Obligations and Contracts Case and Case Doctrines Reviewer Part 3
o It is true that a check is not a legal tender and while delivery of a check
NATURAL OBLIGATIONS: (Articles 1423 to 1430)
ESTOPPEL: (Articles 1431 to 1439)
1. Origin and Elements:
Pio Baretto Realty vs. CA, 360 S 127;
Negotiable Instruments Law – Check Payments, while a delivery of a check
produces the effect of payment only when it is encashed, the rule is otherwise if
the debtor was prejudiced by the creditor’s unreasonable delay in presentment –
acceptance of a check implies an undertaking of due diligence in presenting it for
payment.
The principle of laches does not attach when the judgment is null and void for
want jurisdiction; Estoppel, being an equitable doctrine can’t be invoked to
perpetuate justice.
- Honor Mosrales and Pio Barreto Realty Development Corporation are disputing
over the estate of Nicolai Drepin, represented by Atty. Tomas Trinidad.
- To settle the dispute, and while the case is in court, they entered into a
Compromise Agreement upon which they agree to have the estate in dispute
be sold; that in case Mosrales was able to buy the property first, he should pay
P3,000,000.00 to Barreto Realty (representing the amount of investments by
Barreto Realty on the estate); that should Barreto Realty buy the property first, it
should pay P1,000,000.00 to Mosrales (representing interest).
- The compromise agreement was approved by the judge.
- Barreto Realty was able to buy the property first hence it delivered a manager’s
check worth P1,000,000.00 to Mosrales but the latter refused to accept the
same.
- Barreto Realty filed a petition before the trial court to direct Mosrales to comply
with the Compromise Agreement.
- Barreto Realty also consigned the check payment with the court.
- The judge issued a writ of execution against Mosrales and the sheriff also
delivered the check to Mosrales which the latter accepted.
- However, three years later, Mosrales filed a motion for reconsideration
alleging that the check payment did not amount to legal tender and that
he never even encashed the check. The judge agreed with Mosrales.
WHETHER OR NOT THE JUDGE WAS CORRECT
SC RULED:
- On the judge’s decision
o There was already a final and executory order issued by the same
judge three years prior. The same may no longer be amended
regardless of any claim or error or incorrectness (save for clerical errors
only).
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
produces the effect of payment only when it is encashed, the rule is
otherwise if the debtor (Barreto Realty) was prejudiced by the
creditor’s (Mosrales’) unreasonable delay in presentment.
Acceptance of a check implies an undertaking of due diligence in
presenting it for payment. If no such presentment was made, the drawer
cannot be held liable irrespective of loss or injury sustained by the payee.
Payment will be deemed effected and the obligation for which the
check was given as conditional payment will be discharged.
Kalalo vs. Luz, 34 S 337;
Estoppel – person invoking estoppel must have relied on representations or
conduct of person to be estopped. If an act, conduct, or misrepresentation of the
party sought to be estopped is due to ignorance founded on the innocent
mistake, estoppels will not arise.
- Octavio Kalalo is an engineer whose services were contracted by Alfredo Luz, an
architect in 1961.
- The services included design computation and sketches, contract drawing
and technical specifications of all engineering phases.
- Luz contracted Kalalo to work on ten projects across the country, one of which
was an in the International Rice Research Institute (IRRI) Research Center in Los
Baños, Laguna.
- For Kalalo’s work, Luz agreed to pay him 20% of what IRRI is going to pay or
equivalent of $28,000.00.
- Appellee sent to appellant a statement of account of the fees for services
rendered amounting to P116,565 wherein appellant sent a check for said amount
but Luz refused to accept
- Kalalo alleged that he was to be paid in dollars for the entire project and on the
other hand, Luz contends that Kalalo should not claim additional payment for
the additional services rendered which are not indicated in the contract
SHOULD KALALO BE PAID IN US CURRENCY?
SHOULD KALALO CLAIM FOR ADDITIONAL PAYMENT FOR THE ADDITIONAL
SERVICES RENDERED?
SC RULED:
- On payment of US Currency (no)
o The agreement was formed in 1961, years before the passage of Republic
Act 529 in 1950.
o The said law requires that payment in a particular kind of coin or currency
other than the Philippine currency shall be discharged in Philippine
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
currency measured at the prevailing rate of exchange at the time the
obligation was incurred. Nothing in the law however provides which
rate of exchange shall be used hence it is but logical to use the
rate of exchange at the time of payment.
o RA 529 has already been repealed by Republic Act 8183 which provides
that every monetary obligation must be paid in Philippine currency which
is legal tender in the Philippines. However, the parties may agree that the
obligation or transaction shall be settled in any other currency at the time
of payment.
- On Estoppel in pais
o There is no estoppel in pais in the case at bar as Luz was well aware of
the additional services rendered and has consented to the same. There
was no misrepresentation thus not amounting to estoppel
o Estoppel in pais; elements in relation to party sought to be
estopped.
a. Conduct amounting to false representation or concealment of material
facts; or at least calculated to convey the impression that the facts are
otherwise than, and inconsistent with, those which the party
subsequently attempts to assert;
b. Intent, or atleast expectation that this conduct shall be acted upon by,
or atleast influence the other party;
c. Knowledge, actual or constructive of the real facts.
Cristobal vs. Gomez, 50 P 810;
An equitable estoppel can only be invoked by one who is in a position to be
misled by the misrepresentation with respect to which the estoppel is invoked;
and under circumstances where damage would result to him from the adoption
by the person estopped of a position different from the adoption by the person
that which has been held out to be true.
FACTS:
 Epifanio Gomez owns two parcels of land located in Cavite.
 He sold the property with pacto de retro to Luiz Yangco which was to be redeemed
in five years.
 Upon failure to redeem it after five years, Yangco extended the redemption period
 Marcelino and Telesfora – siblings of Epifanio redeemed the property for their
brother Epifanio under a trust agreement in that when the fruits and interests of
the property already sufficiently covered the capital, the property shall be returned
to Epifanio’s possession
 More than a year later, Epifanio died leaving Paulina Cristobal and their children
 Paulina Cristobal now claims back possession of Epifanio’s land from Marcelino and
Telesfora .
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
 However, Marcelino and Telesfora invokes equitable estoppel as to the agreement
since Epifanio was not made a signatory to the agreement
WHETHER THERE WAS ACCEPTANCE BY EPIFANIO OF THE TRUST AGREEMENT
SC RULED:
- On Acceptance of the trust agreement
o The owner of a piece of property executed a notarial act tending to show
falsely that his brother claimed to be the owner of the property.
o That the brother to whom ownership was imputed could not claim title
against the declarant by virtue of said document, since he had not been
misled by false statement.
o Contrary to defendant’s claim that the agreement was kept secret from
Epifanio, the testimony of Banas stated that Gomez was present when the
arrangement for the repurchase of the property was discussed.
o Banas even told Epifanio to be thankful that the latter was able to recover
the property from Yangco.
o Defendants also claim that because Epifanio had not accepted the
donation in a public document, the same is unenforceable. This is
untenable.
o Epifanio need not accept in accordance with formalities of donations. The
court said that the partnership agreement should be viewed as an express
trust, not as an intended donation. Furthermore, ESTOPPEL CANNOT
BE INVOKED BY ONE WHO IS IN A POSITION TO BE MISLED BY
THE MISREPRESENTATION. If there is estoppel in the case at bar,
it should have been properly invoked by Epifanio and not his
siblings.
o Heirs of Epifanio are therefore entitled to recover the property.
o A person who redeems property belonging to another wich has
been sold under contract with pacto de retro, with the
understanding that the income of the property shall be applied to
the reimbursement of the capital, with interest, and other
expenses incidental to the administration of the property, until the
whole shall be liquidated, whereupon the party shall be restored to
the owner, occupies the position of trustee; and when the purpose
of such a trust has been accomplished; the trustee is bound to
surrender the property of the owner or his successor.
Marques vs. FEBTC, Jan 10, 2011;
In estoppel, a party creating an appearance of fact, which is false, is bound by
that appearance as against another person who acted in good faith on it.
Estoppel is based on public policy, fair dealing, good faith and justice. Estoppel
may arise from silence as well as from words.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3

