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2006 Civil Law Case Digests

PERSONS
PRESUMPTIVE DEATH
Republic of the Philippines VS. Bermudez –
Lorino
G.R. No. 160258. January 19, 2005

appeal was pending, the CA, upon respondent’s
motion issued a resolution increasing the support
pendants like to P20, 000.
The CA dismissal petitioner appeal for lack of
merit and affirmed in to the RTC decision.
Petitioner motion for reconsideration was denied,
hence this petition.
Issue: Whether or not co-ownership is applicable
to valid marriage.

Facts: Gloria Bermudez and Francisco Lorino were
married in June 1987. The wife was unaware that
her husband was a habitual drinker with violent
attitude and character and had the propensity to
go out with his friends to the point of being unable
to work. In 1991 she left him and returned to her
parents together with her three children. She went
abroad to work for her support her children. From
the time she left him, she had no communication
with him or his relatives.
In 2000, nine years after leaving her husband,
Gloria filed a verified petition with the RTC under
the rules on Summary Judicial Proceedings in the
Family Law. The lower court issued an order for
the publication of the petition in a newspaper of
general circulation.
In November 7, 2001, the RTC granted the
summary petition. Although the judgment was
final and executors under the provisions of Act.
247 of the Family Code, the OSG for the Republic
of the Philippines filed a notice of appeal.

Held: Since the present case does not involve the
annulment of a bigamous marriage, the provisions
of article 50 in relation to articles 41, 42 and 43 of
the Family Code, providing for the dissolution of
the absolute community or conjugal partnership of
gains, as the case maybe, do not apply. Rather the
general rule applies, which is in case a marriage is
declared void ab initio, the property regime
applicable to be liquidated, partitioned and
distributed is that of equal co-ownership.
Since the properties ordered to be distributed by
the court a quo were found, both by the RTC and
the CA, to have been acquired during the union of
the parties, the same would be covered by the coownership. No fruits of a separate property of one
of the parties appear to have been included or
involved in said distribution.

Issue: Whether or not the factual and legal bases
for a judicial declaration of presumptive death
under Art 41 of the Family Code were duly
established.

IN THE MATTER OF THE ADOPTION OF
STEPHANIE NATHY ASTORGA GARCIA
G.R. No. 148311. March 31, 2005

Held: Art. 238 of the Family Code under Title XI
Summary Judicial Proceeding in the Family Law,
sets the tenor for cases scoured by these rules, to
wit:
Art238. Until modified by the Supreme Court, the
procedural rules in this Title shall apply in all
cases provided for in this Code requiring summary
court proceeding. Such cases shall be decided in an
expedition’s manner with out regards technical
rules.
The judge of the RTC fully complied with the
above-cited provision by expeditiously rending
judgment within ninety (90) days after the formal
offer of evidence by the petitioner.
CO- OWNERSHIP
Buenaventura VS. CA
G.R. Nos. 127358 and G.R. Nos. 127449
March 31, 2005
Facts: Noel Buenaventura filed a position for the
declaration of nullity of marriage on the ground
that both he and his wife were psychologically
incapacitated.
The RTC in its decision, declared the marriage
entered into between petitioner and respondent
null and violation ordered the liquidation of the
assets of the conjugal partnership property;
ordered petitioner a regular support in favor of his
son in the amount of 15,000 monthly, subject to
modification as the necessity arises, and awarded
the care and custody of the minor to his mother.
Petitioner appealed before the CA. While the

ADOPTION; ILLEGITIMATE CHILD

Facts: Honorato B. Catindig filed a petition to
adopt his minor illegitimate child Stephanie
Astorga Garcia. He averred that Stephanie was
born on June 26, 1994; that Stephanie had been
using her mother’s middle name and surname;
and that he is now a widower and qualified to be
her adopting parent. He prayed that Stephanie’s
middle name be changedto Garcia, her mother’s
surname, and that her surname “Garcia” be
changed to “Catindig” his surname.
The RTC granted the petition for adoption, and
ordered that pursuant to article 189 of the Family
Code, the minor shall be known as Stephanie
Nathy Catindig.
Honorato filed a motion for classification and/or
reconsideration praying that Stephanie be allowed
to use the surname of her natural mother (Garcia)
as her middle name. The lower court denied
petitioner’s motion for reconsideration holding
that there is no law or jurisprudence allowing an
adopted child to use the surname of his biological
mother as his middle name.
Issue: Whether or not an illegitimate child may use
the surname of her mother as her middle name
when she is subsequently adopted by her natural
father.
Held: One of the effects of adoption is that the
adopted is deemed to be a legitimate child of the
adapter for all intents and purposes pursuant to
Article 189 of the Family Code and Section 17 of
Article V of RA 8557.
Being a legitimate by virtue of her adoption, it
follows that Stephanie is entitled to all the rights

provided by law to a legitimate child without
discrimination of any kind, including the right to
bear the surname of her father and her mother.
This is consistent with the intention of the
members of the Civil Code and Family Law
Committees. In fact, it is a Filipino custom that the
initial or surname of the mother should
immediately precede the surname of the father.
JUDICIAL DECLARATION OF NULLITY
Cojuangco vs Palma
A.C. No. 2474 June 30, 2005
Facts: On June 22, 1982, respondent Atty. Leo J.
Palma, despite his subsisting marriage, wed Maria
Luisa Cojuangco, the daughter of complainant
Eduardo M. Cojuangco, Jr. Thus, the latter filed on
November 1982, a complaint disbarment against
respondent. Palma moved to dismiss the
complaint.
On March 2, 1983, the court referred the case to
OSG for investigation and recommendation. The
Assistant Solicitor General heard the testimonies
of the complainant and his witness in the presence
of respondent’s counsel.
On March 19, 1984 respondent filed with the OSG
an urgent motion to suspend proceedings on the
ground that the final actions of his civil case for
the declaration of nullity of marriage between him
and his wife Lisa, poses a prejudicial question to
the disbarment proceeding, but it was denied.
The OSG transferred the disbarment case to the
IBP, the latter found respondent guilty of gross
immoral conduct and violation of his oath as a
lawyer, hence, was suspended from the practice of
law for a period of three years.
In his motion for reconsideration, respondent
alleged that he acted under a “firm factual and
legal conviction in declaring before the Hong Kong
Marriage Registry that he is a bachelor because his
first marriage is void even if there is judicial
declaration of nullity.
Issue: Whether or not a subsequent void marriage
still needs a judicial declaration of nullity for the
purpose of remarriage.
Held: Respondents arguments that he was of the
“firm factual and legal conviction when he
declared before the HIC authorities that he was a
bachelor since his first marriage is void and does
not need judicial declaration of nullity” cannot
exonerate him. In Terre vs Terre, the same defense
was raised by respondent lawyer whose
disbarment was also sought. We held:
“xxx respondent Jordan Terre, being a lawyer,
knew or should have known that such an argument
ran counter to the prevailing case law of this court
which holds that purposes of determining whether
a person is legally free to contract a second
marriage, a judicial declaration that the first
marriage was null and void an initio is essential.
Even if we were to assume, arguendo merely, that
Jordan Terre held that mistaken belief in good
faith, the same result will follow. For if we are to
hold Jordan Terre to his own argument, his frist
marriage to complainant Dorothy Terre must be
deemed valid, with the result that his second
marriage must be regarded as bigamous and
criminal.

MARITAL CONSENT
Pelayo vs. Perez
G.R. No. 141323
Facts: David Pelayo through a Deed of Absolute
Sale executed a deed of sale and transferred to
Melki Perez two parcel of agricultural lands.
Loreza Pelayo and another one whose signature is
eligible witnesses such execution of deed.
Loreza signed only on the third page in the space
provided for witnesses, as such, Perez application
was denied.
Perez asked Loreza to sign on the first and should
pages of the deed of sale but she refused. He then
filed a complaint for specific performance against
the Pelayo spouses.
The spouses moved to dismiss the complaint on
the ground for lack of marital consent as provided
by art166 of the Civil Code.
Issue: Whether or not the deed of sale was null and
viol for lack of marital consent.
Held: Under Art 173, in relation to Art166, both of
the NCC, W/C was still in effect on January 11,
1988 when the deed in question was executed, the
lack of marital consent to the disposition of
conjugal property does not make the contract viol
of initio but Merely violable. Said provisions of law
provide:
Art 166. Unless the wife has been declared a non
compass mentis or a spedthriff, or is under civil
interdiction or is confined in a lepresarium, the
husband connot alienate or encumber any real
property not the Longugal property w/o the wife’s
consent. It she refuses nreasonable to give her
consent, the court may compel her to grant the
same.
Art 173. The wife may during the marriage and
w/in 10 years the transaction questioned, ask the
court for the annulment of any contract of the
husband w/c tends to defraud her or impair
interest in the conjugal partnership property.
Should the wife fail to exercise this right she her
heir, after the dissolution of the marriage may
demand the value of property fraudulently
alienated by the husband.
MARITAL CONSENT
BRAVO ET AL. VS. COURT OF APPEALS
Facts: Spouses Mauricio and Simons owned two
parcel of land. It contain a large residential
dwelling or smaller house and other
improvements.
They had three children – Roland, Cesar and Lily,
Cesar died. Lily married David and had a son,
David Jr,, Senia, Benjamin and their half-sister,
Ofelia.
Simona executed a General Power of Attorney
(GPA) on June 17, 1966, appointing her husband
as her attorney-in-fact. He subsequently
mortgaged the land to the PNB and DBP.
On October 25, 1970, Mauricio executed a Deed of
Sale with assumption of Real Estate Mortgage
transferring the properties to Roland, Ofelia and
Elizabeth. It was conditioned on the payment of
P1,000 and on the assumption of the vendees of
the PNB and DBP mortgages over the properties.

The deed of sale was notarized but was not
annotated on TCT, neither was it presented to DBP
and PNB. The mortgage loans and receipts for loan
payment issued by the two banks continued to be
in Mauricio’s name even after his death November
1973. Simona passed away in 1977.
Issue: Whether or not the deed of sale was void for
lack of marital consent.
Held: Art. 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 partnerships before the effective date
of this Code.
Article 166 expressly applies only to properties
acquired by the conjugal partnership after the
effectivity of the Civil Code of the Philippines
("Civil Code"). The Civil Code came into force on
30 August 1950.1161 Although there is no dispute
that the Properties were conjugal properties of
Mauricio and Simona, the records do not show,
and the parties did not stipulate, when the
Properties were acquired.1171 Under Article 1413
of the old Spanish Civil Code, the husband could
alienate conjugal partnership property for valuable
consideration without the wife's consent.1181
Even under the present Civil Code, however, the
Deed of Sale is not void. It is well-settled that
contracts alienating conjugal real property without
the wife's consent are merely voidable under the
Civil Code - that is, binding on the parties unless
annulled by a competent court - and not void ab
initial
Article 166 must be read in conjunction with
Article 173 of the Civil Code ("Article 173"). The
latter prescribes certain conditions before a sale of
conjugal property can be annulled for lack of the
wife's consent, as follows:
Art. 173. The wife may, during the marriage and
within ten years from the transaction questioned,
ask the courts for the annulment of any contract of
the husband entered into without her consent,
when such consent is required, or any act or
contract of the husband which tends to defraud
her or impair her interest in the conjugal
partnership property. Should the wife fail to
exercise this right, she or her heirs after the
dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
(Emphasis supplied)
Under the Civil Code, only the wife can ask to
annul a contract that disposes of conjugal real
property without her consent. The wife must file
the action for annulment during the marriage and
within ten years from the questioned transaction.
Article 173 is explicit on the remedies available if
the wife fails to exercise this right within the
specified period. In such case, the wife or her heir;
can only demand the value of the property
provided they prove that the husband fraudulently
alienated the property. Fraud is never presumed,
but must be established by clear and convincing
evidence.

ILLEGITIMATE CHILD’S SURNAME
ALBA vs. COURT OF APPEALS
G.R. No. 164041, July 29, 2005
Facts: Private respondent Rosendo C. Herrera
filed a petition for cancellation of the following
entries in the birth certificate of Rosendo Alba
Herrera, Jr, “ to wit: (1) the surname “Herrera” as
appended to the name of the said child; (2) the
reference to private respondent as the father of
Rosendo Alba Herrera Jr.; and (3) the alleged
marriage of private respondent to all child’s
mother, Armi A. Alba He averred that such
challenged entries are false.
Private respondent contended that he married
only once, as evidenced by certification from NSO
and Civil Registrar of Mandaluyong.
The RTC, finding the petition to be sufficient in
form and substance the hearing was set. On the
scheduled hearing the counsel from the OSG
appeared but filed no opposition, Armi was not
present.
The court a quo rendered a decision ordering the
correction of the entries in the Certification of Live
Birth of Rosendo Alba Herrera, Jr.
Armi filed a petition for the annulment of the
judgment, contending that she came to know of
the decision of the RTC where the school where
her son was enrolled, was furnished by private
respondent with a copy of a court order directing
the change of petitioner’s surname from Herrera
to Alba. Armi contended that she and private
respondent cohabited and after their separation,
he continued to give support to their son.
Private respondent denied paternity of petitioner
minor and his purported cohabitation with Armi.
Issue: Whether or not an illegitimate child shall
use the surname of their mother.
Held: Under Art. 176 of the Family Code as
amended by RA No. 9255, w/c took effect on
March 19, 2004, illegitimate children shall use the
surname of their mother , unless their father
recognizes their filiation, in w/c case they may
bear the father’s surname. In Wang vs. Cebu Civil
Registrar it was held that an illegitimate child
whose filiations is not recognized by the father
bears only a given name and his mother’s
surname. The name of the unrecognized
illegitimate child identifies him as such. It is only
when said child is recognized that he may use his
father’s surname, reflecting his status us an
acknowledged illegitimate held.
CHILD CUSTODY
PABLO-GUALBERTO VS. COURT OF APPEALS
G.R. Nos. 154994 and 156254 June 28, 2005
Facts: Crisanto Rafaelito G. Gualberto V filed
before the RTC a petition for declaration of nullity
of his marriage to Joycelyn w/ an ancillary prayer
for custody pendente lite of their almost 4 year old
son, Rafaello, whom her wife took away w/ her
from their conjugal home and his school when she
left him.
The RTC granted the ancillary prayer for custody
pendente lite, since the wife failed to appear
despite notice. A house helper of the spouses

MONASTERIO G. the putative parent is given by the new code a chance to dispute the claim. 151867. Hence. 1981.R. OBLIGATIONS AND CONTRACTS SAN MIGUEL CORPORATION vs.” ANNULMENT OF MARRIAGE. stock handling. education and property pf children. his legal wife died. 1967. Another witness testified that after surveillance he found out that the wife is having lesbian relations. In case of separation of parents parental authority shall be exercised by the parent des granted by the court. warehousing and related services such as. It must be shown that the acts are a manifestation of a disordered personality which makes respondent completely unable to discharge the essential obligations of marital state. w/c reads: “Art 363. and receiving SMC products for its route operations. The Family Code makes no distinction on whether the former was still a minor when the latter died. 1995. Sharon was once confined for psychiatric treatment but she didn’t stop her illicit relationship with the Jordanian national whom she married and whom she had two children. physical structures. Issue: Whether or not Adrian Bernabe may be declared an acknowledged illegitimate son. Thus. After Ernesto Bernabe and Rosalina. Sharon abandoned the petitioner and joined Ibrahim in Jordan with their two children. especially the choice of the child over seven years of age. The RTC granted the nullity of the marriage. equipment and personnel for storage. No mother shall be separated from her child under seven years of age. PSYCHOLOGICAL INCAPACITY DEBEL VS.testified that the mother does not care for the child as she very often goes out of the house and even saw her slapping the child.” No child under seven yrs of age shall be separated from the mother unless the court finds compelling reasons to order otherwise. represented by its manager. and this time awarded the custody of the child to the mother. January 29. COURT OF APPEALS. the instant petition was filed to the Supreme Court. On May 20. Article 213 takes its bearing from Article 363 of the Civil Code. 140500.” This Court has held that when the parents separated. The union produced four children. Issue: Whether or not private respondent’s sexual infidelity or perversion and abandonment fall within the term of psychological incapacity. January 21. Monasterio was given the additional task of . 2002 Facts: The late Fiscal Ernesto Bernabe allegedly fathered a son with his secretary Carolina Alejo and was named Adrian Bernabe who was born on September 18. ACTION FOR RECOGNITION OF ILLEGITIMATE CHILDREN WHO ARE MINORS AT THE TIME OF THE EFFECTIVITY OF THE FAMILY CODE MAY BE BROUGHT FOR A PERIOD OF 4 YEARS FROM ATTAINING MAJORITY AGE. From September 1993 to September 1997 and May 1995 to November 1997. Issue: Whether or not the custody of the minor child should be awarded to the mother. Ibrahim left Sharon so she returned back to the petitioner who had accepted her back. SPURIOUS CHILDREN BERNABE VS. G. Held: In this case private respondent’s sexual infidelity or perversion and abandonment can hardly qualify as mental or psychological illness to such extent that she could not have known the obligation she was assuming.R. not merely due to her youth. ET AL. segregation of empty bottles. 2005 Facts: SMC entered into an Exclusive Warehouse Agreement with SMB Warehousing Services. aside from rendering service as warehouseman. It appears that private respondent’s promiscuity did not exist prior to or at the inception of the marriage. June 23. Finding that the reason stated by Crisanto not to be a compelling reason as provided in Art 213 of the Family Code. No. in fact. Held: Article 213 of the Family Code provided: “Art 213. culminating into marriage before the City Court of Pasay on September 28. considering that “illegitimate children” are usually begotten and raised in secrecy and without the legitimate family being aware of their existence. After giving up all hope for reconciliation. She had an illicit affair with several men and then later to a Jordanian national named Ibrahim. legally or otherwise. the only heir left is Erestina. 1997 a petition seeking the declaration of nullity of his marriage on the ground of psychological incapacity. ALEJO G.R. Troy Francis L. petitioner filed on April 1. in behalf of Adrian. SMB undertook to provide land. immaturity or sexual promiscuity. unless the court finds compelling reason for such measure. the civil marriage was ratified in a church wedding. custody. The court shall take into account all relevant consideration. Held: Under the new law. It was appealed in the CA which set aside the decision of RTC and ordered dismissal of the case. No. The acquaintance led to courtship and romantic relations. the record disclosed that there was a blissful marital union. However on December 9. TROY FRANCIS L. The judge issued the assailed order reversing her previous order. The petitioner avers that during the marriage Sharon turned out to be an irresponsible and immature wife and mother. filed a complaint praying that Adrian be declared an acknowledged illegitimate son of Fiscal Bernabe and be given a share of his father’s estate. unless the parent chosen is unfit. 151037. but not limited to. Carolina. an action for the recognition of an illegitimate child must be brought within the lifetime of the alleged parent. the latter welfare shall be paramount. 1966. the foregoing provision governs the custody of their child. In all question on the care. 2004 Facts: David Debel met Sharon Corpuz while he was working in the advertising business of his father. No. Monasterio.

