UNIVERSITY OF SAN CARLOS

COLLEGE OF LAW
BAR OPERATIONS

WARRIORS' NOTES
CIVIL LAW 2 0 1 9

Researchers:
Prepared by: Makinano, Hazel Ann Mata, Geremae
Civil Law Warrior Notes Team Omega, Mary Jun Dulanas, Trisha Aliya
Angcajas, Margil Obaob, Lawrence
Senior Adviser: Guanzon, Angeli Gella, Mark Oliver
Atty. Maricris Bathan-Lasco Fernandez, Nicole Frances Estrella, Emily Louise
Junior Adviser: Proofreader:
Atty. Mark Lawrence Badayos Leana Rae D. Rondez
Layout:
Karol Grace G. Oroceo
 Table of Contents

I. PERSONS AND FAMILY RELATIONS........................................................................ 3

II. PROPERTY ........................................................................................................................... 6

III. SUCCESSION ................................................................................................................... 11

IV. OBLIGATIONS AND CONTRACTS ........................................................................ 12

V. SALES .................................................................................................................................... 19

VI. LEASE ................................................................................................................................. 23

VII. CREDIT TRANSACTIONS ......................................................................................... 23

VIII. LAND TITLES AND DEEDS .................................................................................. 26

IX. TORTS AND DAMAGES.............................................................................................. 37

2

I. PERSONS AND FAMILY
RELATIONS
1. Is the failure of a case report by a
psychologist to establish that the traits
existed prior to the marriage (juridical
antecedent) and that the
psychological disorder is incurable
(incurability) fatal to a petition for
declaration of nullity of marriage on
the ground of psychological
incapacity?
Yes. There was simply no discernible
explanation on the juridical antecedence or
incurability of Gina's supposed condition.
More significantly, the relation of such
condition to Gina's inability to perform her
essential marital obligations was not
sufficiently shown. To reiterate, the
psychological condition ought to pertain to
personality disorders that are grave and
serious such that the party would be
incapable of carrying out the ordinary duties
required in a marriage.
Unfortunately, the Case Analysis Report
fails to demonstrate this crucial point. In
determining the existence of psychological
incapacity, a clear and understandable
causation between the party's condition and
the party's inability to perform the essential
marital covenants must be shown. A
psychological report that is essentially
comprised of mere platitudes, however
speckled with technical jargon, would not
cut the marriage tie. (Republic of the
Philippines v. Tecag, G.R. No. 229272,
November 19, 2018)
2. What is the probative force of the
testimony of an expert in a
declaration of nullity of marriage
under Article 36 of the Family Code?
The probative force of the testimony of
an expert does not lie in a mere statement of
his or her theory or opinion, but rather in the
assistance that he or she can render to the
3
courts in showing the facts that serve as basis
for his or her criterion and the reasons upon
which the logic of his or her conclusion are
founded. Hence, it has been held that courts
should weigh and consider the probative
value of the findings of the expert witnesses
vis-à-vis the other evidence available, and
the root cause of the psychological
incapacity must still be identified as a
psychological illness and its incapacitating
nature be fully explained. (Republic of the
Philippines v. Tecag, G.R. No. 229272,
November 19, 2018)
3. If the spouse alleges the
psychological incapacity of the other
spouse, is he/she required to adduce
independent evidence of such
incapacity?
Yes. Although there is no requirement
that a party to be declared psychologically
incapacitated should be personally
examined by a physician or a psychologist
(as a condition sine qua non), there is
nevertheless still a need to prove the
psychological incapacity through
independent evidence adduced by the
person alleging said disorder, which Gina
simply failed to do. (Republic of the
Philippines v. Tecag, G.R. No. 229272,
November 19, 2018)
4. Is sexual infidelity, by itself, sufficient
proof that one is suffering from
psychological incapacity?
No. It must be shown that the acts of
unfaithfulness are manifestations of a
disordered personality which makes him/her
completely unable to discharge the essential
obligations of marriage. (Republic of the
Philippines v. Tecag, G.R. No. 229272,
November 19, 2018)
5. How should a divorce between a
Filipino and foreign national be
proven in order for it to be recognized
here?
 In order for a divorce obtained abroad
by the alien spouse to be recognized in our
jurisdiction, it must be shown that the divorce
decree is valid according to the national law
of the foreigner. Both the divorce decree
and the governing personal law of the alien
spouse who obtained the divorce must be
proven since our courts do not take judicial
notice of foreign laws and judgment. Our law
on evidence requires that both the divorce
decree and the national law of the alien
must be alleged and proven like any other
fact. (Medina v. Koike, G.R. No. 215723, July
27, 2016)
6. Is a petition for recognition of foreign
divorce filed by a Filipino citizen
valid?
Yes. Pursuant to Republic vs. Manalo,
foreign divorce decrees obtained to nullify
marriages between a Filipino and an alien
citizen may already be recognized in this
jurisdiction, regardless of who between the
spouses initiated the divorce; provided, of
course, that the party petitioning for the
recognition of such foreign divorce decree –
presumably the Filipino citizen – must prove
the divorce as a fact and demonstrate its
conformity to the foreign law allowing it.
(Morisono v. Morisono, G.R. No. 226013, July
2, 2018)
7. Is a marriage entered into by one
who is not ready to be married,
sufficient to constitute psychological
incapacity under article 36?
No. It has consistently been held that
psychological incapacity, as a ground to
nullify a marriage under Article 36 of the
Family Code, should refer to the most serious
cases of personality disorders clearly
demonstrative of an utter insensitivity or
inability to give meaning and significance to
the marriage. It must be a malady that is so
grave and permanent as to deprive one of
awareness of the duties and responsibilities of
the matrimonial bond one is about to
assume.
4
Motives for entering into a marriage are
varied and complex. Thus, marriages
entered into for other purposes, limited or
otherwise, such as convenience,
companionship, money, status, and title,
provided that they comply with all the legal
requisites, are equally valid. Love, though the
ideal consideration in a marriage contract, is
not the only valid cause for marriage. Other
considerations, not precluded by law, may
validly support a marriage. (Republic v.
Romero II, G.R. Nos. 209180 & 209253,
February 24, 2016)
8. Is marriage to a gambler and cheater
sufficient to constitute the ground of
psychological incapacity under
Article 36 of the Family Code?
No. The Court, in several cases, did not
consider as tantamount to psychological
incapacity the emotional immaturity,
irresponsibility, sexual promiscuity, and other
behavioral disorders invoked by the
petitioning spouses, for the reason that these
behaviors "do not by themselves warrant a
finding of psychological incapacity, as these
may be due to a person's difficulty, refusal, or
neglect to undertake the obligations of
marriage that is not rooted in some
psychological illness that Article 36 of the
Family Code addresses."
Emilio may have engaged in an extra-
marital affair, gambled, failed to support
Cheryl and their son, is irritable and
aggressive, and abandoned his family, while
Cheryl may have married Emilio simply in
obedience to her parents' decision and had
the constant need for her parents' care and
support. However, these acts, by themselves,
do not prove that both parties are
psychologically incapacitated as these may
have been simply due to jealousy, emotional
immaturity, irresponsibility, or dire financial
constraints. (Republic v. Deang, G.R. No.
236279, March 25, 2019)
9. What must be shown in proving
psychological incapacity?
 There must be proof of 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 - which must
be linked with the manifestations of the
psychological incapacity.
Also, while it is not required that the
expert witness personally examine the party
alleged to be suffering from psychological
incapacity, nevertheless, corroborating
evidence must be presented to sufficiently
establish the required legal parameters.
(Republic v. Deang, G.R. No. 236279, March
25, 2019)
10. In a case for judicial declaration of
presumptive death, what does the
“well founded belief” require the
present spouse to prove?
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. It necessitates
exertion of active effort, not a passive one.
As such, the mere absence of the spouse for
such periods prescribed under the law, lack
of any news that such absentee spouse is still
alive, failure to communicate, or general
presumption of absence under the Civil
Code would not suffice. The premise is that
Article 41 of the Family Code places upon
the present spouse the burden of complying
with the stringent requirement of "well
founded belief" which can only be
discharged upon a showing of proper and
honest-to-goodness inquiries and efforts to
ascertain not only the absent spouse's
whereabouts, but more importantly, whether
the latter is still alive or is already dead.
(Republic v. Tampus, G.R. No. 214243, March
16, 2016)
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11. What is the rule when there is doubt
on the validity of marriage?
Jurisprudence states that the validity of
marriage and the unity of the family are
enshrined in our Constitution and statutory
laws; hence, any doubts attending the same
are to be resolved in favor of the
continuance and validity of the marriage
and that the burden of proving the nullity of
the same rests at all times upon the
petitioner. The policy of the Constitution is to
protect and strengthen the family as the
basic social institution and marriage as the
foundation of the family. As such, the
Constitution decrees marriage as legally
inviolable and protects it from dissolution at
the whim of the parties. (Cahapisan-
Santiago v. Santiago, G.R. No. 241144, June
26, 2019)
12. Is expert opinion necessary in proving
psychological incapacity?
No. Notwithstanding the Molina
guidelines (Republic v. Molina), note,
however, that an expert opinion is not
absolutely necessary and may be dispensed
with in a petition under Article 36 of the
Family Code if the totality of the evidence
shows that psychological incapacity exists
and its gravity, juridical antecedence, and
incurability can be duly established. The
evidence need not necessarily come from
the allegedly incapacitated spouse, but can
come from persons intimately related to the
spouses, i.e., relatives and close friends, who
could clearly testify on the allegedly
incapacitated spouse's condition at or about
the time of the marriage. In other words, the
Molina guidelines continue to apply but its
application calls for a more flexible
approach in considering petitions for
declaration of nullity of marriages based on
psychological incapacity. To be clear,
however, the totality of the evidence must
still establish the characteristics that Santos
vs. CA laid down: gravity, incurability, and
juridical antecedence. (Del Rosario v. Del
Rosario, G.R. No. 222541, February 15, 2017)
13. Is Article 36 of the Family Code a
divorce law?
No. Article 36 of the Family Code, as
amended, is not a divorce law that cuts the
marital bond at the time the grounds for
divorce manifest themselves; a marriage, no
matter how unsatisfactory, is not a null and
void marriage. Thus, absent sufficient
evidence establishing psychological
incapacity within the context of Article 36,
the Court is compelled to uphold the
indissolubility of the marital tie. (Del Rosario v.
Del Rosario, G.R. No. 222541, February 15,
2017)
14. Will Article 151 of the Family Code
(which requires earnest efforts to be
made first before suits may be filed
between family members), apply in a
suit filed by a person (plaintiff) against
his full-blood sibling, nephews, and
nieces (co-defendants)?
No. Insofar as Article 151 of the Family
Code is concerned, nephews and nieces are
considered “strangers”. For Article 151 of the
Family Code to apply, the suit must be
exclusively between or among "members of
the same family." Once a stranger becomes
a party to such suit, the earnest effort
requirement is no longer a condition
precedent before the action can prosper.
Article 150 of the Family Code provides:
“Family relations include those: (1) Between
husband and wife; (2) Between parents and
children; (3) Among other ascendants and
descendants; and(4) Among brothers and
sisters, whether of the full or half-blood.”
Hence, any person having a collateral
familial relation with the plaintiff other than
what is enumerated in Article 150 of the
Family Code is considered a stranger who, if
included in a suit between and among family
members, would render unnecessary the
earnest efforts requirement under Article 151.
(Moreno v. Kahn, G.R. NO. 217744, July 30,
2018)
15. Does refusal to live with one’s spouse,
“utter emotional immaturity”,
6
irresponsibility, and infidelity,
constitute as psychological
incapacity under Art. 36 of the Family
Code?
No. There is hardly any doubt that the
intendment of the law has been to confine
the meaning of “psychological incapacity”
to the most serious cases of personality
disorders clearly demonstrative of an utter
insensitivity or inability to give meaning and
significance to the marriage. In Santos v. CA,
the Court first declared that psychological
incapacity must be characterized by: (a)
gravity (i.e., it must be grave and serious such
that the party would be incapable of
carrying out the ordinary duties required in a
marriage); (b) juridical antecedence (i.e., it
must be rooted in the history of the party
antedating the marriage, although the overt
manifestations may emerge only after the
marriage); (c) incurability (i.e., it must be
incurable, or even if it were otherwise, the
cure would be beyond the means of the
party involved). A wife’s refusal to live with
his husband and to assume her duties as wife
and mother as well as her emotional
immaturity, irresponsibility and infidelity do
not rise to the level of psychological
incapacity that would justify the nullification
of the parties’ marriage. (Republic v. De
Gracia, G.R. No. 171557, February 12, 2014)
II. PROPERTY
1. Is a notarized deed of absolute sale
sufficient to establish legal and
equitable title over a parcel of land in
an action for quieting of title?
Yes. For an action for quieting of title to
prosper, it is essential that the plaintiff must
have legal or equitable title to, or interest in,
the property which is the subject matter of
the action. Legal title denotes registered
ownership, while equitable title means
beneficial ownership. (Heirs of Extremadura
v. Extremadura, G.R. No. 211065, June 15,
2016)
2. What is the relief ultimately sought
when the action is one for the
nullification of sale allegedly due to
fraud and certificate of title that was
wrongfully registered to another?
It is evident that petitioner ultimately
seeks for the reconveyance to her of the
subject properties through the nullification of
their supposed sale to Gran. An action for
reconveyance is one that seeks to transfer
property, wrongfully registered by another, to
its rightful and legal owner. Having alleged
the commission of fraud by Gran in the
transfer and registration of the subject
properties in her name, there was, in effect,
an implied trust created by operation of law
pursuant to Article 1456 of the Civil Code
which provides: “If property is acquired
through mistake or fraud, the person
obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of
the person from whom the property comes.”
(Zuñiga-Santos v. Santos-Gran, G.R. No.
197380, October 8, 2014)
3. What is the prescriptive period in an
action for reconveyance?
To determine when the prescriptive
period commenced in an action for
reconveyance, the plaintiff's possession of
the disputed property is material. If there is an
actual need to reconvey the property as
when the plaintiff is not in possession, the
action for reconveyance based on implied
trust prescribes in ten (10) years, the
reference point being the date of registration
of the deed or the issuance of the title. On
the other hand, if the real owner of the
property remains in possession of the
property, the prescriptive period to recover
title and possession of the property does not
run against him and in such case, the action
for reconveyance would be in the nature of
a suit for quieting of title which is
imprescriptible. (Zuñiga-Santos v. Santos-
Gran, G.R. No. 197380, October 8, 2014)
7
4. What has the aggrieved party have to
show in an action for reconveyance
for it to prosper?
It is incumbent upon the aggrieved party
to show that he has a legal claim on the
property superior to that of the registered
owner and that the property has not yet
passed to the hands of an innocent
purchaser for value. (Spouses Roque v.
Aguado, et al., G.R. No. 193787, April 7, 2014)
5. Are owners of an adjacent property
separated by a partition wall entitled
to damages when the owners of the
adjacent property filled the uneven
portion between them with gravel
and earth, causing the partition wall
to crack and damage the adjacent
property?
Yes, but damages the owners are
entitled to are mitigated by their contributory
negligence.
Article 2179 of the Civil Code reads:
“When the plaintiff’s own negligence was
the immediate and proximate cause of his
injury, he cannot recover damages. But if his
negligence was only contributory, the
immediate and proximate cause of the injury
being the defendant’s lack of due care, the
plaintiff may recover damages, but the
courts shall mitigate the damages to be
awarded.”
Verily, contributory negligence is
conduct on the part of the injured party,
contributing as a legal cause to the harm he
has suffered, which falls below the standard
to which he is required to conform for his own
protection. In the case at bar, it is undisputed
that the Sonkin property is lower in elevation
than the Vergara property, and thus, it is
legally obliged to receive the waters that
flow from the latter, pursuant to Article 637 of
the Civil Code. While the proximate cause of
the damage sustained by the house of Sps.
Sonkin was the act of Sps. Vergara in
dumping gravel and soil onto their property,
thus, pushing the perimeter wall back and
causing cracks thereon, as well as water
seepage, the former is nevertheless guilty of
contributory negligence for not only failing to
observe the two (2)-meter setback rule under
the National Building Code, but also for
disregarding the legal easement constituted
over their property. As such, Sps. Sonkin must
necessarily and equally bear their own loss.
(Spouses Vergara v. Sonkin, G.R. No. 193659,
June 15, 2015)
6. Will a previous ruling pertaining to
ownership in an accion publiciana
be considered as res judicata in a
subsequent case for quieting of title?
No. A certificate of title shall not be
subject to a collateral attack and that the
issue of the validity of title can only be
assailed in an action expressly instituted for
such purpose. Hence, any declaration the
CA may have made in its October 17, 2003
Decision stemming from Civil Case No. S-606
cannot affect respondent's ownership over
the property nor nullify his Torrens title, as the
adjudication was only for the purpose of
resolving the issue of possession. There is no
res judicata here as the 2 cases involve
different causes of action. The first case
involved an action to recover possession of
land while the second, the petitioner
asserted his ownership of the land by virtue of
his Torrens title. (Heirs of Amistoso v. Vallecer,
G.R. No. 227124, December 6, 2017)
7. May an owner of a joint bank
account be entitled for the allegedly
unauthorized withdrawal by the
person she shares the joint bank
account with?
Yes. A joint account is one that is held
jointly by two or more natural persons, or by
two or more juridical persons or entities.
Under such setup, the depositors are joint
owners or co-owners of the said account,
and their share in the deposits shall be
presumed equal, unless the contrary is
proved, pursuant to Article 485 of the Civil
Code, which provides: “The share of the co-
owners, in the benefits as well as in the
8
charges, shall be proportional to their
respective interests. Any stipulation in a
contract to the contrary shall be void. The
portions belonging to the co-owners in the
co-ownership shall be presumed equal,
unless the contrary is proved.”
The common banking practice is that
regardless of who puts the money into the
account, each of the named account
holder has an undivided right to the entire
balance, and any of them may deposit
and/or withdraw, partially or wholly, the
funds without the need or consent of the
other, during their lifetime. Nevertheless, as
between the account holders, their right
against each other may depend on what
they have agreed upon, and the purpose for
which the account was opened and how it
will be operated.
In this case, there is no dispute that the
account opened by Evangeline and
Dominador under Savings Account No. 1189-
02819-5 with EPCIB was a joint "OR" account.
It is also admitted that: (a) the account was
opened for a specific purpose, i.e., to
facilitate the transfer of needed funds for
Evangeline's business projects; and (b)
Dominador may withdraw funds therefrom
"if" there is a need to meet Evangeline's
financial obligations arising from said
projects. Hence, while Dominador is a co-
owner of the subject account as far as the
bank is concerned — and may, thus, validly
deposit and/or withdraw funds without the
consent of his co-depositor, Evangeline — as
between him and Evangeline, his authority to
withdraw, as well as the amount to be
withdrawn, is circumscribed by the purpose
for which the subject account was opened.
Under the foregoing circumstances,
Dominador's right to obtain funds from the
subject account was, thus, conditioned on
the necessity of funds for Evangeline's
projects. (Apique v. Fahnensteich, G.R. No.
205705, August 5, 2015)
8. What must be alleged in a forcible
entry complaint?
 The complaint must necessarily allege
that one in physical possession of a land or
building has been deprived of that
possession by another through force,
intimidation, threat, strategy or stealth. It is
not essential, however, that the complaint
should expressly employ the language of the
law, but it would suffice that facts are set up
showing that dispossession took place under
said conditions. In other words, the plaintiff
must allege that he, prior to the defendant’s
act of dispossession by force, intimidation,
threat, strategy or stealth, had been in prior
physical possession of the property. This
requirement is jurisdictional, and as long as
the allegations demonstrate a cause of
action for forcible entry, the court acquires
jurisdiction over the subject matter. (Javier v.
Lumontad, G.R. No. 203760, December 3,
2014)
9. In actions for partition, is it necessary
for the court to make a determination
as to the existence of co-ownership
before it can issue an order to divide
the property?
Yes, it is necessary. The court cannot
properly issue an order to divide the property,
unless it first makes a determination as to the
existence of co-ownership. The court must
initially settle the issue of ownership, which is
the first stage in an action for partition.
Indubitably, therefore, until and unless this
issue of co-ownership is definitely and finally
resolved, it would be premature to effect a
partition of the disputed properties. Further,
omission of the indispensable parties renders
the complaint for partition defective.
(Divinagracia v. Parilla, G.R. No. 196750,
March 11, 2015)
10. Is it necessary to rule on ownership for
an ejectment case (i.e. unlawful
detainer)?
No. The only issue to be resolved in an
unlawful detainer case is the physical or
material possession of the property involved,
independent of any claim of ownership by
any of the parties. Unlawful detainer is an
9
action to recover possession of real property
from one who unlawfully withholds possession
thereof after the expiration or termination of
his right to possession under any contract,
express or implied. Hence, the court can only
resolve the issue as to who has the better
right of possession de facto, it does not rule
upon the ownership of the property, which
must be threshed out in another action for
that purpose. (Piedad v. Spouses Gurieza,
G.R. No. 207525, June 18, 2014)
11. What are the remedies available to a
private person whose property right
was invaded or unreasonably
interfered with by the act, omission,
establishment, business or condition
of the property of another?
Aside from the remedy of summary
abatement which should be taken under the
parameters stated in Articles 704 (for public
nuisances) and 706 (for private nuisances) of
the Civil Code, he or she may file a civil
action to recover personal damages.
Abatement may be judicially sought through
a civil action therefor if the pertinent
requirements under the Civil Code for
summary abatement, or the requisite that
the nuisance is a nuisance per se, do not
concur. To note, the remedies of abatement
and damages are cumulative; hence, both
may be demanded. (Rana v. Wong, G.R.
Nos. 192861 & 192862, June 30, 2014)
12. Can damages be awarded to a
property-owner whose property,
which is a nuisance per accidens,
was summarily abated?
Yes. Damages ought to be awarded,
particularly that of (a) nominal damages – for
the vindication and recognition of the
property-owner’s right to be heard before
the court prior to the abatement of the
property (erroneously perceived as a
nuisance per se) — and (b) temperate
damages — for the pecuniary loss owing to
the demolition of the property, which had
been established albeit uncertain as to the
actual amount of loss. (Rana v. Wong, G.R.
Nos. 192861 & 192862, June 30, 2014)
13. What must the plaintiff prove in an
action for recovery of property?
In order that an action for the recovery of
property may prosper, the party prosecuting
the same need only prove the identity of the
thing and his ownership thereof. (Rana v.
Wong, G.R. Nos. 192861 & 192862, June 30,
2014)
14. What must the plaintiff prove in an
action for forcible entry?
In an action for forcible entry, the plaintiff
must prove that he was in prior possession of
the disputed property and that the
defendant deprived him of his possession by
any of the following: force, intimidation,
threats, strategy, and stealth. (Philippine
Tourism Authority (Now known as Tourism
Infrastructure and Enterprise Zone Authority v.
Sabandal-Herzenstiel, et al., G.R. No. 196741,
July 17, 2013)
15. Is the failure to describe in detail the
manner of defendant’s entry into the
subject property consequential in an
action for forcible entry?
No. Unlawfully entering the subject
property and excluding therefrom the prior
possessor would necessarily imply the use of
force and this is all that is necessary. In order
to constitute force, the trespasser does not
have to institute a state of war. No other
proof is necessary. (Philippine Tourism
Authority (Now known as Tourism
Infrastructure and Enterprise Zone Authority
vs. Sabandal-Herzenstiel, et al., G.R. No.
196741, July 17, 2013)
16. May a Metropolitan Trial Court pass
upon the issue of ownership in an
action for unlawful detainer on the
ground that it looks into the validity of
the cancellation of the Contract to
10
Sell and thus a matter incapable of
pecuniary estimation?
Yes. Metropolitan Trial Courts are
conditionally vested with authority to resolve
the question of ownership raised as an
incident in an ejectment case where the
determination is essential to a complete
adjudication of the issue of possession.
Concomitant to the ejectment court’s
authority to look into the claim of ownership
for purposes of resolving the issue of
possession is its authority to interpret the
contract or agreement upon which the
claim is premised. To deny the MeTC
jurisdiction over a complaint merely because
the issue of possession requires the
interpretation of a contract will effectively
rule out unlawful detainer as a remedy. As
stated, in an action for unlawful detainer, the
defendant’s right to possess the property
may be by virtue of a contract, express or
implied; corollarily, the termination of the
defendant’s right to possess would be
governed by the terms of the same contract.
(Optimum Development Bank v. Spouses
Jovellanos, G.R. No. 189145, December 4,
2013)
17. In forcible entry suits, what is the
nature of possession required under
the law in order to constitute “prior
possession de facto”?
The law does not require a person to
have his feet on every square meter of the
ground before it can be said that he is in
possession thereof. Visiting the property on
weekends and holidays is evidence of actual
or physical possession. The fact of her
residence somewhere else, by itself, does not
result in loss of possession of the subject
property. In this case, occasional visits since
acquisition, payment of realty taxes, request
for a survey authority thereon, and
photographs showing one’s self on the
subject lot, were considered by the court to
be sufficient proof in establishing prior
possession de facto. (Spouses Fahrenbach v.
Pangilinan, G.R. No. 224549, August 7, 2017)
18. May a present possessor be allowed
to tack his possession to that of his
predecessor-in-interest in a case of
forcible entry against him?
No. Tacking of possession only applies to
possession de jure, or that possession which
has for its purpose the claim of ownership. It
is true that the law allows a present possessor
to tack his possession to that of his
predecessor-in-interest to be deemed in
possession of the property for the period
required by law. Possession in this regard,
however, pertains to possession de jure and
the tacking is made for the purpose of
completing the time required for acquiring or
losing ownership through prescription.
Possession in forcible entry suits refers to
nothing more than physical possession, not
legal possession. In short, possession de jure is
irrelevant because the only question in
forcible entry is prior physical possession or
possession de facto. (Spouses Fahrenbach v.
Pangilinan, G.R. No. 224549, August 7, 2017)
19. Can mere waiver of rights transfer
ownership under the Civil Code?
No, a mere waiver of rights is not an
effective mode of transferring ownership
under our Civil Code. Under Article 712 of the
Civil Code, the modes of acquiring
ownership are generally classified into two (2)
classes, namely, the original mode (i.e.,
through occupation, acquisitive prescription,
law or intellectual creation) and the
derivative mode (i.e., through succession
mortis causa or tradition as a result of certain
contracts, such as sale, barter, donation,
assignment or mutuum). One cannot claim
independent right over the subject property
by virtue of a document that does not even
purport to be an effective mode of transfer.
(Heirs of Penaflor v. Heirs of Artemio, G.R. No.
197797, August 9, 2017)
20. May third persons who are not the
riparian owners acquire alluvial
property?
11
Yes, as an exception. Alluvial deposits
along the banks of a creek or a river do not
form part of the public domain as the alluvial
property automatically belongs to the owner
of the estate to which it may have been
added. The only restriction provided for by
law is that the owner of the adjoining
property must register the same under the
Torrens system; otherwise, the alluvial
property may be subject to acquisition
through prescription by third persons. (Heirs of
Francisco Narvasa, Sr. v. Imbornal, G.R. No.
182908, August 6, 2014)
III. SUCCESSION
1. Should the probate of the will be
