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March 14, 2000] LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and EMILIO ROBLES, petitioners, vs. COURT OF APPEALS, Spouses VIRGILIO SANTOS and BABY RUTH CRUZ, RURAL BANK OF CARDONA, Inc., HILARIO ROBLES, ALBERTO PALAD JR. in his capacity as Director of Lands, and JOSE MAULEON in his capacity as District Land Officer of the Bureau Of Lands, respondents. DECISION PANGANIBAN, J.: To be entitled to the remedy of quieting of title, petitioners must show that they have title to the real property at issue, and that some deed or proceeding beclouds its validity or efficacy. Buyers of unregistered real property, especially banks, must exert due diligence in ascertaining the titles of mortgagors and sellers, lest some innocent parties be prejudiced. Failure to observe such diligence may amount to bad faith and may result in the nullity of the mortgage, as well as of the subsequent foreclosure and/or auction sale. Unless the co-ownership is clearly repudiated, a co-owner cannot, by prescription, acquire title to the shares of the other co-owners. Mesm The Case Before us is a Petition for Review under Rule 45, assailing the June 15, 1995 Decision and the January 15, 1996 Resolution of the Court of Appeals (CA) in CA-GR CV No. 34213. In its Decision, the CA ruled: "WHEREFORE, the trial court·s June 17, 1991 decision is REVERSED and SET ASIDE, and in lieu thereof a new one is hereby entered ordering the dismissal of the plaintiffs-appellees['] second amended complaint." Earlier, the trial court had disposed as follows: Sppedä jo "WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Declaring free patent Title No. IV-1-010021 issued by the Bureau of Lands as null and void; 2. Ordering the defendant spouses Vergel Santos and Ruth Santos to deliver the property subject of this case to the plaintiff; and 3. Declaring the heirs of Silvino Robles as the absolute owner of the land in controversy."
The January 15, 1996 CA Resolution denied petitioners' Motion for Reconsideration. The Facts The present Petition is rooted in a case for quieting of title before the Regional Trial Court of Morong, Rizal, filed on March 14, 1988, by Petitioners Lucio Robles, Emeteria Robles, Aludia Robles and Emilio Robles. The facts were narrated by the trial court in this wise: "There seems to be no dispute that Leon Robles primitively owned the land situated in Kay Taga, Lagundi, Morong, Rizal with an area of 9,985 square meters. He occupied the same openly and adversely. He also declared the same in his name for taxation purposes as early as 1916 covered by Tax Declaration No. 17865 (Exh. "I") and paid the corresponding taxes thereon (Exh. "B"). When Leon Robles died, his son Silvino Robles inherited the land, who took possession of the land, declared it in his name for taxation purposes and paid the taxes thereon. Rtc-spped "Upon the death of Silvino Robles in 1942, his widow Maria de la Cruz and his children inherited the property. They took adverse possession of said property and paid taxes thereon. The task of cultivat[ing] the land was assigned to plaintiff Lucio Robles who planted trees and other crops. He also built a nipa hut on the land. The plaintiffs entrusted the payment of the land taxes to their co-heir and half-brother, Hilario Robles. "In 1962, for unknown reasons, the tax declaration of the parcel of land in the name of Silvino Robles was canceled and transferred to one Exequiel Ballena (Exh. "19"), father of Andrea Robles who is the wife of defendant Hilario Robles. Thereafter, Exequiel Ballena secured a loan from the Antipolo Rural Bank, using the tax declaration as security. Somehow, the tax declaration was transferred [to] the name of Antipolo Rural Bank (Exh. "17") and later on, was transferred [to] the name of defendant Hilario Robles and his wife (Exh. "16"). Calrky "In 1996, Andrea Robles secured a loan from the Cardona Rural Bank, Inc., using the tax declaration as security. Andrea Robles testified without contradiction that somebody else, not her husband Hilario Robles, signed the loan papers because Hilario Robles was working in Marinduque at that time as a carpenter. "For failure to pay the mortgage debt, foreclosure proceedings were had and defendant Rural Bank emerged as the highest bidder during the auction sale in October 1968. "The spouses Hilario Robles failed to redeem the property and so the tax declaration was transferred in the name of defendant Rural Bank. On
September 25, 1987, defendant Rural Bank sold the same to the Spouses Vergel Santos and Ruth Santos. Joä spped "In September 1987, plaintiff discovered the mortgage and attempted to redeem the property, but was unsuccessful. On May 10,1988, defendant spouses Santos took possession of the property in question and was able to secure Free Patent No. IV-1-010021 in their names." On the other hand, the Court of Appeals summarized the facts of the case as follows: "The instant action for quieting of title concerns the parcel of land bounded and more particularly described as follows: Sd-aad-sc "A parcel of land located at Kay Taga, Lagundi, Morong, Rizal. Bounded [i]n the north by the property of Venancio Ablay y Simeon Ablay; [i]n the east by the property of Veronica Tulak y Dionisio Ablay; [i]n the south by the property of Simeon Ablay y Dionisio Ablay; and [i]n the west by the property of Dionisio Ablay y Simeon Ablay, with an area of 9,985 square meters, more or less, assessed in the year 1935 at P60.00 under Tax Declaration No. 23219. "As the heirs of Silvino Robles who, likewise inherited the above-described parcel from Leon Robles, the siblings Lucio, Emeteria, Aludia and Emilio, all surnamed Robles, commenced the instant suit with the filing of their March 14, 1988 complaint against Spouses Virgilio and Ruth Santos, as well as the Rural Bank of Cardona, Inc. Contending that they had been in possession of the land since 1942, the plaintiff alleged, among other matters, that it was only in September of 1987 that they came to know of the foreclosure of the real estate mortgage constituted thereon by the half-brother, Hilario Robles, in favor of defendant Rural Bank; and that they likewise learned upon further inquiry, that the latter had already sold the self-same parcel in favor of the Santos spouses (pp. 1-3, orig. rec.). Twice amended to implead Hilario Robles (pp. 76-80, orig. rec) and, upon subsequent discovery of the issuance of Free Patent No. IV-I-010021 in favor of the defendant spouses, the Director of Lands and the District Land Officer of the Bureau of Lands as parties-defendants (pp. 117-121, orig. rec). The plaintiffs· complaint sought the following reliefs on the theory that the encumbrance of their half-brother, constituted on the land, as well as all proceedings taken subsequent thereto, were null and void, to wit: "Wherefore, it is respectfully prayed that (a) a preliminary mandatory injunction be issued forthwith restoring plaintiffs to their possession of said parcel of land; (b) an order be issued annulling said Free Patent No. IV-I-010021 in the name of defendants spouses Vergel Santos and Ruth C. Santos, the deed of sale aforementioned
defendant bank could not have transferred any right to the spouses Santos. which remains unrebutted. his successor-in-interest. Therefore. exclusive and undisputed possession of alienable public lands for the period prescribed by law (30 years). therefore. creates the legal fiction whereby the land. continuously and exclusively until they were ousted from their possession in 1988 by the spouses Vergel and Ruth Santos. Possession of public land x x x which is [of] the character and duration prescribed by the statute is the equivalent of an express grant from the State. orig. "Under the circumstances. Inc. "Inasmuch as the real estate mortgage executed allegedly by Hilario Robles in favor of the defendant Cardona Rural Bank. was admitted by Andrea Robles. Consequently. ipso jure and without the need of judicial or other action. upon completion of the requisite period. to pay plaintiffs the sum of P10. rec. rec.and any tax declaration which have been issued in the name of defendants.000. and considering that "open. was not valid. It thereafter rendered the challenged June 17. ceases to be public land and becomes private property. and (c) ordering defendants jointly and severally. 1991 decision upon the following findings and conclusions: "The real estate mortgage allegedly executed by Hilario Robles is not valid because his signature in the mortgage deed was forged. considering the dictum of the statute itself[:].00 as attorney·s fees. 203. his wife Maria de la Cruz and the plaintiffs occupied the property openly. 120-121. "There can be no question that the subject [property was held] in the concept of owner by Leon Robles since 1916. "The fact that the land was covered by a free patent will not help the defendant Santos any. Silvino Robles. "The possessor x x x shall be conclusively presumed to have performed all the conditions . the defendant bank did not acquire any right arising out of the foreclosure proceedings." (pp. Likewise.) xxxxxxxxx "With the termination of the pre-trial stage upon the parties-litigants· agreement (p. orig. This fact. it stands to reason that the foreclosure proceedings therein were likewise not valid.) the trial court proceeded to try the case on the merits. "Plaintiffs pray for other relief as [may be] just and equitable under the premises.