ROVII-06. in the sole opinion of the CORPORATION. as well as exemplary damages.000 and P300. Otherwise. 156841. 1997. 157098 June 30. NORKIS TRADING COMPANY. x x x If at any time during the contract. NORKIS FREE & INDEPENDENT WORKERS UNION vs. GF Equity. therefore. Indeed. . refused to implement the Wage Order.000. 1998. In accordance with the Wage Order and Section 2. Concededly. it is null and void. P11. 2005 Facts: GF Equity hired Valenzona as Head Coach of the Alaska basketball team in the Philippine Basketball Association under a Contract of Employment where GF Equity would pay Valenzona the sum of P35. G. Antonio. dismissed the complaint. 1998. AINZA. SPOUSES ANTONIO PADUA and EUGENIA PADUA G. CORAZON A. DR. however. SMC filed a Motion to Dismiss on the ground of improper venue The RTC denied the motion.32 for warehousing fees. the RTWPB of Region VII issued Wage Order ROVII-06 which established the minimum wage of P165.R. TULIAO. for P100. thereby raising the daily minimum wage to P165. INC. 1998. and attorney’s fees in the amount of P500. No. substituted by her legal heirs. however. the basic principles of freedom to contract might work to the great disadvantage of a weak party-suitor who ought to be allowed free access to courts of justice.959. While the employment period agreed upon was for two years commencing. Issue: Whether respondent violated the CBA in its refusal to grant its employees an across-the-board increase as a result of the passage of Wage Order No. a Memorandum of Agreement was forged between the parties wherein petitioner shall grant a salary increase to all regular and permanent employees Ten pesos per day increase effective August 1.400 for cashiering fees for the month of September. Issue: Did the RTC of Naga City err in denying the motion to dismiss filed by SMC alleging improper venue? Held: Exclusive venue stipulation embodied in a contract restricts or confines parties thereto when the suit relates to breach of the said contract.00 monthly. the stipulation designating exclusive venues should be strictly confined to the specific undertaking or agreement. 2005 Facts: Spouses Eugenia and Antonio Padua owned a 216. The assailed condition clearly transgresses the principle of mutuality of contracts. insisting that since it has been paying its workers the new minimum wage of P165.00) pesos per day beginning April 1. No Deed of Absolute Sale was executed to evidence the transaction. Valenzona thus filed before the RTC Manila a complaint against GF Equity for breach of contract with damages. But where the exclusivity clause does not make it necessarily all encompassing. The ultimate purpose of the mutuality principle is thus to nullify a contract containing a condition which makes its fulfillment or pretermination dependent exclusively upon the uncontrolled will of one of the contracting parties. 1997. CONCEPCION R. Held: Mutuality is one of the characteristics of a contract. petitioner demanded an across-the-board increase. thereby raising the daily minimum wage to P160. In the case at bar. The assailed stipulation being violative of the mutuality principle underlying Article 1308 of the Civil Code. Concepcion Ainza bought onehalf of an undivided portion of the property from her daughter.cashiering in SMC’s Sorsogon and Camarines Norte sales offices for which he was promised a separate fee.00. as they were already receiving salaries greater than the minimum wage fixed by the Order. Article XII of the CBA. m. 1998. It would be unjust.000. Valenzona demanded from GF Equity payment of compensation arising from the arbitrary and unilateral termination of his employment. Held: The employees are not entitled to the claimed salary increase. ARTURO VALENZONA G.40 sq. Ten pesos per day increase effective August 1.R.R. 2005 Facts: On January 27. fails to exhibit sufficient skill or competitive ability to coach the team. but not acrossthe-board. it cannot be made to comply with said Wage Order. NATIVIDAD A. 1998. by mandating a wage increase of five (P5. the contract incorporates in paragraph 3 the right of GF Equity to preterminate the contract. vs. OLAYON vs. to interpret Wage Order No. 1998. the last sentence of paragraph 3 of the contract carried the following condition: 3. Issue: Whether the questioned last sentence of paragraph 3 is violative of the principle of mutuality of contracts. the COACH. respectively. that petitioner SMC started paying respondent P11. JALECO and LILIA A. On March 10. but cash payment was received by the respondents. June 30. or even lack of basis of its opinion. GF Equity was given an unbridled prerogative to pre-terminate the contract irrespective of the soundness. Such interpretation of the Order is not sustained by its text. there is an increase necessarily resulting from raising the minimum wage level. a “double burden” cannot be imposed upon an employer except by clear provision of law. But it was only on December 1. ROVII-06 to mean that respondent should grant an across-the-board increase. Valenzona still acceded to the terms of the contract. upholding the validity of the assailed provision of the contract.400 per month for his cashiering services. Monasterio demanded P82. Valenzona was terminated as coach of the Alaska team.00) pesos per day beginning October 1. Respondent. No. The trial court. such that even those not related to the enforcement of the contract should be subject to the exclusive venue.000.00 per day. lot with an unfinished residential house Thereafter.00 even before the issuance of the Wage Order.00 and another increase of five (P5. The caveat notwithstanding. simply because they are not within the coverage of the Wage Order. fairness or reasonableness. refused the claim. its validity or performance or compliance of which cannot be left to the will of only one of the parties. June 30. Thereafter. the CORPORATION may terminate this contract. Eugenia and the latter’s husband. No. GF EQUITY. INC. 165420.00.

a registered subdivision developer. 154188 June 15. The verbal contract of sale between Eugenia and Concepcion did not violate the provisions of the Statute of Frauds. executed or partially consummated. Inc. two contracts identically denominated Revised Development and Management Agreement were entered into by respondent with the two successors-in-interest of FGSDC.To help finance the project. Eugenia. respondents caused the subdivision of the property into three portions and registered it in their names in violation of the restrictions annotated at the back of the title.000.R.000. No. written notices of default. Held: There was a perfected contract of sale between Eugenia and Concepcion.and ownership was transferred to Concepcion through physical delivery to Natividad Tuliao. represented by its then President.00. which applies only to an executory agreement. and. petitioner. entered into an Omnibus Loan and Security Agreement with respondent banks for a syndicated term loan in the aggregate principal amount of US$20M. 2005 Facts: Mondragon International Philippines.. and to be paid within a six-year period from the date of initial advance inclusive of a one year and two quarters grace period. in lieu thereof. as evidenced by the receipt. Petitioner. Since Article 1385 of the Civil Code expressly and clearly states that “rescission creates the obligation to return the things which were the object of the contract. Inc. together with their fruits. Held: Mutual restitution is required in cases involving rescission under Article 1191. involving several parcels of land owned by Laperal and FGSDC. the proceeds of the loan were to be released through advances evidenced by promissory notes to be executed by petitioner in favor of each lenderbank. the sale of the conjugal property by Eugenia without the consent of her husband is voidable. as in this case. that even as the Revised Agreements already provided for the non-surrender of the owner’s duplicate copies of the titles. Under the terms and conditions of the aforementioned Agreement and the Supplement. thereafter failed to make payments. COURT OF APPEALS. respondent undertook to convert at its own expense the land subject of the agreement into a first-class residential subdivision. When a verbal contract has been completed. predecessor-in-interest of Filipinas Golf and Country Club.000.00 by 1987 and for which she signed a receipt.R.. both Revised Agreements omitted the obligation of petitioners Laperal and FGCCI to make available to respondent Solid Homes. It appears. who accepted the offer and agreed to pay P100. However. petitioners served on respondent notices of rescission of the Revised Agreements with a demand to vacate the subject properties and yield possession thereof to them. which had regularly paid the monthly interests due on the promissory notes until October 1998. Under the agreement. the action to annul the same must be commenced within six years from the time the right of action accrued. 1988. June 21. 130913. the contract of sale between Eugenia and Concepcion being an oral contract. ASIAN BANK CORPORATION.Then. Consequently. in consideration of which respondent will get 45% of the lot titles of the saleable area in the entire project. INC. Then. Applying the clear language of the law and the consistent jurisprudence on the matter. The aforementioned Agreement was cancelled by the parties. Mondragon Securities Corporation and herein petitioner entered into a lease agreement with the Clark Development Corporation for the development of what is now known as the Mimosa Leisure Estate. therefore. he is now barred from questioning the validity of the sale between his wife and Concepcion. acceleration of payment and demand letters were sent by the lenders to the petitioner. admitted that Concepcion offered to buy 1/3 of the property who gave her small amounts over several years which totaled P100. the Court rules that rescission under Article 1191 in the present case. paid Eugenia the price of P100. Unlike the original agreement.” the Court finds no justification to sustain petitioners’ position that said Article 1385 does not apply to rescission under Article 1191. Petitioner moved for the dismissal of the complaint but was denied. Oliverio Laperal. however. respondent persisted in its request for the delivery thereof . who in turn. Inc. and the price with its interest. 2005 Facts: Filipinas Golf Sales and Development Corporation. Eugenia delivered the property to Concepcion.. Antonio failed to exercise his right to ask for the annulment within the prescribed period. However. vs. Issue: Whether the termination of the Revised Agreement and Addendum. carried with it the effect provided under Article 1385 of the New Civil Code. Thus. and UNITED COCONUT PLANTERS BANK G. Issue: Whether there was a valid contract of sale between Eugenia and Concepcion. The records show that Eugenia offered to sell a portion of the property to Concepcion. MONDRAGON LEISURE AND RESORTS CORPORATION vs. rights to the lot should be restored to private respondent or the same should be replaced by another acceptable lot. It is undisputed that the subject property was conjugal and sold by Eugenia in April 1987 or prior to the effectivity of the Family Code on August 3. hence. OLIVERIO LAPERAL& FILIPINAS GOLF & COUNTRY CLUB INC. Issue: Whether or not respondents have a cause of action against the petitioner? Held: Under the foregoing provisions of the . entered into a Development and Management Agreement with respondent Solid Homes. G. Inc. its enforceability will not be barred by the Statute of Frauds. Antonio claimed that his wife. No. respondents filed a complaint for the foreclosure of leasehold rights against petitioner. carries with it the corresponding obligation of restitution. It is binding unless annulled. because of the contractual breach committed by respondent solid homes. SOLID HOMES. FAR EAST BANK AND TRUST COMPANY. The contract of sale was consummated when both parties fully complied with their respective obligations. the owner’s duplicate copies of the titles covering the subject parcels of land.00 as consideration.As a consequence of the resolution by petitioners.

HONORABLE COURT OF APPEALS.856.Agreement. Timbang and Fernandina Galang to pay the balance of P45. As admitted by them. The four remedies are alternative. GIL AND FERNANDINA GALANG AND NATIONAL HOME MORTGAGE FINANCE CORPORATION. This. SPS. 2005 Facts: Gil and Fernandina Galang obtained a loan from Fortune Savings & Loan Association for P173. Las Piñas. petitioner may be validly declared in default for failure to pay the interest. The provision that applies in the case at bar is Article 1191. In the case at bar.000.614. several payments were made leaving a balance of P45. SOLEDAD C. INC. G. FELIPE AND LETICIA CANNU vs.R. ROMAGO subcontracted the project to BICC Construction. 000. 000. the intention of petitioners to renege on their obligation is utterly clear. Held: 1) Rescission may be had only for such breaches that are substantial and fundamental as to defeat the object of the parties in making the agreement.99. May 26.387. SPS.00 and to assume the balance of the mortgage obligations with the NHMFC and with CERF Realty. No. resolution of the Deed of Sale with Assumption of Mortgage. Whether or not the action for rescission is subsidiary. per instruction of respondent Fernandina Galang. The question of whether a breach of contract is substantial depends upon the attending circumstances and not merely on the percentage of the amount not paid. Adelina R. 130721. eighteen months before the respondent Fernandina Galang paid the outstanding balance of the mortgage loan with NHMFC. in this case the respondents. respondents could properly file an action for foreclosure of the leasehold rights to obtain payment for the amount demanded. a real estate mortgage was constituted on the said house and lot in favor of Fortune Savings & Loan Association. JOEPHIL BIEN. attorney-in-fact of respondents-spouses. A Deed of Sale with Assumption of Mortgage Obligation was made and entered into by and between spouses Fernandina and Gil Galang and spouses Leticia and Felipe Cannu over the house and lot. we find that written notices were sent to the petitioner by the respondents. CAC. it is the duty of the court to require the parties to surrender whatever they may have received from the other.00 to be substantial. The contract involved in the case before us is not one of those mentioned therein.65.As a consequence of the rescission or.778. indeed. To secure payment. Subsequently. 3) There is sufficient evidence showing that demands were made from petitioners to comply with their obligation. Of the P120. there was an outstanding balance due to BICC Construction from ROMAGO.00. in the span of three years from 1990 to 1993. Under Article 1201 of the Civil Code. 3) Whether or not respondents-spouses Galang demanded from petitioners a strict and/or faithful compliance of the Deed of Sale with Assumption of Mortgage. No. Timbang. Delfin Inciong. 139523. there was no formal assumption of the mortgage obligation with NHMFC because of the lack of approval by the NHMFC on account of petitioners’ non-submission of requirements in order to be considered as assignees/successors-ininterest over the property covered by the mortgage obligation. Mrs.R.657. we find petitioners’ failure to pay the remaining balance of P45. INC. 4. When the project was completed. an unregistered loose partnership composed of Soledad Cac. 2005 Facts: The National Power Corporation entered into an agreement with ROMAGO ELECTRIC CO. 800. The parties should be restored to their original situation.00 or in the alternative to vacate the property in question.. Thus. May 26. with the right of choice given to the lenders. constitutes another breach or violation of the Deed of Sale with Assumption of Mortgage. and the respondent-banks have four alternative remedies without prejudice to the application of the provisions on collaterals and any other steps or action which may be adopted by the majority lender. 800. As a consequence of default. 2) The petitioners were not religious in paying the amortization with the NHMFC.05.40. 000. but petitioners did not pay. RENATO CUNANAN and DELFIN INCIONG G. part of which was the former’s share in the CPA amounting to 70% of the NPC-ROMAGO contract or P175. Taken together with the fact that the last payment made was on 28 November 1991. Sometime in March 1993. she made her intentions clear with petitioner Leticia Cannu that she will rescind or annul the Deed of Sale with Assumption of Mortgage. the choice shall produce no effect except from the time it has been communicated. ROMAGO ELECTRIC CO. The subsidiary character of the action for rescission applies to contracts enumerated in Articles 1381 of the Civil Code. for the erection and installation of NPC’s 69 KV 3-Phase Transmission Lines for P2. Issues: 1) Whether or not the breach of the obligation is substantial. more accurately. their payments covered only thirty months. In the present case. for P1. Despite requests from Adelina R. Payment was nonetheless released to ROMAGO by virtue of a sworn affidavit executed that “there . 2) Whether or not there was substantial compliance with the obligation to pay the monthly amortization with NHMFC. wrote NPC to hold its payment to ROMAGO of the aforementioned CPA amounting to P250. On top of this. made constant follow-ups after the last payment made on 28 November 1991. due to the fact that full payment has not been paid and that the monthly amortizations with the NHMFC have not been fully updated. 00.. petitioners refused to do so.000. vs.545. Petitioner Leticia Cannu agreed to buy the property for P120. NHMFC purchased the mortgage loan of respondents-spouses from Fortune Savings & Loan Association for P173.00 to purchase a house and lot located at Pulang Lupa. Soledad Cac. The notices clearly indicate respondents’ choice of remedy: to accelerate all payments payable under the loan agreement It should be noted that the agreement also provides that the choice of remedy is without prejudice to the action on the collaterals. In early 1990. 4. Petitioners immediately took possession and occupied the house and lot. the unpaid amount shall earn default interest.00. Joephil Bien and Renato Cunanan.

