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University of Santo Tomas

CIVIL LAW
RECENT JURISPRUDENCE
(2013 2015)
Recent Jurisprudence (2013 - 2015) Civil Law

Table of Contents

Persons ......................................................................................................................................................................................... 1
Conflict of Laws ......................................................................................................................................................................... 1
Human Relations....................................................................................................................................................................... 1
Marriage and Family Relations ........................................................................................................................................... 3
Essential Requisites of a Valid Marriage ......................................................................................................................... 3
Proof of Marriage ...................................................................................................................................................................... 3
Foreign Divorce ......................................................................................................................................................................... 3
Subsequent Marriage under Art. 41 of FC ...................................................................................................................... 4
Psychological Incapacity........................................................................................................................................................ 5
Property Relations of the Spouses..................................................................................................................................... 6
Paternity and Filiation ............................................................................................................................................................ 7
Family Home............................................................................................................................................................................... 8
Funerals ........................................................................................................................................................................................ 8
Property........................................................................................................................................................................................ 8
Ownership ................................................................................................................................................................................... 8
Ownership in General ............................................................................................................................................................. 8
Immovable Property ............................................................................................................................................................ 10
Accession................................................................................................................................................................................... 10
Right of accession with respect to Immovable Property ...................................................................................... 10
Quieting of Title to, or Interest in and Removal of Interest or Cloud............................................................... 11
Quieting of Titles.................................................................................................................................................................... 11
Co-ownership .......................................................................................................................................................................... 12
Possession ................................................................................................................................................................................ 13
Possession and the Kinds thereof ................................................................................................................................... 13
Acquisition of Possession ................................................................................................................................................... 14
Effects of Possession ............................................................................................................................................................ 14
Acquisitive Prescription ..................................................................................................................................................... 15
Extinctive Prescription........................................................................................................................................................ 15
Easements................................................................................................................................................................................. 15
Easement of Right of Way .................................................................................................................................................. 15
Nuisance .................................................................................................................................................................................... 16
Modes of Acquiring Ownership ....................................................................................................................................... 16
Donation .................................................................................................................................................................................... 16
Prescription ............................................................................................................................................................................. 17
Prescription of Actions ........................................................................................................................................................ 17
Obligations ............................................................................................................................................................................... 18
Classification of Obligations .............................................................................................................................................. 18
Pure and Conditional Obligations ................................................................................................................................... 18
Obligations with Period ...................................................................................................................................................... 19
Nature and Effect of Obligations ..................................................................................................................................... 19
Joint and Solidary Obligation ............................................................................................................................................ 20
Extinguishment of Obligations ......................................................................................................................................... 21
Payment or Performance ................................................................................................................................................... 21
Loss of the Thing Due........................................................................................................................................................... 22
Novation .................................................................................................................................................................................... 23
Compensation ......................................................................................................................................................................... 24
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Contracts ................................................................................................................................................................................... 24
General Provisions ................................................................................................................................................................ 24
Essential Requisites .............................................................................................................................................................. 26
Kinds of Contracts ................................................................................................................................................................. 28
Unenforceable Contracts .................................................................................................................................................... 28
Rescission ................................................................................................................................................................................. 28
Simulation of Contract ......................................................................................................................................................... 30
Sales ............................................................................................................................................................................................ 30
Assignment of Credit ............................................................................................................................................................ 30
Conditional Sale...................................................................................................................................................................... 31
Simulated Sale ......................................................................................................................................................................... 31
Delivery...................................................................................................................................................................................... 31
Purchase in Good Faith ....................................................................................................................................................... 32
Sale of Same Thing/s to Different Vendees................................................................................................................. 33
Contract of Sale....................................................................................................................................................................... 33
Earnest Money ........................................................................................................................................................................ 36
Forgery....................................................................................................................................................................................... 36
Recission ................................................................................................................................................................................... 36
Extinguishment of Debt ...................................................................................................................................................... 37
P.D. 957 The Subdivision and Condominium Buyers Protective Decree ...................................................... 37
Compromise............................................................................................................................................................................. 37
Succession................................................................................................................................................................................. 38
General Provisions ................................................................................................................................................................ 38
Provisions common to Testate and Intestate Succession ..................................................................................... 38
Agency ........................................................................................................................................................................................ 39
Trust ............................................................................................................................................................................................ 40
Credit Transactions .............................................................................................................................................................. 41
Loan ............................................................................................................................................................................................. 41
Interest Rate ............................................................................................................................................................................ 41
Contract of Loan ..................................................................................................................................................................... 44
Checks ........................................................................................................................................................................................ 45
Mortgage ................................................................................................................................................................................... 45
Equitable Mortgage............................................................................................................................................................... 45
Chattel Mortgage.................................................................................................................................................................... 45
Real Estate Mortgage ........................................................................................................................................................... 46
Foreclosure .............................................................................................................................................................................. 48
Redemption.............................................................................................................................................................................. 49
Surety ......................................................................................................................................................................................... 50
Pledge ......................................................................................................................................................................................... 52
Pactum Commissorium ....................................................................................................................................................... 52
Lease ........................................................................................................................................................................................... 53
Land, Titles and Deeds......................................................................................................................................................... 54
Torrens Title ............................................................................................................................................................................ 54
Regalian Doctrine .................................................................................................................................................................. 61
Registration.............................................................................................................................................................................. 64
Cancellation of Title .............................................................................................................................................................. 68
Action of Reconveyance ...................................................................................................................................................... 68
Reconstitution......................................................................................................................................................................... 69
Exemption from CARP ......................................................................................................................................................... 69
Recent Jurisprudence (2013 - 2015) Civil Law

Free Patent ............................................................................................................................................................................... 69


Reversion .................................................................................................................................................................................. 70
Torts and Damages ............................................................................................................................................................... 70
Damages .................................................................................................................................................................................... 70
Negligence ................................................................................................................................................................................ 74
Res Ipsa Loquitur................................................................................................................................................................... 77
Tortfeasors ............................................................................................................................................................................... 78
Attorneys Fees ........................................................................................................................................................................ 78
Civil Liability ............................................................................................................................................................................ 79
Other Laws which are excluded from the Syllabus ................................................................................................. 79
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PERSONS

CONFLICT OF LAWS
PERSONS
David and Leticia are US citizens who own properties in the USA and in the Philippines. Leticia
obtained a decree of divorce from the Superior Court of California in June 2005 wherein the court
awarded all the properties in the USA to Leticia. With respect to their properties in the Philippines,
Leticia filed a petition for judicial separation of conjugal properties. The Court ruled that even if the
Court applies the doctrine of processual presumption as the lower courts did with respect to the
property regime of the parties, the recognition of divorce is entirely a different matter because, to
begin with, divorce is not recognized between Filipino citizens in the Philippines. Absent a valid
recognition of the divorce decree, it follows that the parties are still legally married in the
Philippines. The trial court thus erred in proceeding directly to liquidation. DAVID A. NOVERAS vs.
LETICIA T. NOVERAS, G.R. No. 188289, August 20, 2014, J. Perez

Under the doctrine of processual presumption, if the foreign law involved is not properly pleaded
and proved, our courts will presume that the foreign law is the same as our local or domestic or
internal law. Hence, pleading a foreign law without proving the same will bar its application in the
Philippines. NORMA A. DEL SOCORRO for and in behalf of her Minor Child RODERIGO NORJO
VAN WILSEM vs. ERNST JOHAN BRINKMAN VAN WILSEM, G.R. No. 193707, December 10,
2014, J. Peralta

The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to recognize a foreign judgment
relating to the status of a marriage where one of the parties is a citizen of a foreign country.

In the recognition of foreign judgments, Philippine courts are incompetent to substitute their
judgment on how a case was decided under foreign law. They cannot decide on the "family rights
and duties, or on the status, condition and legal capacity" of the foreign citizen who is a party to the
foreign judgment. Thus, Philippine courts are limited to the question of whether to extend the effect
of a foreign judgment in the Philippines. In a foreign judgment relating to the status of a marriage
involving a citizen of a foreign country, Philippine courts only decide whether to extend its effect to
the Filipino party, under the rule of lex nationalii expressed in Article 15 of the Civil Code.
(MINORU FUJIKI v. MARIA PAZ GALELA MARINAY, G.R. No. 196049, June 26, 2013)

HUMAN RELATIONS
PERSONS
The principle of unjust enrichment has two conditions. First, a person must have been benefited
without a real or valid basis or justification. Second, the benefit was derived at another persons
expense or damage. In this case, Loria received P2,000,000.00 from Muoz for a subcontract of a
government project to dredge the Masarawag and San Francisco Rivers in Guinobatan, Albay.
However, contrary to the parties agreement, Muoz was not subcontracted for the project.
Nevertheless, Loria retained the P2,000,000.00. Thus, Loria was unjustly enriched. He retained
Muozs money without valid basis or justification. Under Article 22 of the Civil Code of the

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Philippines, Loria must return the P2,000,000.00 to Muoz. CARLOS A. LORIA vs. LUDOLFO P.
MUOZ, G.R. No. 187240, October 15, 2014, J. Leonen

Article 28 of the Civil Code provides that unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or any
other unjust, oppressive or high-handed method shall give rise to a right of action by the person
who thereby suffers damage. What is being sought to be prevented is not competition per se but the
use of unjust, oppressive or highhanded methods which may deprive others of a fair chance to
engage in business or to earn a living. Thus, when a manufacturer of plastic kitchenware products
employed the former employees of a neighboring partnership engaged in the manufacture of plastic
automotive parts; deliberately copied the latters products and even went to the extent of selling
these products to the latters customers, there is unfair competition. WILLAWARE PRODUCTS
CORPORATION vs. JESICHRIS MANUFACTURING CORPORATION, G.R. No. 195549, September
3, 2014, J. Peralta

Thus, an individuals right to privacy under Article 26(1) of the Civil Code should not be confined to
his house or residence as it may extend to places where he has the right to exclude the public or
deny them access. The phrase "prying into the privacy of anothers residence," therefore, covers
places, locations, or even situations which an individual considers as private. And as long as his
right is recognized by society, other individuals may not infringe on his right to privacy. The CA,
therefore, erred in limiting the application of Article 26(1) of the Civil Code only to residences.
(SPOUSES HING v. ALEXANDER CHOACHUY, SR. G.R. No. 179736. June 26, 2013)

Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in the
exercise of legal right or duty, act in good faith. He would be liable if he instead acted in bad faith,
with intent to prejudice another. Good faith refers to the state of mind which is manifested by the
acts of the individual concerned. It consists of the intention to abstain from taking an
unconscionable and unscrupulous advantage of another. Malice or bad faith, on the other hand,
implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral
obliquity. (CALIFORNIA CLOTHING, INC. AND MICHELLE S. YBANEZ v. SHIRLEY G. QUINONES,
G.R. No. 175822. October 23, 2013)

There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when
a person retains money or property of another against the fundamental principles of justice, equity
and good conscience. The principle of unjust enrichment requires two conditions: (1) that a person
is benefited without a valid basis or justification, and (2) that such benefit is derived at the expense
of another. (ANTONIO LOCSIN II VS. MEKENI FOOD CORPORATION, G.R. No. 192105, December
09, 2013)

The principle of quantum meruit allows a party to recover the reasonable value of the thing or
services rendered despite the lack of a written contract, in order to avoid unjust enrichment. The
principle states that a person must be paid with an amount that he deserves. It aims to prevent
undue enrichment based on the equitable postulate that it is unjust for a person to retain any
benefit without paying for it. In the instant case, since First Sta. Clara already performed certain
works on the project with an estimated value of, to completely deny it payment for the same would
result in Rivelisa Realtys unjust enrichment at the First Sta. Claras expense. Hence, it is only proper
that First Sta. Clara must be paid on a quantum meruit basis. (RIVELISA REALTY, INC., v. FIRST
STA. CLARA BUILDERS CORPORATION, G.R. NO. 189618 January 15, 2014)

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Unjust enrichment exists, according to Hulst v. PR Builders, Inc., when a person unjustly retains a
benefit at the loss of another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience. The prevention of unjust
enrichment is a recognized public policy of the State, for Article 22 of the Civil Code explicitly
provides that [e]very person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or legal
ground, shall return the same to him. (DOMINGO GONZALO v. JOHN TARNATE, JR., G.R. No.
160600. January 15, 2014)

MARRIAGE AND FAMILY RELATIONS

ESSENTIAL REQUISITES OF A VALID MARRIAGE

A marriage, contracted for the sole purpose of acquiring American citizenship is NOT void ab initio
on the ground of lack of consent. Under Article 2 of the Family Code, consent is an essential
requisite of marriage. Article 4 of the same Code provides that the absence of any essential requisite
shall render a marriage void ab initio. Under said Article 2, for consent to be valid, it must be (1)
freely given and (2) made in the presence of a solemnizing officer. A "freely given" consent requires
that the contracting parties willingly and deliberately enter into the marriage. Consent must be real
in the sense that it is not vitiated nor rendered defective by any of the vices of consent under
Articles 45 and 46 of the Family Code, such as fraud, force, intimidation, and undue influence.
Consent must also be conscious or intelligent, in that the parties must be capable of intelligently
understanding the nature of, and both the beneficial or unfavorable consequences of their act. Their
understanding should not be affected by insanity, intoxication, drugs, or hypnotism. (REPUBLIC OF
THE PHILIPPINES v. LIBERTY D. ALBIOS, G.R. No. 198780. October 16, 2013)

PROOF OF MARRIAGE

Marriage may be proven by any competent and relevant evidence. Hence, when one of the parties to
the marriage or one of the witnesses to the marriage testifies that the marriage took place, it has
been held to be admissible to prove the fact of such marriage. Thus, the testimony of Tecla (wife)
and Adelina, who was present during the marriage ceremony, serves as an admissible evidence to
prove the fact of marriage between Tecla and Eustaquio. (PEREGRINA MACUA VDA. DE AVENIDO
v. TECLA HOYBIA AVENIDO, G.R. No. 173540. January 22, 2014)

FOREIGN DIVORCE

Divorce between Filipinos is void and ineffectual under the nationality rule adopted by Philippine
law. Hence, any settlement of property between the parties of the first marriage involving Filipinos
submitted as an incident of a divorce obtained in a foreign country lacks competent judicial
approval, and cannot be enforceable against the assets of the husband who contracts a subsequent
marriage.

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Atty. Lunas subsequent marriage to Soledad was void for being bigamous, on the ground that the
marriage between Atty. Luna and Eugenia had not been dissolved by the Divorce Decree rendered
by the CFI of Sto. Domingo in the Dominican Republic but had subsisted until the death of Atty.
Luna

Given the subsistence of the first marriage between Atty. Luna and Eugenia, the presumption that
Atty. Luna acquired the properties out of his own personal funds and effort remained. It should
then be justly concluded that the properties in litis legally pertained to their conjugal partnership of
gains as of the time of his death. Consequently, the sole ownership of the 25/100 pro indiviso share
of Atty. Luna in the condominium unit, and of the law books pertained to the respondents as the
lawful heirs of Atty. Luna. SOLEDAD L. LAVADIA vs. HEIRS OF JUAN LUCES LUNA, represented
by GREGORIO Z. LUNA and EUGENIA ZABALLERO-LUNA, G.R. No. 171914, July 23, 2014, J.
Lucas P. Bersamin

Petitioner questions the decision of the RTC, dismissing her petition for the recognition of her
second marriage as valid, for failing to comply with the requirements set forth in Art. 13 of the
Family Code that is obtaining a judicial recognition of the foreign decree of absolute divorce in our
country. The SC however ruled that a divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided the decree is valid according to the national law of the foreigner. The
presentation solely of the divorce decree is insufficient; both the divorce decree and the governing
personal law of the alien spouse who obtained the divorce must be proven. Because our courts do
not take judicial notice of foreign laws and judgment, our law on evidence requires that both the
divorce decree and the national law of the alien must be alleged and proven and like any other fact.
Hence, instead of filing a petition for the recognition of her second marriage as valid, petitioner
should have filed a petition for the judicial recognition of her foreign divorce from her first
husband. EDELINA T. ANDO vs. DEPARTMENT OF FOREIGN AFFAIRS, G.R. No. 195432, August
27, 2014, CJ. Sereno

SUBSEQUENT MARRIAGE UNDER ART. 41 OF FC

Thus, mere absence of the spouse (even for such period required by the law), lack of any news that
such absentee is still alive, failure to communicate or general presumption of absence under the
Civil Code would not suffice. This conclusion proceeds from the premise that Article 41 of the
Family Code places upon the present spouse the burden of proving the additional and more
stringent requirement of well-founded belief which can only be discharged upon a showing of
proper and honest-to-goodness inquiries and efforts to ascertain not only the absent spouses
whereabouts but, more importantly, that the absent spouse is still alive or is already dead.

The law did not define what is meant by well-founded belief. It depends upon the circumstances
of each particular case. Its determination, so to speak, remains on a case-to-case basis. To be able to
comply with this requirement, the present spouse must prove that his/her belief was the result of
diligent and reasonable efforts and inquiries to locate the absent spouse and that based on these
efforts and inquiries, he/she believes that under the circumstances, the absent spouse is already
dead. It requires exertion of active effort (not a mere passive one). (REPUBLIC OF THE
PHILIPPINES VS. MARIA FE ESPINOSA CANTOR, G.R. No. 184621, December 10, 2013)

The proper remedy for a judicial declaration of presumptive death obtained by extrinsic fraud is an
action to annul the judgment. An affidavit of reappearance is not the proper remedy when the

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person declared presumptively dead has never been absent. CELERINA J. SANTOS vs. RICARDO T.
SANTOS, G.R. No. 187061, October 08, 2014, J. Leonen

PSYCHOLOGICAL INCAPACITY

Psychological incapacity is the downright incapacity or inability to take cognizance of and to


assume the basic marital obligations. The burden of proving psychological incapacity is on the
plaintiff. The plaintiff must prove that the incapacitated party, based on his or her actions or
behavior, suffers a serious psychological disorder that completely disables him or her from
understanding and discharging the essential obligations of the marital state. The psychological
problem must be grave, must have existed at the time of marriage, and must be incurable. VALERIO
E. KALAW vs. MA. ELENA FERNANDEZ, G.R. No. 166357, January 14, 2015, J. Del Castillo

The lack of personal examination or assessment by a psychologist or psychiatrist is not necessarily


fatal in a petition for the declaration of nullity of marriage. If the totality of evidence presented is
enough to sustain a finding of psychological incapacity, then actual medical examination of the
person concerned need not be resorted to. In the case at bar, the assessment of the psychological
incapacity of the wife was based solely on the information provided by the husband whose bias in
favor of his cause cannot be doubted. While this circumstance alone does not disqualify the
psychologist for reasons of bias, her report, testimony and conclusions deserve the application of a
more rigid and stringent set of standards. Hence, if the totality of the evidence presented provides
inadequate basis to warrant the conclusion that a psychological incapacity existed that prevented
her from complying with the essential obligations of marriage, the declaration of the nullity of the
marriage cannot be obtained. It has been settled that irreconcilable differences, sexual infidelity or
perversion, emotional immaturity and irresponsibility, and the like, do not by themselves warrant a
finding of psychological incapacity under Article 36, as the same may only be due to a persons
refusal or unwillingness to assume the essential obligations of marriage and not due to some
psychological illness that is contemplated by said rule. GLENN VIAS vs. MARY GRACE PAREL-
VIAS, G.R. No. 208790, January 21, 2015, J. Reyes

The alleged failure of Luz to assume her duties as a wife and as a mother, as well as her emotional
immaturity, irresponsibility and infidelity, cannot rise to the level of psychological incapacity that
justifies the nullification of the parties' marriage. Psychological incapacity as required by Article 36
must be characterized by (a) gravity, (b) juridical antecedence and (c) incurability. The
interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling or decisive, should be given great respect by our courts. The
decision of the NAMT was based on the second paragraph of Canon 1095 which refers to those who
suffer from a grave lack of discretion of judgment concerning essential matrimonial rights and
obligations to be mutually given and accepted, a cause not of psychological nature under Article 36
of the Family Code. A cause of psychological nature similar to Article 36 is covered by the third
paragraph of Canon 1095 of the Code of Canon Law. ROBERT F. MALLILIN vs. LUZ G.
JAMESOLAMIN AND THE REPUBLIC OF THE PHILIPPINES, G.R. No. 192718, February 18,
2015, J. Mendoza

Psychological incapacity, as a ground to nullify a marriage under Article 36 of the Family Code,
should refer to no less than a mental not merely physical incapacity that causes a party to

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be truly incognitive of the basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage which, as so expressed in Article 68 of the Family Code,
among others, include their mutual obligations to live together, observe love, respect and fidelity
and render help and support. There is hardly any doubt that the intendment of the law has been to
confine the meaning of psychological incapacity to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the
marriage. (REPUBLIC OF THE PHILIPPINES v. RODOLFO O. DE GRACIA G.R. No. 171577,
February 12, 2014)

PROPERTY RELATIONS OF THE SPOUSES

After the marriage of petitioner and respondent has been declared void, petitioner filed a complaint
for the partition of the house and lot obtained by them during their marriage. The SC ruled that
what governs them is Art. 147 of the Family Code. Under this article, property acquired by both
spouses through their work and industry shall be governed by the rules on equal co-ownership.
Any property acquired during the union is prima facie presumed to have been obtained through
their joint efforts. A party who did not participate in the acquisition of the property shall be
considered as having contributed to the same jointly if said party's efforts consisted in the care and
maintenance of the family household. Efforts in the care and maintenance of the family and
household are regarded as contributions to the acquisition of common property by one who has no
salary or income or work or industry. In the case at bar since the former spouses both agreed that
they acquired the subject property during the subsistence of their marriage, it shall be presumed to
have been obtained by their joint efforts, work or industry, thus, the property is jointly owned by
them in equal shares. MARIETTA N. BARRIDO vs. LEONARDO V. NONATO, G.R. No. 176492,
October 20, 2014, J. Peralta

Under Art. 147 of the Family Code, properties acquired during cohabitation are presumed co-
owned unless there is proof to the contrary. The title to the property in the name of "Petra Rosca,
married to Luis G. Uy" was notice to the world, including her heirs and successors-in-interest, that
such belonged to Rosca as her paraphernal property. The words "married to" were merely
descriptive of Rosca's status at the time the property was registered in her name. Otherwise, if the
property was conjugal, the title to the property should have been in the names of Luis Uy and Petra
Rosca. LUIS UY, SUBSTITUTED BY LYDIA UY VELASQUEZ AND SHIRLEY UY MACARAIG v.
SPOUSES JOSE LACSAMANA AND ROSAURA* MENDOZA, SUBSTITUTED BY CORAZON BUENA,
G.R. No. 206220, August 19, 2015

The Court held that in a void marriage, as in those declared void under Article 36 of the Family
Code, the property relations of the parties during the period of cohabitation is governed either by
Article 147 or Article 148 of the Family Code. Article 147 of the Family Code applies to union of
parties who are legally capacitated and not barred by any impediment to contract marriage, but
whose marriage is nonetheless void, as in this case. VIRGINIA OCAMPO v. DEOGRACIO OCAMPO,
G.R. No. 198908, August 03, 2015

Benjamin and Sally cohabitated without the benefit of marriage. Thus, only the properties acquired
by them through their actual joint contribution of money, property, or industry shall be owned by
them in common in proportion to their respective contributions. Thus, both the trial court and the
Court of Appeals correctly excluded the 37 properties being claimed by Sally which were given by

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Benjamins father to his children as advance inheritance. SALLY GO-BANGAYAN v. BENJAMIN


BANGAYAN, JR., G.R. No. 201061, July 3, 2013)

The presumption under Article 160 of the New Civil Code, that property acquired during marriage
is conjugal, does not apply where there is no showing as to when the property alleged to be
conjugal was acquired. The presumption cannot prevail when the title is in the name of only one
spouse and the rights of innocent third parties are involved. Moreover, when the property is
registered in the name of only one spouse and there is no showing as to when the property was
acquired by same spouse, this is an indication that the property belongs exclusively to the said
spouse. Moreover, the presumption may be rebutted only with strong, clear, categorical and
convincing evidence. There must be strict proof of the exclusive ownership of one of the spouses,
and the burden of proof rests upon the party asserting it. (BOBBY TAN, v. GRACE ANDRADE, ET
AL. v. BOBBY TAN, G.R. No. 172017 / G.R. No. 171904 August 7, 2013)

Article 147 of the Family Code applies to the union of parties who are legally capacitated and not
barred by any impediment to contract marriage, but whose marriage is nonetheless declared void
under Article 36 of the Family Code, as in this case. Under this property regime, property acquired
during the marriage is prima facie presumed to have been obtained through the couples joint
efforts and governed by the rules on co-ownership. In the present case, Salas did not rebut this
presumption. In a similar case where the ground for nullity of marriage was also psychological
incapacity, we held that the properties acquired during the union of the parties, as found by both
the RTC and the CA, would be governed by co-ownership. (JUAN SEVILLA, JR. v. EDEN VILLENA
AGUILA, G.R. No. 202370, September 23, 2013)

The presumption under Article 160 of the New Civil Code applies when the property in question
was acquired during the lifetime of the husband and the wife and the subsistence of the marriage. It
is not overcome by the fact that the property is registered in the name of the husband or the wife
alone. The consent of both spouses is required before a conjugal property may be mortgaged.
However, since the nature of the property was never alleged in the complaint or raised during trial
by the petitioner, the court cannot apply such. presumption in the instant case. (FRANCISCO LIM v.
EQUITABLE PCI BANK, NOW KNOWN AS THE BANCO DE ORO UNIBANK, INC., G.R. No. 183198.
January 15, 2014

PATERNITY AND FILIATION

The filiation of illegitimate children, like legitimate children, is established by (1) the record of birth
appearing in the civil register or a final judgment; or (2) an admission of legitimate filiation in a
public document or a private handwritten instrument and signed by the parent concerned. In the
absence thereof, filiation shall be proved by (1) the open and continuous possession of the status of
a legitimate child; or (2) any other means allowed by the Rules of Court and special laws. The due
recognition of an illegitimate child in a record of birth, a will, a statement before a court of record,
or in any authentic writing is, in itself, a consummated act of acknowledgment of the child, and no
further court action is required. In fact, any authentic writing is treated not just a ground for
compulsory recognition; it is in itself a voluntary recognition that does not require a separate action
for judicial approval.

It must be concluded that Rodolfo who was born during the marriage of Alfredo Aguilar and
Candelaria Siasat-Aguilar and before their respective deaths has sufficiently proved that he is the
legitimate issue of the Aguilar spouses. He correctly argues, Alfredo Aguilars SSS satisfies the

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requirement for proof of filiation and relationship to the Aguilar spouses under Article 172 of the
Family Code; by itself, said document constitutes an admission of legitimate filiation in a public
document or a private handwritten instrument and signed by the parent concerned. RODOLFO S.
AGUILAR vs. EDNA G. SIASAT, G.R. No. 200169, January 28, 2015, J. Del Castillo

Article 177 of the Family Code provides that "only children conceived and born outside of wedlock
of parents who, at the time of the conception of the former, were not disqualified by any
impediment to marry each other may be legitimated." Article 178 states that "legitimation shall
take place by a subsequent valid marriage between parents." BBB* v. AAA* G.R. No. 193225,
February 9, 2015, REYES, J.

An illegitimate child may use the surname of his father if the latter has expressly recognized their
filiation. However, the child is under no compulsion to use his fathers surname. When Antonio
recognized Andre Lewis and Jerard Patrick as his sons, the two children had the right to use the
surname of Antonio. However, they were under no compulsion or mandate to use the same. The law
uses the word may, which dictates that it is merely permissive. (GRACE M. GRANDE v. PATRICIO
T. ANTONIO, G.R. No. 206248. February 18, 2014)

FAMILY HOME

It has been said that the family home is a real right that is gratuitous, inalienable and free from
attachment. The exemption of the family home from execution, forced sale or attachment is limited
to P300,000 in urban areas and P200,000 in rural areas, unless those maximum values are adjusted
by law. ENRICO S. EULOGIO AND NATIVIDAD V. EULOGIO v. PATERNO C. BELL, SR, ET. AL, G.R.
No. 186322, July 08, 2015

FUNERALS

The petitioner alleges that being a common law spouse who took care of the deceased, she has the
right to make funeral arrangements for the deceased. The Supreme Court ruled that the duty and
the right to make funeral arrangements are confined within the family of the deceased particularly
the spouse of the deceased to the exclusion of a common law spouse. FE FLORO VALINO vs.
ROSARIO D. ADRIANO, FLORANTE D. ADRIANO, RUBEN D. ADRIANO, MARIA TERESA
ADRIANO ONGOCO, VICTORIA ADRIANO BAYONA, and LEAH ANTONETTE D. ADRIANO, G.R.
No. 182894, April 22, 2014, J. Mendoza

PROPERTY

OWNERSHIP

OWNERSHIP IN GENERAL

In actions for recovery of possession, the plaintiff must show proof to support his claim of his right
to possession of the property. The defendant in turn must show proof to controvert the plaintiffs
claim; otherwise the court will rule for the plaintiff. Thus, when a landowner filed an action for
recovery of possession against a public school which built a gymnasium on a parcel of land which

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the owner allowed the school to use as an access road for the schoolchildren, and the plaintiff
showed as evidence tax declarations and a certificate of title over the property, the lone testimonial
evidence the DepEd presented is not sufficient to controvert the landowners case. In addition, the
landowners claim is not barred by laches when the schools possession of the property is not
adverse, and when the landowner brought suit two years after he learned that the school is
constructing a gymnasium over the property. DEPARTMENT OF EDUCATION, represented by its
REGIONAL DIRECTOR TERESITA DOMALANTA vs. MARIANO TULIAO, G.R. No. 205664, June 9,
2014, J. Mendoza

A tax declaration is not a proof of ownership; it is not a conclusive evidence of ownership of real
property. In the absence of actual, public, and adverse possession, the declaration of the land for tax
purposes does not prove ownership. HEIRS OF PACIANO YABAO, represented by REMEDIOS
CHAN vs. PAZ LENTEJAS VAN DER KOLK, G.R. No. 207266, June 25, 2014, J. Mendoza

The petitioner is a lessee of a parcel of land and disputes the title of the owners of the building built
on the land they are leasing. The Supreme Court ruled that it is settled that "[o]nce a contact of lease
is shown to exist between the parties, the lessee cannot by any proof, however strong, overturn the
conclusive presumption that the lessor has a valid title to or a better right of possession to the
subject premises than the lessee." Section 2(b), Rule 131 of the Rules of Court prohibits a tenant
from denying the title of his landlord at the time of the commencement of the relation of landlord
and tenant between them. MIDWAY MARITIME AND TECHNOLOGICAL FOUNDATION,
represented by its Chairman/President PhD in Education DR. SABINO M. MANGLICMOT vs.
MARISSA E. CASTRO, ET AL., G.R. No. 189061, August 6, 2014, J. Reyes

The petitioner claims that they are the rightful owners of the disputed property. Thus, an ejectment
proceeding cannot be commenced against them. The Supreme Court ruled that "ejectment
proceedings are summary proceedings intended to provide an expeditious means of protecting
actual possession or right to possession of property. Title is not involved. The sole issue to be
resolved is who is entitled to the physical or material possession of the premises or possession de
facto." "Issues as to the right of possession or ownership are not involved in the action; evidence
thereon is not admissible, except only for the purpose of determining the issue of possession."
ROLANDO S. ABADILLA, JR. vs. SPOUSES BONIFACIO P. OBRERO and BERNABELA N. OBRERO,
G.R. No. 199448, November 12, 2014, J. Reyes

Though casino chips do not constitute legal tender, there is no law which prohibits their use or
trade outside of the casino which issues them. Since casino chips are considered to have been
exchanged with their corresponding representative value it is with more reason that the Court
should require SBL to prove convincingly and persuasively that the chips it confiscated from
Ludwin and Deoven were indeed stolen from it. If SBL cannot prove its loss, then Article 559 cannot
apply; the presumption that the chips were exchanged for value remains. SUBIC BAY LEGEND
RESORTS AND CASINOS, INC vs. BERNARD C. FERNANDEZ, G.R. No. 193426, September 29,
2014, J. Del Castillo

A third party's possession of a property is legally presumed to be based on a just title, a


presumption which may be overcome by the purchaser in a judicial proceeding for recovery of the
property. Through such a judicial proceeding, the nature of the adverse possession by the third
party may be determined, after such third party is accorded due process and the opportunity to be
heard. The third party may be ejected from the property only after he has been given an

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opportunity to be heard, conformably with the time-honored principle of due process. SIO TIAT
KING v. VICENTE G. LIM, et al., G.R. No. 185407, June 22, 2015, REYES, J.

In ejectment cases, possession, not ownership, is the central issue. TOMASA J. SABELLINA v.
DOLORESBURAY, LEDENIA VILLAMOR, ARLENE MAGSAYO, LUDIMA ROMULO, RAMON
CANADELLA, ROBERTO ACIDO, MARIO ESPARGUERA, RODRIGO ACIDO, RONNIE UBANGAN
and CONCEPCION REBUSTO, G.R. No. 187727, September 2, 2015, BRION, J.

A boundary dispute must be resolved in the context of accion reivindicatoria, not an ejectment case.
A boundary dispute is not about possession, but encroachment. SPOUSES ROMEO and ADORINA
JAVIER v. SPOUSES EVANGELINE and VIRGILIO DE GUZMAN, ARNEL, EDGAR and HENRY
PINEDA and REGINO RAMOS, G.R. No. 186204, September 2, 2015, PERALTA, J.

Rent is a civil fruit that belongs to the owner of the property producing it by right of accession. The
rightful recipient of the disputed rent in this case should thus be the owner of the subject lot at the
time the rent accrued. It is beyond question that Spouses Maraon never lost ownership over the
subject lot. PHILIPPINE NATIONAL BANK v. SPS. BERNARD AND CRESENCIA MARAON, G.R.
No. 189316, July 1, 2013.