under the circumstances. November 15. Silvino Robles. orig. 1988) The land in question has become private land." Ruling of the Court of Appeals In reversing the trial court. Santos is not valid because at the time the property subject of this case was already private land. p.. Registration thereunder would not confer title. p. 12. 25. are co-owners of the land left behind by their common father. 75042. Whether legal or equitable. at the most limited to ascertaining whether the possession claimed is of the required character and length of time. July 12.) The latter·s claim of continuous possession notwithstanding (pp. the issuance of [a] free patent title to the Spouses Vergel Santos and Ruth C. rec. his possession (p. 212 SCRA 214)." No proof is admissible to overcome a conclusive presumption[. (pp. 1966 Deed of Absolute Sale transferring the land in favor of the spouses Hilario and Andrea Robles (Exhibit "3". pp. Court of Appeals.e. 22. The CA ratiocinated as follows: MisÓ spped "As correctly urged by the appellants. IAC. such title would still be effectively discounted by what could well serve as the latter·s acts of repudiation of the coownership. 23-24. be gainsaid that the plaintiff-appellees no longer had any title to speak of when Exequiel Ballena executed the November 7. 1990).R. G. rec. the plaintiff-appellees no longer had any title to the property at the time of the institution of the instant complaint. the Bureau of Lands having no jurisdiction to dispose of the same. 1991 Notice of Appeal (p. II.)" "Dissatisfied with the foregoing decision. 1990.) but also in the name of the Rural Bank of Antipolo (Exhibit 17. it cannot. rec. July 5. TSN.) x x x. Hilario Robles. orig. rec. orig.essential to a government grant and shall be entitled to a certificate of title x x x.260. No. TSN. On the theory that tax declarations can be evincive of the transfer of a parcel of land or a portion thereof (Gacos v.). TSN.) "Even on the theory that the plaintiffs-appellees and their half-brother. i. but simply recognize a title already vested. rec. the court a quo clearly erred in simply brushing aside the apparent transfers [which] the land in litigation had undergone. the Court of Appeals held that petitioners no longer had any title to the subject property at the time they instituted the Complaint for quieting of title. (Cruz v. the Santos spouses and the defendant Rural Bank jointly filed their July 6. "Consequently. the aforesaid loss of title is amply evidenced by the subsequent declaration of the subject realty for taxation purposes not only in the name of Exequiel Ballena (Exhibits "1" and "2". 3-5. orig. 25-27." (pp. 257-259. November 29. vol. rec. orig. 1990) and .] and confirmation proceedings would be a little more than a formality.
206 SCRA 339). 156 SCRA 718. 902. Court of Appeals. 362. Coronel vs. While it may be readily conceded that an action to quiet title to property in the possession of the plaintiff is imprescriptible (Almanza vs. orig. p. Faja vs. it retains the presumption of validity in the absence of a full. was altogether uncorroborated. Ramos vs. 155 SCRA 270. Africa vs. Africa. If only in this latter sense. verbal or written. Gabar. Bargayo vs.) "Appropriately underscored by the appellants. Ramos. 55 SCRA 4999). The complaint filed against herein answering defendant has no legal basis considering that as the lawful owner of the subject real property. viz: "3. made by the parties in the pleadings or in the course of the trial or other . the acknowledgment of which is a prima facie evidence of its due execution (Chua vs. II. Court of Appeals. orig. 1989 answer. while admittedly unrebutted. Burton vs. xxx xxx xxx "In according to the foregoing testimony x x x credibility which. Caragay-Layno vs. the appellants correctly maintain that prescription had already set in. 42 Phil. rec. 75 SCRA 441." (p. 26. Charon Enterprises vs. 45 Phil. the trial court lost sight of the fact that the assailed deed of real estate mortgage (Exhibit "5". Maniks "The foregoing principles take even more greater [sic] when it is. In view of the plaintiffs-appellees· inaction for more than twenty (20) years from the time the subject realty was transferred in favor of Hilario Robles. Court of Appeals. Austria. moreover.) is a public document. Echarri. Camumot. 857. Ibe. rec. orig.). it equally bears emphasis that a co-owner or. 40 Phil. borne in mind that Hilario Robles made the following admissions in his March 8. orig. rec. the appellants correctly argue that the plaintiffs-appellees have lost their cause of action by prescription. 23). Court of Appeals. 133 SCRA 718. rec. clear and convincing evidence to overcome such presumption (Agdeppa vs. the said co-owner[']s successors-ininterest who occupy the community property other than as co-owner[s] can claim prescription as against the other co-owners (De Guzman vs. 257. Vol. the foregoing admission is binding against Hilario [Robles]. Judicial admissions. for that matter.declaration thereof for taxation purposes in his own name (Exhibit "4". 220 SCRA 584). Intermediate Appellate Court. 148 SCRA 75. As such. defendant Hilario Robles has the right to mortgage the said real property and could dispose the same in whatever manner he wishe[s] to do. the court a quo gravely erred in invalidating the real estate mortgage constituted on the land solely on the basis of Andrea Robles· testimony that her husband·s signature thereon was forged (p. De Castro vs. Arguelles.). 20 Phil. 96. 124 SCRA 784. "Over and above the foregoing considerations.
filed this Petition for Review. "7". and then finally to Respondent Spouses Santos. vs. pp. second. II." For a better understanding of the case. Vol. orig. the plaintiffs-appellees· attack upon x x x Free Patent No. who by themselves and their predecessors in interest have been in open. IV-I must necessarily fail. aside from complying with the requirements for the foreclosure of the subject real estate mortgage (Exhibits "6". have lost their title to said property by prescription to their half-brother. TSN. Inc. November 15. Sweet Lines. Vol. Inc. orig. therefore. and then finally. Aludia and Emilio -. and third. orig. actual and adverse possession of said parcel of land since 1916 up to their forced removal therefrom in 1988. rec. to Respondent Spouses Santos.. II. Sppedâ . Petitioners Lucio. the efficacy of the free patent granted to the Santos spouses. 10-11. no evidence being required to prove the same. They cannot be contradicted unless shown to have been made through [a] palpable mistake or [unless] no such admission was actually made (Philippine American General Insurance. the mortgagor and the plaintiffs·appellees cannot now be heard to challenge the validity of the sale of the land after admittedly failing to redeem the same within the extension the appellant Rural Bank granted (pp.all surnamed Robles -. rec. "8" and "10". 212 SCRA 194).proceedings in the same case are conclusive. 1990). "Being dependent on the supposed invalidity of the constitution and foreclosure of the subject real estate mortgage. the appellant Rural Bank had not only relented to the mortgagor·s request to postpone the (Exhibit "g". the above issue will be broken down into three points: first.. Without going into minute detail in discussing the Santos spouses· rights as purchasers for value and in good faith (Exhibit "21".)." Manikx Contending that such ruling was contrary to law and jurisprudence.). Emeteria. to come up with erroneous conclusion. The trial court. then to Respondent Rural Bank of Cardona Inc. then to the Rural Bank of Antipolo. 35-36. then to Respondent Hilario Robles. misread. petitioners. the validity of the real estate mortgage. "It does not help the plaintiffs-appellees· cause any that. Respondent Hilario Robles. The Assigned Error Petitioners ascribe the following error to the respondent court: "Respondent Court of Appeals grievously erred in ruling that with the transfers of the tax declaration over the parcel of land in question from Silvino Robles to Exequiel Ballena. rec. Volume II[)]. and ignored the evidence o[n] record.) but had likewise granted the latter·s request for an extension of the redemption period therefor (Exhibits "11" and "12". the nature of the remedy of quieting of title.
First Issue: Quieting of Title Article 476 of the Civil Code provides: "Whenever there is cloud on title to real property or any interest therein. Upon their failure to pay their indebtedness. According to private respondents. "An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. . That there is an instrument or a document which. Petitioners allege that their title as owners and possessors of the disputed property is clouded by the tax declaration and. the Rural Bank of Cardona. the Robles spouses then mortgaged it to the Rural Bank of Cardona. subsequently. It is essential for the plaintiff or complainant to have a legal or an equitable title to or interest in the real property which is the subject matter of the action.in order to secure an agricultural loan worth P2. The more important question to be resolved. Inc. however.000. record. Petitioners insist that they were not aware that from 1962 until 1987." Based on the above definition. is valid and efficacious is clear in the present case. Miso On the other hand. the deed. encumbrance or proceeding that is being alleged as a cloud on plaintiff·s title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. claim. encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid. Leon. Silvino. an action to quiet title is a common-law remedy for the removal of any cloud or doubt or uncertainty on the title to real property. Private Respondents Vergel and Ruth Santos trace their claim to the subject property to Exequiel Ballena. Inc. on its face. by reason of any instrument. is whether the petitioners have the appropriate title that will entitle them to avail themselves of the remedy of quieting of title. the subject property had been declared in the names of Exequiel Ballena. ineffective. They allege that they inherited it from their father. They maintain that after their father·s death. the free patent thereto granted to Spouses Vergel and Ruth Santos.not as co-owners but as absolute owners -. voidable or unenforceable. Nexold Petitioners anchor their claim to the disputed property on their continued and open occupation and possession as owners thereof. petitioners insist that their shares therein should not have been prejudiced by Hilario·s actions. who in turn had inherited it from his father. and that their half-brother Hilario would be paying the land taxes. they did not agree to the real estate mortgage constituted on it. Maintaining that as co-owners of the subject property. an action may be brought to remove such cloud or to quiet title. the Rural Bank of Antipolo. and may be prejudicial to said title. and finally. Also. they agreed among themselves that Petitioner Lucio Robles would be tending and cultivating it for everyone. -.. who had purportedly sold it to Hilario and Andrea Robles. Hilario Robles. claim. Spouses Vergel and Ruth Santos.