There is no law requiring the presence of a counsel to validate a waiver.99. hearings were conducted to determine the amount of wage differentials due the eight petitioners. Together with said Manifestation is a Joint Affidavit in the local dialect. but in the NPC's “Plans and Specifications” which was expressly included as part of the “Contract Documents”. 23162 dated 03 October 1983. Held: 1. estoppel bars petitioners from challenging it. 2005 Facts: Spouses Danilo and Cristina Decena were the owners of a house and lot in Parañaque City. The petitioners and the respondents. the CPA is not found in the NPC-Romago contract. for the annulment of the sale/MOA.When BICC’s demands for payment were ignored by ROMAGO. Whether or not the final and executory judgment of the Supreme Court could be subject to compromise settlement.387. What is more. Issues: 1. executed a Memorandum of Agreement in which the former sold the property to the latter for P940. vs. relieve. March 31. recovery of possession and damages. We agree with the appellate court that the qualifying phrase “obligations and responsibilities” contained in the Romago-BICC subcontract was applicable only to the NPCRomago contract. In the present case. 1997 of petitioners. The petitioners alleged therein that. 2. BILLY ARNAIZ. 161003. No. Said Manifestation was also signed by the eight petitioners. May 6. Bulacan.712. they did not transfer the property to and in the names of the respondents as vendees because the first two checks drawn and issued by them in payment for the purchase price of the property were . the law must step in to annul such transaction. FELIPE O. thru Mrs. filed a Complaint against the respondents with the RTC Malolos.70 “in full payment of accounts including retention of various works at NPC-Isabela” under defendant’s Cash Disbursement Voucher No. 1999. The vendees forthwith took possession of the property. 2. Where there is clear proof that a waiver was wangled from an unsuspecting or a gullible person. DOMINGO SALARDA. vs. release any and all claims including contract price adjustment which private respondents may have against petitioner on the subcontract. authorized representative and husband of Soledad Cac. Bulacan. Circumstances also reveal that respondent has already complied with its obligation pursuant to the compromise agreement. Contrary to the petitioner’s asseverations that the CPA was not intended to be made applicable to the Romago-BICC subcontract. “there is no basis for including it. stating that the judgment award as computed had been complied with to the satisfaction of petitioners. it must be remembered that the petitioner and the private respondents expressly agreed what documents were going to be incorporated in the principal subcontract. solely because it was entered into after final judgment. The validity of the agreement is determined by compliance with the requisites and principles of contracts. SPOUSES PEDRO and VALERIA PIQUERO G. be construed as a release of the CPA. therefore. of the six petitioners attesting that they have no more collectible amount from respondent and if there is any.250. Rizalino Uy filed a Manifestation requesting that the cases be terminated and closed. petitioners failed to present any evidence to show that their consent had been vitiated. 2. REMY ARNAIZ. SPOUSES DANILO and CRISTINA DECENA. the partners. It appears that Mariano Cac. On May 17. Issues: 1) Whether or not the private respondents are entitled to the CPA accorded to the petitioner by NPC. There is no justification to disallow a compromise agreement. The presence or the absence of counsel when a waiver is executed does not determine its validity. they are abandoning and waiving the same. Having already benefited from the agreement. freely and intelligently.614. 2) Whether or not the particulars of petitioner’s cash disbursement voucher no. MAGBANUA. 2005 Facts: As a final consequence of the final and executory decision of the Supreme Court which affirmed with modification the decision of the NLRC. Together with the manifestation is a Joint Affidavit dated May 5. 1997. six of the eight petitioners filed a Manifestation requesting that the cases be considered closed and terminated as they are already satisfied of what they have received from respondent. It appears in the MOA that the petitioners obliged themselves to transfer the property to the respondents upon the execution of the MOA with the condition that if two of the postdated checks would be dishonored by the drawee bank. filed a complaint for collection of sum of money with damages.” Said CPA not being part of the subcontract price of P1.R.00 payable in six (6) installments via postdated checks. CARLOS DE LA CRUZ. and whether the consideration for it was credible and reasonable. On October 20. Said pleading expressly states that “…the CPA is not included in the computation. was paid the amount of P38. RIZALINO UY G. the latter would be obliged to reconvey the property to the petitioners. The test is whether it was executed voluntarily. JULIO CAHILIG and NICANOR LABUEN. attesting to the receipt of payment from respondent and waiving all other benefits due them in connection with their complaint. Held: 1. The petitioners filed a Motion for Issuance of Writ of Execution. 155736. Whether or not the petitioners’ affidavit waiving their awards in the labor case executed without the assistance of their counsel and labor arbiter is valid.R. the petitioners. ROLLY ARNAIZ. 23162 signed by private respondent’s authorized representative / agent acknowledging receipt of said amount did not extinguish. Soledad Cac as lone plaintiff. No. not by when it was entered into. the Spouses Pedro and Valeria Piquero. the release mentioned in the cash voucher cannot.” This is precisely because the petitioner believes that the private respondents are not entitled to the CPA. then residents of Malolos. Petitioners voluntarily entered into the compromise agreement.does not exist any lien or encumbrances against” the said NPC-ROMAGO contract. hence.

to construct a condominium complex for a total consideration of P35. 1989. However. 2004 Held: There was indeed no acceptance of the offer by Asset Builders.R. Asset Builders Corporation submitted a bid proposal secured by bid bonds valid for 60 days. the breach of the MOA upon the latter’s refusal to pay the first two installments in payment of the property as agreed upon. Held: MPC is liable for price escalation. as well as moral and exemplary damages suffered by the petitioners on account of the aforestated breach of contract of the respondents are merely incidental to the main cause of action. with good and sufficient securities. who were residents of Malolos. The action of the petitioners for the rescission of the MOA on account of the respondents’ breach thereof and the latter’s failure to return the premises subject of the complaint to the petitioners. The Instruction to Bidders prepared by Insular Life expressly required a formal acceptance and a period within which such acceptance was to be made known to the winner. the action should have been filed in the proper court where the property is located. HLC attempts to pass off material cost escalation as a form of damages suffered by it as a natural consequence of the delay in the payment of billings. the trial court acted conformably with Section 1(c).dishonored by the drawee bank. It informed Insular Life that it will not proceed with the project. 147614. 1989. There appears to be no provision. and are not independent or separate causes of action.L.R No. as well as the house constructed thereon occupied by the respondents. and turn over to the petitioners the possession of the real property. On December 15. in Parañaque City. G. on the other hand. 2004 Facts: Insular Life Insurance Company. WITHDRAWAL OF OFFER BEFORE ACCEPTANCE INSURANCE LIFE ASSURANCE COMPANY. The Construction CONTACTS ARE PERFECTED BY MERE CONSENT. 1989. No. JANCOM ENVIRONMENTAL CORPORATION GR No. Rule 4 of the Rules of Court. and were not replaced with cash despite demands therefor. Limited invited companies to participate in the bidding of the proposed Insular Life building. MARINA PROPERTIES CORPORATION. Issue: Whether or not venue was properly laid by the petitioners in the RTC of Malolos. The claim for damages for reasonable compensation for the respondents’ use and occupation of the property. However. January 30. conformably with Section 1. among others. The last stage is the consummation where they fulfill the terms agreed upon culminating in the extinguishment of the contract. but it was extended to October 31. 147465. 2002 Facts: A build-Operate-Transfer Contract for the waste-to energy project was signed between JANCOM and the Philippine Government. Under its proposal form. The BOT Contract was submitted to President Ramos for approval but was then too close to the end of . we find and so rule that Section 5(c). HLC argues that it is entitled to price escalation for both labor and material because MPC was delayed for paying its obligations. Facts: Marina Properties Corporation entered into a contract with H. hence. as plaintiffs in the court a quo. had only one cause of action against the respondents. Negotiation begins when the prospective contracting parties manifest their interest in the contract and ends at the moment of their agreement. February 5. Rule 16 of the Rules of Court when it ordered the dismissal of the complaint. ET AL. the contentious billing itself contains no claim for material cost escalation. 147410. Since the contract allows escalation only of the labor component. in the interim.L. Perfection occurs when they agree upon the essential elements thereof. namely. Asset Builders bound and obliged itself to enter into a contract with Insular Life within 10 days from the notice of the award. but only for the labor component. Rule 2 of the Rules of Court does not apply. EFFECTS OF PERFECTION OF CONTRACTS METROPOLITAN MANILA DEVELOPMENT AUTHORITY VS. The project was awarded to the Asset Builders and a notice to proceed with the construction was sent by Insular Life to the former. MPC. As such. This is so because the petitioners. perfection or consummation. The Construction Contract contains the provision that no cost escalation shall be allowed except on the labor component of the work. Neither did it execute any construction agreement. HLC instituted a case for sum of money. change orders and material price escalation. Carlos Construction. and the respondents’ eviction therefrom is a real action. There are three distinct stages of a contractpreparation or negotiation. the implication is that material cost escalations are barred. Since the petitioners. Asset Builders project. LIABILITY FOR PRICE ESCALATION FOR LABOR AND MATERIAL COST Issue: Whether or not there is a perfected contract between Insular Life and Asset Builders. either in the original or in the amended contract that would justify billing of increased cost of material. it is not entitled to price increases. Contract contains the provision that no cost escalation shall be allowed except on the labor component of the work. LTD. VS.58 million within a period of 365 days from receipt of notice to proceed. Issue: Whether or not MPC is liable for price escalation. STAGES OF CONTRACT. INC. CARLOS CONSTRUCTION. Inc. Such failure to comply with the condition imposed for the perfection of the contract resulted in the failure of the contract. Held: After due consideration of the foregoing. for costs of labor escalation. namely. hence. VS. avers that HLC was delayed in finishing its project. 1989 with a grace period until November 30. Bulacan. venue was improperly laid. January 29. H. The original completion date of the project was May 16. Bulacan. filed their complaint in the said RTC. ASSET BUILDERS CORPORATION G.

may be in keeping with good faith. Held: A penalty clause. Issue: Whether the court is correct in holding the borrowers liable for the penalty. the borrowers were liable for a 3% per month penalty (instead of 5%) and 10% of the total amount of the indebtedness for attorney’s fee.” Art. Art. Significantly. there was a concurrence of offer and acceptance with respect to the material details of the contract. expressly recognized by law. Issue: Whether or not the Deeds of Sale were valid and binding. with respect to the other. (Art.R. PENALTY CLAUSE LIGUTAN VS. a stipulated penalty. is an accessory undertaking to assume greater liability on the part of an obligor in case of breach of an obligation. the brothers filed a complaint for reconveyance. in addition to the principal loan. Sulit failed to pay the balance. however. SIMULATED CONTRACTS CRUZ VS. Although the Deed of Sale between the . At the auction sale. 1346 states that “an absolutely simulated contract is void. 1345 states that “simulation of a contract may be absolute or relative. In the case at bar. A relative stimulation. The asking-price for the land was P700.000 which Edilberto accepted as earnest money with the agreement that title would pass to Sulit on the payment of the balance. Capitalizing on the close relationship of Sanchez with the brothers. to the prejudice of the other party. 147465. No.” The Deeds of Sale were executed merely to facilitate the use of the property as collateral to secure a loan from a bank. The court held. public order or pubic policy binds the parties to their agreement. 000. when it does not prejudice a third person and is not intended for any purpose contrary to law. Issue: Whether or not there is a valid and binding contract between the Republic of the Philippines and JANCOM. It functions to strengthen the coercive force of the obligation and to provide for what could be the stipulated indemnity without the necessity of proof on the existence and on the measure of damages caused by the breach. On the same day.R. usage and law. Held: Simulation takes place when the parties do not really want the contract they have executed to produce the legal effects expressed by its wordings. as between the parties. There being a perfected contract. Sulit succeeded in having the brothers execute a document of sale in favor of Sanchez who would then obtain a bank loan in her name using the said land as collateral.his term that his term expired without him signing the contract. Under Articles 1305 of the Civil Code. In addition. good customs. Although the court may not at liberty ignore the freedom of the parties to agree on such terms and conditions as they see fit. With the change in administration came changes in policy and economic environment. Bancom was declared the highest bidder. according to their nature. 2002 Facts: Ligutan and dela Llana obtained a loan from Security Bank and Trust Co. 147788 March 19. 1315) It is a general principle of law that no one may be permitted to change hid mind or disavow and go back upon his own acts. Ligutan and dela Llana failed to settle the debt. but Sulit had only P25. “A contract is a meeting of the minds between two persons whereby one binds himself. MMDA caused the publication of an invitation to pre-qualify and submit proposals for solid waste management. not its perfection. No. to give something or to render some service. thereby giving rise to the perfection of the absence of President’s signature is untenable. He. COURT OF APPEALS G. MMDA cannot revoke or renounce the same without the consent of the other.” The former takes place when the parties conceal their true agreement” while Art. endorsed the same to incoming President Estrada. morals. Unknown to the brothers. 1315 of the Civil Code provides that a contract is perfected by mere consent. Sanchez executed another Deed of Absolute Sale in favor of Sulit. 2002 Facts: Norma Sulit was introduced by Candelaria Sanchez to Edilberto and Simplicio Cruz and offered to purchase the parcel of land owned by the Cruz brothers. From the moment of perfection. Consent. Civil Code). 1319. Held: There is a valid and binding contract between JANCOM and the Republic of the Philippines. Sulit also defaulted in her payment to the Bank and her mortgage was foreclosed. they agreed to pay 10% of the total amount due by way of attorney’s fees if the matter were indorsed to a lawyer for collection or if a suit were instituted to enforce payment. They executed a promissory note binding themselves jointly and severally to pay the sum borrowed with an interest of 15. among others. nevertheless may be equitably reduced by the courts if iniquitous or unconscionable or if the principal obligation has been partly or irregularly complied with. BANCOM FINANCE CORPORATION G. Sulit managed to obtain a loan from Bancom secured by a mortgage over the land. the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which. or to proceed contrary thereto. Sulit assumed all the obligations of Sanchez to the original owners of the land in a Special Agreement.89% per annum upon maturity and to pay a penalty of 5% every month on the outstanding principal and interest in case of default. on the other hand. is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract (Art. the contract itself provides that the signature of the President is necessary only for its effectivity. the signing and execution of the contract by the parties clearly show that. thus the BOT contract was not pursued and implemented. A complaint for recovery of the amount due was filed with the RTC. JANCOM appealed to the President for reconsideration and despite the pendency of the appeal. February 12. The reduction is justified by the facts that the borrowers were able to partly comply with their obligations. Because Sulit failed to pay the purchase price stipulated in the Special Agreement.

the vendors. Respondent’s liability. The execution of the MOA extinguished respondent’s obligation under the trust receipts. through respondent Ong. 1994. It is operated by Illuminada Cayco Olizon (Olizon). respondent Alfredo T. cause or principal conditions. BMC. 1994 to comply with its obligations under the trust receipts. it provided principal conditions. On April 1994. The second is when the old and the new obligations are incompatible on every point. However. and authorized their use in the ordinary course of business operations. including the red lauan lumber subject of trust receipts. December 26. then the vendors shall immediately execute the absolute deed of sale. The bank alleged that both respondents failed to pay their obligation under the trust receipt despite demand. Held: Petition is DENIED. which are incompatible with the trust agreement. NOVATION PILIPINAS BANK VS. The Management Committee took custody of all BMC’s assets and liabilities. 1981. 1991 and August 4. 1992. Mere failure to deliver the proceeds of the sale of the goods. Clearly. INC. Dark Lauan” sawn lumber. the remaining balance will be paid by the vendee to the vendors within the period of ninety (90) days from the execution of the deed. if sold. Resondents Felicidad Samson. or return the goods. May 9. . applied for a domestic commercial letter credit with petitioner Pilipinas Bank (the bank) to finance the purchase of “Air Dried. respondents filed a complaint against CAYCO and Olixzon for illegal dismissal. MOA novates the trust agreement. the latter was already under the control of the Management Committee created by SEC. Under the deed. The first is when novation has been stated and declared in unequivocal terms. On MARCH 9. shall forfeit the earnest money. TANONGON VS. WHERE THE VENDEE DOES NOT COMPLY WITH HIS OBLIGATION TO PAY THE BALANCE OF THE PURCHASE PRICE. 2002 Facts: Private respondents and petitioner entered into a Deed of Conditional Sale (the deed) of a parcel of land. Alberto Belbes and Luisito Venus were among the employees of CAYCO and/or Olizon. what is being punished by the law is the dishonesty and abuse of confidence in the handling of money or goods to the prejudice of another regardless of whether the latter is the owner. THE VENDOR’S OBLIGATION TO EXECUTE A DEED OF ABSOLUTE SALE WILL NOT ARISE. CONTRACTS Issue: Whether or not the MOA was a novation of the trust agreement between the parties. through its president. would only be civil in nature since the trust receipts were transformed into mere loan documents after the execution of the MOA. ONG 387 SCRA 97. 1992. Contrary to petitioner’s contention. if unsold. People. SAMSON 382 SCRA 130. there was actually no exchange of money. this Court held that there are two ways which could indicate the presence of novation. the bank filed a complaint charging respondents Ong and Leoncia Lim (as president and treasurer of BMC) with violation of the Trust Receipts Law (PD 115). On January 8. VS. Ong. it was the Management Committee which could settle BMC’s obligations. executed two (2) trust receipts providing that it shall turn over the proceeds of the goods to the bank. However. The test of incompatibility is whether or not the two obligations can stand together. but more importantly. Casiano Osin. On due dates. CONDITIONAL OBLIGATION. The bank approved the application and issued a Letter of Credit. BMC failed to comply with the trust receipt agreement. To secure payment of the amount. if not sold. If they cannot. the SEC rendered a Decision approving the Rehabilitation Plan of BMC as contained in the MOA and declaring it in a state of suspension of payments. August 8. On October 13. Moreover. without prior notice to the vendee. the vendee fails and/ or refuses to comply with this obligation. COURT OF APPEALS 349 SCRA 260. and if for no justifiable reason. It bears emphasis that when the petitioner bank made a demand upon a BMC on February 11. if any. On November 22. 2002 Facts: On April 1991. the MOA did not only reschedule BMC’s debts. The incompatibility must take place in any of the essential elements of the obligation. it filed with the Securities and Exchange Commission (SEC) a Petition for Rehabilitation and for a Declaration in a State of Suspension of Payments. BMC and respondent Ong defaulted in the payment of the obligations under the rescheduled payment scheme provided in the MOA. In Quinto vs. upon maturity on July 28. the failure of Sulit to take possession of the property sold to her was a clear badge of simulation that rendered the whole transaction void and without force and effect. they are incompatible and the latter obligation novates the first. Hence this Petition. 2002 Facts: Cayco Marine Service (CAYCO) is engaged in the business of hauling oil. BMC and a consortium of 14 of its creditor banks entered into a Memorandum of Agreement (MOA) rescheduling the payment of BMC’s existing debts. the SEC issued an order creating a Management Committee wherein the bank is represented. thereby producing the effect of extinguishing an obligation by another which substitutes the same. Baliwag Mahogany Corporation (BMC). On November 27. 1992. The Motion for Reconsideration was denied. such as its object. CORINTHIAN REALTY. The Court of Appeals renders its decision holding that the execution of the MOA constitutes novation which places petitioner bank in estoppel to insist on the original trust relation and constitutes a bar to the filing of any criminal information for violation of the trust receipts law. 1991.brothers and Sanchez stipulated a consideration. but as soon as the vendee complies with his obligations under the contract. constitutes violation of PD 115.

