there was no sufficient evidence presented
to show the extent of the damage caused to the Unit.

As correctly found by the CA, the photographs offered into evidence by the petitioners
merely depict a wet bed, wet floor, and wet cabinet apparently taken from one room only,
i.e., the master bedroom. The CA was correct in its assessment that "[n]o photographs were
presented to prove that the other rooms of Unit 2208B-1 were also damaged by the leak."
The petitioners maintain that the letter-quotation from M. Laher, a private document,
proves the foil extent of the damage caused to the Unit. Such contention is erroneous. As a
prerequisite to its admission in evidence, the identity and authenticity of a private
document must be properly laid and reasonably established according to Section 20, Rule
132 of the Rules of Court.

The petitioners also heavily rely on the handwritten report of the petitioners' sister,
Lagman-Castillo, which purportedly show the extent and location of the damage caused to
the Unit.

Atty. Villareal's testimony on the observations contained in the handwritten report of
Lagman-Castillo is inadmissible. Simply stated, as to the contents of the handwritten report
of Lagman- Castillo, Atty. Villareal's testimony is hearsay. Aside from the foregoing, the
petitioners likewise rely on the supposed statements made by Cruz, the Acting Property
Manager of respondent Wack Wack. However, it must be emphasized that Cruz herself was
not presented as a witness. Lastly, the petitioners cite the various demand letters as
evidence of the supposed damage caused to their Unit. It goes without saying that these
letters are self-serving documents that deserve scant consideration in the determination of
damages. Fault or negligence on the part of respondents Carungcong and Wack Wack was

not proven. As regards the second element of a quasi-delict, a careful perusal of the
evidence on record shows that the petitioners failed to present even a shred of evidence
that there was fault or negligence on the part of the respondents Carungcong and Wack
Wack.

As to the supposed fault or negligence of respondent Carungcong, there is no evidence
presented that suggests that such plumbing works were illegally or negligently made. The
petitioners could not even point out what specific rule or regulation was supposedly
violated by respondent Carungcong or her lessee, Tan, in undertaking the plumbing works.
There was no proof offered showing that such plumbing works were even prohibited,
disallowed, or undertaken in a negligent manner.

With respect to the supposed negligence on the part of respondent Wack Wack, the
petitioners do not even dispute that under the Amended Master Deed, respondent Wack
Wack holds title over and exercises maintenance and supervision only with respect to the
common areas. It is also not disputed that the maintenance and repair of the condominium
units shall be made solely on the account of the unit owners, with each unit owner being
"responsible for all the damages to any other Units and/or to any portion of the Projects
resulting from his failure to effect the required maintenance and repairs of his unit."
Proximate cause between the supposed damage caused and the plumbing works
undertaken was not established. Proximate cause is that cause which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces the injury and
without which the result would not have occurred.

Stated in simple terms, it must be proven that the supposed fault or negligence committed
by the respondents, i.e., the undertaking of plumbing works on Unit 2308B-1, was the cause
of the damage to the Unit. Such was not proven by the petitioners. As noted by the CA, the
subject plumbing works are isolated in the balcony area of Unit 2308B-1. The petitioners
do not dispute that the said area is separated from the other areas of the unit and sealed off
by a wall and beam. Hence, if a leakage in the plumbing works on the balcony of Unit
2308B-1 indeed occurred, it is highly improbable that such leak would spread to a wide
area of the Unit. Second, aside from the unsubstantiated self-serving testimony of Atty.
Villareal, there was no evidence presented to show that the supposed widespread leak of
soapy water in the various parts of the Unit was caused by plumbing works on the balcony
of Unit 2308B-1. No witness or document establishing a causal link between the plumbing
works and the damage to the Unit was offered.

Lastly, the fact that the plumbing works done in Unit 2308B-1 was not the cause of the
damage suffered by the petitioners' Unit is further supported by the factual finding of the
CA that a case before the HLURB was previously filed by the petitioners against Golden
Dragon. In this complaint, which was offered in evidence by the petitioners themselves, the
latter alleged that in 1996, way before the installation of the subject plumbing works in
Unit 2308B-1, they had already discovered water leaks in the Unit which damaged the
interiors thereof. It was the petitioners' allegation that the water leakage in the Unit was
made possible due to Golden Dragon's delivery of a "defective and/or substandard unit."40
In fact, the CA noted that the HLURB issued a Decision dated July 9, 2009 holding Golden

Dragon liable for the water leakage suffered by the petitioners. It is of no coincidence that
the award for actual damages granted to the petitioners is similar to the award for actual
damages sought by the petitioners in the instant case. All in all, with the petitioners failing
to prove the existence of the elements of a quasi-delict in the instant case, the CA
committed no reversible error that warrants the Court's exercise of its discretionary
appellate power.

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. MILLER OMANDAM UNABIA,
RESPONDENT
G.R. No. 213346, February 11, 2019

Facts:
On February 11, 2009 respondent Miller Omandam Unabia filed before the RTC a "Petition
for Correction of Entries on the Birth Certificate of Mellie Umandam Unabia," claiming that
his Birth Certificate contained errors in that the name entered therein was "Mellie
Umandam Unabia", when it should properly have been written as "Miller Omandam
Unabia"; that the gender was erroneously entered as "female" instead of "male"; and that
his father's middle initial was erroneously indicated as "U" when it should have been "O".

To support the claim for change of entry as to gender, a Medical Certificate was presented
which was supposedly issued by a physician of the Northern Mindanao Medical Center, Dr.
Andresul A. Labis (Dr. Labis), which certificate stated that respondent was "phenotypically
male"; however, the physician was not presented in court to testify on his findings and
identify the document.

RTC ruled in his favor, on appeal the CTA affirmed the decision of the RTC, that under
Republic Act 10172, which amended R.A. 9048, the city or municipal registrar or the consul
general, as the case may be, is now authorized to correct clerical or typographical errors in
the day and month, in the date of birth or sex of a person appearing in the civil register
without need of a judicial order.

Petitioner questions the Medical Certificate issued by Dr. Labis, Medical Officer III of the
Northern Mindanao Medical Center under the Department of Health, claiming that it failed
to include a certification that respondent "has not undergone sex change or sex transplant"
as required by Section 5 of RA 9048, as amended, and that Dr. Labis was not presented in
court in order that his qualifications may be established and so that he may identify and
authenticate the medical certificate.

Issues:
1. Whether RA 10172 may be applied retroactively
2. Whether the petition to change spelling, sex and middle initial qualify as clerical or
typographical be approved


Ruling:
1: Yes. RA 10172 may be applied retroactively.

When the petition was filed in 2009, the governing law then was the original, unamended
RA 9048. There was no provision then for the administrative correction or change of
clerical or typographical errors or mistakes in the civil registry entries of the day and
month in the date of birth or sex of individuals, but only clerical or typographical errors
and change of first names or nicknames. Administrative corrections or changes relating to
the date of birth or sex of individuals was authorized only with the passage in 2012 of RA
10172. Even then, the amendments under RA 10172 should still apply, the law being
remedial in nature. Moreover, under Section 11 of RA 9048, retroactive application is
allowed "insofar as it does not prejudice or impair vested or acquired rights in accordance
with the Civil Code and other laws."

2: Yes. The petition must be approved.

The said Medical Certificate is a public document, the same having been issued by a public
officer in the performance of official duty; as such, it constitutes prima facie evidence of the
facts therein stated. There was therefor no need to further identify and authenticate Dr.
Labis' Medical Certificate. "A public document, by virtue of its official or sovereign
character, or because it has been acknowledged before a notary public.

There were clerical errors in the aforesaid entries necessitating its rectification. Section 2(3)
of R.A. 10172 defines 'clerical of typographical error' as:
'Clerical or typographical error' refers to a mistake committed in the performance of
clerical work in writing, copying, transcribing or typing an entry in the civil register that is
harmless and innocuous, such as misspelled name or misspelled place of birth, mistake in
the entry of day and month in the date of birth or the sex of the person or the like, which is
visible to the eyes or obvious to the understanding, and can be corrected or changed only
by reference to other existing record or records: provided, however, that no correction
must involve the change of nationality, age, or status of the petitioner.

SOCORRO T. CLEMENTE, AS SUBSTITUTED BY SALVADOR T. CLEMENTE v. REPUBLIC
OF THE PHILIPPINES (DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, REGION
IV-A)
G.R. No. 220008, February 20, 2019

Facts:
Municipal Mayor Amado A. Clemente (Mayor Clemente), Dr. Vicente A. Clemente, Judge
Ramon A. Clemente, and Milagros A. Clemente (Clemente Siblings) were the owners of a
parcel of land covered by Transfer Certificate of Title No. T-50896. During their lifetime,
they executed a Deed of Donation dated 16 March 1963 over a one-hectare portion of their
property in favor of the Republic of the Philippines. The Deed of Donation provided:


The herein DONORS hereby voluntarily and freely give, transfer and convey, by way of
unconditional donation, unto said DONEE, his executors and administrators, all of the
rights, title and interest which the aforesaid DONORS have or which pertain to them and
which they owned exclusively in the above-described real property over a one-hectare
portion of the same, solely for hospital site only and for no other else, where a Government
Hospital shall be constructed, free from all liens and encumbrances whatsoever, which
portion of the land had been segregated in the attached subdivision plan x x x

It was accepted by the district engineer in the same deed of donation. In accordance of the
deed, the construction a building for a hospital was started in the following year. However,
construction was never completed and only its foundation remains.

Almost 41 years after the Deed of Donation was executed, Socorro, as heir and
successor-in-interest of Mayor Clemente, filed a Complaint for Revocation of Donation,
Reconveyance and Recovery of Possession alleging that the Republic of the Philippines
failed to comply with the condition imposed on the Deed of Donation, which was to use the
property "solely for hospital site only and for no other else, where a government hospital
shall be constructed.

The solicitor general argued that all the heirs of Mayor Clemente, Dr. Clemente, Judge
Clemente and Atty. Clemente must be impleaded as petitioners being co-owners of the
property. Moreover assuming arguendo that only one heir must file a case for rescission,
the estate of the Clemente siblings must be settled first. Socorro argues that there is no
need for a settlement of estate because the action for revication of the donation is filed by
an heir of a co-owner.

The last issue raised by petitioner is whether the action is premature, or if it has been
barred by prescription or laches. Respondent argues that the action has already prescribed
because it has been more than ten (10) years since the violation of the condition in the
Deed of Donation.

Issues:
1. Whether the nature of the donation made by the Clemente Siblings is a donation
subject to a condition.
2. Whether the donor has the right to revoke the donation
3. Whether the Solicitor General’s argument is correct
4. Whether the cause of action prescribed or is barred by laches

Ruling:
1: The nature of the donation made by the Clemente Siblings is a donation subject to a
condition – the condition being the construction of a government hospital and the use of
the Subject Property solely for hospital purposes. Upon the non-fulfillment of the condition,
the donation may be revoked and all the rights already acquired by the donee shall be
deemed lost and extinguished. This is a resolutory condition because it is demandable at
once by the done but the non-fulfillment of the condition gives the donor the right to
revoke the donation.


2: Yes. Upon the execution of the Deed of Donation and the acceptance of such donation in
the same instrument, ownership was transferred to the Republic, as evidenced by the new
certificate of title issued in the name of the Province of Quezon. Because the condition in
the Deed of Donation is a resolutory condition, until the donation is revoked, it remains
valid.However, for the donation to remain valid, the donee must comply with its obligation
to construct a government hospital and use the Subject Property as a hospital site. The
failure to do so gives the donor the right to revoke the donation.

3. No. It has been settled that a co-heir or co-owner may bring suit without impleading all
the other co-owners if the suit is for the benefit of all. In Spouses Mendoza v. Coronel, we
held:

The law now allows a co-owner to bring an action for ejectment, which covers all kinds of
actions for the recovery of possession, including forcible entry and unlawful detainer,
without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is
deemed to be instituted for the benefit of all.

In subsequent cases, this Court has consistently held that as long as the co-owner
recognizes the co-ownership, there is no need to implead all the co-owners in all kinds of
action for recovery of possession.

4. Both prescription and laches has not set in. Prescription has not set in. It was only in
September 2003 that the Republic, through DPWH, manifested its lack of intention of
fulfilling its obligation under the deed of donation. It thus became indubitable that the
construction of the hospital will not take place and as a consequence, the obligation of the
donor to honor the donation is extinguished. As the action was filed a year after, it was well
within the four year prescriptive period to revoke a donation because of non-compliance.

Laches has not set in. The deed of donation did not specify the period within which to
comply with the condition and thus, there can be no delay in asserting the right against the
Republic of the Philippines.

D.M. CONSUNJI, INC. v. REPUBLIC OF THE PHILIPPINES AND THE HEIRS OF JULIAN
CRUZ, REPRESENTED BY MACARIA CRUZ ESTACIO
G.R. No. 233339, February 13, 2019

Facts:
D.M. Consunji, Inc. [(DMCI)] filed an application for registration of title over a parcel of land
with the MeTC[.] The subject lot is denominated as Lot No. 5174-A, with an area of 4,935
square meters, more or less, situated at Bambang, Taguig, Metro Manila, and covered by
survey plan Swo-00-001460(5174, MCad-m-590-D). In its application, [DMCI] averred that
it acquired the land from Filomena D. San Pedro [(San Pedro)] by virtue of a Deed of
Absolute Sale dated November 28, 1995; that there are no other persons having any
interest on or possession of the said land; and that [DMCI] and its predecessors-in-interest

have been in open, continuous, exclusive, and notorious possession and occupation of the
land since June 12, 1945, or earlier.

Julian Cruz [(Cruz)], represented by Macaria C. Estacio, filed an opposition to the
application claiming that he is the owner of the subject parcel of land; that his
predecessors-in-interest have occupied and claimed the subject land since the 1920s as
follows: 1) Pablo Cruz as shown by Tax Declaration No. 4055, and 2) Abundia Cruz
(daughter of Pablo Cruz), as shown by Tax Declaration No. 10845 dated October 26, 1941;
and that the latest Tax Declaration over the subject property is under the name of Abundia
Cruz dated January 10, 1994. [Cruz] claims that [San Pedro], who is claimed by [DMCI] to
be the former owner of the subject land, is one of the children of Dionisio Dionisio who was
a previous tenant of the land; and that the tax declaration in the name of [San Pedro], all
dated 1995 or 1994, cannot be considered as evidence of ownership.

Cruz died during trial. He was then substituted by his heirs. The MeTC issued a decision
denying the application on the ground that DMCI failed to prove its actual possession of the
property and the possession.of its predecessor-in-interest since June 12, 1945 or earlier.
DMCI filed a motion for reconsideration. Cruz heirs opposed the motion for reconsideration,
the Office of the Solicitor General (OSG), also opposed the motion for reconsideration,
claiming that there is no showing that the subject land forms part of the disposable and
alienable lands of public domain and the documents offered in evidence to prove this
(survey plan and field inspection report) are not enough based on prevailing jurisprudence.

DMCI insists that the Field Inspection Report conducted by the CENRO and the Survey Plan
of the Subject Land are adequate to prove that the Subject Land is included in the
disposable and alienable lands of the public domain.

Issue:
Whether the Subject Land forms part of the alienable and disposable land of the public
domain.

Ruling:
The land forms part of the public domain.

In its Sps. Fortuna v. Republic, the court ruled that mere notations appearing in survey
plans are inadequate proof of the covered properties' alienable and disposable character.
The applicant, however, must also present a copy of the original classification of the land
into alienable and disposable land, as declared by the DENR Secretary or as proclaimed by
the President.

In Republic v. Heirs of Juan Fabio, the Court ruled that the applicant must present a copy of
the original classification of the land into alienable and disposable, as declared by the DENR
Secretary, or as proclaimed by the President.

The survey plan and the DENR-CENRO certification are not proof that the President or the
DENR Secretary has reclassified and released the public land as alienable and disposable.


In the recent case of In Re: Application for Land Registration, Suprema T. Dumo v. Republic
of the Philippines,] the Court reiterated the requirement it set in Republic v. T.A.N.
Properties, Inc. that there are two documents which must be presented to prove that the
land subject of the application for registration is alienable and disposable. These are: (1) a
copy of the original classification approved by the DENR Secretary and certified as a true
copy by the legal custodian of the official records, and (2) a certificate of land classification
status issued by the CENRO or the Provincial Environment and Natural Resources Office
(PENRO) based on the land classification approved by the DENR Secretary.

The Field Inspection Report conducted by the CENRO and the Survey Plan of the Subject
Land are not adequate to prove that the Subject Land is included in the disposable and
alienable lands of the public domain.

MA. ANTONETTE LOZANO v. JOCELYN K. FERNANDEZ
G.R. No. 212979, February 18, 2019

Facts:
On December 11, 2006, petitioner Ma. Antonette Lozano (Lozano) executed a Waiver and
Transfer of Possessory Rights (Waiver) over the subject property in favor of Fernandez.
After the execution of the document, Fernandez continued to tolerate Lozano's possession
over the property. On July 15, 2009, she sent a demand letter to Lozano ordering her to
vacate the premises. Because Lozano failed to leave the property, Fernandez was
constrained to file an action for unlawful detainer against Lozano.

Petitioner argues that Since 1996, she had owned and possessed the subject property. She
never recalled signing any Waiver in Fernandez's favor. Lozano explained that Fernandez
duped her into signing a blank document, which was later converted to a Waiver. Lozano
claimed that the real contract between her and Fernandez was a loan with mortgage as
evidenced by the fact that she remained in possession of the property even after the
execution of the said Waiver and that she had issued checks in payment of the loan.

The MTC granted the petition which was later on denied by the RTC and sustained by the
CA

Lozano argued that the CA erred in granting probative value on the Waiver because she
was able to prove that its execution was irregular.. She reiterated that Fernandez took
advantage of her poor understanding of legal documentation when the latter made her sign
a blank document which was later converted into the Waiver. Lozano assailed that
Fernandez did not present sufficient evidence to establish that the latter merely tolerated
the former's possession of the property.

Lozano expounded that the complaint for unlawful detainer was also filed beyond the
one-year prescriptive period. She explained that assuming the Waiver was valid, the

complaint should be filed within one year therefrom as it gave Fernandez possessory rights
over the property.

Issues:
1. Whether the waiver must be recognized.
2. Whether the ejectment of petitioner Lozano as decided by the RTC and sustained by
the CA from the subject property is proper

Ruling:
1. The waiver must be granted

Lozano does not contest that the waiver is notarized and as held in Heirs of Spouses
Liwagon v. Heirs of Spouses Liwagon, regularity of notarized documents may be overcome
by clear and convincing evidence and not by mere preponderance of evidence, It enjoys the
presumption of regularity and is a prima facie evidence of the facts stated therein — which
may only be overcome by evidence that is clear, convincing and more than merely
preponderant. Without such evidence, the presumption must be upheld.

2. Lozano’s petition must be granted

In an action for unlawful detainer based on tolerance, the acts of tolerance must be proved.
Bare allegations of tolerance are insufficient and there must be acts indicative of tolerance.
In Reyes v. Heirs of Deogracias Forlales,25 the Court had expounded on the concept of
tolerance in unlawful detainer cases, to wit: acts merely tolerated are those which by
reason of neighborliness or familiarity, the owner of property allows his neighbor or
another person to do on the property; they are generally those particular services or
benefits which one's property can give to another without material injury or prejudice to
the owner, who permits them out of friendship or courtesy. They are acts of little
disturbances which a person, in the interest of neighborliness or friendly relations, permits
others to do on his property, such as passing over the land, tying a horse therein, or getting
some water from a well. And even though this is continued for a long time, no right will be
acquired by prescription.

For there to be tolerance, complainants in an unlawful detainer must prove that they had
consented to the possession over the property through positive acts.

Fernandez's alleged tolerance was premised on the fact that she did not do anything after
the Waiver was executed. However, her inaction is insufficient to establish tolerance as it
indicates negligence, rather than tolerance, on her part. Inaction should not be confused
with tolerance as the latter transcends silence and connotes permission to possess the
property subject of an unlawful detainer case. Thus, even assuming the Waiver was valid
and binding, its execution and Fernandez's subsequent failure to assert her possessory
rights do not warrant the conclusion that she tolerated Lozano's continued possession of
the property in question, absent any other act signifying consent.


NICOMEDES AUGUSTO v. ANTONIO CARLOTA DY

GR No. 218731, Feb 13, 2019

Facts:
The spouses Sixto and Marcosa had only one child, petitioner Roberta Silawan (Roberta).
Respondent Antonio Carlota Dy (Antonio) filed a Complaint for Declaration of Nullity of
Deeds, Titles, Tax Declaration with Partition and/or Recovery of Shares, Attorney's Fees,
Damages and Costs against petitioners Nicomedes Augusto (Nicomedes), Gomercindo
Jimenez (Gomercindo), Marcelino Paquibot (Marcelino), Roberta (collectively, the
petitioners) and the Register of Deeds of Lapu-Lapu City. He claimed to own a portion of
Lot No. 4277 pursuant to a purchase he made on November 25, 1989. While initiating the
paperworks to secure a certificate of title in his name sometime in January 2002, he
discovered that Transfer Certificates of Title (TCTs)3 over Lot No. 4277 were already
issued in petitioners' names.

The transfer of properties was in March 1965, Sixto Silawan sold the entire property
involving 5,327 sq m to Severino. The Annotation in indicated, however, that the sale was
March 30, 1959. Severino, in turn, sold his purchased property to two persons. Such that on
May 7, 1964, Severino sold half of the undivided portion (2,663.5 sq m) to Isnani and Lily.
On September 15, 1965, Severino sold the remaining half (2,663.5 sq m) to Mariano (the
document of sale had a notation that half of the property was sold to another person).

From Isnani and Lily, the property which they purchased (involving 2,663.5 sq m) was
thereafter sold to spouses Filomeno and Lourdes on September 16, 1966.23 On November
25, 1989, spouses Filomeno and Lourdes sold the 2,363.5 sq m of their purchased property
to Antonio. The remaining portion of 300 sq m was, in turn, sold to Nicomedes and
Gaudencia in October 1989.

On July 18, 1968, Mariano sold 1,332.5 sq m of his purchased property to Nicolas and
Maura, who, in turn, sold their purchased property to Gomercindo, who had been issued a
TCT as of 2001. On July 14, 1987, Mariano sold 1,332.5 sq m of the property to Marcelino
who had been issued a TCT as of 2001. In May 1990, Mariano sold again the 1,332.5 sq m to
Rodulfo who, in turn, sold his purchased property to respondent Mario and Luisa Dy
(Luisa), on May 23, 1994.

Issues:
1. Whether there exists a co-ownership.
2. Whether the transfer of property from Mariano to Marcelino and Rodulfo were valid,
thus making the transfer of the subject property from Rodulfo to Mario also valid.

Ruling:
1: Yes. Co-ownership exists

It must be stated at the outset that the disputed property, with an area of 5,327 sq. m is
conjugal in nature being registered under the names of spouses Sixto and Marcosa. Since
Sixto and Marcosa were married prior to the effectivity of the Family Code and no marriage

settlement was provided, their property relations were governed by the conjugal
partnership of gains as provided under Article 119 of the Civil Code. Thus, upon the death
of Marcosa on October 5, 1931, the conjugal nature of the property was dissolved. After the
death of Marcosa), the subject property became co-owned by Sixto and Roberta. In other
words, before actual partition, co-ownership between Sixto and Roberta was formed over
the subject property. Thus, each co-owner of property which is held pro indiviso exercises
his rights over the whole property and may use and enjoy the same with no other
limitation than that he shall not injure the interests of his co-owners.

2: No, the transfer of property were not valid.

The sale or other disposition of a co-owner affects only his undivided share and the
transferee gets only what would correspond to his grantor in the partition of the thing
owned in common.
the sale transaction between Sixto and Severino could be legally recognized only with
respect to the former's pro indiviso share in the co-ownership. Clearly then, at the time of
sale by Sixto in favor of Severino, the former could only dispose of his three-fourths
undivided share of the entire property. The remaining one-fourth belonging to Roberta has
yet to be partitioned. Hence, the sale executed by Sixto in favor of Severino is valid up to
three-fourths undivided portion of the property, which is 3,995.25 sq m and void as to the
remaining one-fourth or 1,331.75 sq m, which pertains to Roberta's undivided share. This
is consistent with the rule that one cannot sell what he does not own.

Since Severino purchased the three-fourths undivided share of Sixto to the property, then
this is the extent of the area of the property (consisting of 3,995.25 sq m) which he could
validly dispose and sell. Hence, the sale by Severino to Isnani and Lily involving the 2,663.5
sq m is valid as the area sold wholly covers what Severino purchased from Sixto. However,
the subsequent sale by Severino to Mariano can be given effect only to the extent of
1,331.75 sq m - the remaining undivided portion of Severino's interest in the property that
was not sold to Isnani. Thus, as between Isnani and Mariano, the former who is first in time
(as the first vendee) is preferred in right. There is no problem with the dispositions made
by spouses Isnani and Lily. Being the co-owner of 2,663.5 sq m undivided portion of the
subject land.

Since Mariano had validly purchased from Severino 1,331.75 sq m of the property, it
follows then that the sale transaction between him and Nicolas is valid up to the said
aliquot share, which is 1,331.75 sq m. This is the only area which he could validly dispose.
Since there was nothing more from the undivided portion that was left to Mariano, his
subsequent sale to Marcelino and to Rodulfo of the portion of the property cannot be given
effect. Clearly, as there was no valid sale between Mariano and Rodulfo, the latter has
nothing to transmit to respondent Mario.


HEIRS OF DOMINADOR S. ASIS, JR., ET AL. VS. G.G. SPORTSWEAR MANUFACTURING

CORPORATION, ET AL.
G.R. NO. 225052 MARCH 27, 2019

FACTS:
On April 2, 1996, G.G. Sportswear Manufacturing Corporation and Nari K. Gidwani
(respondents) signified their intent to purchase Filipinas Washing Company, Inc. (FWC)
through a letter addressed to the latter's President, Dominador S. Asis, Jr. (Dominador).
Dominador and petitioners Dominador R. Asis III, Andrea Asis Oledan, Maria Marta Asis
Garcia, and Maria Ana Asis Angon, are all stockholders of record of FWC.

After more than two months of negotiations, the parties entered into an agreement,
whereby the respondents undertook to purchase FWC under the terms and conditions set
forth in the Letter-Agreement.

On the other hand, petitioners performed the following acts in accordance with the
Letter-Agreement: (a) made representations with Westmont Bank and Equitable Banking
Corporation relative to the restructuring of FWC loan obligations in preparation for
respondents' assumption thereof; (b) ceased FWC operations in preparation for the
turnover of the facilities to respondents; (c) advised the FWC employees about the sale of
the company and gave them their separation pay and other benefits.

Respondents, however, failed to comply with their obligation under the Letter-Agreement
to assume the payment of FWC with Westmont Bank and Equitable Banking Corporation.
This prompted petitioners to demand, through a letter dated August 14, 1996, from
respondents full compliance with their contractual obligations under the
Letter-Agreement.

In response thereto, respondents wrote a letter to petitioners cancelling the
Letter-Agreement for the latter's failure to comply with their obligation to deliver the FWC
shares of stocks to respondents.

On August 30, 1996, petitioners filed a Complaint for rescission of contract with damages
against respondents.

The RTC ruled that by virtue of the rescission, respondents' partial payment should be
restituted, while the consequential damages should be awarded to petitioners.

The CA affirmed the findings of the RTC as to respondents' breach and the rescission of the
Letter-Agreement. It deleted, however, the award of actual damages for failure to find basis.
The CA further deleted the attorney's fees, also, for failure of the RTC to explain such award
in its decision.

Petitioners received a copy of the said decision, instead of filing a motion for
reconsideration, petitioners filed a Manifestation and Urgent Motion praying that the CA
issue an order directing the Branch Clerk of Court, to transmit the documentary evidence to

the CA. Petitioners also prayed that the period for the filing of their partial motion for
reconsideration be suspended until such time that the subject exhibits be transmitted to
the CA.

The CA continued to rule that even if petitioners were able to timely file a motion for
partial reconsideration to question the deletion of the actual damages and attorney's fees,
still it would not merit the reversal or modification of the CA Decision, considering that it
did not have any basis in awarding the said actual damages and attorney's fees.

Petitioner’s filed a Motion for Reconsideration but was denied. Hence, this petition.

ISSUES:
1. Whether or not the CA erred in deleting the award for actual damages.
2. Whether or not the CA erred in deleting the attorney’s fees.

RULING:
The petition is partly meritorious.

As correctly observed by the CA, the Court could not find any basis for the grant of such
amount for actual damages. The Court has, time and again, ruled in no uncertain terms that
actual or compensatory damages cannot be presumed but must be proved with reasonable
degree of certainty. A court cannot rely on speculations, conjectures or guesswork as to the
fact of damage but must depend upon competent proof that they have indeed been suffered
by the injured party and on the basis of the best evidence obtainable as to the actual
amount thereof. It must point out specific facts that could provide the gauge for measuring
whatever compensatory or actual damages were borne.

Nonetheless, in the absence of competent proof on the amount of actual damages suffered,
petitioners correctly argue that they are entitled to temperate damages. Temperate or
moderate damages may be recovered when some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with certainty. The amount thereof
is usually left to the discretion of the courts but the same should be reasonable, bearing in
mind that temperate damages should be more than nominal but less than compensatory.

There is no question that petitioners suffered damages due to the breach committed by the
respondents. The cessation of FWC's operations, the termination of its employees, and the
process of re-operating the business due to the failed tum over to the respondents
necessarily entailed expenses. However, as above-discussed, petitioners failed to present
competent proof of the exact amount of such pecuniary loss to warrant an award of actual
damages. In view of the circumstances obtaining in this case, the Court finds the amount of
P500,000.00 just and reasonable.

In view of the courts a quo's findings that respondents committed breach in their
agreement with petitioners, we also find it proper to award exemplary damages in this
case. Exemplary or corrective damages are intended to serve as a deterrent to serious
wrong doings, and as a vindication of undue sufferings and wanton invasion of the rights of

an injured. "Business owners must always be forthright in their dealings. They cannot be
allowed to renege on their obligations, considering that these obligations were freely
entered into by them. Thus, find the grant of P500,000.00 exemplary damages proper in
this case.

Finally, the monetary awards adjudged to both parties shall earn an interest rate of 6% per
annum from finality of this judgment until full satisfaction thereof.

Anent the award of attorney’s fees, the CA did not err in ruling that the factual and legal
justification in granting the same should be expressly stated in the decision; granting it in
the dispositive portion of the judgment is not enough as its basis is being improperly left to
speculation and conjecture. However, in view of the award of exemplary damages, in
consonance with Article 2208 (1) of the New Civil Code, and petitioners were constrained
to litigate to protect their interests due to respondents’ breach, the Court finds the award of
attorney’s fees in the amount of P100,000.00 which is equivalent to 10% of the total
amount adjudged the petitioners, proper.

LAND BANK OF THE PHILIPPINES VS. ESPERANZA BRIONES-BLANCO, ET AL.
G.R. NO. 213199 MARCH 27, 2019

Facts:
Esperanza Briones-Blanco, Rosario R. Briones, Maria Celsa Briones, Emma
Briones-Marcaida, Milagros Briones-Asprer, Carmelita Briones-Cabundoc, Rebecca
Briones-Bunalos, Ferdinand R. Briones, Luna C. Briones, Marilou Briones Chiongbian, Jose
C. Briones, Jr., Manuel C. Briones II, Evelyn G. Briones, Maria Celestina G. Briones, Maria
Cristita G. Briones, Maria Antonette G. Briones, Manuel Antonio G. Briones, Mariano G.
Briones, Allan G. Briones and Jocelyn B. Avila (respondents) were the co-owners of an
agricultural land (subject land), covered by Transfer Certificate of Title (TCT) No. T-2583,
with an area of more or less 55.9729 hectares situated at Barangay Bueno Voluntad,
Municipality of Plaridel, Misamis Occidental.

The subject land was compulsorily placed by the Department of Agrarian Reform (DAR)
under the coverage of the Comprehensive Agrarian Reform Law (CARL) or Republic Act
(RA) No. 6657. Under the valuation guidelines of RA No. 6657 and DAR Administrative
Order (AO) No. 5, series of 1998, DAR and Land Bank of the Philippines (petitioner)
valuated the subject land at P18,284.28 per hectare for the 53.099 hectares of coco land
portion and P8,738.50 per hectare for the 2.8738 hectares of rice land portion. Said
valuation translates to an average price of about P1.80 per square meter.

Disputing said findings, respondents filed a petition for determination of just compensation
of the subject land. In its Answer, petitioner averred that the valuation was conducted
pursuant to, and in strict compliance with the provisions of RA No. 6657 and pertinent DAR
Administrative Order and Guidelines.
On September 18, 2009, the RTC fixed the amount of just compensation at P4.00 per square
meter or P40,000.00 per hectare. In making such valuation, the RTC found a median on the

figures arrived at by the Agrarian Reform Operations Center, Cuervo Appraisers, Inc., and
local real estate brokers.

Aggrieved, petitioner filed a motion for reconsideration, which was denied. Still seeking
relief, petitioner elevated the matter before the CA via a petition for review under Section
60 of RA No. 6657. The CA dismissed the petition. In affirming the ruling of the RTC, the CA
held that strict adherence to the formula provided by DAR AO No. 5 is not required, as
relevant evidence of the parties and reasonable factors may be used to determine just
compensation.

A motion for reconsideration filed by petitioner was likewise denied. Hence, this instant
petition.

Issue:
Whether or not the disregard of the DAR AO No. 5 as guidelines for determining just
compensation, is proper in this case.

Ruling:
The instant petition is PARTIALLY GRANTED. The case is REMANDED to the court of
origin for proper determination of just compensation.

The Court, in Republic v. Spouses Tomas C. Legaspi and Ruperta V. Esquito, has defined just
compensation as:

x x x [J]ust compensation in expropriation cases is defined "as the full and fair
equivalent of the property taken from its owner by the expropriator. The Court repeatedly
stressed that the true measure is not the taker's gain but the owner's loss. The word 'just' is
used to modify the meaning of the word 'compensation' to convey the idea that the
equivalent to be given for the property to be taken shall be real, substantial, full and
ample."

The determination of just compensation is principally a judicial function. For guidance of
the courts, Section 17 of RA No. 6657 provides:

Sec. 17. Determination of Just Compensation. — In determining just compensation,
the cost of acquisition of the land, the current value of like properties, its nature, actual use
and income, the sworn valuation by the owner, the tax declarations, and the assessment
made by government assessors shall be considered. The social and economic benefits
contributed by the farmers and the farmworkers and by the Government to the property as
well as the non-payment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to determine its
valuation.

In this case, the RTC veered away from the guidelines. It based its valuation on the
following: (a) valuations of the Agrarian Reforms Operations Center, Region 10 which
pegged the price at P1.40 per square meter on coco land and P0.50 on rice land; (b) Cuervo

Appraisers, Inc, which based its valuation on the Bank Appraiser of the Rural Bank of
Oroquieta City, which valued the subject land at P10.00 per square meter and the Bureau of
Internal Revenue, which set the value at P9.00 per square meter; and (c) local real estate
brokers, which made a valuation of P7.00 to P8.00 per square meter. After which, the RTC
proceeded to set the amount of just compensation to P4.00 per square meter as it was
determined to be just, reasonable, and fair.

In setting the valuation at P4.00 per square meter, it bears stressing that the RTC merely
made an estimate as these valuations were based in the prevailing prices in 2006, whereas
the subject land was taken in 2000.

Moreover, there was neither explanation as to why the RTC opted to deviate from the rules
nor stated circumstances which would warrant the same. All the RTC did was to consider
the rules and concluded that just compensation should be the value above-stated.

