2019 Bernabe Civil

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BERNABE CASES
CIVIL LAW
1
PERSONS
HUMAN RELATIONS
G.R. No. 219698, September 27, 2021

PNTC COLLEGES, INC., Petitioner, v. TIME REALTY, INC., Respondent.
BERNABE, J.:
LEGAL BASIS TO REMEMBER
In view of this, "it is well to remember that a contract is the law between the parties. 65 Obligations
arising from contracts have the force of law between the contracting parties and should be complied with
in good faith.66 The parties are allowed by law67 to enter into stipulations, clauses, terms and conditions
they may deem convenient which bind the parties as long as they are not contrary to law, morals, good
customs, public order or public policy."68
BAR QUESTION
PNTC Colleges, Inc. (PNTC) and Time Realty, Inc. (Time Realty) entered into a Contract of Lease
wherein Time Realty leased to PNTC the Extremadura Streets, Sampaloc, Manila, from 2005 to 2007.
While the term of the lease ended on December 31, 2005, the contrast was impliedly renewed on a
monthly basis after said date. With the acquiescence of Time Realty, PNTC continued to occupy the
premises for an increased rental rate.
Later, Time Realty notified PNTC of its intent not to extend the lease on the fourth floor anymore.
PNTC informed Time Realty of its decision to terminate its lease in the fourth floor which would take effect
at the end of April 2007.
Time Realty alleged that PNTC was transferring its operations without settling its (PNTC's)
outstanding rentals and service charges. It retained the remaining properties of PNTC in the premises. It
averred that its retention of PNTC's properties as security was in accordance with Paragraph 23 of the
Contract of Lease.
PNTC filed a Complaint for Delivery of Personal Properties with Damages.
Does Time Realty have the right to take control or possession of PNTC’s properties?
SUGGESTED ANSWER
YES. The lease contract provides that Time Really has the prerogative to take control or
possession of PNTC's properties in the event the latter violates a provision of the contract, including non-
payment of rent and other charges. Through its judicial admissions70 which the CA already took note,
there is no doubt that PNTC should settle the said obligations in accordance with the Contract of
Lease71 and applicable laws.
In view of this, "it is well to remember that a contract is the law between the parties. 65 Obligations
arising from contracts have the force of law between the contracting parties and should be complied with
in good faith.66 The parties are allowed by law67 to enter into stipulations, clauses, terms and conditions
they may deem convenient which bind the parties as long as they are not contrary to law, morals, good
customs, public order or public policy."68
Essentially, the stipulations in the Contract of Lease "are clear and show no contravention, of law,
morals, good customs, public order or public policy. As such, they are valid, and the parties' rights shall
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be adjudicated according to them, being the primary law between them. When the terms of the contract
are clear and leave no doubt as to the intention of the contracting parties, the rule is settled that the
literal meaning of its stipulations should control."69
FAMILY RELATIONS
2
TERMINABLE MARRIAGE
G.R. No. 219185, November 25, 2020

REPUBLIC OF THE PHILIPPINES, Petitioner, v. JOSEPHINE PONCE-PILAPIL,* Respondents.
BERNABE, J.:
Art. 41. A marriage contracted by any person during subsistence of a previous marriage shall be
null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent
for four consecutive years and the spouse present has a well-founded belief that the absent spouse was
already dead. In case of disappearance where there is danger of death under the circumstances set forth
in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient.
For the purpose of contracting the subsequent marriage under the preceding paragraph the
spouse present must institute a summary proceeding as provided in this Code for the declaration of
presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse.
Article 391. The following shall be presumed dead for all purposes, including the division of the
estate among the heirs:
(1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has
not been heard of for four years since the loss of the vessel or aeroplane;
(2) A person in the armed forces who has taken part in war, and has been missing for four years;
(3) A person who has been in danger of death under other circumstances and his existence has
not been known for four years. (n)
BAR QUESTION
Josephine Ponce-Pilapil (Josephine) sought to declare her husband, Agapito S. Pilapil, Jr.
(Agapito), presumptively dead in a petition filed before the Regional Trial Court, Branch 55 of Mandaue
City (RTC). She honestly believes that her husband Agapito is already dead considering that more than six
(6) years have lapsed without any information on his whereabouts. She filed the instant petition for
purposes of declaring her husband Agapito presumptively dead so that she can remarry.
The RTC declared Agapito as presumptively dead, pursuant to Article 41 of the Family Code, in
relation to Article 391 of the Civil Code. The CA ruled against the Republic in a Petition for Certiorari
finding no grave abuse of discretion on the part of the RTC.
WHETHER the CA erred in finding no grave abuse of discretion on the part of the RTC and in
affirming the RTC Order that granted Josephine's petition for declaration of presumptive death of Agapito.
SUGGESTED ANSWER
YES. Respondent failed to demonstrate full compliance with Article 41 of the Family Code.
Jurisprudence sets out four requisites for a grant of a petition for declaration of presumptive death under
Article 41 of the Family Code:
1. the absent spouse has been missing for four consecutive years, or two consecutive years if the
disappearance occurred where there is danger of death under the circumstances laid down in
Article 391 of the Civil Code;
2. the present spouse wishes to remarry;
3. the present spouse has a well-founded belief that the absentee is dead; and
4. the present spouse files for a summary proceeding for the declaration of presumptive death of the
absentee.
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The well-founded belief in the absentee's death requires the present spouse to prove that his/her
belief was the result of diligent and reasonable efforts to locate the absent spouse. It necessitates exertion
of active effort, not a mere passive one. Mere absence of the spouse, even beyond the period required by
law, lack of any news that the absentee spouse is still alive, mere failure to communicate, or general
presumption of absence under the Civil Code would NOT suffice.
3
Here, Josephine's efforts to search for Agapito only consisted of inquiries not even done personally but
by mere letter-correspondence facilitated by another person. Her acts fail to convince the Court that she
indeed went out of her way to locate Agapito, and her search for Agapito's whereabouts cannot be said to
have been diligently and exhaustively conducted.
MARRIAGE CELEBRATED ABROAD
[ G.R. No. 243646. June 22, 2022 ]
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. JOCELYN ASUSANO KIKUCHI, AS

REPRESENTED BY HER ATTORNEY-IN-FACT, EDWIN E. ASUSANO, RESPONDENT.
BERNABE, J
Under Article 26 of the Family Code, a divorce between a foreigner and a Filipino may be
recognized in the Philippines as long as it was validly obtained according to the foreign spouse's national
law. Before a foreign divorce decree can be recognized by the court, the party pleading it must first prove
the fact of divorce and its conformity to the foreign law allowing it.
BAR QUESTION
In 2015, Jocelyn, through her attorney-in-fact, Edwin Asusano (Edwin), filed before the trial court
a Petition for judicial recognition of foreign divorce. She alleged that she was married to Fumio in 1993,
and in 2007, they jointly filed for divorce before the City Hall of Sakado City, Saitama Prefecture. As the
divorce was accepted, Jocelyn sought the recognition thereof here in the Philippines.
The Republic, through the OCP, did not object to the presentation and offer of such evidence and
manifested that it will not be adducing controverting evidence. The RTC and CA granted the Petition.
The Republic, through the OSG, filed the instant Petition, arguing that: Jocelyn failed to comply
with the requirements of authentication and proof of documents concerning the Acceptance Certificate,
and the Authentication by the Philippine Embassy in Tokyo, Japan; Edwin's testimony as to the fact of
divorce should have been excluded for being hearsay; and the foreign law had not been proven.
WHETHER the Petition for judicial recognition of foreign divorce should be granted.
SUGGESTED ANSWER
NO. Jocelyn was able to prove the fact of divorce but not the Japanese law on divorce. For a
petition for judicial recognition of foreign divorce to prosper, the party pleading it must prove the fact of
divorce and the national law of the foreign spouse. Under Article 26 of the Family Code, a divorce between
a foreigner and a Filipino may be recognized in the Philippines as long as it was validly obtained according
to the foreign spouse's national law. Before a foreign divorce decree can be recognized by the court, the
party pleading it must first prove the fact of divorce and its conformity to the foreign law allowing it.
Here, Jocelyn was able to establish the fact of divorce. Jocelyn submitted the Acceptance
Certificate stating that her and Fumio's written notification of divorce had been accepted, as certified by
Kiyoshi Ishikawa, Mayor of Sakado City. The Acceptance Certificate was accompanied by an
Authentication from the Philippine Embassy in Tokyo.
Given that Jocelyn was able to prove the fact of divorce but not the Japanese law on divorce, a
remand of the case rather than its outright dismissal is proper.
VOID MARRIAGES
[ G.R. No. 213954. April 20, 2022 ]

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HANNAMER C. PUGOY-SOLIDUM, PETITIONER, VS. REPUBLIC OF THE

PHILIPPINES,* RESPONDENT.
BERNABE, J.:
4
Tan-Andal further enunciates that psychological incapacity is not a mental incapacity nor a
personality disorder that must be proven through an expert witness. Ordinary witnesses who have been
present in the life of the spouses before their marriage may testify on the behaviors they have observed
from the allegedly incapacitated spouse. Likewise, juridical antecedence of psychological incapacity may
also be proven by ordinary witnesses who can describe the incapacitated spouse's past experiences or
environment growing up, which may have triggered one's particular behavior. In any case, the gravity of
psychological incapacity must be shown to have been caused by a genuinely serious psychic cause. Thus,
"mild characterological peculiarities, mood changes, occasional emotional outbursts" are still not accepted
grounds that would warrant a finding of psychological incapacity under Article 36 of the Family Code.
Tan-Andal also modified the requirement on incurability — that psychological incapacity under
Article 36 of the Family Code must now be incurable, not in the medical, but in the legal sense. Thus, it
must be so enduring and persistent with respect to a specific partner, that the only result of the union
would be the inevitable and irreparable breakdown of the marriage. Ultimately, the totality of evidence
must support a finding of psychological incapacity.
BAR QUESTION
Hannamer and Grant were classmates during their fourth year in high school and eventually
became sweethearts. After graduation, Hannamer found work and started living with Grant. At that time,
Grant's parents were fond of Hannamer for being hardworking and the breadwinner of Grant's family.
However, things changed when she got pregnant and had to stop working.
After Hannamer gave birth, her mother convinced her and Grant to get married. On March 12,
2003, Judge Albert S. Abragan of the RTC of Iligan City, solemnized the marriage of Hannamer and Grant.
Hannamer spent for their wedding, as well as their child's baptismal expenses. Unemployed, Grant could
not contribute a single centavo for their living expenses, which were all shouldered by Hannamer's
mother.
When Hannamer's mother decided to move in with the couple after quitting her job in Manila, the
couple's relationship turned sour culminating to Hannamer leaving their house and staying with Grant's
relatives instead. From that time on, Grant never visited nor sent financial support for Hannamer and
their child. Eventually, Hannamer lost contact with Grant when she moved to another town with her
mother and child.
Hannamer filed a petition for declaration of nullity of marriage under Article 36 of the Family
Code. She averred that Grant showed complete lack of understanding of his duties and responsibilities as
a husband and father during their marriage. He never worked, and only depended on his older sibling for
financial support. Despite not earning, Grant spent most of his time and money on gambling and going to
cockfights.
Dr. Revita diagnosed Grant with narcissistic personality disorder with anti-social and dependent
traits that is characterized by an overwhelming and grandiose sense of self-importance.
The RTC granted the petition. The CA reversed. The CA held that Hannamer failed to prove that
Grant's failure to fulfill his marital obligations was rooted on an incurable psychological illness existing at
the time of marriage.
WHETHER the psychological incapacity of Grant has been duly proven to grant the petition for
nullity of marriage.
SUGGESTED ANSWER
NO. The totality of evidence failed to prove psychological incapacity under Article 36 of the Family
Code.
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Tan-Andal v. Andal provided the following parameters:
1. The psychological incapacity must be shown to have been existing at the time of the
celebration of marriage; (JURIDICAL ANTECEDENCE)
2. Caused by a durable aspect of one's personality structure (INCURABILITY IN LEGAL SENSE),
one that was formed prior to their marriage; 5
3. Caused by a genuinely serious psychic cause (GRAVITY); and
4. Proven by clear and convincing evidence.
from the allegedly incapacitated spouse.
Likewise, juridical antecedence of psychological incapacity may also be proven by ordinary

witnesses who can describe the incapacitated spouse's past experiences or environment growing up,
which may have triggered one's particular behavior. In any case, the gravity of psychological incapacity
must be shown to have been caused by a genuinely serious psychic cause. Thus, "mild characterological
peculiarities, mood changes, occasional emotional outbursts" are still not accepted grounds that would
warrant a finding of psychological incapacity under Article 36 of the Family Code.
would be the inevitable and irreparable breakdown of the marriage.
Apart from the testimonies of Hannamer and Dr. Revita, and the latter's psychological report,
there is no other evidence presented to support the allegation of Grant's psychological incapacity. Thus,
the totality of evidence failed to prove psychological incapacity under Article 36 of the Family Code.
[ G.R. No. 208258. April 27, 2022 ]
MARIA VICIA CARULLO-PADUA, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES AND JOSELITO
PADUA, RESPONDENTS.
BERNABE, J.
from the allegedly incapacitated spouse. Likewise, juridical antecedence of psychological incapacity may
also be proven by ordinary witnesses who can describe the incapacitated spouse's past experiences or
environment growing up, which may have triggered one's particular behavior. In any case, the gravity of
psychological incapacity must be shown to have been caused by a genuinely serious psychic cause. Thus,
"mild characterological peculiarities, mood changes, occasional emotional outbursts" are still not accepted
grounds that would warrant a finding of psychological incapacity under Article 36 of the Family Code.
would be the inevitable and irreparable breakdown of the marriage. Ultimately, the totality of evidence
must support a finding of psychological incapacity.
BAR QUESTIONS
Maria and Joselito were married in a civil ceremony on February 5, 1982 followed by a church
wedding on December 18, 1982. The union produced a son born on March 23, 1986.
On July 17, 1997, Maria filed a petition for declaration of absolute nullity of their marriage with
the trial court anchored on Article 36 of the Family Code. Maria alleged that at the time of the celebration
of their marriage, Joselito was psychologically incapacitated to perform his marital obligations.
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During their cohabitation, Joselito exhibited excessive sexual desire and forced her to perform oral
and anal sex with him; that there were occasions when respondent attempted to sexually molest her
sister, nieces and their household help who were staying with them; that respondent admitted to said
attempts of molestations but begged her to keep said incidents a secret; that Joselito misrepresented
himself as a Roman Catholic when he was actually a born-again christian; that when Maria refused to
convert to Joselito's religion, he began insulting her religious beliefs; and that at one point, at the heat of 6
their quarrel, Joselito attempted to kill Maria by threatening to stab her with a letter opener.
The psychiatrist Dr. Villegas testified that she diagnosed Joselito with a personality disorder of a
sexual deviant or perversion based on Maria's narrations.
1. The root cause of Joselito's personality disorder is traceable to his wretched childhood.
2. The psychological disorder of Joselito is grave, serious and not clinically curable which rendered
him psychologically incapacitated to perform his marital obligations.
The RTC denied the petition as affirmed by the CA. The CA held that the grounds relied upon by
Maria, i.e., sexual perversion, abandonment, Joselito's attempt against her life, and sexual infidelity,
assuming said circumstances to be true, are not grounds for annulment of the marriage but at best valid
grounds for legal separation under Article 55 of the Family Code.
WHETHER the totality of evidence presented by Maria is sufficient to prove that Joselito is
psychologically incapacitated to perform his essential marital obligations, meriting the dissolution of his
marriage with Maria.
SUGGESTED ANSWER
NO. The totality of evidence presented by Maria and found that the same was miserably wanting
to sustain the conclusion that Joselito was psychologically incapacitated to perform the basic obligations
of marriage. Tan-Andal v. Andal provided the following parameters in determining what constitutes
psychological incapacity:
one that was formed prior to their marriage;

Irreconcilable differences, conflicting personalities, emotional immaturity and irresponsibility,

physical abuse, habitual alcoholism, sexual infidelity or perversion, and abandonment, by themselves,
also do not warrant a finding of psychological incapacity under the said Article.
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[ G.R. No. 237524. April 06, 2022 ]

BEBERY O. SANTOS-MACABATA, PETITIONER, VS. FLAVIANO MACABATA, JR. AND REPUBLIC OF
THE PHILIPPINES, RESPONDENTS.
BERNABE, J.:
7

BAR QUESTION
Sometime in October 1996, petitioner and respondent were working as factory workers in separate
electronic companies in Taiwan. Shortly after their introduction to each other, petitioner and respondent
started dating. As they grew closer to each other, petitioner confided in respondent that she experienced a
traumatic ordeal in her past relationship. Respondent reassured petitioner that he still accepted her
despite her past. Petitioner and respondent continued their courtship and later learned that petitioner was
pregnant with their first child.
After the termination of their employment contracts in Taiwan, petitioner and respondent
returned to the Philippines. They got married on June 19, 1997 and the couple moved to a rented house
in Bagong Barrio, Caloocan City and soon welcomed their first child, followed by their second child.
The couple initially enjoyed a peaceful marriage, but when petitioner became the breadwinner of
the family, the couple would often argue about respondent's unemployment during their quarrels,
respondent would insult petitioner by bringing up her traumatic past. Petitioner and respondent would
also argue over respondent's drinking, gambling, and womanizing. Encountering difficulties in supporting
their family, the couple moved to the house of petitioner's parents.
In February 2000, respondent eventually found work as an entertainer in Japan. Petitioner

claimed that she was shocked to learn that respondent indicated his civil status as "single" in his
passport. Respondent would nonetheless proceed to work in Japan and send money to petitioner.
After two years of no communication with respondent, petitioner was able to talk to respondent
after he called his sister to tell petitioner that he was no longer coming back to her, and that he was
already living with another woman.
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Clinical psychologist Dr. Tayag interviewed respondent's youngest brother, Nelson. She concluded
in her report that respondent suffered from antisocial personality disorder stemming from his childhood
years.
The RTC relied on the findings in the report and held that the petitioner provided sufficient
evidence to prove that respondent is psychologically incapacitated to perform his marital obligations. The 8
CA reversed the RTC finding that Dr. Tayag's report failed to fully explain the symptoms of the antisocial
personality disorder, and establish a link between respondent's acts to respondent's alleged psychological
incapacity to comply with his marital obligations.
WHETHER the CA erred when it reversed the Decision of the RTC and issued a Decision finding
that petitioner failed to provide sufficient evidence that respondent is psychologically incapacitated to
perform his marital obligations.
SUGGESTED ANSWER
NO. The CA correctly dismissed the petition for nullity of marriage. Article 36 of the Family Code
provides that a marriage may be declared void on the ground of psychological incapacity.
16. Proven by clear and convincing evidence. (TAKE NOTE)

Here, petitioner failed to prove and substantiate by clear and convincing evidence that respondent
suffers from such "psychological incapacity" that prevents him from complying with his marital obligations
as contemplated under Article 36 of the Family Code.
The totality of evidence does not show that such failure to fulfill his essential marital obligations is
caused by a genuinely serious and incurable psychic cause which exists prior to or at the time of
celebration of the marriage of the parties. Mere disagreements between spouses, uncorroborated by any
other evidence, are not necessarily indicative of the presence of psychological incapacity. Both children of
the parties note that respondent is "mabait" or kind and would give them whatever they may need. In
contrast to the finding in the report, respondent's brother considers their family happy and described
respondent as friendly and similar to their father.
It is apparent that there are inconsistencies in the information provided in the report, and the
conclusion of the clinical psychologist therein. For failure to show by clear and convincing evidence that
the respondent is incapable of fulfilling his essential marital obligations due to a genuinely serious and
incurable psychic cause which exists prior to or at the time of celebration of the marriage of the parties,
the Court is compelled to deny the petition.
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BOOK II
PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

LAND TITLES AND DEEDS
9
[ G.R. No. 212012. March 28, 2022 ]
HEIRS OF JOSE DE LARA, SR.,* PETITIONERS, VS. RURAL BANK OF JAEN, INC., RESPONDENT.
BERNABE, J.:
 Rule II of the 2003 DARAB Rules of Procedure provides that the Adjudicator has the primary and
exclusive jurisdiction over cases involving correction, partition, cancellation, secondary and
subsequent issuances of CLOAs and EPs which are registered with the Land Registration Authority.
 Vda. de Tangub v. CA held that the jurisdiction of the DAR concerns the:
1. determination and adjudication of all matters involving implementation of agrarian reform;

2. resolution of agrarian conflicts and land-tenure related problems; and
3. approval or disapproval of the conversion, restructuring, or readjustment of agricultural lands
into residential, commercial, industrial, and other non-agricultural uses.
 Section 3 (d) of RA 6657 defines agrarian dispute as any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers' associations or representation of persons in
negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of such tenurial
arrangements.
 Regardless, the subject land is deemed non-transferrable under the provisions of PD 27 and RA 6657,
as amended by RA 9700. Lands acquired through PD 27 may only be transferred by hereditary
succession or to the government. Beneficiaries are still enjoined to retain for themselves the lands
they have been granted under existing agrarian reform laws. The prohibition shall now subsist for
only a period of 10 years. An the exceptions to this rule remain: the law shall allow transfers of
awarded lands:
1. via hereditary succession, or

2. to the government, the Land Bank of the Philippines, or to other qualified beneficiaries
through the DAR.
 Agreements that violate law and public policy are inexistent and void from the beginning.
BAR QUESTION
Jose, a farmer-beneficiary under the Operation Land Transfer of Presidential Decree No. (PD)
27,7 was awarded a parcel of land in Dampulan (now Vicente), Jaen, Nueva Ecija with an area of 2,257
square meters (subject land). On November 20, 1998, TCT No. EP-867278 under the Department of
Agriculture Reform (DAR) Emancipation Patent (EP) No. 00735825 covering the subject land was issued in
favor of Jose.
Subsequently, Jose obtained a loan from respondent bank secured by a mortgage over the subject
land. Unfortunately, he failed to pay his obligation; hence, the mortgage was foreclosed. On February 27,
2003, a public auction was held wherein respondent bank was declared the highest bidder.10 On July 3,
2003, the Regional Trial Court (RTC) of Gapan, Nueva Ecija issued a Certificate of Sale11 to respondent
bank. On August 19, 2003, respondent bank registered the sale with the Register of Deeds.
A year passed but neither Jose nor his heirs redeemed the subject land. Thus, on October 4,
2004, respondent bank executed an Affidavit of Consolidation of Ownership13 over the said land.
On December 16, 2004, respondent bank filed a verified petition14 for cancellation of TCT No. EP-
86727 covering the subject land before the PARAD. Petitioners filed an Answer15 and sought the
dismissal of the petition. They argued that:
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1. the PARAD did not acquire jurisdiction over them for failure to implead necessary parties.
2. They also averred that respondent bank's petition lacked a cause of action because the
purported real estate mortgage executed by Jose was void ab initio as it was executed within
the 10-year prohibitory period under Section 2716 of Republic Act No. (RA) 6657,17 otherwise
known as the Comprehensive Agrarian Reform Program.
3. Lastly, petitioners claimed that the mortgage was void because it was executed without the 10
consent of Jose's wife, Marcela Mariano (Marcela).
The PARAD granted respondent bank's petition for cancellation of TCT. The DARAB reversed the
PARAD stating that respondent bank's act of consolidating ownership over the subject land is prohibited
under agrarian laws. It further held that while Section 73-A of RA 6657 permits financial banking
institutions to sell or transfer mortgaged land which has been foreclosed, the lands contemplated in the
said provision do not include those covered by an EP or a CLOA.
The CA reversed the DARAB Decision and reinstated the PARAD. It held that pursuant to Section
6 of RA 7353, respondent bank, as a rural bank, can foreclose the subject land although falling under RA
6657 since Jose and Marcela failed to pay their obligation, and to redeem the property within the one-year
period.
WHETHER the subject land covered by an EP can be foreclosed and its title cancelled by the
PARAD in favor of respondent bank.
SUGGESTED ANSWER
NO. The sale of the subject land by foreclosure to herein respondent bank, being violative of the
law and public policy embodied in PD 27 and RA 6657 as amended by RA 9700, is void ab initio.
DARAB has no jurisdiction over the case at bench as there is no agrarian dispute between the
parties. Rule II of the 2003 DARAB Rules of Procedure provides that the Adjudicator has the primary and
exclusive jurisdiction over cases involving correction, partition, cancellation, secondary and subsequent
issuances of CLOAs and EPs which are registered with the Land Registration Authority.
Vda. de Tangub v. CA held that the jurisdiction of the DAR concerns the:
1. determination and adjudication of all matters involving implementation of agrarian

reform;
2. resolution of agrarian conflicts and land-tenure related problems; and
3. approval or disapproval of the conversion, restructuring, or readjustment of
agricultural lands into residential, commercial, industrial, and other non-agricultural
uses.
The enactment of RA 9700, as the amendatory law to RA 6657, now transfers the exclusive and
original jurisdiction over these cases to the Secretary of the DAR.
Even if the case involves cancellation of an EP, an agrarian dispute between the parties should
first exist for the then DARAB or DAR Secretary to acquire jurisdiction. Section 3 (d) of RA 6657 defines
agrarian dispute as any controversy relating to tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers'
associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to
arrange terms or conditions of such tenurial arrangements.
Tenancy relationship between the parties must exist for the DARAB to acquire jurisdiction. The
following indispensable elements should exist:
1. that the parties are the landowner and the tenant or agricultural lessee;
2. that the subject matter of the relationship is an agricultural land;
3. that there is consent between the parties to the relationship;
4. that the purpose of the relationship is to bring about agricultural production;
5. that there is personal cultivation on the part of the tenant or agricultural lessee; and
6. that the harvest is shared between the landowner and the tenant or agricultural lessee.
Here, there was no tenancy relationship between petitioners and respondent bank over the
subject land. Respondent bank's recourse should have been with the Register of Deeds, not before the
DARAB.
Regardless, the subject land is deemed non-transferrable under the provisions of PD 27 and RA
6657, as amended by RA 9700. Lands acquired through PD 27 may only be transferred by hereditary
succession or to the government.
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Beneficiaries are still enjoined to retain for themselves the lands they have been granted under
existing agrarian reform laws. The prohibition shall now subsist for only a period of 10 years. An the
exceptions to this rule remain: the law shall allow transfers of awarded lands:
1. via hereditary succession, or

2. to the government, the Land Bank of the Philippines, or to other qualified
11
beneficiaries through the DAR.
Rural banks are specifically permitted by law to foreclose lands mortgaged to it, subject to the
conditions and provisions of RA 6657. However, the facts of the case impel the Court to invalidate the
foreclosure sale to respondent bank.
Here, the EP covering the subject land was issued in favor of Jose on November 20, 1998. At the
time the foreclosure sale was held on February 27, 2003, only four years had passed from the time he
acquired the said land in his name. This violated the provisions of PD 27 and RA 6657, as amended by RA
9700.
Agreements that violate law and public policy are inexistent and void from the beginning.
G.R. No. 201655, August 24, 2020
APOLINARIO VALDEZ, AMANDA ESPIRITU, AQUILINA HERNANDEZ, AND SALVADOR PETINES,

REPRESENTED BY THEIR HEIRS AND/OR SUCCESSORS-IN-INTEREST, PETITIONERS, V. HEIRS OF
ANTERO CATABAS, RESPONDENTS.
BERNABE, J.:
Under Section 11 of C.A. No. 141, there are two modes of disposing public lands through
confirmation of imperfect or incomplete titles:
1. by judicial confirmation; and

2. by administrative legalization, otherwise known as the grant of free patents.
TAKE NOTE: RA 11573 (take note of the amendments) na 20 years na lang ang possession, not 30.
Review that nasa SPN Ninyo.
BAR QUESTION
On September 8, 1949, Antero filed Free Patent Application (FPA) No. V-8500 6 for Lot No.
4967. Pursuant to Proclamation No. 427 dated November 7, 1931, Lot No. 4967 was subdivided into three
(3) lots. Lot Nos. 4967-A and 4967-B were reserved for public purposes, particularly road and market site.
Hence, on September 15, 19528 Antero amended his application to cover only Lot No. 4967-C.9
Thereafter, Cadastral Subdivision Survey No. 167 was conducted pursuant to Proclamation No.
24710 dated January 19, 1956 further subdividing Lot No. 4967-C to several lots for disposition to
qualified claimants.
Meanwhile, Antero's free patent application was recommended for approval by Assistant Public
Land Inspector Tomas Cruz and was forwarded to the Central Office of the Bureau of Lands on September
24, 1952.11 The recommendation for approval was received by the Director of Lands on October 7, 1952,
who ordered the posting of the notices of Antero's free patent application in different conspicuous
places12 .
The CA had affirmed the rulings of the Office of the President which confirmed Antero Catabas'
vested right over Lot 4967-C based on his valid and subsisting Free Patent Application.
The controversy arose when herein petitioners filed sales patent applications over lots originally
forming part of Lot 4967-C and were included in the FPA filed by Antero. Herein respondents heirs of
Catabas filed a protest against the sales patent applications. Although a free patent is yet to be issued to
Antero, respondents claimed that Antero already acquired a vested right over Lot No. 4967-C since the
FPA was never canceled by the proper authority.
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The RED-DENR, as affirmed by the Secretary, found the issuance of petitioners' sales patent to be
premature, illegal, fraudulent and their possession over the subject lots characterized by bad faith
considering that their sales patents were issued while Antero's application was still subsisting.
The OP found that Antero's FPA had already met all the requirements for the issuance of a free
patent. Hence, Antero already obtained vested rights over the subject property. The CA affirmed. 12
WHETHER Antero has vested rights over the subject properties on the basis of his free patent
application which was never cancelled.
SUGGESTED ANSWER
YES. The Heirs of Antero then have a superior right to the lots in controversy. Under Section 11 of
C.A. No. 141, there are two modes of disposing public lands through confirmation of imperfect or
incomplete titles:
3. by judicial confirmation; and

4. by administrative legalization, otherwise known as the grant of free patents.
Here, Antero chose to file a free patent application which was governed by Section 44 of C.A. No.
141. Under said provision, he is required to prove continuous occupation and cultivation of agricultural
land subject to disposition since July 4, 1926 (later amended to July 4, 1945) or prior thereto and
payment of real estate taxes while the land has not been occupied by other persons.
Notwithstanding the fact that when Antero filed his amended free patent application in 1952, the
subject property was not yet declared as alienable and disposable public land, preference should be given
to the possession of Antero since 1929 over the petitioners' claims or interest which arose later than
Antero's.
The subsequent declaration of Lot No. 4967-C as open for disposition to qualified claimants
effectively cured the defect of Antero's free patent application filed before the herein petitioners. Antero's
possession of the subject property as evidenced by the payment of real estate taxes starting the year 1929
strengthened his continuous and notorious possession of the subject property which is earlier than July
4, 1945.
Thus, the ruling according preference over the free patent application filed by Antero over Lot No.
4967-C against herein petitioners should be sustained.
[ G.R. No. 197389, October 12, 2020 ]
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. MANUEL M. CARAIG, RESPONDENT.
BERNABE, J.:
RA 11573. “(a) Those who by themselves or through their predecessors-in-interest have been
in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable
agricultural lands of the public domain, under a bona fide claim of ownership, for at least twenty (20)
years (HINDI NA 30 YEARS) immediately preceding the filing of the application for confirmation of title
except when prevented by war or force majeure. They shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title under the
provisions of this Chapter.
Section 7. Proof that the Land is Alienable and Disposable. For purposes of judicial confirmation
of imperfect titles filed under Presidential Decree No. 1529, a duly signed certification by a duly
designated DENR geodetic engineer that the land is part of alienable and disposable agricultural
lands of the public domain is sufficient proof that the land is alienable. (SO, ITO NA LANG ANG
PROOF) Said certification shall be imprinted in the approved survey plan submitted by the applicant in
the land registration court. The imprinted certification in the plan shall contain a sworn statement by the
geodetic engineer that the land is within the alienable and disposable lands of the public domain and shall
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state the applicable Forestry Administrative Order, DENR Administrative Order, Executive Order,
Proclamations and the Land Classification Project Map Number covering the subject land.
BAR QUESTION
On September 2, 2002, Manuel, through his attorney-in-fact, Nelson N. Guevarra (Nelson) filed an
13
Application for Original Registration of Title over a 40,000-square meter portion of Lot 5525, known as Lot
No. 5525-B, which is located at Brgy. San Luis, Sto. Tomas, Batangas. Lot No. 5525-B.
Manuel alleged that he bought Lot No. 5525-B from Reynaldo S. Navarro (Reynaldo) as evidenced
by a Deed of Absolute Sale8 dated September 25, 1989. Reynaldo and his predecessors-in-interest had
been in open, peaceful, continuous, and exclusive possession of the land prior to June 12, 1945 under
a bona fide claim of ownership.
He attached the following documents in his application:
(a) Tax Declaration in his name;
(b) Deed of Absolute Sale executed by Reynaldo in his favor;
(c) Subdivision Plan which was approved in 2002, together with its blue print;
(d) Technical Description; and
(e) Certification in lieu of Geodetic Engineer's Certificate.
The Republic opposed based on the following grounds:
(a) the land is inalienable and part of the public domain;
(b) Manuel and his predecessors-in-interest were not in continuous, exclusive and notorious
possession and occupation of the land since June 12, 1945 or prior thereto; and
(c) the evidence attached to the application insufficiently and incompetently proved his acquisition
of the land or his occupation thereof.
WHETHER the CENRO Certificates are sufficient proofs that Lot No. 5525-B is alienable and
disposable; and Manuel sufficiently proved that he and his predecessors-in-interest were in continuous,
peaceful, notorious and exclusive possession in the concept of an owner of the subject land.
SUGGESTED ANSWER
YES. The requirements under Section 14(1) of PD 1529 were duly met. The applicant must prove
the following requirements for the application for registration of a land under Section 14(1) to prosper:
1. that the subject land forms part of the disposable and alienable lands of the public domain;
2. that the applicants by themselves and their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation thereof; and that the
possession is under a bona fide claim of ownership since June 12, 1945, or earlier. (WALA NG
JUNE 12, 1945. BASTA 20 YEARS UNINTERREUPTED POSSESION IS SUFFICIENT NA)
Here, the CENRO Certificates sufficiently showed that the government executed a positive act of
declaration that Lot No. 5525-B is alienable and disposable land of public domain as of December 31,
1925. (a duly signed certification by a duly designated DENR geodetic engineer that the land is part
of alienable and disposable agricultural lands of the public domain is sufficient proof that the land
is alienable AS MENDED SA RA 11573)
[ G.R. No. 200863, October 14, 2020 ]

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. HEREDEROS DE CIRIACO CHUNACO
DISTELERIA INCORPORADA, RESPONDENT.
BERNABE, J.:

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1. However, when the 1973 Constitution took effect, it limited the alienation of lands of the public
domain to individuals who were citizen of the Philippines.58 Private corporations, even if wholly-
owned by Filipino citizens, were prohibited from acquiring alienable lands of the public
domain.59 At present, the 1987 Constitution continues the prohibition against private
corporations from acquiring any kind of alienable land of the public domain.
14
2. Section 7. Proof that the Land is Alienable and Disposable. For purposes of judicial confirmation
PROOF) Said certification shall be imprinted in the approved survey plan submitted by the
applicant in the land registration court. The imprinted certification in the plan shall contain a
sworn statement by the geodetic engineer that the land is within the alienable and disposable
lands of the public domain and shall state the applicable Forestry Administrative Order, DENR
Administrative Order, Executive Order, Proclamations and the Land Classification Project Map
Number covering the subject land.
3. “(1) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable lands
of the public domain not covered by existing certificates of title or patents under a bona fide claim
of ownership for at least twenty (20) years immediately preceding the filing of the application for
confirmation of title (20 YEARS NA LANG. TINANGGAL NA YUNG REQUIREMENT NA
POSSOSSOR KA SINCE JUNE 12, 1945) except when prevented by war or force majeure. They
shall be conclusively presumed to have performed all the conditions essential to a Government
grant and shall be entitled to a certificate of title under this section.
BAR QUESTION
HCCDI, a domestic corporation with principal office at Barangay Masarawag, Guinobatan, Albay,
applied for land registration of Lot No. 3246 with the MTC of Guinobatan,
Albay docketed as LRA Case No. 01-03.4 HCCDI claimed ownership and actual possession of Lot
No. 3246, with an area of 71,667 square meters (sqm), and an assessed value of P56,930.00, on the
ground of its continuous, adverse, public and uninterrupted possession in the concept of an owner since
1976 by virtue of a Deed of Assignment5 executed by the heirs of Ciriaco Chunaco (Heirs of Chunaco)
who, in turn, had been in continuous, adverse, public, and uninterrupted possession of the subject lot in
the concept of an owner since 1945 or earlier.
HCCDI attached the following documents in its application: (a) Tracing Cloth of Lot No. 3246;7 (b)
Technical Description of Lot No. 3246;8 and (c) Certificate in Lieu of the Lost Surveyor's Certificate.
Petitioner Republic opposed alleging that Lot No. 3246 has not been classified as alienable and
disposable land of the public domain for at least 30 years prior to the filing of the subject application. The
Land Management Office (LMO) of the DENR, through Land Investigator Abaroa, conducted an ocular
inspection and submitted a Report.
1. The subject property is within the alienable and disposable zone as classified in 1926 and
outside of the forest zone or forest reserve or unclassified public forest, existing civil or
military reservation, or watershed or other establishment reservation.
2. Also, it has never been forfeited in favor of the government for non-payment of taxes nor
confiscated as bond in connection with any civil or criminal case.
3. It is covered by: (a) survey plan; and (b) Tax Declaration.
A Certification issued by the DENR states that based on its records, Lot No. 3246 was surveyed
for Ciriaco. The CENRO later issued a Certification stating that it cannot ascertain whether Lot No. 3246
was covered by any kind of public land application or was issued a patent or title due to the fire in
February 1992 which destroyed its records.
A subsequent Certification of the LRA states that after due verification in its Index Book of
Records, Lot No. 3246 has no available records in the Registry of Deeds.
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The MTC granted HCCDI's application for land registration and confirming its title to Lot No. 3246
which the CA affirmed.
WHETHER Lot No. 3246 form part of the alienable and disposable land of the public
15
domain.
YES. Lot No. 3246 forms part of the alienable and disposable land of the public domain.
Lands of the public domain are classified under Section 3, Article XII of the 1987 Constitution into
(1) agricultural, (2) forest or timber, (3) mineral lands, and (4) national parks. Only agricultural lands were
allowed to be alienated while mineral and timber or forest lands are not subject to private ownership
unless they are first reclassified as agricultural lands and so released for alienation.
An applicant for land registration must prove that the land sought to be registered has been
declared by the President or the DENR Secretary as alienable and disposable land of the public domain.
Applying Vega and Serrano, despite the absence of a certification by the CENRO and a certified true copy
of the original classification by the DENR Secretary or the President, HCCDI substantially complied with
the requirement to show that the subject property is indeed alienable and disposable based on the
evidence on record.
Thus, the subject property is alienable and disposable land of the public domain.
WHETHER HCCDI has sufficiently proven that it has been in open, continuous, exclusive
possession and occupation of the subject lot since June 12, 1945 or earlier.
NO. HCCDI failed to prove its and its predecessors-in-interest's possession and occupation of Lot
No. 3246 under a bona fide claim of ownership since June 12, 1945 or earlier. (NOW POSSESSION NA
LANG NG 20 YEARS IS SUFFICIENT)
WHETHER HCCDI is prohibited from owning lands pursuant to Section 11, Article XIV of
the 1973 Constitution; Section 3, Article XII of the 1987 Constitution; and the ruling of this Court
in the Director of Lands v. IAC.
YES. HCCDI, as a corporation, cannot apply for registration of the land of the public domain.
HCCDI, having acquired Lot No. 3246 through a Deed of Assignment executed in 1976, was prohibited to
acquire any kind of alienable and disposable land of the public domain under the 1973 Constitution.
Private corporations, even if wholly-owned by Filipino citizens, were prohibited from acquiring alienable
lands of the public domain. The 1987 Constitution continues the prohibition against private corporations
from acquiring any kind of alienable land of the public domain. Thus, HCCDI, as a private corporation,
cannot apply for the registration of Lot No. 3246 in its name due to the prohibition under the 1973
Constitution. (Wala pong original registration yung lupa. Private citizen muna dapat nag-apply for
registration then saka bibilhin ng private corporation kapag registered private property na yung lupa)
G.R. No. 214981, November 04, 2020

EULOGIO ALDE, PETITIONER, V. CITY OF ZAMBOANGA, AS REPRESENTED BY CITY MAYOR CELSO
L. LOBREGAT, RESPONDENT.
BERNABE, J.:
RA 11573 Section 7. Proof that the Land is Alienable and Disposable. For purposes of judicial
confirmation of imperfect titles filed under Presidential Decree No. 1529, a duly signed certification by a
duly designated DENR geodetic engineer that the land is part of alienable and disposable
agricultural lands of the public domain is sufficient proof that the land is alienable. (SO, ITO NA
LANG ANG PROOF) Said certification shall be imprinted in the approved survey plan submitted by the
applicant in the land registration court. The imprinted certification in the plan shall contain a sworn
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statement by the geodetic engineer that the land is within the alienable and disposable lands of the public
domain and shall state the applicable Forestry Administrative Order, DENR Administrative Order,
Executive Order, Proclamations and the Land Classification Project Map Number covering the subject
land.
BAR QUESTION 16
Petitioner Eulogio Alde (Alde) filed a Miscellaneous Lease Application (MLA) No. 097332-10
covering two (2) lots with the Community Environment and Natural Resources Office (CENRO), Region IX,
Zamboanga City, on February 9, 2001.4 With a combined area of Eight Hundred and Five (805) square
meters, the two lots were covered by Transfer Certificates of Title (TCT) Nos. T-7301 5 and T-7300,6 both in
the name of the Republic. The RED of DENR-Region IX approved the appraisal and granted the authority
to lease the land.
Alde, the lone bidder, was declared as winner after submitting a bid of P174,250. The Secretary of
the DPWH endorsed Alde's MLA to the RED DENR-Region IX interposing no objection to Alde's MLA,
provided "that 4.0 meters from the edge of the sidewalk be reserved for future widening/improvements of
the National Government".
The respondent City Government of Zamboanga objected to the lease application of Alde over the
subject lots. It claimed that the awarded lots were needed for public use and that the posting and
publication requirements of the notice of lease, were not complied with.
A Committee created by DENR-Region IX recommended the dismissal of the Opposition of the City
Government and for the MLA of Alde to be given due course. The DENR Secretary, and later the Office of
the President, approved the recommendation.
The CA reversed the OP declaring as null and void the Order of Award by the RED-DENR Region
IX for having been issued in excess or lack of jurisdiction. It ruled that a presidential proclamation is
necessary to declare that a parcel of public land is not necessary for public service before it can be
disposed, even for those lands referred to in Section 59(d) of CA 141.
WHETHER a presidential proclamation is necessary to declare that a parcel of public land is not
necessary for public service before it can be disposed.
SUGGESTED ANSWER
NO. An administrative action by the OP that declares a land under Section 59(d) as alienable and
disposable and not necessary for public use or public service, complies with the required Presidential
declaration that alienable and disposable lands are not necessary for public use or for public service
before they can be open for sale or lease or disposed, to private parties, entities or corporations.
There is no argument that there must be some sort of a presidential declaration that a piece of
land classified under Section 59(d) of the Public Land Act is no longer necessary for public use or public
service before it can be leased. (NOT ANYMORE UNDER RA 11573)
XXX a duly signed certification by a duly designated DENR geodetic engineer that the land is part
of alienable and disposable agricultural lands of the public domain is sufficient proof that the land
is alienable xxx
[ G.R. NO. 206240, MAY 12, 2021]