COURT OF APPEALS. 25659. Quezon City G. filed a third party claim before the labor arbiter. The CA correctly ruled that the act of Olizon was a “cavalier attempt to evade payment of the judgment debt. The Court of Appeals debunked the claim that the petitioner was a buyer in good faith on the ground that purchasers could not close their eyes to facts that should put reasonable persons on guard. National Capital Judicial Region. by mere motion. Presiding Judge of Regional Trial Court. ruling that the “the lifting of the writ of preliminary injunction does not ipso facto entitle defendant De Guzman to the issuance of a writ of possession over the property in question. 1997. and in consideration. PINEDA. Hence this Petition. after the notice of levy/sale on execution of personal property was issued. Held: Petition is DENIED. There is sufficient basis to affirm the CA finding that petitioner was a buyer in abs faith. 1997. On August 15. petitioner Doretea Tanongon. IDOLOR VS. CAYCO nad Olizon’s motor tanker was seized. 1997.During the auction sale. On June 24. it was reversed by the NLRC. . On June 25. however. On appeal. respondent-spouses De Guzman moved for the issuance of a writ of possession with the Regional Trial Court where the case for the annulment of the Certificate of Sale was pending. The labor arbiter dismissed the complaint for lack of merit. respondent instituted extrajudicial foreclosure proceedings against the real estate mortgage. SPOUSES GUMERSINDO DE GUZMAN and ILUMINADA DE GUZMAN and HON. These facts confirmed respondent’s suspicion that Olizon had intended to overcome the enforcement of the Writ of Execution. It only allows the defendant Sheriff to issue a final deed of sale and confirmation sale and the defendant De Guzman to consolidate the ownership/title over the subject property in his name. non-payment of holiday pay. Petitioner Dorotea Tanongon is not a purchaser in good faith and for value. because it may be dissipating its assets to defraud its creditors. Petitioner should have inquired whether Olizon had other unsettled obligations and encumbrances that could burden the subject property. PROPERTY ISSUANCE OF WRIT OF POSSESSION. The ownership over the subject property having been consolidated in their name. 1997. And the sale of the levied tanker was made only on July 29.” In a petition for certiorari before the Court of Appeals. January 31. 1997. 1997. having acquired the same from Olizon on July 29. not by petition. Idolor obtained a loan from respondent-spouses Gumersindo and Iluminada De Guzman secured by a real estate mortgage over a property covered by TCT No. petitioner bought the tanker barely ten days before it was levied upon on August 8. alleging that she was the owner of the subject motor tanker. the trial court denied the motion. Branch 220. Issue: Whether or not petitioner Dorotea Tanongon is a buyer in good faith and for value. the labor arbiter issued an order dismissing the third party claim for lack of merit. The records show that the sale was hastily concluded. 1997.”[7] Hence. 1997.” She obviously got word of the issuance of these antecedents. 1998. 2002 order of the trial court. petitioner filed a complaint for annulment of the Certificate of Sale with prayer for the issuance of a TRO and a writ of preliminary injunction. the NLRC Research and Investigation Unit submitted to the labor arbiter the judgment award for each respondent. a writ of execution was issued directing the NLRC sheriff to collect from CAYCO and Olizon the responding award due for each respondent On August 8. On October 15. may apply for a Writ of Possession in the same case for annulment of the Certificate of Sale of which he is a defendant. Purchaser in good faith or an innocent purchaser for value is one who buys properly and pays a full and fair price for it at the time of the purchase or before any notice of some other person’s claim on or interest in it. Any person engaged in business would be wary of buying from a company that is closing shop.R. 1997. 2002.underpayment of wages. REAL ESTATE MORTGAGE TERESITA V. No. it reversed and set aside the May 27.[5] On May 27. the NLRC reversed that of the labor arbite hereby lifting the levy and restrained execution. On June 25. to be sold at public auction on August 19. Issue: Whether or not the mortgage. the appellate court found that the trial court gravely abused its discretion in denying the motion for the issuance of the “writ of possession to the mortgagee or the winning bidder is a ministerial function of the court and that the pendency of an action questioning the validity of a mortgage cannot bar the issuance of the writ of possession after title to the property has been consolidated in the mortgagee. 1997. Upon default by petitioner in the payment of her obligation. respondents emerged as the highest bidder and were issued a Certificate of Sale. HON. On appeal. the Court of Appeals annulled the same on the ground of grave abuse of discretion. rest day pay and leave pay. JOSE G. the tanker and the necessary documents were immediately delivered to the new owner to the new owner. The RTC issued a writ of preliminary injunction. 161028. The writ of Execution was issued by the labor arbiter on July 24. 2005 Facts: Petitioner Teresita V.

strictly speaking. since possession becomes an absolute right of the purchaser as the confirmed owner. the landowner is given the option. the Court handed down the decision remanding to the trial court for it to determine the current market value of the apartment building on the lot. The trial court. and the bond required is no longer necessary. Pecson challenged the validity of the auction sale before the RTC of Quezon City. SPOUSES JUAN NUGUID AND ERLINDA T. the Nuguid spouses moved for delivery of possession of the lot and the apartment building. the court is expressly directed to issue the writ. either to appropriate the improvement as his own upon payment of the proper amount of indemnity or to sell the land to the possessor in good faith. Although respondent. and (3) extrajudicial foreclosure of a real estate mortgage under Sec. the lot was sold at public auction to Mamerto Nepomuceno. they still failed to take possession of the property through numerous legal maneuverings of the petitioner. 7 of Act 3135 as amended by Act 4118. (2) judicial foreclosure. the right of the purchaser to the possession of the foreclosed property becomes absolute. 151815. Under Article 448. a “judicial process”. NUGUID VS. On June 23. ruled that the Spouses Nuguid were to reimburse Pecson for his construction cost. by virtue of entry of judgment of the Court’s decision. No. Article 546 provides that a builder in good faith is entitled to full reimbursement for all the necessary and useful expenses incurred. it also gives him right of retention until full reimbursement is made. Pecson filed a Motion to Restore Possession and a Motion to Render Accounting. had intervened. February 23. not a party to the foreclosure suit. On the basis of this Court’s decision. The value so determined shall be forthwith paid by Spouses Juan and Erlinda Nuguid] to Pedro Pecson otherwise the petitioner shall be restored to the possession of the apartment building until payment of the required indemnity. Mere filing of an ex parte motion for the issuance of the writ of possession would suffice. In this case.R. As a result. it is not an ordinary suit filed in court. which upheld the spouses’ title but declared that the apartment building was not included in the auction sale. Upon the expiration of the redemption period. in the corresponding registration or cadastral proceeding in the case of a property with torrens title. 1993 until possession of the same was restored to him. Pecson filed a petition for review before this Court. praying respectively for restoration of his possession over the subject 256square meter commercial lot and for the spouses Nuguid to be directed to render an accounting under oath. or the prevention or redress of a wrong. was undertaken at the time when Pecson was still the owner of the lot. the apartment building was already in existence and occupied by tenants. 17 of Act 496. subject of this dispute. COURT OF APPEALS AND PEDRO P.Held: A writ of possession is an order whereby the sheriff is commanded to place a person in possession of a real or personal property.”[18] It is a non-litigious proceeding and summary in nature as well. Issue: Whether or not the petitioners are liable to pay rent over and above the current market value of the improvement and that such increased award of rentals by the RTC was reasonable and equitable. which affirmed the order of payment of construction costs but rendered the issue of possession moot on appeal. 1993. 3135 is not. by which one party “sues another for the enforcement or protection of a right. of the income derived from the subject four-door apartment from November 22.spouses have been declared as the highest bidder and despite having consolidated the title in their name. when they applied for a writ of execution . the rigid and technical application of the rules on legal fees may be relaxed in order to avoid manifest injustice to the respondent This rule is applicable in the present case. It may be issued under the following instances: (1) land registration proceedings under Sec. When the Nuguids became the uncontested owner of the lot. An ex-parte petition for issuance of possessory writ under Section 7 of Act No. Pecson owned a commercial lot on which he built a 4-door 2-storey apartment building. to which the present case falls. This was affirmed in toto by the Court of Appeals and thereafter by this Court. the purchaser in a foreclosure sale may apply for a writ of possession during the redemption period by filing for that purpose an ex parte motion under oath. HON. A simple ex parte application for the issuance of a writ of possession has become a litigious and protracted proceeding. the spouses Nuguid were entitled to immediate issuance of a writ of possession over the lot and improvements. the Nuguids became the uncontested owners of the 256-square meter commercial lot. As we earlier held. 2005 Facts: Pedro P. Held: It is not disputed that the construction of the 4-door 2-storey apartment. For failure to pay realty taxes. respondent-spouses acquired an absolute right over the property upon the failure of petitioner to exercise her right of redemption and upon the consolidation of the title in their name. provided the debtor is in possession of the mortgaged realty and no third person. As such. who in turn sold it to the spouses Juan and Erlinda Nuguid. The basis of this right to possession is the purchaser’s ownership of the property. Upon the filing of such motion and the approval of the corresponding bond. Under the provision cited above.directing the deputy sheriff to put the spouses Nuguid in possession of the subject property with all the improvements thereon and to eject all the occupants therein. since petitioners opted to appropriate the improvement for themselves as early as June 1993. the RTC issued a Writ of Possession. The RTC also directed Pecson to pay the same amount of monthly rentals to the Nuguids as paid by the tenants occupying the apartment units. On May 26. relying upon Article 546[1][7] of the Civil Code. Even if the same may be considered a judicial proceeding for the enforcement of one’s right of possession as purchaser in a foreclosure sale.Pecson then filed a special civil action for certiorari and prohibition with the Court of Appeals. by virtue of the Entry of Judgment. Relatedly. PECSON G. Pecson duly moved for reconsideration. 1995. Frustrated by this turn of events.

she has a legitimate claim thereto. The petitioners had reaped all the benefits from the improvement introduced by the respondent during said period. the property in question has been in her actual and physical enjoyment. not to respondent. They should account and pay for such benefits. the registered owners of the property. 7864. the CA affirmed in all other respects the ruling of the trial court. IMELDA B. 2005 Facts: The property subject of controversy is a 2. Accordingly. father and daughter respectively. The appellate court held that contrary to the ruling of the trial court.despite knowledge that the auction sale did not include the apartment building. MARIE INES BACONGA. OALIVAR. based on the current market value of the property. until they reimbursed the improver in full. The decision of the trial court is modified so as to order the cancellation of the owner’s duplicate copy of OCT No. The CA invoked the doctrine that a trial court does not acquire jurisdiction over a petition for the issuance of a new owner’s duplicate certificate of title if the original is in fact not lost. BACONGA. 151235. Cagayan de Oro City in 1981. they could not benefit from the lot’s improvement. It constitutes 3/4 of Lot 1436.R. the petitioners still insisted on dispossessing Pecson by filing for a Writ of Possession to cover both the lot and the building. 7864 issued to defendant . this resulted in a violation of respondent’s right of retention. respondent denied all the material allegations but alleged that Lot 1436 was actually sold sometime in 1947 by the petitioners themselves and their father. No. The latter subsequently discovered that what she had bought was registered land. the other two being Lots 1441 and 1485. sold a portion of it to respondent. Worse. the valid and subsisting duplicate certificate of OCT No. 13 of Republic Act No. Respondent is clearly entitled to payment by virtue of his right of retention over the said improvement. 7864 covering Lot 1436 had been lost but upon petition with the trial court in 1977 by Erlinda B. one of the 3 lots covered by OCT No. 7864. Thus. BACONGA. 7864 was the one issued to Erlinda. Lots 1485 and 1441 having been sold in 1949 to Galo Sabanal and Pablo Dagbay respectively. Clearly. REBECCA B. The owner’s duplicate copy of OCT No. Petitioners further alleged that the newly issued owner’s duplicate certificate of OCT to respondent was prejudicial to their previously issued title which is still in existence. Petitioners further alleged that unknown to them. they prayed among others that they be declared as the rightful owners of the property in question and that the duplicate certificate of OCT in their possession be deemed valid and subsisting. Given the circumstances of the instant case where the builder in good faith has been clearly denied his right of retention for almost half a decade. and as such. more or less. Pacursa. the owner’s duplicate copy of OCT obtained by defendant as the one valid. After due trial and consideration of the documentary and testimonial evidence adduced by both parties. Herein petitioners alleged that they are the possessors and owners of Lot 1436 which they inherited from the late Juan and Ines. considering that respondent had failed to comply with the mandatory jurisdictional requirements of law for the reconstitution of title under Sec. PACURSA. the trial court granted the petition. The sale was purportedly covered by a Deed of Definite Sale. The Regional Trial Court Decision was modified by the CA on appeal by petitioners. Nonetheless. SIEGFREDO BACONGA. Despite the Court’s recognition of Pecson’s right of ownership over the apartment building. They acknowledge that Lot 1436 was the only remaining lot covered by OCT No. Said OCT was registered in the names of Juan and Ines Panganiban. without paying any amount to the latter as reimbursement for his construction costs and expenses. We need not belabor now the appellate court’s recognition of herein respondent’s entitlement to rentals from the date of the determination of the current market value until its full payment. PACALDO. ANGELINA N. ERNESTO P. MELANIE BACONGA. alleging that the copy issued to Erlinda was lost in the fire that razed Lapasan. Cagayan de Oro City. AMY B. G. namely: ERLINDA B.025-square meter portion of a lot denominated as Lot 1436. HEIRS OF JUAN PANGANIBAN & INES PANGANIBAN. LI. Mauricio Baconga. Salcedo then came into ownership. respondent fraudulently filed a petition for issuance of the owner’s copy of said title. 26. including the critical holding that respondent was the owner of the subject property. we find that the increased award of rentals by the RTC was reasonable and equitable. the trial court rendered a decision against petitioners and in favor of respondent which declared defendant as the true and real owner of the lot in question. EVELYN BACONGA. July 28. to respondent. The Notice of Adverse Claim alleged in part that Erlinda is one of the lawful heirs of Juan and Ines.025 square meters. one of the heirs of Ines and a petitioner herein. the Register of Deeds of Misamis Oriental issued an owner’s duplicate certificate of the OCT Erlinda. GEMMA BACONGA. BIHAG. In her answer to the amended complaint. OFELIA B. 7864. and ANITA FUENTES VS. It was only 4 years later that they finally paid its full value to the respondent. DAYRIT. petitioners took advantage of the situation to benefit from the highly valued. and thatthe owner’s duplicate copy of Original Certificate of Title No. IMELDA B. a certain Cristobal Salcedo asserted ownership over Lot 1436 and believing that it was unregistered. The petition was granted and the Register of Deeds of Misamis Oriental issued the second owner’s duplicate certificate of OCT to respondent which contained an annotation of a Notice of Adverse Claim filed by Erlinda. From then on. four-unit apartment building by collecting rentals thereon. Unable to annotate the deed of sale at the back of OCT No. before they paid for the cost of the apartment building. Respondent further alleged that the complaint was barred by the principles of estoppel and laches by virtue of the sales executed by petitioners themselves and their father. income-yielding. 7864 null and void same being obtained by plaintiffs when they were not owners anymore of Lot 1436. possession and enjoyment of the property in question and sold a portion of Lot 1436 with an area of 2. PACALDO. situated at Kauswagan.

1974. 259) [2] and Lot 612 (TCT No. The defense of laches is an equitable one and does not concern itself with the character of the defendant’s title but only with whether or not by reason of plaintiff’s long inaction or inexcusable neglect. Lots 545 and 2348 (TCT No. Ma. 143606. v. Sofia C. and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant. All the four (4) elements of laches prescribed by this Court in the case of Go Chi Gun. Irene sold Lot 612 to Greta Tinga . it was Salcedo. No. petitioners’ argument that laches is not applicable to them has no merit. Danilo D. Per Section 46 of the Land Registration Act. 219). both the lower court and the appellate court found that contrary to respondent’s claim of possession. Held: The resolution of the foregoing issues hinges on the question of What appears on the face of the title is controlling in questions of ownership since the certificate of title is an absolute and indefeasible evidence of ownership of the property in favor of the person whose name appears therein. 2005 Facts: Spouses Macario and Irene P. Which owner’s duplicate certificate of title is valid and subsisting. Lot 15-C (TCT No. 1979. MARIANO. because to allow him to do so would be inequitable and unjust to defendant. Jose M. Relucio Four months later. Petitioners’ ownership of the property having been established. In our jurisdiction. 1962). Co Cho. et al. it is negligence or omission to assert a right within a reasonable time. TESTATE ESTATE OF IRENE P.S. On December 1. SIA VS. Macario died and the surviving heirs. Since the owner’s duplicate copy of OCT No. Mariano. 7864 earlier issued to Erlinda is still in existence.R. warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. It was only 45 years from the time Salcedo took possession of the property that petitioners made an attempt to claim it as their own. MARIANO (Helen S. respondent’s predecessor-in-interest who had been in actual possession of the property. to wit: (1) conduct on the part of the defendant. for an unreasonable and unexplained length of time. These premises considered. The registered owners of OCT No. Given the circumstances in the case at bar. Ma. 1964). the reconstituted title is void and the court rendering the decision has not acquired jurisdiction over the petition for issuance of a new title. RUBEN S. Mariano. We rule instead that the successors-in-interest of Juan and Ines are the legal owners of the subject property. On June 7. registered their adverse claim to respondent’s title. Irene executed a Deed of Absolute Sale covering the six parcels of land in favor of Raul Santos. Court of Appeals that if a certificate of title has not been lost but is in fact in the possession of another person. the complainant having had knowledge or notice. This Court had already ruled in Serra Serra v. of the defendant’s conduct and having been afforded an opportunity to institute a suit. 7864 to be still valid for all intents and purposes. HEIRS OF JOSE P. Irene married Rolando S. it was error on the part of the trial court to rule that respondent was the owner of the subject property and for the CA to have affirmed such holding. the one in petitioners’ possession or the one issued to respondent. the Court rules in the negative. (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.00. to do that which by exercising due diligence could or should have been done earlier.000.S. Petitioners are no longer entitled to recover possession of the property by virtue of the equitable defense of laches. In this case. the lower court did not acquire jurisdiction over respondent’s petition for reconstitution of title. or the suit is not held to be barred. June 29. 2. Lot 15-B (TCT No. Petitioners declared the property for tax purposes. Jose and Erlinda. giving rise to the situation of which complaint is made for which the complaint seeks a remedy. he should be barred from asserting his claim at all. 3. On December 9. Mariano). Who between petitioners and respondent is the rightful owner of the property in dispute. 1972. The duplicate certificate of title subsequently issued to respondent is therefore void and of no effect. were issued new titles in their names. and ERLINDA MARIANOVILLANUEVA G. 7864 on the face of the valid and subsisting duplicate certificate of title are still Juan and Ines. Rolando’s first cousin. spouse Irene and children. Leonor S. and filed the instant case all in 1992. Catalino and Claverias v. et al. the application of the equitable defense of laches is more than justified. 1963). This rule taken in conjunction with the indefeasibility of a Torrens title leads to the conclusion that the rightful owners of the property in dispute are petitioners. (2) delay in asserting the complainant’s rights. the question now is whether they are entitled to its possession. they did nothing to assert their right of ownership and possession over the subject property. for a total consideration of P150. or of one under whom he claims.Angelina Dayrit and declaring the owner’s duplicate copy of OCT No. These actuations of petitioners point to the fact that for forty-five (45) years. Salcedo was the owner and the one in possession of the land until 1978 when respondent became the possessor thereof based from the ocular inspection by the lower court. namely petitioners herein. Mariano. By laches is meant: …the failure or neglect. The CA correctly ruled that the duplicate certificate of title in petitioners’ possession is valid and subsisting. On this point. no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession. Mariano. Mariano during their lifetime owned the following six parcels of land covered by five titles: Lot 15-A (TCT No.S. Gamponia. petitioners’ predecessors in interest.[42] and reiterated in the cases of Mejia de Lucas v. Thus. Quingco are present in the case at bar. it is an enshrined rule that even a registered owner of property may be barred from recovering possession of property by virtue of laches. Miguel v. Whether petitioners’ right to recover the property is barred by laches assuming they are the rightful owners thereof as they claim. Issues: 1.

