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Ortigas & Co., Limited Partnership V. Feati Bank and Trust Co.

G.R. No. L-24670 December 14, 1979

Facts: Plaintiff (formerly known as "Ortigas, Madrigal y Cia") is a limited partnership and defendant
Feati Bank and Trust Co., is a corporation. Plaintiff is engaged in real estate business, developing and
selling lots to the public, particularly the Highway Hills Subdivision along Epifanio de los Santos Avenue,
Mandaluyong, Rizal.

On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad Angeles, as
vendees, entered into separate agreements of sale on installments over two parcels of land, known as Lots
Nos. 5 and 6. On July 19, 1962, the said vendees transferred their rights and interests over the aforesaid
lots in favor of one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff
executed the corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on
installment) and the deeds of sale contained a stipulation that the parcel of land subject of this deed of sale
shall be used the Buyer exclusively for residential purposes, and she shall not be entitled to take or
remove soil, stones or gravel from it or any other lots belonging to the Seller.

Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and 106092 issued in
its name, respectively and the building restrictions were also annotated therein. Defendant-appellee
bought Lot No. 5 directly from Emma Chavez, "free from all liens and encumbrances as stated in Annex
'D', while Lot No. 6 was acquired from Republic Flour Mills through a "Deed of Exchange," Annex
"E". TCT No. 101719 in the name of Republic Flour Mills likewise contained the same restrictions,
although defendant-appellee claims that Republic Flour Mills purchased the said Lot No. 6 "in good faith.
free from all liens and encumbrances," as stated in the Deed of Sale, Annex "F" between it and Emma

The complaint sought, among other things, the issuance of "a writ of preliminary injunction ... restraining
and enjoining defendant, its agents, assigns, and those acting on its or their behalf from continuing or
completing the construction of a commercial bank building in the premises ... involved, with the view to
commanding the defendant to observe and comply with the building restrictions annotated in the
defendant's transfer certificate of title."

Issue: Whether the said Resolution can nullify or supersede the contractual obligations assumed by

Ruling: It should be stressed, that while non-impairment of contracts is constitutionally guaranteed, the
rule is not absolute, since it has to be reconciled with the legitimate exercise of police power, i.e., "the
power to prescribe regulations to promote the health, morals, peace, education, good order or safety and
general welfare of the people.

Even if the subject building restrictions were assumed by the defendant-appellee as vendee of Lots Nos. 5
and 6, in the corresponding deeds of sale, and later, in Transfer Certificates of Title Nos. 101613 and
106092, the contractual obligations so assumed cannot prevail over Resolution No. 27, of the
Municipality of Mandaluyong, which has validly exercised its police power through the said resolution.
Accordingly, the building restrictions, which declare Lots Nos. 5 and 6 as residential, cannot be enforced.

CO, doing business under the name & style Dragon Metal Manufacturing vs.
Court of Appeals
G.R. No. 124922 June
22, 1998

Facts: On July 18, 1990, petitioner entrusted his Nissan pick-up car 1988 model [1] to private respondent -
which is engaged in the sale, distribution and repair of motor vehicles - for the following job repair
services and supply of parts. Private respondent undertook to return the vehicle on July 21, 1990 fully
serviced and supplied in accordance with the job contract. After petitioner paid in full the repair bill in the
amount of P1,397.00, private respondent issued to him a gate pass for the release of the vehicle on said
date. But came July 21, 1990, the latter could not release the vehicle as its battery was weak and was not
yet replaced. Left with no option, petitioner himself bought a new battery nearby and delivered it to
private respondent for installation on the same day. However, the battery was not installed and the
delivery of the car was rescheduled to July 24, 1990 or three (3) days later. When petitioner sought to
reclaim his car in the afternoon of July 24, 1990, he was told that it was carnapped earlier that morning
while being road-tested by private respondents employee along Pedro Gil and Perez Streets in Paco,
Manila. Private respondent said that the incident was reported to the police.

Issue: Whether a repair shop can be held liable for the loss of a customers vehicle while the same is in its
custody for repair or other job services?

Ruling: When there was no delay, still working against private respondent is the legal presumption under
Article 1265 that its possession of the thing at the time it was lost was due to its fault. This presumption is
reasonable since he who has the custody and care of the thing can easily explain the circumstances of the
loss. The vehicle owner has no duty to show that the repair shop was at fault. All that petitioner needs to
prove, as claimant, is the simple fact that private respondent was in possession of the vehicle at the time it
was lost. In this case, private respondents possession at the time of the loss is undisputed. Consequently,
the burden shifts to the possessor who needs to present controverting evidence sufficient enough to
overcome that presumption. Moreover, the exempting circumstances - earthquake, flood, storm or other
natural calamity - when the presumption of fault is not applicable do not concur in this case. Accordingly,
having failed to rebut the presumption and since the case does not fall under the exceptions, private
respondent is answerable for the loss.

It must likewise be emphasized that pursuant to Articles 1174 and 1262 of the New Civil Code,
liability attaches even if the loss was due to a fortuitous event if the nature of the obligation requires the
assumption of risk. Carnapping is a normal business risk for those engaged in the repair of motor
vehicles. For just as the owner is exposed to that risk so is the repair shop since the car was entrusted to

29. Upon failure of WMC to pay after repeated demands.500. JR v.000. On the same date. Civil Code). . Paquing. It is not proper to consider an obligation novated as in the case at bar by the mere granting of extension of payment which did not even alter its essence. and (4) validity of the new one. 1990 Facts: On April 15. Magdalena Estates. 1977. 707). 1977.500. Dec. The legal doctrine is that an obligation to pay a sum of money is not novated in a new instrument by changing the term of payment and adding other obligations not incompatible with the old one (Inchausti & Co. No. 1985. (3) the extinguishment of the old contract. on April 5. An obligation to pay a sum of money is not novated in a new instrument wherein the old is ratified by changing only the terms of payment and adding other obligations not incompatible with the old one or wherein the old contract is merely supplementing the new one (Dungo v. v. Hence.000. v. v. Rodriguez. resulting in the extinction of the old obligation and the creation of a valid new one (Tiu Siuco v. L-19377. 1985). it is imperative that it be so declared in unequivocal terms. (2) the agreement of all the parties to the new contract.000. 1983. On May 18.R. both of which operated to the prejudice of the petitioner. In order that an obligation may be extinguished by another which substitutes the same. 18 SCRA 967. Investors Finance Corp. AC GR CV 04077.00 for which it issued the corresponding promissory notes payable on May 30. 1292. 80201. Lasal Development Corporation (to which the credit had been assigned earlier by PISO) sued Garcia for recovery of the debt in the Regional Trial Court of Makati. (1) a previous valid obligation. Cruz. Nov. Novation requires the creation of new contractual relations as well as the extinguishment of the old. In every novation there are four essential requisites. COURT OF APPEALS G. 6 SCRA 1007. v. 978). Yulo.000. AC GR CV 04710. 20. the Western Minolco Corporation (WMC) obtained from the Philippine Investments Systems Organization (PISO) two loans for P2. demand was made on Garcia pursuant to the surety agreement. Habana. Among these are the extension of the original period of payment and the compounding of the interest on the principal obligations. 42 SCRA 322). The petitioner cites other developments or transactions between the parties to the original loans that he contends had the effect of novating the said contracts and consequently extinguished the surety agreement. Rizal Commercial Banking Corp. Garcia also failed to pay. or that the old and the new obligations be on every point incompatible with each other (Art. Sept. Garcia moved to dismiss the case one of the ground was the principal obligation had been novated. There must be a consent of all the parties to the substitution.00 and P1. Issue: Whether or not there is novation.00 on due date. 1983. The acceptance of the promissory note by the plaintiff is not novation of the contract. Antonio Garcia and Ernest Kahn executed a surety agreement binding themselves jointly and severally for the payment of the loan of P2. Inc. 27. Lopeña. GARCIA. November 20. 34 Phil. 1962. To sustain novation necessitates that the same be so declared in unequivocal terms or that there is complete and substantial incompatibility between the two obligations (Sandico v. Ruling: Novation of contract cannot be presumed. 45 Phil. Militante.