VILORIA V. HEIRS OF GAETOS
BERNABE J.
For an action to quiet title to prosper, two indispensable requisites must concur, namely:
1. the plaintiff or complainant has a legal or an equitable title to or interest in the real property
subject of the action; and
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2. the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.
BAR QUESTIONS
17
Josefina Quejado-Viloria, Remedios Quejado-Gaerlan (Remedios), Benjamin F. Quejado, Demetrio
F. Quejado (Demetrio) and Felicitas F. Quejado filed before the trial court a complaint for Quieting of Title
with Damages. They claimed ownership over a 10,000-square meter lot located in Taboc, San Juan, La
Union (subject property), having inherited the subject property from their predecessor-in-interest who had
openly, publicly, continuously and peacefully possessed the same without interruption for more than 30
years in the concept of an owner.
The Quejados alleged that the heirs of Segunda Gaetos, Pablo and Salome Gaetos and Justiniano
Gaetos, and the children of Francisco Gaetos surreptitiously and without their knowledge and consent
caused the subject property to be surveyed for the purpose of claiming ownership. Their acts disturbed
and put a cloud on their ownership, possession, and title over the subject property. Efforts toward
amicable settlement between parties were exerted before the barangay council but failed.6
The Gaetos heirs denied the allegations of the heirs of Quejado. They insisted that the Quejados
were not the owners of the subject property. They maintained that the Gaetos family owned the property
in dispute by virtue of succession from a common ancestor several years before World War II. The subject
property was later surveyed through cadastral survey of San Juan, La Union and partitioned as follows:
Lot No. 1429, with and area of 1,678 sq. m., Constantino Gaetos; Lot No. 1430, with an area of
1,112 sq.m., Juan Aman; Lot No. 1431, with an area of 1,844 sq. m., Pablo Gaetos; and Lot No. 1432,
with an area of 2,824 sq. m., Salome Gaetos8
The heirs of Eudoxia Gaetos and Galiciano Gaetos, represented by Mildred Madayag, intervened in
the case alleging that they were co-owners of the property in issue.
Trial ensued.
The Quejado heirs testified that upon the demise of their parents, they took over the possession of
the subject property. They also averred that their mother mortgaged the subject property on several
occasions. A tenant and a neighbor both acknowledged the ownership of the Quejados over the subject
property.
The heirs of Gaetos adduced the testimony of Isabelo Laurea, who testified that the subject
property was near his place and its original owner was the grandfather of Francisco Gaetos. Teresita,
granddaughter of Francisco, also presented receipts of expropriation payments for the properties ordered
expropriated by the Court.
The RTC found that the evidence of the Quejados did NOT convincingly establish that they
possessed the property publicly, exclusively, and peacefully in the concept of owners. The CA affirmed.
WHETHER petitioners do not have the requisite title to pursue their claim, notwithstanding their
predecessors-in-interests' possession of the property, who even mortgaged the subject property and
declared it under their name for tax purposes.
SUGGESTED ANSWER
YES. In an action for quieting of title, the plaintiff has the burden to show by preponderance of
evidence that they have a legal and equitable title to or interest in the real property subject of the action.
Legal title denotes registered ownership. While equitable title means beneficial ownership.
For an action to quiet title to prosper, two indispensable requisites must concur, namely:
efficacy.
POISONED COPY
Here, petitioners did not have a legal title to the subject property. There were no certificates of title
in their respective names. Based on the findings of the lower courts, they also failed to substantiate their
claim of having equitable title as well. Tax declarations and receipts are not conclusive evidence of
ownership or of the right to possess land when not supported by other evidence. (TANDAAN ITO)
18
G.R. NO. 225426, JUNE 28, 2021

HEIRS OF MAGSAYSAY V. SPS PEREZ
BERNABE, J.
Article 434 of the New Civil Code further provides what a complainant must prove in order to
recover the property:
Art. 434. In an action to recover, the property must be identified, and the plaintiff must rely on
the strength of his title and not on the weakness of the defendant's claim.
In other words, the person who claims a better right of ownership to the property sought to be recovered
must prove two things: first, the identity of the land claimed, and second, his title thereto. 92
As applied in this case, petitioners utterly failed to prove the identity of the land they are claiming (as
extensively discussed earlier) and also their title thereto.
BAR QUESTION
This case originated from a complaint for reconveyance of lots covered by 15 separate Torrens
titles filed by petitioners Heirs of Jesus P. Magsaysay (hereafter, the heirs or petitioners) with the Regional
Trial Court (RTC) in Olongapo City. These titles were in the names of respondents Sps. Zaldy and Annaliza
Perez, Sps. Wilmer and Jocelyn Domingo, Sps. Eduardo and Gilda Rosca, Sps. Fernando and Gemma
Bacolongan, Jeffrey M. De Leon, Miguel Tolentino III, Sps. Antonio and Abdula Decio, Sps. Felix and
Annabel Angcot, Sps. Manuel Jr. and Annamarie Novio, Sps. Arsenio Jr. and Ma. Lourdes Naylon, Kristen
Joy Rosca, Mark5 Jason Rosca, Sps. Benjamin and Analyn Catada, and Sps. Danilo and Flordeliza Bulan
(hereafter collectively referred to as respondents).6 The respondents' respective titles, which collectively
cover a parcel of land located in San Agustin, Castillejos, Zambales with a total land area of 708,124
square meters (sq. m.).
The said titles were issued pursuant to free patents which were obtained by respondents after
administrative proceedings with the DENR covering Cadastral Lot No. 1377.
Petitioners alleged that their predecessor-in-interest, the late Jesus, was in lawful possession in
the concept of an owner of a parcel of land identified as Cadastral Lot No. 1177. Allegedly, after a tax
mapping operation in 1984, the property was identified as Cadastral Lot No. 1377.
Respondents applied for the administrative titling of Cadastral Lot No. 1377. Torrens titles were
issued to them. Petitioners instituted the instant case, alleging that the Torrens titles are void. The RTC
declared respondents' land titles as void and directing the reversion of the subject parcels of land covered
by such titles to the public domain. The CA, in reversing the RTC, found that Lot No. 1177 being claimed
by petitioners was not the same parcel of land as Lot No. 1377 being claimed by respondents, as these two
lots were located in different places with different boundaries.
1. WHETHER petitioners were able to prove that the property covered by the tax declarations of
Jesus is the same property covered by the titles issued in favor of respondents.
2. WHETHER the CA erred when it held that the uncorroborated testimony of petitioner Mario
Magsaysay is insufficient to prove that respondents committed fraud in procuring their titles.
SUGGESTED ANSWER
(1) NO. The property being claimed by petitioners to be in theirs, and their predecessors-in-
interest's possession is not identical to the property titled to respondents.
POISONED COPY
Article 434 of the New Civil Code further provides what a complainant must prove in order to
recover the property:
Art. 434. In an action to recover, the property must be identified, and the plaintiff must rely on
the strength of his title and not on the weakness of the defendant's claim. In other words, the person who
claims a better right of ownership to the property sought to be recovered must prove two things: first, the 19
identity of the land claimed, and second, his title thereto.92
As applied in this case, petitioners utterly failed to prove the .identity of the land they are claiming
and also their title thereto.
Here, while it may be true that petitioners have presented a greater number of testimonial and
documentary evidence, such evidence was not enough to discharge petitioners' burden of proof. No
evidence presented by petitioners would prove that the land they are seeking to recover is identical with
respondents' titled lands.
Petitioners' evidence could not outweigh respondents' Torrens titles, which is imbued with the
presumption of regularity, and the decision of the DENR, also imbued with the presumption of regularity,
that found petitioners to have no claim over Cadastral Lot No. 1377 and that it is respondents who have a
preferential right over the said lot.
(2) NO. Petitioners failed to present clear and convincing proof that fraud was attendant in the
issuance of respondents' titles. A complaint for reconveyance is an action which admits the registration of
title of another party but claims that such registration was erroneous or wrongful. The relief prayed for
may be granted on the basis of intrinsic fraud - fraud committed on the true owner instead of fraud
committed on the procedure amounting to lack of jurisdiction.
The party seeking to recover the property must prove, by clear and convincing evidence, that he
or she is entitled to the property, and that the adverse party has committed fraud in obtaining his or her
title. This standard of proof is less than proof beyond reasonable doubt (for criminal cases) but greater
than preponderance of evidence (for civil cases).
Here, there can be no fraud or misrepresentation if the property being applied for by respondents
in the administrative proceedings were different from the property being claimed by petitioners.
G.R. No. 212126, August 04, 2021

Heirs of Bagaygay v. Heirs of Paciente
BERNABE, J.
Under prevailing jurisprudence, the property should rightly be returned to respondents

considering that the government has not yet filed an action for reversion. Reversion under Section 101 of
the Public Land Act is not automatic as the Office of the Solicitor General must first file an action for
reversion.
BAR QUESTION
On October 8, 1953, Anastacio Paciente, Sr. (Anastacio) was granted a homestead patent over a
parcel of land with an aggregate area of 7.9315 hectares situated in Barrio II, Province of
Cotabato.4 Accordingly, on October 24, 1953, an Original Certificate of Title (OCT) No. V-2423 was issued
in his name.5
Thereafter, by virtue of a Deed of Sale allegedly executed by Anastacio in favor of his brother-in-
law, Eliseo Bagaygay (Eliseo), the latter took possession of the subject land, transferred the title under his
name, and later caused the subdivision of the entire land into three (3) lots covered by Transfer
Certificates of Title (TCT) Nos. T-34610,6 T-34611,7 and T-34612.8 On March 7, 1989, Anastacio died.9
Two years later, on March 18, 1991, Eliseo likewise passed away.10 His wife, petitioner Anecita P.
Bagaygay (Anecita), and his children, namely: petitioners Eladio Bagaygay, Inocencio Bagaygay
POISONED COPY
(Inocencio), Julia Bagaygay (Julia), and Mary Mae Bagaygay took possession of the subject land upon his
death.
In 1999, herein respondents, the heirs of Anastacio filed an action for Declaration of Nullity of the
Deed of Sale and the titles, Recovery of Ownership and Possession, Accounting and Damages against the
heirs of Eliseo. Respondents alleged that: 20
1. Eliseo caused the cancellation of Anastacio's title through a fictitious Deed of Sale;
2. Anastacio never sold the subject land; and
3. The said Deed of Sale was likewise void as it was executed during the five (5)-year period of
prohibition under Section 118 of the Public Land Act.
Petitioners alleged failure to state a cause of action, prescription and laches. Since a copy of the
Deed of Sale could no longer be found, respondents presented as witness the Registrar of Deeds to identify
in court the Primary Entry Book of the Registry of Deeds and prove that the Deed of Sale was executed
within the 5-year prohibitory period.
The RTC dismissed the complaint, giving credence to the testimonies of petitioners and their
witnesses that Anastasio sold the land to Eliseo to defray the expenses for the wedding of respondent
Meregildo in June 1958 and that the Deed of was notarized by Judge Rendon in 1958 or beyond the 5-
year prohibitory period.
The CA, in reversing the RTC, gave more weight to the documentary evidence presented by
respondents than to the testimonies of petitioners and their witnesses. It awarded the land back to
respondents subject to the right of the government to institute reversion proceedings.
WHETHER the Deed of Sale of the subject land was executed in 1958, not 1956, beyond the 5-
year prohibitory period, and the principle of laches applies in the case.
SUGGESTED ANSWER
NO. Documentary evidence prevails over testimonial evidence. Section 5, Rule 130 the ROC allows
the presentation of secondary evidence when the original document has been lost or destroyed and its
unavailability has been duly established. As a rule, documentary evidence takes precedence over
testimonial evidence as the latter can easily be fabricated.
The testimonies of petitioner Anecita and Anastacia with respect to the date of execution cannot
be relied upon considering their age and the fact that they could not even remember their own birthdays.
In contrast, respondents presented as evidence the Primary Entry Book which is an official record
of all instruments filed with the Register of Deeds. As a public document, it is entitled to a presumption of
truth as to the recitals contained therein pursuant to Section 44, Rule 130 of the ROC.
Having been executed within the five-year prohibitory period, the Deed of Sale, as correctly ruled
by the CA, is void ab initio.
Under prevailing jurisprudence, the property should rightly be returned to respondents

considering that the government has not yet filed an action for reversion. Reversion under Section 101 of
the Public Land Act is not automatic as the Office of the Solicitor General must first file an action for
reversion.
The CA likewise correctly ordered respondents to reimburse petitioners the purchase price of the
sale since the Deed of Sale is void ab initio. As to the improvements made on the land and the interests on
the purchase price, these are compensated by the fruits petitioners had received from their long
possession of the homestead pursuant to the ruling of the Court in the case of Sps. Maltos v. Heirs of
Eusebio Borromeo.
NO. Laches does not apply to void ab initio contracts. Heirs of Alido v. Campano made it clear that
laches does not apply to void ab initio contracts. As above-mentioned, a sale of a parcel of land is in
violation of the five year prohibition on the alienation of land acquired via patent application is void and
produces no legal effect.
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G.R. No. 205817, October 06, 2021

REPUBLIC OF THE PHILIPPINES, Petitioner, v. LUISA ABELLANOSA AND GENEROSO MANALO BY
FIL-ESTATE PROPERTIES, INC., Respondents.
BERNABE, J.:
21
In Sebastian v. Spouses Cruz,19 We pointed out that the following requisites must be complied
with for an order for reconstitution to be issued:
(a) that the certificate of title had been lost or destroyed;
(b) that the documents presented by petitioner are sufficient and proper to warrant reconstitution
of the lost or destroyed certificate of title;
(c) that the petitioner is the registered owner of the property or had an interest therein;
(d) that the certificate of title was in force at the time it was lost and destroyed; and
(e) that the description, area and boundaries of the property are substantially the same as those
contained in the lost or destroyed certificate of title.
BAR QUESTION
The instant case stemmed from the filing of a petition for reconstitution on January 12, 2006
docketed as M.C. No. 2006-08, by Luisa Abellanosa and Generoso Manalo by: Fil-Estate Properties, Inc." 5
In the petition for reconstitution, the spouses Manalo claimed that they were once registered
owners of two parcels of land in Barangay Bocohan, Lucena City, Quezon Province, more particularly
described as Lot Nos. 1457 and 1249 with a total land area of 55,086 square meters and covered by
Original Certificate of Title Nos. 7001 (963) and 7362, respectively (collectively, subject lots).
They sold the subject lots to one Marina Valero (Valero) for which the corresponding tax
declaration was issued under the latter's name. Valero later on sold Lot No. 1457 to FEPI, while Lot No.
1249 was developed into a first-class subdivision with FEPI as the developer. However, Valero was unable
to surrender the owner's duplicate copy of the titles to FEPI because the documents were lost beyond
retrieval and presumed burned during the fire that razed the City Hall Building of the City of Lucena on
August 30, 1983."6
On May 17, 2006, respondents sought to amend (first amendment) the petition for reconstitution
by attaching thereto the respective sketch plans of the subject lots including the technical descriptions
thereof. The RTC later issued the June 16, 2006 Order acknowledging the amended petition for
reconstitution.7
On April 28, 2008, the counsel for respondents filed a motion to admit a second amended petition
(second amendment) to propose the substitution of parties by impleading Valero as co-petitioner following
the death of the spouses Manalo and to use the LRA-verified plans and technical descriptions of the
subject lots as bases for the reconstitution of the lost titles. The RTC admitted the motion and the second
amendment to the petition as per Order dated May 5, 2008.9
The Republic appealed claiming that the RTC did not acquire jurisdiction over the case since the
second amendment of the Petition for Reconstitution was not posted and published in accordance with
Sections 12 and 13 of RA 26. It contended that there was no sufficient basis for the reconstitution of the
titles of the subject lots because the grounds for the reconstitution of titles indicated in the second
amendment, such as plans and technical descriptions, are not grounds for filing a petition for
reconstitution.
WHETHER the RTC erred in granting respondents' petition for reconstitution.
SUGGESTED ANSWER
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NO. The instant petition is devoid of merit. For the judicial reconstitution of an existing and valid
original certificate of Torrens title, Section 2 of RA 26 enumerates the acceptable bases, while Sections 12
and 13 provide for the procedure for the reconstitution.
In Sebastian v. Spouses Cruz,19 We pointed out that the following requisites must be complied
with for an order for reconstitution to be issued: 22
(a) that the certificate of title had been lost or destroyed;
(b) that the documents presented by petitioner are sufficient and proper to warrant reconstitution
of the lost or destroyed certificate of title;
(c) that the petitioner is the registered owner of the property or had an interest therein;
(d) that the certificate of title was in force at the time it was lost and destroyed; and
(e) that the description, area and boundaries of the property are substantially the same as those
contained in the lost or destroyed certificate of title.
Here, the revisions merely refer to the substitution of the parties in view of the deaths of the
spouses Manalo and the mention of RA 26 as the applicable law. Hence, the earlier posting and
publication of the petition for reconstitution prior to the second amendment were sufficient for the RTC to
acquire jurisdiction.
Nevertheless, assuming arguendo that another posting and publication was necessary in view of
the second amendment, the absence of the same does not divest the RTC of its jurisdiction that it validly
acquired in the first instance. Settled is the rule that jurisdiction once acquired is not lost upon the
instance of the parties but continues until the case is terminated.
The reconstitution of title is an action in rem, which means it is one directed not only against
particular persons, but against the thing itself. Petitioner's assertion that the bases of the second
amendment, such as plans and technical descriptions, are not grounds for filing the petition for
reconstitution, is just as unacceptable. The bases for the reconstitution of the title were not only the plans
and technical descriptions but also the legible duplicate copies of the titles and a host of other official
documents. (TINANONG ITO SA CAGUIAO BAR)
[ G.R. No. 207159. February 28, 2022 ]

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. HEIRS OF EDUARDO BOOC, MERCEDES BOOC,
AURELIA BOOC, PEDRO BOOC, FLORENTINO BOOC, AND FELICIANA BOOC,* RESPONDENTS.
BERNABE, J.:
RA 26 on judicial reconstitution of a certificate of title, governs the restoration of a lost or

destroyed certificate of title in its original form and condition. The requirements in Section 12, on the
contents of a petition, and Section 13, on the publication of the notice of petition, are mandatory and
jurisdictional in nature.
SECTION 12. XXX The petition shall state or contain, among other things, the following:
(a) that the owner's duplicate of the certificate of title had been lost or destroyed; (b) that no co-owner's
mortgagee's or lessee's duplicate had been issued, or, if any had been issued, the same had been lost or
destroyed; (c) the location, area and boundaries of the property; (d) the nature and description of the
buildings or improvements, if any, which do not belong to the owner of the land, and the names
and addresses of the owners of such buildings or improvements; (e) the names and addresses of the
occupants or persons in possession of the property, of the owners of the adjoining properties and
all persons who may have any interest in the property; (f) a detailed description of the
encumbrances, if any, affecting the property; and (g) a statement that no deeds or other instruments
affecting the property have been presented for registration, or, if there be any, the registration thereof has
not been accomplished, as yet. XXX
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SECTION 13. The court shall cause a notice of the petition, filed under the preceding section, to be
published, at the expense of the petitioner, twice in successive issues of the Official Gazette, and to be
posted on the main entrance of the provincial building and of the municipal building of the municipality or
city in which the land is situated, at least thirty days prior to the date of hearing. The court shall likewise
cause a copy of the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to
every person named therein whose address is known, at least thirty days prior to the date of hearing. Said 23
notice shall state, among other things, the number of the lost or destroyed certificate of title, if
known, the name of the registered owner, the names of the occupants or persons in possession of
the property, the owners of the adjoining properties and all other interested parties, the location, area
and boundaries of the property, and the date on which all persons having any interest therein must
appear and file their claim or objections to the petition. The petitioner shall, at the hearing, submit
proof of the publication, posting and service of the notice as directed by the court.
BAR QUESTION
Subject of the controversy are three lots located in Lapu-Lapu City, Cebu known as: (a) Lot No.
4749; (b) Lot No. 4765; and (c) Lot No. 4777.
On July 9, 1998, respondents filed a petition for reconstitution of OCT of Lot Nos. 4749, 4765,
and 4777 alleging that sometime in 1930, the Court of First Instance (CFI) of Cebu rendered three
Decisions declaring the late Eduardo Booc, Mercedes Booc, Aurelia Booc, Pedro Booc and Florentino Booc
(collectively, the Boocs) as the registered owners of Lot Nos. 4749, 4765, and 4777.
As a results thereof, in 1934, Decree Nos. 531394, 531367, and 531382 were separately issued by
the CFI-Cebu directing the registration of the subject lots in the name of the Boocs. OCTs were thereafter
allegedly issued to the Boocs relative to the subject lots. Unfortunately, the OCTs were lost or destroyed
during the World War II.
At present, Lot No. 4749 is in the material possession of the MEPZA. The MIAA (MCIAA) possesses
Lot Nos. 4765 and 4777.
In its opposition, MCIAA asserted that the government, through the Civil Aeronautics
Administration (CAA), owned the subject lots. The CAA bought the said lots from Julian, Modesta, and
Paulino, as evidenced by three Deeds of Absolute Sale in 1958.
Since then, the government has been in continuous, uninterrupted, and adverse possession of the
subject lots which it declared for taxation purposes under Tax Declarations. The ownership of the subject
lots were then transferred to MCIAA pursuant to RA 6985. MCIAA sought the dismissal of the petition for
reconstitution on the ground that it was prematurely filed. It reasoned that there is still a need to resolve
the issue of ownership which could only be ventilated in an ordinary court action and not before a
cadastral court.
The RTC held that respondents sufficiently proved that the OCTs of the subject lots were issued in
the name of the Boocs, and that these were lost or destroyed during the war.
The CA held that the existence of the decisions and decrees awarding the subject lots to the
Boocs, and the Register of Deeds' certification stating that the OCT was lost or destroyed, are sufficient to
warrant the reconstitution of the purported lost or destroyed certificates of title.
WHETHER respondents are entitled to the reconstitution of the OCTs of the subject lots.
SUGGESTED ANSWER
NO. The respondents are NOT entitled to the reconstitution of the OCTs of the subject lots.
First, the RTC failed to acquire jurisdiction over the petition for reconstitution due to procedural
infirmities. RA 26 on judicial reconstitution of a certificate of title, governs the restoration of a lost or
destroyed certificate of title in its original form and condition. The requirements in Section 12, on the
contents of a petition, and Section 13, on the publication of the notice of petition, are mandatory and
jurisdictional in nature.
Here, the petition for reconstitution did not comply with the requirements laid down in Section 12
of RA 26. Despite being aware that the subject lots are in the material possession of the MIAA and MEPZA,
respondents did not stipulate if a building or improvements which do not belong to the Boocs are erected
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in the subject lots, and the nature thereof. They also did not state the encumbrances affecting the
property, which are the deeds of absolute sale executed in 1957 and 1958 in favor MCIAA.
Verily, the petition for reconstitution is fatally defective due to the presence of severe infirmities.
Respondents likewise did not strictly adhere to the procedures on notice of hearing laid down in Section
13. The amended notice shows did not indicate the number of the lost or destroyed OCTs. It simply stated 24
"Original Certificate of Title of Lot Nos. 4749, 4765 and 4777." The amended notice also failed to indicate
the following in violation of the in rem character of the reconstitution proceedings and the mandatory
nature of the requirements under RA 26:
(a) the names of MEPZA and MIAA who are the occupants and possessors of the subject lots;
(b) the area and the boundaries of the subject lots; and
(c) the date on which all persons having any interest therein must appear and file their claim or
objections to the petition.
There is insufficient evidence showing that OCTs of the subject lots in the name of the Boocs
exist.
At best, the CFI decisions only proved that Lot Nos. 4749, 4765 and 4777 were awarded to the
Boocs and that the lots were to be registered in their names pursuant to Land Registration Act.
Respondents' non-submission of an affidavit of loss further casts doubt if the certificates of title of
the subject lots in the name of the Boocs exist. Section 109 of PD 1529 mandates that the owner must file
with the proper Registry of Deeds a notice of loss executed under oath.
Moreover, respondents are guilty of laches. Laches is negligence or omission to assert a right
within a reasonable time, warranting the presumption that the party entitled to assert it either has
abandoned or declined to assert it. Here, respondents only filed the petition for reconstitution 12 years
after they first discovered that the titles were allegedly lost or destroyed.
In all, the RTC did not acquire jurisdiction over the case.
[ G.R. No. 157719. March 02, 2022 ]
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. CLEMENTE TAPAY AND ALBERTO T. BARRION,
AS THE LEGAL REPRESENTATIVE OF THE HEIRS OF THE DECEASED FLORA L. TAPAY,
[1] RESPONDENTS.
BERNABE, J.:
In Republic v. Heirs of Sta. Ana, the LRA reported that a prior decree of registration had already
been issued, yet the Court still decided to allow the subsequent registration because there was no way to
verify the truthfulness of the alleged prior case. Considering that it is the decree of registration that
binds the land and quiets the title thereto, and not the decision, the registration should be allowed
with much more reason here where no decree of registration covering the subject land had yet been issued
and only the existence of the supposed decision which has not yet even attained finality bars respondents'
application.
BAR QUESTION
Sometime in 1980, Flora and Clemente Tapay (respondents) filed an application for registration of Lot
No. 10786, They alleged that a certain Francisca Cueto had been in possession of the property since 1925
until it was sold to Teofila Lindog (Teofila), respondents' predecessor. When Teofila died intestate in 1971,
respondents inherited the property.
Respondents' application for registration was opposed by the Republic of the Philippines Petitioner
argued that: (1) the documents submitted by respondents (such as the muniments of title, tax declaration,
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and receipt of tax payments) did not constitute competent evidence of acquisition of property; (2) neither
did respondents' open, continuous, exclusive, and notorious possession of the land in the concept of an
owner constitute the same; (3) respondents' claim of ownership based on a Spanish title or grant can no
longer be availed of since respondents failed to file the appropriate application within the period set by
Presidential Decree No. 892;9 and (4) the parcel of land applied for is part of public domain.10
25
A notice of the application for registration was posted, published, and served on the adjoining
property owners.11 The RTC thereafter issued an order of general default against the whole world.12
The LRC (now LRA) was unable to determine the identity of the person to whom the property was
adjudicated to. Despite the report of the LRC, the RTC adjudicated the land to the respondents. After the
Decision became final, the RTC directed the LRC to issue the decree of registration and the corresponding
certificate of title.
However, instead of complying with the order, the LRC submitted a supplemental report
reiterating that the subject land was previously the subject of registration proceedings in Cadastral Case
No. 33. Respondents filed a motion to set aside the decision in Cadastral Case No. 33 which was granted.
(MALI ANG LRC DITO DAHIL MAY FINAL DECREE OF REGISTRATION NA)
Petitioner appealed to the CA, arguing that the RTC had no authority to set aside the decision of
the cadastral court as it amounted to interference with the authority of another co-equal court. The CA
denied the appeal of petitioner.
WHETHER the CA erred in affirming the RTC Order.
SUGGESTED ANSWER
NO. The higher interest of justice will be better served by granting respondents' prayer for a
registration decree.
The Court agrees with petitioner that an RTC has no power to nullify or interfere with the decision
of a co-equal court pursuant to the law and the doctrine of judicial stability. However, the foregoing
presupposes that Cadastral Case No. 33 really existed and that there actually is a decision in that case.
Unfortunately for petitioner, aside from the single entry "Cadastral Case No. 33, LRC (GLRO)
Cadastral Record No. 1305," no other record, including a copy of the decision, exists to support the
theory. Key information, such as the identity of the parties in the case and of the court that rendered the
decision, as well as the outcome thereof, has remained unknown despite the lapse of more than 40 years
since the LRC submitted its report. No one, aside from the Republic, has even come forward to claim any
interest arising from the supposed case. The Court therefore agrees with the CA that the doctrine of
judicial stability finds no application in this case. Practical considerations now demand that the
proceedings in the RTC be no longer disturbed and the August 14, 1996 Order no longer set aside.
In Republic v. Heirs of Sta. Ana, the LRA reported that a prior decree of registration had already
been issued, yet the Court still decided to allow the subsequent registration because there was no way to
verify the truthfulness of the alleged prior case. Considering that it is the decree of registration that
binds the land and quiets the title thereto, and not the decision, the registration should be allowed
with much more reason here where no decree of registration covering the subject land had yet been issued
and only the existence of the supposed decision which has not yet even attained finality bars respondents'
application.
[ G.R. No. 215925. March 07, 2022 ]

ESPERANZA P. GAOIRAN, PETITIONER, VS. THE HONORABLE COURT OF APPEALS, BRANCH 12 OF
THE REGIONAL TRIAL COURT OF ILOCOS NORTE, SPS. TIMOTEO S. PABLO AND PERLITA PABLO,
MARY NYRE DAWN S. ALCANTARA, AND REGISTER OF DEEDS OF LAOAG CITY, RESPONDENTS.
BERNABE, J.

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From Section 109 of PD 1529, for an order of reconstitution to be issued, it must be clearly shown
that the certificate of title had been lost or destroyed. If a certificate of title has not been lost, but is in fact
in the possession of another person, then the reconstituted title is void and the court that rendered the
decision had no jurisdiction.
BAR QUESTION 26
The property subject of the instant petition is a 275-square meter parcel of land situated in
Barangay Poblacion San Miguel & San Pedro, City of Laoag, covered by Transfer Certificate of Title No.
(TCT) T-34540 issued under the name of respondent Perlita S. Pablo (Perlita), married to Timoteo Pablo
(Timoteo).
Petitioner alleged that on September 22, 2009, her friends introduced to her a certain Timoteo H.
Pablo, Jr. who was allegedly looking for a buyer of a land registered under the name of his wife, Perlita S.
Pablo. Timoteo offered for sale the subject property to petitioner and her husband. Timoteo was able to
convince petitioner to purchase the said property upon the representation that he was authorized by his
wife, Perlita to sell the same.
On the same day, petitioner delivered the purchase price to Timoteo in the amount of P500,000.00
and in exchange, Timoteo surrendered the first owner's duplicate copy of TCT T-34540 to petitioner and
undertook to deliver a deed of absolute sale signed by his wife on or before October 22, 2009. Timoteo,
however, did not make good his promise.
Petitioner filed a complaint for Estafa against Timoteo which resulted to the filing of an
Information. Petitioner executed an affidavit of possession with notice of lis pendens and brought the same
to the Register of Deeds for annotation of an adverse claim in the TCT. The RD advised her that the said
complaint, being criminal and not civil in nature, cannot be annotated in the original certificate of title.
On the claim that the owner's duplicate copy of the subject property's title was missing,
respondent Mary, representing herself as the niece of Perlita, and the latter's trustee of the TCT, filed a
petition praying that the owner's duplicate copy of the TCT that had been lost be declared as null and
void. She likewise prayed for the issuance of a second owner's duplicate copy which the RTC granted.
Petitioner instituted before the CA a petition for annulment of judgment (RULE 47) seeking to
annul the Decision of the RTC which granted Mary's petition for the issuance of a second owner's
duplicate copy on the grounds of extrinsic fraud and lack of jurisdiction. She argued that the RTC had no
jurisdiction to issue a new title as the first owner's duplicate copy was never lost, and in fact, is in her
possession all along.
The CA dismissed the petition declaring that a petition under Rule 47 cannot be used to impugn
the second owner's duplicate certificate of title which was issued in the reconstitution proceeding.
WHETHER the CA committed grave abuse of discretion in dismissing the petition for annulment
of judgment.
SUGGESTED ANSWER
YES. The CA erred in denying petitioner's petition for annulment of judgment. Preliminarily, the
Court notes that petitioner should have filed a petition for review on certiorari under Rule 45, not a
petition for certiorari under Rule 65 since the CA acted within its jurisdiction when it rendered the
assailed Decision. In the interest of justice and to prevent further prolonging the proceedings in this case,
the Court resolved to give due course to the petition.
Under Section 2, Rule 47, the only grounds for annulment of judgment are extrinsic fraud and
lack of jurisdiction. Lack of jurisdiction as a ground for annulment of judgment refers to either lack of
jurisdiction over the person of the defending party or over the subject matter of the claim.
The reconstitution of a certificate of title denotes restoration in the original form and condition of a
lost or destroyed instrument attesting the title of a person to a piece of land.
From Section 109 of PD 1529, for an order of reconstitution to be issued, it must be clearly shown
that the certificate of title had been lost or destroyed. If a certificate of title has not been lost, but is in fact
in the possession of another person, then the reconstituted title is void and the court that rendered the
decision had no jurisdiction.
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Here, petitioner clearly alleged in her petition before the CA that, contrary to the claim of Mary in
the reconstitution proceeding, the owner's duplicate copy was not really lost, as the same was surrendered
to her by Timoteo and was in her possession all along. Ergo, the RTC did not validly acquire jurisdiction
over the subject matter of the reconstitution proceeding.
27
[ G.R. NO. 207210. MARCH 21, 2022 ]

GARCIA V. ESCLITO
BERNABE, J.
Section 43 of PD 1529 states that a certificate of title shall not be subject to a collateral
attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance
with law. A direct attack is an action whose main objective is to annul, set aside, or enjoin the
enforcement of a judgment pursuant to which a registration decree is issued, if the judgment has not yet
been implemented, or if already implemented, to seek the recovery of the property. On the other hand, a
collateral attack transpires when, in an action to obtain a different relief, an attack is incidentally made
against the judgment.
BAR QUESTIONS
Sometime in 1979, petitioner Antonio Garcia purchased from Conchita Matute a 29-hectare parcel
of land through a deed of sale. In 1998, he divided the land and donated portions of it to his children and
grandchildren (his co-petitioners) through deeds of transfer of rights.
Petitioners then filed with the Department of Environment and Natural Resources (DENR)
applications for the issuance of land titles pursuant to the DENR's Handog Titulo program. On November
17-25, 1998, petitioners were issued their respective patents and thereafter certificates of title upon
registration.
In 2003, respondents, who are holders of certificates of land ownership award (CLOA) issued by
the Department of Agrarian Reform (DAR) on December 19, 1998, filed a petition for the
annulment/declaration of nullity of deed of sale and all the deeds, documents and proceedings relying
thereon before the Office of the Provincial Adjudicator of the Department of Agrarian Reform Adjudication
Board (DARAB).
They alleged that the 1979 deed of sale was void for violating Section 6 of RA 6657. According to
them, since the 1979 Deed of Sale was not registered before the Registry of Deeds within three months
from the effectivity of RA 6657, the sale was void.
The Provincial Adjudicator of DARAB dismissed respondents' petition for lack of jurisdiction. It
agreed with petitioners that the land was outside the coverage of RA 6657. The DARAB reversed the
Provincial Adjudicator's Decision and declared the deed of sale and the subsequent donations, deeds of
transfer of rights, and the incidental documents void.
Petitioners then filed the R65 petition before the CA. Before the CA could issue the assailed
rulings, petitioners filed a direct complaint for cancellation of certificates of title with the RTC.
The CA agreed with the DARAB that the latter has jurisdiction over respondents' petition to nullify
the deed of sale as it concerned a violation of Section 6 RA 6657;
1. that the property is within the coverage of the law;

2. that based on Section 6, the deed of sale should have been registered to be valid and effective;
and
3. that since it was not registered, the DARAB was justified in declaring it void.
WHETHER the CA commit grave abuse of discretion amounting to lack or excess of jurisdiction in
rendering the assailed Decision and Resolution.
SUGGESTED ANSWER
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YES. Respondents' petition before the Provincial Adjudicator constitutes an impermissible

collateral attack on petitioners' Torrens Certificates of title. Preliminarily, the Court notes that petitioners
availed the wrong remedy and should have filed an ordinary appeal. However, there are instances when
recourse to certiorari may be allowed despite the availability of appeal, such as
1. when public welfare and the advancement of public policy dictates, 28

2. when the broader interest of justice so requires,
3. when the writs issued are void, or
4. when the questioned order amounts to an oppressive exercise of judicial authority.
Section 43 of PD 1529 states that a certificate of title shall not be subject to a collateral attack
and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. A
direct attack is an action whose main objective is to annul, set aside, or enjoin the enforcement of a
judgment pursuant to which a registration decree is issued, if the judgment has not yet been
implemented, or if already implemented, to seek the recovery of the property. On the other hand, a
collateral attack transpires when, in an action to obtain a different relief, an attack is incidentally made
against the judgment.
Here, petitioners are holders of certificates of title registered under the Torrens system. Thus,
their certificates can only be attacked directly. Yet respondents instituted a collateral attack in their
petition before the Provincial Adjudicator.
Jurisprudence has recognized an attack on a deed of sale pursuant to which a certificate of title
was issued as an impermissible collateral attack on the certificate of title. Thus, the CA is not justified in
dismissing petitioners' certiorari petition that questioned the DARAB's patently void Decision. For doing
so, the CA itself committed grave abuse of discretion amounting to lack or excess of jurisdiction, rendering
the assailed Decision a nullity as well.
(ONE MORE. DARAB HAS NO JURISDICTION SINCE THERE WAS NO ALLEGATION OF

TENANCY. MAHIRAP YUNG BAR QUESTION MAARING ITANONG)
[ G.R. NO. 213888. APRIL 25, 2022 ]

HEIRS OF BORRAS V. HEIRS OF BORRAS
BERNABE, J.
The proper recourse for petitioners should have been to file an action for reconveyance. In an
action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead
is the transfer of the property, which has been wrongfully or erroneously registered in another person's
name, to its rightful and legal owner, or to one with a better right.
BAR QUESTION
Procopio Borras (Procopio) was the owner of several parcels of land, one of which was Lot No.
5275 located at Barrio Bigaa, Legazpi City, and covered by Original Certificate of Title (OCT) No. [NA] 2097.
Upon Procopio's death, the properties were inherited by his five children namely: Inocencio, Vicente,
Aurelia, Severina and Leonila.
Upon the death of all the siblings, the properties were inherited by their respective children,
including Eustaquio Borras (Eustaquio), son of Inocencio.
On April 10, 2004, the Heirs of Eustaquio (respondents) claimed ownership of Lot No. 5275. This
was contested by petitioners. The dispute was referred to barangay conciliation which resulted to the
discovery of petitioners that Lot No. 5275 is already registered in the name of Eustaquio Borras. [6]
During his lifetime, Eustaquio claimed ownership over Lot 5275 when he filed a petition for
reconstitution. TCT 21502 was issued in the name of Eustaquio. The Heirs of Eustaquio, herein
respondents, thus claimed ownership over the lot.
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Petitioners then filed an action for quieting of title. The RTC decided in their favor. (NOTE:
THE PROPER REMEDY IS NOT QUIETING OF TITLE)
Respondents filed an appeal before the CA questioning the jurisdiction of the RTC in declaring
TCT 21502 null and void. The CA granted the appeal ruling that while a TCT should not have been issued
to Eustaquio in an action for reconstitution, the declaration of its nullity can only be had either in an 29
action for annulment of judgment under Rule 47, or in an action for reconveyance.
Thereafter, petitioners filed before the CA a petition for annulment of judgment. The CA dismissed
the petition for annulment of judgment on the ground that petitioners failed to prove the existence of
extrinsic fraud or lack of jurisdiction of the CFI.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT
PETITIONERS' PROPER REMEDY IS A CASE FOR RECONVEYANCE COGNIZABLE BY THE REGIONAL
TRIAL COURT AND NOT A PETITION FOR ANNULMENT OF THE JULY 7, 1980 DECISION OF THE
RESPONDENT TRIAL COURT OVER WHICH COURT OF APPEALS HAS JURISDICTION TO DECIDE
SUGGESTED ANSWER
AN ACTION FOR RECONVEYANCE.
Putting to one side the question of whether there was a verbal partition of Lot 5275, the plaintiffs-
appellees must first choose the right action wherein to raise the issue. It cannot be by an action to quiet a
title that under the Property Registration Decree is already incontrovertible. It should have been an action
for reconveyance.
The theory in reconveyance is that, without altering the terms of the decree or title, the true owner
may demand, on equitable grounds that the title be transferred to him.
The action is, moreover, imprescriptible if the plaintiffs are in possession. There is no reason why
they could not have sued for reconveyance instead of quieting of title.
The proper recourse for petitioners should have been to file an action for reconveyance. In an
action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead
is the transfer of the property, which has been wrongfully or erroneously registered in another person's
name, to its rightful and legal owner, or to one with a better right.
G.R. NO. 236619, 6 APR 2022

HEIRS OF EÑANO V. SAN PEDRO CINEPLEX PROPERTIES, INC.
BERNABE, J.
In an action for quieting of title, the objective is for the competent court to remove the cloud by
determining the rights of the parties so that the ones entitled to the subject property may exercise said
rights without fear, disturbance, or interference from those who have no right over the same. Two
requisites must be established in order that a complaint for quieting of title may prosper.
1. First, the plaintiff must have a legal or equitable title or interest in the property subject of the
complaint.
2. Second, the deed, claim, encumbrance, or proceeding allegedly casting doubt over one's title
must be proven to be in truth invalid, void or inoperative despite the prima facie appearance
of validity.
BAR QUESTION
Jennifer Efiano Bote, daughter of Manuel H. Efiano (Manuel), was the representative of the latter's
legal heirs. In August 2006, she authorized her husband Virgilio A. Bote (Virgilio) through a Special Power
of Attorney to file a Complaint for Quieting of Title with Damages involving a parcel of land with an
estimated area of 74,847 square meters.
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Petitioners contended that Manuel is the registered owner of the subject property evidenced by a
TCT. Manuel had been in open and continuous possession of the subject property since 1966 until his
demise in 1987.
In June 2006, while Virgilio was in possession of the subject property, he received a Complaint for
Forcible Entry filed by respondent claiming that it is the registered owner of the subject property by virtue 30
of TCTs. The MTC found that respondent constructively possessed the subject property and directed
petitioners and Virgilio to vacate. When it reached the SC, the latter resolved to remand the same to the
MTC to determine whose certificate of title covered the subject property, and to grant possession to the
proper party. The MTC sustained its previous decision and ordered petitioners and Virgilio to vacate the
subject property.
In the Quieting of Title case, the RTC resolved that the petitioners are the exclusive owners,
having a better right than respondent, over the subject property. Consequently, the TCTs of respondent
were declared null and void.
The CA reversed the RTC.
WHETHER the Complaint for Quieting of Title should not prosper because petitioners did not
have any legal or equitable title over the subject property.
SUGGESTED ANSWER
YES. THE ACTION WILL NOT PROSPER.
In an action for quieting of title, the objective is for the competent court to remove the cloud by
determining the rights of the parties so that the ones entitled to the subject property may exercise said
rights without fear, disturbance, or interference from those who have no right over the same. Two
requisites must be established in order that a complaint for quieting of title may prosper.
3. First, the plaintiff must have a legal or equitable title or interest in the property subject of the
complaint.
4. Second, the deed, claim, encumbrance, or proceeding allegedly casting doubt over one's title
must be proven to be in truth invalid, void or inoperative despite the prima facie appearance
of validity.
Here, petitioners failed to prove that they hold a legal or equitable title over the subject property.
Legal title means registered ownership, where the subject property is registered under the name of the
complainant in an action to quiet title, which may be evidenced by presenting the certificate of title in the
latter's name. Equitable title denotes beneficial ownership, which is ownership recognized by law and
capable of being enforced in the courts at the suit of the beneficial owner.
Petitioners are neither holders of a legal title nor equitable title over the subject property. The
second requisite was not ascertained since the certificates of title in the name of respondent and the origin
of the same were precisely demonstrated through the chain of transactions which led to respondent's
ownership of the subject property.
In fact, the genealogy of respondent's certificates of title were evidenced by the presentation of all
certificates of title from the original title in the name of Gliceria, to Spouses Sibulo, then Dona Crisanta
Investment, to La Paz Housing and finally to respondent. These documentary evidence serve as competent
proof that respondent's certificates of title are genuinely valid not just on their face but also on all legal
aspects.
Considering that the evidence of petitioners did not satisfy the requisites for quieting of title, their
complaint must be dismissed for lack of merit.
POSSESSION
[ G.R. No. 205832. March 07, 2022 ]

GORGONIO P. PALAJOS, PETITIONER, VS. JOSE MANOLO E. ABAD, RESPONDENT.
BERNABE, J.