disallowed for failure to comply with
Article 805 of the Civil Code which
requires a statement on the
attestation clause of the number of
pages used upon which the will is
written?
Yes. The law is clear that the attestation
must state the number of pages used upon
which the will is written. The purpose of the
law is to safeguard against possible
interpolation or omission of one or some of its
pages and prevent any increase or
decrease in the pages. While Article 809 of
the Civil Code allows substantial compliance
for defects in the form of the attestation
clause, the petitioner likewise failed in this
respect. The statement in the
Acknowledgment portion of the subject last
will and testament that it "consists of 7 pages
including the page on which the ratification
and acknowledgment are written" cannot
be deemed substantial compliance. The will
actually consists of 8 pages including its
acknowledgment which discrepancy
cannot be explained by mere examination
of the will itself but through the presentation
of evidence aliunde. (Lopez v. Lopez, G.R.
No. 189982, November 12, 2012)
2. Is the extra-judicial settlement
without the participation of legitimate
 children from another marriage
valid?
No. Legitimate children from another
marriage are entitled to inherit from equal
share. In the execution of the extra-judicial
settlement of the estate, legitimate children
from another marriage should participate. If
they are not properly represented, the
settlement was not valid and binding upon
them and consequently, a total nullity. (Neri
v. Heirs of Spouses Yusop, G.R. No. 194366,
October 10, 2012)
3. Is the court empowered to make
declaration of heirship in a case
involving an issue of ownership?
Yes. Although the principal action of a
case was for the recovery of ownership and
possession of the subject land, it is necessary
to pass upon the relationship of the party for
the purpose of determining what legal rights
they may have in the subject land which they
can pass to the heirs. The need to institute a
separate special proceeding for the
determination of heirship may be dispensed
with for the sake of practicality, as when the
parties in the civil case had voluntarily
submitted the issue to the trial court and
already presented their evidence regarding
the issue of heirship. (Heirs of Fabillar v. Paller,
G.R. No. 231459, January 21, 2019)
4. Differentiate a contract of sale from a
declaration of heirship and waiver of
rights.
The first presumes the existence of a
contract or deed of sale between the
parties. The second is, technically speaking,
a mode of extinction of ownership where
there is an abdication or intentional
relinquishment of a known right with
knowledge of its existence and intention to
relinquish it, in favor of other persons who are
co-heirs in the succession. (Heirs of Penaflor v.
Heirs of Artemio, G.R. No. 197797, August 9,
2017)
12
IV. OBLIGATIONS AND
CONTRACTS
1. Is the remedy of rescission under
Article 1191 be permitted if the
provision breached in the subject
contract provides a contractual
recourse in the event of non-
performance?
No. Although there is indeed failure to
perform the obligation under paragraph 7 of
the contract, for a contracting party to be
entitled to rescission (or resolution) in
accordance with Article 1191 of the Civil
Code, the other contracting party must be in
substantial breach of the terms and
conditions of their contract. A substantial
breach of a contract, unlike slight and casual
breaches thereof, is a fundamental breach
that defeats the object of the parties in
entering into an agreement. Here, it cannot
be said that petitioners' failure to undertake
their obligation under paragraph 7 (to
transfer the registration of the title of the
property) defeats the object of the parties in
entering into the subject contract,
considering that the same paragraph
provides respondents contractual recourse
in the event of petitioners' non-performance
of the aforesaid obligation, that is, to cause
such transfer of title themselves in behalf and
at the expense of petitioners. (Nolasco v.
Cuerpo, G.R. No. 210215, December 9, 2015)
2. For a stipulation pour autrui to be
appreciated, is it necessary that there
be a stipulation deliberately
conferring a benefit or favor to a third
person?
For a stipulation pour autrui to be
appreciated, it is indispensable that there be
a stipulation deliberately conferring a benefit
or favor to a third person. Article 1311 ofthe
Civil Code states: Contracts take effect only
between the parties, their assigns and heirs,
except in case where the rights and
obligations arising from the contract are not
transmissible by their nature, or by stipulation,
or by provision of law. The heir is not liable
beyond the value of the property he
received from the decedent. If a contract
should contain some stipulation in favor of a
third person, he may demand its fulfilment
provided he communicated his acceptance
to the obligor before its revocation. A mere
incidental benefit or interest of a person is not
sufficient. The contracting parties must have
clearly and deliberately conferred a favor
upon a third person. (Republic v. Heirs of
Africa, G.R. No. 205722, August 19, 2015)
3. Does delinquency in payment
necessarily mean delay in the legal
concept?
Mere delinquency in payment does not
necessarily mean delay in the legal concept.
To be in default is different from mere delay
in the grammatical sense, because it involves
the beginning of a special condition or status
which has its own peculiar effects or results.
In order that the debtor may be in default, it
is necessary that: (a) the obligation be
demandable and already liquidated; (b) the
debtor delays performance; and (c) the
creditor requires the performance judicially
or extrajudicially, unless demand is not
necessary — i.e., when there is an express
stipulation to that effect; where the law so
provides; when the period is the controlling
motive or the principal inducement for the
creation of the obligation; and where
demand would be useless. Moreover, it is not
sufficient that the law or obligation fixes a
date for performance; it must further state
expressly that after the period lapses, default
will commence. Thus, it is only when demand
to pay is unnecessary in case of the
aforementioned circumstances, or when
required, such demand is made and
subsequently refused that the mortgagor
can be considered in default and the
mortgagee obtains the right to file an action
to collect the debt or foreclose the
mortgage. (Maybank Philippines, Inc. v.
Spouses Tarrosa, G.R. No. 213014, October
14, 2015)
13
4. Is the 10% retention money separate
and distinct from the unpaid balance
of the Contract Price?
No. Treating the retention money as a
separate and distinct liability from the unpaid
balance would unduly increase its total
liability. In H.L. Carlos Construction, Inc. v.
Marina Properties Corp., the Court held that
in the construction industry, the 10% retention
money is a portion of the contract price
automatically deducted from the
contractor's billings, as security for the
execution of corrective work — if any —
becomes necessary. (President of Church of
Jesus Christ of Latter Day Saints v. BTL
Construction Corp., G.R. Nos. 176439 &
176718, January 15, 2014)
5. Is the project owner liable for
additional costs for works deemed
part of the original works considering
they are not covered under any
change order?
No. Article 1724 of the Civil Code governs
the recovery of additional costs in contracts
for a stipulated price (such as fixed lump-sum
contracts), as well as the increase in price for
any additional work due to a subsequent
change in the original plans and
specifications. Based on the same provision,
such added costs can only be allowed upon
the: (a) written authority from the developer
or project owner ordering or allowing the
written changes in work; and (b) written
agreement of parties with regard to the
increase in price or cost due to the change
in work or design modification. Case law
instructs that compliance with these two (2)
requisites is a condition precedent for
recovery. In these cases, records reveal that
there is neither a written authorization nor
agreement covering the additional price to
be paid for the concrete retaining wall. This
confirms the CA's finding that the
construction of the perimeter wall of the
Medina Project, which is included in the
original plans and specifications for the
same, already subsumes the construction of
the concrete retaining wall. (President of
Church of Jesus Christ of Latter Day Saints v.
BTL Construction Corp., G.R. Nos. 176439 &
176718, January 15, 2014)
6. Is the project owner liable for
additional costs for works taken
under Change Orders where the
former paid such balance directly to
the suppliers?
No. Considering that the project owner's
payment to construction company’s
suppliers already covered the costs of said
additional works upon its own request and to
its own credit, the latter maintains no right to
pursue such claim. (President of Church of
Jesus Christ of Latter Day Saints v. BTL
Construction Corp., G.R. Nos. 176439 &
176718, January 15, 2014)
7. Can a party extra-judicially rescind
an agreement upon the other party’s
violation?
Yes. As a general rule, the power to
rescind an obligation must be invoked
judicially and cannot be exercised solely on
a party's own judgment that the other has
committed a breach of the obligation. As a
well-established exception, however, an
injured party need not sort to court action in
order to rescind a contract when the
contract itself provides that it may be
revoked or cancelled upon violation of its
terms and conditions. (Golden Valley
Exploration, Inc. v. Pinkian Mining Co., G.R.
No. 190080, June 11, 2014)
8. Can a party rescind a contract based
on other grounds not specified in the
contract?
Yes. Article 1191 of the Civil Code
pertinently provides that the "power to
rescind obligations is implied in reciprocal
ones, in case one of the obligors should not
comply with what is incumbent upon him"
and that "[t]he court shall decree the
rescission claimed, unless there be just cause
authorizing the fixing of a period." Such
grounds should be invoked judicially since
14
the court would still need to determine if the
same would constitute substantial breach
and not merely a slight or casual breach of
the contract. However, the party who deems
the contract violated may consider it
resolved or rescinded, and act accordingly,
without previous court action, but it
proceeds at its own risk. For it is only the final
judgment of the corresponding court that will
conclusively and finally settle whether the
action taken was or was not correct in law.
(Golden Valley Exploration, Inc. v. Pinkian
Mining Co., G.R. No. 190080, June 11, 2014)
9. When is a contract formally regarded
as rescinded?
Where parties agree to a stipulation
allowing extra-judicial rescission, no judicial
decree is necessary for rescission to take
place; the extra-judicial rescission
immediately releases the party from its
obligation under the contract, subject only
to court reversal if found improper. On the
other hand, without a stipulation allowing
extra-judicial rescission, it is the judicial
decree that rescinds, and not the will of the
rescinding party. (Golden Valley Exploration,
Inc. v. Pinkian Mining Co., G.R. No. 190080,
June 11, 2014)
10. What is the proper remedy where the
subject units of the contracts to sell
were not completed within the period
stipulated but have already reached
the finishing stage?
Specific performance. Article 1191,
paragraph 2 of the Civil Code provides
that “The injured party may choose
between the fulfillment and the rescission
of the obligation, with the payment of
damages in either case. He may also
seek rescission, even after he has chosen
fulfillment, if the latter should become
impossible.” Rescission (more accurately
referred to as resolution) under this article
"will not be permitted for a slight or
casual breach, but only for such
substantial and fundamental violations
as would defeat the very object of the
parties in making the agreement.
Ultimately, the question of whether a
breach of contract is substantial
depends upon the attending
circumstances." (Buenviaje v. Spouses
Salonga, G.R. No. 216023, October 5,
2016)
11. Were the “swapping arrangements”
entered into with the buyers, whereby
various non-cash assets are
accepted as suitable payments,
invalid and should be rescinded on
the ground that it was done to
defraud its creditors?
No. In Union Bank Philippines v. Sps. Ong,
the Court explained the requirement of fraud
relative to rescissible contracts under Article
1381 of the Civil Code: “Contracts in fraud of
creditors are those executed with the
intention to prejudice the rights of creditors.”
In this case, although the swapping
arrangement was admittedly entered into
without the conformity of Sps. Salonga,
records do not support that this separate
arrangement was entered into in order to
defraud Jebson's creditor under the JVA.
Absent such proof of fraud, the Court
concludes that the "swapping arrangement"
was a bona fide transaction freely entered
into between Jebson and Buenviaje, and
therefore, valid and binding. (Buenviaje v.
Spouses Salonga, G.R. No. 216023, October
5, 2016)
12. Can a creditor proceed against any
of the solidary debtors?
Yes. Article 1216 of the Civil Code
provides: “The creditor may proceed
against any one of the solidary debtors
or some or all of them simultaneously. The
demand made against one of them shall
not be an obstacle to those which may
subsequently be directed against the
others, so long as the debt has not been
fully collected.” The term "jointly and
15
severally" expresses a solidary obligation
granting creditor the right to proceed
against its debtors. (Living Sense, Inc. v.
Malayan Insurance Co., Inc., G. R. No.
193753, September 26, 2012)
13. Is there a simulated sale when there
was actually no exchange of money
despite the stipulation in the deed
that a consideration has been paid
thereof?
Yes. There is an absolute simulation when
there is a colorable contract, however, it
has no substance as the parties have no
intention to be bound by it. The SC
explained that the main characteristic of
an absolute simulation is that the
apparent contract is not really desired or
intended to produce legal effect or in
any way alter the juridical situation of the
parties. As a result, such contract is void,
thereby entitling the parties to recover
from each other what they may have
given under the contract. (Tanchuling v.
Cantela, G. R. No. 209284, November 10,
2015)
14. Can a simulated sale defeat the right
of a mortgagee in good faith?
No, it cannot defeat the right of a
mortgagee in good faith. Indeed, it is settled
that a simulated deed of sale is null and void
and therefore does not convey any right that
could ripen into a valid title, However, for
reasons of public policy, the subsequent
nullification of title to a property is not a
ground to annul the contractual right which
may have been derived by a purchaser,
mortgagee or other transferee who acted in
good faith. The deliberate simulation of sale
intended to obtain loan proceeds clearly
constitutes fraudulent act. As such the
perpetrators cannot be allowed to deny a
validly executed mortgage. (Philippine
Banking Corp. v. Dy, et al., G. R. No. 183774,
November 14, 2012)
15. When can a compensation take
place?
Compensation is a mode of extinguishing
an obligation whereby 2 persons in their
capacity as principals are mutual debtors
and creditors of each other. Art. 1279 of the
Civil Code sets forth the following
requirements: “Art. 1279. In order that
compensation may be proper, it is necessary:
(1) That each one of the obligors be bound
principally, and that he be at the same time
a principal creditor of the other; (2) That both
debts consist in a sum of money, or if the
things due are consumable, they be of the
same kind, and also of the same quality if the
latter has been stated; (3) That the two debts
be due; (4) That they be liquidated and
demandable; and (5) That over neither of
them there be any retention or controversy,
commenced by third persons and
communicated in due time to the debtor.