While the RTC, acting as Special Agrarian Courts, exercises judicial prerogative in
determining and fixing just compensation, the duty to abide by the rules, especially so
when the same are enacted to comply with the objectives of agrarian reform, cannot simply
be disregarded.

As the RTC failed to comply with the foregoing pronouncement, the remand of the case is
deemed proper. More so, when both parties failed to present satisfactory evidence of the
value of the property as of the time of its taking; and that this Court, as we are not a trier of
facts, cannot receive new evidence for prompt disposition of the case.

KAREN NUÑEZ VITO, ET AL. VS. NORMA MOISES-PALMA
G.R. NO. 224466 MARCH 27, 2019

Facts:
Vicentico Nunez, owned a 429 sq.meter lot in Mambusao, Capiz. In May 1992, Vicentico,
who was then suffering from diabetes, borrowed P30,000.00 from Rosita Moises and as
security, executed a real estage mortgage over his property. Since Rosita had on money, the
funds came from Norma Moises-Palma, Rosita’s daughter. According to petitioner, the
P30,000.00 loan of Vecentico was subsequently paid as evidenced by an Affidavit
authorizing Release of Mortgage.

Upon Vicentico’s death on September 27,1994, the subject lot was transmitted to his heirs
namely: petitioners Karen Nunez, Warren Nunez, Lynette Nunez Macinda, Alden Nunez and
Placisa Hisole Nunez, Vicentico’s surviving spouse. Placida died on August 1, 1997 and her
share was inherited equally by her heirs.

On June 28, 1995, Norma was able to have all petitioners, except Alden, sign a Deed of
Adjudication and Sale (DAS) wherein petitioners purportedly sold to Norma their
respective pro indiviso shares in the subject lot for P50,000. After the execution of the DAS,
Norma immediately took possession of the subject lot. Instead of paying cash, Norma

executed a Promissory Note (PN) on July 1, 1995 in favor of petitioners whereby she
obligated her to pay P50,000. She also executed an Acknowledgment of Debt (AOD) dated
February 22, 2007, whereby she admitted that she owed petitioners P50,000, representing
the purchase price of the Deed of Adjudication and Sale.

Despite non-payment of the purchase price and the absence of Alden’s signature on the
Deed of Adjudication and Sale, Norma was able to cause the registration of the document
with the Register of Deeds of Capiz and TCT T-3546022 was issued to her on August 2,
2005.

On July 10,2006, Alden sought to annul the TCT and have the Deed of Adjudication and Sale
declared null and void. However, during the pendency of the case, Alden and Norma
reached a compromise Agreement.

On August 15,2007, petitioner Karen, Warren and Lynette, represented by their brother
and attorney-in- fact Alden, filed against Norma a case for Declaration of Nullity of Deed of
Adjudication and Sale, Cancellation of Transfer Certificate of Title No. T-35460, Recovery of
Ownership and/or Possession of Lot No. 2159-A and Damages before the MTC. MTC ruled
in favor of siblings that the Deed of Adjudication and Sale was null and void on the ground
that the price has in fact never paid the vendee to the vendor.

Norma appealed the decision with the RTC. RTC ruled in favor of Norma saying that the
Deed of Adjudication and Sale was valid because there was constructive delivery of the lot
in question right after the execution of the Deed of Adjudication, showing transfer of
ownership.

Nunez appealed the case before the CA. CA affirmed RTC decision but said that it was not a
contract of sale but in fact a dacion en pago. Petitioners then elevated the case before the
Supreme Court as a question of law under Rule 45 because the ruling of the RTC and the CA
was divergent.

Issue:
Whether or not the transaction between the siblings Nunez and Norma is dacion en pago.

Ruling:
NO. Under Art. 1245 of the Civil Code, there is donation in payment when property is
alienated to the creditor in satisfaction of debt in money and is governed by the law of
sales.

While the Deed of Adjudication and Sale seems to suggest a dation in payment, the
subsequent actuations of the parties, especially Norma, negate the same or the
contemplated offset. If the Deed of Adjudication and Sale was intended to be a dation in
payment, the execution of the promissory note and acknowledgment of debt by Norma as
well as the Compromise Agreement by Alden and Norma on September 7, 2006, whereby
Alden agreed, for an agreed consideration, to respect Norma’s ownership and possession of

85.8 sq. Meters of the subject lot, the share being claimed by him, shows an opposite
declaration, i.e. there was no dation in payment or offset.

When Norma executed the promissory note, acknowledgment of debt and compromise
agreement, she was acknowledging that the principal condition or stipulation on the
payment of the purchase price in the Deed of Adjudication and Sale had been modified from
the offset or cancellation of Vicentico’s indebtedness secured by the Real Estate Mortgage,
without which would have amounted to a dation in payment, to a loan payable within a
certain period, which converted the transaction to as sale on credit.

Given the foregoing, the CA erred in its finding that the transaction between the parties is a
dation payment or dacion en pago. The MTC and MTC were, therefore, correct in
considering the transaction as a contract of sale.

A contract of sale is defined in Article 1458 of the Civil Code, to wit:
ART. 1458. By the contract of sale, one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing, and the other to pay therefor
a price certain in money or its equivalent.

A contract of sale may be absolute or conditional.

The Deed of Adjudication and Sale is an absolute sale because there is no stipulation in the
contract that title to the property remains with the sellers until full payment of the
purchase price and there is stipulation giving the vendors the right to cancel unilaterally
the contract the moment the vendee fails to pay within a fixed period.

Petition is Granted.

HUN HYUNG PARK VS. EUNG WON CHOI
G.R. NO. 220826 MARCH 27, 2019

Facts:
On June 28, 1999, Park, who was engaged in the business of lending money, extended a
loan to Choi in the amount of P1,875,000.00. As payment for the loan, Choi issued PNB
Check No. 0077133 in the same amount dated August 28, 1999 in favor of Park. On October
5, 1999, Park attempted to deposit the check to his bank account but the same was
returned to him dishonored for having been drawn against a closed account. Thereafter,
Park, through counsel, sent a letter to Choi on May 11, 2000 informing the latter of the
dishonored check. Choi received the demand letter on May 19, 2000 through a certain Ina
Soliven, nevertheless, Choi failed to resolve the dishonored check.

With the loan remaining unpaid, Park instituted a complaint against Choi for estafa and
violation of B.P. 22. The prosecution's presentation of evidence, Choi filed a Motion for
Leave of Court to File Demurrer to Evidence along with his Demurrer. In his Demurrer, Choi
asserted that the prosecution failed to prove that he received the notice of dishonor.


The MeTC granted Choi's Demurrer and dismissed the criminal complaint. The
prosecution's Motion for Reconsideration of the dismissal was likewise denied, leading Park
to appeal to the RTC of Makati City.

The RTC held that the evidence presented was insufficient to prove Choi's criminal liability
for B.P. 22, it did not altogether extinguish his civil liability. Accordingly, the RTC ordered
Choi to pay Park the face value of the check (P1,875,000.00) with legal interest.
Aggrieved by the RTC, Choi filed a Motion for Reconsideration. Acting on Choi's Motion for
Reconsideration, the RTC reversed its September 11, 2003 Decision finding that Choi was
liable to Park for P1,875,000.00 and instead ordered the remand of the case to the MeTC
so that Choi may adduce evidence on the civil aspect of the case.

Meanwhile, aggrieved by the RTC - Branch 60's remand of the case to the MeTC, Park
elevated the matter to the CA. The CA, however, dismissed Park's petition on procedural
grounds.

Unsatisfied with the CA's dismissal of his petition on procedural grounds, Park assailed the
CA dismissal of his petition before the Court, and, in G.R. No. 165496 entitled "Hun Hyung
Park v. Eung Won Choi,"the Court, through its Second Division, ruled that the remand of the
case to the MeTC for reception of Choi's evidence on the civil aspect of the case was
proper.

Unsatisfied, Choi appealed the above MeTC Decision dated April 26, 2011 to the RTC -
Branch 142. In its Decision, dated December 23, 2011, the RTC - Branch 142 affirmed the
MeTC Decision and denied Choi's appeal. Maintaining his position that he did not waive his
right to present evidence, Choi filed a Motion for Reconsideration. On March 28, 2012, the
RTC - Branch 142 issued an Order denying Choi's Motion for Reconsideration.

Aggrieved, Choi filed a petition for review under Rule 42 of the Rules of Court with the CA.
The CA granted the petition. On March 30,2015, the CA reversed the RTC -Branch 142
Decision dated December 23, 2011 and Order dated March 28, 2012. The Case is remanded
to the Metropolitan Trial Court, Branch 65, Makati City, for the reception of petitioner's
evidence. In a Resolution dated September 30, 2015, the CA denied Park's Motion for
Reconsideration for lack of merit.

Hence, this petition.

Issue:
The sole issue for the Court's resolution is whether the CA committed any reversible error
in the issuance of the assailed Decision dated March 30, 2015 and Resolution dated
September 30, 2015.

Ruling:
The petition is meritorious.


Given the foregoing, the Court finds that: first, Choi was not deprived of due process, and
was in fact, given more than ample opportunity to present his case; and second, that, as
correctly observed by the MeTC and subsequently affirmed by the RTC - Branch 142, Choi
is liable to pay Park the amount P1,875,000.00 along with its corresponding legal interest.

Inasmuch as the parties did not execute a written loan agreement, and consequently, did
not stipulate on the imposition of interest, Article 1956 of the Civil Code, which states that
"no interest shall be due unless it has been expressly stipulated in writing," operates to
preclude the imposition and running of monetary interest on the principal. In other words,
no monetary interest having been agreed upon between the parties, none accrues in favor
of Park.

Nevertheless, the moment a debtor incurs in delay in the payment of a sum of money, the
creditor is entitled to the payment of interest as indemnity for damages arising out of that
delay. Article 2209 of the Civil Code provides that: "if the obligation consists in the payment
of sum of money, and the debtor incurs in delay, the indemnity for damages, there being no
stipulation to the contrary, shall be the payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is six percent (6%) per annum."

Consequently, by operation of Article 2209 of the Civil Code, Choi becomes liable to pay
Park compensatory interest to indemnify Park for the damages the latter suffered as a
result of Choi's delay in the payment of the loan. Delay in this case, pursuant to Article 1169
of the Civil Code, begins to run from the time Park extrajudicially demanded from Choi the
fulfillment of his loan obligation that is, on May 19, 2000. There being no stipulation as to
the rate of compensatory interest, the rate is six percent (6%) per annum pursuant to
Article 2209 of the Civil Code.

To be clear, however, Article 2212 of the Civil Code, which provides that "interest due shall
earn legal interest from the time it is judicially demanded, although the obligation may be
silent upon this point," does not apply because "interest due" in Article 2212 refers only to
accrued interest. A look at the counterpart provision of Article 2212 of the new Civil Code,
Article 1109 of the old Civil Code, supports this. It provides:

Art. 1109. Accrued interest shall draw interest at the legal rate from the time the
suit is filed for its recovery, even if the obligation should have been silent on this point. In
commercial transactions the provisions of the Code of Commerce shall govern. Pawnshops
and savings banks shall be governed by their special regulations.

In interpreting the above provision of the old Civil Code, the Court in Zobel v. City of Manila,
ruled that Article 1109 applies only to conventional obligations containing a stipulation on
interest. Similarly, Article 2212 of the new Civil Code contemplates, and therefore applies,
only when there exists stipulated or conventional interest.

Finally, in accordance Eastern Shipping Lines, Inc. v. Court of Appeals as further clarified by
the Court in Nacar v. Gallery Frames, in the absence of an express stipulation as to the rate
of interest that would govern the parties, the rate of legal interest for loans or forbearance

of any money, goods or credits and the rate allowed in judgments is twelve percent (12%)
per annum computed from default (i.e., the date of judicial or extrajudicial demand). With
the issuance of Bangko Sentral ng Pilipinas (BSP-MB) Circular No. 799 (s. 2013), said rate
of 12% per annum applies until June 30, 2013, and, from July 1, 2013, the new rate of six
percent (6%) per annum applies. Finally, when the judgment of the court awarding a sum
of money becomes final and executory, the rate of legal interest shall be 6% per annum
from such finality until its satisfaction, the interim period being deemed to be by then an
equivalent to a forbearance of credit.

CARMELITA V. DIZON vs JOSE LUIS K. MATTI, JR.
G.R. No. 215614 March 27, 2019

Facts:
On February 24, 2000, a Deed of Absolute Sale was allegedly executed by Carmelita Dizon
in favor of Jose Luis Matti, Jr. The said Deed was duly notarized and the subject property
which was a townhouse located at Block 2, Lot 48, Veraville Allegria Townhomes, San
Antonio Road, Talon IV, Las Pinas City and registered in the Register of Deeds of Las Pinas
City in the name of Carmelita Dizon, was fully paid by Matti, Jr. On the same month, before
the alleged execution of the Deed, the said townhouse was offered for sale by a certain
Zenaida Acleto, a real estate agent, and a certain Mrs. Basilica Estaris to Matti, Jr. A physical
inspection of the subject townhouse was made and all the original documents of the said
property including the and all the original documents of the said property including the
original Owner’s Duplicate Certificate of Title No. 58674 was shown. However, these
documents were shown to be fake and falsified by the La shown to be fake and falsified by
the La s Pinas City Assessor’s Office when he went to update the real estate taxes and get a
new Tax Declaration for Dizon’s property and bythe Register of Deeds when h the Register
of Deeds when he went to have a copy of the Owner’s e went to have a copy of the Owner’s
Duplicate Copy of the title. A certificate was issued by the Register of Deeds attesting that
the same is fake. Hence, a Complaint for Specific Performance was filed by Matti, Jr. against
Dizon.

Dizon contended that Matti, Jr. has no cause of action against her because she did not
transfer ownership of her property to Matti, Jr. nor did she participate in the negotiation,
preparation, and execution. She did not also sign the same Deed. It is because it is legally
and physically impossible for her to do so since she was not in the Philippines from October
20, 1999 and only went back on November 9, 2000. She is working as a nurse in London.
She also did not met and did not personally know Acleto and Estaris.

The Regional Trial Court (RTC) of Las Pinas City dismissed the Complaint and ruled in favor
of Dizon. The trial court resolved that Dizon could not have signed the Deed of Absolute
Sale which purportedly transferred the subject townhouse covered by TCT No. T-58674 to
Matti, Jr. Thus, making the sale invalid and should be declared null and void. Dizon
sufficiently proved that she was not here in the Philippines when the said execution of the
Deed were made as attested by one of her witnesses, Jeoffrey Valix, a confidential agent and
travel records verifier from the Bureau of Immigration and by the Certification from BID

(Bureau of Immigration and Deportation). This was in contrary to Matti, Jr.’s mere
allegations. Motion for Reconsideration by Matti, Jr. was denied. Aggrieved, Matti, Jr.
appealed to the Court of Appeals (CA).

The CA reversed the Decision and ruled in favor of Matti, Jr. to which the CA held that the
evidence of Dizon were not sufficient to refute the presumption of regularity of a notarized
document. The appellate court added that allegations of forgery cannot be presumed and
that a claim of forgery cannot accepted without an examination of signatures conducted by
an expert witness. Motion for Reconsideration by Dizon was denied. Hence, this Petition.

ISSUE:
Whether or not the sale of subject property purportedly entered into by Dizon and Matti, Jr.
is valid on the basis of the presumption of regularity of the supposedly notarized Deed of
Absolute Sale.

RULING:
NO. The sale is INVALID.

The Supreme Court (SC), based on the existing jurisprudence, held that “though the
notarization of the deed of sale in question vests in its favor the presumption of regularity,
it is not the intention nor the function of the notary public to validate and make binding an
instrument never, in the first place, intended to have any binding legal effect upon the
parties thereto. The intention of the parties still and always is the primary consideration in
determining the true nature of a contract” and that an “apparently valid notarization of
document does not guarantee its validity.” The presumption of regularity can be refuted
by a clear, strong, and convincing evidence.

In this case, there were pieces of clear, strong, and convincing evidence which were enough
to refute the presumption of regularity of an alleged notarized Deed of Absolute Sale. The
testimony of Dizon’s brother and an agent of the Bureau of Immigration corroborates
Dizon’s testimony that she was not in the Philippines when the alleged execution of the
Deed. Public documents like Passport, Certification with an attached Travel Record, and
Letter/Certification of Employment issued by the employer of Dizon substantiates her
claim. The Certification issued by the notarial records of the Office of the Clerk of Court,
Paranaque City, certified that no notarized Deed of Absolute Sale exists in the notarial
records and noting also the Register of Deeds ’ certification thatMatti, Jr.’s copy of the
Owner’s Duplicate Copy of the TCT No. T -58674 is fake.

The Court held also that resort to document examiners are dispensable and not mandatory.
A finding of forgery does not depend on the testimony of handwriting experts. As
jurisprudence grants judges the prerogative to exercise independent judgment on the issue
of authenticity of signatures based on the entirety of evidence, the RTC did not err in
holding that the signature of Dizon in the Deed of Absolute Sale was a forgery on the
ground of physical impossibility, despite the lack of expert testimony scrutinizing the
authenticity of the signature in question. Moreover, Jr. did not have any witnesses aside
from him to corroborate his testimony and there is also a serious doubt in the veracity of

his testimony such as the inconsistency of his testimony regarding the place where Dizon
and him allegedly met. He could not even describe Dizon’s physical appearance during the
alleged execution of the Deed. Hence, the Court was convinced that Dizon did not sell the
property to Matti, Jr. and that the Deed of Absolute Sale is a sham and fictitious document
which should be declared as null and void.

DOMESTIC PETROLEUM RETAILER CORPORATION VS. MANILA INTERNATIONAL
AIRPORT AUTHORITY
G.R. NO. 210641 MARCH 27, 2019

Facts:
Petitioner Domestic Petroleum Retailer Corporation (DPRC)and respondent Manila
International Airport Authority (MIAA) entered into a Contract of Lease whereby the
former leased from the latter parcel of land and building. DPRC was obliged to pay monthly
rentals.

Respondent MIAA passed Resolution No. 98-30 increasing the rentals paid by its
concessionaires and lessees. DRPC initially refused to pay the increased rentals which was
decreed without prior notice and hearing.

Respondent MIAA demanded its payment of... rental in arrears which was based on the
increase prescribed in Resolution No. 98-30 with 2% interest compounded monthly.

DPRC protested in writing to MIAA the increased rentals and the computation. However, it
also signified its intention to comply in good faith with the terms and conditions of the
lease contract by paying.

In the said case, the Court nullified Resolution Nos. 98-30 and 99-11 issued by respondent
MIAA for non-observance of the notice and hearing requirements for the fixing rates
required.

DPRC advised MIAA of its intention to stop paying the increased rental rate, and on January
1, 2006, it stopped paying the increased rental rate but continued paying the original rental
rate prescribed in the lease contract. MIAA required the payment of P645,216.21 allegedly
representing the balance of the rentals from January up to June 2006.

DPRC sent its reply to MIAA denying the unpaid obligation, reiterating that the rental could
no longer be computed based on the nullified Resolution No. 98-30. MIAA ignored its
demand prompting DPRC to send a final written demand.

RTC rendered its Decision, ruling in favor of petitioner DPRC.

CA affirmed the RTC's Decision holding respondent MIAA liable to petitioner DPRC. CA
found that the liability of respondent MIAA to petitioner DPRC for overpaid monthly
rentals was in the nature of a quasi-contract of solutio indebiti.


CA held that "the claim of refund must be commenced within six (6) years from date of
payment pursuant to Article 1145(2) of the Civil Code. The CA found that, despite the
records showing that petitioner DPRC made overpayment in monthly rentals from
December 11, 1998 up to December 5, 2005, such claim could not be fully awarded to
petitioner DPRC due to prescription. The claim for refund must be made within six (6)
years from date of payment. Since [petitioner] DPRC demanded the refund of the increase
in monthly rentals mistakenly paid only on July 27, 2006 and filed this case before the
[RTC] only on December 23, 2008, it can recover only those paid during the period from
January 9,2003 to December 5, 2005

Hence, the instant Petition.

ISSUE:
Whether or not the CA was correct in amending the RTC's Decision, modifying the amount
of respondent MIAA's liability from the full amount of P9,593,179.87 to just P3,839,643.05
plus legal interest at 12% per annum computed from the time of extra-judicial demand on
July 27, 2006, on the basis of the application of the six-year prescriptive period governing
the quasi-contract of solutio indebiti.

RULING:
In the instant case, the Court finds that the essential requisites of solutio indebiti are not
present.

It is undisputed by all parties that respondent MIAA and petitioner DPRC are mutually
bound to each other under a Contract of Lease.

Hence, with respondent MIAA and petitioner DPRC having the juridical relationship of a
lessor-lessee, it cannot be said that in the instant case, the overpayment of monthly rentals
was made when there existed no binding juridical tie or relation between the pay or, i.e.,
petitioner DPRC, and the person who received the payment, i.e., respondent MIAA.

The Court finds that the cause of action of petitioner DPRC is based on the violation of a
contractual stipulation in the parties' Contract of Lease, and not due to the existence of a
quasi-contract.

Hence, by filing its Complaint, petitioner DPRC invoked the Contract of Lease and alleged
that respondent MIAA violated the aforementioned contractual stipulation, considering
that the latter imposed a price escalation of monthly rentals despite reneging on its
contractual obligation to first issue a valid Administrative Order and give petitioner DPRC
prior notice.

Just because the Contract of Lease in itself may be silent as to petitioner DPRC's entitlement
to a refund does not mean that such claim for refund is not provided for in the contract and
cannot be asserted by petitioner DPRC.


It must be stressed that applicable laws form part of, and are read into, contracts without
need for any express reference thereto.

Furthermore, it cannot be said that petitioner DPRC's payments in monthly rentals from
December 11, 1998 up to December 5, 2005 in observance with the subsequently nullified
Resolution No. 98-30 were made due to mistake on the part of petitioner DPRC.

Petitioner DPRC deliberately made the payments in accordance with respondent MIAA's
Resolution No. 98-30, albeit under protest.

Petitioner DPRC also signified its intention to comply in good faith with the terms and
conditions of the lease contract by paying the amount charged in accordance with
Resolution No. 98-30 despite registering its objection to its validity.

Solutio indebiti applies when payment was made on the erroneous belief of facts or law
that such payment is due.[34] In the case at hand, petitioner DPRC's overpayment of
rentals from 1998 to 2005 was not made by sheer inadvertence of the facts or the
misconstruction and misapplication of the law. Petitioner DPRC did not make payment
because it mistakenly and inadvertently believed that the increase in rentals instituted by
the subsequently voided Resolution No. 98-30 was indeed due and demandable. From the
very beginning, petitioner DPRC was consistent in its belief that the increased rentals were
not due as Resolution No. 98-30 was, in its view, void.

Therefore, with the absence of the two essential requisites of solutio indebiti in the instant
case, petitioner DPRC's cause of action is not based on the quasi-contract of solutio indebiti.

SPOUSES LUIS G. BATALLA AND SALVACION BATALLA VS. PRUDENTIAL BANK, ET AL.
G.R. NO. 200676 MARCH 25, 2019

Facts:
In March 1998, petitioner Spouses Luis G. Batalla and Salvacion Batalla purchased a
brand-new Honda Civic from respondent Honda Cars San Pablo, Inc. Respondent Alicia
Rantael then acting manager of Pilipinas Bank, now merged with respondent Prudential
Bank (Prudential), brokered the deal.

To finance the purchase of the said motor vehicle, Spouses Batalla applied for a car loan
with Prudential. On March 23, 1998, they executed a promissory note for the sum of
P292,200.00 payable within 36 months. On May 29, 1998, the Car Loan Agreement was
approved. As such, Prudential issued a Manager's Check in the said amount payable to
Honda.
Spouses Batalla paid P214,000.00 corresponding to the remaining portion of the purchase
price for the Honda Civic. In addition, they also paid P11,000.000.00 for delivery cost and
the installation of a remote-control door mechanism, and P28,333.56 for insurance.


On April 21, 1998, Spouses Batalla received the car after Rantael informed them that it was
parked near Prudential. However, after three days, the rear right door of the car broke
down. The Spouses Batalla consulted a certain Jojo Sanchez (Sanchez), who claimed that
the power lock of the rear right door was defective and that the car was no longer brand
new because the paint of the roof was merely retouched.

On May 3, 1998, Spouses Batalla sent a letter to the manager of Prudential notifying it of
the said defects and demanding the immediate replacement of the motor vehicle. On
August 27, 1998, they took the car to the Auto Body Shop for a thorough evaluation of the
status of the vehicle. According to Arturo Villanueva the vehicle was no longer brand new
because the rooftop was no longer shiny in appearance. Thereafter, the manager of
Prudential, together with two individuals from Honda, met Spouses Batalla and offered to
repair the vehicle. Spouses Batalla rejected it because they wanted the car to be replaced
with a brand new one without hidden defects.

Unable to secure a brand new car in replacement of the alleged defective vehicle, Spouses
Batalla filed a Complaint for Rescission of Contracts and Damages against Prudential and
Honda.

The RTC dismissed the Spouses Batalla's complaint. The trial court ruled that the car sold
to Spouses Batalla was a brand new one and that any perceived defects could not be
attributed to Honda.

Spouses Batalla appealed to the CA. The CA affirmed with modification the RTC decision.
The appellate court ruled that Spouses Batalla cannot rescind the promissory note and car
loan agreement on account of the car's alleged defects because they are distinct from the
contract of sale entered into with Honda.

Unsatisfied, Spouses Batalla moved for reconsideration but it was denied by the CA . Hence,
this present petition.

ISSUES:
1. Whether or not the motor vehicle delivered by Honda had hidden defects.
2. Whether or not Spoused Batalla may rescind the contract of sale, car loan
agreement and promissory note due to the defects of the motor vehicle sold.

RULING:
The petition is without merit.

In the case at bench, none of the exceptions are present. The courts a quo have consistently
found that the motor vehicle delivered to Spouses Batalla was brand new. In addition, they
ruled that if there were defects, it could not be attributed to Honda, or, were minor defects
that could have been easily repaired. Moreover, these findings of fact are sufficiently
supported by the evidence on record.


Spouses Batalla anchored their complaint for rescission of contract against Prudential and
Honda on the allegation that the car delivered to them was not brand new and that it
contained hidden defects. Even assuming that the car delivered to Spouses Batalla had a
defective car door, they still do not have any grounds for rescinding the contract of sale.

Article 1561 of the Civil Code provides for an implied warranty against hidden defects in
that the vendor shall be responsible for any hidden defects which render the thing sold
unfit for the use for which it is intended, or should they diminish its fitness for such use to
such an extent that, had the vendee been aware thereof, he would not have acquired it or
would have given a lower price. In an implied warranty against hidden defects, vendors
cannot raise the defense of ignorance as they are responsible to the vendee for any hidden
defects even if they were not aware of its existence.

In case of a breach of an implied warranty against hidden defects, the buyer may either
elect between withdrawing from the contract and demanding a proportionate reduction of
the price, with damages in either case. Here, Spouses Batalla opted to withdraw from the
contract of sale after their demand for a replacement car was not granted.

As can be seen, the redhibitory action pursued by Spouses Batalla was without basis. For
one, it was not sufficiently proven that the defects of the car door were important or
serious. The hidden defect contemplated under Article 1561 of the Civil Code is an
imperfection or defect of such nature as to engender a certain degree of importance and
not merely one of little consequence. Spouses Batalla failed to prove that such defect had
severely diminished the roadworthiness of the motor vehicle. In fact, they admitted that
they had no problem as to the road worthiness of the car.

Loan Agreement independent in the contract of Sale:

Other than rescission of the contract of sale, Spouses Batalla also sought for the rescission
of the car loan agreement and promissory note with Prudential.

A contract of loan is one where one of the parties delivers money or other consumable
thing upon the condition that the same amount of the same kind and quality shall be paid. It
is perfected upon delivery of the object of the contract. On the other hand, a contract of sale
is a special contract whereby the seller obligates himself to deliver a determinate thing and
to transfer its ownership to the buyer. The same is perfected by mere consent of the
parties.

Thus, it is readily apparent that a contract of loan is distinct and separate from a contract of
sale. In a loan, the object certain is the money or consumable thing borrowed by the
obligor, while in a sale the object is a determinate thing to be sold to the vendee for a
consideration. In addition, a loan agreement is perfected only upon the delivery of the
object i.e., money or another consumable thing, while a contract of sUnder this premise, it is
not hard to see the absurdity in the position of Spouses Batalla that they could rescind the
car loan agreement and promissory note with Prudential on the ground of alleged defects
of the car delivered to them by Honda. The transactions of Spouses Batalla with Prudential

and Honda are distinct and separate from each other. From the time Spouses Batalla
accepted the loan proceeds from Prudential, the loan agreement had been perfected. As
such, they were bound to comply with their obligations under the loan agreement
regardless of the outcome of the contract of sale with Honda. Even assuming that the car
that Spouses Batalla received was not brand new or had hidden defects, they could not
renege on their obligation of paying Prudential the loan amount. ale is perfected by mere
consent of the parties.

ASUNCION Z. JURADO, ET AL. VS. SPOUSES VICENTE AND CARMEN CHAI
G.R. NO. 236516 MARCH 25, 2019

Facts:
Petitioners Asuncion and Catalina claimed to be the registered owners, together with their
deceased brother Fernando Zamora, of a 7,086-square meter (sq. m.) parcel of land
denominated as Lot 4900 of the Cadastral Survey of Santiago, located in Santiago City,
Isabela (Lot 4900), covered by TCT No. T-65150 which they inherited from their father,
Dominador Zamora. Dominador held the same under TCT No. T-2291 after acquiring it
from the original owners, Spouses Antonio Pariñas and Maura Balbin.

Sometime in 1997, they discovered that respondents unlawfully caused the subdivision of
Lot 4900 into several parcels of land under four (4) certificates of title (derivative titles), to
wit: (1) TCT No. T-1943468 in the name of Vicente Chai, married to Carmen T. Chai; (2) TCT
No. T-1943479 in the name of Eduardo Sarmiento, married to Josefina M. Sarmiento ; (3)
TCT No. T-l9434810 in the name of Anastacio Palermo ; and (4) TCT No. T-19434911 in the
names of Leonora Pariñas and Margarita Pariñas (Pariñas heirs).This prompted the
Zamoras to file an annulment case against respondents, Spouses Sarmiento, Anastacio, the
Pariñas heirs with their spouses, and the Register of Deeds (RD) for Isabela in Santiago
City, Isabela (RD-Santiago), which was later amended to include the lessee, Petron
Corporation (Petron), as defendant. They claimed that the titles of Chai, et al. proceeded
from a fake Original Certificate of Title (OCT) No. 3429 that was reconstituted judicially and
administratively without notice to all concerned parties, and without following the
prescribed procedure.

The RTC: (a) declared null and void TCT Nos. T-194346, T-194348, and T-194349; (b)
confirmed petitioners' ownership over Lot 4900 covered by TCT No. T-65150; and (c)
ordered Petron to pay petitioners the rentals stipulated in the Lease Agreement dated
September 20, 1996, or to consign the rentals in court while the case is under litigation.

The RTC observed that the judicial reconstitution proceedings of Pariñas OCT 3429 was
attended with irregularity. It likewise ruled that respondents were not purchasers in good
faith, pointing out that the fact that Pariñas OCT 3429 was a reconstituted title should have
alerted them to make an investigation in the Register of Deeds, which could have disclosed
such irregularity but they failed to do so. Consequently, it ruled that Chai, et al. did not
acquire valid title to Lot 4900, and declared their titles null and void for having been
derived from a spurious and fake reconstituted title.


On the other hand, the RTC ruled that petitioners were able to discharge their burden of
proving their claim of ownership over Lot 4900 by preponderance of evidence. While it
noted that TCT No. T-65150 is not intact with the RD-Santiago, it held that petitioners were
able to show that they and their predecessors-in-interest were issued certificates of title
over the said land.

Finally, the RTC found that Petron had the right to rely on respondents' title at the time the
Lease Contract was entered. Aggrieved, petitioners and herein respondents separately
moved for reconsideration, which were, however, denied.

Only herein respondents elevated the matter to the CA.

In a Decision dated May 12, 2016, the CA reversed the RTC decision and dismissed the
annulment case for lack of merit.

The CA ruled that respondents were purchasers in good faith despite the irregularity which
attended the reconstitution of Pariñas OCT 3429. On the other hand, the CA held that
petitioners were not able to prove their right or interest in Lot 4900, pointing out that TCT
No. T-65150 was not on file with the RD-Ilagan and notwithstanding, they had not taken
any immediate action to reconstitute the same.

Unperturbed, petitioners moved for reconsideration but the same was denied. Hence, this
petition.

ISSUES:
1. Whether or not the respondents are purchasers in good faith.
2. Whether or not petitioners have not proven their claim of ownership over Lot
4900.

HELD:
The petition is GRANTED.

I. Persons dealing with administratively reconstituted titles should conduct an
inquiry or investigation as might be necessary to acquaint themselves with the
defects in the titles of their vendors.
Case law states that reconstituted titles shall have the same validity and legal effect as to
the originals thereof unless the reconstitution was made extrajudicially, or administratively.
This is because administrative reconstitution is essentially ex-parte and without notice, and
thus, administratively reconstituted titles do not share the same indefeasible character of
the original certificates of title. Anyone dealing with such copies are put on notice of such
fact and warned to be extra-careful.
In this case, Pariñas OCT 3429 was judicially reconstituted. However, Respondents had not
conducted any other inquiry or investigation to acquaint themselves with the defects of the
said title. Subsequently, it turned out that there is no Pariñas OCT 3429 on file with the

RD-Santiago. While the mere fact that the RD does not have the original of a certificate of
title does not necessarily mean that such title never existed, the inexistence of Pariñas OCT
3429 was sufficiently established with the express admission by the RD-Santiago that what
was transmitted to it by the RD-Ilagan that is now on file with it is the Calma OCT over a
9,155-sq. m. parcel of land located in Barrio Marasat Grande, San Mateo, Isabela, issued
pursuant to Decree No. N-167495 in Cadastral Case No. 23, LRC Cadastral Record No. 1474,
and registered. Between the above admission from the government office responsible for
safeguarding the OCTs and TCTs in its possession, and respondents' RD-Ilagan
Certification101 which does not bear the seal of office of the RD-Ilagan102 nor indicate that
the required documentary stamp, as well as the certification fee had been paid, the
admission of the RD-Santiago should prevail.

Considering the foregoing, it is therefore apparent that Spouses Pariñas were not issued
Pariñas OCT 3429, and said title is totally inexistent. That it was reconstituted is of no
moment because an administrative reconstitution of title is merely a restoration or
replacement of a lost or destroyed title in its original form at the time of the loss or
destruction. The issuance of a reconstituted title vests no new rights and determines no
ownership issues, and shall always be without prejudice to any party whose right or
interest in the property was duly noted in the original, at the time it was lost or destroyed,
but entry or notation of which has not been made on the reconstituted certificate of title, as
expressly provided under Section 7 of RA 26, which was duly noted on the reconstituted
Pariñas OCT 3429. Consequently, this Court finds respondents not to be innocent
purchasers for value, and as such, acquired no better title to Lot 4900 than what their
predecessors-in-interest had, and which is without prejudice to the rights of another
person who may prove a better right thereto than their transferors.
II. Petitioners have proven their claim of ownership over Lot 4900.
Petitioners have an owner's duplicate certificate of title in genuine/authentic Judicial Form
109-D.

Considering petitioners' possession of the afore-mentioned ancient documents showing
acts of dominion over Lot 4900 by Dominador which can be traced to the ownership of
Antonio, the Court finds that petitioners' evidence, which convincingly prove their claim of
ownership over Lot 4900, should clearly prevail over that of respondents', whose title was
competently shown to have emanated from an ultimately inexistent and void title.
Jurisprudence states that any title that traces its source to a void title, as respondents' in
this case, is also void since the spring cannot rise higher than its source. Nemo potest plus
juris ad alium transferre quam ipse habet. Consequently, TCT No. T-194346 in the name of
respondent Vicente Chai should be declared null and void, having been derived from the
inexistent Pariñas OCT 3429. On the other hand, having convincingly proven their claim of
ownership over Lot 4900, petitioners' ownership and their entitlement to possession
thereof should be confirmed.


