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 PERSONS AND FAMILY RELATIONS

1. AAA and BBB got married in Mandaue City on June 5, 2000. Sometime in November 2000, BBB left
without any information of where he was going. She inquired from their friends if they saw or heard
BBB, but they were also clueless. Based on AAA’s knowledge, BBB had a cyst in his right jaw which
was getting bigger. AAA sought to declare BBB presumptively dead considering that more than 6
years have lapsed without any information on his whereabouts. Is BBB presumptively dead which
would allow AAA to remarry?
No. Jurisprudence sets out four requisites for a grant of a petition for declaration of presumptive death under
Article 41 of the Family Code: first, 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; second, the present spouse wishes to remarry;third, the present spouse
has a well-founded belief that the absentee is dead; and fourth, the present spouse files for a summary
proceeding for the declaration of presumptive death of the absentee. 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 and that based on these efforts and inquiries, he/she believes
that under the circumstances, the absent spouse is already dead. AAA in this case only successfully
established that the whereabouts of BBB are indeterminable. As circumstances that definitely suggest BBB's
death remain to be seen, the Court cannot consider AAA's civil status as that of a widow. (Republic vs.
Ponce-Pilapil, G.R. No. 219185. November 25, 2020)

2. AAA filed before the trial court a Petition for judicial recognition of foreign divorce of his marriage
with BBB. She submitted before the court a photocopy of the English translation of the Civil Code of
Japan, published by Eibun-Horei-Sha, Inc. and stamped with "LIBRARY, Japan Information and
Culture Center, Embassy of Japan, 2627 Roxas Boulevard, Pasay City". Is the document sufficient
proof of the law of Japan on divorce?
No. The Court noted that the translations by Eibun-Horei-Sha, Inc. (the publisher of the document submitted
by AAA) are not advertised as a source of official translations of Japanese laws. Not being an official
translation, the document submitted by AAA does not prove the existing law on divorce in Japan.
Unfortunately, without such evidence, there is nothing on record to establish that the divorce between AAA
and BBB was validly obtained and is consistent with the Japanese law on divorce. (Republic vs. Kikuchi, G.R. No.
243646, June 22, 2022)

3. AAA sought to nullify her marriage with BBB on the ground of psychological incapacity. Since it was
clinically found that: (1) BBB is a sexual deviant/sadist type, as manifested by his preference for anal
and oral sex; and (2) that said personality disorder of BBB is characterized by seriousness or gravity
and incurability, AAA alleged that BBB is not capable of adhering to a normal sex life. AAA asserts
that one who unconsciously inflicts sexual violence on his wife, such as BBB, is incapable of
complying with the essential marital obligations of observing mutual love and respect. Do these
irreconcilable differences and conflicting personalities of the spouses amount to psychological
incapacity as ground for nullity of marriage?
No. The mere showing of 'irreconcilable differences' and 'conflicting personalities' [as in the present case,] in
no wise constitutes psychological incapacity. Article 36 of the Family Code contemplates downright incapacity
or inability to take cognizance of and to assume the basic marital obligations. It is not enough to prove that a
spouse failed to meet his responsibilities and duties as a married person; incapacity 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. 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.
It must be stressed that an unsatisfactory marriage is not a null and void marriage. (Carullo-Padua vs. Padua, G.R.
No. 208258. April 27, 2022)

4. Under present jurisprudence, is psychological incapacity a mental incapacity that must be proven by
expert opinion?
No. Psychological incapacity is neither a mental incapacity nor a personality disorder that must be proven
through expert opinion. There must be proof, however, of the durable or enduring aspects of a person's
personality, called "personality structure," which manifests itself through clear acts of dysfunctionality that
undermines the family. The spouse's personality structure must make it impossible for him or her to
understand and to comply with his or her essential marital obligations. Proof of these aspects of personality
need not be given by an expert. Ordinary witnesses who have been present in the life of the spouses before
the latter contracted marriage may testify on behaviors that they have consistently observed from the
supposedly incapacitated spouse. From there, the judge will decide if these behaviors are indicative of a true
and serious incapacity to assume the essential marital obligations. (Carullo-Padua vs. Padua, G.R. No. 208258. April 27,
2022)

5. AAA sought to nullify her marriage with BBB on the ground of psychological incapacity. The following
are AAA’s testimony: (1) she was the breadwinner of BBB's family, while BBB never worked and only
spent his time in gambling and cockfighting; (2) their relationship turned sour after she got pregnant;
(3) BBB's parents were no longer fond of her for being an additional mouth to feed; (4) that BBB
asked her to leave with her mother and child after being instructed by his parents; and (5) even after
their forced departure, BBB did not bother to go after her and their child. Are these allegations

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 sufficient to prove that BBB is psychologically incapable to comply with the essential marital
obligations?
No. These allegations do not necessarily constitute psychological incapacity. Irreconcilable differences, sexual
infidelity or perversion, emotional immaturity and irresponsibility and the like, do not by themselves prove the
existence of psychological incapacity under Article 36 of the Family Code. The totality of evidence must still
be sufficient to prove that the incapacity was grave, incurable, and existing prior to the time of the marriage.
(Pugoy-Solidum vs. Republic, G.R. No. 213954. April 20, 2022)

6. AAA and BBB started dating when they were working in Taiwan. After months of courtship, AAA got
pregnant. After the termination of their employment contract, they returned to the Philippines and got
married. AAA later on became the breadwinner of the family and they would often argue about BBB’s
unemployment. In 2000, BBB worked as an entertainer in Japan and in his passport, he indicated
“single” as his status. BBB proceeded with his work but in 2002, he failed to send money to AAA and
lost communication with each other. Is BBB psychologically incapacitated to perform his marital
obligation?
No. The Tan-Andal case retains the fifth Molina guideline that requires that "such illness must be grave
enough to bring about the disability of the party to assume the essential obligations of marriage", but further
provides that there must be a clear and convincing evidence showing that such incapacity is caused by a
genuinely serious psychic cause. The Court, in the Molina case, further elaborates: Thus, 'mild
characterological peculiarities, mood changes, occasional emotional outbursts' cannot be accepted as root
causes. The illness must be shown as downright incapacity or inability, not a refusal, neglect or difficulty,
much less ill will. In other words, there is a natal or supervening disabling factor in the person, an adverse
integral element in the personality structure that effectively incapacitates the person from really accepting and
thereby complying with the obligations essential to marriage. For failure to show by clear and convincing
evidence that BBB 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. (Santos-Macabata vs. Macabata, Jr., G.R. No. 237524. April 6, 2022)

7. AAA’s claim that they are the legitimate children of the spouses BBB. However, AAA's records of birth
were not recorded in the Civil Register or their legitimate filiation embodied in a public document or a
private handwritten instrument signed by the spouses BBB. Instead, AAA offered testimonies of their
relatives, namely, CCC, DDD, EEE and FFF, to prove that they are legitimate children of the spouses
BBB. The testimonies of CCC and FFF were based on their own personal knowledge of AAA’s status
as legitimate children of the BBB couple. They are close relatives of AAA and live near the subject
property, hence, they had the opportunity to meet and know their neighbors who are also their
relatives. Both DDD and EEE testified on AAA's family pedigree based on the declarations relayed to
them by other family members who were already deceased and cannot testify in court. Did AAA
sufficiently prove their filiation through these testimonies?
Yes. 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, such as, baptismal certificate, a judicial admission, a family bible in which his or her
name has been entered, common reputation respecting his or her pedigree, admission by silence, the
testimonies of witnesses and other kinds of proof admissible under Rule 130 of the Rules of Court. Here, the
testimonial evidence is sufficient to establish AAAs' status as heirs of the BBB couple. Both the Civil Code
and Family Code recognize such other means allowed by the Rules of Court to prove filiation or the legitimacy
status of a person, that includes testimonies of witnesses. Although no documentary evidence was offered by
AAA to prove their legitimacy, the testimonies of the witnesses presented preponderantly tipped the scales in
their favor. (Ende vs. Roman Catholic Prelate of the Prelature Nullius of Cotobato, Inc., G.R. No. 191867. December 6, 2021)

8. Spouses, who are both foreigners residing and have been gainfully employed in the Philippines for at
least 3 continuous years, filed a petition for adoption under the Domestic Adoption Act. Should the
case be referred to Inter-Country Adoption Board (ICAB)?
No. Since the spouses have been residing and have been gainfully employed in the Philippines and are thus
living in the Philippines for at least three continuous years prior to the filing of the petition for adoption, as
required by the Domestic Adoption Act, their Petition for Adoption was appropriately filed under the Domestic
Adoption Act. Even if the instant adoption proceeding would be referred to the ICAB, there is still a high
probability that the ICAB will file a manifestation so that the domestic adoption before the trial court could be
pursued, considering the circumstances of the case. Consequently, the referral to the ICAB would only cause
a delay in the adoption proceedings, a matter that would be clearly prejudicial to the interest of the adoptee
and the AAA’s. Since the case properly falls under the Domestic Adoption Act, it is for the best interest of the
child that the instant case be speedily disposed by continuing the proceedings in the trial court for the
determination of whether AAAs are indeed qualified to adopt the child, instead of inappropriately referring the
instant domestic adoption case to the ICAB where the proceedings may have to start anew and might be
referred back to the trial court for the continuation of the domestic adoption proceedings. Settled is the rule
that in adoption proceedings, the welfare of the child is of paramount interest. (Spouses Park vs. Hon. Liwanag, G.R.
No. 248035. November 27, 2019)

9.

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 PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

10. When is ownership transferred to the buyer?

As 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. Article 1498 of the
Civil Code provides that when the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not
appear or cannot be clearly inferred. (Cabilo vs. Tampan, G.R. No. 209702, March 23, 2022)

11. What must the complainant prove in an action to recover property?

Under Article 434 of the New Civil Code, 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. (Heirs of Magsaysay vs. Sps. Perez, G.R. No. 225426. June 28, 2021)

12. AAAs acquired land from their predecessor-in-interest who, in turn, merely tolerated the occupation
of the property by BBBs. After title was transferred to the AAAs, they likewise tolerated the presence
of BBBs upon the understanding that they will peacefully vacate the land once the AAAs' need to use
the same arises. When AAAs' demands to vacate the property were made, the last of which was on
February 12, 2013, BBBs refused to comply. BBBs claim that they were entitled to the possession and
occupation of the land because they had been in possession of the same in the concept of an owner
for more than twenty years and they introduced valuable improvements therein and that they have
priority in rights to apply for title of their respective lots because the original Transfer Certificate of
Title (TCT) and its derivative titles were declared null and void by the Court of Appeals. Hence, AAAs
filed a complaint for unlawful detainer on August 6, 2013. AAAs asserted that BBBs' offer to purchase
the property from them was a tacit recognition that the AAAs owned the property and that their
Torrens certificate of title proved their ownership of the land. Are the elements of unlawful detainer
present in this case?
Yes. An action for unlawful detainer will stand if the following requisites are present:
Initially, possession of property by the defendant was by contract with or by tolerance of the plaintiff;
a. Eventually, such possession became illegal upon notice by plaintiff to defendant of the termination of the
latter's right of possession;
b. Thereafter, the defendant remained in possession of the property and deprived the plaintiff of the
enjoyment thereof; and
c. Within one year from the last demand on defendant to vacate the property, the plaintiff instituted the
complaint for ejectment.
The occupation became illegal when BBBs refused to heed AAAs' express and clear demands to vacate the
subject property. It is evidently clear that the complaint for unlawful detainer was made within one year from
the time the last formal demand to vacate was made.
Further, it should be pointed out that BBBs would not have made an offer to purchase the subject land from
AAAs had they been truly in possession of the property in the concept of an owner. Their claim is thus
negated by the fact that the subject land is registered in the name of the AAAs. It is settled that a Torrens title
is evidence of an indefeasible title to property in favor of the person in whose name the title appears. It is
conclusive evidence with respect to the ownership of the land described therein. Hence, AAAs as the
titleholders are entitled to all the attributes of ownership of the property including possession. (Spouses Liu vs.
Espinosa, G.R. No. 238513. July 31, 2019)

13. What is the nature of the possession of the defendant in unlawful detainer cases?
In unlawful detainer cases, the possession of the defendant was originally legal, as his possession was
permitted by the plaintiff on account of an express or implied contract between them. However, the
defendant's possession became illegal when the plaintiff demanded that defendant vacate the subject
property due to the expiration or termination of the right to possess under their contract, and the defendant
refused to heed such demand. (Spouses Liu vs. Espinosa, G.R. No. 238513. July 31, 2019)

14. Is BBBs' claim of possession of the property in the concept of an owner an issue that may be decided
upon in a case for unlawful detainer?
No. BBBs' claim of possession of the property in the concept of an owner is a collateral issue that may not be
decided upon in a case for unlawful detainer. To stress, the only issue to be resolved in an unlawful detainer
case is physical or material possession of the property involved, independent of any claim of ownership by
any of the parties involved. (Spouses Liu vs. Espinosa, G.R. No. 238513. July 31, 2019)

15. AAA and his siblings sued BBB and others with the crime of forcible entry. BBB claimed that he
bought the land and was given a deed of absolute sale in 1988. On the other hand, AAA claimed that
they are the registered owners of the subject parcels of land covered by Transfer Certificates of Title
in 1999. AAA showed proof that their actual possession of the property was in 2001 while BBB
showed pieces of evidence such as real property tax receipt in 2005. Is AAA entitled to recover in an
ejectment suit of forcible entry by proving his prior possession of the property?
Yes. Since AAA proved his prior possession, he is entitled to file forcible entry complaint pursuant to Rule 70
of the Rules of Court which provides that any person deprived of the possession of any land or building by
force, intimidation, threat, strategy, or stealth may file a forcible entry complaint within one year from the
discovery of unlawful deprivation. (Palajos vs. Abad, G.R. No. 205832. March 7, 2022)