Compensation takes effect by operation of
law when all the aforementioned requisites
are present. It extinguishes the debts to the
concurrent amount, even if the parties are
not aware thereof. Absence of any of the
requisites mentioned in Art. 1729,
compensation fails to take place despite
being mutual debtors and creditors of each
other. (Union Bank of the Philippines v.
Development Bank of the Philippines, G. R.
No. 191555, January 20, 2014)
16. Will the fixed lump sum nature of a
contract preclude the parties from
agreeing on additional works and/or
changes to the project?
No. The fixed lump sum nature of a
contract does not preclude the parties from
stipulating on additional works to the project
covered by said fixed lump sum contract
which would entail added liabilities on the
part of the project owner. In fact, Article
1724, the provision under the Civil Code
governing fixed lump sum contracts, allows
contractors to recover from project owners
additional costs in fixed lump sum contracts,
as well as the increase in price for any
additional work due to a subsequent change
16
in the original plans and specifications,
provided that there exists: (a) a written
authority from the developer or project
owner ordering or allowing the written
changes in work; and (b) written agreement
of the parties with regard to the increase in
price or cost due to the change in work or
design modification. Jurisprudence instructs
that compliance with these two (2) requisites
is a condition precedent for recovery and
hence, the absence of one or the other
condition bars the claim for additional costs.
Notably, neither the authority for the
changes made nor the additional price to be
paid therefor may be proved by any
evidence other than the written authority
and agreement as above-mentioned.
(Filinvest Alabang, Inc. v. Century Iron Works,
Inc., G. R. No. 213229, December 9, 2015)
17. Can A’s breach of its obligations
under a sale of assets contract with B
be considered as a fortuitous event to
extinguish a separate obligation
arising from loan contract previously
entered into by B with C as creditor,
where the proceeds of the sale of
assets contract was supposed to be
applied to the payment of the loan
transactions?
No. Absent any showing that the terms
and conditions of the loan transactions have
been, in any way, modified or novated by
the terms and conditions in the sale of assets
contract, said contracts should be treated
separately and distinctly from each other,
such that the existence, performance or
breach of one would not depend on the
existence, performance or breach of the
other.
Moreover, A’s breach of its obligations to
B arising from the sale of assets contract
cannot be classified as a fortuitous event
under jurisprudential formulation. To
constitute a fortuitous event, the following
elements must concur: (a) the cause of the
unforeseen and unexpected occurrence or
of the failure of the debtor to comply with
obligations must be independent of human
will; (b) it must be impossible to foresee the
event that constitutes the caso fortuito or, if it
can be foreseen, it must be impossible to
avoid; (c) the occurrence must be such as to
render it impossible for the debtor to fulfill
obligations in a normal manner; and, (d) the
obligor must be free from any participation in
the aggravation of the injury or loss.
While it may be argued that A’s breach
of the sale of assets contract was unforeseen
by B, the same is clearly not "impossible" to
foresee or even an event which is
"independent of human will." Neither has it
been shown that said occurrence rendered
it impossible for B to pay its loan obligations
to C and thus, negates the former's force
majeure theory altogether. In any case, as
earlier stated, the performance or breach of
the sale of assets contract bears no relation
to the performance or breach of the subject
loan transactions, they being separate and
distinct sources of obligation. The fact of the
matter is that B’s loan obligations to C remain
subsisting for the basic reason that the former
has not been able to prove that the same
had already been paid or, in any way,
extinguished. (Metro Concast Steel
Corporation, et. al. v. Allied Bank
Corporation, G. R. No. 177921, December 4,
2013)
18. Is a party entitled to its counterclaim
for damages on the ground that the
provision on when to raise claims
against the other party is void for
being a contract of adhesion and that
the other party delivered substandard
products?
No. A contract of adhesion is one
wherein one party imposes a ready-made
form of contract on the other. It is a contract
whereby almost all of its provisions are
drafted by one party, with the participation
of the other party being limited to affixing his
or her signature or "adhesion" to the contract.
However, contracts of adhesion are not
invalid per se as they are binding as ordinary
contracts. The validity or enforceability of the
impugned contracts will have to be
17
determined by the peculiar circumstances
obtained in each case and the situation of
the parties concerned. In this case, there is
no proof that ECIC was disadvantaged or
utterly inexperienced in dealing with Phoenix.
Encarnacion is presumably an astute
businessman who signed the Agreement
with full knowledge of its import. The parties
had entered into three (3) similar
Agreements under the same terms and
conditions for the supply of ready-mix
concrete. Thus, the Court is hard-pressed to
believe that Encarnacion had no sufficient
opportunity to read and go over the
stipulations of the Agreement and reject or
modify the terms had he chosen to do so.
ECIC is liable for the payment of the
delivered ready-mix concrete. (Encarnacion
Construction & Industrial Corp. v. Phoenix
Ready Mix Concrete Development &
Construction, Inc., G.R. No. 225402,
September 4, 2017)
19. A foreigner, who was well aware that
he is constitutionally prohibited to
own Philippine lands, bought parcels
of land in the Philippines, and allowed
his Filipina spouse to register the
property in the latter’s name. Upon
declaration of nullity of marriage,
may the foreigner, validly claim for
reimbursement of the value of the
land against his former Filipina
spouse?
No. The foreigner cannot seek
reimbursementwhere it is clear that he
willingly and knowingly bought the property
despite the prohibition against foreign
ownership of Philippine land. Surely, a
contract that violates the Constitution and
the law is null and void, vests no rights,
creates no obligations and produces no
legal effect at all. Corollary thereto, under
Article 1412 of the Civil Code, the Foreigner
cannot have the subject properties deeded
to him or allow him to recover the money he
had spent for the purchase thereof. The law
will not aid either party to an illegal contract
or agreement; it leaves the parties where it
finds them. Indeed, one cannot salvage any
rights from an unconstitutional transaction
knowingly entered into. (Beumer v. Amores,
G.R. NO. 195670, DECEMBER 3, 2012)
20. Does the principle on obligatory force
of contracts applies to the
contracting party’s assignees?
Yes. Obligations arising from contracts
have the force of law between the
contracting parties and should be complied
with in good faith. As such, the stipulations in
contracts are binding on them unless the
contract is contrary to law, morals, good
customs, public order or public policy.
The same principle on obligatory force
applies by extension to the contracting
party's assignees, in turn, by virtue of the
principle of relativity of contracts which is
fleshed out in Article 1311 of the Civil
Code, viz.: Contracts take effect only
between the parties, their assigns and heirs,
except in case where the rights and
obligations arising from the contract are not
transmissible by their nature, or by stipulation
or by provision of law. (Fort Bonifacio
Development Corp. v. Fong, G.R. NO.
209370, March 25, 2015)
21. Where a contract provides that a
party thereto cannot assign or
transfer any rights and obligations
arising from such contract without the
written consent of the other party,
and notwithstanding such provision, a
party assigned his rights without the
consent of the other, is the assignee
left without recourse?
No. Such does not preclude any recourse
that the assignee may take against the
assignor (original party). After all, an
assignment of credit for a consideration and
covering a demandable sum of money is
considered as a sale of personal property. To
this, Article 1628 of the Civil Code provides:
“The vendor in good faith shall be responsible
for the existence and legality of the credit at
the time of the sale, unless it should have
been sold as doubtful; but not for the
18
solvency of the debtor, unless it has been so
expressly stipulated or unless the insolvency
was prior to the sale and of common
knowledge.” Even in these cases he shall only
be liable for the price received and for the
expenses specified in No. 1 of Article 1616.
The vendor in bad faith shall always be
answerable for the payment of all expenses,
and for damages. (Fort Bonifacio
Development Corp. v. Fong, G.R. NO.
209370, March 25, 2015)
22. Distinguish absolute simulation and
relative simulation of contract.
If the parties state a false cause in the
contract to conceal their real agreement,
the contract is only relatively simulated and
the parties are still bound by their real
agreement. Hence, where the essential
requisites of a contract are present and the
simulation refers only to the content or terms
of the contract, the agreement is absolutely
binding and enforceable between the
parties and their successors in interest.
In absolute simulation, there is a
colorable contract but it has no substance as
the parties have no intention to be bound by
it. "The main characteristic of an absolute
simulation is that the apparent contract is not
really desired or intended to produce legal
effect or in any way alter the juridical
situation of the parties." "As a result, an
absolutely simulated or fictitious contract is
void, and the parties may recover from each
other what they may have given under the
contract. (De Leon v. Dela Llana, G.R. No.
212277, February 11, 2015)
23. What is the effect of an absolutely
simulated contract to the venue
stipulation in a lease contract?
With the lease contract definitely settled
as absolutely simulated, and hence, void,
there can be no invocation of the exclusive
venue stipulation on the part of either party;
thus, the general rule on the filing of real
actions in the court where the property is
situated prevails. (De Leon v. Dela Llana, G.R.
No. 212277, February 11, 2015)
24. May an implied trust become an
express one?
Yes. A trust may have a constructive or
implied nature in the beginning, but the
registered owner's subsequent express
acknowledgement in a public document of
a previous sale of the property to another
party effectively converted the same into an
express trust. (Go v. Estate of the Late
FelisaTamio de Buenaventura, G.R. No.
211972, July 22, 2015)
V. SALES
25. Does the notarized deed of absolute
sale (its existence and due execution
not questioned) effect the transfer of
ownership from the seller to the buyer,
despite the fact that the buyer never
physically possessed the subject
parcel of land?
Yes. Article 1477 of the Civil Code
recognizes that the "ownership of the thing
sold shall be transferred to the vendee upon
the actual or constructive delivery thereof."
Related to this article is Article 1497 of the
same Code which provides that "[t]he thing
sold shall be understood as delivered, when
it is placed in the control and possession of
the vendee."
Article 1498 of the Civil Code lays down
the general rule that the execution of a
public instrument "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 clearly be inferred."
However, the execution of a public
instrument gives rise only to a prima facie
presumption of delivery, which is negated by
the failure of the vendee to take actual
possession of the land sold. A person who
does not have actual possession of the thing
sold cannot transfer constructive possession
by the execution and delivery of a public
19
instrument. Actual possession may be
personally exercised by the vendee or
through another. Article 524 provides,
“Possession may be exercised in one's own
name or in that of another.”
"[I]t is not necessary that the owner of a
parcel of land should himself occupy the
property as someone in his name may
perform the act. In other words, the owner of
real estate has possession, either when he
himself is physically in occupation of the
property, or when another person who
recognizes his rights as owner is in such
occupancy," as the parties in this case. Jose
exercised possession of the subject land
through Manuel (and eventually, his son,
Marlon) whom he allowed to stay and care
for the land in exchange for the delivery of
the produce thereof, and likewise voluntarily
paid taxes therefor. (Heirs of Jose
Extremadura v. Extremadura, G.R. No.
211065, June 15, 2016)
26. Is a “Conditional Deed of Sale”
containing a stipulation where the
seller promises to execute a deed of
absolute sale upon full payment of
the buyer of the purchase price in the
nature of a contract of sale or a
contract to sell?
It is in the nature of a contract to sell. It
has been consistently ruled that where the
seller promises to execute a deed of absolute
sale upon the completion by the buyer of the
payment of the purchase price, the contract
is only a contract to sell even if their
agreement is denominated as a Deed of
Conditional Sale, as in this case. This
treatment stems from the legal
characterization of a contract to sell, that is,
a bilateral contract whereby the prospective
seller, while expressly reserving the ownership
of the subject property despite delivery
thereof to the prospective buyer, binds
himself to sell the subject property exclusively
to the prospective buyer upon fulfillment of
the condition agreed upon, such as, the full
payment of the purchase price. Elsewise
stated, in a contract to sell, ownership is
retained by the vendor and is not to pass to
the vendee until full payment of the
purchase price. (Spouses Roque v. Aguado,
et al., G. R. No. 193787, April 7, 2014)
27. Is there double sale when the
contract that the aggrieved party
base their claim of ownership on is a
contract to sell, and not one of sale?
No. In order to determine the
applicability of Article 1544 (double sale), the
following must be satisfied: (a) The two (or
more) sales transactions in issue must pertain
to exactly the same subject matter, and must
be valid sales transactions; (b) The two (or
more) buyers at odds over the rightful
ownership of the subject matter must each
represent conflicting interests; and (c) The
two (or more) buyers at odds over the rightful
ownership of the subject matter must each
have bought from the same seller. (Spouses
Roque v. Aguado, et al., G. R. No. 193787,
April 7, 2014)
28. Can an action for unlawful detainer
validly cancel a contract to sell of
residential lots?
No. One has the right to continue
occupying unmolested over the subject
property unless the conditional contract (i.e.
Contract to Sell) is cancelled in accordance
with Sec 3 (b) of RA 6552, otherwise known as
the Realty Installment Buyer Protection Act,
which states that: In all transactions or
contracts involving the sale or financing of
real estate on installment payments,
including residential condominium
apartments but excluding industrial lots,
commercial buildings and sales to tenants
under Republic Act Numbered Thirty-eight
hundred forty-four, as amended by Republic
Act Numbered Sixty-three hundred eighty-
nine, where the buyer has paid at least two
years of installments, the buyer is entitled to
the following rights in case hedefaults in the
payment of succeeding installments: xxx
xxxxxx (b) If the contract is canceled, the
seller shall refund to the buyer the cash
surrender value of the payments on the
20
property equivalent to fifty per cent of the
total payments made, and, after five years of
installments, an additional five per cent every
year but not to exceed ninety per cent of the
total payments made: Provided, That the