third. it is imperative that it be so declared in unequivocal terms. Ruling: The subsequent execution of the real estate mortgage as security for the existing loan would not have resulted in the extinguishment of the original contract of loan because of novation. Extinctive novation . such as a change of the nature of the prestation. On 16 November 1998. [26] (2) the object or principal conditions. petitioners filed an omnibus motion for reconsideration and to admit newly discovered evidence. or from negotiorum gestio to agency. to pay the sum borrowed with an interest of 15. and fourth. Petitioners acknowledge that the real estate mortgage contract does not contain any express stipulation by the parties intending it to supersede the existing loan agreement between the petitioners and the bank.[23] An obligation to pay a sum of money is not extinctively novated by a new instrument which merely changes the terms of payment or adding compatible covenants or where the old contract is merely supplemented by the new one.R.[6] alleging that while the case was pending before the trial court. The obligation matured on 8 September 1981. the validity of the new one.e. a previous valid obligation. petitioners failed to settle the debt. the agreement of all the parties to the new contract. however. or from a mortgage to antichresis.. 2002 Facts: Petitioners Tolomeo Ligutan and Leonidas dela Llana obtained on 11 May 1981 a loan in the amount of P120.189% per annum upon maturity and to pay a penalty of 5% every month on the outstanding principal and interest in case of default. Petitioners executed a promissory note binding themselves. LIGUTAN vs. (1) the juridical relation or tie. such as from a mere commodatum to lease of things. Extinctive novation requires. Issue: Whether or not there is novation. such as the substitution of a debtor[27] or the subrogation of the creditor. i. jointly and severally. to be sure. or (3) the subjects. petitioners agreed to pay 10% of the total amount due by way of attorneys fees if the matter were indorsed to a lawyer for collection or if a suit were instituted to enforce payment. The incompatibility. No.[25] or from a sale to one of loan. COURT OF APPEALS G. incompatibility is required so as to ensure that the parties have indeed intended such novation despite their failure to express it in categorical terms.[22] In order that an obligation may be extinguished by another which substitutes the same. Despite several demands from the bank. Petitioners contended that the execution of the real estate mortgage had the effect of novating the contract between them and the bank. first.[21] Respondent bank has correctly postulated that the mortgage is but an accessory contract to secure the loan in the promissory note. the extinguishment of the obligation. the bank. petitioner Tolomeo Ligutan and his wife Bienvenida Ligutan executed a real estate mortgage on 18 January 1984 to secure the existing indebtedness of petitioners Ligutan and dela Llana with the bank.000. should take place in any of the essential elements of the obligation. granted an extension but only up until 29 December 1981.00 from respondent Security Bank and Trust Company. In addition. or that the old and the new obligation be on every point incompatible with each other. 138677 February 12. second.[24] When not expressed.

. but no payment was made to him.220. It also does not state that Eric Sy somehow substituted petitioner Arco Pulp and Paper as respondent’s debtor.31. expressly or by implication.R. Santos. to factories engaged in the paper mill business. 39 (Emphasis supplied) There is nothing in the memorandum of agreement that states that with its execution. Lim the value of the raw materials or deliver to him their finished products of equivalent value. full width 76 inches at the price of P18. 2007.. owned by Eric Sy. When he deposited the check on April 18. Lim alleged that when he delivered the raw materials.968. No.does not necessarily imply that the new agreement should be complete by itself. under the name Quality Paper and Plastic Products. the principle — novatio non praesumitur — that novation is never presumed. Quality Paper and Plastic Products. Arco Pulp and Paper issued a post-dated check dated April 18. (price subject to change per advance notice). Eric Sy that ARCO will deliver 600 tons Test Liner 150/175 GSM. 2007. (Arco Pulp and Paper) through its Chief Executive Officer and President. Santos and Mr. Arco Pulp and Paper and a certain Eric Sy executed a memorandum of agreement where Arco Pulp and Paper bound themselves to deliver their finished products to Megapack Container Corporation. 206806 June 25. Lim works in the business of supplying scrap papers. Candida A. over to the new obligation. and other raw materials. . ARCO PULP AND PAPER CO. certain terms and conditions may be carried.68 as partial payment. It merely shows that petitioner Arco Pulp and Paper opted to deliver the finished products to a third person instead. with the assurance that the check would not bounce. LIM G. 2007.487. April 18.968. through his company.50 per kg. Quantity of Local OCC delivery will be based on the quantity of Test Liner delivered to Megapack Container Corp. the raw materials would be supplied by Dan T. Eric Sy’s account. debitum pro debito — basically extinguishing the old obligation for the new one.50 per kg. Candida A. Dan T.31 to Arco Pulp and Paper Company.766. its animus must be ever present. 2014 Facts: Dan T. he delivered scrap papers worth 7. total of 600 Metric Tons at P6. based on the above production schedule. INC. for novation to be a jural reality. Lim. The parties allegedly agreed that Arco Pulp and Paper would either pay Dan T. to Megapack Container for Mr. v. Issue: Whether or not there is novation. novatio is literally construed as to make new. So it is deeply rooted in the Roman Law jurisprudence. the obligation of petitioner Arco Pulp and Paper to respondent would be extinguished. At bottom. for his account. it was dishonored for being drawn against a closed account. On the same day. On May 5. From February 2007 to March 2007. Enterprises. According to the memorandum. cartons. The memorandum of agreement reads as follows: Per meeting held at ARCO. Inc. it has been mutually agreed between Mrs. Ruling: In the civil law setting.220. 2007 in the amount of 1. It has been agreed further that the Local OCC materials to be used for the production of the above Test Liners will be supplied by Quality Paper & Plastic Products Ent.Lim sent a letter to Arco Pulp and Paper demanding payment of the amount of 7. Dan T.