ANNIE TAN VS. GREAT ENTERPRISES, INC.

G.R. NO. 220400, MARCH 20, 2019

Common carriers are obligated to exercise extraordinary diligence over the goods
entrusted to their care. This is due to the nature of their business, with the public policy
behind it geared toward achieving allocative efficiency and minimizing the inherently
inequitable dynamics between the parties to the transaction.Here, petitioner is a common
carrier obligated to exercise extraordinary diligence over the goods entrusted to her. Her
responsibility began from the time she received the soya beans from respondent's broker
and would only cease after she has delivered them to the consignee or any person with the
right to receive them.

Facts:

On February 3, 1994, Great Harvest hired Tan to transport 430 bags of soya beans from
Tacoma Integrated Port Services, Inc. in Port Area, Manila to Selecta Feeds in Camarin,
Novaliches, Quezon City. That same day, the bags of soya beans were loaded into Tan's
hauling truck. Her employee, Rannie Sultan Cabugatan , then delivered the goods to Selecta
Feeds.At Selecta Feeds, however, the shipment was rejected. Upon learning of the rejection,
Great Harvest instructed Cabugatan to deliver and unload the soya beans at its warehouse
in Malabon. Yet, the truck and its shipment never reached Great Harvest's warehouse.

Great Harvest asked Tan about the missing delivery. Tan admitted that she could not locate
both her truck and Great Harvest's goods. She reported her missing truck to the Western
Police District Anti-Carnapping Unit and the National Bureau of Investigation. The NBI
informed Tan that her missing truck had been found in Cavite. However, the truck had been
cannibalized and had no cargo in it. Great Harvest filed a Complaint for sum of money
against Tan for the continued refusal to pay the missing shipment.

Tan denied that she entered into a hauling contract with Great Harvest, insisting that she
merely accommodated it. Tan also pointed out that since Great Harvest instructed her
driver to change the point of delivery without her consent, it should bear the loss brought
about by its deviation from the original unloading point.

The trial court granted Great Harvest's Complaint for sum of money. It found that Tan
entered into a verbal contract of hauling with Great Harvest, and held her responsible for
her driver's failure to deliver the soya beans to Great Harvest. Tan filed an Appeal, but the
Court of Appeals dismissed it. The Court of Appeals also held that the cargo loss was due to
Tan's failure to exercise the extraordinary level of diligence required of her as a common
carrier, as she did not provide security for the cargo or take out insurance on it.

Issue:
Whether petitioner Annie Tan should be held liable for the value of the stolen soya beans.


Ruling:
YES.

Article 1732 of the Civil Code defines common carriers as "persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or
both, by land, water or air, for compensation, offering their services to the public." The Civil
Code outlines the degree of diligence required of common carriers in Articles 1733, 1755,
and 1756:

ARTICLE 1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over the goods
and for the safety of the passengers transported by them, according to all the
circumstances of each case .

ARTICLE 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with a
due regard for all the circumstances.

ARTICLE 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in articles 1733 and 1755.

Law and economics provide the policy justification of our existing jurisprudence. The
extraordinary diligence required by the law of common carriers is primarily due to the
nature of their business, with the public policy behind it geared toward achieving allocative
efficiency between the parties to the transaction.

Allocative efficiency is an economic term that describes an optimal market where
customers are willing to pay for the goods produced. Thus, both consumers and producers
benefit and stability is achieved.

The notion of common carriers is synonymous with public service under Commonwealth
Act No. 146 or the Public Service Act. Due to the public nature of their business, common
carriers are compelled to exercise extraordinary diligence since they will be burdened with
the externalities or the cost of the consequences of their contract of carriage if they fail to
take the precautions expected of them.

Common carriers are mandated to internalize or shoulder the costs under the contracts of
carriage. This is so because a contract of carriage is structured in such a way that
passengers or shippers surrender total control over their persons or goods to common
carriers, fully trusting that the latter will safely and timely deliver them to their destination.
In light of this inherently inequitable dynamics and the potential harm that might befall
passengers or shippers if common carriers exercise less than extraordinary diligence the
law is constrained to intervene and impose sanctions on common carriers for the parties to
achieve allocative efficiency.


Here, petitioner is a common carrier obligated to exercise extraordinary diligence over the
goods entrusted to her. Her responsibility began from the time she received the soya beans
from respondent's broker and would only cease after she has delivered them to the
consignee or any person with the right to receive them.

Furthermore, Article 1734 of the Civil Code holds a common carrier fully responsible for
the goods entrusted to him or her, unless there is enough evidence to show that the loss,
destruction, or deterioration of the goods falls under any of the enumerated exceptions:

ARTICLE 1734. Common carriers are responsible for the loss, destruction, or deterioration
of the goods, unless the same is due to any of the following causes only: (1)Flood, storm,
earthquake, lightning, or other natural disaster or calamity; (2)Act of the public enemy in
war, whether international or civil;(3)Act or omission of the shipper or owner of the
goods;(4)The character of the goods or defects in the packing or in the containers;(5)Order
or act of competent public authority.

Nothing in the records shows that any of these exceptions caused the loss of the soya beans.
Petitioner failed to deliver the soya beans to respondent because her driver absconded
with them. She cannot shift the blame for the loss to respondent's supposed diversion of
the soya beans from the loading point to respondent's warehouse, as the evidence has
conclusively shown that she had agreed beforehand to deliver the cargo to respondent's
warehouse if the consignee refused to accept it.

Finally, petitioner's reliance on De Guzman v. Court of Appealsis misplaced. There, the
common carrier was absolved of liability because the goods were stolen by robbers who
used "grave or irresistible threat, violence or force" to hijack the goods. De Guzman viewed
the armed hijack as a fortuitous event:

Under Article 1745 (6) above, a common carrier is held responsible and will not be allowed
to divest or to diminish such responsibility even for acts of strangers like thieves or
robbers, except where such thieves or robbers in fact acted "with grave or irresistible
threat, violence or force." We believe and so hold that the limits of the duty of
extraordinary diligence in the vigilance over the goods carried are reached where the
goods are lost as a result of a robbery which is attended by "grave or irresistible threat,
violence or force.

"In contrast to De Guzman, the loss of the soya beans here was not attended by grave or
irresistible threat, violence, or force. Instead, it was brought about by petitioner's failure to
exercise extraordinary diligence when she neglected vetting her driver or providing
security for the cargo and failing to take out insurance on the shipment's value.


UNITRANS INTERNATIONAL FORWARDERS, INC. VS. INSURANCE COMPANY OF

NORTH AMERICA, ET AL.
G.R. NO. 203865, MARCH 13, 2019

Facts:
On July 28, 2003, ICNA filed an Amended Complaint for collection of sum of money arising
from marine insurance coverage on two (2) musical instruments imported from Melbourne
Australia on April 22, 2002.

The Complaint, was filed before the Regional Trial Court of Makati City, Branch 139 (RTC),
was instituted against South East Asia Container Line (SEACOL) and the unknown
owner/charterer of the vessel M/S Buxcrown, both doing business in the Philippines
through its local ship agent Unitrans, and against the unknown charterer of M/S Doris
Wullf, doing business in the Philippines through its local ship agent TSA, for the collection
of the principal amount of Twenty-Two Thousand, Six Hundred Fifty-Seven Dollars and
Eighty Three Cents US$22,657.83 with interests thereon and attorney's fees.

On or about 22 April 2002, in Melbourne, Australia, SEACOL a foreign company solicited
and received shipment of pieces of STC musical instruments from the shipper Dominant
Musical Instrument for transportation to and delivery at the port of Manila, complete and
in good condition. SEACOL then loaded the insured shipment on board M/S Buxcrown for
transportation from Melbourne Australia to Singapore. In Singapore, the shipment was
transferred from M/S Buxcrown to M/S Doris Wullf for final transportation to the port of
Manila. The aforesaid shipment was insured with ICNA against all risk in favor of the
consignee, San Miguel Foundation for the Performing Arts.

On 12 May 2002, M/S Doris Wullf arrived and docked at the Manila International Container
Port, North Harbor, Manila. The container van was discharged from the vessel was received
by Unitrans and upon stripping the contents thereof, it was found that two of the cartons
containing the musical instruments were in bad order condition, per Turn Over Survey
Report. Unitrans then delivered the subject shipment to the consignee. After further
inspection, it was found out that two units of musical instruments were damaged and could
no longer be used for their intended purpose, hence were declared a total loss

Obviously, the damages sustained by the insured cargo were caused by the fault and
negligence of the therein defendants. Formal claims were filed against the therein
defendants but they refused and failed to pay the same without valid and legal grounds.

On March 29,2010, the RTC granted the Complaint and held Unitrans liable to ICNA for the
sum of US$22,657.83 or its equivalent in Philippine Peso, P1,042,260.18 with interest.

Unitrans filed an appeal but the CA denied its appeal for lack of merit. They also filed a
Motion for Clarification and Reconsideration but was denied by the CA. Hence, this instant
Petition.


Issue:
Whether or not the CA was correct in rendering the assailed Decision, which affirmed the
RTC's Decision holding Unitrans liable to ICNA.

Ruling:
The instant Petition is bereft of merit.

Article 1735 of the Civil Code states that if the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as required in Article 1733.

In turn, Article 1733 states that common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers transported by them, according to all the
circumstances of each case.

Hence, jurisprudence holds that a common carrier is presumed to have been negligent if it
fails to prove that it exercised extraordinary vigilance over the goods it transported. When
the goods shipped are either lost or arrived in damaged condition, a presumption arises
against the carrier of its failure to observe that diligence, and there need not be an express
finding of negligence to hold it liable. To overcome the presumption of negligence, the
common carrier must establish by adequate proof that it exercised extraordinary diligence
over the goods. It must do more than merely show that some other party could be
responsible for the damage.

In the instant case, considering that it is undisputed that the subject goods were severely
damaged, the presumption of negligence on the part of the common carrier, i.e., Unitrans,
arose. Hence, it had to discharge the burden, by way of adequate proof, that it exercised
extraordinary diligence over the goods; it is not enough to show that some other party
might have been responsible for the damage. Unitrans failed to discharge this burden.
Hence, it cannot escape liability.

LAND BANK OF THE PHILIPPINES VS. LUCY GRACE AND ELMA GLORIA FRANCO
REPRESENTED BY ATTORNEY-IN-FACT
G.R. NO. 203242, MARCH 12, 2019

Facts:
Lucy Grace Franco and Gloria Franco offered their parcelof land for sale to the Department
of Agrarian Reform (DAR) under the Voluntary Officer to Sell of the Comprehensive
Agrarian Reform in 1995. A total of 12.5977 hectares were acquired and distributed to
qualified agrarian reform beneficiaries. The Franco were dissatisfied with the initial
valuation of P739,461.43.

In its September 18,2007 decision, the Special Agrarian Court fixed the just compensation
for the hectares of the land area actually taken by the government in the amount of

P1,024,115.49, and ordered the Land Bank of the Philippines to pay the remaining balance
of P288,115,49 with legal interest at 12% per annum from April 25, 1996 until full
payment. Also, The Franco’s were also entitled of an additional 5% cash payment by way of
incentive for voluntary offering their lots for sale under Sec.19 of RA No. 6657.

ISSUES:
1. Whether or not the Court of Appeals erred in affirming the Special Agrarian Court's
valuation of just compensation using a variation of the basic general formula
provided for in Department of Agrarian Reform Administrative Order No. 5, series
of 1998.
2. Whether or not the five percent (5%) cash incentive under Section 19 of the
Comprehensive Agrarian Reform Law refers only to the mode of payment of the
cash portion, not to an increase in the total amount of just compensation.

RULING:
NO. The just compensation to be paid to Franco is P739,461.43, as computed by the Land
Bank of the Philippines and Department of Agrarian Reform with legal interest of 12%
from the time of taking until June 30,2012, and legal interest of 6% from July 1,2013 until
its full satisfaction.

The Land Bank of the Philippines already factored the property’s market value as
appearing in the 1996 tax declaration in computing the value of just compensation. By
averaging the price of the land, as computed based on the Department guidelines, and the
land’s market value as appearing in the 1996 tax declaration, the special agrarian court did
a” double take up” of the market value per tax declaration of the property. It destroyed the
affordability of the land to the farmers beneficiaries.

YES. Section 19 must be interpreted to mean that while the 5% cash payment is an
incentive to owners- sellers to expedite the agrarian reform program, the incentive given to
these land owners should not be to detriment of the government. Instead of receiving only
35% in cash, the land owner shall receive 40% in cash and 60% in bonds.

LILIBETH ESPINAS-LANUZA, ONEL ESPINAS, AS HEIRS OF LEOPOLDO ESPINAS, AND
THE MUNICIPAL ASSESSOR OF DARAGA, ALBAY VS. FELIX LUNA, JR., ET AL.
G.R. NO. 229775, MARCH 11, 2019

Facts:
During his lifetime, Simon Velasco was the owner of several properties including the land
covered by Original Certificate of Title (OCT) No. 20630, situated in Namantao, Daraga,
Albay (subject property). Simon had four children, namely, Heriberto Velasco, Genoviva
Velasco, Felisa Velasco, and Juan Velasco. Felix Luna, Jr., is the son of Genoviva, while
Armando Velasco and Antonio Velasco are the children of Heriberto (collectively,
respondents).


Respondents allege that Juan and Felisa, through deceit, connivance, and
misrepresentation, executed a Deed of Extrajudicial Settlement and Sale dated May 14,
1966, which adjudicated the subject property to Leopoldo Espinas son of Felisa. They
further contend that they discovered the fraud in 2010 when they came to know that Tax
Declaration No. 02-040-0147 was issued in Leopoldo's name.

In their defense, Lilibeth Espinas-Lanuza and Onel Espinas (petitioners), children of
Leopoldo, argue that when Simon died intestate, his children agreed to partition his estate
such that the property situated in Magogon, Camalig, Albay went to Genoviva and the
parcel of land located in Ting-ting, Taloto, Camalig, Albay went to Heriberto. On the other
hand, the subject property was the joint share of Juan and Felisa who subsequently
executed a Deed of Extrajudicial Settlement and Sale on May 14, 1966, conveying the
subject property to Leopoldo.

On December 2, 2014, the RTC ruled in favor of the respondents declaring that
[respondents] Felix Luna, Jr., Armando Velasco and Antonio Velasco, are co-owners
with [petitioners] Lilibeth Espina-Lanuza and Onel Espina, of Cadastral Lot No.
13507 situated in the Municipality of Daraga, Albay.

Petitioners filed an appeal with the CA. On June 13, 2016, the instant appeal was denied for
lack of merit. Petitioners moved for reconsideration, but the same was denied by the CA.
Hence, this petition for review on certiorari.

Issues:
1. Whether or not the CA erred ang gravely abused its discretion in upholding the
findings of the RTC- Albay, Branch 1 that Felix Luna, Jr., Armando Velasco and
Antonio Velasco are co-owners with petitioners Lilibeth Espina-Lanuza and Onel
Espina of the Cadastral Lot No. 13507 situated in the Municipality of Daraga,
Albay.
2. Whether or not the CA erred and gravely abused its discretion in ignoring the
actual partition already done by Genoviva, Heriberto, Felisa and Juan, all
surnamed Velasco long before the sale of Lot No.13507 in favor of Leopoldo
Esina on May 14, 1996.
3. Whether or not the CA erred and gravely abused its discretion when it ignored
the presence of laches and prescription in petitioner’s favor alleging fraud has
been committed against laches and prescription in petitioner’s favor alleging
fraud has been committed against the excluded heirs.

Ruling:

Partition is the separation, division and assignment of a thing held in common among those
to whom it may belong. It may be effected extrajudicially by the heirs themselves through a
public instrument filed before the register of deeds.


However, as between the parties, a public instrument is neither constitutive nor an

inherent element of a contract of partition. Since registration serves as constructive notice
to third persons, an oral partition by the heirs is valid if no creditors, are affected.
Moreover, even the requirement of a written memorandum under the statute of frauds
does not apply to partitions effected by the heirs where no creditors are involved
considering that such transaction is not a conveyance of property resulting in change of
ownership but merely a designation and segregation of that part which belongs to each
heir.

Every act which is intended to put an end to indivision among co-heirs and legatees or
devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a
compromise, or any other transaction.

In the case at bar, it can be gleaned unerringly that the heirs of Simon agreed to orally
partition his estate among themselves, as evinced by their possession of the inherited
premises, their construction of improvements thereon, and their having declared in their
names for taxation purposes their respective shares. Actual possession and exercise of
dominion over definite portions of the property in accordance with an alleged partition are
considered strong proof of an oral partition.

In addition, a possessor of real estate property is presumed to have title thereto unless the
adverse claimant establishes a better right. Also, under Article 541 of the Civil Code, one
who possesses in the concept of an owner has in his favor the legal presumption that he
possesses with a just title, and he cannot be obliged to show or prove it. Moreover, Article
433 of the Civil Code provides that actual possession under a claim of ownership raises a
disputable presumption of ownership. Here, aside from respondents' bare claim that they
are co-owners of the subject property, they failed to adduce proof that the heirs of Simon
did not actually partition his estate.

Finally, laches has set in against respondents, precluding their right to recover the subject
property In De Vera-Cruz v. Miguel, the Court declared:
Laches has been defined as such neglect or omission to assert a right, taken in conjunction
with lapse of time and other circumstances causing prejudice to an adverse party, as will
operate as a bar in equity. It is a delay in the assertion of a right which works disadvantage
to another because of the inequity founded on some change in the condition or relations of
the property or parties. It is based on public policy which, for the peace of society, ordains
that relief will be denied to a stale demand which otherwise could be a valid claim. It is
different from and applies independently of prescription. While prescription is concerned
with the fact of delay, laches is concerned with the effect of delay. Prescription is a matter
of time; laches is principally a question of inequity of permitting a claim to be enforced, this
inequity being founded on some change in the condition of the property or the relation of
the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas
prescription applies at law. Prescription is based on a fixed time, laches is not. Laches
means the failure or neglect for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; it is negligence

or omission to assert a right within a reasonable time, warranting the presumption that the
party entitled to assert it either has abandoned or declined to assert it.

The elements of laches are: (1) conduct on the part of the defendant, or one under whom he
claims, giving rise to the situation that led to the complaint and for which the complaint
seeks a remedy; (2) delay in asserting the complainant's rights, having had knowledge or
notice of the defendant's conduct and having been afforded an opportunity to institute a
suit; (3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and (4) injury or prejudice to the
defendant in the event relief is accorded to the complainant, or the suit is not held barred.

In this case, there is no question on the presence of the first element of laches. The object of
respondents' complaint before the trial court was to annul the extrajudicial settlement in
order to recover their shares in the subject property, which is presently in the hands of
petitioners. The second element of delay is also present in the case at bar. Respondents'
suit was instituted in 2010, 44 years after the property was conveyed to Leopoldo in 1966.
Again, respondents' predecessors-in-interest, Genoviva and Heriberto, could not have been
unaware of Leopoldo's open and continuous possession of the subject property. The third
element is also present in this case. Petitioners had no inkling of respondents' intent to
possess the subject property considering that Simon's children never contested the
conveyance of the subject property to Leopoldo. As to the fourth element of laches, it goes
without saying that petitioners will be prejudiced if respondents' complaint is accorded
relief, or not held barred. Needless to say, laches has set in against respondents, precluding
their right to recover the subject property.
Accordingly, considering that Felisa and Juan already owned the subject property at the
time they sold the same to Leopoldo on May 14, 1966, having been assigned such property
pursuant to the oral partition of the estate of Simon effected by his heirs, petitioners are
entitled to actual possession thereof.

MELINDA M. MALABANAN VS. FRANCISCO MALABANAN, JR., ET AL.
G.R. NO. 187225, MARCH 6, 2019

Facts:
Melinda Malabanan is the widow of Jose Malabanan. In a December 18, 1984 Deed of
Absolute Sale, they acquired a 310-square meter lot, a portion of a 2,000-square meter land
registered under Maria Cristina Rodriguez. Subsequently,Transfer Certificate of Title No.
T-188590 was issued to "Jose married to Melinda" covering the disputed property. The
spouses built a house on the lot which the family had possessed since 1984.

On October 13, 1984, Melinda left the Philippines to work in Libya. Unfortunately, Jose was
murdered on June 12, 1985 prompting her to return home on June 25, 1985. She then
returned to Libya on August 19, 1985, and only came home on November 8, 1990.

Later on, Melinda discovered that Transfer Certificate of Title No. T-188590 had long been
canceled through a string of transactions, and that the property was registered under the

name of Spouses Dominador III and Guia Montano. The following were executed: (a).
Special Power of Attorney was allegedly executed by her husband, Jose Malabanan, with
her conformity authorizing her father-in-law Francisco Malabanan, Jr. to mortgage, lease or
sell their property covered by TCT No. T-188590; (b). on the basis of said Special Power of
Attorney, the subject property was sold by Francisco Malabanan, Jr. to Benjamin M. Lopez
(Francisco's brother-in-law) via a Deed of Absolute Sale executed and as a result, TCT No.
T-188590 was canceled and [in] lieu thereof TCT No. T-195283 was issued in the name of
Benjamin Lopez married to Antonia Lopez; (c) within the span of 3 months Francisco
Malabanan, Jr. bought back the subject property under a Deed of Absolute Sale dated
September 9, 1985 and as a result, TCT No. T-195283 was canceled and a new TCT No.
T-198039 was issued in the name of Francisco Malabanan, Jr. married to Adelfina Mendoza
on September 18, 1985.

When Melinda's mother-in-law, Adelfina Mendoza died, her family executed an
Extrajudicial Settlement of her estate. The property, then covered by Transfer Certificate of
Title No. T-198039, was adjudicated to Ramon Malabanan who was Jose's brother.

Melinda filed before the Regional Trial Court a Complaint for Annulment of Title with
Damages against Spouses Ramon and Prescila Malabanan and Francisco Malabanan. On
June 17, 1994, Ramon sold the property to the Montano Spouses, with whom Transfer
Certificate of Title No. T-467540 was issued.

Melinda later filed an Amended Complaint to implead the Montano Spouses. She argued
that the Special Power of Attorney was void as her signature in it was forged, and that she
and Jose remained the real owners of the property.

On July 9, 2004 Decision, the Regional Trial Court ruled in favor of Melinda. It found that
she has proved her ownership over the property, which was fraudulently transferred
through Francisco's clever scheme.

On appeal, the Court of Appeals, set aside the trial court's ruling and ordered the
Complaint's dismissal. The Court of Appeals further held that under Article 1448 of the
Civil Code, there is a disputable presumption that a gift was in favor of the child when a
parent pays for a property but its title is conveyed to the child. Likewise, the Court of
Appeals cited Article 153 of the Civil Code, in relation to Article 148 of the Civil Code and
Article 109, Paragraph 2 of the Family Code. Based on these statutes, it found that since
Jose acquired the gift by gratuitous title during marriage, the property was excluded from
the conjugal partnership of gains. As it was his exclusive property, Jose can dispose it
without Melinda's consent. Hence, Melinda's signature being forged in the Special Power of
Attorney did not invalidate the authority Jose had given his father.

Melinda filed a Motion for Reconsideration but was denied, holding that the arguments
raised were extensively discussed in its Decision. Hence, Melinda filed this Petition for
Review on Certiorari against Francisco, the Malabanan Spouses, and the Montano Spouses.


Issue:
Whether or not the property formerly covered by Transfer Certificate of Title No. T-188590
was conjugal, and thus, rendering its sale without the wife's consent void.

Ruling:
The petition was granted.

The circumstances here transpired prior to the effectivity of the Family Code on August 3,
1988. Thus, petitioner and Jose's marriage and property relations are governed by the Civil
Code.

Under the Civil Code, property acquired during marriage is presumed to be conjugal. There
is no need to prove that the money used to purchase a property came from the conjugal
fund. What must be established is that the property was acquired during marriage. Only
through "clear, categorical, and convincing" proof to the contrary will it be considered the
paraphernal property of one (1) of the spouses.

Here, the pieces of evidence presented by respondents, who had the burden of proving that
the property was not conjugal, were insufficient to overturn this presumption. A certificate
of title is the best evidence of ownership of a property.

Since this case involves conjugal property, Articles 165 and 166 of the Civil Code are
relevant:

ARTICLE 165. The husband is the administrator of the conjugal partnership.
ARTICLE 166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband
cannot alienate or encumber any real property of the conjugal partnership without the
wife's consent. If she refuses unreasonably to give her consent, the court may compel her to
grant the same.

This article shall not apply to property acquired by the conjugal partnership before the
effective date of this Code.

This Court, applying those Civil Code provisions, ruled in a number of cases that the sale of
conjugal property by a spouse without the other's consent is void. All subsequent
transferees of the conjugal property acquire no rights whatsoever from the conjugal
property's unauthorized sale. Here, Jose had no right to either unilaterally dispose the
conjugal property or grant respondent Francisco this authority through the supposed
Special Power of Attorney.
The transactions that transferred ownership of the disputed property arose from the
Special Power of Attorney, which petitioner has consistently assailed. Considering that
petitioner was in Libya when the Special Power of Attorney was executed, and that an
expert witness testified on the forgery of petitioner's signature, the court ruled that the
Special Power of Attorney is void.


GENEROSO SEPE VS. HEIRS OF ANASTACIA KILANG, REP.

BY HER CHILDREN MARIA, DONATA, FELICIANA, DOMINGA AND SEVERO ALL
SURNAMED SOLIJON
G.R. NO. 199766, APRIL 10, 2019

Facts:
In a complaint instituted on May 16, 2002, respondents Heirs of Anastacia Kilang,
represented by her children Maria, Donata, Feliciana, Dominga and Severo Solijon
(respondents), sought the nullification of: (1) Deed of Sale of a Registered Land dated
November 18, 1992 (DOS) executed by Anastacia Kilang with marital consent of Fabian
Solijon in favor of spouses Generoso Sepe (petitioner) and Gaudencia D. Sepe (2)
Confirmation of Sale dated December 17, 1992 (COS) executed by respondents, except
Dominga; and (3) Transfer Certificate of Title No. (TCT) T-35367 registered in the names of
spouses Sepe; and for recovery of title, possession with damages.

The complaint alleged that the late Anastacia, who was then an 84-year old, illiterate,
rheumatic and bedridden mother, agreed to the offer of petitioner to undertake the
subdivision of her land in Cabawan District, Tagbilaran City under TCT T-10069 in
consideration for one lot in the subdivision and a first preference to buy any portion that
might be for sale; but taking advantage of the ignorance of respondents' family, petitioner
managed to have the DOS executed and misled Feliciana and Donata into believing that the
document was the instrument of subdivision.

By the DOS, which was executed and notarized on November 18, 1992, Anastacia, with her
husband's consent, purportedly sold her paraphernal property a lot located at Barrio
Gaboc, Tagbilaran City with an area of 18,163 square meters (subject lot) and covered by
TCT T-10069 to spouses Sepe for P15,000.00.

On December 14, 1992, Anastacia executed a notarized Notice of Adverse Claim, wherein
she claimed that "the second duplicate copy of [TCT T-10069] was lost sometimes (sic) on
the first week of December 1992, and was found in the possession of one Generoso Sepe
without the knowledge and consent of the owner" and the "parcel of land was never sold
nor encumbered to anybody else."

On December 17, 1992, respondents, save Dominga, executed the COS for a consideration
of P40,000.00, wherein they confirmed absolutely and irrevocably the sale of the subject lot
situated at Barrio Gaboc (now Cabawan District) made and executed by their parents,
Anastacia and Fabian, in favor of spouses Sepe, and warranted to defend their rights and
peaceful possession of the subject lot.

On January 14, 1993, Anastacia executed a notarized Notice of Withdrawal of Adverse
Claim, wherein she alleged that she was made to sign an Adverse Claim by Dominga and
Donata; she did not understand its contents; and she remembered that she had "already
sold the same land to [spouses Sepe] on November 18, 1992 before Atty. Gaspar S. Rulona
the Adverse Claim was an error; and she wanted "the same withdrawn, so that the DEED

OF SALE OF THE LAND COVERING TCT NO. T-10069, would push through, and the title so
issued in favor of the vendees spouses Sepe.

TCT T-10069 in the name of Anastacia was cancelled and TCT T-35367 was issued in the
names of spouses Sepe.

On November 17, 1998, Maria wrote the Regional Director of the National Bureau of
Investigation (NBI) seeking assistance relative to this case in a letter of even date.

On December 21, 1998, respondents, represented by Maria, filed a case (Civil Case No.
6703) for nullification of the sale and the TCT issued to petitioner. Respondents failed to
prosecute the case for some time resulting in its dismissal without prejudice on February
26, 2002.

On May 16, 2002, respondents refiled the case by filing the Complaint dated March 25,
2002. After the RTC admitted respondents' offer of documentary evidence, counsel for
petitioner manifested that he was opting to file a demurrer to evidence.

On August 7, 2006, the RTC issued an Order granting the demurrer to evidence and
dismissing the case.

Respondents filed a motion for reconsideration, but the RTC denied the same.

Aggrieved, respondents interposed an appeal before the CA. The CA granted respondents'
appeal.

Petitioner filed a motion for reconsideration, which was denied by the CA. Hence, the
present Petition.

Issues:
1. Whether or not the CA erred in its ruling that there was no consideration for the
sale.
2. Whether or not the CA erred in its finding that the haste by which Anastacia
executed the adverse claim on December 14, 1992 meant that she did not sell her
property to anybody.
3. Whether or not the CA erred in its finding that the withdrawal of the adverse claim
was not done by Anastacia but through the illegal machinations of petitioner.
4. Whether or not the CA erred in its finding that petitioner took advantage of the
ignorance of Anastacia and her children by making them believe that the DOS in
favor of petitioner referred to a partition or subdivision of the subject lot.
5. Whether or not the CA erred in its finding that if petitioner had validly purchased
the subject lot, he would not exert effort to cause the execution of the COS.

Ruling:
The Petition is with merit.


The general rule is that only questions of law may be raised in a Rule 45 petition to review.
While the issues propounded by petitioner are seemingly factual, the ultimate issue
whether the 1992 DOS is valid is both factual and legal. Petitioner is thus asking the Court
to re-examine the evidence presented by the parties, which re-examination is warranted
since the findings of the CA are contrary to those of the trial court, a recognized exception
to the rule that the findings of fact of the CA are conclusive and binding upon the Court.

The CA observed that "what is glaring in the evidence and the records of this case is the fact
that there was no discussion or assertion whether or not money or cause or consideration
exchanged hands between Anastacia Kilang and Generoso Sepe." To sustain its finding of
lack of consideration, the CA relied on the testimonies of Anastacia's daughters that no
consideration was paid to their mother by petitioner, without, however, indicating the
pertinent pages of the relevant transcript of stenographic notes of their testimonies. Also,
the CA interpreted the execution of the Notice of Adverse Claim by Anastacia and the COS
as additional proofs that there was no sale by Anastacia of the subject lot to spouses Sepe.

Petitioner's reliance on the DOS as proof that the sale contemplated therein was supported
by sufficient consideration is not without legal basis. The disputable presumption of
existence and legality of the cause or consideration inherent in every contract supports his
stance.
Article 1354 of the Civil Code provides: "Although the cause is not stated in the contract, it
is presumed that it exists and is lawful, unless the debtor proves the contrary." Otherwise
stated, the law presumes that even if the contract does not state a cause, one exists and is
lawful; and it is incumbent on the party impugning the contract to prove the contrary. If the
cause is stated in the contract and it is shown to be false, then it is incumbent upon the
party enforcing the contract to prove the legality of the cause.

Aside from the presumption of sufficient consideration working in favor of petitioner, the
acknowledgment of the DOS before a notary public makes it a public document.
According to Section 19, Rule 132 of the Rules, documents acknowledged before a notary
public, except last wills and testaments, and public records, kept in the Philippines, of
private documents required by law to be entered therein, are public documents. The
certificate of acknowledgment in a notarial document is prima facie evidence of the
execution of the instrument or document involved. On the other hand, documents
consisting of entries in public records made in the performance of a duty by a public officer
are prima facie evidence of the facts stated therein; and all other public documents are
evidence, even against a third person, of the fact which gave rise to their execution and of
the date of the latter.

Furthermore, the COS executed by 4 of the 5 children of Anastacia, which is supported by a
valuable consideration, bolsters petitioner's cause. It is noted that Dominga, who is not a
signatory to the COS, did not testify for respondents. Indeed, respondents have ratified and
confirmed the sale of the subject lot by their parents to spouses Sepe. Again, their claim
that the amount they received from spouses Sepe was a Christmas gift to them, aside from
being incredible as held by the RTC, is not clear and convincing evidence to overcome the
facts stated in the COS.


Given the failure of respondents to adduce clear and convincing evidence to support their
cause and overcome the presumptions granted by law in favor of the public documents
above-enumerated, the RTC did not err in granting petitioner's demurrer to evidence.

SPOUSES ISIDRO R. SALITICO AND CONRADA C. SALITICO VS. HEIRS OF
RESURRECCION MARTINEZ FELIX, NAMELY: LUCIANO, ET AL.
G.R. NO. 240199, APRIL 10, 2019

Facts:
Amanda is the registered owner of a 1,413-square-meter parcel of land registered in her
name under Original Certificate of Title No. (OCT) P-1908, located in Bambang, Bulacan
(subject property). By virtue of a document entitled Huling Habilin ni Amanda H. Burgos
the subject property was inherited by the niece of Amanda, Resurreccion, as a devisee.

Thereafter, Resurreccion, as the new owner of the subject property, executed a document
entitled Bilihang Tuluyan ng Lupa, which transferred ownership over the parcel of land in
favor of the petitioners Sps. Salitico. The latter then took physical possession of the subject
property.

Subsequently, a proceeding for the probate of the huling habilin was undertaken before the
RTC, Branch 22 Probate Court.

On June 6, 2014, the RTC rendered its Decision dismissing the Complaint for lack of cause
of action. the RTC found that Resurreccion had indeed validly sold. The RTC also held that
the action filed by the petitioners Sps. Salitico is premature on the ground that it was not
shown that the Probate Court had already fully settled the Estate of Amanda.

The petitioners Sps. Salitico filed their Motion for Reconsideration, which was denied in the
RTC's Order dated May 26, 2015.

Hence, on June 16, 2015, the petitioners Sps. Salitico filed their Notice of Appeal, which was
granted by the RTC on June 18, 2015. The appeal was given due course by the CA.

The CA dismissed the appeal due to the pendency of the probate proceedings before the
Probate Court. The petitioners Sps. Salitico filed their Motion for Reconsideration dated
November 9, 2017, which was denied by the CA. Hence, this appeal via Petition for Review
on Certiorari.

Issue:
Whether or not the CA erred in upholding the RTC's Decision dated June 6, 2014 and Order
dated May 26, 2015, which dismissed the petitioners Sps. Salitico's Complaint for Specific
Performance due to lack of cause of action.


Ruling:
The instant Petition is partly meritorious.

Article 777 of the Civil Code, which is substantive law, states that the rights of the
inheritance are transmitted from the moment of the death of the decedent. Article 777
operates at the very moment of the decedent's death meaning that the transmission by
succession occurs at the precise moment of death and, therefore, at that precise time, the
heir is already legally deemed to have acquired ownership of his/her share in the
inheritance, "and not at the time of declaration of heirs, or partition, or distribution." Thus,
there is no legal bar to an heir disposing of his/her hereditary share immediately after such
death. The Court, early on in Teves de Jakosalem v. Rafols, et al.,21 explained that a sale made
by a legal or intestate heir of his share in an inheritance does not interfere with the
administration of the estate.