the mortgage was foreclosed and the property sold to the bank as the highest bidder. (2) . the following requisites must concur: (1) the co-owner has performed unequivocal acts of repudiation amounting to an ouster of the other co-owners. In 1962. inasmuch as it was an unregistered parcel of land. why was he able to sell it to Spouses Hilario and Andrea in 1966? Lastly. as evidenced by the different tax declarations issued in their names. absent any clear repudiation of the co-ownership. in the name of the Rural Bank of Cardona and. No such document was presented. the Rural Bank of Cardona. 1966. the subject property was declared in the name of Exequiel for taxation purposes. and that it was foreclosed and in fact declared in the bank·s name in 1965. and thereafter. Second. there was no instrument or deed of conveyance evidencing its transfer from the heirs of Silvino to him. Third. to whom petitioners had entrusted the payment of the land taxes. Hilario effected no clear and evident repudiation of the co-ownership. in the name of the Santos spouses. private respondents purchased the property from the bank. 1965. 1965. Contrary to the disquisition of the Court of Appeals. Scmis Therefore. Jospped The failure to show the indubitable title of Exequiel to the property in question is vital to the resolution of the present Petition. Thus. Ostensibly. Thereafter. in the name of Hilario and Andrea. it was again declared in the same name. on November 7. however. the deed of conveyance purportedly evidencing the transfer of ownership and possession from the heirs of Silvino to Exequiel should have been presented as the best proof of that transfer. In order that the title may prescribe in favor of a coowner. did not observe due diligence in determining Hilario·s title thereto. It was from him that Hilario had allegedly derived his title thereto as owner. in the name of the Rural Bank of Antipolo. an allegation which thereby enabled him to mortgage it to the Rural Bank of Cardona. considering that the subject property had been mortgaged by Exequiel to the Rural Bank of Antipolo. while it was declared in the name of Exequiel in 1962. finally.. on October 28. considering that the petitioners are alleging continued possession of the property. Clearly. This fact is important. Inc. there is merit to the contention of the petitioners that Hilario mortgaged the disputed property to the Rural Bank of Cardona in his capacity as a mere co-owner thereof. and Exequiel·s acquisition of the said property by prescription was not alleged. the said transaction did not divest them of title to the property at the time of the institution of the Complaint for quieting of title. First. the Court of Appeals failed to consider irregularities in the transactions involving the disputed property. The occupation and the possession thereof by the petitioners and their predecessors-in-interest until 1962 was not disputed. Exequiel was the father-in-law of Hilario. On September 30. Also undisputed is the fact that the petitioners continued occupying and possessing the land from the death of Silvino in 1942 until they were allegedly ousted therefrom in 1988. petitioners· predecessors-in-interest. It is a fundamental principle that a co-owner cannot acquire by prescription the share of the other co-owners. Sppedjo Undisputed is the fact that the land had previously been occupied by Leon and later by Silvino Robles.
the Court held: Sc-slx "x x x. otherwise. Likewise. who were tending and cultivating it. Hilario did not have possession of the subject property. the bank should have exerted more effort to fully determine the title of the Robleses. Tomas." In Tomas v. First. or that it had subsequently been declared in the name of Hilario. the bank should not have relied solely on the Deed of Sale purportedly showing that the ownership of the disputed property had been transferred from Exequiel Ballena to the Robles spouses. Rural Bank of Compostela v. the mortgage is void. neither did he exclude the petitioners from the use and the enjoyment thereof. as they had indisputably shared in its fruits. keeping in trust money belonging to their depositors. and (3) the evidence thereof is clear and convincing. and the circumstances surrounding the transaction between Hilario and his father-in-law Exequiel were suspicious. for their business is one affected with public interest. Second. failed to observe due diligence and.such positive acts of repudiation have been made known to the other co-owners. than private individuals. Because it was dealing with unregistered land. the bank was utterly remiss in its duty to establish who the true owners and possessors of the subject property were. Banks. as he in fact did. it is essential that the mortgagor be the absolute owner of the property to be mortgaged. In the present case. it is apparent that Hilario Robles was not the absolute owner of the entire subject property. it would have discovered that the said property was in fact being occupied by the petitioners. be construed as a repudiation of the co-ownership. Court of Appeals invalidated a real estate mortgage after a finding that the bank had not been in good faith. Inc. MisÓ sc Second Issue: Validity of the Real Estate Mortgage In a real estate mortgage contract. Had it been more circumspect and assiduous. he had the right to alienate his share. was a mortgagee in bad faith. It acted with precipitate haste in approving the Robles spouses· loan application. in not fully ascertaining his title thereto. The Court explained: "The rule that persons dealing with registered lands can rely solely on the certificate of title does not apply to banks. The assertion that the declaration of ownership was tantamount to repudiation was belied by the continued occupation and possession of the disputed property by the petitioners as owners. In the present case. should exercise more care and prudence in dealing even with registered lands. as such.. as agreed upon by the co-owners. which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of land registration statute. indeed. as well as the real estate mortgage covering the disputed parcel of land. his act of entering into a mortgage contract with the bank cannot be construed to be a repudiation of the co-ownership. As absolute owner of his undivided interest in the land. and that the Rural Bank of Cardona. Act . Neither should his payment of land taxes in his name.
he showed me all the documents.. sir. Inc. The said bank. was a mortgagee in bad faith. Missc Third Issue: Efficacy of Free Patent Grant Petitioners repeatedly insist that the disputed property belongs to them by private ownership and." Lastly. Thus. Q From whom? A From his father.Hilario·s share in the disputed property. peacefully.openly. Leon Robles. who was the owner of this parcel of land? A My father. sir. They likewise contend that they cultivated it and harvested its fruits. the petitioners continued occupying it and harvesting the fruits therefrom. Lucio Robles testified: "xxx xxx xxx Q By the way.496. sir. being the immediate predecessor of the Santos spouses. who merely stepped into the shoes of the bank. publicly and continuously as early as 1916 until they were forcibly ousted therefrom in 1988. notwithstanding the bank·s insistence that it had become the owner of the subject property and had paid the land taxes thereon. only to what legally pertains to the latter -. x x x. he can be adjudged to have disposed to the Rural Bank of Cardona. . as well as to mortgagees of the same character and description. it could not have been awarded to the Santos spouses by free patent. the Court likewise finds it unusual that. only his undivided share therein. Q Before the death of your father. as such. Considering that Hilario can be deemed to have mortgaged the disputed property not as absolute owner but only as a co-owner. extended only to purchasers for value and in good faith. justice and equity mandate the entitlement of the Santos spouses. Spped Q How did your father acquire this parcel of land? A My father knew that it [was] by inheritance. They allege that they possessed it in the concept of owners -. why do you know this parcel of land? A Because before my father died. Q And do you know also [from] whom Leon Robles acquired this land? A It was inherited from his father. sir.
without the necessity of a certificate of title being issued. even as he admitted on the stand that he had visited it twice. Q When did you plant those trees? A Before the death of my father. a right to a grant. Kycalr Carlos Dolores insisted that the Rural Bank of Cardona. as evidenced by their testimonies and the tax declarations issued in the names of their predecessors-ininterest. jurisprudence holds that a free patent covering private land is null and void. the director of lands had no authority to issue a free patent thereto in favor of another person. and I was the one who planted those trees. exclusive and notorious possession and occupation of the land. Director of Lands. it was not controverted by the other parties." Accordingly. Verily. had acquired and possessed the subject property. however. In the light of their open. He did not. santol trees. in which it held that a riparian owner presently in possession had a better right over an abandoned river bed than had a registered owner by virtue of a free patent. after this case was already filed. at the time of the death of your father. give any reason why the petitioners had continued occupying it. Worth quoting is the disquisition of the Court in Agne v. and the records do not show. M-issdaa Q Now.. The petitioners do not concede. Q Now. sir. It must be noted that while their claim was not corroborated by other witnesses. They allege private ownership thereof. sir. the President of the . Inc." The preceding claim is an assertion that the subject property is private land. sir.Q What is the nature of this parcel of land? A It·s an agricultural land. continuous. by operation of law. of which he was the manager. sir." The land was "segregated from the public domain. either. sir. after the death of your father. who cultivated this parcel of land? A I took charge of the land after the death of my father. Q Up to when? A Up to the present. this land was planted with what crops? A Mango trees. a government grant. "Under the provisions of Act 2874 pursuant to which the title of private respondents· predecessor-in-interest was issued. that it was ever an alienable land of the public domain. petitioners are "deemed to have acquired.
but from the fact that the land is not under the jurisdiction of the Bureau of Lands. Hence we ruled in Director of Lands v. or of private ownership. that if at the time the free patents were issued in 1953 the land covered therein were already private property of another and. Being null and void. has no authority to grant a free patent for land that has ceased to be a public land and has passed to private ownership and a title so issued is null and void. inasmuch as the ¶subject· of such freehold or private land is not embraced in any manner in the title of the Act and the same is excluded from the provisions of the text thereof. Necessarily. or his alter ego. Kyle "We reiterate that private ownership of land is not affected by the issuance of the free patent over the same land because the Public Land Act applies only to lands of the public domain. Quod nullum est. "Now. but from the fact that the land is not under the jurisdiction of the Bureau of Lands. Free Patent No. et al. then applicants patentees acquired no right or title to the land. "A free patent which purports to convey land to which the government did not have any title at the time of its issuance does not vest any title in the patentee as against the true owner. the free patent granted and the subsequent titles produce no legal effect whatsoever. The Court has previously held that the Land Registration Act and the Cadastral Act do not give anybody who resorts to the provisions thereof a better title than what he really and lawfully has. Only public land may be disposed of by the Director of Lands. a certificate of title fraudulently secured is null and void ab initio if the fraud consisted in misrepresenting that the land is part of the public domain. therefore. The nullity arises. the land in dispute was already under the private ownership of herein petitioners and no longer a part of the lands of the public domain. not part of the disposable land of the public domain. the Director of Lands. The jurisdiction of the Director of Lands is limited only to public lands and does not cover lands publicly owned. and lands held in private ownership are not included therein and are not affected in any manner whatsoever thereby. Sicsican. was and is to limit its application to lands of the public domain. and cannot possibly come within the purview of said act 2874. constitutes no part of the public domain. not from the fraud or deceit. Since as early as 1920. Land held in freehold or fee title. As earlier stated. Act No. Exsm . 2874. the nullity arises. not from fraud or deceit. The patentee and his successors-in-interest acquired no right or title to said land. 23263 issued to Herminigildo Agpoon is null and void and the subsequent titles issued pursuant thereto cannot become final and indefeasible. the same could not have been the subject matter of a free patent.Philippines. The purpose of the Legislature in adopting the former Public Land Act. nullum producit effectum. although it is not.