The 40-day period lapsed but Wellex and U-Land were not able to enter into any share purchase agreement although drafts were exchanged between the two. Inc.The consent of the creditor must also be secured for the novation to be valid:chanRoblesvirtualLawlibrary Novation must be expressly consented to. 14 January 2015FACTS: Wellex and U-Land agreed to develop along-term business relationship through the creation of joint interest in airline operations and property development projects in the Philippines.” On appeal. THE WELLEX GROUP. Wellex acknowledged the receipt of these remittances in a confirmation letter addressed to U-Land and allegedly delivered stock certificates and TCTs of subject properties. APIC does not own a single share of APC. Ltd. and the option to acquire from WELLEX shares of stock of EXPRESS SAVINGS BANK ("ESB") up to40% of the outstanding capital stock of ESB of U-Land. U-Land remitted to Wellex a total of US$7.GR No. U-Land Airlines Co. mutual restitution is required to bring back the parties to their original situation prior to the inception of the contract. The Wellex Group. 1911 of the civil code. it is clear that defendant fraudulently violated the provisions of the MOA. RTC: Ruled in favor of Uland and ordered rescission of contract under Art. Entering into and funding a joint development agreement.. The "rescission" referred to in Article1191 referred to "resolution" of a contract due to a breach of a mutual obligation. 2015 Facts: Civil Code provisions shall govern and regulate the resolution of this controversy. Thus.. Ruling: No implied novation took place. Wellex and U-Land still failed to enter into the share purchase agreement and the joint development agreement. Issue: Whether or not there is novation. the rescission that is relevant to the present case is that of Article 1191. Respondent U-land avers that this case was inapplicable because the pertinent provision in Suria was not Article 1191 but rescission under Article 1383 of the Civil Code. Petitioners invokes Suria v.00. However. the Court of Appeals affirmed the ruling of the Regional Trial Court. Operation and management of APIC/PEC/APC.945. Despite these transactions. Lopena: . LTD. the conflicting intention and acts of the parties underscore the absence of any express disclosure or circumstances with which to deduce a clear and unequivocal intent by the parties to novate the old agreement. Under the circumstances. In previous cases. “Notwithstanding the said remittances. Considering that the rescission of the contract is based on Article1191 of the Civil Code. which held that an "action for rescission is not a principal action that is retaliatory in character under Article 1191 of the Civil Code. INC. G. Thus. No. v. Acropolis Central Guaranty Corporation: Neither can novation be presumed in this case. 167519. U-LAND AIRLINES. 167519 January 14.499. Moreover.. while Article 1384 spoke of "rescission" because of lesion and damage. On the other hand. defendant could not even satisfactorily substantiate its claim that at least it had the intention to cause the transfer of APC shares to APIC. The provisions of the memorandum were agreed to be executed within 40 days from its execution date. CO. this court has consistently ruled that presumed novation or implied novation is not deemed favorable. but a subsidiary one which is available only in the absence of any other legal remedy under Article 1384 of the Civil Code. In United Pulp and Paper Co. Hence this petition. As explained in Duñgo v. Defendant obviously did not enter into the stipulated SPA because it did not have the shares of APC transferred to APIC despite its representations. Basis of rescission: Wellex’s misrepresentation that APIC was a majority shareholder of APC that compelled it to enter into the agreement.R. Intermediate Appellate Court. which involves breach in a reciprocal obligation. U-Land filed a Complaint praying for rescission of the First Memorandum of Agreement and damages against Wellex and for the issuance of a Writ of Preliminary Attachment. Inc. Despite the absence of a share purchase agreement. The agreement includes: Acquisition of APIC and PEC shares. v. v.

respondent U-Land is entitled to the return of the amount it remitted to petitioner Wellex. 2008 Facts: Rino Manzano.“Novation by presumption has never been favored. Pursuant to Section 9. Santos who in turn filed a cross claim and third party complaint against Manzano. The bank maintained it exercised due diligence in the supervision of its employees while Santos denied to be negligent on her job. and inconsistent with. or that the will to novate appears by express agreement of the parties or in acts of similar import. only the execution of a final share purchase agreement within either of the periods contemplated by this stipulation will justify the parties’ retention of what they received or would receive from each other. or at least influenced by the other party. and (c) knowledge.R. Santos and Abacan both contend that Chowking is estopped from claiming reimbursement and damages because of its negligence for allowing Manzano to take hold. The bank refused thus the respondent filed a complaint for the sum of money with damages. CHOWKING FOOD CORPORATION G. The checks were encashed without the signatures of the other authorized officials of Chowking but was accepted and honored by Santos. it need be established that the old and new contracts are incompatible in all points. No. It impleaded the bank president. This is simply an enforcement of Section 9 of the First Memorandum of Agreement. acting accounting manager of Chowking. This the bank knows this as the customary practice of Chowking.86. Petitioner Wellex is likewise entitled to the return of the certificates of shares of stock and titles of land it delivered to respondent U-Land. Manzano misappropriated the amount and when Chowking found out it demanded reimbursement from the bank. endorse and encash its checks. 177526 July 4. or at least expectation that this conduct shall be acted upon. those which the party subsequently attempts to assert. Antonio Abacan and the bank branch manager. actual or constructive of the actual facts.” There being no novation of the First Memorandum of Agreement. (b) intent. They do not allow the encashment of checks without the signature of all its authorized signatories. . Chowking did not in any way show misrepresentation on the material facts on the encashment of checks.981. PHILIPPINE SAVINGS BANK v. To be sustained. endorsed and encashed from the petitioner 5 checks amounting to a total of P556. However. the bank failed to provide evidence to show they observe due diligence required from banks by the law. Issue: Whether or not Chowking is estopped from its claim against for the wrongful encashment of the checks Ruling: For estoppel to occur the following requisites should be met: (a) conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than. Abacan invokes that the respondent does not have any cause of action against him because he has no involvement to the transaction.

ULANDAY CONSTRUCTION. Branch 145.00 cash advance. Ruling: CA misapplied the principle of estoppel in pais .922.00 for Change Order Nos.270. failing to comply with the provisions on change orders. The petitioner subsequently granted the respondent a P100.000. 1ra1aw and partially paid P130. the respondent submitted 12 progress billings. the respondent filed a complaint with the Regional Trial Court (RTC).30. 2010 Facts: In February 1985. loss or non- usage of specified construction materials. for collection of the unpaid balance of the contract and the unpaid change orders. They demanded payment of liquidated damages for delay in the completion.885. 16 and 17 would be paid upon completion of the contract.298. amounting to P912. On July 4. The outstanding balance on the change orders totaled P740. the concrete structural shell of the formers two-storey residential house in Urdaneta Village. 1996. Inc.142. the respondent also effected 19 change orders without the petitioners prior written approval. the respondent notified the petitioners that the delay in the payment of progress billings delays the accomplishment of the contract work.91. plus damages and attorneys fees. payment was made beyond the seven (7)-day period provided in the contract. amounting to P1. paid P42. unconstructed and non-completed works. within a 150-day period.641.000. leaving the unpaid progress billings at P445. failing to finish the contract within the 150-day stipulated period. hanroblesvirtuallawlibrary On May 8. and overstating its billings. No. (respondent) to construct. the construction errors.00. G. a1aw the petitioners complained of the respondents delayed and defective work.291.59.R.587. asserting that the respondent violated the contract provisions by. Makati City. Makati City at the contract price of P3. however.61 for Change Order No. In their answer with counterclaim. cra1aw Petitioner Debbie Chung acknowledged in writing that the balance for Change Order Nos.13. 1995. In a letter dated April 16. INC. among others. While the petitioners settled the first 7 progress billings. 156038 October 11. 1996. As the actual construction went on. 16 and 17. SPOUSES VICTORIANO CHUNG and DEBBIE CHUNG v. During the construction. the petitioners denied liability. The petitioners. the petitioners contracted with respondent Ulanday Construction. plus damages and attorneys fees.