POISONED COPY
The three elements that must be alleged and proved for a forcible entry suit to prosper are the following:
1. plaintiff had prior physical possession of the property before the defendant encroached on the
property;
2. plaintiff was deprived of possession either by force, intimidation, threat, strategy or stealth by
31
defendant; and
3. that the action was filed within one (1) year from the time the plaintiff learned of his
deprivation of the physical possession of the property, except that when the entry is through
stealth, the one (1) year period is counted from the time the plaintiff-owner or legal possessor
learned of the deprivation of the physical possession of the property.
BAR QUESTION
On February 25, 2006, Manolo and his siblings, namely, Ma. Jasmin E. Abad and Jose Roman E.
Abad (collectively, plaintiffs), filed a complaint for forcible entry against Palajos, along with other
individuals, (collectively, defendants), with the Metropolitan Trial Court (MeTC) of Quezon City, Branch 38,
docketed as Civil Case No. 06-35654.[4]
On April 25, 2006, while Civil Case No. 06-35654 was pending before the MeTC, plaintiffs filed a
motion to render judgment claiming that defendants therein either filed their answer beyond the
reglementary period or did not file any answer at all.[5] In its June 16, 2006 Order, the MeTC granted
plaintiffs' motion, except against Palajos whose answer was admitted.[6]
Plaintiffs claimed that they are the registered owners of three adjacent and contiguous parcels of
land, more particularly described as Lot Nos. 5, 7 and 9 which they acquired from their parents. They
discovered that defendants, by means of force upon things, strategy and stealth and without their
knowledge and consent, destroyed portions of the perimeter fence, entered the subject property and
constructed their houses thereon, depriving plaintiffs of their possession.
Palajos claimed that he entered Lot No. 5 in 2006 by virtue of a 1988 deed of absolute sale which
B.C. Regalado & Co. executed in his favor. The MeTC ruled in favor of plaintiffs finding that they had prior
physical possession of the subject property since they constructed a concrete perimeter fence thereon
sometime in 2001.
The RTC reversed the MeTC ruling finding that the plaintiffs failed to prove prior actual physical
possession. The CA reversed the RTC and reinstated the MeTC.
WHETHER Manolo proved his prior physical possession of the subject property, which includes
Lot No. 5, Block 73, to entitle him to recover in an ejectment suit of forcible entry.
SUGGESTED ANSWER
YES. Manolo proved his prior physical possession of the subject property. The three elements that
must be alleged and proved for a forcible entry suit to prosper are the following:
4. plaintiff had prior physical possession of the property before the defendant encroached on the
property;
5. plaintiff was deprived of possession either by force, intimidation, threat, strategy or stealth by
defendant; and
6. that the action was filed within one (1) year from the time the plaintiff learned of his
deprivation of the physical possession of the property, except that when the entry is through
stealth, the one (1) year period is counted from the time the plaintiff-owner or legal possessor
learned of the deprivation of the physical possession of the property.
Possession in forcible entry cases refers to prior physical possession or possession de facto, not
possession de jure or that arising from ownership. As an exception, Section 16, Rule 70 provides that the
issue of ownership shall be resolved in deciding the issue of possession if the question of possession is
intertwined with the issue of ownership.
POISONED COPY
Possession can be acquired not only by material occupation, but also by the fact that a thing is
subject to the action of one's will or by the proper acts and legal formalities established for acquiring such
right.
Here, both the MeTC and the CA correctly found that Manolo and his siblings were able to
establish that they are the registered owners of the subject property which they acquired from their 32
parents in 1999. Although they did not immediately put the same to active use, Manolo had been
occupying the land since 1999.
With regard to the issue of prior physical possession, sometime in 2001, Manolo and his siblings
took actual possession of the subject property and constructed a concrete perimeter fence around it. On
the other hand, Palajos' evidence of alleged prior possession of Lot No. 5 occurred after Manolo took
possession of the subject property.
Entry in the premises of the subject property without the consent and knowledge of the registered
owner, clearly falls under stealth, which is defined as any secret, sly or clandestine act to avoid discovery
and to gain entrance into, or to remain within the residence of another without permission.
OWNERSHIP
G.R. No. 216587, August 04, 2021

SPOUSES EUGENIO PONCE AND EMILIANA NEROSA, Petitioners, v. JESUS ALDANESE, Respondent.
BERNABE, J.
While the tax declaration is not conclusive proof of ownership of Jesus over the subject land, it is
an indication however that he possesses the property in the concept of an owner for nobody in his or her
right mind would be paying taxes for a property that is not in his or her actual or constructive possession.
(The taxpayer without possession is matatalo ng actual possessor. So, dapat the taxpayer is also the
possessor para conclusive ang kanyang ownership. Take note that this is applicable sa mga unregistered
land – yung mga walang titulo. Pag titled land – the proof ownership is the instrument like deed of sale.
Paano yung registered owner sa TCT. Well, TCT is not a proof of ownership – registration binds the land
against the world)
BAR QUESTION
Under dispute is a parcel of unregistered land4 known as Lot No. 6890, an unregistered land
which consists of 3.9030 hectares.
In 1973, respondent Jesus Aldanese (Jesus) inherited Lot No. 6890 from his father, Teodoro
Aldanese, Sr. He diligently paid its real property taxes from that time on under Tax Declaration No. (TD)
13003 which is in his name.5 TD 13003 was subsequently cancelled and TD 13163-A6 was issued by the
Municipal Assessor of Sibonga, still in Jesus' name, as the owner and possessor thereof.
Jesus stayed in the city because of his business. In August 1996, he was surprised when he
discovered that the Spouses Ponce encroached upon the entire portion of his lot. He immediately
demanded that they vacate his land and to return it to him. However, the Spouses Ponce refused to heed
Jesus' demand on the ground that Lot No. 6890 is part of the land that they bought from his brother
Teodoro Aldanese, Jr. (Teodoro Jr.).8
Jesus then asked his brother Teodoro Jr. about the purported sale of his land. However, Teodoro
Jr. denied selling his brother's land to the Ponces. He explained to Jesus that what he sold to the Spouses
Ponce was a parcel of land that he owned known as Lot No. 11203. Lot No. 11203 is adjacent to Lot No.
6890 of Jesus. Teodoro Jr. then showed Jesus a photocopy of the Deed of Absolute Sale .
During the barangay proceedings, the Ponces admitted encroaching on Lot No. 6890 because Lot
No. 11203 contained less than the area stated in the Deed of Absolute Sale. The RTC ruled in favor of
Jesus. The CA sustained the RTC holding that prescription has not yet set in since the complaint was filed
within the 30-year prescriptive period for real actions over immovable properties.
WHETHER Jesus is the absolute owner of Lot No. 6890 to be entitled of possession thereof.
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SUGGESTED ANSWER
YES. There is preponderant evidence on record to support the conclusion that Jesus, being the
lawful owner of the subject property, is entitled to the possession of Lot No. 6890.
Here, Lot No. 6890 remained untitled. To prove his ownership over the lot, Jesus presented a Tax
33
Declaration and that he has been paying realty taxes thereon as early as 1980 as owner of the property.
While the tax declaration is not conclusive proof of ownership of Jesus over the subject land, it is
an indication however that he possesses the property in the concept of an owner for nobody in his or her
right mind would be paying taxes for a property that is not in his or her actual or constructive possession.
On the other hand, the Ponces failed to present any proof of ownership such as payment of real
property taxes or a certificate of title in their names. In the absence of competent evidence showing that
Lot No. 6890 is covered by the Deed of Absolute Sale, the Ponces have no right to possess the property,
much less in the concept of an owner. Moreover, they cannot be deemed possessors in good faith since
they were aware that the subject land is not part of the land that Teodoro Jr. sold to them.
G.R. No. 232682, September 13, 2021
PATRICIO G. GEMINA, AND ALL OTHER PERSONS CLAIMING RIGHTS UNDER HIM, Petitioners, v.
HEIRS OF GERARDO V. ESPEJO, JR., NAMELY: MA. TERESA R. ESPEJO, JAIME GERARDO
FRANCISCO R. ESPEJO, AND RHODORA PATRICE R. ESPEJO, REPRESENTED BY THEIR
ATTORNEY-IN-FACT, MA. TERESA R. ESPEJO, AND NENAFE V. ESPEJO, Respondents.
BERNABE, J.
Article 434. In an action to recover, the property must be identified (KUKUHA NG SURVEY PLAN),
and the plaintiff must rely on the strength of his title and not on the weakness of the defendant's claim.
(The technical description that provides for the metes and bounds of a parcel of land cannot stand alone,
much more be considered as a foolproof-evidence exactly pointing to the subject property. The identity of
the disputed land sought to be recovered or of the subject property in this case may be established
through a survey plan of the said property)
BAR QUESTION
The present controversy involved a property located at 156 Session Road, Woodcrest Homes,
Talanav, Area B, Batasan Hills, Quezon City (subject property).
According to Gemina, he purchased, owned, occupied with his family, and possessed the subject
property openly, continuously, peacefully, and in the concept of an owner since 1978. 5 To buttress his
contention, he presented the following;
(a) Deed of Absolute Sale (Quitclaim)6 dated May 16, 1978;
(b) pictures of fruit-bearing trees such as mango tree, sampaloc tree, and coconut tree that he
planted on the subject prqperty;7
(c) Building Permit8 from the Office of the Building Official in Quezon City as proof that he
constructed a residential house on the subject property;
(d) Notice of Assessment of Real Property;9
(e) Sworn Statement10 of the value of real property;
(f) Tax Declaration No. C-139-07819;11 (g) several Real Property Tax Bill-Receipt;12
(h) Transfer Certificate of Title (TCT) No. 25277413 in the name of vendor Ana De Guia San Pedro
(Ana);
(i) Deed of Conditional Sale14 dated November 20, 1995 between Ana and Gemina;
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(j) Information Sheet15 of the Batasan Hills Homeowners Association, Inc. to Drove that he held
the Director and the Treasurer positions of the homeowners association where the subject property is
located; and
(k) photocopies of billings or statement of accounts to bolster his claim of actual presence on the
subject property.16 34
On the other hand, the heirs of Espejo averred that they are co-owners of the subject property
which is covered by TCT No. RIV786U (93809) (TCT 93809) in die names of Gerardo V. Espejo, Jr.
(Gerardo) and Nenafe, and with Tax Declaration No. B-139-03384 also in the names of Gerardo and
Nenafe. When Gerardo died in 1975, he was survived by his wife Ma. Teresa R. Espejo (Teresa) and
children Jaime Gerardo Francisco (Jaime) and Rhodora Patrice (Rhodora), collectively referred to as the
heirs of Espejo.17
In 2004, the Espejo heirs, through their representative, sent Gemina a demand letter asserting
their ownership over the subject property, and demanding him and his family to vacate. The Espejos filed
an action for recovery of possession.
The RTC ruled in favor of the heirs of Espejo based on preponderance of evidence. It held that as
between the TCT 93809 in the hands of the Espejos and the self-serving claim of Gemina that he
purchased the subject property in 1978, the TCT 93809 of the Espejo heirs is superior as it serves as an
indefeasible and incontrovertible title to the subject property. The CA affirmed.
WHETHER the subject property has been sufficiently identified as required in an action to recover
possession of real property.
SUGGESTED ANSWER
NO. The identity of the property and the title of the claimant must be ascertained in an action to
recover possession of real property pursuant to Article 434 of the Civil Code.
The technical description that provides for the metes and bounds of a parcel of land cannot stand
alone, much more be considered as a foolproof-evidence exactly pointing to the subject property. The
identity of the disputed land sought to be recovered or of the subject property in this case may be
established through a survey plan of the said property.
While the subject property was identified to be the land located at 156 Session Road, Woodcrest
Homes, Talanay, Area B, Batasan Hills, Quezon City, however, the fallo of the trial court's Decision refers
to another property, the one situated in 156 Session Road, Garland Subdivision, Talanay, Area B, Batasan
Hills, Quezon City.
C0-OWNERSHIP
[ G.R. No. 225159. March 21, 2022 ]

REYNALDO REYES, AS HEIR OF VITALIANO REYES, PETITIONER, VS. SPS. WILFREDO AND
MELITA GARCIA, RESPONDENTS.
BERNABE, J.:*
Article 494 of the Civil Code, that is, no co-owner shall be obliged to remain in the co-ownership
and that each co-owner may demand at any time partition of the thing owned in common insofar as his or
her share is concerned.
BAR QUESTION
Petitioner Reynaldo Reyes (petitioner) claimed that Julian Reyes (Julian) is the owner of an
unregistered parcel of land located in Quezon St., Bagumbayan, Taguig with a total area of 463 square
meters (sqm) as per Tax Declaration No. 9700 (5277) Julian and his spouse, Marcela Reyes (Marcela) had
POISONED COPY
nine children, namely, Vitaliano, Maria, Felicidad, Ireneo, Isidoro, Anastacio, Julia, Vicente and
Isadora. On September 21, 1944 and October 31, 1964, Julian and Marcela died, respectively
On August 30, 1975, the heirs of Julian and Marcela executed a "Partihan At Bilihan Nang
Kalahating Bahagi ng Lupang Tirahan Sa Labas ng Hukuman," and sold half of the subject property, i.e.,
231.5 sqm, to one of the heirs, Anastacio. 35
The remaining quarter of the subject property, i.e., 116 sqm, was occupied by Vitaliano's children,
namely, petitioner and Fermin Reyes (Fermin), while the other quarter was sold by Isidoro to respondents
Wilfredo and Melita Garcia (spouses Garcia), as per Deed of Sale dated August 16, 1989.
Sometime in 1997, petitioner and Fermin came to know of Isidoro's sale of ¼ of the subject
property to respondents spouses Garcia when the latter filed an ejectment case against Fermin. Thus,
herein petitioner filed a complaint for recovery of ownership, quieting of title and annulment of deed of
sale against the spouses Garcia alleging that the Deed of Sale dated August 16, 1989 is void since Isidoro
is not the true and real owner of the subject property which originally belongs to Julian's estate.
Sps Garcia alleged that petitioner is not the real party in interest and thus cannot bring the
present suit against them to recover the subject property which is co-owned with other non-impleaded
parties. The RTC dismissed petitioner's complaint holding that Isidoro may validly sell his pro indiviso
share in the subject property as an heir of Julian and Marcela, and co-owner of the subject property. The
CA affirmed.
WHETHER the CA erred when it ruled that the proper remedy of the parties is to partition the
subject property AND WHETHER the CA erred when it did not declare the Deed of Sale as null and void
insofar as the interests of the other heirs are concerned.
SUGGESTED ANSWER
NO. The proper remedy herein is not a nullification of the sale or for the recovery of the thing
owned in common but a division of the common property. (AN ACTION FOR PARTITION ANG TAWAG
DITO)
A co-owner may alienate an inchoate portion of the subject property which belongs to him or her.
Isidoro, as one of the heirs of Julian and Marcela, has the right to alienate his pro indiviso share in the co-
owned property even without the consent of the other co-heirs. To demand a partition or division of the
common property is in accord with Article 494 of the Civil Code, that is, no co-owner shall be obliged to
remain in the co-ownership and that each co-owner may demand at any time partition of the thing owned
in common insofar as his or her share is concerned.
Nevertheless, the spouses Garcia, as co-owner of the subject property by virtue of the deed of sale
executed by Isidoro in their favor, cannot claim a specific portion of the subject property prior to its
partition. Carvajal v. CA as reiterated in Heirs of Jarque v. Jarque ruled that without partition, either by
agreement between the parties or by judicial proceeding, a co-heir cannot dispose of a specific portion of
the estate.
Further, the deed of sale is valid. The fact that the sale executed by Isidoro in favor of the spouses
Garcia was made prior to the partition of the subject property will not render the deed of sale null and
void. Nonetheless, despite the validity of the sale, the spouses Garcia only acquired Isidoro's inchoate
interest in the subject property and not a definite portion thereof.
(Note: Any co-owner like Reyes may buy back the property owned in common within the month after
he learned of the sale when sold without his knowledge)
BOOK III
DIFFERENT MODES OF ACQUIRING OWNERSHIP
SUCCESSION
[ G.R. No. 204793, June 08, 2020 ]
IN THE MATTER OF THE PETITION FOR THE PROBATE OF THE WILL OF CONSUELO SANTIAGO
GARCIA
POISONED COPY
CATALINO TANCHANCO AND RONALDO TANCHANCO, PETITIONERS, VS. NATIVIDAD GARCIA

SANTOS, RESPONDENT.
BERNABE, J.:
LEGAL BASIS TO REMEMBER 36
Article 809. In the absence of bad faith, forgery, or fraud, or undue and improper pressure and
influence, defects and imperfections in the form of attestation or in the language used therein shall not
render the will invalid if it is proved that the will was in fact executed and attested in substantial
compliance with all the requirements of article 805.
Taboada vs. Hon. Rosal allowed the probate of a will notwithstanding that the number of pages
was stated not in the attestation clause, but in the Acknowledgment. Azuela vs. CA ruled that there is
substantial compliance with the requirement, if it is stated elsewhere in the will how many pages it is
comprised of.
BAR QUESTION
Consuelo was married to Anastacio Garcia (Anastacio) who passed away on August 14, 1985.
They had two daughters, Remedios Garcia Tanchanco (Remedios) and Natividad Garcia Santos (Natividad).
Remedios predeceased Consuelo in 1985 and left behind her children, which included Catalino Tanchanco
(Catalino) and Ronaldo Tanchanco (Ronaldo, collectively Tanchancos).
On April 4, 1997, Consuelo, at 91 years old, passed away leaving behind an estate consisting of
several personal and real properties.7
On August 11, 1997, Catalino (apo ni Consuelo kay Remedios) filed a petition before the RTC of
Pasay City to settle the intestate estate of Consuelo and raffled to Branch 113. Catalino alleged that the
legal heirs of Consuelo are: Catalino, Ricardo, Ronaldo and Carmela, all surnamed Tanchanco (children of
Remedios), and Melissa and Gerard Tanchanco (issues of Rodolfo Tanchanco, Remedios' son who
predeceased her and Consuelo), and Natividad, the remaining living daughter of Consuelo.
Catalino additionally alleged that Consuelo's properties are in the possession of Natividad and her
son, Alberto G. Santos (Alberto), who have been dissipating and misappropriating the said properties.
Withal, Catalino prayed:
(1) for his appointment as the special administrator of Consuelo's intestate estate and the
issuance of letters of administration in his favor;
(2) for a conduct of an inventory of the estate;
(3) for Natividad and all other heirs who are in possession of the estate's properties to surrender
the same and to account for the proceeds of all the sales of Consuelo's assets made during the last years
of her life;
(4) for all heirs and persons having control of Consuelo's properties be prohibited from disposing
the same without the court's prior approval;
(5) for Natividad to produce Consuelo's alleged will to determine its validity;
(6) for Natividad to desist from disposing the properties of Consuelo's estate; and
(7) for other reliefs and remedies.
Natividad filed a Motion to Dismiss stating that she already filed a petition for the probate of the
Last Will and Testament of Consuelo. The Tanchancos opposed alleging that the will's attestation clause
did not state the number of pages and that the will was written in Tagalog, and not the English language
usually used by Consuelo. They alleged that Consuelo's signature was forged. Natividad contended that
there was substantial compliance in that although the attestation clause did not state the number of
pages comprising the will, the same was clearly indicated in the acknowledgment portion.
The two cases were consolidated.

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The RTC found the purported will replete with aberrations. Two attesting witnesses to the will and
the notary public were all associates of a law firm which is the counsel of Natividad herein. Except for
Natividad and her lawyers, no one knew that Consuelo ever executed a will during her lifetime. The will's
acknowledgment clause showed that Consuelo's residence was in Makati City and not in Pasay City where
she actually resided most of her life.
37
The CA, in reversing the RTC, held that the positive testimonies of the witnesses established the
due execution and authenticity of the will especially when the Tanchancos could not present proof that
the said witnesses are not credible or competent. In fine, it found that there was substantial compliance
with the requirements of Article 805.
WHETHER the will should be allowed probate.
SUGGESTED ANSWER
YES. The will should be allowed probate as it faithfully complied with the formalities required by
law. It is settled that the law favors testacy over intestacy and hence, the probate of the will cannot be
dispensed with.
Similarly, testate proceedings for the settlement of the estate of the decedent take precedence over
intestate proceedings for the same purpose. The probate court cannot inquire into the intrinsic validity of
the will or the disposition of the estate by the testator. Thus, due execution is whether the testator, being
of sound mind, freely executed the will in accordance with the formalities prescribed by law as mandated
by Articles 805 and 806 of the Civil Code.
Here, Consuelo's will complied with the formalities, except that the attestation clause failed to
indicate the total number of pages upon which the will was written.
Caneda v. CA explained that under Article 809, the defects or imperfections must only be with
respect to the form of the attestation or the language employed therein. Such defects or imperfections
would not render a will invalid should it be proved that the will was really executed and attested in
compliance with Article 805. The rule on substantial compliance presupposes that the defects in the
attestation clause can be cured or supplied by the text of the will. Taboada vs. Hon. Rosal allowed the
probate of a will notwithstanding that the number of pages was stated not in the attestation clause, but in
the Acknowledgment. Azuela vs. CA ruled that there is substantial compliance with the requirement, if it
is stated elsewhere in the will how many pages it is comprised of.
Additionally, lawyers are not disqualified from being witnesses to a will.
Since the will in this case is contested, Section 11, Rule 76 applied in that all the subscribing
witnesses, and the notary in the case of wills executed under the Civil Code of the Philippines, if present
in the Philippines and not insane, must be produced and examined.
Here, the lawyer-witnesses unanimously confirmed that the will was duly executed by Consuelo
who was of sound mind and body at the time of signing. The Tanchancos failed to dispute the competency
and credibility of these witnesses.
Also, it is beyond cavil that Consuelo understood both Tagalog and English. Considering the
foregoing, the will of Consuelo should be allowed probate as it complied with the formalities required by
the law.
[ G.R. No. 191867. December 06, 2021 ]
AMLAYON ENDE and QUEZON ENDE, SURVIVING CHILDREN AND LEGITIMATE HEIRS OF SPOUSES
BUTAS ENDE AND DAMAGI AROG, represented by their co-heir, Attorney-In-Fact, LETECIA ENDE-
BACALSO, Petitioners, vs. ROMAN CATHOLIC PRELATE OF THE PRELATURE NULLIUS OF
COTABATO, INC., FR. RONILO VILLAMOR and/or JOSE RABANG, WELHILMINA* VDA. DE GEN-
ERALLA, JESUS ACOSTA, ELIZA DIAZ, and/or JUANITO** DIAZ and FLORENTINO KINTANAR, both
represented by FELIPE VINLUAN, SR., PRIMO BAGASMAS and JESSIE FLORES and/or CORAZON
FLORES. Respondents.
BERNABE, J.:

POISONED COPY
1. The Court laid down in Treyes v. Larlar that a prior determination of heirship in a special
proceeding is not prerequisite before one can file an ordinary civil action to enforce ownership
rights by virtue of succession. What is abandoned in Treyes is the prior determination of heirship
in a separate special proceeding as a prerequisite for filing an ordinary civil action.
Accordingly, when two or more heirs rightfully assert ownership over another in an ordinary civil
38
action to recover the property of the estate against third persons, the trial court may determine
their status or right as legal heirs to protect their legitimate interests in the estate, since
successional rights is transmitted by operation of law from the moment of death of the decedent.
2. Well-settled is the rule that purchaser of real estate with knowledge of any defect or lack to title of
the vendor cannot claim that he has acquired title thereto in good faith as against the true owner
of the land or interest therein.
The essential elements of laches are namely:
1. Conduct of the part of the defendant, or of one under whom he claims, giving rise to the situation
complained of;
2. Delay in asserting complainant's right after he had knowledge of the defendant's conduct and
after he has an opportunity to sue;
3. Lack of knowledge or notice on the part of the defendant that the complainant would assert the
right on which he bases his suit; and
4. Injury or prejudice to the defendant in the event relief is accorded to the complainant.
BAR QUESTION
The spouses Butas Ende (Butas) and Damagi Arog (Damagi; collectively, spouses Ende), both
Manobo natives, were the registered owners of a lot with an area of 223,877 square meters (sqm) located
in Sudapin, Kidapawan, Cotabato covered by OCT No. P-46114. However, portions of the subject property
are presently occupied by respondents Roman Catholic (11,356 sqm.); Welhilmina, (112,023 sqm.); Eliza
and Juanito Diaz (26,457 sqm.); and Jessie and Corazon Flores (12,500 sqm.).7
On August 17, 1995, Amado, Daniel, Felipe, and Pilar, claiming to be the surviving heirs of the
spouses Ende, filed a complaint for quieting of OCT No. P-46114 and recovery of possession thereof with
damages and attorney's fees, docketed as Civil Case No. 1069.
They claimed that, taking advantage of the ignorance and illiteracy of the spouses Ende,
respondents gradually took possession of portions of the subject property through deceitful
machinations. In addition, they alleged that the lawful heirs of the spouses Ende had executed an
extrajudicial settlement of estate which includes the subject property. They likewise claimed that
respondents' ownership over the portions of the subject property was merely evidenced by tax declarations
and that the purported conveyances of said respective portions were never annotated on OCT No. P-
46114.
Respondents claimed that they acquired ownership over their respective portions of the subject
property from Damagi or from third persons who, in turn, acquired the same from Damagi. They belied
Amado, et al's allegation that they are the rightful heirs of the spouses Ende. They also invoked acquisitive
prescription claiming that their possession of the respective portions of the subject property spanned at
least 30 years to at most 50 years already.
Petitioner Amlayon and Quezon, claiming to be the surviving children and legitimate heirs of the
spouses Ende, intervened. They claimed that they are the children and legitimate heirs of the spouses
Ende and that Amado, et al, are mere impostors. They further claimed that they were not able to exercise
their rights over the subject property after the death of the Sps. Ende because they were driven away from
the subject property by Inacara and Joseph, who are purportedly nephews of the Sps Ende. Thus, they
prayed for the nullity of the extrajudicial settlement of estate of the Sps Ende and the dismissal of the
complaint for quieting of title.
The RTC dismissed the complaint for quieting of title and recovery of possession of the subject
property. It, however, granted Amlayon and Quezon's claim who, by preponderance of evidence, proved
that they are the children of the Sps Ende, and therefore the legal heirs.
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The RTC found that the conveyances in favor of respondents were null and void for being
fictitious. Except for Wilhelmina who acquired a portion of the subject property from Damagi. However,
the portion was reduced to 7.4625 Ha instead of 10 Ha as Damagi can only convey up to her lawful share
in the inheritance.
The RTC also ruled that the improvements of all the defendants except Wilhelmina shall be 39
governed by Articles 545 to 548 of the New Civil Code.
The CA reversed and set aside the RTC's ruling in favor of Amlayon and Quezon. However, the CA
affirmed the RTC's dismissal of the complaint for quieting of title.
The CA dismissed the complaint and the answer-in-intervention for lack of cause of action. Both
parties failed to establish that they are the real parties-in-interest to institute an action for quieting of title
or recovery of possession. CA held that there was a need for a prior declaration of heirship in a special
proceeding to determine the proper party who can institute an action. The CA further ruled that
petitioners' inaction to claim as alleged rightful heirs of the spouses Ende begs for the application of the
doctrine of laches.
Although the subject property covered by the Torrens System which means that it cannot be
acquired by prescription, the right to recover the same may be barred by laches.
I. WHETHER petitioners Amlayon and Quezon are the legal heirs of the Endes'
YES. The Court declares petitioners Amlayon and Quezon to be the legal and rightful heirs of Sps
Ende.
The Court laid down in Treyes v. Larlar that a prior determination of heirship in a special
proceeding is not prerequisite before one can file an ordinary civil action to enforce ownership rights by
virtue of succession. What is abandoned in Treyes is the prior determination of heirship in a separate
special proceeding as a prerequisite for filing an ordinary civil action.
Accordingly, when two or more heirs rightfully assert ownership over another in an ordinary civil
action to recover the property of the estate against third persons, the trial court may determine their
status or right as legal heirs to protect their legitimate interests in the estate, since successional rights is
transmitted by operation of law from the moment of death of the decedent. Thus, the RTC validly acquired
jurisdiction over the determination of heirship between Amado, Daniel, Felipe, and Pilar, and petitioners
Amlayon and Quezon.
In the absence of the record of birth and admission of legitimate filiation, Article 267 of the Civil
Code and Article 172 of the Family Code provide that filiation shall be proved by any other means allowed
by the Rules of Court and special laws.
Here, petitioners offered testimonies of their relatives to prove that they are legitimate children of
the spouses Ende.
Laureana and Cristina testified on petitioners Amlayon and Quezon's family pedigree based on the
declarations relayed to them by other family members who were already deceased and cannot testify in
court. Such are considered declarations about pedigree that are admissible, as an exeption to the hearsay
rule, under Section 39, Rule 130.
Based on the foregoing, it is clear that between the positive affirmation of petitioner's witnesses,
that Amlayon and Quezon are legitimate children of the spouses Ende.
II. WHETHER respondents validly acquired ownership over the respective portions of the
subject property.
PARTLY. Dagami's share totaled 11 Ha and 190.385 sqm.
The sale to the predecessors-in-interest of Wilhelmina of 10 Ha is thus valid. The deed of absolute
sale executed by Heirs of Zarza in favor of respondent Juanito is valid only to the extent of 1 Ha and
190.385 sqm. All other dispositions are null and void.
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Well-settled is the rule that "purchaser of real estate with knowledge of any defect or lack to title
of the vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the
land or interest therein."
Not one of the purchasers of the respective portions of the subject property protected their rights
by registering their documents of sale or having them duly annotated upon the issuance of title. 40
III. WHETHER petitioners Amlayon and Quezon are barred by the principle of laches to
recover the ownership and possession of the subject property.
NO. The essential elements of laches are namely:
5. Conduct of the part of the defendant, or of one under whom he claims, giving rise to the situation
complained of;
6. Delay in asserting complainant's right after he had knowledge of the defendant's conduct and
after he has an opportunity to sue;
7. Lack of knowledge or notice on the part of the defendant that the complainant would assert the
right on which he bases his suit; and
8. Injury or prejudice to the defendant in the event relief is accorded to the complainant.
The acts of petitioners belie the claim that they slept on their rights. Amlayon and Quezon were
prevented from going into the subject property because of Inacara's threats. However, upon Inacara's
death, petitioners gradually prepared the documents needed to recover the subject property and asked
advice from certain individuals and institution. Although they did not immediately file a case in court, this
does not mean that laches already set in against their favor.
Laches does not imply the case in court must be filed in order that it may not be successfully invoked.
Also, acquisitive prescription or adverse possession, no matter how long, is unavailing even to the
registered owner's hereditary heirs as the latter simply steps into his or her shoes by operation of law and
are merely the continuation of the personality of their predecessor-in-interest.
DONATIONS
[ G.R. No. 213001, August 04, 2021 ]
LAURO CARDINEZ, ISIDRO CARDINEZ, JESUS CARDINEZ, VIRGIE CARDINEZ, FLORA LACONSAY
AND AIDA DELA CRUZ, PETITIONERS, VS. SPOUSES PRUDENCIO AND CRESENCIA CARDINEZ,
RESPONDENT.
BERNABE, J.:
Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of
another, who accepts it. An agreement between the donor and the donee is essential like in any other
contract. Consent, to be valid, must have the following requisites:
1. intelligent or with an exact notion of the matter to which it refers;
2. free; and
3. spontaneous.
Article 1410. The action or defense for the declaration of the inexistence of a contract does not prescribe.
BAR QUESTION
The late Simeona Cardinez owned a 1,950-square meter parcel of land. Upon her demise, her
sons, Prudencio, Florentino, and Valentin inherited the land and equally divided it among themselves.
On April 23, 1986, Transfer Certificate of Title (TCT) No. T-26701 covering the land was issued in the
name of the brothers as co-owners. Prudencio's share in the land was the middle portion which he
registered for taxation purposes under Tax Declaration No. (TD) 18237.
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Sometime in 1994, Valentin requested Prudencio to donate the ten-square meter portion of his
land being encroached by the former's balcony. Prudencio agreed to Valentin's request out of his love and
trust for his brother. Valentin then asked Prudencio and his wife Cresencia Cardinez (Cresencia) to sign a
document that was written in English. Prudencio and Cresencia were unable to understand the contents.
Hence, Valentin told the Cardinez couple that the purported document was for the partition of the 41
inherited land, cancellation of TCT No. T-26701, and transfer of their shares in their respective names. As
they were convinced by Valentin's explanation and trusted him, Prudencio and Cresencia signed the
document without even reading and understanding its contents. The spouses Cardinez were not given a
copy of the document after it was signed.
Fourteen years later, or in 2008, Prudencio found out that a survey of the land was being
conducted. To his surprise, Valentin's children, herein petitioners, informed him that he already donated
his inherited portion to them through the document that he allegedly executed with Cresencia.
Respondents, Sps Cardinez, filed a Complaint for Annulment of Document with Recovery of
Possession and Damages. Prudencio attested that he and Cresencia only finished Grade 3 elementary
education. On cross-examination, he also admitted that he appeared before the notary public for
notarization of the document. However, the latter did not explain to him the contents thereof.
Petitioners averred that Prudencio purchased the subject land sometime in 1972 and then
donated it to them as evidenced by the Deed of Donation. They also contended that the action had already
prescribed since 10 years had lapsed from the execution of the Deed of Donation, a written contract.
The RTC found respondents' evidence sufficient to prove that the Deed of Donation was executed
through fraudulent means. Considering that respondents instituted the complaint within four years from
discovery of the fraudulent act, the RTC further held that the action against petitioners had not yet
prescribed.
The CA affirmed the findings of the RTC that petitioners did not freely give their land to petitioners
by virtue of a Deed of Donation. It however ruled that the Deed of Donation was void ab initio, and not
just voidable since respondents' consent, which is an indispensable element in donation, was totally
absent.
I. WHETHER the donation is valid.
NO. The Deed of Donation is void ab initio in the absence of respondents' consent.
Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor
of another, who accepts it. An agreement between the donor and the donee is essential like in any other
contract. Consent, to be valid, must have the following requisites:
4. intelligent or with an exact notion of the matter to which it refers;

5. free; and
6. spontaneous.
Consent is absent in the instant case. Respondents did not give their consent to the donation of
their land to petitioners. Prudencio did not read the document before affixing his signature because he
trusted his brother that it was for the partition of their inherited land and the cancellation of its title.
Valentin neither read the contents of the document to respondents nor gave them a copy thereof. The
notary public likewise did not explain its contents to respondents and only asked them to affix their
signatures therein.
Considering that they did not give their consent at all to the Deed of Donation, it is therefore null
and void.
II. WHETHER the action instituted by respondents has already prescribed.
NO. The action for annulment of the Deed of Donation is imprescriptible. The Deed of Donation is
an absolute nullity hence it is subject to attack at any time. This is in accord with Article 1410 of the Civil
Code which states that an action to declare the inexistence of a void contract does not prescribe.
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[ G.R. No. 214590. April 27, 2022 ]

ESTATE OF SUSANO J. RODRIGUEZ, REPRESENTED BY ITS ATTORNEY-IN-FACT VIRGILIO R.
VALENZUELA, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE
DEPARTMENT OF HEALTH, RESPONDENTS.
BERNABE, J.
LEGAL BASIS TO REMEMBER 42
ARTICLE 733. Donations with an onerous cause shall be governed by the rules on contracts, and
remuneratory donations by the provisions of the present Title as regards that portion which exceeds the
value of the burden imposed.
Article 1144 of the Civil Code provides that all actions upon a written contract shall be brought
within ten (10) years from accrual of the right of action.
Article 727. Illegal or impossible conditions in simple and remuneratory donations shall be
considered as not imposed.
Rescission will not be granted in the following:
1. where the breach is only slight or casual;
2. where there has been substantial compliance; and
3. where the court finds valid reason for giving a period of fulfillment of the obligation.
BAR QUESTION
On September 12, 1968, Susano J. Rodriguez (Rodriguez) executed a deed of conditional donation in
favor of the Republic over a parcel of land covered by Transfer Certificate of Title (TCT) No. 7800 for the
purpose of constructing thereon a mental facility, XXX
5. That the DONEE shall not under any circumstance or in any manner Lease, Let, Convey,
Dispose, or Encumber the property herein donated or any part or portion thereof to any person or entity,
except with the prior and express knowledge and approval of the DONOR, it being the desire and intention
of the latter to have the said property for the exclusive use of the said hospital and FINALLY;
On September 29, 2008, the estate, represented by its attorney-in-fact Valenzuela, filed a
complaint against the Republic for revocation of the donation and forfeiture of improvements. It alleged
that the Republic allowed a portion of the donated property to be used for residential and commercial
purposes in violation of the fifth condition in the deed of conditional donation.
The Republic alleged that the RTC had no jurisdiction over petitioner's complaint as an estate has
no legal capacity to sue and could not be a party to a court action. The estate's cause of action had
already prescribed. Article 1144 of the Civil Code provides that an action upon a written contract must be
brought within 10 years from the time the right of action accrues. Since the deed of conditional donation
was executed in 1968, an action to enforce the conditions therein prescribed in 1978. Lastly, the condition
in the deed that the subject property cannot in any manner be leased, let, conveyed, disposed or
encumbered without the prior and express knowledge and approval of the donor, constitutes undue
restriction on the rights arising from ownership of the Republic, and thus, contrary to public policy.
The RTC revoked the deed in so far as the 27 of the 32 hectares subject of donation. The deed
provided that the Republic must comply with the conditions within two years from execution. The
computation of the 10-year prescriptive period shall commence from the time reasonable opportunity was
afforded the Republic to fulfill the condition.
The estate's cause of action accrued when the Republic failed to have the ejectment suit it
filed against the informal settlers in the subject property be executed. Thus, when the estate filed
the instant complaint, the estate is well within the 10-year prescriptive period.
The CA reversed and set aside the RTC. It found that the estate has legal personality to institute
the present action. It ruled that the RTC erred in ruling that the title to the subject property is still under
the name of Rodriguez. It ruled that since the deed of conditional donation did not expressly state the
duration of the prohibition, it means that it was perpetual or for an indefinite period hence, illegal for
being an impossible condition contemplated under Article 727 of the Civil Code and must be considered as
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not imposed. It ruled that there was no violation on the part of the Republic since it did not lease, let,
dispose or encumber the subject property. In any event, the non-execution of the Decision in the
ejectment case did not amount to a substantial breach of the deed.
I. WHETHER the estate's complaint has already prescribed.