actual cancellation of the contract shall take
place after thirty days from receipt by the
buyer of the notice of cancellation or the
demand for rescission of the contract by a
notarial act and upon full payment of the
cash surrender value to the buyer.
(Associated Marine Officers and Seamen’s
Union of the Philippine PTGWO-LTF v.
Decena, G.R. No. 178584, October 8, 2012)
29. Does the contract to sell between
parties remain valid and subsisting
despite the cancellation of the
contract?
Yes, if such cancellation is not in
accordance with the provisions of Sec. 3(b)
of RA 6552. The Court emphasized the
mandatory requirements of notice of
cancellation and payment of cash surrender
value, otherwise, no actual cancellation will
result, thereby the contract will remain valid
and subsisting. (Lefebre v. A Brown Co., Inc.,
G. R. No. 224973, September 27, 2017)
30. Can a buyer demand for
reimbursement of what she has paid
upon the remiss of the developer of a
subdivision or condominium of its
obligations?
Yes. Under Sec 20 in relation to Sec 23 of
PD 957, the buyer has the option to demand
reimbursement of the total amount paid, or
to wait for further development of the
subdivision, in case the developer of a
subdivision or condominium fails in its
obligation. Should the buyer choose to wait
for the development of the subdivision, she
may suspend payment of installments until
such time that the owner or developer had
fulfilled its obligation to her. (Lefebre v. A
Brown Co., Inc., G. R. No. 224973, September
27, 2017)
31. Should the remedies provided for in
the Civil Code governing sale of
personal property in instalments be
available to a party who merely
financed the buyer for the payment of
the purchase price?
No. Article 1484 of the Civil Code, which
governs the sale of personal properties in
instalments, presupposes a vendor-vendee
relationship. Where respondent never
bought the chattel from petitioner but from a
third party and merely sought financing from
petitioner for its full purchase price, there is no
vendor-vendee relationship between
petitioner and respondent. Thus, the
remedies available governing sale of
personal property in instalments, do not
apply. (Equitable Savings Bank v. Palces, G.R.
No. 214752, March 9, 2016)
32. Where, in a contract to sell of a
subdivision lot, after the payment of
the full purchase price of the buyer,
there is unreasonable and unjustified
delay in the delivery of certificate of
title on the part of the seller, is
rescission proper? If yes, how much
should the restitution to the buyer by
the seller be?
Yes. The long delay in the performance of
the seller’s obligation from date of demand,
being unreasonable and unjustified,
constitutes substantial breach on his part
which accords the buyer the right to rescind
the contract. Equity and justice dictate that
the injured party should be afforded full
recompense and as such, be allowed to
recover the prevailing market value of the
undelivered lot which had been fully paid for.
It is the intent of PD 957 to protect the buyer
against unscrupulous developers, operators
and/or sellers who reneged on their
obligations. Indeed, there would be unjust
enrichment if seller is made to pay only the
purchase price plus interest. (Gotesco
Properties, Inc., et al. v. Spouses Fajardo, G.R.
No. 201167, February 27, 2013)
21
33. When the monetary interest
stipulated by the parties is found to be
excessive, iniquitous,
unconscionable, and/or exorbitant,
what legal rate of interest should be
imposed instead by the courts?
When the stipulated monetary interest is
found unconscionable, it is as if the parties
failed to specify the interest rate to be
imposed on the principal amount, in which
case the legal rate of interest prevailing at
the time the agreement was entered into is
applied by the Court. This is because,
according to jurisprudence, the legal rate of
interest is the presumptive reasonable
compensation for borrowed money. (Isla v.
Estorga, G.R. No. 233974, July 2, 2018)
34. Where the legal rate of interest is
imposed by the court after a finding
that the stipulated monetary interest
is unconscionable, should said
imposed rate persist regardless of
shifts in the legal rate of interest?
This rate, which by their contract the
parties have settled on, is deemed to persist
regardless of shifts in the legal rate of interest.
Stated otherwise, the legal rate of interest,
when applied as conventional interest shall
always be the legal rate at the time the
agreement was executed and shall not be
susceptible to shifts in rate. (Isla v. Estorga,
G.R. No. 233974, July 2, 2018)
35. May the seller (in a Contract to Sell)
be compelled through a complaint
for specific performance to execute
a Deed of Sale when its payments
correspond only to the principal
obligation and did not include
payments of the real property taxes
of the subject property contrary to the
terms of the contract?
No. A contract to sell is akin to a
conditional sale where the efficacy or
obligatory force of the vendor's obligation to
transfer title is subordinated to the
happening of a future and uncertain event,
so that if the suspensive condition does not
take place, the parties would stand as if the
conditional obligation had never existed. The
respondent Spouses Endaya (sellers) had no
obligation to execute a deed of sale over the
subject properties because the contract to
sell imposed upon the buyers the obligation
to pay the real property taxes over the
subject properties. However, the summary of
payments shows that payments pertain only
to the principal obligation. (Ventura v. Heirs
of Spouses Endaya, G.R. No. 190016, October
2, 2013)
36. What are the three requisites that
must be complied with by a seller of
a real property paid in installments to
have a right to cancel a Contract to
Sell against the defaulting buyer?
The seller should comply with the steps
provided for in RA 6552, or the "Realty
Installment Buyer Protection Act", which
provides for the rights of the buyer in case of
his default in the payment of succeeding
installments. Sps. Jovellanos are buyers who
have paid less than two (2) years-worth of
installments. Thus, Optimum should comply
with three (3) requisites before the seller may
actually cancel the subject contract: (1) the
seller shall give the buyer a 60-day grace
period to be reckoned from the date the
installment became due; (2) the seller must
give the buyer a notice of
cancellation/demand for rescission by
notarial act if the buyer fails to pay the
installments due at the expiration of the said
grace period; and (3)v the seller may
actually cancel the contract only after thirty
(30) days from the buyer’s receipt of the said
notice of cancellation/demand for rescission
by notarial act. (Optimum Development
Bank v. Spouses Jovellanos, G.R. No. 189145,
December 4, 2013)
37. Is the contract, a contract of sale or a
contract to sell, when the Invoice
Receipt issued to the vendee
contains a title reservation
stipulation?
22
It is a contract of sale. In the construction
or interpretation of an instrument, the
intention of the parties is primordial and is to
be pursued. The denomination or title given
by the parties in their contract is not
conclusive of the nature of its contents.
Bearing in mind its consensual nature, a
contract of sale had been perfected at the
precise moment ACE Foods, as evinced by its
act of sending MTCL the Purchase Order,
accepted the latter’s proposal to sell the
subject products in consideration of the
purchase price.
The fact that the Invoice Receipt was
signed by a representative of ACE Foods
does not, by and of itself, prove animus
novandi since: it was not shown that the
signatory was authorized by ACE Foods (the
actual party to the transaction) to novate
the original agreement; the signature only
proves that the Invoice Receipt was
received by a representative of ACE Foods
to show the fact of delivery; and as matter of
judicial notice, invoices are generally issued
at the consummation stage of the contract
and not its perfection, and have been even
treated as documents which are not
actionable per se, although they may prove
sufficient delivery.
Thus, absent any clear indication that the
title reservation stipulation was actually
agreed upon, the Court must deem the
same to be a mere unilateral imposition on
the part of MTCL which has no effect on the
nature of the parties’ original agreement as
a contract of sale. (Ace Foods, Inc. v. Micro
Pacific Technologies Co., Ltd., G.R. No.
200602, December 11, 2013)
38. What is the new rate of legal interest?
Beginning July 1, 2013, the new rate of six
percent (6%) per annum shall be the
prevailing rate of interest when applicable.
(Odiamar v. Valencia, G.R. No. 213582,
September 12, 2018)
39. What are the guidelines in an award
of interest in the concept of actual
and compensatory damages?
 1. The interest is to be computed from
default, i.e., from judicial or extrajudicial
demand under and subject to the provisions
of Article 1169 of the Civil Code.
2. When the judgment of the court
awarding a sum of money becomes final
and executory, the rate of legal interest shall
be 6% per annum from such finality until its
satisfaction, this interim period being
deemed to be by then an equivalent to a
forbearance of credit. (Odiamar v. Valencia,
G.R. No. 213582, September 12, 2018)
40. Is the stipulation three percent (3%)
monthly interest excessive and
unconscionable?
Yes. In a plethora of cases, the Court has
affirmed that stipulated interest rates of three
percent (3%) per month and higher are
excessive, iniquitous, unconscionable, and
exorbitant, hence, illegal and void for being
contrary to morals, and can be equitably
reduced by the court. (Spouses Guevarra v.
The Commoner Lending Corp., Inc., G.R. No.
204672, February 18, 2015)
VI. LEASE
41. What kind of contract exists where
one party parks a vehicle in a garage
upon payment of a fixed amount?
The act of parking a vehicle in a garage,
upon payment of a fixed amount is a
contract of lease. Even in a majority of
American cases, it has been ruled that where
a customer simply pays a fee, parks his car in
any available space in the lot, locks the car
and takes the key with him, the possession
and control of the car, necessary elements in
bailment, do not pass to the parking lot
operator, hence, the contractual
relationship between the parties is one of
lease. (Spouses Mamaril v. The Boy Scout of
the Philippines, et. al, G.R. No. 179382,
January 14, 2013)
23
42. Should the lessor of a parking space
be held liable for the loss of a vehicle
of the lessee, by reason of an intruder,
where the lessor provided security to
guard the space?
The lessor is not obliged to answer for a
mere act of trespass which a third person
may cause on the use of the thing leased;
but the lessee shall have a direct action
against the intruder. Here, the lessor was not
remiss in its obligation to provide the lessee a
suitable parking space for the vehicle as it
even hired security guards to secure the
premises; hence, it should not be held liable
for the loss suffered by the lessee. (Spouses
Mamaril v. The Boy Scout of the Philippines,
et. al, G.R. No. 179382, January 14, 2013)
VII. CREDIT
TRANSACTIONS
43. In an action for redemption of a
foreclosed property, is the
mortgagee entitled to its total claims
under the promissory note and the
mortgage contract?
No, in view of the settled rule that an
action to foreclose must be limited to the
amount mentioned in the mortgage. Hence,
amounts not stated therein must be
excluded, like the penalty charges. (Spouses
Guevarra v. The Commoner Lending Corp.,
Inc., G.R. No. 204672, February 18, 2015)
44. What should be the basis of the
repurchase price when the mortagee
is a bank, or a banking or credit
institution?
Redemptions from lending or credit
institutions, like TCLC, are governed by
Section 47 of the General Banking Law of
2000, which amended Section 6 of Act No.
3135 in relation to the proper redemption
price when the mortgagee is a bank, or a
banking or credit institution.
 Therefore, in addition to the principal and
interest, the repurchase price should also
include all the expenses of foreclosure, i.e.,
Judicial Commission, Publication Fee, and
Sheriff's Fee, in accordance with Section 47
of the General Banking Law of 2000.
Considering further that Sps. Guevarra failed
to redeem the subject property within the
one-year reglementary period, they are
liable to reimburse TCLC for the
corresponding Documentary Stamp Tax
(DST) and Capital Gains Tax (CGT) it paid
pursuant to Bureau of Internal Revenue (BIR)
Revenue Regulations No. 4-99,70 which
requires the payment of DST on extra-judicial
foreclosure sales of capital assets initiated by
banks, finance and insurance companies, as
well as CGT in cases of non-redemption. CGT
and DST are expenses incident to TCLC's
custody of the subject property, hence,
likewise due, under the above provision of
law. (Spouses Guevarra v. The Commoner
Lending Corp., Inc., G.R. No. 204672,
February 18, 2015)
45. When should an action to enforce a
right arising from a mortgage be
commenced?
An action to enforce a right arising from
a mortgage should be enforced within ten
(10) years from the time the right of action
accrues, i.e., when the mortgagor defaults in
the payment of his obligation to the
mortgagee; otherwise, it will be barred by
prescription and the mortgagee will lose his
rights under the mortgage. (Maybank
Philippines., Inc. v. Spouses Tarrosa, G.R. No.
213014, October 14, 2015)
46. What are the remedies that can be
alternatively pursued by the
mortgage creditor for the satisfaction
of his credit in case the mortgagor
dies?
The remedies are: (1) to waive the
mortgage and claim the entire debt from the
estate of the mortgagor as an ordinary claim;
(2) to foreclose the mortgage judicially and
prove any deficiency as an ordinary claim;
24
and (3) to rely on the mortgage exclusively,
foreclosing the same at any time before it is
barred by prescription without right to file a
claim for any deficiency. (The plain result of
adopting the last mode of foreclosure is that
the creditor waives his right to recover any
deficiency from the estate. The third mode
includes extrajudicial foreclosure sales, the
result of extrajudicial foreclosure is that the
creditor waives any further deficiency claim).
(Heirs of the Late Spouses Magsalang v.
Manila Banking Corp., G.R. No. 171206,
September 23, 2013)
47. Is Article 2079 of the Civil code only
limited to contracts of guaranty, and
not to contracts of suretyship?
No. The Court in Cochingyan, Jr. v. R&B
Surety & Insurance Co., Inc. and later in the
case of Security Bank and Trust Co., Inc. v.
Cuenca, held that Article 2079 of the Civil
Code, which pertinently provides that "[a]n
extension granted to the debtor by the
creditor without the consent of the guarantor
extinguishes the guaranty," equally applies to
contracts of guaranty and suretyship. The
theory behind Article 2079 is that an
extension of time given to the principal
debtor by the creditor without the surety's
consent would deprive the surety of his right
to pay the creditor and to be immediately
subrogated to the creditor's remedies
against the principal debtor upon the
maturity date. (Trade and Investment
Development Corp. of the Phils. v. Asia Paces
Corp., G.R. No. 187403, February 12, 2014)
48. Are the sureties’ liabilities under the
Surety Bonds extinguished by the
payment extensions granted by the
creditor banks to which the former
did not give their consent?
No. Article 2079 of the Civil Code refers to
a payment extension granted by the creditor
to the principal debtor without the consent
of the guarantor or surety. In this case, the
Surety Bonds are suretyship contracts which
secure the debt of ASPAC, the principal
debtor, under the Deeds of Undertaking to
pay TIDCORP, the creditor, the damages
and liabilities it may incur under the Letters of
Guarantee. No payment extension was,
however, granted by TIDCORP in favor of
ASPAC in this regard. The payment
extensions granted by creditor banks pertain
to TIDCORP's own debt to the banks in the
event of ASPAC’s default. Such would not
deprive the bonding companies of their right
to pay their creditor (TIDCORP) and to be