Respondents refused to accede to such counter-proposals. at best. contained counter-proposals. and 17 are. ra1aw The real office of the equitable norm of estoppel is limited to supplying deficiency in the law. the petitioners did not. and 17 and their non-objection to the other change orders effected by the respondent cannot give rise to estoppel in pais that would render the petitioners liable for the payment of all change orders. According to respondents. intentionally or through culpable negligence. they discussed the terms and conditions of the lease with petitioner. The revised document. petitioner occupied respondents land and began construction on January 18. by accepting and paying for Change Order Nos. but it should not supplant positive law. 1. "[a] contract is a meeting of minds between two persons whereby one binds himself. Sometime in March. 1988. 2000 Facts: Respondents alleged that they are the owners of a parcel of land situated in Lagawa.000. 16. 1987. that upon the termination of the lease. with respect to the other. the building shall belong to respondents. he shall continue to pay the monthly rental of P500. respondent Maria Baguilat demanded that the contract of lease should first be signed. representations or admissions or by his silence when he ought to speak out.00. Respondents insisted that petitioner re-draft the contract in accordance with their discussions. Immediately objecting to the construction. However. 1988. 1. the requirement for the petitioners written consent to any change or alteration in the specifications.a1aw The contract also expressly provides that a mere act of tolerance does not constitute approval. 138113 October 17. COURT OF APPEALS G. Estoppel in pais.000. even before preparing the contract of lease.00. presented to respondents sometime in April. arises when one. No. The payments for Change Order Nos. Ifugao and that sometime in December. the cost of which shall not exceed P40. 1988. and 17. petitioner continued to occupy respondents land. that respondents shall reimburse petitioner for the cost of the building by applying the rentals thereto.The petitioners payment of Change Order Nos. that petitioner will construct a building on such land. 1. or equitable estoppel. petitioner finally presented the lease contract to respondents but it did not contain the terms and conditions previously agreed upon. petitioner assured respondents that he was preparing the contract. BUGATTI v. do away with the contractual term on change orders nor with the application of Article 1724. It was agreed by petitioner and respondents that the aforesaid terms and conditions should be included in a written contract of lease to be prepared by petitioner and presented to respondents for their approval. Despite the fact that no contract was signed by the parties. 16.R. In this case. Issue: Whether or not a contract of lease had been perfected Ruling: Under Article 1305 of the Civil Code. particularly that petitioner will lease a portion of respondents land for a period of nine (9) years in return for a monthly rental of P500. to give something or to render . 16. acts of tolerance on the petitioners part that could not modify the contract.00 for the duration of the lease. that after petitioner is fully reimbursed for the costs of construction in the amount of P40.00. by his acts. Thus. petitioner offered to lease their land. plans and works is explicit in Article 1724 of the Civil Code and is deemed written in the contract between the parties. induces another to believe certain facts to exist and the other rightfully relies and acts on such beliefs so that he will be prejudiced if the former is permitted to deny the existence of such facts. However.

" A contract undergoes three distinct stages — preparation or negotiation. and finally. 2002 Facts: Frank Roa obtained a loan from Ayala Investment and Development Corporation (AIDC). No. 133632.000 loan. BPIIC filed for foreclosure proceedings on the ground that private respondents failed to pay the mortgage indebtedness. Private respondents executed a mortgage deed containing the stipulation. its perfection.146. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. It is perfected upon . purporting to be what was left of their loan after full payment of Roa’s loan. Roa sold the properties to ALS and Litonjua.R. The suit was dismissed and affirmed by the CA. The loan contract was signed on 31 March 1981 and was perfected on 13 September 1982. Said house and lot were mortgaged to AIDC to secure the loan. secured by the same property.87. BPIIC. v. February 15. Private respondents maintained that they should not be made to pay amortization before the actual release of the P500. The perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. Issue: Whether or not a contract of loan is a consensual contract Held: A loan contract is not a consensual contract but a real contract. The last stage is the consummation of the contract wherein the parties fulfill or perform the terms agreed upon in the contract. its consummation. culminating in the extinguishment thereof.some service. AIDC was not willing to extend the old interest to private respondents and proposed a grant of new loan of P500. the latter paid in cash and assumed the balance of Roa’s indebtedness wit AIDC. BPI INVESTMENT CORP. released to private respondents P7. for the construction of his house.000 with higher interest to be applied to Roa’s debt. AIDC’s predecessor. when the full loan was released to private respondents. COURT OF APPEALS G.

but rather on the amendment of the credit facilities on 15 October 1996 increasing the loan line fromP8.000. Said loan was covered by a Credit Agreement and a Continuing Suretyship with petitioner as surety. SBC filed against Booklight and herein petitioner an action for collection of sum of money with the RTC. Although a perfected consensual contract can give rise to an action for damages. if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. As of 15 May 2000. The payment of amortization should accrue from the time BPIIC released the loan amount to ALS and Litonjua because it was only at that time (the delivery of the amount -.R. herein petitioner alleged that under the Continuing Suretyship.000. .725. A contract of loan involves a reciprocal obligation.000. to secure full payment and performance of the obligations arising from the credit accommodation. without knowing that SBC had already filed the collection case. Issues: Whether or not there is mutuality of contracts.487.126. Only when a party has performed his part of the contract can he demand that the other party also fulfills his own obligation and if the latter fails.41. it paid the sum of P1. After trial. 2010 Facts: On 30 May 1996. SBC approved the renewal of credit facility of Booklight in the amount ofP10. Booklight drew several availments of the approved credit facility from 1996 to 1997 and faithfully complied with the terms of the loan. For failure to settle the loans upon maturity. 184041 October 13. default sets in. inclusive of interest past due and penalty.000. From August 3 to 14. SALUDO.599. 1998. the loan contract was only perfected on the date of the second release of the loan.000. demands were made on Booklight and petitioner for the payment of the obligation but the duo failed to pay.the object of the contract) that the loan contract was perfected.875.00. wherein the obligation or promise of each party is the consideration for that of the other. 000.00 to P10. In the present case. it was the parties’ understanding that his undertaking and liability was merely as an accommodation guarantor of Booklight.00. Booklight denied executing the promissory of the object of the contract. Booklight executed nine (9) promissory notes in favor of SBC in the aggregate amount of P9. JR v. The Court of Appeals affirmed in toto the ruling of the RTC. Petitioner argued that said offer to pay constitutes a valid tender of payment which discharged Booklight’s obligation to the extent of the offer. On 16 June 2000. Booklight was extended an omnibus line credit facility by SBC in the amount of P10. No. A perfected real contract gives rise only to obligations on the part of the borrower.652. SECURITY BANK CORPORATION G.000. the RTC ruled that petitioner is jointly and solidarily liable with Booklight under the ContinuingbSuretyship Agreement. In his Answer to the complaint.11 on 30 September 1999 as a prelude to restructuring its loan for which it earnestly negotiated for a mutually acceptable agreement until 5 July 2000. It is a basic principle in reciprocal obligations that neither party incurs in delay. In his Answer.00 under the prevailing security lending rate. It also claimed that it was not in default as in fact.00. On 30 October 1997. Booklight asserted that the amount demanded by SBC was not based on the omnibus credit line facility of 30 May 1996. it does not constitute a real contract which requires delivery for perfection. the obligation of Booklight stood at P10.000. He countered that he came to know that Booklight offered to pay SBC the partial payment of the loan and proposed the restructuring of the obligation.