43
NO. In the case at bar, the donation involved is an onerous one since the burden imposed upon
the donee is to build a mental hospital on the donated property. Thus, the provisions of the Civil Code on
the rules on contracts shall govern, to wit:
ARTICLE 733. Donations with an onerous cause shall be governed by the rules on contracts, and
remuneratory donations by the provisions of the present Title as regards that portion which exceeds the
value of the burden imposed.
Article 1144 of the Civil Code provides that all actions upon a written contract shall be brought
within ten (10) years from accrual of the right of action.
Petitioner's complaint for revocation of the donation therefore has not yet prescribed since the
cause of action accrued only upon the alleged failure of the Republic to comply with any or all of the
conditions of the donation.
According to the RTC, the estate's cause of action accrued when the Republic failed to have the
RTC's Decision in Civil Case No. P-86, an ejectment suit filed by the Republic against the informal settlers
in the subject property, which was decided in favor of the Republic, and affirmed by the CA in its Decision
dated February 28, 1995, be executed. More than 10 years have lapsed since the finality of the said
Decision, but the Republic has yet to execute the same. (SO 10 YEARS FROM FEB 1995 TO 2005)
As such, the Republic is estopped by laches or negligence or omission to assert a right within a
reasonable time as it failed to move for execution of the judgment within five years from finality or move
for the revival of the judgment within 10 years.
Thus, when the estate filed the instant complaint on September 29, 2008, the estate is well within
the 10-year prescriptive period to file an action on a written contract counted from the failure of the
Republic to execute the judgment in its favor in Civil Case No. P-86.
II. WHETHER the fifth condition in the deed of conditional donation is valid.
NO. It should be declared as an illegal or impossible condition within the contemplation of Article
727 as it is contrary to public policy.
Roman Catholic Archbishop of Manila v. CA invalidated a provision in the deed of donation that
the donated property should not be sold within a period of 100 years from the date of execution as it
unduly restricts on the rights of ownership of the donee.
Although the parties herein did not agree on the period of validity of the restriction as in Roman
Catholic Archbishop, the same may be viewed as perpetual or permanent which constitutes undue
restriction for unreasonable period of time.
III. WHETHER the Republic violated the fifth condition.
NO. The Republic did not violate the fifth condition in the deed of conditional donation.
The Republic complied with the fifth condition of the donation by filing an ejectment case against
the informal settlers in order to utilize the whole portion of the donated property for the exclusive use of
the mental hospital in consonance with the condition imposed by the donor.
It would be unfair for the donor to impose a restriction on the Republic not to lease, let, dispose,
convey or encumber the donated property when upon the execution of the donation, the donated property
was actually occupied by third parties.
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It cannot be considered as failure on the part of the Republic to fully comply with the conditions of
donation when it did not file a motion for execution or motion for revival of judgement. It was justified
when it failed to have the judgment executed due to the threats of violence of the informal settlers.
Rescission will not be granted in the following:

44
4. where the breach is only slight or casual;
5. where there has been substantial compliance; and
6. where the court finds valid reason for giving a period of fulfillment of the obligation.
The failure on the part of the Republic to move for execution or to move for revival of judgment
could not be considered as a substantial breach. The Republic already complied with the main
prestation of the deed of conditional donation which is the construction of the mental hospital and
a concrete road.
The Republic, therefore, did not commit any violation that would constitute as disposition or
conveyance of its right of ownership over the portion of the donated property in favor of the informal
settlers by its failure to move for execution or revival of the ejectment case.
BOOK IV
OBLIGATIONS
KINDS OF OBLIGATIONS
[ G.R. No. 207856, November 18, 2020 ]
PHILIPPINE NATIONAL BANK, PETITIONER, VS. LORENZO T. BAL, JR., RESPONDENT.
BERNABE, J.:
Bal may not be held personally or solidarily liable. Settled is the rule that solidarity is never
presumed. There is solidary liability when the obligation so states, or when the law or the nature of
the obligation requires the same, which are unavailing in the instant case.
BAR QUESTION
On October 12, 2000, PNB filed a complaint for sum of money against Tan and herein respondent
Bal. PNB claimed that Bal approved various cash withdrawals by Tan against several checks without
waiting for them to be cleared. When these checks were dishonored, PNB claimed that Bal allowed Tan to
deposit several checks to partially cover Tan's various cash withdrawals. Nevertheless, these new checks
were also dishonored for insufficient funds.
PNB further asserted that Tan had already acknowledged his outstanding obligation to the bank
in the amount of P520,000.00 and executed a promissory note in its favor. To confirm this
acknowledgement, Tan issued another promissory note in favor of PNB in the same amount. Despite
demand, however, Tan failed to pay PNB the stipulated amount.
PNB alleged that Bal violated the bank's policy on the prohibition against drawing on uncollected
deposits pursuant to its General Circular No. 11-58/80 dated March 14, 1980. In addition, PNB claimed
that Bal violated and exceeded his limited authority to approve encashment of other bank checks under
its Manual of Signing Authority. In view of the foregoing violations, PNB averred that it incurred losses in
the amount of P520,000.00 and that Bal is personally liable to the bank pursuant to its Manual of Policies
on Cash, Checks and Other Cash Items and Deposits.
PNB prayed that Tan and Bal be held jointly and severally liable to the bank in the amount of
P520,000.00, plus interest and damages.
Bal argued that the trial court had no jurisdiction over the complaint against him because it
amounted to an administrative action. He likewise asserted that PNB had no valid cause of action against
him because he neither made any acknowledgement of the obligation nor participated in the business
transactions.
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The RTC dismissed the complaint against Bal but held Tan solely liable. The CA affirmed.
WHETHER Bal may be held personally liable on the drawings against uncollected check
deposits in the amount of P520K in view of his violation of the existing policies of PNB.
SUGGESTED ANSWER
45
NO. Bal has not incurred any personal liability on the drawings against the uncollected bank
deposits in question.
PNB had acknowledged that Bal raised the same argument when he explained to the bank that
his act of approving the withdrawals against the uncollected deposits had been a mere act of
accommodation to the valued clients of the bank, such as Tan.He made a judgment call based on his
appraisal of Tan’s banking history with PNB and the regularity of the checks presented on payment. Bal's
questioned acts were therefore made within his discretion as branch manager.
The PNB Administrative Adjudication Panel already penalized Bal for the same infraction.It is
therefore Tan who must be pursued by PNB for the amount that it claims to have lost.
Bal may not be held personally or solidarily liable. Settled is the rule that solidarity is never
presumed. There is solidary liability when the obligation so states, or when the law or the nature of the
obligation requires the same, which are unavailing in the instant case.
EXTINGUISHMENT OF OBLIGATIONS
[ G.R. No. 212024, October 12, 2020 ]

BANCO DE ORO UNIBANK, INC. (NOW BDO UNIBANK, INC.), PETITIONER, VS. EDGARDO C. YPIL,
SR., CEBU SUREWAY TRADING CORPORATION, AND LEOPOLDO KHO, RESPONDENTS.
BERNABE, J.:
In order that compensation may be proper, it is necessary:
1. That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;
2. That both debts consist in a sum of money, or if the things due are consumable, they be of
the same kind, and also of the same quality if the latter has been stated;
3. That the two debts be due;
4. That they be liquidated and demandable;
5. That over neither of them there be any retention or controversy, commenced by third persons
and communicated in due time to the debtor.
BAR QUESTION
On August 20, 2002, Kho, representing CSTC, offered a proposal to respondent Edgardo C. Ypil,
Sr. (Ypil) to invest in the Prudentialife Plan - Millionaires in Business scheme. Ypil acquiesced and Kho
was able to solicit the total amount of P300,000.00 from him. Eventually, though, Ypil opted to get a
refund of the amounts he paid and manifested such intent through a letter dated February 11, 2003.
Ypil thus filed a Complaint for Specific Performance with Attachment, Damages and Attorney's
fees against CSTC and Kho before the RTC of Cebu City.
In an Order10 dated October 15, 2003, the RTC granted Ypil's prayer for the ex-parte issuance of
an attachment order. Afterwards, the trial court issued a Writ of Preliminary Attachment on October 29,
2003. Sheriff Guaren issued a Notice of Garnishment to BDO which informed him that CSTC and/or Kho
have no available garnishable funds.
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The RTC discovered that the Bank already debited from CSTC's savings and current accounts
some amounts to offset its outstanding obligation with the Bank under a loan agreement. It directed the
Bank, through Polloso, to show cause why it should not be held guilty of indirect contempt for debiting the
money from the accounts of CSTC and Kho which was under custodia legis.
The Bank averred that since the Bank and CSTC were creditors and debtors of each other, and 46
that CSTC defaulted in its obligations to the Bank, legal compensation already took effect.
The RTC ordered the Bank's North Mandaue Branch to make available the garnished deposits of
CSTC and Kho pursuant to the Notice of Garnishment. The Bank filed a Petition for Certiorari with
application for issuance of TRO and/or WPI before the CA. Meanwhile, the RTC rendered a Judgment
Based on Compromise Agreement. Ypil and Kho submitted a Compromise Agreement wherein Kho,
in behalf of CSTC, agreed to pay the garnished amount of P300K as full and final settlement of
CSTC's obligation.
The CA denied the Bank's application for a writ of injunction. It later declared that the RTC did
not commit grave abuse of discretion when it issued the assailed Orders as it correctly held that the
service of the Notice of Garnishment upon the Bank effectively placed CSTC's deposits under custodia
legis. It found that not all the elements of legal compensation pursuant to Article 1279 of the Civil Code
are present as there is no proof as to when the obligation became due, liquidated and demandable.
WHETHER legal compensation took place ipso jure as between the Bank and CSTC when CSTC
defaulted in its obligations to the Bank.
SUGGESTED ANSWER
NO. CSTC's debt cannot be considered as due and liquidated, thereby legal compensation did not
take place by operation of law.
In order that compensation may be proper, it is necessary:
6. That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;
7. That both debts consist in a sum of money, or if the things due are consumable, they be of
the same kind, and also of the same quality if the latter has been stated;
8. That the two debts be due;
9. That they be liquidated and demandable;
10. That over neither of them there be any retention or controversy, commenced by third persons
and communicated in due time to the debtor.
Here, the flaw in the Bank's argument is its failure to specify the date when CSTC actually
defaulted in its obligation or particularly pinpoint which installment it failed to pay.
Thus, CSTC's indebtedness cannot be considered as due and liquidated.
G.R. No. 208140, July 12, 2021
CARLOS J. VALDES, GABRIEL A.S. VALDES, FATIMA DELA CONCEPTION AND ASUNCION V.
MERCADO,* Petitioners, v. LA COLINA DEVELOPMENT CORPORATION (LCDC), PHILIPPINE
COMMUNICATION SATELLITE, INC. (PHILCOMSAT), LA COLINA RESORTS CORPORATION (LCRC),
MONTEMAR RESORTS AND DEVELOPMENT CORPORATION (MRDC), JOSE MARI CACHO, HONORIO
A. POBLADOR III, AND ALFREDO L. AFRICA, Respondents.
DECISION
BERNABE, J.:
The elements of a contract of sale are:
1. consent or meeting of the minds, that is, consent to transfer ownership in exchange for the
price;
POISONED COPY
2. determinate subject matter; and

3. price certain in money or its equivalent.
For a valid novation to take place, the following requisites must concur:
1. a previous valid obligation;

47
2. the agreement of all the parties to the new contract;
3. the extinguishment of the old contract; and
4. validity of the new one.
Jurisprudence has shown that in order to constitute fraud that provides basis to annul contracts,
it must fulfill two conditions:
1. the fraud must be dolo causante or it must be fraud in obtaining the consent of the party, and
2. the fraud must be proven by clear and convincing evidence and not merely by a
preponderance thereof.
BAR QUESTION
Carlos Valdes (Carlos, Sr.) and his children, herein petitioners (Valdeses), are the stockholders of
Bataan Resorts Corporation (BARECO), which owned a large tract of land in Bagac, Bataan under
Transfer Certificates of Title Numbers 45864, 45865, 45867, 45868, and 45869.
Having received a favorable response from Francisco, both Carlos, Sr. and Francisco proceeded to
carry out the Montemar Project, which included the development and improvement of the beach basin as
a beach resort (Montemar Beach Club), and the conversion of the remaining land area into a residential
subdivision (Montemar Villas).10
To implement the project, the Valdeses transferred and conveyed their shares of stock in BARECO
in favor of LCDC, a fully-owned corporation of the Cacho family, through a Deed of Sale 11 dated May 24,
1975, for a consideration of P20 Million. LCDC then made a partial payment thereof in the amount of P2.5
Million from February 1975 to December 1979,12 while the remaining balance amounting to P17.5 Million
was covered by promissory notes.13
The P17.5 Million was to be paid by way of an Assignment of Rights14 dated October 30, 1975,
wherein LCDC: (1) assigned to the Valdeses three million worth of shares in LCRC, the corporation
established by LCDC to market and sell the shares of the beach resort; and (2) undertook to pay the
Valdeses (50%) of the net proceeds (later reduced 40%) from the sale of the Montemar Villas lots inside
BARECO, as previously acquired by LCDC.
However, during the years 1981 up to 1985, there was a delay in the remittances of the shares to
the Valdeses in the net proceeds from the sale of the Montemar Villas lots. The records, however, would
bear that a portion of the purchase price of P20 Million, or P16,125,717.31, was eventually paid to the
Valdeses.19
The foregoing notwithstanding, Carlos, Sr. filed a Complaint20 dated July 13, 1987 for Annulment
or Rescission of Contract or Specific Performance and Damages with Prayers for Receivership Pendente
Lite and Preliminary Injunction against LCDC. The case was settled on a Joint Motion to Dismiss. 21 dated
April 26, 1990 filed by both parties pursuant to a letter agreement.
In the said letter agreement, LCDC vowed to continue to undertake the marketing of the
Montemar Villas lots for the purpose of remitting to the Valdeses their 40% share in the sale of the said
lots until full payment of the purchase price of BARECO shares amounting to P20 Million. The RTC thus
dismissed the case with prejudice in its Order23 dated April 27, 1990.
Meanwhile, as the loans obtained by LCDC from DBP/APT remained unpaid, the mortgaged
properties of LCDC, LCRC, and MBCI were eventually foreclosed by DBP/ATP. 24
Sometime in 1992, LCDC and LCRC initiated negotiations with Philcomsat, a prospective investor
of the Montemar Project. In this regard, Philcomsat presented a Memorandum of Intent 25 dated August 18,
1992, which embodied the terms and conditions agreed upon by LCDC, LCRC, MBCI, and Philcomsat.
Under the said agreement, Philcomsat vowed to settle the outstanding loans of LCDC, LCRC, and
MBCI with APT, GCC, and Philcomsat. In consideration thereof, the ownership over the properties of
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LCDC and LCRC, including their shares in MBCI, would be transferred to MRDC. MRDC would then
proceed with the improvement of the facilities and services of MBCI and development of the properties
conveyed to it by LCDC and LCRC into a sports or recreation complex, which includes a gold course and a
country club.
I. WHETHER there was a joint venture between LCDC and the Valdeses. 48
NO. The agreement entered into by the parties is a contract of sale. As embodied in Article 1370 of
the Civil Code, the cardinal rule in the interpretation of contracts is that when the terms of the contract
are clear, its literal meaning shall control.
Here, the Deed of Sale, if read in conjunction with the promissory notes issued to the Valdeses
and the Assignment of Rights, leaves no room for interpretation as to the exact intention of the parties –
they entered into a contract of sale. The elements of a contract of sale are:
price;
The Deed of Sale executed by Carlos, Sr. and LCDC resulted in a perfected contract of sale.
1. there was a mutual agreement between them,

2. wherein 4,000 shares of stock of the Valdeses in BARECO
3. were sold to LCDC for a consideration of P20M.
II. WON there was a novation of the Deed of Sale between LCDC and the Valdeses that would
result in the extinguishment of LCDC's liability to the Valdeses.
YES. There was a valid novation of the initial agreement between LCDC and the Valdeses to
develop and sell the Montemar Villas lots which thereby extinguished LCDC's original obligation to the
Valdeses.
Novation is defined as the extinguishment of an obligation by the substitution or change of the

obligation by a subsequent one which terminates the first, either by changing the object or principal
conditions, or by substituting the person of the debtor, or subrogating a third person in the rights of the
creditor.
For a valid novation to take place, the following requisites must concur:
5. a previous valid obligation;

6. the agreement of all the parties to the new contract;
7. the extinguishment of the old contract; and
8. validity of the new one.
Here, the new concept of the Montemar Project would entail the development of a golf course or
sports complex on the unsold lots of the Montemar Villas. Necessarily, the implementation of this new
concept is incompatible with the old obligation of LCDC under their previous agreement.
III. WHETHER Philcomsat and MRDC are purchasers in good faith and for value of the
subject properties in Bataan?
YES. Philcomsat and MRDC were not in bad faith in executing the MOA and Consolidated Deed of
Sale. Jurisprudence has shown that in order to constitute fraud that provides basis to annul contracts, it
must fulfill two conditions:
3. the fraud must be dolo causante or it must be fraud in obtaining the consent of the party, and
4. the fraud must be proven by clear and convincing evidence and not merely by a
preponderance thereof.
Here, Philcomsat would not have agreed to invest in the Montemar Project without first securing
the consent and written approval of LCRC, LCDC, and MBCI stockholders, which included the Valdeses.
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There is simply no fraud or bad faith to speak of.
[ G.R. No. 221147. September 29, 2021 ]
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, PETITIONER, VS. MERO 49

STRUCTURES, INC., SUBSTITUTED BY NOVUM STRUCTURES LLC, INC., FIRST CENTENNIAL
CLARK CORP., AND NATIONAL DEVELOPMENT COMPANY, RESPONDENTS.
BERNABE, J.:
Novation extinguishes an obligation between two parties when there is a substitution of objects or
debtors or when there is subrogation of the creditor. There are two modes of substituting the person of the
debtor:
1. expromision. — the initiative for the change does not come from — and may even be made
without the knowledge of — the debtor, since it consists of a third person's assumption of the
obligation.
2. delegacion. — the debtor offers, and the creditor accepts, a third person who consents to the
substitution and assumes the obligation; thus, the consent of these three persons are
necessary.
Both modes of substitution by the debtor require the consent of the creditor.
Novation may also be extinctive or modificatory.
1. It is extinctive when an old obligation is terminated by the creation of a new one that takes the
place of the former.
2. It is merely modificatory when the old obligation subsists to the extent that it remains
compatible with the amendatory agreement.
Novation may also be express or implied.
1. It is express when the new obligation declares in unequivocal terms that the old obligation is
extinguished.
2. It is implied when the new obligation is incompatible with the old one on every point.
BAR QUESTION
In line with the 100th anniversary celebration of the Philippine independence from Spanish colonial
rule in 1998, First Centennial Clark Corporation.(FCCC) was created for the purpose of designing,
constructing, operating, and managing the Philippines' National Centennial Exposition to be held in the
Clark Special Economic Zone (CSEZ) located in Clark Field, Pampanga.
On March 16, 1998, FCCC entered into a Construction Agreement with petitioner Asian
Construction and Development Corporation (Asiakonstrukt) for the finalization of the architectural
concept, design, and storyline approved by the National Centennial Commission and to undertake all the
necessary construction works for the Exposition Theme Park. On even date, respondent MERO
Structures, Inc. (MERO), an American corporation, submitted a Materials Only Proposal to Asiakonstrukt
for the supply of materials in constructing a special Philippine flag structure in the Expo Filipino, the
grand opening of which is on July 19, 1998. Asiakonstrukt accepted the Materials Only Proposal.
In a bill of lading dated April 5, 1998,11 MERO shipped the spaceframe to "Philippine Centennial
Exposition c/o Asiakonstrukt."12
On June 16, 1998, Asiakonstrukt submitted to FCCC a proposal for the design, supply, and
installation of the flag structure using MERO's spaceframe subject to the following terms and conditions:
(a) full payment of the imported MERO spaceframe structures upon its delivery on-site; (b) 50% payment
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of installation and lighting of spaceframe structures upon receipt of the notice to proceed while the
remaining 50% shall be paid on progress billing; and (c) completion of the project on June 28, 1998.
FCCC approved the proposal, subject to the applicable rules and regulations of the COA, the
reimbursement of the costs out of the sponsorships, and the submission of a certificate from MERO that
Asiakonsrukt is the only certified installer of spaceframe structures in the Philippines. 50
MERO requested that it be paid directly by the FCCC and that Asiakonstrukt notify FCCC that the
work is complete and satisfactory and that full payment should be made.
Asiakonstrukt still failed to pay, prompting MERO to institute a Complaint for sum of money
against NDC, FCCC and Asiakonstrukt. NDC challenged MERO's personality to sue in the Philippines as
well as the validity of the complaint's verification and certification against forum shopping. FCCC that no
privity of contract exists between it and MERO. Asiakonstrukt objected on the imposition of 18% annual
interest, which was allegedly not stipulated in writing.
The RTC upheld MERO's right to collect from Asiakonstrukt and FCCC. It held that the
documentary evidence presented by MERO, wherein a 1.5% monthly interest was stated, does not bear
the signatures of any of the defendants.
The CA affirmed the RTC. It ruled that while there was indeed a written stipulation between
MERO and Asiakonstrukt as to the 18% interest, contrary to the RTC's findings, the said interest may
nevertheless be tempered by the courts in the interest of justice and equity.
It still agreed with the RTC that legal interest shall apply.
Asiakonstrukt asserts that a new contract was entered into by it and MERO, wherein MERO
waives its rights to collect from Asiakonstrukt and is subrogated to Asiakonstrukt's place to collect
directly from FCCC and NDC.
WHETHER a new contract was borne of the letters exchanged by MERO and Asiakonstrukt.
SUGGESTED ANSWER
NO. At most, the said exchanges merely show Asiakonstrukt's approval of MERO's extraordinary
efforts in helping the former fulfill its obligation to the latter. In any event, Asiakonstrukt's approval of
MERO's request to collect directly from the FCCC did not extinguish Asiakonstrukt's obligation to pay
MERO.
Novation extinguishes an obligation between two parties when there is a substitution of objects or
debtors or when there is subrogation of the creditor. There are two modes of substituting the person of the
debtor:
3. expromision. — the initiative for the change does not come from — and may even be made
without the knowledge of — the debtor, since it consists of a third person's assumption of the
obligation.
4. delegacion. — the debtor offers, and the creditor accepts, a third person who consents to the
substitution and assumes the obligation; thus, the consent of these three persons are
necessary.
Both modes of substitution by the debtor require the consent of the creditor.
Novation may also be extinctive or modificatory.
1. It is extinctive when an old obligation is terminated by the creation of a new one that takes the
place of the former.
2. It is merely modificatory when the old obligation subsists to the extent that it remains
compatible with the amendatory agreement.
Novation may also be express or implied.
3. It is express when the new obligation declares in unequivocal terms that the old obligation is
extinguished.
4. It is implied when the new obligation is incompatible with the old one on every point.
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Here, there was neither an express nor implied novation through the letters exchanged between
MERO and Asiakonstrukt.
1. there is nothing in the letters that unequivocally states that the obligation of Asiakonstrukt to
pay MERO would be extinguished;
2. there is also no mention that MERO would substitute or subrogate Asiakonstrukt as FCCC's 51
payee/obligee;
3. Asiakonstrukt's non-objection to MERO's request to collect from FCCC directly is not
incompatible with the obligation of Asiakonstrukt to pay MERO.
To emphasize, Asiakonstrukt is the only party obligated to pay MERO, not FCCC and definitely
not NDC.
G.R. No. 214960 15 JUN 2022

CHUA V. SECRETARY OF JUSTICE
BERNABE, J.
Section 4 of the Trust Receipts Law defines a trust receipt transaction as
1. any transaction by and between an entruster and an entrustee,

2. where the entrustor transfers possession
3. of specific goods, among others, to which he or she has ownership or absolute title thereto,
4. to the entrustee upon the latter's execution and delivery of a document called a trust receipt.
If the goods are not sold or otherwise disposed, the entrustee shall return the goods themselves.
The law punishes the entrustee's failure to turn over the proceeds of the sale of the goods covered, or to
return the goods themselves if not sold. Under Section 13 of the law, such failure shall constitute the
crime of Estafa under Art 315, par 1 (b) of the RPC. The offense of violation of the Trust Receipts Law is
malum prohibitum: mere failure to turn over the proceeds of the sale, or to return the goods themselves if
not sold, amounts to the violation.
A necessary element of novation is the cancellation of the old obligation by the new one, which
may be effected expressly or impliedly. There is an express novation if the new obligation unequivocally
declares that it extinguishes or substitutes the old obligation; on the other hand, and there is an implied
novation if the old and the new obligations are on every point incompatible with each other.
BAR QUESTION
This case arose from a Complaint-Affidavit filed with the Office of the City Prosecutor, Makati
City, by private respondent BDO Unibank, Inc. (BDO) against petitioners for four counts of violation of the
Trust Receipts Law.
Meanwhile, petitioners are the responsible officers of NF Agri-Business Corporation (NF ABC). In
1999, EBC (NOW BDO) issued commercial letters of credit and, thereafter, imported merchandise for the
account of : Nr ABC. The merchandise consisted of peruvian fish meal and various kinds of soybean
meals for agriculture purposes. The imported merchandise was delivered to NF ABC. Consequently,
petitioners executed trust receipts.
The trust receipts were payable within 90 days from their dates of execution. However, NF ABC
failed to pay its obligation under the trust receipts when it became due. Hence, the Complaint-Affidavit.
Petitioners averred that NF ABC maintained and continued its commitment to pay its debt. They entered
into negotiations with BDO and they reached an agreement with respect to the terms of payment and
interest. This agreement was reduced into writing. NF ABC then issued postdated checks for the period
until April 2002, after which it proposed a revised repayment schedule and issued anew postdated checks
until March 2004. The outstanding obligation was ultimately reduced to Pl 7,430,882.88. In sum,
petitioners argued that there was a novation as the trust receipt transaction was converted into a simple
loan.
The City Prosecutor dismissed the Complaint-Affidavit, holding that there was a novation. The
SOJ reversed finding that there was no novation of the obligations under the trust receipts. The mere
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failure of petitioners to turn over the proceeds of the sale of the goods, or to return the goods if not sold to
the bank, is the gravamen of the offense charged. The CA affirmed the SOJ.
WHETHER the CA erred in affirming the SOJ's finding of probable cause to charge petitioners
with Estafa under the RPC in relation to the Trust Receipts Law.
52
SUGGESTED ANSWER
NO. The SOJ did not commit grave abuse of discretion in ordering the filing of four counts of
Estafa under the RPC, in relation to the Trust Receipts Law, against petitioners.
Section 4 of the Trust Receipts Law defines a trust receipt transaction as
5. any transaction by and between an entruster and an entrustee,

6. where the entrustor transfers possession
7. of specific goods, among others, to which he or she has ownership or absolute title thereto,
8. to the entrustee upon the latter's execution and delivery of a document called a trust receipt.
If the goods are not sold or otherwise disposed, the entrustee shall return the goods themselves.
The law punishes the entrustee's failure to turn over the proceeds of the sale of the goods covered, or to
return the goods themselves if not sold. Under Section 13 of the law, such failure shall constitute the
crime of Estafa under Art 315, par 1 (b) of the RPC. The offense of violation of the Trust Receipts Law is
malum prohibitum: mere failure to turn over the proceeds of the sale, or to return the goods themselves if
not sold, amounts to the violation.
Here, there is probable cause to hold petitioners liable for violating the Trust Receipts Law since
they failed to turn over the proceeds of the sale of goods or return the goods themselves.
WAS THERE A NOVATION OF THE OBLIGATION?
A necessary element of novation is the cancellation of the old obligation by the new one, which
may be effected expressly or impliedly. There is an express novation if the new obligation unequivocally
declares that it extinguishes or substitutes the old obligation; on the other hand, and there is an implied
novation if the old and the new obligations are on every point incompatible with each other.
The incompatibility must take place in any of the essential elements of the obligation, such as its
object, cause or principal conditions thereof; otherwise, the change would be merely modificatory in
nature and insufficient to extinguish the original obligation.
Here, the new agreement expressly recognized the old obligation; the former did not completely
obliterate the latter. Petitioners are still liable under the trust receipts, but were given time to pay under
the schedule of payments. The new schedule of payments is merely modificatory and supplementary to the
original obligation. In sum, the SOJ did not err or gravely abuse her discretion in finding probable cause
to charge petitioners with Estafa in relation to the Trust Receipts Law.
CONTRACTS
[ G.R. No. 202284, March 17, 2021]
CRISTINA* R. SEMING, PETITIONER, VS. EMELITA P. ALAMAG, VIOLETA L. PAMAT, ROLANDO L.

PAMAT AND FERNANDO L. PAMAT, RESPONDENTS.
BERNABE, J.:
 The elements of a contract of sale are:
price;
3. price certain in money or its equivalent
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 "The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the
thing is capable of being made determinate without the necessity of a new or further agreement
between the parties."
BAR QUESTION
53
In 2006, petitioner and her spouse, Eutiquio Seming (collectively, spouses Seming), filed before
the RTC an action for specific performance and damages against the spouses Angel Pamat and Natividad
Pamat (Natividad; collectively spouses Pamat).
The case involved the one-half portion (subject property) of a parcel of land known as Lot 512-C.
Lot 512-C has an area of 1,542 square-meters, and covered by Transfer Certificate Title (TCT) No. T-
1347816 of the Registry of Deeds of Albay issued under the names of Jesusa Seming Vda. De Lopez
(Jesusa), and the spouses Pamat.
In their complaint, the spouses Seming alleged that sometime in 1977, they purchased Jesusa's
share in Lot 512-C, which consisted of 771 square meters or one-half portion of the property. They then
took possession of the said portion by constructing their conjugal dwelling thereon.
Jesusa subsequently executed a Deed of Sale in their favor. Petitioner further alleged that, in the
same year, she and her husband entered into a verbal agreement with the spouses Pamat concerning the
purchase of the other half portion of Lot 512-C also measuring 771 square meters. The spouses Seming
admitted that, at that time, the parties did not execute any written agreement reflecting the sale of the
subject property in their favor.
Meanwhile, a complaint for quieting of title (Civil Case No. 744) respecting Lot 512-C was filed by
a certain Maria Aguilar Avecilla against Jesusa and the spouses Pamat. Petitioner averred that, with the
consent of Jesusa and the Pamats, she agreed to shoulder all expenses of the litigation.
The amount of litigation expenses spent by petitioner shall then be treated as part of petitioner's
payment for the purchase price of the subject property. Additionally, the spouses Seming paid a portion of
the said purchase price of the subject property both in cash and in kind.
In 1990, petitioner Cristina and Natividad agreed that the payments made by her and her
husband, both in cash and in kind, shall serve as partial payment for a 200 sqm portion of the subject
property. She supposedly executed a receipt whereby Natividad acknowledged receipt from her of the
amount of P6K. A similar receipt was executed the following year for another 200 sqm.
The quieting of title case became final in 1983. Natividad, whose litigation expenses in said case
were shouldered by petitioner, agreed to pay the latter with another 200-sqm portion of the subject
property. At this point, Sps Seming were able to acquire 600 sqm out of the 771-sqm area.
In 2002, Cristina offered to buy from the Sps Pamat the remaining 171-sqm portion of the subject
property for P10K and further requested that the sale of the 600-square meter portion thereof be
embodied in a Deed of Sale. Sps Pamat rejected both offer and request.
Sps Pamat maintained that they never sold any portion of their share in Lot 512-C to petitioner.
They further argued that nowhere in the Compromise Agreement executed in 2006 did they admit
petitioner's possession over the subject property.
The RTC rendered a Decision ordering respondents to execute a Deed of Absolute Sale in favor of
petitioner covering 600 sqm. It held that there was a perfected contract of sale between petitioner and
Natividad.
The CA reversed the ruling of the RTC and held that no contract of sale existed between the Sps
Pamat and petitioner. It disregarded the two receipts presented by petitioner explaining that she failed to
prove the due execution and authenticity of the receipts.
WHETHER there was a perfected and valid contract of sale between Petitioner and the Sps
Pamat.
SUGGESTED ANSWER
NO. There is no contract of sale between petitioner and Natividad.
The object of the supposed sale in the instant case is ambiguous. It is well settled that the object
of every contract must be determinate. "The requisite that a thing be determinate is satisfied if at the time
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the contract is entered into, the thing is capable of being made determinate without the necessity of a new
or further agreement between the parties."
Petitioner relied on the October 22, 1990 and January 23, 1991 receipts to prove that Natividad
transferred and conveyed to petitioner the former's 771-square meter portion of Lot 512-C. But as
mentioned above, said receipts are null and void, and thus, should not be given evidentiary weight and
54
credence. Notably, even if we consider the receipts presented by petitioner, the exact portion of Lot 512-C
allegedly sold to petitioner was not specified. The phrase "[t]his amount is payment only for two lots"
renders the object of the sale ambiguous as it does not even define the metes and bounds of the lots which
are supposedly the subject of the sale.
The price for the sale of the subject property is also uncertain. Other than her bare testimonies,
petitioner's claim that she extended financial aid to Natividad was not supported by corroborating
evidence. Although the litigation expenses spent by petitioner form part of the purchase price of the
subject property, no receipt of expenses was presented by petitioner which would aid this Court to
determine the exact amount thereof. This undetermined amount of expenses all the more renders the
price or consideration of the sale ambiguous.
G.R. No. 206667, June 23, 2021

GUILLERMA S. SILVA, Petitioner, v. CONCHITA S. LO, Respondent.
BERNABE, J
LEGAL BASIS
Article 1317 of the Civil Code provides that a contract entered into in the name of another by one
who has no authority shall be unenforceable, unless it is ratified, expressly or impliedly, by the
person on whose behalf it has been executed.
BAR QUESTION
On May 20, 1975, Carlos, Jr. died intestate leaving behind a sizeable estate to his compulsory heirs:
the surviving spouse, Concepcion Sandico (Concepcion), and their children, Ma. Enrica Sandico-Pascual
(Enrica), Carlos L. Sandico III (Carlos III), petitioner Guillerma Sandico Silva (Guillerma), Lily Sandico-
Brown (Lily), Pamela S. Zapanta (Pamela), respondent Conchita S. Lo (Conchita) and Teodoro L. Sandico
(Teodoro).
Sometime in 1976, the heirs of Carlos Jr. executed an Extrajudicial Settlement of Estate which
provided that all properties of the decedent shall be owned in common, pro indiviso, by his heirs. In
September 1988, Carlos, Jr.'s heirs executed a Memorandum of Agreement for the physical division of the
estate. However, both agreements were never implemented and the heirs remained pro indiviso co-owners
of the estate's properties.
On August 3, 1989, Enrica, one of the heirs, filed Civil Case No. Q-89-3137 before the RTC
impleading all the other heirs, her mother and siblings, as defendants. Eventually, Teodoro withdrew as
defendant and joined suit as plaintiff-in-intervention.
Opposing the physical division of the properties, defendants therein primarily asserted
Concepcion's usufructuary rights over the estate's real properties. They further alleged a diminished value
and use of the properties should these be physically divided. Given the unanimity of their defense against
the complaint, Conchita and two other heirs residing abroad, Lily and Pamela, executed a Special Power of
Attorney (SPA) in favor of their mother Concepcion and their sister, Guillerma, respectively.
Thereafter, the RTC issued numerous orders reflecting the negotiations during court hearings for
the distribution and partition of the estate among the heirs. The trial court encouraged the heirs to arrive
at a mutually acceptable partition and distribution of the estate's properties. The contentious matters
among the heirs were the inventory and classification of the estate's properties and their respective
proposals for settlement and division thereof.
In 1994, the Registry of Deeds issued a TCT covering the subject property in the names of
Concepcion and Carlos III subject to the encumbrances of the decedent's estate which listed the names of
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the other compulsory heirs. The title's Memorandum of Encumbrances likewise noted Enrica's lis
pendens.
In the course of the trial, the heirs agreed on the manner of division of each property—via raffle.
The RTC ordered the partition of the intestate estate of the late Carlos, Jr.
55
Later, Conchita executed a Revocation of the SPA. She filed a copy of the Revocation with the RTC
but failed to furnish her agent, Concepcion, a copy thereof.
Despite the Order of Partition, various properties of the estate remained undivided and were not
distributed among the heirs. Enrica filed a Motion to Appoint Commissioners to Make Partition. A
Manifestation was filed opposing the appointment of commissioners on the ground that the agricultural
land tenants have already agreed to the subdivision of the agricultural lands.
In compliance with RA 6657, the heirs, represented by Concepcion, executed the 1999
Kasunduan with the tenants. As a voluntary land transfer arrangement allowed by the CARL, it provided
for a 50-50 sharing of the subject property, i.e., Carlos, Jr.'s heirs retained half thereof, and the other half
will be distributed to the qualified beneficiaries, the tenants.
The RTC granted the Motion to Appoint Commissioners. Yet again, the appointment did not
happen as plaintiffs appeared to have acquiesced to the defendants' proposed subdivision.
Concepcion, representing herself and the other defendants-heirs, executed a second agreement
(2006 Kasunduan) with the tenants. Thereafter, the defendants filed a Motion for Approval of New
Agreement and New Subdivision Plan. The plaintiffs no longer opposed the motion.
The RTC approved the New Agreement and Subdivision Plan and ordered the plaintiffs Enrica and
Teodoro to sign the document.
Concepcion then filed a Motion to Order Register of Deeds to Enter New Titles. Conchita opposed
on the ground that the 2006 Kasunduan is void. As per Conchita, the 2006 Kasunduan lacked her
signature since she had already revoked the agency relationship with her mother, Concepcion.
The RTC granted Concepcion's motion and ordered the Register of Deeds of Pampanga to enter
new titles in the names of the tenants and the heirs of Carlos, Jr.
The CA annulled and set aside the Orders of the RTC via a petition for certiorari ruling that the
2006 Kasunduan did not conform with the procedure laid down in Rule 69.
I. WHETHER the 2006 Kasunduan is void because it was not signed by all the heirs of the
decedent.
NO. Despite the lack of signatures of specifically three (3) heirs of the decedent, Enrica, Teodoro
and respondent Conchita, the 2006 Kasunduan is a valid partition. Albeit plaintiffs Enrica and Teodoro
did not sign the Kasunduan, they acquiesced to the partition and distribution of the subject property.
Neither of them had questioned it nor had they intervened in the CA and in this appeal. It is also effective
as against Conchita.
The transfer of half of the subject property was under the aegis of the DAR pursuant to RA 6657
which the heirs cannot ignore or circumvent by their claim that the 2006 Kasunduan was not validly
executed.
Also, the transfer and distribution of half of the subject property can be considered as the share of
Concepcion in the conjugal partnership property regime during her marriage to the decedent.
As a co-owner pro indiviso, Conchita exercises her right to the entire coowned property. Quijano v.
Amante ruled that each of the co-owners holds the property pro indiviso and exercises his or her rights
with the entire property; thus, each co-owner may use and enjoy the property with no other limitation
than that he shall not injure the interests of his co-owners.
Thus, the partition and alienation of half of the subject property, through the 2006 Kasunduan, is
not completely void and cannot be annulled.
II. the 2006 Kasunduan is enforceable as against Conchita.