As applied to the instant case, upon the death of Amanda, Resurreccion became the
absolute owner of the devised subject property, subject to a resolutory condition that upon
settlement of Amanda's Estate, the devise is not declared inofficious or excessive. Hence,
there was no legal bar preventing Resurreccion from entering into a contract of sale with
the petitioners Sps. Salitico with respect to the former's share or interest over the subject
property.

In a contract of sale, the parties' obligations are plain and simple. The law obliges the
vendor to transfer the ownership of and to deliver the thing that is the object of sale to the
vendee. Therefore, as a consequence of the valid contract of sale entered into by the
parties, Resurreccion had the obligation to deliver the subject property to the petitioners
Sps. Salitico. In fact, it is not disputed that the physical delivery of the subject property to
the petitioners Sps. Salitico had been done, with the latter immediately entering into
possession of the subject property after the execution of the Bilihang Tuluyan ng Lupa.
Therefore, considering that a valid sale has been entered into in the instant case, there is no
reason for the respondents heirs to withhold from the petitioners Sps. Salitico the owner's
duplicate copy of OCT P-1908. To reiterate, Resurreccion already sold all of her interest
over the subject property to the petitioners Sps. Salitico. Therefore, the respondent’s heirs
have absolutely no rhyme nor reason to continue possessing the owner's duplicate copy of
OCT P-1908.

ROLANDO D. CORTEZ VS. LUZ CORTEZ
G.R. NO. 224638, APRIL 10, 2019

Facts:
Rolando D. Cortez (petitioner) and Luz Cortez (respondent) were married on March 5,
1990. petitioner filed an Amended Petition for the declaration of nullity of his marriage on
the ground of his and respondent's psychological incapacity, alleged that respondent was
introduced to him by the former's brother and the latter's friend. According to the
petitioner he was invited to a birthday party of respondent's cousin and after consuming
three bottles of beer, he became dizzy and passed out. When he woke up, he was already in

a room with respondent and was clad only in his underwear and they were covered with a
blanket. Respondent's brother, a policeman, saw that something happened between them.

Petitioner claimed that at about the same time, he was already scheduled to work abroad
as a seaman but because of the incident he was stopped by a hold-departure order issued
by the POEA because of respondent's complaint as she was then pregnant. He was forced
by respondent's brothers to marry respondent before a Municipal Trial Court Judge of
Meycauayan, Bulacan. They went to the POEA to submit their marriage contract and the
allotment paper, and he was able to leave for his seaman duty. They never had a
honeymoon nor sexual intercourse.

Petitioner averred while he was abroad respondent gave birth to a son September 14,
1990, he was forced by respondent and her brothers to attend the child's baptism on March
31, 1993 and paid for it. He never lived with respondent since his return as he stayed in his
sister's house in Valenzuela City until his departure for abroad on October 16, 1991. On
February 3, 1993, respondent gave birth to a baby girl. He tried to religiously give support
despite his doubts and reservations. However, in 1994, he came to know that respondent
had a husband and a child in Samar, thus, he suspended giving support to respondent and
the two children. However, respondent filed a case of abandonment against him but was
later dismissed, as they executed a compromise agreement for the support of the children.

Petitioner claimed that: upon his return to the Philippines in 1998 from his work overseas,
he subjected himself to a semenal examination which showed that he had low sperm count
and did not have the capacity to impregnate a woman; he continued giving financial
support to avoid being harassed, but stressed that he never cohabited with respondent;
and he claimed that they got married not out of love but because of respondent's desire to
ensure material support for herself and the children.

Each party was examined by Dr. Felicitas Artiaga-Soriano, a psychiatrist. She declared both
parties psychologically incapacitated to comply with the essential marital obligations of
marriage.

On July 9, 2012, the RTC rendered its Decision, the petition was DENIED. Petitioner filed a
motion for reconsideration, which was also denied by the RTC.

Petitioner appealed the Decision to the CA. The CA issued its Decision, stating that the
Decision dated July 9, 2012 of the Regional Trial Court (Branch 172, Valenzuela City) is
SUSTAINED.

Petitioner filed a Motion for Reconsideration, which the CA denied. Hence this petition for
review on certiorari filed by petitioner.

Issue:
Whether or not the petitioner was psychologically incapacitated to perform marital
obligation.


Ruling:
The petition was denied.

Article 36 of the Family Code provides:

ART. 36. A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations of
marriage, shall likewise be void even if such incapacity becomes manifest only after its
solemnization.

Thus, the antecedence can be traced to his rearing and family environment making him a
person with dependency inclination and passive-aggressive in traits. As said, his
psychological incapacity stems from his traits and his not loving the respondent from the
very beginning. That is where gravity comes in as that is obviously, solid evidence, that he,
from the beginning had no intentions whatsoever to do the duties and obligations of a
husband and a father.

We find that the report failed to show how petitioner's personality traits incapacitated him
from complying with the essential obligations of marriage. On the contrary, the report
established that because petitioner was forced to marry respondent without love, he had
no intention to do his full obligations as a husband. Mere "difficulty," "refusal," or "neglect"
in the performance of marital obligations or "ill will" on the part of the spouse is different
from "incapacity" rooted on some debilitating psychological condition or illness.

Notably, petitioner admitted that it was only when he learned in 1994 that respondent had
a child prior to their marriage in 1990 that he stopped giving support to respondent and
their two children; that because of the abandonment case filed against him and the threats
coming from respondent's brothers if he would stop supporting respondent and the
children that he entered into a compromise agreement with respondent regarding the
financial support for their children; that despite giving support, however, he refused to live
with respondent. Petitioner's showing of ill-will and refusal to perform marital obligations
do not amount to psychological incapacity on his part.

Petitioner's claim of lack of realization that he has marital obligation to perform as husband
to respondent is not a consideration under Article 36 of the Family Code as what the law
requires is a mental illness that leads to an inability to comply with or comprehend
essential marital obligations.

The Court emphasized that the burden of proving psychological incapacity falls upon
petitioner. He must prove that he or respondent suffer from a psychological disorder which
renders them incapable of taking cognizance of the basic marital obligations, which he
failed to do.


HIPOLITO AGUSTIN AND IMELDA AGUSTIN VS. ROMANA DE VERA

G.R. NO. 233455, APRIL 3, 2019

Facts:
On January 6, 1986, Gregorio and spouses Hipolito and Lolita Agustin executed a document
entitled “Contract of Purchase and Sale” whereby they agreed to sell a parcel of land in
Dagupan with the following terms: A P15,000 as the down payment upon the execution of
the contract and the balance upon release of the land from Pangasinan Savings and Loan
Association to which the parcel of land is currently mortgaged; the vendor to have the title
of the land released from the mortgage from the bank within a period of one month from
execution.

Agustin constructed a residential house after payment of P15,000. Half of the land was sold
to Imelda, Agustin’s sister, who also introduced improvements on the property and
constructed a sari-sari store. Agustin caused the annotation of an adverse claim since seller
had not yet delivered the title.

Gregorio sold the property to Romana de Vera for P500,000 under a registered deed of
sale. Gregorio died on September 17, 2007. Agustin and Imelda filed an action praying for
the annulment of the deed of absolute sale in favor of Romana and to uphold their rights of
ownership under the Contract to Purchase and sale. They alleged that Romana was a buyer
in bad faith. The sale in her favor was executed 14 days before the death of Gregorio who
was 80 years old. They had been in possession of the land for 20 years. Assuming there was
a double sale, they should be preferred as first buyers and first in possession in good faith
and for value.

The RTC ruled in favor of Agustin and Imelda, annulling the deed of sale in favor of
Romana. The CA granted Romana’s appeal, reversing the RTC decision.

Hipolito and Imelda filed their Motion for Reconsideration on April 18, 2017, which was
subsequently denied by the CA. Hence, the instant Petition.

FIRST ISSUE:

Whether or not the Contract to Purchase and Sale entered into by Hipolito and Gregorio is a
contract of sale or a contract to sell.

Ruling:
It is a contract of sale.

According to Article 1458 of the Civil Code, by a contract of sale, one of the contracting
parties obligates himself to transfer the ownership and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.


Accordingly, the elements of a valid contract of sale under Article 1458 of the Civil Code
are: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price
certain in money or its equivalent.

In the instant case, the Court finds that all the aforesaid elements are present in the instant
case. By entering into the agreement entitled "Contract to Purchase and Sale," both parties
had arrived at a meeting of the minds that the seller, i.e., Gregorio, transferred the
ownership and possession of the subject property to the buyer, i.e., Hipolito, with the latter
obliged to pay a price certain in money, i.e., P30,000.00.

It must be stressed that upon the execution of the Contract to Purchase and Sale, Gregorio
ceded the possession of the subject property to petitioner Hipolito. It is not disputed that
petitioner Hipolito immediately took possession of the subject property, had constructed
thereon their residential house, and paid the real estate taxes upon the subject property.

Delivery passes title. In connection with the fact that Hipolito gained possession over the
subject property upon the execution of the Contract to Purchase and Sale, Article 1477 of
the Civil Code states that the ownership of the thing sold shall be transferred to the vendee
upon the actual or constructive delivery thereof. Further, under Article 1478, the parties
may stipulate that ownership in the thing shall not pass to the purchaser until he has fully
paid the price.

In accordance with Articles 1477 and 1478 of the Civil Code, the general rule states that
ownership of property passes on to the buyer ipso jure when its possession is transferred
in the latter's favor if no reservation to the contrary has been made. In the absence of
stipulation to the contrary, the ownership of the thing sold passes to the vendee upon
actual or constructive delivery thereof.

Gregorio did not make any express or implied reservation whatsoever withholding
ownership of the subject property from Hipolito. If Gregorio really intended that the
transfer of ownership over the subject property was dependent on the fulfilment of other
conditions, then he would have expressed words to that effect in the Contract to Purchase
and Sale. Nor would he have willingly transferred the physical possession of the subject
property to Hipolito. With possession being the natural consequence and effect of
ownership, it would be unnatural for a property owner to just let go and cede possession of
the property, without even a whimper, under an agreement selling the said property and,
at the same time, allege the retention of ownership over the property.

In fact, aside from the delivery of the subject property to Hipolito, the intention of the
parties to cede ownership of the subject property to Hipolito is further buttressed by the
fact that after the delivery of the subject property to Hipolito, the obligation of paying real
estate taxes was immediately assumed by Hipolito. The fact that Hipolito had already
assumed the obligation of paying real property taxes on the subject property has not been
disputed by Romana.



SECOND ISSUE:

Whether or not the rule on double sale apply to the case.

Ruling:
Even if the rule on double sales is applied to the instant case, the result remains the same.
Hipolito and Imelda would still have a better right of ownership over the subject property.

According to Article 1544 of the Civil Code, if the same thing should have been sold to
different vendees, in the case of immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry of Property:

Art. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it
who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith
was first in the possession; and, in the absence thereof, to the person who presents the
oldest title, provided there is good faith. Applying the foregoing in the instant case, it is
indisputable that Romana was a buyer in bad faith. Hence, Hipolito and Imelda have the
better right of ownership over the subject property.

In the instant case, it is not disputed that on August 22, 2007, Hipolito and Imelda caused
the annotation on TCT No. 36897 of an adverse claim indicating the fact that they had
entered into a sale contract with Gregorio. This annotation was made prior to the execution
of the Deed of Absolute Sale between Gregorio and Romana on September 3, 2007.
Confirmed by Romana's own witness, Rafael M. de Vera, Romana transacted with Gregorio
over the subject property even with the prior annotation of Hipolito's adverse claim on the
TCT and with full knowledge that there was a prior sale transaction between Gregorio and
Hipolito.43 In fact, Romana herself testified that prior to purchasing the subject property
from Gregorio, she knew that Hipolito and Imelda were already in possession of the subject
property and that the latter have built their houses therein.

Hence, with Romana indubitably being a buyer in bad faith, Hipolito and Imelda have a
better right of ownership over Romana.


BNL MANAGEMENT CORPORATION AND ROMEO DAVID VS. REYNALDO UY, ET AL.
G.R. NO. 210297, APRIL 3, 2019

Facts:
BNL Management owned six (6) condominium units at the Imperial Bayfront Tower
Condominium. These units were leased to its clients under separate contracts of lease. BNL
Management also held exclusive rights to three (3) parking spaces of Imperial Bayfront.

On December 16, 1996, BNL Management, through David, wrote a letter to the building
administrator of Imperial Bayfront, acknowledging receipt of the November billing
statement. n the letter, it brought up concerns over: (1) the general cleanliness and
maintenance of common areas; (2) security; (3) building insurance; (4) encroachment on
two (2) of the parking spaces; and (5) the annotation of the parking spaces on the mother
title.

In a follow-up letter sent on March 4, 1997, BNL Management, through counsel, declared
that it would withhold paying monthly dues and instead deposit them and its arrears in a
bank as escrow, which could be withdrawn by the Imperial Bayfront Tower Condominium
Association (the Association) only after it has complied with the demands in the letter.

BNL Management sent several letters to the building administrator reiterating its earlier
complaints. On July 7, 1999, BNL Management received a letter from Sevilla containing a
breakdown of its arrears in the payment of association dues. BNL Management received the
Second billing and it also contained a warning that after a third notice had been sent, the
Association would terminate utility services. On August 19, 1999, BNL Management
received the Third Notice of Billing. Still, BNL Management did not pay the arrears.

Thus, in an August 24, 1999 meeting, the Association's Board of Directors, resolved to
disconnect the lighting facilities in the six (6) units owned by BNL Management.

BNL Management again wrote the Association on August 28, 1999, complaining that the
lights in the hallway leading to its units had been turned off. Since the Association refused
to restore its electricity and water, BNL Management and David filed before the Regional
Trial Court a Complaint against Uy, et al. for damages and specific performance with
preliminary mandatory/prohibitory injunction.

The Regional Trial Court dismissed the Complaint. It found that a homeowners' association
depended on the dues paid by its members to deliver services such as building
maintenance. It held that Uy, et al. were justified in disconnecting BNL Management's
power and water services under Paragraph 5 of the Association's House Rules and
Regulations, which were based on its Master Deed and Declaration of Restrictions under
Section 9 of the Condominium Act.

BNL Management and David filed an Appeal, but it was denied by the Court of Appeals,
affirming the Regional Trial Court Decision.


BNL Management and David moved for reconsideration, but the Motion was denied in the
Court of Appeals.

On January 24, 2014, BNL Management and David filed before this Court a Petition for
Review on Certiorari.

Issue:
Whether or not petitioners BNL Management Corporation and its president, Romeo David,
are entitled to damages for the disconnection of water and electricity utilities from the
units they own at Imperial Bayfront.

Ruling:
The Petition is denied.

Petitioners defend their nonpayment of association dues based on the Association's
noncompliance with its correlative obligation to address their complaints concerning
Imperial Bayfront's management and maintenance. They claim that they are entitled to
withhold payment until and unless their demands are met by the Association.

Moreover, petitioners allege that they are not bound by the House Rules and Regulations,
claiming that they are invalid and, thus, cannot be the basis for the disconnection of utility
services from their units. Both these defenses must fail.

First, as to the party first at fault, the common finding of the Regional Trial Court and the
Court of Appeals is that it was petitioners who failed to comply with their obligation to
timely pay association dues.

Here, the conclusion of the Regional Trial Court and the Court of Appeals that petitioners
were first in fault was based on evidence presented by the parties, and for this Court to
review their conclusions would require weighing the probative value of the parties'
evidence.

Petitioners fail to present a compelling reason for this Court to review these factual
findings. They have not shown how the lower courts failed to appreciate the evidence they
presented, or that their findings are wholly lacking in basis in the record, or that they have
committed a misapprehension of facts.

Here, when petitioners bought the condominium units from Imperial Bayfront, they were
bound by the terms and conditions of the declaration of restrictions attached to the Master
Deed. As the Court of Appeals found, the Master Deed expressly allows its condominium
association to subject its owners, purchasers, tenants, and lessees to rules and regulations
for "the efficient and mutually beneficial management and operation of the project." These
were the House Rules and Regulations, which vested in the Association the power to
interrupt utility services in case of nonpayment of association dues.

Finally, petitioners are not entitled to the damages they prayed for.


Moral damages are awarded in circumstances enumerated under Article 2217 of the Civil
Code.

ARTICLE 2217. Moral damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendant's wrongful
act or omission.

For moral damages to be awarded, the following requisites must be present:

Such damages, to be recoverable, must be the proximate result of a wrongful act or
omission the factual basis for which is satisfactorily established by the aggrieved party. An
award of moral damages would require certain conditions to be met; to wit: (1) First,
there must be an injury, whether physical, mental or psychological, clearly sustained by the
claimant; (2) second, there must be a culpable: act or omission factually established; (3)
third, the wrongful act or omission of the defendant is the proximate cause of the injury
sustained by the claimant; and (4) fourth, (the award of damages is predicated on any of
the cases stated in Article 2219.

Here, respondents were not found to have committed any culpable act or omission that
would warrant an award of moral damages for petitioner David. Clearly, the injury he
allegedly sustained was caused by his own failure, as president of petitioner BNL
Management, to resolve the corporation's nonpayment of dues.

For its part, petitioner BNL Management, being a corporation, is not entitled to moral
damages.

There is no showing here that an exception should apply pro hac vice in favor of petitioner
BNL Management.

Moreover, as the Court of Appeals aptly pointed out, exemplary damages may only be
awarded if a party proves entitlement to temperate, liquidated, actual, or moral damages.
Petitioners have already admitted that they will not quantify the actual damages they
sustained.] They have also neither sought for nor been granted temperate or liquidated
damages.
Accordingly, petitioner BNL Management cannot be awarded exemplary damages.


MARY CHRISTINE C. GO-YU VS. ROMEO A. YU

G.R. NO. 230443. APRIL 3, 2019

Facts:
On October 21, 2009, herein petitioner filed with the RTC of Davao City, Branch 12, a
Petition for Declaration of Nullity of Marriage and Dissolution of the Absolute Community
of Property wherein she enumerated the following circumstances of her marriage which
prompted her to seek relief from the Court, thus: (1) Both she and her husband stayed at
the latter’s home after the marriage where she had to contend with the constant meddling
of her mother-in-law and the mother-in-law’s constant intrusion into their privacy; (2) Her
husband’s promises to move out which were never fulfilled; (3) The adjustments that she
had to make which entailed a lot of sacrifice on her part such as but not limited to the
giving up of some of the luxuries she was used to when her husband’s financial resources
dwindled; (4) The limitation of her social life after their marriage and her becoming
withdrawn; (5) Her act of single-handedly taken on the responsibility of running their
household and making all the decisions as her husband was too busy with his involvement
with personal and social activities outside their house; (6) The considerable decrease in the
spouses’ sexual activity after their wedding; (7) Her inability to conceive and her husband’s
refusal to allow her to undergo in-vitro fertilization; and (8) Their growing apart as
husband and wife which led them to live separate lives even though they stay under the
same roof, among others.

Because of the all these circumstances, the wife claimed that she was diagnosed with
“Narcissistic Personality Disorder”. According to her petition, this disorder existed before
their marriage. And the fact that she (the wife) is comfortable with her behavior, sees
nothing wrong with it or that she needed to change makes treatment improbable.
Petitioner sought the dissolution of the parties' absolute community of properties claiming
that their marriage is governed by the provisions of the Family Code and that they did not
enter into any prenuptial agreement.

After petitioner has rested her case, respondent filed a Demurrer to Evidence6 claiming
that petitioner's alleged Narcissistic Personality Disorder, which supposedly renders her
psychologically incapacitated to perform her essential marital obligations, is not supported
by clear evidence.

The RTC denied respondent's Demurrer to Evidence by holding that petitioner has adduced
substantial evidence to show that she is suffering from a personality disorder and that
there is, therefore, a need for respondent to adduce controverting evidence. Respondent
filed a Motion for Reconsideration but the same was denied.

Respondent then filed with the CA a special civil action for certiorari under Rule 65 of the
Rules of Court assailing the Orders of the RTC which denied his Demurrer to Evidence and
his subsequent Motion for Reconsideration.

On January 13, 2017, the CA reversed and set aside the June 20, 2013 and July 31, 2013
Orders of the RTC and granted respondent's Demurrer to Evidence, thereby dismissing the

Petition for Declaration of Nullity of Marriage and Dissolution of the Absolute Community
of Property filed by petitioner.

Petitioner filed a Motion for Reconsideration but was denied by the CA. Hence, the instant
petition for review on certiorari.

Issue:
Whether or not an unsatisfactory marriage is not a null and void marriage.

Ruling:
The petition was denied.

After evaluating the evidence presented by the wife herself, the Supreme Court found that
the wife actually understood her marital obligations and even took steps towards fulfilling
them. Hence, it gave little credence to the psychiatrist’s findings, ruling that the latter failed
to sufficiently substantiate its report and specify the factual basis thereof or even state
where the information was obtained.

While the Supreme Court did acknowledge that the wife was unhappy with her marriage
and commiserated with her situation, the Supreme Court nonetheless said that the remedy
is not to have the marriage declared void, as this remedy is only limited to certain grounds
and situations, thus

“The Court understands and commiserates with petitioner's frustration over her marital
woes. However, "to be tired and to give up on one's situation and on one's spouse are not
necessarily signs of psychological illness; neither can falling out of love be so labeled. When
these happen, the remedy for some is to cut the marital knot to allow the parties to go their
separate ways. This simple remedy, however, is not available to us under our laws. Ours is
a limited remedy that addresses only a very specific situation a relationship where no
marriage could have validly been concluded because the parties, or [where] one of them, by
reason of a grave and incurable psychological illness existing when the marriage was
celebrated, did not appreciate the obligations of marital life and, thus, could not have
validly entered into a marriage. Outside of this situation, this Court is powerless to provide
any permanent remedy."

Significantly, apart from noting that the wife understood and actually took steps towards
fulfilling her marital obligations, the Supreme Court also took into account the fact that it
was the party claiming psychological incapacity who was filing the petition. This served to
further weaken the evidentiary weight of the wife’s testimonial and documentary evidence,
as the Supreme Court merely considered them as self-serving.

In the end, the High Court was constrained to uphold the marriage and deny the petition,
ruling that “unless the evidence presented clearly reveals a situation where the parties, or
one of them, could not have validly entered into a marriage by reason of a grave and
serious psychological illness existing at the time it was celebrated, the Court will be
compelled to uphold the indissolubility of the marital tie.

SPOUSES JOHN T. SY AND LENY N. SY, AND VALENTINO T. SY VS. MA. LOURDES DE
VERA-NAVARRO AND BENJAEMY HO TAN LANDHOLDINGS, INC., HEREIN
REPRESENTED BY GRACE T. MOLINA, IN HER CAPACITY AS CORPORATE SECRETARY
G.R. NO. 239088, APRIL 3, 2019

Facts:
This case stems from a Complaint filed by petitioners Sps. Sy against respondents Ma.
Lourdes De Vera-Navarro and Benjaemy Ho Tan Landholdings, Inc. (respondent BHTLI)
before the RTC for Declaration of Nullity of Deed of Absolute Sale, Cancellation of Transfer
Certificate of Titles, Recovery of Ownership, and Damages, docketed as Civil Case No. 6333.

In their Complaint, it is alleged that petitioner John was one of the co-owners of a parcel of
land and the four-storey building found therein situated at Rizal Street, Barangay Zone IV,
Zamboanga City, covered by Transfer Certificate of Title No. (TCT) T-171,105 (subject
property). Petitioners Sps. Sy alleged that the subject property has a market value of more
than P40,000,000.00.

The controversy arose when on May 31, 2006, petitioner John, for himself and in
representation of his co-owners, borrowed P3,720,000.00 from respondent De
Vera-Navarro, secured by a Real Estate Mortgage Contract over the subject property. Such
Mortgage Contract was annotated on TCT. etitioners Sps. Sy then alleged that immediately
after the execution of the Mortgage Contract, respondent De Vera-Navarro asked petitioner
John to execute an undated Deed of Absolute Sale with a stated consideration in the
amount of P5,000,000.00, supposedly for the purpose of providing additional security for
the loan. Petitioners Sps. Sy also claimed that petitioner John and respondent De
Vera-Navarro verbally agreed that the mode of payment for the said loan would be
respondent De Vera-Navarro's collection of rental payments from the tenants of the subject
property in the total amount of P70,000.00 per month for five years.

On March 22, 2011, to the surprise of petitioner John, he was informed by respondent
BHTLI through a letter from its representative that the ownership of the subject property
had been transferred to respondent De Vera-Navarro. In the main, petitioners Sps. Sy
claimed that they are the rightful owners of the subject property since the undated Deed of
Absolute Sale executed purportedly between petitioner John and respondent De
Vera-Navarro is allegedly null and void.

On the other hand, respondent De Vera-Navarro, while admitting the existence of the
Mortgage Contract to secure the P3,720,000.00 loan agreement with petitioners Sps. Sy,
alleged that the amount remained unpaid and that John even obtained additional loans
reaching more or less P10,500,000.00.

Respondent BHTLI alleged that it is a buyer in good faith since the sale between it and
respondent De Vera-Navarro over the subject property was supposedly consummated on
March 14, 2011, or 10 days prior to the annotation of the adverse claim on March 24, 2011.
Since it was supposedly not aware of any infirmity involving the subject property,
respondent BHTLI alleged that it should be treated as a buyer in good faith.


On October 8, 2014, the RTC issued a Decision declaring the purported Deed of Absolute
Sale between petitioner John and respondent De Vera-Navarro an equitable mortgage and
thus null and void.

Respondents De Vera-Navarro and BHTLI filed their respective Motions for
Reconsideration. Petitioners Sps. Sy filed their Comment/Opposition to respondents De
Vera-Navarro and BHTLI's Motions for Reconsideration with Partial Motion for
Reconsideration. The RTC denied the Motions for Reconsideration of respondents De
Vera-Navarro and BHTLI, and the Partial Motion for Reconsideration of the petitioners Sps.
Sy.

Petitioners Sps. Sy filed an appeal with the CA. Respondent BHTLI likewise filed an appeal
with the CA. Respondent De Vera-Navarro's appeal was deemed abandoned and dismissed
for failure to file an appellant's brief within the prescribed period.

On November 23, 2017, the CA reversed the rulings of the RTC and denied the appeal of
petitioners Sps. Sy, while granting the appeal of respondent BHTLI.

On December 21, 2017, the petitioners Sps. Sy filed their Motion for Reconsideration, which
was denied by the CA. Hence, the instant appeal via Petition for Review on Certiorari under
Rule 45 of the Rules of Court.

ISSUE:
Whether or not the CA erred when it held in the assailed Decision dated November 23,
2017 and assailed Resolution dated April 20, 2018 that the transaction between petitioner
John and respondent De Vera-Navarro was a valid contract of sale and not an equitable
mortgage, and that respondent BHTLI was a buyer in good faith, reversing the previous
ruling of the RTC.

RULING:
The instant Petition is meritorious.

The purported contract of sale between petitioner John and respondent De Vera-Navarro is
an equitable mortgage and not a legitimate contract of sale.

An equitable mortgage is defined as one which although lacking in some formality, or form
or words, or other requisites demanded by a statute, nevertheless reveals the intention of
the parties to charge real property as security for a debt, and contains nothing impossible
or contrary to law. Its essential requisites are: (1) that the parties entered into a contract
denominated as a contract of sale; and (2) that their intention was to secure an existing
debt by way of a mortgage.

Article 1602 of the Civil Code states that a contract shall be presumed to be an equitable
mortgage, in any of the following cases:


Article 1604 of the Civil Code, in turn, provides that the abovementioned badges of an
equitable mortgage apply to a contract purporting to be an absolute sale, such as in the
instant case.

Jurisprudence consistently shows that the presence of even one of the circumstances
enumerated in Article 1602 suffices to convert a purported contract of sale into an
equitable mortgage. The existence of any of the circumstances defined in Article 1602 of
the New Civil Code, not the concurrence nor an overwhelming number of such
circumstances, is sufficient for a contract of sale to be presumed an equitable mortgage.

In fact, the Court has previously ruled that when in doubt, courts are generally inclined to
construe a transaction purporting to be a sale as an equitable mortgage, which involves a
lesser transmission of rights and interests over the property in controversy.

Applying the foregoing to the instant case, the Court finds that the presence of at least four
badges of an equitable mortgage creates a very strong presumption that the purported
contract of sale entered between petitioner John and respondent De Vera-Navarro is an
equitable mortgage.

First, it is not disputed by any party that the supposed vendor of the subject property,
petitioner John, remains to be in possession of the subject property despite purportedly
selling the latter to respondent De Vera-Navarro. It is uncanny for a supposed buyer to
desist from taking possession over property which he/she has already purchased.

Second, the purchase price of the purported sale indicated in the undated Deed of Absolute
Sale is inadequate.

Third, the evidence on record shows that respondent De Vera-Navarro retained for herself
the supposed purchase price. Aside from the testimony of petitioner John that no
consideration was paid at all for the supposed contract of sale, the RTC also noted that no
proof was presented by respondent De Vera-Navarro that she actually parted with the sum
of P5,000,000.00 in favor of petitioner John pursuant to the undated Deed of Absolute Sale.

Fourth, from the evidence presented by petitioners Sps. Sy, it is established that the real
intention of the parties is for the purported contract of sale to merely secure the payment
of their debt owing to respondent De Vera-Navarro.

SPOUSES LUCIA A. OROZCO AND CRESENTE R. OROZCO (DECEASED), SUBSTITUTED
BY HIS HEIRS, NAMELY: JOCELYN O. GUJELING, ET AL. VS. FLORANTE G. LOZANO, SR.
(DECEASED), SUBSTITUTED BY HIS HEIRS, NAMELY: EPIFANIA LOZANO, ET AL.
G.R. NO. 222616 , APRIL 3, 2019

Facts:
Spouses Orozco acquired a parcel of land designated as Lot No. 3780. By the time of
acquisition, the spouses did not know the exact area of the land and Cresented Orozco
measured the same only using a rope. On September 4, 1980, the spouses Orozco sold half

of their parcel of land to Florante Lozano. The two parcels of land were subsequently
identified as Lot No. 3780-A and Lot No. 3780-B, the former owned by Lozano, and the
latter by the spouses Orozco. By their contract, both of the parcels cover an equal size of
285 square meters, or a total of 570 square meters. Thereafter, Lozano built structures not
only on his own lot, but also some parts covering the other. Spouses Orozco did not prevent
Lozano from building the boarding house because they thought that the said boarding
house was constructed within Lot No. 3780-A. Later on, the spouses were surprised that
Lozano was asking them to sign a piece of paper purportedly an acknowledgment receipt
for the sale of another 62 square meters in Lot No. 3780-B. The spouses deny that there
was an agreement for the sale of another portion of land. They dispute the authenticity of
the signatures in the acknowledgment receipt. The spouses likewise allege that Lozano
encroached on their property as the structures were built within Lot NO. 3780-B.

For his part, Lozano asserts that there was another contract whereby the spouses accepted
another P700.00 for another 62 square meters of land covered by Lot No. 3780-B, as
evidenced by an acknowledgment receipt signed by the spouses themselves. According to
Lozano, the purchase price totals P1,000.00 and he only lacks P300.00 for the whole
purchase price. Anent the issue of encroachment, it turns out that the total area of the
original Lot No. 3780 was 651 square meters and not 570 square meters. Thus, by
acquiring half of the land, his total area is 325.5 square meters and not 285 square meters.
The boarding house that he built was well within the 325.5 marker.

After 18 years, or on September 2, 1998, the spouses Orozco filed a complaint for Recovery
of Possession and Damages with Application for Writ of Preliminary Injunction with the
MCTC. Said first level court, ruling that there was no perfected contract of sale as to the
additional 62 square meters, the complaint was granted.

On appeal to the RTC, the decision appealed from was reversed. In doing so, the second
level court ruled that there was a perfected contract as evidenced by the acknowledgment
receipt. As the spouses failed to disprove the forgery of their signatures in such
acknowledgment receipt, there was valid contract, and thus, transfer of ownership was
likewise valid.

On petition for review to the CA, the decision of the RTC was affirmed in toto. Hence, this
present petition for review on certiorari.

Issues:
1. Whether or not Lozano encroach Lot No. 3780-B?
2. Whether or not there was a perfected contract of sale covering the additional 62 square
meters of Lot No. 3780-B

Ruling:
WHEREFORE, the petition is DENIED. We AFFIRM the 18 September 2015 Decision and the
8 December 2015 Resolution of the Court of Appeals, Cagayan de Oro City in CA-G.R. SP No.
05171-MIN.


In the said Deed of Sale, Spouses Orozco agreed to sell to Lozano "one-half portion of Lot
No. 3780." Lozano, in turn, agreed to pay Spouses Orozco a lump sum of P5,000.00 for
one-half portion of Lot No. 3780 which was described in the Deed of Sale with specific
boundaries. Article 1542 of the Civil Code applies in the present case. It is clear that
Spouses Orozco were divesting of and ceding to Lozano one-half of Lot No. 3780 for a lump
sum payment of P5,000.00. Hence, by virtue of the Deed of Sale, the title of ownership over
half of 651 square meters of Lot No. 3780 or 325.5 square meters was validly transferred
to Lozano. Spouses Orozco cannot invoke the lack of knowledgeof the true area of Lot No.
3780 because Spouses Orozco purchased Lot No. 3780 using the stated boundaries of Lot
No. 3780 as reference without securing the assistance of a geodetic engineer to measure
the exact land area. In a contract of sale of real estate contained in a land mass under
Article 1542, the specific boundaries stated in the contract must control over any statement
with respect to the area contained in the said boundaries. Where both the area and the
boundaries of the immovable are declared, the area covered within the boundaries prevails
over the stated area in the deed of sale. In case of conflict between the area and boundaries,
it is the latter which should prevail. under Article 1542, what is controlling is the entire
land included within the boundaries, regardless of whether the real area should be greater
or smaller than that recited in the deed of sale. Notably, the Deed of Sale validly transferred
the title of ownership over half of Lot No. 3780 or 325 .5 square meters from Spouses
Orozco to Lozano.

On the issue of the subsequent sale, there was a perfected contract of sale for the 62 square
meter portion of Lot No. 3780-B from Spouses Orozco to Lozano. There was a meeting of
the minds between Spouses Orozco and Lozano when the latter offered to purchase for
P.1,000.00 an additional 62 square meters of Lot No. 3780-B from Spouses Orozco to
extend the boundary of his property. Lozano's offer was accepted by Spouses Orozco and
the initial payment of P400.00 was made by Lozano as evidenced by the handwritten
acknowledgment receipt dated 24 April 1981 signed by Orozco. Subsequently, another
payment of P300.00 by Lozano was made to Lucia Orozco, totaling the payment of Lozano
to P700.00, leaving a remaining unpaid balance of P300.00. As a rule, forgery cannot be
presumed and must be proved by clear, positive, and convincing evidence. The burden of
proof lies on the party alleging forgery. One who alleges forgery has the burden to establish
his case by a preponderance of evidence. This, Orozcos failed to establish.

ROGACIANO L. OROPEZA AND AMELDA S. OROPEZA VS. ALLIED BANKING
CORPORATION AND REGISTER OF DEEDS FOR CITY OF DAVAO
G.R. NO. 222078, APRIL 1, 2019

Facts:
Petitioners, on November 30, 2006, filed a "Petition for Cancellation of Derivative Titles
and Their Reversion/Reinstatement to the Original Registered Owner/s and the
Cancellation of Annotations on the Title of their Original Owners and/or Issuance of New
Title In Lieu of Cancelled Ones, Clean and Clear of Subject Annotations" against
respondents Allied Banking Corporation (now Philippine National Bank) and Register of
Deeds for City of Davao.