Indeed. the petitioners are claiming the property which. This ruling does not. not the private respondents. apply to the present case. Ruling that the private respondents. the real party-in-interest is the government. we agree with the petitioners that the prayer in the complaint will have the same result of reverting the land to the government under the Regalian Doctrine. to arrive at the unavoidable conclusion that the title of herein petitioners over the land in dispute is superior to the title of the registered owner which is a total nullity. Barinaga ruled that only the government is entitled to this relief. continued and exclusive possession thereof since 1916. 4216. the ultimate beneficiary would be the government. however. the Court held in Peltan Development. Gabila v. By asking for the nullification of the free patent granted to the Santos spouses. praying as it did for the cancellation of the transfer certificates of title of petitioners on the ground that they were derived from a "spurious" OCT No. herein petitioners asserted and proved private ownership over the disputed parcel of land by virtue of their open. Msesm Neither does the present case call for the reversion of the disputed property to the State." The Santos spouses argue that petitioners do not have the requisite personality to question the free patent granted them. therefore.xxx xxx xxx "We have. who were applicants for a free patent. Court of Appeals that only the solicitor general could file an action for the cancellation of a free patent. Inc. While the private respondents in Peltan recognized that the disputed property was part of the public domain when they applied for free patent. x x x. assailed in effect the validity of said title. rightfully belongs to them." Because the cancellation of the free patent as prayed for by the private respondents in Peltan would revert the property in question to the public domain. The complaint. Therefore. the Court ratiocinated thus: Sl-xm-is "The Court also holds that private respondents are not the proper parties to initiate the present suit. which can be represented by the solicitor general only. . inasmuch as "it is a well-settled rule that actions to nullify free patents should be filed by the Office of the Solicitor General at the behest of the Director of Lands." Private respondents· reliance on this doctrine is misplaced. v. The long and continued possession of petitioners under a valid claim of title cannot be defeated by the claim of a registered owner whose title is defective from the beginning. While private respondents did not pray for the reversion of the land to the government. were not the proper parties in an action to cancel the transfer certificates covering the parcel of land that was the subject of their application. they contend.
peaceful. Inc. Considering the circumstances peculiar to this complicated problem. nullum producit effectum.. possessed and cultivated it as owners for more than thirty years. which was guilty of laches because.250 square meter portion since 1920. and more important. continuous and adverse possession of the 2. granting that it had acquired the subject property legally. justice and equity mandate that we declare Petitioners Lucio. . and produces no legal effect whatsoever. However. because "this case involves purely private interests. reasoning that the action should have been instituted by the solicitor general. the trial court dismissed a Complaint seeking the declaration of nullity of an Original Certificate of Title issued pursuant to a free patent. it can even be argued that they thus regained it by acquisitive prescription. Misspped Epilogue We recognize that both the petitioners and the Santos spouses fell victim to the dubious transaction between Spouses Hilario and Andrea Robles and the Rural Bank of Cardona.Indeed. private respondents· claim of open." The foregoing considered. the Supreme Court held: Sl-xsc "It is settled that a Free Patent issued over private land is null and void. It is apparent that they are claiming ownership of the disputed property on the basis of their possession thereof in the concept of owners . But it manifested that it would not file a memorandum." ScmisÓ In any event. continuously and adversely since 1916. In any case. it failed to enforce its rights as owner. Considering that they had possessed the property ingood faith for more than ten years. the Office of the Solicitor General was afforded an opportunity to express its position in these proceedings. Emerita. It was oblivious to the petitioners· continued occupation. only one conclusion can be drawn -. Aludia and Emilio Robles to have the requisite title essential to their suit for quieting of title. In that case. publicly. laches is a remedy in equity. Inc. and its illegal inclusion in the Free Patent of petitioners and in their original certificate of title. Because they and their predecessors-in-interest have occupied. peacefully. Scä The claim that petitioners were guilty of laches in not asserting their rights as owners of the property should be viewed in the light of the fact that they thought their brother was paying the requisite taxes for them. From another viewpoint.openly. the Court finds this conclusion the logical and just solution. the same issue was resolved by this Court in Heirs of Marciano Nagano v. Quod nullum est. Court of Appeals.it has become private land and is therefore beyond the authority of the director of lands. Moreover. the fact that they continued cultivating it and harvesting and gaining from its fruits. we sustain the contention of petitioners that the free patent granted to the Santos spouses is void. In reversing the trial court. cultivation and possession thereof. gave private respondents a cause of action for quieting of title which is imprescriptible. it can even be said that it was the Rural Bank of Cardona.
(Chairman). COQUIA. et al. the Petition is hereby GRANTED. vs. The assailed Decision is REVERSED and SET ASIDE. the sale of the subject property to the Santos spouses is valid insofar as it pertained to his share only. HON. No costs. the REM was foreclosed.and considering the circumstances in this case. 1975 NORTHERN MOTORS. L-40018 December 15. The subject land was inherited from their father. it is valid as to Hilario Robles· share therein. JJ. etc.. J. Melo. Jurismis In sum. IV-1-010021 issued by the Bureau of Lands covering the subject property. CA 328 SCRA 97 FACTS: An action for quieting of title was filed by petitioner against Santos. Vitug. INC. Emerita. and Gonzaga-Reyes. the trial court·s Decision is REINSTATED. Aludia and Emilio Robles. concur.is hereby declared null and void insofar as it prejudiced the shares of Petitioners Lucio. on the other -. Jjjuris WHEREFORE. JORGE R. They later knew about the REM and foreclosure and subsequent sale to Santos. intervenor. HELD: A co-owner cannot acquire by prescription the share of other co-owners absent any clear indication of repudiation of co-ownership. Except as modified by the last paragraph of this Decision. ROBLES V. petitioner.: . Likewise declared null and void is Free Patent No.. An action to quiet title is a common law remedy for the removal of any cloud or doubt or uncertainty on the title to real property. Their brother was able to mortgage the land and upon failure to pay. G. SO ORDERED.. the petitioners cannot be held guilty of it. RESOLUTION AQUINO. Purisima.R.. Consequently. the real estate mortgage contract covering the disputed property ² a contract executed between Spouses Hilario and Andrea on the one hand and the Rural Bank of Cardona. Inc. respondents. No.. FILINVEST CREDIT CORPORATION.
Inc. (See art. Rule 39 of the Rules of Court is not correct. Honesto Ong's contention that Northern Motors. realized that to vindicate its claim by independent action would be illusory. jus in re or jus ad rem. On the other hand. 1975 in the Court of First . being recorded. ³ Honesto Ong in his motion invokes his supposed "legal and equity status" vis-a-vis the mortgaged taxicabs. The mortgagee is not obligated to file an "independent action" for the enforcement of his credit. Luneta Motor Company. Civil Code). That amount was characterized by Northern Motors. The essence of the chattel mortgage is that the mortgaged chattels should answer for the mortgage credit and not for the judgment credit of the mortgagor's unsecured creditor. In that resolution. as unpaid seller and mortgagee. Inc. Such action was filed on April 14. was negligent because it did not sue the sheriff within the 120-day period provided for in section 17. as the "ransom" for the taxicabs levied upon by the sheriff at the behest of Honesto Ong. it was constrained to enter into a compromise with Honesto Ong by agreeing to pay him P145. further prayed that the sheriff should be required to deliver to it the proceeds of the execution sale of the mortgaged taxicabs without deducting the expenses of execution. the assignee of a portion of the chattel mortgage credit.. whereas. Inc. Northern Motors. For that pragmatic reason. prayed for the reversal of the lower court's orders cancelling the bond filed by Filwriters Guaranty Assurance Corporation. XI Enciclopedia Juridica Española 294) or a lien which. Inc. Inc. Northern Motors.000. Northern Motors... it was held that the lien of Northern Motors. 1975. He contends that his only recourse was to levy upon the taxicabs which were in the possession of the judgment debtor. That contention is not a justification for setting aside the holding that Ong had no right to levy upon the mortgaged taxicabs and that he could have levied only upon the mortgagor's equity of redemption. Manila Yellow Taxicab Co.Respondent Honesto Ong and City Sheriff of Manila filed a motion for the reconsideration of this Court's resolution of August 29. over certain taxicabs is superior to the levy made on the said cabs by Honesto Ong. the assignee of the unsecured judgment creditor of the chattel mortgagor. in its motion for the partial reconsideration of the same August 29 resolution... 1. Inc. as chattel mortgagee. 66 Phil 459). Manila Yellow Taxicab Co. Respondents' motion for reconsideration. The mortgage creates a real right (derecho real. "has still an independent legal remedy" against the mortgagor for the recovery of the unpaid balance of the price. 2087. Inc. To require him to do so would be a nullification of his lien and would defeat the purpose of the chattel mortgage which is to give him preference over the mortgaged chattels for the satisfaction of his credit. The registration of the chattel mortgage is an effective and binding notice to him of its existence (Ong Liong Tiak vs. Inc. Honesto Ong's theory that Manila Yellow Taxicab's breach of the chattel mortgage should not affect him because he is not privy of such contract is untenable. follows the chattel wherever it goes. It is relevant to note that intervenor Filinvest Credit Corporation.