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16. What are the elements that must be alleged and proved for a forcible entry suit to prosper?
The elements of forcible entry are as follows:
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 defendant; &
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. (Palajos vs. Abad, G.R. No. 205832. March 7, 2022)

17. In a case of forcible entry, will the suit only prosper if there is actual possession of the property?
No. Possession can be acquired by juridical acts. These are acts to which the law gives the force of acts of
possession. Examples of these are donations, succession, execution and registration of public instruments,
inscription of possessory information titles and the like. The reason for this exceptional rule is that possession
in the eyes of the law does not mean that a man has to have his feet on every square meter of ground before
it can be said that he is in possession. It is sufficient that AAA was able to subject the property to the action of
his will. (Palajos vs. Abad, G.R. No. 205832. March 7, 2022)

18. Distinguish forcible entry and unlawful detainer in terms of possession, demand to vacate, and
prescriptive period.
Forcible Entry Unlawful Detainer
Possession the possession of the defendant or the the possession is previously legal but
intruder is illegal from the beginning because eventually becomes unlawful upon the
his/her possession of the property is against expiration of one's right to possess the
the will or without the consent of the plaintiff property after, for instance, the termination
or the former possessor. Thus, plaintiff must or violation of a lease contract. Thus, the
allege in the complaint and prove that he/she plaintiff need not have prior physical
was in prior physical possession of the possession of the property. Prior to the
property m litigation until he/she was deprived filing of the action, the plaintiff must issue a
thereof by the defendant. demand to vacate to defendant, which the
latter fails to comply.
Demand to no previous demand to vacate is required prior to the filing of the action, plaintiff must
Vacate before the filing of the action issue a demand to vacate to defendant,
which the latter fails to comply
Prescriptive in general, the one-year prescriptive period is the one-year period m unlawful detainer 1s
period reckoned from the date of actual entry on the counted from the date of the last demand to
property; however, if forcible entry is done vacate.
through stealth, the period is counted from the
time the plaintiff discovered the entry.
(Palajos vs. Abad, G.R. No. 205832. March 7, 2022)

19. AAA had been occupying a lot along Creek I for more than 55 years openly, publicly, adversely, and
continuously in the concept of an owner. BBB contested that the said property is covered by a TCT
registered under its name. BBB filed a Complaint for ejectment against AAA. AAA filed a civil case for
cancellation of title with damages and other reliefs. BBB filed a Motion to Dismiss alleging that the
principal issue in the case, i.e., whether Creek I is a man-made or a public creek, has been resolved in
the ejectment case when the Supreme Court affirmed and declared that Creek I is man-made and
belongs to BBB. Is the issue of ownership adjudicated in the ejectment case binding on the civil case
for cancellation of title?
No. The sole issue in ejectment cases is physical or material possession of the subject property, independent
of any claim of ownership by the parties." Section 16, Rule 70 of the Rules of Court provides the exception to
the rule in 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. In the related ejectment case, the parties were allowed
to prove how they came into possession of the property. Incidentally, the issue of the ownership of Creek I,
came into forth. In the ejectment case, the issue of ownership over Creek I was resolved in favor of BBB.
Time and again, this Court has consistently held that where the issue of ownership is inseparably linked to
that of possession, adjudication of the issue on ownership is not final and binding, but merely for the purpose
of resolving the issue of possession. The adjudication of the issue of ownership is only provisional, and not a
bar to an action between the same parties involving title to the property. Thus, any ruling on ownership that
was passed upon in the ejectment case is not and should not be binding on the civil case. (Tiña vs. Sta. Clara
Estate, Inc., G.R. No. 239979. February 17, 2020)

20. What are the requirements for an action for quieting of title to prosper?
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 (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.' (Viloria vs. Heirs of Gaetos, G.R.
No. 206240. May 12, 2021, Heirs of Marquez vs. Heirs of Hernandez, G.R. No. 236826. March 23, 2022)

21. AAAs, heirs of BBB, filed a Complaint for Quieting of Title with Damages against CCC. To enforce
their claim, they presented, among others, TCT which was issued in the name of BBB and Tax
Declaration. On the other hand, CCCs presented a genealogy of certificates of title on how they
acquired the property. Will the complaint prosper?

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 No. Two requisites must be established in order that a complaint for quieting of title may prosper. First, the
plaintiff must have a legal or equitable title or interest in the property subject of the complaint. 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.
AAAs failed to prove that they hold a legal or equitable title over the subject property. On one hand, 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. On
the other hand, 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." AAAs are neither holders of a legal
title nor equitable title over the subject property as the TCTs and tax declarations they presented were not
sufficient to establish their claim.
Similarly, the second requisite was not ascertained since the certificates of title in the name of CCC and the
origin of the same were precisely demonstrated through the chain of transactions which led to CCC's
ownership of the subject property. Therefore, the alleged cloud created by CCC's certificates of title did not
exist. (Heirs of Eñano vs. San Pedro Cineplex Properties, G.R. No. 236619. April 6, 2022)

22. Will a complaint for nullification of sale and recovery of ownership filed by a part-owner in case of a
sale of the entire land, made by the other part-owner in a co-ownership, to a third party, prosper?
No. It may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire
property by one co-owner without the consent of the other co-owners is not null and void. However, only the
rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property. The proper
action in cases like this is not for the nullification of the sale or for the recovery of the thing owned in common
from the third person who substituted the co-owner or co-owners who alienated their shares, but the division
of the common property as if it continued to remain in the possession of the co-owners who possessed and
administered it. (Reyes vs. Sps. Garcia, G.R. No. 225159. March 21, 2022)

23. 5 of the 8 heirs, to the exclusion of 3 other heirs, executed a Kasunduan for the voluntary transfer of
the land allowed by the CARL with a 50-50 sharing condition (the heirs shall retain half of the land and
the other half will be distributed to the qualified beneficiaries). Should the entire partition be
annulled?
No. Articles 493-495 and 498 of the Civil Code allow for alienation by a co-owner of his or her share in the
co-owned property, termination of the co-ownership, and partition of the property. (Silva vs. Lo, G.R. No. 206667.
June 23, 2021)

24. One of the co-heirs authorized her husband through a Special Power of Attorney to file a Complaint
for Quieting of Title with Damages involving the co-owned property. Can the husband validly institute
the case?
Yes. Every co-owner may institute a suit to protect the rights over the co-owned property for the benefit of all
other co-owners without the latter being impleaded as co-plaintiffs in the case. Yet when a co-owner
repudiates the co-ownership and claims one's rights over the co-owned property without regard to the
co-ownership, the need to implead the other co-owners to the suit becomes significant.
Thus, the husband’s personality to institute the case on behalf of the co-heirs especially since he was given a
Special Power of Attorney executed by his wife who was one of the co-heirs should be recognized. (Heirs of
Eñano vs. San Pedro Cineplex Properties, G.R. No. 236619. April 6, 2022)

25. BBB filed an Application for Original Registration of Title over a lot. He allegedly bought the said lot
from AAA who, together with his predecessors-in-interest, had allegedly been in open, continuous,
and exclusive possession of land before June 12, 1945. BBB presented six witnesses. One of the
witnesses who frequented the land since he was a child, categorically testified that it was CCC who
possessed and owned the lot. CCC planted banana and coffee in the land and hired the services of
other workers to help him till the soil. CCC transferred the land to his son AAA. Three witnesses
attested the truth of BBB’s claim that the land was sold to him while the three other witnesses
corroborated the said testimony. However, the earliest tax declaration on record is 1955. Has BBB
sufficiently established his possession in the concept of owner of the property since June 12, 1945, or
earlier?
Yes. Settled is the rule that an applicant for registration of a subject land must proffer proof of specific acts of
ownership to substantiate his claim. In other words, he should prove that he exercised acts of dominion over
the lot under a bona fide claim of ownership since June 12, 1945, or earlier. "The applicant must present
specific acts of ownership to substantiate the claim and cannot just offer general statements which are mere
conclusions of law than factual evidence of possession." The testimonies of the witnesses are credible
enough to support BBB's claim of possession. CCC performed specific acts of ownership. The possession
and occupation as bona fide owner of CCC and AAA can be tacked to the possession of BBB. The fact that
the earliest tax declaration on record is 1955 does not necessarily show that the predecessors were not in
possession of the lot since 1945. Indeed, the Court in a long line of cases has stated that tax declarations or
tax receipts are good indicia of possession in the concept of owner. However, it does not follow that belated
declaration of the same for tax purposes negates the fact of possession. (Republic vs. Caraig, G.R. No. 197389.
October 12, 2020)

26. In 1949, BBB filed a Free Patent Application for Lot A which it has possessed since 1929 as evidenced
by Tax Declaration and the corresponding payments of real estate taxes ever since. However, AAAs
filed a Sales Patent Application to several lots which are included in Lot A. The investigations found
that the property is not yet alienable and disposable in 1956. Should BBB's occupation and

7
 possession be considered in granting his free patent application in 1949 when the subject property is
not yet declared alienable and disposable?
Yes. An applicant for a free patent does not claim the land as his or her private property but acknowledges
that the land is still part of the public domain. BBB, in choosing to apply for free patent, acknowledged that the
land covered by his application still belongs to the government and is still part of the public domain.
Notwithstanding the fact that when BBB filed his amended free patent application in 1952, the subject
property was not yet declared as alienable and disposable public land, the Court is persuaded to give
preference to the possession of BBB since 1929 over the AAAs' claims or interest which arose later than
BBB's. The subsequent declaration of the lot as open for disposition to qualified claimants effectively cured
the defect of BBB's free patent application filed before the herein AAAs. BBB'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. (Valdez vs. Heirs of
Catabas, G.R. No. 201655. August 24, 2020)

27. AAA requested his sibling BBB to donate 10sqm of his land which encroached on his balcony.
Thereafter, BBB and his wife signed a document written in English and was not understood by them.
AAA thereafter told them that the document was for the partition of the inherited land and transfer of
their respective shares, then they signed the document. It was later on discovered that the instrument
was a Deed of Donation. Is the Deed valid?
No. An agreement between the donor and the donee is essential like in any other contract. As such, the
requisites of a valid contract under Article 1318 of the Civil Code must concur, namely: (1) consent of the
contracting parties, that is consent to donate the subject land to AAAs; (2) object certain which is the subject
matter of the contract; (3) cause of the obligation which is established. Consent is absent in the instant case.
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. The parties' intention should be clear; otherwise, the donation is
rendered void in the absence thereof or voidable if there exists a vice of consent. BBBs did not give their
consent to the donation of their land to AAAs. Hence, no valid donation had transpired between the parties.
(Cardinez vs. Spouses Prudencio, G.R. No. 213001. August 4, 2021)

28. What are the four types of donation?

Pure or simple Remuneratory or Conditional or modal Onerous
compensatory
One where the One made for the purpose One where the donation is That which imposes
underlying cause is of rewarding the donee for made in consideration of upon the donee a
plain gratuity. This is past services, which future services or where the reciprocal obligation
donation in its truest services do not amount to donor imposes certain or, to be more
form. a demandable debt. conditions, limitations or precise, this is the
charges upon the donee, kind of donation
the value of which is inferior made for a valuable
than that of the donation consideration, the
given cost of which is equal
to or more than the
thing donated
(Estate of Rodriguez vs. Republic, G.R. No. 214590, April 27, 2022)

29. The decedent executed a deed of conditional donation in favor of the Republic over a parcel of land
for the purpose of constructing thereon a mental facility. The deed of conditional donation, expressly
provided for the automatic revocation and/or reversion in case of breach of any of the conditions
therein. Five out of the 32 hectares of land subject of the donation are being used by the Republic for
the operation of its mental hospital, while a portion of the land is occupied by the informal settlers. In
order to utilize the subject property exclusively for the use of the mental hospital, the Republic filed
an ejectment case against the informal settlers. Thereafter, a judgment favorable to the Republic was
rendered. It became final and executory in 1995. However, the Republic failed to have the Decision
executed by filing a motion for execution within five years or a motion to revive the judgment within
10 years from the finality of Civil Case. In 2007, the estate filed a complaint against the Republic for
revocation of the donation. Was the complaint filed within the prescriptive period?
Yes. 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.
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. The estate’s complaint filed in 2007 is well within the prescriptive
period, which is 10 years from the lapse of the period within which the Republic could file a motion for revival
of judgment of the Civil Case. The cause of action accrued only from the time of the alleged violation of the
Republic, that is, its failure to comply with its obligation to not lease, let, encumber or dispose any portion of
the donated property, i.e., its failure to move for execution or revival of judgment of the Civil Case, which
resulted in the continuous occupation of the informal settlers on a portion of the donated property. (Estate of
Rodriguez vs. Republic, G.R. No. 214590, April 27, 2022)

30. One of the conditions in the deed of donation stated: “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.” Is the condition in the donation valid?