One party prepares the stipulation in the contract. That cannot be said of petitioner. Issue: WON the provision in the mobiline service agreements fixing the venue of all suits arising from the contract is clear and binding and that the venue of the complaint was improperly laid. and that it is entered into before the filing of the suit. A contract of adhesion is defined as one in which one of the parties imposes a ready-made form of contract. 2004 Facts: Delfin Tecson applied for 6 cellular phone subscriptions with PILTEL on various dates in 1996. [ PILIPINO TELEPHONE CORPORATION v. It must be borne in mind.Held: The lameness of petitioners stand is pointed up by his attempt to escape from liability by labelling the Continuing Suretyship as a contract of adhesion. appealed to the CA. which the other party may accept or reject. giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing. Metro Manila. The one who adheres to the contract is. are not entirely prohibited. the provision is clear and binding. however. Held: Yes. It also denied PILTEL’s subsequent MFR. that it is expressed in writing by the parties thereto. Section 4. but which the latter cannot modify. PILTEL. affirmed the Decision of the RTC and denied the subsequent MFR filed by PILTEL. Such an agreement would be valid and binding provided that the stipulation on the chosen venue is exclusive in nature or in intent. He is deemed knowledgeable of the legal implications of the contract that he is signing. if he adheres. Subscriber hereby expressly waives any other venues. However. PILTEL: Moved to dismiss the case on the ground of improper venue. before the filing of an action. in 2001. . R. of the Revised Rules of Civil Procedure allows the parties to agree and stipulate in writing. CA. Contracts of adhesion. that contracts of adhesion are not invalid per se. Rule 4. TECSON G. 156966 May 7. while the other party merely affixes his signature or his adhesion thereto. he gives his consent. and the venue was improperly laid. on the exclusive venue of any litigation between them. in reality. Tecson filed with the RTC of Iligan City a complaint against PILTEL for “Sum of Money and Damages”. He is a lawyer. which were all approved and later on covered by 6 mobiline service agreements.” RTC denied the motion to dismiss and required PILTEL to file an answer on the complaint within 15 days from receipt thereof. where one party imposes a ready-made form of contract on the other. free to reject it entirely. No. citing a common provision in the mobiline service agreements to the effect that - "Venue of all suits arising from this Agreement or any other suit directly or indirectly arising from the relationship between PILTEL and subscriber shall be in the proper courts of Makati. A contract of adhesion presupposes that the party adhering to the contract is a weaker party.

Hence. Veloso answered that her debt was to Ricablanca in her own right. A contract of adhesion is no exception.319 on behalf of Michael & Co. Goods were proven to have been delivered to La Cooperativa. clearly enough. The rule is that. A contract of adhesion is just as binding as ordinary contracts. During the pendency of the suit initiated by Hill. should there be ambiguities in a contract of adhesion. the intent of the parties to consider the venue stipulation as being preclusive in character. she alleges that she has no transaction with Michael & Co. it doesn’t invalidate the subject stipulation. Promissory note was indorsed to Plaintiff Hill. respondent had no sufficient opportunity to read and go over the terms and conditions embodied in the agreements. and not in her capacity as guardian of her minor children. when she signed the blank sheet of paper thinking it was for the P8. in fact. what is natural and logical is that Veloso would have refused to execute her obligation to Levering in the first instance (i. the literal meaning of its stipulations must be held controlling. Although such is a clearly a contract of adhesion. Levering commenced proceedings to recover the P8. now indorsed to Hill.000. such ambiguities are to be construed against the party that prepared it. to acquire in the pursuit of his business subsequent subscriptions and remained a subscriber of petitioner for quite sometime. And the facts constituting the consideration for the contract contained in the promissory note are fully proven. A contract duly executed is the law between the parties.000. nor with the plaintiff. Upon Franco’s death. mother and former guardian of said children. the added stipulation that the subscriber "expressly waives any other venue" should indicate. however. respondent secured six (6) subscription contracts for cellular phones on various dates.e. to whom Veloso thought the obligation was due as guardian of the estate of the minor children. Veloso alleged that she was deceived by Franco into signing a blank sheet of paper by saying that it was for a promissory note to be executed by Veloso for P8. Held: There is no other signed document than the promissory note presented with the intention. HILL v. Nevertheless. but are clear and leave no doubt on the intention of the parties. It would be difficult to assume that.000 was already paid. La Cooperativa Filipina. PETITION IS GRANTED. and they are obliged to comply fully and not selectively with its terms. Issue:Whether or not the promissory note is binding on the defendants. and as they had not received any kind of goods whatever from said firm. With regard to the P8. for goods to be received by the former’s company. the stipulations are not obscure. on its being signed. VELOSO 31 Phil 160 July 24.319 balance. Hill brought the present suit to recover the P4.000) as she did reject it in 1912 saying she did not consider . contracts of adhesion are not prohibited even as the courts remain careful in scrutinizing the factual circumstances underlying each case to determine the respective claims of contending parties on their efficacy. Respondent continued. Veloso alleged that she discovered that the former apparently used her signature to execute the contract with Michael & Co. 1915 Facts: Defendant Veloso and Domingo Franco jointly and severally executed a promissory note in the amount of P6. If. of securing the payment of the goods sold to the La Cooperativa. In the case at bar. P2.000 for the benefit of the minor children of one Ricablanca. It is true that the SC struck down such contracts as being assailable when the weaker party is left with no choice by the dominant bargaining party and is thus completely deprived of an opportunity to bargain effectively.So. The new guardian is one Levering. Therefore. during each of those times.

No.” Two years later. It has been fully proven that the goods. Pampanga. and regulations of the country club were obscure. rules.R. But. “Under Article 1330. Franco could be as a third person inducing deceit. the latter’s presumed consent to the contract prevails.300. . ISSUE: Whether or not petitioners committed fraud or defaulted on their promises as would justify the annulment or rescission of their contract of sale with respondents? HELD: The general rule is that he who alleges fraud or mistake in a transaction must substantiate his allegation as the presumption is that a person takes ordinary care for his concerns and that private dealings have been entered into fairly and regularly. It is of no importance whether La Cooperativa exclusively belonged to Veloso or Franco. the obligation being joint. Tan and Susana C. They are both but one single contracting party in a relation with or against Michael & Co. Tan bought from petitioner RN Development Corporation (RNDC) two class “D” shares of stock in petitioner Fontana Resort and Country Club. which entitled them to use park facilities and stay at a two-bedroom villa for “five (5) ordinary weekdays and two (2) weekends every year for free. There is deceit when by words or insidious machinations on the part of one of the contracting parties. were received by La Cooperativa. 2012 FACTS: Sometime in March 1997. 154670 January 30. clear and convincing evidence such specific acts that vitiated a party’s consent. It was likewise proven that La Cooperativa belonged to the defendant. and that the goods came from Michael & Co. FONTANA RESORT & COUNTRY CLUB. respondent spouses Roy S.” One who alleges defect or lack of valid consent to a contract by reason of fraud or undue influence must establish by full. But not all forms of fraud can vitiate consent. and that FRCCI class “D” shareholders would be admitted to one membership in the country club. nor exempt Veloso from the obligation incurred. but to their mother. TAN G.00. there is no reason for making one of the parties suffer for the consequences of the act of a third person in whom the other contracting party may have reposed an imprudent confidence.. INC. to be called Fontana Leisure Park (FLP). enticed by the promises of petitioners’ sales agents that petitioner FRCCI would construct a park with first-class leisure facilities in Clark Field. in March 1999. There is fraud when one party is induced by the other to enter into a contract.319 with the stipulated interest. otherwise. v. Inc. the consideration for the debt.300. through and solely because of the latter’s insidious words or machinations. the other is induced to execute a contract which without them he would not have made.00 they spent to purchase FRCCI shares of stock from petitioners. respondents filed before the SEC a Complaintfor refund of the P387. Deceit alleged could not annul the consent of the contracting parties to the promissory note. (FRCCI). Respondents alleged that they had been deceived into buying FRCCI shares because of petitioners’ fraudulent misrepresentations. Construction of FLP turned out to be still unfinished and the policies. that FLP would be fully developed and operational by the first quarter of 1998.herself in debt to the minors. Franco is not one contracting party with regard to Veloso as the other. Disposition Judgment appealed from is reversed against defendant Veloso ordering the payment of the P4. worth P387.