1974. 20536 of the Court of First Instance of Rizal. his assignor. Inc.. the levy thereon was wrongful. 951. Civil Case No. 1963. 196. should be deducted from the proceeds of the execution sale. That might explain his unawareness of the pendency of such action." Ong's contention.. which he erroneously characterized as a "respondent" (it is not a respondent in this case). which was held on December 18. To uphold that contention is to destroy the essence of chattel mortgage as a paramount encumbrance on the mortgaged chattel. Inc. Inc. Dineros and Provincial Sheriff of Rizal. Inc. at an execution sale the buyers acquire only the right of the judgment debtor which in this case was a mere right or equity of redemption. . Manila Yellow Taxicab Co. The sale did not extinguish the pre-existing mortgage lien (See sec. That proposition is devoid of any legal sanction and is glaringly contrary to the nature of a chattel mortgage. If that is the point which Ong is trying to put across. should be delivered to Northern Motors. Pasig Branch XIII. However. to Northern Motors. instead of Honesto Ong. That argument is not clear. Inc. 25. Leyte Autobus Co. The third-party claim filed by Northern Motors. Inc. Inc. Rule 39. versus Manila Yellow Taxicab Co. Lara vs. Those cabs cannot be sold at an execution sale because. 8 SCRA 103). Respondent Ong admits "that the mortgagee's right to the mortgaged property is superior to that of the judgment creditor". entitled "Northern Motors.. Moreover.Instance of Rizal. and it is something which does not directly affect him. et al. Inc. The other arguments of Honesto Ong in his motion may be boiled down to the proposition that the levy made by mortgagor's judgment creditor against the chattel mortgagor should prevail over the chattel mortgage credit. 21065 entitled "Northern Motors. 97 Phil. in Civil Case No. that the writ of execution. Ong probably means that the installments already paid by Manila Yellow Taxicab Co. cannot be sustained. May 30. vs. Filwriters Guaranty Assurance Corporation. Potenciano vs.. "only to such extent as has exceeded the amount paid by respondent Manila Yellow Taxicab to" Northern Motors. Pasig Branch VI.". that matter should be raised by Manila Yellow Taxicab Co. L-7907.. Bayona. 97 Phil. et al.. Some arguments adduced by Honesto Ong in his motion were intended to protect the interests of the mortgagor. Inc. as explained in the resolution under reconsideration. That contention is not well-taken. Ong argues that the proceeds of the execution sale. Rules of Court. which was enforced against the seven taxicabs (whose sale at public auction was stopped) should have precedence over the mortgage lien. Hacbang vs. in the replevin case. was impleaded as a defendant therein. He reasons out they were not parties to the mortgage and that they acquired the cars prior to the mortgagee's assertion of its rights thereto. Tropical Commercial Corporation. then. Inc.. Inc. But he contends that the rights of the purchasers of the cars at the execution sale should be respected. should have alerted the purchasers to the risk which they were taking when they took part in the auction sale.
". 21065 of the Court of First Instance of Rizal. 1974. That injustice should be corrected. It argues that Honesto Ong or Manila Yellow Taxicab Co. 2.The motion for reconsideration of Ong and the sheriff should be denied.. 1975 by Filwriters Guaranty Assurance Corporation for Tropical Commercial Co. We already held that the execution was not justified and that Northern Motors. Hence. Inc.. The bonds were cancelled without notice to Northern Motors. Those cabs should not have been levied upon and sold at public auction to satisfy the judgment credit which was inferior to the chattel mortgage. as third-party claimant. ³ The lower court in its order of January 3. Annex B of motion). 1975. Pasig Branch XIII. It may also be noted that in a prior case. the truth is that such an action for damages was filed on April 14. Northern Motors.000. Inc. Since the cabs could no longer be recovered because apparently they had been transferred to persons whose addresses are unknown (see par. vs. had given the impression that it had not filed any action for damages against the sheriff within the one hundred twenty-day period contemplated in Section 17.. Inc. in its instant motion for partial reconsideration. et al.. entitled "Northern Motors. Inc. as mortgagee. 20536 and 21065 would be baseless or futile actions against the surety. Inc. Inc. further prays for the reconsideration of that portion of our resolution allowing the sheriff to deduct expenses from the proceeds of the execution sale for the eight taxicabs which sale was held on December 18. should shoulder such expenses of execution.000 filed on December 18. As already noted above. Northern Motors.. a replevin case (where an amended complaint dated January 15. Civil Case No. the surety. the proceeds of the execution sale . in that case prayed that the surety be ordered to pay to it damages in the event that the eight taxicabs could not be surrendered to the mortgagee. 1975 was filed). 20536 of the Court of First Instance of Rizal at Pasig. Rule 39 of the Rules of Court. Filwriters Guaranty Assurance Corporation. 1974). 1975 cancelled the indemnity bonds for P480. our resolution of August 29.. If the said bond is not reinstated or if the lower court's orders cancelling it are allowed to stand. should be reconsidered. was impleaded as a defendant by reason of its bond for P240. the sheriff and the judgment creditor in Civil Case No. the aforementioned Civil Cases Nos. 0032 posted on December 18. Northern Motors. Petitioners motion for partial reconsideration. was entitled to the possession of the eight taxicabs. Inc. 1975 against the surety. page 4. 12. Inc. The action involves the indemnity bond for P240. Manila Yellow Taxicab Co. reiterates its petition for the reinstatement of the bond filed by Filwriters Guaranty Assurance Corporation.000 (No. We already held that the cancellation of the bonds constituted a grave abuse of discretion but we previously denied petitioner's prayer for the reinstatement of the bonds because Northern Motors Inc. Inc. insofar as it did not disturb the lower court's orders cancelling the indemnity bonds.
are as follows: Deceased spouses Jose C. No. 1957. March 6. WHEREFORE. Petitioner.R. vs. Muñoz Palma. The resolution of August 29.000 is regarded as in full force and Respondent Sheriff of Manila is further directed to deliver to Northern Motors. as culled from the assailed CA decision and that of the trial court. Baco River Plantation Co. SECOND DIVISION G. Esguerra... the entire proceeds of the execution sale held on December 18.. seeking to reverse and set aside the Decision[1 dated February 22. SR. Inc. Castro. 26105. respondent. 632).: Before the Court is the petition for review on certiorari filed by the Government Service Insurance System (GSIS). 1956. 1975.R. JJ. Civil Code.. 26 Phil. Makasiar. Inc. Zulueta and Soledad Ramos obtained various loans from defendant GSIS for (the) period September. 1956 to October. and Barredo JJ. 2002 denying its motion for reconsideration. is entitled to the entire proceeds without deduction of the expenses of execution. concur. . v. CV No. DECISION CALLEJO. Concepcion Jr.. 155206 : October 28. 1975). 37177 and 50365. cancelling the indemnity bond for P240. Urrutia & Co.000 (as reaffirmed in its order of January 17. 2002 of the Court of Appeals (CA) in CA-G. 1957 and October 15. 1189 and 1269..J. Teehankee. April 4. and Martin. 2003] GOVERNMENT SERVICE INSURANCE SYSTEM. 1957. 62309 and its Resolution dated September 5. The antecedent facts of the case.117. SO ORDERED.000. EDUARDO M.. J. 1974 for the eight taxicabs which were mortgaged to that firm. The Zuluetas failed to pay their loans to defendant GSIS and the latter foreclosed the real estate mortgages dated September 25. Northern Motors. DE SANTIAGO. are set aside. substituted by his widow ROSARIO ENRIQUEZ VDA. The said indemnity bond for P240. 1975 is modified in the sense that the lower court's orders of January 3 and 6. 1957 in the total amount of P3. Antonio. Makalintal.00 secured by real estate mortgages over parcels of land covered by TCT Nos. Fernando.may be regarded as a partial substitute for the unrecovarable cabs (See arts. C. took no part. SANTIAGO. private respondents' motion for reconsideration is denied and petitioner's motion for partial reconsideration is granted.