In its Answer, respondent bank claimed that petitioners have no cause of action as they are
precluded from asserting the claims subject of the complaint on the ground of forum
shopping. It also argued that the circumstances obtaining in the case show that petitioners
have already sought the judicial remedies of declaration of illegality of foreclosure and
recovery of ten foreclosed properties. It further asserted that the Decision dated October
26, 1992 of the Regional Trial Court (RTC) of Davao City, did not provide any declaration of
illegality of foreclosure, neither did it provide for the return of the ten parcels of land; and
that petitioners did not appeal nor seek reconsideration of the said decision. Lastly,
respondent bank alleged that the extrajudicial foreclosure sale of the subject properties
transpired twenty years ago; thus, petitioners are already barred by laches for their failure
to promptly assail the said sale. Respondent bank, by way of counterclaim, prayed for the
award of moral damages, exemplary damages and attorney's fees.

The RTC dismissed petitioners' complaint and compulsory counterclaim. Petitioners
elevated the case to the CA, the petition was denied. Hence, the present petition.

ISSUE:
Whether or not an action to recover registered land may not be barred by laches.

RULING:
The petition lacks merit.

Laches has been defined as the failure or neglect, for an unreasonable and unexplained
length of time, to do that which, by exercising due diligence, could or should have been
done earlier. It should be stressed that laches is not concerned only with the mere lapse of
time.

The Court agrees with the CA and the RTC that the elements of laches are present in this
case. Certificates of title on the subject properties have already been issued in the name of
respondent bank after a valid extrajudicial foreclosure on August 22, 1984 and after the
period to redeem the same properties had already elapsed. It was only after the lapse of
twenty-two years from the date of the extrajudicial foreclosure that petitioners sought to
annul the sale. The respondent bank, apparently, did not anticipate that petitioners would
assail the former's possession of the subject properties as it continued to pay taxes due
thereon. And clearly, respondent bank would be prejudiced if the present action is not
barred by laches as it will incur a loss in its assets.

As a general rule, an action to recover registered land may not be barred by laches;
however, this Court, in certain cases, allowed laches as a bar to recover a registered
property under the Torrens system, the Court ruled that laches will bar recovery of the
property even if the mode of transfer was invalid.

As such, due to the above disquisitions, this Court finds it just to rule that the rule on laches
applies in this case. There is no absolute rule as to what constitutes laches or staleness of
demand; each case is to be determined according to its particular circumstances, and after
due consideration, this Court finds it just to rule that petitioners' present action is already

barred by laches. The essence of laches or "stale demands" is the failure or neglect for an
unreasonable and unexplained length of time to do that which, by exercising due diligence,
could or should have been done earlier, thus, giving rise to a presumption that the party
entitled to assert it either has abandoned or declined to assert it. It is not concerned with
mere lapse of time; the fact of delay, standing alone, being insufficient to constitute laches.

PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK VS. WILLIAM GOLANGCO
CONSTRUCTION CORPORATION/WILLIAM GOLANGCO CONSTRUCTION
CORPORATION VS. PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK
G.R. NO. 195372/G.R. NO. 195375. APRIL 10, 2019

Facts:
The controversy arose when portions of the granite wash-out finish of the exterior walls of
the building began peeling off and falling from the walls in 1993. William Golangco
Construction Corporation [WGCC] made minor repairs after Philippine Commercial
International Bank [PCIB] requested it to rectify the construction defects. In 1994, PCIB
entered into another contract with Brains and Brawn Construction and Development
Corporation to re-do the entire granite wash-out finish after WGCC manifested that it was
not in a position to do the new finishing work, though it was willing to share part of the
cost. PCIB incurred expenses amounting to P11,665,000.00 for the repair work.

PCIB filed a request for arbitration with the Construction Industry Arbitration Commission
(CIAC) for the reimbursement of its expenses for the repairs made by another contractor.
WGCC, on the other hand, interposed a counterclaim for P5,777,157.84 for material cost
adjustment.

Issue:
Whether the CA erred in directing PCIB to pay interest on the principal award at the rate of
6% per annum, reckoned from June 21,1996, or the date of the issuance of the CIAC
Decision, until full payment

Ruling:
Monetary interest under Article 1956 serves as compensation fixed by the parties for the
use or forbearance of money. As can be gleaned from the foregoing provision, payment of
monetary interest is allowed only if: (i) there was an express stipulation for the payment of
interest; and (ii) the agreement for the payment of interest was reduced in writing. The
concurrence of the two conditions is required for the payment of monetary interest.

On the other hand, compensatory interest is that which is allowed in actions for breach of
contract or tort for the unlawful detention of money already due. As the governing
provisions indicate, compensatory interest may be imposed by law or by the courts as
penalty or indemnity for damages.

The reckoning point for compensatory interest, when imposed on unliquidated claims, is
set on the date of the judgment of the court or quasi-judicial body granting the award since
it is only at such time when the amount claimed becomes liquidated, that is, determined

with reasonable certainty. In this case, WGCC's claim became liquidated on June 21, 1996,
the day the CIAC Decision awarding its counterclaim amounting to P5,777,157.84 was
issued. Hence, WGCC is entitled to compensatory interest at the rate of 12% from June 21,
1996 to June 30, 2013, and 6% interest from July 1, 2013 until finality of this Decision.

SPOUSES ISIDRO R. SALITICO AND CONRADA C. SALITICO VS. HEIRS OF
RESURRECCION: MARTINEZ FELIX
G.R. NO. 240199, APRIL 10, 2019

Facts:
Amanda is the registered owner of a 1,413-square-meter parcel of land registered in her
name, located in Bambang, Bulacan (subject property). By virtue of a document entitled
Huling Habilin ni Amanda H. Burgos dated May 7, 1986 (Huling Habilin), the subject
property was inherited by the niece of Amanda, Resurreccion, as a devisee.

Thereafter, Resurreccion, as the new owner of the subject property, executed a document
entitled Bilihang Tuluyan ng Lupa dated November 10, 1998, which transferred ownership
over the parcel of land in favor of the petitioners Sps. Salitico. The latter then took physical
possession of the subject property.

Subsequently, a proceeding for the probate of the Huling Habilin was undertaken before
the RTC, Branch 22 (Probate Court). Respondent Recaredo was appointed as the executor
of the Huling Habilin. The latter then filed and presented the Huling Habilin before the
Probate Court, which approved it on February 6, 2008. The Probate Court likewise issued a
Certificate of Allowance on January 12, 2009.

On March 9, 2010, the petitioners Sps. Salitico received a demand letter requiring them to
vacate the subject property and surrender possession over it to the respondents heirs. To
protect their interest over the subject property, the petitioners Sps. Salitico executed an
Affidavit of Adverse Claim dated March 17, 2009, which was however denied registration
by the respondent RD on November 3, 2009.

In their Complaint before the RTC, the petitioners Sps. Salitico sought the delivery and
return in their favor of the owner's duplicate copy of OCT P-1908 and the execution of the
corresponding Deed of Absolute Sale by way of confirming the Bilihang Tuluyan ng Lupa.
They likewise prayed that OCT P-1908 be cancelled and a new one be issued in their names.
Lastly, they also demanded payment of attorney's fees, moral and exemplary damages, and
reimbursement for litigation expenses.

Issue:
Whether the CA erred in upholding the RTC's Decision dated June 6, 2014 and Order dated
May 26, 2015, which dismissed the petitioners Sps. Salitico's Complaint for Specific
Performance due to lack of cause of action.


Ruling:
To clarify, this holding does not go against Article 777 of the Civil Code whatsoever. What
the aforesaid Civil Code provision signifies is that there is no legal bar preventing an heir
from disposing his/her hereditary share and transferring such share to another person,
inasmuch as the right thereto is vested or transmitted to the heir from the moment of the
death of the decedent or testator. The rule, however, does not state that the transferee may
already compel the issuance of a new certificate of title covering the specific property in
his/her name. SaCIDT

Hence, reading Article 777 of the Civil Code together with the pertinent provisions of PD
1529 and the Rules of Court, while an heir may dispose and transfer his/her hereditary
share to another person, before the transferee may compel the issuance of a new certificate
of title covering specific property in his/her name, a final order of distribution of the estate
or the order in anticipation of the final distribution issued by the testate or intestate court
must first be had.

Therefore, despite the existence of a valid contract of sale between Resurreccion and the
petitioners Sps. Salitico, which ordinarily would warrant the delivery of the owner’s
duplicate copy of OCT P-1908 in favor of the latter, pending the final settlement of the
Estate of Amanda, and absent any order of final distribution or an order in anticipation of a
final distribution from the Probate Court, the RD cannot be compelled at this time to cancel
OCT P-1908 and issue a new certificate of title in favor of the petitioners Sps. Salitico

MA. LUISA A. PINEDA VS. VIRGINIA ZUÑIGA VDA. DE VEGA
G.R. NO. 233774. APRIL 10, 2019

Facts:
Petitioner alleged that, on March 25, 2003, respondent borrowed from her P500,000.00
payable within one year with an interest rate of 8% per month. To secure the loan,
respondent executed a real estate mortgage (2003 Agreement) over a parcel of
land ,together with all the buildings and improvements existing thereon (Property), in
petitioner's favor. On the loan's maturity, respondent failed to pay her loan despite demand.
As of May 2005, the unpaid accumulated interest amounted to P232,000.00. In her answer,
respondent denied petitioner's material allegations and countered that the complaint was
dismissible for lack of prior barangay conciliation proceeding and for failure to join her
husband as a party. She also argued that the interest rate agreed upon was excessive and
unconscionable, thus illegal. She further denied receiving P500,000.00 from petitioner and
claimed that the said amount was the accumulated amount of another obligation she
earlier secured from petitioner.

In her reply, petitioner averred that respondent's husband did not need to be joined
because the transaction did not involve him and although the agreement was to charge an
interest rate of 8% per month, what was actually charged was just 4% per month.
Petitioner admitted that the original loan which respondent obtained in 2000 was only
P200,000.00 with an undertaking to pay 3% interest per month.


In the written interrogatories addressed to petitioner, she admitted that the P500,000.00
indicated in the 2003 Agreement referred to a previously executed undated real estate
mortgage (undated Agreement) between the parties which secured respondent's loan of
P200,000.00 from her.

Issue:
Whether demand letter was sent by petitioner to respondent and was it received by the
latter.

Ruling:
In the absence of express statutory provisions, a mortgage creditor may institute against
the mortgage debtor either a personal action for debt or a real action to foreclose the
mortgage. In other words, he may pursue either of the two remedies, but not both. By such
election, his cause of action can by no means be impaired, for each of the two remedies is
complete in itself. Thus, an election to bring a personal action will leave open to him all the
properties of the debtor for attachment and execution, even including the mortgaged
property itself. And, if he waives such personal action and pursues his remedy against the
mortgaged property, an unsatisfied judgment thereon would still give him the right to sue
for a deficiency judgment, in which case, all the properties of the defendant, other than the
mortgaged property, are again open to him for the satisfaction of the deficiency. In either
case, his remedy is complete, his cause of action undiminished, and any advantages
attendant to the pursuit of one or the other remedy are purely accidental and are all under
his right of election. On the other hand, a rule that would authorize the plaintiff to bring a
personal action against the debtor and simultaneously or successively another action
against the mortgaged property, would result not only in multiplicity of suits so offensive to
justice and obnoxious to law and equity, but also in subjecting the defendant to the
vexation of being sued in the place of his residence or of the residence of the plaintiff, and
then again in the place where the property lies

The RTC found that the undated Agreement contained no stipulation on interest and the
2003 Agreement's interest rate was unconscionable, the rate of interest on the loan of
respondent should be 12% per annum from judicial demand or filing of the original
complaint with the RTC until June 30, 2013 and 6% per annum from July 1, 2013 until
finality of this Decision. The total amount due as of such date of finality shall bear an
interest of 6% per annum until its full satisfaction.

ROSETTE Y. LERIAS v. CA
GR No. 193548, April 08, 2019

Facts:
The Spouses Nicanor E. Yñiguez and Salvacion Oppus-Yñiguez (Spouses Yñiguez) averred
that they were the owners of a parcel of commercial land located at Barangay Abgao,
Maasin, Southern and that they had paid the real property taxes assessed on the property.
The Southern Leyte had annotated an adverse claim on April 30, 1991 under Entry No.
5479 following Sangguniang Panlalawigan Resolution No. 346-S. '88. Subsequently, Philson

Construction had started to build a multi-purpose center on the property without their
consent and without having been issued the proper licenses from the concerned local
government offices and that the acts of Southern Leyte and Philson Construction resulted
in a cloud of doubt on their ownership of the property. They prayed that they be declared
the lawful owners of the property and that Southern Leyte and Philson Construction be
enjoined from performing acts inimical to their rights as the owners of the property.

Southern Leyte denied the alleged ownership of the Spouses Yñiguez and it insisted that
the lot was sold to the Province of Leyte by Felix Aya-ay, as the guardian of then minors
Josefina and Asuncion Oppus y Garces. The sale was evidenced by the seller's affidavit
and the buyer's affidavit, both of which were dated June 3, 1918. The Province of Leyte paid
the real property taxes starting in 1918.

Upon its creation as a separate province, it (Southern Leyte) was given the lot and that it
had owned the contested property since 1918 and had been in continued peaceful
possession of the same. The ownership of the Spouses Yñiguez was based on the deed of
donation executed by Asuncion Oppus on May 28, 1986 of the lot purportedly covered by
OCT No. 35 and TCT No. 150, but said lot was different from its lot and that through fraud
and misrepresentation, the Spouses Yñiguez had secured TCT No. T-1089 that eventually
and fraudulently covered its lot.

Issue:
Whether or not the writ of preliminary injunction was issued with grave abuse of
discretion amounting to lack or excess of jurisdiction.

Ruling:
The Court GRANTS the petition for certiorari.

It is necessary for the applicant of the remedy of injunction to prove the following in order
to obtain injunctive relief, namely: (1) there exists a clear and unmistakable right to be
protected; (2) the right is directly threatened by an act sought to be enjoined; (3) the
invasion of the right is material and substantial; and (4) there is an urgent and paramount
necessity for the issuance of the writ to prevent serious and irreparable damage.

The court find and rule that conformably with the foregoing standards Southern Leyte's
right to be protected by injunction was not established, or was not shown to exist. Southern
Leyte's claim to have owned the property since 1918 was supported only by the tax
declaration. In contrast, the petitioner's ownership was registered under the Torrens
system (TCT No. T-9542). The latter should be preferred because her Torrens certificate
was evidence of her indefeasible title to property as the person whose name appeared
thereon. Indeed, the registration of title under the Torrens system was a quieting of the
title to the land in question. Her ownership was consequently neither doubtful nor
disputable, but certain and settled. At any rate, the law expressly made her certificate of
title, being indefeasible, not subject to collateral attack, but only to a direct attack.


The CA stated that Southern Leyte's actual possession of the property gave rise to the
disputable presumption of ownership. The statement was inherently fallacious because the
presumption of ownership could not arise in the face of the ownership of the petitioner
being already registered under the Torrens system.

The CA ratiocinated that Southern Leyte was entitled to the continued occupation of the
property despite the ownership already adjudged in favor of the Spouses Yñiguez. The CA
declared that Southern Leyte's right of occupation must be protected. Such declaration was
unwarranted, however, for the occupation of the property by Southern Leyte, even if it was
true, could not prejudice the petitioner's registered ownership unless Southern Leyte's
possession was based on some other right that must be respected, like that of a lessee. Yet,
the CA nowhere mentioned by what right Southern Leyte was entitled to remain in
possession. In short, Southern Leyte's right to remain in possession was either doubtful or
non-existent; hence, the issuance of the injunctive relief was improper.

Injunction is the strong arm of equity. This transcendent or extraordinary remedy should
not be lightly indulged in but should be used sparingly and only in a clear and plain case.
The power of the courts to issue injunctions should be exercised sparingly, with utmost
care, and with great caution and deliberation. The objective of preliminary injunction is to
preserve the status quo until the merits of the case can be fully heard. The injunction,
being a preliminary remedy, must not resolve the merits of the main case pending the trial,
for it is not the function of preliminary injunction to determine the merits of a case, or to
decide controverted facts.

SPOUSES YU HWA PING AND MARY GAW VS. AYALA LAND, INC./HEIRS OF SPOUSES
ANDRES DIAZ AND JOSEFA MIA VS. AYALA LAND, INC.
G.R. NO. 173120/G.R. NO. 173141. APRIL 10, 2019

Facts:
On March 17, 1921, petitioners Spouses Andres Diaz and Josefa Mia (Spouses Diaz)
submitted to the General Land Registration Office for approval of the Director of Lands a
survey plan designated as Psu-25909, which covered a parcel of land located at Sitio of Kay
Monica, Barrio Pugad Lawin, Las Piñas, Rizal, with an aggregate area of 460,626 square
meters covered by Lot 1. On May 26, 1921, the Director of Lands approved survey plan
Psu-25909

On October 21, 1925, another survey plan was done covering Lot 3 of the same parcel of
land designated as Psu-47035 for a certain Dominador Mayuga. The said survey, however,
stated that the lot was situated at Sitio May Kokek, Barrio Almanza, Las Piñas, Rizal. Then,
on July 28, 1930, another survey was undertaken designated as Psu-80886 for a certain
Eduardo C. Guico (Guico). Again, the survey indicated a different address that the lots were
situated in Barrio Tindig na Mangga, Las Piñas, Rizal. Finally, on March 6, 1931, an
additional survey plan was executed over the similar parcel of land designated as
Psu-80886/SWO-20609 for a certain Alberto Yaptinchay (Yaptinchay). Psu-80886 and
Psu-80886/SWO-20609 covered Lot 2, with 158,494 square meters, and Lot 3, with
171,309 square meters, of the same land.


On March 12, 1993, petitioner Spouses Yu Hwa Ping and Mary Gaw (Spouses Yu) acquired
ownership over 67,813 square meters representing the undivided half-portion of Lot 1-A
originating from OCT No. 8510 of Spouses Diaz.

On January 27, 1994, Spouses Yu acquired ownership over Lot 1-B originating from OCT No.
8510 of Spouses Diaz with an area of 135,000 square meters. On the other hand, on May 4,
1980, CPJ Corporation transferred their interest in the subject properties to third persons.
Later, in 1988, Ayala Corporation obtained the subject properties from Goldenrod, Inc. and
PESALA. In 1992, pursuant to the merger of respondent Ayala Land, Inc.

Meanwhile, sometime in August 1995, Spouses Yu visited their lots. To their surprise, they
discovered that ALI had already clandestinely fenced the area and posted guards thereat
and they were prevented from entering and occupying the same. They also discovered that
the transfer of certificates of titles covering parcels of land overlapping their claim were in
the name of ALI.

On December 4, 1996, Spouses Yu filed a complaint before the RTC of Las Piñas City,
Branch 255, against ALI for declaration of nullity of the TCTs issued in the name of the
latter (Yu case). They also sought the recovery of possession of the property covered by
ALI's title which overlapped their land alleging that Spouses Diaz, their predecessors had
open, uninterrupted and adverse possession of the same from 1921 until it was transferred
to Cabautan in 1976.

The SC ruled that there are indeed glaring errors in the surveys relied upon by ALI. These
errors could not be merely disregarded as they affect the authenticity and validity of OCT
Nos. 242, 244 and 1609. ALI then file a motion for reconsideration but was denied. ALI filed
a second motion for reconsideration.

Issue:
Whether or not the title of ALI is superior over the other.

Ruling:
A certificate of title serves as evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein, it is not a conclusive proof of
ownership. It is a well-settled rule that ownership is different from a certificate of title. The
fact that a person was able to secure a title in his name does not operate to vest ownership
upon him of the subject land. Registration of a piece of land under the Torrens System does
not create or vest title, because it is not a mode of acquiring ownership. A certificate of title
is merely an evidence of ownership or title over the particular property described therein.
It cannot bused to protect a usurper from the true owner; nor can it be used as a shield for
the commission of fraud; neither does it permit one to enrich himself at the expense of
others. Its issuance in favor of a particular person does not foreclose the possibility that the
real property may be co-owned with persons not named in the certificate, or that it may be
held in trust for another person by the registered owner.


A survey plan precisely serves to establish the true identity of the land to ensure that it
does not overlap a parcel of land or a portion thereof already covered by a previous land
registration, and to forestall the possibility that it will be overlapped by a subsequent
registration of any adjoining land. Thus, if the survey plan is evidently erroneous, then the
exact and finite identity of the land cannot be reflected in the technical description of the
certificate of title.

An action for reconveyance may also be based on a void contract. When the action for
reconveyance is based on a void contract, as when there was no consent on the part of the
alleged vendor, the action is imprescriptible.

To recall, ownership is different from a certificate of title. A certificate of title is merely an
evidence of ownership or title over the particular property described therein, and it cannot
be used to protect a usurper from the true owner; nor can it be used as a shield for the
commission of fraud; neither does it permit one to enrich himself at the expense of others.
Thus, the Court, in its July 26, 2017 Decision, allowed the action of the Spouses Yu because
it is an action for reconveyance that attacks the right of ownership of ALI over the land,
resulting into void contracts of conveyances. As discussed in the said Decision, between
OCT No. 8510 and OCT Nos. 1609, 242 and 244, the latter titles are null and void due to the
invalid surveys and technical descriptions. It is settled that a void title cannot give rise to a
valid title, and that an action to declare the nullity of a void title does not prescribe and is
susceptible to direct, as well as to collateral attack.

JUANITA E. CAHAPISAN-SANTIAGO VS. JAMES PAUL A. SANTIAGO
G.R. No. 241144, June 26, 2019

Facts:
Sometime in 1999, respondent met petitioner at a car service center along Marcos Highway,
Antipolo City. At that time, petitioner was forty (40) years old and respondent was
twenty-two (22) years old. Petitioner became respondent's girlfriend, and three (3) months
into the relationship, she became pregnant. Eventually, or on March 31, 2000, petitioner
and respondent got married before the Mayor of Pangil, Laguna. During their marriage,
however, instead of experiencing marital bliss, their relationship was fraught with quarrels.

Respondent averred that petitioner was domineering, considering that she was the one
earning and he was a high school drop-out. Sometime in 2005, petitioner and respondent
separated because they could no longer stand each other. After eleven (11) years of living
apart, respondent filed a Petition for Declaration of Nullity of Marriage before the RTC. In
support of his petition, respondent presented the report of an expert clinical psychologist,
Ms. Shiela Marie 0. Montefalcon (Ms. Montefalcon), who assessed him to be suffering from
Dependent Personality Disorder (DPD), and petitioner from Narcissistic Personality
Disorder (NPD). According to the report, respondent's DPD is a long term chronic
condition that manifested itself through his overdependence on petitioner and his own
mother to meet his emotional and physical needs. The clinical features of respondent's DPD
were likewise exhibited through his: (a) difficulty in making everyday decisions without an
excessive amount of advice and reassurance from petitioner and his own mother; ( b)

problem in expressing disagreement with others because of fear or loss of support or

approval; (c) struggle in initiating projects on his own because of lack of self-confidence in
judgment or abilities; (d) excessive dependence on petitioner and his own mother to obtain
nurturance and support; and (e) inclination to substance use and abuse. On the other hand,
petitioner's NPD was found to be grave, severe, and already ingrained deeply within her
adaptive system, as evidenced by her pervasive pattern of grandiosity, need for admiration,
and lack of empathy. As both parties were found to be psychologically incapacitated to
perform their essential marital obligations, Ms. Montefalcon, therefore, recommended that
their marriage be declared null and void.

For her part, petitioner contended that respondent was not psychologically incapacitated,
but was merely immature and lacked a sense of responsibility. She also pointed out that
respondent's past addictive behavior is not permanent, considering that the latter was able
to cope with his drug dependency and was able to change for the better. She added that
respondent's alleged DPD is even contrary to his personality, since the report stated that
respondent "can present a proposal or lead a group discussion with ease and tact. He is
assertive but sometimes impatient. He is best in situations that need sound common sense
and practical ability with things. He relies on his ability to improvise instead of preparing in
advance."

Issue:
Whether or not the parties' marriage should be nullified on the ground of respondent's
psychological incapacity.

Ruling:

The RTC, as affirmed by the CA, already ruled that there was insufficient evidence to prove
the root cause or juridical antecedence of petitioner's alleged NPD. Finding no cogent
reason to disturb the same, the resolution of this case shall, thus, revolve on whether or not,
on the other hand, respondent's psychological incapacity, i.e., DPD, was proven.

Jurisprudence states that the validity of marriage and the unity of the family are enshrined
in our Constitution and statutory laws; hence, any doubts attending the same are to be
resolved in favor of the continuance and validity of the marriage and that the burden of
proving the nullity of the same rests at all times upon the petitioner. The policy of the
Constitution is to protect and strengthen the family as the basic social institution and
marriage as the foundation of the family. As such, the Constitution decrees marriage as
legally inviolable and protects it from dissolution at the whim of the parties.

Under Article 3633 of the Family Code, as amended, psychological incapacity is a valid
ground to nullify a marriage. However, in deference to the State's policy on marriage,
psychological incapacity does not merely pertain to any psychological condition; otherwise,
it would be fairly easy to circumvent our laws on marriage so much so that we would be
practically condoning a legal subterfuge for divorce.


According to case law, psychological incapacity should be confined to the most serious
cases of personality disorders that clearly manifest utter insensitivity or inability to give
meaning and significance to the marriage. It should refer to no less than a mental-not
merely physical incapacity that causes a party to be truly incognitive of the basic marital
covenants·· that concomitantly must be assumed and discharged by the parties to the
marriage, which, as provided under Article 68 of the Family Code, among others, include
their mutual obligations to live together, observe love, respect and fidelity, and render help
and support.

In this accord, psychological incapacity must therefore be characterized by three (3) traits:
(a) gravity, i.e., it must be grave and serious such that the party would be incapable of
carrying out the ordinary duties required in a marriage; (b) juridical antecedence, i.e., it
must be rooted in the history of the party antedating the marriage, although the overt
manifestations may emerge only after the marriage; and (c) incurability, i.e., it must be
incurable, or even if it were otherwise, the cure would be beyond the means of the party
involved.

Applying the foregoing guidelines, the Court finds that contrary to the rulings of the courts
a quo -the totality of evidence presented failed to sufficiently establish respondent's
psychological incapacity based on his DPD.

SPOUSES BELINDA LIU AND HSI PIN LIO VS. MARCELINA ESPINOSA, ET AL.
G.R. NO. 238513, JULY 31, 2019

Facts:
Petitioner Belinda Y. Liu owns a parcel of land covered by Transfer Certificate of Title (TCT)
No. 146-20100088914 in Barangay Centro, Agdao, Davao City. Petitioner Hsi Pin Liu is her
husband. They acquired said land from their predecessor-in-interest who, in tum, merely
tolerated the occupation of the property by respondents Marcelina Espinosa, Mary Ann M.
Estrada, Archie Asumbrado, Inesita Asumbrado, Loreta Tutor, Elias Penas, Benita Abantao,
Basiliza Martizano, Arman Paras, Miguelita M. Antega, Joventino Cahulogan, and Tito Tubae.
The latter are the present occupants of the land.

After title was transferred to the petitioners, they likewise tolerated the presence of the
respondents upon the understanding that they will peacefully vacate the land once the
petitioners' need to use the same arises. When petitioners' demands5 to vacate the
property were made, however, the latest of which was on February 12, 2013, the
respondents refused to comply.
On November 11, 2014,8 the MTCC rendered judgment in favor of petitioners. It declared
them as the rightful possessors of the property and directed the respondents to vacate the
subject land and to tum the same over to the petitioners. Further, respondents were
ordered to pay the petitioners PhP 20,000.00 as attorney's fees, as well as reasonable
rental fee for the use of the subject property in the amount of PhP 5,000.00 per month with
6% interest per annum, computed from August 6, 2013, the date the ejectment suit was
filed, until the respondents vacate the property.

Respondents thus filed an Appeal with the RTC, Branch 17, Davao City, from the MTCC
Decision, where they asserted that: (1) the MTCC had no jurisdiction to entertain the action
because it failed to take into consideration that the defendants were in possession of the
land in the concept of an owner, and not by tolerance of the plaintiffs nor of their
predecessors-in-interest; (2) they were entitled to the possession and occupation of the
land because they had been in possession of the same in the concept of an owner for more
than twenty years and they introduced valuable improvements therein; (3) they have
priority in rights to apply for title of their respective lots because Original Certificate of
Title No. 38 and its derivative titles were declared null and void by the Court of Appeals;
and ( 4) they were harassed and were thus entitled to the damages and reliefs that they
prayed for in their counter-claim.

Moreover, respondent Joveniano Gorduiz, Sr. asserted that the MTCC committed a gross
and blatant error when it declared the petitioners as the rightful possessors of the property
and that the defendants' possession and/or occupation was one of unlawful detainer.
The Court of Appeals granted the respondents' petition in its October 23, 2017 Decision
and reversed the findings of the RTC. It held that petitioners were unable to sufficiently
prove the presence of tolerance of respondents' occupation from the start of their
possession of the subject property. Also, plaintiffs failed to adduce evidence that would
have shown when the respondents entered the property or who gave them the permission
to do the same. Thus, the Court of Appeals found that the petitioners' bare claim of
tolerance could not sustain their action for unlawful detainer.

Issue:
Whether this unlawful detainer case is independent of any claim of ownership by any of the
parties involved

Ruling:
The Court fully sustains both the MTCC and the RTC findings that the foregoing requisites
have been sufficiently established in the case at bar.

This occupation became illegal when respondents refused to heed petitioners' express and
clear demands to vacate the subject property, the last of which was dated February 12,
2013. It is evidently clear that the complaint for unlawful detainer, filed on August 6, 2013,
was made within one year from the time the last formal demand to vacate was made.
Further, it should be pointed out that respondents would not have made an offer to
purchase the subject land from petitioners had they been truly in possession of the
property in the concept of an owner. Their claim is thus negated by the fact that the subject
land is registered in the name of the petitioners. It is settled that a Torrens title is evidence
of an indefeasible title to property in favor of the person in whose name the title appears. It
is conclusive evidence with respect to the ownership of the land described therein. Hence,
petitioners as the titleholders are entitled to all the attributes of ownership of the property
including possession.

Even then, the respondents' claim of possession of the property in the concept of an owner
is a collateral issue that may not be decided upon in a case for unlawful detainer. To stress,

the only issue to be resolved in an unlawful detainer case is physical or material possession
of the property involved, independent of any claim of ownership by any of the parties
involved.
Thus, the Court finds that the appellate court gravely erred when it reversed the findings of
the RTC. Petitioners clearly possess superior rights over the possession of the property as
the registered owners thereof, and all the elements of unlawful detainer were sufficiently
proven in the case at bar.

SPS. JULIAN BELVIS, SR. AND CECILIA BELVIS, ET AL. VS. SPS. CONRADO V. EROLA AND
MARILYN EROLA, AS REPRESENTED BY MAUREEN FRIAS
G.R. NO. 239727, JULY 24, 2019

Facts:
Respondents alleged that they are owners of a 29,772 sq. m.-lot situated in Barangay
Malag-it, Pontevedra, Capiz. Lot 597 (subject property) is covered by Transfer Certificate of
Title No. T-26108 and a tax declaration, both in the name of respondent Conrado V. Erola
(Conrado), who allegedly purchased the same in October of 1978. As the parties were close
relatives, i.e., petitioner Cecilia Erola-Bevis (Cecilia) being the sister of respondent Conrado,
respondents allegedly allowed petitioners to possess the lot, subject to the condition that
they would vacate the same upon demand.

On July 2, 2012, respondents sent petitioners a letter requiring the latter to vacate the
property within 30 days from receipt of the letter. Petitioners, however, refused to comply.
After unsuccessful barangay conciliation proceedings, respondents filed the instant
complaint.

On the other hand, petitioners claimed that in 1979, the subject property was purchased by
the late Rosario V. Ero la (Rosario), the mother of petitioner Cecilia and respondent
Conrado. Conrado, however, allegedly succeeded in registering the property solely in his
name. Hence, an implied trust was allegedly created over the ½ undivided hereditary share
of petitioner Cecilia. For over 34 years, petitioners alleged that they possessed and
cultivated the tot in the concept of an owner, believing in good faith that they were
co-owners of the subject lot. In the course of their possession, petitioners allegedly
introduced various improvements thereon by planting bamboos, nipa palms and coconut
trees, and by constructing fishponds. In their Answer, petitioners further claimed that
respondents failed to personally appear during the barangay conciliation proceedings and
that their representative, Maureen, had no authority to appear on their behalf.

The MCTC held that although petitioners claimed that respondents failed to personally
appear during the mandatory barangay conciliation proceedings, the Office of the Punong
Barangay nevertheless issued a Certification to File Action in accordance with Section 412
of Republic Act No. (R.A.) 7160. Further, the case was referred to Philippine Mediation
Center (PMC) during pre-trial but the parties still failed to amicably settle the same.

On the issue of possession, the MCTC reasoned that petitioners failed to present any
evidence to prove that the property was purchased by the late Rosario and that it was

registered solely in the name of respondent Conrado in trust for his co-heir and sister,
petitioner Cecilia. The MCTC further held that petitioners were not builders in good faith as
their possession of the lot was by mere tolerance, which was subject to an implied promise
to vacate the same upon demand. Hence, respondents had the better right to possess the
subject property.

R TC held that despite the non-appearance of respondents, the parties failed to arrive at a
settlement before the Office of the Punong Barangay, the PMC and even before the court
during Judicial Dispute Resolution (JDR) proceedings. In fact, the Certification to File Action
was issued upon agreement of the parties. Thus, the RTC relaxed the technical rules of
procedure and held that a remand of the case would be unnecessarily circuitous. On the
substantive issue, the RTC held that petitioners failed to prove that petitioner Cecilia was a
co-owner of the property or that the same was purchased by Rosario.

Issue:
Whether respondents complied with the mandatory conciliation proceedings under R.A.
7160.

Ruling:
The Petition is partly meritorious.

Respondents substantially complied with the mandatory barangay conciliation proceedings
under R.A. 7160.

The CA, the R TC, and the MCTC unanimously found that petitioners and respondents'
representative underwent barangay conciliation proceedings. Unfortunately, they failed to
arrive at any amicable settlement. Thereafter, upon agreement of the parties, the Office of
the Punong Barangay issued a Certification to File Action. During pre-trial, the parties again
underwent mediation before the PMC and JDR before the court. Still, no settlement was
reached. Given the foregoing, the Court finds that the purposes of the law, i.e., to provide
avenues for parties to amicably settle their disputes and to prevent the "indiscriminate
filing of cases in the courts," have been sufficiently met. Considering that the instant
complaint for unlawful detainer, an action governed by the rules of summary procedure,
has been pending for 6 years, the Court finds it proper to relax the technical rules of
procedure in the interest of speedy and substantial justice. Having disposed of the
procedural issue, the Court shall now proceed with the substantive issues raised.

In view of the fore going, the Court is therefore constrained to remand the instant case to
the MCTC for further proceedings to determine the facts essential to the proper application
of Articles 448 in relation to Articles 546 and 548 of the Civil Code.
On a final note, it bears emphasis that this is a case for unlawful detainer. Thus, "the sole
issue for resolution is the physical or material possession of the property involved,
independent of any claim of ownership by any of the parties." The determination of the
ownership of the subject lot is merely provisional and is without prejudice to the
appropriate action for recovery or quieting of title.


WHEREFORE, the Petition is GRANTED

JOAQUIN BERBANO, ET AL. VS. HEIRS OF ROMAN TAPULAO, NAMELY: ALBERT D.
TAPULAO, ET AL.
G.R. NO. 227482, JULY 1, 2019

Facts:
Respondents Heirs of Roman Tapulao, namely: Albert D. Tapulao, Danilo D. Tapulao,
Marieta Tapulao-Reyes, Linda Tapulao-Ramirez, and Josefina Tapulao-Dacanay filed a
Complaint for Recovery of Possession and Damages against petitioners Joaquin Berbano,
Trinidad Berbano, and Melchor Berbano.