There is an exception to the rule that accessory follows the principal. Where it can be duly
established that the owner of the accessory is different from the owner of the principal, the two
properties should be treated separately. Hence, when there are factual and evidentiary evidence to
prove that the building and the lot on which it stands are owned by different persons, they shall be
treated separately. (MAGDALENA T. VILLASI v. SPOUSES FILOMENO GARCIA AND ERMELINDA
HALILI-GARCIA, G.R. No. 190106. January 15, 2014)

IMMOVABLE PROPERTY

Under the Local Government Code, machinery, to be deemed real property subject to real property
tax, need no longer be annexed to the land or building. MANILA ELECTRIC COMPANY v. THE CITY
ASSESSOR AND CITY TREASURER OF LUCENA CITY, G.R. No. 166102, August 5, 2015,
LEONARDO-DE CASTRO, J.

The real estate mortgage over the machineries and equipment is in full accord with the
classification of such properties by the Civil Code of the Philippines as immovable property. Article
415 of the Civil Code provided that the following are immovable property: the Land, buildings,
roads and constructions of all kinds adhered to the soil; xxx Machinery, receptacles, instruments or
implements intended by the owner of tenement for an industry or works which may be carried on
in a building or on a piece of land, and which tend directly to meet the needs of the said industry or
works. (STAR TWO (SPV-AMC), INC. v. PAPER CITY CORPORATION OF THE PHILIPPINES, G.R.
No. 169211, March 6, 2013)

ACCESSION

RIGHT OF ACCESSION WITH RESPECT TO IMMOVABLE PROPERTY

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Article 453 of the Civil Code clearly reads that a landowner is considered in bad faith if he does not
oppose the unauthorized construction thereon despite knowledge of the same. The fact that the
Sanchezes did take action to oppose the construction on their property by writing the HLURB and
the City Building Official of Quezon City. The Court agrees with both the RTC and the CA that Garcia
and TSEI are builders in bad faith. They knew for a fact that the property still belonged to the
Sanchezes and yet proceeded to build the townhouses not just without the authority of the
landowners, but also against their will. BANK OF THE PHILIPPINE ISLANDS vs. VICENTE VICTOR
C. SANCHEZ ET AL.; GENEROSO TULAGAN ET AL. vs. VICENTE VICTOR C. SANCHEZ ET AL.;
REYNALDO V. MANIWANG vs. VICENTE VICTOR C. SANCHEZ and FELISA GARCIA YAP, G.R. No.
179518; G.R. No. 179835; G.R. No. 179954, November 19, 2014, J. Velasco Jr.

The term "builder in good faith" as used in reference to Article 448 of the Civil Code, refers to one
who, not being the owner of the land, builds on that land believing himself to be its owner unaware
of the defect in his title or mode of acquisition. The essence of good faith lies in an honest belief in
the validity of one's right, ignorance of a superior claim, and absence of intention to overreach
another. SPOUSES CRISPIN AQUINO and TERESA V. AQUINO V. SPOUSES EUSEBIO AGUILAR
and JOSEFINA V. AGUILAR, G.R. No. 182754, June 29, 2015

Under Article 448 pertaining to encroachments in good faith, as well as Article 450 referring to
encroachments in bad faith, the owner of the land encroached upon petitioner herein has the
option to require respondent builder to pay the price of the land. According to jurisprudence, the
price must be fixed at the prevailing market value, reckoned at the time that the landowner elected
the choice, and not at the time that the property was purchased. (MERCY VDA. DE ROXAS v. OUR
LADYS FOUNDATION, INC., G.R. No. 182378, March 6, 2013)

QUIETING OF TITLE TO, OR INTEREST IN AND REMOVAL OF INTEREST OR CLOUD


OVER TITLE TO OR INTEREST IN REAL PROPERTY
QUIETING OF TITLE

For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the
plaintiff or complainant has a legal or equitable title to or interest in the real property subject of the
action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on the title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or
efficacy. The first requisite was not complied with. Petitioners alleged open, continuous, exclusive,
and uninterrupted possession of the subject property is belied by the fact that respondents, in
2005, entered into a Contract of Lease with the Avico Lending Investor Co. over the subject lot
without any objection from the petitioners. Petitioners inability to offer evidence tending to prove
that Bienvenido and Escolastica Ibarra transferred the ownership over the property in favor of
petitioners is likewise fatal to the latters claim. VILMA QUINTOS, represented by her Attorney-
in-Fact FIDEL I. QUINTOS, JR.; FLORENCIA I. DANCEL, represented by her Attorney-in-Fact
FLOVY I. DANCEL; and CATALINO L. IBARRA, vs. PELAGIA I. NICOLAS, NOLI L. IBARRA,
SANTIAGO L. IBARRA, PEDRO L. IBARRA, DAVID L. IBARRA, GILBERTO L. IBARRA, HEIRS OF
AUGUSTO L. IBARRA, namely CONCHITA R., IBARRA, APOLONIO IBARRA, and NARCISO
IBARRA, and the spouses RECTO CANDELARIO and ROSEMARIE CANDELARIO, G.R. No.
210252, June 16, 2014, J. Velasco, Jr.

The petitioners allege that they are the owners of the disputed property. This allegation is anchored
on the assertion that at the time of the death of their parents, the disputed property is still under

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the latters name. The Supreme Court ruled that for an action to quiet title to prosper, two
indispensable requisites must concur: (1) the plaintiff or complainant has a legal or equitable title
or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or
proceeding claimed to be casting a cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy. Petitioners Complaint in
Civil Case No. TM-1118 failed to allege these two requisites for an action to quiet title. HERMINIO
M. DE GUZMAN, FOR HIMSELF AND AS ATTORNEY-IN-FACT OF: NILO M. DE GUZMAN,
ANGELINO DE GUZMAN, JOSEFINO M. DE GUZMAN, ESTRELLA M. DE GUZMAN, TERESITA DE
GUZMAN, ELSA MARGARITA M. DE GUZMAN, EVELYN M. DE GUZMAN, MA. NIMIA M. DE
GUZMAN, ANTOLIN M. DE GUZMAN, AND FERDINAND M. DE GUZMAN vs. TABANGAO REALTY
INCORPORATED, G.R. No. 154262, February 11, 2015, J. Leonardo-De Castro

Thus, both requisites in order for an action for quieting of title to prosper have been met in this
case: (1) Phil-Ville had established its equitable title or interest in the 16 parcels of land subject of
the action; and (2) TCT No. T-177013, found to overlap titles to said properties of Phil-Ville, was
previously declared invalid. CLT REALTY DEVELOPMENT CORPORATION vs. PHIL-VILLE
DEVELOPMENT AND HOUSING CORPORATION, REPUBLIC OF THE PHILIPPINES (THROUGH
THE OFFICE OF THE SOLICITOR GENERAL) AND THE REGISTER OF DEEDS OF METRO MANILA
DISTRICT III, CALOOCAN, G.R. No. 160728, March 11, 2015, J. Leonardo-De Castro

The petitioner may vindicate its rights in the property through an action for quieting of title, a
common law remedy designed for the removal of any cloud upon, or doubt, or uncertainty affecting
title to real property. The action for quieting of title may be brought whenever there is a cloud on
title to real property or any interest in real property by reason of any instrument, record, claim,
encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said title. This Court holds that the
DARAB decision in favor of Cabral satisfies all four elements of a cloud on title. (GREEN ACRES
HOLDINGS, INC. v. VICTORIA CABRAL ET AL., G.R No. 175542, June 5, 2013)

CO-OWNERSHIP

A co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to


partition among all the co-owners. However, this should not signify that the vendee does not
acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him.
Since the co-owner/vendors undivided interest could properly be the object of the contract of sale
between the parties, what the vendee obtains by virtue of such a sale are the same rights as the
vendor had as co-owner, in an ideal share equivalent to the consideration given under their
transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires
a proportionate abstract share in the property held in common. EXTRAORDINARY
DEVELOPMENT CORPORATION vs. HERMINIA F. SAMSON-BICO and ELY B. FLESTADO, G.R.
No. 191090, October 13, 2014, J. Perez

Under Article 493 of the New Civil Code, a co-owner has an absolute ownership of his undivided
and pro-indiviso share in the co-owned property. He has the right to alienate, assign and mortgage
it, even to the extent of substituting a third person in its enjoyment provided that no personal rights
will be affected. In this case, Jesus can validly alienate his co-owned property in favor of Lapinid,
free from any opposition from the co-owners. Lapinid, as a transferee, validly obtained the same
rights of Jesus from the date of the execution of a valid sale. Absent any proof that the sale was not

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perfected, the validity of sale subsists. In essence, Lapinid steps into the shoes of Jesus as co-owner
of an ideal and proportionate share in the property held in common. Thus, from the perfection of
contract on 9 November 1997, Lapinid eventually became a co-owner of the property. Even
assuming that the petitioners are correct in their allegation that the disposition in favor of Lapinid
before partition was a concrete or definite portion, the validity of sale still prevails. VICENTE
TORRES, JR., CARLOS VELEZ, AND THE HEIRS OF MARIANO VELEZ, NAMELY: ANITA CHIONG
VELEZ, ROBERT OSCAR CHIONG VELEZ, SARAH JEAN CHIONG VELEZ AND TED CHIONG
VELEZ vs. LORENZO LAPINID AND JESUS VELEZ, G.R. No. 187987, November 26, 2014, J. Perez

A joint account is one that is held jointly by two or more natural persons, or by two or more
juridical persons or entities. Under such setup, the depositors are joint owners or co-owners of the
said account, and their share in the deposits shall be presumed equal, unless the contrary is proved,
pursuant to Article 485 of the Civil Code. DOMINADOR M. APIQUE v. EVANGELINE APIQUE
FAHNENSTICH, G.R. No. 205705, August 05, 2015

In suits to recover properties, all co-owners are real parties in interest. However, pursuant to
Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action,
any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners,
namely the co-owner who filed the suit for the recovery of the co-owned property, is an
indispensable party thereto. The other co-owners are not indispensable parties. They are not even
necessary parties, for a complete relief can be afforded in the suit even without their participation,
since the suit is presumed to have been filed for the benefit of all co-owners. (Rey Castigador
Catedrilla v. Mario and Margie Lauron, G.R. No. 179011. April 15, 2013)

A co-owner cannot acquire by prescription the share of the other co-owners, absent any clear
repudiation of the co-ownership. In order that the title may prescribe in favor of a co-owner, the
following requisites must concur: (1) the co-owner has performed unequivocal acts of repudiation
amounting to an ouster of the other co-owners; (2) such positive acts of repudiation have been
made known to the other co-owners; and (3) the evidence thereof is clear and convincing.
(ANTIPOLO INING (DECEASED), SURVIVED BY MANUEL VILLANUEVA ET. AL. v. LEONARDO R.
VEGA ET. AL, G.R. No. 174727, August 12, 2013)

POSSESSION

POSSESSION AND THE KINDS THEREOF

If the purchaser is a third party who acquired the property after the redemption period, a hearing
must be conducted to determine whether possession over the subject property is still with the
mortgagor or is already in the possession of a third party holding the same adversely to the
defaulting debtor or mortgagor. In the instant case, while respondents' petition for the issuance of a
writ of possession was filed ex-parte, a hearing was, nonetheless, conducted when the RTC gave
petitioner her day in court by giving her the opportunity to file various pleadings to oppose
respondent's petition. Moreover, there is no dispute that petitioner remained in possession of the
subject property prior to the issuance of the questioned writ of possession. It is, thus, clear that
respondents' resort, as a subsequent or third-party purchaser, the petition for the issuance of a writ
of possession is proper. NORMA V. JAVATE vs. SPOUSES RENATO J. TIOTUICO AND LERMA C.
TIOTUICO, G.R. No. 187606, March 09, 2015, J. Peralta

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ACQUISITION OF POSSESSION

Anacleto Mangaser filed Forcible entry against Ugay. However, the latter contended that Mangaser
has failed to prove prior physical possession over the property. The court ruled that possession can
be acquired by juridical acts. These are acts to which the law gives the force of acts of possession.
Examples of these are donations, succession, execution and registration of public instruments,
inscription of possessory information titles and the like. The reason for this exceptional rule is that
possession in the eyes of the law does not mean that a man has to have his feet on every square
meter of ground before it can be said that he is in possession. It is sufficient that petitioner was able
to subject the property to the action of his will. ANACLETO C. MANGASER, REPRESENTED BY HIS
ATTORNEY-IN-FACT EUSTAQUIO DUGENIA vs. DIONISIO UGAY, G.R. No. 204926, December
03, 2014, J. Mendoza

EFFECTS OF POSSESSION

When it is shown that the plaintiff in a case of accion publiciana had a valid title issued in her name
in 1967, within the period which the Supreme Court held that titles issued over the same properties
were valid; that she has been paying the realty taxes on the said properties since l969; that she
likewise appointed an administrator of the disputed lands, and more importantly, there is no
question that she offered to sell to petitioners the portions of the subject properties occupied by
them, then she deserves to be respected and restored to her lawful possession as provided in
Article 539 of the New Civil Code. PAUL P. GABRIEL, JR, et al. vs. CARMELING CRISOLOGO, G.R.
No. 204626, June 9, 2014, J. Mendoza

Penta Pacific leased its properties to Ley Construction. Both parties then entered into a contract to
sell. Ley Construction failed to pay its amortizations prompting Penta Pacific to file an action for
ejectment. The CA affirmed the ruling of the RTC that the MeTC had no jurisdiction over the case. In
resolving, the Supreme Court ruled that, a defendant's claim of possession de Jure or his averment
of ownership does not render the ejectment suit either accion publiciana or accion reivindicatoria.
The suit remains an accion interdictal, a summary proceeding that can proceed independently of
any claim of ownership. Even when the question of possession cannot be resolved without deciding
the issue of ownership, the issue of ownership is to be resolved only to determine the issue of
possession. PENTA PACIFIC REALTY CORPORATION vs. LEY CONSTRUCTION AND
DEVELOPMENT CORPORATION, G.R. No. 161589, November 24, 2014, J. Bersamin

Though casino chips do not constitute legal tender, there is no law which prohibits their use or
trade outside of the casino which issues them. In any case, it is not unusual nor is it unlikely that
respondent could be paid by his Chinese client at the former's car shop with the casino chips in
question; said transaction, if not common, is nonetheless not unlawful. These chips are paid for
anyway petitioner would not have parted with the same if their corresponding representative
equivalent in legal tender, goodwill, or otherwise was not received by it in return or exchange.
Given this premise that casino chips are considered to have been exchanged with their
corresponding representative value it is with more reason that the Court should require
petitioner to prove convincingly and persuasively that the chips it confiscated from the Fernandez
brothers were indeed stolen from it; if so, any Tom, Dick or Harry in possession of genuine casino
chips is presumed to have paid for their representative value in exchange therefor. If SBL cannot
prove its loss, then Art. 559 cannot apply; the presumption that the chips were exchanged for value
remains. SUBIC BAY LEGEND RESORTS AND CASINOS, INC. vs. BERNARD C. FERNANDEZ, G.R.
No. 193426, September 29, 2014, J. Del Castillo

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Squatters have no possessory rights over the land intruded upon. The length of time that they may
have physically occupied the land is immaterial; they are deemed to have entered the same in bad
faith, such that the nature of their possession is presumed to have retained the same character
throughout their occupancy. (PILAR DEVELOPMENT CORPORATION v. RAMON DUMADAG, ET.
AL., G.R. No. 194336, March 11, 2013)

Under Articles 444 and 1942 of the old Civil Code, possession of real property is not affected by acts
of a possessory character which are merely tolerated by the possessor, or which are due to his
license. Granted that long, continued occupation, accompanied by acts of a possessory character,
affords some evidence that possession has been exerted in the character of owner and under claim
of right, this inference is unavailing to petitioners since Simplecios continued possession of the
property after his defeat in the ejectment suit was clearly upon the tolerance of respondents
predecessors-in-interest. (VEVENCIA ECHIN PABALAN, ET. AL. v. THE HEIRS OF SIMEON A.B.
MAAMO, SR., G.R. No. 174844, March 20, 2013

ACQUISITIVE PRESCRIPTION

Section 41 of the Code of Civil Procedure provides for the applicable prescriptive period to vest
ownership over the subject portion, considering that Article 1116 of the New Civil Code provides
that prescription already running before the effectivity of this Code shall be governed by laws
previously in force. ROBERTO STA. ANA DY, et al. v. BONIFACIO A. YU, et al., G.R. No. 202632,
July 08, 2015, PERLAS-BERNABE, J.

EXTINCTIVE PRESCRIPTION

There are two kinds of prescription provided in the Civil Code. One is acquisitive, that is, the
acquisition of a right by the lapse of time as expounded in paragraph 1, Article 1106. Acquisitive
prescription is also known as adverse possession and usucapcion. The other kind is extinctive
prescription whereby rights and actions are lost by the lapse of time as defined in paragraph 2,
Article 1106 and Article 1139. Another name for extinctive prescription is litigation of action. These
two kinds of prescription should not be interchanged. CONSUELO V. PANGASINAN AND
ANNABELLA V. BORROMEO v. CRISTINA DISONGLO-ALMAZORA, ET., AL., G.R. No. 200558, July
01, 2015

EASEMENTS

EASEMENT OF RIGHT OF WAY

The convenience of the dominant estate's owner is not the basis for granting an easement of right of
way, especially if the owner's needs may be satisfied without imposing the easement. Thus, mere
convenience for the dominant estate is not what is required by law as the basis of setting up a
compulsory easement. Furthermore, based on the Ocular Inspection Report, petitioner's property
had another outlet to the highway. Access to the public highway can be satisfied without imposing
an easement on the spouses' property. ALICIA B. REYES vs. SPOUSES VALENTIN RAMOS,
FRANCISCO S. AND ANATALIA, G.R. No. 194488, February 11, 2015, J. Leonen

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The easement of right of way shall be established at the point least prejudicial to the servient estate.
DEMETRIA DE GUZMAN, et al. v. FILINVEST DEVELOPMENT CORPORATION, G.R. No. 191710,
January 14, 2015, DEL CASTILLO, J.

Under Article 649 of the Civil Code, an easement of right-of-way may be demanded by the owner of
an immovable or by any person who by virtue of a real right may cultivate or use the same.
LIWAYWAY ANDRES, RONNIE ANDRES, AND PABLO B. FRANCISCO v. STA. LUCIA REALTY &
DEVELOPMENT, INCORPORATED, G.R. No. 201405, August 24, 2015

NUISANCE

It is a standing jurisprudential rule that unless a nuisance is a nuisance per se, it may not be
summarily abated. Aside from the remedy of summary abatement which should be taken under the
parameters stated in Articles 704 (for public nuisances) and 706 (for private nuisances) of the Civil
Code, a private person whose property right was invaded or unreasonably interfered with by the
act, omission, establishment, business or condition of the property of another may file a civil action
to recover personal damages. Abatement may be judicially sought through a civil action therefor if
the pertinent requirements under the Civil Code for summary abatement, or the requisite that the
nuisance is a nuisance per se, do not concur. To note, the remedies of abatement and damages are
cumulative; hence, both may be demanded. LINDA RANA vs. TERESITA LEE WONG, SPS. SHIRLEY
LEE ONG and RUBEN ANG ONG and SPS. ROSARIO and WILSON UY; SPS. ROSARIO and WILSON
UY; WILSON UY as attorney-in-fact of TERESITA LEE WONG, and SPS. SHIRLEY LEE ONG and
RUBEN ANG ONG vs. SPS. REYNALDO and LINDA LANA, G.R. No. 192861; G.R. No. 192862, June
30, 2014, J. Perlas-Bernabe

Commercial and industrial activities which are lawful in themselves may become nuisances if they
are so offensive to the senses that they render the enjoyment of life and property uncomfortable.
The fact that the cause of the complaint must be substantial has often led to expressions in the
opinions that to be a nuisance the noise must be deafening or loud or excessive and unreasonable.
The determining factor when noise alone is the cause of complaint is not its intensity or volume. It
is that the noise is of such character as to produce actual physical discomfort and annoyance to a
person of ordinary sensibilities, rendering adjacent property less comfortable and valuable. If the
noise does that it can well be said to be substantial and unreasonable in degree, and reasonableness
is a question of fact dependent upon all the circumstances and conditions. There can be no fixed
standard as to what kind of noise constitutes a nuisance. (SMART COMMUNICATIONS, INC., v.
ARSENIO ALDECOA, ET. AL., G.R. No. 166330, September 11, 2013)

MODES OF ACQUIRING OWNERSHIP

DONATION

In order to sufficiently substantiate her claim that the money paid by the respondents was actually
a donation, petitioner should have also submitted in court a copy of their written contract evincing
such agreement. As earlier ruled by the Court, a donation must comply with the mandatory formal
requirements set forth by law for its validity. When the subject of donation is purchase money,
Article 748 of the NCC is applicable. Accordingly, the donation of money as well as its acceptance
should be in writing. Otherwise, the donation is invalid for non-compliance with the formal

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requisites prescribed by law. ESPERANZA C. CARINAN vs. SPOUSES GAVINO CUETO and
CARMELITA CUETO, G.R. No. 198636, October 8, 2014, J. Reyes

The Daclans lament the supposed failure of the Province to provide agricultural extension and on-
site research services and facilities as required under the IRR of the LGC of 1991, which failure
they believe, constituted a violation of the stipulation contained in the deeds of donation to develop
and improve the livestock industry of the country. Yet this cannot be made a ground for the
reversion of the donated lands; on the contrary, to allow such an argument would condone undue
interference by private individuals in the operations of government. The deeds of donation merely
stipulated that the donated lands shall be used for the establishment of a breeding station and shall
not be used for any other purpose, and that in case of non-use, abandonment or cessation of the
activities of the BAI, possession or ownership shall automatically revert to the Daclans. It was never
stipulated that they may interfere in the management and operation of the breeding station. Even
then, they could not directly participate in the operations of the breeding station. REPUBLIC OF
THE PHILIPPINES, REPRESENTED BY THE SECRETARY OF AGRICULTURE vs. FEDERICO
DACLAN, JOSEFINA COLLADO, AND HER HUSBAND FEDERICO DACLAN AND MINVILUZ
DACLAN, AS SURVIVING HEIRS OF DECEASED JOSE DACLAN, G.R. No. 197115 (consolidated),
March 23, 2015, J. Del Castillo

A pure/simple donation is the truest form of donation as it is based on pure gratuity. The
remuneratory/compensatory type has for its purpose the rewarding of the donee for past services,
which services do not amount to a demandable debt. A conditional/modal donation, on the other
hand, is a consideration for future services; it also occurs where the donor imposes certain
conditions, limitations or charges upon the donee, whose value is inferior to the donation given.
Lastly, an onerous donation imposes upon the donee a reciprocal obligation; this is made for a
valuable consideration whose cost is equal to or more than the thing donated. (CERILA J.
CALANASAN, REPRESENTED BY TEODORA J. CALANASAN AS ATTORNEY-IN-FACT v. SPOUSES
VIRGILIO DOLORITO AND EVELYN C. DOLORITO, G.R. No. 171937, November 25, 2013)

PRESCRIPTION

PRESCRIPTION OF ACTIONS

Since the complaint for annulment was anchored on a claim of mistake, i.e., that petitioners are the
borrowers under the loan secured by the mortgage, the action should have been brought within
four (4) years from its discovery. As mortgagors desiring to attack a mortgage as invalid, petitioners
should act with reasonable promptness, else its unreasonable delay may amount to
ratification. Verily, to allow petitioners to assert their right to the subject properties now after their
unjustified failure to act within a reasonable time would be grossly unfair to PSMB, and perforce
should not be sanctioned. As such, petitioners' action is already barred by laches, which, as case law
holds, operates not really to penalize neglect or sleeping on one's rights, but rather to avoid
recognizing a right when to do so would result in a clearly inequitable situation. SPOUSES
FRANCISCO SIERRA (substituted by DONATO, TERESITA, TEODORA, LORENZA, LUCINA,
IMELDA, VILMA, and MILAGROS SIERRA) and ANTONINA SANTOS, SPOUSES ROSARIO SIERRA
and EUSEBIO CALUMA LEYVA, and SPOUSES SALOME SIERRA and FELIX GATLABAYAN
(substituted by BUENA VENTURA, ELPIDIO, PAULINO, CATALINA, GREGORIO, and EDGARDO
GATLABAYAN, LORETO REILLO, FERMINA PEREGRINA, and NIDA HASHIMOTO) vs. PAIC
SAVINGS AND MORTGAGE BANK, INC., G.R. No. 197857, September 10, 2014, J. Perlas-

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Prescription of actions is interrupted when they are filed before the court, when there is a written
extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt
by the debtor. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE PRIVATIZATION AND
MANAGEMENT OFFICE (PMO) v. ANTONIO V. BAEZ, LUISITA BAEZ VALERA, NENA BAEZ
HOJILLA, AND EDGARDO B. HOJILLA, JR., G.R. No. 169442, October 14, 2015

This action to annul the foreclosure of the mortgage was not yet barred by prescription because the
applicable period of prescription was 10 years from the time the right of action accrued by virtue of
the action being upon a written contract. RURAL BANK OF MALASIQUI, INC. V. ROMEO M.
CERALDE and EDUARDO M. CERALDE, JR., G.R. NO. 162032, November 25, 2015

Petitioner claims to have had an oral contract of attorneys fees with the deceased spouses, Article
1145 of the Civil Code allows him a period of six (6) years within which to file an action to recover
professional fees for services rendered. Respondents never asserted or provided any evidence that
Spouses de Guzman refused petitioners legal representation. For this reason, petitioners cause of
action began to run only from the time the respondents refused to pay him his attorneys fees.
(RANCISCO L. ROSARIO, JR. v. LELLANI DE GUZMAN, et al., G.R. No. 191247. July 10, 2013)

The prescription of actions for the reconveyance of real property based on implied trust is 10 years.
Verily, the reckoning point for purposes of the Dicos demand of reconveyance based on fraud was
their discovery of the fraud. Such discovery was properly pegged on the date of the registration of
the transfer certificates of title in the adverse parties names, because registration was a
constructive notice to the whole world. (SPOUSES ANGELES DICO AND CELSO DICO, SR. v.
VIZCAYA MANAGEMENT CORPORATION, et al., G.R. No. 161211. July 17, 2013)

OBLIGATIONS

CLASSIFICATION OF OBLIGATIONS

PURE AND CONDITIONAL OBLIGATIONS

In reciprocal obligations, either party may rescind the contract upon the others substantial breach
of the obligation/s he had assumed thereunder. The basis therefor is Article 1191 of the Civil Code.
PMC rescinded the operating agreement with GVEI due to failure of the latter to advance payment
for actual cost. The court ruled that in reciprocal obligations, either party may rescind the contract
upon the others substantial breach of the obligation/s he had assumed thereunder. GOLDEN
VALLEY EXPLORATION, INC. vs. PINKIAN MINING COMPANY and COPPER VALLEY, INC., G.R.
No. 190080, June 11, 2014, J. Perlas-Bernabe

The right of rescission of a party to an obligation under Article 1191 of the Civil Code is predicated
on a breach of faith by the other party who violates the reciprocity between them. The breach
contemplated in the said provision is the obligors failure to comply with an existing obligation.
When the obligor cannot comply with what is incumbent upon it, the obligee may seek rescission
and, in the absence of any just cause for the court to determine the period of compliance, the court
shall decree the rescission. Thus, the delay in the completion of the project as well as of the delay in
the delivery of the unit are breaches of statutory and contractual obligations which entitle
respondent to rescind the contract, demand a refund and payment of damages. SWIRE REALTY
DEVELOPMENT CORPORATION vs. JAYNE YU, G.R. No. 207133, March 09, 2015, J. Peralta

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The court ruled that the power to rescind the obligations of the injured party is implied in
reciprocal obligations, such as in this case. On this score, the CA correctly applied Article 1191,
which provides thus: the power to rescind obligations is implied in reciprocal ones, in case one of
the obligors should not comply with what is incumbent upon him.The injured party may choose
between the fulfillment and the rescission of the obligation, with the payment of damages in either
case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become
impossible.The court shall decree the rescission claimed, unless there be just cause authorizing the
fixing of a period. (ALILEO A. MAGLASANG v. NORTHWESTERN UNIVERSITY, INC., G.R. No.
188986, March 20, 2013)

Considering that the agreement between the parties was not circumscribed by a definite period, its
termination was subject to a condition the happening of a future and uncertain event. The
prevailing rule in conditional obligations is that the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of the event that
constitutes the condition. Furthermore, quantum meruit should apply in the absence of an express
agreement on the fees. (International Hotel Corporation v. Francisco B. Joaquin, Jr., et al. G.R.
No. 158361. April 10, 2013)

OBLIGATIONS WITH PERIOD

Obligations with a resolutory period take effect at once, but terminate upon arrival of the day
certain. A day certain is understood to be that which must necessarily come, although it may not be
known when. If the uncertainty consists in whether the day will come or not, the obligation is
conditional. In the instant case, a plain reading of the Contract of Reclamation reveals that the six
(6)-year period provided for project completion, or termination of the contract was a mere estimate
and cannot be considered a period or a "day certain" in the context of Art. 1193. To be clear, par. 15
of the Contract of Reclamation states: "the project is estimated to be completed in six (6) years."
The lapse of six (6) years from the perfection of the contract did not, make the obligation to finish
the reclamation project demandable, such as to put the obligor in a state of actionable delay for its
inability to finish. Thus, F.F. Cruz cannot be deemed to be in delay. ROWENA R. SALONTE vs.
COMMISSION ON AUDIT, CHAIRPERSON MA. GRACIA PULIDO-TAN, COMMISSIONER JUANITO
G. ESPINO, JR., COMMISSIONER HEIDI L. MENDOZA, and FORTUNATA M. RUBICO, DIRECTOR
IV, COA COMMISSION SECRETARIAT, G.R. No. 207348, August 19, 2014, J. Velasco, Jr.,

NATURE AND EFFECT OF OBLIGATIONS

In the landmark case of Eastern Shipping Lines, Inc. v. Court of Appeals, as regards particularly to
an award of interest in the concept of actual and compensatory damages, the rate of interest, as well
as the accrual thereof, is imposed, as follows: When the obligation is breached, and it consists in
the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest
shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand
under and subject to the provisions of Article 1169 of the Civil Code. In line with the recent circular
of the Monetary Board of the Bangko Sentral ng Pilipinas No. 799 (July 1, 2013), the Court has
modified the guidelines in Nacar v. Gallery Frames, wherein the interest due shall itself earn legal
interest from the time it is judicially demanded and in the absence of stipulation, the rate of interest
shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand

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under and subject to the provisions of Article 1169 of the Civil Code. This case, however, does not
involve acquiescence to the temporary use of a partys money but a performance of a particular
service, specifically the construction of the diaphragm wall, capping beam, and guide walls of the
Trafalgar Plaza. Thus, in the absence of any stipulation as to interest in the agreement between the
parties herein, the matter of interest award arising from the dispute in this case would actually fall
under the second paragraph of the above-quoted guidelines in the landmark case of Eastern
Shipping Lines, which necessitates the imposition of interest at the rate of 6%, instead of the 12%
imposed by the courts below. As to the rate of interest due thereon, however, the Court notes that
the same should be reduced to 6% per annum considering the fact that the obligation involved
herein does not partake of a loan or forbearance of money. FEDERAL BUILDERS, INC. vs.
FOUNDATION SPECIALISTS, INC., G.R. No. 194507, September 8, 2014, J. Peralta

There are four instances when demand is not necessary to constitute the debtor in default: (1)
when there is an express stipulation to that effect; (2) where the law so provides; (3) when the
period is the controlling motive or the principal inducement for the creation of the obligation; and
(4) where demand would be useless. In the first two paragraphs, it is not sufficient that the law or
obligation fixes a date for performance; it must further state expressly that after the period lapses,
default will commence.

Corollary thereto, Art. 2209 solidifies the consequence of payment of interest as an indemnity for
damages when the obligor incurs in delay.