o Court found that Maxilite had sufficient funds at the time of the first
- Maxilte is a domestic corporation engaged in the importation and trading of reminder for payment of the insurance premium.
equipment for energy-efficiency systems wherein Marques is the President and o FEBTC is estopped from claiming that the insurance premium has been
controlling stockholder of. unpaid.
- FEBTC is a local bank which handled the financing and related requirements of o FEBTC induced Maxilite and Marques to believe that the insurance
Marques and MAXILITE. premium has in fact been debited from Maxilite’s account.
- FEBTC financed MAXILITE’S capital and operational requirements through loans o FEBTC failed to debit and instead disregarded the written reminder from
secured with properties of Marques. FEBIBI to debit Maxilite’s account.
- Subsidiaries of FEBTC are FEBIBI and Makati Insurance Company. o FEBTC’s conduct clearly constitutes negligence in handling Maxilite’s and
- FEBIBI facilitated the procurement and processing from Makati Insurance 4 Marques‘ accounts.
separate and independent fire insurance policies over the trust receipted o As a consequence of its negligence, FEBTC must be held liable for
merchandise. damages and is solely liable for the payment of the face value of the
- Maxilite paid the premiums for these policies through debit arrangement. insurance policy.
- FEBTC would debit Maxilite’s account for the premium payments.
- Maxilite fully settled its trust receipt account.
- Maxilite failed to pay a certain insurance premium so FEBIBI sent written
Fat Kee Computer vs. Online Networks, Feb 2, 2011
One who claims the benefit of an estoppel on the ground that he has been misled
reminders to FEBTC to debit Maxilite’s account.
by the representations of another must not have been misled through his own
- A fire gutted in a building where Maxilite’s office and warehouse were located
want of reasonable care and circumspection. A lack of diligence by a party
wherein they suffered a loss of P2.1M which they are claiming against the fire
claiming an estoppel is generally fatal. If the party conducts himself with
insurance policy with Makati Insurance Company.
careless indifference to means of information reasonably at hand, or ignores
- Makati Insurance denied the fire loss claim on the ground of non-payment of
highly suspicious circumstances, he may not invoke the doctrine of estoppel.
premium.
- Petitioner F.A.T. Kee Computer Systems, Inc. is engaged in the business of selling
WHETHER OR NOT THE PREMIUM FOR THE SUBJECT INSURANCE HAS BEEN PAID;
computer equipment and in the rendering of maintenance services for its sold
(YES)
units.
- ONLINE is engaged in business of selling computer units, parts, and software.
WHETHER OR NOT FEBTC, FEBIBI AND MAKATI INSURANCE COMPANY ARE
- In its complaint, it was alleged that ONLINE sold computer printers to FATKEE
JOINTLY AND SEVERALLY LIABLE;( NO)
which was evidenced by invoice receipts containing a stipulation that an “interest
of 28% per annum is to be charged on all accounts overdue” and “an additional
WHETHER OR NOT MAXILITE AND MARQUES CAN INVOKE ESTOPPEL IN
sum equal to 25% of the amount will be charged by vendor for attorney’s
CLAIMING AGAINST FEBTC, FEBIBI AND MAKATI INSURANCE COMPANY THE
fees plus cost of collection in case of suit.”
FACE VALUE OF THE INSURANCE POLICY.( YES)
- It was also said that the president of FAT KEE, Huang, Jr., made an offer to pay
the amount which was originally in US dollars into Philippine legal tender which
SC RULED:
ONLINE accepted.
- On the premium for the subject insurance
- After payments made, ONLINE decided to stop the application of interest in view of
o Maxilite nd Marques alleged they were led to believe that the settlement of
its good relationship with FAT KEE.
Maxilite’s trust receipt account included the payment of the insurance
- FAT KEE continued to pay, however, a balance remained according to ONLINE’s
premium.
computations.
o Prior to the full settlement of the trust receipt account, FEBTC had
- Despite the repeated demands of ONLINE, FAT KEE failed to pay the remaining
insurable interest over the merchandise and had greater reason to debit
balance without a valid reason.
Maxilite’s account.
- FAT KEE answered the complaint stating that they were never informed
- On estoppel
of ONLINE’s agreement to its offer of paying US dollars.
- It also alleged that the invoice receipts were unilaterally prepared by ONLINE.
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
- Furthermore, FATKEE stated that the payments tendered were in Philippine peso,
in accordance with the Statement of Account, and that these were accepted by
ONLINE.
- They said they already had paid the total amount of the debt.
- According to the testimony of Huang, he said that there was no agreement
between FATKEE and ONLINE for the payment in US dollars.
- There was neither an agreement to a specific exchange rate.
WHETHER OR NOT ONLINE WAS ESTOPPED BY THE DECEMBER STATEMENT
OF ACCOUNT SINCE IT WAS NOT INDICATED IN THE STATEMENT WHETHER THE
AMOUNT IS TO BE PAID IN DOLLARS OR PESOS
SC RULED: Petition DENIED
- FAT KEE cannot invoke estoppel against ONLINE for the latter’s issuance of the
SOA.
- The testimonial evidence of both ONLINE and FAT KEE establish that, during the
meeting, the parties tried but failed to reach an agreement as regards the
payment of FAT KEE’s outstanding obligation and
the exchange rate to beapplied thereto.
- By their act of submitting their respective proposals andcounter-proposals
on the mode of payment and the exchange rate, FAT KEE and ONLINE
demonstrated that it was not their intention to be further bound by the
SOA, especially with respect to the exchange rate to be used.
- Moreover, FATKEE only started making payments vis-à-vis
the subject invoice receipts 2 months after the aforementioned meeting.
- One who claims the benefit of an estoppel on the ground tha the has been misled
by the representations of another must not have been misled through his own
want of reasonable care and circumspection. A lack of diligence by a party
claiming an estoppels is generally fatal.
- If the party conducts himself with careless indifference to means of information
reasonably at hand, or ignores highly suspicious circumstances, he may not invoke
the doctrine of estoppel.
- Good faith is generally regarded as requiring the exercise of reasonable diligence
to learn the truth , and accordingly estoppel is denied where the party claiming
it was put on inquiry as to the truth and had available means for ascertaining it, at
least where actual fraud has not been practiced on the party claiming the
estoppels.
2. Promissory Estoppel:
Terminal Services vs. PPA, 378 S 82
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
An estoppel may arise from the making of a promise even though without
consideration, if it was intended that the promise should be relied upon and in
fact it was relied upon, and if refusal to enforce it would be virtually to sanction
the perpetration of fraud or would result in other injustice.
Short facts:
PROMISE: For PPA to issue necessary permits to TEFASCO’Sport activities
-TEFASCO relied on the promise which induced TEFASCO to pay the
necessary fees and has suffered damages by reason of PPA’s refusal to fulfill
its promise
- Here are 2 consolidated petitions for review, one filed by the Terminal Facilities
and Services Corporation (TEFASCO) and the other by the Philippine Ports
Authority (PPA).
- TEFASCO is a domestic corporation organized and existing under the laws of the
Philippines.
- It is engaged in the business of providing port and terminal facilities as well as
arrastre, stevedoring and other port-related services at its own private port at
Barrio Ilang.
- Sometime in 1975 TEFASCO submitted to PPA a proposal for the construction of a
specialized terminal complex with port facilities and a provision for port services in
Davao City.
- To ease the acute congestion in the government ports at Sasa and Sta. Ana,
Davao City, PPA welcomed the proposal and organized an inter-agency committee
to study the plan. The committee recommended approval.
- PPA Board of Directors passed Resolution No. 7 accepting and approving
TEFASCO's project proposal.
- TEFASCO broke round with massive infrastructure work, the PPA Board curiously
passed on October 1, 1976 Resolution No. 50 under which TEFASCO, without
asking for one, was compelled to submit an application for construction permit.
- Without the consent of TEFASCO, the application imposed additional significant
conditions.
- 2 years after the completion of the port facilities and the commencement of
TEFASCO's port operations PPA again issued to TEFASCO another permit, under
which more onerous conditions were foisted on TEFASCO's port operations.
- In the purported permit appeared for the first time the contentious provisions for
10% government share out of arrastre and stevedoring gross income and 100%
wharfage and berthing charges.
- TEFASCO and PPA executed a MOA providing among others for (a)
acknowledgment of TEFASCO's arrears in government share P3,807,563.75.
- In return PPA promised to issue the necessary permits for TEFASCO's port
activities. TEFASCO complied with the MOA and paid the accrued and current
government share.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
- TEFASCO sued PPA and PPA Port Manager, and Port Officer in Davao City for
refund of government share it had paid and for damages as a result of alleged
illegal exaction from its clients of 100% berthing and wharfage fees.
- The complaint also sought to nullify the February 10, 1984 MOA and all other PPA.
WHETHER OR NOT THE COLLECTION BY PPA OF 100% WHARFAGE FEES AND
BERTHING CHARGES; THE PROPRIETY OF THE 50% WHARFAGE FEES AND 30%
BERTHING CHARGES AS ACTUAL DAMAGES IN FAVOR OF TEFASCO FOR THE
PERIOD FROM 1977 TO 1991 IS VALID.
SC RULED:
 On promissory estoppel:
o Elements:
 Definite promise
 Promise induced such an action
 Party who relied to such promise suffered damages by
reason of the non-fulfillment of promise
- The imposition by PPA of 10%, later reduced to 6%, government share out of
arrastre and stevedoring gross income of TEFASCO is void.
- This exaction was never mentioned in the contract, much less is it a binding
prestation, between TEFASCO and PPA.
- What was clearly stated in the terms and conditions - appended to PPA Resolution
No. 7 was for TEFASCO to pay and/or secure from the proper authorities "all fees
and/or permits pertinent to the construction and operation of the proposed
project."
- The government share demanded and collected from the gross income of
TEFASCO from its arrastre and stevedoring activities in TEFASCO's wholly owned
port is certainly not a fee or in any event a proper condition in a regulatory permit.
- Rather it is an onerous "contractual stipulation" which finds no root or basis or
reference even in the contract aforementioned.
3. Estoppel vs. Laches:
Francel Realty vs. Sycip, 469 S 431;
The doctrine of estoppel by laches was espoused in Tijam vs. Sibonghay holding
that a perty may be barred from questioning a court’’s jurisdiction after being
invoked to secure affirmative relief against its opponent; Laches prevents the
issue of lack of jurisdiction from being raised for the first time on appeal by a
litigant whose purpose is to annul everything done in a trial in which it has
actively participated.
- Francel alleged that it had executed a Contract to Sell to Sycip a property in
Cavite, for P451,000.00.
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
- The Contract to Sell provides that in case of default in the payment of two or more
installments, the whole obligation will become due and demandable and the seller
will then be entitled to rescind the contract and take possession of the property;
the buyer will vacate the premises without the necessity of any court action and
the down payment will be treated as earnest money or as rental for the use of the
premises.
- Francel alleged that Sycip failed to pay the monthly amortization of P9,303.00
since October 30, 1990 despite demands to update his payments and to vacate
the premises so Francel filed in the MTC an action for unlawful detainer and award
for costs and damages.
- Sycip, on the other hand filed a motion o dismiss the case on the ground that he
stopped paying because the townhouse sold to him was of defective construction;
that in fact a case for unsound real estate business practice is pending in the
HLURB.
- MTC granted the dismissal on the ground that it had no jurisdiction and that the
case was cognizable by the HLURB. RTC affirmed. CA reversed.
WHETHER OR NOT MTC HAD JURISDICTION?
SC RULED: No.
- Petitioner's complaint is for unlawful detainer.
- The determination of the ground for ejectment requires a consideration of the
rights of a buyer on installment basis of real property.
- Private respondent claims that he has a right under P.D. No. 957, §23 to stop
paying monthly amortizations after giving due notice to the owner or developer of
his decision to do so because of petitioner's alleged failure to develop the
subdivision or condominium project according to the approved plans and within
the time for complying with the same.
- The case thus involves a determination of the rights and obligations of parties in a
sale of real estate under P.D. No. 957, Private respondent has in fact filed a
complaint against petitioner for unsound real estate business practice with the
HLURB.
- Therefore this is not a simple case for unlawful detainer arising from the failure of
the lessee to pay the rents, comply with the conditions of a lease agreement or
vacate the premises after the expiration of the lease.
- Since the determinative question is exclusively cognizable by the HLURB, the
question of the right of petitioner must be determined by the agency.
- As to the counterclaim, Pursuant to Rule 6, §8 a party may file a counterclaim only
if the court has jurisdiction to entertain the claim. Otherwise the counterclaim
cannot be filed.
Metromedia Times vs. Pastorin, 465 S 335
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
Whether the court had jurisdiction either of the subject matter of the action or of
the parties is barred from such conduct not because the judgment or order of the
court is valid and conclusive as an adjudication, but for the reason that such a
practice cannot be tolerated – obviously for reasons of public policy.
- Respondent, because of tardiness was supposedly terminated by the petitioner
company, but because of the timely intervention of the union, the dismissal was
not effected.
- However, he incurred another infraction when he obtained a loan from a magazine
dealer and when he was not able to pay the loan, he stopped collecting the
outstanding dues of the dealer/creditor.
- After requiring him to explain, respondent admitted his failure to pay the loan but
gave no definitive explanation for the same. Thereafter, he was penalized with
suspension.
- He was also not allowed to do field work, and was transferred to a new position.
- Despite the completion of his suspension, respondent stopped reporting for work
and sent a letter communicating his refusal to accept the transfer. He then filed a
complaint for constructive dismissal, non-payment of backwages and other money
claims with the labor arbiter.
- The complaint was resolved in favor of respondent.
- Petitioner lodged an appeal with the NLRC, raising as a ground the lack of
jurisdiction of the labor arbiter over respondent’s complaint. Significally, this issue
was not raised by petitioner in the proceedings before the Labor Arbiter.
- The NLRC reversed the decision of the LA and ruled that the LA has no jurisdiction
over the case, it being a grievance issue properly cognizable by the voluntary
arbitrator.
- However, the CA reinstated the ruling of the CA.
- The CA held that the active participation of the party against whom the action was
brought, coupled with his failure to object to the jurisdiction of the court or quasi-
judicial body where the action is pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of the case and will bar
said party from later on impugning the court or body’s jurisdiction.
WHETHER OR NOT PETITIONER IS ESTOPPED FROM QUESTIONING THE
JURISDICTION OF THE LA DURING APPEAL.
SC RULED:
- The SC held that petitioner is not estopped from questioning the jurisdiction of the
LA during appeal.
- The lack of jurisdiction of a court may be raised at any stage of the proceedings,
even on appeal.
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
- This doctrine has been qualified by recent pronouncements which stemmed
principally from the ruling in the cited case of Sibonghanoy.
- It is to be regretted that the holding in said case had been applied to situations
which were obviously not contemplated therein.
- The exceptional circumstances involved in Sibonghanoy which justified
the departure from the accepted concept of non-waivability of objection
to jurisdiction has been ignored and, instead a blanket doctrine had been
repeatedly upheld that rendered the supposed ruling in Sibonghanoy not
as the exception, but rather the general rule, virtually overthrowing
altogether the time honored principle that the issue of jurisdiction is not
lost by waiver or by estoppel.
- The operation of the principle of estoppel on the question of jurisdiction seemingly
depends upon whether the lower court actually had jurisdiction or not.
- If it had no jurisdiction, but the case was tried and decided upon the theory that it
had jurisdiction, the parties are not barred, on appeal, from assailing such
jurisdiction, for the same 'must exist as a matter of law, and may not be conferred
by consent of the parties or by estoppel.
- However, if the lower court had jurisdiction, and the case was heard and decided
upon a given theory, such, for instance, as that the court had no jurisdiction, the
party who induced it to adopt such theory will not be permitted, on appeal, to
assume an inconsistent position—that the lower court had jurisdiction.
- Here, the principle of estoppel applies. The rule that jurisdiction is
conferred by law, and does not depend upon the will of the parties, has no
bearing thereon.
- Applying the general rule that estoppel does not confer jurisdiction,
petitioner is not estopped from assailing the jurisdiction of the labor
arbiter before the NLRC on appeal.
4. By Silence:
Magtira vs. CA, 96 S 680;
The fact that a document is entitled “Kasulatan Sanlaan” is not controlling where
the body shows that it is a deed with right to repurchase. For laches to attach,
actual knowledge of the commission of the adverse act is not necessary, it is
enough if plaintiff had the opportunity to know of such acts under the
circumstances. Payment of realty taxes as evidence that deed of sale with right
to repurchase and not a mortgage.
- On 1926, Isidro Magtira bought a parcel of riceland from respondent Zacarias
Pangan in consideration of P725.00.
- While the document is entitled “Kasulatang Sanglaan,” the body thereof contains a
statement “inilipat nang biling mabibiling muli.” Pursuant to said agreement,
Zacarias took possession of property beginning Feb 8, 1926.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
- Magtiras obtained additional P140.00 in 1928; P35.00 in 1929 and P100.00 in
1930. The amounts thus obtained reached P1000.00.
- Magtiras asked for and were given an extension of 5 years or up to April 1935 to
“redeem.”
- Petitioner maintains that she orally sought redemption by offering Zacarias
P1,000.00 on three occasions but Zacarias pleaded more time to be in possession
of the land. On Aug 23, 1945 (10yrs 4mos) after extended period after April 30,
1935, Zacarias filed an affidavit for consolidation of ownership.
- Isidro died intestate in 1953 leaving petitioner Sofie Magtira as his sole heir.
- According to petitioner it was only in 1955 that she came to know that Zacarias
was claiming ownership of the land. She filed an action against respondent for
“accounting cancellation of real estate mortgage and for recovery of ownership.”
- She claimed that while the documents speaks of contract of sale with right of
repurchase, the agreement and the intention of parties was one of loan with
equitable mortgage.
- Respondent argued that: the sale was with pacto de retro, thus, he is under no
obligation to render an accounting of the fruits thereof; Magtiras evidenced no
intention to repurchase property, nor had they made any tender of payment, nor
did they file action for protection of their rights and that he has been in possession
of property for 30yrs so he has acquired absolute ownership by extraordinary
acquisitive prescription and plaintiff’s right to recover the same had been
extinguished by prescription.
- RTC dismissed the complaint as the property was sold by pacto de retro and that
Zacarias has become owner of the property by acquisitive prescription. CA
affirmed.
WON THE AGREEMENT WAS A SALE WITH PACTO DE RETRO INSTEAD OF LOAN
WITH EQUITABLE MORTGAGE
WON SOFIA IS GUILTY OF LACHES WHICH ESTOPS HER FROM ASSERTING HER
CAUSE OF ACTION
SC RULED
1. On the pacto de retro v. Loan with equitable mortgage
The document cannot be presumed as one of equitable mortgage.
- The words “aking inilipat, ipinagbiili nang biling mabibiling muli” in the document
are expressive of their intent that the property be sold with right to repurchase.
The title “Kasulatang Sanglaan” is not a decisive factor.
- “To determine the nature of contact, courts do not have or are not bound to rely
upon the name or title given by the contracting parties, should there be a
controversy as to what they really had intended to enter into, but the way the
contracting parties do or perform their respective obligations stipulated or agreed
upon may be shown and inquired into, and should performance conflict with the
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
name or title given the contract by the parties, the former must prevail over the
latter.”
2. On the doctrine of laches
- Petitioner is guilty of laches.
- Sofia showed inexcusable negligence in effectively asserting and protecting her
rights; to make proper consignation of the repurchase price.
- More than 10 years had elapsed without Sofia having undertaken any positive
decisive step to assert and protect her rights to property.
- That Zacarias kept the consolidation of ownership a secret does not negate
presence of laches.
- “Actual knowledge on the part of the plaintiff of the existence of cause of
action against the defendant is not necessary or essential, but that it is
enough if such knowledge may be imputed to plaintiff by reason of the
existence of opportunity on his part to acquire such knowledge, or
because of circumstances of which he was cognizant.”
- Laches – failure or neglect, for unreasonable an unexplained length of time, to
that which, by exercising due diligence, could or should have been done earlier
- Negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it wither has abandoned it or decline
to assert it
3. Acquisitive prescription operated to bar action by Sofia (From date of filing of
consolidation of ownership by Zacarias on Aug 23, 1946 – filing of complaint
June 18, 1956 = 11 years)
- Period of prescription should be reckoned not merely from time when she allegedly
came to know the claim of ownership by Zacarias but from the date of registration
of the affidavit of consolidation with register of deeds because it constitutes
constructive notice to the whole world.
- Sofia failed to exercise the right of repurchase and Zacarias acted well within his
rights under old Civil Code when he consolidated ownership 1945.
De Ynchausti vs. MERALCO, 36 P 908
Rights of Landowners – real right of the owners is the right to just compensation
for the lands taken – the owner of the land who stands by without objection can’t
reclaim the land.
- MERALCO was duly authorized by the DPWH to construct an electric railroad track
upon the provincial highway running from the city of Manila to the municipality of
Parañaque.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3