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YES. The 2006 Kasunduan is enforceable as against Conchita. Conchita failed to inform her
agent, Concepcion, of the fact of revocation. She continued to clothe her mother with apparent authority
to act on her behalf. Apparent authority is based on the principle of estoppel. Agency may be oral, unless
the law requires a specific form.
Here, Conchita failed to give her mother notice of the revocation and belatedly repudiated her 56
assent to the 2006 Kasunduan which was signed by her mother on her behalf despite her full and
complete knowledge that the case was ongoing.
Article 1317 of the Civil Code provides that a contract entered into in the name of another by one
who has no authority shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on
whose behalf it has been executed.
Here, Conchita has impliedly ratified her mother's assent to the partition on her behalf by failing
to assail the RTC's 2007 Order and the conduct of the raffle for distribution of the property even after she
had obtained a copy of the Order and the Minutes of Raffle.
G.R. No. 230573, June 28, 2021

THE HEIRS OF ANSELMA GODINES, NAMELY: MARLON, FRANCISCO, ROQUE, ROSA AND ALMA,
ALL SURNAMED GODINES,* Petitioners, v. PLATON DEMAYMAY AND MATILDE DEMAYMAY,
Respondents.
BERNABE, J.:
LEGAL BASIS
A sale of real property must be evidenced by a written document as an oral sale of immovable
property is unenforceable. The Estate of Gonzales v. The Heirs of Perez has held that failure to observe the
prescribed form of contracts does not invalidate the transaction. Although a conveyance of land is not
made in a public document, it does not affect the validity of such conveyance. Article 1358 does not
require the accomplishment of the acts or contracts in a public instrument in order to validate the act or
contract but only to insure its efficacy. Heirs of Alida v. Campana reiterated that the Statute of Frauds
applies only to executory contracts and not to those which have been executed either fully or partially.
BAR QUESTION
Petitioners Marlon, Francisco, Roque, Rosa, and Alma, all surnamed Godines, claim to be the
forced heirs of Anselma Yuson Godines (Anselma) who died on August 11, 1968 leaving a parcel of
residential lot.
However, respondent spouses Platon and Matilde (Matilde; collectively, spouses Demaymay or
respondents) are in possession of the land in question5 considering that during her lifetime, Anselma
obtained a loan from Matilde and in consideration thereof, the spouses Demaymay were allowed to use the
land6 for a period of 15 years. However, this agreement was not reduced into writing.
Petitioners then found out that Tax Declaration No. 6111 in the name of Anselma was cancelled
and Tax Declaration No. 7194 was issued under the name of Matilde by virtue of a Deed of Confirmation
of Sale supposedly executed by petitioner Alma in 1970.
Given this, petitioners filed a Complaint for Recovery of Ownership and Possession and
Declaration of the Deed of Confirmation as Null and Void with Damages against the spouses Demaymay
before the Regional Trial Court (RTC) of Catalingan, Masbate, Branch 49.
The MCTC and RTC ruled in favor of petitioners. The CA reversed.
WHETHER the CA gravely erred in ruling that the heirs of Anselma are bound by the oral
contract of sale allegedly executed in favor of the Sps Demaymay.
SUGGESTED ANSWER
NO. Our jurisdiction has long recognized the validity of oral contracts, including oral contracts of
sale. It must be emphasized that the main issue at hand is the validity of the oral sale between Anselma
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and the spouses Demaymay, and not the validity of the Deed of Confirmation of Sale. Contracts that have
all the essential requisites for their validity are obligatory regardless of the form they are entered into,
except when the law requires that a contract be in some form to be valid or enforceable.
A sale of real property must be evidenced by a written document as an oral sale of immovable
property is unenforceable. The Estate of Gonzales v. The Heirs of Perez has held that failure to observe the 57
prescribed form of contracts does not invalidate the transaction. Although a conveyance of land is not
made in a public document, it does not affect the validity of such conveyance. Article 1358 does not
require the accomplishment of the acts or contracts in a public instrument in order to validate the act or
contract but only to insure its efficacy. Heirs of Alida v. Campana reiterated that the Statute of Frauds
applies only to executory contracts and not to those which have been executed either fully or partially.
Here, the Statute of Frauds is inapplicable as the verbal sale between Anselma and the Sps
Demaymay had already been partially consummated when the former received the initial payment of
P1,010.00 from the latter.
Considering that the oral sale between Anselma and the Sps Demaymay is valid, petitioners, being
the heirs of Anselma, are legally bound by the said oral sale.
G.R. No. 213796, June 28, 2021
SPOUSES CALVIN LUTHER R. GENOTIVA AND VIOLET S. GENOTIVA, Petitioners, v. EQUITABLE-PCI

BANK (NOW BANCO DE ORO UNIBANK, INC.), Respondent.
BERNABE, J.
LEGAL BASIS
For intimidation to vitiate consent, the following requisites must be present:
1. that the intimidation must be the determining cause of the contract, or must have caused the
consent to be given;
2. that the threatened act be unjust or unlawful;
3. that the threat be real and serious, there being an evident disproportion between the evil and
the resistance which all men can offer, leading to the choice of the contract as the lesser evil;
and
4. that it produces reasonable and well-grounded fear from the fact that the person from whom
it comes has the necessary means or ability to inflict the threatened injury.
BAR QUESTION
On February 13, 2003, the spouses Genotiva filed before the RTC a Complaint for Declaration of
Nullity of Contract, Reconveyance and Damages with Prayer for a Writ of Preliminary Injunction and/or
Temporary Restraining Order against BDO.8
In the Complaint, they alleged that Calvin Genotiva (Calvin), together with his business
colleagues, ventured into the commercial production of hollow blocks and concrete pavers under the
registered name Goldland Equity, Inc. (Goldland).9 Sometime in 1997, Goldland applied for a "clean loan"
with BDO at its Cagayan de Oro City Branch where petitioner Violet Genotiva (Violet) was an
employee.10 BDO granted the loan in the amount of P2,000,000.00 as evidenced by a Promissory Note
dated November 12, 1996.11
The Genotivas further alleged that when Violet retired on October 15, 1998, she requested for the
payment of her retirement benefits12 and for the release of the owner's copy of Transfer Certificate of Title
No. 77966 (subject property) which was retained by BDO in relation to Violet's earlier housing loan which
loan was already fully paid.13 However, BDO allegedly refused to release her retirement benefits unless she
and her husband would execute a real estate mortgage over the subject property to secure Goldland's
loan.14 Being pressed for money, they had no choice but to accede to BDO's demands and to sign the Real
Estate Mortgage dated March 17, 1999 (subject contract) in favor of BDO. 15
According to the spouses Genotiva, sometime after the subject contract was executed, they offered
to pay BDO the amount of P500,000.00 to redeem the collateral.16 However, instead of applying the
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P500,000.00 for the redemption, BDO applied it to the payment of the interest due on Goldland's
loan.17 Further, when Goldland defaulted in its payment of the loan, BDO wrongfully foreclosed the
subject property and scheduled its auction sale.18
Thus, in their Complaint, the spouses Genotiva prayed for the following: first, the declaration of
the subject contract as void for having been executed under duress in view of BDO's withholding of 58
Violet's retirement benefits; second, for an order releasing the P500,000.00 deposit, the retention thereof
by BDO not having any basis, as well an order requiring BDO to pay damages; and third, for the issuance
of a Temporary Restraining Order (TRO) against the scheduled auction sale of the subject property. 19
BDO alleged that it withheld the issuance of Violet's clearance because of her existing Deed of
Suretyship which was previously executed by the Genotivas and other stockholders when Goldland
applied for the P2M loan.
The RTC held that the subject contract was voidable considering that it was executed by the Sps
Genotiva under BDO's undue influence. It also ordered that the P500K be returned to the Genotivas for
having been invalidly applied to the interest on Goldland's loan.
The CA granted BDO's appeal holding that the bank as a creditor has the right to proceed against
the spouses Genotiva as sureties.
SUGGESTED ANSWER
I. WHETHER the subject contract is valid in view of the spouses Genotiva's claim of vitiated
consent.
YES. The Subject Contract is valid.
For intimidation to vitiate consent, the following requisites must be present:
5. that the intimidation must be the determining cause of the contract, or must have caused the
consent to be given;
6. that the threatened act be unjust or unlawful;
7. that the threat be real and serious, there being an evident disproportion between the evil and
the resistance which all men can offer, leading to the choice of the contract as the lesser evil;
and
8. that it produces reasonable and well-grounded fear from the fact that the person from whom
it comes has the necessary means or ability to inflict the threatened injury.
Here, it is obvious that BDO's supposed "threat", i.e., its withholding of Violet's retirement
benefits, is not the intimidation referred to by law. Contrary to the Sps Genotiva's claim that they were
intimidated by BDO, it was actually them who willingly offered to execute the subject contract in exchange
for the release of Violet's retirement benefits.
It is important to differentiate consent that is reluctantly but freely given, on one hand from
consent that was obtained through duress or any other vice of consent, on the other. Contracts entered
into with reluctance are NOT necessarily voidable. Mangahas v. Brobio held that being forced into a
situation does not amount to vitiated consent where it is not shown that the party is deprived of free will
and choice.
II. WHETHER BDO has the right to retain the P500K under the Deed of Suretyship.
NO. BDO has no right to apply the P500K to Goldland's loan. Palmares v. CA teaches that a
creditor's right to proceed against the surety exists independently of his right to proceed against the
principal.
Under Article 1216 of the Civil Code, the creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously. The right of the creditor to proceed against the surety
refers to the right to sue the surety independently of the right to sue the principal or the other sureties. By
"proceed", the law means to "sue" or to "institute proceedings." The creditor's right to proceed against the
surety does not give him any right to deprive said surety of his property without due process of the law.
Here, the manner by which BDO enforced the surety contract violates the basic principle of due
process. Also, BDO may not set off the amounts without the consent of the Sps Genotiva because consent
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is required for conventional compensation. Neither can BDO invoke legal compensation because the same
requires each of the debtors to be bound principally.
In this case, while the Sps Genotiva are directly liable for Goldland's loan, their liability stems not
from a principal contract, but a secondary one, i.e. the Deed of Suretyship.
59
[ G.R. No. 207051. December 01, 2021 ]
LORENZO WILLY, SUBSTITUTED BY HIS HEIRS, NAMELY: FELICIDAD D. WILLY, BETTY WILLY
CADANGEN, TONY WILLY, COSME WILLY, ROSARIO WILLY-ARMAS, ERLINDA WILLY-DAPYAWON,
JOHNNY WILLY, JOSE WILLY, RODOLFO WILLY, SWINIE WILLY, ISABEL WILLY, NEDA
CACANANDO, AND BENITA WILLY, HEREIN REPRESENTED BY THEIR ATTORNEYS-IN-FACT, MARIA
APRILA WILLY CRUZ AND BETTY WILLY CADANGEN, PETITIONERS, VS. REMEDIOS F. JULIAN,
GEORGE F. JULIAN, JOAN J. AGUIRRE, EMILY J. BUSTARDE, AND WILLIAM F. JULIAN,
RESPONDENTS.
DECISION
BERNABE, J.:
LEGAL BASIS
Subject to the provisions of the Statute of Frauds and of any other applicable statute, a contract
of sale may be made in writing, or by word of mouth, or partly in writing and partly by word of mouth, or
may be inferred from the conduct of the parties.
Article 1477 provides that the thing sold shall be understood as delivered, when it is placed in the
control and possession of the vendee.
BAR QUESTION
The controversy between the parties is traced to a 67,635-square meter6 unregistered land owned
by Modesto Willy (Modesto). The subject property is covered by Bureau of Lands PSU No. 192802. Modesto
was the father of Lorenzo Willy (Lorenzo), who was likewise the progenitor of the some of the petitioners.
On March 29, 1963, Modesto executed a written agreement (1963 Agreement) conveying portions of the
subject property to three individuals who rendered services to Modesto in connection therewith;
On November 16, 1968, the subject property was surveyed anew for the benefit of a prospective
buyer, Ricardo, to whom Modesto's agent, Emilio Dongpaen (Dongpaen), offered for sale his portion of the
subject property. During the survey, at the direction of Modesto, with Dongpaen likewise present, another
surveyor, Engr. Jose Fernandez, delineated and segregated a total area of 15,000 square meters for
Ricardo's intended acquisition. The segregated portion was designated as Lots 1 and 2.
Subsequently, on various dates, a series of sale transactions occurred among Modesto, Dongpaen,
and Ricardo for the sale of Lots 1 and 2 to Ricardo:
1. On January 27, 1969, Dongpaen sold to Ricardo the 10,000-square meter portion of the
subject property initially conveyed to Dongpaen by Modesto under the 1963 Agreement.
2. On June 17, 1969, Dongpaen sold to Ricardo an additional 5,000 square meters of the subject
property.
3. On June 24, 1969,20 Modesto sold to Dongpaen an additional 5,000 square meters of the
subject property ostensibly covered by a Deed of Sale21 which was notarized on the following day, June
25, 1969.
Thereafter, pursuant to an arrangement with Modesto and his son, Lorenzo, who offered to
cultivate Ricardo's portion of the subject property, Ricardo saw no need to occupy Lots 1 and 2, and
simply allowed Lorenzo's possession thereof. According to Ricardo, Lorenzo tilled Lots 1 and 2 on his
behalf, and remitted to Ricardo his share of the fruits thereof. In 1979, Modesto died.
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Ricardo filed a complaint for Partition of Property and Damages, against the heirs of Modesto.
The MCTC ruled in favor of Ricardo and ordered the segregation of his portion of the subject
property. It ruled that Modesto validly conveyed the 15,000-sqm portion of the subject property to
Dongpaen who then validly transferred it to Ricardo.
60
The RTC reversed the MCTC holding that the 1963 Agreement is a private document which did
not have the effect of constructive delivery to the intended transferees. In short, Ricardo is not a co-owner
of the subject property and thus not entitled to its partition.
The CA, in reversing the RTC, construed the events comprising the 1968 survey and the
subsequent execution of the corresponding deeds of conveyances as constructive delivery.
WHETHER the CA erred in upholding Ricardo's claim of ownership over Lots 1 and 2 of the
subject property.
SUGGESTED ANSWER
NO. Ricardo is the valid owner of Lots 1 and 2 of the subject property which right of ownership
vested in his heirs at the moment of his death.
The 1963 Agreement is not purely a sales contract; it is an innominate contract reflecting a sales
contract, a contract of agency to sell the subject property; and contract to transfer ownership of property
in exchange for services. Subject to the provisions of the Statute of Frauds and of any other applicable
statute, a contract of sale may be made in writing, or by word of mouth, or partly in writing and partly by
word of mouth, or may be inferred from the conduct of the parties. Dongpaen merely holds title to the
subject property as Modesto's sales agent for the further sale of a portion thereof.
All contracts invoked in this case have been either partially or totally performed by Modesto,
Dongpaen and Ricardo. Perforce, the contracts are removed from the ambit of the Statute of Frauds and
cannot be considered as unenforceable contracts.
One other thing militates against petitioners' claim that the 1963 Agreement is unenforceable —
Ricardo's possession of Lots 1 and 2 in the concept of owner and receipt of fruits thereof. Article 1477
provides that the thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee.
Ricardo's indicia of ownership of Lots 1 and 2 are his possession in the concept of owner and his
receipt of fruits from the cultivation of the land which Lorenzo regularly remitted to him. Both law and
jurisprudence mandate that courts must give life to the agreement between parties and not strangle it by
stringent application of technicalities.
G.R. No. 200608, February 10, 2021
BACALA V. HEIRS OF POLIÑO
BERNABE, J.:
For civil law
BAR QUESTION
The case stemmed from a complaint for nullity and/or annulment of sale, accounting, damages,
and attorney's fees with prayer for injunctive reliefs (complaint) filed by original plaintiff, Aproniana Polino
Balisalisa (Aproniana), as judicial guardian of Aquilino O. Polino (Aquilino) and Ducepino O. Polino
(Ducepino), against original defendants-spouses Juan Polino (Juan) and Corazon Rom (Corazon) docketed
as Civil Case No. 1863 before the Regional Trial Court (RTC), Branch 32 of Lupon, Davao Oriental.
Aproniana, Juan, and Anecito Polino5 (Anecito) were siblings. Anecito, married to Clara O. Polino
(Clara), was the father of Aquilino and Ducepino. Both sons were mentally incapacitated.
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Anecito and Clara were the registered owners of a parcel of land planted with coconuts located at
Cocomon, Lupon, Davao Oriental (subject property).7 It spanned an area of 80,003 square meters and
covered by Transfer Certificate of Title (TCT) No. T-3353.8 Anecito and Clara died9 intestate on November
21, 1994 and November 18, 1987, respectively. They were survived by their sons and sole heirs, Aquilino
and Ducepino.
61
A Deed of Sale and an Agreement, executed by and between Anecito and Juan in 1992 surfaced.
Anecito allegedly ceded unto Juan the subject property for a consideration of P15K. The Agreement
stipulated that during Anecito's lifetime, Juan shall allow Anecito to enjoy the usufruct of the subject
property, and that upon Anecito's death, Juan shall continue to support and provide financial assistance
to Aquilino and Ducepino.
Aproniana applied for the issuance of letters of guardianship over Aquilino and Ducepino. Her
petition was granted on June 6, 1996 and she took her oath of guardianship on August 7. While the
guardianship proceedings were pending, Juan executed a Deed of Voluntary Transfer conveying the
subject property to his children.
Aproniana instituted the instant Complaint against the spouses Juan and Corazon and in behalf
of siblings Aquilino and Ducepino.
The RTC ruled in favor of Aproniana finding that the supposed sale between Anecito and Juan
involved no money and was not truly paid for. It held that the Deed of Sale was null and void for lack of
cause or consideration and for being fictitious and simulated pursuant to Articles 1409, 1352, and 1346
of the Civil Code. Even if the Deed of Sale and the Agreement would be deemed as a donation, the RTC
held the same to be null and void for failure to comply with the formalities of a donation as prescribed
under Article 749. It further concluded that Juan failed to comply with his obligations under the
Agreement, leading to the nullity of the Deed of Sale.
Citing Article 1354 of the Civil Code and the best evidence rule, the CA, in reversing the RTC,
presumed the existence of a cause and consideration in the Deed of Sale.
SUGGESTED ANSWER
Will gross inadequacy of the price nullify the contract between Anecito and Juan?
NO. Gross inadequacy of the price did not invalidate the subject contract. Two presumptions find
relevance in this case.
1. A contract enjoys the presumption that it is supported by an existing and lawful cause or
consideration.
2. Notarized documents, being public in nature, require no further proof of their authenticity and
due execution.
To debunk the existence of consideration in the Deed of Sale, there must be more than mere
preponderant evidence showing that Anecito did not truly execute the disputed document or that the
parties had not truly intended a contract of sale.
Here, petitioner never submitted any controverting evidence. The legal presumptions of the existence
of a valid consideration and regularity of execution of contract still stand in favor of the Deed of Sale.
WHAT WAS THE CONTRACT BETWEEN ANECITO AND JUAN?
The Contract between Anecito and Juan was a sale subject to a resolutory condition. Gross
inadequacy or simulation of price neither affects nor invalidates a sale, but it can be shown that the
parties may have really intended a donation or some other act or contract.
Donation has three indispensable elements:
1. the reduction of the patrimony of the donor;

2. the increase in the patrimony of the donee; and
3. the intent to do an act of liberality or animus donandi.
Here, While Anecito's patrimony may have decreased with the correlative increase in that of Juan by
virtue of the Deed of Sale and Agreement, it does not appear that this was impelled by liberality on the
part of Anecito.
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One cannot question a contract of sale for being simulated and at the same time assail the same for
having a grossly inadequate consideration. As the Court has declared in Sta. Fe Realty, Inc. v. Sison that
the two grounds are incompatible.
The elements of a contract of sale are:
1. consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; 62
Here, all three elements were established.
A resolutory condition extinguishes a transaction that, for a time, existed and discharges the
obligations created thereunder.
Here, it was stipulated in the Agreement that Anecito shall enjoy the usufruct of the subject property,
and that upon Anecito's death, Juan shall support and give financial assistance to Aquilino and Ducepino.
The parol evidence rule forbids any addition to or contradiction of the terms of a written instrument
by testimony or other evidence purporting to show that, at or before the execution of the parties' written
agreement, other or different terms were agreed upon by the parties, varying the purport of the written
contract.
The plain meaning rule assumes that the intent of the parties to an instrument is embodied in the
writing itself, and when the words are clear and unambiguous the intent is to be discovered only from the
express language of the agreement.
The "four corners" rule allows courts in some cases to search beneath the semantic surface for clues
to meaning.
In case of fraud, mistake, or any other vice vitiating consent by either or both of the parties, or if any
or all contractual stipulations would be shown to be contrary to law, morals, good customs, public order,
or public policy, the courts may step in to consider all the prevailing circumstances and evidence to
unmask the true intent behind the written word. However, no such vice of consent or illegalities were
proven to taint the Deed of Sale and Agreement. Thus, there is no reason to look beyond the plain import
of the parties' contractual stipulations.
WAS THE CONTRACT BETWEEN ANECITO AND JUAN VALID?
YES. The Deed of Sale and the Agreement remain valid.
As a general rule, the power to rescind an obligation must be invoked judicially and cannot be
exercised solely on a party's own judgment that the other has committed a breach of the obligation. As an
exception, an injured party need not resort to court action in order to rescind a contract when the contract
itself provides that it may be revoked or cancelled upon violation of its terms and conditions.
The exception appears to hold in this case as the Agreement already provided a self-terminating
clause upon a breach of the conditions therein.
Aproniana had never adduced any concrete evidence that Anecito, during his lifetime, had never
received any income produced by the subject property.
Nothing on record also shows that Juan truly left Aquilino and Ducepino to fend on their own after
the death of Anecito, or that Juan's neglect caused Ducepino's death as Aproniana had insinuated.
G.R. No. 219292, June 28, 2021
CITY OF TANAUAN, Petitioner, v. GLORIA A. MILLONTE, Respondent. *
BERNABE, J.:
Article 1410. The action or defense for the declaration of the inexistence of a contract does not
prescribe.
BAR QUESTION
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The registered owners of the lot covered by Original Certificate of Title No. 3243 (OCT 3243) 4 were
the Gonzaga siblings, namely: Marcelo, Eleuteria, Pantaleona, Ambrosio, and Lucio. The mother of
respondent, Florencia Gonzaga Arroyo, was the daughter of Lucio. Hence, Millonte is Lucio's
granddaughter and direct descendant.5 Millonte filed a Complaint6 dated May 12, 2004 against petitioner
City of Tanauan, praying for the declaration of nullity of the Deed of Absolute Sale 7 dated February 10,
1970, as well as Transfer Certificate of Title No. T-42198 (TCT T-42198), 8 and for the reinstatement of OCT 63
3243.
The contested property is presently occupied by the Tanauan Water District. Supposedly, the City
of Tanauan acquired the lot for P30,000.00 pursuant to a Deed of Absolute Sale allegedly signed by the
Gonzagas, as vendors, and the then Municipality of Tanauan, represented by then Mayor Sebastian
Carandang, as vendee.9
Upon examination of the Deed of Absolute Sale, Millonte realized that the Gonzaga siblings were
already dead when the said deed was executed, hence, they could not have signed the document.
Petitioner raises prescription as more than 34 years have passed since the execution of the said
deed and more than 14 years from the registration of the sale in the Register of Deeds.
The RTC nullified the Deed of Sale since the Gonzaga siblings were already dead at the time of the
deed's execution. It ruled that if any one party to a contract was already dead at the time of its execution,
such contract would undoubtedly be simulated and therefore, null and void. The CA affirmed the RTC
finding that Millonte satisfactorily overturned the presumption of regularity of the execution of a notarized
document.
WHETHER the Deed of Absolute Sale is null and void.
SUGGESTED ANSWER
The Deed of Absolute Sale was indeed null and void.
We find that respondent proved with preponderance evidence that the Complaint should be
granted. After a review of the records, We hold that the Deed of Absolute Sale was indeed null and void.
Case law provides that "forgery cannot be presumed and must be proved by clear, positive and convincing
evidence by the party alleging the same."65 Hence, Millonte bears the burden to prove that the signatures
of the Gonzagas were forgeries because they had died prior to the execution of the Deed of Absolute Sale.
To prove that the signatures of the Gonzagas were forgeries because they had died prior to the
execution of the Deed of Absolute Sale, Millonte submitted:
1. a Certification indicating the fact of death of Ambrosio;

2. Certifications stating that the death certificates of Pantaleona, Lucio, Marcelo, and Eleuteria
could not be produced or located due to the fire;
3. the testimonies of the relatives of the deceased.
Millonte's resort to secondary evidence was proper, as the original documents (the death
certificates of the other Gonzaga siblings) were unavailable because these were destroyed by the fire.
More importantly, as long as one contracting party to the contract is proven with evidence to be
dead at the time of the execution of the contract - in this case, Ambrosio - the Deed of Absolute Sale
should be considered as definitely simulated. Thus, the Deed of Absolute Sale is null and void.
Petitioner could not even claim to be an innocent purchaser for value since it did not show that it
fully ascertained the identities and genuineness of the signatures of the purported vendors.
Article 1410 of the Civil Code states that the action or defense for the declaration of the
inexistence of a contract does not prescribe. Millonte, as an heir, could assail the validity of the Deed of
Absolute Sale even years after the execution of the document, and even if the title of the property has
already been transferred in the name of the City of Tanauan.
TRUSTS
G.R. No. 203815, December 07, 2020
EFRAIM D. DANIEL, Petitioner, v. NANCY O. MAGKAISA, CECILIA O. MAGKAISA, IMELDA O.
MAGKAISA, AND MARISSA ODA, Respondents.
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BERNABE, J
LEGAL BASIS
Trust is the legal relationship between one person having an equitable ownership of property and 64
another person owning the legal title to such property, the equitable ownership of the former entitling him
to the performance of certain duties and the exercise of certain powers by the latter.
BAR QUESTION
During her lifetime, Consuelo owned three parcels of land covered by Original Certificates of Title
(OCT) Nos. P-23608 and P-2361,9 located at Manggahan, Kawit, Cavite (Manggahan lots), and Transfer
Certificate of Title (TCT) No. T-3220,10 located at Medicion, Imus, Cavite (Medicion lot). Consuelo
supposedly sold these properties to her sister, Nelidia, as reflected in a Deed of Sale. 11 Apparently,
Consuelo instructed Nelidia that upon her (Nelidia's) death, the properties should be transferred to
Consuela's grandchildren, specifically herein respondents.12
To comply with Consuela's instruction, Nelidia executed a Declaration of Trust 13 dated September
6, 1993 with the conformity of Efraim, who likewise signed therein. In the said document, Nelidia
acknowledged that she held in trust the three parcels of land in favor of the respondents. 14 Eventually,
Nelidia caused the issuance of new TCTs in her name, as evidenced by TCT Nos. T-408005, 15 T-
408004,16 and T-408003.17
When Nelidia died on November 1, 1996, it was only then that the respondents discovered the
existence of the Declaration of Trust. Since then, Efraim purportedly had possession over the properties
and refused to surrender the titles to the respondents.18 Hence, respondents filed a Complaint19 for
Reconveyance Plus Damages, with Prayer for Preliminary Injunction dated October 8, 1997 against
Efraim. They alleged that they received reliable information that Efraim has transferred the subject
properties in his name or is about to do so, with the intention of disposing the same, to their damage and
prejudice.20
Efraim alleged that the trust has already been revoked through a document entitled Revocation of
Declaration of Trust. Said document was not signed by Nelidia, the respondents, and the notary public.
He also argued that there is no showing that the respondents accepted the trust and that it was not
registered with the Registry of Deeds as to bind third parties.
The RTC ruled that the document denominated as Revocation of Trust has no probative value and
effect. The CA affirmed holding that the Declaration of Trust is a valid contract until revoked.
WHETHER the respondents are entitled to the reconveyance of the subject properties in their
favor.
SUGGESTED ANSWER
YES. Since the trust is now considered as terminated after the trustee's death, the properties
should be transferred to the names of the respondents as the beneficiaries of the said trust.
Trust is the legal relationship between one person having an equitable ownership of property and
Here, Nelidia, as the trustee, had the duty to properly manage the properties for the benefit of the
beneficiaries, respondents herein. Efraim is not even a party to this trust and he only signed the
document evidencing the trust as Nelidia's husband.
G.R. No. 233775, September 15, 2021

DORIS MARIE S. LOPEZ, Petitioner, v. ANICETO G. SALUDO, JR., Respondent.
BERNABE, J
LEGAL BASIS
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Trust is the legal relationship between one person having an equitable ownership in property and
The Civil Code provides that an implied trust is created when a property is sold to one party but
paid for by another for the purpose of having beneficial interest in said property. 65
An implied trust arises, not from any presumed intention of the parties, but by operation of law in
order to satisfy the demands of justice and equity and to protect against unfair dealing or downright
fraud.
While implied trusts may be proven by oral evidence, the evidence must be trustworthy.
BAR QUESTION
Respondent Aniceto G. Saludo (respondent) filed Civil Case No. 70886-PSG, an Action for
Reconveyance and Damages with a Prayer for a Temporary Restraining Order and/or Preliminary
Injunction against petitioner. Respondent prayed that he be declared the true owner of two parcels of land
located in Barrio Pineda, Pasig City, and to have said properties reconveyed to him.
Respondent alleged that sometime in April or May 1997, petitioner told him that she knows of two
parcels of land that were being offered for sale at a reasonable price. At first, respondent was hesitant to
buy the said lands. However, he was eventually convinced to purchase the subject properties.
Petitioner then offered to pose as the buyer because the seller, who was her close friend, allegedly
wanted to deal only with her to keep his financial constraints within his close family friends. Respondent
then entrusted to petitioner the purchase price amounting to P15,000,000.00, with the agreement that
petitioner would be the signatory in the Deed of Sale but will hold the properties in trust for, and
subsequently reconvey the same to, respondent.
After the execution of the sale, however, respondent noticed that petitioner started evading him
and did not give any update as to the registration of the sale in his name. When respondent inquired on
the status of the properties, he found out that the properties were already registered in the name of
petitioner as evidenced by TCT Nos. PT-111136 and PT-111137 issued by the Register of Deeds of Pasig
City, pursuant to a Deed of Absolute Sale5 dated May 25, 1999 executed by Bulalacao Realty Corporation
(BRC) in favor of petitioner.
This prompted respondent to immediately assume possession of the properties and introduce
major renovations on the house amounting to a total of P9,000,000.00. He likewise paid the real property
taxes thereon for 13 years. Since then, he has been in actual possession of the properties. As the
occupant thereof, he is also the one paying the homeowner's association dues.
Respondent made several demands, both oral and written, upon petitioner to reconvey the subject
properties to him, but to no avail. Hence, respondent filed an Affidavit of Adverse Claim 6 on July 31, 2001
against petitioner over the properties and had it annotated on the TCTs.
Lopez claimed that she purchased the subject properties from BRC in 1997 pursuant to a Deed of
Sale under Pacto de Retro. Since the properties were not repurchased by the vendor-a-retro, a Deed of
Absolute Sale was executed in her favor for the two lots. Lopez claimed that Saludo volunteered to finance
the renovation of the house on account of their special relationship.
The RTC declared Saludo as the true and rightful owner of the subject properties. The CA
affirmed.
WHETHER respondent had sufficiently proved that an implied trust was created between him
and petitioner.
SUGGESTED ANSWER
YES. Saludo was able to prove his ownership over the subject properties.
Trust is the legal relationship between one person having an equitable ownership in property and
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to the performance of certain duties and the exercise of certain powers by the latter. The Civil Code
provides that an implied trust is created when a property is sold to one party but paid for by another for
the purpose of having beneficial interest in said property. An implied trust arises, not from any presumed
intention of the parties, but by operation of law in order to satisfy the demands of justice and equity and
to protect against unfair dealing or downright fraud. While implied trusts may be proven by oral evidence,
the evidence must be trustworthy. 66
Here, Saludo had actually adduced evidence to prove his intention to purchase the subject
properties by paying the purchase price thereof, through petitioner, with the attendant expectation that
petitioner would later on reconvey the same to him.
As to the allegation of Lopez that the purchase money for the properties was gratuitously
furnished by Saludo, the formalities of a valid donation under Article 748 of the Civil Code should have
been complied with, failing which, there could be no donation to speak of.
G.R. No. 206404

Gaw v. Chua 14 Feb 2022
BERNABE, J.
LEGAL BASIS
Implied resulting trust is not an exception to the Constitutional ban against ownership of
Philippine lands by a non- Filipino. The fundamental law dictates that non-Filipinos cannot acquire or
hold title to private lands or to lands of the public domain, except only by way of legal succession.
Moreover, there is no implied trust if the enforcement of the trust would be against law or public policy.
It is likewise worth noting that a beneficiary in an implied trust receives the beneficial ownership
over the property subject of the trust. It follows that such beneficiary must be capacitated to own real
property in the Philippines.
BAR QUESTION
(1) Lot No. 5370-A;
(2) Lot No. 5662; and
(3) Lot No. 5663.
On November 22, 1969, Pedro S. Santos, Nestorio S. Santos, Herminia Santos Salamat, Roman S.
Santos, and Gloria Santos Valera (the Santoses) executed a deed of absolute sale over the aforementioned
three lots in favor of Lu Pieng for the consideration of P19,000.00.
Lu Pieng rented these lots to spouses Chua Chin and Chan Chi for their lumber business.
Chua Chin and Chan Chi were Chinese nationals and had seven children, namely: petitioner
Concepcion Chua Gaw (Concepcion), respondent Suy Ben Chua (Ben), Chua Kiam Suy (Santos), Chua
Suy Pen (Pino), Chua Suy Lu (Lucio), Chua Sioc Ruan (Juanita), and Julita Chua (Julita).
On November 26, 1976, Lu Pieng sold the three lots to Lucio for the total consideration of
P24,000.
On July 18, 1980, Lucio sold the three lots to Juanita for the total amount of P29,000.00. On
November 27, 1980, Juanita was issued Transfer Certificate of Title (TCT) No. T-263881 under her name
for Lot Nos. 5662 and 5663.
On July 28, 1988, Juanita donated Lot No. 5370-A to Ben. Juanita also subsequently sold Lots
Nos. 5662 and 5663 to Ben on September 20, 1989.
Chan Chi, Chua Chin's spouse, died on October 16, 1993. At the time of their deaths, Chua Chin
and Chan Chi remained Chinese citizens.
The estates of Chua Chin and Chan Chi were never legally settled, judicially or extrajudicially.
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On May 25, 1998, TCT No. T-263881 under Juanita's name was cancelled and TCT No. T-112477
was issued under Ben's name covering Lot Nos. 5662 and 5663. Lot No. 5370-A remained unregistered
land.
Two cases involving titles to land sprouted thereafter and were filed before the Regional Trial
Courts (RTC) of Malolos, Bulacan. 67
On June 16, 1995, Ben filed an application for the registration and confirmation of land titles in
his name, docketed as Land Registration Case (LRC) Case No. 25-M-95. Subject of the application was Lot
No. 5370-A, among four other lots. Ben claimed ownership in fee simple over Lot No. 5370-A, alleging that
he and his predecessors-in-interest had occupied the same since time immemorial without any reservation
or known lien, mortgage, burden, or encumbrance. Ben also declared that he is the owner of Lot No. 5663,
one of the properties adjoining Lot No. 5370-A. He thus asserted his entitlement to all the benefits under
Commonwealth Act No. 141,22 otherwise known as The Public Land Act.
Concepcion, joined by her spouse, Antonio Gaw, filed a complaint for reconveyance of her
undivided share in real property held in trust and for damages against Ben and his spouse and co-
respondent herein, Felisa.
Subjects of the complaint for reconveyance and damages are Lots 5662 and 5663. She stated
that their parents had actually purchased the lots with the understanding that the buyer or transferee
shall only hold legal and beneficial ownership in trust for the legal heirs. She posited that Ben cannot
assert sole ownership over the same and thus sought her undivided share in Lots 5662 and 5663.
The RTC denied Ben's application for registration and confirmation of land titles in his name and
granted Concepcion's complaint for reconveyance and damages. The CA affirmed the denial of Ben's
application and dismissed Concepcion's complaint for reconveyance and damages. It upheld the full effect
and the presumption of regularity of the notarized documents evidencing the transactions over the subject
lots, particularly the 1969 deed of absolute sale between the Santoses and Lu Pieng. It likewise overruled
Concepcion's view that an implied trust was created over the subject properties, since to do so was to
sustain the violation of the Constitution provision prohibiting aliens from owning lands in the Philippines.
The CA ruled that Lu Pieng owned the subject lots, and, necessarily, Concepcion cannot claim any
hereditary share therein as the same shall be excluded from Chua Chin and Chan Chi's estates.
WHETHER an implied trust was established in fact and in law over Lot Nos. 5370-A, 5662, and
5663.
SUGGESTED ANSWER
NO. In view of the Constitutional prohibition, the implied trust was ineffective.
Implied resulting trust is not an exception to the Constitutional ban against ownership of
Philippine lands by a non- Filipino. The fundamental law dictates that non-Filipinos cannot acquire or
hold title to private lands or to lands of the public domain, except only by way of legal succession.
Moreover, there is no implied trust if the enforcement of the trust would be against law or public policy.
It is likewise worth noting that a beneficiary in an implied trust receives the beneficial ownership
over the property subject of the trust. It follows that such beneficiary must be capacitated to own real
property in the Philippines.
The implied trust being insisted on by Concepcion cannot have any legal effect as Chua Chin, due
to his alienage, was incapacitated to own real property. Also, there is no solid evidence that Chua Chin
gave adequate consideration for the trust.
In all, the Constitutional proscription against foreign ownership of lands and the evidentiary
requirements in establishing legal claims cancel Concepcion's claim of implied trust over the subject lots.
BOOK 5
SPECIAL CONTRACTS
MORTGAGE
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[ G.R. No. 203348, July 06, 2020 ]

PASTORA GANANCIAL, PETITIONER, VS. BETTY CABUGAO, RESPONDENT.
BERNABE, J.:
LEGAL BASIS 68
Article 2085 of the Civil Code specifies the elements of valid contracts of mortgage:
1. That they be constituted to secure the fulfillment of a principal obligation;

2. That the mortgagor be the absolute owner of the thing mortgaged;
3. That the persons constituting the mortgage have the free disposal of their property, and in
the absence thereof, that they be legally authorized for the purpose.
Camcam v. CA ruled that an irregular notarization merely reduces the evidentiary value of a
document to that of a private document, which requires proof of its due execution and authenticity to be
admissible as evidence. It does not thus necessarily affect the validity of the contract reflected in the
document.
BAR QUESTION
Pastora Ganancial (Ganancial) owed Betty Cabugao (Cabugao) the amount of P130,000.00, agreed
to be payable within three years. To guarantee her indebtedness, Ganancial entrusted to Cabugao the
Transfer Certificate of Title (TCT) No. 168803 and Tax Declaration No. 641, both covering a 397-square-
meter parcel of land located in Balangobong, Binalonan, Pangasinan, which Ganancial owns in her name.
The transaction later turned sour and ended in the parties' respective lawsuits against each other.
On October 2, 2001, Cabugao filed a case for foreclosure of real estate mortgage against Ganancial. On
October 8, 2001, the latter, in turn, filed against the former a complaint for declaration of the deed of
mortgage as null and void, with damages. These cases were eventually ordered consolidated before Branch
45.
Cabugao alleged that on March 4, 1998, Ganancial executed a Deed of Mortgage4 over the subject
property as collateral for her loan. Despite the lapse of three years from the date of the mortgage and
repeated demands, Ganancial failed and refused to pay the amount she owed Cabugao. A final demand
having proved futile, Cabugao sought the judicial foreclosure of the real estate mortgage, plus interest,
and the award of attorney's fees and litigation expenses.
For her part, Ganancial assailed the authenticity of the Deed of Mortgage. While she entrusted
TCT No. 168803 with Cabugao, Ganancial averred that she never executed the supposed Deed of Mortgage
nor appeared for its notarization. Cabugao allegedly required Ganancial and her children to affix their
signatures on a blank bond paper, which Cabugao filled out only later. Ganancial learned of the existence
of the Deed of Mortgage for the first time during her confrontation with Cabugao before
the barangay captain regarding her unpaid debt and where Cabugao threatened to foreclose the subject
property. Ganancial thus prayed for the declaration of the Deed of Mortgage as null and void and claimed
moral damages, exemplary damages, litigation expenses, and costs of suit.
The RTC ruled in favor of Cabugao. There being a finding of bad faith, the RTC also held
Ganancial liable for moral damages, exemplary damages, attorney's fees, and litigation costs. The CA, in
affirming the RTC, concurred that forgery or falsification cannot be presumed and must be proved with
clear, positive, and convincing evidence by the party who alleges the same. Ganancial reiterates that she
and her two sons were made to sign a blank piece of paper as acknowledgment of her indebtedness to
Cabugao, and that thereafter, the latter supplied the particulars of the mortgage on the same piece of
paper.
WHETHER the Deed of Mortgage is null void in light of the infirmities in its notarization.
NO. Mere formal infirmities in the notarization of the instrument will not invalidate the mortgage.
Camcam v. CA ruled that an irregular notarization merely reduces the evidentiary value of a
document to that of a private document, which requires proof of its due execution and authenticity to be
admissible as evidence. It does not thus necessarily affect the validity of the contract reflected in the
document.
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Ganancial had alleged that fraud invalidated her consent to the mortgage. The fraud alleged to
have vitiated Ganancial's consent to the mortgage must be proven by clear and convincing evidence. Clear
and convincing evidence is less than proof beyond reasonable doubt but greater than preponderance of
evidence.
Here, the evidence presented by Ganancial is too weak to convince that the subject document 69
was fabricated or falsified.
Article 2085 of the Civil Code specifies the elements of valid contracts of mortgage:
4. That they be constituted to secure the fulfillment of a principal obligation;

5. That the mortgagor be the absolute owner of the thing mortgaged;
6. That the persons constituting the mortgage have the free disposal of their property, and in
the absence thereof, that they be legally authorized for the purpose.
Here, the mortgage contract was perfected, valid, and effective, and Ganancial and Cabugao were
far from having absolutely no intention to be bound thereunder.
CREDIT TRANSACTIONS
[ G.R. No. 196476, September 28, 2020 ]
DEVELOPMENT BANK OF THE PHILIPPINES, PETITIONER, VS. HEIRS OF JULIETA L. DANICO,

NAMELY, ROGELIO L. DANICO, CORAZON D. EMETERIO, NENITA D. YBAÑEZ, RODRIGO L. DANICO,
DANILO L. DANICO, DANIEL L. DANICO, GLORIA ESCRUPULO, VILMA MOSQUEDA, AND NATIONAL
POWER CORPORATION, RESPONDENTS.
BERNABE, J.:
LEGAL BASIS
It should be noted, nonetheless, that the new rate could only be applied prospectively and not
retroactively. Consequently, the twelve percent (12%) per annum legal interest shall apply only until June
30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall be the prevailing rate
of interest when applicable.
BAR QUESTION
On April 22, 1977, the Spouses Danico obtained an agricultural loan from petitioner DBP in the total
amount of P150,000.00 which was secured by: a) real estate mortgage (REM) over their four (4) real
properties covered by Original Certificate of Title (OCT) No. P-1439, TCT No. T-8127, TCT No. T-3278 and
OCT No. P-537;5 and b) a chattel mortgage over one unit of Massey Fergusson tractor and accessories.
On August 6, 1982, DBP extrajudicially foreclosed the real property covered by TCT No. T-8127 for
failure of the Spouses Danico to pay their loan obligation. As a result, TCT No. T-8127 was canceled and
TCT No. T-19241 was issued in the name of DBP.
On September 9, 1985, NPC bought from the Spouses Danico the following: (a) Lot No. 861 which
is covered by OCT No. P-1439; (b) Lot No. 857-B which is a portion of the land covered by TCT No. T-3278,
as the two lots are part of the NPC's Reservoir Area. As per the Deed of Absolute Sale of Registered Land
dated September 9, 1985, Lot No. 861 covered by OCT No. P-1439 was sold by the Danicos to NPC in the
total amount of P511,290.00 provided that:
MAY ASSUMPTION OF OBLIGATION LIKE TAXES AND MORTGAGE
DBP agreed to the sale of the two lots to NPC on the condition that a portion of the proceeds
would be applied to the Spouses Danico's outstanding obligation with DBP. However, NPC paid DBP only
the total amount of P92,003.4714 from the proceeds of the sale of a portion of land covered by TCT No. T-
3278 as per Official Receipt No. 2205487 dated November 17, 1986.15 NPC did not remit to DBP the
amount P301,350.50 from the proceeds of the sale of the land covered by OCT No. P-1439.
SO, HINDI NABAYARAN LAHAT NG NPC ANG DBP.