Art. 2209 is specifically applicable in this instance where: (1) the obligation is for a sum of money;
(2) the debtor, Rivera, incurred in delay when he failed to pay on or before 31 Decem-ber 1995; and
(3) the Promissory Note provides for an indemnity for damages upon default of Rivera which is the
payment of a 5% monthly interest from the date of default. RODRIGO RIVERA vs. SPOUSES
SALVADOR CHUA AND VIOLETA S. CHUA, G.R. No. 184458 (consolidated), January 14, 2015, J.
Perez

In order that the debtor may be in default, it is necessary that: (a) the obligation be demandable and
already liquidated; (b) the debtor delays performance; and (c) the creditor requires the
performance judicially or extrajudicially,unless demand is not necessary. MAYBANK PHILIPPINES,
INC. (FORMERLY PNB-REPUBLIC BANK) v. SPOUSES OSCAR AND NENITA TARROSA, G.R. No.
213014, October 14, 2015

The 1997 Asian Financial Crisis cannot be said to be unforeseeable and beyond the control of a
business corporation, especially a corporation engaged in real estate enterprise. Such corporation is
considered a master in projections of commodities and currency movements and business risks. It
has the ability to foresee such situation. Thus, the 1997 Asian Financial Crisis is not an instance of
caso fortuito. (FIL-ESTATE PROPERTIES, INC. AND FIL-ESTATE NETWORK, INC., v. SPOUSES
CONRADO AND MARIA VICTORIA RONQUILLO, , G.R. NO.185798. January 13, 2014)

JOINT AND SOLIDARY OBLIGATION

As previous ruled by the Court, The well entrenched rule is that solidary obligations cannot be
inferred lightly. They must be positively and clearly expressed. A liability is solidary only when the
obligation expressly so states, when the law so provides or when the nature of the obligation so
requires. Respondent was not able to prove by a preponderance of evidence that petitioners'

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obligation to him was solidary. Hence, applicable to this case is the presumption under the law that
the nature of the obligation herein can only be considered as joint. It is incumbent upon the party
alleging otherwise to prove with a preponderance of evidence that petitioners' obligation under the
loan contract is indeed solidary in character. SPOUSES RODOLFO BEROT AND LILIA BEROT vs.
FELIPE C. SIAPNO, G.R. No. 188944, July 9, 2014, CJ. Sereno

Solidary liability must be expressly stated. In the present case, the joint and several liability of
Subic Water and OCWD was nowhere clear in the agreement. The agreement simply and plainly
stated that Olongapo City and OCWD were only requesting Subic Water to be a co-maker, in view of
its assumption of OCWDs water operations. Under these circumstances, Olongapo City cannot
proceed after Subic Water for OCWDs unpaid obligations. The law explicitly states that solidary
liability is not presumed and must be expressly provided for. Not being a surety, Subic Water is not
an insurer of OCWDs obligations under the compromise agreement. OLONGAPO CITY vs. SUBIC
WATER AND SEWERAGE CO., INC., G.R. No. 171626, August 6, 2014, J. Brion

EXTINGUISHMENT OF OBLIGATIONS

PAYMENT OR PERFORMANCE

Article 1242 of the Civil Code is an exception to the rule that a valid payment of an obligation can
only be made to the person to whom such obligation is rightfully owed. It contemplates a situation
where a debtor pays a possessor of credit i.e., someone who is not the real creditor but appears,
under the circumstances, to be the real creditor. In such scenario, the law considers the payment to
the possessor of credit as valid even as against the real creditor taking into account the good faith
of the debtor. Hence, NAPOCORs payment to Mangondato of the fees and indemnity due for the
subject land as a consequence of the execution of Civil Case No. 605-92 and Civil Case No. 610-92
could still validly extinguish its obligation to pay for the same even as against the Ibrahims and
Maruhoms. NATIONAL POWER CORPORATION vs. LUCMAN M. IBRAHIM et al., G.R. No. 175863,
February 18, 2015, J. Perez

Payment: Although Article 1271 of the Civil Code provides for a legal presumption of renunciation
of action (in cases where a private document evidencing a credit was voluntarily returned by the
creditor to the debtor), this presumption is merely prima facie and is not conclusive; the
presumption loses efficacy when faced with evidence to the contrary. The provision merely raises a
presumption, not of payment, but of the renunciation of the credit where more convincing evidence
would be required than what normally would be called for to prove payment.

Novation: In order to give novation legal effect, the creditor should consent to the substitution of a
new debtor. Novation must be clearly and unequivocally shown, and cannot be presumed.
LEONARDO BOGNOT vs. RRI LENDING CORPORATION, REPRESENTED BY ITS GENERAL
MANAGER, DARIO J. BERNARDEZ, G.R. No. 180144, September 24, 2014, J. Brion

It is settled that compliance with the requisites of a valid consignation is mandatory. Failure to
comply strictly with any of the requisites will render the consignation void. One of these requisites
is a valid prior tender of payment. In the instant case, the SC finds no cogent reason to depart from
the findings of the CA and the RTC that Del Carmen and her co-heirs failed to make a prior valid
tender of payment to Sabordo. ELIZABETH DEL CARMEN vs. SPOUSES RESTITUTO SABORDO
and MIMA MAHILUM-SABORDO, G.R. No. 181723, August 11, 2014, J. Peralta

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The binding effect of any agreement between parties to a contract is premised on two settled
principles: (1) that any obligation arising from contract has the force of law between the parties;
and (2) that there must be mutuality between the parties based on their essential equality. Any
contract which appears to be heavily weighed in favor of one of the parties so as to lead to an
unconscionable result is void. Any stipulation regarding the validity or compliance of the contract
which is left solely to the will of one of the parties, is likewise, invalid. (Spouses Ignacio F. Juico
and Alice P. Juico v. China Banking Corporation, G.R. No. 187678 . April 10, 2013)

Consignation is necessarily judicial. Article 1258 of the Civil Code specifically provides that
consignation shall be made by depositing the thing or things due at the disposal of judicial
authority. The said provision clearly precludes consignation in venues other than the
courts.Spouses Oscar and Thelma Cacayorin v. Armed Forces and Police Mutual Benefit
Association, Inc., G.R. No. 171298. April 15, 2013

As a general rule, all obligations shall be paid in Philippine currency. However, the contracting
parties may stipulate that foreign currencies may be used for settling obligations. This
notwithstanding, the practice of a company of paying its sales agents in US dollars must be taken
into consideration. NETLINK COMPUTER INCORPORATED vs. ERIC DELMO, G.R No. 160827,
June 18, 2014, J. Bersamin

Tender of payment "is the manifestation by the debtor of a desire to comply with or pay an
obligation. If refused without just cause, the tender of payment will discharge the debtor of the
obligation to pay but only after a valid consignation of the sum due shall have been made with the
proper court." Consignation is the deposit of the proper amount with a judicial authority in
accordance with rules prescribed by law, after the tender of payment has been refused or because
of circumstances which render direct payment to the creditor impossible or inadvisable.

Tender of payment, without more, produces no effect. To have the effect of payment and the
consequent extinguishment of the obligation to pay, the law requires the companion acts of tender
of payment and consignation. (SPS. NAMAEL AND LOURDES BONROSTRO v. SPS. JUAN AND
CONSTACIA LUNA, G.R. No. 172346. July 24, 2013)

A party in a contract cannot claim that his obligation to pay to another is extinguished for the
reason that his debtor failed to pay him and that the other party was witness to the same. Such is
not a mode of extinguishment of an obligation. (METRO CONCAST STEEL CORPORATION, ET AL.
vs. ALLIED BANK CORPORATION, G.R. No. 177921, December 4, 2013)

LOSS OF THE THING DUE

Relying on Article 1267 of the Civil Code to justify its decision to pre-terminate its lease with
respondent, petitioner invokes the 1997 Asian currency crisis as causing it much difficulty in
meeting its obligations. In Philippine National Construction Corporation v. CA, the Court held that
the payment of lease rentals does not involve a prestation to do envisaged in Articles 1266 and
1267 which has been rendered legally or physically impossible without the fault of the obligor-
lessor. Article 1267 speaks of a prestation involving service which has been rendered so difficult by
unforeseen subsequent events as to be manifestly beyond the contemplation of the parties. To be
sure, the Asian currency crisis befell the region from July 1997 and for sometime thereafter, but
petitioner cannot be permitted to blame its difficulties on the said regional economic phenomenon

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because it entered into the subject lease only on August 16, 2000, more than three years after it
began, and by then petitioner had known what business risks it assumed when it opened a new
shop in Iloilo City. COMGLASCO CORPORATION/AGUILA GLASS vs. SANTOS CAR CHECK
CENTER CORPORATION, G.R. No. 202989, March 25, 2015, J. Reyes

For Article 1267 to apply, the following conditions should concur, namely: (a) the event or change
in circumstances could not have been foreseen at the time of the execution of the contract; (b) it
makes the performance of the contract extremely difficult but not impossible; (c) it must not be due
to the act of any of the parties; and (d) the contract is for a future prestation. Mere inconvenience,
or unexepected impediments, or increased expenses did not suffice to relieve the debtor from a bad
bargain. TAGAYTAY REALTY CO., INC. v. ARTURO G. GACUTAN, G.R. No. 160033, July 01, 2015

NOVATION

Arco Pulp and Paper had an alternative obligation whereby it would either pay Dan T. Lim the value
of the raw materials or deliver to him their finished products of equivalent value. When petitioner
Arco Pulp and Paper tendered a check to Lim in partial payment for the scrap papers, they
exercised their option to pay the price. This choice was also shown by the terms of the
memorandum of agreement which declared in clear terms that the delivery of petitioner Arco Pulp
and Papers finished products would be to a third person, thereby extinguishing the option to
deliver the finished products of equivalent value to respondent. The trial court erroneously ruled
that the execution of the memorandum of agreement constituted a novation of the contract
between the parties. Novation extinguishes an obligation between two parties when there is a
substitution of objects or debtors or when there is subrogation of the creditor. The consent of the
creditor must be secured for the novation to be valid. In this case, Lim was not privy to the
memorandum of agreement, thus, his conformity to the contract need not be secured. If the
memorandum of agreement was intended to novate the original agreement between the parties,
respondent must have first agreed to the substitution of Eric Sy as his new debtor. ARCO PULP
AND PAPER CO., INC. and CANDIDA A. SANTOS vs. DAN T. LIM, doing business under the name
and style of QUALITY PAPERS & PLASTIC PRODUCTS ENTERPRISES, G.R. No. 206806, June 25,
2014, J. Leonen

Article 1293 of the New Civil Code provides that novation which consists in substituting a new
debtor in the place of the original one, may be made even without the knowledge or against the will
of the latter, but not without the consent of the creditor. BANK OF THE PHILIPPINE ISLANDS v.
AMADOR DOMINGO, G.R. No. 169407, March 25, 2015, LEONARDO-DE CASTRO, J.

The settled rule is that novation is never presumed, but must be clearly and unequivocally shown.
In order for a new agreement to supersede the old one, the parties to a contract must expressly
agree that they are abrogating their old contract in favor of a new one. Thus, the mere substitution
of debtors will not result innovation, and the fact that the creditor accepts payments from a third
person, who has assumed the obligation, will result merely in the addition of debtors and not
novation, and the creditor may enforce the obligation against both debtors. If there is no agreement
as to solidarity, the first and new debtors are considered obligated jointly. (S.C. MEGAWORLD
CONSTRUCTION AND DEVELOPMENT CORPORATION v. ENGR. LUIS U. PARADA, G.R. No.
183804, September 11, 2013)

In novation, a subsequent obligation extinguishes a previous one through substitution either by


changing the object or principal conditions, by substituting another in place of the debtor, or by

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subrogating a third person into the rights of the creditor. Novation requires (a) the existence of a
previous valid obligation; (b) the agreement of all parties to the new contract; (c) the
extinguishment of the old contract; and (d) the validity of the new one. There cannot be novation in
this case since the proposed substituted parties did not agree to the PRAs supposed assignment of
its obligations under the contract for the electrical and light works at Heritage Park to the HPMC.
The latter definitely and clearly rejected the PRAs assignment of its liability under that contract to
the HPMC. (PHILIPPINE RECLAMATION AUTHORITY (FORMERLY KNOWN AS THE PUBLIC
ESTATES AUTHORITY) v. ROMAGO, INC./ROMAGO, INC. v. PHILIPPINE RECLAMATION
AUTHORITY, G.R. Nos. 174665 and 175221, September 18, 2013)

By virtue of the Deed of Assignment, the assignee is deemed subrogated to the rights and
obligations of the assignor and is bound by exactly the same conditions as those which bound the
assignor. Accordingly, an assignee cannot acquire greater rights than those pertaining to the
assignor. The general rule is that an assignee of a nonnegotiable chose in action acquires no greater
right than what was possessed by his assignor and simply stands into the shoes of the latter.55
Applying the foregoing, the Court finds that MS Maxco, as the Trade Contractor, cannot assign or
transfer any of its rights, obligations, or liabilities under the Trade Contract without the written
consent of FBDC. FORT BONIFACIO DEVELOPMENT CORPORATION vs. VALENTIN L. FONG., G.R.
No. 209370, March 25, 2015, J. Perlas-Bernabe

The payment made to Caltex as the insured being thereby duly documented, respondent became
subrogated as a matter of course pursuant to Article 2207 of the Civil Code. In legal contemplation,
subrogation is the "substitution of another person in the place of the creditor, to whose rights he
succeeds in relation to the debt;" and is "independent of any mere contractual relations between
the parties to be affected by it, and is broad enough to cover every instance in which one party is
required to pay a debt for which another is primarily answerable, and which in equity and
conscience ought to be discharged by the latter." (VECTOR SHIPPING CORPORATION, et al. v.
AMERICAN HOME ASSURANCE CO., ET AL., G.R. No. 159213)

COMPENSATION

A debt is liquidated when its existence and amount are determined. Compensation can only take
place between certain and liquidated debts; it cannot extend to unliquidated, disputed claims.
PHILIPPINE TRUST COMPANY v. FLORO ROXAS AND EUFEMIA ROXAS, G.R. No. 171897,
October 14, 2015

Compensation is a mode of extinguishing to the concurrent amount, the debts of persons who in
their own right are creditors and debtors of each other. The object of compensation is the
prevention of unnecessary suits and payments through the mutual extinction by operation of law of
concurring debts. (ADELAIDA SORIANO v. PEOPLE OF THE PHILIPPINES, G.R. No. 181692,
August 14, 2013)

CONTRACTS

GENERAL PROVISIONS

BCDA and SMLI have agreed to subject SMLIs Original Proposal to Competitive Challenge. This
agreement is the law between the contracting parties with which they are required to comply in

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good faith. Verily, it is BCDAs subsequent unilateral cancellation of this perfected contract which
this Court deemed to have been tainted with grave abuse of discretion. BCDA could not validly
renege on its obligation to subject the unsolicited proposal to a competitive challenge in view of this
perfected contract, and especially so after BCDA gave its assurance that it would respect the rights
that accrued in SMLIs favor arising from the same. SM LAND, INC. vs. BASES CONVERSION AND
DEVELOPMENT AUTHORITY AND ARNEL PACIANO D. CASANOVA, ESQ., IN HIS OFFICIAL
CAPACITY AS PRESIDENT AND CEO OF BCDA, G.R. No. 203655, August 13, 2014, J. Velasco Jr.

Contracts are obligatory no matter what their forms may be, whenever the essential requisites for
their validity are present. In determining whether a document is an affidavit or a contract, the Court
looks beyond the title of the document, since the denomination or title given by the parties in their
document is not conclusive of the nature of its contents. In the construction or interpretation of an
instrument, the intention of the parties is primordial and is to be pursued. If the terms of the
document are clear and leave no doubt on the intention of the contracting parties, the literal
meaning of its stipulations shall control. If the words appear to be contrary to the parties evident
intention, the latter shall prevail over the former. In this case, the terms of the Joint Affidavit of
Undertaking executed by the parties readily discloses that it contains stipulations characteristic of a
contract. (RODOLFO G. CRUZ AND ESPERANZA IBIAS v. ATTY. DELFIN GRUSPE, G.R. No.
191431, March 13, 2013)

The binding effect of any agreement between parties to a contract is premised on two settled
principles: (1) that any obligation arising from contract has the force of law between the parties;
and (2) that there must be mutuality between the parties based on their essential equality. Any
contract which appears to be heavily weighed in favor of one of the parties so as to lead to an
unconscionable result is void. Any stipulation regarding the validity or compliance of the contract
which is left solely to the will of one of the parties, is likewise, invalid. (Spouses Ignacio F. Juico
and Alice P. Juico v. China Banking Corporation, G.R. No. 187678 . April 10, 2013)

Obligations arising from contracts, after all, have the force of law between the contracting parties
who are expected to abide in good faith with their contractual commitments, not weasel out of
them. Moreover, when the terms of the contract are clear and leave no doubt as to the intention of
the contracting parties, the rule is settled that the literal meaning of its stipulations should govern.
In such cases, courts have no authority to alter a contract by construction or to make a new contract
for the parties. Since their duty is confined to the interpretation of the one which the parties have
made for themselves without regard to its wisdom or folly, it has been ruled that courts cannot
supply material stipulations or read into the contract words it does not contain. Indeed, courts will
not relieve a party from the adverse effects of an unwise or unfavorable contract freely entered
into. (HEIRS OF MANUEL UY EK LIONG v. MAURICIA MEER CASTILLO ET AL., G.R. No. 176425,
June 5, 2013)

The general rule is that heirs are bound by contracts entered into by their predecessors-in-interest
except when the rights and obligations arising therefrom are not transmissible by (1) their nature,
(2) stipulation or (3) provision of law. In the subject Contract of Lease, not only were there no
stipulations prohibiting any transmission of rights, but its very terms and conditions explicitly
provided for the transmission of the rights of the lessor and of the lessee to their respective heirs
and successors. The contract is the law between the parties. The death of a party does not excuse
nonperformance of a contract, which involves a property right, and the rights and obligations
thereunder pass to the successors or representatives of the deceased. Similarly, nonperformance is
not excused by the death of the party when the other party has a property interest in the subject

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matter of the contract. (ANALITA P. INOCENCION, SUBSTITUTING FOR RAMON INOCENCION


(DECEASED) v. HOSPICIO DE SAN JOSE, G.R. No. 201787, September 25, 2013)

Under the pari delicto doctrine, the parties to a controversy are equally culpable or guilty, they shall
have no action against each other, and it shall leave the parties where it finds them. As a doctrine in
civil law, the rule on pari delicto is principally governed by Articles 1411 and 1412 of the Civil Code.
It must be stressed that Article 1412 of the Civil Code that breathes life to the doctrine speaks of the
rights and obligations of the parties to the contract with an illegal cause or object which does not
constitute a criminal offense. It applies to contracts which are void for illegality of subject matter
and not to contracts rendered void for being simulated, or those in which the parties do not really
intend to be bound thereby. (OSCAR CONSTANTINO, MAXIMA CONSTANTINO and CASIMIRA
MATURINGAN v. HEIRS OF PEDRO CONSTANTINO, JR., G.R. No. 181508, October 2, 2013)

A contract where there is no mutuality between the parties partakes of the nature of a contract of
adhesion. Any obscurity will be construed against the party who prepared the contract; the latter
being presumed the stronger party to the agreement, and who caused the obscurity. Moreover, in
an increase of interest rate, the creditor, as in the case of PNB, cannot validly increase the interest
rate unilaterally. Even if the borrower paid the increased interest without protest, such cannot be
construed to mean that the borrower is estopped from assailing the unilateral increase of interest
rate. (PHILIPPPINE NATIONAL BANK v. SPOUSES ENRIQUE MANALO & ROSALINDA JACINTO,
ET AL, G.R. No. 174433, February 24, 2014)

ESSENTIAL REQUISITES

When a person was merely informed that she was convicted of an offense and that caused her to
seek measures to avoid criminal liability, the contracts entered into by the said person cannot be
considered executed under duress, threat or intimidation. Also, the threat to prosecute for estafa
not being an unjust act, but rather a valid and legal act to enforce a claim, cannot at all be
considered as intimidation. SPOUSES VICTOR AND EDNA BINUA vs. LUCIA P. ONG, G.R. No.
207176, June 18, 2014, J. Reyes

One who alleges any defect or the lack of a valid consent contract must establish the same by full,
clear, and convincing evidence, not merely by preponderance of evidence. The rule is that he who
alleges mistake affecting a transaction must substantiate his allegation, since it is presumed that a
person takes ordinary care of his concerns and that private transactions have been fair and
regular. Where mistake or error is alleged by parties who claim to have not had the benefit of a
good education, as in this case, they must establish that their personal circumstances prevented
them from giving their free, voluntary, and spontaneous consent to a contract. SPOUSES
FRANCISCO SIERRA (substituted by DONATO, TERESITA, TEODORA, LORENZA, LUCINA,
IMELDA, VILMA, and MILAGROS SIERRA) and ANTONINA SANTOS, SPOUSES ROSARIO SIERRA
and EUSEBIO CALUMA LEYVA, and SPOUSES SALOME SIERRA and FELIX GATLABAYAN
(substituted by BUENA VENTURA, ELPIDIO, PAULINO, CATALINA, GREGORIO, and EDGARDO
GATLABAYAN, LORETO REILLO, FERMINA PEREGRINA, and NIDA HASHIMOTO) vs.PAIC
SAVINGS AND MORTGAGE BANK, INC., G.R. No. 197857, September 10, 2014, J. Perlas-
Bernabe

Petitioner questions the decision of the CA holding that it employed fraud to induce respondent to
enter a contract with it. The SC ruled that though petitioner was guilty of fraud, such fraud however
is not sufficient to nullify its contract with respondent. Jurisprudence has shown that in order to

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constitute fraud that provides basis to annul contracts, it must fulfill two conditions. First, the fraud
must be dolo causante or it must be fraud in obtaining the consent of the party. This is referred to
as causal fraud. Second, the fraud must be proven by clear and convincing evidence and not merely
by a preponderance thereof. In the present case, respondent failed to prove that the
misrepresentation made by petitioner was the causal consideration or the principal inducement
which led her into buying her unit in the said condominium project. Such being the case,
petitioners misrepresentation in its advertisements does not constitute causal fraud which would
have been a valid basis in annulling the Contract to Sell between petitioner and respondent. ECE
REALTY AND DEVELOPMENT INC. vs. RACHEL G. MANDAP, G.R. No. 196182, September 1,
2014, J. Peralta

The Deed of Absolute Sale executed by Avelina in favor of respondents was correctly nullified and
voided by the RTC. Avelina was not in the right position to sell and transfer the absolute ownership
of the subject property to respondents. As she was not the sole heir of Eulalio and her Affidavit of
Self-Adjudication is void, the subject property is still subject to partition. Avelina, in fine, did not
have the absolute ownership of the subject property but only an aliquot portion. It is apparent from
the admissions of respondents and the records of this case that Avelina had no intention to transfer
the ownership, of whatever extent, over the property to respondents. Hence, the Deed of Absolute
Sale is nothing more than a simulated contract. AVELINA ABARIENTOS REBUSQUILLO
[substituted by her heirs, except Emelinda R. Gualvez] and SALVADOR A. OROSCO, vs. SPS.
DOMINGO and EMELINDA REBUSQUILLO GUALVEZ and the CITY ASSESSOR OF LEGAZPI CITY,
G.R. No. 204029, June 4, 2014, J. Velasco, Jr.

The following are the essential requisites of contracts: (a) consent; (b) object or subject matter; and
(c) cause or consideration. SM LAND, INC., v. BASES CONVERSION AND DEVELOPMENT
AUTHORITY AND ARNEL PACIANO D. CASANOVA, ESQ., IN HIS OFFICIAL CAPACITY AS
PRESIDENT AND CEO OF BCDA, G.R. No. 203655, March 18, 2015, VELASCO JR., J.

Article 1315 of the Civil Code provides that Contracts are perfected by mere consent and from that
moment the parties are bound not only to the fulfillment of what has been expressly stipulated but
also to all the consequences which, according to their nature, may be in keeping with good faith,
usage and law. SM INVESTMENTS CORPORATION V. ESTELA MARFORI POSADAS, MARIA
ELENA POSADAS AND AIDA MACARAIG POSADAS, G.R. NO. 200901, December 7, 2015

Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain, and the acceptance, whether express
or implied, must be absolute. An acceptance is considered absolute and unqualified when it is
identical in all respects with that of the offer so as to produce consent or a meeting of the minds.
ANGEL V. TALAMPAS, Jr. v. MOLDEX REALTY, INC., G.R. No. 170134, June 17, 2015, BRION, J.

So long as there is any uncertainty or indefiniteness, or future negotiations or considerations to be


had between the parties, there is not a completed contract, and in fact, there is no contract at all.
SPOUSES OSCAR AND GINA GIRONELLA v. PHILIPPINE NATIONAL BANK, G.R. No. 194515,
September 16, 2015

A contract of sale is perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price. Thus, for a contract of sale to be valid, all of the
following essential elements must concur: a) consent or meeting of the minds; b) determinate
subject matter; and c) price certain in money or its equivalent. In this case, there is no perfected

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contract of sale between PELA and Al-Amanah for want of consent and agreement on the price.
After scrutinizing the testimonial and documentary evidence in the records of the case, it is found
that the parties did not agree on the price and no consent was given, whether express or implied.
(ROBERN DEVELOPMENT CORPORATION, ET. AL. v. PEOPLES LANDLESS ASSOCIATION, G.R.
No. 173622, March 11, 2013)

A valid contract of sale requires: (a) a meeting of minds of the parties to transfer ownership of the
thing sold in exchange for a price; (b) the subject matter, which must be a possible thing; and (c) the
price certain in money or its equivalent. In this case, all the elements were present. However, there
is no evidence to show that the other co-owners consented to Alejandros sale transaction with the
petitioner. Hence, for want of authority to sell Lot No. 3, Alejandro only sold his aliquot share of the
subject property to the petitioner. (REMAN RECIO v. HEIRS OF SPOUSES AGUEGO and MARIA
ALTAMIRANO, G.R. No. 182349. July 24, 2013)

A party to a loan agreement cannot claim that the promissory note is void as to him on the ground
of fraud if the same was not employed to deceive him into obtaining his consent. Jurisprudence has
shown that in order to constitute fraud that provides basis to annul contracts, it must fulfill two
conditions. First, the fraud must be dolo causante or it must be fraud in obtaining the consent of the
party. Second, this fraud must be proven by clear and convincing evidence. The records showed
that petitioner had been unjustly excluded from participating in the management of the affairs of
the corporation. This exclusion from the management in the affairs of Sterling Shipping Lines, Inc.
constituted fraud incidental to the performance of the obligation. (ALEJANDRO V. TANKEH v.
DEVELOPMENT BANK OF THE PHILIPPINES, STERLING SHIPPING LINES, INC., RUPERTO V.
TANKEH, VICENTE ARENAS and ASSET PRIVATIZATION TRUST, G.R. No. 171428, November
11, 2013)

KINDS OF CONTRACTS

UNENFORCEABLE CONTRACTS

Unenforceable contracts are those which cannot be enforced by a proper action in court, unless
they are ratified, because either they are entered into without or in excess of authority or they do
not comply with the statute of frauds or both of the contracting parties do not possess the required
legal capacity. In the present case, however, respondents' predecessor-in-interest, Bernardino
Taeza, had already obtained a transfer certificate of title in his name over the property in question.
Since the person supposedly transferring ownership was not authorized to do so, the property had
evidently been acquired by mistake. This case clearly falls under the category of unenforceable
contracts mentioned in Article 1403, paragraph (1) of the Civil Code, which provides, thus: (1)
Those entered into in the name of another person by one who has been given no authority or legal
representation, or who has acted beyond his powers. IGLESIA FILIPINA INDEPENDIENTE vs.
HEIRS of BERNARDINO TAEZA, G.R. No. 179597, February 3, 2014, J. Peralta

RESCISSION

Wellex and U-Land bound themselves to negotiate with each other within a 40-day period to enter
into a share purchase agreement. If no share purchase agreement was entered into, both parties
would be freed from their respective undertakings. For Article 1191 to be applicable, however,
there must be reciprocal prestations as distinguished from mutual obligations between or among

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the parties. A prestation is the object of an obligation, and it is the conduct required by the parties
to do or not to do, or to give. Parties may be mutually obligated to each other, but the prestations of
these obligations are not necessarily reciprocal. The reciprocal prestations must necessarily
emanate from the same cause that gave rise to the existence of the contract. U-Land correctly
sought the principal relief of rescission or resolution under Article 1191. The obligations of the
parties gave rise to reciprocal prestations, which arose from the same cause: the desire of both
parties to enter into a share purchase agreement that would allow both parties to expand their
respective airline operations in the Philippines and other neighboring countries. THE WELLEX
GROUP, INC. vs. U-LAND AIRLINES, CO., LTD., G.R. No. 167519. January 14, 2015, J. Leonen

If a party to a contract of lease violates its terms and conditions, the other party should go to court
to make the former refrain from his 'illegal' activities or seek rescission of the contract, rather than
taking the law into his own hands. Otherwise, he is liable for breach of contract for illegally
terminating the same. PRISCILO B. PAZ v. NEW INTERNATIONAL ENVIRONMENTAL
UNIVERSALITY, INC., G.R. No. 203993, April 20, 2015, PERLAS-BERNABE, J.

For a contracting party to be entitled to rescission (or resolution) the other contracting party must
be in substantial breach of the terms and conditions of their contract. ROGELIO S. NOLASCO,
NICANORA N. GUEVARA, LEONARDA N. ELPEDES, HEIRS OF ARNULFO S. NOLASCO, AND
REMEDIOS M. NOLASCO, REPRESENTED BY ELENITA M. NOLASCO v. CELERINO S. CUERPO,
JOSELITO ENCABO, JOSEPH ASCUTIA, AND DOMILO LUCENARIO, G.R. No. 210215, December
9, 2015, PERLAS-BERNABE, J.

The Civil Code uses rescission in two different contexts, namely: (1) rescission on account of breach
of contract under Article 1191; and (2) rescission by reason of lesion or economic prejudice under
Article 1381. ASB REALTY CORPORATION v. ORTIGAS & COMPANY LIMITED PARTNERSHIP,
G.R. No. 202947, December 9, 2015, BERSAMIN, J.

As a contractual remedy, rescission is available when one of the parties substantially fails to do
what he has obligated himself to perform. It aims to address the breach of faith and the violation of
reciprocity between two parties in a contract. Under Article 1191 of the Civil Code, the right of
rescission is inherent in reciprocal obligations.

The general rule is that rescission of a contract will not be permitted for a slight or casual breach,
but only for such substantial and fundamental violations as would defeat the very object of the
parties in making the agreement. It must be pointed that in the absence of a stipulation, a party
cannot unilaterally and extra judicially rescind a contract. A judicial or notarial act is necessary
before a valid rescission can take place. GEORGE C. FONG v. JOSE V. DUEAS, G.R. No. 185592,
June 15, 2015

Even if Article 1191 were applicable, petitioner would still not be entitled to automatic rescission.
Under Article 1191of the Civil Code, the right to resolve reciprocal obligations, is deemed implied in
case one of the obligors shall fail to comply with what is incumbent upon him. But that right must
be invoked judicially. Consequently, even if the right to rescind is made available to the injured
party, the obligation is not ipso facto erased by the failure of the other party to comply with what is
incumbent upon him. The party entitled to rescind should apply to the court for a decree of
rescission. The right cannot be exercised solely on a partys own judgment that the other committed
a breach of the obligation. The operative act which produces the resolution of the contract is the

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decree of the court and not the mere act of the vendor. (EDS MANUFACTURING, INC. v.
HEALTHCHECK INTERNATIONAL INC. G.R. No. 162802, October 9, 2013)

Well-settled is the rule that rescission will not be permitted for a slight or casual breach of the
contract. The question of whether a breach of contract is substantial depends upon the attending
circumstances. Also, Article 1191 of the Civil Code expressly provides that rescission is without
prejudice to the rights of third persons who have acquired the thing, in accordance with Article
1385 of the Civil Code. In turn, Article 1385 states that rescission cannot take place when the things
which are the object of the contract are legally in the possession of third persons who did not act in
bad faith. (PLANTERS DEVELOPMENT BANK V. SPS. ERNESTO LOPEZ AND FLORENTINA
LOPEZ, ET AL., G.R. NO. 186332. OCTOBER 23, 2013)

SIMULATION OF CONTRACT

"Simulation takes place when the parties do not really want the contract they have executed to
produce the legal effects expressed by its wordings. Simulation or vices of declaration may be either
absolute or relative." ANCHULING-TAN, RITA TANCHULING-MAPA, ROSEMARIE TANCHULING-
SALINAS, and VINCENT RAYMOND B. TANCHULING V. SOTERA CANTELA, G.R. NO. 209284,
November 15, 2015

The burden of proving the alleged simulation of a contract falls on those who impugn its regularity
and validity. A failure to discharge this duty will result in the upholding of the contract. MILAGROS
REYES V. FELIX ASUNCION, G.R. NO. 196083, November 11, 2015
SALES

ASSIGNMENT OF CREDIT

The assignment of all contractual rights of an assignor in favor of an assignee relegates the former
to the status of a mere stranger to the jural relations established under the contract to sell.
SPOUSES MICHELLE M. NOYNAY and NOEL S. NOYNAY vs. CITIHOMES BUILDER AND
DEVELOPMENT, INC., G.R. No. 204160, September 22, 2014, J. Mendoza

UCPB assigned accounts receivable to Primetown. Thereafter, Spouses filed a complaint against the
latter for refund for payment. The court ruled that the agreement conveys the straightforward
intention of Primetown to sell, assign, transfer, convey and set over to UCPB the receivables,
rights, titles, interests and participation over the units covered by the contracts to sell. It explicitly
excluded any and all liabilities and obligations, which Primetown assumed under the contracts to
sell. In every case, the obligations between assignor and assignee will depend upon the judicial
relation which is the basis of the assignment. An assignment will be construed in accordance with
the rules of construction governing contracts generally, the primary object being always to
ascertain and carry out the intention of the parties. This intention is to be derived from a
consideration of the whole instrument, all parts of which should be given effect, and is to be sought
in the words and language employed. SPOUSES CHIN KONG WONG CHOI AND ANA O. CHUA
vs. UNITED COCONUT PLANTERS BANK, G.R. No. 207747, March 11, 2015, J. Carpio

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Through the assignment of credit, the new creditor is entitled to the rights and remedies available
to the previous creditor. Moreover, under Article 1627 of the Civil Code, the assignment of a credit
includes all the accessory rights, such as a guaranty, mortgage, pledge, or preference.
METROPOLITAN BANK & TRUST COMPANY v. G & P BUILDERS, INCORPORATED, SPOUSES
ELPIDIO AND ROSE VIOLET PARAS, SPOUSES JESUS and MA. CONSUELO PARAS AND
VICTORIA PARAS, G.R. No. 189509, November 23, 2015, LEONEN, J.

CONDITIONAL SALE

It is essential to distinguish between a contract to sell and a conditional contract of sale specially in
cases where the subject property is sold by the owner not to the party the seller contracted with,
but to a third person. In a contract to sell, there being no previous sale of the property, a third
person buying such property despite the fulfilment of the suspensive condition such as the full
payment of the purchase price, for instance, cannot be deemed a buyer in bad faith and the
prospective buyer cannot seek the relief of reconveyance of the property. There is no doublesale in
such case. Title to the property will transfer to the buyer after registration because there is no
defect in the owner-sellers title per se, but the latter, of course, may be sued for damages by the
intending buyer. SPOUSES JOSE C. ROQUE AND BEATRICE DELA CRUZ ROQUE, ET AL vs. MA.
PAMELA AGUADO, ET AL., G.R. No. 193787, April 7, 2014, J. Perlas- Bernabe

SIMULATED SALE

If the words of a contract appear to contravene the evident intention of the parties, the latter shall
prevail. Such intention is determined not only from the express terms of their agreement, but also
from the contemporaneous and subsequent acts of the parties. This is especially true in a claim of
absolute simulation where a colorable contract is executed. VALENTINA CLEMENTE v. COURT OF
APPEALS, et al., G.R. No. 175483, October 14, 2015, JARDELEZA, J.