8
 No. The provision is an undue restriction to the right of the Republic for unreasonable period of time. The
provision in the deed of conditional donation did not expressly state a period of restriction on the Republic's
right to dispose of the donated property. The donor could not unduly restrict the right of the donee to dispose
of the donated property perpetually or for an unreasonable period of time. The prohibition in the deed of
donation that the Republic cannot lease, let, convey, dispose or encumber the donated property without
specifying the duration of the restriction should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code as it is contrary to public policy. (Estate of Rodriguez vs. Republic, G.R.
No. 214590, April 27, 2022)

31. What is the prescriptive period of an action for annulment of a Deed of Donation which is adjudged as
void ab initio?
None. The action 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. (Cardinez vs. Spouses Prudencio, G.R. No. 213001. August 4, 2021)

32. AAAs, legitimate heirs of spouses CCC, intervened in the quieting of title and recovery of possession
case filed by the plaintiffs, who claim to be surviving heirs of spouses CCC, against BBBs. AAAs
prayed for the nullity of the extrajudicial settlement of estate of the spouses CCC. BBBs contend that
AAAs' right to recover the subject property had already been barred by laches for failure of herein
AAAs to pursue an action to recover the subject property from BBBs for at least 30 years to at most
50 years. AAAs failed to recover the subject property immediately because they were driven away
from the land by the nephews of the spouses CCC, DDD and EEE. Nonetheless, after the death of
DDD, AAA immediately went to the persons in possession of the subject property and they were
summoned by the Office for Southern Cultural Communities (OSCC) to settle. Prior to that, AAA
sought counsel on how to recover their land as he had no knowledge on legal matters. AAA’s
daughter testified that they went to the Register of Deeds to secure a copy of the Original Certificate
of Title (OCT) only to discover that it was a clean title as there were no annotations of any documents
of sale or any conveyances on it. Also, AAAs appeared before the barangay conciliation regarding the
recovery of the subject property, wherein a representative of several purchasers, offered them land or
money in exchange for not filing a case in court. However, AAAs did not agree with the
representative’s proposal. When the plaintiffs filed the action for quieting of title, the AAAs were yet to
gather and prepare more documents in support of their own case. Are AAAs barred by laches to
recover the ownership and possession of the subject property?
No. The foregoing acts of AAAs belie the claim that they slept on their rights. Although they did not
immediately file a case in court, this does not mean that laches already set in against their favor. It must be
pointed out that AAAs consistently asserted their rights as legal heirs of the spouses CCC outside of court but
due to certain circumstances, they were unable to properly file the same for the court's consideration. Laches
does not imply that a case in court must be filed in order that it may not be successfully invoked. It merely
requires "delay in asserting complainant's right after he had knowledge of the defendant's conduct and after
he has an opportunity to sue." We cannot blame AAAs for not filing immediately in court since they were still
in the process of collating the necessary documents in support of their right. To note, they immediately
intervened in the case after having knowledge of the case filed by herein plaintiffs. This shows that AAAs
were serious in asserting their right against the herein plaintiffs, who were claiming to be the alleged heirs of
the spouses CCC and in the recovery of the subject property from BBBs. (Ende vs. Roman Catholic Prelate of the
Prelature Nullius of Cotobato, Inc., G.R. No. 191867. December 6, 2021)

33. From 1985 until 1999, AAAs have been in peaceful possession of a 200-sq. m. property. On December
15, 1999, AAAs received a demand letter from BBB to vacate the property. On November 2000, AAAs
filed an action for quieting of title against BBB. Should the action be dismissed on the ground of
laches?
No, since the AAA’s continuous actual possession of the subject property has rendered their right to bring an
action for quieting of title imprescriptible. AAAs are not guilty of laches or estoppel considering that they
instituted the action immediately upon receipt of the knowledge of the claim over the premises. (Heirs of Marquez
vs. Heirs of Hernandez, G.R. No. 236826. March 23, 2022)

34. BBBs applied for a free patent which was subsequently granted. AAAs filed a Complaint for
Declaration of Nullity of Title, Reconveyance and Damages. They asserted that the BBBs obtained the
free patent and the consequent Original Certificate of Title (OCT) through fraud and false
representation that they were owners and possessors of the lot. May an action for reconveyance still
prosper despite the title's indefeasibility?
Yes. The principle of indefeasibility of a Torrens title means that a certificate of title registered under the
Torrens System serves as proof of an incontrovertible title over the property in favor of the individual whose
name appears on the title which may only be cancelled, altered or modified through a direct attack where the
objective of the action is to annul or set aside the judgment or enjoin its enforcement. An action for
reconveyance based on fraud is a direct attack on a Torrens title. It follows that despite the finality accorded to
a Torrens title, reconveyance may prosper as an equitable remedy given to the rightful owner of a land that
was erroneously registered in the name of another. This action recognizes the validity of the registration and
its incontrovertible nature; it does not question the indefeasibility of the Torrens title. An allegation of fraud in
an action for reconveyance must have two requisites. First, that the individual seeking reconveyance must
prove entitlement or ownership over the property in question, and second, that fraud must be established by
clear and convincing evidence, not just based on mere surmises or conjectures. Here, they have sufficiently
complied with the two requisites for an action for reconveyance based on fraud. (Heirs of Leonarda Latoja vs. Heirs of

9
 Gavino Latoja, G.R. No. 195500, March 17, 2021)

35. AAA purchased a land and filed with Department of Environment and Natural Resources (DENR)
applications for the issuance of land titles pursuant to the DENR's Handog Titulo program. They were
issued their respective patents and thereafter certificates of title upon registration. BBBs, who are
holders of certificates of land ownership award issued by Department of Agrarian Reform (DAR) filed
a petition for nullity of deed of sale before Department of Agrarian Reform Adjudication Board
(DARAB) on the ground that it violated Sec 6 of Comprehensive Agrarian Reform Law (CARL) when
the same was not registered before the Registry of Deeds within the specified period. They argued
that all other deeds, documents and proceeding relying thereon including certificates of title should
also be void. Is the petition for nullity of deed of sale proper to attack the certificates of title of the
purchasers?
No. Section 43 of Presidential Decree 1529 (PD 1529), or the Property Registration Decree, 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 collateral attack is prohibited because the integrity of
land titles and their indefeasibility are guaranteed by the Torrens system of registration. The Torrens system
was adopted precisely to quiet titles to lands and to put a stop forever to any question of legality of the titles,
except claims which were noted at the time of registration or which may arise subsequent thereto. AAAs'
certificates of title, being registered in the Torrens system, can only be attacked in an action expressly
instituted for that purpose. It cannot be assailed even incidentally in an action mainly seeking a different relief,
such as in BBBs' petition to nullify the deed of sale. (Garcia vs. Esclito, G.R. No. 207210. March 21, 2022.)

36. AAA filed a Miscellaneous Lease Application (MLA) with the Community Environment and Natural
Resources Office (CENRO). The City Environment & Natural Resources Office (CENRO) of the DENR
referred to the Department of Public Works and Highways (DPWH) the matter of determining whether
the subject lots are needed by the Government for public use. The Regional Director of the DPWH
interposed no objection to the approval of the MLA. Thus, an Order of Award for the lease of the
subject lot is issued in favor of AAA. However, the City Government of Zamboanga objected to the
lease application of AAA claiming that the awarded lots were needed for public use. DENR Secretary
denied the opposition and gave due course to the Order of Award. Office of the President (OP)
affirmed the DENR Secretary’s decision. The CA declared the Order of Award null and void ruling that
a presidential proclamation is necessary to declare that a parcel of land is not necessary for public
service before it can disposed. Is a presidential proclamation necessary to declare that a parcel of
land is not necessary for public service before it can disposed?
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. Section 63 of Commonwealth Act 141
(CA 141) states that “Whenever it is decided that covered lands are not needed for public purposes, the
Director of Lands shall ask the Secretary of Agriculture and Commerce for authority to dispose of the same.
The word decide is defined as "to form a definite opinion" or "to render judgment". As long as a definite
opinion or judgment is rendered that certain alienable or disposable public lands are not needed for public use
or public service or even for national wealth, then the legal requirement under Section 63, is deemed
complied with. This Court has time and again ruled that to prove that a public land is alienable and
disposable, what must be clearly established is the existence of a positive act of the government. This is not
limited to a presidential proclamation. Such fact could additionally be proven through an executive order; an
administrative action; investigative reports of Bureau of Lands investigators; and a legislative act or a statute.
(Alde vs. City of Zamboanga, ,G.R. No. 214981, November 4, 2020)

37. May the application for land registration filed by AAA, a domestic corporation, be granted?
No. AAA, as a private corporation, cannot apply for the registration of a land in its name due to the prohibition
under the 1987 Constitution against private corporations or associations acquiring alienable land of the public
domain. (Republic vs. Herederos de Ciriaco Chunaco Disteleria Incorporada, G.R. No. 200863. October 14, 2020)

38. Is Implied resulting trust an exception to the Constitutional ban against ownership of Philippine lands
by a non-Filipino?
No. The 1987 Constitution is clear on the right of Filipinos to own lands in the Philippines to the exclusion of
foreigners: Save in cases of hereditary succession, no private lands shall be transferred or conveyed except
to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. Our
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. The primary purpose of the Constitutional provision is the
conservation of the national patrimony in the hands of Filipino citizens. Not even ownership in trust is allowed.
57 Also, an implied trust simply is not a mode of legal succession. Their main distinction is that implied trusts
take effect upon agreement by the parties to constitute the same, whereby legal succession ensue at the
moment of death of the decedent. Moreover, there is no implied trust if the enforcement of the trust would be
against law or public policy. (Gaw vs. Ben Chua, G.R. No. 206404. February 14, 2022)

39. The Philippine National Police (PNP) filed an application for land title registration before the Regional
Trial Court (RTC). In support of its application, it submitted the tracing cloth plan, technical
descriptions of the subject lots, the approved sketch plan and the respective tax declarations of
subject lots. Should the PNP’s application for land title registration be granted despite failure to
submit a DENR certification stating that the land subject for registration is entirely within the alienable

10
 and disposable zone?
No. The prevailing rule during the pendency of the PNP's application for registration of land title in the RTC
was that a DENR certification stating that the land subject for registration is entirely within the alienable and
disposable zone constitutes as substantial compliance, which the PNP failed to comply with. The prevailing
rule requires that "an application for original registration must be accompanied by (1) a CENRO or [Provincial
Environment and Natural Resources Office (PENRO)] Certification; and (2) a copy of the original classification
approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. In
the instant case, the PNP did not submit a DENR Certification to the effect that the subject lots are alienable
and disposable lands of the public domain, which was the prevailing requirement. Even Survey Plans
prepared by the DENR, containing annotations that the subject lots are alienable, do not constitute
incontrovertible evidence to overcome the presumption that the property sought to be registered belongs to
the inalienable public domain. (Republic vs. Philippine National Police, G.R. No. 198277. February 8, 2021)

40. AAA, BBB and a bank entered into an Asset Pool Formation and Trust Agreement for the development
of certain lots. Thereafter, AAA entered into a contract to sell (first contract) with CCC for the sale of
the parcels of land. In turn, CCC, also through a Contract to Sell (second contract), sold the disputed
property to DDD. Another Contract to Sell (third contract) was made on the same property between
CCC and BBB, in accordance with a Memorandum of Agreement entered into by CCC, AAA and BBB.
BBB cancelled the contract because of CCC’s failure to pay the purchase price of BBB. On the other
hand, being able to pay the purchase price in full, DDD filed an action to compel CCC to deliver to her
the title of the property. Is DDD an innocent purchaser for value?
Yes. Since DDD 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 BBB's name due to CCC's default in the third contract. By virtue of the Memorandum of Agreement and the
third contract, BBB not only acquired the rights to the assets, but also the obligations attached thereto. Since
DDD paid the full price, CCC, as the seller when the second contract was executed, should issue the title in
her favor. However, given that the assets were already transferred to BBB, it is now BBB's obligation to turn
over the disputed property to DDD and then issue the corresponding deed of absolute sale and certificate of
title in her name. DDD, who had fully paid the purchase price of the property, should not be made to suffer the
consequences of the default of the Asset Pool, including the failure of CCC to comply with its obligation to
BBB under their contract to sell [3rd contract]. It is settled that "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." Indeed, "[o]ne of the purposes of Presidential Decree No. 957 (P.D. No. 957) (The Subdivision and
Condominium Buyers' Protective Decree) is to discourage and prevent unscrupulous owners, developers,
agents and sellers from reneging on their obligations and representations to the detriment of innocent
purchasers." DDD should be treated fairly, as she fulfilled her end of the bargain. (Home Guaranty Corporation vs.
Manlapaz G.R. No. 202820, January 13, 2021)

41. AAA maintains that the Deed of Absolute Sale executed by Spouses BBB and CCC was valid since
there was a valuable consideration and an identified object of sale. It contends that at the time of the
sale, despite happening after the death of BBB, the then-surviving spouse, CCC, owned the properties
in his own right and through the waivers executed by their children in his favor. However, Atty. DDD,
its president and representative, did not diligently ascertain the genuineness of the signatures of the
owners-spouses, especially that of BBB's and merely relied on CCC representations that BBB's
signature was genuine. Can AAA claim the defense of being a buyer in good faith when it purchased
and paid the fair price for the properties absent any notice that the sellers did not have the capacity to
sell?
No. In Bautista v. Silva, the Court erected a standard to determine the good faith of the buyers dealing with a
seller who had title to and possession of the land but whose capacity to sell was restricted, in that the consent
of the other spouse was required before the conveyance, declaring that in order to prove good faith in such a
situation, the buyers must show that they inquired not only into the title of the seller but also into the seller's
capacity to sell. Thus, the buyers of conjugal property must observe two kinds of requisite diligence, namely:
(a) the diligence in verifying the validity of the title covering the property; and (b) the diligence in inquiring into
the authority of the transacting spouse to sell conjugal property in behalf of the other spouse. AAA cannot
claim to be an innocent purchaser for value since Atty. DDD, being a lawyer, should have been more
circumspect to determine if the Spouses both had the capacity to sell and if they voluntarily and validly signed
the deeds of sale. He could have requested or even demanded to personally talk to BBB in order to affirm if
she consented to the disposition of the properties. If only Atty. DDD did his due diligence, he would have
discovered that BBB was already dead, if his claim that he had no idea about her death prior to the sale is to
be believed. (Arakor Construction and Development Corporation vs. Sta. Maria, G.R. No. 215006. January 11, 2021)