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Is NPC liable to pay Interest?
SUGGESTED ANSWER
NO. As to respondent NPC's liability to pay interest, Article 1956 of the Civil Code states that no
interest shall be due unless it has been expressly stipulated in writing. As can be gleaned from the
foregoing provision, payment of monetary interest is allowed only if: (1) there was an express stipulation 70
for the payment of interest; and (2) the agreement for the payment of interest was reduced in writing. The
concurrence of the two conditions is required for the payment of monetary interest. Thus, We have held
that collection of interest without any stipulation therefor in writing is prohibited by law.
In the case at bar, it is clearly apparent that the two deeds of sale do not contain any stipulation
as to the payment of monetary interest.
Thus, from the foregoing, in the absence of an express stipulation as to the rate of interest that
would govern the parties, the rate of legal interest for loans or forbearance of any money, goods or credits
and the rate allowed in judgments shall no longer be twelve percent (12%) per annum —— but will now be
six percent (6%) per annum effective July 1, 2013.
It should be noted, nonetheless, that the new rate could only be applied prospectively and not
retroactively. Consequently, the twelve percent (12%) per annum legal interest shall apply only until June
30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall be the prevailing rate
of interest when applicable.
G.R. No. 209837, May 12, 2021
GOLDWELL PROPERTIES TAGAYTAY, INC., NOVA NORTHSTAR REALTY CORPORATION, AND NS

NOVA STAR COMPANY, INC., REPRESENTED HEREIN BY FLOR ALANO, Petitioners, v.
METROPOLITAN BANK AND TRUST COMPANY, Respondent.
BERNABE, J.
LEGAL BASIS
Under Article 2089 of the Civil Code, the debtor cannot ask for the release of any portion of the
mortgaged property or of one or some of the several lots mortgaged unless and until the loan thus secured
has been fully paid, notwithstanding the fact that there has been a partial fulfillment of the obligation.
Hence, the debtor who has paid a part of the debt cannot ask for the proportionate extinguishment of the
mortgage as long as the debt is not completely satisfied.
As regards monetary interest, although the parties are "free to stipulate their preferred rate," the
courts are "allowed to equitably temper interest rates that are found to be excessive, iniquitous,
unconscionable, and/or exorbitant."
BAR QUESTION
Petitioner Goldwell Properties Tagaytay, Inc. (Goldwell) obtained loans from respondent
Metropolitan Bank and Trust Company (Metrobank) in 2001 covered by several promissory notes 5 (PN)
and secured by real estate mortgages and a continuing surety agreement.6
Petitioner Nova Northstar Realty Corporation (Nova) also obtained loans from Metrobank under PN
Nos. TLS 2568 and TLS 2559 secured by a real estate mortgage and continuing surety agreement. 7
When Nova and Goldwell (debtor companies) experienced financial difficulties, both requested
Metrobank to modify their interest payment scheme from monthly to quarterly. According to Metrobank,
when the debtor companies made the request during the last week of October 2001, a branch manager of
Metrobank immediately referred the matter to its executive committee. On December 11, 2001, or roughly
a month and a half later, Metrobank's executive committee approved the request.
On the other hand, the petitioners, in a letter9 dated April 24, 2002, alleged that it took the bank
four months to reduce the approval in writing, which resulted in the accumulation of interest and in their
failure to pay. Hence, the debtor companies requested for the restructuring of their outstanding
loans10 and stated the following:
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Our collection from our receivables can pay 25% of our interest due if reduced to 10% interest
per annum. The 70% interest balance [can] be capitalized and added to the principal of P49.28
Million. We can pay the interest due, quarterly, on the new loan balance and the loan principal
renewable yearly. Should our collection allow, like before, we will reduce balance as fast as we
can.
71
The parties executed two Debt Settlement Agreements (DSAs) both dated August 15, 2003. One
was between Metrobank and Nova as debtor-mortgagor,12 with spouses Jose N. Hernandez and Eva L.
Hernandez (spouses Hernandez) as sureties. The other involved Metrobank and Goldwell as borrower-
mortgagor,13 Nova and Nova Northstar Service Apartment Hotel Co., Inc. as third-party mortgagors, and
the spouses Hernandez as sureties.
In Nova's DSA, Nova and the Sps Hernandez acknowledged that as of July 2003, they had a total
outstanding obligation of P19.5M. In Goldwell's DSA, Goldwell and the Sps Hernandez acknowledged that
they had a total outstanding obligation of P55.5M as of same period.
Pursuant to the DSAs, the debtor companies' total restructured balance amounted to P62.4M.
Goldwell and Nova executed PNs amounting to P9.3M and P129M, respectively.
Petitioners requested Metrobank to allow them to pay the equivalent loan value of their collaterals
as full payment of the loan. Metrobank instead sent separate demand letters to both for the payment of
their past due accounts.
Metrobank rejected petitioners' proposal to pay P35M, finding the same way below the original
principal amount of their outstanding loan. It further stated that the proposal would not adequately cover
the collaterals that they intend to release, while the remaining collaterals would not be enough to cover for
the loan balance.
After a series of correspondence, the parties resorted to mediation proceedings before the BSP
which were unsuccessful.
Eventually, petitioners filed the instant Complaint primarily to enjoin Metrobank from initiating
foreclosure proceedings upon their mortgaged properties. They likewise prayed that Metrobank be ordered
to:
1. make an accounting of the outstanding loan obligations and consider and apply the appraisal
values submitted by the two (2) independent appraisal companies in determining the real
values of the mortgaged properties;
2. allow and make partial release of mortgaged properties upon payment of its corresponding
loan value;
3. remove the imposition of the penalty charges on both the past due interest and principal
amount of obligation.
The RTC dismissed the Complaint for lack of merit finding that the DSAs stipulated that in case of
petitioners' default, Metrobank could revert to the original obligation amounts. It held that the petitioners'
claims that their default was caused by Metrobank's delay and imposition of exorbitant interest rates and
penalty charges were unfounded. It observed that the petitioners merely employed delaying tactics and
were not serious about settling their accountabilities.
The CA affirmed the judgment of the RTC in toto.
WHETHER Metrobank correctly computed the total obligation of the petitioners considering the
interest rates and penalty charges included therein.
SUGGESTED ANSWER
NO. Petitioners are liable to Metrobank but their liability should be qualified. Partial release of the
collaterals cannot be allowed.
Under Article 2089 of the Civil Code, the debtor cannot ask for the release of any portion of the
mortgaged property or of one or some of the several lots mortgaged unless and until the loan thus secured
has been fully paid, notwithstanding the fact that there has been a partial fulfillment of the obligation.
Hence, the debtor who has paid a part of the debt cannot ask for the proportionate extinguishment of the
mortgage as long as the debt is not completely satisfied.
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Here, the fact that petitioners paid for the loan value of the Pasay properties is immaterial; the
mortgage would still be in effect since the loans have not been fully settled.
By the principle of mutuality of contracts, petitioners are bound by the valid terms and conditions
of the DSAs as their representatives willingly executed the said contracts. Considering the original loan
contracts, the promissory notes, the DSAs, and even the deeds of real estate mortgage, the petitioners 72
bound themselves to settle the amounts being demanded by Metrobank.
The monetary interest rate, penalty interest rate, and imposition of VAT are INIQUITOUS.
As a principal condition and an important component in contracts of loan, interest rates, are only
allowed if agreed upon by express stipulation of the parties, and only when reduced into writing. Any
change to it must be mutually agreed upon, or it produces no binding effect.
The right to recover interest arises only either:
1. by virtue of a contract (monetary interest) or

2. as damages for delay or failure to pay the principal loan on which the interest is demanded
(compensatory interest).
As regards monetary interest, although the parties are "free to stipulate their preferred rate," the
courts are "allowed to equitably temper interest rates that are found to be excessive, iniquitous,
unconscionable, and/or exorbitant."
Here, the interest rate of 14.25% per annum (or 1.1875%. per month) upon the principal
obligation should, in theory, be considered as a fair rate.
Based on the Manual of Regulations of Banks (MORB) of the Bangko Sentral ng Pilipinas (BSP),
banks and borrowers are allowed to agree on a floating rate of interest, provided that it must be based on
market-based reference rates. In order for the concept of a floating rate of interest to apply, it presupposes
that a market-based reference rate is indicated in writing and agreed upon by the parties.
Here, based on the DSAs, Metrobank had the authority to unilaterally apply the "prevailing
market rate" without specifying the market-based reference and securing the written assent of the
petitioners, which is in violation of the principle of mutuality of contracts. Thus, the repriced monetary
interest of 14.25% per annum should be declared as VOID.
As to the penal/compensatory interest, considering the nullification of the repriced monetary

interest, the penalty interest rate of 18% per annum stipulated in the DSAs should likewise be reduced to
6%.
In a situation wherein the interest rate scheme imposed by the bank was struck down because
the bank was allowed under the loan agreement to unilaterally determine and increase the imposable
interest rate, thus being null and void, 'only the interest rate imposed is nullified; hence, it is deemed not
written in the contract. The agreement on payment of interest on the principal loan obligation remains.'
The Court shall apply the applicable legal rate of interest, which refers to 'the prevailing rate at
the time when the agreement was entered into.
COMMON CARRIERS
G.R. No. 212136, October 04, 2021
KLM ROYAL DUTCH AIRLINES, Petitioner, v. DR. JOSE M. TIONGCO, Respondent.
DECISION
BERNABE, J.
A contract of carriage is one whereby a certain person or association of persons obligate

themselves to transport persons, things, or goods from one place to another for a fixed price. Considering
that a contract of carriage is vested with public interest, a common carrier is presumed to have been at
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fault or to have acted negligently in case of lost or damaged goods unless they prove that they observed
extraordinary diligence. In an action based on a breach of contract of carriage, the aggrieved party does
not need to prove that the common carrier was at fault or was negligent. He or she is only required to
prove the existence of the contract and its non-performance by the carrier.
Kierulf v. Court of Appeals pronounced that "the social and financial standing of a claimant of 73
moral damages may be considered in awarding moral damages only if he or she was subjected to
contemptuous conduct despite the offender's knowledge of his or her social and financial standing."
BAR QUESTION
In October 1998, respondent Dr. Jose M. Tiongco (Dr. Tiongco), a prominent surgeon and one of
the founders of the Medical Mission Group Hospital and Health Services in Davao City, was invited by the
United Nations - World Health Organization (UN-WHO) to be a keynote speaker in the 20 th Anniversary of
Alma-Ata Declaration to be held in Almaty, Kazakhstan from November 27-28, 1998. Thus, Dr. Tiongco
secured his visa for Kazakhstan and purchased tickets for his flights.
There being no direct flight from Manila to Kazakhstan, Dr. Tiongco had to fly to Singapore via
Singapore Airlines where he would then take two connecting flights to Almaty on board petitioner KLM,
his main carrier.
Dr. Tiongco arrived at Amsterdam the next day in time for his third flight to Frankfurt, Germany.
However, his flight to Frankfurt on board KLM departed from Amsterdam 45 minutes late. As a result, Dr.
Tiongco missed his fourth flight, i.e. from Frankfurt to Almaty. When Dr. Tiongco arrived in Almaty,
nobody from KLM, Lufthansa, or Turkish Airlines assisted him. His suitcase was still nowhere to be found.
Dr. Tiongco delivered his lecture without any of his visual aids and despite being inappropriately
attired. Dr. Tiongco wrote Singapore Airlines, KLM and Lufthansa, demanding for compensation for his
lost luggage and the inconvenience he suffered. All either denied liability, or failed to respond.
Dr. Tiongco filed a Complaint for Damages and Attorney's Fees against KLM, Turkish Airlines,
Singapore Airlines, and Lufthansa. KLM insisted that it performed extraordinary diligence in transporting
Dr. Tiongco to his last destination. It denied liability for the lost suitcase since it is not his first or last
carrier. Even if found liable, KLM averred that the amount of actual damages should only be $400, i.e.,
$20 per kilo, pursuant to the Warsaw Convention since Dr. Tiongco did not declare the actual value of his
suitcase.
The RTC ruled that KLM is solely liable for the damages suffered by Dr. Tiongco on account of his
lost suitcase. KLM failed to exercise extraordinary care in handling the suitcase of Dr. Tiongco when it
wrongfully transferred it to Lufthansa flight no. LH10381 instead of LH3346, Dr. Tiongco's flight to
Almaty. The RTC also noted that KLM, being the airline which issued the tickets, is the principal in the
contract of carriage and, hence, is liable for the acts and omissions of the other carriers to which it
endorsed the other legs of the flight.
The RTC awarded Dr. Tiongco nominal damages considering his failure to sufficiently prove the
amount of actual damages he suffered, as well as moral damages, exemplary damages, and attorney's
fees. The CA agreed with the trial court on KLM's liability for breach of contract of carriage but modified
the awards of damages for being excessive.
WHETHER KLM acted in gross negligence, bad faith and willful misconduct in relation to the
loss of Dr. Tiongco's suitcase so that the latter can be entitled to award of damages.
SUGGESTED ANSSWER
YES. KLM is liable for breach of contract of carriage.
A contract of carriage is one whereby a certain person or association of persons obligate

themselves to transport persons, things, or goods from one place to another for a fixed price. Considering
that a contract of carriage is vested with public interest, a common carrier is presumed to have been at
fault or to have acted negligently in case of lost or damaged goods unless they prove that they observed
extraordinary diligence. In an action based on a breach of contract of carriage, the aggrieved party does
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not need to prove that the common carrier was at fault or was negligent. He or she is only required to
prove the existence of the contract and its non-performance by the carrier.
Here, KLM breached its contract with Dr. Tiongco when it failed to deliver his checked-in suitcase
at the designated place and time. KLM's liability for the lost suitcase was sufficiently established as it
failed to overcome the presumption of negligence. 74
KLM also acted in bad faith. Nobody from KLM's personnel updated him of what happened to the
search. The bad faith on the part of KLM as found by the RTC and the CA thus renders the same liable for
moral and exemplary damages.
Kierulf v. Court of Appeals pronounced that "the social and financial standing of a claimant of
moral damages may be considered in awarding moral damages only if he or she was subjected to
contemptuous conduct despite the offender's knowledge of his or her social and financial standing."
KLM liable for temperate, not nominal, damages.Temperate damages or moderate damages, which
are more than nominal but less than compensatory damages, may be recovered when the court finds that
some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided
with certainty. KLM's liability for temperate damages may not be limited to that prescribed in Article 22(2)
of the Warsaw Convention, as amended by the Hague Protocol, in the presence of bad faith.
As aptly held in Northwest Airlines, Inc. v. Court of Appeals, citing Alitalia: The Convention's
provisions do not "regulate or exclude liability for other breaches of contract by the carrier" or misconduct
of its officers and employees, or for some particular or exceptional type of damage.
TORTS AND DAMAGES

G.R. No. 214898, June 08, 2020
EDISON PRIETO AND FEDERICO RONDAL, JR., PETITIONERS, v. ERLINDA CAJIMAT,

RESPONDENT.
BERNABE, J.
ARTICLE 2180. XXXEmployers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the former are not engaged
in any business or industry.
When the actual damages is less than the sum allowed by the Court as temperate damages, now
pegged at P50,000.00, the award of temperate damages is justified in lieu of actual damages. (So, the
minimum now is P50,000)
BAR QUESTION
On January 14, 2003, at around 7:40 in the evening, petitioner Rondal, Jr. was driving a red
Yamaha tricycle with plate number BT 9799 along the southbound lane of the national highway.
Thereafter, petitioner Rondal, Jr. overtook two tricycles in front of him and occupied the northbound lane
which resulted in a head-on collision with a black Yamaha "chop-chop" motorcycle which was driven by
Narciso Cajimat III (Cajimat III). As a result, Cajimat III suffered a fractured skull which caused his
instantaneous death.
A criminal case for Reckless Imprudence resulting in Homicide was filed against petitioner Rondal,
Jr. Meanwhile, the mother of deceased Cajimat III, respondent Erlinda, filed a separate civil action for
damages before the RTC against petitioners Rondal, Jr. and Prieto, the registered owner of the red Yamaha
tricycle.
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Erlinda posited that at the time of the incident, Rondal, Jr. did not have a driver's license and was
intoxicated. The direct, immediate, and proximate cause of the collision was Rondal, Jr.'s gross
negligence.
The MCTC rendered a Decision finding Rondal, Jr. guilty beyond reasonable doubt of Reckless
Imprudence resulting in Homicide. The RTC, applying the principle of res ipsa loquitur, rendered a 75
Decision finding Rondal, Jr. and Prieto negligent and are therefore civilly liable which the CA affirmed.
In addition, the RTC reasoned that deceased Cajimat III cannot be considered contributorily
negligent in the vehicular mishap as there was no evidentiary proof that his motorcycle did not have a
headlight at the time of the collision.
As to petitioner Prieto's civil liability under Article 2176 in relation to Article 2180 of the Civil
Code, the RTC ruled that as owner of a public utility vehicle, he is solidarily liable as an employer of
petitioner Rondal, Jr. Petitioner Prieto's allegations that petitioner Rondal, Jr. was not his employee nor
did he ask consent to drive the red Yamaha tricycle were not sufficiently substantiated and therefore, self-
serving.
Thus, the RTC ordered petitioners to jointly and solidarily pay respondent Erlinda the following:
(a) P29,000.00 as actual expenses; (b) P50,000.00 as civil indemnity; (c) P50,000.00 as moral damages;
(d) P30,000.00 as exemplary damages; (e) P25,000.00 as attorney's fees; and (f) P2,700.00 as cost of suit. 8
WHETHER the proximate cause of Cajimat III's demise is due to his own negligence.
SUGGESTED ANSWER
NO. No sufficient evidence was presented by petitioners to prove that indeed Cajimat III's
motorcycle had no headlight and blinkers during the mishap. There is nothing in the testimony of the
investigating officer who responded to the subject vehicular accident, to show that he confirmed that
indeed the deceased's motorcycle had no headlights during the incident.
The burden of proof rests upon the petitioners, who are required to establish their case by a
preponderance of evidence. However, aside from their allegations, no other evidence was presented to
prove that indeed the deceased was negligent in driving his motorcycle.
The monetary awards of (a) P50,000.00 as civil indemnity; (b) P50,000.00 as moral damages; (c)
P25,000.00 as attorney's fees; and (d) P2,700.00 as cost of suit are correct and in accord with recent
jurisprudence.15
However, We deem it necessary to delete the actual damages in the amount of P29,000.00 and
award P50,000.00 as temperate damages in lieu thereof in conformity with prevailing jurisprudence 16 that
when the actual damages is less than the sum allowed by the Court as temperate damages, now pegged at
P50,000.00, the award of temperate damages is justified in lieu of actual damages.
We likewise modify the award of exemplary damages into P50,000.00 to recognize the reckless and
imprudent manner in which petitioners Prieto and Rondal, Jr. acted during the incident. These monetary
awards shall earn interest at the rate of six percent (6%) per annum from date of finality of this judgment
until fully paid.
[ G.R. No. 197593, October 12, 2020 ]

BANK OF THE PHILIPPINE ISLANDS, PETITIONER, VS. CENTRAL BANK OF THE PHILIPPINES (NOW
BANGKO SENTRAL NG PILIPINAS) AND CITIBANK, N.A., RESPONDENTS.
BERNABE, J.:
A special agent is defined as one who receives a definite and fixed order or commission, foreign to
the exercise of the duties of his office.
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ARTICLE 2180. XXX The State is responsible in like manner when it acts through a special agent;
but not when the damage has been caused by the official to whom the task done properly pertains, in
which case what is provided in article 2176 shall be applicable.
76
BAR QUESTION
Petitioner BPI and respondent Citibank, N.A. (Citibank) are both members of the Clearing House
established and supervised by the CBP. Both banks maintained demand deposit balances with the CBP
for their clearing transactions with other commercial banks coursed through the said clearing facilities.
On January 28, 1982, BPI Laoag City Branch discovered outstanding discrepancies in its inter-
bank reconciliation statements in CBP in the amount of P9 million. Hence, on February 9, 1982, petitioner
BPI filed a letter-complaint before the CBP on the latter's irregular charging of its demand deposit account
in the amount of P9 million.
It also requested CBP to conduct the necessary investigation of the matter. In addition, both CBP
and petitioner BPI agreed to refer the matter to the National Bureau of Investigation (NBI) to conduct a
separate investigation. The results of the NBI Investigation Report showed that an organized criminal
syndicate using a scheme known as "pilferage scheme" committed the bank fraud. As a result of the
aforesaid fraud committed against BPI, Desiderio and Estacio, together with other personalities, were
convicted of three (3) counts of Estafa thru Falsification of Public Documents by the Sandiganbayan.
BPI requested CBP, to credit back to its demand deposit account the amount of P9M. However,
CBP credited only the amount of P4.5M. Hence, BPI filed a complaint for sum of money against CBP. CBP
filed a third-party complaint against Citibank for the latter's negligence which caused the perpetration of
the fraud.
The RTC rendered its Decision in favor of BPI. It gave credence to the NBI Investigation Report
that the immediate and proximate cause of the defraudation were the criminal acts of CBP employees,
Valentino and Estacio. It ruled that CBP, as employer, shall be liable for the damage caused by its
employees to BPI under Articles 2176 and 2180 of the Civil Code.
The CA, in reversing the RTC, dismissed the complaint filed by BPI and ordered the cancellation of
the payment made by CBP in the amount of P4.5M. It reasoned that the State is generally liable only for
quasi-delicts in case the act complained of was performed by a special agent. Both Valentino and Estacio
were not special agents.
WHETHER CBP is liable for the torts committed by its employees Valentino and Estacio.
NO. CBP is not liable for the acts of its employees because Valentino and Estacio were not "special
agents". The State in the performance of its governmental functions is liable only for the tortuous acts of
its special agents. On the other hand, the State becomes liable as an ordinary employer when performing
its proprietary functions.
Here, CBP's establishment of clearing house facilities for its member banks to which Valentino
and Estacio were assigned as Bookkeeper and Janitor-Messenger, respectively, is a governmental
function. As such, the State or CBP in this case, is liable only for the torts committed by its employee
when the latter acts as a special agent but not when the said employee or official performs his or her
functions that naturally pertain to his or her office.
A special agent is defined as one who receives a definite and fixed order or commission, foreign to
the exercise of the duties of his office.
Evidently, both Valentino and Estacio are not considered as special agents of CBP. Thus, CBP
cannot be held liable for any damage caused to BPI by reason of Valentino and Estacio's unlawful acts.
Even on the assumption that CBP is performing proprietary functions, still, it cannot be held
liable because Valentino and Estacio acted beyond the scope of their duties. Article 2180 of the Civil Code
provides that an employer shall be liable for the damages caused by their employees acting within the
scope of their assigned tasks.
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Valentino and Estacio's fraudulent acts of tampering with and pilfering of documents are not in
furtherance of CBP's interests nor done for its account as the said acts were unauthorized and unlawful.
Thus, where a public officer acts without or in excess of jurisdiction, any injury or damage caused by such
acts is his or her own personal liability and cannot be imputed to the State.
77
[ G.R. No. 218344. March 21, 2022 ]

JESSICA P. MAITIM A.K.A. "JEAN GARCIA," PETITIONER, VS. MARIA THERESA P. AGUILA,
RESPONDENT.
BERNABE, J
UPCB General Insurance Co. v. Pascual Liner, Inc. reiterated the applicability of res ipsa loquitur
in vehicular accidents, wherein it is sufficient that the accident itself be established, and once established
through the admission of evidence, whether hearsay or not, the rule on res ipsa loquitur already starts to
apply.
The liability of the employer under Article 2180 is direct and immediate; it is not conditioned
upon prior recourse against the negligent employee and a prior showing of the insolvency of such
employee.
BAR QUESTION
Petitioner Jessica Maitim (Maitim) and respondent Maria Theresa P. Aguila (Aguila) were residents
of Grand Pacific Manor Townhouse.[4] Their respective townhouse units are approximately nine meters
apart, separated only by a driveway jointly used by the townhouse unit owners. [5]
On April 25, 2006, Maitim was on board her vehicle, a Ford W-150 Chateau Wagon registered
under her name, which was being driven by Restituto Santos (Santos), her driver for 12 years. [6] While they
were driving along the common driveway, Angela Aserehet P. Aguila (Angela), the six-year old daughter of
Aguila, was sideswiped by Maitim's vehicle.[7] Angela was dragged for about three meters resulting to her
right leg being fractured.[8]
Maitim and Santos did not immediately take Angela to the hospital after the incident; she was
only brought to St. Luke's Medical Center after the insistence of Angela's grandmother, Lirio Aguila.
[9]
Angela was diagnosed to have suffered swelling, hematoma, multiple abrasions, and displaced, complete
fracture on the right leg.[10] Thus, she underwent operation at Asian Hospital and was in a wheelchair from
April 25, 2006 to July 18, 2006.[11]
The incident was referred to the barangay for conciliation but only Aguila appeared. At this point,
Aguila's actual expenses amounted to P169,187.32.[12] Aguila then sent demand letters to Maitim and
Santos to no avail.[13] Thus, Aguila filed the instant action for damages based on quasi-delict before the
Regional Trial Court (RTC).[14]
Maitim denied liability and alleged that her vehicle was covered by a comprehensive insurance
that included third-party liability, but she was not able to file for insurance claim due to Aguila's refusal
to submit the necessary documents. She avers that she should not be made liable for vicarious liability
because she exercised due diligence in the selection and supervision of her employee.
The RTC rule din favor of Aguila holding that Santos was presumed to be negligent, applying the
doctrine of res ipsa loquitur, and that Maitim was vicariously liable. The CA affirmed ruling that Maitim
and Santos are solidarily liable for damages, and that there was no contributory negligence on the part of
Aguila and her daughter.
WHETHER the CA committed a reversible error when it affirmed the RTC Decision finding
Maitim solidarily liable under the doctrine of vicarious liability.
SUGGESTED ANSWER
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NO. Maitim is solidarily liable under the doctrine of vicarious liability. The RTC correctly applied
the doctrine of res ipsa loquitur when it ruled that Santos should be presumed negligent.
UPCB General Insurance Co. v. Pascual Liner, Inc. reiterated the applicability of res ipsa loquitur
in vehicular accidents, wherein it is sufficient that the accident itself be established, and once established
through the admission of evidence, whether hearsay or not, the rule on res ipsa loquitur already starts to 78
apply.
Here, the fact that Angela was hit by a moving vehicle owned by Maitim and driven by Santos is
undisputed. Since it is clearly established that there was a vehicular accident that caused injuries, then
the rule on res ipsa loquitur shall apply. An inference of negligence on the part of Santos, the person who
controls the instrumentality causing the injury, arises, and he has the burden of presenting proof to the
contrary.
There is nothing natural about a child getting dragged for three meters and her leg being
completely fractured by a slow-moving vehicle, especially if a reasonably prudent man was driving the
vehicle with care.
Maitim failed to prove that she was not vicariously liable in this case. The liability of the employer
under Article 2180 is direct and immediate; it is not conditioned upon prior recourse against the negligent
employee and a prior showing of the insolvency of such employee.
Here, the finding of negligence against Santos gave rise to the presumption of negligence on the
part of Maitim in the latter's selection and/or supervision of the former. Maitim's attempt to deflect
liability clearly falls short as she was not able to present concrete proof that she exercised the care and
diligence of a good father of a family in the selection and supervision of her employee, Santos.
There was no contributory negligence on the part of Aguila.The Court sees no negligence on the
part of Aguila when she allowed Angela to exit their door and walk towards their garage. There is a
reasonable expectation of safety, considering that the driveway is still within the premises of their
residence and not on the street where vehicles ordinarily drive by.
G.R. No. 207429, November 18, 2020

MANILA ELECTRIC COMPANY (MERALCO), Petitioner, v. AAA CRYOGENICS PHILIPPINES, INC.,
Respondents.
BERNABE, J.
The calculation of temperate damages is usually left to the sound discretion of the courts. We
observe the limit that in giving recompense, the amount must be reasonable, bearing in mind that the
same should be more than nominal, but less than compensatory.
The award of attorney's fees is an exception rather than the general rule; thus, there must be
compelling legal reason to bring the case within the exceptions provided under Article 2208 of the Civil
Code to justify the award.
As a public utility vested with vital public interest, Meralco should be reminded of its "obligation
to discharge its functions with utmost care and diligence."
BAR QUESATION
AAA was engaged in the production of liquid forms of gasses, such as liquid oxygen, liquid
nitrogen and liquid argon. In the production of these products, the plant facilities of AAA relied on
computers and electronic processors that required a very stable source of power, otherwise the whole
plant would shut down and freeze up. Every time the plant shut[s] down due to power fluctuation, the
purity of the liquid gasses went down, and the plant had to stop production for at least four hours in order
to regain the required purity of the gasses. Further, if the plant froze up, it had to be dried out for at least
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72 hours without production, and then cooled down again for at least 16 hours before production could
resume. A stable source of power was, thus, crucial to AAA's operations.
AAA's Plant Supervisor reported fluctuations and interruptions in the electrical power supplied by
Meralco. As a result of these power fluctuations and interruptions, AAA suffered losses in the amount of
P21,092,760.00. AAA sent several letters informing Meralco of its problems with respect to the supply of 79
power, but Meralco could not remedy the situation, except to advise AAA to install power conditioning
equipment in the form of a motor generator set in order to level out the supply of power.
In the meantime, AAA stopped paying its electrical bills until its total accountabilities reached
P13,657,141.56. Meralco, thus, disconnected and terminated its service contract with AAA. After
deducting AAA's service and meter deposit and applying interest charges, Meralco computed AAA's unpaid
bills to amount to P10,453,477.55.
AAA filed an action for Injunction and Damages against Meralco seeking to collect the amount of
P21M representing its losses due to power fluctuations and interruptions.
On the other hand, Meralco filed an action against AAA for Collection of Sum of Money to collect
the sum of P13.6M representing the latter's unpaid electric bill.
The two cases were consolidated since they arose from a single contract and the same set of facts.
The RTC found Meralco liable for actual damages arising from its failure to deliver constant energy supply
to AAA. It relied on the Log Sheet Readings of AAA's computers and Meralco's expert witness Cañita, who
affirmed the capability of AAA's computers to accurately record the power fluctuations and interruptions.
The RTC also held AAA liable for its unpaid electricity bills amounting to P10.45M. It further ordered the
parties' respective liabilities to be offset.
The CA affirmed the RTC. Only Meralco appealed to the SC.
SUGGESTED ANSWER
WHETHER the power fluctuations and interruptions occurred and were caused by Meralco.
YES. The occurrence of the power fluctuations and interruptions is well-supported by evidence.
Despite the occurrence of the power fluctuations and interruptions in the electricity delivered by
Meralco, however, AAA was unable to prove with a reasonable degree of certainty the amount of actual
damages it suffered. To establish the amount of actual damages it suffered, AAA offered in evidence two
documents: (1) Summary of Production Losses due to Fluctuation; and (2) Comparative Presentation of
Production under Normal Power Supply, Production when there is Power Fluctuation.
However, the basis and source of these documents were never presented in court, and neither
were they testified to by any witness of AAA.
Therefore AAA cannot be allowed to recover the amount of P21M without running afoul of the
well-established doctrine that the amount of actual damages must be proved with a reasonable degree of
certainty.
The calculation of temperate damages is usually left to the sound discretion of the courts. We
observe the limit that in giving recompense, the amount must be reasonable, bearing in mind that the
same should be more than nominal, but less than compensatory. The Court finds three-fourths of AAA's
claim, or P15.8M, to be in order.
WHETHER Meralco is liable for exemplary damages.
YES. The same was properly awarded by the CA.
Records show that despite Meralco's repeated assurance of better electric supply, and despite
knowledge of the serious production losses experienced by AAA due to the power fluctuations and
interruptions, it still failed to provide any remedy, in wanton disregard of its contractual obligation to
deliver energy "at reasonably constant potential and frequency.
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As a public utility vested with vital public interest, Meralco should be reminded of its "obligation
to discharge its functions with utmost care and diligence."
WHETHER Meralco is entitled to attorney's fees.

80
NO. Meralco is NOT entitled to attorney's fees.
The award of attorney's fees is an exception rather than the general rule; thus, there must be
compelling legal reason to bring the case within the exceptions provided under Article 2208 of the Civil
Code to justify the award.
No compelling reason is present here.
G.R. No. 200635, February 01, 2021

ALLIED BANKING CORPORATION* AND GUILLERMO DIMOG, Petitioners, v. SPOUSES MARIO
ANTONIO MACAM** & ROSE TRINIDAD MACAM, SPOUSES WILLAR FELIX AND MARIBEL CANA AND
SPOUSES MELCHOR AND HELEN GARCIA, Respondents.
BERNABE, J.
The savings deposit agreement between the bank and the depositor is the contract that
determines the rights and obligations of the parties as in a simple loan.42 In contemplation of the fiduciary
nature of a bank-depositor relationship, the law imposes on the bank a higher standard of integrity and
performance in complying with its obligations under the contract of simple loan, beyond those required
of non-bank debtors under a similar contract of simple loan.43
BAR QUESTION
Mario Macam (Mario), on the recommendation of his brother Manuel and facilitation of Elena
Valerio (Valerio), invested P1,572,000.00 in the cellular card business of respondent Helen Garcia (Helen).
Valerio was a Unit Manager in Helen's business, soliciting investments and promising weekly interest
payments of 2.29%.
On February 6, 2003, a series of transactions occurred at the Allied Bank-Alabang Las Pinas
Branch (AB-ALP), headed by respondent Maribel Cana (Cana). At 8:45 a.m., Cana informed bank teller
Melissa Berras (Berras) to anticipate a deposit by Helen in the amount of P46 Million.
Caña effected a local override and approved the fund transfer. Consequently, the amounts were
credited to the five deposit accounts, including Valerio's, in the amount of P10M.
Valerio withdrew from her deposit account and deposited to the account of Manuel and his wife
Sheila. Through Sheila's deposit by way of a credit memo, the Sps Mario Macam opened a Savings
Account at Allied Bank-Pasong Tamo.
Later on, Caña informed the branch that the P46M deposit had been cancelled.
On that same date, through Sheila's deposit of P1,590,000.00 by way of a credit memo, the
Spouses Mario Macam opened Savings Account No. 1850-06565-2 at Allied Bank-Pasong Tamo (AB-PT)
Branch. In subsequent and separate instances, the Spouses Mario Macam were able to make withdrawals
in the total amount of P490,000.00,11 leaving a balance of P1.1 Million in their savings account with AB-
PT.
(Here, nagkaroon ng discrepancy sa mga accounts) Due to the significant discrepancy, Allied Bank
investigated the branch, AB-ALP, and its transactions on February 6, 2003. Allied Bank was able to
recover more than half of the amount, leaving a balance of P9,800,000.00.20
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On February 19, 2003, Angela Barcelona, Region Head, Retail Banking Group for Allied Bank's
South Metro Manila Branches, ordered the debit of the remaining P1.1 Million from the account of
the Spouses Mario Macam which resulted in the closure thereof. 21
On March 3, 2003, the Spouses Mario Macam learned of the closure after they were unable to
withdraw from their account. Hence, the Spouses Mario Macam filed the complaint for Damages against 81
the bank and the AB-PT Branch Head, Dimog.22
Not unexpectedly, Allied Bank denied any liability for the closure of the Spouses Mario Macam's
account and claimed ownership of the P1.1 Million deposit. Allied Bank traced its title to the dubious
transfers amounting to P46 Million on February 6, 2003 beginning from the crediting of Helen's account
and the ensuing fund transfers to various deposit accounts maintained by particular individuals with
different branches of Allied Bank.23
The RTC ordered Allied Bank and Dimog, jointly and severally, to pay the Sps Mario Macam. The
CA affirmed the RTC in toto. It found that Allied Bank is liable to the Sps Mario Macam for breach of
contract, or culpa contractual.
WHETHER Allied Bank is liable for unilaterally debiting and closing the deposit account of the
Spouses Mario Macam.
SUGGESTED ANSWER
YES. Allied Bank is liable.
RA 8791 enshrines the fiduciary nature of banking that requires high standards of integrity and
performance.38 The statute now reflects jurisprudential holdings that the banking industry is impressed
with public interest requiring banks to assume a degree of diligence higher than that of a good father of a
family.39 Thus, all banks are charged with extraordinary diligence in the handling and care of its deposits
as well as the highest degree of diligence in the selection and supervision of its employees.
The foregoing obligation of banks is absolute and deemed written into every deposit agreement
with its depositors.
We affirm the lower courts' uniform factual finding that there is a deposit agreement between
Allied Bank and the Spouses Mario Macam. The savings deposit agreement between the bank and the
depositor is the contract that determines the rights and obligations of the parties as in a simple loan. 42 In
contemplation of the fiduciary nature of a bank-depositor relationship, the law imposes on the bank
a higher standard of integrity and performance in complying with its obligations under the contract of
simple loan, beyond those required of non-bank debtors under a similar contract of simple loan. 43
G.R. No. 205405, June 28, 2021
EDUARDO ATIENZA, Petitioner, v. GOLDEN RAM ENGINEERING SUPPLIES & EQUIPMENT

CORPORATION AND BARTOLOME TORRES, Respondents.
BERNABE, J.
Bad faith imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of a known duty through some motive or interest or ill will that partakes of the nature of fraud.
BAR QUESTION
[Petitioner] Eduardo Atienza was engaged in the business of operating MV Ace I, a passenger
vessel plying the Batangas-Mindoro route. [Respondent] Golden Ram Engineering Supplies and
Equipment Corporation [GRESEC] is a dealer and distributor of engines and heavy equipment. Its
President and Manager is [respondent] BartoLome T. Torres.
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Asserting his claim for damages arising from breach of warranty. Atienza filed a Complaint,
averring, inter alia, that Torres offered for sale two vessel engines amounting to P3.5 Million Pesos to be
installed in MV Ace I, described as follows:
82
TWO (2) MAN Diesel Engines, Type D 2840 LE, rated at 470 Hp each, continuous output "A" at
1800 rpm, complete with 2 x ZF (Zahnradfabrik Friedrichshafen AG) Reversed/Reduction Gear
Type BW 161 4.06:1 standard ration in accordance with the attached Technical Specification and
Scope of Supply.
On 24 August 1993, Atienza bought the two vessel engines from [GRESEC] and as proof of his
purchase, he was issued a Proforma Invoice which stated therein the warranty period, viz:
WARRANTY PERIOD OF THE EQUIPMENT:
The warranty period is given in accordance with the General Conditions of Sale DK.0105.N-12-87,
article XI, herewith attached, for a period of 12 months, reckoned from date of commissioning, but
not longer than 18 months after notification of readiness for delivery ex-warehouse Manila. The
warranty period is farther limited to 2000 hours of operation.
Atienza forthwith paid the amount of P2.5 Million Pesos, after which the two engines were
delivered and commissioned by [GRESEC] sometime in March 1994.
On 26 September 1994, the engine on the right side of MV Ace I suffered a major dysfunction, the
diagnosis of which revealed that the connecting rod had split resulting in engine stuck up. Atienza
immediately reported the incident to [GRESEC] which sent a certain Engineer R. R. Torres (Engr. Torres),
its Sales and Service Engineer, to inspect and determine the extent of the damage. Engr. Torres confirmed
that the "defect was inherent being attributable to factory defect". This finding was reported to MAN B&W
Diesel, Singapore Pte. Ltd. (MAN Diesel), the foreign supplier. In turn, the latter promised that the engine
which suffered the malfunction would be replaced in accordance with the warranty.
Thereafter, Atienza made pleas for the replacement of the engine but his entreaties fell on deaf
ears. Inevitably, he suffered losses for failure to operate since 26 September 1994. On 28 October 1994,
Atienza wrote [GRESEC] a Demand Letter offering two alternatives for the company: one, replace the
engine or reimburse him for the losses he had incurred, or two, retrieve the two engines and refund the
cost with interest plus payment for losses. However, [GRESEC] paid no heed to his demand prompting
him to lodge a Complaint for damages.
GRESEC and Torres claimed that the cause of the damage to the engine was improper
maintenance on the part of Atienza.
The RTC found that Atienza proved by preponderance of evidence that he sustained damages
because respondents, GRESEC and Bartolome, breached the warranty against hidden defects.
The CA agreed that Atienza established his cause of action against respondents. It however found
respondents' denial of Atienza's warranty claim was done in good faith based on their honest belief that
the claim did not comply with Item XI of the Warranty Conditions of the contract. It also exculpated
Bartolome from solidary liability with GRESEC as the latter is a separate juridical personality.
WHETHER respondents' denial of Atienza's warranty claim for the defective vessel engines was
done in bad faith as to hold Torres solidarily liable with GRESEC for the payment of actual and moral
damages, attorney's fees and costs of suit.
SUGGESTED ANSWER
YES. The Court agrees with the finding of the RTC that respondents were in bad faith.
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Bad faith imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of a known duty through some motive or interest or ill will that partakes of the nature of fraud.
Consider the following:
1. The starboard engine broke down a mere six (6) months from the time it was commissioned.
83
On cross, Engr. Torres testified that the engine broke down well within the period of 12
months from the time of its commissioning and had not reached 2,000 hours of use.
2. From the time it was commissioned, the starboard engine performed poorly compared with
the portside engine and continuously emitted black smoke.
3. Various parts of the malfunctioning engine successively conked out and had to be replaced.
4. During negotiations for the sale of the engines and in the course of its operation, GRESEC
and Torres repeatedly told Atienza that they were responsible for, and in charge of,
maintaining the engines.
5. Respondents did not provide Atienza with written reports on the repairs made.
6. Contrary to the representation of respondents, the starboard engine had a weak acceleration
and below the minimum RPM.
7. Respondents presented in evidence "the authorization of MAN regarding the shipment of four
(4) DEMO units."
The bad faith of respondents in refusing to repair and subsequently replace a defective engine
which already underperformed during sea trial and began malfunctioning six (6) months after its
commissioning has been clearly established. Respondents' uncaring attitude towards fixing the engine
which relates to MV Ace I's seaworthiness amounts to bad faith.
Tramat Mercantile v. CA ruled that personal liability of a corporate director, trustee or officer
along (although not necessarily) with the corporation may so validly attach, as a rule, only when:
1. He assents (a) to a patently unlawful act of the corporation, or (b) for bad faith or gross
negligence in directing its affairs, or (c) for conflict of interest, resulting in damages to the
corporation, its stockholders or other persons;
2. He consents to the issuance of watered stocks or who, having knowledge thereof, does not
forthwith file with the corporate secretary his written objection thereto;
3. He agrees to hold himself personally and solidarity liable with the corporation; or
4. He is made, by a specific provision of law, to personally answer for his corporate action.
Here, Atienza established sufficient and specific evidence to show that Bartolome had acted in bad
faith or gross negligence in the sale of the defective vessel engine.
[ G.R. No. 210928. February 14, 2022 ]