DELIVERY

Under the Civil Code, the vendor is bound to transfer the ownership of and deliver, as well as
warrant the thing which is the object of the sale. The ownership of thing sold is considered acquired
by the vendee once it is delivered to him. Thus, ownership does not pass by mere stipulation but
only by delivery.In the Law on Sales, delivery may be either actual or constructive, but both forms
of delivery contemplate "the absolute giving up of the control and custody of the property on the
part of the vendor, and the assumption of the same by the vendee." NFF INDUSTRIAL
CORPORATION vs. G & L ASSOCIATED BROKERAGE AND/OR GERARDO TRINIDAD, G.R. No.
178169, January 12, 2015, J. Peralta

The Civil Code states that ownership of the thing sold is transferred to the vendee upon the actual
or constructive delivery of the same. SPOUSES MAGDALINO AND CLEOFE BADILLA v. FE
BRAGAT, G.R. No. 187013, April 22, 2015

Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad
order at their destination constitutes a prima facie case of fault or negligence against the carrier. If
no adequate explanation is given as to how the deterioration, loss, or destruction of the goods
happened, the transporter shall be held responsible. EASTERN SHIPPING LINES, INC. v. BPI/MS
INSURANCE CORP., and MITSUI SUMITOMO INSURANCE CO., LTD., G.R. No. 182864, January
12, 2015, PEREZ, J.

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It is not enough for a seller to show that he is capable of delivering the goods on the date he agreed
to make the delivery. He has to bring his goods and deliver them at the place their agreement called
for, i.e., at the Ajinomoto Pasig River wharf. A stipulation designating the place and manner of
delivery is controlling on the contracting parties. The thing sold can only be understood as
delivered to the buyer when it is placed in the buyers control and possession at the agreed place of
delivery. Cargill presented no evidence that it attempted to make other deliveries to complete the
balance of Contract 5026. (SAN FERNANDO REGALA TRADING, INC. v. CARGILL PHILIPPINES,
INC., G.R. No. 178008, October 9, 2013)

PURCHASE IN GOOD FAITH

While a third party may not be considered as innocent purchaser for value, he can still rightfully
claim for actual and compensatory damages, considering that he did not join the other defendants
in their efforts to frustrate plaintiffs rights over the disputed properties and who might well be an
unwilling victim of the fraudulent scheme employed by the other defendants.

Nonetheless, even if when no bad faith can be ascribed to the parties alike, an equal footing of the
parties necessarily tilts in favor of the superiority of the notice of levy and the constructive notice
against the whole world which the original party to the contract of sale had produced and which
effectively bound third persons. Thus, the latter has two options available: 1) they may exercise the
right to appropriate after payment of indemnity representing the value of the improvements
introduced and the necessary and useful expenses defrayed on the subject lots; or 2) they may
forego payment of the said indemnity and instead, oblige the Saberons to pay the price of the land.
RAUL SABERON, JOAN F. SABERON and JACQUELINE SABERON vs. OSCAR VENTANILLA, JR.,
and CARMEN GLORIA D. VENTANILLA, G.R. No. 192669, April 21, 2014, J. Mendoza

One is considered a buyer in bad faith not only when he purchases real estate with knowledge of a
defect or lack of title in his seller but also when he has knowledge of facts which should have
alerted him to conduct further inquiry or investigation, as Krystle Realty in this case. Further, as
one asserting the status of a buyer in good faith and for value, it had the burden of proving such
status, which goes beyond a mere invocation of the ordinary presumption of good faith.

The agreement of the parties to submit the determination of the genuineness of Domingos
signature to a handwriting expert of the NBI does not, authorize the RTC to accept the findings of
such expert.The opinion of a handwriting expert, therefore, does not mandatorily bind the court,
the expert's function being to place before the court data upon which it can form its own opinion.
KRYSTLE REALTY DEVELOPMENT CORPORATION, rep. by CHAIRMAN OF THE BOARD,
WILLIAM C. CU vs. DOMINGO ALIBIN, as substituted by his heirs, G.R. No. 196117/G.R. No.
196129, August 13, 2014, J. Perlas-Bernabe

When a piece of land is in the actual possession of persons other than the seller, the buyer must be
wary and should investigate the rights of those in possession. Without making such inquiry, one
cannot claim that he is a buyer in good faith. When a man proposes to buy or deal with realty, his
duty is to read the public manuscript, that is, to look and see who is there upon it and what his
rights are. A want of caution and diligence, which an honest man of ordinary prudence is
accustomed to exercise in making purchases, is in contemplation of law, a want of good faith. The
buyer who has failed to know or discover that the land sold to him is in adverse possession of

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another is a buyer in bad faith. (HOSPICIO D. ROSAROSO v. LUCILA LABORTE SORIA, G.R. No.
194846, June 19, 2013)

A buyer in good faith is one who buys the property of another without notice that some other
person has a right to or interest in such property. To prove good faith, the following conditions
must be present: (a) the seller is the registered owner of the land; (b) the owner is in possession
thereof; and (3) at the time of the sale, the buyer was not aware of any claim or interest of some
other person in the property, or of any defect or restriction in the title of the seller or in his capacity
to convey title to the property. All these conditions must be present, otherwise, the buyer is under
obligation to exercise extra ordinary diligence by scrutinizing the certificates of title and examining
all factual circumstances to enable him to ascertain the seller's title and capacity to transfer any
interest in the property. (SPOUSES ELISEO R. BAUTISTA AND EMPERA TRIZ C. BAUTISTA vs.
SPOUSES MILA JALANDONI AND ANTONIO JALANDONI, G.R. No. 171464, November 27, 2013)

SALE OF SAME THING/S TO DIFFERENT VENDEES

The petitioner asserts that it has a better right of ownership over the disputed property in the case
at bar by virtue of a Dacion En Pago. The Supreme Court ruled that the most prominent index of
simulation is the complete absence of an attempt on the part of the vendee to assert his rights of
ownership over the property in question. After the sale, the vendee should have entered the land
and occupied the premises. ORION SAVINGS BANKvs. SHIGEKANE SUZUKI, G.R. No. 205487,
November 12, 2014, J. Brion

CONTRACT OF SALE

Indeed, not being an heir of Luis, Romeo never acquired any right whatsoever over the subject lots
even if he was able to subsequently obtain a title in his name. It is a well-settled principle that no
one can give what one does not have, nemo dat quod non habet. One can sell only what one owns or
is authorized to sell, and the buyer can acquire no more right than what the seller can transfer
legally. SKUNAC CORPORATION and ALFONSO F. ENRIQUEZ vs. ROBERTO S. SYLIANTENG and
CAESAR S. SYLIANTENG, G.R. No. 205879, April 23, 2014, J. Peralta

The primary consideration in determining the true nature of a contract is the intention of the
parties. If the words of a contract appear to contravene the evident intention of the parties, the
latter shall prevail. Such intention is determined not only from the express terms of their
agreement, but also from the contemporaneous and subsequent acts of the parties. Such that when
the contract denominated as Resibo reveals that nothing therein suggests, even remotely, that the
subject property was given to secure a monetary obligation but an intent to sell his share in the
property, said contract is a contract of sale and not an equitable mortgage. HEIRS OR REYNALDO
DELA ROSA, Namely: TEOFISTA DELA ROSA, JOSEPHINE SANTIAGO AND JOSEPH DELA ROSA
vs. MARIO A. BA TONGBACAL, IRENEO BATONGBACAL, JOCELYN BA TONGBACAL, NESTOR
BATONGBACAL AND LOURDES BA TONGBACAL, G.R. No. 179205, July 30, 2014, J. Perez

Unless all the co-owners have agreed to partition their property, none of them may sell a definite
portion of the land. The co-owner may only sell his or her proportionate interest in the co-
ownership. A contract of sale which purports to sell a specific or definite portion of unpartitioned
land is null and void ab initio.

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At best, the agreement between Juan and Henry is a contract to sell, not a contract of sale. A
contract to sell is a promise to sell an object, subject to suspensive conditions. Without the
fulfillment of these suspensive conditions, the sale does not operate to determine the obligation of
the seller to deliver the object.

A co-owner could enter into a contract to sell a definite portion of the property. Such contract is still
subject to the suspensive condition of the partition of the property, and that the other co-owners
agree that the part subject of the contract to sell vests in favor of the co-owners buyer. Hence, the
co-owners consent is an important factor for the sale to ripen. JUAN P. CABRERA vs. HENRY
YSAAC, G.R. No. 166790, November 19, 2014, J. Leonen

Article 1491, paragraph 5 of the Civil Code prohibits court officers such as clerks of court from
acquiring property involved in litigation within the jurisdiction or territory of their courts. For the
prohibition to apply, the sale or assignment of the property must take place during the pendency of
the litigation involving the property. Where the property is acquired after the termination of the
case, no violation of paragraph 5, Article 1491 of the Civil Code attaches.

A thing is said to be in litigation not only if there is some contest or litigation over it in court, but
also from the moment that it becomes subject to the judicial action of the judge. A property forming
part of the estate under judicial settlement continues to be subject of litigation until the probate
court issues an order declaring the estate proceedings closed and terminated. The rule is that as
long as the order for the distribution of the estate has not been complied with, the probate
proceedings cannot be deemed closed and terminated. The probate court loses jurisdiction of an
estate under administration only after the payment of all the debts and the remaining estate
delivered to the heirs entitled to receive the same. (RODOLFO S. SABIDONG v. NICOLASITO S.
SOLAS, A.M. No. P-01-1448 June 25, 2013)

In a contract to sell, the seller retains ownership of the property until the buyer has paid the price
in full. A buyer who covertly usurps the seller's ownership of the property prior to the full payment
of the price is in breach of the contract and the seller is entitled to rescission because the breach is
substantial and fundamental as it defeats the very object of the parties in entering into the contract
to sell. In the case at bar, the court finds that respondent Rowenas act of transferring the title to the
subject land in her name, without the knowledge and consent of petitioners and despite non-
payment of the full price thereof, constitutes a substantial and fundamental breach of the contract
to sell. (SPOUSES DELFIN O. TUMIBAY AND AURORA T. TUMIBA-DECEASED ET AL. v. SPOUSES
MELVIN A. LOPEZ, G.R. No. 171692, June 3, 2013)

The two conditional deeds of sale entered into by the parties are contracts to sell, as they both
contained a stipulation that ownership of the properties shall not pass to the vendee until after full
payment of the purchase price. In a conditional sale, as in a contract to sell, ownership remains with
the vendor and does not pass to the vendee until full payment of the purchase price. The full
payment of the purchase price partakes of a suspensive condition, and non-fulfillment of the
condition prevents the obligation to sell from arising. To differentiate, a deed of sale is absolute
when there is no stipulation in the contract that title to the property remains with the seller until
full payment of the purchase price.

Articles 1191 and 1592 of the Civil Code are applicable to contracts of sale, while R.A. No. 6552
applies to contracts to sell. R.A. No. 6552, otherwise known as the Realty Installment Buyer Act,
applies to the subject contracts to sell. R.A. No. 6552 (Maceda Law) recognizes in conditional sales

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of all kinds of real estate (industrial, commercial, residential) the right of the seller to cancel the
contract upon non-payment of an installment by the buyer, which is simply an event that prevents
the obligation of the vendor to convey title from acquiring binding force. (MANUEL UY & SONS,
INC. v. VALBUECO, INCORPORATED, G.R. No. 179594. September 11, 2013)

To note, while the quality of contingency inheres in a contract to sell, the same should not be
confused with a conditional contract of sale. In a contract to sell, the fulfillment of the suspensive
condition will not automatically transfer ownership to the buyer although the property may have
been previously delivered to him. The prospective seller still has to convey title to the prospective
buyer by entering into a contract of absolute sale.On the other hand, in a conditional contract of
sale, the fulfillment of the suspensive condition renders the sale absolute and the previous delivery
of the property has the effect of automatically transferring the sellers ownership or title to the
property to the buyer. (FREDERICK VENTURA, MARITES VENTURA-ROXAS v. HEIRS OF
SPOUSES EUSTACIO T. ENDAYA and TRINIDAD L. ENDAYA, G.R. No. 190016, October 2, 2013)

In a contract of Sale, one of the contracting parties obligates himself to transfer the ownership of
and to deliver a determinate thing while the other party obligates himself to pay therefor a price
certain in money or its equivalent. There was no sale on credit in this case because ownership of the
items did not pass from one party to the other.

There is also no novation made. The acceptance of partial payments, without further change in the
original relation between the complainant and the accused, cannot produce novation. There must
be proof of intent to extinguish the original relationship, and such intent cannot be inferred from
the mere acceptance of payments on account of what is totally due. (NARCISO DEGAOS vs.
PEOPLE OF THE PHILIPPINES, G.R. No. 162826. October 14, 2013)

The full payment of the purchase price in a contract to sell is a suspensive condition, the non-
fulfillment of which prevents the prospective sellers obligation to convey title from becoming
effective, as in this case. (OPTIMUM DEVELOPMENT BANK vs. SPOUSES BENIGNO V.
JOVELLANOS and LOURDES R. JOVELLANOS, G.R. No. 189145, December 4, 2013)

A contract of sale is classified as a consensual contract, which means that the sale is perfected by
mere consent. No particular form is required for its validity. Upon perfection of the contract, the
parties may reciprocally demand performance, i.e., the vendee may compel transfer of ownership of
the object of the sale, and the vendor may require the vendee to pay the thing sold.

In contrast, a contract to sell is defined as a bilateral contract whereby the prospective seller, while
expressly reserving the ownership of the property despite delivery thereof to the prospective
buyer, binds himself to sell the property exclusively to the prospective buyer upon fulfillment of the
condition agreed upon, i.e., the full payment of the purchase price. A contract to sell may not even
be considered as a conditional contract of sale where the seller may likewise reserve title to the
property subject of the sale until the fulfillment of a suspensive condition, because in a conditional
contract of sale, the first element of consent is present, although it is conditioned upon the
happening of a contingent event which may or may not occur. (ACE FOODS, INC. VS. MICRO
PACIFIC TECHNOLOGIES CO., LTD., G.R. No. 200602, December 11, 2013)

In sales with the right to repurchase, the title and ownership of the property sold are immediately
vested in the vendee, subject to the resolutory condition of repurchase by the vendor within the

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stipulated period. Once the conditions for the repurchase are complied with, the ownership of the
subject property is reverted back to the original vendor. Since, Eduardo fulfilled the conditions for
the exercise of the right to repurchase, he cannot be denied of acquiring the property by exercising
his right to repurchase the same. (ROBERTO R. DAVID v. EDUARDO C. DAVID G.R. NO. 162365.
January 15, 2014)

In a contract to sell, the seller retains ownership of the subject property. Thus, the seller may still
enter into a valid contract of mortgage. However, when the contract to sell ripens to an absolute
contract of sale, the mortgagor and mortgagee must respect the rights of the buyer over the subject
property. Such buyer is not privy to the contract between the mortgagor and mortgagee; hence, the
buyer can make the necessary actions to protect her rights over the property. Despite the apparent
validity of the mortgage between the petitioner and PEPI, the former is still bound to respect the
transactions between respondents PEPI and Dee. (PHILIPPINE NATIONAL BANK v. TERESITA
TAN DEE, ET AL., G.R. No. 182128, February 19, 2014)

EARNEST MONEY

In a potential sale transaction, the prior payment of earnest money even before the property owner
can agree to sell his property is irregular, and cannot be used to bind the owner to the obligations of
a seller under an otherwise perfected contract of sale; to cite a well-worn clich, the carriage cannot
be placed before the horse. Securitrons sending of the February 4, 2005 letter to FORC which
contains earnest money constitutes a mere reiteration of its original offer which was already
rejected previously. FORC can never be made to push through a sale which they never agreed to in
the first place. FIRST OPTIMA REALTY CORPORATION vs. SECURITRON SECURITY SERVICES,
INC., G.R. No. 199648, January 28, 2015, J. Del Castillo

FORGERY

Fermin filed a case for Annulment of Deed of Absolute Sale, Transfer Certificate of Title and
Damages alleging that the signature of her father was forged. While the Court recognize that the
technical nature of the procedure in examining forged documents calls for handwriting
experts, resort to these experts is not mandatory or indispensable, because a finding of forgery does
not depend entirely on their testimonies. Judges must also exercise independent judgment in
determining the authenticity or genuineness of the signatures in question, and not rely merely on
the testimonies of handwriting experts. SERCONSISION R. MENDOZA vs. AURORA MENDOZA
FERMIN, G.R. No. 177235, July 7, 2014, J.Peralta

RECISSION

The failure of TSEI to pay the consideration for the sale of the subject property entitled the
Sanchezes to rescind the Agreement. And in view of the finding that the intervenors acted in bad
faith in purchasing the property, the subsequent transfer in their favor did not and cannot bar
rescission. Contrary to the contention of BPI, although the case was originally an action for
rescission, it became a direct attack on the title, certainly there is no indication that when the
Sanchezes filed their complaint with the RTC they already knew of the existence of TCT 383697.
BANK OF THE PHILIPPINE ISLANDS vs. VICENTE VICTOR C. SANCHEZ ET AL./GENEROSO
TULAGAN ET AL. vs. VICENTE VICTOR C. SANCHEZ ET AL./REYNALDO V. MANIWANG vs.
VICENTE VICTOR C. SANCHEZ and FELISA GARCIA YAP, G.R. No. 179518, G.R. No. 179835, G.R.
No. 179954, November 19, 2014, J. Velasco Jr.

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EXTINGUISHMENT OF DEBT

Cameron Grandville filed a motion for reconsideration for the April 10, 2013 decision of the
Supreme Court. It argues that the right of Eagle Ridge Development to extinguish the obligation has
already lapsed. However, the Court in resolving this case stated that nder the circumstances of this
case, the 30-day period under Article 1634 within which Eagle Ridge Developments could exercise
their right to extinguish their debt should begin to run only from the time they were informed of
the actual price paid by the assignee for the transfer of their debt. EAGLE RIDGE DEVELOPMENT
CORPORATION, MARCELO N. NAVAL and CRISPIN I. OBEN vs. CAMERON GRANVILLE 3 ASSET
MANAGEMENT, INC., G.R. No. 204700, November 24, 2014, J. Leonen

P.D. 957
THE SUBDIVISION AND CONDOMINIUM BUYERS' PROTECTIVE DECREE

In this case, the contract to sell between Rotairo and Ignacio & Company was entered into in 1970,
and the agreement was fully consummated with Rotairos completion of payments and the
execution of the Deed of Sale in his favor in 1979. Clearly, P.D. No. 957 (Sale of Subdivision Lots and
Condominiums) is applicable in this case.

It was error for the CA to rule that the retroactive application of P.D. No. 957 is warranted only
where the subdivision is mortgaged after buyers have purchased individual lots. According to the
CA, the purpose of Sec. 18 requiring notice of the mortgage to the buyers is to give the buyer the
option to pay the installments directly to the mortgagee; hence, if the subdivision is mortgaged
before the lots are sold, then there are no buyers to notify. What the CA overlooked is that Sec. 21
requires the owner or developer of the subdivision project to complete compliance with its obliga-
tions within two years from 1976. The two-year compliance provides the developer the
opportunity to comply with its obligation to notify the buyers of the existence of the mortgage, and
conse-quently, for the latter to exercise their option to pay the installments directly to the
mortgagee. AMBROSIO ROTAIRO (SUBSTITUTED BY HIS SPOUSE MARIA RONSAYRO ROTAIRO,
AND HIS CHILDREN FELINA ROTAIRO, ERLINDA ROTAIRO CRUZ, EUDOSIA ROTAIRO
CRIZALDO, NIEVES ROTAIRO TUBIG, REMEDIOS ROTAIRO MACAHILIG, FELISA ROTAIRO
TORREVILLAS, AND CRISENCIO R. ROTAIRO, MARCIANA TIBAY, EUGENIO PUNZALAN, AND
VICENTE DEL ROSARIO vs. ROVIRA ALCANTARA AND VICTOR ALCANTARA, G.R. No. 173632,
September 29, 2014, J. Reyes

The lack of a license to sell or the failure on the part of a subdivision developer to register the
contract to sell or deed of conveyance with the Register of Deeds does not result to the nullification
or invalidation of the contract to sell it entered into with a buyer. The contract to sell remains valid
and subsisting. The intrinsic validity of the contract to sell is not affected by the developers
violation of Section 5 of PD 957.Nevertheless, the respondent in this case is entitled to 50% refund
under the Maceda Law. (MOLDEX RAELTY INC. v. FLORA A. SABERON, G.R. No. 176289. April 8,
2013)

COMPROMISE

A compromise agreement is a contract whereby the parties make reciprocal concessions in order to
resolve their differences and, thus, avoid or put an end to a lawsuit, in order to be binding upon the

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litigants with the force and effect of a judgment, must have been executed by them. DAVID M.
DAVID v. FEDERICO M. PARAGAS, JR., G.R. No. 176973, February 25, 2015, MENDOZA, J.

A Compromise Agreement which is not contrary to law, morals, good customs, public policy and
public order shall be granted. PEOPLES GENERAL INSURANCE CORP. (FORMERLY: PEOPLE'S
TRANS-EAST ASIA INSURANCE CORP.) v. COL. FELIX MATEO A. RUNES, G.R. No. 212092, April
8, 2015, MENDOZA, J.

A judicially approved compromise agreement has the effect and authority of res judicata. It is final,
binding on the parties, and enforceable through a writ of execution. Article 2041 of the Civil Code,
however, allows the aggrieved party to rescind the compromise agreement and insist upon his
original demand upon failure and refusal of the other party to abide by the compromise agreement.
REYNALDO INUTAN, HELEN CARTE, NOEL AYSON, IVY CABARLE, NOELJAMILI, MARITES
HULAR, ROLITOAZUCENA, RAYMUNDO TUNOG, ROGER BERNAL, AGUSTEV ESTRE, MARILOU
SAGUN, AND ENRIQUE LEDESMA, JR. v. NAPAR CONTRACTING & ALLIED SERVICES, NORMAN
LACSAMANA,*** JONAS INTERNATIONAL, INC., AND PHILIP YOUNG, G.R. No. 195654,
November 25, 2015, DEL CASTILLO, J.

SUCCESSION

GENERAL PROVISIONS

It is hornbook doctrine that successional rights are vested only at the time of death. Article 777 of
the New Civil Code provides that "the rights to the succession are transmitted from the moment of
the death of the decedent. Thus, in this case, it is only upon the death of Pedro Calalang on
December 27, 1989 that his heirs acquired their respective inheritances, entitling them to their pro
indiviso shares to his whole estate. At the time of the sale of the disputed property, the rights to the
succession were not yet bestowed upon the heirs of Pedro Calalang. And absent clear and
convincing evidence that the sale was fraudulent or not duly supported by valuable consideration
(in effect an officious donation inter vivos), the respondents have no right to question the sale of the
disputed property on the ground that their father deprived them of their respective shares. Well to
remember, fraud must be established by clear and convincing evidence. NORA B. CALALANG-
PARULAN and ELVIRA B. CALALANG vs. ROSARIO CALALANG-GARCIA, LEONORA CALALANG-
SABILE, and CARLITO S. CALALANG, G.R. No. 184148, June 9, 2014, J. Villarama, Jr.

There is no basis to apply the provisions on intestacy when testate succession evidently applies.
DOLORES L. HACBANG AND BERNARDO J. HACBANG v. ATTY. BASILIO H. ALO, G.R. No.
191031, October 05, 2015

In the right of representation, representatives will be called to the succession by the law and not by
the person represented; and the representative does not succeed the person represented but the
one whom the person represented would have succeeded. ANDY ANG v. SEVERINO PACUNIO, et
al., G.R. No. 208928, July 8, 2015, PERLAS-BERNABE, J.

PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION

Partition is the separation, division and assignment of a thing held in common among those to
whom it may belong. Every act which is intended to put an end to indivision among co-heirs and

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legatees or devisees is deemed to be a partition. Partition may be inferred from circumstances


sufficiently strong to support the presumption. Thus, after a long possession in severalty, a deed of
partition may be presumed. The evidence presented by the parties indubitably show that, after the
death of Alipio, his heirs Eusebio, Espedita and Jose Bangi had orally partitioned his estate,
including the subject property, which was assigned to Eusebio. Accordingly, considering that
Eusebio already owned the subject property at the time he sold the one-third portion thereof.
SPOUSES DOMINADOR MARCOS and GLORIA MARCOS, vs. HEIRS OF ISIDRO BANGI and
GENOVEVA DICCION, represented by NOLITO SABIANO, G.R. No. 185745, October 15, 2014, J.
Reyes

AGENCY

The power to collect and receive payments on behalf of the principal is an ordinary act of
administration covered by the general powers of an agent. On the other hand, the filing of suits is an
act of strict dominion. V-GENT, INC., v. MORNING STAR TRAVEL and TOURS, INC., G.R. No.
186305, July 22, 2015, BRION, J.

According to Article 1990 of the New Civil Code, insofar as third persons are concerned, an act is
deemed to have been performed within the scope of the agent's authority, if such act is within the
terms of the power of attorney, as written. In this case, Spouses Rabaja did not recklessly enter into
a contract to sell with Gonzales. They required her presentation of the power of attorney before
they transacted with her principal. And when Gonzales presented the SPA to Spouses Rabaja, the
latter had no reason not to rely on it. SPOUSES ROLANDO AND HERMINIA
SALVADOR vs. SPOUSES ROGELIO AND ELIZABETH RABAJA AND ROSARIO GONZALES, G.R.
No. 199990, February 04, 2015, J. Mendoza

A special power of attorney is necessary to enter into any contract by which the ownership of an
immovable is transmitted or acquired either gratuitously or for a valuable consideration.
FLORENTINA BAUTISTA-SPILLE REPRESENTED BY HER ATTORNEY-IN-FACT, MANUEL B.
FLORES, JR., v. NICORP MANAGEMENT AND DEVELOPMENT CORPORATION, BENJAMIN G.
BAUTISTA AND INTERNATIONAL EXCHANGE BANK, G.R. No. 214057, October 19, 2015

The execution of an SPA for the administration of the properties, on the same day the Deeds of
Absolute Sale were executed, is antithetical to the relinquishment of ownership. VALENTINA
CLEMENTE v. COURT OF APPEALS, et al., G.R. No. 175483, October 14, 2015, JARDELEZA, J.

As a general rule, a contract of agency may be oral. However, it must be written when the law
requires a specific form. Specifically, Article 1874 of the Civil Code provides that the contract of
agency must be written for the validity of the sale of a piece of land or any interest therein.
Otherwise, the sale shall be void. A related provision, Article 1878 of the Civil Code, states that
special powers of attorney are necessary to convey real rights over immovable properties. Further
the special power of attorney mandated by law must be one that expressly mentions a sale or that
includes a sale as a necessary ingredient of the authorized act. Such power must be must express in
clear and unmistakable language. In the present case, the pieces of documentary evidence by Sally
did not convince the Court as to the existence of agency. Necessarily, the absence of a contract of
agency renders the contract of sale unenforceable. Joy Training effectively did not enter into a valid
contract of sale with the spouses Yoshizaki. (SALLY YOSHIZAKI v. JOY TRAINING CENTER OF
AURORA, INC., G.R. No. 174978. July 31, 2013)

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Sps. Sarili purchased the subject property from Ramos on the strength of the latters ostensible
authority to sell under the subject SPA. The said document, however, readily indicates flaws in its
notarial acknowledgment since the respondents community tax certificate (CTC) number was not
indicated thereon. The due execution and authenticity of the subject SPA are of great significance in
determining the validity of the sale entered into by Victorino and Ramon since the latter only claims
to be the agent of the purported seller. The rule that even if the procurement of a certificate of title
was tainted with fraud and misrepresentation, such defective title may be the source of a
completely legal and valid title in the hands of an innocent purchaser for value is not applicable to
the Sps. Sarili. A higher degree of prudence is required from one who buys from a person who is not
the registered owner, although the land object of the transaction is registered. Since Sps. Sarilis
claim over the subject property is based on forged documents, no valid title had been transferred to
them and, in turn, to petitioners. (THE HEIRS OF VICTORINO SARILI v. PEDRO F. LAGROSA,
REPRESENTED IN THIS ACT BY HIS ATTORNEY-IN-FACT, LOURDES LABIOS MOJICA, G.R. No.
193517. January 15, 2014)

In a contract executed by an agent for a principal, the contract must upon its face purport to be
made, signed and sealed in the name of the principal. When the Real Estate Mortgage, explicitly
shows on its face, that it was signed by Concepcion, the agent, in her own name and in her own
personal capacity, and without indicating that he is signing for and in behalf of his principal, the
mortgage is only binding upon her, the agent, and not upon the principal. (NICANORA G. BUCTON
(DECEASED), SUBSTITUTED BY REQUILDA B. YRAY, PETITIONER, VS. RURAL BANK OF EL
SALVADOR, INC., ET AL, G.R. No. 179625, February 24, 2014)

TRUST

The Court is in conformity with the finding of the trial court that an implied resulting trust was
created as provided under the first sentence of Article 1448which is sometimes referred to as a
purchase money resulting trust, the elements of which are: (a) an actual payment of money,
property or services, or an equivalent, constituting valuable consideration; and (b) such
consideration must be furnished by the alleged beneficiary of a resulting trust. In this case, the
petitioners have shown that the two elements are present. Luis, Sr. was merely a trustee of Juan
Tong and the petitioners in relation to the subject property, and it was Juan Tong who provided the
money for the purchase of Lot 998 but the corresponding transfer certificate of title was placed in
the name of Luis, Sr. JOSE JUAN TONG, ET AL.vs.GO TIAT KUN, ET AL., G.R. No. 196023, April 21,
2014, J.Reyes

The existence of implied trust prevents prescription from setting in because the defense of
prescription cannot be set up in an action to enforce trust. NORMA EDITA R. DY SUN-ONG v. JOSE
VICTORY R. DY SUN, G.R. No. 207435, July 01, 2015, CARPIO, J.

Express trusts are created by direct and positive acts of the parties, by some writing or deed, or
will, or by words either expressly or impliedly evincing an intention to create a trust. WILSON GO
AND PETER GO v. THE ESTATE OF THE LATE FELISA TAMIO DE BUENAVENTURA, G.R. No.
211972, July 22, 2015

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The principle of a resulting trust is based on the equitable doctrine that valuable consideration, and
not legal title, determines the equitable title or interest. SPOUSES ARMANDO AND LORNA
TRINIDAD v. DONA* MARIE GLENN IMSON, G.R. No. 197728, September 16, 2015

A trust by operation of law is the right to the beneficial enjoyment of a property whose legal title is
vested in another. A trust presumes the existence of a conflict involving one and the same property
between two parties, one having the rightful ownership and the other holding the legal title. There
is no trust created when the property owned by one party is separate and distinct from that which
has been registered in anothers name. In this case, the Caparas survey plan and the deed of sale
between the petitioners and Miguela showed that the parcel of land sold to the petitioners is
distinct from the consolidated parcels of land sold by Caparas to the spouses Perez. (Ricardo Chu,
Jr. and Dy Kok Eng v. Melania Caparas and Spouses Ruel and Hermenegilda Perez, G.R. No.
175428. April 15, 2013)

Trust is the legal relationship between one person having an equitable ownership in property and
another person owning the legal title to such property, the equitable ownership of the former
entitling him to the performance of certain duties and the exercise of certain powers by the latter. A
trust fund refers to money or property set aside as a trust for the benefit of another and held by a
trustee. Under the Civil Code, trusts are classified as either express or implied. An express trust is
created by the intention of the trustor or of the parties, while an implied trust comes into being by
operation of law. (GERSIP ASSOCIATION, INC., LETICIA ALMAZAN, ANGELA NARVAEZ, MARIA B.
PINEDA, LETICIA DE MESA AND ALFREDO D. PINEDA v. GOVERNMENT INSURANCE SERVICE
SYSTEM, G.R. No. 189827, October 16, 2013)

A constructive trust having been constituted by law between respondents as trustees and
petitioner as beneficiary of the subject property, may respondents acquire ownership over the said
property? The Court held in the same case of Aznar, that unlike in express trusts and resulting
implied trusts where a trustee cannot acquire by prescription any property entrusted to him unless
he repudiates the trust, in constructive implied trusts, the trustee may acquire the property
through prescription even if he does not repudiate the relationship. It is then incumbent upon the
beneficiary to bring an action for reconveyance before prescription bars the same.