immediately subrogated to the latter's
remedies against the principal debtor
(ASPAC) upon the maturity date. (Trade and
Investment Development Corp. of the
Philippines v. Asia Paces Corp., G.R. No.
187403, February 12, 2014)
49. May the creditor split his/her cause of
action on the unpaid loan obligation
by filing a petition for judicial
disclosure of the real estate
mortgage covering the loan and,
thereafter, a personal action for the
collection of the unpaid balance of
said obligation not comprising a
deficiency arising from foreclosure?
No. Splitting a cause of action is a mode
of forum shopping by filing multiple cases
based on the same cause of action, but with
different prayers, where the ground of
dismissal is litis pendentia (or res judicata, as
the case may be). In loan contracts secured
by a real estate mortgage, the rule is that the
creditor-mortgagee has a single cause of
action against the debtor-mortgagor, i.e. , to
recover the debt, through the filing of a
personal action for collection of sum of
money or the institution of a real action to
foreclose on the mortgage security. The two
remedies are alternative, not cumulative or
successive, and each remedy is complete by
itself.
In this case, the Deed of Real Estate
Mortgage and the subject PN both refer to
one and the same obligation, i.e., Rafael's
loan obligation. As such, there exists only one
cause of action for a single breach of that
obligation. Records show that petitioner, as
creditor-mortgagee, instituted an action for
25
judicial foreclosure proceedings Court in
order to recover on Rafael's debt. The
availment of such remedy thus bars recourse
to the subsequent ling of a personal action
for collection of the same debt, in this case,
under the principle of litis pendentia,
considering that the foreclosure case only
remains pending as it was not shown to have
attained finality. (Marilag v. Martinez, G.R.
No. 201892, July 22, 2015)
50. Will the buyer in a foreclosure sale
become the absolute owner if it is not
redeemed after the redemption
period?
Yes. It is thus settled that the buyer in a
foreclosure sale becomes the absolute
owner of the property purchased if it is not
redeemed during the period of one year
after the registration of the sale. As such, he
is entitled to the possession of the said
property and can demand it at any time
following the consolidation of ownership in
his name and the issuance to him of a new
transfer certificate of title . The buyer can in
fact demand possession of the land even
during the redemption period except that he
has to post a bond in accordance with
Section 7 of Act No. 3135, as amended. No
such bond is required after the redemption
period if the property is not redeemed.
Possession of the land then becomes an
absolute right of the purchaser as confirmed
owner. Upon proper application and proof of
title, the issuance of the writ of possession
becomes a ministerial duty of the court.
The issuance of a writ of possession to a
purchaser in a public auction is a ministerial
act. After the consolidation of title in the
buyer's name for failure of the mortgagor to
redeem the property, the writ of possession
becomes a matter of right. Its issuance to a
purchaser in an extrajudicial foreclosure sale
is merely a ministerial function. The trial court
has no discretion on this matter. Hence, any
talk of discretion in connection with such
issuance is misplaced. (Spouses Marquez v.
Spouses Alindog, G.R. No. 184045, January
22, 2014)
51. What is the nature of the obligation
when in a contract entered into by
parties, one party engages to
perform additional works (e.g.
structural, architectural, electric, and
plumbing works) as mere financial
accommodation for the other party:
forbearance of money or contracts of
service?
Contracts of service. Forbearance of
money, goods, or credit refers to
arrangements other than loan agreements
where a person acquiesces to the temporary
use of his money, goods or credits pending
the happening of certain events or fulfilment
of certain conditions such that if these
conditions are breached, the said person is
entitled not only to the return of the principal
amount given, but also to compensation for
the use of his money equivalent to the legal
interest since the use or deprivation of funds
is akin to a loan.
The liability of the Province of Cebu to
WTCI is not in the nature of a forbearance of
money as it does not involve an
acquiescence to the temporary use of
WTCI's money, goods or credits. Rather, this
case involves WTCI's performance of a
particular service. The reduction of the
interest rate from 12% to 6% per annum is
warranted given that the liability of the
Province of Cebu did not arise from a loan or
forbearance of money but from the non-
payment of services rendered by WTCI.
NB: The guidelines used in Eastern
Shipping Lines case (award of interest as
actual/compensatory damages) stating that
the interest rate for forbearance of money is
12% and other obligations not constituting as
forbearance of money is 6% (at the court’s
discretion) has been updated by the BSP
Circular No. 799, series of 2013 which
reduced the rate of legal interest for loans or
forbearance of money from 12% to 6%.
Nevertheless, the rate of legal interest for
obligations not constituting loans or
forbearance such as the one subject of this
case remains unchanged at 6% per annum.
26
(WT Construction, Inc. v. Province of Cebu,
G.R. Nos. 208984 & 209245, September 16,
2015)
52. What is the duty of the RTC in issuing a
writ of possession after the lapse of
the redemption period in an
extrajudicial foreclosure?
Section 7 of Act No. 3135, as amended
by Act No. 4118, imposes upon the RTC a
ministerial duty to issue a writ of possession to
the new owner upon a mere ex parte
motion. Possession being an essential right of
the owner with which he is able to exercise
the other attendant rights of ownership, after
consolidation of title, the purchaser in a
foreclosure sale may demand possession as
a matter of right. There is no need for an
ordinary action to gain possession thereof.
The mere filing of an ex parte motion for the
issuance of the writ of possession would
suffice, and no bond is required. (Heirs of
Penaflor v. Heirs of Artemio, G.R. No. 197797,
August 9, 2017)
53. What is the effect of the existence of
a third party possessor to the RTC’s
ministerial duty to issue a writ of
possession?
The issuance by the RTC of a writ of
possession in favor of the purchaser of the
said real property ceases to be ministerial
and may no longer be done ex parte. It is not
enough that the property be held by a third
party, but rather the said possessor must
have a claim thereto adverse to the
debtor/mortgagor. To be considered in
adverse possession, the third party possessor
must have done so in his own right and not
merely as a successor or transferee of the
debtor or mortgagor. (Heirs of Penaflor v.
Heirs of Artemio, G.R. No. 197797, August 9,
2017)
VIII. LAND TITLES AND
DEEDS
54. What is the period of redemption in an
extra-judicial foreclosure of
registered land acquired under a free
patent?
The mortgagor may redeem the property
within two (2) years from the date of
foreclosure if the land is mortgaged to a rural
bank under RA No. 720, as amended,
otherwise known as the Rural Banks Act, or
within one (1) year from the registration of the
certificate of sale if the land is mortgaged to
parties other than rural banks pursuant to Act
No. 3135. If the mortgagor fails to exercise
such right, he or his heirs may still repurchase
the property within five (5) years from the
expiration of the aforementioned
redemption period pursuant to Section 119 of
the Public Land Act, which states: SEC. 119.
Every conveyance of land acquired under
the free patent or homestead provisions,
when proper, shall be subject to repurchase
by the applicant, his widow, or legal heirs,
within a period of five years from the date of
the conveyance. (Spouses Guevarra v. The
Commoner Lending Corp., Inc., G.R. No.
204672, February 18, 2015)
55. Is the tender of the repurchase price
and consignation necessary for the
preservation of the right of
repurchase under Sec. 119 of the
Public Land Act?
No. The filing of a judicial action for such
purpose within the five-year period
under Section 119 of the Public Land Act
is already equivalent to a formal offer to
redeem. On this premise, consignation of
the redemption price is equally
unnecessary. (Spouses Guevarra v. The
Commoner Lending Corp., Inc., G.R. No.
204672, February 18, 2015)
56. When an owner sells several portions
of a co-owned land, and there is a
partial factual partition or termination
of the co-ownership, are the buyers
27
entitled to the segregation of their
respective portions, and the issuance
of new certificates of title in their
names?
Yes, upon compliance with the
requirements of law (Property Registration
Decree). Under Sec. 58 of the law, “xxx the
Register of Deeds shall not enter any transfer
certificate to the grantee until a plan of such
land showing all the portions or lots into which
it has been subdivided and the
corresponding technical descriptions shall
have been verified and approved pursuant
to Section 50 of this Decree. Meanwhile, such
deed may only be annotated by way of
memorandum upon the grantor's certificate
of title, original and duplicate, said
memorandum to serve as a notice to third
persons of the fact that certain
unsegregated portion of the land described
therein has been conveyed, and every
certificate with such memorandum shall be
effectual for the purpose of showing the
grantee's title to the portion conveyed to
him, pending the actual issuance of the
corresponding certificate in his name. xxx”
In this relation, Section 53 of PD 1529
(Property Registration Decree) requires the
presentation of the owner's duplicate title for
the annotation of deeds of sale. Therefore,
the buyers of said portions of land can
compel the owner to deliver or surrender
possession of the owner’s duplicate TCT
covering the subject land. (Geñorga v. Heirs
of Meliton, G.R. No. 224515, July 3, 2017)
57. Should the possession of the owner’s
duplicate TCT be surrendered to the
buyers, do they have preferential
right as against the registered owners
over its possession despite the fact
that some of the buyers continuously
fail to comply with the requirements
for the registration of their respective
deeds of sale and the issuance of
certificates of title in their names?
No. From the time petitioner (the buyer)
received possession of the subject owner's
duplicate title in 2009, a considerable
amount of time had passed until she
submitted the same to the RD-Naga on
September 13, 2013. But even up to the time
she filed the instant petition before the Court
on May 6, 2016, she failed to show any
sufficient justification for the continued failure
of the concerned buyers to comply with the
requirements for the registration of their
respective deeds of sale and the issuance of
certificates of title in their names to warrant a
preferential right to the possession of the
subject owner's duplicate title as against
respondents (registered owners) who
undisputedly own the bigger portion of the
subject land. (Geñorga vs. Heirs of Meliton,
G.R. No. 224515, July 3, 2017)
58. Can the Registrar of Deeds be
expected to retain possession of the
subject owner's duplicate title longer
than what is reasonable to perform its
duty?
No. The function of a Register of Deeds
with reference to the registration of
deeds is only ministerial in nature. In the
absence of a verified and approved
subdivision plan and technical
description duly submitted for
registration on TCT No. 8027, it must return
the same to the presenter, in this case,
petitioner (buyer) who failed to establish
a better right to the possession of the said
owner's duplicate title as against
respondents (registered owners).
(Geñorga v. Heirs of Meliton, G.R. No.
224515, July 3, 2017)
59. In a petition for reconstitution of title
anchored on a purported owner's
duplicate copy (which has been lost
or destroyed), what must be
presented by petitioner?
Based on Republic Act No. 26, the
following must be present for an order of
reconstitution to issue: (a) the certificate of
title had been lost or destroyed;(b)the
documents presented by petitioner are
28
sufficient and proper to warrant
reconstitution of the lost or destroyed
certificate of title; (c) the petitioner is the
registered owner of the property or had an
interest therein; (d) the certificate of title was
in force at the time it was lost and destroyed;
and (e) the description, area, and
boundaries of the property are substantially
the same as those contained in the lost or
destroyed certificate of title. Particularly,
when the reconstitution is based on an
extant owner's duplicate TCT, the main
concern is the authenticity and genuineness
of the certificate. (Luriz v. Republic, G.R. No.
208948, February 24, 2016)
60. Can the TCT be reconstituted if the
owner of the property was already
divested of its ownership at the time
the TCT was lost?
No. The registered owner was divested of
any title or interest in the vested properties
registered in his name under TCT No. 1297,
which was thereby rendered of no force and
effect at the time it was lost or destroyed
and, thus, cannot be reconstituted. (Luriz v.
Republic, G.R. No. 208948, February 24, 2016)
61. Should the finding by the court of
doubt on the authenticity and
genuineness of the questioned
certificate sought to be reconstituted
also be taken as an adjudication on
the ownership of the subject lands?
No, they are but determinations of
whether or not the certificate of title sought
to be reconstituted is authentic, genuine,
and in force and effect at the time it was lost
or destroyed, which, based on case law, are
central to resolving petitions for reconstitution
of title. Clearly, a reconstitution of title
proceeding involves only the re-issuance of a
new certificate of title lost or destroyed in its
original form and condition. In this light, the
court does not pass upon the ownership of
the land covered by the lost or destroyed
certificate, as the said matter should be
threshed out in a separate proceeding for
the purpose. (Luriz v. Republic, G.R. No.
208948, February 24, 2016)
62. May a bank claim that it is a
mortgagee in good faith with respect
to an unregistered parcel of land?
No, the doctrine of mortgagee in good
faith applies only to lands registered under
the Torrens system and not to unregistered
lands. Second, the principle is inapplicable to
banking institutions which are behooved to
exercise greater care and prudence before
entering into a mortgage contract. Hence,
the ascertainment of the status or condition
of properties offered as security for loans
must be a standard and an indispensable
part of its operations. In this case, the bank
should not have relied on the special power
of attorney since it is presented by a mere
co-owner of the property. (Rural Bank of
Cabadbaran, Inc. v. Melecio-Yap, G.R. No.
178451, July 30, 2014)
63. Is it necessary for people who are
dealing with administratively
reconstituted titles to conduct an
inquiry or investigation to acquaint
themselves with the defects in the
titles of their vendors?
Yes. Anyone dealing with such copies are
put on notice of such fact and warned to be
extra-careful. Case law states that
reconstituted titles shall have the same
validity and legal effect as to the originals
thereof unless the reconstitution was made
extrajudicially, or administratively. This is
because administrative reconstitution is
essentially ex-parte and without notice, and
thus, administratively reconstituted titles do
not share the same indefeasible character of
the original certificates of title. (Jurado vs.
Spouses Chai, G.R. No. 236516, March 25,
2019)
64. When is one considered a buyer in
bad faith?
29
One is considered a buyer in bad faith
not only when he purchases real estate
with knowledge of a defect or lack of
title in his seller but also when he has
knowledge of facts which should have
alerted him to conduct further inquiry or
investigation. (Krystle Realty
Development Corp. v. Alibin, G.R. Nos.
196117 & 196129, August 13, 2014)
65. Did the petition for annulment of sale