42. AAA was the registered owner of the subject property. He died in 1939 leaving his wife, BBB, and
legitimate children, CCC and DDD. Subsequently, his wife, BBB, and other alleged heirs of AAA,
executed several extrajudicial settlements of estate to accommodate every buyer of a portion of the
subject property and executed several documents of disposition. The documents of sale and/or
disposition described the subject property as covered by free patent application in the name of AAA
until the issuance of OCT. From the above dispositions, not one has been registered or duly
annotated in its OCT. EEEs, the purchasers, disclosed that they were not able to register their
respective documents of sale or dispositions or have them duly annotated as it was contested by
various individuals. Hence, they relied on the title of the alleged heirs. Are EEEs considered
purchasers in good faith?
No. The purchasers should have examined the certificate of title and all factual circumstances necessary for

11
 them to determine whether or not flaws existed that might invalidate their title, especially when these
purchasers acquired the subject property or a portion thereof from persons who are not the registered owners
and whose alleged rights were not registered or duly annotated on the title. Well-settled is the rule that "a
purchaser of real estate with knowledge of any defect or lack of 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 same rule
also applies to those with knowledge of facts that should have put one on inquiry and investigation as might
be necessary to be acquainted with the defects in the title of the vendor, as in the case at bar. EEEs' willful
refusal to believe that a defect exists in the vendors' title or the possibility of its existence will not make them
innocent purchasers for value if a defect indeed occurs. A buyer of registered land is expected to act with the
diligence of a prudent man, otherwise, he or she cannot be deemed as a purchaser in good faith. (Ende vs. Roman
Catholic Prelate of the Prelature Nullius of Cotobato, Inc., G.R. No. 191867. December 6, 2021)

43. BBB alleged that AAA convinced him to buy two parcels of land after the latter’s assurance that the
titles of the land were clean, that the TCT would be issued after the execution of the sale, and that the
selling price was very reasonable. The two agreed that the AAA would be the signatory in the Deed of
Sale since the seller allegedly wanted to deal only with her. They also agreed that AAA would hold the
properties in trust for and subsequently reconvey the same to BBB. BBB entrusted Php15 million to
the AAA as the purchase price. After the transaction, BBB made several demands (both oral and
written) for the AAA to reconvey the properties to him, but to no avail. BBB immediately started to
assume possession of the properties and made renovations and thereafter filed an Affidavit of
Adverse Claim. Is an implied trust created between the AAA and the BBB?
Yes. Trust is the legal relationship between one person having an equitable ownership in property and
another person owning the legal title to such property, the equitable ownership of the former entitling him to
the performance of certain duties and the exercise of certain powers by the latter. 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. (Lopez vs. Saludo, G.R. No. 233775. September 15, 2021)

44. Does the submission of a tax declaration illustrate conclusive proof of ownership?
No, it does not, but while the tax declaration is not conclusive proof of ownership over the subject land, it is an
indication however that the one who pays for and updates the tax declaration 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. They constitute at least proof that the holder has a claim of title over
the property. The voluntary declaration of a piece of property for taxation purposes manifests not only one's
sincere and honest desire to obtain title to the property and announces his adverse claim against the State
and all other interested parties, but also the intention to contribute needed revenues to the Government. Such
an act strengthens one's bona fide claim of acquisition of ownership. (Spouses Ponce vs. Aldanese, G.R. No. 216587.
August 4, 2021)

45. AAA inherited Lot A from his father and has been paying real property taxes under his name. The
Spouses BBB claim that they bought the land from AAA’ brother, CCC, and presented a tax
declaration but without the lot number for it was issued but AAA asserts that Lot B was sold instead,
which is adjacent to Lot A. The Spouses BBB encroached upon the entire portion of Lot A, but
refused to vacate despite AAA’ demands. The two deeds executed in favor of the Spouses BBB,
Absolute Sale and Confirmation of Oral Partition made no mention of Lot A as included in the
purchased land which they are aware of. Can the Spouses BBB claim absolute ownership over Lot A?
No, the Spouses BBB cannot claim absolute ownership over Lot A. In the absence of competent evidence
showing that Lot A is covered by the Deed of Absolute Sale, the BBBs have no right to possess the property,
much less in the concept of an owner. BBBs failed to present any proof of ownership such as payment of real
property taxes or a certificate of title in their names over Lot A. True, the Spouses BBB presented tax
declaration to support their claim over the land. However, it did not state the lot number of the land for which it
was issued. Moreover, they cannot be deemed possessors in good faith since they were aware that the
subject land is not part of the land that CCC sold to them. Besides, assuming that CCC sold Lot A to the
BBBs, the sale would be invalid as it was owned by AAA. We have repeatedly stressed that "no one can give
what one does not have.”. "A seller can only sell what he or she owns, or that which he or she does not own
but has authority to transfer, and a buyer can only acquire what the seller can legally transfer.” (Spouses Ponce
vs. Aldanese, G.R. No. 216587. August 4, 2021)

46. Some of the estate of the decedent AAA were covered by the Comprehensive Agrarian Reform for
distribution to tenant-farmers. Thus, in 1999, the heirs executed a Kasunduan for the voluntary
transfer of the land allowed by the Comprehensive Agrarian Reform Law (CARL) with a 50-50 sharing
condition (i.e., the heirs shall retain half of the land and the other half will be distributed to the
qualified beneficiaries. A similar Kasunduan was executed by the other defendant-heirs (but not all
the heirs) in 2006. Is the 2006 Kasunduan valid despite the other heirs not signing the said document?
Yes. The transfer of half of the subject property was under the aegis of the Department of Agrarian Reform
(DAR) pursuant to the law which the heirs cannot ignore or circumvent by their claim that the 2006
Kasunduan was not validly executed. Given the compulsory requirement of the law, there is no validity to
BBB's assertion that property of the decedent was distributed to non-heirs. Plainly, the partition of the subject
property, and the consequent transfer and titling of half thereof to qualified beneficiaries, is valid, just and
binding on all the heirs of the decedent, including Conchita. (Silva vs. Lo, G.R. No. 206667. June 23, 2021)

12
47. What are the requisites that must be complied with for an order for reconstitution to be issued?
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. (Republic vs. Abellanosa, G.R.
No. 205817. October 6, 2021)

48. What are the sources or bases of the original certificates of title for filing the petition for
reconstitution?
Section 2 of RA No. 26, otherwise known as An Act Providing a Special Procedure for the Reconstitution of
Torrens Certificate of Title Lost or Destroyed, enumerates the acceptable bases for the judicial reconstitution
of an existing and valid original certificate of Torrens title:
(a) The owner's duplicate of the certificate of title;
(b) The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title;
(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal custodian
thereof;
(d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which the
original certificate of title was issued;
(e) A document, on file in the registry of deeds, by which the property, the description of which is given in said
document, is mortgaged, leased or encumbered, or an authenticated copy of said document showing that its
original had been registered; and
(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the
lost or destroyed certificate of title. (Republic vs. Abellanosa, G.R. No. 205817. October 6, 2021.)

49. AAA presented to court the owner’s duplicate copy of title in order to annul the decision of Regional
Trial Court (RTC) in reconstituting the title of the same property. Should the RTC decision
reconstituting the subject title be annulled?
Yes. This is on the ground that the first owner's duplicate copy was never lost but was in fact in possession of
AAA. Reconstitution presupposes the existence of an original certificate of title which was lost or destroyed. If
there was no loss or destruction, there is actually nothing to reconstitute. When the owner's duplicate
certificate of title was not actually lost or destroyed, but is in fact in the possession of another person, the
reconstituted title is void because the court that rendered the order of reconstitution had no jurisdiction over
the subject matter of the case. It is, therefore, the fact of the loss or existence of the owner's duplicate
certificate, and not whether the process prescribed by applicable law was successfully complied with, that
determines the presence or lack of jurisdiction of the trial court. (Gaoiran vs. CA, G.R. No. 215925. March 7, 2022)

50. BBBs filed a petition for reconstitution of OCT of 3 lots. BBBs attached to their petition the following
documentary evidence: (a) decisions of the CFI-Cebu awarding the subject lots to the BBBs; (b)
decrees issued by the cadastral court pursuant to which an original certificate of title of the subject
lots was issued in favor of the BBBs; (c) Register of Deeds' certification stating that “the Original
Certificate of Title of the 3 lots of Opon Cadastre as per records on file has/have been lost or
destroyed during the last Global War”; (d) technical description of the subject lots; and (e)
certifications from the Branch Clerks of Court stating that no application for reconstitution of original
certificate of title for the subject lots was filed before the said trial courts; and (f) sketch plans of the
subject lots. Are BBBs entitled to the reconstitution of the OCTs of the subject lots?
No. The pieces of evidence presented are insufficient to show that OCTs of the subject lots in the name of the
BBBs exist. At best, the CFI-Cebu decisions only proved that the lots were awarded to the BBBs and that the
lots were to be registered in their names pursuant to Land Registration Act. Neither can the Register of
Deeds' certification be considered as competent evidence as it did not state the title numbers of the
certificates of title, and the names for which they were issued. The LRA Report merely corroborated the
award of the subject lots to the BBBs pursuant to the decrees. It did not even state if the certificates of title
covering the subject lots were in fact issued to them. BBBs' non-submission of an affidavit of loss further casts
doubt if the certificates of title of the subject lots in the name of the BBBs exist. Section 109 of Presidential
Decree No. 1529 mandates that the owner must file with the proper Registry of Deeds a notice of loss
executed under oath. BBBs did not also submit any tax declarations relative to the subject lots. While a tax
declaration does not prove ownership, payment of realty tax is an exercise of ownership over the said lots and
is the payor's unbroken chain of claim of ownership over it. Moreover, BBBs are guilty of laches. Here, BBBs
only filed the petition for reconstitution 12 years after they first discovered that the titles were allegedly lost or
destroyed. (Republic vs. Heirs of Booc, G.R. No. 207159, February 28, 2022)

51. Is the determination of heirship a prerequisite before one can file a civil action to enforce ownership
rights by virtue of succession?
No. Given the clear dictates of the Civil Code that the rights of the heirs to the inheritance vest immediately at
the precise moment of the decedent's death even without judicial declaration of heirship, no prior judicial
declaration of heirship is necessary before an heir can file an ordinary civil action to enforce ownership rights
acquired by virtue of succession through the nullification of deeds divesting property or properties forming part
of the estate and reconveyance thereof to the estate or for the common benefit of the heirs of the decedent.
The rule is: unless there is a pending special proceeding for the settlement of the decedent's estate or for the
determination of heirship, the compulsory or intestate heirs may commence an ordinary civil action to declare
the nullity of a deed or instruments and for recovery of property, or any other action in the enforcement of their

13
 ownership rights acquired by virtue of Succession, without the necessity of a prior and separate judicial
declaration of their status as such. The ruling of the trial court shall only be in relation to the cause of action of
the ordinary civil action, i.e., the nullification of a deed or instrument, and recovery or reconveyance of
property, which ruling is binding only between and among the parties. (Ende vs. Roman Catholic Prelate of the Prelature
Nullius of Cotobato, Inc., G.R. No. 191867, December 6, 2021)

52. Whether the liabilities of spouses AAA as sellers of a property in a contract of sale are transmissible
to their heirs?
Yes, the death of spouses AAA did not extinguish their contractual obligations since as a rule, a party's
contractual rights and obligations are transmissible to the successors. Art. 776 of the Civil Code states: “the
inheritance includes all the property, rights and obligations of a person which are not extinguished by his/her
death.” 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. Thus, the heirs of the
seller and the buyer are bound thereby as they are not deemed non-privies to the contract of sale or contract
to sell, as the case may be. (Heirs of Gonzales vs. Spouses Basas, G.R. No. 206847. June 15, 2022)

53. The attestation clause omitted to mention the number of pages comprising the will. Nevertheless, the
acknowledgment portion of the will supplied the omission by stating that the will has five pages, to
wit: "Ang HULING HABILING ito ay binubuo ng lima (5) na dahon, kasama ang dahong kinaroroonan
ng Pagpapatunay at Pagpapatotoong ito." Is there substantial compliance with Art. 805 of the Civil
Code?
Yes, such substantially complied with Article 809 of the Civil Code. Mere reading and observation of the will,
without resorting to other extrinsic evidence, yields the conclusion that there are actually five pages even if
the said information was not provided in the attestation clause. When the number of pages was provided in
the acknowledgment portion instead of the attestation clause, "[t]he spirit behind the law was served though
the letter was not. Although there should be strict compliance with the substantial requirements of the law in
order to insure the authenticity of the will, the formal imperfections should be brushed aside when they do not
affect its purpose and which, when taken into account, may only defeat the testator's will." (Tanchano v. Santos,
G.R. No. 204793, June 08, 2020)

54. May lawyers be competent witnesses to a Will?

Yes. Article 820 of the Civil Code provides that, "[a]ny person of sound mind and of the age of eighteen years
or more, and not blind, deaf or dumb, and able to read and write, may be a witness to the execution of a will
mentioned in Article 805 of this Code." Here, the attesting witnesses to the will in question are all lawyers
equipped with the aforementioned qualifications. In addition, they are not disqualified from being witnesses
under Article 821 of the Civil Code, even if they all worked at the same law firm at the time. (Tanchano v. Santos,
G.R. No. 204793, June 08, 2020)