An action for reconveyance based on an implied or constructive trust must perforce prescribe in
ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that,
illustrates this rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an
implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the
property. (IGLESIA FILIPINA INDEPENDIENTE v. HEIRS OF BERNARDINO TAEZA, G.R. No.
179597, February 03, 2014)

CREDIT TRANSACTIONS

LOAN

INTEREST RATE

Lim argues that legal interest in accordance with the case of Eastern Shipping must also be
awarded. The rules on legal interest in Eastern Shipping have, however, been recently modified

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by Nacar in accordance with Bangko Sentral ng Pilipinas Monetary Board (BSP-MB) Circular No.
799, which became effective on July 1, 2013. Pertinently, it amended the rate of legal interest in
judgments from 12% to 6% per annum, with the qualification that the new rate be applied
prospectively. Thus, the 12% per annum legal interest in judgments under Eastern Shipping shall
apply only until June 30, 2013, and the new rate of 6% per annum shall be applied from July 1, 2013
onwards. CONRADO A. LIM vs. HMR PHILIPPINES, INC., TERESA SANTOS-CASTRO, HENRY
BUNAG AND NELSON CAMILLER, G.R. No. 201483, August 04, 2014, J. Mendoza

There is no doubt that ECE incurred in delay in delivering the subject condominium unit, for which
reason the trial court was justified in awarding interest to Hernandez from the filing of his
complaint. There being no stipulation as to interest, under Article 2209 the imposable rate is six
percent (6%) by way of damages. Section 1 of Resolution No. 796 of the Monetary Board of the
Bangko Sentral ng Pilipinas dated May 16, 2013 provides: "The rate of interest for the loan or
forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of an
express contract as to such rate of interest, shall be six percent (6%) per annum." Thus, the rate of
interest to be imposed from finality of judgments is now back at six percent (6%), the rate provided
in Article 2209 of the Civil Code. ECE REALTY and DEVELOPMENT, INC. vs. HAYDYN
HERNANDEZ, G.R. No. 212689, August 6, 2014, J. Reyes

It is jurisprudential axiom that a foreclosure sale arising from a usurious mortgage cannot be given
legal effect. This Court has previously struck down a foreclosure sale where the amount declared as
mortgage indebtedness involved excessive, unreasonable, and unconscionable interest charges. In
no uncertain terms, this Court ruled that a mortgagor cannot be legally compelled to pay for a
grossly inflated loan.In the case at bar, the unlawful interest charge which led to the amount
demandedwill result to the invalidity of the subsequent foreclosure sale. ANCHOR SAVINGS BANK
vs. PINZMAN REALTY AND DEVELOPMENT CORPORATION, MARYLIN MANALAC AND RENATO
GONZALES, G.R. No. 192304, August 13, 2014, J. Villarama Jr.

When a person granted an unsecured loan without a maturity date in favor of a corporation and its
president and general manager (who is a lawyer) without reducing the loan transaction in writing,
the creditor cannot enforce payment of 6% monthly interest. The payments of the debtor to the
creditor must be considered as payment of the principal amount of the loan because Article 1956
was not complied with. In addition, even if the interest was in writing, it cannot be collected
because it is unconscionable. ROLANDO C. DE LA PAZ vs. L & J DEVELOPMENT COMPANY, G.R.
No. 183360, September 8, 2014, J. Del Castillo

Monetary interest refers to the compensation set by the parties for the use or forbearance of
money. No such interest shall be due unless it has been expressly stipulated in writing. On the
other hand, compensatory interest refers to the penalty or indemnity for damages imposed by law
or by the courts.This being the case and judging from the tenor of the CA, there can be no other
conclusion than that the interest imposed by the appellate-court is in the nature of compensatory
interest. SUN LIFE OF CANADA (PHILIPPINES), INC. vs. SANDRA TAN KIT and The Estate of the
Deceased NORBERTO TAN KIT, G.R. No. 183272, October 15, 2014, J.Del Castillo

The compounding of interest should be in writing. Article 1956 of the New Civil Code, which refers
to monetary interest provides that No interest shall be due unless it has been expressly stipulated
in writing. As mandated by the foregoing provision, payment of monetary interest shall be due only
if: (1) there was an express stipulation for the payment of interest; and (2) the agreement for such
payment was reduced in writing.

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The imposition of an unconscionable rate of interest on a money debt, even if knowingly and
voluntarily assumed, is immoral and unjust.

In the case at bar, it is undisputed that the parties have agreed for the loan to earn 5% monthly
interest, the stipulation to that effect put in writing. When the petitioners defaulted, the period for
payment was extended, carrying over the terms of the original loan agreement, including the 5%
simple interest. However, by the third extension of the loan, respondent spouses decided to alter
the agreement by changing the manner of earning interest rate, compounding it beginning June
1986. This is apparent from the Statement of Account prepared by the spouses Embisan
themselves. Thus, Spouses Embisan, having imposed, unilaterally at that, the compounded interest
rate, had the correlative duty of clarifying and reducing in writing how the said interest shall be
earned. Having failed to do so, the silence of the agreement on the manner of earning interest is a
valid argument for prohibiting them from charging interest at a compounded rate. SPOUSES
TAGUMPAY N. ALBOS AND AIDA C. ALBOS vs. SPOUSES NESTOR M. EMBISAN AND ILUMINADA
A. EMBISAN, DEPUTY SHERIFF MARINO V. CACHERO, AND THE REGISTER OF DEEDS OF
QUEZON CITY, G.R. No. 210831, November 26, 2014, J. Velasco Jr.

In the absence of an express stipulation as to the rate of interest that would govern the parties, the
rate of legal interest for loans or forbearance of any money, goods or credits and the rate allowed in
judgments shall no longer be twelve percent (12%) per annum - as reflected in the case of Eastern
Shipping Lines - but will now be six percent (6%) per annum effective July 1, 2013, pursuant to
Monetary Board Resolution No. 796. It should be noted, nonetheless, that the new rate could only
be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per annum
legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate of six percent
(6%) per annum shall be the prevailing rate of interest when applicable. (DARIO NACAR, v.
GALLERY FRAMES AND/OR FELIPE BORDEY, JR., G.R. No. 189871, August 13, 2013)

Article 1956 of the Civil Code, which refers to monetary interest, specifically mandates that no
interest shall be due unless it has been expressly stipulated in writing. Thus, the collection of
interest in loans or forbearance of money is allowed only when these two conditions concur: (1)
there was an express stipulation for the payment of interest; (2) the agreement for the payment of
the interest was reduced in writing. Absent any of these two conditions, the money debtor cannot
be made liable for interest. Thus, petitioner is entitled only to the principal amount of the loan plus
the allowable legal interest from the time of the demand, at the rate of 6% per annum. (TING TING
PUA v. SPOUSES BENITO LO BUN TIONG and CAROLINE SIOK CHING TENG, G.R. No. 198660,
October 23, 2013)

The rate of interest declared illegal and unconscionable does not entitle petitioners-spouses to stop
payment of interest. It should be emphasized that only the rate of interest was declared void. The
stipulation requiring petitioners-spouses to pay interest on their loan remains valid and binding.
They are, therefore, liable to pay interest from the time they defaulted in payment until their loan is
fully paid. (SPOUSES BAYANI H. ANDAL AND GRACIA G. ANDAL v. PHILIPPINE NATIONAL
BANK, ET AL., G.R. No. 194201. November 27, 2013)

CONTRACT OF LOAN

The agreement between PNB and [Spouses Tajonera] was one of a loan. Under the law, a loan
requires the delivery of money or any other consumable object by one party to another who

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acquires ownership thereof, on the condition that the same amount or quality shall be paid. Loan is
a reciprocal obligation, as it arises from the same cause where one party is the creditor, and the
other the debtor. The obligation of one party in a reciprocal obligation is dependent upon the
obligation of the other, and the performance should ideally be simultaneous. This means that in a
loan, the creditor should release the full loan amount and the debtor repays it when it becomes due
and demandable.

PNB, not having released the balance of the last loan proceeds in accordance with the 3rd
Amendment had no right to demand from [Spouses Tajoneras] compliance with their own
obligation under the loan. Indeed, if a party in a reciprocal contract like a loan does not perform its
obligation, the other party cannot be obliged to perform what is expected of them while the other's
obligation remains unfulfilled. PHILIPPINE NATIONAL BANK vs. SPOUSES EDUARDO AND MA.
ROSARIO TAJONERA AND EDUAROSA REALTY DEVELOPMENT, INC., G.R. No. 195889,
September 24, 2014, J. Mendoza

A loan requires the delivery of money or any other consumable object by one party to another who
acquires ownership thereof, on the condition that the same amount orquality shall be paid. Loan is
a reciprocal obligation, as it arises from the same causewhere one party is the creditor, and the
other the debtor. The obligation of one party in a reciprocal obligation is dependent upon the
obligation of the other, and the performance should ideally be simultaneous. This means that in a
loan, the creditor should release the full loan amountand the debtor repays it when it becomes due
and demandable. PHILIPPINE NATIONAL BANK vs. SPOUSES EDUARDO AND MA. ROSARIO
TAJONERA and EDUAROSA REALTY DEVELOPMENT, INC. G.R. No. 195889, September 24,
2014, J. Mendoza

Forbearance, within the context of usury law, has been described as a contractual obligation of a
lender or creditor to refrain, during a given period of time, from requiring the borrower or debtor
to repay the loan or debt then due and payable. WT CONSTRUCTION, INC. v. THE PROVINCE OF
CEBU, G.R. No. 208984, September 16, 2015, PERLAS-BERNABE, J.

While Central Bank Circular No. 905-82 effectively removed the ceiling on interest rates for both
secured and unsecured loans, regardless of maturity, nothing in the said circular could possibly be
read as granting carte blanche authority to lenders to raise interest rates to levels that would be
unduly burdensome, to the point of oppression on their borrowers. In exercising this power to
determine what is iniquitous and unconscionable, courts must consider the circumstances of each
case, since what may be iniquitous and unconscionable in one may be totally just and equitable in
another. NUNELON MARQUEZ v. ELISAN CREDIT CORPORATION, G.R. No. 194642, April 6,
2015, BRION, J.

Settled is the principle which the Court has affirmed in a number of cases that stipulated interest
rates of three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and
exorbitant. NORLINDA S. MARILAG v. MARCELINO B. MARTINEZ, G.R. No. 201892, July 22,
2015, PERLAS-BERNABE, J.

Loans are often secured by a mortgage. However, a mortgage contract is an accessory contract,
dependent upon the fulfillment or non-fulfillment of the principal contract, which is the contract of
loan. The mortgage contract cannot be enforced unless the obligation in the contract of loan is due
and demandable but left unpaid. (DEVELOPMENT BANK OF THE PHILIPPINES v. GUARIA

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AGRICULTURAL AND REALTY DEVELOPMENT CORPORATION G.R. NO. 160758. January 15,
2014.)

CHECKS

The Court holds that there was indeed a contract of loan between the petitioners and respondent.
The signatures of the petitioners were present on both the PNB checks and the cash disbursement
vouchers. The checks were also made payable to the order of the petitioners. The Court pointed out
that a check functions more than a promissory note since it not only contains an undertaking to pay
an amount of money but is an "order addressed to a bank and partakes of a representation that the
drawer has funds on deposit against which the check is drawn, sufficient to ensure payment upon
its presentation to the bank." NEIL B. AGUILAR AND RUBEN CALIMBAS vs. LIGHTBRINGERS
CREDIT COOPERATIVE, G.R. No. 209605, January 12, 2015, J. Mendoza

MORTGAGE

EQUITABLE MORTGAGE

A transaction is deemed to be an equitable mortgage, not an absolute sale, when a party have
remained in possession of the subject property and exercised acts of ownership over the lot even
after the purported absolute sale and it could be gleaned from the intention of the parties that the
transaction is intended secure the payment of a debt. SPS. FELIPE SOLITARIOS and JULIA TORDA
vs. SPS. GASTON JAQUE and LILIA JAQUE, G.R. No. 199852, November 12, 2014, J. Velasco, Jr.

An equitable mortgage is one which, although lacking the proper formalities, form or words, or
other requisites prescribed by law for a mortgage, nonetheless shows the real intention of the
parties to make the property subject of the contract as security for debt and contains nothing
impossible or anything contrary to law in this intent. HEIRS OF ANTERO SOLIVA v. SEVERINO,
JOEL, GRACE, CENON, JR., RENATO, EDUARDO, HILARIO, all surnamed SOLIVA, ROGELIO V.
ROLEDA, and SANVIC ENTERPRISES, INC., represented by its Manager, SANTOS PORAQUE,
G.R. No. 159611, April 22, 2015, BRION, J.

One of the circumstances provided for under Article 1602 of the Civil Code, where a contract shall
be presumed to be an equitable mortgage, is "where it may be fairly inferred that the real intention
of the parties is that the transaction shall secure the payment of a debt or the performance of any
other obligation." In the instant case, it has been established that the intent of both petitioners and
respondent is that the subject property shall serve as security for the latter's obligation to the
former. The circumstances surrounding the execution of the disputed Deed of Transfer would show
that the said document was executed to circumvent the terms of the original agreement and
deprive respondent of her mortgaged property without the requisite foreclosure. Since the original
transaction between the parties was a mortgage, the subsequent assignment of ownership of the
subject lots to petitioners without the benefit of foreclosure proceedings, partakes of the nature of a
pactum commissorium, as provided for under Article 2088 of the Civil Code. (SPOUSES MARTIRES
v. MENELIA CHUA, G.R. No. 174240, March 20, 2013)

CHATTEL MORTGAGE

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Although a promise expressed in a chattel mortgage to include debts that are yet to be contracted
can be a binding commitment that can be compelled upon, the security itself, however, does not
come into existence or arise until after a chattel mortgage agreement covering the newly contracted
debt is executed either by concluding a fresh chattel mortgage or by amending the old
contract conformably with the form prescribed by the Chattel Mortgage Law. NUNELON MARQUEZ
v. ELISAN CREDIT CORPORATION, G.R. No. 194642, April 6, 2015, BRION, J.

REAL ESTATE MORTGAGE

The Amendment of Real Estate Mortgage constituted by Jose Sr. over the entire property without
his co-owners' consent is not necessarily void in its entirety. The right of the PNB as mortgagee is
limited though only to the portion which may be allotted to Jose Sr. in the event of a division and
liquidation of the subject property. Registration of a property alone in the name of one spouse does
not destroy its conjugal nature. What is material is the time when the property was acquired.
PHILIPPINE NATIONAL BANK vs. JOSE GARCIA and CHILDREN et al., G.R. No. 182839, June 2,
2014, J. Brion

When a bank relied on a forged SPA, it has the burden to prove its authenticity and due execution as
when there is a defect in the notarization of a document, the clear and convincing evidentiary
standard normally attached to a duly-notarized document is dispensed with, and the measure to
test the validity of such document is preponderance of evidence.

However, where a mortgage is not valid due to a forged SPA, the principal obligation which it
guarantees is not thereby rendered null and void. What is lost is merely the right to foreclose the
mortgage as a special remedy for satisfying or settling the indebtedness which is the principal
obligation. In case of nullity, the mortgage deed remains as evidence or proof of a personal
obligation of the debtor and the amount due to the creditor may be enforced in an ordinary action.

The partial invalidity of the subject real estate mortgage brought about by the forged status of the
subject SPA would not, therefore, result into the partial invalidation of the loan obligation
principally entered into by the parties; thus, absent any cogent reason to hold otherwise, the need
for the recomputation of said loan obligation should be dispensed with. RURAL BANK OF
CABADBARAN, INC. vs. JORGITA A. MELECIO-YAP, LILIA MELECIO PACIFICO (deceased,
substituted by her only child ERILL*ISAAC M. PACIFICO, JR.), REYNALDO A. MELECIO DELOSO,
and SARAH MELECIO PALMA-GIL, G.R. No. 178451, July 30, 2014, J. Perlas-Bernabe

In a real estate mortgage, allegations of forgery, like all other allegations, must be proved by clear,
positive, and convincing evidence by the party alleging it. But even if there is variation on the date
of issuance of the Community Tax Certificate (CTC) as indicated on the notarization of the alleged
SPA and on the day it was actually secured, such defect in the SPA does not automatically render it
invalid. Defective notarization will simply strip the document of its public character and reduce it to
a private instrument, but nonetheless, binding, provided its validity is established by
preponderance of evidence.

The law requires that the form of a contract that transmits or extinguishes real rights over
immovable property should be in a public document, yet the failure to observe the proper form
does not render the transaction invalid. The necessity of a public document for said contracts is
only for convenience; it is not essential for validity or enforceability. LEONARDO C. CASTILLO,
represented by LENNARD V. CASTILLO vs. SECURITY BANK CORPORATION, JRC POULTRY

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FARMS or SPOUSES LEON C. CASTILLO, JR., and TERESITA FLORESCASTILLO, G.R. No. 196118,
July 30, 2014, J. Peralta

The effect of the failure of Apolinario Cruz, the predecessor-in-interest of Rolando Robles,
petitioner to this case, to obtain the judicial confirmation was only to prevent the title to the
property from being transferred to him. For sure, such failure did not give rise to any right in favor
of the mortgagor or the respondents as his successors-in-interest to take back the property already
validly sold through public auction. Nor did such failure invalidate the foreclosure proceedings. To
maintain otherwise would render nugatory the judicial foreclosure and foreclosure sale, thus
unduly disturbing judicial stability. ROLANDO ROBLES, REPRESENTED BY ATTY. CLARA C.
ESPIRITU vs. FERNANDO FIDEL YAPCINCO, PATROCINIO B. YAPCINCO, MARIA CORAZON B.
YAPCINCO, and MARIA ASUNCION B. YAPCINCO-FRONDA, G.R. No. 169569, October 22, 2014,
J. Bersamin

Yanson, as a transferee or successor-in-interest of PNB by virtue of the contract of sale between


them, is considered to have stepped into the shoes of PNB. As such, he is necessarily entitled to avail
of the provisions of Section 7 of Act No. 3135. Verily, one of the rights that PNB acquired as
purchaser of the subject properties at the public auction sale, which it could validly convey by way
of its subsequent sale of the same to respondent, is the availment of a writ of possession. This can
be deduced from the stipulation that [t]he [v]endee further agrees to undertake, at xxx his
expense, the ejectment of any occupant of the [p]roperty. Accordingly, Yanson filed the
contentious ex parte motion for a writ of possession to eject Spouses Gatuslao therefrom and take
possession of the subject properties.

Further, respondent may rightfully take possession of the subject properties through a writ of
possession, even if he was not the actual buyer thereof at the public auction sale, in consonance
with the Courts ruling in Ermitao v. Paglas. The Court ruled that after the expiration of the
redemption period without redemption having been made by petitioner, respondent became the
owner thereof and consolidation of title becomes a right. Being already then the owner, respondent
became entitled to possession. Petitioner already lost his possessory right over the property after
the expiration of the said period. SPOUSES JOSE O. GATUSLAO AND ERMILA LEONILA LIMSIACO-
GATUSLAO vs. LEO RAY V. YANSON, G.R. No. 191540, January 21, 2015, J. Del Castillo

In an extrajudicial foreclosure of a real estate mortgage, failure to comply with the publication
requirement by the mortgagee brought by the failure of its lawyer to make an effort to inquire as to
whether the Oriental Daily Examiner was indeed a newspaper of general circulation, as required by
law, and as a result, the mortgagee became the sole bidder, will invalidate the notice and render the
sale voidable. The principal object of a notice of sale in a foreclosure of mortgage is to notify the
mortgagor and to inform the public generally of the nature and condition of the property to be sold,
and of the time, place, and terms of the sale. These are given to secure bidders and prevent a
sacrifice of the property. ATTY. LEO N. CAUBANG vs. JESUS G. CRISOLOGO AND NANETTE B.
CRISOLOGO, G.R. No. 174581, February 04, 2015, J. Peralta

The doctrine of the mortgagee in good faith, wherein buyers or mortgagees dealing with property
covered by a Torrens Certificate of Title are no longer required to go beyond what appears on the
face of the title, is not applicable to banks, since a banking institution is expected to exercise due
diligence before entering into a mortgage contract. SPOUSES EMILIANO L. JALBAY, SR. and
MAMERTA C. JALBAY v. PHILIPPINE NATIONAL BANK, G.R. No. 177803, August 3, 2015,
PERALTA, J.

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Even if on the outset, a party is a mortgagee in good faith, if he subsequently purchases the property
with notice of lis pendens, he cannot claim to have a better right over the said property by
interposing the argument that he is a mortgagee in good faith. (HOMEOWNERS SAVINGS AND
LOAN BANK v. ASUNCION P. FELONIA AND LYDIA C. DE GUZMAN, REPRESENTED BY MARIBEL
FRIAS MARIE MICHELLE P. DELGADO, ET AL G.R. No. 189477, February 26, 2014)

It is incumbent upon the respondent Malarayat Rural Bank to be more cautious in dealing with the
spouses Guia, and inquire further regarding the identity and possible adverse claim of those in
actual possession of the property, especially since the spouses Guia were not the registered owners
of the land being mortgaged. Since the subject land was not mortgaged by the owner thereof and
since the respondent Malarayat Rural Bank is not a mortgagee in good faith, said bank is not
entitled to protection under the law. (MACARIA ARGUELLES AND THE HEIRS OF THE DECEASED
PETRONIO ARGUELLES v. MALARAYAT RURAL BANK, INC., G.R. No. 200468, March 19, 2014)

FORECLOSURE

In an extra-judicial foreclosure of registered land acquired under a free patent, the mortgagor may
redeem the property within two (2) years from the date of foreclosure if the land is mortgaged to a
rural bank under Republic Act No. (RA) 720, as amended, otherwise known as the Rural Banks Act,
or within one (1) year from the registration of the certificate of sale if the land is mortgaged to
parties other than rural banks pursuant to Act No. 3135. If the mortgagor fails to exercise such
right, he or his heirs may still repurchase the property within five (5) years from the expiration of
the redemption period pursuant to Section 119 of the Public Land Act. The RTC and CA both
correctly ruled that Sps. Guevarras right to repurchase the subject property had not yet expired
when Cadastral Case No. 122 was filed on September 8, 2005. SPOUSES RODOLFO and
MARCELINA GUEVARRA vs. THE COMMONER LENDING CORPORATION, INC., G.R. No. 204672,
J. Perlas-Bernabe

The insolvency court has exclusive jurisdiction to deal with the property of the insolvent.
Consequently, after the mortgagor-debtor has been declared insolvent and the insolvency court has
acquired control of his estate, a mortgagee may not, without the permission of the insolvency court,
institute proceedings to enforce its lien. METROPOLITAN BANK AND TRUST COMPANY vs. S.F.
NAGUIAT ENTERPRISES, INC., G.R. No. 178407, March 18, 2015, J. Leonen

The issuance of a writ of possession to a purchaser in a public auction is a ministerial function of


the court, which cannot be enjoined or restrained, even by the filing of a civil case for the
declaration of nullity of the foreclosure and consequent auction sale. ST. RAPHAEL MONTESSORI
SCHOOL, INC., REPRESENTED BY TERESITA G. BADIOLA v. BANK OF THE PHILIPPINE
ISLANDS, G.R. No. 184076, October 21, 2015, PERALTA, J.

Where the proceeds of the sale are insufficient to pay the debt, the mortgagee has the right to
recover the deficiency from the debtor. METROPOLITAN BANK AND TRUST COMPANY v. CPR
PROMOTIONS AND MARKETING, INC. and SPOUSES CORNELIO P. REYNOSO, JR. and LEONIZA
F. REYSONO, G.R. No. 200567, June 22, 2015, VELASCO, JR., J.

To enable the extrajudicial foreclosure of a Real Estate Mortgage (REM), the special power to sell
should have been either inserted in the REM itself or embodied in a separate instrument attached to

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the REM. SPOUSES BENITO BAYSA and VICTORIA BAYSA v. SPOUSES FIDEL PLANTILLA and
SUSAN PLANTILLA, REGISTER OF DEEDS OF QUEZON CITY, and THE SHERIFF OF QUEZON
CITY , G.R. No. 159271, July 13, 2015, BERSAMIN, J.

The mistakes and omissions which would invalidate notice pertain to those which: 1) are calculated
to deter or mislead bidders, 2) to depreciate the value of the property, or 3) to prevent it from
bringing a fair price. BANK OF THE PHILIPPINE ISLANDS (formerly Prudential Bank) v.
SPOUSES DAVID M. CASTRO and CONSUELO B. CASTRO, G.R. No. 195272, January 14, 2015,
PEREZ, J.

The law only requires (1) the posting of notices of sale in three public places, and (2) the
publication of the same in a newspaper of general circulation. Personal notice to the mortgagor is
not necessary. However, the parties to the mortgage contract are not precluded from exacting
additional requirements.

Precisely, the purpose of the foregoing stipulation is to apprise respondent of any action which
petitioner might take on the subject property, thus according him the opportunity to safeguard his
rights. When petitioner failed to send the notice of foreclosure sale to respondent, he committed a
contractual breach sufficient to render the foreclosure sale on November 23, 1981 null and
void.(Lim vs. Development Bank of the Philippines, G.R. No. 177050, July 1, 2013)

While the petitioner claims that it was not obliged to pay any surplus because the balance from the
proceeds was applied to the respondents other obligations and to those of her attorney-in-fact, it
failed, however, to show any supporting evidence showing that the mortgage extended to those
obligations. The petitioner, as mortgagee or purchaser, cannot just simply apply the proceeds of the
sale in its favor and deduct from the balance the respondents outstanding obligations not secured
by the mortgage. Thus, there is no reason to depart from the CAs ruling that the balance or excess,
after deducting the mortgage debt plus the stipulated interest and the expenses of the foreclosure
sale, must be returned to the respondent. (PHILIPPINE BANK OF COMMUNICATIONS VS. MARY
ANN O. YEUNG, G.R. No. 179691, December 04, 2013)

REDEMPTION

An insufficient sum was tendered by the Spouses Dizon during the redemption period. Whether the
total redemption price is PhP 251,849.77 as stated in the Petition for Review, or PhP 232,904.60 as
stated in the Banks Motion for Reconsideration of the CA Decision, or PhP 428,019.16 as stated in
its Appellants Brief, is immaterial. What cannot be denied is that the amount of PhP 90,000.00 paid
by the Spouses Dizon during the redemption period is less than half of PhP 181,956.72 paid by the
Bank at the extrajudicial foreclosure sale... If only to prove their willingness and ability to pay, the
Spouses Dizon could have tendered a redemption price that they believe as the correct amount or
consigned the same. Seventeen long years passed since the filing of the complaint but they did not
do either. Indeed, they manifestly failed to show good faith.

The Spouses Dizons own evidence show that, after payment of PhP 90,000.00, the earliest date
they exerted a semblance of effort to re-acquire the subject property was on October 15, 1996.
Apart from being way too late, the tender was not accompanied by the remaining balance of the
redemption price. The same is true with respect to their letter dated February 27, 1998, wherein
they were still making proposals to the Bank. The courts intervention was resorted to only on April
3, 1998 after the redemption period expired on October 18, 1994, making it too obvious that such

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recourse was merely a delayed afterthought to recover a right already lost. GE MONEY BANK, INC.
(FORMERLY KEPPEL BANK PHILIPPINES) vs. SPOUSES VICTORINO M. DIZON AND ROSALINA
L. DIZON, G.R. No. 184301, March 23, 2015, J. Peralta

The remedy from an order granting a writ of possession after the lapse of redemption period is an
ordinary appeal. After the lapse of the redemption period, the remedy of a debtor to contest the
possession of the property is a separate action, e.g., action for recovery of ownership, for annulment
of mortgage and/or annulment of foreclosure, and not the appeal provided for in Section 8 of Act
No. 3135. BANK OF THE PHILIPPINE ISLANDS v. SPOUSES JOHNSON & EVELYN CO & JUPITER
REAL ESTATE VENTURES, INC., G.R. No. 171172, November 09, 2015, JARDELEZA, J.

A valid redemption of property must appropriately be based on the law which is the very source of
this substantive right. It is, therefore, necessary that compliance with the rules set forth by law and
jurisprudence should be shown in order to render validity to the exercise of this right. Hence, when
the Court is beckoned to rule on this validity, a hasty resort to elementary rules on construction
proves inadequate. THE CITY OF DAVAO represented by THE CITY TREASURER OF DAVAO
CITY v. THE INTESTATE OF AMADO S. DALISAY, represented by SPECIAL ADMINISTRATOR
ATTY. NICASIO B. PADERNA, G.R. No. 207791, July 15, 2015, MENDOZA, J.

Upon the expiration of the right of redemption, the possession of the property shall be given to the
purchaser or last redemptioner unless a third party is actually holding the property adversely to
the judgment obligor. For the exception to apply, the property need not only be possessed by a
third party, but also held by him adversely to the judgment obligor. AQA GLOBAL
CONSTRUCTION, INC. v. PLANTERS DEVELOPMENT BANK , JE-AN SUPREME BUILDERS AND
SALES CORPORATION v. PLANTERS DEVELOPMENT BANK (Consolidated Petitions), G.R. No.
211649 & G.R. No. 211742, August 12, 2015, PERLAS-BERNABE, J.

Only the redeeming co-owner and the buyer are the indispensable parties in an action for legal
redemption, to the exclusion of the seller/co-owner A party who is not the co-owner of a land
subject of a compromise agreement cannot claim that he was defrauded when the parties in the
compromise agreement entered into the same. As a third party to the agreement, he is not
indispensable for the agreement to materialize. (VIRGINIA Y. GOCHAN, FELIX Y. GOCHAN III,
LOUISE Y. GOCHAN, ESTEBAN Y. GOCHAN, JR., and DOMINIC Y. GOCHAN v. CHARLES MANCAO,
G.R. No. 182314, November 13, 2013)

SURETY

In suretyship, the oft-repeated rule is that a suretys liability is joint and solidary with that of the
principal debtor. This undertaking makes a surety agreement an ancillary contract, as it
presupposes the existence of a principal contract. Nevertheless, although the contract of a surety is
in essence secondary only to a valid principal obligation, its liability to the creditor or "promise" of
the principal is said to be direct, primary and absolute; in other words, a surety is directly and
equally bound with the principal. He becomes liable for the debt and duty of the principal obligor,
even without possessing a direct or personal interest in the obligations constituted by the latter.
Thus, a surety is not entitled to a separate notice of default or to the benefit of excussion. It may in
fact be sued separately or together with the principal debtor.

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After a thorough examination of the pieces of evidence presented by both parties, the RTC found
that Gilathad delivered all the goods to One Virtual and installed them. Despite these compliances,
One Virtual still failed to pay its obligation, triggering UCPBs liability to Gilat as the formers
surety. In other words, the failure of One Virtual, as the principal debtor, to fulfill its monetary
obligation to Gilat gave the latter an immediate right to pursue UCPB as the surety. GILAT
SATELLITE NETWORKS, LTD vs. UNITED COCONUT PLANTERS BANK GENERAL INSURANCE
CO., INC., G.R. No. 189563, April 7, 2014, CJ. Sereno

The liabilities of an insurer under the surety bond are not extinguished when the modifications in
the principal contract do not substantially or materially alter the principal's obligations. The surety
is jointly and severally liable with its principal when the latter defaults from its obligations under
the principal contract. On the basis of petitioners own admissions, the principal contract of the
suretyship is the signed agreement. The surety, therefore, is presumed to have acquiesced to the
terms and conditions embodied in the principal contract when it issued its surety bond. PEOPLE'S
TRANS-EAST ASIA INSURANCE CORPORATION, a.k.a. PEOPLE'S GENERAL INSURANCE
CORPORATION vs. DOCTORS OF NEW MILLENNIUM HOLDINGS, INC., G.R. No. 172404, August
13, 2014, J. Leonen

Verily, in a contract of suretyship, one lends his credit by joining in the principal debtors obligation
so as to render himself directly and primarily responsible with him, and without reference to the
solvency of the principal. Thus, execution pending appeal against NSSC means that the same course
of action is warranted against its surety, CGAC. The same reason stands for CGACs other principal,
Orimaco, who was determined to have permanently left the country with his family to evade
execution of any judgment against him. CENTENNIAL GUARANTEE ASSURANCE CORPORATION
vs. UNIVERSAL MOTORS CORPORATION, RODRIGO T. JANEO, JR., GERARDO GELLE, NISSAN
CAGAYAN DE ORO DISTRIBUTORS, INC., JEFFERSON U. ROLIDA, and PETER YAP, G.R. No.
189358, October 8, 2014, J. Perrlas-Bernabe

Mallari was administratively charged due to the fact the he approved surety bond in favor of
ECOBEL without consideration of the policies by GSIS. The court finds substantial evidence to prove
Mallaris administrative liability. The Court notes that irregularities, defects and infirmities
attended the processing, approval, issuance, and the actual drawdown of the US$10,000,000.00
ECOBEL bond in which Mallari actively participated. In a letter, dated September 13, 2002, to the
FFIB, Mr. Reynaldo R. Nograles, OIC-Office of the President, Internal Audit Service, GSIS, attached a
copy of the excerpts from the Final Report on the GSIS Audit of Underwriting Departments. Said
Audit Report found that: there was non-adherence to existing policies/SOPs in the processing and
release of the Ecobel Land, Inc. guaranty payment bond, as well as non-adherence to GSIS GIGs
business policy statement on survey, inspection or assessment of risks/properties to be insured
including re-inspection and survey of insured properties. OFFICE OF THE OMBUDSMAN, vs.
AMALIO A. MALLARI, G.R. No. 183161, December 03, 2014, J. Mendoza

A surety is considered in law as being the same party as the debtor in relation to whatever is
adjudged touching the obligation of the latter, and their liabilities are interwoven as to be
inseparable. And it is well settled that when the obligor or obligors undertake to be jointly and
severally liable, it means that the obligation is solidary, as in this case. YULIM INTERNATIONAL
COMPANY LTD., JAMES YU, JONATHAN YU, and ALMERICK TIENG LIM vs. INTERNATIONAL
EXCHANGE BANK (now Union Bank of the Philippines), G.R. No. 203133, February 18,
2015, J. Reyes

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Where there is a concurrence of two or more creditors or of two or more debtors in one and the
same obligation, Article 1207 provides that among them, "[t]here is a solidary liability only when
the obligation expressly so states, or when the law or the nature of the obligation requires
solidarity." ESTANISLAO and AFRICA SINAMBAN v. CHINA BANKING CORPORATION, G.R. No.
193890, March 11, 2015, REYES, J.

As provided in Article 2047, the surety undertakes to be bound solidarily with the principal obligor.
That undertaking makes a surety agreement an ancillary contract as it presupposes the existence of
a principal contract. CCC INSURANCE CORPORATION v. KAWASAKI STEEL CORPORATION, et
al., G.R. No. 156162, June 22, 2015, LEONARDO-DE CASTRO, J.