- track was completed toward the end of the year 1912, and thereafter some The owner of land, who stands by, without objection, and sees a public railroad
question appears to have arisen as to the width of the highway, the plaintiff in this constructed over it, cannot, after the road is completed or large expenditures have
action insisting that the ancient highway was not as wide by 3 meters as was been made thereon upon the faith of his apparent acquiescence, reclaim the land,
claimed by the Director of Public Works; and further, that the railroad company or enjoin its use by the railroad company. In such case there can only remain to
had encroached on his land. the owner a right of compensation.
- The prayer of the complaint is for recovery of possession of this strip of land and
for damages for the alleged unlawful taking and detention, in the sum of P1,000. The trial judge denied plaintiff's prayer for possession, but being of opinion that
- It is substantially admitted that at the time when the railroad track was laid down, he is entitled to recover the value of the land, gave judgment for an amount
the plaintiff's predecessor in interest was the owner in fee of the strip of land equal to its assessed value.
described in the information, over which the railroad track was laid, he having had
his title thereto duly registered under the provisions of the Land Registration Act; 5. Inapplicability:
and because, further, no evidence was submitted which would sustain an
affirmative finding as to the true width of the ancient highway.
Rep vs. Go Bon Lee, 111 P 805;
Citizenship - Naturalization – Failure to enroll children of school age is ground
for denying petition as well as cancellation of certification – Petition must be
WHOSE RIGHTS MUST PREVAIL IN THIS CASE?
filed after 1yr. from filing of the declaration of intention; hearing after 1yr. is not
substantial compliance with requirement. Applicant’s children of school age must
SC RULED:
be enrolled in the Philippines; birth and stay if children in China since infancy and
- NO OBJECTION? – ESTOPPED BY SILENCE
the strictness of Philippines immigration laws are no excuse for not complying
- The railroad corporation being clothed with the right to take the land in question in
with requirement.
condemnation proceedings, it would be a manifestly vain and useless formality to
- Go was granted Philippine citizenship by the CFI and took his oath of allegiance,
render judgment for the restoration of possession upon payment of an indemnity
and naturalization cert. was issued to him.
to reimburse the railroad corporation for its expenditures on the land — with the
- The solicitor general filed for petition for the cancellation of Go’s cert of
full knowledge that before such judgment could be executed the railroad
naturalization on the grounds that it was obtained illegally, that he had not
corporation could and would take possession of the land in condemnation
enrolled all his minor children of school age in any public or private school
proceedings upon payment of compensation for the value of the land and the
recognized by the Philippines, that he did not reside in the Philippines.
improvements made upon it.
- It is clear that with relation to lands which a railroad corporation is authorized
under its charter to have condemned for its use, and which have been entered
upon and occupied by the railroad corporation, under a claim of right and in good Republic vs. CA, 354 S 148;
faith, but without first instituting the appropriate condemnation proceedings, the
right of election secured to the landowner in articles 361 and 453 of the Civil Code
Estoppel – it is a hornbook law that the principle of estoppel does not operate the
has, in substance and effect, been destroyed by the enactment of the legislation
Government for the act of its agents, for reasons of public policy
conferring the power upon the railroad corporation to take possession in
condemnation proceedings.
- Paredes appeared to have purchased a certain parcel of lang of which he applied
- The only right secured to the landowner in such case is the right to his
for a free patent.
lands not taken, which right he may enforce in an ordinary action to
- Is application was approved and was issued with a Free Patent and an OCT on May
compel the corporation to pay the value of the land under the terms of
1, 1984.
article 361 of the Code, or, if he so desires, by the institution of
- On June 27, 1984 the Sangguniang Bayan adopted a resolution undertaking the
appropriate proceedings to compel the corporation to have the land
assistance of the Municipality of San Francisco to recover possession of the land as
condemned and to pay the compensation and damages assessed in the
it was averred to have been designated by the Bureu of Lands as a school site for
course of the condemnation proceedings..
the San Francisco Town Site Reservation, long before title to it was issued in
Paredes’ name.

By: Cyndy dela Cruz, 1-D

Hoarding is a crime. Share away <3
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
- The also questioned the claim of Paredes to have posted his application for free
patent on the door of their Municipal Hall because if he did they would have filed
an opposition.
- The bureau of Lands filed the necessary action on their behalf of the recovery of
the alnd, cancellation of the free patent title under Paredes’ name and the
reversion of the land to the public domain.
- It also amended its complaint to include the DBP as respondent where Paredes
had mortgaged the property.
- The trial court declared he title of Paredes null and void and ordered the
cancellation of his patent title and ordered Paredes and DBP to surrender the OCT
to the Register of Deeds and the cancellation of the same.
- On DBP’s cross-claim that it was a purchaser for value in good faith, the court
ordered Paredes to pay DBP the outstanding balance of its loan.
W/N THE FREE PATENT TITLE ISSUED TO RESPONDENT IS CONTRARY TO FREE
PATENT LAW.
W/N PAREDES CAUSED MISREPRESENTATION AND FRAUD ON HIS APPLICATION
FOR THE FREE PATENT
SC ruled:
 On free patent v. homestead patent
o The respondent acquired the land through a free patent and not through a
homestead patent
o The free patent requires that the applicant must have continuously
occupied and cultivated either by himself or his predecessors-in-interest an
agricultural public land for at least 30 years and the same has not been
occupied by any person
o On this ground alone, the Court finds sufficient reason to nullify the title of
the respondents
 On estoppels against the government
o The land was reserved as a school site before the issuance of the patent of
the respondents.
o Respondent was very well aware of that the site was reserved but sought
the help of an attorney to prevent the encroachment made upon the
property
o Respondent cannot invoke estoppel against the government
because although the respondent acquired its title without any
opposition from the government, the government is not estopped
to question the validity of his certificate of title because the
principle of estoppel does not operate against the State.
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
Republic vs. “G” Holdings, 475 S 608;
 The Committee on Privatization approved the proposal of the Asset Privatization
Trust for the negotiated sale of 90% of the shares of stock of the government
owned Maricalum Mining Corporation
 G Holdings signified its interest, participated in the bidding and submitted the
best bid
 A disagreement ensued on the matter of when the installment payments shall
commence and G Holdings filed a complaint for specific performance and
damages with the RTC.
 The Solicitor General filed a notice of appeal on behalf of the Republic however
the notice of appeal was filed with the CA, not with the trial court which
rendered the judgment appealed from
 The Republic asserts that its failure to file its appeal on the proper court was by
reason of the extrinsic fraud employed by G holdings