In their Complaint, respondents averred that their father Roman Tapulao was the
registered owner of a lot located in Taguing, Baggao, Cagayan covered by Original
Certificate of Title (OCT) No. P-9331. They paid the realty taxes thereon.

After the death of Roman Tapulao and his wife Catalina CasabarTapulao, respondents
caused the relocation survey of the lot. It revealed that petitioners occupied portions of the
lot. Despite several demands, however, petitioners refused to vacate and return the lot to
respondents.

In their Answer, petitioners argued that the original owner of the lot was Felipe Pefia.
Sometime in 1954, Felipe Pefia ceded his possession over half hectare of the lot in favor of
Joaquin Berbano. From that time on, Joaquin had been in open and exclusive possession of
the lot.

Subsequently, Felipe Pefia sold the adjacent lot to Roman Tapulao. When Roman Tapulao
caused its registration, the survey mistakenly included therein the adjacent lot belonging to
Joaquin. As a result, OCT No. P-93 (in the name of Roman Tapulao) also covered Joaquin's
lot. Roman and Catalina Tapulao acknowledged this error through their Affidavit dated
April 2, 1976. They promised to respect Joaquin's ownership of that specific portion.

The case was then called for pre-trial which for one reason or another got reset for eight (8)
consecutive times. During the pre-trial on January 30, 2014, petitioners and counsel failed
to appear. Thus, respondents moved to present evidence ex-parte which the trial court
granted.

ISSUE:
Is petitioners' challenge against the trial court's jurisdiction tenable?

RULING:
Petitioners' claim that the property in dispute is only a specific portion of the lot or only
6,804 square meters, which supposedly carries the proportional assessed value of P8, 111.
72, is irrelevant. It does not alter what is actually alleged in the complaint. Besides, it is not
for petitioners to define the allegations in their adversaries' complaint. That is the

respondents' prerogative as plaintiffs below. Additionally, petitioners cannot limit the

dispute to the alleged area actually being contested. This is because the rest of the
contiguous portion of the lot could be relevant to the remedy or remedies flowing
therefrom. For example, who bears the burden of paying for improvements; what are the
indicators of good and bad faith by petitioners? The point is this: respondents' allegations
in their complaint cannot be at once deemed to be a case of bad and false pleading.
Lastly, but no less important, petitioners never questioned the trial court's jurisdiction in
the proceedings before it. In fact, petitioners even filed their Answer and sought affirmative
relief therein. The trial court summarized petitioners' prayer in their Answer, to wit:

Because of the groundless filing of the case, the defendants suffered mental anguish,
wounded feelings, social humiliation and they also incurred actual damages. They were
likewise compelled to engage the services of a counsel and incurred actual damages.
Thus, defendants pray for the dismissal of the case, that the plaintiffs be ordered to
execute the necessary documents to cause the transfer and registration of the lot in suit
in the name of the defendants and the award of actual, moral and exemplary damages.

It is only after the case was decided against them that they challenged it for the first time
via their motion for reconsideration. In Tijam, et al. v. Sibonghanoy, et al., the Court held
that a party cannot. invoke the jurisdiction of a court and ask for affirmative relief against
his opponent and, after obtaining or failing to obtain such relief, repudiate or question that
same jurisdiction. So must it be.
The petition is DENIED.

ROSEMARIE ERIBAL BOWDEN, REPRESENTED BY FLORENCIO C. ERIBAL, SR. VS.
DONALD WILLIAM ALFRED BOWDEN
G.R. NO. 228739, JULY 17, 2019

FACTS:
Rosemarie Eribal Bowden (petitioner) was the registered owner of a 2004 Mitsubishi
Pajero (subject vehicle) with Plate No. FFD 228.3 The subject vehicle was sold to Virgilio S.
Ramos (Ramos) without petitioner's consent by her then husband Donald William Alfred
Bowden (respondent), a British national residing in Iloilo City. The marriage of petitioner
and respondent was dissolved by virtue of a Decree of Divorce dated June 12, 2006.
Petitioner claimed that while she was in London, she entrusted the Original
Receipt-Certificate of Registration (OR-CR) of the subject vehicle to her niece Juvelyn Enate.
However, during petitioner's marriage with respondent, the latter executed an affidavit of
loss of the OR-CR and submitted it to the Roxas City District, Office of the Land
Transportation Office (LTO). This paved the way for the issuance of a new OR-CR to
respondent which he used to execute a deed of sale6 of the subject vehicle in his favor.
Respondent submitted the deed of sale to the LTO and a new CR was issued in his name.
Both affidavit of loss and deed of sale bore forged signatures of petitioner, prompting her to
file criminal complaints against respondent.


On April 4, 2014, respondent filed a demurrer to evidence with leave of court claiming
insufficiency of evidence. He argued that the petitioner failed to prove that he falsified the
affidavit of loss and deed of sale and used them as alleged in the informations. In the
judicial affidavits of petitioner's witnesses, Juvelyn Enate and Florencio S. Eribal, Sr. did not
testify as to the identity of the person who affixed the forged signature of petitioner in the
affidavit of loss and submitted the falsified document to the LTO. Even petitioner admitted
in her judicial affidavit that she did not see respondent sign the affidavit of loss and deed of
sale bearing her forged signature, more so present them to the LTO. Respondent likewise
questioned petitioner's failure to present the original copy of the purported affidavit of loss
and deed of sale.

On July 7, 2014, the MTCC modified the May 6, 2014 Order by granting the demurrer to
evidence and acquitting respondent as to the charge of falsification. It held that petitioner
failed to prove that respondent was the one who actually forged the questioned documents.
It also noted that the informations are duplicitous, charging respondent with the
commission of two crimes in each information. However, considering that respondent had
been arraigned and had entered his plea of not guilty without a motion to quash having
been filed, respondent was deemed to have waived the defects.

On September 16, 2014, respondent filed a petition for certiorari before the Regional Trial
Court (RTC) of Roxas City, alleging grave abuse of discretion on the part of the MTCC in
denying the demurrer on the charge of use of falsified documents. Respondent averred that
he cannot be tried for the crime of use of falsified documents as it was already included in
the crime of falsification for which he was acquitted. Assuming that he can be prosecuted
for the use of falsified documents, he pointed out that the petitioner failed to prove that he
used the falsified affidavit of loss and deed of sale given that the purported CRs of the
subject vehicle in his name and in the name of Ramos were not admitted as evidence for
the petitioner. He also contended that the element of damage or intent to cause damage
was wanting since at the time that he allegedly used the falsified documents, he was still
married to petitioner and the subject vehicle remained a property of the marriage.

Ruling:
The petition is barren of merit.

Under Section 23, paragraph 1, Rule 119 of the Rules of Court, a criminal action may be
dismissed on the ground of insufficiency of evidence in two ways: (1) on the court's
initiative, after an opportunity to be heard is accorded the prosecution; and (2) upon
demurrer to evidence filed by the accused with or without leave of court. In both instances,
the dismissal may be made only after the prosecution rests its case.

When the accused files a motion to dismiss by way of demurrer to evidence, it is incumbent
upon the trial court to review and examine the evidence presented by the prosecution and
determine its sufficiency to sustain a judgment of conviction beyond reasonable doubt. If
competent evidence exists, the court shall deny the demurrer and the accused may still
adduce evidence on his behalf if the demurrer was filed with leave of court. If filed without
leave, the accused submits the case for judgment on the basis of the evidence of the

prosecution. On the other hand, if the court finds the evidence insufficient to support a
verdict of guilt, the court shall grant the demurrer and the criminal case shall be dismissed.
Such dismissal is a resolution on the merits and tantamount to an acquittal. Any further
prosecution of the accused after an acquittal is a violation of his constitutional right against
double jeopardy. Accordingly, an order granting the demurrer to evidence and acquitting
the accused on the ground of insufficiency of evidence cannot be the subject of an appeal.

Petitioner files the instant petition for review on certiorari under Rule 45 of the Civil
Procedure, instead of a petition for certiorari under Rule 65, hence, an erroneous remedy.
On this point alone, the petition must be dismissed.

But even if a Rule 65 petition is filed, the same will not prosper since the CA did not act
with grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the
cases for use of falsified affidavit of loss and use of falsified deed of sale. The Court agrees
with the CA that the petitioner fails to put up a prima facie case of use of falsified
documents which justifies the grant of the demurrer but for a different reason. The
petitioner was given an opportunity to present her case. She pas formally offered her
evidence and actively participated in the trial. Petitioner was afforded her right to move for
the reconsideration of the MTCC decision denying the demurrer to the charge of use of
falsified documents. When the trial proceeded before the MTCC, the court allowed the
petitioner to present Erwin Lou Calungcagin to whom respondent purportedly sold the
subject vehicle. Indubitably, there is no denial of due process that warrants the filing of a
Rule 65 petition

The petition is denied.

LARA'S GIFTS & DECORS, INC., PETITIONER, v. MIDTOWN INDUSTRIAL SALES, INC.,
RESPONDENT.
G. R. No. 225433, August 28, 2019

Facts:
Petitioner is engaged in the business of manufacturing, selling, and exporting handicraft
products. On the other hand, respondent is engaged in the business of selling industrial and
construction materials, and petitioner is one of respondent's customers. Respondent
alleged that from January 2007 up to December 2007, petitioner purchased from
respondent various industrial and construction materials in the total amount of
P1,263,104.22. The purchases were on a 60 day credit term, with the condition that 24%
interest per annum would be charged on all accounts overdue, as stated in the sales
invoices. Petitioner paid for its purchases by issuing several postdated checks in favor of
respondent. However, when respondent deposited the checks on their maturity dates, the
checks bounced. Respondent sent a demand letter dated 21 January 2008, which was
received by petitioner on 22 January 2008, informing petitioner of the bounced checks and
demanding that petitioner settle its accounts. Still petitioner failed to pay, prompting
respondent to file on 5 February 2008 a Complaint for Sum of Money with Prayer for
Attachment against petitioner.


In its Answer, petitioner admitted that from January 2007 to December 2007, petitioner
purchased from respondent, on a 60-day credit term, various industrial and construction
materials in the total amount of P1,263,104.22. However, petitioner claimed that most of
the deliveries made were substandard and of poor quality. Petitioner alleged that the
checks it issued for payment were not for value because not all of the materials delivered
by respondent were received in good order and condition. However, petitioner failed to
prove that the deliveries made by respondent did not comply with the required
specifications.
Petitioner claims that it was placed in a disadvantageous position and have been cheated or
misled into agreeing to the 24% interest rate per annum that was stated in the sales
invoices.

Issues:
1. Whether or not articles 1192 and 1283 of the civil code are applicable
in the present case.
2. Whether or not the interest rate fixed at 24% per annum is void.
3. Assuming that the interest rate of 24% is valid, whether or not the
said rate shall be applied only until finality of judgment.
4. What is the present legal interest?
5. Whether or not the transaction is forbearance of credit which
warrants the application of the Usury Law?

RULING:
1. Articles 1192 and 1283 of the Civil Code do not apply.

Articles 1192 and 1283 of the Civil Code read:
Art 1192 In case both parties have committed a breach of the obligation, the
liability of the first infractor shall be equitably tempered by the courts fit
cannot be determined which of the parties first violated the contract the
same shall be deemed extinguished, and each shall bear his own damages.

Art 1283 If one of the parties to a suit over an obligation has a claim for
damages against the other, the former may set it off by proving his right to
said damages and the amount thereof.

In this case, petitioner failed to substantiate its claims that the materials delivered were
substandard or of poor quality. Thus, petitioner cannot demand either a tempering of its
liability or an offset of damages.
2. No, the interest rate fixed at 24% per annum is valid.

In Asian Construction and Development Corporation v. Cathay Pacific Steel
Corporation, the Court upheld the validity of interest rate fixed at 24% per annum that was
expressly stipulated in the sales invoices. The Court held that petitioner construction
company is presumed to have full knowledge of the terms and conditions of the contract
and that by not objecting to the stipulations in the sales invoice, it also bound itself to pay
not only the stated selling price but also the interest of 24% per annum on overdue

accounts and the 25% of the unpaid invoice for attorney's fees.

In the present case, petitioner, which has been doing business since 1990 and has been
purchasing various materials from respondent since 2004, cannot claim to have been
misled into agreeing to the 24% interest rate which was expressly stated in the sales
invoices. Besides, this Court has already ruled in several cases that an interest rate of
24% per annum agreed upon between the parties is valid and binding and not excessive
and unconscionable. Thus, the stipulated 24% interest per annum is binding on petitioner.

3. No, the rate shall be applied not only until finality of judgment.

The stipulated interest is the law between the parties, and should be applied until full
payment of the obligation. Article 1159 of the Civil Code provides that "[o]bligations arising
from contracts have the force of law between the contracting parties and should be
complied with in good faith." Article 1956 of the Civil Code also states that "[n]o interest
shall be due unless it has been expressly stipulated in writing." Furthermore, the
contracting parties may establish such stipulations as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order, or public policy, and the
parties are bound to fulfill what has been expressly stipulated. Thus, unless the
stipulated interest is excessive and unconscionable, there is no legal basis for the
reduction of the stipulated interest at any time until full payment of the principal
amount. The stipulated interest remains in force until the obligation is satisfied. In the
absence of stipulated interest, the prevailing legal interest prescribed by the Bangko
Sentral ng Pilipinas shall apply.

Under Articles 2210 and 2211 of the Civil Code, when the obligation, other than loans or
forbearance of money, goods or credits, is breached, the court may in its
discretion impose an interest on the damages awarded. The interest imposed in the
discretion of the court will be the prevailing legal interest prescribed by the Bangko Sentral
ng Pilipinas.

In contrast, Article 2209 of the Civil Code is applicable only to loans or forbearance of
money, goods or credit which arise out of "obligations consisting in the payment of a
sum of money, and the debtor incurs in delay," and thus where there is a
debtor-creditor relationship. Articles 2210 and 2211 refer to obligations that do not
involve the payment of a sum of money and there is no debtor-creditor relationship.
Moreover, the payment of interest in Article 2209 is mandatory, while the payment of
interest in Articles 2210 and 2211 is discretionary on the court.

4. The Legal Interest Rate in Article 2209 of the Civil Code Has Been Amended
On 24 February 1916, Act No. 2655 or the Usury Law was enacted which fixed the legal
interest at 6% per annum for loans, forbearance of money, goods, credits or judgments.
This legal interest applied in the absence of stipulated interest.

On 18 June 1949, Republic Act No. 386, otherwise known as the Civil Code of the
Philippines, was enacted and took effect the following year. Article 2209 of the Civil Code

declared that the legal interest in obligations to pay a sum of money is 6% per annum when
the debtor incurs in delay. Article 2209 applies to loans and forbearance of money, goods
or credits. This legal interest will apply in the absence of stipulated interest.

On 29 January 1973, Presidential Decree No. 116 (P.D. No. 116) was issued, which
amended the Usury Law and fixed the legal interest for loans, forbearance of money, goods,
credits or judgments at 6% per annum "or such rate as may be prescribed by the
Monetary Board of the Central Bank of the Philippines." This legal interest applies in
the absence of stipulated interest. Section 11 of P.D. No. 116 states: "All Acts and parts of
Acts inconsistent with the provisions of this Decree are hereby repealed." This
repealing clause applied to Acts, Commonwealth Acts, and Republic Acts, including Article
2209 of Republic Act No. 386 (Civil Code of the Philippines). When P.D. No. 116 says "[a]ll
Acts and parts of Acts," it does not mean only Act No. 2655 (Usury Law) but all other Acts,
without exception.

Thus, based on BSP-MB Circular No. 799, the legal interest referred to in Article 2209 of the
Civil Code is now 6% per annum.

5. Yes. This case involves a forbearance of credit wherein petitioner was granted a 60-day
credit term on its purchases, with the condition that a 24% interest per annum would be
charged on all accounts overdue.

The term "forbearance" in the context of the Usury Law has been defined as "a contractual
obligation of lender or creditor to refrain, during a given period of time, from requiring the
borrower or debtor to repay a loan or debt then due and payable." In consideration of this
forbearance, the parties often agree on the payment of interest on the amount due.

In Estores v. Spouses Supangan, the Court ruled that "forbearance of money, goods or
credits" has a "separate meaning from a loan." The Court then reiterated, citing Crismina
Garments, Inc. v. Court of Appeals, that "forbearance of money, goods or credits" refers to
"arrangements other than loan agreements, where a person acquiesces to the
temporary use of his money, goods or credits pending happening of certain events or
fulfillment of certain conditions." The Court explained in Estores:

The contract involved in this case is admittedly not a loan but a Conditional
Deed of Sale. However, the contract provides that the seller (petitioner) must
return the payment made by the buyer (respondent-spouses) if the
conditions are not fulfilled. There is no question that they have in fact, not
been fulfilled as the seller (petitioner) has admitted this. Notwithstanding
demand by the buyer (respondent-spouses), the seller (petitioner) has failed
to return the money and should be considered in default from the time that
demand was made on September 27, 2000.

Even if the transaction involved a Conditional Deed of Sale, can the
stipulation governing the return of the money be considered as a forbearance
of money which required payment of interest at the rate of 12%? We believe

so.

In Crismina Garments, Inc. v. Court of Appeals, "forbearance" was defined as
a "contractual obligation of lender or creditor to refrain during a given
period of time, from requiring the borrower or debtor to repay a loan or
debt then due and payable." This definition describes a loan where a debtor
is given a period within which to pay a loan or debt. In such case,
"forbearance of money, goods or credits" will have no distinct definition from
a loan. We believe, however, that the phrase "forbearance of money,
goods or credits" is meant to have a separate meaning from a loan,
otherwise there would have been no need to add that phrase as a loan is
already sufficiently defined in the Civil Code. Forbearance of money,
goods or credits should therefore refer to arrangements other than
loan agreements, where a person acquiesces to the temporary use of his
money, goods or credits pending happening of certain events or
fulfillment of certain conditions. In this case, the respondent-spouses
parted with their money even before the conditions were fulfilled. They have
therefore allowed or granted forbearance to the seller (petitioner) to use
their money pending fulfillment of the conditions. They were deprived of the
use of their money for the period pending fulfillment of the conditions and
when those conditions were breached, they are entitled not only to the
return of the principal amount paid, but also to compensation for the use of
their money. And the compensation for the use of their money, absent any
stipulation, should be the same rate of legal interest applicable to a loan since
the use or deprivation of funds is similar to a loan.

Forbearance of goods includes the sale of goods on installment, requiring periodic payment
of money to the creditor. Forbearance of credits includes the sale of anything on credit,
where the full amount due can be paid at a date after the sale.

VIVE EAGLE LAND, INC. vs NATIONAL HOME MORTGAGE FINANCE CORPORATION
G.R. No. 230817, September 04, 2019

Facts:
The complainant Vive Eagle Land, Inc. (Vive) alleged that on November 17, 1999, it
entered into a Deed of Sale of Rights, Interests, and Participation Over Foreclosed Assets,
whereby it agreed to purchase National Home Mortgage Finance Corporation’s (NHMFC)
rights, interests, and participation in the foreclosed property of Alyansa ng mga
Maka-Maralitang Asosasyon at Kapatirang Organisasyon, Inc. located at Barangay Sta.
Catalina, Angeles City for a total purchase price of P40,000,000.00 payable in instalments.

Vive paid for few instalments, however, did not pay the subsequent installments. According
to Vive, it failed to pay because it was prevented from exercising its right to avail of a

developmental loan under Section 8 of the Deed of Sale due to issues on the subject
property.
NHMFC, through Sison, notified Vive through a letter dated February 10, 2006 of the
rescission/cancellation and/or revocation of the Deed of Sale due to the alleged
non-payment of the balance of the purchase price. Vive then filed an amended complaint
however it was dismissed by the RTC finding the rescission to be valid.

Issue:
Whether or not the Rescission of the deed of sale of rights, interests, and participation is
valid.

Ruling:
The court affirmed the decision of CA. The appellate court held that Vive's failure to pay the
purchase price on the date and in the manner prescribed by the Deed of Sale is an event of
default giving NHMFC the right to annul/cancel the contract and forfeiting whatever right
Vive may have acquired thereunder pursuant to Section 5 thereof. It is clear from Section 7
of the Deed of Sale that the parties intended their agreement to be a contract to sell or a
conditional sale. The title to the property was not immediately transferred, through a
formal deed of conveyance, in the name of Vive prior to or at the time of the first payment.
Thus, since the title and ownership remains with NHMFC until Vive fully pays the balance
of the purchase price, the Deed of Sale was merely a contract to sell. As such, NHMFC can
validly exercise its right to annul and/or cancel the Deed of Sale upon failure of Vive to pay
the purchase price on the date and manner prescribed. Thus, considering that the Deed of
Sale was validly annulled and/or cancelled, the subsequent transaction and MOA entered
into between NHMFC and Cavacon is valid.

SPOUSES SALVADOR BATOLINIO AND AMOR P. BATOLINIO VS. SHERIFF JANET
YAP-ROSAS AND PHILIPPINE SAVINGS BANK
G.R.NO. 206598, SEPTEMBER 04, 2019

Facts:
According to private respondent on October 26, 2007, Nicefora. Miñoza (Miñoza) obtained
a loan from it in the amount of P-5.7 Million as security thereof, Miñoza executed a real
estate mortgage (REM) over a parcel of land registered under her name, located in Las
Piñas City. Miñoza failed to pay the loan when it fell due. Thus, private respondent
instituted an extrajudicial foreclosure of the REM and later, it emerged as the highest
bidder at the public auction such that a certificate of sale was eventually issued in its favor
and registered with the Registry of Deeds on June 23, 2008. Private respondent added that
it demanded from Miñoza and all those persons claiming rights under her to vacate the
subject property, but to no avail. The RTC granted the petition and issued a writ of
possession.

Meanwhile, spouses Salvador Batolinio and Amor P. Batolinio (petitioners) filed an
Omnibus Motion with Prayer for the Issuance of a Preliminary Mandatory Injunction.
They claimed that they were the owners of the subject property. They stated that in 2003,

they mortgaged it to Union Bank of the Philippines (Union Bank), but in September 2007,
through a certain Leonila Briones, Yolanda Vargas, and Fedeline Balbis, they decided to sell
it to Miñoza for P2.435 Million. Allegedly, the aforesaid sale was subject to these conditions:
(1) Miñoza would secure financing from one Velez and Maria Elena Simbulan, who, in turn,
would pay petitioners' balance with Union Bank; (2) Miñoza would then secure a loan from
private respondent for P5.5 Million using the same property as collateral; and (3) upon
approval of the loan, private respondent would release the proceeds to petitioners.

While petitioners asserted that Miñoza, in cahoots with other people, forged their
signatures in the deed of sale and certificate of full payment pertaining to the subject
property, they confirmed having executed a letter of guaranty for private respondent to
facilitate the loan of Miñoza. At the same time, they stated that they filed an adverse claim
on the subject property as well as a civil case for cancellation of title, specific performance,
and damages against Miñoza, among other persons.

Petitioners added that they were third persons claiming rights adverse to Miñoza; thus,
they could not be deprived of the possession of the subject property without being heard of
their claim first and they confirmed receiving a notice to vacate relative to the grant of
private respondent's petition for the issuance of a writ of possession.

Issue:
Whether it was correct for the CA to rule that the issue of private respondent being a
mortgagee or buyer in good faith or for value does not warrant the suspension of the writ
of possession.

Ruling:
First, petitioners sold the subject property to Miñoza through a deed of absolute sale. By
doing so, they relinquished their title over it in favor of the latter. This also means that from
the time that they sold the subject property, petitioners no longer had any right over it and
cannot be considered as third parties with an adverse interest from the judgment debtor.
Second, as pointed out by the CA, the sale was an absolute one; thereby, it was without any
reservation of ownership by its previous owners (petitioners). In fact, the interest of the
judgment debtor stemmed from petitioners themselves which refutes the very claim of
petitioners of a different interest from that of Miñoza.

Third, considering that the sale of real property is an effective mode of transferring
ownership, it follows that there is sufficient reason to conclude that petitioners have no
independent right over the subject property.

Petitioners contention is untenable when it insist that the RTC improperly issued a writ of
possession in favor of private respondent on the contention that they were third parties
holding the subject property adverse to the judgment debtor, Miñoza. A successful buyer of
a foreclosed property bought at a public auction sale is authorized to apply for a writ of
possession (1) during the redemption period upon filing of the corresponding bond; and, (2)
after the expiration of the redemption period without any need of a bond.


ELMER MONTERO VS. SANTIAGO MONTERO, JR. AND CHARLIE MONTERO

G.R. No. 217755, September 18, 2019

Facts:
Dominga Taeza (Dominga) was the second legal wife of Jose Montero. Their children were
Alfredo, Pacita, Marcela, and Ernesto. Dominga had one illegitimate son, Federico Taeza.
Petitioner [Elmer] was a surviving heir of Alfredo Montero. Dominga was the second legal
wife of Jose Montero. Their children were Alfredo, Pacita, Marcela, and Ernesto. Dominga
had one illegitimate son, Federico Taeza. Elmer was a surviving heir of Alfredo Montero.
Sometime in 1993, when Elmer was about to pay the real estate tax on the property, he was
informed by the Assessors' Office of Pilar, Abra that the same was already transferred in
the name of respondent Santiago by virtue of an Affidavit of Adjudication dated June 13,
1989 upon the latter's misrepresentation that Santiago was an only heir of his father
Santiago Montero, Sr.. The latter, however, was not related by blood to Dominga, but was
the son of Jose Montero (Dominga's husband) by his first marriage.

The respondents wantonly refused to reconvey the property to the surviving heirs of
Dominga.
Santiago and Charlie filed a Motion to Dismiss, alleging that the Regional Trial Court had no
jurisdiction over the subject matter of the complaint. The motion to dismiss was denied by
the RTC. On appeal, CA set aside the decision of the RTC and granted the motion to dismiss.

Issue:
Whether the subject matter of petitioner Elmer's Complaint involve the title to, possession
of, or interest in real property, or is incapable of pecuniary estimation.

Ruling:
The subject matter of petitioner Elmer's Complaint involves title to, possession of, and
interest in real property which indisputably has an assessed value of below P20,000.00, the
CA was correct in finding that the RTC had no jurisdiction to hear, try and decide the case.

It is crystal clear that petitioner Elmer asserts his alleged right of possession over the
subject property by seeking the reconveyance of the subject property. According to
jurisprudence, in a number of cases, the Court has held that actions for reconveyance of or
for cancellation of title to or to quiet title over real property are actions that fall under the
classification of cases that involve title to, or possession of, real property, or any interest
therein. Hence, the instant case is clearly one involving title to, possession of, and interest
in real property.

JESSICA LIO MARTINEZ VS. HEIRS OF REMBERTO F. LIM
G.R. NO. 234655, SEPTEMBER 11, 2019

Facts:
Respondents are the heirs of Remberto Lim who, during his lifetime, owned, possessed, and
cultivated a parcel of land located in Sitio Banga, Barangay VI, Coron, Palawan. Adjoining
Remberto's land is the land of his brother - Jose Lim. It is worthy to note that per the

technical description in said title, the property is bounded on both the east and west by the
properties of the Heirs of Socorro Lim, which were later on acquired by the late Remberto
Lim.

As it happened, Jose sold his land to a certain Dorothy and Alexander Medalla who,
thereafter, subdivided the same into two (2) smaller lots, designated as Lots 1 and 2. Lot 2
was further subdivided into nine (9) smaller lots.

On 10 August 2010, petitioner Martinez and her father entered into the property and
uprooted some of the acacia mangium trees that were previously planted thereon by the
late Remberto Lim and his son, Alan Lim. To further delineate their claimed property,
petitioner fenced the same and placed signs thereon that read NO TRESPASSING and
NOTICE THIS PROPERTY IS OWNED BY THE MARTINEZ FAMILY.

Now then, claiming that petitioner had unlawfully encroached into a portion of their
property, respondents, through counsel, sent a demand letter to petitioner demanding that
she immediately remove the fence that she built on respondents' land as well as to turn
over peaceful possession of that portion of property that petitioner intruded into.
Unfortunately, the demand was ignored by petitioner, and respondents were constrained
to file the instant complaint for Forcible Entry with Prayer for Issuance of Writ of
Preliminary Injunction against petitioner before the Municipal Circuit Trial Court of
Coron-Busuanga (MCTC).
In its Decision dated 12 August 2014, the MCTC ordered petitioner, among others, to vacate
and turn over peaceful possession of the disputed portion of property.

Issue:
Whether or not the court erred in upholding the trial court’s particular finding that the
respondents supposedly have a better and/or superior right of possession over the
contested properties, notwithstanding that the petitioner’s claim of ownership over the
subject properties is supported by a torrens title to her name.

Ruling:
Accion interdictal is a summary action that seeks the recovery of physical possession
where the dispossession has not lasted for more than one year, and is to be exclusively
brought in the proper inferior court. The issue involved is material possession or
possession de facto. The action is either forcible entry (detentacion) or unlawful detainer
(deshhucio). In forcible entry, the plaintiff is deprived of physical possession of real
property by means of force, intimidation, strategy, threats, or stealth, but in unlawful
detainer, the defendant illegally withholds possession of real property after the expiration
or termination of his right to hold possession under any contract, express or implied. The
two are distinguished from each other in that in forcible entry, the possession of the
defendant is illegal from the beginning, and that the issue is which a party has prior de
facto possession, while in unlawful detainer, the possession of the defendant is originally
legal but becomes illegal because of the expiration or termination of the right to possess.
Both actions must be brought within one year from the date of actual entry on the land by

the defendant in case of forcible entry, and within one year from the date of last demand in
case of unlawful detainer.

Accion publiciana is the second possessory action. It is a plenary action to recover the right
of possession, and the issue is which party has the better right of possession (possession de
jure). It can be filed when the dispossession lasted for more than one year. It is also used to
refer to an ejectment suit where the cause of dispossession is not among the grounds for
forcible entry and unlawful detainer, or when possession has been lost for more than one
year and the action can no longer be maintained under Rule 70 of the Rules of Court. The
objective of the plaintiff in accion publiciana is to recover possession only, not ownership.

The last possessory action is accion reivindicatoria or accion de reivindicacion. It is an
action whereby the plaintiff alleges ownership of the parcel of land and seeks recovery of
its full possession. The issue involved in and determined through accion reivindicatoria is
the recovery of ownership of real property. This action can be filed when the dispossession
lasted for more than one year.

The Court reiterate that a boundary dispute cannot be settled summarily through the
action for forcible entry covered by Rule 70 of the Rules of Court. In forcible entry, the
possession of the defendant is illegal from the very beginning, and the issue centers on
which between the plaintiff and the defendant had the prior possession de facto. If the
petitioner had possession of the disputed areas by virtue of the same being covered by the
metes and bounds stated and defined in her Torrens titles, then she might not be validly
dispossessed thereof through the action for forcible entry. The dispute should be properly
threshed out only through accion reivindicatoria. Accordingly, the MCTC acted without
jurisdiction in taking cognizance of and resolving the dispute as one for forcible entry.

SHEMBERG CORPORATION, MARKETING VS. CITIBANK
G.R. NO. 216029, SEPTEMBER 04, 2019

Facts:
On December 10, 1996, petitioner Shemberg Marketing Corporation (Shemberg) executed
a real estate mortgage over a parcel of land located in Mandaue City including all
improvements, machineries, and equipment found thereon, in favor of respondent Citibank,
N.A. (Citibank), to secure loan accommodations amounting to P28,242,000.00.

On February 13, 1998, Citibank sent a demand letter to Shemberg wherein it required the
latter to pay its outstanding balance in the amount of USD390,000.00 under a Promissory
Note . Unfortunately, Shemberg defaulted in the payment of its outstanding obligation to
Citibank. Consequently, Citibank commenced the extra-judicial foreclosure of the
mortgaged properties on May 10, 1999 subsequently it was foreclosed. Upon learning of
the foreclosure sale, Shemberg filed a Complaint for rescission or declaration of nullity of
the contract of real estate mortgage against .


In its Complaint, Shemberg alleged that: (a) in 1996, Citibank required Shemberg to
execute a real estate mortgage for and in consideration of the increase and renewal of its
credit line with the bank; (b) relying on the representation that its credit line would be
renewed, Shemberg executed the subject real estate mortgage in Citibank's favor; (c)
however, despite the execution of the mortgage, Citibank refused to renew and increase
Shemberg's credit line. Shemberg asserted that the real estate mortgage was void for lack
of consideration, given Citibank's failure to comply with its commitment to renew and
increase its credit line with the bank.

For its part, Citibank countered that it required the execution of the real estate mortgage in
order to provide additional security/collateral to augment Shemberg's subsisting chattel
mortgage due to the latter's dire financial condition at the time. Citibank pointed out that
the real estate mortgage secured the various obligations of Shemberg to the bank up to the
extent of P28,242,000.00. This included Promissory Note No. 8976267001 in the amount of
USD500,000.00, executed by Shemberg on September 13, 1996, with Shemberg defaulting
in the payment of the outstanding balance of USD390,000.00 thereof at maturity.

Issue:
Whether the real estate mortgage is indeed valid and binding between the parties.

Ruling:
The Petition is unmeritorious. The court declared the real estate mortgage, as well as the
extra-judicial foreclosure proceedings initiated by Citibank, valid, and imposed the
stipulated interest equivalent to 8.89% per annum on the unpaid balance of Promissory
Note No. 8976267001 from the time of filing of the extra-judicial foreclosure until finality
of the Decision.

The court found that the subject real estate mortgage secured Shemberg's present and
future obligations with Citibank to the extent of P28,242,000.00, or the liquidation value of
the mortgaged properties. It noted that at the time of execution of the mortgage, Shemberg
had an existing loan obligation totaling P58,238,200.00. Thus, it concluded that, contrary to
the RTC's findings, the real estate mortgage was not without consideration.

The court likewise ruled that Citibank had rightfully initiated the extra-judicial foreclosure
of the mortgaged properties after Shemberg failed to pay its oustanding balance of
US$390,000.00 under Promissory Note No. 8976267001.

Moreover, the court held mat the RTC erred in granting an additional year for Shemberg to
pay its obligation under the promissory note, considering that: first, Shemberg never
prayed for the fixing of the period for the payment of its outstanding balance with Citibank;
and second, it was not necessary to fix the period for payment as the promissory note itself
stated that the loan obligation was payable on September 8, 1997.


PHILIPPINE NATIONAL BANK VS ELENITA V. ABELLO ET AL.

G.R. NO. 242570, SEPTEMBER 18, 2019

Facts:
On November 21, 2008, a Complaint for Cancellation/Discharge of Mortgage/Mortgage
Liens was filed by Elenita V. Abello.
The complaint involves parcels of land covered by TCT Nos. T-127632, T-82974, and
T-58311, all located at Bacolod City, registered under the names of Manuel and Elenita (the
Spouses Abello). Inscribed on the TCTs were various encumbrances. Over the two other
lots covered by TCT Nos. T-82974 and T-58311, inscribed were the real estate mortgage
(REM) obtained by the Spouses Abello from the petitioner on October 30, 1975 for the
amount of P227,000.00, under Entry No. 80024, which was made on November 4, 1975.

Manuel died on October 14, 1998, consequently, his heirs, herein respondents, executed a
Declaration of Heirship on June 5, 2003 authorizing Elenita to act as administrator of the
estate. In their complaint, the respondents sought for the cancellation of the inscriptions
claiming that since the petitioner made no action against them since 1975, the action has
already prescribed. Accordingly, the respondents argued that they should be discharged as
a matter of right and the encumbrances cancelled.