covered by Transfer Certificate of Title (TCT) No. We find no such substantial or material breach. was willing to reimburse 50% of whatever respondent had paid him so far. m. the RTC ruled in favor of petitioner and held that the kasunduan preceded the kasunduan sa bilihan ng lupa. However.” “Rescission of a contract will not be permitted for a slight or casual breach. On appeal. m. 2010 FACTS: The respondent and the petitioner executed a kasunduan sa bilihan ng lupa where the latter agreed to sell a parcel of land with an area of some 21. without which. After hearing. the burden of establishing the default of petitioners’ lies upon respondents. G. respondents would not have bought the FRCCI shares. or must have caused the consent to be given. 362995 at P400/sq. PASTOR.731 sq. respondent cannot be . 172279 February 11. No. respondents have miserably failed to prove how petitioners employed fraud to induce respondents to buy FRCCI shares.” Simply stated. praying that petitioner Valentin Movido be compelled to cause the survey of a parcel of land subject of their contract to sell. out of the 22. but only such substantial and fundamental breach as would defeat the very object of the parties in making the agreement. HELD: Rescission is only allowed when the breach is so substantial and fundamental as to defeat the object of the parties in entering into the contract. the fraud must be the determining cause of the contract. He. There is no showing that in their sales talk to respondents. Petitioner in his answer charged respondent with delay in paying several installments due and did not pay the 7th installment in the amount of P1 million. considering the circumstances of the instant case. What is apparent to us is that respondents knowingly and willingly consented to buying FRCCI shares.000 sq.fraud refers to dolo causante or causal fraud.R. MOVIDO v. but were later on disappointed with the actual FLP facilities and club membership benefits. the RTC dismissed the complaint of respondent for lack of merit and/or cause of action. Respondents appear to be literate and of above- average means. Due to respondent’s failure to fulfill his obligations. but respondents once more failed to discharge the same. This was allegedly a material breach because they agreed that the survey of the property would only be done after respondent would have paid the 7th installment. In this case. the Court of Appeals (CA) reversed the RTC decision. without which such consent would not have been given. Defendant filed a complaint for specific performance in the Regional Trial Court (RTC) of Imus. one party secures the consent of the other by using deception. The right to rescind a contract arises once the other party defaults in the performance of his obligation. It can only be expected that petitioners presented the FLP and the country club in the most positive light in order to attract investor-members. Thus.” In the same case as fraud. It is true that respondent failed to pay the 7th and 8th installments of the purchase price. prior to or simultaneous with the execution of a contract. petitioner claimed that he had no choice except to rescind the kasunduan sa bilihan ng lupa. in which. m. however. It also ordered the rescission of the kasunduan sa bilihan ng lupa as well as the forfeiture of 50% of the amount already paid by respondent (but ordered petitioner to return to respondent 50% of the amount already paid. ISSUE: Whether or not the failure of respondent to pay the 7th and 8th installments of the purchase price gave petitioner the right to rescind the contract. who may not be so easily deceived into parting with a substantial amount of money. Cavite. petitioners actually used insidious words or machinations. particularly the provisions of the kasunduan.

Under paragraph 4 of the grant. Petitioner and respondent would not have entered into either of the agreements if they did not intend to be bound or governed by them. No. the Spouses Cabahug filed the complaint for the payment of just compensation. particularly on the purchase price for that portion. the kasunduan refers to a particular or specific matter. CABAHUG. Leyte. 2013 Facts: The Spouses Cabahug are the owners of two parcels of land situated in Barangay Capokpok. Indeed. Jesus Cabahug executed two documents denominated as Right of Way Grant in favor of NPC. i. Under both the kasunduan sa bilihan ng lupa and the kasunduan. On the other hand. Despite repeated demands by respondent. Specialibus derogat generalibus. in connection with its Leyte-Cebu Interconnection Project. that portion of the land that is traversed by a Napocor power line. Their stipulations must therefore be interpreted together. the kasunduan sa bilihan ng lupa contains the general terms and conditions of the agreement of the parties. taken together. as well as the portion traversed by the Napocor power line. On 21 September 1998. ? On 9 November 1996. NPC averred that it already paid the full easement fee mandated under Section 3-A of RA 6395 and that the reservation in the grant referred to additional compensation for easement fee. Tabango. In the first place. petitioner failed to perform his obligation.R. he cannot properly invoke his right to rescind the contract. if there is a way of reconciling them. petitioner undertook to cause the survey of the property in order to determine the portion excluded from the sale. registered in their names and they were among the defendants in a suit for expropriation earlier filed by NPC before the RTC. T-9813 and T-1599. damages and attorneys fees against NPC claiming to have been totally deprived of the use of the portions of land covered by TCT Nos. it constitutes an exception to the general provisions of the kasunduan sa bilihan ng lupa. On the other hand. . NATIONAL POWER CORPORATION G. nor plant in any area within the Right of Way that will adversely affect or obstruct the transmission line of NPC.deemed to have committed a serious breach. Jesus Cabahug reserved the option to seek additional compensation for easement fee. attributing to the doubtful ones that sense that may result from all of them taken jointly. respondent was not in default as petitioner never made a demand for payment.e. As the kasunduan pertains to a special area of the agreement. the kasunduan sa bilihan ng lupa and the kasunduan should both be given effect rather than be declared conflicting. considering that there was a breach on the part of petitioner (and no material breach on the part of respondent). By said grant. however. the two agreements actually constitute a single contract pertaining to the sale of a land to respondent by petitioner. Moreover.939 and 4. Their proper construction must be one that gives effect to all.750 square meters of the parcels of land covered by TCT Nos. Jesus Cabahug agreed not to construct any building or structure whatsoever. For and in consideration of the easement fees Cabahug granted NPC a continuous easement of right of way for the latters transmissions lines and their appurtenances over 24. v. except agricultural crops. respectively. the growth of which will not exceed three meters high. 6395. The suit was later dismissed when NPC opted to settle with the landowners by paying an easement fee equivalent to 10% of value of their property in accordance with Section 3-A of Republic Act (RA) No. Thus. T- 9813 and T-1599. 186069 January 30. however. not the full just compensation sought by the Spouses Cabahug. In this connection..