WHETHER OR NOT THE FAILURE OF THE SOLICITOR GENERAL TO FILE THE
NOTICE OF APPEAL WITH THE PROPER FORUM AMOUNTED TO EXTRINSIC FRAUD
WHICH PREVENTED THE PETITIONER FROM APPEALING THE CASE WITH THE
COURT OF APPEALS
SC RULED: NO
-
Extrinsic fraud refers to any fraudulent act of the prevailing party in the
litigation which is committed outside of the trial of the case, whereby the
unsuccessful party is prevented from fully proving his case, by fraud or
deception practiced on him by his opponent.
- The Republic has not proven, or even alleged, that “G” Holdings practiced deceit or
employed subterfuge on it, precluding it from fully and completely presenting its
case to the court. Since the prevailing party did not commit or participate in
the commission of fraud which prevented the other party from having his
day in court, there was no reason for the appellate court to annul the
decision of the trial court.
- The unfortunate predicament of the Republic was caused by the Solicitor General,
its own counsel. We have consistently ruled that, to render a judgment void, the
fraud must be committed by the adverse party and not by one’s own counsel.
While the Republic or the government is usually not estopped by the
mistake or error on the part of its officials or agents,the Republic cannot
now take refuge in the rule as it does not afford a blanket or absolute
immunity. Our pronouncement in Republic v. Court of Appeals is
instructive: the Solicitor General may not be excused from its
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
shortcomings by invoking the doctrine as if it were some magic
incantation that could benignly, if arbitrarily, condone and erase its
errors.
Favis vs. Municipality of Subangan, 136 P 366;
Estoppel against municipality not operative when it would validate a contract
in which it has no power to make or would enable it to do indirectly what it
cannot do directly
- Plaintiff spouses Favis instituted this action against defendants Municipality of
Sabangan for the recovery of the principal sum of P1,115 representing the invoice
value of G.I pipes of various sizes needed by the defendant in its municipal
waterworks construction.
- Defendant, through its mayor, alleged that the then Municipal Mayor was never
authorized to contract or buy on credit from the plaintiff. That defendant
municipality cannot be bound for the acts of the then mayor.
- The City Court of Baguio rendered judgment in favor of plaintiffs. Defendant
appealed to the CFI of Baguio but did not pay or deposit docket fee nor file an
appeal bond, as required by Rule 40, section 2, of the RoC. Plaintiff therefore
moved to dismiss the appeal on the ground of non-payment of the fee, contending
that only the RP is exempt.
Petitioners also contend that the CFI has no jurisdiction over the case because the
case is still under the City Court. The defendant, not being able to comply with the
requirements of appeal (non-payment), therefore the City Court still has the
jurisdiction over the case.
WHETHER OR NOT THE DOCTRINE OF ESTOPPEL IS APPLICABLE IN THIS
CASE
SC RULED:
Section 16 – Government Exempt – the Republic of the Philippines is
exempt from paying the legal fees provided in this rule
• Section 16 is an exemption clause – it is applicable only to the Republic of the
Philippines i.e. the National Government, and not to local governments or
subdivisions.
• The Court a quo did not commit error of jurisdiction in holding that the
defendant municipality was exempt from payment of the appellate court docket
fee.
• Failure to pay the docketing fees does not automatically result in the dismissal of
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
the appeal, much less affect the Court’s jurisdiction. The dismissal is discretionary
in the appellate court.
• The record shows that the requisites for the purchasing right of
municipalities (i.e. bidding, etc. pursuant to Setion 3, Act 2264) have not
been complied with. However, the municipality has been benefited by the
installation of the pipes.
• San Diego case: The doctrine of estoppel cannot be applied as against a
municipal corporation to validate a contract which it has no power to
make, or which it is authorized to make only under prescribed conditions,
within prescribed limitations, although the corporation has accepted the
benefits thereof and the other party has fully performed his part of the
agreement. To apply the doctrine of estoppels against a municipality in
such a case would be to enable it to do indirectly what it cannot do
directly. Where a contract is violative of a public policy, the municipality
executing it cannot be estopped to assert the invalidity on the ground, nor
can it be estopped to assert the invalidity of a contract which has ceded
away its legislative or governmental powers.
o Contracts requiring public bidding affect public interest, and to change
them without complying with that requirement would be against public
policy.
Eugenio vs. Perdido, 97 P 41;
Sale within 5yrs. From date to issuance of patent is unlawful and null and void
from execution. An action to declare inexistent contract does not prescribe.
Where a patent issued to a homesteader was recorded in the registry of
property, the homestead is considered registered within the meaning of the Land
Registration Act 496 and enjoys the same privileges as Torrens titles issued
under said legislation. No estoppel can be predicated on an illegal act.
- On November 1, 1927 Homestead Patent No. 10847 was issued in the name of
Teodoro Eugenio;
- Teodoro Eugenio in the presence of his son Juan, and daughter Basilia sold the
homestead and delivered possession for P1,300.00 to spouses Perdido whose heirs
are joined as defendants and respondents;
- This action was filed to recover the land, upon the theory that the contract was
mere mortgage of the homestead, which plaintiff inherited from their father; and
that they had attempted unsuccessfully to repay the debt;
- The CFI held the contract to be a contract of sale, which was void, because
executed within five years from the issuance of the homestead patent; therefore it
ordered to return of the property upon repayment of P1,300.00 with interest;
W/N THE ACTION TO ANNUL THE SALE IN 1932 HAD NOT PRESCRIBED;
Obligations and Contracts Case and Case Doctrines Reviewer Part 3

- "Granting, without conceding, that petitioners' predecessor-in-interest, Teodoro

W/N THE RIGHT TO REPURCHASE WITHIN THE FIVE-YEAR PERIOD HAS NOT Eugenio, could not have conveyed his homestead title on March 12, 1932, yet his
LAPSED, INASMUCH AS THE SALE WAS NEVER REGISTERED. subsequent acquisition of a complete homestead title sufficient for conveyancing
under the Homestead Law on November 1, 1932 validated whatever defect the
SC RULED: title of Clemente Sadang might have had."
- There is no question that the sale in March 1932 having been made within
five years from "the date of issuance of the patent" was "unlawful and
null void from its execution", by express provision of sections 116 and
Cristobal vs. Gomez, 50 P 810
- Epifanio Gomez owns two parcels of land located in the Cavite.
122 of Act No. 2874.
- He sold the property with Pacto de Retro to Luis Yangco, redeemable in five
- Under the existing classification, such contract would be "inexisting" and "the
years.
action or defense for declaration" of such inexistence" does not prescribe".
- The period to redeem expired but Yangco extended it.
- The imprescriptibility of plaintiff's action to recover is further strengthened by Sec.
- Gomez approached Bibiano Banas , a relative, to secure a loan.
46 of the Land Registration Act providing that "no title to registered land in
- The latter only agreed if Gomez’s brother Marcelino and sister Telesfora would also
derogation to that of the registered owner shall be acquired by prescription or
be responsible for the loan.
adverse possession".
- On 12 August 1907, Marcelino and Telesfora entered into a “private partnership in
- The patent issued to the homesteader Teodoro Eugenio was recorded in the
participation” for the purpose of redeeming the property from Yangco.
registry of deeds of Nueva Viscaya, and that Oct N was issued in his name.
- Epifanio was present when said agreement was discussed and assented to.
- Such being the case his homestead was considered "registered within the meaning
- The capital consisted of P7000, of which P1500 came from Marcelino, and P5500
of the Land Registration Act No. 496" and enjoys the same privileges as Torrens
from Telesfora.
titles issued under said legislations.
- The agreement provided that the property redeemed will be placed in the name of
- Respondents also content that, having executed the deed of the sale, petitioners
Marcelino and Telesfora, the income, rent, and produce of the property would go
are estopped from denying defendants' ownership and possession, or that, at
to the two and that the property shall be returned to their brother as soon as the
least, being in pari delicto they should not be allowed to recover.
capital employed have been covered.
- Epifanio should also manifest good behavior in the opinion of Marcelino and
- No estoppel can be predicted on an illegal act.
Telesfora.
- The principle of estoppel as contented by respondents would mean
- More than a year later, Epifanio Gomez dies leaving Paulina Cristobal and their
something like this: petitioners having represented and led the
four children.
respondents to believe, that the sale was valid, they may not thereafter
- Meanwhile, Marcelino Gomez continued to possess the property, improved it, and
allege it is invalid.
earned income from it.
- Yet the respondents are conclusively presumed to know the law, and
- He acquired exclusive rights over it when Telesfora conveyed her interest to him.
should not be allowed to plead estoppel which is founded in ignorance. "It
- He sold the property with pacto de retro to Banas, redeemable within five years.
is generally considered that as between the parties to a contract, validity
- On April 1, 1918, he redeemed the property from Banas.
cannot be given to it by estoppel if it is prohibited by law or is against the
- Subsequently, Paulina and children filed action to recover property from Marcelino.
public policy".
- They claimed that the capital had been covered by the property’s income, hence,
the same should be returned to them. The lower court granted their petition.
- As to the rule of in pari delicto, homesteaders or their heirs have heretofore been
- Marcelino appealed. Hence the present petition.
allowed to maintain, the pari delicto doctrine may not be invoked in a case of this
kind since it would run counter to an avowed fundamental policy of the State, that
WHETHER THERE WAS ACCEPTANCE BY EPIFANIO OF THE TRUST AGREEMENT.
the forfeiture of the homestead is a matter between the State and the grantee of
his heirs, and that until the State has taken steps to annul the grant and asserts
SC RULED: Yes.
title to the homestead the purchaser is, as against the vendor or his heirs, "no
- Contrary to defendant’s claim that the agreement was kept secret from Epifanio,
more entitled to keep the land than any intruder."
the testimony of Banas stated that Gomez was present when the arrangement for

By: Cyndy dela Cruz, 1-D

Hoarding is a crime. Share away <3
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
the repurchase of the property was discussed. Banas even told Epifanio to be
thankful that the latter was able to recover the property from Yangco.
- Defendants also claim that because Epifanio had not accepted the donation in a
public document, the same is unenforceable. This is untenable.
- Epifanio need not accept in accordance with formalities of donations. The court
said that the partnership agreement should be viewed as an express trust, not as
an intended donation.
6. Exceptions:
Bachrach Motors vs. Unson, 50 P 981;
Nilo vs. Romero, 111 P 540;
If the defendant city believed that it was wrongly represented, its city attorney
should have filed a motion to dismiss the case, based on such ground. Not having
done so the doctrine of estoppel now operated against defendant city. Laches –
petition for relief from judgment; more than 3yrs. Have elapsed.
- Fausto Nilo filed a case against the City of Davao, represented by City Engineer, to
recover payment for the use as road way, of a part of his land by the defendant
City.
- The City of Davao interposed the defense of prescription of action limiting the filing
of the action to four (4) years.
- On same date, plaintiff filed a motion to declare defendant in default and to strike
its answer, alleging that the period to file answer expired on October 3, 1955,
whereas the same was actually filed on October 7, 1955.
- It is admitted in the opposition of the defendant to plaintiff's motion to have the
defendant declared in default and to strike its answer, that there was negligence
on the part of the City Engineer's Office in not immediately forwarding the papers
to the City Fiscal's Office.
- Due to the death of plaintiff Fausto Nilo, a motion for substitution was filed and the
petitioners, as heirs, became the plaintiffs.
W/N THE COURT VALIDLY ACQUIRED JURISDICTION OVER THE DEFENDANT CITY
OF DAVAO
SC RULED:
- On December 16, 1958, the lower court entered an Order the dispositive
portion of which is hereunder reproduced:
- Jurisdiction over the party may be acquired by voluntary appearance in court
which has jurisdiction over the subject matter.
- There is no dispute regarding the fact that summons were served upon
defendant City, thru the representative named in said complaint; that for
some negligence on the part of its employees, the answer of the city to the
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
complaint was filed out of time; that the city of Davao, as represented by the
City Engineer, was duly assisted by the City Attorney, thru Special Counsel
Medialdea; that the City Attorney did his best to defend the rights of the City,
as shown by the effort he exerted to lift the default order by a motion for
reconsideration.
- The appearance of the City Attorney for and in behalf of the City of Davao
constituted a voluntary appearance, sufficient in law to confer upon the
court jurisdiction over it.
- If defendant City believed that it was wrongly represented, its City
Attorney should have filed a motion to dismiss, base on such ground.
Unfortunately, however, he did not.
- The doctrine of estoppel now operates against respondent City of
Davao.
- Certain requirements are provided for which respondent City of Davao
failed to comply with.
Leca Realty vs. Republic, 503 S 563
- RP & DPWH, filed a complaint for eminent domain for the taking of some
portions of the properties of Leca Realty Corp. Leeleng, Metrobank, BPI,
Cityland.
- The properties would be affected by the construction of the EDSA-Shaw
Boulevard Overpass Project in Shaw Boulevard, Mandaluyong City, a public
purpose to be undertaken by the DPWH.
- CA affirmed the lower court’s judgment for the following reasons. First,
the RTC’s appointment of the commissioners was fair and
impartial. Second, the fair market values of the affected properties were
unanimously arrived at by the appointed commissioners after a thorough
and objective investigation and analysis of the properties, with due
consideration of the various factors affecting those values: location,
existing facilities, desirability, neighborhood, and size.
- The appellate court likewise debunked the contention of the RP that the
commissioners had erred in fixing the fair market values of the properties,
because the appraisals exceeded the zonal values determined in
Department of Finance Order No. 71-96. The CA held that the zonal
valuation was made for taxation purposes only and was not necessarily
reflective of the actual market values of the properties in the area.
IS THE REPUBLIC BOUND AND PUT IN ESTOPPEL BY
THE GROSS NEGLIGENCE/MISTAKE OF ITS AGENT/FORMER COUNSEL;
SC RULED:
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
 On Estoppel by the Government
- It is a hornbook doctrine that mere errors of judgment cannot be the
proper subject of a special civil action for certiorari.
- Where the issue or question involved affects the wisdom or legal
soundness of the decision – not the jurisdiction of the court to render
said decision – the same is beyond the province of a special civil action
for certiorari.
- Furthermore, petitions under Rule 65 must be filed within 60 days. In
the present case, the Petition was filed after over a year.
- The Republic through the OSG invokes the principle that a lawyer’s
gross negligence will not bind the client. The Republic imputes the failure
to file a timely appeal to one of its lawyers, Solicitor Mauro Elinzano, who
allegedly took no action after receiving the adverse Decision of the Court of
Appeals.
- The time-honored rule that the government cannot be estopped by the
mistakes or errors of its agent is not without exceptions.
-
“While the Republic or the government is usually not estopped by the
mistake or error on the part of its officials or agents, the Republic cannot
now take refuge in the rule as it does not afford a blanket or absolute
immunity. The Solicitor-General may not be excused from its
shortcomings by invoking the doctrine as if it were some magic
incantation that could benignly, if arbitrarily, condone and erase its
errors.”
- The rule on non-estoppel of the government is not designed to
perpetrate an injustice. In general, the rules on appeal are
created and enforced to ensure the orderly administration of
justice. The judicial machinery would run aground if late
petitions, like the present one, are allowed on the flimsy
excuse that the attending lawyer was grossly lacking in
vigilance.
TRUSTS: (Rule 98 Parol Evidence Rule 130 Sec 9; Articles 1440 to 1457)
1. Concept:
Sotto vs. Teves, 86 S 154
Co-ownership as kind of express trust. In express trust, no particular words are
required for its creation, it being sufficient that a trust is clearly intended.
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
 Florentino Rallos married Maria Fadullon with two children born out of this
marriage, Concepcion Rallos and Carmen Rallos, and since then have
entrusted their settlement to Atty. Sotto through a Mocion – an
agreement of co-ownership
 Atty. Sotto married Concepcion Rallos in 1913
 In 1945, Concepcion Rallos died in 1945
 Direct descendants of Rallos and Fadullon contests the revelation of Cesar
Sotto that all the properties now in question have already been under the
name of Atty. Sotto
 Descendants contend that what Atty. Sotto did was a violation of their
trust agreement.
 Petitioners on the other hand contend that such co-ownership evidenced
by the Mocion did not amount to a trust.
WAS THERE AN EXPRESS TRUST CREATED?
IS ATTY. SOTTO A CONSTRUCTIVE TRUSTEE? HOW?
IS THERE A VIOLATION OF ARTICLE 1443?
SC RULED:
 On the express trust:
o There was an express trust that was created. The Petitioners erred
in contending otherwise.
o The Petitioners erred in contending that if not expressly stated in
writing, no express trust will be created. The mere language of the
agreement – Mocion reveals such express trust
o The Mocion contains agreements of co-ownership amongst Spouses
Rallos and Atty. Sotto and as what was held in Castrillo et. al v.
CA, co-ownership is a form of trust and every co-owner is a
trustee of the other.
o Whether established by law or by agreement, the property or thing
held pro-indiviso is impressed with a fiducial nature that each co-
owner becomes a trustee for the benefit of his co-owners.
o Under the law of Trusts, it is not necessary that the document
expressly state and provide for the express trust, for no
particular words are required for the creation of an express
trust.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3