Issue:
Whether or not the CA erred in ordering the cancellation of the annotated encumbrances
on the subject TCTs.

Ruling:
The commencement of the prescriptive period for REMs is crucial in determining the
existence of cause of action. Prescription, in turn, runs in a mortgage contract not from the
time of its execution, but rather a) when the loan became due and demandable, for
instances covered under the exceptions set forth under Article 1169 of the New Civil Code,
or b) from the date of demand.

A REM is an accessory contract constituted to protect the creditor's interest to ensure the
fulfillment of the principal contract of loan. By its nature, therefore, the enforcement of a
mortgage contract is dependent on whether or not there has been a violation of the
principal obligation. Simply, it is the debtor's failure to pay that sets the mortgage contract
into operation. Prior to that, the creditor-mortgagee has no right to speak of under the REM
as it remains contingent upon the debtor's failure to pay his or her loan obligation.
The respondents pray for the cancellation of the encumbrances on the TCTs which refer to
the REMs constituted on the property. Consequently, the cancellation of these annotations
is dependent on whether the action for REM has already prescribed. Therefore, an
allegation of the date of maturity of the loan is also vital in this case as it signifies the
commencement of the running of the period of prescription for an action for foreclosure
REM.


SPS ANTHONY ROGELIO BERNARDO AND MA. MARTHA BERNARDO VS

UNION BANK OF THE PHILIPPINES
G.R. NO. 208892, SEPTEMBER 18, 2019

Facts:
On August 20, 1999, petitioners, Spouses Anthony Rogelio Bernardo and Ma. Martha
Bernardo, obtained a loan amounting to P3,032,635.57 from respondent Union Bank of the
Philippines (Union Bank). The loan was secured by a real estate mortgage executed by
petitioners in Union Bank's favor Over a 700-square meter lot on which their family home
stood, located in Ayala Alabang Village, Muntinlupa City.

Petitioners, however, eventually defaulted in the payment of their loan. Consequently,
Union Bank commenced the extrajudicial foreclosure proceedings on the mortgaged
property. The Certificate of Sale was thereafter issued in Union Bank’s favor and duly
registered with the Register of Deeds of Muntinlupa City on February 26, 2001. On
February 20, 2002, petitioners filed a Complaint for annulment of the foreclosure sale
against Union Bank on the ground of noncompliance with the publication notice
requirement prior to the foreclosure sale of the mortgaged property.

During the pre-trial, the parties executed a Compromise Agreement which was then
approved by the RTC on June 2, 2004. In the Compromise Agreement, petitioners agreed to
buy back the foreclosed property for 5,459,871.19, with the condition that failure to
comply with the terms of the agreement shall entitle Union Bank, among others, to enforce
its rights and remedies under the real estate mortgage contract. Unfortunately,
petitioners again defaulted in their payments to Union Bank pursuant to the payment
schedule under Section 6(b) of the Compromise Agreement. This prompted Union Bank to
file a Motion for Issuance of Writ of Execution before the RTC in order to consolidate its
title over the foreclosed property. The RTC granted the motion in its Order dated December
13, 2005 and directed the issuance of a Writ of Execution in the bank’s favor. Consequently,
title to the foreclosed property was transferred in Union Bank’s name under Transfer
Certificate of Title No. 18260.

On January 8, 2007, petitioners filed a Motion to Quash the Writ of Execution and Notice to
Vacate before the RTC. The RTC granted the motion in its Order16 dated February 13, 2007
but instead of quashing the Writ of Execution, it ordered that the writ be stayed "only for
the purpose of collecting all the amounts due and outstanding pursuant to the schedule of
payments" under the Compromise Agreement. While Union Bank's Motion for
Reconsideration was pending, petitioners filed a Motion for Judicial Consignation on May
21, 2007. Union Bank opposed the motion and countered that it was not necessary to
resort to judicial consignation as the bank was already in the process of evaluating the
proposal offered by petitioners.

Issues:
Whether petitioners' original loan obligation to Union Bank was novated by the
Compromise Agreement


Whether Union Bank can resort to the exercise of its rights and remedies under the real
estate mortgage contract in case of petitioners' failure to comply with the new payment
scheme set forth in the Compromise Agreement.

Ruling:
In implementing a compromise agreement, the courts cannot modify, impose terms
different from the terms of the compromise agreement, or set aside the compromises and
reciprocal concessions made in good faith by the parties without gravely abusing their
discretion.

A careful perusal of the Compromise Agreement shows that it was executed by the parties
for the settlement of petitioners' outstanding loan obligation with Union Bank. They agreed
that petitioners would buy back the foreclosed property from the bank for P5,459,871.19,
which amount they termed as the "purchase price" in the agreement. The purchase price
was to be paid under an amortization schedule, made an integral part of the agreement,
that divided payment thereof in equal installments of P72,170.25 per month for a period of
fifteen (15) years.

Note, in this regard, that the Compromise Agreement specifically referred to the payment
of petitioners' original loan obligation as the very purpose for its execution. Since there was
no real change in the original obligation, substitution of the person of the debtor, or
subrogation of a third person to the rights of the creditor, petitioners' loan obligation to
Union Bank cannot be said to have been extinguished by novation, as petitioners insist.

The remedies available to Union Bank should petitioners fail to abide by the terms of the
Compromise Agreement are: first, to forfeit all payments made by petitioners which would
then be applied as rental for their use and possession of the mortgaged property; second, to
move for the issuance of a writ of execution to enforce payment of the purchase price or the
balance thereof with the trial court; and third, to exercise its rights and remedies under the
real estate mortgage.

These remedies became readily available to Union Bank when petitioners admittedly failed
to pay their monthly amortizations to the bank as required under the Compromise
Agreement. Consequently, the RTC was correct when it issued its Order dated December 13,
2005 granting the Motion for Issuance of Writ of Execution filed by Union Bank in order to
consolidate its title over the foreclosed property.

HEIRS OF FERNANDO ET AL VS. HEIRS OF RAMOS ET AL
G.R. NO. 237871, SEPTEMBER 18, 2019

Facts:
The respondents and Lucena Ramos (Lucena) are the nine (9) children and heirs of the
spouses Dominador Ramos and Damiana Porciuncula ("spouses Ramos"). On the other
hand, petitioners Margarita, Felix, and Remigia Fernando (Remigia) are the collateral heirs
of Tomas Fernando (Tomas).


The spouses Ramos owned a piece of agricultural land located at Barrio, Agricultura (now
Licaong) Munoz, Nueva Ecija with a total area of 3.1541 hectares. The Ramoses both died
intestate in the year 1945. Thereafter, on October 30, 1952, Lucena unilaterally executed a
Declaration of Heirship declaring that she is the sole heir of the spouses Ramos. Hence,
Lucena was able to transfer the ownership of the subject property in her name and as a
result, TCT No. NT-12647 was issued in her favor.

Subsequently, Lucena sold to Tomas the subject property through a pacto de retro sale
dated August 14, 1955 for P8,800.00, with Lucena having been granted the right to redeem
the subject property within three years from the date of the sale. Aggrieved by Lucena's
unilateral act of executing a Declaration of Heirship, in 1955, the respondents filed a
complaint against spouses Lucena and Alfredo Mateo. As a consequence of the final and
executory, the subject property was subdivided by and among the heirs of the spouses
Ramos, who are in open, continuous, exclusive, adverse, and notorious possession in the
concept of owners.

Sometime in 1993, the petitioners Fernandos learned of the Decision dated January 25,
1961 which is embodied in the Entry of Judgment dated February 18, 1961 issued by the
Court of Appeals. Thus, petitioner Margarita went to the residence of spouses Lucena and
Alfredo to demand that the latter comply with the said Decision. An alleged verbal
agreement was entered into between the petitioners Fernandos and spouses Lucena and
Alfredo wherein the latter were given more time to pay or surrender the title of the subject
property to the petitioners Fernandos. During this time, the spouses Lucena and Alfredo
were in possession of the 2-hectare portion of the subject property while one Vicente
Tobias was in possession of the remaining 1 hectare.

Four years thereafter or sometime in 1997, the petitioners Fernandos again demanded that
the spouses Lucena and Alfredo comply with their verbal agreement. However, the spouses
refused to pay nor surrender the title of the subject property to the petitioners Fernandos.
Hence, on May 8, 1997, the petitioners Fernandos filed a complaint for specific
performance and damages to enforce the oral agreement covering the entire subject
property against the spouses Lucena and Alfredo.

Issue:
Whether the CA gravely erred in giving due course to the Complaint for Annulment of
Decision filed by the respondents and declaring the Decision of the Regional Trial Court
annulled and set aside for lack of jurisdiction.

Ruling:
The respondents were recognized as the co-owners of the subject property, being the
co-heirs of the intestate estate of the spouses Ramos. The Declaration of Heirship
unilaterally executed by Lucena, which adjudicated the subject property unto the latter
alone, was nullified. As a result, the subject property was partitioned among all the heirs in
the proportion of 1/9 each.


Despite full knowledge, the petitioners Fernandos entered into a supposed verbal
agreement with the spouses Lucena and Alfredo, asking the latter to execute all the
necessary documents to facilitate the complete transfer of possession and control of the
subject property to the petitioners Fernandos on the basis of the pacto de retro sale
entered into by their predecessor-in-interest Tomas with the spouses Lucena and Alfredo.

The petitioners Fernandos cannot feign ignorance of the fact that the respondents have
been declared with finality as the co-owners of the subject property, being the co-heirs of
the original owners of the subject property, i.e., the spouses Ramos. In fact, the petitioners
Fernandos themselves alleged that in the very verbal agreement they sought to enforce,
they agreed that the parties should abide by the decision of the court.

SPS. ERNESTO V. YU AND ELSIE YU VS EULOGIO A. TOPACIO, JR.
G.R. NO. 216024, SEPTEMBER 18, 2019

Facts:
Topacio alleged that he is the registered owner of Lot 7402-E situated in Barangay
Paliparan, Dasmarinas, Cavite consisting of 9,878 square meters. That Spouses Yu were
issued TCT No. T-490552 consisting of 606 square meters, more or less, which is a portion
of the area covered by his title. Topacio believed that said title issued to Spouses Yu is
spurious, illegal and null and void as the same was issued much later than his title.
Allegedly, said title of Spouses Yu casts a cloud on Topacio's title. Despite demand made by
Topacio, Spouses Yu failed to cease and desist from fencing and constructing a house on
Topacio's property, prompting the latter to file the instant action.

In their Answer with Counterclaim, Spouses Yu claimed that they are the owners of the
property covered by TCT No. T-490552 consisting of 606 square meters. They have
acquired the said property from spouses Asislo Martinez and Norma Linatoc (Spouses
Martinez) by virtue of an Absolute Deed of Sale dated June 10, 1994.6 The said property
was then covered by TCT No. T-267842 in the name of Asislo Martinez. Spouses Yu,
thereafter, registered the sale of the said property causing the issuance of TCT No.
T-490552.

Spouses Yu explained that their predecessors (Spouses Martinez) acquired the said
property from the Bureau of Lands on June 9, 1989 by virtue of Sales Certificate No. 1793,
Deed No. V-70973.7 Based on the said Sales Certificate, the said property was surveyed by
the Public Land Surveyor on July 18, 1938.

Spouses Yu averred that prior to their purchase of the said property, they caused the
conduct of a relocation survey over the same to ascertain its boundaries. The survey was
conducted by Geodetic Engineer Antonio Pascual, Jr., who thereafter prepared a location
survey plan.

After the execution of the Deed of Absolute Sale, spouses Yu took possession of the subject
property, exercised dominion over the same and religiously paid real estate taxes due
thereon. In November 1994, spouses Yu constructed a fence around the said property after

obtaining a barangay permit and a fencing permit from the Municipal Engineer's Office. At
the time the fence was being constructed, no one stopped nor disturbed spouses Yu from
completing the work. Neither did anybody claim ownership over the subject property.

Meanwhile, Topacio filed a Motion for Joint Survey which was granted by the Regional Trial
Court (RTC) in an Order10 dated May 7, 2008, in aid of the early disposition of the case
without going into trial. On March 5, 2009, a survey team conducted a verification survey
on the parcels of land claimed by Topacio and spouses Yu in the presence of all the parties,
who were duly assisted by their counsels and private geodetic engineers.

On February 25, 2010, Engr. Tañola submitted his Report of Verification Survey, which in
gist states, that Lot 7402-E registered in the name of Eulogio A. Topacio, Jr. and Lot
8142-New registered in the name of spouses Ernesto V. Yu and Elsie Yu, have the same
points (which is Mon. 79) and when plotted using their respective Tie Lines it appeared
that they fall apart with each other with the approximate distance of 1,526 meters. That
based on the actual verification survey, the property claimed by spouses Yu with existing
structure and with the total area of 450 square meters is inside the property of Topacio.

Issue:
The court of appeals erred in resolving the location or boundary of Topacio’s purported
property in the case below, which is an action for quieting of title.

Ruling:
In an action for quieting of title, the competent court is tasked to determine the respective
rights of the complainant and other claimants, not only to place things in their proper place,
to make the one who has no rights to said immovable respect and not disturb the other, but
also for the benefit of both, so that he who has the right would see every cloud of doubt
over the property dissipated, and he could afterwards without fear introduce the
improvements he may desire, to use, and even to abuse the property as he deems best. It
has for its bases Articles 476 and 477 of the Civil Code, which provide:

ART. 476. Whenever there is a cloud on title to real property or any interest therein, by
reason of any instrument, record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.

ART. 477. The plaintiff must have legal or equitable title to, or interest in the real
property which is the subject-matter of the action. He need not be in possession of said
property.

In order that an action for quieting of title may prosper, two requisites must concur: (1) the
plaintiff or complainant has a legal or equitable title or interest in the real property subject

of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting
cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.

Since spouses Yu had introduced improvements on the said portion of land in good faith,
Topacio as owner thereof, may exercise his option of choosing between appropriating as
his own the structures constructed thereon by spouses Yu by paying the proper indemnity
or value; or obliging spouses Yu to pay the price of the said lot if its value is considerably
not more than that of the improvements. Otherwise, reasonable rent must be paid by
spouses Yu if Topacio did not choose to appropriate the improvements, pursuant to Article
448 of the Civil Code.

PEOPLE OF THE PHILIPPINES VS. BERNABE EULALIO
GR NO. 214882, OCTOBER 16, 2019

Facts:
Accused- appellant Eulalio was charged and convicted by the trial court for the crimes of
rape and acts of lasciviousness under the Revised Penal Code. The Court of Appeals
affirmed the conviction with modification on the sentences and civil indemnity for the two
convictions.

For the crime of rape, accuse-appellant as sentenced to suffer the penalty of Reclusion
Perpetua and was ordered to pay the victim the amount of fifty thousand pesos(P
50,000.00) as civil indemnity, same amount as moral damages and thirty thousand pesos
(P30,000.00) as exemplary damages. All with interest of 6% per annum from ate of finality
of the decision.

For the crime of acts of lasciviousness, the accused was orederd to pay the amount of tenty
thousand pesos (P20,000.00) as civil indemnity, thirty thousand pesos (P30,000.00) as
moral damages and fifteen thousand pesos (P15,000.00) as exemplary damages. All with
interest at the rate of 6% per annum from the date of finality of the decision.

The accused appellant contended that his guilt has not been proven beyond reasonable
doubt.

Issue:
Whether or not the imposed civil liabilities are proper.

Ruling:
The damages awarded must be modified. As explained in the case of people versus Roy,
when the circumstances sorrounding the crime call for the imposition of Reclusion
Perpetua only, there being no ordinary aggravating circumstance, the proper amount of
civil indemnity, moral damages, and exemplary damages should be seventy five thousand
pesos (P75,000.00) each. Moreover, the monetary awards should be subject to the interest
rate of six (6%) percent per annum from the finality of the decision until fully paid.
Furthermore, the award of civil indemnity in the case of Acts of Lasciviousness, as well as

moral damages and exemplary damages in favor of the offended party, should be increased
to fifty thousand pesos (P50,000.00) each in view of the recent pronouncement in People
versus Tulagan. Likewise, a fine in the amount of fifteen thousand pesos (P15,000.00) is
imposed. Additionally, the said monetary awards should earn a legal interest of 6% per
annum from date of the finality of the decision until fully paid.

CAMARINES SUR TEACHERS AND EMPLOYEES ASSOCIATION VS. PROVINCE OF
CAMARINES SUR
GR NO. 19966, OCTOBER 7, 2019

Facts:
A parcel of land was registered in the name of the Province of Camarines Sur was donated
to CASTEA by virtue of a Deed of Donation with a condition that the Donee (CASTEA) shall
only use the property subject of donation for no other purposes except the construction of
its building to house its offices in connection with its functions under its charter and
by-laws. Pursuant thereto, the Donee is prohibited to sell, mortgage, or encumber the
property donated including any and all improvements thereon in favor of any party
otherwise, the donation shall be deemed automatically revoked and voided and no further
force and effect.
On October 19, 2007, the Province executed a Deed of Revocation of Donation thru its
Provincial Governor against CASTEA on the ground of violation of the Deed of Donation by
leasing the property to a third party, and by virtue of the Automatic Revocation clause on
the Deed of Donation inter Vivos. Later on, a case for Unlawful Detainer was filed against
CASTEA.

The Donee, CASTEA, contended that the Province ceased to be the owner of the property in
issue by virtue of the Deed of Donation Inter Vivos it executed in favor to them. That the act
of leasing out the portion of the building it constructed does not constitute selling,
mortgaging or encumbering the donated property or any improvements thereof. That it
leased the portion of its building for its own benefit since the rentals collected redounded
to the benefit of the teachers and employees for its mutual aid and death benefits paid to its
members.

Issue:
Whether or not the Donor Province validly exercised the right of automatic revocation or
rescission granted to it by virtue of the Deed of Donation Inter vivos.

Ruling:
While the legality of automatic revocation or rescission clauses in deeds of donation has
been upheld, the courts are not precluded from determining whether their application or
enforcement by the donors concerned are proper if the donees contest the revocation or
rescission. If the court sustains its propriety, the court’s decision is not the act that revokes
the donation but would be merely declaratory of the validity of the revocation. A judicial
declaration of its propriety is, therefore, required before the continued possession by the
Donee can be declared unlawful.


The lease did not defeat the Deed of Donation to be considered as substantial and
fundamental breach to warrant the resolution of the deed. While the unregistered lease
for more than 1 year is an encumbrance, the encumbrance in the instant case is not
perpetual as it is time-bound to only 20- years which is not an unreasonable period.
Moreover only a portion of the building was leased out and not the whole property.

In order for the breach to reach the threshold of substantiality and fundamentality, the
breach should be of paramount character as to totally and perpetually deprive the Donee of
the donated property. Thus, the single violation by the done when weighed against its
substantial compliance of the other conditions or prestations of the donations and the
avowed purpose of the donation is, as it should be, considered insignificant to trigger the
application of automatic revocation clause.
The revocation of the deed by the Province is improper and lacks legal basis. However,
given that the donee disregarded a provision of the deed not o encumber, award of nominal
damage in favor of the Province is proper.

NATIONAL POWER CORPORATION VS. DELTA P, INC.,
G.R. NO. 221709, OCTOBER 16, 2019

Facts:
Respondent Delta P, Inc. (Delta P), an independent power producer, previously took over
the operations of a generating plant in Puerto Princesa City owned by Paragua Power
Corporation (PPC). At the time of the takeover of operations, PPC had a Power Purchase
Agreement (PPA) with petitioner National Power Corporation (NAPOCOR), wherein the
latter agreed to purchase the electricity generated by the former for the purpose of meeting
NAPOCOR's obligation to supply the consumers.

As a result of Delta P's takeover, NAPOCOR was requested to direct payment for the
services to Delta P. However, NAPOCOR refused to do so, with the reasoning that PPC, not
Delta P, is the contracting party involved in the PPA. The standstill resulted in Delta P.
subsequently advising NAPOCOR that it could no longer operate the power station for lack
of funds.

Upon the request of the local government of Palawan, NAPOCOR supplied fuel to the
generating plant and pay the manpower salaries while Delta P’s internal problems were
being resolved.

The contractual relationship of the parties continued without any hitch until the NAPOCOR
issued on a Debit Memo deducting P24,449,247.36 from Delta P's account for the alleged
incremental costs of the fuel it had supplied to Delta P from February 25, 2003 to June 25,
2003. Finding the same preposterous, Deita P countered by filing a sum of money case
assailing the validity of the Debit Memo for lack of prior agreement authorizing payment of
the fuel costs. The lower courts held that the supply of fuel to be in the form of a donation
and essentially gratuitous.


Issues:
1. Whether or not NAPOCOR's supply of fuel to Delta P is gratuitous, and in the form of a
donation.
2. Whether or not Delta P is liable to reimburse NAPOCOR for the latter's payment of the
same.

Ruling:
1. Yes. The Court adheres to the findings of fact consistent with both the RTC and the CA
that the debit made by NAPOCOR was unilaterally done, and that NAPOCOR's supply of fuel
to Delta P was an act of gratuity.

It is clear that NAPOCOR's motivation for supplying the fuel was the power crisis in
Palawan and the request of the local government to intervene. While this may not be as
absolute an act of liberality as NAPOCOR had a personal agenda for doing so, such reason
does not take away from the fact that the supplying of fuel was done without the annexing
of any condition to be complied with by Delta P. There was not even an annotation in any
document that Delta P would have to pay any amount back, nor any indication whatsoever
that the supply was a mere loan. Absent any these, for whatever reason, the Court agrees to
the finding that the supplying of fuel was a donation, which was defined in Republic of the
Philippines v. Sps. Llamas, to wit:

A donation is, by definition, “an act of liberality.” Article 725 of the Civil Code
provides:

Article 725. Donation is an act of liberality. whereby a person disposes gratuitously of
a thing or right in favor of another, who.. accepts it.

To be considered a donation, an act of conveyance must necessarily proceed freely
from the donor's own, unrestrained volition. A donation cannot be forced: it cannot arise
from compulsion, be borne by a requirement, or otherwise be impelled by a mandate
imposed upon the donor by forces that are external to him or her. Article 726 of the Civil
Code reflects this commonsensical wisdom when it specifically states that conveyances
made in view of a "demandable debt" cannot be considered true or valid donations.

NAPOCOR’s grant was not forced, did not arise from any compulsion exerted upon it, and
was not impelled by any mandate. Even arguing that NAPOCOR was constrained to supply
the fuel at the request of the local government, there was nothing to hinder it from
annotating or stating even in brief terms that this payment would be a loan meant to be
paid back once Delta P reaches financial stability.

NAPOCOR itself mentions that as a government entity subject of audit, the funds that it
provides must be carefully accounted for. Thus, NAPOCOR should have protected what it
supplied by putting a caveat for whatever it gave, and absent that, there is no other
conclusion than to treat the supply of fuel as gratuitous and a donation without condition.


2. Yes. Despite the foregoing, the Court agrees with the arguments posited by NAPOCOR
and finds that the lower courts erred in stating that unjust enrichment is not present in this
case. An exception to the general rule that the findings of fact are binding is when the
inference of the lower court is manifestly mistaken. Herein, the Court finds that both the
trial court and the CA were manifestly mistaken when they failed to take into consideration
the fact that Delta P was enriched without justification due to the fuel supply given by
NAPOCOR.

There is unjust enrichment “when a person unjustly retains a benefit to the loss of another,
or when a person retains money or property of another against the fundamental principles
of justice, equity and good conscience." The principle of unjust enrichment requires two
conditions: (1) that a person is benefited without a valid basis or justification, and (2) that
such benefit is derived at the expense of another.

In the case at bar, the fuel grant, while done unilaterally, was still done without NAPOCOR
receiving anything in return, even when Delta P's internal issues were eventually sorted
out. NAPOCOR ended up prejudiced by its action especially as there was no legal obligation
mandating it to contribute to the woes of Delta P, only the intervention of the local
government due to the power crisis in Palawan. There was an appreciable monetary loss
on the part of NAPOCOR, despite Delta P's lack of attendant blame, with the end result of
Delta P's enrichment being a correlative loss on the books of NAPOCOR.

In Almario v. Philippine Airlines, Inc.:

(Article 22 of the New Civil Code) on unjust enrichment recognizes the principle that one
may not enrich himself at the expense of another. An authority on Civil Law writes on the
subject, viz[.]:

Enrichment of the defendant consists in every patrimonial, physical, or moral advantage,
so long as it is appreciable in money. It may consist of some positive pecuniary value
incorporated into the patrimony of the defendant, such as: (1) the enjoyment of a thing
belonging to the plaintiff; (2) the benefits from service rendered by the plaintiff to the
defendant; (3) the acquisition of a right, whether real or personal; (4) the increase of
value of property of the defendant; (5) the improvement of a right of the defendant, such
as the acquisition of a right of preference; (6) the recognition of the existence of a right in
the defendant; and (7) the improvement of the conditions of life of the defendant.

The enrichment of the defendant must have a correlative prejudice, disadvantage, or
injury to the plaintiff. This prejudice may consist, not only of the loss of property or the
deprivation of its enjoyment, but also of non-payment of compensation for å prestation or
service rendered to the defendant without intent to donate on the part of the plaintiff, or
the failure to acquire something which the latter would have obtained. The injury to the
plaintiff, however, need not be the cause of the enrichment of the defendant. It is enough
that there be some relation between them, that the enrichment of the defendant would
not have been produced had it not been for the fact from which the injury to the
plaintiff is derived.


While the Almario case states that intent to donate on the part of NAPOCOR, which the
Court holds is present despite the former's protestations, may be enough to remove a case
from the ambit of the unjust enrichment doctrine, the failure to acquire any compensation
even from the local government of Palawan, who had requested that NAPOCOR provide the
fuel in the first place, means that there was unjust enrichment on the part of NAPOCOR

This case presents one of the rare situations where Delta P is unjustly enriched through the
voluntary act of the enriching party. NAPOCOR in this case. The Court holds that while the
principle of solutio indebitis will not apply as a remedy for NAPOCOR’s recovery, as the
payment of the fuel costs was not a mistake and NAPOCOR was not able to prove that the
requirements for the same have been met, NAPOCOR is entitled to recover under the
doctrine of unjust enrichment, for the amount it paid to Delta P for the supply of fuel, for
the period February 25, 2003 to June 25, 2003.

SPOUSES FRANCISCO VS. BATTUNG
G.R. NO. 212740, NOVEMBER 13, 2019

Facts:
Battung (respondent) is the owner of a parcel of land. Celia Francisco entered into a Deed
of Conditional Sale of Registered Land (Deed) as the buyer with respondent as the seller
over the subject land. The Deed provides the following terms and conditions:

a. That the amount of sale shall be P346,400.00, the same to be paid as follows:
aa. P20,000.00 shall be paid upon the execution of this instrument;

bb. P5,000.00 monthly effective March 30, 1997 and to so (sic) until the full
amount of the one-half of the purchase price in the amount of P173,000.00 is
fully paid;

cc. P173,000.00 shall be paid in full on or before December 30, 1999.

b. That the Deed of Absolute Sale of the above-described lot shall only be executed in
favor of the vendee upon the full payment of the full (sic) amount of the purchase price in
the amount of P346,400.00 and after which the title shall be transferred in the name of
the vendee.

Petitioners were unable to pay the amount due within the period fixed in the Deed. Instead
of paying P5,000.00 monthly effective March 30, 1997 until the amount of P173,000.00,
representing one-half (1/2) of the purchase price, is paid, they failed to complete it and
only paid small amounts, i.e., P300, P500, P700, P1,000.00, P1,500.00, P2,000.00, or
+2,500.00, from time-to-time. They failed to complete the payment of P173,000.00
corresponding to the other half of the purchase price that fell due on December 30,1999.


Issues:

I. Whether or not the Deed is a Contract of Sale or a Contract to Sell?
II. Whether or not Petitioners can avail of the rights of the buyer under Section 3 of RA No.
6552 (Maceda Law)?
III. Whether or not the acceptance in the course of the proceedings by respondent of the
sum of P107,650.00 constitutes partial performance of the Deed?

Ruling:

I. The Deed is a contract to sell and not a contract of sale based on the provisions of
the Deed.

In Diego v. Diego, the Court held that an agreement stipulating that the execution of the
deed of sale shall be contingent on the full payment of the purchase price is a contract to
sell, thus:

It is settled jurisprudence, to the point of being elementary, that an agreement which
stipulates that the seller shall execute a deed of sale only upon or after full payment of the
purchase price is a contract to sell, not a contract of sale. In Reyes v. Tuparan, this Court
declared in categorical terms that "[w]here the vendor promises to execute a deed of
absolute sale upon the completion by the vendee of the payment of the price, the contract
is only a contract to sell. The aforecited stipulation shows that the vendors reserved title to
the subject property until full payment of the purchase price."

In this case, it is not disputed as in fact both parties agreed that the deed of sale shall only
be executed upon payment of the remaining balance of the purchase price. Thus, pursuant
to the above stated jurisprudence, we similarly declare that the transaction entered into by
the parties is a contract to sell.

Clause 2(b) of the Deed readily reveals that respondent shall only execute the Deed
and transfer the title over the subject land in favor of petitioners upon full
payment of the purchase price:

b. That the Deed of absolute sale of the above-described lot shall only be executed in
favor of the vendee upon the full payment of the full (sic) amount of the purchase
price in the amount of P346,400.00 and after which the title shall be transferred in the
name of the vendee. Resultantly, given that the ownership over the subject land was
retained by respondent until full payment by “petitioners of the purchase price," the
Deed is a contract to sell.

II. No. Petitioners cannot avail of the rights of the buyer under Section 3 of RA No. 6552.

RA No. 6552 expressly grants the buyer, who must have paid at least two (2) years of
installments, the following rights:


Section 3. In all transactions or contracts involving the sale or financing of real estate on
installment payments, including residential condominium apartments but excluding
industrial lots, commercial buildings and sales to tenants under Republic Act Numbered
Thirty-eight hundred forty-four, as amended by Republic Act Numbered Sixty-three
hundred eighty-nine, where the buyer has paid at least two years of installments, the
buyer is entitled to the following rights in case he defaults in the payment of succeeding
installments:

(a) To pay, without additional interest, the unpaid installments due within the total
grace period earned by him which is hereby fixed at the rate of one month grace
period for every one year of installment payments made: Provided, That this right
shall be exercised by the buyer only once in every five years of the life of the
contract and its extensions, if any.

(b) If the contract is canceled, the seller shall refund to the buyer the cash surrender
value of the payments on the property equivalent to fifty per cent of the total
payments made, and, after five years of installments, an additional five per cent
every year but not to exceed ninety per cent of the total payments made:
Provided, That the actual cancellation of the contract shall take place after
thirty days from receipt by the buyer of the notice of cancellation or the
demand for rescission of the contract by a notarial act and upon full payment
of the cash surrender value to the buyer.

Down payments, deposits or options on the contract shall be included in the
computation of the total number of installment payments made.

In Orbe v. Filinvest Land, Inc., the Court emphasized that “at least two years of installments”
means the “equivalent of the totality of payments diligently or consistently made
throughout a period of two (2) years:

When Section 3 speaks of paying "at least two years of installments," it refers to the
equivalent of the totality of payments diligently or consistently made throughout a period
of two (2) years. Accordingly, where installments are to be paid on a monthly basis, paying
"at least two years of installments" pertains to the aggregate value of 24 monthly
installments. As explained in Gatchalian Realty v. Angeles:

It should be noted that Section 3 of R.A. 6552 and paragraph six of Contract Nos. 2271 and
2272, speak of "two years of installments." The basis for computation of the term refers to
the installments that correspond to the number of months of payments, and not to the
number of months that the contract is in effect as well as any grace period that has been
given. Both the law and the contracts thus prevent any buyer who has not been diligent in
paying his monthly installments tom unduly claiming the rights provided in Section 3 of R.A.
6552.

The phrase "at least two years of installments" refers to value and time. It does not only
refer to the period when the buyer has been making payments, with total disregard for the

value that the buyer has actually conveyed. It refers to the proportionate value of the
installments made, as well as payments having been made for at least two (2) years.

Laws should never be so interpreted as to produce results that are absurd or unreasonable.
Sustaining petitioner's contention that spe falls within Section 3's protection just because
she has been paving for more than two (2) years goes beyond a justified, liberal
construction of the Maceda Law. It facilitates arbitrariness, as intermittent payments of
fluctuating amounts would become permissible, so long as they stretch for two (2) years.
Worse, it condones an absurdity. It sets a precedent that would endorse minimal, token
payments that extend for two (2) years. A buyer could, then, literally pay loose change for
two (2) years and still come under Section 3's protection.

In this case, petitioners did not diligently and consistently pay at least two (2) years of
monthly installments. As pointed by the CA, instead of paying P5,000.00 monthly effective
March 30, 1997, they merely paid small amounts, i.e., P300.00, P500.00, P700.00, P1,000.00,
P1,500.00, P2,000.00, or P2,500.00, from time to time.

Clearly, petitioners are unjustifiably claiming their rights under Section 3 of R.A. No. 6552.
They failed to faithfully comply with the requirement of paying their monthly installments
for two (2) years and yet they have the audacity to invoke Section 3. Treating the receipt by
respondent in open court of the sum of P107,560.00 in consideration of the Deed as
substantial compliance by petitioners of the provisions of Section 3 would be unfair and
defiant of the purpose of RA No. 6552. It would tolerate arbitrariness on the part of the
buyer when satisfying his monetary obligations to the seller.

III. No. The acceptance in the course of the proceedings by respondent of the sum of
P107,650.00 constitutes partial performance of the Deed.

In Ayala Life Assurance, Inc. v. Ray Burton Development Corporation, the Court held that
the payment by the buyer of purchase price is a positive suspensive condition and the
non-fulfillment of which is an event that prevents the seller from conveying title to the
buyer. Said non payment of the purchase price renders the contract to sell ineffective and
without force and effect. Therefore, a cause of action for specific performance does not
arise.

Here, petitioners failed to realize that there could no longer be a performance, not even
partial, of the Deed the moment that they failed to pay the purchase price of the subject
land in accordance with the terms of the Deed. It is worthy to note that at the time of the
receipt by the respondent of the sum of P107,650.00, the Deed was already without force
and effect. Thus, there could have been no partial performance, let alone a cause of action
for specific performance.


PEOPLE VS. JEFFERSON MARON Y EMPLONA,

JONATHAN ALMARIO Y CAYGO AND NESTOR BULAHAN Y GUTIERREZ
G.R. NO. 232339, NOVEMBER 20, 2019

Facts:
On 4 January 2010, at around 10:00 p.m., while Michael and Alma were seated on a bench
and engaged in a conversation, three (3) male persons on board a motorcycle arrived near
the shores of a Lake. Two (2) of them alighted from the motorcycle, one went in front of.
Michael and Alma and urinated along the banks of the lake, while the other went behind a
coconut tree nearby.

Ten minutes later, the man who urinated suddenly approached Alma and pointed a knife to
her neck. Likewise, the person who hid behind the coconut tree approached Michael and
pointed a knife at him. The men then announced, “hold-up”. Thereafter, the person who
stayed at the motorcycle approached Michael and Alma, brandishing a “kawit.” Michael
cried for help and attempted to fight. The three men however, repeatedly stabbed Michael
until he slumped on the ground lifeless.

All the accused were found GUILTY beyond reasonable doubt of the crime of murder
attended by the aggravating circumstance of treachery, and sentences each of them to
suffer the penalty of reclusion perpetua. The CA awarded, among others, civil indemnity,
moral damages, and exemplary damages in the amount of P100,000.00 each to the heirs of
victim.

Issue:
Whether or not civil indemnity, moral damages, and exemplary damages in the amount of
P100,000.00 each awarded is correct?