and partition constitute a collateral
attack on the certificate of title?
No. In a complaint for partition, the
plaintiff seeks, first, a declaration that he is a
co-owner of the subject properties; and
second, the conveyance of his lawful shares.
An action for partition is at once an action for
declaration of co ownership and for
segregation and conveyance of a
determinate portion of the properties
involved. In Lacbayan v. Samoy, Jr which is
an action for partition premised on the
existence or non-existence of co-ownership
between the parties, the Court categorically
pronounced that a resolution on the issue of
ownership does not subject the Torrens title
issued over the disputed realties to a
collateral attack It must be borne in mind
that what cannot be collaterally attacked is
the certificate of title and not the title itself. In
this case at bar, petitioner’s petition for
annulment of sale did not constitute a
collateral attack since she was actually
assailing respondent’s title to the subject
lands and not any Torrens certificate of title
over the same. (Bagayas v. Bagayas, G.R.
Nos. 187308 & 187517, September 18, 2013)
66. Is the amendment of a TCT under Sec.
108 of PD 1529 a direct attack on the
certificate of title contemplated
under Section 48 of the same law?
No. Jurisprudence instructs that an action
or proceeding is deemed to be an attack on
a certificate of title when its objective is to
nullify the same, thereby challenging the
judgment pursuant to which the certificate of
title was decreed.
Section 108 of PD 1529 explicitly states
that said provision "shall not be construed to
give the court authority to reopen the
judgment or decree of registration." In fact,
based on settled jurisprudence, Section 108
of PD 1529 is limited only to seven instances
or situations, namely:
a) when registered interests of any
description, whether vested,
contingent, expectant, or inchoate,
have terminated and ceased;
b) when new interests have arisen or
been created which do not appear
upon the certificate;
c) when any error, omission or mistake
was made in entering a certificate or
any memorandum thereon or on any
duplicate certificate;
d) when the name of any person on the
certificate has been changed;
e) when the registered owner has been
married, or, registered as married, the
marriage has been terminated and
no right or interest of heirs or creditors
will thereby be affected;
f) when a corporation, which owned
registered land and has been
dissolved, has not conveyed the
same within three years after its
dissolution;
g) when there is reasonable ground for
the amendment or alteration of title.
Hence, the same cannot be said to
constitute an attack on a certificate of title
as defined by case law. (Bagayas v.
Bagayas, G.R. Nos. 187308 & 187517,
September 18, 2013)
67. Is a petition under Sec. 108 of PD 1529
(Amendment and alteration of
certificates) the proper remedy on
30
the ground where the petitioner is an
adopted child and the signature of
petitioner’s adoptive mother in the
deed of absolute sale was forged?
No. As held in Philippine Veterans Bank v.
Valenzuela, the prevailing rule is that
proceedings under Section 108 of PD 1529
are summary in nature, contemplating
corrections or insertions of mistakes which are
only clerical but certainly not controversial
issues. Relief under said legal provision can
only be granted if there is unanimity among
the parties, or that there is no adverse claim
or serious objection on the part of any party
in interest. In this case, petitioner cannot avail
of the summary proceedings under Section
108 of PD 1529 because the present
controversy involves not the amendment of
the certificates of title issued in favor of
Rogelio and Orlando but the partition of the
estate of Maximino and Eligia who are both
deceased. The remedy then of petitioner is
to institute intestate proceedings for the
settlement of the estate of the deceased
spouses Maximino and Eligia. (Bagayas v.
Bagayas, G.R. Nos. 187308 & 187517,
September 18, 2013)
68. Is the Memorandum of Agreement for
the sale of land with an agreement to
deposit in escrow the total
consideration within a fixed period a
voluntary dealing or an adverse
claim (involuntary dealing)?
Voluntary dealing. In the case at hand, a
cursory perusal of the MOA shows that it is
essentially a conditional sale where payment
is subject to the submission of certain
documents by the seller. It is settled that in a
deed of conditional sale, ownership is
transferred after the full payment of the
installments of the purchase price or the
fulfillment of the condition and the execution
of a definite or absolute deed of sale. Given
the foregoing, the MOA is essentially a
dealing affecting less than the ownership of
the subject property that is governed by
Section 54 of PD 1529. Being a conditional
sale, the MOA is a voluntary instrument
which, as a rule, must be registered as such
and not as an adverse claim. (Logarta v.
Mangahis, G.R. No. 213568, July 5, 2016)
69. How are voluntary instruments
registered?
The prevailing rule is that voluntary
instruments such as contracts of sale,
contracts to sell, and conditional sales are
registered by presenting the owner's
duplicate copy of the title for annotation,
pursuant to Sections 51 to 53 of PD 1529. The
reason for requiring the production of the
owner's duplicate certificate in the
registration of a voluntary instrument is that,
being a willful act of the registered owner, it
is to be presumed that he is interested in
registering the instrument and would willingly
surrender, present or produce his duplicate
certificate of title to the Register of Deeds in
order to accomplish such registration. The
exception to this rule is when the registered
owner refuses or fails to surrender his
duplicate copy of the title, in which case the
claimant may file with the Register of Deeds
a statement setting forth his adverse claim.
(Logarta v. Mangahis, G.R. No. 213568, July 5,
2016)
70. Was the petition for cancellation of
the subject entries the proper
remedy?
No. Being a voluntary dealing affecting
less than the ownership of the subject
property, Section 54 of PD 1529 — which
states that the cancellation of annotations
involving interests less than ownership is within
the power of the Register of Deeds — should
have been applied. (Logarta v. Mangahis,
G.R. No. 213568, July 5, 2016)
71. What is the effect if the basis of an
adverse claim is a perfected contract
of sale?
In Register of Deeds of Quezon City v.
Nicandro, the Court held that where the
31
basis of the adverse claim was a perfected
contract of sale which is specifically
governed by Section 57 of the Land
Registration Act, or Act No. 496, the filing of
an adverse claim was held ineffective for the
purpose of protecting the vendee's right.
Similarly, in L.P. Leviste & Company, Inc. v.
Noblejas, the Court emphasized that if the
basis of the adverse claim is a perfected
contract of sale, the proper procedure is to
register the vendee's right as prescribed by
Sections 51 and 5 2 of PD 1529, and not under
Section 70 which is ineffective for the
purpose protecting the vendee's right since it
does not have the effect of a conveyance.
(Logarta v. Mangahis, G.R. No. 213568, July 5,
2016)
72. Where the land sold is in the
possession of a person other than the
vendor, is relying in the correctness of
the certificate of title enough?
No. While the rule is that every person
dealing with registered land may safely rely
on the correctness of the certificate of title
issued therefor and the law will in no way
oblige him to go beyond the certificate to
determine the condition of the property,
where the land sold is in the possession of a
person other than the vendor, the purchaser
must go beyond the certificate of title and
make inquiries concerning the actual
possessor.
It is, of course, expected from the
purchaser of a valued piece of land to
inquire first into the status or nature of
possession of the occupants, i.e., whether or
not the occupants possess the land in
concept of owner. As is the common
practice in the real estate industry, an ocular
inspection of the premises involved is a
safeguard a cautious and prudent purchaser
usually takes. Should he find out that the land
he intends to buy is occupied by anybody
else other than the seller who is not in actual
possession, it would then be incumbent upon
the purchaser to verify the extent of the
occupant’s possessory rights. The failure of a
prospective buyer to take such
precautionary steps would mean negligence
on his part and would thereby preclude him
from claiming or invoking the rights of a
“purchaser in good faith.” (Magsano v.
Pangasinan Savings and Loan Bank, Inc.,
G.R. No. 215038, October 17, 2016)
73. Are tax declarations and/or tax
receipts sufficient proof of ownership
as to entitle the holder thereof a
better right to the ownership and
possession of the property?
No. Tax declarations and/or tax receipts
are not conclusive proof of ownership. These
may only become the basis of a claim for
ownership when they are coupled with proof
of actual possession of the property. These
documents, however, must all bow down to
the indefeasibility of a Torrens title when such
is issued. By the issuance of the title, the land
is bound and the title thereto is quieted.
(Heirs of Delfin v. Rabadon, G.R. No. 165014,
July 31, 2013)
74. Can a purchaser who bought a titled
lot from another, who only possessed
and presented a special power of
attorney (SPA) to dispose of such
property, be considered as an
innocent purchaser for value where
said purchaser merely relied on the
face of the title and where there is a
flaw in the purported SPA’s notarial
acknowledgment?
The general rule is that every person
dealing with registered land may safely rely
on the correctness of the certificate of title
issued therefor and the law will in no way
oblige him to go beyond the certificate to
determine the condition of the property.
However, a higher degree of prudence is
required from one who buys from a person
who is not the registered owner, although the
land object of the transaction is registered. In
such a case, the buyer is expected to
examine not only the certificate of title but all
factual circumstances necessary for him to
determine if there are any flaws in the title of
the transferor. The buyer also has the duty to
32
ascertain the identity of the person with
whom he is dealing with and the latter's legal
authority to convey the property.
The strength of the buyer's inquiry on the
seller's capacity or legal authority to sell
depends on the proof of capacity of the
seller. If the proof of capacity consists of a
special power of attorney duly notarized,
mere inspection of the face of such public
document already constitutes sufficient
inquiry. If no such special power of attorney
is provided or there is one but there appears
to be flaws in its notarial acknowledgment,
mere inspection of the document will not do;
the buyer must show that his investigation
went beyond the document and into the
circumstances of its execution. (Heirs of Sarili
v. Lagrosa, G.R. No. 193517, January 15, 2014)
75. May the Court pass upon the validity
of a certificate of title on the basis of
a counterclaim?
Yes. To rule on the issue of validity in a
case for recovery of possession is tantamount
to a collateral attack. However, it should be
overlooked that private respondent filed a
counterclaim against petitioner, claiming
ownership over the land and seeking
damages. Hence, the court could rule on the
question of the validity of the certificate of
title for the counterclaim can be considered
a direct attack on the same. A counterclaim
is considered an original complaint, only this
time, it is the original defendant who
becomes the plaintiff. It stands on the same
footing and is to be tested by the same rules
as if it were an independent action. Besides,
the prohibition against collateral attack does
not apply to spurious or non-existent titles,
which are not accorded indefeasibility, as in
this case. (Bangis v. Heirs of Adolfo, G.R. No.
190875, June 13, 2012)
76. In a petition for the reconstitution of a
title, when should the publication of
the notice of the petition be
reckoned, according to RA 26: the
date of issue of the Official Gazette or
the date of its actual release?
 The date of its actual release. Acquisition
of jurisdiction over a reconstitution case
through publication of the notice of the
petition, as a jurisdictional requirement, is
hinged on a strict compliance; substantial
compliance is not enough. The law requires:
(a) notice of the petition should be published
in two (2) successive issues of the Official
Gazette; and (b) publication should be
made at least thirty (30) days prior to the
date of hearing.
“Publication” means the actual
circulation or release of the issue of the
Official Gazette on which the notice of the
petition is printed. The law could not have
possibly contemplated “publication”
independent of its actual dissemination to
the public, for whose benefit the requisite of
publication is mandated in the first place. For
sure, publication without actual circulation of
the printed material is worthless.
Consequently, the thirty-day period that
precedes the scheduled hearing should be
reckoned from the time of the actual
circulation or release of the last issue of the
Official Gazette, and not on the date of its
issue as reflected on its front cover. (Republic
v. De Asis, Jr., G.R. No. 193874, July 24, 2013)
77. Does fraudulent registration in itself
entitle a defrauded party to recover
damages from the Assurance Fund?
No. Loss, damage, or deprivation of land
or any estate or interest therein through
fraudulent registration alone is not a valid
ground to recover damages against the
Assurance Fund. Section 101 of PD 1529
explicitly provides that "[t]he Assurance Fund
shall not be liable for any loss, damage or
deprivation caused or occasioned by
a breach of trust, whether express, implied or
constructive or by any mistake in the resurvey
or subdivision of registered land resulting in
the expansion of area in the certificate of
title." It is hornbook doctrine that "[w]hen a
party uses fraud or concealment to obtain a
certificate of title of property, a constructive
trust is created in favor of the defrauded
party."However, as stated in Section 101 of
PD 1529, the inability to recover from the
33
defrauding party does not make the
Assurance Fund liable therefor. (Spouses
Stilianopoulos v. Register of Deeds for Legazpi
City, G.R. No. 224678, July 3, 2018)
78. When is one entitled to recover
damages from the Assurance Fund?
The loss, damage or deprivation
becomes compensable under the
Assurance Fund when the property has been
further registered in the name of an innocent
purchaser for value. This is because in this
instance, the loss, damage or deprivation
are not actually caused by any breach of
trust but rather, by the operation of the
Torrens system of registration which renders
indefeasible the title of the innocent
purchaser for value.The registration of the
innocent purchaser for value's title is
therefore a condition sine qua non in order to
properly claim against the Assurance
Fund. To note, it has been held that a
mortgagee in good faith stands as an
innocent mortgagee for value with the rights
of an innocent purchaser for value. (Spouses
Stilianopoulos v. Register of Deeds for Legazpi
City, G.R. No. 224678, July 3, 2018)
79. Does the law require a prior
declaration of insolvency of the other
defendants and that the obligation
remained unpaid before the liability
of the Assurance Fund arise?
No. To recover against the Assurance
Fund, however, it must appear that the
execution against such defendants other
than the National Treasurer and the Register
of Deeds is returned unsatisfied in whole and
in part.A prior declaration of insolvency or
inability to recover from the usurper
is not actually required before the claimant
may file an action against the Assurance
Fund. Whether or not funds are to be paid
out of the Assurance Fund is a matter to be
determined and resolved at the execution
stage of the proceedings. (Spouses
Stilianopoulos v. Register of Deeds for Legazpi
City, G.R. No. 224678, July 3, 2018)