 On Atty. Sotto being a constructive trustee

o Yes, Atty. Sotto is a constructive trustee. Not by reason of his
marriage to Rallos but for the reason of the confidence reposed
upon him due to his prestige and tremendous social and political
influence
o He became the protector of interests of the family and thus could
not be held to be the one who would seek selfish benefit for
himself
 On a violation of Article 1443
o Parole evidence presented merely affirmed the intention if the heirs
to continue to co-ownership
o This is NOT in violation of the provisions in Article 1443.
2. Express:
Ramos vs. Ramos, 61 S 284;
Once a decision or manifestation which evidences a receipthet of shares in a
settlement has been made, there is a negation of the existence of an express
trust.
 Martin Ramos married Candida Tanate and out of this marriage were born three
legitimate children and seven natural children
 After the death of the spouses, a partition project was instituted which were
signed by the heirs
 After final judgment, a receipt of all the shares adjudicated to each heir was given:
o ½ of Martin’s estate – 3 legitimate children
o 1/3 remaining free portion – adjudicated to all seven natural children
 Petitioners, “natural children” of Martin, now files this case for the reconveyance of
their alleged “other shares” contending that their shares were merely held in trust
WAS THERE AN EXISTENCE OF AN EXPRESS TRUST?
IF THERE IS NO EXPRESS TRUST, WAS THERE AN IMPLIED TRUST?
SC HELD:
 On the existence of an express trust
o There was no express trust in the case at bar.
o In a trust, a legal title is vested to another, BUT in the case at bar, the
decision and manifestation as to the receipt of the shares negates the
existence of an express trust
o Public documents proved that the estate was well-settled and adjudicated
to each heir by virtue of the provisions on partition
 On the existence of an implied trust
o Neither was there an implied trust in the case at bar
o The provisions on implied trust require that legal title be named after
another and such is not present in this case
o And even if there was implied trust, the enforcement of implied trusts
have already been barred by prescription and laches
o Proceedings started in 1906, the present action was brought only in 1914
o There was definitely an inexcusable delay
_______________________________________________________________
Cuayacong vs. Cuayacong, 129 P 439;
Lorenzo vs. Posadas 64 P 353
Requisites of Article 1444, No particular or technical words are required to create
a testamentary trust
 When Thomas Hanley died, his will stated as follows:
o My money as well as my real estate will be given to my nephew
o However, my properties will only be given 10 years after my death
 The court appointed Moore as a trustee, however he resigned. Lorenzo took his
place
 Posadas, the Collector of Internal Revenue assessed the inheritance tax amounting
to 2, 054.74. He filed a motion in Hanley’s testamentary proceedings and Lorenzo
was ordered to pay the same (But with Lorenzo’s protest)
 Lorenzo claims that the inheritance tax should have been assessed after 10 years
and thus asked for a refund
WAS THE ESTATE DELINQUENT IN PAYING THE INHERITANCE TAX?
SC RULED:
 Yes, Sec. 1544 of the Revised Administrative Coe provides that the payment
of the inheritance tax shall be made before delivering to each beneficiary his
share (although the property is still to be given after 10 years)
 Even though there was no express mention of the word trust in the will, the CFI
was correct in appointing a trustee
o No particular or technical words are required to create a
testamentary trust:
 Sufficient words to raise a trust
 Definite subject
 Ascertained object

By: Cyndy dela Cruz, 1-D

Hoarding is a crime. Share away <3
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
Implied:
Juan vs. Yap, Mar 30, 2011;
There is implied trust even though the specific provisions in the Chapter of Trusts
does not apply. Such listing does not exclude other general concepts of trust
 The Caneda spouses mortgaged to petitioner Richard Juan, employee and nephew
of Gabriel Yap to secure a loan
 Petitioner thereafter sought the extrajudicial foreclosure of the mortgage. Although
petitioner and respondent participated in the auction sale, the properties were sold
to petitioner for tendering the highest bid. However, no certificate of sale was
issued because he failed to pay the sales commission
 A year after, Gabriel Yap and the Caneda spouses executed a MOA in which the
spouses acknowledged Yap as their real mortgage-creditor and Juan as their
trustee.
 Yap agreed that spouses can redeem the foreclosed properties for 1.2 million
 Yap agreed to annul the previous contract in order that the properties be
reconveyed
 Juan insisted on his rights over the properties and that he was not a trustee
WAS THERE AN IMPLIED TRUST?
DOES THE PAROLE EVIDENCE RULE APPLY?
SC RULED:
 On implied trust
o Yes. Although not appearing as one of the provisions on the Chapter on
Trusts, the code itself provides that such listing does not exclude other
general concepts of trust
o This is hinged on the general principle: Equity converts the holder of
the property right as trustee for the benefit of another if the
circumstances of its acquisition makes the holder ineligible in good
conscience to hold and enjoy it.
 On parole evidence
o When Caneda spouses asked for the extension of time within which to pay
for the loan, they directed their request to Yap and not to Juan
o Solon, the notary public who drew the contract revealed that at the time of
entering into the contract, Yap was abroad and trusted Juan to “take
care of everything”
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
o AND, in fact, it was Yap not Juan who shouldered the expenses for
foreclosure purposes which indicated that Yap was the real mortgage-
creditor
Kiel vs. Estate of Sabert, 46 P 193;
Main Doctrine:
A trust will not be created when, for purposes of evading the law prohibiting one
from taking or holding real property he takes a conveyance thereof in the name of another
person. Leggett v. Dubois (1835)
In the case at bar Kiel is a German citizen who is not deemed eligible to acquire public
lands in the Philippines. Kiel and Sabert entered into an agreement to develop the Parang
Plantation Company. Sabert was to furnish the capital to run the plantation and Kiel was
to manage it. A partnership was formed between Kiel and Sabert.
Kiel developed the plantation but was deported from the Philippines during the World War.
Sabert transferred all his rights to two parcels of land situated in the municipality of
Parang in Cotabato in consideration of a sum of money to the Nituan Plantation
Company.
Kiel tried to settle things with Sabert however, Sabert’s death came before any amicable
agreement can be reached.
This was indeed not a case of claiming rights as to a Trust, for there can be no trust for
purposes of evading a law. This case only asks for a straight money judgment
against the estate.
Thomson vs. CA, 298 S 280;
Trust relationship manifestly indicated since petitioner is Executive Vice
President of AmCham. Petitioner has the obligation to transfer share to private
respondent
 Thomson is the Executive Vice President and later on, Management Consultant of
the American Chamber of Commerce of the Philippines for over 10 years.
 AmCham bought a share in the Manila Polo Club but had it listed in the name of
Thomson, as indicated in the employment advice
 When Thomson’s contract of employment was up for renewal, he notified private
respondent that he would not longer be available as EVP but private respondent
asked petitioner to stay for another 6 months
 Petitioner indicated his acceptance of the extension however sent a counter-
proposal to reimburse the purchase price of MPC share at 110,000 contending that
he was the rightful owner of the shares
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
IS PRIVATE RESPONDENT THE BENEFICIAL OWNER OF THE SHARES? OR IS IT
THOMSON?
SC RULED:
 On trusts
o A trust relationship was created since petitioner, being the EVP of
AmCham, occupied a fiduciary position in the business of the private
respondent
o Applicable here is the rule that a trust arises in favor of one who pays
the purchase money of property in the name of another, because of
the presumption that he who pays for a thing intends a beneficial
interest therein for himself.
o Petitioner now has the obligation to transfer said share to the private
respondent upon termination of his duties as Executive Vice President
Muller vs. Muller, 500 S 65
Purchase in violation of the constitutional prohibition of aliens in owning private
lands
 Elena Buenaventura Muller and Helmut Muller married in Hamburg, Germany
sometime in 1989.
 Couple resided in Germany but moved and resided permanently in the Philippines
in 1992
 Respondent sold the house he inherited in Germany and used the proceeds for the
purchase of a parcel of land in Antipolo
 The Antipolo property was registered in the name of petitioner
 The spouses separated and on 1994, respondent filed a petition for separation of
properties before the RTC of Quezon City
 Trial court rendered a decision which terminated the regime of absolute
community property between the petitioner and the respondent and with regard to
the Antipolo property, the court held that it was acquired using paraphernal
funds. However, the court ruled that respondent cannot recover his funds
because the property was purchased in violation of Section 7, Article XII
of the Constitution1
IS RESPONDENT ENTITLED TO REIMBURSEMENT OF FUNDS USED FOR THE
ACQUISITION OF THE ANTIPOLO PROPERTY?
1 Save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or
hold lands of the public domain
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
SC RULED:
 On the constitutional prohibition
o Respondent was well aware of the constitutional prohibition and that he is
not entitled to reimbursement of the funds for the acquisition of the
Antipolo Property
o Where purchase is made in violation of an existing statute and in
evasion of its express provision, no trust can result in favor of the
party who is guilty of the fraud. To hold otherwise would allow
circumvention of the constitutional prohibition
3. Prescription:
Amerol vs. Bagumbaran, 154 S 397;
Marguez vs. CA, 300 S 655
Doctrine: The doctrine laid down in Gerona v. de Guzman has already
been superseded by the ruling in Amerol v, Bagumbaran in that with the
effectivity of the New Civil Code on August 30, 1950, the provisions on
the prescriptive period are now governed by Articles 1139-1155.
Since implied or constructive trusts are obligations created by law, then the
prescriptive period to enforce the same prescribes in ten years.
PRESCRIPTION
General Provisions (Articles 1106 – 1116)
1. Acquisitive vs. Extinctive:
Morales vs. CFI, 97 S 872
Extinctive prescription. Article 1141 – Real actions over immovables prescribe
after 30 years. This action is without prejudice to what is established for the
acquisition of ownership and other real rights by prescription
 On September 26, 1957, Rosario and Santiago Terez filed a civil case for the
recovery, possession, ownership, unpaid rentals and damages of one-half of a
piece of land and one-half of the house built thereon. Trial court dismissed
the complaint
 On May 7, 1978, Marciana Morales, filed another civil case with allegations and
reliefs similar to the dismissed civil case above.
 On May 31, 1978, Spouses Terez filed their answer denying the allegations of
the complaint and invoked the defense that the plaintiff’s cause of action
has been barred by prescription.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3