R-570 from petitioner Erlinda Mariano. On appeal. Nos. 1) the donation was void.R. Issue: Whether or not the deed of donation inter vivos executed on August 25. Lot 545 and Lot 2348 as the lots subject of the case. 1987. and damages. there is no longer any actual case or controversy between the parties insofar as the issue of redemption of Lot 15-C is concerned.R. On June 19. had expressly declared that respondents have the right to redeem the lot covered by TCT No. Three weeks later. 1988. Possession and Damages against the respondent alleging that. Meanwhile. ETC. Jose and Erlinda filed a complaint against Rolando. Previously. it specifically mentioned only Lot 15-A. 1996. such acts of dominion demonstrate that the two Deeds of Absolute Sale executed by Irene in favor of Raul are simulated or fictitious contracts. to execute and deliver to Erlinda Mariano a duly accomplished certificate of redemption of said property. and 3) she merely tolerated respondent’s possession of the land as well as the construction of his house thereon. widow of Sixto Calicdan. this fact and the fact that petitioner is not a party to the case. Held: Three undisputed facts are prominent in the present petition which have great bearing in the disposition thereof: (1) petitioner is neither a party before the trial court nor in the CA. 1989 he was substituted by his surviving heirs. Pangasinan formerly owned by Sixto to respondent Silverio Cendana who immediately entered into possession of the land. 1992. A Motion for Reconsideration was filed by Raul. R-570 before Branch 22 of the Regional Trial Court of Camarines Sur. the reconveyance of the properties. 94617 and 95281. Sometime in 1949. On December 9. wherein herein respondent Erlinda Villanueva and petitioner Sia are parties. On October 2. In its decision. TCT issued in the name of Raul Santos and Amado Sanao are ordered cancelled. Lot 15-B. Irene executed another Deed of Absolute Salein favor of Raul covering Lots 545 and 2348. A POSSESSOR IN THE CONCEPT OF OWNER SOLEDAD CALICDAN. Lot 15-C was levied upon in favor of Francisco Bautista in Civil Case No. the CA held that: only four lots are subject of the case. In his answer with Motion to dismiss. the Court of Appeals reversed the trial court’s decision and declared that the donation was valid and that the petitioner lost her ownership of the property by prescription. militate against the propriety of declaring in the assailed Resolution that respondents have the right to redeem Lot 15-C. Cendana constructed a two-storey residential house thereon where he resided until his death in 1998. 2004 Facts: On August 25. filed a Complaint for Recovery of Ownership. Irene continued to possess. 1947 was void. despite the execution of the two Deeds of Absolute Sale in favor of Raul. On June 26. 1)the land was donated to him by Fermina in 1947. Finally. on November 24. Thus. Issue: Whether or not the Court of Appeals erred in having declared in its resolution that plaintiffsappellants have the right to redeem Lot 15-C from herein petitioner. This is settled by the decision of this Court which orders the Provincial Sheriff of Camarines Sur to accept payment of redemption money for the property levied in Civil Case No. Heirs of Jose and the Testate Estate of Irene filed a complaint for annulment of title and deed with damages. On March 10.155080. Fermina. plaintiffs-appellants are declared to have the right to redeem Lot 15-C from Ruben Sia. while the Supplemental Motion to Restore Possession and Administration to Plaintiffs-Appellants was granted. (2) Lot 15-C is not a subject matter of the case. peacefully. 2) the respondent took advantage of her incompetence in acquiring the land. Thus. Mariano filed a Motion for Partial Reconsideration/Clarification. the trial court ordered Silverio Cendana to vacate the land and surrender ownersip and possession of the same to petitioner. when Rolando died. G. through her legal guardian. respondent contended that. SILVERIO CENDANA. Such Civil Case was consolidated for joint trial with former Civil Case and a Joint Judgment was rendered by the trial court dismissing the complaints and counterclaims and upholding the validity of the Deeds of Absolute Sale executed by Irene in favor of Raul. daughter of Fermina. The Heirs of Jose and Erlinda M. and Motion for Reconsideration filed separately by Raul Santos and as well as the Motion for Reconsideration/Clarification filed by Heirs of Jose P. Lot 15-A was transferred to Amado Sanao under a Deed of Sale with Real Estate Mortgage. the assailed Resolution. MODE OF ACQUIRING OWNERSIP. 1988. When Jose died on December 2. February 5. 2) he had been publicly. petitioner Soledad. likewise. and 3) the complaint was barred by prior judgment in the special proceedings. docketed as Civil Case No. Finally.de los Reyes. on August 9. he was substituted by his surviving heirs. In its decision dated November 12. The Definite Deed of Sale and writ of execution issued in favor of Ruben Sia are nullified. and (3) our decision in G. who died intestate. 1947. No. continuously and adversely in possession of the land for a period of 45 years. 1990. They sought the annulment of the Deed of Absolute Sale on grounds of forgery and simulated sale. it was sold at public auction to Ruben Sia. Irene died. Mariano and Erlinda were denied. ETC. the three remaining lots were transferred in the name of Raul. exercise management and control over the subject properties. There is no question that Lot 15-C is not one of the parcels of land involved in the appeal before the CA. PRESCRIPTION. 1986. 1982. Guadalupe Castillo. Held: Prescription is another mode of acquiring ownersip and other real right over immovable . Accordingly. On appeal. 17745 which refers to Lot 15-C. VS. executed a deed of donation intervivos whereby she conveyed a 750-square meter of unregistered land located in Mangaldan. 881506. Irene constructed a building on Lots 545 and 2348. Raul and the Register of Deeds of Naga City before the RTC of Naga City for annulment of sale with damages.

SALES SALE BY A CO-OWNER. Bandoy). In determining whether a donation is one of mortis causa. the transfer should be revocable by the transferor at will. there is just title when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights. and 3. June 5.131953.) That the transfer should be void if the transferor should survive the transferee. namely. Issue: Whether or not the donations were inter vivos or mortis causa. and the transferee gets only what corresponds to his grantor’s share in the partition of the property owned in common. CO-OWNERSHIP AGUIRRE ET. uninterrupted and adverse. In the present case. the following characteristics must be taken into account: 1. ET AL.) That before his death. 2. thereby making the buyer a co-owner of the property.property. 122249. Petitioners. The disputed donations are donations mortis causa. a sale of the entire property by one co-owner without the consent of the other co-owner is NOT NULL AND VOID. 2004 Facts: Leocadio Medrano and his first wife Emilia owned a piece of land. ( Mainit v. VS. January 29. then living. and could transmit his ownership.) It conveys no title or ownership to the transferee before the death of the transferor. Nicolas Cabatingan. and another portion to Tiburcio Balitaan. Four other deeds of donation were subsequently executed by Conchita Cabatingan bestowing parcels of land upon Estela Maglasang. petitioners sued them seeking the nullity of the documents and partition. nevertheless. the right of disposition is not transferred to the donee while the donor is still alive. Since a co-owner is entitled to sell his undivided share. the nature of the donations as mortis causa is confirmed by the fact that the donations do not contain any clear provision that intends to pass propriety rights to donee prior to Cabatingan’s dearh. the present donation shall be deemed automatically rescinded and of no further force and effect. as it demands that the possession be in good faith and with just title and there is no evidence on record to prove respondent’s good faith. but the revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed. will become effective upon the death of the donor. Conchita Cabatingan died.R. his heirs learned that he had executed an Affidavit of Transfer of Real Property in which he falsely stated that he was only heirs of Leocadio. to wit: this Court has held that the possession of a coowner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact beneficial to all of them. DONATION MORTIS CAUSA OR INTER VIVOS MA. should manage and administer the said property. 2002 Facts: Conchita Cabatingan executed in favor of her brother. No. but the grantor was not the owner or could not transmit any right. Acts which may be considered adverse to strangers may not be considered adverse in so far as co-owners are . The proper action in cases like this is not for the nullification of the sale or for the recovery of possession of the things owned in common from the third person who substituted the co-owner or co-owners who alienated their shares. Held: A sale by a co-owner of the whole property as his will affect only his own share but not those of the other co-owners who did not consent to the sale ( Art. So. These deeds of donation contain similar provisions. COURT OF APPEALS. only the rights of the co-ownerseller are transferred. For purposes of prescription. however. After the death of Emilia. was able to sell the property to Maria Bacong a portion of the property. No.R. Tiburcio also contended that he is an innocent purchaser for value. Leocadio married his second wife Miguela. G. provided. that the possession should be in the concept of an owner. or what amounts to the same thing. ESTELA MAGLASANG VS. peaceful. It is concerned with lapse of time in the manner and uner conditions laid down by law. It clearly provides that the sale or other disposition affects only the seller’s share pro indiviso. NCC). Maria Bacong later sold the said portion to Rosendo Bacong. It is clear therefore that the deed of sale executed by Sixto in favor of Tiburcio Balitaan is valid conveyance only insofar as the share of Sixto in the co-ownership is concerned. 493. a child of the first marriage. Issue: Whether there was a valid sale made by a co-owner ( Sixto) without the consent of the other co-owners. Held: In a donation mortis causa. public. After Sixto died. all his heirs agreed that Sixto Medrano. all heirs of Leocadio who were affected by the sale demanded reconveyance of the portions sold by Sixto but the 3 vendees refused. that the transferor should retain the ownership and control of the property while alive. Cabatingan did not intend to transfer the ownership of the properties to the donee during her lifetime. As we have enunciated in Salvador v. Nicolas Cabatingan and Merly Cabatingan. THE HEIRS OF CORAZON CABATINGAN G. CA (1995). a “Deed of Conditional Donation Inter Vivos for House and Lot”. Sixto. but the DIVISION of the common property as if it continued to remain in the possession of the co-owners who possessed and administered it. ad nutum. his adverse possession of the land for more than 45 years aptly shows he has met the requirements for extraordinary acquisitive prescription to set in. The vendees contended that they acquired the property under the valid deed of sale and petitioners ‘cause of action was bared by laches and prescription. Later. that in the event that the donee should die before the donor. In this case at bar. which state that the donation. The good failth of the possessor consists in the reasonable belief that the person from whom he received the thing was the owner thereof. When Leocadio died. AL.

the respondents failed to present competent evidence that the acts of Sixto adversely and clearly repudiate the existing co-ownership among the heirs of Leocadio Medrano. the latter having the option either to demand full payment of total price or to rescind the contract. The agreed price of the eight titled properties was P 1. (2) should the petitioner fail to comply with any of the terms of contract. (b) providing for a partial payment of P300. No. and the payment of land taxes. There were several transactions between them to settle the amount due. which must not be later than March 30. On the other hand.concerned. The Contract to Buy is actually a contract to sell whereby the vendor reserves ownership of the property and is not to pass until full payment. Almeda (vendee) and Avelino Cariño (vendor). Anama was then advised to vacate the property despite his opposition to the rescission of the Contract to Buy. Such payment is a positive suspensive condition. he failed to pay the third installment when it became due. and (3) that the evidence thereon must be clear and convincing. cannot serve as proof of exclusive ownership. Since ownership of the subject property was not pass to petitioner until fill payment of the purchase price. in whose favor TCT was issued. and (d) obliging Cariño to pay Almeda the sum of . one covering eight titled properties.800. and the other. Thus. Later. Issue: Whether the rescission of the Contract to Buy was valid. Cancellation of TCT. IMPOSTION OF 12% ANNUAL INTEREST RATE ALMEDA VS.743. with the balance earning twelve percent (12%) interest per annum. COURT OF APPEALS. (2) that such positive acts of repudiation have been known to the cestui que trust or the other co-owners. if it is not borne out by clear and convincing evidence that he exercised such acts of possession which unequivocally constituted an ouster or deprivation of the rights of the other coowners.00. 128609. who mortgaged it to Philippine Savings Bank and later was foreclosed. PSBank was entitled to rescind the Contract to Buy. fruits or profits from the property. the following elements must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cetui que trust or the other co-owners.000. No. GR. Respondent’s reliance on the tax declaration in the name of Sixto Medrano is unworthy of credit since we have held on several occasions that tax declarations by themselves do not conclusively prove title to land. January 29. Cariño and Almeda executed an amendment to their agreements to sell (a) extending the deadline for the production of the titles to the untitled properties.00 for the titled properties. Douglas and the PSBank entered into an agreement denominated as a Contract to Buy whereby the bank agreed to sell to Douglas the said land with all the improvements thereon. 152143. Anama was able to pay the first and second installments. The contract provides the Bank two options in the event that petitioner fails to pay any of the installments. twenty percent (20%) of which was to be paid upon the signing and execution of the agreement and the balance to be paid in four equal semi-annual installments. 2003 Facts: Ponciano L. Anama then filed a case for Declaration of Nullity of Deed of Sale. his failure to pay on the date stipulated. But later. or in the extension granted. and the balance. Further.208. in order that a co-owner’s possession may be deemed adverse to the cetui que trust or the other co-owners. however. The bank could validly sell the property to the spouses Co. it also provides that (1) Anama shall apply with the bank for a loan.00. Tested against these guidelines. January 13. GR. The bank sold the property to spouses Co. 1982. entered into two agreements to sell. all amounts paid are forfeited in favor of PSBank. This was either (1) to rescind the contract outright and forfeit all amounts paid by the petitioner. and the balance plus interests to be paid in semi-annual installments starting form the date of issuance of the respective certificates of title to the lots involved. the failure of which is not a breach but simply an event that prevents the obligation of the vendor to convey title from acquiring binding force. the erection of buildings and fences and planting of trees thereon. fifteen percent (15%) of which was to be paid upon the signing and execution of the agreement. After petitioner repeatedly failed to pay the third installment. the Bank chose to exercise the first option. the proceeds of which answer for the balance of the purchase price. the right of the bank to sell the property being unequivocal. prevented the obligation for the Bank to pass title of the property to Anama. The Contract to Buy provides that Anama shall purchase the property of a certain amount and shall pay to the PSBank. the purchase price of the three untitled properties was P1. and forfeited the payments made by Anama which were applied as rentals of the use of the property. and Specific Performance with Damages. (c) requiring Cariño to render an accounting of the proceeds of the sugar cane crop on the properties subject of the sale up to the 1982 harvest season. bearing a twelve percent (12%) annual interest from the signing thereof. 2004 Facts: The property was previously owned by Douglas Anama’s parents. the bank executed an Affidavit of Cancellation rescinding the contract. beginning six (6) months from the signing thereof. predecessors-in-interest of petitioners and respondents. ET AL. Held: Since Anama failed to pay the third installment. respondents failed to show that the Affidavit executed by Sixto to the effect that he is the sole owner of the subject property was known or made known to the other co-heirs of Leocadio Medrano. or (2) to demand the satisfaction of the contract and insist on the full payment of the total price. his receipts of rentals. A mere silent possession by a coowner. RESCISION OF “CONTRACT TO BUY” ANAMA VS.580. three untitled properties. CARIÑO ET AL. to be paid as follows: fifteen percent (15%) of the purchase price plus interest to be paid upon the issuance of titles to the lots.