The contract of indemnity is the law between the parties. It is a cardinal rule in the interpretation of
a contract that if its terms are clear and leave no doubt on the intention of the contracting parties,
the literal meaning of its stipulation shall control. PAULINO M. EJERCITO, JESSIE M. EJERCITO
AND JOHNNY D. CHANG v. ORIENTAL ASSURANCE CORPORATION, G.R. No. 192099, July 08,
2015

In guaranty, the guarantor binds himself to the creditor to fulfill the obligation of the principal
debtor in case the latter should fail to do so. In contrast, the surety is solidarily bound to the
obligation of the principal debtor. ALLIED BANKING CORPORATION v. JESUS YUJUICO, G.R. No.
163116, June 29, 2015, BERSAMIN, J.

Petitioners liability under the suretyship contract is different from its liability under the law. There
is no question that as a surety, petitioner should not be made to pay more than its assumed
obligation under the surety bonds. However, it is clear from the above-cited jurisprudence that
petitioners liability for the payment of interest is not by reason of the suretyship agreement itself
but because of the delay in the payment of its obligation under the said agreement. (J PLUS ASIA
DEVELOPMENT CORPORATION v. UTILITY ASSURANCE CORPORATION, G.R. No. 199650, June
26, 2013)

Where a debtor obtained a loan six months after the execution of a Continuing Suretyship, such
obligation of the debtor is still covered by such Continuing Suretyship. This is further bolstered
when the contract clearly states that the surety is liable for all credit accommodations extended to
the debtor, both present and future obligations. The debtor is will still be liable for the principal of
the loan, together with the interest and penalties due thereon. (MARIANO LIM v. SECURITY BANK
CORPORATION, G.R. No. 188539. March 12, 2014)

PLEDGE

PACTUM COMMISSORIUM

Petitioner assails the decision of the CA ruling that Section 8.02 of the ARD does not constitute
pactum commissorium, on the ground that since the ARDA and the Pledge Agreement are entirely
separate and distinct contract and that neither contract contains both elements of pactum
commissorium: the ARDA solely has the second element, while the Pledge Agreement only has the
first element, such provision cannot be considered as one of pactum commissorium. The SC
however ruled that the agreement of the parties may be embodied in only one contract or in two or
more separate writings. In case of the latter, the writings of the parties should be read and

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interpreted together in sucha way as to render their intention effective. The ARDA and the Pledge
Agreement herein, although executed in separate written instruments, are integral to one another.
It was the intention of the parties to enter into and execute both contracts for a complete
effectuation of their agreement. PHILNICO INDUSTRIAL CORPORATION vs. PRIVATIZATION
AND MANAGEMENT OFFICE, G.R. No. 199420, August 27, 2014, J. Leonardo-De Castro

Prompt assignment and conveyance without the need of conducting foreclosure proceedings,
judicial or otherwise is indicative of pactum commissorium which is void and ineffectual and does
not serve to vest ownership. HOME GUARANTY CORPORATION v. LA SAVOIE DEVELOPMENT
CORPORATION, G.R. No. 168616, January 28, 2015, LEONEN, J.

LEASE

Under Article 1715 of the Civil Code, if the work of a contractor has defects which destroy or lessen
its value or fitness for its ordinary or stipulated use, he may be required to remove the defect or
execute another work. If he fails to do so, he shall be liable for the expenses by the employer for the
correction of the work. In the case at bar, Mackay was given the opportunity to rectify his work.
Subsequent to Zameco IIs disapproval to supply the spouses Caswell electricity for several reasons,
credence must be given to the latters claim that they looked for said Mackay to demand a
rectification of the work, but said Mackay and his group were nowhere to be found. OWEN
PROSPER A. MACKAY vs. SPOUSES DANA CASWELL AND CERELINA CASWELL, G.R. No. 183872,
November 17, 2014, J. Del Castillo

By virtue of Republic Act No. 3844, the sharing of the harvest in proportion to the respective
contributions of the landholder and tenant (share tenancy) was abolished. Hence, to date, the only
permissible system of agricultural tenancy is leasehold tenancy, a relationship wherein a fixed
consideration is paid instead of proportionately sharing the harvest as in share tenancy. Its
elements are: (1) the object of the contract or the relationship is an agricultural land that is leased
or rented for the purpose of agricultural production; (2) the size of the landholding is such that it is
susceptible of personal cultivation by a single person with the assistance of the members of his
immediate farm household; (3) the tenant-lessee must actually and personally till, cultivate or
operate the land, solely or with the aid of labor from his immediate farm household; and (4) the
landlord-lessor, who is either the lawful owner or the legal possessor of the land, leases the same to
the tenant-lessee for a price certain or ascertainable either in an amount of money or produce. In
the case at bar, there is no doubt that a land with a total area of 7.9 hectares were susceptible of
cultivation by a single person with the help of the members of his immediate farm household. Also,
ones knowledge of and familiarity with the landholding, its production and the instances when the
landholding was struck by drought definitely established that the lessee personally cultivated the
land. Moreover, the fact that an agricultural lessee has a regular employment does not render his
ability to farm physically impossible. MANUEL JUSAYAN,ALFREDO JUSAYAN, AND MICHAEL
JUSAYAN vs. JORGE SOMBILLA, G.R. No. 163928, January 21, 2015, J. Bersamin

New World and AMA entered into a lease agreement whereby New World agreed to lease to AMA
its commercial building located in Manila. AMA failed to pay its rentals citing financial losses. AMA
then preterminated the 8 year lease agreement and demanded the refund of its security deposit and
advance rentals. It also prayed that its liabilities be reduced on account of its financial difficulties.
The Supreme Court ruled that in the sphere of personal and contractual relations governed by laws,
rules and regulations created to promote justice and fairness, equity is deserved, not demanded.

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The application of equity necessitates a balancing of the equities involved in a case, for [h]e who
seeks equity must do equity, and he who comes into equity must come with clean hands. Persons
in dire straits are never justified in trampling on other persons rights. Litigants shall be denied
relief if their conduct has been inequitable, unfair and dishonest as to the controversy in issue. The
actions of AMA smack of bad faith. NEW WORLD DEVELOPERS AND MANAGEMENT INC. vs. AMA
COMPUTER LEARNING CENTER INC., G.R. Nos. 187930 & 188250, February 23, 2015, C.J.
Sereno

LAND, TITLES AND DEEDS

TORRENS TITLE

The settled rule is that a free patent issued over a private land is null and void, and produces no
legal effects whatsoever. Private ownership of land as when there is a prima facie proof of
ownership like a duly registered possessory information or a clear showing of open, continuous,
exclusive, and notorious possession, by present or previous occupants is not affected by the
issuance of a free patent over the same land, because the Public Land Law applies only to lands of
the public domain. Lot No. 18563, not being land of the public domain as it was already owned by
Aznar Brothers, was no longer subject to the free patent issued to the Spouses Ybaez. AZNAR
BROTHERS REALTY COMPANY vs. SPOUSES JOSE AND MAGDALENA YBAEZ, G.R. No. 161380,
April 21, 2014, J. Bersamin

It cannot be argued that Dolores had already acquired a vested right over the subject property
when the NHA recognized her as the censused owner by assigning to her a tag number TAG No. 77-
0063. While it is true that NHA recognizes Dolores as the censused owner of the structure built on
the lot, the issuance of the tag number is not a guarantee for lot allocation. The census, tagging, and
Dolores petition, did not vest upon her a legal title to the lot she was occupying, but a mere
expectancy that the lot will be awarded to her. The expectancy did not ripen into a legal title when
the NHA, informed her that her petition for the award of the lot was denied. DOLORES CAMPOS vs.
DOMINADOR ORTEGA, SR. AND JAMES SILOS, G.R. No. 171286, June 02, 2014, J. Peralta

In reconstitution proceedings, the Court has repeatedly ruled that before jurisdiction over the case
can be validly acquired, it is a condition sine quo non that the certificate of title has not been issued
to another person. If a certificate of title has not been lost but is in fact in the possession of another
person, the reconstituted title is void and the court rendering the decision has not acquired
jurisdiction over the petition for issuance of new title. In the case at bench, the CA found that the
RTC lacked jurisdiction to order the reconstitution of the original copy of TCT No. 301617, there
being no lost or destroyed title over the real property, the respondent having duly proved that TCT
No. 301617 was in the name of a different owner, Florendo, and the technical description appearing
on that TCT No. 301617 was similar to the technical description appearing in Lot 939, Piedad Estate
covered by TCT No. RT-55869 (42532) in the name of Antonino. VERGEL PAULINO AND CIREMIA
PAULINO vs. COURT OF APPEALS AND REPUBLIC OF THE PHILIPPINES, represented by the
ADMINISTRATOR of the LAND REGISTRATION AUTHORITY, G.R. No. 205065, June 4, 2014, J.
Mendoza

Where the authority to proceed is conferred by a statute and the manner of obtaining jurisdiction is
mandatory, the same must be strictly complied with, or the proceedings will be void. For non-
compliance with the actual notice requirement to all other persons who may have interest in the

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property, in this case the registered owners and/or their heirs, in accordance with Section 13 in
relation to Section 12 of RA 26, the trial court did not acquire jurisdiction over L.R.A. The
proceedings therein were therefore a nullity and the Decision was void. REPUBLIC OF THE
PHILIPPINES vs. FRANKLIN M. MILLADO, G.R. No. 194066, June 4, 2014, J. Villarama, Jr.

Further strong proofs that the properties in question are the paraphernal properties of a spouse are
the very Torrens Titles covering said properties.

The phrase Pedro Calalang, married to Elvira Berba Calalang merely describes the civil status and
identifies the spouse of the registered owner Pedro Calalang. Evidently, this does not mean that the
property is conjugal. As the sole and exclusive owner, Pedro Calalang had the right to convey his
property in favor of Nora B. Calalang-Parulan by executing a Deed of Sale on February 17, 1984. A
close perusal of the records of this case would show that the records are bereft of any concrete
proof to show that the subject property indeed belonged to respondents maternal grandparents.
The evidence respondents adduced merely consisted of testimonial evidence such as the
declaration of Rosario Calalang-Garcia that they have been staying on the property as far as she can
remember and that the property was acquired by her parents through purchase from her maternal
grandparents. However, she was unable to produce any document to evidence the said sale, nor
was she able to present any documentary evidence such as the tax declaration issued in the name of
either of her parents. NORA B. CALALANG-PARULAN and ELVIRA B. CALALANG vs.
ROSARIO CALALANG-GARCIA, LEONORA CALALANG-SABILE, and CARLITO S. CALALANG, G.R.
No. 184148, June 9, 2014, J. Villarama, Jr.

The established rule is that a forged deed is generally null and cannot convey title, the exception
thereto, pursuant to Section 55 of the Land Registration Act, denotes the registration of titles from
the forger to the innocent purchaser for value. Thus, the qualifying point here is that there must be
a complete chain of registered titles. This means that all the transfers starting from the original
rightful owner to the innocent holder for value and that includes the transfer to the forger must
be duly registered, and the title must be properly issued to the transferee. SPOUSES DOMINADOR
PERALTA AND OFELIA PERALTA vs. HEIRS OF BERNARDINA ABALON / HEIRS OF
BERNARDINA ABALON vs. MARISSA ANDAL, LEONIL AND AL, ARNEL AND AL, SPOUSES
DOMINDOR PERALTA AND OFELIA PERALTA, and HEIRS of RESTITUTO RELLAMA,
represented by his children ALEX, IMMANUEL, JULIUS and SYLVIA, all surnamed RELLAMA,
G.R. No. 183448 / G.R. No. 183464, June 30, 2014, CJ. Sereno

The standard is that for one to be a purchaser in good faith in the eyes of the law, he should buy the
property of another without notice that some other person has a right to, or interest in, such
property, and should pay a full and fair price for the same at the time of such purchase, or before he
has notice of the claim or interest of some other persons in the property. He buys the property with
the belief that the person from whom he receives the property was the owner and could convey
title to the property. Indeed, a purchaser cannot close his eyes to facts that should put a reasonable
man on his guard and still claim he acted in good faith. HECTOR L. UY vs. VIRGINIA G. FULE;
HEIRS OF THE LATE AMADO A. GARCIA, HEIRS OF THE LATE GLORIA GARCIA ENCARNACION;
HEIRS OF THE LATE PABLO GARCIA; and HEIRS OF THE LATE ELISA G. HEMEDES, G.R. No.
164961, June 30, 2014, J. Bersamin

The petitioners assail the decision of the CA affirming in toto the decision of the RTC declaring that
their predecessors-in-interest are not buyers in good faith and for value. In denying the petition
the SC ruled that the transfers of the properties in question did not go far, but were limited to close

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family relatives by affinity and consanguinity. Good faith among the parties to the series of
conveyances is therefore hard if not impossible to presume. Unfortunately for the petitioners, they
did not provide any sufficient evidence that would convince the courts that the proximity of
relationships between/among the vendors and vendees in the questioned sales was not used to
perpetrate fraud. Thus there is nothing to dispel the notion that apparent anomalies attended the
transactions among close relations.

It must be emphasized that "the burden of proving the status of a purchaser in good faith and for
value lies upon him who asserts that standing. In discharging the burden, it is not enough to invoke
the ordinary presumption of good faith that everyone is presumed to act in good faith. The good
faith that is here essential is integral with the very status that must be proved. x x x Petitioners have
failed to discharge that burden." HEIRS OF SPOUSES JOAQUIN MANGUARDIA AND SUSANA
MANALO, ET AL vs. HEIRS OF SIMPLICIO VALLES AND MARTA VALLES, ET AL., G.R. No.
177616, August 27, 2014, J. Del Castillo

A purchaser of property under the Torrens system cannot simply invoke that he is an innocent
purchaser for value when there are attending circumstances that raise suspicions. In that case, he
cannot merely rely on the title and must look beyond to ascertain the truth as to the right of the
seller to convey the property. ENRIQUETA M. LOCSIN vs. BERNARDO HIZON, CARLOS HIZON,
SPS. JOSE MANUEL AND LOURDES GUEVARA, G.R. No. 204369, September 17, 2014, J. Velasco
Jr.

More than the charge of constructive knowledge, the surrounding circumstances of this case show
Roviras actual knowledge of the disposition of the subject property and Rotairos possession
thereof. It is undisputed that after the contract to sell was executed , Rotairo imme-diately
secured a mayors permit for the construction of his residential house on the property. Rotairo,
and subsequently, his heirs, has been residing on the property since then. Rovira, who lives only
fifty (50) meters away from the subject property, in fact, knew that there were structures built on
the property. Rovira, however, claims that she did not bother to inquire as to the legitimacy of the
rights of the occupants, because she was assured by the bank of its title to the property. But Rovira
cannot rely solely on the title and assurances of Pilipinas Bank; it was incumbent upon her to look
beyond the title and make necessary inquiries because the bank was not in possession of the
property. Where the vendor is not in possession of the property, the prospective vendees are
obligated to investigate the rights of one in possession. A purchaser cannot simply close his eyes to
facts which should put a reasonable man on guard, and thereafter claim that he acted in good faith
under the belief that there was no defect in the title of the vendor. Hence, Rovira cannot claim a
right better than that of Rotairo's as she is not a buyer in good faith. AMBROSIO ROTAIRO
(SUBSTITUTED BY HIS SPOUSE MARIA RONSAYRO ROTAIRO, AND HIS CHILDREN FELINA
ROTAIRO, ERLINDA ROTAIRO CRUZ, EUDOSIA ROTAIRO CRIZALDO, NIEVES ROTAIRO TUBIG,
REMEDIOS ROTAIRO MACAHILIG, FELISA ROTAIRO TORREVILLAS, AND CRISENCIO R.
ROTAIRO, MARCIANA TIBAY, EUGENIO PUNZALAN, AND VICENTE DEL ROSARIO vs. ROVIRA
ALCANTARA AND VICTOR ALCANTARA, G.R. No. 173632, September 29, 2014, J. Reyes

Jurisprudence consistently holds that "prescription and laches cannot apply to registered land
covered by the Torrens system" because "under the Property Registration Decree, no title to
registered land in derogation to that of the registered owner shall be acquired by prescription or
adverse possession.

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Mario claimed that they have been in possession of the said parcel of land since 1969 and that cause
of action of the Dionisios is already barred by laches. Jurisprudence consistently holds that
"prescription and laches cannot apply to registered land covered by the Torrens system" because
"under the Property Registration Decree, no title to registered land in derogation to that of the
registered owner shall be acquired by prescription or adverse possession. SPOUSES MARIO
OCAMPO and CARMELITA F. OCAMPO vs. HEIRS OF BERNARDINO U. DIONISIO, represented
by ARTEMIO SJ. DIONISIO, G.R. No. 191101, October 1, 2014, J. Reyes

To determine when the prescriptive period commenced in an action for reconveyance, the
plaintiffs possession of the disputed property is material. If there is an actual need to reconvey the
property as when the plaintiff is not in possession, the action for reconveyance based on implied
trust prescribes in ten (10) years, the reference point being the date of registration of the deed or
the issuance of the title. On the other hand, if the real owner of the property remains in possession
of the property, the prescriptive period to recover title and possession of the property does not run
against him and in such case, the action for reconveyance would be in the nature of a suit for
quieting of title which is imprescriptible.

In the case at bar, a reading of the allegations of the Amended Complaint failed to show that Eliza
remained in possession of the subject properties in dispute. ELIZA ZUNIGA-SANTOS, represented
by her Attorney-in Fact, NYMPHA Z. SALES vs. MARIA DIVINA GRACIA SANTOS-GRAN and
REGISTER OF DEEDS OF MARIKINA CITY, G.R. No. 197380, October 8, 2014, J. Perlas-Bernabe

A bank that accepts a mortgage based upon a title which appears valid on its face and after
exercising the requisite care, prudence, and diligence appropriate to the public interest character of
its business can be deemed a mortgagee in good faith. The subsequent consolidation of title in its
name after a valid foreclosure shall be respected notwithstanding later proof showing that the title
was based upon a void transaction. In this case, PNB is considered as a mortgagee in good faith
because it complied with the standard operating practice expected from banks. ONOFRE ANDRES,
SUBSTITUTED BY HIS HEIRS, NAMELY: FERDINAND, ROSALINA, ERIBERTO, FROILAN, MA.
CLEO FE, NELSON, GERMAN, GLORIA, ALEXANDER, MAY, ABRAHAM, AND AFRICA, ALL
SURNAMED ANDRES vs. PHILIPPINE NATIONAL BANK, G.R. No. 173548, October 15, 2014, J.
Leonen

Amada argues that the subsequent buyer of the disputed parcel of land is in good faith. The court
has held that the rule in land registration law that the issue of whether the buyer of realty is in
good or bad faith is relevant only where the subject of the sale is registered land and the purchase
was made from the registered owner whose title to the land is clean. AMADA COTONER-ZACARIA
vs. SPOUSES ALFREDO REVILLA AND THE HEIRS OF PAZ REVILLA, G.R. No. 190901, November
12, 2014, J. Leonen

Marietta could acquire valid title over the whole property if she were an innocent purchaser for
value. An innocent purchaser for value purchases a property without any notice of defect or
irregularity as to the right or interest of the seller. He or she is without notice that another person
holds claim to the property being purchased. Marietta cannot claim the protection to innocent
purchasers for value because the circumstances do not make this available to her. In this case, there
was no certificate of title to rely on when she purchased the property from Enrique. At the time of
the sale, the property was still unregistered. What was available was only a tax declaration issued
under the name of Heirs of Lopez. HEIRS OF GREGORIO LOPEZ, REPRESENTED BY ROGELIA
LOPEZ, ET AL., vs. DEVELOPMENT BANK OF THE PHILIPPINES [NOW SUBSTITUTED BY

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PHILIPPINE INVESTMENT TWO (SPV-AMC), INC.], G.R. No. 193551, November 19, 2014, J.
Leonen

Spouses owned the subject property wherein petitioner Elena was allowed to stay. Upon the
spouses divorce, the property went to the wife. She sold it to the respondent See. The Court held
that See was a buyer in good faith. She went to the Register of Deeds to verify the title and relied on
the marriage settlement agreement. The Court found that she exerted due diligence. An innocent
purchaser for value refers to someone who buys the property of another without notice that some
other person has a right to or interest in it, and who pays a full and fair price at the time of the
purchase or before receiving any notice of another persons claim. FLORENTINO W. LEONG AND
ELENA LEONG, ET AL. vs. EDNA C. SEE, G.R. No. 194077, December 03, 2014, J. Leonen

Before a certificate of title which has been lost or destroyed may be reconstituted, it must first be
proved by the claimants that said certificate of title was still in force at the time it was lost or
destroyed, among others. REPUBLIC OF THE PHILIPPINES vs. HEIRS OF SPOUSES DONATO
SANCHEZ and JUANA MENESES represented by RODOLFO S. AGUINALDO, G.R. No. 212388,
December 10, 2014, J. Velasco, Jr.

Every person dealing with a registered land may safely rely on the correctness of the certificate of
title issued therefor and the law will in no way oblige him to go beyond the certificate to determine
the condition of the property. SPOUSES CARLOS J. SUNTAY and ROSARIO R. SUNTAY vs. KEYSER
MERCANTILE INC., G.R. No. 208462, December 10, 2014, J. Mendoza

The filing of an action to quiet title is imprescriptible if the disputed real property is in the
possession of the plaintiff. The rule on the incontrovertibility or indefeasibility of title has no
application in this case given the fact that the contending parties claim ownership over the subject
land based on their respective certificates of title thereon which originated from different sources.
The Syjucos' title, shows that it originated from OCT No. 994 registered on May 3, 1917 while
Bonficacio's title shows that that it likewise originated from OCT No. 994, but registered on April
19, 1917. This case affirmed the earlier finding that there is only one OCT No. 994, the registration
date of which had already been decisively settled as 3 May 1917 and not 19 April 1917 and
categorically concluded that OCT No. 994 which reflects the date of 19 April 1917 as its
registration date is null and void. IMELDA SYJUCO, et.al vs. FELISA D. BONIFACIO and VSD
REALTY & CORPORATION, G.R. No. 148748, January 14, 2015, J. Leonardo-De Castro

The persons who can file the petition for reconstitution of a lost certificate are the registered
owner, his assigns or persons in interest in the property. In this case, Ungay Malobago Mines, Inc.
admitted that it was not the owner of the land on which the mining patent was issued as the same
was owned and registered in the name of Rapu Rapu Minerals Inc., thus it has no legal capacity to
institute a petition for reconstitution of a lost certificate. UNGAY MALOBAGO MINES, INC. vs.
REPUBLIC OF THE PHILIPPINES, G.R. No. 187892, January 14, 2015, J. Peralta

Petitioner assails the decision of the CA that the action for reconveyance filed by her was not the
proper remedy on the ground that it constitutes a collateral attack on the validity of the subject
certificate of title. The SC however ruled that it is not unmindful of the principle of indefeasibility of
a Torrens title and that a certificate of title shall not be subject to collateral attack. Contrary to the
pronouncements of the MCTC and the CA, however, the complaint of petitioner was not a collateral
attack on the title warranting dismissal. As a matter of fact, an action for reconveyance is a
recognized remedy, an action in personam, available to a person whose property has been

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wrongfully registered under the Torrens system in anothers name. In an action for reconveyance,
the decree is not sought to be set aside. It does not seek to set aside the decree but, respecting it as
incontrovertible and no longer open to review, seeks to transfer or reconvey the land from the
registered owner to the rightful owner. MARIFLOR T. HORTIZUELA, represented by JOVIER
TAGAUFA vs. GREGORIA TAGUFA, ROBERTO TAGUFA and ROGELIO LUMABAN, G.R. No.
205867, February 23, 2015, J. Mendoza

An action is deemed an attack on a title when the object of the action or proceeding is to nullify the
title, and thus challenge the judgment pursuant to which the title was decreed. THE HEIRS OF
EUGENIO LOPEZ, SR. NAMELY, OSCAR M. LOPEZ, MANUEL M. LOPEZ AND PRESENTACION L.
PSINAKIS v. THE HONORABLE FRANCISCO QUERUBIN, IN HIS CAPACITY AS PRESIDING JUDGE
OF THE REGIONAL TRIAL COURT OF ANTIPOLO, BRANCH 74, THE HEIRS OF ALFONSO
SANDOVAL AND HIS WIFE ROSA RUIZ, REPRESENTED BY THEIR ATTORNEY-IN-FACT, MRS.
IMELDA RIVERA, G.R. No. 155405, March 18, 2015, LEONARDO-DE CASTRO, J.

A person who possesses a title issued under the Torrens system is entitled to all the attributes of
ownership including possession. A certificate of title cannot be subject to a collateral attack in an
action for unlawful detainer. TERESA D. TUAZON v. SPOUSES ANGEL AND MARCOSA ISAGON,
G.R. No. 191432, September 02, 2015, BRION, J.

In order that the holder of a certificate of title issued by virtue of the registration of a voluntary
instrument may be considered a holder in good faith and for value, the instrument registered
should not be forged. Consequently, if there is no new title issued in one s favor, there is no new
title to annul and the issue of good faith or bad faith becomes irrelevant. RUBY RUTH S. SERRANO
MAHILUM v. SPOUSES ILANO, G.R. No. 197923, June 22, 2015, DEL CASTILLO, J.

An innocent purchaser for value is defined as one who buys the property of another, without notice that
some other person has a right or interest in such property and pays the full price for the same, at the time of
such purchase or before he has notice of the claims or interest of some other person in the property. An
innocent purchaser for value includes an innocent lessee, mortgagee, or other encumbrancer for value and
that their claim as an innocent purchaser for value must be substantiated by proof. JOSEFINA C. BILLOTE
v. IMELDA SOLIS, et al., G.R. No. 181057, June 17, 2015, PERALTA, J.

It is a condition sine qua non that the person who brings an action for damages against the
assurance fund be the registered owner, and, as to holders of transfer certificates of title, that they
be innocent purchasers in good faith and for value. THE REGISTER OF DEEDS OF NEGROS
OCCIDENTAL and the NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES v.
OSCAR ANGLO, SR., and ANGLO AGRICULTURAL CORPORATION, represented by OSCAR
ANGLO, JR., G.R. No. 171804, August 5, 2015, LEONEN, J.

The burden of proving the status of a purchaser in good faith lies upon one who asserts that status
and this onus probandi cannot be discharged my mere invocation of the legal presumption of good
faith. ADELFA DIO TOLENTINO, ET. AL. V. SPOUSES MARIA JERERA AND EBON LATAGAN, G.R.
No. 179874, June 22, 2015

A purchaser in good faith and for value is one who buys property of another without notice that
some other person has a right to, or interest in, such property and pays full and fair price for the
same at the time of such purchase or before he or she has notice of the claim or interest of some

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other person in the property. BLISS DEVELOPMENT CORP./HOME GUARANTY CORPORATION v.


MONTANO DIAZ, DOMINGO TAPAY, AND EDGAR H. ARREZA, G.R. No. 213233, August 05, 2015

It is a recognized principle that a person dealing on a registered land need not go beyond its
certificate of title, it is also a firmly settled rule that where there are circumstances which would put
a party on guard and prompt him to investigate or inspect the property being sold to him, such as
the presence of occupants/tenants thereon, it is expected from the purchaser of a valued piece of
land to inquire first into the status or nature of possession of the occupants. The burden of proving
good faith lies with the second buyer (petitioners herein) which is not discharged by simply
invoking the ordinary presumption of good faith. After an assiduous assessment of the evidentiary
records, this Court holds that the petitioners are NOT buyers in good faith as they failed to
discharge their burden of proof. (Spouses Vallido v. Spouses Pono, et al., G.R. No. 200173. April
15, 2013)

The real purpose of the Torrens system is to quiet title to land and to stop forever any question as
to its legality. Once a title is registered, the owner may rest secure, without the necessity of waiting
in the portals of the court, or sitting on the "mirador su casa," to avoid the possibility of losing his
land. A Torrens title is generally a conclusive evidence of the ownership of the land referred to
therein. A strong presumption exists that Torrens titles are regularly issued and that they are valid.
In this case, (DEOGENES O. RODRIGUEZ v. HON. COURT OF APPEALS AND PHILIPPINE CHINESE
CHARITABLE ASSOCIATION, INC., G.R. No. 184589, June 13, 2013

It is a well-known doctrine that the issue as to whether the certificate of title was procured by
falsification or fraud can only be raised in an action expressly instituted for the purpose. A Torrens
title can be attacked only for fraud, within one year after the date of the issuance of the decree of
registration. Such attack must be direct, and not by a collateral proceeding. The title represented by
the certificate cannot be changed, altered, modified, enlarged, or diminished in a collateral
proceeding. The certificate of title serves as evidence of an indefeasible title to the property in favor
of the person whose name appears therein. (HILARIA BAGAYAS v. ROGELIO BAGAYAS, ET. AL.,
G.R. Nos. 187308 and 187517, September 18, 2013)

A person dealing with a registered land has the right to rely on the face of the Torrens title and need
not inquire further, unless the party concerned has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to make such an inquiry. The indefeasibility of a
Torrens title as evidence of lawful ownership of the property protects buyers in good faith who rely
on what appears on the face of the said certificate of title. Moreover, a potential buyer is charged
with notice of only the burdens and claims annotated on the title. There has been no showing that
Spouses Fernandez were aware of any irregularity in Carlos title that would make them suspicious
and cause them to doubt the legitimacy of Carlos claim of ownership, especially because there were
no encumbrances annotated on Carlos title. Hence, the current possessor, shall remain to be so
until such time that his possession is successfully contested by a person with a better right.
(VIRGILIO G. CAGATAO v. GUILLERMO ALMONTE, G.R. No. 174004, October 9, 2013)

It is an established rule that a Torrens certificate of title is not conclusive proof of ownership.
Verily, a party may seek its annulment on the basis of fraud or misrepresentation. However, such
action must be seasonably filed, else the same would be barred. In this relation, Section 32 of PD
1529 provides that the period to contest a decree of registration shall be one (1) year from the date
of its entry and that, after the lapse of the said period, the Torrens certificate of title issued thereon

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becomes incontrovertible and indefeasible. (LAURA E. PARAGUYA vs. SPOUSES ALMA ESCUREL-
CRUCILLO ET AL., G.R. No. 200265, December 2, 2013)

Pursuant to Section 108 of PD No. 1529, in an action for the cancellation of memorandum annotated
at the back of a certificate of title, the persons considered as indispensable include those whose
liens appear as annotations. As indispensable parties, they must be given the proper notice of any
proceeding involving the subject properties.

Thus, in a case where two (2) parcels of land were attached by various creditors and the levies are
annotated on the back of the titles of the subject properties, one creditor cannot file an action for
cancellation of lien without giving notice to all parties-in- interest, like other creditors whose lien
over the subject properties appear on the back of the titles of the subject properties. (JESUS G.
CRISOLOGO AND NANETTE B. CRISOLOGO v. JEWM AGRO-INDUSTRIAL CORPORATION, G.R.
No. 196894. March 03, 2014)

REGALIAN DOCTRINE

The burden of proof in overcoming the presumption of State ownership of the lands of the public
domain is on the person applying for registration or claiming ownership, who must prove that the
land is alienable or disposable. To overcome this presumption, incontrovertible evidence must be
established that the land is alienable or disposable. There must be an existence of a positive act of
the government such as a presidential proclamation or an executive order; an administrative
action; investigation reports of Bureau of Lands investigators; or a legislative act or a statute. The
applicant may also secure a certification from the government that the land claimed to have been
possessed for the required number of years is alienable and disposable. In this case, petitioners cite
a surveyor geodetic engineers notation indicating that the survey was inside alienable and
disposable land. Such notation does not constitute a positive government act validly changing the
classification of the land. A mere surveyor has no authority to reclassify lands of the public domain.
By relying solely on the said surveyors assertion, petitioners have not sufficiently proven that the
land in question has been declared alienable." REPUBLIC OF THE PHILIPPINES vs. CORAZON C.
SESE and FE C. SESE, G.R. No. 185092, June 4, 2014, J. Mendoza

Petitioner Republic assails the decision of the CA affirming in toto the decision of the trial court
holding that the respondents was able to prove that the subject lots had been classified as alienable
and disposable. Ruling in favor of Republic, the SC ruled that the evidence required to establish that
land subject of an application for registration is alienable and disposable are: (1) CENRO or PENRO
Certification; and (2) a copy of the original classification approved by the DENR Secretary and
certified as a true copy by the legal custodian of the official records. In the present case, the
foregoing documents had not been submitted in evidence. There is no copy of the original
classification approved by the DENR Secretary. As ruled by this Court, a mere certification issued by
the Forest Utilization & Law Enforcement Division of the DENR is not enough. Republic is then
correct that evidence on record is not sufficient to prove that subject lots had been declared
alienable and disposable lands. REPUBLIC OF THE PHILIPPINES vs. FRANCISCA, GERONIMO
AND CRISPIN, ALL SURNAMED SANTOS, G.R. No. 191516, June 4, 2014, J. Peralta

The approval by city and municipal boards and councils of an application for subdivision through
an ordinance should already be understood to include approval of the reclassification of the land,
covered by said application, from agricultural to the intended non-agricultural use. Otherwise, the
approval of the subdivision application would serve no practical effect; for as long as the property

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covered by the application remains classified as agricultural, it could not be subdivided and
developed for non-agricultural use. KASAMAKA-CANLUBANG, INC., represented by PABLITO M.
EGILDO vs. LAGUNA ESTATE DEVELOPMENT CORPORATION, G.R. No. 200491, June 9, 2014, J.
Peralta

The Regalian doctrine, embodied in Section 2, Article XII of the 1987 Constitution, provides that all
lands of the public domain belong to the State, which is the source of any asserted right to
ownership of land. All lands not appearing to be clearly within private ownership are presumed to
belong to the State. 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 for land classification or
reclassification cannot be assumed. It must be proved.

In this case, the records do not support the findings made by the RTC and the CA that the subject
properties are part of the alienable and disposable portion of the public domain. It bears noting that
in support of his claim that the subject properties are alienable and disposable, Raneses merely
presented the Conversion Subdivision Plan which was prepared by Engr. Montallana with the
annotation that the subject properties were "inside alienable and disposable land area Proj. No. 27-
B as per LC Map No. 2623 certified by the Bureau of Forestry on January 3, 1968" and the Inter-
Office Memorandum from the LLDA. Raneses failed to hurdle this burden and his reliance on the
said annotation and Inter-Office Memorandum is clearly insufficient. Clearly, the pieces of evidence
submitted by Raneses before the RTC in this case hardly satisfy the aforementioned documentary
requirements. REPUBLIC OF THE PHILIPPINES vs. CRISANTO S. RANESES, G.R. No. 189970,
June 9, 2014, J. Villarama, Jr.