 Respondent judge ruled in favor of Sp. Terez contending that after the lapse of  Surety invoked the question of jurisdiction of the CFI2 15 years after the
15 years, the right of Morales to recover possession and ownership of the action was commenced
property had already prescribed not to mention the fact that they are guilty of
laches.
IS THE CAUSE OF ACTION OF MARCIANA MORALES BARRED BY PRESCRIPTION?
Catholic Bishop vs. Court of Appeals, Nov 14, 1996;
Doctrine of laches undoubtedly closely related to the issue of prescription.
Even if not raised as an assigned error, a just, fair, and complete resolution
SC RULED:
necessitates the consideration of the application of the doctrine of laches
 On the difference between acquisitive and extinctive prescription
 By virtue of the authority given him by the Roman Catholic Archbishop of
o Decision of the respondent judge relied on par. 2 of Article 1141 in that
Manila to donate a portion of lot, the then parish priest executed a Escritura
the action is barred because defendants Terez have acquired the subject
de Donacion donating an area of 265.36 sq. m to Ana de los Reyes for her
properties by acquisitive prescription
long and satisfactory service to the church
o The contention of the respondent judge is wrong.
 Donation was accepted and delos Reyes commenced possession of the
o Acquisitive v. Extinctive Prescription
property
 Acquisitive
 However, the deed was refused registration by the Registry of Deeds
 Vests the property and raises a new title to the occupant
 6 years later, Ana died without issue
 Relationship between the occupant and the land in terms
 Nevertheless, before her death, she gave subject property to her nephew, who
of possession is capable of producing legal consequences
took possession of the property as owner and was never disturbed until 49
 Extinctive
years later when the Catholic Bishop of Balanga claims possession of
 Bars the right of action
the property and invoking that the deed of donation was never
 One does not look at the act of the possessor but to the
registered
neglect of the owner
CAN THE CATHOLIC BISHOP OF BALANGA CLAIM BACK THE POSSESSION AND
 In the case at bar, this is the prescription
OWNERSHIP OF THE PROPERTY ALLEGEDLY DONATED TO DELOS REYES?
contemplated. Because of the failure of the
defendants to assert their action in the manner and
SC RULED:
time prescribed by law.
 On the doctrine of laches
o _Petitioners contend that because “laches” was not indicated in the
2. Prescription vs. Laches:
assignment of errors, it shall not have been used as basis in the judgment
Tijam vs. Sibonghanoy, 32 S 29;
o But doctrine of laches is undoubtedly directly related to the issue
Brought appeal to question court jurisdiction 15 years after judgment is the of prescription
exception to the general rule that the question of jurisdiction may be brought o The Catholic Bishop of Balanga only filed his complaint after 49
at any time during the proceedings including appeal years has elapsed since the donation of subject property – and
such is a stale demand
 Spouses Serafin and Felicitas commenced a civil case against Sibonghanoy for
the recovery of 1,908 Php with legal interest.
 A writ of attachment was issued but the same has been dissolved Insurance of Phil Islands vs. Sponses Gregorio, Feb 14,
 Trial court ruled in favor of petitioner spouses and the court issued a writ of
execution against Sibonghanoy 2011
 Plaintiffs moved for the writ of execution against the surety bond, Surety 4-year prescriptive period in cases of FRAUD begins at the time of discovery
moved to quash the writ but was denied by the RTC and shall be reckoned at the time of the actual discovery of fraud

2 If not barred by prescription, CFI should have acquired jurisdiction over the
matter for the amount exceeded 2,000Php
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
Doctrine of laches is applied not to penalize neglect or sleeping on one’s
right, but to avoid recognizing a right, when to do so would result in a clearly
unfair situation
 Three loans were obtained by the Spouses Gregorio from the Insurance of the
Philippine Islands Corporation
 None of the three loans were paid therefore, petitioner moved for the foreclosure
of the properties
 Petitioner, by virtue of the public auction sale, was the highest bidder and
obtained ownership and possession of the properties
 27 years after petitioner assumed ownership, he filed a complaint for damages
alleging that in 1995, it discovered that the lots were already registered in the
names of third persons and furthermore grounds their contention on the reason of
fraud
 Respondents argue that petitioner’s cause of action had already prescribed by
virtue of prescription and laches
 RTC ruled in favor of petitioner, CA reversed, contending that the period of
bringing the action shall be reckoned from the time of registration of the titles
covering the subject properties
IS CA’S DECISION CORRECT?
SC RULED:
 On the period of reckoning discovery of fraud
o Action for alleged fraud must be commenced four years after its discovery
and in the case at bar, it shall be reckoned in 1995 when petitioner
discovered about the TCTs being named after third persons
o Doctrine of prescription, much more laches cannot be invoked in
this case
3. Limitations and Extent of Prescription:
Vda. De Alberto vs. Court of Appeals, 173 S 436;
Jurisdiction issue: If a party had voluntarily participated in the trial, they
cannot later on raise the issue of lack of jurisdiction
Estate proceedings are binding against the whole world, 4 years prescriptive
period in filing for a complaint a lesion subject of the partition
No defense of minority if minors have parents, guardians and legal
representatives
 Andrea Jongco and Antonio Alberto lived together as husband and wife and
Antonio Alberto Jr. was born out of this union
 Andrea Jongco and Antonio Alberto Sr. separated and the latter married Natividad
del Rosario, herein petitioner and two children were born out of this marriage
o Lourdes Alberto
o Antonio J. Alberto Jr.
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
 In 1949, Antonio Alberto Sr. died, estate proceedings were instituted and he
partition did not include Antonio J. Alberto Jr. as one of the heirs
 In 1953, Antonio J. Alberto Jr. filed an action praying that petitioners acknowledge
him as the natural child of Antonio Alberto Sr. and that his ¼ share shall be turned
over to him
 In 1960, Petitioners filed a motion to dismiss contending that the cause of action
of private respondent is already barred by prior judgment and by the statute of
limitation
 Trial court denied the motion to dismiss, but later on rendered a decision in favor
of the petitioners
 Private respondent appealed to CA, CA ruled in favor of respondent, hence this
case
SC RULED:
 On the question of jurisdiction
o Party who have actively participated/ voluntarily participated in the trial
cannot later on invoke the defense of jurisdiction/ raise the issue of
jurisdiction during appeal
 On the intestate proceedings
o Proceedings had been terminated in November 9, 1953, the instant case
was brought in 1960
o Private respondent cannot invoke that he had no knowledge/notice on the
intestate proceedings for this is a proceeding in rem - binding against the
whole world and is published
o Private respondents cannot validly secure a judgment in favor of them on
their lack of due diligence
 On prescription
o Article 1100: The action for prescription on account of lesion shall
prescribe after 4 years from the time the partition was made.
o Private respondents could have validly asserted their right if the action
was brought within 1953-1957
o 1953 – court approved the partition and hence, period of running of the
prescriptive period commenced at this point.
 On the defense of minority
o As an exception to the general rule:
 Prescription runs against
 Minors and incapacitated persons who have parents,
guardians or other legal representatives
 Private respondent was living with his mother at that time and she
was the one who filed this complaint in the case at bar
 On the doctrine of laches
o About 1944, Andrea Jongco learned of the marriage of Antonio Alberto to
Natividad. YET, she took no steps to protect the interests of the child.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
o It is evident that the plaintiff’s case is adversely affected by his long delay
in bringing the action
Marcelino vs. Court of Appeals, 210 S 444;
Doctrine of laches, case was brought up after 50 years, Doctrine of laches is
grounded on the discouragement of stale claims
 Petitioners are minor grandchildren of Guillermo MArcelino and Luciana
Marcelino, only heirs of Silvestre Marcelino and Genovevo Patricio – registered
owners of three parcels of land
 Private respondents in this case contend that even before WW2 they have
been in possession of these parcels of land and the certificates of title thereof
 They averred that they are the lawful occupants and the action of the
petitioners to recover ownership and possession had already prescribed
 RTC dismissed the case on the ground of laches, CA upheld RTC’s decision
 Petitioners filed this petition for review invoking that they are not guilty of
laches
SC RULED:
 On the doctrine of laches
o Petitioners admitted in their complaint that private respondents had been
occupying the parcel of land in question even before WW2
o For almost 50 years no action had been taken by the petitioners to
recover possession of the land thereof
o Long inaction of petitioners bars them from recovering the same
Republic vs. PNB, 13 S 42;
No prescription against the government – Army is an instrumentality of the
government
 AFP opened a current account in PNB in 1947
 PNB, in 1947, through negligence paid to an unnamed person a sum of 37,
553.32 Php on a check bearing fictitious names and forged signatures
 Statemeot of Account revealed above-transaction in which one of the officers
called the attention of PNB in 1950
 PNB, despite of repeated demands, refused to return the value, hence this case
filed in 1959
 PNB, moved to dismiss the action on the ground of prescription
HAS THE ACTION PRESCRIBED?
SC RULED:
 On prescription against the government
o Plea of prescription cannot be maintained against the Army because the
statute of limitations does not run against the State
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
o The Army is one of the instrumentalities of the Republic and its functions
are compulsory and essential to sovereignty, constituent in character as
distinguished from ministrant and optional ones
Director of Forest Admin vs. Fernandez, 192 S 121;
Forest or timber land cannot be acquired by prescription. Parcels of land not
capable of private appropriation cannot be the object of acquisitive
prescription
 Land in question is a pasture land belonging to the public domain occupied by the
defendant for 30 years, in the course of which they had already paid the necessary
rentals in compliance with the rules and regulations governing the matter
 Spouses Gregorio Legazpi and Valentina Cervania filed an application for the
registration and confirmation of title to a parcel of land to which the Director of
Lands and Director of Forest Development had opposed on the ground that,
among others, the property is the portion of the public domain belonging to
RP not subject for appropriation
 In another civil case, the basis of the private respondent in pushing for the
application for the registration of the parcel of land is his purchase of the
aforesaid property from Mateo Pablo and that he has been in possession of the
same as owner and has fully developed the property into a fishpond
 BUT records show that the Deed of Absolute Sale is for the leasehold rights alone
and not on the ownership of the property itself
CAN THE PRIVATE RESPONDENTS VALIDLY CLAIM OWNERSHIP AND
REGISTRATION OF LANDS IN FAVOR OF THEM?
SC RULED:
 On objects of prescription
o Forest lands of the public domain cannot be acquired by prescription,
its possession, however long cannot ripen into private ownership
o Whole mass of land claimed by private respondents is within the
Manleluag reforestation program, thus even continuous possession
of the lands is doubtful
Republic vs. Court of Appeals, 131 S 532
Government may, by remuneration, decide for itself what portions of the
public land shall be forestry land unless private interests have intervened
before such reservations were made.
Extent of lake bed – highest ordinary depth – highest depth of the waters of
Laguna de Bay during the dry season
Obligations and Contracts Case and Case Doctrines Reviewer Part 3