47 and the interest thereon. JR. shall be the payment of the interest agreed upon. Cariño made demands for the full and final payment of the balance due him in the amount of P477. this interim period by deemed to be by then an equivalent to a forbearance of credit.”(2) “Deed of Resale. and nominal damages and the costs of the suit. Inc. reflecting their true agreement. The latter denied that the agreement between them was a loan but a Deed of Sale. In view of the conclusions we have reached. fifteen percent (15%) of all the amounts due. in accordance with our decision in Eastern Shipping Lines. 3537 SCRA 199. moral. including his children by his first wife. and (3)”Agreement. Rafael Medalla executed a Deed of Absolute Sale purporting to sell his share in the inheritance to Gorgonio Hilado. Almeda asked Cariño for the execution of a Deed of Absolute Sale over the eight titled properties although they had not been fully paid. 1604. The latter executed an undertaking to pay Cariño the balance of the purchase price. Respondent assisted by his brother petitioner Miguel entered into a Deed of Absolute Sale with brothers Edardo Balguma and Leopoldo .” Anita Macainan (his aunt) tried to redeem the first property that was sold from Hilado but she failed.(3) when after the expiration of the right to repurchase another instrument extending the period of the redemption or granting a new period is executed. alleging that the first deed of sale was in fact an equitable mortgage to secure a loan from Hilado. Held: Under Art. After his death. 2002 Facts: Respondent Braulio Katipunan Jr. and in the absence of stipulation. Lourdes&Teresita surnamed Medalla) succeeded to her inheritance. litigation expenses. the owner of the property may prove that the contract is really a loan with a mortgage that the document does not express the true intent and agreement of the parties. January 30.”(1) “ Memorandum of Agreement. 1602 in relation to Art. it is unnecessary to pass upon Hilado’s contention that respondents are bound by the terms of the “Deed of Sale” in question as the law between the parties.000.589. so she filed a suit against Rafael and Hilado for Legal redemption before the RTC. Rafael filed a cross-claim against Hilado.(5) when the vendor binds himself to pay the taxes on the thing sold. ELEMENTS.00 a month in case of the failure of the former to produce the certificates of title to the untitled properties by June 30. and the debtor incurs in delay. his estate was divided among his heirs. Respondents herein are the heirs of Rafael Medalla. The contracts to sell of the parties stipulated that the balance of the purchase price shall earn an interest rate of 12% per annum upon signing of the contract. her children ( Rafael.CONTRACT WHERE CONSENT IS VITIATED IS VOIDABLE. Over the next 2 years. the legal interest. as provided for under Central Bank Circular No. CONTRACTS OF SALE. which were occupied by lessees. Held: This contention is without merit. Later. Despite demand letters sent to Almeda. Cariño prayed that Almeda be ordered to pay him the balance. respondents’ extrajudicial demand for payment of the remaining balance plus interest having begun on said date. the indemnity for damages. NCC provides: If the obligation consists in the payment of a sum of money. when the judgment of the court awarding the sum of money becomes final and executory. (2) when the vendor remains in possession as lessee or otherwise. 2002 Facts: Gorgonio Macainan was the owner of the several properties. 1982. KATIPUNAN VS. Rosita & Berbonio) As Berbonio had predeceased Gorgonio.(6) in any other case where it may be fairly inferred that theh real intention of the parties is that the presence of any of these circumstances is sufficient for a contract to be presumed as an equitable mortgage. the balance was not paid. a 12% interest per annum shall also be imposed from such finality until satisfaction thereof. Deeds of Sale for two of the three untitled lots were also executed.” whereby Hilado resold to Medalla two of the 5 hectares a lot. KATIPUNAN. The RTC found the claim of Cariño to be well founded and gave judgment in his favor.ANNULMENT AND RESTITUTION OF THE PROPERTY AND ITS FRUITS TO THE RESPONDENT IS JUST AND PROPER. is the registered owner of a lot and a five-door apartment constructed thereon. 2209. 1993. 416. EQUITABLE MORTGAGE HILADO VS. he executed another”Deed of Absolute Sale in favor of Hilado over his share in another inherited property. Art. The interest in this case should be allowed to run from March 9. vs. February 15.(1) when the price of a sale…. Cariño granted the request and executed the Deed of Sale over the eight titled lots in favor of Almeda. there being no stipulation to contrary. Hilado and Medalla executed 3 more contracts concerning the sold properties. the applicable rate is 6% since the case does not involve a loan or forbearance of money. It will suffice to say that even if a document appears on its face to be a sale. So. Such stipulations have the force of law between the contracting parties and should be complied with in good faith. The Almedas claim that the imposition of a 12% annual interest is erroneous because it is contrary to law and jurisprudence. In addition. Issue: Whether or not the contention of Almeda is meritorious. NCC. including interests as attorney’s fees. Issue: Whether the Deed of Absolute Sale executed by Medalla and Hilado is in fact an equitable mortgage. a contract purporting to be an absolute sale is presumed to be an equitable mortgage--.is unusually inadequate. Hence. which is six per cent per annum. Court of Appeals.(4) when the purchaser retains for himself a part of the purchase price. the legal interests thereon from demand to full payment.P10. Cariño filed before the RTC a complaint against Almeda. HEIRS OF RAFAEL MEDALLA 377 SCRA 257. According to them. exemplary. The CA subsequently affirmed the lower court’s decision. a contract ( Anita.

C. He further alleged that he did not receive the consideration stated in the contract. He claimed that there was evident bad faith and conspiracy in taking advantage of his ignorance. ( co-petitioners). So. there were negotiations for the purchase of the property that was held between them. Atty. property whereby Pineda sold the property to the spouse Duque for 1. Pineda and spouses Duque executed an “Agreement to Sell” over the Q. no contract was perfected (Art. This authority must be in writing. the two parties executed an “Agreement to Exchange Real Properties. property. the title was registered in the names of the Balguma brothers and they started collecting rentals thereon. property.C.1332 and 1390 of NCC and Sec.2002 Facts: Nelson and Mercedez Bañez are the original owners of a parcel of land together with its improvements located at White Plains. since the Deed of Absolute Sale between respondent and Balguma brothers is voidable and hereby annulled. he signed the Deed of Absolute Sale.Q.SPECIAL POWER OF ATTORNEY PINEDA VS. The presence of any of these vices renders the contract voidable. Duque confirmed that at the time he purchased the property from Pineda.. Pineda could not validly sell the subject property to Duque. Later. the decision of RTC was reversed and it was held that Braulio was incompetent. Hence. The contract entered into by the parties being voidable contract. But when the case was elevated. The RTC dismissed the complaint because Braulio failed to prove his cause of action since he admitted that he obtained loans from the Balgumas. and Pineda was authorized to occupy the Q. he being only a third grader. concerning the incompetence of a party in contract. 1398 provides that when the defect of the contract consists in the incapacity of one of the parties. A contract where one of the parties is incapable of giving consent or where consent is vitiated by mistake. or intimidation is not void ab initio but only voidable and is binding upon the parties unless annulled proper court action.000 on February 1983. SALE BY AN AGENT. Balguma and Inocencio Valdez ( one of the petitioners) convinced him to work abroad. then the restitution of the property and its fruits to respondent is just and proper. the latter had no special power of attorney to sell the property. Through insidious words and machinations. 2) Pineda to pay an earnest money of $ 12.” In the agreement. COURT OF APPEALS 367 SCRA 222.C. undue influence. Later. The latter were interested in the property so the Bañezes did not insist on the return of said property. In his testimony. Pursuant to the agreement. As the consent of the real owner of the property was not obtained. 1330 of NCC. the elements of a contract of a sale are consent. but the latter failed to clear the mortgages over her California property. they agreed to: 1) exchange their respective properties. except when he has been benefited by the things or price received by him. represented by their lawyer-father involving the subject property for a consideration of P187.C. February 6. has very low I. Pineda paid the earnest money of $12. and he acknowledged selling the property and stopped collecting the rentals. 2.C. A contract of sale is born from the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. fraud. illiterate and has a slow comprehension. It was agreed also that both should undertake to clear the mortgages over their respective properties.000. which document turned out to be a Deed of Absolute Sale. intimidation. and fraud. Property) while Alejandria Pineda is the owner of a house located at Los Angeles. This meeting of minds speaks of the intent of the parties in entering the contract respecting the subject matter and the consideration thereof. Thus. A special power of attorney is necessary to enter into any contract by which the ownership of an immovable is transmitted or acquired for a valuable consideration. Thus. The record shows that pursuant to the agreement to sell. and price in money or its equivalent.00. Q. 1318 of the Civil Code) LAND TITLES AND DEEDS JURISDICTION . Jr. there were payments that occupying their Q. the incapacitated person is not obliged to make any restitution. So. Held: The Supreme Court found the petition devoid of merit. property. a special power of attorney is essential.000.Balguma. was correctly annulled on appeal. The Bañez were allowed to occupy or lease to a tenant the California property.(Q. The effect of annulment is to restore the parties to the status quo ante insofar as legally and equitably possible---this much is dictated by Art. consent may be vitiated by any of the following: mistake. they made him sign a document purportedly a contract of employment. and 3) to consummate the exchange of properties not later than June 1983. violence. contending that his brother Miguel. Rule 92 of the Rules of Court.C. object. otherwise the sale shall be void. Braulio filed a complaint for annulment of the Deed of Absolute Sale. Under Art. The CA based its decision on Arts. Without an authority in writing. The Civil Code provides that in a sale of a parcel of land or any interest therein made through an agent. but the same failed which resulted in the Bañezes’ demanding for the Duques to vacate the property and later filed a case before the court. Issue: Whether the Duques validly acquired the Q. California (California Property). any sale in favor of Duque is void. Held: Pineda’s sale of the property to Duques was not authorized by the real owners of the land Bañez. unknown to the Bañezes. There was a vitiated consent on the part of the respondent as he signed the Deed of Absolute Sale without the remotest idea of what it was and received no consideration thereof.6 M. Issue: Whether there was a valid contract of sale between the parties.

tax declarations or receipts are not adequate proofs of ownership. Issue: Whether or not jurisdiction over the subject matter lies with the DARAB or with the Metropolitan Trial Court. This prompted CDC to file a complaint for Unlawful Detainer against the petitioners before the Metropolitan Trial Court (MeTC). Held: For the DARAB to have jurisdiction over the case. It is well settled that the use of forged instrument or prejudiced testimonials during trial is not an extrinsic fraud. or from presenting all of his case to the court. 128392 April 29. 128254. 2005 available notwithstanding the indefeasibility of the Torrens Title. What is sought is the transfer of the property or its title. which has been wrongfully or erroneously registered in another person’s name. it should be stressed that extrinsic fraud pertains to an act committed outside of the trial.R. March 15. Rexlon then filed with the Court of Appeals a petition for annulment of the decision of the trial court on the ground that David allegedly employed fraud and deception in securing the replacement owner’s duplicate copies. January 16.R. The alleged fraud in this case was perpetrated during the trial. 128412. it is the Department of Agrarian Reform Adjudication Board (DARAB) that has jurisdiction over the case. adverse and public possession of the land in the concept of owners since time immemorial. Reconveyance does not set aside or re-subject to review the findings of fact of the Bureau of Lands. COURT OF APPEALS G. it is the MeTC that has jurisdiction over the subject matter there being no proof of tenancy relationship. China Banking Corporation (CBC). They merely showed tax declarations. because such evidence does not preclude the participation of any party in the proceedings. Hence. Inc. it does not bar the adverse party from rebutting or opposing the use of such evidence. As against a transfer certificate of title. petition granted by the court. Facts: The heirs and their father. INC. The petitioners refused to pay and vacate the premises despite demands to settle their obligations and notice to vacate were served upon them. heir’s tenant Miguel Dahilig had been consistently tending the land since 1947 and was the one who planted the various crops and trees on the lot. but to the manner in which it was produced so that there is not a fair submission of the controversy. Held: Extrinsic fraud contemplates a situation where a litigant commits acts outside the trial of the case. 2002 Facts: Respondent Alex David was the registered owner of two parcel of land. the effect of which prevents a party from having a trial. The farm was under the administration of Beata and Isabel Dator who took over its management after Petra Dator died.R. The petitioners maintained that since the land was classified as agricultural as evidenced by a Tax Declaration Certificate. COURT OF APPEALS G. 2) Whether or not the heirs have been in open and continuous possession of the disputed lot. Private respondents filed an action for reconveyance against petitioner heirs. (Rexlon) entered into an agreement with respondent for the purchase of the two parcels of land as evidenced by an “absolute deed of sale. continuous. and Isabel Dator obtained free patent in favor of the heirs by means of fraud and misrepresentation. Facts: Casimiro Development Corporation (CDC) alleged that it was the owner of a parcel of registered land since it acquired the same from the previous owner. It must be noted that the petitioners failed to adequately prove ownership of the land.” Respondent filed with the Regional Trial Court a petition for the issuance of the owner’s duplicate copies which were allegedly lost. Issue: Whether or not such misrepresentation or fraud of respondent David can be characterized as an extrinsic fraud as to merit the annulment of the trial court’s decision. Juan remained in possession of his share until his death. Juan Dator executed a Deed of Extrajudicial Partition of the share of Pomposa in the Tanza estate with the eastern portion thereof going to Juan and the western half to the children. the decree of registration is respected as incontrovertible. there must be a tenancy relationship between the parties. 2) The heirs convincingly established their open and continuous occupation of the entire Tanza estate. They alleged that they were the owners in fee simple and they were in possession of the land. 2004 Held: 1) The registered owner may still be compelled to reconvey the registered property to its true owner. Thus. Petitioner Rexlon Realty Group. One of the indispensable elements in order for a tenancy agreement to take hold over a dispute is that the parties are the landowner and the tenant or agricultural lessee. While a perjured testimony may prevent a fair and just determination of a case. Furthermore. and the title to the lot was issued to them after faithful compliance with the requirements for the issuance of a free patent. No. After the sale CDC advised the petitioners that it was the new owner and that they had failed to pay the rentals due to it and to its predecessorsin-interest. No. Issues: 1) Whether or not the reconveyance is still PRESCRIPTION DOES NOT RUN AGAINST THE . Isabel Dator applied for a free patent over the entire Tanza estate in behalf of the heirs thus it was awarded. No.MATEO vs. EXTRINSIC FRAUD REXLON REALTY GROUP. It should be noted that the land is covered by a Transfer Certificate of Title in the name of CDC’s predecessor-in-interest CBC. VS. COURT OF APPEALS G. a real contest. RECONVEYANCE HEIRS OF POMPOSA SALUDARES VS. or where it operates upon matters pertaining to the judgment itself. to its rightful or legal owner or to the one with a better right. Petitioners alleged that they and their predecessors in interest had been in actual.

2) Whether or not occupation will ripen into ownership. as it remained part of the patrimonial property of the state which is inalienable and not disposable. and the other documents submitted by petitioner in support of his application. Issue: Who between the petitioner and respondent has a better claim to the land? Held: The execution of public documents. no matter how long. Castorio Alvarico filed a civil case for reconveyance against Amelita.R. and notorious possession of the land. Issues: 1) Whether or not prescription runs against the state. The trial court granted the application. inalienable and not subject to registration. Held: 1) Prescription does not run against the state. serves as notice to the whole world. The reason for the rule is to establish the true identity of the land to ensure that it does not overlap a parcel of land or portion thereof already covered by a previous land registration. AND NOTORIOUS POSSESSION OF THE LAND DEL ROSARIO VS. as in the REDEMPTION PERIOD OF THE PROPERTY . the Republic of the Philippines filed with the Intermediate Appellate Court an action to declare the proceedings in the LRC case null and void and to cancel the original certificate of title and to confirm the subject land as part of the public domain. no oppositor appeared except for the provincial prosecutor who appeared on behalf of the Solicitor General in representation of the Republic of the Philippines. He averred that the donations to him had the effect of withdrawing the earlier transfer to Amelita. No. It follows that he cannot recover the property because he has not shown that he is the rightful owner thereof. All persons must take notice and no one can plead ignorance of its registration. petitioner has no standing at all to question the validity of Amelita’s title. She added that the donation was void because of lack of approval from the Bureau of Lands and that she had validly acquired the land as Fermina’s rightful heir. 2) Unless public land is shown to have been reclassified or alienated to a private person by the state it remains part of the inalienable public domain. case of Affidavits of Adjudication is entitled to the presumption of regularity. cannot ripen into ownership and be registered as a title. A Torrens title. A TORRENS TITLE. The lengthy occupation of the disputed land by petitioners cannot be counted in their favor. he took possession of the same. 1967. Quezon. 2) A mere casual cultivation of portions of the land by the claimant does not constitute possession under claim of ownership for him. 2002 Facts: On June 15. and notorious possession of the land. On the other hand. petitioners raised the special defense of indefeasibility of title and res judicata. OPEN. During the initial hearing. 2) Whether or not petitioners had been in open. continuous. The Republic claimed that the subject land was classified as timberland. SOLA G. Almost eighteen (18) years later. hence. 129682. Quezon promulgated a decision confirming petitioner’s title to properties located in San Narciso. CONTINUOUS. Occupation thereof in the concept of owner. March 21. 138953. He claimed that Fermina donated the land to him and immediately thereafter.STATE PAGKATIPUNAN VS. Amelita maintained that the donation to petitioner was void because Fermina was no longer the owner of the property when it was allegedly donated to petitioner. Respondent appealed for failure of petitioner to submit in evidence the original tracing cloth plan and to establish that he and his predecessors in interest had been in open. Clearly then. REPUBLIC G. June 6. and to forestall the possibility that it will be overlapped by a subsequent registration. Possession is not exclusive and notorious so as to give rise to a presumptive grant from the state. the Court of First Instance of Gumaca. The possession of the land however long the period thereof may have extended never confers title thereto upon the possessor because the Statute of Limitations with regard to public land does not operate against the state unless the occupant can prove possession and occupation of the same under the claim of ownership for the required number of years. duties and conditions imposed which was approved by the Bureau of Lands. 148338. who agreed to assume all the obligations. continuous. June 6. 2002 Facts: Petitioner filed an application for registration of a parcel of land. ONCE REGISTERED. hence convincing evidence is required to assail and controvert them. the original tracing cloth plan. No. the property having been transferred earlier to her.R. SERVES AS NOTICE TO THE WHOLE WORLD ALVARICO VS.R. once registered. 2002 Facts: Fermina Lopez executed a Deed of SelfAdjudication and Transfer of Rights over lot 5 in favor of Amelita Sola. No. The clerk of court transmitted to the Land Registration Authority (LRA) the duplicate copy of petitioner’s application for registration. Held: 1) The submission in evidence of the original tracing cloth plan duly approved by the Bureau of Lands in cases for application of original registration of land is mandatory requirement. COURT OF APPEALS G. Issues: 1) Whether or not the submission in evidence of the original tracing cloth plan is a mandatory requirement.

Repeal of laws should be made clear and express. is not repealed by a subsequent statute. Petitioners contended that Section 4 of R. 123850. unless the intent to repeal or alter is manifest although the terms of the general law are broad enough to include the cases embraced in the special law. provided for a particular case or class of cases. October 18. 138842.D. 2000 Facts: Petitioners and respondent Romeo Nazareno are three of the five children of spouses Maximino and Aurea Nazareno. the law governing the subdivision of the Tondo Foreshore Lands from which the subject property emanated does not apply to the attendant facts in this case. 464. who during their . They asserted that the repurchase by the petitioner of the lot redounded to their benefit as co-hei and now as co-owners. No. No. 1597 is within the purview of redemption by a coowner which inures to the benefit of all the other coowners of the property. 464 which was applicable. petitioner-spouses’ predecessor in interest.A. 1597 and Section 78 of P.RECAÑA VS. provisions and applications. Petitioner’s repurchase of the subject lot within the five-year redemption period of Section 4 of R. general in its terms. Private respondents. the other children and heirs of Macarion Arboleda filed for declaration of co-ownership and partition against petitioner. 464. Section 4 of R. 1597 or Section 78 of P.A. The latter is a law or decree of general application.A. Instead they instead that it was Section 78 of P.R. Issue: Which of the two laws.A. COURT OF APPEALS G. COURT OF APPEALS G.D. The city treasurer of Manila auctioned the lot at a public auction sale due to tax delinquency. Spouses Cirilo and Miguela Montejo sold the property to petitioner-spouses who refunded the amount equivalent to the delinquent taxes and other expenses entailed. 1597.D.R. The land was covered by an original certificate in the name of Arboleda. The failure to add a specific repealing clause indicates that the intent was not to repeal any existing law unless there is an irreconcilable or repugnancy between Section 4 of R. should apply in so far as the redemption period of the subject property is concerned? Held: A special statute. 2001 Facts: Lot 6 of Block 2 of the Tondo Foreshore Land of the Land Tenure Administration was sold to Macario Arboleda. The former law is of special and exclusive application to lots acquired from the Tondo Foreshore Land only. January 5. INNOCENT PURCHASER FOR VALUE NAZARENO VS.