Sr. Sr. Patricio. The documentary evidence proves that in 1911 or prior to the death of Valentina Ignacio her two children. died in 1886 survived by his only child. secured a Torrens title. wherein Benita Salao-Marcelo daughter of Valentin Salao claimed 1/3 interest on the said fishpond. Salao. Salao. His eldest son. inherited from his father Juan Y. Held: As correctly pointed out by the Spouses Cabahug. Salao Jr. OCT No. or by construction. 1976 Facts: The spouses Manuel Salao and Valentina Ignacio of Barrio Dampalit. the fourth paragraph of the Grant executed by Jesus Cabahug which expressly states as follows:cralawlibrary That I hereby reserve the option to seek additional compensation for Easement Fee. her estate was administered by her daughter Ambrosia. 185 of the Registry of Deeds of Pampanga.Issue: Whether or not the spouses are still entitled to collect compensation based on the contract of the right of way. Salao. Lubao. 1991. After Valentina’s death. Jr. based on the Supreme Court Decision in G. and Ambrosia Salao. 1951 informed Juan S. or alter them for the benefit of one party and to the detriment of the other. Neither can they rewrite contracts because they operate harshly or inequitably as to one of the parties. that his clients had a one-third share in the two fishponds and that when Juani took possession thereof in 1945. Juan (Banli) and Ambrosia. Gutierrez" case. relieve one of the parties from the terms which he voluntarily consented to. Valentin Salao. read into it any other intention that would contradict its plain import. Malabon. No. and that those earnings were used in the acquisition of the Calunuran fishpond. It was alleged in the said case that Juan Y. Juan Y. The defendant Juan Y. There is no documentary evidence to support that theory. Pampanga. The property in question is the forty-seven-hectare fishpond located at Sitio Calunuran.?r?l1 From the foregoing reservation. in their names. Manuel Salao died in 1885. 60077. which jurisprudence is designated as "NPC v. ½ of the fishpond and the other half from the donation of his auntie Ambrosia Salao. Where they obtained the capital and that Valentin Salao and Alejandra Salao were included in that joint venture.R. Courts cannot supply material stipulations. Rizal begot four children named Patricio. Salao. Alejandra. for that matter. read into the contract words it does not contain or. promulgated on January 18. Salao vs Salao L-26699 March 16. that the funds used were the earnings of the properties supposedly inherited from Manuel Salao. Sr and Ambrosia Salao had engaged in the fishpond business. The lawyer of Benita Salao and the Children of Victorina Salao in a letter dated January 26. in which he refused to give Benita and Victorina’s . it is evident that the Spouses Cabahugs receipt of the easement fee did not bar them from seeking further compensation from NPC.

1951 categorically stated that Valentin Salao did not have any interest in the two fishponds and that the sole owners thereof his father Banli and his aunt Ambrosia. oral evidence can be easily fabricated. — In order to establish a trust in real property by parol evidence. and that he Juani was the donee of Ambrosia’s one-half share. It cannot rest on vague and uncertain evidence or on loose. However. — Where a trust is to be established by oral proof. as already noted. On the other hand. allows an implied trust to be proven by oral evidence. a Torrens title is generally a conclusive of the ownership of the land referred to therein (Sec. Salao. Act 496). and Ambrosia Salao. 47. contrary to the recitals of a Torrens title. Held: There was no resulting trust in this case because there never was any intention on the part of Juan Y. and Ambrosia Salao. the testimony supporting it must be sufficiently strong to prove the right of the alleged beneficiary with as much certainty as if a document proving the trust were shown. and for the reconveyance to them of the Calunuran fishpond as Valentin Salao’s supposed one-third share in the 145 hectares of fishpond registered in the names of Juan Y. . Jr. for the heirs of Valentin Salao. (Syllabus. that Torrens titles were regularly issued and that they are valid. Santa Juana vs.000. This is not a case where to satisfy the demands of justice it is necessary to consider the Calunuran fishpond ” being held in trust by the heirs of Juan Y. A Torrens Title is generally a conclusive evidence of the ownership of the land referred to therein. Issue : Whether or not the Calunuran fishpond was held in trust for Valentin Salao by Juan Y. Salao. there was no mention on the deeds as to the share of Valentin and Alejandra. 110). equivocal or indefinite declarations. as shown in the Torrens titles issued in 1911 and 1917. proof as to the fiduciary relation of the parties must be clear and convincing. satisfactory and convincing evidence. In order to maintain an action for reconveyance. Ambrosia Salao and Valentin Salao to create any trust. Del Rosario 50 Phil. proof as to the fiduciary relation of the parties must be clear and convincing. Jr. The plaintiffs utterly failed to prove by clear. Sr. Trusts. certainty of proof. Trustworthy oral evidence is required to prove an implied trust because. Juan S. Salao. the proof should be as fully convincing as if the act giving rise to the trust obligation were proven by an authentic document. Act 496). upon vague and inconclusive proof. Sr. Sr. The foregoing rulings are good under article 1457 of the Civil Code which. in his answer dated February 6. Benita Salao and her nephews and niece asked for the annulment of the donation to Juan S. Sr. A strong presumption exists that Torrens titles were regularly issued and that they are valid. In order to maintain an action for reconveyance. (Sec. Salao.children their one-third share of the net fruits which allegedly amounted to P200. Trust and trustee. 47. Salao. Such a trust cannot be established upon testimony consisting in large part of insecure surmises based on ancient hearsay. A trust cannot be established. Salao. A strong presumption exists.. establishment of trust by parol evidence. evidence needed to establish trust on parol testimony. There was no constructive trust because the registration of the two fishponds in the names of Juan and Ambrosia was not vitiated by fraud or mistake.

R. the owner may rest secure. MTC ruled in favor of petitioner. or sitting in the mirador de su casa. Petitioner alleges she bought the land from Limpiado and the transaction was not reduced in writing.RTC reversed RTC reversed and ruled in favor of Petitioner. Further claims that petitioner has abandoned her right over the property since she just filed her complaint in 1997. without the necessity of waiting in the portals of the court.The real purpose of the Torrens system is. 2007 Facts: Petitioner (canezo) filed complaint for recovery of real property against respondent Rojas Petitioner filed complaint for recovery of real property against Rojas (second wife of her father) plus damages. RTC first reversed MTC stating that prescription took place and acquisitive prescription has already set. 148788 November 23.Respondent claims that petitioner ought to have impleaded all of the heirs as defendants. Father possessed and cultivated the land until his death. NO. RTC reveres its original decision stating that no prescription took place since petitioner ENTRUSTED the . she immediately took possession of said property. Respondent claims that father bought the property in 1948 and that is why the tax declarations was in father’s name. to avoid the possibility of losing his land”. property was part of ESTATE. to quiet title to land. In 1980 she found out that respondent (second wife) was in possession/cultivating the same as well as tax declarationsin Crispulo Rojas name (father). Canezo V Rojas G. Respondent claims that it was the father who bought the property the reason why tax declaration was in his name and was in possession until death and property was included in ESTATE which petitioner RECEIVED her share in the estate. “Once a title is registered.000 sqm unregistered land in Biliran.subject property is a 4.CA ruled in favor of the respondents MTC claims that there was no proof that father bought the property. She allegedly ENTRUSTED the property to his father when she and hubby left for Mindanao in 1984 and said father took possession of land and cultivated it.Upon death in 1978.