Private persons cannot reclaim land from public waters without prior
permission by the government, and even if reclamation is authorized,
acquisition of ownership is not automatic
 GR 43105
o Del Rio purchased a lot near the shore of Laguna de Bay about 20
meters therefrom from Angel Pili, said purchase was duly recorded
with the Registry of Deeds
o Del Rio thereafter filed his application for registration but was opposed
by the Director of Lands and a private opposition in the case as
follows:
 GR 43190
o Private opposition obtained permission from the Del Rio to construct
duck houses on the land in question but in violation of the original
agreement, private opposition constructed residential houses
thereon
o Private oppositors thereafter opposed del Rio’s application for
registration
SC RULED:
 On whether the subject land is public land
o Public lands have been described as those which are not subject of private
ownership and are reserved for public purposes
o Article 420:
 Intended for public use
 Belong to the State intended for some public service or for the
development of national wealth
o Article 502:
 Rivers and natural beds
 Continuous and intermittent waters of springs and brooks running
in the natural beds
 Waters rising continuously or intermittently on lands of public
dominion
 Lakes and lagoons and their beds
 On the definition of lake bed
o Extent of a lake bed is defined in Article 74 of the Law of Waters
 The natural bed or basin of lakes, ponds, or pools is the ground
covered by their waters when at their highest ordinary depth
 Highest depth of Laguna de Bay during the dry season,
such depth being the regular, common, natural, which
occurs most of the time during the year.
 HOWEVER, the subject lot in this case is not covered
by the highest ordinary depth of Laguna de Bay and
therefore, is not a part of the bed or basin of Laguna
de Bay
 On the right of respondent to file for acknowledgment of ownership of the
land
o Evidence of tax receipts and declaration of ownership for taxation
purposes become a strong evidence of ownership acquired by prescription
o Applicant has been in open, continuous, public, peaceful, exclusive
and adverse possession of property
o Applicant is an owner of just title and good faith
o This is pursuant to the Public Land Act – open, continuous, public,
peaceful, exclusive and adverse possession of property for at least
30 years.
4. Waiver of Prescription:
DBP vs. Adil, 161 S 307
When a party acknowledges the correctness of a debt and promises to pay it
after the same has already prescribed with full knowledge of the prescription, he
thereby waives the benefit of prescription
 Confessor and Villafuerte obtained an agricultural loan from DBP, then Agricultural
and Industrial Bank evidenced by a promissory note
 Obligation remained outstanding and unpaid even after the lapse of 10 years
 Confessor, then a member of the Congress of the Philippines, executed a second
promissory note in which:
o 1. He acknowledged the outstanding debt
o 2. Expressly promised to pay
 Spouses did not pay at the stipulated date
 DBP filed a complaint for the payment of the loan
 Trial court ruled in favor of the spouses, thus this case
SC RULED:
 On the waiver of prescription
o Article 1112
o No doubt that the prescription has set in on Feb 10, 1940. HOWEVER
Confessor executed a promissory note whereby he promised to pay the
amount covered by the previous promissory note.
o The express promise of an essential element in proving Confessor’s
right to prescription
5. Prescriptive Periods:
DBP vs. Ozarraga, September 20, 1965;
Foreclosure of mortgage – Section 40 and 43 Code of Civil Procedure (10
years)
Law applicable before the effectivity of this Code