660 sq. Lot No. it began disposing the foreclosed lots including the excluded ones. In another NOTE: The following lots in the Antonio Subdivision were already released by the GSIS and therefore are not included in this sale. 19 Block 1. 15 Block 7. 1974. 6. I. I. 2. And the lots on ADDITIONAL EXCLUSION FROM PUBLIC SALE are LOTS NO. A Certificate of Sale (Annex F.229. 3 and 10 (New Plan) Block V (Old Plan) Block VII. 1 Block 3. 7. 3. The sold properties were returned to defendant GSIS. 23553 cancelled TCT No. 1 lots Nos. 1. Block 9. 6. 26 and 27 (New Plan) Block VI (Old Plan) Block VIII. an Affidavit of Consolidation of Ownership (Annex G. 37177 and 50356. & 4 2. all in the name of defendant GSIS.747 sq. 26105. 29-31) was executed by defendant GSIS over Zuluetas lots. 12 Block 1. 1980. 1. On April 7. 2 and 3 Block 11. 21925. 7 402 sq. were already excluded from the foreclosure.m. were sold. 8.m. 50-H-5-C-9JM-7.84. 7. 1. 21926. 2 Block 2. and 13 (Old Plan) Block I. The Certificate of Sale dated August 14. 2 4.m. 9. representative Eduardo Santiago and then plaintiff Antonio Vic Zulueta executed an agreement whereby Zulueta transferred all his rights and interests . and TCT No.m. 11 Block 2. 1990. After defendant GSIS had re-acquired the properties sold to Yorkstown Development Corporation. Lots Nos. 6 Block 4. 1974 had been annotated and inscribed in TCT Nos. 4 and 6 (New Plan) Block VIII (Old Plan) Block X. 12 Block 5.m. with the following notations: (T)he following lots which form part of this title (TCT No. 1. 2. 1975. 5. 4. 1. 12 and 13 (New Plan) Block I (Old Plan) Block III. 10. 23-28) was issued by then Provincial Sheriff Nicanor D. 5 Block 1. 50-H-5-C-9-J-65-H-5. Records. 1 to 11. which as earlier stated. On March 6. 3 and 4 Block 10. Lot No.On August 14. 3 Block 10. 2. namely: LOT NO. 10. 3. Vol. Not all lots covered by the mortgaged titles. 5 Block 5. Block No. 15. 14 and 20 (New Plan) Block III (Old Plan) Block V. Block No. Salaysay. 7. 10 Block 6. 8 and 10 (Old Plan) Block II. Vol. 1. the mortgaged properties were sold at public auction by defendant GSIS submitting a bid price ofP5. 4. Block No. 23554 cancelling TCT No.138 sq. On November 25. 26105) are not covered by the mortgage contract due to sale to third parties and donation to the government: 50-H-5-C-9-J-65-H-8. 1. On July 2. 13 Block 5. 17. 1. TCT No. 3 487 sq. 11 Block 9. 13 and 20 (New Plan) Block IV (Old Plan) Block VI. Block No. pp. 1980. 3. 5. 3. pp.m. 12 and 20 (New Plan) Block VII (Old Plan) Block II. 1. 6 (New Plan) Block XI (Old Plan) Block XII. 5 (New Plan) Block X (Old Plan) Block ZXII. The Register of Deeds of Rizal cancelled the land titles issued to Yorkstown Development Corporation. Road Lots Nos. 2. TCT No. however. Lot No. Block No. 4 263 sq. 23 Block 3. 1 to 13. 15. including the lots. 6. 5 Block 11 (New). 7. 1 -6. 8. defendant GSIS sold the foreclosed properties to Yorkstown Development Corporation which sale was disapproved by the Office of the President of the Philippines. 1. Records. 5. 21924. 23552 was issued cancelling TCT No. Ninety-one (91) lots were expressly excluded from the auction since the lots were sufficient to pay for all the mortgage debts.927.
The dispositive portion of the RTC decision reads: WHEREFORE. in substitution of her deceased husband Eduardo. Subsequently. Block VII (Old Plan). pp. 6. as defendant therein. 12.[2 On May 7. 0. 5. Wenceslao B. 7. 6. Lots 1. Block V (Old Plan). 1. Block 3. 4. n. judgment is hereby rendered in favor of plaintiff and against the defendant: 1. 3. 15. 1. 14 and 20. e. 1989 (Annex H. as the plaintiff. Trinidad. . 28 and 29. 8. Block VI (New Plan). Santiago. he was substituted by his widow. o. 32-33) to defendant GSIS asking for the return of the eighty-one (81) excluded lots. Gonzales and the heirs of Mamerto Gonzales moved to be included as intervenors and filed their respective answers in intervention. b. Rosario Enriquez Vda. Vol. Records. Ordering defendant to reconvey to plaintiff the seventy-eight (78) lots released and excluded from the foreclosure sale including the additional exclusion from the public sale. 13. Block 4. Block VIII (New Plan).over the excluded lots. Rosario Enriquez Vda. Block 8. 1996. Manuel III and Sylvia G. 3 and 10. Lot Nos. 13 and 24. c. f. the RTC rendered judgment against the petitioner ordering it to reconvey to the respondent. 8 and 10. 1990. Lots 5. Block IV (New Plan). and 13. Lot Nos. Subsequently. Lots 6. Block 2. Lots 2. l. Lot Nos. wrote a demand letter dated May 11. Lot 6. Block X (Old Plan). 24. the petitioner. m. Lots 13. Lot Nos. Lots 6 and 15. 5. 7. filed with the Regional Trial Court (RTC) of Pasig City. Lot Nos. Zulueta was substituted by Santiago as the plaintiff in the complaint a quo. After due trial. k. Branch 71. 16 and 23. 10. Block XI (New Plan). Lot Nos. d. and Marciana P. Antonio Vic Zulueta. 2. 9 and 11. Upon the death of Santiago on March 6. 4 and 6. Urbano. Spouses Alfeo and Nenita Escasa. g. 1. Block VIII (Old Plan). s. 7. Lot Nos. Block III (New Plan). Block VI (Old Plan). p. I. Block 5. 13 and 20. 12. 5. 7. the seventy-eight lots excluded from the foreclosure sale. Block XII (Old Plan). i. Block XII (Old Plan). j. Block V (New Plan). 7 and 12. de Santiago. represented by Eduardo M. Block I. Lots 10 and 16. r. q. 1. 5. Block 7. Atty. 10. Block II (Old Plan). 3. Block II (Old Plan). Block III (Old Plan). Block I (Old Plan). a complaint for reconveyance of real estate against the GSIS. Plaintiff Eduardo Santiagos lawyer. Block 6. 1. 26 and 27. h. filed its answer alleging inter alia that the action was barred by the statute of limitations and/or laches and that the complaint stated no cause of action. Block I (New Plan). de Santiago. namely: a. 12 and 15. Lot 5. 8. Lot 6. Block VII (New Plan). Lot Nos. Block X (New Plan). Lot Nos.
PT-80342 under Entry No. The petitioner now comes to this Court alleging that: THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT A) PETITIONER WAS GUILTY OF BAD FAITH WHEN IN TRUTH AND IN FACT. THERE WAS NO SUFFICIENT GROUND TO SUPPORT SUCH CONCLUSION. Ordering the Registry of Deeds of Pasig City to cancel the Notices of Lis Pendens inscribed in TCT No. the herein appeal is DISMISSED for lack of merit. if the seventy-eight (78) excluded lots could not be reconveyed. 2002. Block 11. PT-12267/T-23554. 3 and 5 (New). 2. PT-12267/T-23554.[4 The petitioner moved for a reconsideration of the aforesaid decision but the same was denied in the assailed CA Resolution ofSeptember 5. and TCT No. 1975 when the petitioner consolidated its ownership over the subject lots. The Decision of December 17. the petitioner maintains that it did not act in bad faith when it erroneously included in its certificate of sale. Lots 1. 2. AND B) THERE WAS NO PRESCRIPTION IN THIS CASE. 11. The dispositive portion of the assailed decision reads: WHEREFORE. The petitioner asserts that the action for reconveyance instituted by the respondent had already prescribed after the lapse of ten years from November 25. 17 and 22. PT-84913 under Entry No. Lots 1. Costs of suit. Lots 1. . v.[3 The petitioner elevated the case to the CA which rendered the assailed decision affirming that of the RTC. premises considered. the fair market value of each of said lots. Block 10. 1997 of Branch 71 of the Regional Trial Court of Pasig City is hereby AFFIRMED. and subsequently consolidated the titles in its name over the seventy-eight lots (subject lots) that were excluded from the foreclosure sale.t. 3.[5 In its petition. 81812 under Entry No. PT-12267/T23554. 2. TCT No. There was no proof of bad faith nor could fraud or malice be attributed to the petitioner when it erroneously caused the issuance of certificates of title over the subject lots despite the fact that these were expressly excluded from the foreclosure sale. Block 9. 3 and 4. u. an action for reconveyance based on implied or constructive trust prescribes in ten years from the time of its creation or upon the alleged fraudulent registration of the property. Ordering the Registry of Deeds of Pasig City to cancel the land titles covering the excluded lots in the name of defendant or any of its successors-in-interest including all derivative titles therefrom and to issue new land titles in plaintiffs name. Ordering defendant to pay plaintiff. 4. 5. According to the petitioner.
[7 The Court agrees with the findings and conclusion of the trial court and the CA. is expected to exercise greater care and prudence in its dealings. still it could not legally claim ownership and absolute dominion over them because indefeasibility of title under the Torrens system does not attach to titles secured by fraud or misrepresentation. when the action was instituted on May 7. 1990. As declared by the CA: The acts of defendant-appellant GSIS in concealing from the Zuluetas [the respondents predecessors-in-interest] the existence of these lots. more than fourteen years had already lapsed. we find the petition barren of merit. the respondents predecessorsin-interest. including those . in failing to notify or apprise the spouses Zulueta about the excluded lots from the time it consolidated its titles on their foreclosed properties in 1975.[6 By assailing the findings of facts of the trial court as affirmed by the CA. Marcos during the same year demonstrated a clear effort on its part to defraud the spouses Zulueta and appropriate for itself the subject properties. the petitioner thereby raised questions of facts in its petition. That the petitioner acted in bad faith in consolidating ownership and causing the issuance of titles in its name over the subject lots. Although there are exceptions to the said rule. like banks. It is a government financial institution and. The petitioner likewise takes exception to the holding of the trial court and the CA that it (the petitioner) failed to apprise or return to the Zuluetas. At the outset. It is well-settled that a holder in bad faith of a certificate of title is not entitled to the protection of the law for the law cannot be used as a shield for fraud. in failing to inform them when it entered into a contract of sale of the foreclosed properties to Yorkstown Development Corporation in 1980 as well as when the said sale was revoked by then President Ferdinand E. the petitioner contends that the same was already barred by prescription as well as laches. The petitioners arguments fail to persuade. that it acted in bad faith. it bears emphasis that the jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the Rules of Court. as amended. This Court is not a trier of facts. The fraud committed by defendant-appellant in the form of concealment of the existence of said lots and failure to return the same to the real owners after their exclusion from the foreclosure sale made defendant-appellant holders in bad faith. we find no reason to deviate therefrom. is limited to reviewing only errors of law. even if we indulged the petition and delved into the factual issues. the seventy-eight lots excluded from the foreclosure sale because the petitioner had no such obligation under the pertinent loan and mortgage agreement. The petitioner is not an ordinary mortgagee.In this case. Case law has it that the findings of the trial court especially when affirmed by the CA are binding and conclusive upon this Court. Even if titles over the lots had been issued in the name of the defendant-appellant. Thus. notwithstanding that these were expressly excluded from the foreclosure sale was the uniform ruling of the trial court and appellate court. Nonetheless.