Petitioners on the other hand for the loss of items left with it for safekeeping by filed a third party complaint against Romeo and its guests. and that Natividad was only to hold the said lots in Issue: Whether or not a hotel may evade liability trust for her siblings. which had passed on to third persons. Catering national who comes to the Philippines for to the public. discovered a deed o f sale selling petitioner McLaughlin found out that some of the money and Natividad six lots including Lot-3b occupied by jewelry he deposited were missing. 2003. Jr. After the death box cannot be opened unless the key of the guest of Maximino.” former as set forth in Articles 1998 to 2001[37] is suppressed or diminished shall be void. The rule is Art. Article 2003 is controlling. hotelkeepers are bound to provide business.R. The safety deposit turn does not allow such duty to the public to be . No. Maximino. Marketing will have to be upheld for Ros-Alva We find no reason to reverse their common Marketing is an innocent purchaser for value conclusion. Lainez proceedings and he was thereafter appointed and Payam are employees of Tropicana who is administrator of his father’s estate. The twin duty McLaughlin deposited cash and jewelry to the constitutes the essence of the business.marriage had acquired properties. Notably. 2005 case. The hotel business like the common carrier’s Facts: MAURICE McLaughlin is an Australian business is imbued with public interest. Tan admitted that she stole recovery of possession which was favored by the McLaughlin’s keys. 13-b. both the trial court and the Held: The sale of Lots 13 and 14 to Ros-Alva appellate court found the same to be null and void. Romeo charged with the custody of the keys. During his trips he stays in Tropicana. Romeo in turn filed an annulment of the note to cover the amount of the stolen money and sales on the ground of lack of consideration in that jewelry. 13 and 14 2003 of the Civil Code which voids such waivers. question appropriate for resolution in this petition. February 17. Held: The issue of whether the “Undertaking For The Use of Safety Deposit Box” executed by Issue: Whether or not a person dealing with a McLoughlin is tainted with nullity presents a legal registered land may rely on the certificate of title. Thereafter. Sr. Lainez and Romeo but which was sold to petitioner Payam admitted that they assisted Tan to open his Maximino. their persons and belongings. The law in safety deposit box of the Hotel. Any stipulation between the hotel-keeper in no way oblige him to go behind the certificate to and the guest whereby the responsibility of the determine the condition of the property. McLaughlin wanted to make the the transfer was merely to avoid inheritance tax management liable. filed an action for deposit box. Jr. The hotel-keeper cannot free himself settled that “every person dealing with registered from responsibility by posting notices to the effect land may safely rely on the correctness of the that he is not liable for the articles brought by the certificate of title issued therefore and the law will guest. a not only lodging for hotel guests and security to hotel recommended to him by Brunhilda Tan. et al vs. Tan executed a promissory court.. TORTS AND DAMAGES Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to YHT Realty Corp. 126780. Court of Appeals apply to situations such as that presented in this G. Romeo filed for intestate and that of the management are present. thus: which relied on the title of Natividad. by having these guests execute written his wife Eliza seeking the annulment of the waivers holding the establishment or its employees transfer to Romeo of Lot 3 which is granted by the free from blame for such loss in light of Article trial court except as to Lots 3.

Reyes to leave. the damage. allegedly sustained request for the latter to leave the party was made bodily injuries and the vehicle suffered extensive such that they nearly kissed each other. Ms. which was then correct in observing that –Considering the being repaired by the Quezon City government. the coordinator of the party or injuring another. there was no need for the police to take guests for their signature. Thus his father Fulgencio Dacara Senior request was meant to be heard by him only and (Fulgencio) filed a calim for damages against the there could have been no intention on her part to Local Government. Article 20 pertains to damages leave the party as was instructed but created a arising from a violation of law which does not scene. is to set certain Facts: Robeto Reyes known as “Amay Bisaya” saw standards which must be observed not only in the in a hotel lobby his friend Dr. right to ask Mr. the lower court was at Matahimik St. When Article 19 is violated. Dacarra (sic). Reyes which the wrongdoer must be responsible. good custom. 2005 to be emulated. manner. a. Lim was perfectly within her hotel and Ruby Lim for damages. He sued the obtain herein as Ms. In the Lim of asking Reyes to leave was in an exemplary absence of any proof of motive on the part of Ms. the testimony of Mr. Reyes did not 21 of the Civil Code. Article 21refers to Issue: Whether or not Ruby Lim acted abusively in acts contra bonus mores and has the following asking Roberto Reyes. Reyes and expose him to Any damage suffered by Reyes must be borne by ridicule and shame.R. intent to injure. 154259. (3) for the sole intent of prejudicing However. an asked him to leave since it is an exclusive party action for damages is proper under Articles 20 or and he is not one of those invited. Lim having been in the hotel business for twenty Quezon City Government vs. Lim to humiliate Mr.k. had plaintiff simply left the party as prepared forms imposed by hotel keepers on requested. The G. Jr. No. 150304 June 15. Thus. 2005 object of this article. Violeta Filart who he exercise of one’s rights but also in the performance said to have invite him the party of the hotel’s of one’s duties. (2) but leave the party where he was not invited by the which is contrary to morals. public celebrant thereof thereby becomes liable under order. Dacara years wherein being polite and discreet are virtues G R No.negated or diluted by any contrary stipulation in other guests aware of what transpired between so-called “undertakings” that ordinarily appear in them. February 28. therefore. (2) which is exercised basket of Filart to the penthuse where the party is. Article 19 involves a legal wrong committed for Nikko Hotel Manila Garden & Ruby Lim vs..” to elements: (1) There is an act which is legal. So Reyes carried the fruit There is a legal right or duty.’s car turned turtle upon hitting a she acted to the contrary does not inspire belief rammed into a pile of earth/street diggings found and is indeed incredible. thereby he was escorted out. Ruby Lim. and (3) it is done with Articles 19 and 21 of the Civil Code. in bad faith. “Amay Bisaya.a. Its elements are the following: (1) outgoing manager. him out. would shout at him from a very close distance. The LGU contended that the cause embarrassment to him. Quezon City. or public policy. Absent such not act abusively in asking Roberto Reyes in intention and as the Court observed the conduct of leaving the party to which he is not invited. since the LGU have out up reaction to the request that must have made the warning signs. It was plaintiff’s fault is with the driver. there can be no damages to be awarded. Under the above mentioned Held: The Supreme Court ruled that Ruby Lim did articles the act must be intentional. Reyes that Facts: Dacara Jr. it is highly unlikely that she him alone. The trial court ruled that the LGU . As closeness of defendant Lim to plaintiff when the a result.

they must secure and the like. It is apparent from the Decisions of instrumentalities have failed to show the modicum the trial and the appellate courts. property. and defendant as the proximate cause of the injury that they must have nevertheless been indifferent sustained by the claimant. there was no credible proof that would in the so-called ‘premier city. the be imposed by way of example or correction for Decisions are conspicuously silent with respect to the public good. well-settled is the rule that moral construction areas with adequate precautionary damages cannot be awarded -. much less. In the present case. digging in a side street which caused the accident Thus. Public policy requires such imposition to Decision of the trial court. Gross negligence means such utter psychological -. social humiliation. Issue: Whether or not the Quezon City Mere allegations do not suffice. wounded feelings. in the absence of proof of physical suffering. 144773. A finding of gross negligence can be he suffered a deep cut on his left arm when the car discerned from the Decisions of both the CA and overturned after hitting a pile of earth that had the trial court.’ Article 2229 of the justify an award of moral damages based on Civil Code provides that exemplary damages may Article 2219(2) of the Civil Code.whether in a civilor measures. mental anguish. besmirched maintenance of roads and streets.’s bare assertion of physical injury. The AZNAR BROTHERS REALTY COMPANY VS. (3) a wrongful act or omission of the probable consequences of their carelessness. Thus. award of moral damages must be solidly anchored LAURENCIO AYING on a definite showing that respondent actually G. a court must be cases of quasi-delicts. No. wounded feelings. The award of these damages is the claim of respondent that his moral sufferings meant to be a deterrent to socially deleterious were due to the negligence of petitioners. or similar injury. We quote from the RTC Decision: been left in the open without any warning device “Sad to state that the City Government through its whatsoever.whether physical mental. It must be testimony of respondent’s four witnesses.is liable. want of care as to raise a presumption that the (2) a culpable act or omission factually persons at fault must have been conscious of the established. moral shock. care expected of them other evidence (such as a medical certificate or (sic) by the constituents of this City. the Complaint a reckless disregard for the safety of persons or alleged that respondent’s son Fulgencio Jr. damges due to the injuries suffered by Dacara Jr. a criminal case. The actions. Moreover. however. and (4) the award of (or worse) to the danger of injury to the person or damages predicated on any of the cases stated in property of others. serious anxiety. It is even proof of medical expenses) was presented to prove more deplorable that it was a case of a street Fulgencio Jr. The son testified that instant case. fright. or negligence. Such a circumstance obtains in the sustained physical injuries. Article 2231 of the Civil Code mandates that in Held: To award moral damages. experienced emotional and mental sufferings. they must be Government is liable for moral and exemplary substantiated by clear and convincing proof. makes emphasized that local governments and their no mention of any statement regarding moral employees should be responsible not only for the suffering. which summarizes the suppress wanton acts of an offender. exemplary damages may be satisfied with proof of the following requisites: (1) recovered if the defendant acted with gross an injury -. social humiliation safety of the public. May 16. SUCCESSION besmirched reputation.R. that no of responsibility.clearly sustained by the claimant. but also for the reputation. such as mental anguish. 2005 . The negligence must amount to Article 2219.

Lapu-Lapu City. Emiliano. The him until and unless he repudiates the trust. 1456. are now entitled to the mistaken belief that all the heirs have executed the reconveyance of their share in the land in dispute. Thus. After her death the Torrens title over the property. the person obtaining it is. ABELLAR considered a trustee of an implied trust for the G. ALIPIO ABAJA and NOEL fraud. whether the will of Abada has an prescribe in ten years and not otherwise.Facts: The disputed property is Lot No. Abellar was appointed period. opposition is that decedent left no will or if there is prescription may supervene even if the trustee a will it was executed not in consonance with the does not repudiate the relationship. Undoubtedly. the probate of the will of prescription ownership over property entrusted to Paula Toray was also filed with the court. The RTC- line of decisions of this Court.325 square meters located at it is now well-settled that an action for Dapdap. all surnamed Aying. an area of 34. If property is acquired through mistake or petitioner. Roberta and Fausta. three siblings. Thereafter. However. subject document. having brought their action within the acquired the entire parcel of land with the prescriptive period. Thus. oppositors in the will of Abada nand Toray are applies to express trusts and resulting implied their nephews and nieces. No. should be applied. The RTC ruled implied or constructive trust must perforce only on . namely: made with preterition of any of the compulsory Juan. Simeon. BELINDA CAPONONG-NOBLE. As discussed above. An action for reconveyance based on an administratix of Toray’s property. illustrates this rule. law.R. Emiliano shares of the heirs who executed the subject and Simen filed a case for the ejectment of the document. The rule that a trustee cannot acquire by Alipio Abada. imposed the obligation upon Issue: Whether or not respondents’ cause of action petitioner to act as a trustee for the benefit of is imprescriptible respondent heirs of Emiliano and Simeon Aying Held: The facts on record show that petitioner who. and of very recent Kabankalan further held that the failure of the . 147145. 2005 benefit of the person from whom the property Facts: This is a case of the probate of the will of comes. what the extra-judicial partition. the Roberta. Roberta. Belinda Caponong-Noble was assigned as the repudiation of said trust is not a condition administratix of the estate of Abada by the trial precedent to the running of the prescriptive court. namely. 4399 with vintage at that. stating that a partition Crisanta Maloloy-on’s eight children. heirs shall not be rescinded. A long attestation clause as required by law. lost during Real Estate with Deed of Absolute Sale is not being the war. Bernabe. Celedonio. The siblings extra-judicially sold the lot rescinded. ABADA. Necessarily. suffice it to say that the Extra-Judicial Partition of The certificate of title was. the trial court is correct that the provision of law applicable to this case is TESTATE ESTATE OF THE LATE ALIPIO Article 1456 of the Civil Code which states: ART. the Cadastral Court issued a Decision petitioner’s argument that the provision of Article directing the issuance of a decree in the name of 1104 of the Civil Code. its validity had been upheld but however. Francisco. of the Civil Code. however. After the partition the was conveyed to petitioner was ownership over the lot was sold. January 31. by force of law. Crisanta Maloloy-on reconveyance based on an implied or constructive petitioned for the issuance of a cadastral decree in trust prescribes in ten years from the issuance of her favor over said parcel of land. 29 years after. Article 1456 present occupants. Thereafter. With regard to in 1930. The ground for trusts. in constructive implied trusts. In fact. only as to the parties who participated in the Emiliano and Simeon Aying did not participate in execution of the same. particularly. the law. vs.

2d ed. so that in case of failure Canuto. against Consolacion and her spouse. COURT OF APPEALS There is no statutory requirement to state in the AND REMEDIOS EGUENIO-GINO will itself that the testator knew the language or G. should not be rejected where its On February 4. Unsatisfied with the decision persons. Office of the Register of Deeds. CONSOLACION SISON VS. The matter in dispute in the present case is the attestation clause PRESCRIPTIVE PERIOD TO RECOVER in the will of Abada.. in his testimony. it is not imperative that a parrot-like on 4 June 1932. Caponong- Facts: Petitioner Sison and respondent Eugenio- Noble further argues that Alipio. or joint affidavit affirming the Kasulatan in favor of other casualty. In these gatherings. PROBATE FOR WILL governs the form of the attestation clause of SPOUSES RICARDO PASCUAL AND Abada’s will. explained the extent and limits of the rule on Held: The Court of Appeals did not err in liberal construction. probate the will of Abada. namely Felicidad and Beatriz. Section 618 of the Code of PROPERTY OBTAINED BY FRAUD GIVING RISE Civil Procedure. and sufficient if from the language employed it can Act No. The laws in force at that time are copy of the words of the statute be made. among others. Ricardo We rule to apply the liberal construction in the Pascual for annulment of transfer of certificate of probate of Abada’s will.oppositors to raise any other matter forecloses all four signatures: that of Abada and of three other other issues. permanent form. The Court of the applicable laws. therefore. enactment of the New Civil Code. in Consolacion. Consolacion. 1968. August 15. 2645 TO AN IMPLIED TRUST. Canuto and or understood the contents of the will and the 11 other individuals including his sister Catalina Spanish language used in the will. 115925.R. No. Canuto and Consolacion Spanish language. This is a matter that a party may establish by proof aliunde. 190 or the Code of Civil Procedurewhich reasonably be deduced that the attestation clause governed the execution of wills before the fulfills what the law expects of it. Canuto sold his share in Lot 2 in favor of clause is made for the purpose of preserving. executed a of the memory of the subscribing witnesses. sec. Abada and his companions would talk in the On September 26. 1956. 1988. and if so. a record of the facts attending On October 23. to show that Abada knew respectively of the late Canuto Sison. certificate of title. 132. The question on the Issue: Whether or not the will of Abada has an number of the witnesses is answered by an attestation clause. This sufficiently proves that executed a Kasulatan ng Bilihang Tuluyan under Abada speaks the Spanish language. as amended by Act No. An attestation which. whether the examination of the will itself and without the need attestation clause complies with the requirements for presentation of evidence aliunde. they may still be proved. Remedios filed a complaint attestation clause serves the purpose of the law. Abada executed his will However. Precision of language in the sustaining the RTC-Kabankalan in admitting to drafting of an attestation clause is desirable. three witnesses to the will. 2003 dialect used in the will. which the latter registered with the (Thompson on Wills. Abada’s will clearly shows title because the former claimed that she is the . It is reasonable to conclude that there are Caponong-Noble appealed.) A will. the surviving children of the execution of the will. has failed. It is the Civil Code of 1889 or the Old Civil Code. Alipio and his brother Victoriano were co-owners of a testified that Abada used to gather Spanish- property known as Lot 2 covered by an original speaking people in their place. Gino are the niece and granddaughter . However.