By: Cyndy dela Cruz, 1-D

Hoarding is a crime. Share away <3
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
 No pertinent facts
 Plaintiff only moved for the reconsideration of the decision which dismissed the
complaint on the ground of prescription
Alvero v. Reas
Prescription lies even in the absence of good faith and just title
Prescription already running before the effectivity of NCC is to be governed by
the laws previously in force – Section 40 and 41 of Code of Civil Procedure
 Plaintiffs herein predicate their ownership as successors of Alejandra Alvero who
acquired the land from Cipriana by Succession
 Defendants on the other hand assert that they had verbally partitioned the lot and
that they had since possessed their respective shares, They further pleaded
adverse possession
Did the MAGSUMBOLS acquire Lot 655-A by prescription?
 CFI upheld the contentions of the plaintiffs, CA reversed on the basis that no
decree or certificate of title was ever issued
SC ruled:
 CA also ruled anent the issue of prescription that defendants - appellants have
been in actual, open, public, continuous possession of the land for over 10 years
and such possession has ripened into ownership by and through prescription
IS THE DECISION OF CA CORRECT?
SC RULED:
 On the law applicable in the case at bar
o Law applicable before the effectivity of the NCC is the Code of Civil
Procedure, sections 40 and 41
o Section 41:
 Ten years actual adverse possession by any person claiming to be
the owner… shall vest a full and complete title to every actual
occupant or possessor
 Prescription lies in such a procedural law even in the absence of
good faith and just title
o In the New Civil Code – Ownership and other real rights may be
acquired through uninterrupted adverse possession for thirty years
without need of just title and good faith
Prescription of Ownership: (Articles 1117 – 1138)
1. Ordinary vs. Extraordinary:
Godinez vs. Court of Appeals, 135 S 351
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
Judge mistakenly entered 1/6 share for partition instead of 1/7, no decree of
partition issued, land remained unregistered until possessor took possession
of the land for half a century.
 Land was originally owned by Felix Bergado and was inherited by his seven
children
 During the estate proceedings, Judge Guillermo mistakenly entered 1/6 share
of the partition instead of 1/7 causing no decree of partition to be rendered
thereby no registration commenced.
 It was only 38 years after the mistake that it was corrected by Judge Pablo
and the land became a registered land at last.
 HOWEVER, the IGOT brothers and the Magsumbols sued the Bergado heirs for
the reconveyance of 5/7 of the portion of the land which they have been in
possession for almost half a century when the Bergado heirs have ceased
possession of the same in 1934.
 On prescription
o The Code of Civil Procedure’s prescriptive period shall be followed in
the case at bar.
o The MAGSUMBOLS had been in continuous, uninterrupted and
notorious possession of the land for more than half a century and
the canons of common sense side with them.
Heirs of Amarante vs. Court of Appeals, 185 S 585
Coconut trees planted are approximately 70 years of age – a clear indication
that Malonis Infiel had begun occupying the lot a very long time ago. No
question that possession exceeded 30 years – period for extraordinary
prescription
 Malonis Infiel had been in possession of subject lot long before the advent of the
Second World War.
 Celso Amarante, herein petitioner, together with his aunts and their children – who
are all heirs of Malonis Infiel had been in peaceful possession of subject lots after
the death of Malonis Infiel
 Their possession continued to be undisturbed until after Gregorio Bolo, a common-
law husband of one of the granddaughters of Felix Malonis surveyed and occupied
subject lots claiming to have purchased the same from Felix Malonis by virtue of
an Absolute Deed of Sale
 Gregorio Bolo relied much on his tax declarations on claiming possession of the
land but the trial judge rendered it insufficient to support his claim for ownership
of subject land.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
IS THE TRIAL COURT CORRECT IN RENDERING JUDGMENT IN FAVOR OF THE
PETITIONERS?
SC RULED:
 On the evidence of possession
o Coconut trees planted in the subject land were already approximately
seven years of age. The mango trees had already circumferences of
about (3) arm lengths indicating that those trees were very old. Thus,
it can be clearly concluded that Malonis Infiel has begun
occupying the lot a very long time ago.
o There is further no question that this possession has exceeded
thirty years – the period for extraordinary prescription
provided for in Article 1137 of the New Civil Code.
 On Section 48(b) of the Commonwealth Land Act
o XXX Those who by themselves or through their predecessors-in-
interest have been in open, continuous and exclusive possession and
occupation of agricultural lands under a bonafide claim for ownership
XXX for at least thirty years XXX
2. Concept of Possession:
Republic vs. Court of Appeals, 146 S 15;
US Military had only used the land as commodatum and the same cannot
militate against the title of Domingo Baloy and his successors-in-interest
 Baloys applied for the registration of the land on their names but the Director
of Lands opposed alleging that this land had become public thru the operation
of Act 627 pursuant to the EO of the President of the US declaring the area to
be within the US NAVAL Reservation
 Director of Lands argues that since Domingo Baloy failed to file his claim
within the prescribed period, the land had become irrevocably public and could
not be the subject of a valid registration for private ownership
IS SUBJECT LAND AVAILABLE FOR REGISTRATION FOR PRIVATE OWNERSHIP|?
SC RULED:
 On Act 627
o A cursory reading of the act reveals that several steps are to be followed
before any affected land can be conclusively adjudged to be public
land
o Under the provision, private land can only be deemed to have
become public land only by virtue of a judicial declaration after due
notice and hearing
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
o None of these were followed and therefore, it can be clearly deduced that
the land was still “private” in character
 On the possessory character of the US Navy
o The occupancy of the US Navy was not in the concept of an owner, but
rather, a commodatum.
o One’s ownership of a thing may be lost by prescription by reason of
another’s possession if such possession be under claim of ownership, not
where the possession is only intended to be one of transient as in the
case at bar.
Ramos vs. Court of Appeals, 112 S 542;
Tax receipts are strong evidence of possession as no one in his right mind
would pay realty taxes year after year for property not in his actual
possession. In the case at bar, action for reconveyance had already
prescribed as it was filed 39 years from registration of the property in
respondent’s names
 Records show that the property in question was owned and registered in the
name of Gabriel Ramos, married to Francisca Catambay.
 They mortgaged the property to PNB to guarantee payment of a loan
 Couple died and were survived by their only child – Catalina Ramos
 When Catalina became the registered owner of the land, she sold it to
respondent Alejandro Catambay and every year thereafter, Catambay has
been paying the realty tax due and had declared the same in his name
 Salud Ramos, daughter of Catalina Ramos, prays for the reconveyance of
subject properties contending that in the Deed of Absolute Sale, the signature
of her mother was fictitiously obtained making her believe that it was one of a
guaranty of payment for the mortgage to PNB
CAN THE SUBJECT PROPERTY BE VALIDLY ADJUDICATED IN FAVOR OF RAMOS?
SC RULED:
 On the presumption of regularity
o There is always present a presumption of regularity in the issuance of the
certificate of title in the ordinary course of law
o The burden of proof rests upon the person claiming its invalidity and
petitioner have failed to show such clear and convincing proof as to the
same
 On the possessory rights of respondents
o Respondents first and foremost acquired title to the property by virtue of a
valid Deed of Absolute Sale and was religiously paying for the property
taxes and other tax thereon as evidence by the receipts
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
o Tax receipts are strong evidences of possession since no on in his
rightmind would pay realty taxes year after year for property not in his
actual possession
 On prescription
o Furthermore, adverse possession of the subject property had ripened to
ownership after the lapse of ten years, good or bad faith under Section
40 of the Code of Civil Procedure
Coronado vs. Court of Appeals, 191 S 814;
Possession by mere tolerance of the owner does not start the running of the
prescriptive period for ownership
 Property subject of this case is a parcel of land in Laguna being contested by
JUANA on the one hand, and CORONADO on the other.
 JUANA claims that the property is a portion of what was bequeathed to her by
virtue of a will executed by her grandfather
 JUANA further claims that her property was included together with two parcels of
land bequeathed to CORONADO in a will executed by Dr. Dalmacio Monterola
 JUANA opposed the probate however the will was allowed and thus JUANA filed for
an action for quieting of title among others.
SC RULED:
 On acquisitive prescription
o Monterola never claimed ownership over the property in question. As a
matter of fact, one of the deeds of donation executed by Monterola in
favor of CORONADO acknowledged that the boundary owner on the
property conveyed to her is JUANA – the reason why during the
lifetime of Monterola, JUANA had always been allowed to enter and reap
the benefits or produce of said property
 On possession
o Possession, under the Civil Code, must be possession under the claim of
title, or it must be adverse
o Acts of possessory character performed by one who holds by mere
tolerance of the owner are clearly not the concept of possession as
enshrined in this Code.
Corpus vs. Padilla, 5 S 814
Requisites of Acquisitive Prescription. ADVERSE – CONTINUOUS-PUBLIC –
EXCLUSION OF ALL
 Sixto Domingo is in possession of subject land for 4-5 years before the Spanish
revolution
 Pedro Domingo succeeded Sixto but abandoned subject land
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
 Rufino Tawagin borrowed the land from Pedro Domingo and cultivated the same
until it was sold to Benjamin Padilla in 1956
 HOWEVER, in 1929, Mariano Corpuz, father of petitioner declared the land for
taxation purposes and cultivated the northern part thereof
 In 1937, Domingo and Corpuz executed a Deed of Absolute Sale
 Southern portion of the lot was cultivated by Pedro Domingo
 In 1956, Mariano Corpuz caused the cultivation of subject lot thru a tenant Fruto
Saad from whom Benjamin Padilla had wrested possession of the land.
 Mariano Corpuz now claims ownership by prescription of the lands which were
previously abandoned by Pedro Domingo and which he had caused cultivation
thereof
CAN CORPUZ VALIDLY CLAIM OWNERSHIP OVER SUBJECT LOTS?
SC RULED:
 On acquisitive prescription
o The claim of Corpuz for acquisitive prescription is contradicted by his own
evidence
o Mariano Corpuz expressly recognizes that the subject lot forms part of the
property to which Pedro Domingo has title thereto
o One cannot recognize the rights of another and at the same time
claim adverse possession which can ripen to ownership, thru
acquisitive prescription
3. Prescription over registered properties:
Reyes vs. Court of Appeals, 258 S 651
Forged deed, simulated signatures – not indications of possession in good
faith. Petitioner failed to rebut evidences presented against him
 Florentino Reyes, herein petitioner, and his sisters entered into a deed of Extra-
Judicial Partition in which Florentino contends that his sisters have waived their
rights, interests and participation in favor of him thus apportioning only 50 sq. m.
to Paola Reyes, one of his sisters
 In 1985, private respondents, sisters of Florentino denied having entered into and
signed a Deed of Extra-Judicial Partition and contends that their signatures were
forged
 Petitioner executed a Deed of Absolute Sale, selling the subject land to his children
and the respondents thereafter moved for the nullification of said sale
 Lower Court and CA rendered a decision in favor of private respondents
IS THE DEED OF ABSOLUTE SALE VALID? CAN FLORENTINO VALIDLY CLAIM
OWNERSHIP OVER SUBJECT LAND?
SC RULED:
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
 On forgery
o The CA and the lower court found out the ff:
 Signatures at the bottom page appears to be written by one and
the same hand
 The Notary Public who appears to have signed the document was
not commissioned as Notary Public for the province of Rizal
 The word “Pasay, Rizal” was superimposed on the word “Makati”
o Petitioners failed to rebut such information and the facts duly presented
remain to be the facts of the case
 On ownership by prescription
o Petitioners contend that even assuming there was forgery, they had
become absolute owners of the subject property by virtue of acquisitive
prescription
o Petitioners, did not meet the requirements of good faith based from
the very fact of forgery
o Moreover, there can be no acquisitive prescription considering that
the subject parcel of land is a titled property
o Even if the petitioners allege adverse possession the same cannot be
maintained because private respondents have been residing in subject
land.
4. Good Faith:
Negrete vs. CFI of Marinduque, 48 S 113;
Deed of sale covers parcel of land patently different from disputed land as to
area, location and boundary. There is absent good faith where possessor is
aware of the differences in area, location and boundaries between the land
subject of the deed of sale and disputed land
 The deed of sale in favor of the deceased Maderazo, covers a parcel of land
patently different from the disputed land owned by the appellant as to area,
location and boundary owners.
 Hence, the appellee, along with his late father Maderazo, could not claim
good faith in occupying said land of appellant on the basis of the instrument
of the sale
 If appellee’s position is to be maintained, it would be easy for anyone to
acquire ownership of an untitled land belonging to another by adverse
possession of only ten years on the basis of the document of sale
covering a distinct parcel executed by a person who is a stranger to
the land.
 Applicable statute in this case is the prescription of action for recovery of a
real property which is 30 years without prejudice to what is established
for the acquisition of ownership and other real rights by prescription
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
 Action by Negrete was instituted 13 years after 1954 (alleged year of
possession of Maderazo) and this institution of action for the recovery of real
property interrupted the running of the prescriptive period.
 Maderazos cannot validly claim good faith since possessor was well aware of
the flaws of the title (stated above)
Magtira vs. Court of Appeals, 96 S 680 (facts from
estoppel cases)
Acquisitive prescription operated to bar action by Sofia (From date of filing of
consolidation of ownership by Zacarias on Aug 23, 1946 – filing of complaint
June 18, 1956 = 11 years)
- Period of prescription should be reckoned not merely from time when she allegedly
came to know the claim of ownership by Zacarias but from the date of registration
of the affidavit of consolidation with register of deeds because it constitutes
constructive notice to the whole world.
- Sofia failed to exercise the right of repurchase and Zacarias acted well within his
rights under old Civil Code when he consolidated ownership 1945.
5. Just Title:
Doliendo vs. Biarnesa, 7 P 232;
 Jose Doliendo bought the land in question from Ventura Belarmino.
 When Belarmino died, and estate proceedings were instituted, his properties
were included in a public auction sale as payment for the alleged shortages in
his official accounts as cabeza de barangay
 The parcel of land which was bought by Doliendo was included in such public
auction sale to which Biarnesa was the highest bidder and thus was awarded
the subject land.
 Defendant had been in possession of subject property more than ten years
prior to the institution of this action for recovery of property
DID THE DEFENDANT ACQUIRE OWNERSHIP OF THE PROPERTY THROUGH
PRESCRIPTION AND IN GOOD FAITH?
SC RULED:
 On good faith
o Even if it should be proved that the subject land was not lawfully
included in the list of properties subject to the payment of the
debts of late Ventura Belarmino, it is clear the the public auction
sale did in fact take place and that the transaction was in good
faith and the defendant bought the land from one whom he
believed to have the right to sell
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
Solis vs. Court of Appeals, 176 S 678
Just title contemplated by the Civil Code is not one of a valid title but such a
title where, although there was a mode of transferring ownership, still
something is wrong because the grantor is not the owner
 Private respondents took possession of the subject land way back in 1933
and such possession was adverse, continuous, open, public and
uninterrupted and in the concept of an owner.
 This land was allegedly donated by Simeon Solis to private respondents
however, petitioners claim that there is no competent proof to show that
such donation was valid as to be sufficient enough to create or establish
just title of private respondents as donees
CAN AN INVALID DONATION SUFFICE AS JUST TITLE AS CONTEMPLATED BY THE
CIVIL CODE?
SC RULED:
 On just title
o Even a void donation may be a basis of the claim for ownership which may
ripen into title by prescription
o It is the essence of the statute of limitations that, whether the party had a
right to the possession or not, if he entered under the claim of such right
for the period of ten years (named in the statute of limitations to
which the operative law at the time of the case at bar is the Code
of Civil Procedure), the right of action of the plaintiff is barred by that
adverse possession
o The right given by the statute of limitations does not depend upon
and has no necessary connection with the validity of the claim
under which the possession was held
6. Prescription over illegally acquired movables:
7. Computation of Time:
South City Homes vs. Republic, 185 S 693
In the case at bar, petitioner’s claim is rejected not because it is a private
corporation barred from acquiring public land but because it has failed to
establish its title to the disputed lot whatever its nature
 South City Homes claims possession of a strip of land adjoining the two parcels of
land which it has bought from its predecessors-in-interest
 The Republic of the Philippines argues that the elongated piece of land between
the two lots now owned by herein petitioner used to be a canal which could not
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
have been appropriated by the purchasers of the adjacent lots or their successors-
in-interest
 Prescription, according to the Republic cannot also be properly maintained as
petitioner has failed to establish the requisite possession of the lot, as to manner
and length to justify the judicial confirmation of title to its name
CAN PETITIONER VALIDLY CLAIM OWNERSHIP OVER THE STRIP OF LAND?
SC RULED:
 On technical descriptions of the lands subject of the Deed of Sale
o What is obvious is the technical descriptions of the two lots whose areas
do not include the strip of land between them
o The strip of land was then a canal which could not have been subject of
any exclusive appropriation to private persons at that time
 On the claim of acquisitive prescription
o Even as though the canal had dried up and was filled with dirt and silt,
petitioner’s possession of the strip of land cannot be validly claimed as one
that goes as far back as “time immemorial” for it was only in 1980 that an
evidence of such claim – a tax declaration and receipt was dated
o And possession was held to begin from 1981 when petitioner acquired the
two adjacent lots and occupied the strip of land thinking that it is part of
the two lots
o The application for registration was filed in 1983 – less than three years
since the applicant had been in possession of the property.
o No adverse possession was properly proven and this was far too short
of the prescriptive period which is 10 years if he possession is in
good faith and thirty years if in bad faith.
Doctrines for important cases under Prescription of Actions
Prescription of Actions: (Articles1139 to 1155, 649)
1. Good Faith vs. Bad Faith:
Dira vs. Tanega, 33 S 479
Longest period in the chapter on prescription in the Civil Code is 10 years –
plaintiff’s action is barred by the lapse of ten years from the time his cause of
action accrued
 Dira and Tanega together with Pagulayan entred into a partnership for the
purpose of engaging in the printing business in the City of Tacloban and the
terms of the said partnership was for 5 years from organization
 Plaintiff failed, during the course of the partnership, to pay off his loan after
several demands for him to settle the same.
Obligations and Contracts Case and Case Doctrines Reviewer Part 3
 Defendant assumed full ownership of the business and changed the name of
the same
 Thus this action of the plaintiff of partnership accounting – which was
commenced after a lapse of 9 years, 10 months and 11 days after the
expiration of the contract of partnership.
SC RULED:
 Petitioner contends that respondent became his trustee and that his actions are
imprescriptible.
 However, petitioner’s claim is without merit.
 In good faith or bad faith, after eight years of actual adverse possession,
appellee acquired clear ownership of appellant’s share by acquisitive
prescription.
2. Prescriptive Periods
Kramer Jr. vs. Court of Appeals, 178 S 518
Doctrine: Action based upon a quasi-delict must be instituted within 4 years. The
prescriptive period begins from the day the quasi-delict is committed.
Right of action accrues when there exists a cause of action – Elements:
 A right in favor of the plaintiff by whatever means and under whatever
law it arises or is created
 An obligation on the part of defendant to respect such right
 An act or omission on the part of defendant violative of the right of the
plaintiff
It is only when the last element occurs or takes place that it can be said in law
that a cause of action has arisen
In the case at bar, the right of action accrues from the day of the collision of the two
vessels which caused damage and injury to the plaintiffs
3. When Period Begins to Run:
Tolentino vs. Court of Appeals, 162 S 66;
Usage of surname after marriage is terminated during the Japanese
Occupation – Philippine law silent whether or not a divorced woman may
continue to use the surname of her husband because there are no provisions
for divorce under Philippine law
By: Cyndy dela Cruz, 1-D
Hoarding is a crime. Share away <3
Doctrine: Period of prescription is 5 years from the right of action accrues when
there is no special provision which ordains otherwise and shall be counted from the
day they may be brought.
In the case at bar, Consuelo David and Arturo Tolentino terminated their marriage
during the Japanese Occupation. Tolentino married Constancia in 1945 however
Consuelo continued to use the surname Tolentino which prompted Constancia to file
a complaint to enjoin Consuelo to stop using the surname Tolentino.
The case was filed 20 years after the right of action accrued. Thus, the right of action
has already prescribed
Provident vs. Court of Appeals, 222 S 125;
Interruption v. Suspension of period
Doctrine: When the prescription is interrupted, all the benefits acquired so far from
the possession cease and when prescription starts anew, it will be entirely a new
one. The concept of interruption should not be equated with suspension where the
past period is included in the computation being added to the period after prescription
is resumed
In the case at bar, Provident Bank was placed under receivership by the Central Bank
of the Philippines therefore was forbidden and immobilized in doing business in the
Philippines. Therefore it has not lost any right against Spouses Guarin for their failure
to pay off its loan in due time
4. Interruptions of Periods:
Ledesma vs. Court of Appeals, 224 S 175;
Doctrine: Two Schools of thought as to the legal effect of the cessation of the
interruption by an intervening action upon the period of prescription:
1. That full period of prescription should start to run anew reckoned from
the date of the cessation of the interruption
2. Cessation of the interruption merely toils the running of the remaining period
of prescription, deducting from the full period thereof the time that has already
elapsed prior to the filing of the intervening action
The interruption of the prescriptive period by written extrajudicial demand
means that the said period would commence anew from the receipt of the
Obligations and Contracts Case and Case Doctrines Reviewer Part 3

demand. That is the correct meaning of interruption as distinguished from mere

suspension or tolling the prescriptive period.

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By: Cyndy dela Cruz, 1-D

Hoarding is a crime. Share away <3