RULING:
No. In order for treachery to qualify murder, it is not enough for the prosecution to show
that the attack was sudden, unexpected and without warning. Rather, there must be a
showing that the mode of attack was consciously adopted and that the accused made “some
preparation to kill the deceased in a manner as to insure the execution of the crime or to
make it impossible or hard for the person attacked to defend himself or retaliate.

Here, the RTC and the CA erroneously ruled that the killing of Michael was attended by
treachery. It cannot be said that Michael did not expect that he would be stabbed by
appellants since the latter already announced “hold-up” while Maron and Bulahan were
poking their knives at Alma and Michael, and while Almario was brandishing his kawit in
front of them. Michael also had the opportunity to shout for help. Further, there is no
showing that appellants made some preparations to kill Michael in the said manner since
Alma's testimony shows that appellants originally planned to rob them.

However, the Court finds that appellants are still guilty of murder since the killing of
Michael was attended by the qualifying circumstance of employing means to weaken the
defense.

In People v. Jugueta (Jugueta), the rule is that civil indemnity, moral damages, and
exemplary damages to be awarded shall be P100,000.00 each where the penalty imposed is
death but reduced to reclusion perpetua because of Republic Act No. 9346, otherwise
known as “An Act Prohibiting the Imposition of Death Penalty in the Philippines.”

Here, as discussed above, treachery should not be appreciated anymore as an aggravating
circumstance. But with the appreciation of the qualifying circumstance of employing means
to weaken the defense of the victim, the crime committed is Murder. Thus, in the absence
of any aggravating circumstance, the penalty that must be imposed on the appellants is
reclusion perpetua and not death. Following Jugueta, the award of civil indemnity, moral
damages, and exemplary damages, where the penalty imposed is reclusion perpetua other
than the above stated rule, should be $75,000.00 each.

EQUITABLE PCI BANK vs. MANILA ADJUSTERS & SURVEYORS, INC., ILOCOS SUR ,
FEDERATION OF FARMERS COOPERATIVE, INC., ESTATE OF NG YEK KIONG and
ERNESTO COKAI
G.R. No. 166726, November 25, 2019

Facts:
On June 27, 1975, the Federation and the Philippine American General Insurance Co., Inc.
(Philam), represented by its adjuster, Manila Adjusters and Surveyors, Company (MASCO),
executed a Deed of Sale involving salvaged fertilizers which were stored in warehouses in
San Fernando, La Union. The agreement provided that the Federation would pay for the
stocks of fertilizers in installments in accordance with an agreed schedule for the total
amount of P5,159,725.00. The Federation was also required to open an irrevocably
confirmed without recourse Letter of Credit (LOC) amounting to P1,000,000.00 which will
be forfeited in favor of MASCO in case of the Federation's non-compliance with the terms
and conditions of the contract.
In the November 10, 1995 Decision, the RTC held that the Federation did not comply with
the terms and conditions of the Deed of Sale, since it failed to pay the entire sum of
P5,159,725.00. On the other hand, the trial court found that MASCO properly filed its claim
against the LOC with the Bank.

The CA, in its assailed August 31, 2004 Decision, affirmed the RTC's findings and likewise
found that MASCO complied with the conditions to claim the proceeds of the LOC upon
presentation of the required documents to the Bank. Moreover, it ruled that MASCO was
entitled to an award of interest based on Article 2209 of the Civil Code. Since MASCO
strictly complied with the terms of the LOC, it was legally entitled to payment and interest
at the rate of 12% per annum.

Issues:
1. When should the legal interest commence to run?
2. What is the proper interest rate?


Ruling:

1. The legal interest on the face amount of the LOC or P1,000,000.00 shall commence to run
from the time extrajudicial demands was made, or the date when the letter-claim along
with the documents were submitted to the Bank, specifically on October 8, 1975. In this
respect, the Court agrees with the ruling of the CA, which affirmed the RTC's finding.

2. The Court modifies the appealed CA Decision with regard to the interest on the
monetary awards. The guidelines laid down in the case of Eastern Shipping Lines are
accordingly modified to embody BSP-MB Circular No. 799, as follows:

I. When an obligation, regardless of its source, i.e., law, contract quasi-contracts,
delicts or quasi-delicts is breached, the contravenor can be held liable for
damages. The provisions under Title XVIII on "Damages” of the Civil Code
govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:

(1) When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 6% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.

(2) When an obligation, not constituting a loan or forbearance of money, is breached,
an interest on the amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum. No interest, however, shall
be adjudged on unliquidated claims or damages, except when or until the
demand can be established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall begin to run
from the time the claim is made judicially or extrajudicially (Art. 1169, Civil
Code), but when such certainty cannot be so reasonably established at the time
the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages
may be deemed to have been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the amount finally
adjudged.

(3) When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph
1 or paragraph 2, above, shall be 6% per annum from such finality until its

satisfaction, this interim period being deemed to be by then an equivalent to a

forbearance of credit.

And, in addition to the above, judgments that have become final and executory gprior
to July 1, 2013, shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein.

Based on the foregoing, the amount of F1,000,000.00 shall be subject to interest at the rate
of 12% per annum from the date the extrajudicial demand was made or on October 8, 1975
until June 30, 2013, and thereafter, 6% per annum from July 1, 2013 until finality of this
judgment.
Moreover, once the judgment in this case becomes final and executory, the monetary award
discussed above shall be subject to legal interest at the rate of 6% per annum from such
finality until its satisfaction.

RICAFORT vs. BAUTISTA
G.R. No. 200984, November 25, 2019

Facts:
EARIST is a state college established by virtue of Presidential Decree No. 1524. Based on
EARIST charter, and as reiterated in Republic Act No. (RA) 8292 otherwise known as the
Higher Education Modernization Act of 1997, the BoT is its governing body.

On December 8, 1999, respondent was appointed as President of EARIST the then CHED for
four years effective on December 8, 1999, or until December 2003.

On May 14, 2003, or prior to the expiration of respondent's term in December 2003, the
BoT passed Board Resolution approving the reappointment of respondent effective
December 16, 2003 up to age 65, but without prejudice to an extension beyond 65 years
of age. Thereafter, the BoT passed Board Resolution No. 15 2003 approving the
reappointment of respondent for one full term of four (4) years effective on December 16,
2003.

Sometime in 2005, upon reaching the mandatory retirement age of 65, respondent was
offered a retirement benefit by the GSIS to which she applied and approved by the GSIS
effective December 1, 2005. On April 19, 2006, upon learning of the approval of
respondent's application for retirement, the BoT, headed by its new Chairman, herein
petitioner, together with the other members thereof, passed and approved an unnumbered
resolution, which considered the respondent to have mandatorily retired from service.
She excluded respondent from the conference room that led to the appointment of Dr.
Hilario as OIC in the Office of the President.

The RTC ruled in the application for an injunction by respondent and was upheld by the CA
awarded the respondent with actual damages by way of her unearned salary from April 19,
2006 up to December 2007; exemplary damages in the amount of P50,000.00; and
attorney's fees in the amount of P20,000.00.


Issue:
Whether or not the award has basis?

Ruling:
Yes. The Court affirms the findings of the court a quo as to petitioner's display of an abuse
of power as Commissioner of the CHED when she excluded respondent from the conference
room that led to the appointment of Dr. Hilario as OIC in the Office of the President that
consequently denied respondent of her right to due process.

Accordingly, the Court finds that both the court a quo and the CA correctly awarded in
favor of respondent actual damages by way of unearned salary from April 19, 2006 until
December 17, 2007. It follows, therefore, that the award of exemplary damages is likewise
proper. The requisites for the award of exemplary damages are as follows:

(1) they may be imposed by way of example in addition to compensatory damages,
and only after the claimant's right to them has been established;

(2) that they cannot be recovered as a matter of right, their determination depending
upon the amount of compensatory damages that may be awarded to the
claimant; and

(3) the act must be accompanied by bad faith or done in a wanton, fraudulent,
oppressive or malevolent manner.

There is no doubt that all of the requisites for the award of exemplary damages are present
in the instant case. The imposition of exemplary damages on petitioner's part is by way of
example or correction for the public good since the existence of bad faith was established
by the court a quo.
On the grant of attorney's fees to respondent, the Court affirms both the court a quo and
the CA that there was an unjustified refusal on the part of petitioner to satisfy respondent's
valid, just, and demandable claim. Hence, it is just and equitable to grant respondent
attorney's fees.

However, applying the guidelines in Nacar v. Gallery Frames, et al., the Court finds that a
legal interest at the rate of 6% shall be imposed on the amount finally adjudged, from the
finality of this Decision until its full satisfaction, this interim period being deemed to be by
then an equivalent to a forbearance of credit.


ARCINUE vs. BAUN

G. R. No. 211149, November 28, 2019

Facts:
AMA Computer Learning Center (ACLC) granted petitioner Oscar Arcinue a franchise to
operate a computer training school under ACLC's name. The franchise was for 10 years
subject to strict compliance with the parties' Agreement for Franchise Operations.

Three (3) years later, Arcinue still had not commenced operation. Not only that. He also
sold his franchise to respondent Alice Ilalo S. Baun for P85,000.00 without ACLC's prior
approval contrary to the agreenebt. After the sale though, Baun immediately took steps to
set-up the computer school. She leased a building and hired an architect for renovations to
conform with ACLC's specifications. - Upon ACLC's inspection, however, the proposed
school building did not meet its standards since the total floor area was inadequate. More,
ACLC found out that Baun was a director of another school which likewise offered
computer courses.

Baun filed the complaint against Arcinue and ACLC for specific performance and damages
to enforce her rights as transferee of Arcinue’s franchise. Trial on the merits ensued. Baun
completed her presentation of evidence. She, however, died on June 21, 2009. She was
survived by her siblings whom the trial court allowed to substitute as plaintiff in the
proceedings below.

The RTC held that Arcinue had acted in bad faith in his dealings with ACLC and Baun. Not
only did he fail to set-up the computer school as stipulated in the franchise agreement with
ACLC, he also profited from it by selling his franchise to Baun, sans ACLC's prior approval.
Consequently, ACLC lost its potential income during the seven (7)-year period within which
Arcinue failed to operate the computer school. Too, Baun suffered pecuniary loss when she
paid Arcinue P85,000.00 for the transfer of franchise and incurred expenses in setting up
the computer school without ACLC's approval. The trial court thus ruled that Arcinue's acts
were in violation of Articles 19, 20, and 21 of the Civil Codel which warranted payment of
damages. The lower court ordered Arcinue to pay the estate of the late plaintiff the sum of
P85,000.00 as actual damages, with legal interest at six percent (6%) per annum or a
fraction thereof, from the time he unjustly received the said amount from the plaintiff in
1993 until the same is paid in full.

On appeal, Arcinue argued that he did not act in bad faith in his dealings with ACLC and
Baun. Further, the case should have been dismissed when Baun died since an action for
specific performance and damages is a personal action which did not survive Baun's death.

Issues:

1. Whether or not Baun's death rendered her complaint dismissible?
2. Whether or not the interest on the monetary award is correct?


Ruling:
1. No. Second, Section 1, Rule 87 of the Rules of Court enumerates the following actions
which survive the death of a party, thus: (1) recovery of real or personal property, or an
interest from the estate; (2) enforcement of liens on the estate; and (3) recovery of
damages for an injury to person or property.

In Board of Liquidators v. Heirs of Kalaw, the Court ruled that an action for damages caused
by tortious conduct survives the death of a party. For it falls under suits to recover
damages for an injury to person or property, real or personal. The Court further
emphasized that injury to property is not limited to injuries to specific property, but
extends to other wrongs by which personal estate is injured or diminished. To maliciously
cause a party to incur unnecessary expenses, as in this case, is certainly injury to that
party's property.

Here, both the trial court and the Court of Appeals found petitioner to have acted in bad
faith to the damage and prejudice of respondent. The lower courts thus ruled that
petitioner's tortious acts were in violation of Articles 19, 20, and 21 of the Civil Code
warranting payment of damages.

2. No. The Court modifies the interest rate imposed on the monetary awards to conform
with the guidelines laid down in Lara's Gift Shop & Decors, Inc. v. Midtown Industrial Sales,
Inc., viz:

(2) In the absence of stipulated interest, in a loan or forbearance of money,
goods, credits or judgments, the rate of interest on the principal amount shall be
theprevailing legal interest prescribed by the Bangko Sentral ng Pilipinas, which
shall be computed from default, i.e., from extrajudicial or judicial demand in
accordance with Article 1169 of the Civil Code, UNTIL FULL PAYMENT,
without compounding any interest unless compounded interest is expressly
stipulated by law or regulation. Interest due on the principal amount accruing as
of judicial demand shall SEPARATELY earn legal interest at the prevailing rate
prescribed by the Bangko Sentral ng Pilipinas, from the time of judicial demand
UNTIL FULL PAYMENT.

XXX XXX XXX

In Estores v. Spouses Supangan, the Court explained the meaning ofsforbearance of money,
viz:

Forbearance of money, goods or credits should therefore refer to arrangements other
than loan agreements, where a person acquiesces to the temporary use of his
money, goods or credits pending happening of certain events or fulfillment of
certain conditions. In this case, the respondent-spouses parted with their money
even before the conditions were fulfilled. They have therefore allowed or granted
forbearance to the seller (petitioner) to use their money pending fulfillment of the
conditions. They were deprived of the use of their money for the period pending

fulfillment of the conditions and when those conditions were breached, they are
entitled not only to the return of the principal amount paid, but also to
compensation for the use of their money. And the compensation for the use of
their money, absent any stipulation, should be the same rate of legal interest
applicable to a loan since the use or deprivation of funds is similar to a loan.

Here, respondent paid petitioner P85,000.00 conditioned upon the supposed transfer of
petitioner's franchise rights to operate ACLC's computer school. The transfer, however,
never took place albeit petitioner retained respondent’s payment. Respondent is thus
entitled not only to the return of the principal amount she paid, but also to compensation
for the use of her money.

Considering that respondent filed the complaint below against petitioner on September 11,
1997, the legal interest rate of twelve percent (12%) per annum applies here from judicial
demand on September 11, 1997 until June 30, 2013. Beginning July 1, 2013, the effectivity
of the Bangko Sentral ng Pilipinas-Monetary Board Circular No. 799, the new legal interest
rate of six percent (6%) per annum must apply until full payment.

More, Lara's Gift Shop & Decors, Inc. ordains that interest due on the principal amount shall
also earn legal interest at the prevailing rate prescribed by the Bangko Sentral ng Pilipinas
from the time of judicial demand until full payment. Thus, the interest due on the principal
amount which petitioner owes shall also earn twelve percent (12%) interest per annum
from judicial demand on September 11, 1997 until June 30, 2013, and six percent (6%) per
annum from July 1, 2013 until full payment.

HEIRS OF THE LATE SPOUSES VICTOR L. MONTEVILLA AND RESTITUTA C.
MONTEVILLA, REPRESENTED BY ATTY. ANITA C. MONTEVILLA v. SPOUSES LEO A.
VALLENA AND MELBA G. VALLENA,
G.R. No. 234419, December 05, 2019

Facts:
Petitioners (the Montevillas) are the heirs of Victor L. Montevilla (Victor) and Restituta C.
Montevilla (spouses Montevilla), who left their children several parcels of land and one of
which is Lot No. 1. In 1961, Victor sold a portion of Lot 1, measuring 58 square meters, to
Benigno Zeta (Benigno), who sold it to Roman Manlangit (Roman). The latter sold the lot to
Jose Vallena (Jose), father of respondent Leo Vallena (Leo).

At the back of Jose's land was a vacant lot owned by Victor. In 1993, respondent spouses
sought permission from Jorge, one of Victor's heirs, to use a portion of the vacant lot,
measuring 40 square meters, as storage for their patis business. Jorge agreed on condition
that the structure would be made of light materials. However, when the business prospered,
spouses Vallena built a two-storey concrete building without the Montevilla's knowledge,
consent, and in defiance of their agreement.

The administrator of spouses Montevilla's estate,Anita, called spouses Vallena's attention

on the illegal structure. However, Anita and her sister underwent verbal abuse and threat
from Leo. The Montevillas demanded payment of P1,000.00 as monthly rent beginning May,
1994, and to vacate the lot. The demand was unheeded, prompting the Montevillas to file a
civil action for ejectment on April 10, 1995.

For their part, spouses Vallena denied the Montevilla's allegations. They alleged that Victor
sold to Benigno a 58-square meter lot and a 36-square meter lot, or a total of 94 square
meters. Benigno sold the 94-square meter lot to Roman, who eventually sold it to Jose.
They averred that there is a private document wherein Victor sold to Jose a 4-square meter
lot, bringing a total of 98 square meters in Jose's name. However, spouses Vallena were
unable to present the documents of sale because they were either burned or misplaced
during Jose's lifetime.

Issues:
1. Whether or not the spouses Vallena have the right of possession over the 40-square
meter lot.
2. WoN there was a valid sale of the subject property.

Ruling:
1) No. In resolving the issue of possession, the Court will provisionally determine the issue
of ownership since both parties claim to be the owners.

In its decision, the CA held that the Montevillas did not offer evidence of prior physical
possession. The Court disagrees. Section 4, Rule 129 of the Rules of Court on judicial
admission states that an admission, verbal or written, made by the party in the course of
the proceedings in the same case, does not require proof.

Here, the spouses Vallena admitted in their pleadings that Victor was the original owner
and alleged seller of the contested 40-square meter lot. Their admission means that they
recognize that Victor had prior possession of the lot before he allegedly sold it to them. A
seller must have exercised acts of ownership, such as physical possession and acts of
administration, before entering into a transaction over his property. With spouses Vallena's
judicial admission, the Montevillas need not prove prior physical possession, because upon
Victor's death, his rights, including the right of possession, over the contested lot were
transmitted to his heirs by operation of law.

2) None. The alleged contract of sale is imperfect and invalid.

The Court sustains the MCTC's ruling. Section 3, Rule 130 of the Rules of Court on
best evidence rule states that when the subject of inquiry is the contents of a
document, no evidence shall be admissible other than the original document itself.

Here, spouses Vallena presented photocopies of the alleged deed of sale and alleged
acknowledgment receipts. They claim that the original copies were misplaced,
missing, lost, or burned, but they were unable to state with certainty the
circumstances surrounding its disappearance. Importantly, they failed to prove that

the original documents existed in the first place. Without the original documents,
spouses Vallena failed to prove that Jose bought the contested lot partly from Victor
and partly from Roman.

The Court also noticed that the deed of sale and one of the acknowledgement
receipts pertain to a sale between Victor and Benigno. The deed of sale specified
that Victor sold a lot, measuring square meters, to Benigno for P210.00. The two
documents show that a transaction took place between them, and nowhere does
Jose's name appear in these documents. These documents do not prove that Victor
and Jose or Benigno and Jose entered into a contract of sale.

As for the other acknowledgement receipt allegedly between Victor and Jose, the
Court also upholds the MCTC ruling that even if the court accepts the photocopies as
evidence, they are not sufficient evidence of a contract of sale for lack of one of the
elements - certainty of object under Article 1318 of the New Civil Code of the
Philippines. Since spouses Vallena were unable to prove that Jose bought the
contested lot from Victor, their main defense crumbles.

The Court reviewed the spouses Vallena's Joint Affidavit and found that they failed
to indicate with certainty the size of the land that Victor and Roman allegedly sold to
Jose. Spouses Vallenas' Answer and Position Paper also contain ambiguous
allegations on the exact measurement of the lot allegedly sold.
If spouses Vallena do not know the exact size of the land which Jose allegedly bought
from Victor and Roman, how can they convince the Court to grant them possession
of the contested lot? It is precisely for this reason that the original copies of the
documents of sale must be presented in the trial court.

On the other hand, the Court evaluated the Montevilla's documentary exhibits and
found that they support their claim of ownership, prior possession, and tolerance as
to spouses Vallena's occupation of the contested lot.

In civil case, the quantum of evidence required is preponderance of evidence. Here,
the Montevillas presented 15 exhibits,while the Vallenas submitted nine
exhibits. More than just having a greater number of exhibits, the Montevillas
sufficiently prove their claim that they are in prior possession of the contested lot
because their parents owned it and possessed it. It is not just the quantity, but
foremost the quality of evidence that determines who has preponderance of
evidence. Thus, the Montevillas have satisfactorily substantiated their version.

On the other hand, spouses Vallena's main defense that Jose bought the contested
lot partly from Victor and partly from Roman was unproven due to
non-presentation of the original documents of sale. Since their most important piece
of evidence was struck down, there is nothing left for their defense. Therefore, they
have no right of possession over the 40-square meter contested lot.


PABLO. UY vs. HEIRS OF JULITA UY RENALES

G. R. No. 277460, December 5, 2019

Facts:
The controversy is centered on a lot, with its improvement, erected thereon, i.e., a building.
The relationship of the parties is as follows: Labnao had two children, i.e., petitioner Uy and
Julita Uy-Renales (Julita). Julita produced three children, i:e., the respondents Heirs of Julita.
Hence, petitioner Uy is the uncle of the respondents Heirs of Julita. Julita died intestate on
May 9, 1976. Upon the death of Labnao in 1995, as the surviving offspring of Labnao, Uy
became the owner of one-half share of the subject lot and subject building owned by his
deceased mother, with the other half pertaining to the respondents Heirs of Julita as co
owners.

However, petitioner Uy discovered that the subject lot was allegedly fraudulently sold by
Labnao in 1990 in favor of the respondents Heirs of Julita through a Deed of Absolute Sale'
dated April 11, 1990 (Deed of Absolute Sale) purportedly executed by Labnao.

On their part, the respondents Heirs of Julita assert that they have acquired ownership over
the subject lot when they purchased the same from their grandmother Labnao on April 11,
1990, as evidenced by the Deed of Absolute Sale. However, respondents Heirs of Julita
admitted that they did not have any participation in the drafting of the Deed of Absolute
Sale and that all the siblings were surprised when this document was given to them by
Labnao in May of 1990 (or one month after the purported execution of the Deed of
Absolute Sale), which was the first time they ever saw the document.

Issues:
1. Whether there was a contract of sale that was entered into between the parties'
predecessor-in-interest, Labnao, and the respondents Heirs of Julita, transferring
ownership over the subject lot in the latter's favor?
2. If there is no contract of sale, was there a valid donation?

Ruling:
1. None. There is no valid contract of sale of immovable property.
A contract is a meeting of minds between two persons whereby one binds himself/herself,
with respect to the other, to give something or to render some service. Article 1458 of the
Civil Code, in turn, defines a sale as a contract whereby one of the contracting parties, i.e.,
the seller, obligates himself/herself to transfer the ownership and to deliver a determinate
thing, and the other party, i.e., the buyer, obligates himself/herself to pay therefor a price
certain in money or its equivalent.
Thus, the elements of a contract of sale are: (1) consent; (2) object; and (3) price in money
or its equivalent. The absence of any of these essential elements negates the existence of a
perfected contract of sale.

A contract of sale is a consensual contract. Under Article 1475 of the Civil Code, the
contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price. Because a contract of sale is a

consensual contract, no particular form is required for its validity. Thus, even if there is a
document that purports to be a contract of sale, if there is strong countervailing evidence
establishing the want of consent or meeting of the minds, there is no contract of sale.

In Spouses Salonga v. Spouses Concepcion, it was held that the notarization of a document
does not guarantee its validity because it is not the function of the notary public to validate
an instrument that was never intended by the parties to have any binding legal effect.
Neither is the notarization of a document conclusive as to the nature of the transaction, nor
is it conclusive of the true agreement of the parties thereto. Simply stated, the existence,
veracity, and authenticity of a notarized written deed of sale do not conclusively determine
whether all the essential requisites of a contract are present.

Applying the foregoing to the instant case, as made clear in the respondents Heirs of Julita's
Formal Offer of Exhibits/Documentary Evidence, there is no other documentary evidence
that had been offered to prove that a contract of sale was entered into by the parties aside
from the Deed of Absolute Sale. The only other evidence presented to prove the existence
of a contract of sale is the testimony of respondent Jessica.

A careful review of the sworn testimony of respondent Jessica reveals that the respondents
Heirs of Julita never consented to enter into any contract of sale, completely belying the
contents of the Deed of Absolute Sale. Otherwise stated, respondent Jessica's testimony
establishes that there was, in fact, no meeting of the minds with respect to the alleged sale
of the subject lot.
Respondent Jessica never testified that the respondents Heirs of Julita approached Labnao
to offer to buy the subject lot. Nor did she testify that the respondents Heirs of Julita
consented to purchase the subject lot. As well, she never testified that Labnao had
approached them to offer to sell the subject lot. In short, the testimony of respondent
Jessica is devoid of any contention that there was any offer and any acceptance of such
offer to buy the subject lot.

Indeed, during cross-examination, respondent Jessica even candidly admitted that the
respondents Heirs of Julita did not have any participation in the drafting of the Deed of
Absolute Sale and that all the siblings were surprised when this document was given to
them by Labnao in May of 1990 (or one month after the purported execution of the Deed of
Absolute Sale), which was the first time they ever saw the document.

2. None. There is no valid donation of immovable property.

What the Court deduces from the facts on record is that Labnao's intention was to ensure
that her grandchildren -- the respondents Heirs of Julita — would exclusively receive the
subject lot. Thus, instead of simply donating the property, Labnao opted to simply simulate
a contract of sale.

Unfortunately, even as a transfer of the subject lot to the respondents Heirs of Julita, the
Deed of Absolute Sale cannot be considered a valid donation. According to Article 749 of
the Civil Code, in order for a donation of an immovable property to be considered valid, the

donation must be made in a public document, specifying therein the property donated and
the value of the charges which the donee must satisfy. In the instant case, as already
explained, the Deed of Absolute Sale was not properly notarized, making it a private
document. Hence, there was no donation made in a public document.

Moreover, Article 749 of the Civil Code additionally requires that the donee manifests
his/her acceptance of the donation of the immovable property in either the same public
instrument or in a separate instrument. If the donee accepts the donation in a separate
instrument, the donor should be notified thereof in an authentic form, and this step shall be
noted in both instruments. In the instant case, there was no acceptance of any donation
manifested by the respondents Heirs of Julita in the unilaterally executed Deed of Absolute
Sale. There was also no separate instrument that was executed by the respondents Heirs of
Julita for the purpose of accepting any donation from their grandmother. Simply stated, the
formalities of making and accepting a donation of an immovable property required under
Article 749 of the Civil Code were not observed. The donation of real property is void
without the formalities stated in Article 749.

Even if it were a valid donation, it would have been collated back to the estate of Labnao
pursuant to Articles 908 and 1064 of the Civil Code, and petitioner Uy and the respondents
Heirs of Julita would have divided the estate of Labnao equally, with petitioner Uy
inheriting in his own right and the respondents Heirs of Julita inheriting as a group per
stirpes or by right of representation.

ATTY. LEONARD FLORENT O. BULATAO vs. ZENAIDA C. ESTONACTOC
G.R. No. 235020, December 10, 2019

Facts:
On June 3, 2008, Zenaida executed a Deed of Mortgage of Real Property [(DMRP) in favor of
Atty. Bulatao covering a parcel of land for the amount of P200,000.00 with the interest at
the rate of 5% per month, within a period of 12 months or 1 year or before June 4, 2009.
When Zenaida defaulted in her obligation, Atty. Bulatao foreclosed the mortgage and
petitioned the court for the sale of the subject property in a public auction.

Zenaidal filed a Complaint for Injunction, Annulment of Deed of Real Estate Mortgage and
Damages against Atty. Bulatao seeking to declare the [DMRP) as illegal, inexistent and null
and void, and to make the contract unenforceable. She asserted that Atty. Bulatao, in grave
abuse of her rights, took advantage of her financial distress and urgent financial needs by
imposing in the [DMRP] an interest of 5% per month which is excessive, iniquitous,
unconscionable, exorbitant and contrary to public policy, rendering the contract null and
void.

Atty. Bulatao argues that the payment of the 5% monthly interest was voluntarily agreed
upon by him and Zenaida and absent fraud committed upon Zenaida, the stipulated interest
rate should stand. On the assumption that the 5% monthly interest is invalid, the ruling of
the CA reducing it to 1% per month or 12% per annum is not just and right. Atty. Bulatao
takes the position that the 5% per month should be applied to the borrowed amount of

P200,000.00 for one year (the term of the loan) and thereafter, the 12% yearly interest
should apply.

Regarding the DMRP, Atty. Bulatao argues that since Zenaida is a co owner to the extent of
3/4 (1/2 portion representing her share in the conjugal property and 1/4 portion as her
legitime in the estate of her husband Adolfo Estonactoc) of the subject property and the
remaining 1/4 portion being co owned by her son Jose Rafael Estonactoc, Atty. Bulatao has
the right to foreclose Zenaida's 3/4 share.

Issues:
1. ) Is the interest rate valid?
2. ) Is the foreclosure valid?
3. ) If the interest rate is not valid, what is its effect on Zenaida’s obligation?
4. ) Was there a valid demand of payment to warrant forclosure?
5. ) Is the DMRP valid?

Ruling:
1. No. Atty. Bulatao's argument of voluntariness in his and Zenaida's agreement on the 5%
monthly interest cannot be sustained. The willingness of the parties to enter into a
relation involving an unconscionable interest rate is inconsequential to the validity of the
stipulated rate.

The imposition of an unconscionable rate of interest on a money debt, even if knowingly
and voluntarily assumed, is immoral and unjust. It is tantamount to a repugnant
spoliation and an iniquitous deprivation of property, repulsive to the common sense of
man. It has no support in law, in principles of justice, or in the human conscience nor is
there any reason whatsoever which may justify such imposition as righteous and as one
that may be sustained within the sphere of public or private morals.

The imposition of an unconscionable interest rate is void ab initio for being “contrary to
morals, and the law."

In determining whether the rate of interest is unconscionable, the mechanical application
of pre-established floors would be wanting. The lowest rates that have previously been
considered unconscionable need not be an impenetrable minimum. What is more crucial is
a consideration of the parties' contexts. Moreover, interest rates must be appreciated in
light of the fundamental nature of interest as compensation to the creditor for money lent
to another, which he or she could otherwise have used for his or her own purposes at the
time it was lent. It is not the default vehicle for predatory gain. As such, interest need only
be reasonable. It ought not be a supine mechanism for the creditor's unjust enrichment at
the expense of another.

Given that the agreement on the 5% monthly interest is void for being unconscionable, the
interest rate prescribed by the BSP for loans or forbearances of money, credits or goods
will be the surrogate or substitute rate not only for the one-year interest period agreed
upon but for the entire period that the loan of Zenaida remains unpaid.


The distinction that Atty. Bulatao makes between "open-ended contracts” or contracts with
indefinite period and "term contracts” or contracts for a specific period is misguided as the
distinction has no legal basis as far as a loan, whether commodatum or mutuum, is
concerned. As provided in Article 1933 of the Civil Code, “[b]y the contract of loan, one of
the parties delivers to another, either something not consumable so that the latter may use
the same for a certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the condition that the same
amount of the same kind and quality shall be paid, in which case the contract is simply
called a loan or mutuum.” Thus, a period is contemplated in a contract of loan and it cannot
be an "open ended contract” or a contract with an indefinite period.

2) No. In a situation wherein null and void interest rates are imposed under a contract of
loan, the non-payment of the principal loan obligation does not place the debtor in a state
of default, considering that under Article 1252 of the Civil Code, if a debt produces interest,
payment of the principal shall not be deemed to have been made until the interests have
been covered. Necessarily, since the obligation of making interest payments in the instant
case is illegal and thus non-demandable, the payment of the principal loan obligation was
likewise not yet demandable. With Zenaida not being in a state of default, the foreclosure of
the subject properties should not have proceeded.

3) The invalidity of the 5% per month interest rate does not affect the obligation of Zenaida
to repay her loan of P200,000.00 from Atty. Bulatao. Based on the recent en banc case of
Lara's Gifts & Decors. Inc. v. Midtown Industrial Sales, Inc., the applicable interest is the
BSP-prescribed rate of 12% per annum from the execution of the DMRP on June 3, 2008,
wherein the parties agreed to the payment of interest, to June 30, 2013 and at the rate of 6%
per annum from July 1, 2013 until full payment. Also, taking into account Article 2212 of
the Civil Code, which provides that “[i]nterest due shall earn legal interest from the time it
is judicially demanded, although the obligation may be silent upon this point,” the interest
due on the principal amount (computed as mentioned above) accruing as of judicial
demand (the filing of the counterclaim, in this case) shall separately earn interest at the
rate prescribed by the BSP from time of judicial demand up to full payment.

4) No, there was no valid demand of payment.

For there to be a valid payment, the three characteristics of payment must be present.
These are: (1) integrity of payment, which is provided for in Article 1233 of the Civil Code:
“A debt shall not be understood to have been paid unless the thing or service in which the
obligation consists has been completely delivered or rendered, as the case maybe;" (2)
identity of payment, which is provided for in Article 1244: “The debtor of a thing cannot
compel the creditor to receive a different one, although the latter may be of the same value
as, or more valuable than that which is due. In obligations to do or not to do, an act or
forbearance cannot be substituted by another act or forbearance against the obligee's will;"
and (3) indivisibility of payment, which is provided for in Article 1248: “Unless there is an
express stipulation to that effect, the creditor cannot be compelled partially to receive the
prestations in which the obligation consists. Neither may the debtor be required to make

partial payments. However, when the debt is in part liquidated and in part unliquidated,
the creditor may demand and the debtor may effect the payment of the former without
waiting for the liquidation of the latter."49 Since integrity of payment requires that the
thing or service in which the obligation consists has been completely delivered or rendered
as the case may be, the debtor must comply in its entirety with the prestation and that the
creditor is satisfied with the same.

These characteristics of payment should mirror the demand made by the creditor in order
for the debtor to incur in delay under Article 1169 of the Civil Code. The demand must
comply with the integrity,'identity and indivisibility characteristics as well. Since the
debtor cannot compel the creditor to accept an incomplete delivery or an amount less than
what is due, it follows that the creditor cannot compel the debtor to pay more than what is
due. Thus, the characteristics of integrity and identity will be violated if the creditor
demands more than what is due.
In this case, the terms of the Real Estate Mortgage remain effective, the foreclosure
proceedings held on September 8 and 15, 2011, cannot be given effect. In the Notice of
Extra-Judicial Sale dated July 15, 2011, and in the Certificate of Sale dated October 10, 2011,
the amount designated as mortgage indebtedness amounted to P560,000.00. Likewise, in
the demand letter dated April 15, 2011, defendant-appellee demanded frome
plaintiff-appellant the amount of P540,000.00 for the unpaid loan. Since the debt due is
limited to the principal of P200,000.00 with 12% per annum as legal interest, the previous
demand for payment of the amount of P540,000.00 cannot be considered as a valid demand
for payment. For an obligation to become due, there must be a valid demand. Nor can the
foreclosure proceedings be considered valid since the total amount of the indebtedness
during the foreclosure proceedings was pegged at P560,000.00 which included interest and
which this Court now nullifies for being excessive, iniquitous, and exorbitant. If the
foreclosure proceedings were considered valid, it would result in an inequitable situation
wherein plaintiff-appellant will have her land foreclosed for failure to pay an over-inflated
loan only a small part of which she was obligated to pay.

5) As to the DMRP, the CA recognized Zenaida as a co-owner of the mortgaged property
and as such, she could validly convey through sale or mortgage the portion belonging to her.
Tthe Real Estate Mortgage in favor of [Atty. Bulatao] is not entirely rendered void as its
validity is limited only to the portion belonging to [Zenaida].” The rights of a co-owner of a
certain property are clearly specified in Article 493 of the Civil Code. Thus:

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or :. mortgage it and
even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the
termination of the co-ownership. The sale of the property owned in common by one
co-owner without the consent of the others did not give to the buyer ownership over
the entire land but merely transferred to the buyer the undivided share of the seller,
making the buyer the co-owner of the land in question.


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