Court of Appeals[14 and Samonte v. 1456. the general rule that the discovery of fraud is deemed to have taken place upon the registration of real property because it is considered a constructive notice to all persons does not apply in this case.] 496. than private individuals. If property is acquired through mistake or fraud. On the issue of prescription. Article 1456 of the Civil Code provides: Art. such discovery is deemed to have taken place upon the issuance of the certificate of title over the property. the four-year period shall be counted therefrom. as found by the CA. by force of law. extended only to purchasers for value and in good faith. for their business is one affected with public interest. Further. should exercise more care and prudence in dealing even with registered lands. By so doing. or institutions like the petitioner. generally. keeping in trust money belonging to their depositors.[15 where this Court reckoned the prescriptive period for the filing of the action for reconveyance based on implied trust from the actualdiscovery of fraud. the petitioners acts of concealing the existence of these lots. Act [No. which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of land registration statute. as well as to mortgagees of the same character and description. Registration of real property is a constructive notice to all persons and. CA[9 is apropos: Banks.[8 The Courts ruling in Rural Bank of Compostela v.[13 The petitioners defense of prescription is untenable. regularly engaged in the business of lending money secured by real estate mortgages. The CA correctly cited the cases of Adille v. considered a trustee of an implied trust for the benefit of the person from whom the property comes. It cannot feign ignorance of the fact that the subject lots were excluded from the sale at public auction. thus.[10 Due diligence required of banks extend even to persons. its failure to return them to the Zuluetas and even its attempt to sell them to a third party is proof of the petitioners intent to defraud the Zuluetas and appropriate for itself the subject lots. the petitioner executed an affidavit in consolidating its ownership and causing the issuance of titles in its name over the subject lots despite the fact that these were expressly excluded from the foreclosure sale. indeed.[11 In this case.[12 On the other hand. As held by the CA. . Court of Appeals. the petitioner acted in gross and evident bad faith. the person obtaining it is. its act constituted gross negligence amounting to bad faith. At the least. An action for reconveyance based on implied or constructive trust prescribes in ten years from the alleged fraudulent registration or date of issuance of the certificate of title over the property.involving registered lands. an action for reconveyance of real property based on fraud prescribes in four years from the discovery of fraud.
We note the petitioners sub rosa efforts to get hold of the property exclusively for himself beginning with his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is the only heir and child of his mother Feliza with the consequence that he was able to secure title in his name [alone]. 14-15) that he came to know that there were 91 excluded lots in Antonio Village which were foreclosed by the GSIS and included in its consolidation of ownership in 1975 when. the Court in Adille ratiocinated: It is true that registration under the Torrens system is constructive notice of title. While actions to enforce a constructive trust prescribes in ten years. they came to know [of it] apparently only during the progress of the litigation. According to the respondent Court of Appeals. [T]he prescriptive period of the action is to be reckoned from the time plaintiffappellee (then Eduardo M. we cannot dismiss private respondents claims commenced in 1974 over the estate registered in 1955. the petitioner is a holder in bad faith of certificates of title over the subject lots. notwithstanding the long-standing rule that registration operates as a universal notice of title. For the same reason. prescription is not a bar. as borne out by the records. the respondent actually discovered the fraudulent act of the petitioner only in 1989: . Article 22 of the Civil Code explicitly provides that every person who. as established by the CA. we. The petitioner is not entitled to the protection of the law for the law cannot be used as a shield for frauds. we hold that the right of the private respondents commenced from the time they actually discovered the petitioners act of defraudation. Hence. are not prepared to count the period from such a date in this case.[16 The above ruling was reiterated in the more recent case of Samonte. It is therefore no argument to say that the act of registration is equivalent to notice of repudiation. he and Antonio Vic Zulueta discussed it and he was given by Zulueta a special power of attorney to represent him to recover the subject properties from GSIS. assuming there was one. Accordingly. In this case.[17 Following the Courts pronouncements in Adille and Samonte. reckoned from the date of the registration of the property. Santiago) hadactually discovered the fraudulent act of defendant-appellant which was. The complaint for reconveyance was filed barely a year from the discovery of the fraud. as we said. through an act of performance . the institution of the action for reconveyance in the court a quo in 1990 was thus well within the prescriptive period.In ruling that the action had not yet prescribed despite the fact that more than ten years had lapsed between the date of registration and the institution of the action for reconveyance. but it has likewise been our holding that theTorrens title does not furnish a shield for fraud. the petitioner unarguably had the legal duty to return the subject lots to the Zuluetas. only in 1989. Plaintiffappellee Eduardo M. in 1989. 1995. The petitioners attempts to justify its omission by insisting that it had no such duty under the mortgage contract is obviously clutching at straw. Having acted in bad faith in securing titles over the subject lots. pp.. Santiago categorically testified (TSN of July 11..[18 Contrary to its claim.
.50. Respondent....117.. 2002 and Resolution dated September 5.. 2002 of the Court of Appeals in CA-G.. The assailed Decision dated February 22. On February 12..R.. 297840 to respondent in settlement of their total obligation.. Tarlac City and covered by TCT No.. 297840.. and AUSTRIA-MARTINEZ.: On different dates from July 14.. Petitioners. 1999 to March 20.-x DECISION CARPIO MORALES. acquires or comes into possession of something at the expense of the latter without just or legal ground. . shall return the same to him. 2008 x ... ONG and EDNA SHEILA PAGUIO-ONG.. SECOND DIVISION SPOUSES WILFREDO N. WHEREFORE. 62309 are AFFIRMED IN TOTO.... TINGA. Promulgated: July 9.000... petitioners and respondent executed an Amendment to Amended Real Estate Mortgage consolidating their loans inclusive of charges thereon which totaled P5. J...* JJ.. 2000. No. or any other means. BRION. CARPIO MORALES.. 172592 Present: QUISUMBING.. Costs against the petitioner....by another...versus G.. 2001. On even date.. Chairperson..00. ... and a Memorandum of Agreement reading: ROBAN LENDING CORPORATION... J.916.. CV No... Ong and Edna Sheila Paguio-Ong obtained several loans from Roban Lending Corporation (respondent) in the total amount of P4.R.. These loans were secured by a real estate mortgage on petitioners parcels of land located in Binauganan... SO ORDERED.000...... the parties executed a Dacion in Payment Agreement wherein petitioners assigned the properties covered by TCT No.. petitioner-spouses Wilfredo N. the petition is DENIED for lack of merit.
and a further sum of 25% attorneys fees thereon. b) Declaring the Memorandum of Agreement xxx and Dacion in Payment x x x as null and void for being pactum commissorium. unjust enrichment. with a promise to pay the FIRST PARTY in full within one year from the date of the consolidation and restructuring. accounting was in order. 2000. stricken out or set aside. alleging that the Memorandum of Agreement and the Dacion in Payment executed are void for being pactum commissorium. before the Regional Trial Court (RTC) of Tarlac City.50. accounting. unconscionable. illegal exaction.That the FIRST PARTY [Roban Lending Corporation] and the SECOND PARTY [the petitioners] agreed to consolidate and restructure all aforementioned loans.916. which they have executed and signed today in favor of the FIRST PARTY be enforced[. hence. and revolting to the conscience as they hardly allow any borrower any chance of survival in case of default. abandoned. Petitioners alleged that the loans extended to them from July 14. unconscionable and illegal and therefore.117. iniquitous. Petitioners decried these additional charges as illegal. otherwise the SECOND PARTY agree to have their DACION IN PAYMENT agreement.] In April 2002 (the day is illegible). iniquitous. annulment of deeds. but because of the illegal exactions thereon. 5% penalty per month on the total amount due and demandable. and outstanding obligations totaling P5. Petitioners thus prayed for judgment: a) Declaring the Real Estate Mortgage Contract and its amendments x x x as null and void and without legal force and effect for having been renounced. 9322. The SECOND PARTY hereby sign [sic] another promissory note in the amount of P5. for declaration of mortgage contract as abandoned. Petitioners further alleged that they had previously made payments on their loan accounts. . 1999 to March 20. 2000 were founded on several uniform promissory notes.50 (a copy of which is hereto attached and forms xxx an integral part of this document). which provided for 3. and in addition. penalties. Evat [sic] and attorneys fees assessed and loaded into the loan accounts of the plaintiffs with defendant as unjust.5% monthly interest rates. petitioners filed a Complaint. docketed as Civil Case No.117. c) Declaring the interests.916. the total balance appears not to have moved at all. and given up. which have been all past due and delinquent since April 19. and damages. respondent exacted certain sums denominated as EVAT/AR.