REX G. RICO, PETITIONER, VS. UNION BANK OF THE PHILIPPINES, RESPONDENT.
BERNABE, J.:
The contract between the card company and the credit card holder is a simple loan arrangement.
Pantaleon v. American Express International, Inc. explained that the creditor-debtor relationship arises
only after the credit card issuer has approved the cardholder's purchase request in line with Article 1319.
The use of a credit card to pay for a purchase is only an offer to the credit card company to enter
into a loan agreement with the credit card holder. Before the credit card issuer accepts this offer, no
obligation relating to the loan agreement exists between them.
Thus, UBP has no obligation to enter into a loan agreement with Rico when the latter tendered his
offer by using his credit card to pay for his purchase at Gourdo's Restaurant. Rico, cannot, therefore
demand from UBP to loan him or to pay for his purchase.
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BAR QUESTION
Union Bank issued Rico a Union Bank Visa credit card under Account No. 4404-5305-3656 with
a credit limit of P150,000.00 and cash advance limit of P75,000.00.
On January 24, 2006, Rico filed a complaint for damages before the RTC claiming that Union
84
Bank negligently handled his credit card account. He alleged that Union Bank:
(a) charged him an amount for "U-Protect Premium Plan," an insurance coverage against
unauthorized use of others in case of loss or theft;
(b) charged him $20.00 as Expedia Service Fees in his Statement of Account (SOA) dated June 10,
2005;
(c) declined his transaction with Tiger Airways when he used the credit card to purchase airline
tickets online on June 18, 2005;
(d) imposed late payment charges and interests despite having paid his credit card bill for SOA
dated May 2005 on June 15, 2005;
(e) imposed an annual membership fee despite its guarantee that he would not be charged thereof;
and
(f) charged him an amount of P30,076.79 in his SOA dated October 15, 2005 when he only used
his credit card to pay for a P347.00 meal in Kitaro Sushi restaurant during the billing period.
In addition, Rico averred that Union Bank dishonored his credit card for alleged non-payment of
overdue account which consequently caused his card to be declined when he tried to pay for his bill at
Gourdo's Restaurant on November 20, 2005.
Rico claimed that his SOA dated November 15, 2005 stated a balance of P1,228.84 when he did
not use his credit card during the covered billing period. Even if Union Bank reversed all charges and
admitted its error, Rico maintained that he suffered embarrassment, social humiliation, mental anguish,
serious anxieties, besmirched reputation, and wounded feelings when his card was dishonored at
Gourdo's Restaurant.
The RTC ruled that the dishonor of Rico's credit card was without any valid reason, as UBP in fact
reversed all the charges in Rico's SOA. UBP's contention that Rico's failure to pay the minimum amount
due, i.e., P500, on his SOA resulted in the blocking of his card was untenable as Rico's outstanding
obligation to the bank was only P347 which he already paid. It ruled that UBP's careless, negligent, and
unjustified dishonor of Rico's credit card placed the latter in an embarrassing situation at Gourdo's
Restaurant.
Thus, the RTC granted an award of P500K as moral damages, P200K exemplary damages, and
P300K attorney's fees. The CA affirmed the RTC but decreased the damages awarded.
WHETHER Rico is entitled to moral damages, exemplary damages and attorney's fees due to the
alleged gross negligence of Union Bank when it dishonored Rico's credit card purchase request, which
caused him embarrassment and humiliation in the restaurant.
SUGGESTED ANSWER
NO. Rico failed to convince that UBP breached any obligation that would make it answerable for
his humiliation or embarrassment.
The contract between the card company and the credit card holder is a simple loan arrangement.
Pantaleon v. American Express International, Inc. explained that the creditor-debtor relationship arises
only after the credit card issuer has approved the cardholder's purchase request in line with Article 1319.
The use of a credit card to pay for a purchase is only an offer to the credit card company to enter
into a loan agreement with the credit card holder. Before the credit card issuer accepts this offer, no
obligation relating to the loan agreement exists between them.
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Thus, UBP has no obligation to enter into a loan agreement with Rico when the latter tendered his
offer by using his credit card to pay for his purchase at Gourdo's Restaurant. Rico, cannot, therefore
demand from UBP to loan him or to pay for his purchase.
While it is true that with the issuance of the credit card to Rico, UBP granted him a credit facility
or a pre-approved amount which the card holder may use in his purchase of goods and services, this is 85
not a demandable right which the card holder may hold against the credit card company as if he is
entitled to be granted a loan whenever he or she wants to, or that the bank owes him or her money by the
mere issuance of a credit card. The disapproval of the credit card transaction which allegedly caused him
embarrassment and humiliation worthy of moral damages cannot be solely attributed to Union Bank
when there is no demandable right to begin with.
Article 2220 of the Civil Code contemplates gross negligence as bad faith which would justify an
award of moral damages. Although the credit card company may disapprove the card holder's credit card
transaction, it shall do so justifiably and within the bounds of laws and the credit card membership
agreement.
Here, UBP disapproved Rico's use of credit card due to the latter's failure to pay the minimum
amount due of his SOA. The cause of the inadvertent late payment charges and interests charged in the
SOA was Rico's use of the credit card to pay for his Tiger Airways airline tickets which he allegedly
cancelled as he did not want to pursue his travel anymore. Granting that the cancellation of the airline
ticket was finally resolved in Rico's favor, it must be stressed that at the time of the purported
embarrassing and humiliating incident the said disputed transaction was not yet resolved.
Thus, UBP had the right to revoke Rico's credit card privileges, and consequently disapprove the
transaction in Gourdo's Restaurant. It is quite unfortunate for Rico to fault Union Bank for its failure to
refund or reverse the amount of Tiger Airways airline tickets, when it was clear that the incident arose
from his own decision to cancel his flight with Tiger Airways and insistence to refund or reverse the same.
Every credit card transaction involves three contracts, namely:
1. the sales contract between the credit card holder and the merchant or the business
establishment which accepted the credit card;
2. the loan agreement between the credit card issuer and the credit card holder; and lastly,
3. the promise to pay between the credit card issuer and the merchant or business
establishment.
Apropos, UBP cannot be considered grossly negligent in charging the amount of airline tickets
against Rico's credit card account. Thus, the disapproval of Rico's credit card was justified and done in
good faith. Damnum absque injuria — there can be no damage without injury when the loss or harm was
not the result of a violation of a legal duty.
The underlying basis for the award of tort damages is the premise that an individual was injured
in contemplation of law; thus there must first be a breach before damages may be awarded and the breach
of such duty should be the proximate cause of the injury.
COMPROMISE AGREEMENT
G.R. No. 204447, May 03, 2021
MARIA MAGDALENA V. AROMIN ALSO KNOWN AS MARIA V. AROMIN, Petitioner, v. HEIRS OF

SPOUSES WILFREDO AND LEONILA SOMIS, NAMELY: WILFREDO A. SOMIS, JR., VIOLITA SOMIS-
FLORES, ELEANOR SOMIS FLORES, OLIVE SOMIS DE CASTRO, DELIA SOMIS-SORIANO, LALAINE
SOMIS-DE LA CRUZ, CELSO A. SOMIS, AND ALL PERSONS CLAIMING RIGHTS UNDER THEM,
Respondents.**
DECISION
BERNABE, J
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When a decision becomes final and executory, it becomes valid and binding upon the parties and
their successors in interest. Such decision or order can no longer be disturbed or reopened no matter how
erroneous it may have been. Article 1305 of the Civil Code provides that a contract is a meeting of the
minds between two persons, whereby one is bound to give something or to render some service to the 86
other. The Compromise Agreement was clear that the contracting parties mutually agreed to transfer to
each other the properties indicated therein.
BAR QUESTION
The instant case stemmed from a Petition for Annulment of Judgment3 which approved the
Compromise Agreement executed by and between Maria Magdalena Aromin (Maria) and Leonila Somis
(Leonila), as well as "[other documents and proceedings in connection thereto." 5
Maria alleged that she and her deceased husband Rufmo6 owned three (3) parcels of land.
According to Maria, in February 2007, she instructed her son, Briccio V. Aromin (Briccio), to pay
the realty tax for the foregoing lots. Briccio then discovered that Lots A and C were sold to the spouses
Wilfredo and Leonila (spouses Somis), through a Deed of Sale with the Right to Repurchase dated May 20,
1971, allegedly signed by Maria and Rufino.8
On June 18, 2007, Maria filed a Complaint for Annulment of Documents with Damages, alleging
that she did not sign the Deed of Sale transferring Lot C to the spouses Somis, hence it is void.
Summonses were served on the Somises who filed their Answer on August 30, 2007. 9
Subsequently, on November 28, 2007, the parties entered into a Compromise Agreement 10 which
stated:
2. That for and in consideration of the withdrawal of the case filed by the FIRST PARTY [Maria
Aromin] against the SECOND PARTY [Leonila Somis], the SECOND PARTY agreed that the subject
property located in Taberna, Bauang, La Union as covered by PIN No. 008-08-037-03-002 [Lot A]
shall belong to the FIRST PARTY and in turn, the FIRST PARTY agreed that the property subject
at bar located in Baccuit Syr, Bauang, La Union as covered by PIN NO. 008-08-005-08-025 [Lot
B] shall belong to the SECOND PARTY.
The Compromise Agreement was approved by the trial court in its January 17, 2008
Decision12 which became final.13 A Writ of Execution was issued on June 27, 2008.14
Maria filed a motion to set aside the Order granting the issuance of the writ of execution. She
claimed that she intended to give Lot C, and not Lot B, to the Sps Somis. The RTC granted the motion.
The Somis couple filed a Petition for Certiorari before the CA. In granting the petition, the CA
declared that "unless the court-approved compromise agreement is set aside through the available
remedies provided under the law, its nature as a final and executory judgment demands that it be
implemented strictly in accordance with its terms and conditions."
Maria, through Atty. Indasen, filed a Motion to Annul the Compromise Agreement. The trial court
denied the Motion for being moot and academic. It pointed out that the Compromise Agreement has
become final and executory.
Maria filed a Petition for Relief from Judgment which was dismissed for non-payment of docket
fees.
Maria secured the services of Atty. Hidalgo, who then filed a Petition for Reformation of
Compromise Agreement. The Petition was withdrawn when Maria opted to file the instant Petition for
Annulment of Judgment before the CA.
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The CA dismissed the petition noting that jurisdiction over the persons of the parties were
properly acquired as well as over the subject matter.
WHETHER the Compromise Agreement between the parties is valid and binding.
87
SUGGESTED ANSWER
YES. In view of the finality of the trial court's Decision which upheld the Compromise Agreement,
the latter is binding between and among the parties.
When a decision becomes final and executory, it becomes valid and binding upon the parties and
their successors in interest. Such decision or order can no longer be disturbed or reopened no matter how
erroneous it may have been. Article 1305 of the Civil Code provides that a contract is a meeting of the
minds between two persons, whereby one is bound to give something or to render some service to the
other. The Compromise Agreement was clear that the contracting parties mutually agreed to transfer to
each other the properties indicated therein.
If indeed there was a mistake on which property should be transferred to the Sps Somis, Maria
should have availed of her remedies immediately. Section 2, Rule 47 provides that an annulment of
judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction.
Here, the CA correctly held that jurisdiction over the spouses Somis was acquired by the trial
court when summonses were duly served on them. With regard to Celso, jurisdiction was likewise
acquired over his person when he voluntarily appeared before the court by signing and filing the
Compromise Agreement.
As to Marial allegation of extrinsic fraud, Maria actively participated in the proceedings and was
properly assisted by her counsel both in the RTC and the appellate court. Thus, Maria was accorded with
due process to defend her case.
[ G.R. No. 207887. March 14, 2022 ]

LINO DOMILOS, PETITIONER, VS. SPOUSES JOHN AND DOROTHEA PASTOR, AND JOSEPH L.
PASTOR, RESPONDENTS.
BERNABE, J.:
The subject compromise agreement, being a contract that has the force of law, is governed
by the requisites and principles of contracts under Articles 1312, 1315 and 1385 of the Civil Code.
Article 1144. The following actions must be brought within ten years from the time the right of
action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
BAR QUESTION
The history of this long-running case began in 1953 when Victoriano Domilos (Victoriano)
acquired possession over a parcel of land along Kms. 4-5, Santo Tomas Road, Baguio City, measuring
approximately 15,745 square meters (sq.m.) in size. In 1974, Sergio Nabunat (Nabunat) and his family
built a shanty on the land and resided therein for three months.
In February 1976, Victoriano transferred all his rights over the property to his son, petitioner Lino
Domilos (Lino). A month later or in March 1976, Nabunat and his family, including his mother-in-law,
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Can-ay Palichang (Palichang), returned to the subject property and constructed a house thereon without
Lino's consent. This prompted Lino to file a complaint for forcible entry against Nabunat.
On November 17, 1977, the City Court of Baguio rendered a Decision in favor of Lino, ordering
Nabunat and the members of his family to vacate the subject property and remove his house therefrom,
among others. 88
The Court of First Instance (now the RTC), Branch 4, in a Decision dated January 6, 1979,
sustained the Decision of the City Court of Baguio. A Writ of Execution and Alias Writs of Execution were
issued, and Nabunat's house was demolished.
In 1986, Lino and Palichang entered into a compromise agreement, dividing the property among five
different parties. Lino, Nabunat and Palichang then sold different portions of the property to different
parties. The Nabunats sold separate portions to Dorothea and Joseph.
Lino later sought to execute the Decision of the MTCC by filing a motion for issuance of 4th alias
Writ of Execution against Nabunat. He and Palichang then executed a revocation and cancellation of
compromise agreement.
The corresponding 4th Alias Writ on Special Order for Demolition of Improvement was issued
resulting in the demolition of some of the properties of the Sps Pastor.
The Pastors filed a suit for annulment of Order, 4th Alias Writ of Execution, revocation of
compromise agreement, recovery of possession, damages, among others, against Lino, Palichang and
Soledad Nabunat. The Pastors claimed that Lino wrongfully sold a portion of his property even if he had
none left to sell, according to the compromise agreement. The CA sustained the RTC and ruled in favor of
the Pastors.
WHETHER the Pastors are the rightful owners of the subject properties.
SUGGESTED ANSWER
YES. The Court affirms the Decision of the CA and RTC finding the Pastors to be the rightful
owners of the subject properties.
Preliminarily, Lino's contention that both the RTC and CA Decisions were in violation of the first
paragraph of Article VIII, Section 14 of the 1987 Constitution is untenable. Both the RTC and the CA
summarized the facts of the case on its pertinent points and backed up their rulings and conclusion with
applicable law and jurisprudence. The subject compromise agreement, being a contract that has the force
of law, is governed by the requisites and principles of contracts under Articles 1312, 1315 and 1385 of the
Civil Code.
Here, the third persons, the Pastors, who came into possession of the object of the contract are
bound by the contract or compromise agreement. Rescission, or in this case, revocation or cancellation of
the compromise agreement, cannot take place because the objects of the contract are already in the legal
possession of the Pastors who did not act in bad faith. At the time the compromise agreement was revoked
by Lino and Palichang, the Pastors were already legal co-owners of the property by virtue of a valid sale.
As such, their respective shares in the disputed property may not be validly included in the revocation of
the compromise agreement.
Finally, Lino cannot anymore move to execute the decisions of the lower courts. The RTC
Decision, dated January 6, 1979, attained finality when no appeal was taken. In accordance with Art
1144, paragraph (3) of the Civil Code, Lino had 10 years from the time the judgment was issued or until
January 1989 to bring an ordinary civil action for the execution of the RTC judgment. However, the 10
years had already lapsed by the time Lino filed the motion for 4th Alias Writ of Execution.
SALES
[ G.R. No. 203990, August 24, 2020 ]
PRYCE PROPERTIES CORP. (NOW PRYCE CORPORATION), PETITIONER, VS. NARCISO R.
NOLASCO, JR. RESPONDENT.
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BERNABE, J.:
Section 4 of RA 6552 requires four (4) conditions before the seller may actually cancel the contract 89
thereunder:
1. the defaulting buyer has paid less than two (2) years of installments;
2. the seller must give such defaulting buyer a sixty (60)-day grace period, reckoned from the
date the installment became due;
3. if the buyer fails to pay the installments due at the expiration of the said grace period, the
seller must give the buyer a notice of cancellation and/or a demand for rescission by
notarial act (THIS IS IMPORTANT) ; and
4. the seller may actually cancel the contract only after the lapse of thirty (30) days from the
buyer's receipt of the said notice of cancellation and/or demand for rescission by notarial act.
BAR QUESTION
The case stemmed from a complaint for recovery of a sum of money (Complaint) filed by Narciso R.
Nolasco, Jr. (Nolasco) on January 22, 1999 before the RTC against Pryce Corporation, formerly Pryce
Properties Corporation (Pryce).
Nolasco alleged the following in his Complaint:
1. in 1995, he purchased three lots located in Cagayan de Oro City from Pryce;
2. also in 1995, he deposited a total amount of P393,435.00 through check payments in favor of
Pryce;
3. the latter did not deliver to Nolasco the copies of the lots' certificates of title and their sales
agreement;
4. he was surprised, frustrated, and dismayed when he finally received the sales agreement, as it
contained unacceptable conditions to which he conveyed his objections to Pryce;
5. since he had not yet signed the sales agreement, there was still no meeting of the minds between
him and Pryce; and that despite demands for refund of his deposit payments, Pryce failed to
comply.
6. Nolasco also sought the amounts of P100,000.00 as moral damages, P50,000.00 as exemplary
damages, and P50,000.00 as attorney's fees.
Pryce countered that Nolasco could not yet be issued certificates of title since their transaction was
not a contract of sale but a contract to sell. Nolasco, under RA 6552 or the Maceda Law, was not entitled
to a refund of his deposits since he failed to complete the payments within the grace period provided by
Pryce, resulting in their forfeiture and the rescission of the contract to sell.
The RTC ruled in favor of Nolasco declaring him as entitled to the refund, citing jurisprudence and
Article 1191 of the Civil Code.
The CA found that the contract entered into by Pryce and Nolasco was a contract to sell. It
nonetheless upheld Nolasco's entitlement to a refund, as Pryce did not exercise the remedy of cancellation
under RA 6552.
SUGGESTED ANSWER
WHETHER the contract between Pryce and Nolasco was rescinded in accordance with RA
6552.
NO. The contract to sell between Pryce and Nolasco was not validly cancelled.
Section 4 of RA 6552 requires four (4) conditions before the seller may actually cancel the contract
thereunder:
5. the defaulting buyer has paid less than two (2) years of installments;
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6. the seller must give such defaulting buyer a sixty (60)-day grace period, reckoned from the
date the installment became due;
7. if the buyer fails to pay the installments due at the expiration of the said grace period, the
seller must give the buyer a notice of cancellation and/or a demand for rescission by
notarial act (THIS IS IMPORTANT) ; and
8. the seller may actually cancel the contract only after the lapse of thirty (30) days from the 90
buyer's receipt of the said notice of cancellation and/or demand for rescission by notarial act.
Here, there was compliance with the first and second requisites when Pryce sent Nolasco, a
defaulting buyer whose payments did not amount to two years' worth of installments, its letter giving him
sixty (60) days to make good on his obligation.
However, it did not meet the last two conditions as there was no notice of notarial rescission
served upon Nolasco.
Necessarily, thirty (30) days could not have lapsed from a non-existent service of such notice.
A notarial rescission contemplated under RA 6552 is a unilateral cancellation by a seller of a

perfected contract thereunder acknowledged by a notary public and accompanied by competent evidence
of identity.
WHETHER Pryce should refund Nolasco.
YES. The lower courts properly directed the refund of the deposit payments made by Nolasco to
Pryce. A defaulting buyer of real property on installments, whether or not she or he has paid two (2) years
of installments, has three (3) common legal remedies in the absence of a valid rescission, granted by
Section 6 of RA 6552 and jurisprudence:
1. Pay in advance any installment at any time, necessarily without interest;

2. Pay the full unpaid balance of the purchase price at any time without interest, and to have
such full payment of the purchase price annotated in the certificate of title covering the real
property subject of the transaction under RA 9552; or
3. Claim an equitable refund of prior payments and/or deposits made by the defaulting buyer to
the seller pertinent to their transaction under RA 9552, if any.
Here, Nolasco was firm in his choice to claim a refund by filing at the outset a case for recovery of
sum of money against Pryce.
[ G.R. No. 200484, November 18, 2020 ]

PASCUAL PURISIMA, JR., LEONARDO PURISIMA, EUFRATA PURISIMA, AND ESTELITA DAGUIO,
PETITIONERS, VS. MACARIA PURISIMA AND SPOUSES ERLINDA AND DANIEL MEDRANO,
RESPONDENTS.
BERNABE, J.:
By Article 1403 (2) (e) of the Civil Code, a verbal contract for the sale of real property is
unenforceable, unless ratified. For such contract offends the Statute of Frauds. ℒαwρhi ৷ But long accepted
and well settled is the rule that the Statute of Frauds is applicable only to executory contracts - not to
contracts either totally or partially performed.ℒαwρhi ৷ The complaint here states that the deceased
Adriana Maloto sold the disputed house and land to plaintiff; that consideration thereof was paid; that by
reason of such sale, plaintiff performed acts of ownership thereon. The facts thus alleged are constitutive
of a consummated contract. It matters not that neither the receipt for the consideration nor the sale itself
was in writing. Because "oral evidence of the alleged consummated sale of the land" is not forbidden by
the Statute of Frauds and may not be excluded in court.
An action for reconveyance of property based on an implied or constructive trust is the proper
remedy of an aggrieved party whose property had been erroneously registered in another's name. The
prescriptive period for the reconveyance of registered property is ten years, reckoned from the date of the
issuance of the certificate of title. However, where the complainant is in possession of the land to be
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reconveyed and the registered owner was never in possession of the disputed property, the action for
reconveyance would be in the nature of an action to quiet title which is imprescriptible.
BAR QUESTION
91
On November 8, 1999, Macaria Purisima (Macaria) and the Spouses Erlinda and Daniel Medrano
(Spouses Medrano; respondents, collectively) filed a complaint for reconveyance, cancellation and quieting
of title against their late brother's heirs, Pascual Purisima, Jr. (Purisima Jr.), Leonardo Purisima, Eufrata
Purisima and Estelita Daguio, (collectively, petitioners).
Respondents alleged that their brother, Pascual Purisima Sr. (Pascual Sr.), owned Lot 71, PLS-
631-D located in Cagumitan, Tuao, Cagayan. However, sometime in 1960, Pascual Sr. sold portions of the
aforesaid property to respondents to answer for his medical bills.
At the time of the sale, the whole land was not yet titled but it was surveyed for a patent
application under Purisima Sr.'s name by the Land Management Bureau on April 21, 1960. The following
portions that were sold to the respondents were thus identified:
Lot 71-A, Pls-D containing an area approximately Three Thousand Five Hundred and
Seven (3,507) square meters, and;
Lot 71-B, Pls-631-D containing an area of Three Thousand Five Hundred Twenty-Five
(3,525) square meters.
Banking on mutual trust, the survey as well as the sale was not recorded by the parties. Since the
1960s and prior to the death of Purisima Sr. on April 12, 1971, respondents had been in open, continuous
and exclusive possession of the apportioned properties. They had been paying realty taxes thereon and
had their own tenants tilling their respective portions of land.
On September 19, 1978, petitioners, as heirs of Pascual Sr., executed an Extrajudicial

Settlement of Estate of Deceased, Pascual Purisima and Sale over the unregistered property of their
father which included the sale of the properties apportioned to the respondents.
On December 16, 1991 Purisima Jr. was granted Free Patent No. 021528- 91-2459 under the
name of "Heirs of Pascual Sr.". The free patent covered the whole of Lot 71, including the portions that
were already sold to the respondents.
On August 17, 1992, the Free Patent was later on registered with the Registry of Deeds of Tuao,
Cagayan and Original Certificate of Title (OCT) No. P-596811 was issued in favor of the "Heirs of Pascual
Purisima Sr. rep. by Pascual Purisima Jr.".
Upon learning of the inclusion of their land in the extrajudicial settlement, respondents repeatedly
requested Purisima Jr. to surrender OCT P-5968 in order to annotate the Extrajudicial Settlement of
Estate of Deceased, Pascual Purisima, Sr. and Sale, register the previous subdivision plan and finally
secure their own titles covering their respective lots.
However, petitioners ignored respondents' pleas and despite barangay conciliation proceedings,
the parties failed to reach an amicable settlement. Hence, respondents filed a case before the RTC to
remove the cloud on their title over the apportioned lots and for their ownership to be not disturbed.
The petitioners, on the other hand, countered that there was no sale that transpired at any given
time. The amounts given by the respondents were due to the fact that their father was sick.
Admittedly, while they all signed the Extrajudicial Settlement of Estate of Deceased, Pascual
Purisima, Sr. and Sale, they did not understand its import and were convinced by the respondents, their
aunts, that the document was merely an evidence of their indebtedness. They did not appear before a
notary public in the execution thereof nor were they given a copy of the said document.
Purisima Jr. further testified that he went through the legal process of applying for a free patent
and the eventual obtainment of OCT. Throughout the whole process he did not hear of any complaints
from the respondents.
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The only time that petitioners allowed the respondents to take possession of the property was only
after the issuance of the OCT already and even then, it was by mere tolerance and as a form of payment
for the financial help that respondents extended to their father.
WHETHER the 1960 oral sale was already fully consummated as evidenced by the 1978
Extrajudicial Settlement of Estate and Sale. 92
SUGGESTED ANSWER
YES. The 1960 oral sale was already fully consummated as evidenced by the 1978 Extrajudicial
Settlement of Estate of Deceased and Sale which was undisputed and acknowledged by the petitioners
themselves.
The sale between the respondents and Purisima Sr. was consummated and that the Statute of
Frauds has no application in the case. Settled is the rule that the Statute of Frauds is applicable only to
executory contracts - NOT to contracts either totally or partially performed. A contract of sale, whether
oral or written, is classified as a consensual contract, which means that the sale is perfected by mere
consent and no particular form is required for its validity.
Consequent to every sale is the transfer of ownership in exchange for a price paid or promised.
The transfer of the properties to respondents arising from the 1960 sale by Pascual Sr. of the apportioned
properties effectively vested ownership to the respondents from that time.
An action for reconveyance of property based on an implied or constructive trust is the proper
remedy of an aggrieved party whose property had been erroneously registered in another's name. The
prescriptive period for the reconveyance of registered property is ten years, reckoned from the date of the
issuance of the certificate of title. However, where the complainant is in possession of the land to be
reconveyed and the registered owner was never in possession of the disputed property, the action for
reconveyance would be in the nature of an action to quiet title which is imprescriptible.
Thus, there is no error on the part of the appellate court as to its assailed Decision.
[ G.R. No. 215006, January 11, 2021 ]
ARAKOR CONSTRUCTION AND DEVELOPMENT CORPORATION, PETITIONER, VS. TERESITA G.

STA. MARIA, ALFREDO N. GADDI, FERNANDO N. GADDI, JR., MARILYN G. MALIXI, EVANGELINE G.
GOLICRUZ, LILIAN G. FRANCISCO, LILIBETH G. PAGUIO AND THE LATE EFREN N. GADDI, HIS
HEIRS, JENNY, ALLAN, JOEFFREY AND FELY ALL SURNAMED GADDI, RESPONDENTS.
BERNABE, J.:
Case law provides that "forgery cannot be presumed and must be proved by clear, positive and
convincing evidence by the party alleging the same
BAR QUESTION
The Spouses Fernando Gaddi, Sr. (Fernando Sr.) and Felicidad Nicdao Gaddi (Felicidad)
(collectively Spouses Gaddi) owned the five contested parcels of land located in Hermosa, Bataan and
described in TCT Nos. T-92141, T-92142, T-92143, T-92144, and T-100713.5
Felicidad died intestate on November 18, 1985, and was survived by Fernando Sr. and her eight
children, herein respondents, namely: Teresita G. Sta. Maria (Teresita), Alfredo N. Gaddi (Alfredo),
Fernando N. Gaddi, Jr. (Fernando Jr.), Marilyn G. Malixi (Marilyn), Evangeline G. Golicruz (Evangeline),
Efren N. Gaddi (Efren), Lilian G. Francisco (Lilian) and Lilibeth G. Paguio (Lilibeth) (collectively the
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Gaddis). Felicidad's heirs inventoried her properties but they did not initiate its partition; thus, the parcels
of land remained in the name of the Spouses Gaddi.
On February 7, 1996, Fernando Sr. passed away, followed by Efren on May 8, 1998. After the
deaths of Fernando, Sr. and Efren, Atty. Greli Legaspi (Atty. Legaspi), the president of petitioner Arakor
Construction and Development Corporation (Arakor), informed the Gaddis that their parents had already 93
sold the contested five parcels of land to Arakor for P400,000.00 as evidenced by two undated Deeds of
Absolute Sale and that the titles to the properties have already been transferred to Arakor's name.
Thus, the Gaddis filed a Complaint for Annulment of Deed[s] of Absolute Sale and Transfer
Certificates of Title against Arakor. They alleged that the two contracts of sale were forged and the
conveyance of the properties was fraudulent since Felicidad could not have signed the documents and
given her consent thereon since she has been dead for seven years before the alleged execution of the said
contracts.
Arakor denied employing fraud. It contended that the Deeds of Absolute Sale were already signed
and notarized when Fernando Sr. and Efren delivered them to the office of Atty. Legaspi on September 8,
1992. Atty. Legaspi also disclaimed any knowledge about the death of Felicidad.
The RTC declared the Deeds of Absolute Sale as void for being fictitious because Felicidad had
already passed away when the documents were executed. The CA affirmed.
WHETHER the CA correctly affirmed the findings of the trial court that the Deeds of Absolute
Sale are null and void for being forged and fictitious.
SUGGESTED ANSWER
YES. The Deeds of Absolute Sale are null and void.
Case law provides that "forgery cannot be presumed and must be proved by clear, positive and
convincing evidence by the party alleging the same." Here, the Gaddis satisfactorily discharged this
burden by submitting in evidence the Certificate of Death of Felicidad to prove that her demise preceded
the execution of the contracts of sale. This is in addition to Arakor's admission that Felicidad's death
occurred before the sale transpired.
Considering that Felicidad's signatures were forged, the Deeds of Absolute Sale are null and void
and convey no title to Arakor. Thus, the TCTs which were issued in favor of Arakor "by virtue of the said
spurious and forged document are also null and void."
Arakor cannot claim to be an innocent purchaser for value since Atty. Legaspi did not diligently
ascertain the genuineness of the signatures of the owners, Spouses Gaddi, especially that of Felicidad's.
Arakor cannot insist on the due execution of the Deeds of Absolute Sale simply because these were
notarized.
While it is true that a notarized document carries the evidentiary weight conferred upon it with
respect to its due execution, and has in its favor the presumption of regularity, this presumption,
however, is not absolute. It may be rebutted by clear and convincing evidence to the contrary.
An action that is predicated on the fact that the conveyance complained of was null and void ab
initio is imprescriptible. Hence, the Gaddis could assail the validity of the Deeds of Absolute Sale and they
rightly did so, in spite of Arakor's claim that they failed to question the sale several years after Arakor
secured the titles to the properties.
(NOTE: If Arakor had sold the property to an innocent purchaser for value, at na-issuhan ng title, hindi na
mahahabol pa yung lupa)
[ G.R. No. 202820, January 13, 2021 ]
HOME GUARANTY CORPORATION, PETITIONER, VS. ELVIRA S. MANLAPAZ, RESPONDENT.*
BERNABE, J.:
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The seller's obligation to deliver the corresponding certificates of title is simultaneous and
reciprocal to the buyer's full payment of the purchase price.
94
BAR QUESTION
On September 20, 1995, Vive Eagle Land, Inc. (VELI), Planters Development Bank (Bank), and
petitioner HGC entered into the VELI Asset Pool Formation and Trust Agreement (Asset Pool) for the
development of the lots in Eagle Crest Village (Village) in Baguio City which included the property in
dispute, a parcel of land with an area of 166 square meters located at Lot 2, Block 5, Phase III of the
Village.
Housing and Development Participation Certificates backed up VELI's properties and were floated
and sold to investors. HGC extended a P130 Million guaranty on the Participation Certificates in the event
the Asset Pool fails to service the interest due to the investors or to redeem the said Certificates upon
maturity. Meanwhile, the Bank acted as trustee and held the titles to the lots covered by the Asset Pool.
Due to the delay in the project's development, the Asset Pool was declared in default.
Consequently, the investors, through the Bank, called on HGC's guaranty. On August 19, 1998, after
HGC's payment of the guaranty call in the amount of P135,691,506.85, the Bank assigned and
transferred the possession and ownership of the assets of the Asset Pool to HGC through a Deed of
Assignment and Conveyance. Notably, this included the contested land.
Prior thereto, or on January 8, 1998, VELI entered into a Contract to Sell with First La Paloma
Properties, Inc. (FLPPI) involving the bulk of the properties in the Village which included the property in
question. On June 22, 1998, FLPPI, through its President, Marcelino Yumol (Yumol), entered into a
Contract to Sell with respondent Manlapaz over the disputed property for P913,000.00.
Given that a substantial part of the properties which were assigned to HGC was apparently sold
by VELI to FLPPI, on October 8, 1998, VELI, FLPPI and HGC entered into a Memorandum of
Agreement (superseding the Contract to Sell dated January 8, 1998 and other agreements between FLPPI
and VELI) in which FLPPI assumed to pay HGC the value of the properties in the total amount of
P153,029,200.00. Accordingly, HGC and FLPPI executed a Contract to Sell dated October 15, 1998 over
the real properties.
When FLPPI failed to pay, HGC informed FLPPI on November 15, 2000 in a letter addressed
to Yumol that it is invoking its right to cancel their contract.
Meanwhile, after failing to secure the title to the disputed land, Manlapaz filed a Complaint for
delivery of title with prayer for damages with the Legal Services Group (LSG) of the Housing and Land Use
Regulatory Board (HLURB). Manlapaz claimed that despite full payment and demands for delivery, FLPPI
failed to execute the final deed of sale and to deliver the title of the lot in her favor. She alleged that she
was deprived of her title and ownership to the contested property and prayed for the award of moral and
exemplary damages as well as attorney's fees.
The Bank contended that Manlapaz has no cause of action against it and that it was not privy to
her contract with FLPPI.
HGC averred that Manlapaz has no cause of action against it because it is also an unpaid seller
based on the Contract to Sell it entered into with FLPPI.
The Legal Services Group of the HLURB held that as the subdivision owner or developer, FLPPI
has the obligation to deliver the title to Manlapaz upon full payment pursuant to Section 25 of PD 957. It
found that Manlapaz has a cause of action against HGC. When HGC entered into a Memorandum of
Agreement with FLPPI and VELI, and the Contract to Sell with FLPPI, HGC became aware of the Contract
to Sell between VELI and FLPPI.
HGC filed a Petition for Review before the Board of Commissioners (BOC) of the HLURB. The BOC-
HLURB dismissed the complaint filed by Manlapaz. The OP affirmed.
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The CA granted the appeal of Manlapaz ruling that Manlapaz, as an innocent purchaser for value,
should be protected from the effects of the transactions entered into by HGC, VELI and FLPPI in which
Manlapaz had no participation.
WHETHER HGC should execute a deed of absolute sale and cause the transfer of the certificate
of title to the contested lot in favor of Manlapaz. 95
SUGGESTED ANSWER
YES. Given that Manlapaz had fully paid the purchase price of the contested lot, the property
should now be transferred in her name.
The timeline of transactions shows that HGC, VELI and the Bank entered into the Asset Pool.
1. Thereafter, VELI, through a Contract to Sell (first contract):

2. sold properties to FLPPI.
3. In turn, FLPPI, also through a Contract to Sell (second contract), sold the disputed property to
Manlapaz.
4. Almost two months later, the Asset Pool defaulted, causing the Bank to execute the Deed of
Assignment and Conveyance in favor of HGC.
FLPPI sold the contested property to Manlapaz prior to the declaration of default of the Asset Pool
and before the Bank issued the Deed of Assignment and Conveyance to HGC. The sale to Manlapaz
likewise occurred prior to the execution of the MOA among VELI, FLPPI and HGC, and before the
execution of the Contract to Sell (third contract) between HGC and FLPPI pursuant to the said
memorandum. HGC cancelled the Contract to Sell with FLPPI due to the latter's failure to fulfill its
obligations.
Since Manlapaz already fully paid the purchase price, she is entitled to the issuance of the deed of
absolute sale and the transfer certificate of title in her favor, even if the disputed property has already
been transferred to HGC's name due to FLPPI's default in the third contract.
The seller's obligation to deliver the corresponding certificates of title is simultaneous and
reciprocal to the buyer's full payment of the purchase price.
[ G.R. No. 203946. August 04, 2021 ]
ARTURO A. DACQUEL, PETITIONER, VS. SPOUSES ERNESTO SOTELO AND FLORA DACQUEL-
SOTELO, REPRESENTED BY THEIR ATTORNEY-IN-FACT, IMELDA SOTELO, RESPONDENTS.
BERNABE, J.:
When in doubt, courts are generally inclined to construe a transaction purporting to be a sale as
an equitable mortgage, which involves a lesser transmission of rights and interests over the property in
controversy. Here, the CA aptly found two badges of fraud against petitioner:
1. there was gross inadequacy in the purchase price.

2. the respondents-spouses, as vendors of the subject property, remained in possession of the
same.
Article 2088. The creditor cannot appropriate the things given by way of pledge or mortgage, or
dispose of them. Any stipulation to the contrary is null and void.
The general rule is that attorney's fees cannot be recovered as part of damages because of the
policy that no premium should be placed on the right to litigate. They are not to be awarded every time a
party wins a suit. Being the exception rather than the rule, an award of attorney's fees requires compelling
reason before it may be granted. Even when a claimant is compelled to bring his cause to court or incur
expenses to protect his rights, attorney's fees still may not be awarded as part of damages where no
sufficient showing of bad faith could be reflected in a party's persistence in a case other than an erroneous
conviction of the righteousness of his cause.
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BAR QUESTION
Subject of the case is a parcel of land located in Malabon City formerly covered by Transfer
Certificate of Title (TCT) No. 738[4] in the names of respondents-spouses Ernesto and Flora Sotelo (the
Sotelos), later registered und er TCT No. M-10649[5] under the name of petitioner Arturo Dacquel
(Dacquel). 96
Established facts show that in 1994, the Sotelos began the construction of a 7-door apartment on
the subject land. Due to budget constraints, the Sotelos had to borrow the amount of P140,000.00 from
Dacquel, who was Flora Sotelo's (Flora) brother. The construction of the apartment was completed in
1997.[6]
The Sotelos claimed that the debt of P140,000.00 was agreed to be payable in double the said
amount or P280,000.00, to be collected from the rental income of four out of the seven apartment units.
There was no agreed period within which to pay the loan and the interests. Dacquel also required the
Sotelos to cede to him the subject land as security for the loan.
Consequently, on September 1, 1994, the parties executed a Deed of Sale[7] in consideration of the
amount of P140,000.00. TCT No. 738 in the names of the Sotelos was thereafter cancelled and TCT No. M-
10649 was issued, constituting Dacquel as the new registered owner of the subject land. In March 2000,
when Dacquel had collected the full amount of P280,000.00 in rental income from the four apartment
units, the Sotelos asked for the return of the subject lot. Dacquel, however, allegedly held on to the title
and refused to yield the subject lot to the Sotelos.[8]
The Sotelos thus filed a Complaint for annulment of title and reconveyance against Dacquel before
the RTC. They alleged in their Complaint that Dacquel held the title to the subject land only as security for
the loan and in trust for them.
Dacquel, on the other hand, asserted that the Sotelos's debts to him totaled P1M, which he had
recorded in a black diary. He also alleged that the true consideration of the Deed of Sale was P1M, and the
amount of P140K was indicated on the Deed only for the purpose of reducing the tax liabilities for the
transaction. The Sotelos were allegedly estopped from questioning the validity of the Deed of Sale because
of their acquiescence to the subject property's transfer unto Dacquel's name.
The RTC ruled in favor of Dacquel. The CA reversed the RTC and decided in favor of the Sotelos.
Applying the provisions of Articles 1602 and 1604 of the Civil Code, the CA declared the Deed of Sale to be
one of equitable mortgage. It found two badges of fraud: gross inadequacy of the price and the continued
possession by the Sotelos of the subject property.
SUGGESTED ANSWER
WHETHER Deed of Sale between petitioner and respondents-spouses constituted an

equitable mortgage.
YES. The transaction between petitioner and respondents-spouses was an equitable mortgage.
When in doubt, courts are generally inclined to construe a transaction purporting to be a sale as
an equitable mortgage, which involves a lesser transmission of rights and interests over the property in
controversy. Here, the CA aptly found two badges of fraud against petitioner:
3. there was gross inadequacy in the purchase price.