55. AAA instructed her sister BBB, wife of CCC, to transfer her properties to AAA’s grandchildren (DDDs),
upon her death. BBB executed a Declaration of Trust with the conformity of CCC, acknowledging that
she held in trust the three parcels of land in favor of DDDs. Eventually, BBB caused the issuance of
new TCTs in her name and when she died, CCC purportedly had possession over the properties and
refused to surrender the titles to DDDs. Are DDDs entitled to the reconveyance of the subject
properties in their favor?
Yes. Jurisprudence provides that "[a] trust is the legal relationship between one person having an equitable
ownership of property and another person owning the legal title to such property, the equitable ownership of
the former entitling him to the performance of certain duties and the exercise of certain powers by the latter."
In this case, BBB, as the trustee, had the duty to properly manage the properties for the benefit of the
beneficiaries, DDDs. Notably, AAA is not a party to this trust and he only signed the document evidencing the
trust as BBB's husband. Nonetheless, there is no dispute that AAA readily admitted the due execution and
validity of the Declaration of Trust. Thus, as a signatory, he is bound by the intent and contents of the said
document and thus should honor the directives contained therein. (Daniel vs. Magkaisa, G.R. No. 203815. December 7,
2020)

OBLIGATIONS AND CONTRACTS

56. The Bank debited from AAA's savings and current accounts some amounts to offset its (AAA's)
outstanding obligation with the Bank under a loan agreement. The Bank averred that since AAA
defaulted in its obligations to the Bank as embodied in a Credit Agreement and Promissory Note, its
entire obligation immediately became due and demandable without need of demand or notice. It
asserted that since the Bank and AAA were creditors and debtors of each other, legal compensation
already took effect. It did not however specify the date when AAA defaulted or pinpoint which
installment it failed to pay. Did legal compensation take place ipso jure as between the Bank and
AAA?
No. It is settled that compensation is a mode of extinguishing to the concurrent amount the debts of persons
who in their own right are creditors and debtors of each other. Article 1279 provides that in order that
compensation may be proper, it is necessary that the two debts be due and that they be liquidated and
demandable. The Bank failed to specify the date when AAA actually defaulted in its obligation or particularly
pinpoint which installment it failed to pay. In this case, the time of default and the amount due were not
specific and particular. Without this information, a simple arithmetic computation cannot possibly be done
without risking errors especially with regard to the application of interest and penalties. (Banco de Oro Unibank, Inc.
vs. Ypil, G.R. No. 212024. October 12, 2020)

14
57. AAA entered into a Construction Agreement with BBB for the Exposition Theme Park. On an even
date, CCC submitted a Materials Only Proposal to BBB for the supply of materials in constructing a
special Philippine flag structure for the Expo, which BBB accepted. The materials were shipped.
Subsequently, BBB submitted to AAA a proposal for the design, supply, and installation of the flag
structure using CCC's spaceframe subject to the following terms and conditions: (a) full payment of
the imported CCC spaceframe structures upon its delivery on-site; (b) 50% payment of installation
and lighting of spaceframe structures upon receipt of the notice to proceed while the remaining 50%
shall be paid. In a letter, CCC was allowed by BBB to collect payment directly from the AAA as
requested by the former. CCC made a final demand from BBB, but to no avail, hence, remained unpaid
for the value of the spaceframe. Did BBB's approval of CCC's request to collect directly from the AAA
extinguish BBB's obligation to pay CCC by way of novation?
No. Under the Civil Code, in order that an obligation may be extinguished by another which substitute the
same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be
on every point incompatible with each other. Novation which consists in substituting a new debtor in the place
of the original one, may be made even without the knowledge or against the will of the latter, but not without
the consent of the creditor. First, there is nothing in the letters that unequivocally states that the obligation of
BBB to pay CCC would be extinguished. Second, there is also no mention that CCC would substitute or
subrogate BBB as AAA's payee/obligee as the letters merely show that CCC was allowed by BBB to try
collecting from AAA directly. Lastly, using the test of incompatibility, BBB's non-objection to CCC's request to
collect from AAA directly is not incompatible with the obligation of BBB to pay CCC. It merely provided an
alternative mode in collecting payment to CCC, which is not even valid as far as AAA is concerned since the
latter did not even consent to the same, not to mention there is no existing contractual relationship between
CCC and AAA. If the exchange of letters between CCC and BBB was intended to novate the original
agreement between the parties, AAA must have first agreed to the substitution of CCC as the new
payee/creditor, at least to the extent of the amount representing the payment for the flag. The exchange of
letters must have also stated in clear and unequivocal terms that it has replaced the criminal obligation of
BBB to CCC. Neither of these circumstances is present in this case. Since there was clearly no novation,
BBB's obligation to CCC remains valid and existing. (Asian Construction and Development Corporation vs. Mero Structures,
Inc., G.R. No. 221147. September 29, 2021)

58. Would the proposal of an entrustee for a staggered mode of returning the money representing the
proceeds of the sale of the goods/items tantamount to a “novation” or a change of terms of the trust
receipt agreement as to blunt the ill-effects of the breach and reduce the crime of Estafa into a mere
civil liability?
No. A necessary element of novation is the cancellation of the old obligation by the new one, which may be
effected expressly or impliedly. It is never presumed and must be proven as a fact. There is an express
novation if the new obligation unequivocally declares that it extinguishes or substitutes the old obligation; on
the other hand, there is an implied novation if the old and the new obligations are on every point incompatible
with each other. The test of incompatibility is whether the two contracts can stand together, each one having
an independent existence. 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. (Chua vs. Secretary of Justice, G.R. No.
214960. June 15, 2022)

59. AAA claims that she and her husband owned three (3) parcels of land: Lot A, Lot B, and Lot C. The
parties entered into a Compromise Agreement prepared by AAA’s lawyer which stated that Lot A will
belong to AAA and Lot B will belong to BBB. The Compromise Agreement was approved by the trial
court in its January 17, 2008 Decision which became final and a Writ of Execution was subsequently
issued. On July 8, 2008, AAA filed a motion to set aside the order. She argues that there was no
meeting of the minds of parties since she intended to transfer Lot C and not Lot B which was
erroneously reflected on the Compromise Agreement. Is the compromise agreement void?
No. 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. A valid contract requires the
concurrence of the essential elements pursuant to Article 1318 which are: consent of the contracting parties,
object certain, and cause of the obligation. The Compromise Agreement was clear that the contracting parties
mutually agreed to transfer to each other the properties indicated therein. Even if it was AAA's counsel who
prepared the written instrument, she or her representative was expected to exercise due diligence in
reviewing the entries therein before signing the instrument. Moreover, if indeed there was a mistake on which
property should be transferred to the spouses BBB, AAA should have availed of her remedies immediately.
(Aromin vs. Heirs of Wilfredo, G.R. No. 204447. May 3, 2021)

60. The owner of the property, AAA, executed a compromise agreement with BBB and CCC over the
property. Thereafter, CCC sold her property indicated in the compromise agreement to Spouses DDD,
who then possessed the subject property in good faith. While Spouses DDD were already in
possession and were enjoying the subject property, AAA changed his mind and executed a
revocation and cancellation of the compromise agreement. Is the revocation and cancellation of the
compromise agreement done by AAA valid?
No, it is not. A compromise agreement, being a contract that has the force of law, is also governed by the
requisites and principles of contracts under Title II of the Civil Code. It is a contract that created real rights as
it was a contract for division of property. Third persons, Spouses DDD, who came into possession of the
object of the contract are thus bound by the contract or compromise agreement. Revocation or cancellation of
the compromise agreement, cannot take place because the objects of the contract are already in the legal

15
 possession of the DDDs who did not act in bad faith. At the time the compromise agreement was revoked by
AAA, the DDDs 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 without their knowledge and consent. Although it is clear that the DDDs are not parties to the
compromise agreement, their objection to its revocation can be treated as an adverse claim over the disputed
property. (Domilos vs. Spouses Pastor, [G.R. No. 207887. March 14, 2022)

61. What is the principle of mutuality of contracts? Do contracts of adhesion violate this principle?
The principle of mutuality of contracts, found in Article 1308 of the Civil Code, states that a "contract must
bind both contracting parties; its validity or compliance cannot be left to the will of one of them." In accordance
with this principle, when the execution of the contract's terms is skewed in favor of one party, the contract
must be rendered void. A contract of adhesion is so-called because its terms are prepared by only one party
while the other party merely affixes his signature signifying his adhesion thereto. Nevertheless, contracts of
adhesion are not invalid per se and they are not entirely prohibited. The one who adheres to the contract is in
reality free to reject it entirely, if he adheres, he gives his consent. Accordingly, a contract duly executed is the
law between the parties, and they are obliged to comply fully and not selectively with its terms. A contract of
adhesion is no exception. (Goldwell Properties Tagaytay, Inc. vs. Metropolitan Bank and Trust Company, G.R. No. 209837, May
12, 2021)

62. Does gross inadequacy of price affect the validity of a contract of sale?
No. Gross inadequacy does not affect the validity of a contract of sale, unless it signifies a defect in the
consent of the parties actually intended for a donation or some other contract. Inadequacy of cause will not
invalidate the contract unless there has been fraud, mistake, or undue influence. (Cabilo vs. Tampan, G.R. No.
209702. March 23, 2022)

63. The payment for the fourth installment was dishonored due to insufficient funds and AAA sent a
demand for BBB otherwise the title shall be consolidated. Despite the nonpayment of the fourth
check, BBB issued the fifth check which was cleared and credited. AAA subsequently informed BBB
through a letter dated December 23, 1994 that it had already consolidated its title to the subject
property. Has AAA validly rescinded the Memorandum of Agreement (MOA)?
No. There was no valid rescission of the MOA, primarily for the reason that the requisites of the Maceda Law
were not complied with. The Court laid down the four conditions under Section 4 of the Maceda Law that
should be met before the seller may cancel the contract: (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; 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. The letter
dated December 23, 1994 informing BBB that the AAA is already "consolidating title to the subject property,"
should have effectively canceled the MOA; the said letter, however, did not comply with the Maceda Law
which requires that the seller must give a notice or a demand for rescission by notarial act. Further, the
Maceda Law provides that actual cancellation can only be effected after 30 days from buyer's receipt of the
notarial rescission. In this case, there is no showing that this requirement was observed by AAA as it intended
that the letter dated December 23, 1994 to be the termination of the MOA. (Integrated Credit and Corporate Services
vs. Cabreza, G.R. No. 203420. February 15, 2021)

64. AAAs pray that the Memorandum of Agreement and Consolidated Deed of Sale be rescinded as both
these contracts caused damage to the interests and participation of the AAAs of their 40% share in
the proceeds of the sale of the Montemar Villas lots. However, there was evidence that through AAAs’
representative, BBB, they gave their consent to the changes in the contract. Can the AAAs avail of
remedy of Rescission?
No. Rescission is a remedy granted by law to the contracting parties, and even to third persons, to secure the
reparation of damages caused to them by a contract, even if it should be valid" by reason of external causes
resulting in a pecuniary prejudice to one of the contracting parties or their creditors, the result of which, is the
restoration of things to their condition at the moment prior to celebration of said contract. The kinds of
rescissible contracts are the following: first, those rescissible because of lesion or prejudice; second, those
rescissible on account of fraud or bad faith; and third, those which, by special provisions of law, are
susceptible to rescission. None of the above circumstances are present in this case. As discussed above, the
records of the case are replete with evidence that the AAAs, through BBB, gave their express conformity to
the new concept of the Montemar Project and the entrance of Philcomsat as new investor for the said project.
Having expressed their consent to the changes brought about by these new contracts, and having been made
aware of the effects thereof, the AAAs cannot now feign ignorance and assert that they were prejudiced in
their rights and interests. (Valdes vs. La Colina Development Corporation, G.R. No. 208140. July 12, 2021)

65. How may a party invoke illiteracy under Article 1332 of the Civil Code to invalidate a contract?
The contracting party who alleges fraud or vitiated consent must establish the same by full, clear and
convincing evidence. 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 the execution of the consented contract. (Cabilo vs. Tampan,
G.R. No. 209702. March 23, 2022)

66. AAA and BBB executed a Deed of Extrajudicial Settlement Among Heirs with Absolute Sale (Deed)
adjudicating between themselves the two parcels of land and transferring the same to spouses CCC.
The Deed was notarized. However, AAA was illiterate at the time of the execution of the Deed. She was

16
 unable to read and write. AAA alleged that the spouses took advantage of her illiteracy and old age
and that her thumb mark was affixed by employing deceit, false pretenses and false representations.
She testified that her children were not present during the execution of the Deed and that its contents
were not explained to her when she affixed her thumbmark on it. Is the Deed valid?
No, it is voidable. When one of the contracting parties 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. To rebut the
presumption, the other contracting party must show, by clear and convincing evidence, that the terms and
contents of the contract were explained to the contracting party who is unable to read. The Spouses failed to
rebut this by clear and convincing evidence. Consequently, fraud or mistake was present. Therefore, the
Deed, despite being notarized, was defective. (Spouses de Vera vs. Catungal, G.R. No. 211687. February 10, 2021)

67. When AAA retired, BDO refused to release her retirement benefits unless AAA and her spouse, as
sureties for the loan of BBB from BDO, would execute a real estate mortgage over a house and lot to
secure BBB’s loan. The spouses acceded to BDO’s demand and executed a REM. Is the REM voidable
on ground of duress or intimidation?
No. Duress or intimidation is present when one of the contracting parties is compelled by a reasonable and
well-grounded fear of an imminent and grave evil upon their person or property or upon the person or property
of their spouse, descendants or ascendants, to give their consent. 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. Here, BDO's supposed "threat," i.e., its withholding of AAA's retirement benefits, is
not the intimidation referred to by law. 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. It is necessary to distinguish between real
duress and the motive which is present when one gives his consent reluctantly. A contract is valid even
though one of the parties entered into it against his wishes and desires or even against his better judgment.
Contracts are also valid even though they are entered into by one of the parties without hope of advantage or
profit. Here, the Genotivas, in executing the subject contract in exchange for the release of AAA's retirement
benefits, agreed to accept what they thought was a better option. (Spouses Genotiva vs. Equitable-PCI Bank, G.R. No.
213796, June 28, 2021)