Petitioner Gahol applied for Townsite Sales Application with the DENR for the land adjacent to her
property. Respondent Cobarrubias filed a protest, stating that she and her family are occupying
said lot. The Court ruled that Gahols application must be rejected because one of the requirements
was that the applicant must not own any other lot but Gahol is a registered owner of a residential
lot. She also stated that there are no signs of improvement or occupation in the said lot but it was in
fact occupied by Cobarrubias. She is disqualified due to the untruthful statements in her
application. CARMEN T. GAHOL, substituted by her heirs, RICARDO T. GAHOL, MARIA ESTER
GAHOL PEREZ, JOSE MARI T. GAHOL, LUISITO T. GAHOL and ALCREJ CORPORATION vs.
ESPERANZA COBARRUBIAS, G.R. No. 187144, September 17, 2014, J. Peralta

Consequently, before land may be placed under the coverage of Republic Act No. 6657, two
requisites must be met, namely: (1) that the land must be devoted to agricultural activity; and (2)
that the land must not be classified as mineral, forest, residential, commercial or industrial land. For
land to be covered under Presidential Decree No. 27, it must be devoted to rice or corn crops, and
there must be a system of share-crop or lease-tenancy obtaining therein. Unfortunately, the Dakila
property did not meet these requirements. HOLY TRINITY REALTY & DEVELOPMENT
CORPORATION, vs. VICTORIO DELA CRUZ, LORENZO MANALAYSAY, RICARDO MARCELO, JR.
and LEONCIO DE GUZMAN, G.R. No. 200454, October 22, 2014, J. Bersamin

Thus, in order for the homestead grantees or their direct compulsory heirs to retain their
homestead, the following conditions must be satisfied: (a) they must still be the owners of the
original homestead at the time of the CARL's effectivity, and (b) they must continue to cultivate the
homestead land. In this case, Linda, as the direct compulsory heir of the original homestead grantee,
is no longer cultivating the homestead land. That parcels of land are covered by homestead patents
will not automatically exempt them from the operation of land reform. It is the continued

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cultivation by the original grantees or their direct compulsory heirs that shall exempt their lands
from land reform coverage." DANILO ALMERO, TERESITA ALAGON, CELIA BULASO, LUDY
RAMADA, REGINA GEGREMOSA, ISIDRO LAZARTE, THELMA EMBARQUE, FELIPE LAZARTE,
GUILERMA LAZARTE, DULCESIMA BENIMELE vs. HEIRS OF MIGUEL PACQUING, as
represented by LINDA PACQUING FADRILAN, G.R. No. 199008, November 19, 2014, J. Brion

It is not enough for the PENRO or CENRO to certify that a land is alienable and disposable. The
applicant for land registration must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as alienable and disposable, and that the
land subject of the application for registration falls within the approved area per verification
through survey by the PENRO or CENRO. In addition, the applicant for land registration must
present a copy of the original classification approved by the DENR Secretary and certified as a true
copy by the legal custodian of the official records. Thus, the property registration of a corporation
merely relying on the CENRO Certification must be dismissed for failure to prove that the land had
been declared alienable and disposable. REMMAN ENTERPRISES, INC. vs. REPUBLIC OF THE
PHILIPPINES, G.R. No. 188494, November 26, 2014, J. Reyes

The applicant for land registration must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as alienable and disposable, and that the
land subject of the application for registration falls within the approved area per verification
through survey by the PENRO or CENRO. REPUBLIC OF THE PHILIPPINES vs. SPS. JOSE
CASTUERA AND PERLA CASTUERA, G.R. No. 203384, January 14, 2015, J. Carpio

Property which has been reserved for public or quasi-public use or purpose are non-alienable and
shall not be subject to sale or other disposition until again declared alienable by law or by
proclamation of the President. NAVY OFFICERS' VILLAGE ASSOCIATION, INC. (NOVAI) v.
REPUBLIC OF THE PHILIPPINES , G.R. No. 177168, August 03, 2015, BRION, J.

Public land not shown to have been reclassified or released as alienable agricultural land or
alienated to a private person cannot be acquired by private persons without any grant, express or
implied, from the government. HEIRS OF RAFAEL GOZO represented by CASTILLO GOZO and
RAFAEL GOZO, JR. v. PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH DAY
ADVENTIST CHURCH (PUMCO), SOUTH PHILIPPINE UNION MISSION OF SDA (SPUMCO) and
SEVENTH DAY ADVENTIST CHURCH AT SIMPAK, LALA, LANAO DEL NORTE represented by
BETTY PEREZ, G.R. No. 195990, August 05, 2015, PEREZ, J.

When the purchaser or the mortgagee is a bank, the rule on innocent purchasers or mortgagees for
value is applied more strictly. Since the banking business is impressed with public interest, they are
expected to be more cautious, to exercise a higher degree of diligence, care and prudence, than
private individuals in their dealings, even those involving registered lands. Banks may not simply
rely on the face of the certificate of title. LAND BANK OF THE PHILIPPINES v. BELLE
CORPORATION, G.R. No. 205271, September 02, 2015, PERALTA, J.

As a general rule and pursuant to the Regalian Doctrine, all lands of the public domain belong to the
State and are inalienable. Lands that are not clearly under private ownership are also presumed to
belong to the State and, therefore, may not be alienated or disposed;
The following are excepted from the general rule, to wit:

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(a) Agricultural lands of the public domain are rendered alienable and disposable through
any of the exclusive modes enumerated under Section 11 of the Public Land Act. If the mode
is judicial confirmation of imperfect title under Section 48(b) of the Public Land Act, the
agricultural land subject of the application needs only to be classified as alienable and
disposable as of the time of the application, provided the applicants possession and
occupation of the land dated back to June 12, 1945, or earlier. Thereby, a conclusive
presumption that the applicant has performed all the conditions essential to a government
grant arises, and the applicant becomes the owner of the land by virtue of an imperfect or
incomplete title. By legal fiction, the land has already ceased to be part of the public domain
and has become private property.

(b) Lands of the public domain subsequently classified or declared as no longer


intended for public use or for the development of national wealth are removed from the
sphere of public dominion and are considered converted into patrimonial lands or lands of
private ownership that may be alienated or disposed through any of the modes of acquiring
ownership under the Civil Code. If the mode of acquisition is prescription, whether ordinary
or extraordinary, proof that the land has been already converted to private ownership prior
to the requisite acquisitive prescriptive period is a condition sine qua non in observance of
the law (Article 1113, Civil Code) that property of the State not patrimonial in character
shall not be the object of prescription. (HEIRS OF MARIO MALABANAN v. REPUBLIC OF
THE PHILIPPINES, G.R. No. 179987, September 3, 2013)

As proof that the subject property is alienable and disposable, Tensuan presented a Certification
dated July 29, 1999 issued by the CENRO-DENR which verified that "said land falls within alienable
and disposable land under Project No. 27-B L.C. Map No. 2623 under Forestry Administrative Order
No. 4-1141 dated January 3, 1968." However, the Supreme Court have declared unequivocally that a
CENRO Certification, by itself, is insufficient proof that a parcel of land is alienable and disposable.
The CENRO is not the official repository or legal custodian of the issuances of the DENR Secretary
declaring public lands as alienable and disposable. The CENRO should have attached an official
publication of the DENR Secretarys issuance declaring the land alienable and disposable. (PEOPLE
OF THE PHILIPPINES v. LYDIA CAPCO DE TENSUAN, represented by CLAUDIA C. ARUELO, G.R.
No. 171136, October 23, 2013)

REGISTRATION

A land registration court has no jurisdiction to order the registration of land already decreed in the
name of another in an earlier land registration case. After the promulgation of the Guido, it can no
longer be said that an original registration proceeding is proper, since Guido held that certificate of
title are genuine and authentic. What the land registration court should have done was to dismiss
the application for registration upon learning that the same property was already covered by a
valid title. RODOLFO V. FRANCISCO vs. EMILIANA M. ROJAS, and the legitimate heirs of JOSE A.
ROJAS, namely: JOSE FERDINAND M. ROJAS II, ROLANDO M. ROJAS, JOSE M. ROJAS, JR.,
CARMELITA ROJAS-JOSE, VICTOR M.ROJAS, and LOURDES M. ROJAS, all represented by
JOSEFERDINAND M. ROJAS II, G.R. No. 167120, April 23, 2014, J. Peralta

A land registration court has no jurisdiction to order the registration of land already decreed in the
name of another in an earlier land registration case. A second decree for the same land would be
null and void, since the principle behind the original registration is to register a parcel of land only
once.

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The issue of fraudulent alienation raised in the second application for registration of the subject
property is collateral attack which should be directly raised in a separate proceeding filed for such
purpose. It cannot be entertained in this proceeding. In several cases, the Court has ruled that an
attack is indirect or collateral when, in an action to obtain a different relief, an attack on the
judgment or proceeding is nevertheless made as an incident thereof. JOSEPHINE WEE vs.
FELICIDAD MARDO, G.R. No. 202414, June 4, 2014, J. Mendoza

On one hand, AFP-RSBS argued that its and its predecessors-in-interests possession before the
declaration that the property was alienable and disposable agricultural land in1982 should be
included in the computation of the period of possession for purposes of registration. On the other
hand, Republic of the Philippines holds the position that possession before the establishment of
alienability of the land should be excluded in the computation. The Court ruled that what is
important in computing the period of possession is that the land has already been declared
alienable and disposable at the time of the application for registration. Upon satisfaction of this
requirement, the computation of the period may include the period of adverse possession prior to
the declaration that land is alienable and disposable. AFP RETIREMENT AND SEPARATION
BENEFITS SYSTEM [AFP-RSBS] vs. REPUBLIC OF THE PHILIPPINES, G.R. No.180086, July 2,
2014, J. Leonen

It must be emphasized that the present ruling on substantial compliance applies pro hac vice. It
does not in any way detract from our rulings in Republic v. T.A.N. Properties, Inc., and similar cases
which impose a strict requirement to prove that the public land is alienable and disposable,
especially in this case when the decisions of the lower court and the Court of Appeals were
rendered prior to these rulings. To establish that the land subject of the application is alienable and
disposable public land, the general rule remains: all applications for original registration under the
Property Registration Decree must include both(1) a CENRO or PENRO certification and(2) a
certified true copy of the original classification made by the DENR Secretary. As an exception,
however, the courts - in their sound discretion and based solely on the evidence presented on
record - may approve the application, pro hac vice, on the ground of substantial compliance
showing that there has been a positive act of government to show the nature and character of the
land and an absence of effective opposition from the government. This exception shall only apply to
applications for registration currently pending before the trial court prior to this Decision and shall
be inapplicable to all future applications. REPUBLIC OF THE PHILIPPINES vs. APOSTELITA SAN
MATEO, ET AL., G.R. No. 203560, November 10, 2014, J. Velasco, Jr.

An applicant for land registration or judicial confirmation of incomplete or imperfect title under
Section 14(1) of Presidential Decree No. 1529 must prove the following requisites:(1) that the
subject land forms part of the disposable and alienable lands of the public domain, and (2) that the
applicant has been in open, continuous, exclusive and notorious possession and occupation of the
same under a bona fide claim of ownership since June 12, 1945, or earlier. Concomitantly, the
burden to prove these requisites rests on the applicant. With regard to the first requisite, it is
undisputed that the land subject of registration is part of the alienable and disposable lands of the
public domain. The trial court found the Department of Environment and Natural Resources report
sufficient to prove the existence of the first requisite. The Court of Appeals decision was silent on
this matter. Respondent Republic failed to make objections on the issue as well. Thus, we do not see
any reason to deviate from the findings of the lower courts. LUZVIMINDA APRAN CANLAS vs.
REPUBLIC OF THE PHILIPPINES, G.R. No. 200894, November 10, 2014, J. Leonen

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An applicant for original registration of title based on a claim of exclusive and continuous
possession or occupation must show the existence of the following: (1) Open, continuous, exclusive
and notorious possession, by themselves or through their predecessors-in-interest, of land; (2) The
land possessed or occupied must have been declared alienable and disposable agricultural land of
public domain; (3) The possession or occupation was under a bona fide claim of ownership; (4)
Possession dates back to June 12, 1945 or earlier.

Therefore, what is important in computing the period of possession is that the land has already
been declared alienable and disposable at the time of the application for registration. Upon
satisfaction of this requirement, the computation of the period may include the period of adverse
possession prior to the declaration that land is alienable and disposable.

In the present case, there is no dispute that the subject lot has been declared alienable and
disposable on March 15, 1982. This is more than eighteen (18) years before Roasa's application for
registration, which was filed on December 15, 2000. Moreover, the unchallenged testimonies of two
of Roasa's witnesses established that the latter and her predecessors-in-interest had been in
adverse, open, continuous, and notorious possession in the concept of an owner even before June
12, 1945. REPUBLIC OF THE PHILIPPINES vs. CECILIA GRACE L. ROASA, married to GREG
AMBROSE ROASA, as herein represented by her Attorneys-in-Fact, BERNARDO M. NICOLAS,
JR. and ALVIN B. ACAYEN, G.R. No. 176022, February 2, 2015, J. Peralta

The respondent claims that he is the owner of the disputed parcel of land by virtue of his open,
exclusive, notorious and continuous possession of the land for more than 30 years. The Supreme
Court ruled that adverse possession can only ripen into ownership when the land adversely owned
is classified as an agricultural land. If the disputed land is non-agricultural, adverse possession
cannot ripen into ownership. THE HON. SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM vs. NEMESIO DUMAGPI, REPRESENTED BY VICENTE DUMAGPI, G.R. No. 195412,
February 04, 2015, J. Reyes

The State is not estopped from the acts of the Clerk of Court in land registration cases. Illegal acts of
government agents do not bind the State. Assuming that it is, the respondents did not prove that the
land sought to be registered is an alienable and disposable land. All applications for original
registration under the Property Registration Decree must include both (1) a CENRO or PENRO
certification and (2) a certified true copy of the original classification made by the DENR Secretary.
REPUBLIC OF THE PHILIPPINES vs. SPOUSES DANTE and LOLITA BENIGNO, G.R. No. 205492,
March 11, 2015, J. Del Castillo

Emeteria G. Lualhati filed with the RTC of Antipolo City an application for original registration
covering Lots 1 and 2 situated in C-5 C-6 Pasong Palanas, Sitio Sapinit, San Juan, Antipolo, Rizal. To
support her contention that the lands subject of her application is alienable and disposable, Lualhati
submitted certifications from the DENR-CENRO, Region IV, Antipolo City, stating that no public land
application or land patent covering the subject lots is pending nor are the lots embraced by any
administrative title. It has been repeatedly ruled that certifications issued by the CENRO, or
specialists of the DENR, as well as Survey Plans prepared by the DENR containing annotations that
the subject lots are alienable, do not constitute incontrovertible evidence to overcome the
presumption that the property sought to be registered belongs to the inalienable public domain.
Rather, this Court stressed the importance of proving alienability by presenting a copy of the
original classification of the land approved by the DENR Secretary and certified as true copy by the
legal custodian of the official records.

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Moreover, as petitioner Republic aptly points out, Lualhati failed to provide any other proof of acts
of dominion over the subject land other than the fact that she, together with her husband and
children, planted fruit-bearing trees and constructed their home thereon considering the vastness
of the same. A mere casual cultivation of portions of the land by the claimant, and the raising
thereon of cattle, do not constitute possession under claim of ownership. In that sense, possession
is not exclusive and notorious as to give rise to a presumptive grant from the State. REPUBLIC OF
THE PHILIPPINES vs. EMETERIA G. LUALHATI, G.R. No. 183511, March 25, 2015, J. Peralta

The general rule is that where two certificates of title purport to include the same land, the earlier
in date prevails. JOSE YULO AGRICULTURAL CORPORATION v. SPOUSES PERLA CABAYLO
DAVIS AND SCOTT DAVIS, G.R. No. 197709, August 3, 2015, DEL CASTILLO, J.

The date of registration is reckoned from the time of the title's transcription in the record book of
the Registry of Deeds (RD). Therefore, the date appearing on the face of a title refers to the date of
issuance of the decree of registration, as provided in Sections 41 and 42 of the Land Registration
Act or Section 40 of the P.D. 1529. CLT REALTY DEVELOPMENT CORPORATION v. HI-GRADE
FEEDS CORPORATION, REPUBLIC OF THE PHILIPPINES (through OSG), REGISTER OF DEEDS
OF METRO MANILA, DISTRICT III, CALOOCAN CITY, and the COURT OF APPEALS, G.R. No.
160684, September 2,2015, PEREZ, J.

While the law requires the Register of Deeds to obtain a copy of the Deed of Conveyance before
cancelling the sellers title, its subsequent failure to produce the copy, after a new title had already
been issued is not a sufficient evidence to hold that the claimed sale never actually happened.
HEIRS OF DATU DALANDAG KULI, represented by DATU CULOT DALANDAG v. DANIEL R. PIA,
FILOMENA FOLLOSCO, and JOSE FOLLOSCO, SR., G.R. No. 199777, June 17, 2015, SERENO, C.J.

In a judicial confirmation of title under original registration proceedings, applicants may obtain the
registration of title to land upon a showing that they or their predecessors-in-interest have been in
(1) open, continuous, exclusive, and notorious possession and occupation of (2) agricultural lands
of the public domain, (3) under a bona fide claim of acquisition or ownership, (4) for at least 30
years immediately preceding the filing of the application for confirmation of title, except when
prevented by war or force majeure. The burden of proof in land registration cases rests on
applicants who must show clear, positive and convincing evidence that their alleged possession and
occupation were of the nature and duration required by law. (REPUBLIC OF THE PHILIPPINES v.
MARTIN T. NG, G.R. No. 182449, March 6, 2013)

Article 1544 of the Civil Code does not apply to sales involving unregistered land. Suffice it to state
that the issue of the buyers good or bad faith is relevant only where the subject of the sale is
registered land, and the purchaser is buying the same from the registered owner whose title to the
land is clean. In such case, the purchaser who relies on the clean title of the registered owner is
protected if he is a purchaser in good faith for value. Act No. 3344 applies to sale of unregistered
lands. What applies in this case is Act No. 3344, as amended, which provides for the system of
recording of transactions over unregistered real estate. Act No. 3344 expressly declares that any
registration made shall be without prejudice to a third party with a better right. (SPOUSES
CLEMENCIO C. SABITSANA, JR v. JUANITO F. MUERTEGUI, G.R. No. 181359 August 5, 2013)
Registration is the operative act which gives validity to the transfer or creates a lien upon the land.
A certificate of title serves as evidence of an indefeasible and incontrovertible title to the property
in favor of the person whose name appears therein. Since the spouses Vilbar did not cause the

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transfer of the certificate title in their name, or at the very least, annotate or register such sale in the
original title in the name of Dulos Realty, have no indefeasible and incontrovertible title over Lot 20
to support their claim. (SPOUSES BERNADETTE AND RODULFO VILBAR v. ANGELITO L.
OPINION, G.R. No. 176043. January 15, 2014)

An applicant for registration of titles mere reliance on a surveyor-geodetic engineers notation in


Survey Plan indicating that the survey was inside alienable and disposable land to prove that the
land in question formed part of the alienable and disposable lands of the public domain is not
sufficient to prove such fact. Such notation does not constitute a positive government act validly
changing the classification of the land in question. A mere surveyor has no authority to reclassify
lands of the public domain. Thus, applicants failure to prove that the subject land has been
classified as alienable and disposable lands of the public domain, the application for registration of
title must be denied. (REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DIRECTOR OF
LANDS v. ROSARIO DE GUZMAN VDA. DE JOSON, G.R. No. 163767. March 10, 2014)

An application for registration of land must be accompanied by evidence showing that the land in
question was within an area expressly declared by law either to be the patrimonial property of the
State, or to be no longer intended for public service or the development of the national wealth.
Otherwise, the Court is left with no alternative but to deny the respondents application for
registration. (REPUBLIC OF THE PHILIPPINES v. ZURBARAN REALTY AND DEVELOPMENT
CORPORATION, G.R. No. 164408. March 24, 2014)

CANCELLATION OF TITLE

Under Sec. 108 of PD 1529, the proceeding for the erasure, alteration, or amendment of a certificate
of title may be resorted to in seven instances: (1) when registered interests of any description,
whether vested, contingent, expectant, or inchoate, have terminated and ceased; (2) when new
interests have arisen or been created which do not appear upon the certificate; (3) when any error,
omission or mistake was made in entering a certificate or any memorandum thereon or on any
duplicate certificate; (4) when the name of any person on the certificate has been changed; (5)
when the registered owner has been married, or, registered as married, the marriage has been
terminated and no right or interest of heirs or creditors will thereby be affected; (6) when a
corporation, which owned registered land and has been dissolved, has not conveyed the same
within three years after its dissolution; and (7) when there is reasonable ground for the
amendment or alteration of title. The present case falls under (3) and (7), where the Registrar of
Deeds of Bulacan committed an error in issuing TCT T-145321 in the name of Adriano M.
Tambuyat married to Rosario E. Banguis when, in truth and in fact, respondent Wenifreda and
not Banguis is Adrianos lawful spouse. ROSARIO BANGUIS-TAMBUYAT vs. WENIFREDA
BALCOM-TAMBUYAT, G.R. No. 202805, March 23, 2015, J. Del Castillo

ACTION FOR RECONVEYANCE

An action for reconveyance based on an implied trust prescribes in ten (10) years, reckoned from
the date of registration of the deed or the date of issuance of the certificate of title over the
property, if the plaintiff is not in possession. Hence, when a complaint for reconveyance is filed
beyond the 10-year reglementary period, such cause of action is barred by prescription. HEIRS OF
FRANCISCO I. NARVASA, SR., ANDHEIRS OF PETRA IMBORNAL AND PEDRO
FERRER,REPRESENTED BY THEIR ATTORNEY-IN-FACT, MRS. REMEDIOS B. NARVASA-

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REGACHO vs. EMILIANA, VICTORIANO, FELIPE, MATEO, RAYMUNDO, MARIA,AND EDUARDO,


ALL SURNAMED IMBORNAL, G.R. No. 182908, August 06, 2014, J. Perlas Bernabe

In order to successfully maintain an action to recover the ownership of a real property, the person
who claims a better right to it must prove two things: first, the identity of the land claimed; and
second, his title thereto. BALTAZAR IBOT v. HEIRS OF FRANCISCO TAYCO, REPRESENTED BY
FLORA TAYCO, WILLY TAYCO AND MERLYN T. BULANTE, G.R. No. 202950, April 06, 2015

RECONSTITUTION

The survey plan and technical description are not competent and sufficient sources of
reconstitution when the petition is based on Section 2(f) of RA No. 26. They are mere additional
documentary requirements. Where the RTC ordered reconstitution on the basis of the survey plan
and technical description, the order of reconstitution is void for want of factual support. REPUBLIC
OF THE PHILIPPINES v. CESAR C. PASICOLAN and GREGORIO C. PASICOLAN, G.R. No. 198543,
April 15, 2015, DEL CASTILLO, J.

No petition for the judicial reconstitution of a Torrens title that does not strictly adhere to the
requirements of Republic Act No. 26, albeit unopposed, should be granted even on the pretext that
the reconstitution would not affect the ownership or possession of the property. REPUBLIC OF
THE PHILIPPINES v. WILFREDO MANCAO, G.R. No. 174185, July 22, 2015, BERSAMIN, J.

The nature of reconstitution proceedings under RA 26 denotes a restoration of the instrument,


which is supposed to have been lost or destroyed, in its original form and condition. On this score,
it bears stressing that the nature of reconstitution proceedings under RA 26 denotes a restoration
of the instrument, which is supposed to have been lost or destroyed, in its original form and
condition. As such, reconstitution must be granted only upon clear proof that the title sought to be
restored had previously existed and was issued to the petitioner. Strict compliance with the
requirements of the law aims to thwart dishonest parties from abusing reconstitution proceedings
as a means of illegally obtaining properties otherwise already owned by other parties. (REPUBLIC
OF THE PHILIPPINES v. RICORDITO N. DE ASIS, JR.G.R. No. 193874, July 24, 2013)

EXEMPTION FROM CARP

To be exempt from CARP, all that is needed is one valid reclassification of the land from agricultural
to non-agricultural by a duly authorized government agency before June 15, 1988, when the CARL
took effect. NOEL L. ONG, et al., v. NICOLASA O. IMPERIAL, et al., G.R. No. 197127, July 15, 2015,
LEONARDO-DE CASTRO, J.

FREE PATENT

Section 124 of the Public Land Act is clear and explicit that a contract which purports to alienate,
transfer, convey or encumber any homestead within the prohibitory period is void from its
execution. ANASTACIO TINGALAN v. SPOUSES RONALDO AND WINONA MELLIZA, G.R. No.
195247, June 29, 2015, VILLARAMA, JR., J.

The right to repurchase under Sec. 119 of CA 141 does not cease once the propertys nature and
classification gets changed. What the law strictly requires is that the repurchase must be for the
purpose of preserving the land for the use of the patentee and his family. SPOUSES ALFONSO

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ALCUITAS, SR. (deceased-represented by his heirs) and ESTELA ALCUITAS (for herself and as
representative of the heirs of the deceased Alfonso Alcuitas, Sr.) v. MINVILUZ C.
VILLANUEVA., G.R. No. 207964, September 16, 2015, MENDOZA, J.

REVERSION

Reversion under Section 101 of the Public Land Act is not automatic. The Office of the Solicitor
General must first file an action for reversion. ELISEO MALTOS and ROSITA P. MALTOS v. HEIRS
OF EUSEBIO BORROMEO, G.R. No. 172720, September 14, 2015, LEONEN, J.

TORTS AND DAMAGES

DAMAGES

Moral damages are mandatory without need of allegation and proof other than the death of the
victim, owing to the fact of the commission of murder or homicide, such as when the victim was
gunned down in front of his house. If medical and funeral expenses were substantiated, actual
damages may be awarded. However, damages for loss of earning capacity may not be awarded
absent documentary evidence except where the victim was either self-employed or a daily wage
worker earning less than the minimum wage under current labor laws. The testimony of the wife of
the victim, a Senior Desk Coordinator of a radio station, as to the latters monthly salary without
any documentary evidence will not suffice to substantiate the claim. JOSE ESPINELI a.k.a. DANILO
ESPINELI vs. PEOPLE OF THE PHILIPPINES, G.R. No. 179535, June 9, 2014, J. Del Castillo

Medical malpractice or, more appropriately, medical negligence, is that type of claim which a victim
has available to him or her to redress a wrong committed by a medical professional which has
caused bodily harm. In order to successfully pursue such a claim, a patient, or his or her family as in
this case, "must prove that a health care provider, in most cases a physician, either failed to do
something which a reasonably prudent health care provider would have done, or that he or she did
something that a reasonably prudent provider would not have done; and that failure or action
caused injury to the patient.

As the Court held in Spouses Flores v. Spouses Pineda, et al.,the critical and clinching factor in a
medical negligence case is proof of the causal connection between the negligence and the injuries.
The claimant must prove not only the injury but also the defendant's fault, and that such fault
caused the injury. A verdict in a malpractice action cannot be based on speculation or conjecture.
Causation must be proven within a reasonable medical probability based upon competent expert
testimony,which the Court finds absent in the case at bar. As regards the respondents'
counterclaim, the CA's award of P48,515.58 is sustained. PEDRITO DELA TORRE vs.DR. ARTURO
IMBUIDO, DRA. NORMA IMBUIDO in their capacity as owners and operators of DIVINE SPIRIT
GENERAL HOSPITAL and/or DR. NESTOR PASAMBA, G.R. No. 192973, September 29, 2014, J.
Reyes

The relationship between the credit card issuer and the credit card holder is a contractual one that
is governed by the terms and conditions found in the card membership agreement. Such terms and
conditions constitute the law between the parties. In case of their breach, moral damages may be
recovered where the defendant is shown to have acted fraudulently or in bad faith. Malice or bad
faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or

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moral obliquity. However, a conscious or intentional design need not always be present because
negligence may occasionally be so gross as to amount to malice or bad faith. Hence, bad faith in the
context of Article 2220 of the Civil Code includes gross negligence. Nowhere in the terms and
conditions requires the defendant to submit new application form in order to reactivate her credit
card. Indeed, BPI Express Credit did not observe the prudence expected of banks whose business
was imbued with public interest, hence, defendant is entitled to damages. BPI EXPRESS CARD
CORPORATION vs. MA. ANTONIA R. ARMOVIT, G.R. No. 163654, October 8, 2014, J. Bersamin

The existence of contractual breach in this case revolves around the exclusive status of Drugmakers
as the manufacturer of the subject pharmaceutical products. In particular, the Contract
Manufacturing Agreement states that Drugmakers, being the exclusive manufacturer of the subject
pharmaceutical products, had to first give its written consent before S.V. More could contract the
services of another manufacturer. The agreements notwithstanding, S.V More, through the CMPP
and absent the prior written consent of Drugmakers, contracted the services of Hizon Laboratories
to manufacture some of the pharmaceutical products covered by the said contracts. Considering
that Drugmakers palpably suffered some form of pecuniary loss resulting from S.V. Mores breach of
contract, the Court deems it proper to, instead, award in their favor the sum of P100,000.00 in the
form of temperate damages. This course of action is hinged on Article 2224 of the Civil Code. S.V.
MORE PHARMA CORPORATION and ALBERTO A. SANTILLANA vs. DRUGMAKERS LABO RA
TORIES, INC. and ELIEZER DEL MUNDO; S.V. MORE PHARMA CORPORATION and ALBERTO A.
SANTILLANA vs. DRUGMAKERS LABO RA TORIES, INC. and ELIEZER DEL MUNDO, G.R. No.
200408; G.R. No. 200416, November 12, 2014, J. Perlas- Bernabe

Actual or compensatory damages are those awarded in satisfaction of, or in recompense for, loss or
injury sustained. The burden is to establish one's case by a preponderance of evidence which means
that the evidence, as a whole, adduced by one side, is superior to that of the other. Actual damages
are not presumed. In this case, GMA Veterans had not shown that the security guards were not
assigned to another employer, and that it was compelled to pay the guards despite the pre-
termination of the security agreement to be entitled to the amount of PI6,014.00 per month. Indeed,
no evidence was presented by GMA Veterans establishing the actual amount of loss suffered by
reason of the pre-termination. It is elementary that to recover damages, there must be pleading and
proof of actual damages suffered. Temperate damages may be allowed in cases where from the
nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is
convinced that the aggrieved party suffered some pecuniary loss. The SC also take into
consideration that GMA Veterans certainly spent for the security guard's training, firearms with
ammunitions, uniforms and other necessary things before their deployment to Snow Mountain.
Hence, the SC find it just and proper to award temperate damages in the amount of P200,000.00 in
lieu of actual damages. SNOW MOUNTAIN DAIRY CORPORATION vs. GMA VETERANS FORCE,
INC., G.R. No. 192446, November 19, 2014, J. Peralta

Actual damages are not presumed. The claimant must prove the actual amount of loss with a
reasonable degree of certainty premised upon competent proof and on the best evidence
obtainable. Thus, an insurer of copper concentrates which were contaminated by seawater while at
sea, who, along with the consignee, arbitrarily fixed the salvage value of the cargo, and who failed to
refute expert testimony from the common carrier as regards the lack of any adverse effect of
seawater on copper concentrates, then actual damages are not proven. LOADSTAR
SHIPPINGCOMPANY, INCORPORATED and LOADSTARINTERNATIONAL SHIPPINGCOMPANY,
INCORPORATED vs. MALAYAN INSURANCE COMPANY, INCORPORATED, G.R. No. 185565,
November 26, 2014, J. Reyes

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Petitioner questions the decision of the CA awarding respondent nominal damages after having
ruled that the actual damages awarded by the RTC was unfounded. Petitioner argues that nominal
damages are only awarded to vindicate a right that has been violated and not to indemnify a party
for any loss suffered by the latter. The SC ruled that what should have been awarded was temperate
and not nominal damages. Temperate or moderate damages may be recovered when the court finds
that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
provided with certainty. Considering that it has been established that respondent suffered a loss,
even if the amount thereof cannot be proven with certainty, the Court ruled that what should have
been awarded was temperate damages. SEVEN BROTHERS SHIPPING CORPORATION vs. DMC-
CONSTRUCTION RESOURCES, INC., G.R. No. 193914. November 26, 2014, C.J. Sereno

In awarding damages in libel cases, the court is given ample discretion to determine the amount,
depending upon the facts of the particular case. Article 2219 of the Civil Code expressly authorizes
the recovery of moral damages in cases of libel, slander or any other form of defamation. However,
while no proof of pecuniary loss is necessary in order that moral damages may be awarded, x x x it
is nevertheless essential that the claimant should satisfactorily show the existence of the factual
basis of damages and its causal connection to defendants acts. Considering that respondent
sufficiently justified his claim for damages (i.e. he testified that he was embarrassed by the said
letters [and] ashamed to show his face in [sic] government offices), the Court finds him entitled to
moral and exemplary damages. However, the Court equitably reduce the amounts awarded because
even though the letters were libellous, respondent has not suffered such grave or substantial
damage to his reputation to warrant receiving P5,000,000 as moral damages and P100,000.00 as
exemplary damages.