The accumulated interest and other charges which were computed for more than two (2) years would stand reasonable and valid taking into consideration [that] the principal loan isP4. 2003. as well as other just and equitable reliefs. was reset several times due to. among other things. e. During the scheduled initial hearing of May 7. the parties efforts to settle the case amicably.000.1 Moral damages in an amount not less than P100.000 and if indeed it became beyond the Plaintiffs capacity to pay then the fault is attributed to them and not the Defendant[. respondent maintained the legality of its transactions with petitioners. the initial hearing of the case.000.00. alleging that: xxxx If the voluntary execution of the Memorandum of Agreement and Dacion in Payment Agreement novated the Real Estate Mortgage then the allegation of Pactum Commissorium has no more legal leg to stand on.00 and exemplary damages of P50. the RTC issued the following order: .2 Attorneys fees in the amount of P50. The Dacion in Payment Agreement is lawful and valid as it is recognized x x x under Art. cralawIn its Answer with Counterclaim. 1245 of the Civil Code as a special form of payment whereby the debtor-Plaintiffs alienates their property to the creditorDefendant in satisfaction of their monetary obligation.3 The cost of suit. 2002.000.00 appearance fee per hearing.] After pre-trial.000. and e. originally set on December 11.000.d) Ordering an accounting on plaintiffs loan accounts to determine the true and correct balances on their obligation against legal charges only. and e) Ordering defendant to [pay] to the plaintiffs: -e.00 plus P1.
e. the counsels are directed to be ready with their memorand[a] together with all the exhibits or evidence needed to support their respective positions which should be the basis for the judgment on the pleadings if the parties fail to settle the case in the next scheduled setting. except as to the amount of damages. 2003 setting was eventually rescheduled to February 11. . x x x x (Underscoring supplied) At the scheduled April 14. a summary judgment may be rendered by the court if the pleadings. 2003 at 10:00 oclock in the morning. Just in case [plaintiffs counsel] Atty. there is no genuine issue as to any material fact. On appeal. a judgment on the pleadings would not have been proper in this case as the answer tendered an issue. 2004. x x x what it actually rendered was a summary judgment. Concepcion cannot present his witness in the person of Mr. 2004 at which both counsels were present and the RTC issued the following order: The counsel[s] agreed to reset this case on April 14. However. On the other hand.However. at 10:00 oclock in the morning. supporting affidavits. dismissed the complaint.Considering that the plaintiff Wilfredo Ong is not around on the ground that he is in Manila and he is attending to a very sick relative. the initial hearing of this case is reset to June 18. Branch 64 of the Tarlac City RTC. Wilfredo Ong in the next scheduled hearing. (Underscoring supplied) It appears that the June 18. or otherwise admits the material allegations of the adverse partys pleading. the counsel manifested that he will submit the case for summary judgment. A judgment on the pleadings is proper when the answer fails to tender an issue. By Decision of April 21. and other documents show that. the Court of Appeals noted that x x x [W]hile the trial court in its decision stated that it was rendering judgment on the pleadings. both counsels appeared but only the counsel of respondent filed a memorandum. finding on the basis of the pleadings that there was no pactum commissorium. 2004 hearing. without objection on the part of the defendants counsel. the validity of the MOA and DPA. i. 2004.
WHEN IT FAILED TO CONSIDER THAT THE MEMORANDUM OF AGREEMENT (MOA) AND THE DACION EN PAGO (DPA) ARE NULL AND VOID FOR BEING CONTRARY TO LAW AND PUBLIC POLICY. which enables the mortgagee to acquire ownership of the mortgaged property without the need of any foreclosure proceedings. the Court of Appeals upheld the RTC decision that there was no pactum commissorium. are: (1) there should be a property mortgaged by way of security for the payment of the principal obligation.They differ. . finding the error in nomenclature to be mere semantics with no bearing on the merits of the case. Both parties admit the execution and contents of the Memorandum of Agreement and Dacion in Payment. . on whether both contracts constitute pactum commissorium or dacion en pago. WHEN IT FAILED TO CONSIDER THAT TRIAL IN THIS CASE IS NECESSARY BECAUSE THE FACTS ARE VERY MUCH IN DISPUTE. or dispose of them. and . IV. WHEN IT FAILED AND REFUSED TO HOLD THAT THE MEMORANDUM OF AGREEMENT (MOA) AND THE DACION EN PAGO AGREEMENT (DPA) WERE DESIGNED TO CIRCUMVENT THE LAW AGAINST PACTUM COMMISSORIUM. The petition is meritorious. . . which is prohibited under Article 2088 of the Civil Code which provides: The creditor cannot appropriate the things given by way of pledge or mortgage. petitioners filed the instant Petition for Review on Certiorari. . This Court finds that the Memorandum of Agreement and Dacion in Payment constitute pactum commissorium. and (2) there should be a stipulation for automatic . faulting the Court of Appeals for having committed a clear and reversible error I.Nevertheless. . Their Motion for Reconsideration having been denied. . WHEN IT FAILED AND REFUSED TO APPLY PROCEDURAL REQUISITES WHICH WOULD WARRANT THE SETTING ASIDE OF THE SUMMARY JUDGMENT IN VIOLATION OF APPELLANTS RIGHT TO DUE PROCESS. however. . . III. . Any stipulation to the contrary is null and void. The elements of pactum commissorium. II. .
the Memorandum of Agreement and the Dacion in Payment contain no provisions for foreclosure proceedings nor redemption. Court of Appeals where this Court upheld a Memorandum of Agreement/Dacion en Pago. courts may reduce interest rates.916. compounded monthly unconscionable and reduces it to a yearly rate of 12% of the amount due. and the penalty fees unconscionable. Respondent. the failure by the petitioners to pay their debt within the one-year period gives respondent the right to enforce the Dacion in Payment transferring to it ownership of the properties covered by TCT No.117.5%. interests and interests thereon. Respecting the charges on the loans. penalty charges. v. under the Memorandum of Agreement executed on the same day as the Dacion in Payment. the alienation of the properties was by way of security. This Court finds too the penalty fee at the monthly rate of 5% (60% per annum) of the total amount due and demandable principal plus interest. Under the Memorandum of Agreement. This Court. In a true dacion en pago. pactum commissorium being void for being prohibited by law. finds the monthly interest rate of 3. 297840. to be computed from the time of demand. with interest not paid when due added to and becoming part of the principal and likewise bearing interest at the same rate. In the case at bar.appropriation by the creditor of the thing mortgaged in case of non-payment of the principal obligation within the stipulated period. This Court finds the attorneys fees of 25% of the principal. That the questioned contracts were freely and voluntarily executed by petitioners and respondent is of no moment. vis a vis respondents denial thereof. That case did not involve the issue of pactum commissorium. The prayer for accounting in petitioners complaint requires presentation of evidence.50 which they were to pay within one year. based on existing jurisprudence. . Inc. the assignment of the property extinguishes the monetary debt. This does not persuade. or 42% per annum unconscionable and thus reduces it to 12% per annum. On the contrary. Respondent cites Solid Homes. Respondent argues that the law recognizes dacion en pago as a special form of payment whereby the debtor alienates property to the creditor in satisfaction of a monetary obligation. The Dacion in Payment did not extinguish petitioners obligation to respondent. and thus reduces the attorneys fees to 25% of the principal amount only. A remand of the case is thus in order. they claiming to have made partial payments on their loans. petitioners had to execute a promissory note for P5. In the case at bar. automatically acquires ownership of the properties upon petitioners failure to pay their debt within the stipulated period. and attorneys fees if they are iniquitous or unconscionable. in effect. and not by way of satisfying the debt.
2. the trial court and the Court of Appeals erred in holding that a summary judgment is proper.Prescinding from the above disquisition.5%. is an issue of fact that requires the presentation of evidence. depositions. A judgment on the pleadings may be rendered only when an answer fails to tender an issue or otherwise admits the material allegations of the adverse partys pleadings. the affidavits. The monthly interest rate of 3. the challenged Court of Appeals Decision is REVERSED and SET ASIDE. The Memorandum of Agreement and the Dacion in Payment executed by petitioner. respondents Answer with Counterclaim disputed petitioners claims that the Memorandum of Agreement and Dation in Payment are illegal and that the extra charges on the loans are unconscionable. the following terms of the loan contracts between the parties areMODIFIED as follows: 1. Respondent disputed too petitioners allegation of bad faith. 3. As mentioned above. Civil Case No. is reduced to 12% per annum.spouses Wilfredo N. SO ORDERED. and admissions presented by the moving party show that such issues are not genuine. 9322 is REMANDED to the court of origin only for the purpose of receiving evidence on petitioners prayer for accounting. Ong and Edna Sheila Paguio-Ong and respondent Roban Lending Corporation on February 12. . But neither is a judgment on the pleadings proper. as opposed to a fictitious or contrived one. petitioners prayer for accounting requires the presentation of evidence on the issue of partial payment. to be computed from the time of demand. A summary judgment is proper if. and The attorneys fees are reduced to 25% of the principal amount only. A summary judgment is permitted only if there is no genuine issue as to any material fact and a moving party is entitled to a judgment as a matter of law. The monthly penalty fee of 5% of the total amount due and demandable is reduced to 12%per annum. while the pleadings on their face appear to raise issues. WHEREFORE. A genuine issue. In the case at bar. 2001 are declared NULL AND VOID for being pactum commissorium. In line with the foregoing findings. or 42% per annum.