68. Does the Statute of Fraud apply to all kinds of contracts?

No. The Statute of Frauds applies only to executory contracts and not to those which have been executed
either fully or partially. (Heirs of Godines vs. Demaymay, G.R. No. 230573. June 28, 2021)

69. Is the Deed of Absolute Sale valid when it was signed and executed by the seller after her death?
No. If any one party to a supposed contract was already dead at the time of Its execution, such contract is
undoubtedly simulated and false, and, therefore, null and void by reason of its having been made after the
death of the party who appears as one of the contracting parties therein. Indeed, "no one can give what one
does not have; nemo dat quod non habet. One can sell only what one owns or is authorized to sell, and the
buyer can acquire no more right than what the seller can transfer legally." (Arakor Construction and Development
Corporation vs. Sta. Maria, G.R. No. 215006. January 11, 2021; see also City of Tanauan vs. Millonte, G.R. No. 219292. June 28, 2021)

70. What are the conditions for fraud to constitute a basis to annul contracts?
(1) the fraud must be dolo causante or it must be fraud in obtaining the consent of the party;
(2) fraud must be proven by clear and convincing evidence and not merely by a preponderance thereof.
(Valdes vs. La Colina Development Corporation, G.R. No. 208140. July 12, 2021)

SPECIAL CONTRACTS

71. In a Deed of Sale and an Agreement executed by AAA and his brother BBB, the subject property was
allegedly ceded unto BBB for Php15,000 and was agreed that AAA shall enjoy the usufruct during his
lifetime. Aproniana, BBB and AAA’s sister, filed a complaint against BBB and his wife, seeking the
nullification of the subject Deed of Sale and Agreement on the ground that they are fictitious and
without consideration since the market value of the said property during that time was Php150,000.
Aproniana also stated that AAA had told her that the sale was simulated and that that no
consideration was paid. Did gross inadequacy of the price nullify the contract between AAA and
BBB?
No. Two presumptions find relevance in this case. First, a contract enjoys the presumption that it is supported
by an existing and lawful cause or consideration. This presumption is disputable and may be overthrown by
preponderance of evidence to the contrary. Preponderance of evidence is the weight, credit, and value of the
aggregate evidence on either side and is usually considered to be synonymous with the term "greater weight
of evidence" or "greater weight of credible evidence." Second, notarized documents, being public in nature,
require no further proof of their authenticity and due execution. They are entitled to full faith and credit on its
face and are prima facie evidence of the facts stated therein. To overturn this presumption of regularity, clear
and convincing proof is required. To debunk the existence of consideration in the Deed of Sale, there must be
more than mere preponderant evidence showing that AAA did not truly execute the disputed document or that
the parties had not truly intended a contract of sale. However, whether preponderant, clear, or convincing,

17
 Aproniana never submitted any controverting evidence. (Bacala vs. Heirs of Spouses Poliño, G.R. No. 200608. February
10, 2021)

72. AAA, through a deed of sale, ceded a property unto BBB for Php15,000. It was agreed in the deed that
AAA shall enjoy the usufruct during his lifetime that upon AAA's death, BBB shall support and give
financial assistance to CCC and DDD. They also agreed that breach of the terms and conditions of the
Agreement shall render the Deed of Sale non- effective and nugatory.

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.
The burden of proof weighs on the party making the allegation against these presumptions.

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. Not all three are
present. While AAA's patrimony may have decreased with the correlative increase in that of BBB by virtue of
the Deed of Sale and Agreement, it does not appear that this was impelled by liberality on the part of AAA.
Had animus donandi really been the true motive for the transfer of the subject property, AAA and BBB would
have so stated in the documents that they executed.

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; (2) determinate subject matter; and (3) price certain in money or its
equivalent. The Deed of Sale contains all the three basic requisites of a contract of sale. A resolutory
condition extinguishes a transaction that, for a time, existed and discharges the obligations created
thereunder. The stipulations in the Agreement are resolutory. (Bacala vs. Heirs of Spouses Poliño, G.R. No. 200608.
February 10, 2021)

73. Is there a valid contract of sale when the sale was allegedly entered into through a verbal agreement,
the only evidence presented being the receipts where the signature of the alleged seller was forged,
where the exact portion of the lot sold was not specified, and where there is no evidence as to the
purchase price?
No. The elements of a contract of sale are: a] consent or meeting of the minds, that is, consent to transfer
ownership in exchange for the price; b] determinate subject matter; and c] price certain in money or its
equivalent." "A contract of sale is a consensual contract. Under Article 1475 of the Civil Code, the contract of
sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract
and upon the price. Here, the absence of consent or meeting of the minds is established. 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 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. Finally, the price for the sale of the subject property is also uncertain. Hence, there is no valid
contract of sale. (Seming vs. Alamag, G.R. No. 202284. March 17, 2021)

74. AAA sold to BBB a land on which BBB’s house was built. Consequent to said sale agreement, AAA
allowed BBB and her family to continue their occupation thereon. BBB fully paid for it before she
died. Was the contract of sale consummated only upon full payment?
No. The contract of sale was consummated even before full payment of the purchase price. Ownership of the
thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. The thing is
understood as delivered when it is placed in the control and possession of the vendee. Even assuming there
is no full satisfaction of the purchase price, the actual turn-over of the possession of the property renders the
contract consummated albeit partially. (Heirs of Marquez vs. Heirs of Hernandez, G.R. No. 236826. March 23, 2022)

75. Is full payment of purchase price essential to the transfer of ownership?

No. Payment of the purchase price is not essential to the transfer of ownership as long as the property sold
has been delivered; and such delivery operated to divest the vendor of title to the property which may not be
regained or recovered until and unless the contract is resolved or rescinded in accordance with law. (Heirs of
Marquez vs. Heirs of Hernandez, G.R. No. 236826. March 23, 2022)

76. AAA and BBB are co-owners of a property. AAA sold to CCC a definite portion of the same property.
When AAA pointed out to BBB the boundaries of the said portion, BBB did not object. Was the sale
between AAA and CCC valid even if the sale was made without the consent of the co-owner BBB?
Yes, because the moment AAA pointed out the boundaries of the property and BBB made no objection, there
is, in effect, a partial partition of the co-owned property. The title may be pro-indiviso or inchoate but the
moment the co-owner as vendor pointed out its location and even indicated the boundaries over which the
fences were to be erected without objection, protest or complaint by the other co-owners, on the contrary they
acquiesced and tolerated such alienation, occupation and possession, a factual partition or termination of the
co-ownership, although partial, was created. (Heirs of Marquez vs. Heirs of Hernandez, G.R. No. 236826. March 23, 2022)

77. Two days prior the expiration of the redemption period, AAA offered to redeem the property by paying
the stipulated redemption price to be paid in installments. BBB and AAA then entered into a
Memorandum of Agreement (MOA) which stipulated that BBB agreed to postpone the consolidation of
the property, and allowed AAA, with spouses CCC as guarantors, to redeem the property on an
agreed redemption price to be paid in stipulated installments. Is the MOA between BBB and AAA with
spouses CCC as guarantors a valid contract of sale?

18
 Yes. Despite not being denominated as a "Deed of Sale," a contract is what the law defines it to be, and not
what the contracting parties call it. Article 1458 of the Civil Code defines a contract of sale to be a contract
where "one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate
thing, and the other to pay therefor a price certain in money or its equivalent." The essential elements of a
contract of sale are: (a) consent; (b) object; and (c) price in money or its equivalent. Here, the MOA contains
all the essential elements of a contract of sale. As previously stated, it was sufficiently shown that BBB and
AAA with the spouses CCC consented to the execution of the MOA. The subject property, that is owned by
BBB, is the object of the contract. Lastly, the amount to be paid in installments on the period set by the parties
constitutes the price. Hence, the MOA is a contract of sale of the subject property entered into by BBB and
AAA with the spouses CCC. (Integrated Credit and Corporate Services vs. Cabreza, [G.R. No. 203420. February 15, 2021)

78. The contract to sell provides that it shall be considered automatically cancelled 30 days after service
by the seller to the buyer of a notarized notice of cancellation or rescission and that service by
registered mail is sufficient proof of service and constructive receipt. Is it valid under Maceda law?
No. The conditions in the Contract to Sell conflict with RA 6552, which dictates "receipt" and not "service" of
the notice of rescission to the buyer as the reckoning point of the thirty (30)-day period before actual
cancellation. The Contract to Sell even dispensed with this legal requirement of receipt by deeming mere
service by registered mail as sufficient proof of service and constructive receipt. For being contrary to Section
4 of RA 6552, these stipulations are rendered null and void, and the general provisions governing a contract
to sell under RA 6552 shall govern. (Pryce Properties Corp., vs. Nolasco, Jr., G.R. No. 203990. August 24, 2020)

79. Is an answer with counterclaim filed by AAA a valid notarial rescission under Maceda Law?
No. 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.
This notarial notice of rescission has peculiar technical requirements. AAA violated all of them. The notarial
act converting the private notice of cancellation into a public one must be an acknowledgment. An
acknowledgment is the act of one who has executed a deed in going before some competent officer or court
and declaring it to be his act or deed. AAA's Answer with Counterclaims, however, was notarized through a
jurat. A jurat is that part of an affidavit in which the notary certifies that before him or her, the document was
subscribed and sworn to by the executor. Under notarial rules, acknowledgments cover written deeds and
acts, whereas jurats confirm affidavits and pleadings. A deed of rescission notarized via acknowledgment is
already a piece of evidence all on its own. On the other hand, an allegation of rescission contained in an
affidavit or a pleading and confirmed by a notarial jurat still remains to be proved; it merely implies that the
signatory thereof sets out to prove the fact of the rescission before a notary public. (Pryce Properties Corp., vs.
Nolasco, Jr., G.R. No. 203990. August 24, 2020)

80. What are the remedies of a defaulting buyer of real property on installments in the absence of a valid
rescission?
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 (a) Pay in advance any installment at any time, necessarily without interest; (b)
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 (c) 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. (Pryce Properties Corp., vs. Nolasco, Jr., G.R.
No. 203990. August 24, 2020)

81. Spouses AAA borrowed P140,000.00 from BBB, to be paid in double to be collected from rental
income of some apartment units to be constructed by the spouses using said money. Consequently,
the parties executed a Deed of Sale in consideration of the amount of P140,000.00. A TCT was
thereafter issued constituting BBB as the new registered owner of the subject land. When BBB had
collected the full amount of P280,000.00 in rental income from the four apartment units, the AAAs
asked for the return of the subject lot. BBB, however, held on to the title and refused to yield the
subject lot to the AAAs. Should BBB’s title to the subject property be nullified and reconveyed to Sps.
AAA?
Yes. The transaction between the parties is an equitable mortgage and title may be nullified and real property
may be reconveyed in case of 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. There are two badges of fraud against AAA — gross
inadequacy of price in the Deed of Sale and continued possession of the subject property by BBBs-spouses
as debtors of AAA. The mortgagee's consolidation of ownership over the mortgaged property upon the
mortgagor's mere failure to pay the obligation constitutes pactum commissorium. The mortgagor's default
does not operate to automatically vest on the mortgagee the ownership of the encumbered property. Such
arrangements as contrary to morals and public policy and thus void. If a mortgagee in equity desires to obtain
title to a mortgaged property, the mortgagee's proper remedy is to cause the foreclosure of the mortgage in
equity and buy it at a foreclosure sale. Having proceeded to cause the cancellation of BBBs-spouses title to
the mortgaged property and its transfer to his name without availing of the remedy of foreclosure, the
transaction is consequently rendered void, and title to the subject property should be reverted to
BBBs-spouses. (Dacquel vs. Spouses Sotelo, G.R. No. 203946. August 4, 2021)

82. AAA and BBB entered into a Contract of Lease. When the term of the lease ended, the contract was
impliedly renewed on a monthly basis after. With the acquiescence of BBB, AAA continued to occupy

19
 the premises for an increased rental rate. Eventually, the lease was terminated. AAA commenced the
transfer of its operations to its new site. However, BBB alleged that AAA did so without settling its
(AAA's) outstanding rentals and service (electricity and water) charges, plus interest/surcharges. BBB
retained the properties of AAA's as security in accordance with Paragraph 23 of the Contract of Lease
in case of breach of default. AAA denied that the lease contract was still in effect when the properties
were confiscated. It submitted copies of check vouchers payable to BBB to answer for its liabilities
but these were not actually tendered to the latter. Is AAA liable for the unpaid rentals and service
charges to BBB?
Yes, AAA is liable to BBB for rental arrears and service charges. AAA’s obligations must be fulfilled in
accordance with law and the lease contract. Particularly, AAA incurred liabilities because it violated the
provisions of the Contract of Lease which it willingly signed. It is well to remember that a contract is the law
between the parties. Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith. (PNTC Colleges, Inc. vs. Time Realty, Inc., G.R. No. 219698. September 27, 2021)

83. Is a stipulation on a contract of lease providing prerogative on the part of the lessor to retain the
property of lessee in case of breach of default valid?
Yes, it is valid. The parties are allowed by law 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." Essentially, such stipulation is clear and shows no contravention of law, morals,
good customs, public order or public policy. As such, they are valid, and the parties' rights shall 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 be controlled. (PNTC Colleges, Inc. vs. Time Realty, Inc., G.R. No. 219698. September 27, 2021)