As to the award of attorneys fees, it is an accepted doctrine that the award thereof as an item of
damages is the exception rather than the rule, and counsels fees are not to be awarded every time a
party wins a suit. The power of the court to award attorneys fees under Article 2208 of the Civil
Code demands factual, legal and equitable justification, without which the award is a conclusion
without a premise, its basis being improperly left to speculation and conjecture. In all events, the
court must explicitly state in the text of the decision, and not only in the decretal portion thereof,
the legal reason for the award of attorneys fees. ALEJANDRO C. ALMENDRAS, JR. vs. ALEXIS C.
ALMENDRAS, G.R. No. 179491, January 14, 2015, C.J. Sereno

In a licensing contract, the essence of which is the transfer by the licensor, Honrado to the licensee,
GMA Films, for a fee, of the exclusive right to telecast the films listed in the Agreement. Stipulations
for payment of commission to the licensor is incongruous to the nature of such contracts unless
the licensor merely acted as agent of the film owners. Nowhere in the Agreement, however, did the
parties stipulate that Honrado signed the contract in such capacity. Being a stranger to such
arrangements, they are not entitled to complain of any breach by Honrado of his contracts with the
film owners than the film owners are for any breach by a stranger of its Agreement with
aforementioned. The trial court awarded attorneys fees to Honrado as it deemed it just and
reasonable to do so, using the amount provided by Honrado on the witness stand (P100,000).
Undoubtedly, attorneys fees may be awarded if the trial court deems it just and equitable. Such
ground, however, must be fully elaborated in the body of the ruling. Its mere invocation, without
more, negates the nature of attorneys fees as a form of actual damages. RICARDO C. HONRADO vs.
GMA NETWORK FILMS, INC., G.R. No. 204702, January 14, 2015, J. Carpio

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The award of damages to Spouses Rabaja cannot be sustained by this Court. The filing alone of a
civil action should not be a ground for an award of moral damages in the same way that a clearly
unfounded civil action is not among the grounds for moral damages. Article 2220 of the New Civil
Code provides that to award moral damages in a breach of contract, the defendant must act
fraudulently or in bad faith. In this case, Spouses Rabaja failed to sufficiently show that Spouses
Salvador acted in a fraudulent manner or with bad faith when it breached the contract of sale. Thus,
the award of moral damages cannot be warranted. SPOUSES ROLANDO AND HERMINIA
SALVADOR vs. SPOUSES ROGELIO AND ELIZABETH RABAJA AND ROSARIO GONZALES, G.R.
No. 199990, February 04, 2015, J. Mendoza

Effectively, therefore, the debt incurred by the government on account of the taking of the property
subject of an expropriation constitutes a forbearance which runs contrary to the trial courts
opinion that the same is in the nature of indemnity for damages calling for the application of Article
2209 of the Civil Code. Nevertheless, in line with the recent circular of the Monetary Board of the
BSP-MB No. 799, Series of 2013, effective July 1, 2013, the prevailing rate of interest for loans or
forbearance of money is six percent (6%) per annum, in the absence of an express contract as to
such rate of interest.

The records of this case reveal that DPWH did not delay in its payment of just compensation as it
had deposited the pertinent amount in full due to respondent on January 24, 2011, or four (4)
months before the taking thereof, which was when the RTC ordered the issuance of a Writ of
Possession and a Writ of Expropriation on May 27, 2011. The amount deposited was deemed by the
trial court to be just, fair, and equitable, taking into account the well-established factors in assessing
the value of land, such as its size, condition, location, tax declaration, and zonal valuation as
determined by the BIR. Considering, therefore, the prompt payment by the DPWH of the full
amount of just compensation as determined by the RTC, the Court finds that the imposition of
interest thereon is unjustified and should be deleted. REPUBLIC OF THE PHILIPPINES,
REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS vs. ARLENE R.
SORIANO, G.R. No. 211666, February 25, 2015, J. Peralta

The formula for the computation of loss of earning capacity is as follows:


Net earning capacity = Life Expectancy x [Gross Annual Income - Living Expenses (50% of gross
annual income)], where life expectancy = 2/3 (80 - the age of the deceased).
PEOPLE OF THE PHILIPPINES vs. BENJAMIN CASAS Y VINTULAN, G.R. No. 212565, February
25, 2015, J. Perlas-Bernabe

FAJ Construction was found guilty of violating the construction agreement for its defective and
incomplete work, delay, and for unjustified abandonment of the project. Susan argued that the issue
of whether the trial and appellate courts correctly decided the amount of damages is a factual issue
which is beyond the jurisdiction of this Court. The Supreme Court held that it is not a trier of facts
and does not normally undertake the re-examination of the evidence presented by the contending
parties during trial. FAJ CONSTRUCTION & DEVELOPMENT CORPORATION vs. SUSAN M.
SAULOG, G.R. No. 200759, March 25, 2015, J. Del Castillo

Absent competent proof on the actual damages suffered, a party still has the option of claiming
temperate damages, which may be allowed in cases where, from the nature of the case, definite
proof of pecuniary loss cannot be adduced although the court is convinced that the aggrieved party
suffered some pecuniary loss. ROGELIO ROQUE v. PEOPLE OF THE PHILIPPINES, G.R. No.
193169, April 6, 2015, DEL CASTILLO, J.

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The grant of temperate damages is drawn from equity to provide relief to those definitely injured.
Therefore, it may be allowed so long as the court is convinced that the aggrieved party suffered
some pecuniary loss. On the other hand, in order to obtain exemplary damages under Article 2232
of the Civil Code, the claimant must prove that the assailed actions of the defendant are not just
wrongful, but also wanton, fraudulent, reckless, oppressive or malevolent.(RENO R. GONZALES,
ET. AL. v. CAMARINES SUR II ELECTRIC COOPERATIVE, INC, G.R. No. 181096, March 6, 2013)

Temperate or moderate damages avail when the court finds that some pecuniary loss has been
suffered but its amount cannot from the nature of the case, be proved with certainty In this case, it
cannot be denied that the heirs of Magdua suffered pecuniary loss, although the exact amount was
not proved with certainty. (PEOPLE OF THE PHILIPPINES v. PERCIVAL DELA ROSA Y BAYER
G.R. No. 201723. June 13, 2013

To recover moral damages in an action for breach of contract, the breach must be palpably wanton,
reckless and malicious, in bad faith, oppressive, or abusive. Hence, the person claiming bad faith
must prove its existence by clear and convincing evidence for the law always presumes good faith.
Bad faith does not simply connote bad judgment or negligence; hence, it is a question of
intention, which can be inferred from ones conduct and/or contemporaneous statements. The
inappropriate dealings of Adriano to acquire financial gain at the expense of respondents, with the
approval or acquiescence of the Board; the hiring of unqualified personnel being used as a ground
for termination despite the fact that such hiring was upon their recommendation; and the repeated
allegations of non-compliance even if respondents had corrected already what were complained of,
constituted unjust and dishonest acts schemed by the petitioners to provide an appearance of
validity to the termination. These acts constituted bad faith on part of petitioner. (JAIME P.
ADRIANO and LEGASPI TOWERS 300, INC. v. ALBERTO LASALA and LOURDES LASALA, G.R.
No. 197842, October 9, 2013)

Under Article 2206 of the Civil Code, the heirs of the victim are entitled to indemnity for loss of
earning capacity. Compensation of this nature is awarded not for loss of earnings, but for loss of
capacity to earn money. The indemnification for loss of earning capacity partakes of the nature of
actual damages which must be duly proven by competent proof and the best obtainable evidence
thereof. Thus, as a general rule, documentary evidence should be presented to substantiate the
claim for damages for loss of earning capacity. By way of exception, damages for loss of earning
capacity may be awarded despite the absence of documentary evidence when (1) the deceased is
self-employed and earning less than the minimum wage under current labor laws, or (2) the
deceased is employed as a daily wage worker earning less than the minimum wage under current
labor laws. (ROBERT DA JOSE, ET AL. vs. CELERINA R. ANGELES, ET AL., G.R. No. 187899.
October 23, 2013)

Where a bank was merely a purchaser or transferee of the property that has a pending forcible
entry case, it cannot be made liable for nominal damages since it has not violated or invaded a right.
It is not prohibited from acquiring the property even while the forcible entry case was pending,
because as the registered owner of the subject property, the seller may transfer his title at any time
and the lease merely follows the property as a lien or encumbrance. (ONE NETWORK RURAL
BANK, INC., PETITIONER, v. DANILO G. BARIC, RESPONDENT., G.R. No. 193684, March 05,
2014)

NEGLIGENCE

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It also clearly stated that permission or authorization to retrieve and remove the internal organs of
the deceased was being given ONLY IF the provisions of the applicable law had been complied with.
Such instructions reveal that Dr. Alanoacted prudently by directing his subordinates to exhaust all
reasonable means of locating the relatives of the deceased. He could not have made his directives
any clearer. He even specifically mentioned that permission is only being granted IF the
Department of Surgery has complied with all the requirements of the law. Verily, Dr. Alano could
not have been faulted for having full confidence in the ability of the doctors in the Department of
Surgery to comprehend the instructions, obeying all his directives, and acting only in accordance
with the requirements of the law. DR. FILOTEO A. ALANO vs, ZENAIDA MAGUD-LOGMAO, G.R.
No. 175540, April 7, 2014, J. Peralta

Contending that it exercised extraordinary diligence in the selection and supervision of its drivers,
petitioner argues that it should be absolved from any liability for damages caused by its employee.
The SC ruled that when an employee causes damage due to his own negligence while performing
his own duties, there arises the juristantum presumption that his employer is negligent, rebuttable
only by proof of observance of the diligence of a good father of a family. Failure however of
petitioner to establish the modes and measures it adopted to ensure the proper selection and
supervision of its employees, petitioner therefore should be held liable for the damages cause by its
employee. DAVAO HOLIDAY TRANSPORT SERVICES CORPORATIONvs. SPOUSES EULOGIO AND
CARMELITA EMPHASIS, G.R. No. 211424, November 26, 2014, J. Reyes

1 died and 2 suffered injury due to mishap along the highway. The respondents contended that the
cause of death and injuries was due to live tension wire of Cagayan Electric Cooperative Inc. The
court ruled there was no negligence on the part of Cagayan Electric Cooperative Inc. Thus, there is
no negligence on the part of petitioner that was allegedly the proximate cause of Camilos death and
Rapanans injuries. From the testimonies of petitioners employees and the excerpt from the police
blotter, this Court can reasonably conclude that, at the time of that fatal mishap, said wires were
quietly sitting on the shoulder of the road, far enough from the concrete portion so as not to pose
any threat to passing motor vehicles and even pedestrians. Hence, if the victims of the mishap were
strangled by said wires, it can only mean that either the motorcycle careened towards the shoulder
or even more likely, since the police found the motorcycle not on the shoulder but still on the road,
that the three passengers were thrown off from the motorcycle to the shoulder of the road and
caught up with the wires. CAGAYAN ELECTRIC COOPERATIVE, INC. REPRESENTED BY ITS
GENERAL MANAGER AND CHIEF EXECUTIVE OFFICER, GABRIEL A. TORDESILLAS vs. ALAN
RAPANAN AND MARY GINE TANGONAN, G.R. No. 199886, December 3, 2014, J. Villarama Jr.

The petitioners was found negligent by both the RTC and the Court of Appeals and ordered to pay
jointly and severally for damages. The petitioners allege that they are not negligent. The Supreme
Court ruled that as the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would not do. It is the failure to observe for the
protection of the interest of another person that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury. CA correctly affirmed the
RTCs finding that Transworld and Ruks are guilty of negligence. RUKS KONSULT AND
CONSTRUCTION vs. ADWORLD SIGN AND ADVERTISING CORPORATION* AND TRANSWORLD
MEDIA ADS, INC., G.R. No. 204866, January 21, 2015, J. Perlas-Bernabe

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Negligence has been defined as "the failure to observe for the protection of the interests of another
person that degree of care, precaution, and vigilance which the circumstances justly demand,
whereby such other person suffers injury. Verily, foreseeability is the fundamental test of
negligence. It is the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would not do. The records show that driver
Gimena was clearly running at a reckless speed. He did not take the necessary precaution and
instead, drove on and bumped the deceased despite being aware that he was traversing a
commercial center where pedestrians were crossing the street. Gimena should have observed due
diligence of a reasonably prudent man by slackening his speed and proceeding cautiously while
passing the area. R TRANSPORT CORPORATION vs. LUISITO G. YU, G.R. No. 174161, February
18, 2015, J. Peralta

ATI suffered damage due to the fault of petitioners negligence. However, petitioners contended
that they should not be held liable for there was no negligence on their part. The court ruled that
Negligence, on the other hand, is defined as the failure to observe that degree of care, precaution
and vigilance that the circumstances justly demand, whereby another suffers injury. In the case
under consideration, the parties do not dispute the facts of damage upon ATIs unloader, and of
such damage being the consequence of someones negligence. However, the petitioners deny
liability claiming that it was not established with reasonable certainty whose negligence had caused
the co-mingling of the metal bars with the soybean meal cargo. The Court, on this matter, agrees
with the CAs disquisition that the petitioners should be held jointly and severally liable to ATI. ATI
cannot be faulted for its lack of direct access to evidence determinative as to who among the
shipowner, Samsun, ContiQuincyBunge and Inter-Asia should assume liability. The CA had
exhaustively discussed why the doctrine of res ipsa loquitur applies. UNKNOWN OWNER OF THE
VESSEL M/V CHINA JOY, SAMSUN SHIPPING LTD., AND INTER-ASIA MARINE TRANSPORT, INC.
vs. ASIAN TERMINALS, INC., G.R. No. 195661, March 11, 2015, J. Reyes

Article 1763 of the Civil Code, which states that "a common carrier is responsible for injuries
suffered by a passenger on account of the willful acts or negligence of other passengers or of
strangers, if the common carrier's employees through the exercise of the diligence of a good
father of a family could have prevented or stopped the act or omission." Notably, for this
obligation, the law provides a lesser degree of diligence, i.e., diligence of a good father of a family, in
assessing the existence of any culpability on the common carrier's part. G.V. FLORIDA
TRANSPORT, INC. v. HEIRS OF ROMEO L. BATTUNG, JR., REPRESENTED BY ROMEO BATTUNG,
SR., G.R. No. 208802, October 14, 2015

Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to
the harm he has suffered, which falls below the standard to which he is required to conform for his
own protection. SPS. FERNANDO VERGARA AND HERMINIA VERGARA v. ERLINDA
TORRECAMPO SONKIN, G.R. No. 193659, June 15, 2015

Since the contract between the parties is an ordinary one for services, the standard of care required
of respondent is that of a good father of a family under Article 1173 of the Civil Code. This connotes
reasonable care consistent with that which an ordinarily prudent person would have observed
when confronted with a similar situation. The test to determine whether negligence attended the
performance of an obligation is: did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person would have used in the same

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situation? If not, then he is guilty of negligence. (CATHAY PACIFIC AIRWAYS v. JUANITA REYES,
ET AL., G.R. No. 185891, June 26, 2013)

The elements necessary to establish a quasi-delict case are: (1) damages to the plaintiff; (2)
negligence, by act or omission, of the defendant or by some person for whose acts the defendant
must respond, was guilty; and (3) the connection of cause and effect between such negligence and
the damages. (Dra. Leila A. Dela Llana vs. Rebecca Biong, Doing Business Under the Name and
Style of Pongkay Trading, G.R. No. 182356, December 04, 2013)

The degree of diligence required of common carriers is extraordinary diligence. The extraordinary
responsibility of the common carrier lasts from the time the goods are unconditionally placed in the
possession of, and received by the carrier for transportation until the same are delivered, actually
or constructively, by the carrier to the consignee, or to the person who has a right to receive
them. Owing to this high degree of diligence required of them, common carriers, as a general rule,
are presumed to have been at fault or negligent if the goods they transported deteriorated or got
lost or destroyed. (EASTERN SHIPPING LINES, INC. v. BPI/MS INSURANCE CORP., AND MITSUI
SUMITOMO INSURANCE CO., LTD., G.R. NO. 193986. January 15, 2014)

A physician is guilty of gross misconduct when he chose to conduct a normal delivery and
deliberately left her patient to a midwife and two inexperienced assistants despite knowing that the
patient was under prolonged painful labor and about to give birth to a macrosomic baby by vaginal
delivery which resulted to a stillborn baby and the loss of her reproductive capacity. A physician
should be dedicated to provide competent medical care with full professional skill in accordance
with the current standards of care, compassion, independence and respect for human dignity. DR.
IDOL L. BONDOC vs. MARILOU R. MANTALA, G.R. No. 203080, November 12, 2014, J. Villarma,
Jr.

Dr. Gestuvo acted in bad faith or in a wanton, fraudulent, reckless, oppressive manner when he was
in breach of the doctrine of informed consent. NILO B. ROSIT V. DAVAO DOCTORS HOSPITAL and
DR. ROLANDO G. GESTUVO, G.R. NO. 210445, December 7, 2015

RES IPSA LOQUITUR

For the doctrine of res ipsa loquitur to apply, the complainant must show that: (1) the accident is of
such character as to warrant an inference that it would not have happened except for the
defendants negligence (2) the accident must have been caused by an agency or instrumentality
within the exclusive management or control of the person charged with the negligence complained
of and (3) the accident must not have been due to any voluntary action or contribution on the part
of the person injured. The present case satisfies all the elements of res ipsa loquitur. VICENTE
JOSEFA vs. MANILA ELECTRICCOMPANY, G.R. No. 182705, July 18, 2014, J.Brion

Literally, res ipsa loquitur means the thing speaks for itself. It is the rule that the fact of the
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or
raise a presumption of negligence, or make out a plaintiff's prima facie case, and present a question
of fact for defendant to meet with an explanation. DR. JAIME T. CRUZ v. FELICISIMO V. AGAS, JR.,
G.R. No. 204095, June 15, 2015

In order to allow resort to the of res ipsa loquitur, the following essential requisites must first be
satisfied, to wit: (1) the accident was of a kind that does not ordinarily occur unless someone is

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negligent; (2) the instrumentality or agency that caused the injury was under the exclusive control
of the person charged; and (3) the injury suffered must not have been due to any voluntary action
or contribution of the person injured.

Where the lack of oxygen causing the patients bradycardia during the operation could have been
triggered by the vago-vagal and not the negligence of his attending physicians, res ipsa loquitur
cannot apply, the first requisite being wanting. (DR. FERNANDO P. SOLIDUM v. PEOPLE OF THE
PHILIPPINES, G.R. No. 192123. March 10, 2014)

TORTFEASORS

Pursuant to Article 2194, joint tortfeasors are solidarily liable. They are each liable as principals, to
the same extent and in the same manner as if they had performed the wrongful act themselves.
When a construction of a billboards lower structure without the proper foundation by the first
contractor, and that of the second contractors finishing its upper structure and just merely
assuming that the first would reinforce the weak foundation are the two successive acts which were
the direct and proximate cause of the damages sustained by the company who hired their services.
Worse, both contractors were fully aware that the foundation for the billboard was weak; yet,
neither of them took any positive step to reinforce the same. They merely relied on each others
word that repairs would be done to such foundation, but none was done at all. RUKS KONSULT
AND CONSTRUCTION vs. ADWORLD SIGN AND ADVERTISING CORPORATION* AND
TRANSWORLD MEDIA ADS, INC., G.R. No. 204866, January 21, 2015, J. Perlas-Bernabe

It is well settled that in case of motor vehicle mishaps, the registered owner of the motor vehicle
is considered as the employer of the tortfeasor-driver, and is made primarily liable for the tort
committed by the latter under Article 2176, in relation with Article 2180, of the Civil Code. METRO
MANILA TRANSIT CORPORATION v. REYNALDO CUEVAS AND JUNNEL CUEVAS, REPRESENTED
BY REYNALDO CUEVAS, G.R. No. 167797, June 15, 2015

Under Article 2194 of the Civil Code, joint tort-feasors are solidarily liable for the resulting damage.
Joint tort-feasors are each liable as principals, to the same extent and in the same manner as if they
had performed the wrongful act themselves. It is likewise not an excuse for any of the joint tort-
feasors that individual participation in the tort was insignificant as compared to that of the
other. To stress, joint tort-feasors are not liable pro rata. The damages cannot be apportioned
among them, except by themselves. They cannot insist upon an apportionment, for the purpose of
each paying an aliquot part. They are jointly and severally liable for the whole amount. Thus, as
joint tort-feasors, Malvar and the respondents should be held solidarily liable to the Intervenor.
(CZARINA T. MALVAR v. KRAFT FOOD PHILS., INC., ET. AL. G.R. No. 183952, September 9,
2013)

ATTORNEYS FEES

When the plaintiff in a case of unfair competition under the Civil Code fails to satisfactorily prove
that it had lost income, yet the trial court awarded actual damages in the amount claimed by the
plaintiff, and the CA deleted such an award and awarded in its place nominal damages, the award of
attorneys fees must also be lowered. WILLAWARE PRODUCTS CORPORATION vs. JESICHRIS
MANUFACTURING CORPORATION, G.R. No. 195549, September 3, 2014, J. Peralta

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Attorneys fees is not available when the defendant employer is not guilty of bad faith. Thus, when
the company-designated physician gave the seafarer a final, permanent partial disability grading
beyond the 120-day period but before the 240 day maximum, then the latter is not entitled to
permanent disability benefits. The employer is not in bad faith in refusing to give the seafarer full
disability benefits; thus the award of attorneys fees in favor of the seafarer is unwarranted.
RICARDO A. DALUSONG vs. EAGLE CLARC SHIPPING PHILIPPINES, INC., et al., G.R. No. 204233,
September 3, 2014, Acting C.J. Carpio

CIVIL LIABILITY

Ferro Chemicals, Inc. joined the public prosecutor in filing the petition for certiorari before this
court. Ramon Garcia, President of Ferro Chemicals, Inc., signed the verification and certification of
non-forum shopping of the petition for certiorari. When the civil action for the recovery of civil
liability ex delicto is instituted with the criminal action, whether by choice of private complainant
(i.e., no reservation is made or no prior filing of a separate civil action) or as required by the law or
rules, the case will be prosecuted under the direction and control of the public prosecutor. The civil
action cannot proceed independently of the criminal case. ANTONIO M. GARCIA vs. FERRO
CHEMICALS, INC., G.R. No. 172505, October 01, 2014, J. Leonen

The extinction of the penal action does not carry with it the extinction of the civil liability where the
acquittal is based on reasonable doubt. DOLORES DIAZ v. PEOPLE OF THE PHILIPPINES and
LETICIA S. ARCILLA, G.R. No. 208113, December 2, 2015, PERLAS-BERNABE, J.

OTHER LAWS WHICH ARE EXCLUDED FROM THE SYLLABUS

Agricultural lessees, being entitled to security of tenure, may be ejected from their landholding only
on the grounds provided by law. These grounds the existence of which is to be proven by the
agricultural lessor in a particular case are enumerated in Section 36 of Republic Act No. (RA)
3844, otherwise known as the Agricultural Land Reform Code. In this case, it was established that
the agricultural lessees willfully and deliberately failed to pay the lease rentals when they fell due,
which is one of the grounds for dispossession of their landholding as provided in said provision of
law. EUFROCINA NIEVES vs. ERNESTO DULDULAO and FELIPE PAJARILLO, G.R. No. 190276,
April 2, 2014, J. Perlas-Bernabe

A case involving agricultural land does not immediately qualify it as an agrarian dispute. The mere
fact that the land is agricultural does not ipso facto make the possessor an agricultural lessee or
tenant; there are conditions or requisites before he can qualify as an agricultural lessee or tenant,
and the subject matter being agricultural land constitutes simply one condition. In order to qualify
as an agrarian dispute, there must likewise exist a tenancy relation between the parties. Thus, when
farmer-beneficiaries of PD 27 who are registered owners of agricultural lands filed a complaint for
forcible entry against a person whose claim of ownership over the same parcels of land emanates
from a donation by the heirs of the original owner, it is a civil case within the jurisdiction of the
ordinary courts, as all the elements for an agrarian dispute are not present. CHARLES BUMAGAT,
et al. vs. REGALADO ARRIBAY, G.R. No. 194818, June 9, 2014, J. Del Castillo

In Heirs of Lazaro Gallardo vs. Soliman, the DARAB has exclusive jurisdiction over cases involving
the cancellation of registered EPs; the DAR Secretary, on the other hand, has exclusive jurisdiction
over the issuance, recall or cancellation of EPs or Certificates of Land Ownership Awards that are
not yet registered with the Register of Deeds.

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Thus, since certificates of title have been issued in the respective names of the respondents as early
as in 1990, the DAR Region I Director had no jurisdiction to cancel their titles; the same is true with
respect to the DAR Secretary. Thus, their respective January 30, 1991 and August 22, 1995 Orders
are null and void; consequently, respondents EPs and titles subsists, contrary to petitioners claim
that they have been cancelled. Void judgments or orders have no legal and binding effect, force or
efficacy for any purpose; in contemplation of law, they are nonexistent. MARIANO JOSE,
FELICISIMO JOSE, DECEASED, SUBSTITUTED BY HIS CHILDREN MARIANO JOSE, CAMILO JOSE,
TIBURCIA JOSE, FERMINA JOSE, AND VICTORIA JOSE vs. ERNESTO M. NOVIDA, RODOLFO
PALAYPAY, JR., ALEX M. BELARMINO, RODRIGO LIBED, LEONARDO L. LIBED, BERNARDO B.
BELARMINO, BENJAMIN G. ACOSTA, MODESTO A. ORLANDA, WARLITO B. MEJIA, MAMERTO B.
BELARMINO, MARCELO O. DELFIN AND HEIRS OF LUCINO A. ESTEBAN, REPRESENTED BY
CRESENCIA M. VDA. ESTEBAN, G.R. No. 177374, July 2, 2014, J. Del Castillo

Properties of the Lajoms were taken due to the Agrarian Reform Program. Just compensation was
partially given. The Lajoms contested the computation of just compensation due to an alleged error
in the applicable law. The Court ruled that the date of taking of the subject land for purposes of
computing just compensation should be reckoned from the issuance dates of the emancipation
patents. An emancipation patent constitutes the conclusive authority for the issuance of a Transfer
Certificate of Title in the name of the grantee. It is from the issuance of an emancipation patent that
the grantee can acquire the vested right of ownership in the landholding, subject to the payment of
just compensation to the landowner. LAND BANK OF THE PHILIPPINES vs. JOSE T. LAJOM,
represented by PORFIRIO RODRIGUEZ et al., G.R. No. 184982 & 185048, August 20, 2014, J.
Perlas-Bernabe

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to
the landowner; Provided, however, That in case the area selected for retention by the landowner is
tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary
in the same or another agricultural land with similar or comparable features. In case the tenant
chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right
to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The
tenant must exercise this option within a period of one (1) year from the time the landowner
manifests his choice of the area for retention. RENATO L. DELFINO, SR. (Deceased), Represented
by his Heirs, namely: GRACIA DELFINO, GREGORIO A. DELFINO; MA. ISABEL A. DELFINO,
RENATO A. DELFINO, JR., MA. REGINA DELFINO ROSELLA, MA. GRACIA A. DELFINO, MARIANO
A. DELFINO, MA. LUISA DELFINO GREGORIO and REV. FR. GABRIELA. DELFINO vs. AVELINO K.
ANASAO and ANGEL K. ANASAO (Deceased and represented by his sole heir, SIXTO C.
ANASAO), G.R. No. 197486, September 10, 2014, J. Villarama, Jr.

When Automat asked the spouses to vacate the premises, the spouses refused to vacate unless they
were paid compensation. They claimed they were agricultural tenants [who] enjoyed security of
tenure under the law. The Court ruled that tenancy relationship cannot be presumed. The
allegation of its existence must be proven by evidence, and working on anothers landholding raises
no presumption of an agricultural tenancy. Consequently, the landowners consent to an
agricultural tenancy relationship must be shown. AUTOMAT REALTY AND DEVELOPMENT
CORPORATION, LITO CECILIA AND LEONOR LIM vs. SPOUSES MARCIANO DELA CRUZ, SR. AND
OFELIA DELA CRUZ, G.R. No. 192026, October 01, 2014, J. Leonen

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Lands classified as non-agricultural in zoning ordinances approved by the Housing and Land Use
Regulatory Board or its predecessors prior to June 15, 1998 are outside the coverage of the
compulsory acquisition program of the Comprehensive Agrarian Reform Law. However, there has
to be substantial evidence to prove that lands sought to be exempted fall within the non-
agricultural classification. In this case del Rosario failed to prove with substantial evidence that the
subject property is industrial property and as such is not sufficient to rebut the findings of both the
Department of Agrarian Reform and the Office of the President. REMIGIO D. ESPIRITU and NOEL
AGUSTIN vs. LUTGARDA TORRES DEL ROSARIO represented by SYLVIA R. ASPERILLA, G.R.
No. 204964, October 15, 2014, J. Leonen

It bears emphasizing that Republic Act No. 6552 aimed to protect buyers of real estate on
installment payments, not borrowers or mortgagors who obtained a housing loan to pay the costs
of their purchase of real estate and used the real estate as security for their loan. The "financing of
real estate in installment payments" referred to in Section 3, should be construed only as a mode of
payment vis--vis the seller of the real estate, and excluded the concept of bank financing that was a
type of loan. Accordingly, Sections 3, 4 and 5, supra, must be read as to grant certain rights only to
defaulting buyers of real estate on installment, which rights are properly demandable only against
the seller of real estate

The Sps. Sebastians insistence would have been correct if the monthly amortizations being paid to
BPI Family arose from a sale or financing of real estate. In their case, however, the monthly
amortizations represented the installment payments of a housing loan that BPI Family had
extended to them as an employees benefit. The monthly amortizations they were liable for was
derived from a loan transaction, not a sale transaction, thereby giving rise to a lender-borrower
relationship between BPI Family and the petitioners. SPOUSES JAIME SEBASTIAN AND
EVANGELINE SEBASTIAN vs. BPI FAMILY BANK, INC., CARMELITA ITAPO AND BENJAMIN HAO,
G.R. No. 160107, October 22, 2014, J. Bersamin

The issue in these two consolidated cases involves the tightly contested Diwalwal Gold Rush Area
(DGRA) in Mt. Diwata, Mindanao, specifically, the 729-hectare portion excluded from SMGMCs
Mineral Production Sharing Agreement application (MPSA No. 128), and declared as Peoples Small
Scale Mining Area. SMGMC was the assignee of the original holder of a permit to explore (EP 133)
covering 4,941 hectares of DGRA. Due to supervening events, [the Court] declares the petitions
moot and academic. MONCAYO INTEGRATED SMALL-SCALE MINERS ASSOCIATION, INC.
(MISSMA) vs. SOUTHEAST MINDANAO GOLD MINING CORP. (SMGMC), BALITE INTEGRATED
SMALL-SCALE MINING CORP., (BISSMICO) ET AL., G.R. No. 149638 (consolidated), December
10, 2014, J. Leonen

For abandonment to exist, the following requisites must concur: (1) a clear intent to abandon; and
(2) an external act showing such intent. The term is defined as the willful failure of the ARB,
together with his farm household, to cultivate, till, or develop his land to produce any crop, or to use
the land for any specific economic purpose continuously for a period of two calendar years. It
entails, among others, the relinquishment of possession of the lot for at least two (2) calendar years
and the failure to pay the amortization for the same period. What is critical in abandonment is
intent which must be shown to be deliberate and clear. The intent must be established by the
factual failure to work on the landholding absent any valid reason as well as a clear intent, which is
shown as a separate element. (HEIRS OF LORENZO BUENSUCESO v. LOVY PEREZ, G.R. No.
173926, March 6, 2013)

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When one party enters into a covenant with another, he must perform his obligations with fealty
and good faith. This becomes more imperative where such party has been given a grant, such as
land, under the land reform laws. While the tenant is emancipated from bondage to the soil, the
landowner is entitled to his just compensation for the deprivation of his land. (HEIRS OF LAZARO
GALLARDO, ET AL. v. PORFERIO SOLIMAN, ET AL., G.R. No. 178952. April 10, 2013)

When a property is taken by the government for public use, jurisprudence clearly provides for the
remedies available to a landowner. The owner may recover his property if its return is feasible or, if
it is not, the aggrieved owner may demand payment of just compensation for the land taken. For
failure of respondents to question the lack of expropriation proceedings for a long period of time,
they are deemed to have waived and are estopped from assailing the power of the government to
expropriate or the public use for which the power was exercised. (SECRETARY OF THE
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS ET AL. v. SPOUSES HERACLEO AND
RAMONA TECSON, G.R. No. 179334. July 1, 2013)

A tenancy relationship is a juridical tie that arises between a landowner and a tenant once they
agree, expressly or impliedly, to undertake jointly the cultivation of a land belonging to the
landowner, as a result of which relationship the tenant acquires the right to continue working on
and cultivating the land. The relationship cannot be presumed. Mere occupation or cultivation of an
agricultural land does not automatically convert the tiller into an agricultural tenant recognized
under agrarian laws. (HEIRS OF FLORENTINO QUILO v. DEVELOPMENT BANK OF THE
PHILIPPINES-DAGUPAN BRANCH, ET AL., G.R. No. 184369. October 23, 2013)

The Regional Trial Court, acting as a Special Agrarian Court, has jurisdiction to determine just
compensation at the very first instance, and the petitioner need not pass through the DAR for initial
valuation. The determination of just compensation is essentially a judicial function, which is vested
in the Regional Trial Court acting as a Special Agrarian Court. (SPOUSES JOSE M. ESTACION, JR.
AND AGELINA T. ESTACION v. HON. SECRETARY, DEPARTMENT OF AGRARIAN REFORM, ET
AL., G.R. NO. 163361. March 12, 2014)

CENRO Certification stating that Lot 4342 falls within the alienable and disposable area is
inadequate to prove that the subject lot is alienable and disposable. Aside from the CENRO
certification, an application for original registration of title over a parcel of land must be
accompanied by a copy of the original classification approved by the DENR Secretary and certified
as a true copy by the legal custodian of the official records in order to establish that the land is
indeed alienable and disposable. (MINDA S. GAERLAN, PETITIONER, v. REPUBLIC OF THE
PHILIPPINES, RESPONDENT, G.R. No. 192717, March 12, 2014)

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