PARTITION INTER VIVOS MAY dismiss holding that the reckoning of the BE DONE FOR AS LONG AS LEGITIMATES ARE prescriptive period for filing complaint is NOT PRECLUDED. Remedies filed her complaint on February 4. while her share was Unquestionably. Petitioners claim that the It was inappropriate to order the reconveyance of basis of the action is fraud and the action should the subject lots to Remedios in her capacity as have been filed within four years from the executrix of Catalina’s last will because she sued registration of Consolacion’s title on October 28. of First Instance against petitioner-spouses giving rise to an implied trust under Article 1456 of Florentino and Erlinda for delivery of her the Civil Code is ten years pursuant to Article 1144. No. 2000 upon by the trial court applies only if the fraud Facts: Flavio Zaragoza Cano was the registered does not give rise to an implied trust and the owner of certain parcels of land. PROPERTY CERTIFICATE NOT trial. owner of the disputed lots. her in Catalina’s last will. year prescriptive period begins to run from the 1964. he died without a will and was survived by time of the discovery of the mistake. 1988. Zacariaz. On December 9. ground of prescription.R. implied trust which repudiation takes place when She further alleged that her father in his lifetime the adverse party registers the land. HONORABLE COURT OF APPEALS Held: The four-year prescriptive period relied G. Remedios has not acquired any right means since the area covered by the TCT is twice under the last will. violence. Florentino and 1390 of the Civil Code. cause of action either to seek reconveyance of Lot Petitioner sought to dismiss the complaint on the 2 or to enforce an implied trust over these lots. Remedios filed the complaint late not conveyed by way of deed of sale then. On December 28.owner of the lots since Catalina devised the land to being a devisee of Catalina’s last will. Remedies also added since the probate court has not admitted Catalina’s that the lots were obtained through fraudulent last will. the four- Alberta. LEGITIME OF evidentiary in nature and must await the COMPULSORY HEIRS IS DETERMINED AFTER presentation of the parties’ evidence during the COLLATION. undue influence or fraud. 1988 The shares of her brothers and sister were given to or more than 19 years after Consolacion registered them in advance by way of deed of sale. Petitioners denied knowledge of an alleged Remedies anchors her right in filing the suit on her distribution by way of deeds of sale to them by . September 29. 1968. petitioners not in such capacity but as the alleged 1968 and not some 19 years later on February 4. inheritance share and for payment of damages. SUBJECT TO COLLATERAL ATTACK Issue: Whether or not the action for annulment or SPOUSES FLORENTINO ZARAGOZA AND cancellation of transfer of certificate of title by ERLINDA ENRIQUEZ-ZARAGOZA VS. partitioned the properties among his four children. his four children. In such a case. The trial court denied petitioner’s motion to SUCCESSION. all surnamed Zaragoza. THE Remedios has prescribed. He had four action is to annul a voidable contract under Article children namely: Gloria. without valid consideration. Remedies is thus without any the size of Canuto. 1981. this ten-year prescriptive period begins to run She claims that she is a natural-born Filipino from the date the adverse party repudiates the citizen and the youngest child of the late Flavio. but her title over the lot on October 28. 106401. intimidation. However. thus warranting its dismissal. private respondent Alberta It is now well-settled that the prescriptive period Zaragoza-Morgan filed a complaint with the Court to recover property obtained by fraud or mistake.

respondent paid a total of P792.00 each before she settled the done in this case where the original petition for P500.00 loan from the same. and not the delivery of inheritance share. the lot registered in the name of petitioners can be a valid subject matter of the entire proceeding for CREDIT TRANSACTIONS the delivery of inheritance share. On appeal. instances.00 for the second loan. statements executed by respondent. respondent made 11 of the other compulsory heirs. They denied knowledge of the alleged although the trial court. as an obiter.00 each therefore be dismissed without prejudice to the before paying the principal loan of P500. collation cannot be P22. the transfer of court ruled that. Padillo obtained a of sale was not executed in favor of private P500.00 loan from petitioner First Fil-Sin respondent because she had become an American Lending Corp. January 12. (2) Whether the validity of the deed of sale and modified or cancelled except in a direct proceeding consequently. The trial court dismissed questioning the validity of the deed of sale in favor respondent’s complaint. the appellate of petitioner and consequently.00.5% and 5% Private respondent. 2005 properties among his three children. determination of their respective legitime and if Thereafter.their father.000. In both her favor.00 for indispensable parties are present for the rightful the first loan and P775. when the case was elevated estate of their father during his lifetime. respondent executed a promissory note It is basic in the law of succession that a partition and disclosure statement. private respondent did not do so because she became an American citizen. agreed to pay interest at the rates of 4. nevertheless. A certificate of title shall not be Flavio Zaragoza Cano of his properties is valid.000. As delivery of inheritance share only impleaded one regards the second loan. based on the disclosure certificate of title issued in the latter’s name. No. much more. to the Court of Appeals. question the genuineness of the signature of the They denied that there was partitioning of the deceased. Held: Both the trial court and the public FIRST FIL-SIN LENDING CORPORATION VS. was in effect 4. inter vivos may be done for as long as legitimes are respondent made 13 monthly interest payments of not prejudiced. respondent filed an action for sum of the legitimes were prejudiced by the partitioning money against petitioner alleging that she only inter vivos. in submitting her petition for per annum. Unfortunately. Could this be done? The petition is a Issues: (1) Whether the partition inter vivos by collateral attack.000. the transfer certificate of title over in accordance with law. the latter declared the sale The Regional Trial Court rendered judgment to be fictitious because of finding of marked adjudicating Lot 471 in the name of Flavio differences in the signature of Flavio in the deed of Zaragoza Cano to Alberta Zaragoza-Morgan as sale vis-à-vis signatures found in earlier appertaining her share in his estate. the reason for his failure to since according to it.R. For the first loan.500.00 outstanding principal obligation.000.5% and 5% per month. for the two loans. he already partitioned and distributed his G. and subsequently obtained another citizen and the Constitution prohibited a sale in P500.500. Alberta. The petition must monthly interest payments of P25. made a intention of their father to convey the cited lots to finding of validity of the conveyance of the said lot. excepting private respondent through deeds of sale. A deed Facts: Respondent Gloria D. the interest . respondent found that during the lifetime of GLORIA PADILLO Flavio. It cannot be altered.000. subject to collateral attack.000. institution of a new proceeding where all the In sum. 160533. respectively. documents.

contention that Spouses Cruz failed to pay their Held: Perusal of the promissory notes and the loan. Mateo Cruz obtained an agricultural the 12% per annum penalty imposed by the Court crop loan from PNB in the amount of Php156. January 16. 126908. Absolute Sale was entered into by Spouses So Hu Issue: Whether or not the applicable interest and Spouses Cruz. Later Spouses Cruz loaned again room for interpretation. by the parties violates their freedom to stipulate After Land Bank remitted to PNB Php359. No. it disclosure statements pertinent to the loan now claimed the property. if the of the contract.000 and constituted a real estate mortgage outstanding obligations have been fully paid.rates should be imposed on a monthly basis but that courts ought to apply certain established rules only for the 3-month term of the loan. Thereafter. Spouses Antonio and Soledad So Hu disclosure statements should not favor petitioner paid for the release of the mortgaged property since the loan documents were prepared by the since they were interested in it. Thus a Deed of latter. The provision as Spouses Cruz. When PNB found obligations of respondent clearly and Spouses So Hu In possession of the property. using their parcel of land to secure said loan. of construction in order to ascertain the supposed the legal interest rate will apply. As to the penalty charges. it was reduced to 1% APPEALS per month or 12% per annum. petitioner argues that Subsequently. the terms are to be mortgage is an accessory contract which derives its understood literally just as they appear on the face existence from the principal contract. It is only in instances when the principal ceases to be it also ceases. In this case. PNB conducted a public auction sale per annum despite the clear agreement of the covering the property in question under the parties on another applicable rate. language of a contract is ambiguous or obscure with the extinguishment of the loan. conveying the property to the should be the legal interest of twelve percent (12%) former. found the penalty charges pegged at 1% per day of delay highly unconscionable as it would translate PHILIPPINE NATIONAL BANK VS. However.5% and 5% Philippine National Bank (PNB) in the amount of monthly interest shall be imposed until the Php70. Consequently.43 in cash and transferred Respondent avers that the interest on the loans is Php25. Issue: Is the extra judicial foreclosure of the third Nowhere was it stated that the interest rates shall mortgage valid? be applied on a monthly basis. Thus. bonds. They obtained a loan from the basis. Php174. COURT OF to 365% per annum. 500 in terms and conditions as they may deem proper. A contract of alleged intention of the parties.5% were asked to vacate the property. Since it was the sole and highest bidder. they unambiguously provide for interest rates of 4. G. Thus. 2003 Petitioner maintains that the interest rates are to Facts: Spouses Mateo and Carlita Cruz owned a be imposed on a monthly and not on a per annum parcel of land. respectively. Respondent asserts that from PNB and secured it with another real estate any ambiguity in the promissory notes and mortgage.R. it insists that the 4. per annum and 5% per annum. PNB issued a Deed of per annum as expressly stated in the promissory Release of Real Estate Mortgage in favor of the notes and disclosure statements. PNB released all to annual interest rate is clear and requires no titles to them. Thus.500 in bonds. when the Held: It is manifested in records that Spouses So terms of the agreement are clear and explicit that Hu had already paid the principal obligation they do not justify an attempt to read into it any secured by the third mortgage. The court also intent of the parties. the mortgage .000 of Appeals in lieu of the 1% per day as agreed upon which was also secured by a real estate mortgage.

a G. In the property by the private respondents from 1980. 1993 during ALS Management and Development Corporation which petitioners were receiving rentals from the (ALS) and Antonio Litonjua. 377 SCRA 177. February 15. the law on mortgage. respondents executed a mortgage deed and private respondents was an equitable containing the above stipulations with the mortgage necessarily takes the deed out of the provision that payments of monthly amortization ambit of the law on sales and puts into operation shall commence on May 1. Said house and lot faith in refusing and obstructing the redemption of were mortgaged to AIDC to secure the loan. 1968 to December 31. . in case of non-payment of the debt. he Francisco and Carolina Ramirez covering a parcel must.is also extinguished. the Claravalls failed to redeem the property. No. CONTRACT OF LOAN. 1965. Francisco Ramirez alleging among others that the the predecessor of BPIIC. registering the mortgaged property in his own name upon the mortgagor’s failure to redeem the RAMIREZ VS. private respondent to good morals and public policy and. On March 31. The Supreme Court found BPI INVESTMENT CORPORATION VS. COURT OF APPEALS property amounts to pactum commissorium. REAL CONTRACT. August 15. foreclose of land including the improvements thereon with the mortgage first and thereafter purchase the an option to repurchase within a period of two mortgaged property at the foreclosure sale. Before perfect title over a mortgaged executed a deed of sale in favor of spouses property may thus be secured by the mortgagee. therefore. At the expiration of the two-year period. the mortgagor’s default does not operate to vest the property can no longer be validly foreclosed since mortgagee the ownership of the encumbered it would be a foreclosure that satisfies an property and the act of the mortgagee in extinguished obligation. the spouses Claravall filed a complaint for accounting Facts: Frank Roa obtained a loan Ayala and damages against the Intestate Estate of Investment and Development Corporation (AIDC). years. 1981. spouses Loreto Claravall and Victoria Claravall void. balance of the Roa’s indebtedness with AIDC. they were the registered such loan to be secured by the property. 2003 forfeiture clause declared by the Court as contrary Facts: On December 29. COURT that the Deed of Absolute sale with option to OF APPEALS repurchase was one of equitable mortgage.R. prompting them to file a complaint against the RECIPROCAL OBLIGATION spouses Ramirez to compel the latter to sell the property back to them. 133841. On September 13. at an owners and not private respondents. Note that the loan secured by the mortgage was It is a well-established doctrine that the already paid prior to the foreclosure. interest rate of 20% per annum and service fee of Held: The declaration by the Supreme Court in the 1% per annum on the outstanding principal first case that the deed of sale with option to balance payable within ten years. Thus. repurchase entered into by the spouses Ramirez 1981. AIDC granted the respondents a new the fruits of the property as prior to the loan of P500 000 to be applied to Roa’s debt and redemption thereof. Issue: Whether or not petitioners were entitled to Thereafter. Roa sold the house and lot to respondents January 2. ALS and Litonjua assumed the for and returned to private respondents. for the construction of a spouses Ramirez acted fraudulently and in bad house on his lot in Muntinlupa. As paty of the tenants of the property which must be accounted purchase price. 2002 Following the death of Francisco Ramirez.

Thus a new TCT was issued in the name of the spouses Velasco. offering to redeem the perfected consensual contract falls under the first property which petitioner failed to do and led to clause of Art. to secure payment of a loan.87 delay if the other does not comply or is not ready purporting to be what was left of the latter5’s loan to comply in a proper manner with what is after fully paying the loan of Roa. other owners of the property executed a falsified deed of absolute sale wherein they made it appear Issue: Whether or not a contract of loan is a that the entire lot was sold to spouses Donalito consensual contract or real contract. SECOND LAGUNA be computed from the said date. On the other DEV’T. a contract of loan involves a reciprocal annulment of the mortgage. 1934 of the NCC. CA (125 SCRA 122). In the monthly amortization after September 134. loan. the the Court of Appeals. On two occasions. Consequently. Without the respondents. only when a party has On June 1984. default sets in. the date when the said lot to their five children. 2003 1934 of the NCC. BANKING INSTITUTION date when the mortgage deed was executed. BPIIC released to respondents P&146. contract in Bonnevie declared by this Court as a petitioners wrote the bank. neither party incurs in the Deed of Absolute Sale were falsified and as . the loan contract was perfected on March 31. hence a real contract. respondents argue that based on Article G. an if the latter fails.1982. BPIIC claims that a contract of loan 1982 for it was only then when it complied with its is a consensual contract and a contract of loan is obligation under the loan contract. In the present case. No. Therefore. BANK hand. respondents filed a civil case against petitioner could not demand for the payment of BPIIC opposing the foreclosure proceedings. the amortization and interests on the loan should BENJAMIN NAVARRO VS. the said case. 1982 that owned a certain registered land and sold 5/6 of the the loan contract was perfected. However. They alleged that the obligation wherein the obligation of each party is sale of the lot with respect to their 1/6 share is void the consideration for that of the other.R. spouses Velasco mortgaged the contract but a real contract. inter alia. Facts: Spouse Catalino and Consuelo Navarro In this case. Velasco and Esther Navarro. full loan was released to the respondents. in perfected at the time the contract of mortgage is computing the amount due. 129428. Held: A contract of loan is not a consensual Subsequently. February 27. It is perfected only property to respondent Laguna Development Bank upon the delivery of the object of the contract. BPIIC instituted foreclosure performed his part if the contract can he demand proceedings against the respondents because of that the other party also fulfill his own obligation their failure to pay the mortgage indebtedness. It is an accepted the consolidation of the ownership over the promise to deliver something by way of a simple property in favor of the respondent bank. the starting date is executed conformably with the ruling in Bonnevie October 13. In ab initio considering the signatures appearing in reciprocal obligations. the MORTGAGE. the Also. 1981. the bank Petitioner misapplied the Bonnevie case. hence. The had the mortgaged foreclosed. it was only on September 13. incumbent upon him. Petitioners filed a complaint praying. The trial petitioners Benjamin and Rosita Navarro are listed court rendered a decision in favor of the as co-owners of the property. By virtue of the sale. which was subsequently affirmed by knowledge and consent of the petitioners. a simple loan was perfected upon the delivery of the contract. vs. 1982 not May 1981. Thereafter.

BANCOM FINANCE CORPORATION property. petitioners filed a complaint for defective. Sulit succeeded in having the entering into a mortgage contract. that spouses Velasco falsified their signatures On the other hand. In entering into a mortgage contract with spouses In a special agreement. As a result. it is faith.000 to Norma when it subsequently sold property to respondent Sulit who gave P25. Sulit failed to pay the balance price. consequently. Nor did petitioners were the ones in bad faith because they they question the validity of the mortgage and its already had knowledge of the existence of the foreclosure. Sulit defaulted in her payment to presumed that a person takes ordinary care of his Bancom and her mortgage was foreclosed. 000 as earnest money. Bancom intervened in that whoever alleges bad faith in any transaction the case and claimed priority as mortgagee in good must substantiate his allegation. there was no indication that respondent obligation to pay the petitioners within six bank acted in bad faith. Sulit to the bank their TCT showing they were then the managed to obtain a loan from respondent absolute owners thereof. Sanchez status or the consdition of a property offered to it executed another deed of absolute sale over the as a security for a loan must be a standard and said land in favor of Sulit. required to conduct an exhaustive investigation on . since. it is a settled jurisprudence reconveyance of the land. However. In this connection. Sulit was indispensable part of its operation. Unknown to the petitioners.such the mortgage contract involving their share executed by spouses alleging that the respondent MORTGAGE. The ascertainment of the in favor of Sanchez and on the same day. They sold the land for P700. Sulit assumed Sanchez’s Velasco. Moreover. even those petitioners execute a document of sale of the land involving registered land. This title of the land to Sulit. March 19. circumstances or indications that aroused On account of Sulit’s failure to pay the amount respondent bank’s suspicion that the title was stipulated. those letters could have led mortgage over the property when they caused the the bank to believe that petitioners recognize the annotations. Indeed. Respondent further claims that. 2002 Issue: Whether or not the respondent bank acted Facts: Petitioners Edilberto and Simplicio Cruz in bad faith when it accepted said mortgage the were registered owners of a parcel of agricultural property subject of a falsified Deed of Sale and land. petitioners did not state pendens had already been annotated in the title. the petitioners did not transfer the Held: Respondent did not act in bad faith. Spouses Velasco presented months. Clearly. Meanwhile. respondent maintains that appearing in the Deed of Absolute Sale. Indeed there was no Bancom secured by a mortgage over the land. spouses Guzman. BANKING INSTITUTION spouses were purchasers in bad faith because they knew of the pending litigation concerning the CRUZ VS. validity of the Deed of Absolute Sale and the being an innocent mortgagee. it bears registered the real estate mortgage over the subject reiterating that in their two letters to respondent matter. it should not be mortgage as well as its subsequent foreclosure. 379 SCRA 490. able to effect the transfer of the title in her name. But capitalizing on the Court stressed that a mortgagee-bank is expected close relationship of one Candelaria Sanchez with to exercise greater care and prudence before the petitioners. petitioners are wanting mortgagee in good faith because at the time it in this respect. their adverse claim and notice of lis bank earlier mentioned. concerns and that private transactions are entered Petitioners argue that respondent was not a into in good faith.

the mortgagor’s title before it could extend a loan. An innocent purchaser for value registered the mortgage. It should have Held: First. it is expected parties to the unregistered mortgage were not to exercise greater care and prudence in its bound by it. dealings. This rule. it is not an ordinary mortgagee. to third persons. unlike private individuals. solely on the certificate of title does not apply to however. as a general rule. every person dealing not simply relied on the face of the certificate of with a registered land may safely rely on the title as its ancillary function of investing funds correctness of the certificate of title and is no required a greater degree of diligence. observance of the necessary precautions to ascertain flaws in the title of Sulit. mortgage or any other not the operative act for a mortgage to be binding encumbrancer for value. is subject to the right of a person banks. deprived of the land through fraud to bring an Second. including those involving registered . Thus. however. respondent was already aware that there action for rconveyance. Respondent was clearly wanting in the mortgagee in good faith. indispensable. provided the rights of was an adverse claim and notice of lis pendens innocent purchaser for value and in good faith are annotated on the certificate of title when it not prejudiced. Respondent. registration is includes an innocent lessee. it is a mortgagee bank. lands. Although. is between parties. The ascertainment of the status for a loan must be a standard and indispensable part of its Issue: Whether or not respondent Bancom is a operations. The rule longer required to look behind the certificate in that persons dealing with registered lands can rely order to determine the actual owner. petitioners being third As such.