84. May the court reduce the interest on unpaid rentals stipulated and agreed by the parties?
Yes, as the imposition of an interest on unpaid rentals takes the nature of a penalty clause. Even if such was
specified in the contract, public morals and policy dictate that the interest rate should still be reasonable and
equitable. Although a court is not at liberty to ignore the freedom of the parties to agree on such terms and
conditions as they see fit that contravene neither law nor morals, good customs, public order or public policy,
a stipulated penalty, nevertheless, may be equitably reduced by the courts if it is iniquitous or unconscionable
or if the principal obligation has been partly or irregularly complied with. As provided in Article 1229 of the Civil
Code, The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly
complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the
courts if it is iniquitous or unconscionable. (PNTC Colleges, Inc. vs. Time Realty, Inc., G.R. No. 219698. September 27, 2021)

85. BBBs, through a Special Power of Attorney (SPA), mortgaged several parcels of land to the AAA. After
the lapse of 17 years without the AAA demanding payment or filing a case to collect or foreclose the
mortgage, can BBBs file a case to cancel the mortgage liens notwithstanding that they were only
vested with special power to mortgage?
Yes. Article 1882 of the Civil Code expressly provides: “The limits of the agent's authority shall not be
considered exceeded should it have been performed in a manner more advantageous to the principal than
that specified by him.” Given this and considering that BBB was already given special authority to encumber
the mortgagors-principals' titles with the subject mortgage contracts, then it is indeed implicit that BBB is also
authorized to do all the necessary acts to release the mortgagors-principals from such encumbrance. Thus,
the filing of the instant case to cancel the mortgage liens, which were annotated in the mortgagor-principals'
respective titles through the special authority granted by them to BBB, should be considered within the limits
of BBB's authority since disencumbering the mortagagors-principals' titles of the same mortgage liens are
obviously advantageous to the latter. To reiterate, unlike a foreclosure of a real estate mortgage, which
involves real property rights, the cancellation of a real estate mortgage is merely personal in nature. In fact,
the mortgaged properties do not even come into the picture until there is a default on the loan as the
mortgage's purpose is merely to secure such loan. (PNB-Republic Bank vs. Sian-Limsiaco, G.R. No. 196323. February 8,
2021)

86. Can BBBs who executed a Real Estate Mortgage through a Special Power of Attorney file a case to
cancel the mortgage liens in their own name without joining their principals?
Yes. Sec. 3, Rule 3 of the Rules of Court provides: “An agent acting in his own name and for the benefit of an
undisclosed principal may sue or be sued without joining the principal except when the contract involves
things belonging to the principal.” Clearly, the Rules allow agents to bring actions for the principals in their
own name without joining their principals, provided that the contract does not involve things belonging to the
principal. As applied in this case, while it may seem that the mortgage contracts "involve" real property of the
principals, such contracts are actually not of that nature. With respect to mortgage, the rule on real actions
only mentions an action for foreclosure of a real estate mortgage. It does not include an action for the
cancellation of a real estate mortgage. It must be emphasized that whether or not the petition to cancel the
mortgage liens was granted, no transfer or disposition of real property rights would have occurred either way.
This is in contrast to a case involving the foreclosure of a mortgage, wherein property rights will clearly be
transferred or at least be affected depending on the ruling of the court hearing such a case. Therefore, since
neither the subject mortgage contracts nor the instant case involved the mortgagors-principals' real property
rights, there was no need to join them and hence, BBB validly instituted the action in her own name but still in
her capacity as an agent of the mortgagors-principals. (PNB-Republic Bank vs. Sian-Limsiaco, G.R. No. 196323. February
8, 2021)

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87. What is the doctrine of apparent authority?
Under the doctrine of apparent authority, if a corporation knowingly permits one of its officers or any other
agent to act within the scope of an apparent authority, it holds the agent out to the public as possessing the
power to do those acts; thus the corporation will, as against anyone who has in good faith dealt with it through
such agent, be estopped from denying the agent's authority. (Agro Food and Processing Corp. vs. Vitarich Corporation,
G.R. No. 217454. January 11, 2021)

88. AAA posits that the amendments to the original contract with BBB are not binding on the corporation
since the officer had no actual authority from its board of directors. On the other hand, BBB argues
that the amendments are binding pursuant to the doctrine of apparent authority since in over a span
of two (2) years, with over eighty nine (89) billings and three (3) instances of amendments, AAA never
contested the amended toll fees. Did AAA cloth its officer with apparent authority to amend the
contract?
Yes. It bears stressing that the existence of apparent authority may be ascertained not only through the
"general manner in which the corporation holds out an officer or agent as having the apparent authority to act
in general", but also through the corporation's "acquiescence in his acts of a particular nature, with actual or
constructive knowledge thereof, whether within or beyond the scope of his ordinary powers." Here, it is easy
to see that AAA, reasonably appearing to have knowledge of the amendments, acquiesced to the same.
Indeed, AAA never contested nor protested the amendments. "When a corporation intentionally or negligently
clothes its officer with apparent authority to act in its behalf, it is estopped from denying its officer's apparent
authority as to innocent third parties who dealt with this officer in good faith." (Agro Food and Processing Corp. vs.
Vitarich Corporation, G.R. No. 217454. January 11, 2021)

89. Can the computation of legal interest for default in the deed of sale include the time in which the
injunction was issued which prevented the bank from paying the proceeds of the Letter of Credit
(LOC), considering that there is no stipulation of interest rate and that the bank did not advance any
amount or offer any alternative to pay in spite of the issuance of the injunctive order which was
eventually dissolved by the Court?
Yes. The Bank failed to present sufficient factual or legal basis to support its contention that the time in which
the injunction was in effect should not be included in the computation of the legal interest, it being established
that the parties to the Deed of Sale did not stipulate an interest rate in case of default when they entered into
the sale. Furthermore, the Bank did not advance any amount or offer any alternative in order to show that it
was willing to pay the proceeds of the LOC in spite of the issuance of an injunctive order (which was
eventually dissolved by the Court anyway). Withal, the legal interest on the face amount of the LOC shall
commence to run from the time extrajudicial demand was made. (Equitable PCI Bank vs. Manila Adjusters & Surveyors,
Inc., G.R. No. 166726. November 25, 2019)

90. In the absence of an express provision as to the rate of interest that would govern the parties to a
loan or forbearance of any money, goods or credits, what should apply?
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. (Development Bank of the Philippines vs. Danico, G.R. No. 196476. September 28, 2020; see also
Equitable PCI Bank vs. Manila Adjusters & Surveyors, Inc., G.R. No. 166726. November 25, 2019)

91. Discuss the floating interest rate system.

There may be instances wherein an interest rate scheme which does not specifically indicate a particular
interest rate may be validly imposed. Such an interest rate scheme refers to what is typically called a floating
interest rate system. The Bangko Sentral ng Pilipinas (BSP) allows backs and borrowers to agree on a
floating rate of interest, provided that it must be based on market-based reference rates: (Manual of
Regulations for Banks) X305.3 Floating rates of interest. - The rate of Interest on a floating rate loan during
each interest period shall be stated on the basis of Manila Reference Rates (MRRs), T-Bill Rates or other
market based reference rates plus a margin as may be agreed upon by the parties. This BSP requirement is
consistent with the principle that the determination of interest rates cannot be left solely to the will of one
party. It further emphasized that the reference rate must be stated in writing, and must be agreed upon by the
parties. Hence, 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. (Goldwell Properties Tagaytay,
Inc. vs. Metropolitan Bank and Trust Company, G.R. No. 209837. May 12, 2021)

92. What would be the effect if the interest rate scheme imposed by the bank was struck down because of
the stipulation that allows the bank to unilaterally determine and Increase the imposable interest rate?
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. “Relevantly, "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.”
(Goldwell Properties Tagaytay, Inc. vs. Metropolitan Bank and Trust Company, G.R. No. 209837. May 12, 2021)

93. Is Banco De Oro (BDO), the creditor, entitled to retain the P500,000.00 deposit of the sureties under
the Deed of Suretyship and apply it to the interest due on the loan without the consent of the
sureties? No, BDO is not entitled to retain the P500,000,00. 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. It does not
contemplate a situation where the creditor is allowed to take by force or without consent the property of the

21
 surety. If BDO indeed rejected the offer of redemption, the proper course of action for the bank was to return
the amount to the sureties or inquire if the latter would be interested in applying the payment to the principal’s
due interest. BDO may not simply retain the money and apply it to another account under the excuse that it
was exercising its right as a creditor to collect from the sureties. It must do so through lawful means, i.e.,
through the institution of proceedings for collection or enforcement of the surety contract. (Spouses Genotiva vs.
Equitable-PCI Bank, G.R. No. 213796. June 28, 2021)

94. Can BDO, the creditor, invoke compensation to set-off the P500,000 deposit of the spouses AAA, the
sureties, to answer for BBB’s, the principal, interest without the consent of the sureties?
No, BDO may not set-off the amounts without the consent of the spouses AAA because consent is required
for conventional compensation. Neither can BDO invoke legal compensation because the same requires each
of the debtors to be bound principally, and in the case, while the spouses AAA are directly liable for BBB's
loan, their liability stems not from a principal contract, but a secondary one, i.e., the Deed of Suretyship. Thus,
BDO's claim that its retention of the P500,000.00 is allowed under the Deed of Suretyship lacks basis.
(Spouses Genotiva vs. Equitable-PCI Bank, G.R. No. 213796. June 28, 2021)

95. It was alleged that the deed of mortgage was spurious because: the document was supposedly
executed and notarized on March 4, 1998, but was entered in a 2001 notarial book by a notary public
whose notarial commission ended in 2001; that the entry indicated in the notarial register actually
pertained to a deed of sale of a motor vehicle; that different typewriters were used in typing the
contents of the Deed of Mortgage and its notarization; and that the acknowledgment was written on
the back of the document, despite the considerable space allotted and remaining below the Deed of
Mortgage. Will these infirmities in the notarization of the instrument invalidate the mortgage?
No. 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. The
irregular notarization — or, for that matter, the lack of notarization — does not thus necessarily affect the
validity of the contract reflected in the document. Errors in, or even absence of, notarization on a deed of
mortgage will not invalidate an already perfected mortgage agreement. If anything, these would only
depreciate the evidentiary value of the said written deed, as the same would be demoted from a public
document to a private one. (Ganancial vs. Cabugao, G.R. No. 203348. July 6, 2020)

96. If there are many properties used as collateral, can borrowers compel the bank to release certain
collateral upon payment of loan values of said collateral even if the total loan is not yet paid?
No. Under this Article 2089 of the Civil Code, it provides that 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, it is provided that 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." Thus, the fact
that the borrower paid for the loan value of certain properties is immaterial; the mortgage would still be in
effect since the loans have not been fully settled. (Goldwell Properties Tagaytay, Inc. vs. Metropolitan Bank and Trust
Company, G.R. No. 209837. May 12, 2021)

97. Can the land covered by an Emancipation Patent issued in favor of AAA on November 20, 1998, be
foreclosed by the bank on February 27, 2003, or four years after the issuance, for AAA’s failure to pay
the loan, and thus the foreclosure sale is valid?
No. While the bank’s right to foreclose the mortgage over the subject land property had its basis on AAA’s
failure to pay the loan, it arose within the 10-year period during which AAA was supposed to keep the subject
land to his name, under Sec. 27 of RA 6657 otherwise known as the Comprehensive Agrarian Reform
Program. There was, therefore, a factual impediment to the bank’s action to foreclose the mortgage, and a
legal imperative to await the lapse of the 10-year retention period before pursuing his case against AAA. The
sale of the subject land by foreclosure to the bank, being violative of the law and public policy embodied in PD
27 and RA 6557 as amended by RA 9700, is void ab initio. (Heirs of de Lara, Sr. vs. Rural Bank of Jaen, Inc., G.R. No.
212012, March 28, 2022)

98. Is there unjust enrichment on the act of AAA retaining the properties of BBB for the unpaid rentals,
pursuant to Paragraph 23 of the Contract of Lease which provided that AAA can retain the properties
of BBB's as security in case of breach of default?
No. There would be no unjust enrichment to speak of, as AAA withheld the properties pursuant to Paragraph
23 of the Contract of Lease, a provision which BBB knowingly agreed to. In other words, AAA retained the
said properties as security to compel BBB to pay and not to unduly enrich itself. Jurisprudence holds that
there is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person
retains money or property of another against the fundamental principles of justice, equity and good
conscience. The statutory basis for the principle of unjust enrichment is Article 22 of the Civil Code which
provides that 'every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall return the
same to him.' The principle of unjust enrichment under Article 33 requires two conditions: (1) that a person is
benefited without a valid basis or justification, and (2) that such benefit is derived at another's expense or
damage. There is no unjust enrichment when the person who will benefit has a valid claim to such benefit.
Here, it does not show that AAA unjustly benefitted from the retention of the properties without valid basis, as
it merely acted in accordance with the lease contract to ensure recovery of what is due to it. If anything, the
so-called "benefit" which AAA is "enjoying" by withholding the properties is the assurance that it would be able

22
 to collect from BBB. (PNTC Colleges, Inc. vs. Time Realty, Inc., G.R. No. 219698. September 27, 2021)

99. Is recovery of payment for services rendered to the Municipality allowed despite the invalidity of a
Municipal Ordinance which rendered the contract between the Municipality and AAA, invalid?
Yes. Based on the legal principle of quantum meruit, that a person may recover a reasonable value of the
thing he delivered or the service he rendered. Jurisprudence provides that recovery on the basis of quantum
meruit is allowed despite the invalidity or absence of a written contract between a contractor and a
government agency. The absence or invalidity of required documents would not necessarily preclude the
contractor from receiving payment for the services he or she has rendered for the government. Thus, despite
the invalidity of a Municipal Ordinance which in turn rendered the contract between the Municipality and AAA,
invalid, the latter is still entitled to receive payment for the services it rendered. The Municipality cannot be
unjustly enriched and allowed to retain the benefits of the services rendered by AAA without properly paying
for it. (Municipality of Corella vs. Philkonstrak Development Corporation, G.R. No. 218663. February 28, 2022)