When should the six (6) year prescriptive
period begin to run for purposes of claiming
compensation against the Assurance Fund:
from the date of the cancellation of the TCT
and registration of the innocent purchaser in
GF or from the date of the discovery of the
fraud? (“Jurisprudence has yet to interpret
the meaning of the phrase "from the time the
right to bring such action first occurred''.)
Prescription, for purposes of determining
the right to bring an action against the
Assurance Fund, should be reckoned from
the moment the innocent purchaser for
value registers his or her title and upon actual
knowledge thereof of the original title
holder/claimant. The registration of the
innocent purchaser for value's title is a
prerequisite for a claim against the
Assurance Fund on the ground of fraud to
proceed, while actual knowledge of the
registration is tantamount to the discovery of
the fraud. The constructive notice rule on
registration should not be made to apply to
title holders who have been unjustly deprived
of their land without their negligence. The
actual title holder cannot be deprived of his
or her rights twice – first, by fraudulent
registration of the title in the name of the
usurper and second, by operation of the
constructive notice rule upon registration of
the title in the name of the innocent
purchaser for value.
In actions for compensation against the
Assurance Fund grounded on fraud,
registration of the innocent purchaser for
value's title should only be considered as a
condition sine qua non to file such an action
and not as a form of constructive notice for
the purpose of reckoning prescription. This is
because the concept of registration as a
form of constructive notice is essentially
premised on the policy of protecting the
innocent purchaser for value's title, which
consideration does not, however, obtain in
Assurance Fund cases. Accordingly, it should
not be applied, especially since its
application with respect to reckoning
prescription would actually defeat the
34
Assurance Fund's laudable purpose.
(Spouses Stilianopoulos v. Register of Deeds
for Legazpi City, G.R. No. 224678, July 3, 2018)
80. In a proceeding for reconstitution of
lost or destroyed title, what is the
effect of the absence of any
opposition to the petitioner’s burden?
Even assuming that no opposition was
filed, the person seeking reconstitution is not
relieved of his burden of proving not only the
loss or destruction of the title sought to be
reconstituted, but that also at that time, she
was the registered owner thereof. (Republic
v. Susi, G.R. No. 213209, January 16, 2017)
81. In a proceeding for reconstitution of
lost or destroyed title, how does the
failure to comply with procedural
requirements affect the ensuing
proceedings?
Before the court can properly act,
assume, and acquire jurisdiction or authority
over the petition and grant the reconstitution
prayed for, petitioner must observe the
procedures and requirements prescribed by
the law. Non-compliance with the
prescribed procedure and requirements
deprives the trial court of jurisdiction over the
subject matter or nature of the case and,
consequently, all its proceedings are
rendered null and void. (Republic v. Susi, G.R.
No. 213209, January 16, 2017)
82. In a proceeding for reconstitution of
lost or destroyed title anchored on a
purported owner’s duplicate copy of
the title (as source), how does the
Land Registration Authority’s Report
“expressing serious doubts on the
authenticity of the petitioner's
duplicate title, and informing the
court of the existence of other titles
over the subject land” affect the
classification of petitioner’s source of
reconstitution?
 Although an “owner's duplicate of the
certificate of title” is classified expressly as a
source under Section 3(a) of RA 26 (Special
Procedure for Reconstitution of Lost or
Destroyed Torrens Certificate of Title), by the
existence of the LRA’s report expressing
doubts to said duplicate’s authenticity, the
petition should be treated, instead, as falling
under Section 3(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 v. Susi, G.R. NO. 213209, January
16, 2017)
83. What is the difference between
reconstitution under Sec 3(a) and Sec
3(f) of RA 26?
Whereas Section 3(a) merely requires
publication and posting of notices, Section
3(f) indispensably requires actual and
personal notice of the date of hearing of the
reconstitution petition to actual owners and
possessors of the land involved in order to
vest the trial court with jurisdiction thereon. If
no notice of the date of hearing of a
reconstitution case is served on a possessor
or one having interest in the property
involved, he is deprived of his day in court
and the order of reconstitution is null and
void. (Republic v. Susi, G.R. NO. 213209,
January 16, 2017)
84. Within what period should an action
for annulment of title on the basis of
fraud or misrepresentation be filed?
Not later than 1 year from the date of
entry of the decree of registration. Section 32
of PD 1529 provides that the period to
contest a decree of registration shall be one
(1) year from the date of its entry and that ,
after the lapse of the said period, The Torrens
certificate of title issued thereon becomes
incontrovertible and
indefeasible, viz.:”Review of decree of
registration; Innocent purchaser for
value. The decree of registration shall not be
reopened or revised by the reason of
absence, minority, or other disability of any
35
person adversely affected thereby, nor by
any proceeding in any court by reversing
judgments, subject, however, to the right of
any person, including the government and
the branches thereof, deprived of land or of
any estate or interest therein by such
adjudication or confirmation of title obtained
by actual fraud, to file in the proper Court of
First Instance a petition for reopening and
review of the decree of registration not later
than one year from and after the date of the
entry of such decree of registration, but in no
case shall such petition be entertained by
the court where an innocent purchaser for
value has acquired the land or an interest
therein, whose rights may be prejudiced.
Whenever the phrase "innocent purchaser
for value" or an equivalent phrase occurs in
this Decree, it shall be deemed to include an
innocent lessee, mortgagee, or other
encumbracer for value.” (Paraguya v.
Spouses Crucillo, G.R. No. 200265, December
2, 2013)
85. What happens after one year from the
date of entry of the decree of
registration?
Upon the expiration of said period of one
year, the decree of registration and the
certificate of title issued shall become
inconvertible. Any person aggrieved by such
decree of registration in any case may
pursue his remedy by action for damages
against the applicant or any other persons
responsible for the fraud. (Paraguya v.
Spouses Crucillo, G.R. No. 200265, December
2, 2013)
86. What is the prescriptive period for an
action for reconveyance in relation to
the issuance of certificate of title?
The prescriptive period for actions for
reconveyance is ten (10) years reckoned
from the date of issuance of the certificate of
title, except when the owner is in possession
of the property in which case the action for
reconveyance becomes imprescriptible.
(Paraguya vs. Spouses Crucillo, G.R. No.
200265, December 2, 2013
87. Until when may Spanish Titles “titulo
posesorio” be used as evidence in
land registration proceedings?
Based on Section 1 of PD 892, entitled
"Discontinuance of the Spanish Mortgage
System of Registration and of the Use of
Spanish Titles as Evidence in Land
Registration Proceedings," Spanish titles can
no longer be used as evidence of ownership
after six (6) months from the effectivity of the
law, or starting August 16, 1976. viz.: “Section
1. The system of Registration under the
Spanish Mortgage Las is discontinued, and all
lands recorded under said system which are
not yet covered by Torrens title shall be
considered as unregistered lands.” All holders
of Spanish titles or grants should apply for
registration of their lands under Act. 496,
otherwise known as the Land Registration
Act, within six (6) months from the effectivity
of this decree. Thereafter, Spanish titles
cannot be used as evidence of land
ownership in any registration proceeding
under the Torrens system. (Paraguya v.
Spouses Crucillo, G.R. No. 200265, December
2, 2013)
88. Is judicial decree alone a sufficient
and proper basis for the reconstitution
of the lost or destroyed certificate of
title?
No. The applicable law on the matter is
RA 26 which governs the process by which a
judicial reconstitution of Torrens Certificates
of Title may be done. RA 26 presupposes that
the property whose title is sought to be
reconstituted has already been brought
under the provisions of the Torrens System.
Under Section 2 of said law, the following
must be present for an order for
reconstitution to issue: (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
36
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.
Hence, the applicability of RA 26 is
contingent on the existence of a previously
issued OCT which has been lost or destroyed.
In the absence of evidence to prove that an
OCT was previously issues by virtue of a
judicial Decree, a judicial reconstitution of
title under Sec 2 of RA 26 cannot prosper.
(Republic v. Dagondon, G.R. No. 210540,
April 19, 2016)
89. Does the land sought to be registered
under Section 14 (1) of PD 1529 have
to be declared alienable and
disposable since June 12, 1945 or
earlier for the applicant to secure
judicial confirmation of its title?
No. Registration under Section 14 (1) of
PD 1529 is based on possession and
occupation of the alienable and disposable
land of the public domain since June 12,
1945 or earlier, without regard to whether the
land was susceptible to private ownership at
that time. The applicant needs only to show
that the land had already been declared
alienable and disposable at any time prior to
the filing of the application for registration.
(Republic v. Science Park of the Philippines,
G.R. No. 237714, November 12, 2018)
90. What kind of possession and
occupation is required under Section
14 (1) of PD 1529?
Open, continuous, exclusive and
notorious possession and occupation.
Possession is: (a) open when it is patent,
visible, apparent, notorious, and not
clandestine; (b) continuous when
uninterrupted, unbroken, and not
intermittent or occasional; (c) exclusive
when the adverse possessor can show
exclusive dominion over the land and an
appropriation of it to his own use and benefit;
and (d) notorious when it is so conspicuous
that it is generally known and talked of by the
public or the people in the neighborhood.
(Republic v. Science Park of the Philippines,
G.R. No. 237714, November 12, 2018)
91. How is open, continuous, exclusive,
and notorious possession and
occupation proved?
To prove open, continuous, exclusive,
and notorious possession and occupation in
the concept of owner, the claimant must
show the nature and extent of cultivation on
the subject land, or the number of crops
planted or the volume of the produce
harvested from the crops supposedly
planted thereon. (Republic v. Science Park
of the Philippines, G.R. No. 237714, November
12, 2018)
92. What is the effect of an existing
decision which binds lots subject to
registration?
Since it had been duly notified of an
existing decision which binds over the subject
lots, it was incumbent upon applicant to
prove that the said decision would not affect
its claimed status as owner of the subject lots
in fee simple. Land registration proceedings
are in rem in nature and, hence, by virtue of
the publication requirement, all claimants
and occupants of the subject property are
deemed to be notified of the existence of a
cadastral case involving the subject lots. (First
Gas Power Corp. v. Republic, G.R. No.
169461, September 2, 2013)
93. What should a prospective buyer do
when a piece of land is in the actual
possession of persons other than the
seller to be considered a buyer in
good faith?
When a man proposes to buy or deal with
realty, his duty is to read the public
manuscript, that is, to look and see who is
there upon it and what his rights are. A want
of caution and diligence, which an honest
man of ordinary prudence is accustomed to
exercise in making purchases, is in
contemplation of law, a want of good faith.
The buyer who has failed to know or discover
37
that the land sold to him is in adverse
possession of another is a buyer in bad faith.
(Go v. Estate of the Late Felisa Tamio de
Buenaventura, G.R. No. 211972, July 22, 2015)
IX. TORTS AND DAMAGES
94. What is the liability of two tortfeasors,
both of whom are negligent, and
such negligence caused damage to
a third person?
They are joint tortfeasors, therefore, they
are solidarily liable. Verily, "[j]oint tortfeasors
are those who command, instigate,
promote, encourage, advise, countenance,
cooperate in, aid or abet the commission of
a tort, or approve of it after it is done, if done
for their benefit. They are also referred to as
those who act together in committing wrong
or whose acts, if independent of each other,
unite in causing a single injury. Under Article
2194 of the Civil Code, joint tortfeasors are
solidarily liable for the resulting damage. In
other words, joint tortfeasors are each liable
as principals, to the same extent and in the
same manner as if they had performed the
wrongful act themselves." (Ruks Konsult and
Construction v. Adworld Sign and Advertising
Cop., G.R. No. 204866, January 21, 2015)
95. When is it appropriate to award
temperate damage?
Article 2224 of the Civil Code states that
"temperate 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 proved with
certainty." (In this case, there was lack of
substantiation as regards the length of time
for which supposed profits were lost). (S.V.
More Pharma Corp. v. Drugmakers
Laboratories, Inc., G.R. Nos. 200408 & 200416,
November 12, 2014)
96. Is a stipulation providing for attorney’s
fees valid?
 Yes. The award of attorney’s fees is not in
the nature of an indemnity but rather a
penalty in the form of liquidated damages.
The SC upheld that the same is binding
between the parties so as long it does not
contravene the law, morals, public order, or
public policy. However, the court reserves its
right to reduce the amount of attorney’s fees
whether intended as indemnity or penalty, if
the same is iniquitous or unconscionable.
(Westmont Bank v. Funai Phils., Corp., G.R.
Nos. 175733 & 180162, July 8, 2015)

When will the liability for the payment of

interest be reckoned if it was the heirs of the
debtor who signified their intent to pay and
was refused by the heirs of the creditor?

It is undisputed that the Heirs of Bangis

(creditor) made no judicial or extrajudicial
demand on the Heirs of Adolfo (debtor) to
pay the mortgage debt. Instead, it was the
latter who signified their intent to pay their
father's loan obligation which was refused.
The mortgage contract therefore continued
to subsist despite the lapse of a considerable
number of years from the time the debt was
constituted in 1975. The liability, which is
based on a loan or forbearance of money,
shall be subject to legal interest from the
date it was judicially determined by the CA
until the finality of this Decision, and not from
1975 (the date of the constitution of the
mortgage); nor from 1998 (when an attempt
to pay was made) or in 2000 at the time the
complaint was filed, because it was the Heirs
of Adolfo and not Bangis who filed the instant
suit to collect the indebtedness. Thereafter,
the judgment award inclusive of interest shall
bear interest until its full satisfaction. (Bangis v.
Heirs of Adolfo, G.R. No. 190875, June 13,
2012)

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