4. the respondents-spouses, as vendors of the subject property, remained in possession of the
same.
In Sps. Raymundo v. Sps. Bandong, it was observed that it is contrary to human experience that a
person would easily part with his property after incurring a debt. Also, petitioner cannot correctly argue
that his agreement with respondents-spouses constituted dation in payment or dacion en pago. Dacion en
pago, according to Manresa, is the transmission of the ownership of a thing by the debtor to the creditor
as an accepted equivalent of the performance of obligation.
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WHETHER the petitioner's title to the subject property should be nullified and reconveyed
to respondents-spouses.
YES. Title may be nullified and real property may be reconveyed in case of equitable mortgage.
II.2 Petitioner did not become owner of the subject property but a mere mortgagee thereof. As such, he
97
was bound by the prohibition against pactum commissorium as embodied in Article 2088. The
mortgagor's default does not operate to automatically vest on the mortgagee the ownership of the
encumbered property. Here, the transaction is consequently rendered void, and title to the subject
property should be reverted to respondents-spouses.
WHETHER respondents-spouses are entitled to attorney's fees.
NO. Attorney's fees are awarded only on factual and legal grounds under Article 2208 of the Civil
Code.
The general rule is that attorney's fees cannot be recovered as part of damages because of the
policy that no premium should be placed on the right to litigate. They are not to be awarded every time a
party wins a suit. Being the exception rather than the rule, an award of attorney's fees requires compelling
reason before it may be granted.
Even when a claimant is compelled to bring his cause to court or incur expenses to protect his
rights, attorney's fees still may not be awarded as part of damages where no sufficient showing of bad
faith could be reflected in a party's persistence in a case other than an erroneous conviction of the
righteousness of his cause.
Here, no such bad faith was proven against petitioner. Both parties were impelled by the honest
belief that their respective actions were justified.
[ G.R. No. 206847. June 15, 2022 ]
THE HEIRS OF ZENAIDA B. GONZALES, REPRESENTED BY ARNEL B. GONZALES, PETITIONERS,

VS. SPOUSES DOMINADOR AND ESTEFANIA BASAS AND ROMEO MUNDA, RESPONDENTS.
BERNABE, J.:
Purchasers must continuously possess their status as buyers in good faith from the time they
acquired the property until they register the property under their name. Thus, they must both be buyers
and registrants in good faith.
BAR QUESTION
The late Zenaida B. Gonzales (Zenaida) purchased from respondents spouses Dominador and
Estefania Basas (collectively, spouses Basas), a parcel of land including the house thereon, situated at No.
427 Espinola St., Block 6, Magsaysay Village, Tondo, Manila, with an area of 152.98 square meters and
covered by Transfer Certificate of Title No. (TCT) 187898[6] (subject property).[7] An annotation in the title
indicates that the consent of the National Housing Authority (NHA) is necessary for the disposal of the
same.[8]
Zenaida and the spouses Basas executed the following documents to reflect their mutual
agreement on the sale and purchase of the subject property: Contract to Sell dated May 10,
1996[9] (Contract to Sell) which reflects the total price of the subject property at P800,000.00.
Zenaida discovered that the spouses Basas subsequently sold the subject property to respondent
Munda. She caused the annotation of her affidavit of adverse claim on the title of the subject property.
Petitioners claimed that Munda was a buyer in bad faith because he was aware of the first sale of the
subject property to Zenaida.
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Zenaida filed a complaint for nullity of sale, specific performance, and damages against
respondents.The Sps Basas posited that it was the agreement of the parties that until the balance of the
purchase price as reflected in the Agreement is fully paid, they will continue to occupy the subject
property. Munda argued that he purchased the subject property in good faith and for value. He was not
aware of any previous transactions between the Sps Basas and Zenaida.
98
The RTC ruled in favor of petitioners which the CA reversed. The CA found Munda as a buyer in
good faith and for value.
Who between Zenaida, as petitioners' predecessor-in-interest, and Munda, is the rightful owner
of the subject property.
SUGGESTED ANSWER
ZENAIDA. Petitioners sufficiently proved that the Sps Basas sold the subject property to their
predecessor-in-interest, Zenaida, and that ownership of the same was constructively delivered to the latter
pursuant to said sale upon execution of the 1996 Deed of Absolute Sale (DOAS).
The Agreement entered into by Zenaida and the spouses Basas is a contract of sale subject to
resolutory conditions, which reinforced their DOAS. The true intention of the parties was for the spouses
Basas to procure the consent of the NHA such that Zenaida withheld payment off the balance of the
purchase price until the spouses Basas obtained the same. The DOAS transferred the ownership of the
subject property from the spouses Basas to Zenaida.
The RTC aptly pointed out that the right to repossess the ownership of the subject property could
not have been conferred upon the spouses Basas if the ownership of said property had not been
transferred to and consequently constructively possessed by Zenaida.
The sale of the subject property between Zenaida and the spouses Basas was valid and binding
despite the failure to immediately register the sale in the Register of Deeds. Registration is NOT a
recognized mode of acquiring ownership but binds the whole world, especially innocent purchasers for
value. The nature of a sale is a consensual contract because it is perfected by mere consent.
For purposes of validity of the sale, the mutual agreement of the parties on the subject matter of
the sale and its price would suffice and no required form is necessary.
The execution of a written instrument such as a deed of sale is important for purposes of:
1. the enforceability of executory contracts under Article 1403 of the Civil Code;
2. the convenience of the parties under Article 1358; and
3. the eventual registration of the sale with the land registration authority under PD 1529.
Here, both the DOAS and Agreement contain all the three requisites of a contract of sale. By virtue
of the Agreement being a contract of sale, the subject property was constructively delivered to Zenaida
subject to the resolutory conditions stated therein, even though the spouses Basas remained in
possession of the subject property, albeit in a different capacity.
The provisions of Article 1544 on double sale is inapplicable because the spouses Basas were no
longer the owners of the subject property when they transferred the same to Munda.
In order for the foregoing provision on double sale to apply, the following circumstances must
concur: the two (or more):
1. sales transactions in the issue must pertain to exactly the same subject matter, and must be
valid sales transactions;
2. buyers at odds over the rightful ownership of the subject matter must each represent
conflicting interests; and
3. buyers at odds over the rightful ownership of the subject matter must each have bought from
the very same seller.
The foregoing requisites of a double sale are absent because the sale of the subject property by the
Basas to Munda was not a valid sale transaction since by that time, the spouses Basas were no longer the
owners of the property.
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Even if the provision on double sale were applicable, Zenaida had a better right to the subject
property since Munda was a buyer and registrant in bad faith. Munda may have had no knowledge yet of
the defect in the Basas' title as sellers, since Zenaida's adverse claim was not yet annotated, there are
other circumstances that established Munda's bad faith.
Purchasers must continuously possess their status as buyers in good faith from the time they 99
acquired the property until they register the property under their name. Thus, they must both be buyers
and registrants in good faith. Here, Munda failed to show that he continuously possessed his status as a
buyer and registrant in good faith. Munda failed to refute petitioners' claim that Zenaida and her son went
to his house and informed him and his wife that Zenaida had earlier purchased the subject property, but
that Munda's wife replied that Zenaida's contract was merely a contract to sell while theirs was a contract
of sale.
The liabilities of the spouses Basas are transmittable to their heirs. A contract of sale and contract
to sell involving land or immovable property involve patrimonial rights and obligations, which by their
nature are essentially transmissible or transferrable.
The RTC appropriately found the spouses Basas liable to petitioners for exemplary damages and
attorney's fees. Exemplary damages are imposed not to enrich one party or impoverish another, but to
serve as a deterrent against, or as a negative incentive to curb socially deleterious actions such as the acts
of the spouses Basas. Not only did the spouses Basas fail to comply in good faith with their obligations as
stated in the Agreement, but they likewise proceeded to sell the subject property to Munda. Petitioners are
also entitled to recover attorney's fees from the spouses Basas as they were forced to litigate to protect
their interest.
[ G.R. No. 209702. March 23, 2022 ]
SOCORRO P. CABILAO, PETITIONER, VS. MA. LORNA Q. TAMPAN, REP. BY HER ATTORNEY-IN-
FACT JUDITH TAMPAN-MONTINOLA & DANILO TAMPAN, RESPONDENTS.
BERNABE, J.
A duly notarized document enjoys the prima facie presumption of authenticity and due execution,
as well as the full faith and credence attached to a public instrument. A party assailing the authenticity
and due execution of a notarized document is required to present evidence that is clear, convincing and
more than merely preponderant. Socorro failed to overcome this burden.
When a party claims that one is unable to read or is otherwise illiterate, and fraud is alleged, a
presumption that there is fraud or mistake in obtaining consent of that party arises under Article 1332 of
the NCC. However, for Article 1332 to be applicable, the party must show clear and convincing evidence of
one's personal circumstances and that he or she is unable to read at the time of execution of the contested
contract.
Gross inadequacy of price does not affect the validity of a contract of sale, unless it signifies a
defect in the consent or that the parties actually intended a donation or some other contract. Inadequacy
of cause will not invalidate a contract unless there has been fraud, mistake or undue influence.
Between the seller and buyer, ownership is transferred not by the issuance of the new certificate
of title in the name of the buyer but by the execution of the instrument of sale in a public document.
It is a settled rule that tax declarations and realty tax payment of property are not conclusive
evidence of ownership, they are nonetheless good indicia of the possession in the concept of owner, for no
one in his right mind would be paying taxes for a property that is not in his actual or at least constructive
possession.
BAR QUESTION
On April 7, 1988, Lorna Tampan-Naldoza (Lorna) purchased a residential house and lot from
Socorro Cabilao (Socorro) located at 599 Narciso St., Surigao City (subject property), covered by TCT No.
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T-59, through a Deed of Absolute Sale of a Residential Land together with a House (Deed of Sale), in the
amount of P10,000.00.
Since Lorna was in the United States, her mother, Antonieta, purchased the property on her
behalf. In 1995, Lorna decided to have TCT No. T-59 registered in her name but she discovered that the
owner's duplicate got lost while it was kept by Judith Tampan-Montinola (Judith) in the house. Thereafter, 100
Lorna, through Judith, filed a petition for the issuance of a new owner's duplicate. However, spouses
Lapulapu and Lelita (Lelita) Buyser (collectively, spouses Buyser) opposed her petition on the ground that
they were in possession of the said title after buying the same from Socorro. Thus, Lorna's petition was
dismissed.
When Lelita informed Socorro about the petition for the issuance of a new owner's copy of the
title, Socorro denied having sold the subject property to Lorna. However, due to the controversy, Socorro
repurchased the subject property and the owner's duplicate was surrendered back to her.
On April 29, 1996, Lorna and Judith lodged a complaint for declaration of nullity of a pacto de
retro sale entered into on January 25, 1995 between Socorro and spouses Buyser. The case was docketed
as Civil Case No. 4818.
Socorro filed an action for Annulment or Cancellation of Document, Quieting of Title/Recovery of

Ownership and Possession, Injunction, and Damages against Lorna and Danilo Tampan.
The RTC declared the Deed of Sale between Socorro and Lorna as null and void. The CA reversed
the RTC's findings Socorro failed to substantiate her claim that the Tampans employed fraud and
deception in securing her signature on the Deed of Sale. It further held that the Deed of Sale between
Socorro and Lorna, being a notarized document, bears evidentiary weight with respect to its due execution
and enjoys a presumption of regularity.
WHETHER the Deed of Sale between Lorna and Socorro is valid.
SUGGESTED ANSWER
YES. The Court upholds the validity of the Deed of Sale between Lorna and Socorro.
A contract is a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service. The essential requisites are:
1. consent of the contracting parties;

2. object certain which is the subject matter of the contract; and
3. cause of the obligation which is established.
Here, all the elements of a valid contract are present. The Deed of Sale validly transferred the
ownership over TCT No. T-59 from Socorro to Lorna in consideration of P10K. A duly notarized document
enjoys the prima facie presumption of authenticity and due execution, as well as the full faith and
credence attached to a public instrument. A party assailing the authenticity and due execution of a
notarized document is required to present evidence that is clear, convincing and more than merely
preponderant. Socorro failed to overcome this burden.
While Socorro claims that she is an illiterate person, she failed to prove this fact. When a party
claims that one is unable to read or is otherwise illiterate, and fraud is alleged, a presumption that there
is fraud or mistake in obtaining consent of that party arises under Article 1332 of the NCC. However, for
Article 1332 to be applicable, the party must show clear and convincing evidence of one's personal
circumstances and that he or she is unable to read at the time of execution of the contested contract.
Here, there is nothing in Socorro's testimony showing that she cannot read English or that she was
illiterate.
Gross inadequacy of price does not affect the validity of a contract of sale, unless it signifies a
defect in the consent or that the parties actually intended a donation or some other contract. Inadequacy
of cause will not invalidate a contract unless there has been fraud, mistake or undue influence.
That the title over the subject property remained under Socorro's name despite the execution of
the Deed of Sale does not affect the validity of the deed of sale. Between the seller and buyer, ownership is
transferred not by the issuance of the new certificate of title in the name of the buyer but by the execution
of the instrument of sale in a public document.
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It is also uncontested that the real property taxes are paid by the Tampans. It is a settled rule
that tax declarations and realty tax payment of property are not conclusive evidence of ownership, they
are nonetheless good indicia of the possession in the concept of owner, for no one in his right mind would
be paying taxes for a property that is not in his actual or at least constructive possession.
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[ G.R. No. 236826. March 23, 2022 ]
HEIRS OF HERMINIO MARQUEZ, REPRESENTED BY ALMA MARIE MARQUEZ, PETITIONERS, VS.

HEIRS OF EPIFANIA M. HERNANDEZ, REPRESENTED BY LOURDES H. TIONSON,* RESPONDENTS.
BERNABE, J.
A co-owner cannot sell a definite portion of a land without the consent from his or her co-owners.
However, the law allows a co-owner to alienate an undivided interest of the co-owned property.
For an action to quiet to prosper, two indispensable requisites must concur, namely:
efficacy.
BAR QUESTION
The instant case stemmed from a complaint for specific performance with damages filed by herein
respondents Heirs of Epifania M. Hernandez; namely, Lourdes Hernandez-Tiongson, BERNABE H.
Hernandez, Gliceria Hernandez-De Dios, Remedios Hernandez-Castro, Dionisia Hernandez-Panopio,
Aurora Hernandez-Pascual, and Oscar M. Hernandez (collectively, respondents), on November 21, 2000
against Herminio Marquez (Herminio). In their amended complaint, respondents impleaded herein
petitioner Marquez.
Respondents are the children and legal heirs of Epifania Hernandez (Epifania). Since 1955,
respondents and Epifania have been occupying a parcel of land located in Matungao, Bulacan with an
area of 200 square meters (subject property). The subject property forms part of a 1,417-square meter
property previously owned by the spouses Anastacio and Lourdes Sakay (spouses Sakay), and spouses
Godofredo and Florsita Cruz (spouses Cruz). Epifania and respondents had built their house on the
subject property with the consent and tolerance of its previous owners.
In 1967, the spouses Sakay and the spouses Cruz sold the 1,417-square meter property to
Herminio.
In 1985, Herminio sold to Epifania the 200-square meter portion of the land on which her house
was built for P400.00 per square meter. In view of this sale agreement, Epifania supposedly undertook to
pay Herminio the total price of the subject property within the year of its purchase, or sometime before the
end of 1985. In the event that Epifania failed to comply with the terms, the sale agreement would be
considered or treated as a lease contract, and the amounts paid by Epifania would be treated as rentals or
advances to Herminio under a continuing lease of the subject property.
.According to respondents, Epifania was able to pay in full the agreed purchase for the subject
property before her death on July 28, 1995 by paying in cash, checks and depositing money in various
occasions.
Sometime in March 2000, respondents executed an Extrajudicial Settlement of the Heirs of

Epifania Hernandez which stated, in part, that the proceeds of the joint savings account of their mother
and Herminio with the Rural Bank of Del Pilar, Inc. shall be considered as full payment for the subject
property. Notably, Herminio signified his conformity to the above-quoted provision in the said extrajudicial
settlement between respondents by affixing his signature thereon.
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Subsequently, the Rural Bank of Del Pilar, Inc. ceased operations. After processing the deposit
insurance claim with the Philippine Deposit Insurance Corporation (PDIC), a check in the amount of
P61,429.87 was released by PDIC, which was received by Herminio on June 16, 2000.
Meanwhile, on December 15, 199917 and July 17, 2000, respondents received from Marquez
demand letters to vacate the premises of the subject property. It appears that on August 4, 1994, Marquez 102
and Herminio executed an Extrajudicial Settlement of Estate with Waiver of Rights whereby Herminio
waived all his rights, interest and participation over the 1,417-square meter property in favor of Marquez.
Despite respondents' demands, Herminio allegedly refused to execute a deed of absolute sale over
the subject property in favor of Epifania. Thus, respondents' complaint for specific performance against
Herminio.
Marquez, being the registered owner of the 1,417-square meter property, which is covered by
Transfer Certificate of Title No. (TCT) T-81516,20 respondents filed an amended complaint impleading
Marquez as a defendant. In the said amended complaint, respondents prayed that judgment be rendered
directing Herminio and Marquez to cause the execution of a deed of absolute sale for the subject property
in favor of respondents and that title over the subject property be transferred to their names.
The RTC rendered a Decision in favor of respondents declaring as valid the sale between Herminio
and Epifania. It explained that the contract of sale between Epifania and Herminio was consummated
when the latter accepted from the former the initial payment. When Herminio allowed Epifania and her
children to occupy the subject property, it was from this point when ownership thereof was transferred
from Herminio to Epifania. The CA affirmed the findings of the RTC that the complaint filed by
respondents is not for specific performance but one for quieting of title.
SUGGESTED ANSWER
WHETHER there was a valid contract of sale between Herminio and Epifania.
YES. There was a valid contract of sale between Herminio and Epifania based on the following
pieces of evidence.
1. the provisional receipt signed by Herminio wherein he stated that he acknowledged receipt from
Epifania the amount of P2K as initial payment for the subject property;
2. the checks issued to Herminio as partial payments for to subject property;
3. the acknowledgment receipt from the PDIC stating that Herminio received from it a check in the
amount of P61K as payment of insured deposit from his Rural Bank joint savings account with
Epifania; and
4. the EJS of the Heirs of Epifania stating that the proceeds of the joint savings account served as
full payment from Epifania of the subject property, which was conformed to and signed by
Herminio.
The contract of sale was consummated even before Epifania made full payment of the purchase price,
and that Herminio transferred ownership over the said property when he allowed Epifania and
respondents to continue their occupation thereon consequent to the execution of the agreement. A co-
owner cannot sell a definite portion of a land without the consent from his or her co-owners. However, the
law allows a co-owner to alienate an undivided interest of the co-owned property.
WHETHER the respondents' complaint is not only for specific performance but also for quieting
of title.
YES. Respondents' complaint is not only for specific performance but also for quieting of title. For an
action to quiet to prosper, two indispensable requisites must concur, namely:
efficacy.
Here, ownership over the subject property was transferred to Epifania as early as 1985 by virtue of its
delivery by Herminio. Respondents, as heirs of Epifania, thus acquired an equitable title to the subject
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property. It cannot be said that respondents are guilty of laches since their continuous actual possession
of the subject property has rendered their right to bring an action for quieting of title imprescriptible.
CONCURRENCE AND PREFERENCE OF CREDIT

103
[ G.R. No. 204226. April 18, 2022 ]
BUREAU OF INTERNAL REVENUE, PETITIONER, VS. TICO INSURANCE COMPANY, INC., GLOWIDE
ENTERPRISES, INC., AND PACIFIC MILLS, INC., RESPONDENTS.
BERNABE
It is settled that execution is enforced by the fact of levy and sale. As a result of such execution,
title over the subject property vests immediately in the purchaser, subject only to the right to redeem the
property within the period provided by law. While the right acquired by the purchaser at an execution sale
is inchoate, and does not become absolute until after the expiration of the redemption period without the
right of redemption having been exercised, the purchaser's right is still entitled to protection, and must be
respected until extinguished by redemption.
The prior registration of a lien creates a preference as the act of registration is the
operative act that conveys and affects the land, even against subsequent judgment creditors.
Duties, taxes, and fees due the Government enjoy priority only when they are with reference to a
specific movable property, under Article 2241 (1), or immovable property, under Article 2242 (1).
However, with reference to the other real and personal property of the debtor, sometimes referred to as
"free property," the taxes and assessments due the National Government, other than those in Articles
2241 (1) and 2242 (1), will come only in ninth place in the order of preference. (YUN PALA YUN HAHAHAH
NGAYON KO LANG ITO NA-GETZ)
BAR QUESTION
Respondent TICO Insurance Company, Inc. (TICO) is an insurance company duly organized and
existing under Philippine laws. It is engaged in the sale of life insurance until it was placed under
liquidation by the Insurance Commission in 2002. Respondents Glowide and PMI are clients of TICO that
took out a fire insurance policy over several properties in 1997.
On August 7, 2006, respondent TICO filed a Complaint for interpleader with the RTC Makati to
determine who between respondents Glowide and PMI, on one hand, and petitioner BIR on the other, has
a superior right over Units 7A and 7B of the Trafalgar Plaza Condominium covered by Condominium
Certificates of Title (CCT) Nos. 39452 and 39453 and registered under TICO's name.
TICO alleged that Glowide and PMI had attached the condominium units to cover their claim for
the balance of their insurance proceeds after they had obtained a judgment in their favor, while the BIR
issued a warrant of distraint and/or levy on the real and personal properties of TICO, and a notice of tax
lien covering the condominium units, to answer for TICO's tax liabilities. The case was docketed as Special
Civil Action No. 06-667 and heard by the RTC Makati.
The RTC held that the claim of BIR over the condominium units is superior to that of Glowide and
PMI.
The CA ruled that Glowide and PMI are entitled to the possession and conveyance of the
condominium units, since their rights over the condominium units which revert to the date of the
annotation of the levy on attachment, i.e., December 22, 2000, are superior to the BIR's claim, since the
latter's notice of tax lien on the CCTs was annotated only on February 15, 2005. It further opined that
TICO's resort to an action for interpleader is improper since Glowide and PMI had already succeeded in
securing a favorable final judgment against TICO. The BIR belatedly filed its MR which the CA denied.
Which between the BIR, on the one hand, and Glowide and PMI, on the other, is entitled to
ownership of the condominium units.
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SUGGESTED ANSWER
GLOWIDE and PMI's rights over the condominium units are superior to the BIR's claim, and are
thus entitled to possession and conveyance of the condominium units.
It is settled that execution is enforced by the fact of levy and sale. As a result of such execution,
104
title over the subject property vests immediately in the purchaser, subject only to the right to redeem the
property within the period provided by law. While the right acquired by the purchaser at an execution sale
is inchoate, and does not become absolute until after the expiration of the redemption period without the
right of redemption having been exercised, the purchaser's right is still entitled to protection, and
must be respected until extinguished by redemption.
Here, as a result of the execution sale, title to the condominium units vested immediately in
Glowide and PMI, subject only to TICO's right to repurchase. When TICO failed to redeem the property
after the expiration of the redemption period, it was divested of its rights over the condominium units.
The prior registration of a lien creates a preference as the act of registration is the operative act
that conveys and affects the land, even against subsequent judgment creditors.
An auction sale conducted pursuant to an order of execution retroacts to the date of

annotation of the levy on attachment, and the purchaser in the auction sale has the concomitant right
to have a certificate of title issued in his favor on the basis thereof as if it were annotated on the same
date.
When the condominium units were sold on execution to Glowide and PMI in 2004, the sale — and
the rights acquired by Glowide and PMI when it purchased the condominium units — retroacted to the
date of inscription of their notice of levy on December 2000.
On the other hand, a tax lien is enforceable against all property and rights to property belonging
to the taxpayer, and retroacts to the time when the tax assessment was made. However, the tax lien shall
not be valid against any judgment creditor until notice of such lien is filed with the Register of Deeds.
Considering GLOWIDE and PMI's rights over the condominium units retroact to December 2000,
the condominium units may no longer be considered TICO's property when the BIR annotated its tax lien
in 2005.
As to BIR's assertion that it enjoys absolute preference over any other claims pursuant to Articles
2241, 2242 (1), and 2246 to 2249, of the Civil Code: TICO's tax claim is only an ordinary preferred credit
under Article 2244 since it is not based on taxes due on the condominium units but on TICO's deficiency
in payment of its income tax, annual registration fees, value-added tax, percentage tax, withholding tax on
wages, expanded withholding tax, and documentary stamp tax. On the other hand, Glowide and PMI's
claim is a special preferred credit under Article 2242 (7) of the Civil Code, and thus superior to BIR's tax
claim which is only an ordinary preferred credit.
Duties, taxes, and fees due the Government enjoy priority only when they are with reference to a
specific movable property, under Article 2241 (1), or immovable property, under Article 2242 (1). However,
with reference to the other real and personal property of the debtor, sometimes referred to as "free
property," the taxes and assessments due the National Government, other than those in Articles 2241 (1)
and 2242 (1), will come only in ninth place in the order of preference.
ADDITIONAL TOPICS FROM 2023 BAR SYLLABI
MARRIAGE
Void Marriages (See Tan-Andal v. Andal, G.R. No. 196359, May 11, 2021)
In Andal, the Supreme Court categorically abandoned the Molina guideline which required the
medical or clinical identification of the psychological incapacity or root cause, and that the same must be
sufficiently proven by experts. The Supreme Court emphasized that the psychological incapacity is
“neither a mental incapacity nor a personality disorder that must be proved through expert opinion”.
What must be proven is the “durable or enduring aspects of a person’s personality called
“personality structure”, which manifests itself through clear acts of dysfunctionality that undermines the
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family. The spouse’s personality structure must make it impossible for him or her to understand and,
more important, to comply with his or her essential marital obligations.”
Expert testimony is not required to prove these aspects of personality, and ordinary witnesses are
sufficient as long as they have been present in the pre-married life of the spouses and can testify as to the
behaviors that they have consistently observed from the incapacitated spouse.
105
Juridical antecedence is still required
That the psychological incapacity must be existent at the time of the marriage. This means that
juridical antecedence is still required as it is specifically mandated under Article 36. The juridical
antecedence may be proven by testimonial evidence on the spouse’s past experiences that led them to
their psychological incapacity.
Psychological incapacity must be incurable, but in the legal sense
In Andal, the Supreme Court amended the third Molina guideline by saying that while
psychological incapacity must be incurable, the incurability must be in the legal sense, and not in the
medical sense. Incurability in the legal sense means that the “incapacity must be so enduring and
persistent with respect to the specific partner, and contemplates a situation where the couple’s respective
personality structures are so incompatible and antagonistic that the only result of the union would be the
inevitable and irreparable breakdown of the marriage.”
Gravity
The requirement that the psychological incapacity must be grave is retained, which must be
shown that it is caused by a genuinely serious cause. The Supreme Court clarified, though, that gravity is
not in the sense that the psychological incapacity must be shown to be a serious or dangerous illness.
Essential marital obligations
In Andal, the Supreme Court ruled that the essential marital obligations are limited to those
between the spouses. However, once the spouses have children, their obligations to their children are also
a part of their spousal obligations to each other Furthermore, the Supreme Court clarified that not all
kinds of failure to meet the obligations to their children will nullify the marriage, but only those that are
shown to be of “grievous nature that it reflects on the capacity of one of the spouses for marriage”.
The Supreme Court summarized the amendment, as follows:
“To summarize, psychological incapacity consists of clear acts of dysfunctionality that show a lack
of understanding and concomitant compliance with one’s essential marital obligations due to psychic
causes. It is not a medical illness that has to be medically or clinically identified; hence, expert opinion is
not required.
As an explicit requirement of the law, the psychological incapacity must be shown to have been
existing at the time of the celebration of the marriage, and is caused by a durable aspect one’s personality
structure, one that was formed before the parties married. Furthermore, it must be shown caused by a
genuinely serios psychic cause. To prove psychological incapacity, a party must present clear and
convincing evidence of its existence.”)
PULIDO CASE
In the leading case of Pulido v. People, G.R. No. 220149, 27 July 2021, BERNABE, J., the SC
en banc exonerated the accused from criminal liability for bigamy when during the pendency of the
bigamy case, a judicial declaration of nullity of the first marriage was entered. Previous decisions had held
that a person who contracts a second marriage without a prior court declaration of nullity of his first
marriage was liable for bigamy even if the first marriage was subsequently declared void by a court. The
SC held in Pulido that the requirement of a prior judicial declaration of nullity under Article 40 of the
Family Code, which is for purposes only of remarriage, should not have been extended to criminal cases.
ADOPTION
Domestic Administrative Adoption and Alternative Child Care Act (RA 11642)
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TAKE NOTE: Enacted on 6 January 2022, Republic Act 11642 also known as “Domestic Administrative
Adoption and Child Care Act” is expected to facilitate some adoption processes.
RA 11642 which reorganized Inter-country Adoption Board (ICAB) into National Authority for
Child Care (NACC) aims to simplify the domestic administrative adoption proceedings and lessen the cost
of streamline services for alternative child care. 106
The NACC is the one-stop quasi-judicial agency responsible for administrative domestic
adoptions, foster care, certification of a child legally available for adoption, and the Stimulated
Rectification Act. It exercises all powers and functions relating to alternative child care, including
declaring a child legally available for domestic administrative and inter-country adoption, foster care,
kinship care, family-like care, or residential care.
Regarding the existing processes of alternative child care, for inter-country adoption cases, no
changes will be made in the process of inter-country adoption and issuance of the certification of a child
legally available for adoption.
However, for domestic adoption cases and as provided in section 56 of RA 11642, judicial petitions
for domestic adoption pending in court upon effectivity of the law may be withdrawn and filed before the
NACC.
EFFECTS OF A DECREE OF ADOPTION
Art. 189. Adoption shall have the following effects:
(1) For civil purposes, the adopted shall be deemed to be a legitimate child of the adopters and
both shall acquire the reciprocal rights and obligations arising from the relationship of parent and child,
including the right of the adopted to use the surname of the adopters;
(2) The parental authority of the parents by nature over the adopted shall terminate and be vested
in the adopters, except that if the adopter is the spouse of the parent by nature of the adopted, parental
authority over the adopted shall be exercised jointly by both spouses; and
(3) The adopted shall remain an intestate heir of his parents and other blood relatives. (39(1)a,
(3)a, PD 603)
Art. 190. Legal or intestate succession to the estate of the adopted shall be governed by the
following rules:
(1) Legitimate and illegitimate children and descendants and the surviving spouse of the adopted
shall inherit from the adopted, in accordance with the ordinary rules of legal or intestate succession;
(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the adopted concur
with the adopter, they shall divide the entire estate, one-half to be inherited by the parents or ascendants
and the other half, by the adopters;
(3) When the surviving spouse or the illegitimate children of the adopted concur with the adopters,
they shall divide the entire estate in equal shares, one-half to be inherited by the spouse or the illegitimate
children of the adopted and the other half, by the adopters.
(4) When the adopters concur with the illegitimate children and the surviving spouse of the
adopted, they shall divide the entire estate in equal shares, one-third to be inherited by the illegitimate
children, one-third by the surviving spouse, and one-third by the adopters;
(5) When only the adopters survive, they shall inherit the entire estate; and
(6) When only collateral blood relatives of the adopted survive, then the ordinary rules of legal or
intestate succession shall apply. (39(4)a, PD 603)
LAND TITLES AND DEEDS

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Review of Decree of Registration; Innocent Purchaser for Value (IPV); Rights of IPV
PD 1529. Section 32. Review of decree of registration; Innocent purchaser for value. The decree of
registration shall not be reopened or revised by reason of absence, minority, or other disability of any
person adversely affected thereby, nor by any proceeding in any court for reversing judgments, subject,
however, to the right of any person, including the government and the branches thereof, deprived of land 107
or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud,
(1) to file in the proper Court of First Instance a petition for reopening and review of the decree of
registration not later than one year from and after the date of the entry of such decree of
registration, but in no case shall such petition be entertained by the court where an innocent purchaser
for value has acquired the land or an interest therein, whose rights may be prejudiced.
Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this
Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.
Upon the expiration of said period of one year, the decree of registration and the certificate of title
issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case
may pursue his remedy by action for damages against the applicant or any other persons responsible for
the fraud.
RA 11573 An Act Improving the Confirmation Process for Imperfect Land Titles: REPUBLIC V.
PASIG RIZAL CO., INC., G.R. NO. 213207, FEBRUARY 15, 2022
Legal basis to remember:
RA 11573
Section 5. Section 48 of Commonwealth Act No. 141, as amended, is hereby further amended
to read as follows:
“SEC. 48. The following-described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have perfected or
completed, may file a petition at any time, whether personally or through their duly authorized
representatives, in the Regional Trial Court of the province where the land is located, for confirmation of
their claims and the issuance of a certificate of title to land not exceeding twelve (12) hectares:
“(a) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of alienable and disposable agricultural
lands of the public domain, under a bona fide claim of ownership, for at least twenty (20) years (HINDI
NA 30 YEARS) immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. They shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be entitled to a certificate of title under the
provisions of this Chapter.
“(b) Those who have acquired ownership of private lands or abandoned riverbeds by right of
accession or accretion under the provision of existing laws; and
“(c) Those who have acquired ownership of land in any other manner provided by law.”
Section 6. Section 14 of Presidential Decree No. 1529 is hereby amended to read as follows:
“SECTION 14. Who may apply. The following persons may file at any time, in the proper Regional
Trial Court in the province where the land is located, an application for registration of title to land, not
exceeding twelve (12) hectares, whether personally or through their duly authorized representatives:
“(1) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the
public domain not covered by existing certificates of title or patents under a bona fide claim of ownership
for at least twenty (20) years immediately preceding the filing of the application for confirmation of
title (20 YEARS NA LANG. TINANGGAL NA YUNG REQUIREMENT NA POSSOSSOR KA SINCE JUNE 12,
1945) except when prevented by war or force majeure. They shall be conclusively presumed to have
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performed all the conditions essential to a Government grant and shall be entitled to a certificate of title
under this section.
“(2) Those who have acquired ownership of private lands or abandoned riverbeds by right of
accession or accretion under the provisions of existing laws.
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“(3) Those who have acquired ownership of land in any other manner provided for by law.
“Where the land is owned in common, all the co-owners shall file the application jointly.
“Where the land has been sold under pacto de retro, the vendor a retro may file an application for
the original registration of the land: Provided, however, That should the period for redemption expire
during the pendency of the registration proceedings and ownership to the property consolidated in the
vendee a retro, the latter shall be substituted for the applicant and may continue the proceedings.
“A trustee on behalf of the principal may apply for original registration of any land held in trust by
the trustee, unless prohibited by the instrument creating the trust.”
Section 7. Proof that the Land is Alienable and Disposable. For purposes of judicial confirmation
PROOF) Said certification shall be imprinted in the approved survey plan submitted by the applicant in
the land registration court. The imprinted certification in the plan shall contain a sworn statement by the
geodetic engineer that the land is within the alienable and disposable lands of the public domain and shall
state the applicable Forestry Administrative Order, DENR Administrative Order, Executive Order,
Proclamations and the Land Classification Project Map Number covering the subject land.
Should there be no available copy of the Forestry Administrative Order, Executive Order or
Proclamation, it is sufficient that the Lad Classification (LC) Map Number, Project Number, and date of
release indicated in the land classification map be stated in the sworn statement declaring that said land
classification map is existing in the inventory of LC Map records of the National Mapping and Resource
Information Authority (NAMRIA) and is being used by the DENR as land classification map.
Section 9. Removal of Restrictions. – The provisions of Republic Act No. 11231 shall be applicable
to Free Patents issued under this Act. (NOTE: FREE PATENTS ISSUED IN THIS ACT)
FACTS OF THE CASE:
Sometime in 1958, Manuel Ham caused the survey fo the Subject Property (SP). The olan was
approved and was declared in Manuel’s name for tax purposes. He died thereafter and his widow
Esperanza and their children trasfered their beneficial ownership over the SP to Dee Ham family
corporation, PRCI. From thenon, PRCI pays the real property taxes due in its name.
In 2009, Esperanza executed an affidavit to formalized the transfer. As president of PRCI, she filed
before the RTC an application for original registration of tile ove the SP. She alleged that PRCI is the owner
of the SP and that PRCI and its predecessors in interest have been open, continuous, exclusive and
notorious possession of the SP for more than 50 years. She also averred that the SP has neither been
encumbered, nor has it been adversely possessed or claimed by any other party.
No opposition was entered against the application after due notice and publication. An order of
general default was entere3d against the whole world with the exception of the Republic of the Philippines.
Subsequently, PRCI presented ex parte the ff:
1. The approved Survey Plan, Technical Description and Surveyor’s Certification of the SP
2. Tax Declaration and Tax Receipts from 1956
3. Affidavit of Esperanza transferring the ownership of the SP to PRCI
4. Certification of the Regional Technical Director of Forest Management Service of the DENR to
prove that the SP is within the alienable and disposable land of public domain
5. Affidavit of Bernarda LU attesting to PRCI’s ownership of the SP and its uninterrupted possession
The Trial Copurt confirming and affirming PRCI’s title oce the SP. On January 3, 2012, the Solicitor
General assailed the RTC Decision before the CA via Rule 41(appeal). CA dismissed the appeal. The RP
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appeals the dismissal to the SC maintaining that the CA erred when it affirmed the RTC decision
granting PRCI’s applications for registration in the absence of proof that:
1. The government officials who issued the certifications on land classification status testified on
their contents pursuant to the Court’s ruling in TAN Properties and Hanover; and
2. The DENR RED NCR attached a copy fo the original classification approved by the DENR
109
Secretary, certified by the legal custodian of DENR records
(Explanation kung bakit ganito ang kuda ang SG. Ang prevailing jurisprudence ay ang cases ni TAN and
Hanover that requires the approval of the DENR Secretary had approved the land classification, and that
certification must be certified as true copy by the legal custodian of the official records. That certification
must state that the DENR Secretary has approved the classification and released the land of the public
domain as Alienable and Disposable, and that the land subject of the application for registration falls
within the approved area per verification through survey by the PENRO, CENRO or the RED (NCR).
Moreover, the government officers must be presented in court to ntestify on the certifications contents)
ISSUES:
Whether PRCI sufficiently proved that it is entitled to a decree of registration ove the SP?
HELD:
Ibalik sa CA ang kaso dahil umeksena ang RA 11573. Ito na ang case law at hindi na ang cases ni
Tan and Hanover. Under that law, PRCI had only prove/present the ff:
1. That they are in possession of the SP for more than 20 years (Carry n nila nito dahil 1956 pa sila
in possession)
2. The new law only requires a certification from the Geodetic Engineer na AnD n yung SP based on
Section 7 of RA 11573.
(For purposes of judicial confirmation of imperfect titles filed under Presidential Decree No. 1529,
a duly signed certification by a duly designated DENR geodetic engineer that the land is
part of alienable and disposable agricultural lands of the public domain is sufficient proof
that the land is alienable)
NOTES TO REMEMBER
1. Once property of public dominion is classified by the State as alienable and disposable of the
public domain, it immediately becomes open to private acquisition since alienable lands of the
public domain form part of the patrimonial property of the State. The operative act which
converts property of public dominion to patrimonial property is its classification as
alieanable and disposable land of the public domain, as this classification precisely serves
as the manifestation of the State’s lack of intent to retain the same for some public use or
purpose.
2. From these referenced cases, it becomes clear that the need for an express government
manifestation confirming that the property in question is “no longer retained” by the State for
public use, public service, or the development of national wealth, stems from the principle that
abandonment of property of public dominion under Article 420 cannot be inferred solely from
non-use. In turn, the determination of whether property has in fat been abandoned by the State is
necessary only in cases where there has been prior State-use. To repeat, there is no
abandonment to speak of in the absence of prior State-use.
3. Equally notable is the final proviso of the new Section 14 (1) which espressly states that upon
proof of possession of alienable and disposable lands of the public domionion for the period (at
least 20 years) and in the manner required under said provision, all applicants “shall be
conclusively presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under this section.” This final proviso unequivocally
confirms that the classification of land as alienable and disposable immediately places it
within the commerce fo man, and renders it susceptible to private acquisition through
adverse possession.
WILLS AND SUCCESSION

POISONED COPY
FIDEICOMMISSARY SUBSTITUTION (COMPARED WITH TESTAMENTARY TRUSTS)
A testamentary trust is a specific type of trust that's created as part of a last will and testament. A
grantor (the creator of the trust) leaves instructions in their will for a named executor detailing how their
assets are managed by a trustee and distributed to beneficiaries. Whereas, in fideicomisary substitution,
the testator wills directly to the first heir the assets with the instructions to transfer it to the second heir. 110
In a fideicommissary substitution, both the fiduciary and the fideicommissary heirs are true heirs of the
testator, which cannot be said of the trustee. The fideicommissary heir is entitled to the enjoyment of the
property, while the trustee is not.
IRON CLAD RULE
Children, regardless of their parents’ marital status, can now inherit from their
grandparents and other direct ascendants by right of representation.
In a Decision penned by Associate Justice Marvic M.V.F. Leonen, the Court En Banc reinterpreted
Article 992 of the Civil Code, which prohibits non-marital children from inheriting from their siblings who
are marital children, as well as “relatives of [their] father or mother[.]” The Decision used the terms
“marital” and “non-marital” to replace the terms “legitimate” and “illegitimate” when referring to the
children, as the latter terms are pejorative terms when used to describe children based on their parents’
marital status. Departing from regressive conjectures about family life in favor of the best interests of the
child, the Court abandoned the presumption that “nonmarital children are products of illicit relationships
or that they are automatically placed in a hostile environment perpetrated by the marital family.” The
Court ruled that grandparents and other direct ascendants are outside the scope of “relatives” under
Article 992. “Both marital and nonmarital children, whether born from a marital or nonmarital child, are
blood relatives of their parents and other ascendants.” Thus, a nonmarital child’s right of representation
should be governed by Article 982 of the Civil Code, which does not differentiate based on the birth status
of grandchildren and other direct descendants. (G.R. Nos. 208912 and 209018, Aquino v. Aquino,
December 7, 2021)
---------xxx-------
For God so loved the world, that he gave his only begotten Son,
that whoever believes in him should not perish, but have everlasting life.
- John 3:16
END FOR CIVIL LAW

2019 Bernabe Civil

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POISONED COPY

G.R. No. 219698, September 27, 2021

LEGAL BASIS TO REMEMBER

PNTC filed a Complaint for Delivery of Personal Properties with Damages.

G.R. No. 219185, November 25, 2020

LEGAL BASIS TO REMEMBER

MARRIAGE CELEBRATED ABROAD

[ G.R. No. 243646. June 22, 2022 ]

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. JOCELYN ASUSANO KIKUCHI, AS

LEGAL BASIS TO REMEMBER

[ G.R. No. 213954. April 20, 2022 ]

HANNAMER C. PUGOY-SOLIDUM, PETITIONER, VS. REPUBLIC OF THE

Tan-Andal v. Andal provided the following parameters:

Likewise, juridical antecedence of psychological incapacity may also be proven by ordinary

[ G.R. No. 208258. April 27, 2022 ]

LEGAL BASIS TO REMEMBER

Tan-Andal v. Andal provided the following parameters:

Likewise, juridical antecedence of psychological incapacity may also be proven by ordinary

Irreconcilable differences, conflicting personalities, emotional immaturity and irresponsibility,

[ G.R. No. 237524. April 06, 2022 ]

Tan-Andal v. Andal provided the following parameters:

Likewise, juridical antecedence of psychological incapacity may also be proven by ordinary

In February 2000, respondent eventually found work as an entertainer in Japan. Petitioner

Tan-Andal v. Andal provided the following parameters:

Likewise, juridical antecedence of psychological incapacity may also be proven by ordinary

PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

LEGAL BASIS TO REMEMBER

1. determination and adjudication of all matters involving implementation of agrarian reform;

1. via hereditary succession, or

1. determination and adjudication of all matters involving implementation of agrarian

1. via hereditary succession, or

G.R. No. 201655, August 24, 2020

APOLINARIO VALDEZ, AMANDA ESPIRITU, AQUILINA HERNANDEZ, AND SALVADOR PETINES,

LEGAL BASIS TO REMEMBER

1. by judicial confirmation; and

3. by judicial confirmation; and

[ G.R. No. 197389, October 12, 2020 ]

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. MANUEL M. CARAIG, RESPONDENT.

LEGAL BASIS TO REMEMBER

He attached the following documents in his application:

(a) Tax Declaration in his name;

(b) Deed of Absolute Sale executed by Reynaldo in his favor;

(d) Technical Description; and

(e) Certification in lieu of Geodetic Engineer's Certificate.

The Republic opposed based on the following grounds:

(a) the land is inalienable and part of the public domain;

[ G.R. No. 200863, October 14, 2020 ]

LEGAL BASIS TO REMEMBER

G.R. No. 214981, November 04, 2020

LEGAL BASIS TO REMEMBER

[ G.R. NO. 206240, MAY 12, 2021]

LEGAL BASIS TO REMEMBER

G.R. NO. 225426, JUNE 28, 2021

LEGAL BASIS TO REMEMBER

G.R. No. 212126, August 04, 2021

LEGAL BASIS TO REMEMBER

Under prevailing jurisprudence, the property should rightly be returned to respondents

Under prevailing jurisprudence, the property should rightly be returned to respondents

G.R. No. 205817, October 06, 2021

(a) that the certificate of title had been lost or destroyed;

WHETHER the RTC erred in granting respondents' petition for reconstitution.

[ G.R. No. 207159. February 28, 2022 ]

LEGAL BASIS TO REMEMBER