100. Two employees of the CBP (Central Bank of the Philippines) - a bookkeeper and a janitor-messenger -
were convicted of three counts of estafa through falsification of public documents for having
committed fraud against Bank of the Philippine Islands (BPI), a member of the Clearing House
established by CBP." Can CBP be liable for the torts committed by its employees?
No. CBP is not liable for the acts of its employees because they were not “special agents” nor acting within
the scope of their assigned tasks. Article 2180 of the Civil Code provides that the State is responsible for the
damages caused by its employees 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. 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 CBP employees are not considered as
special agents of CBP during their commission of the fraudulent acts against BPI as they were regular
employees performing tasks pertaining to their offices, namely, bookkeeping and janitorial-messenger. Thus,
CBP cannot be held liable for any damage caused to BPI by reason of its employees’ unlawful acts. Even
assuming that CBP is an ordinary employer (and not a , it still cannot be held liable. 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. An act is deemed an assigned task if it is "done by an employee, in furtherance
of the interests of the employer or for the account of the employer at the time of the infliction of the injury or
damage." Obviously, the 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. (Bank of the
Philippine Islands vs. Central Bank of the Philippines and Citibank, G.R. No. 197593. October 12, 2020)

101. Philippine National Bank (PNB) filed a complaint for a sum of money against the client, AAA and one
of its own branch heads, BBB. PNB claimed that BBB approved various cash withdrawals by AAA
against several checks without waiting for them to be cleared. When these checks were dishonored,
PNB claimed that BBB allowed AAA to deposit several checks to partially cover AAA's various cash
withdrawals. Nevertheless, these new checks were also dishonored for insufficient funds. PNB further
asserted that AAA had already acknowledged and confirmed his outstanding obligation to the bank in
the amount of P520,000.00 and executed a promissory note in its favor. Despite demand, however,
AAA failed to pay PNB the stipulated amount. PNB also alleged that BBB violated the bank's policy on
the prohibition against drawing on uncollected deposits pursuant to its General Circular. In addition,
PNB claimed that BBB violated and exceeded his limited authority to approve encashment of other
bank checks under its Manual of Signing Authority. Because of these, PNB averred that it incurred
losses in the amount of P520,000.00 and that BBB is personally liable to the bank pursuant to its
Manual of Policies on Cash, Checks and Other Cash Items and Deposits. PNB Administrative
Adjudication Panel penalized BBB with four (4) months suspension without prejudice to the filing of
an appropriate court action on the part of the bank. BBB, on the other hand, claimed that it is only
after careful evaluation of the track record and dealings of the depositor that he decided to approve
the check deposit of AAA. Can BBB be held personally and solidarily liable with AAA for the amount
of P520, 000.00?
No, because BBB's questioned acts were made within his discretion as branch manager and 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. As claimed by
BBB, it is only after careful evaluation of the track record and dealings of the depositor that he decided to
approve the check deposit of AAA. In Tan v. People, it was held that as to the uncollected cheek deposits, the
bank may honor the check at its discretion in favor of clients. BBB's position as branch head entails the
exercise of such discretion. Additionally, since BBB was already penalized by PNB for his violations by way of
a four-month long suspension, making him personally accountable for the liability that AAA had already
acknowledged to be his would be tantamount to penalizing him twice for the same offense. The phrase
“without prejudice to the filing of an appropriate court action on the part of the bank - referred only to the
recovery of the amount involved from the one who actually benefited from the fraud, that is, AAA. (Philippine
National Bank vs. Bal, Jr., [G.R. No. 207856. November 18, 2020)

102. Allied Bank ascribes all blame to the acts of its employee since the latter approved the unauthorized
debit of the transactions which led to the closure of the Spouses’ deposit account. What is the
liability, if any, of Allied Bank?
Its liability under the deposit agreement with the Spouses is primary and not vicarious. Articles 1172, 2176
and 2180 of the Civil Code lay down the following principles: (1) the responsibility of the obligor arising from

23
 negligence in the performance of the obligation is demandable; (2) the fault or negligence of the obligor
causing damage to another obliges him to pay for the damage done; and (3) the obligation to pay for the
damage is demandable not only for one's own acts or omission, but also for those of persons for whom one is
responsible. Paragraph 5 of Article 2180 provides that "employers shall be liable for the damages caused by
their employees xxx acting within the scope of their assigned tasks xxx." (Allied Banking Corporation vs. Spouses
Macam, G.R. No. 200635. February 1, 2021)

103. Can the doctrine of res ipsa loquitur be applied to presume the driver negligent for sideswiping a
six-year old child?
Yes. 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. 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 the driver, the person who controls the instrumentality
(vehicle) causing the injury, arises, and he has the burden of presenting proof to the contrary. (Maitim vs. Aguila,
G.R. No. 218344, March 21, 2022)

104. A six-year old child was sideswiped by AAA's vehicle driven by driver named BBB and dragged for
three meters, resulting in a fractured right leg. BBB was found to be negligent. Can AAA be held
vicariously liable?
Yes. In relation to Article 2176, Article 2180 of the Civil Code provides the basis for the concept of vicarious
liability in our jurisdiction, to wit: “The obligation imposed by article 2176 is demandable not only for one's own
acts or omissions, but also for those of persons for whom one is responsible. Employers 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.” Applying these concepts to the present
case, the finding of negligence against BBB gave rise to the presumption of negligence on the part of AAA in
the latter's selection and/or supervision of the former. Therefore, it is incumbent upon AAA to prove that she
exercised the diligence of a good father of a family in the selection and supervision of her employee, BBB.
(Maitim vs. Aguila, G.R. No. 218344, March 21, 2022)

105. Is an airline liable for breach of contract for the lost luggage of its passenger?
Yes. 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. Hence, 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. (KLM Royal Dutch
Airlines vs. Tiongco, G.R. No. 212136. October 4, 2021)

106. The respective townhouse units of AAA and BBB are approximately nine meters apart, separated only
by a driveway jointly used by the townhouse unit owners. While AAA’s vehicle was driven by her
driver CCC along the common driveway, DDD, the six-year old daughter of BBB, was sideswiped and
dragged for three meters, resulting in a fractured right leg. DDD had exited their door and was on her
way towards the garage to board their car. CCC was found to be negligent. Is there contributory
negligence on DDD's part?
No. The driveway was a common area to both parties' townhouse units, which meant that the driveway is as
much a part of BBB's residence as it is of AAA's. DDD was not just running or loitering around but was
actually on her way to board their car. There is no negligence on the part of BBB when she allowed DDD 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.
Moreover, given the location and relatively narrow profile of the driveway, it can be reasonably expected that
anyone who traverses such driveway with a motor vehicle would drive slowly and with utmost caution. (Maitim
vs. Aguila, G.R. No. 218344, March 21, 2022)

107. How is the airline’s liability for damages determined?

Under Article 2216 of the Civil Code, the assessment of damages is left to the discretion of the court
according to the circumstances of each case. The courts must adhere to the principle that the amount of
damages awarded should not be palpably excessive as to indicate that it was the result of prejudice or
corruption on the part of the trial court. It must therefore be fair, reasonable, and proportionate to the injury.
(KLM Royal Dutch Airlines vs. Tiongco, G.R. No. 212136. October 4, 2021)

108. Is an airline liable for moral and exemplary and nominal damages if a passenger loses his luggage
containing his resource materials and other possessions to be used in a speaking engagement,
without which, the latter would not have been done properly, considering that nobody from the
airline’s personnel updated the passenger of what happened to the search for the luggage, that it was
only when the passenger wrote the airline a demand letter that the latter reached out to him asking for
time to investigate the matter, that it did not even notify him of the result of the purported
investigation, and that when it was eventually found, the airline did not inform the passenger that his
luggage had been found or took the necessary steps to transport it back?
Yes. The bad faith on the part of the airline renders the same liable for moral and exemplary damages. The
award of moral damages is proper to enable the injured party to obtain means of diversion or amusement that
will serve to alleviate the moral suffering they underwent because of another's culpable action. (KLM Royal Dutch
Airlines vs. Tiongco, G.R. No. 212136. October 4, 2021)

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109. Is an airline liable for both nominal damages and temperate damages if a passenger loses his luggage
containing his resource materials and other possessions to be used in a speaking engagement,
without which, the latter would not have been done properly?
No, the airline is liable for temperate damages only. Article 2221 of the Civil Code states that nominal
damages may be awarded in order that the plaintiff's right, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered. They are "recoverable where a legal right is technically violated and must be vindicated against an
invasion that has produced no actual present loss of any kind or where there has been a breach of contract
and no substantial injury or actual damages whatsoever have been or can be shown." On the other hand,
Article 2224 of the same Code states that 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. Simply
put, temperate damages are awarded when the injured party suffered some pecuniary loss but the amount
thereof cannot, from the nature of the case, be proven with certainty. (KLM Royal Dutch Airlines vs. Tiongco, G.R. No.
212136. October 4, 2021)

110. AAA filed against BBB a complaint for declaration of the deed of mortgage as null and void, with
damages. The RTC ruled in favor of BBB and awarded moral and exemplary damages. The RTC
decision reads: “There is bad faith on the part of AAA. There being bad faith, she is liable for moral
damages as enunciated in the case of China Airlines, Ltd. vs. Court of Appeals, 406 SCRA 113.” Is the
award of moral, exemplary and attorneys fees proper?
No. Moral damages are not recoverable simply because a contract has been breached. They are recoverable
only if the party from whom they are claimed acted fraudulently or in bad faith or in wanton disregard of
his/her contractual obligations. As regards the assessment of exemplary damages, the wrongful act must be
accompanied by bad faith, and the award therefor would be allowed only if the guilty party acted in a wanton,
fraudulent, reckless or malevolent manner. Attorney's fees represent the reasonable compensation paid to a
lawyer by his/her client for the legal services he/she has rendered to the latter. They may be awarded by the
court as indemnity for damages to be paid by the losing party to the prevailing party in the instances specified
in Article 2208 of the Civil Code. Strangely enough, none of the foregoing Civil Code provisions, pieces of
jurisprudence, or similar legal references were even slightly alluded to by the RTC to justify the monetary
awards. In fine, there was no clear and distinct citation of the RTC's factual and legal bases as regards its
positive grant of damages in favor of BBB, or any discussion as to how AAA was liable therefor. (Ganancial vs.
Cabugao, G.R. No. 203348. July 6, 2020)

111. Is the award for temperate damages proper in the case of AAA who was unable to use productively
the 102 hectares of its landholdings after it was deprived of its possession in 1972?
Yes. With the passage of time, it is impossible to determine AAA's losses with any certainty. Thus, considering
the particular circumstances of this case, the award of temperate damages is reasonable. (Land Bank of the
Philippines vs. Del Moral, Inc., G.R. No. 187307. October 14, 2020)

112. Can nominal damages be awarded in addition to the temperate damages granted?
No. Nominal damages should be deleted as temperate and nominal damages are incompatible and thus,
cannot be granted concurrently. (Land Bank of the Philippines vs. Del Moral, Inc., G.R. No. 187307. October 14, 2020)

113. AAA, engaged in the production of liquid forms of gasses which require a very stable source of
power, experienced power fluctuations and interruptions causing losses amounting to more than 21
million pesos. There is no indication as to where this figure was based or how it was derived. There is
likewise no receipt nor any supporting document offered in court to support such figure. 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. Is Meralco liable for temperate damages, exemplary damages, and attorney’s
fees?

He is liable only for temperate and exemplary damages, but not for attorney’s fees.

Liable for temperate damages: Under Article 2224 of the Civil Code, "[t]emperate 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." Here, without indication as to where the figure for loss was based or how it was derived and
without any supporting receipts, the resulting figure may very well be a product of speculation or sheer
estimation. Nevertheless, Meralco cannot escape liability for this sole reason. This is because Meralco failed
to provide any concrete proof of the cause of the power interruptions and fluctuation. Meralco is liable for
temperate damages to an amount equivalent to a certain percentage of the actual damages claimed by AAA.

Liable for exemplary damages: 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." 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."

Not liable for Attorney’s fees: Jurisprudence instructs that "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

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 provided under Article 2208 of the Civil Code to justify the award." There is no compelling legal reason here.
(Go vs. Teruel, A.C. No. 11119. November 4, 2020)

114. AAA filed a complaint for damages claiming that Union Bank negligently handled his credit card
account. AAA 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. Per records of the case, the card was dishonored because his account was
already in "past due" status for failure to pay the minimum amount due. Is AAA entitled to moral
damages, exemplary damages, and attorney's fees due to the alleged gross negligence of Union
Bank?
No. 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. While it is true that with the issuance of the credit card to
AAA, Union Bank 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 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. Union Bank may or may not approve AAA's
purchase requests based on the latter's credit standing, credit card history, and financial capability. Union
Bank disapproved AAA's use of credit card due to the latter's failure to pay the minimum amount due of his
SOA. Hence, as it was AAA's own action which was the proximate cause of his embarrassing and humiliating
experience, the award of moral damages is clearly unjustified. (Rico vs. Union Bank of the Philippines, G.R. No. 210928,
February 14, 2022)

115. When the commission of a crime results in death, what awards are the heirs of the victim entitled to?
When death results in the commission of a crime, the heirs of the victim are entitled to (a) civil indemnity ex
delicto for the death of the victim without need of evidence other than the commission of the crime; (b) actual
or compensatory damages to the extent proved, or temperate damages when some pecuniary loss has been
suffered but its amount cannot be provided with certainty; (c) moral damages; and (d) exemplary damages
when the crime was committed with one or more aggravating circumstances. (People vs. Camarino, G.R. No. 222655.
December 9, 2020)

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