Erlinda. BRIONES February 5.R.even assuming Implied trust. in representation of the deceased siblings of Maximino.SilverioBriones.The heirs of Maximino filed a complaint against the heirs of Donata for the partition. coupled with the performance of acts of ownership. on the other hand. petitioners right of action to recover is barred by prescription . Trustee would necessarily have legal title hence right to transfer the tax declarations in his name as this was more beneficial to the beneficiary. the facts show that after Donata’s death. ErlindaPilapil (Erlinda). PILAPIL v. subsequently. HEIRS OF MAXIMINO R. which was initially granted. 2007 G. Gregorio filed with the RTC a Motion to Set Aside the Order.father is owner. When Maximinodied.Gregorio. Donata instituted intestate proceedings to settle her husband’s estate. and continued to manage the same and collectthe rental fees thereon. The trial court also issued an order.49 YEARS lapsed. which then issuedappointedDonata as the administratrix of Maximino’s estate. Thus. Respondents.and recovery of possession of real property. we hold that there was no express trust or resulting trust established between the petitioner and her father. such as payment of real estate taxes. HELD: Neither express or implied resulting TRUST existed in this case. In light of the disquisitions. Intention to create trust CANNOT be inferred from petitioner’s testimony and on the facts and circumstance. composed of his nephews and nieces. were appointed as administrators of Donata’s intestate estate. she should not have made an issue of the tax declarations. They alleged that Donata. and without theknowledge of the other heirs.Maximino was married to Donata but their union did not produce any children. But then. and the other nephews and nieces of Donata. Silverio’s Letters of Administration for the intestate estate of Maximino was subsequently set aside by the RTC.Donata died. were so . Rizalina’s daughter. Donata and. allowing Silverio tocollect rentals from Maximino’s properties. petitioner’s inaction for 17 years since discovery of possession of second wife tax declaration was in father’s name. claiming that the said properties were already under his and his wife’sadministration as part of the intestate estate of Donata. as administratrix of theestate of Maximino. ripened into ownership. and property was included in estate. succeeded in registering in her name the real properties belongingto the intestate estate of to her father. 150175 Facts: Petitioners are the heirs of the late Donata Ortiz-Briones (Donata). Furthermore. and grandnephews andgrandnieces. consisting of her survivingsister. in the absence of a trust relation. and that 10-year prescription starts from the day the trustee REPUDIATES the trust. father was in adverse possession. RTC found no evidence showing such. Erlinda instituted apetition for the administration of the intestate estate of Donata. through fraud and misrepresentation. No. in breach of trust. Erlinda and her husband. we can only conclude that Crispulos uninterrupted possession of the subject property for 49 years. a nephew of Maximino. annulment. CA ruled in favor of the respondent. Petitioner contends that there was EXPRESS TRUST hence prescription will not set in. ISSUE: WON trust existed. Assuming trust existed it was terminated upon DEATH of father.Erlinda took possession of the real properties. Rizalina Ortiz-Aguila (Rizalina). Petitioner only TESTIFIED that the father agreed to give her proceeds of the production of the land SC states that had it been had it been her intention to create trust. CA. filed for Letters of Administration for the intestate estateof Maximino.. are the heirs of the lateMaximinoBriones (Maximino).

Zacarias. Issue: Whether or Not the action was barred by prescription. for a party to deserve the considerations of thecourts. Abdon Augusto. Respondent Heirs filed Civil Case No. for(1) recovery of Lot No. before instituting. 1934. 02679 in the name of Calipan was cancelled pursuant to an "ExtrajudicialPartition"5 executed before Notary Public Vicente Fanilag. 4397 owned by Aniceto Augusto who was married to Petrona Calipan. indifference. They even attended his wake.respondents are consistently displaying a penchant for delayed action. Apparently. they waited another two years. On the contrary. 144773 May 16. Respondents sought the declaration of nullity(inexistence) of the Deed of Sale because of the absence of their consent as the true and lawful owners of the land. 4397. tax declaration certificates covering Lot No. without any profferedreason or justification for such delay. Respondents anchored their action for reconveyance in the trial court on the nullity of the Deed of Sale between petitioner Aznar and the supposed owners of the property. 2005 Facts: The subject matter of this controversy is Lot No. 2666-L against petitioner Aznar Realty. Ciriaco Icoy. based on impliedtrust. In view of the foregoing. This was granted by the trial court. annulment and recovery of the real property belonging to the estate of Maximino. Tax Declaration No. the property remained undivided as evidenced by Tax Declaration No. he must show that he is not guilty of any of the aforesaid failings.obviously exercising rightsof ownership over the real properties. Teoderica Augusto.The heirs of Maximino knew he died on 1 May 1952. Felipe Aying. Teoderica. Zacarias Augusto. AZNAR BROTHERS VS. in exclusion of all others. 4397 were issued to the following: Filomeno Augusto.R. It asked for a preliminary hearing on the affirmative defenses as if a motion to dismiss had been filed. the Motion for Reconsideration is DENIED. Ruling: Petition is without merit. particularly the belated submission of evidence and argument of new issues. When Aniceto died on December3. claim is imprescriptible. filed a Petition for Letters of Administration for the intestate estate of Maximinoon 21 January 1985. They did notoffer any explanation as to why they had waited 33 years from Maximino’s death before one of them. 1962 as null and void. is also barred by laches. on 3 March 1987. (4) the cancellation of the TCT issued to petitioner Aznar Realty and (5) the issuance of a restraining order and/or writ of preliminary injunction. HEIRS OF ANICETO AUGUSTO G. he left behind five children: Geronimo. After learning that the intestate estate of Maximino was already settled inaspecial proceeding. based onimplied trust. Branch 27. The law does not encourage laches. and Carlos and Filomeno Augusto in the RTC of Lapu-Lapu City. acomplaint for partition. Issue: Whether or not respondents’ right to recover possession of the disputed properties. as well as respondents’ conductbefore this Court. (2) the declaration of the Deed of Sale dated February 13. They argued that the sale to petitioner Aznar was void since the purported "owners" who signed the Deed of .negligence or ignorance. Pedro Tampus and Anacleto Augusto. In lieu thereof. (3) the recognition of the Heirs. No.It is well established that the law serves those who are vigilant and diligent and not those whosleep when the law requires them to act. Aznar Realty filed an answer interposing the defense of lack of cause of action and prescription. Respondents impugned the validity of the document because the sellers were not the true owners of the land. Arsenia and Irenea. Silverio. is also barred by laches. Held: Respondents’ right to recover possession of the disputed properties.Considering the circumstances in the afore-quoted paragraphs. These persons sold the property to petitioner Aznar Brothers Realty Company (Aznar Realty) through a Deed of Sale of Unregistered Land. which must have already put theheirs of Maximino on guard if they truly believed that they still had rights thereto. 026794 issued to Petrona Calipan in 1945.

1992." should be applied only in the absence of. The action or defense for the declaration of the inexistence of a contract does not prescribe. which has been aptly described as "justice outside legality. Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity. the trial court should not have dismissed the complaint without looking into the validity of the sale of land to petitioner Aznar Realty. They pointed out that the 1945 Tax Declaration in the name of Petrona Calipan indicated that the property was undivided as of the time Aniceto Augusto died in 1932. the Court of Appeals did not err in setting aside the decision of the trial court and ordering that the case be remanded for trial. Aequetas nunguam contravenit legis The positive mandate of Art. They certainly could not be deemed to have slept on their rights. Neither could laches be invoked in the case at bar. Only eight months had passed from the time they were ejected to the time they asserted their rights over their property.Sale as vendors were not even heirs of Aniceto Augusto and Petrona Calipan. Thus. In actions for reconveyance of property predicated on the fact that the conveyance complained of was null and void ab initio. Respondents were evicted from their land in November 1991 and they filed their complaint with the trial court on July 28. . statutory law. 1410 of the New Civil Code conferring imprescriptibility to actions for declaration of the inexistence of a contract should pre-empt and prevail over all abstract arguments based only on equity. and never against. Thus. The "owners" who sold the land to petitioner Aznar Realty could not have been the true owners of theland since there was no showing how they acquired the land in the first place. Equity. a claim of prescription of action would be unavailing.