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Civil Law Case Digests
Civil Law Case Digests
METROBANK
G.R. No. 167082; August 3, 2016 A: No. Considering that the possession
Q: Should the promissory notes should be and occupation of the property in question
strictly construed against the respondent as by Apolonio, Jr. and his predecessors-in-
they were contracts of adhesion because the interest were not shown in the records to
petitioner’s only participation in their have been "since June 12, 1945, or earlier,"
execution was affixing her signature? the application must be rejected.
The applicant for judicial
A: No. Even assuming that the promissory confirmation of imperfect title must trace
notes were contracts of adhesion, such his possession of the subject land to June 12,
circumstance alone did not necessarily 1945, or earlier. Any length of possession
entitle her to bar their literal enforcement that does not comply with the requirement
against her if their terms were unequivocal. cannot support the application, which must
It is preposterous on her part to disparage be then dismissed for failure to comply with
the promissory notes for being contracts of Commonwealth Act No. 141 (Public Land
adhesion, for she thereby seems to forget Act) and Presidential Decree No. 1529
that the validity and enforceability of (Property Registration Decree).
contracts of adhesion were the same as
those of other valid contracts.
As a rule, indeed, the contract of Sps. MERCADER vs. Sps. BARDILAS
adhesion is no different from any other G.R. No. 163157; June 27, 2016
contract. Its interpretation still aligns with Q: May the owners of Lot A extend
the literal meaning of its terms and their house on a portion of said easement,
conditions absent any ambiguity, or with claiming that they are entitled to its use as
the intention of the parties. The terms and much as the owners of Lot B.
conditions of the promissory notes involved
herein, being clear and beyond doubt, A: No. Easement or servitude,
should then be enforced accordingly. according to Valdez v. Tabisula, is "a real
right constituted on another's property,
corporeal and immovable, by virtue of
BUENAVENTURA vs. METROBANK which the owner of the same has to abstain
G.R. No. 167082; August 3, 2016 from doing or to allow somebody else to do
Q: Can the promissory note act a guaranty something on his property for the benefit of
to secure payment of checks by the issuer? another thing or person." "It exists only
when the servient and dominant estates
A: No. A guaranty is not presumed; it must belong to two different owners. It gives the
be expressed and in writing to be holder of the easement an incorporeal
enforceable. The promissory notes provide, interest on the land but grants no title
in clear language, that appellant is primarily thereto. Therefore, an acknowledgment of
liable thereunder. It being clear that the the easement is an admission that the
promissory notes were entirely silent about property belongs to another.
the supposed guaranty, the promissory With the right of way rightfully
notes must be read literally due to the belonging to them as the owners of the
absence of any ambiguities about their burdened property, the Spouses Bardilas
language and meaning. In other words, the (Lot B) remained entitled to avail
petitioner could not validly insist on the themselves of all the attributes of ownership
guaranty. under the Civil Code, specifically: jus
utendi, jus fruendi, jus abutendi, jus
disponendi and jus vindicandi. Article 428
REPUBLIC vs. BAUTISTA, JR. of the Civil Code recognizes that the owner
G.R. No. 166890; June 28, 2016 has the right to enjoy and dispose of a thing,
Q: Can the applicant be confirmed of without other limitations than those
his imperfect title to the subject land? established by law.
As owners of the 3 square meter
wide road in dispute, the Bardilas Spouses A: The sale of jointly owned real
(owners of Lot B) may rightfully compel the property by a co-owner without the express
(Mercader Spouses) to pay them the value authority of the others is unenforceable
of the land upon which a portion of their against the latter, but valid and enforceable
house encroaches, and in case the against the seller.
petitioners fail to pay, the appellants may The Deed was void as far as the
remove or demolish the encroaching respondents' shares in the subject lot were
portion of the (Mercader Spouses)’ house. concerned, but valid as to Julian's share.
The conveyance by a co-owner of the entire
property pursuant to the Deed did not bind
Sps. PEN vs. Sps. JULIAN the respondents for lack of their consent
G.R. No. 160408; January 11, 2016 and authority in his favor. As such, the
Article 2088 of the Civil Code Deed had no legal effect as to their shares in
prohibits the creditor from appropriating the property, but the sale is valid as against
the things given by way of pledge or the vendor’s share.
mortgage, or from disposing of them; any
stipulation to the contrary is null and void.
The elements for pactum commissorium to
exist are as follows: 1) that there should be a ASB REALTY CORP. vs. ORTIGAS & CO.
pledge or mortgage wherein property is LTD.
pledged or mortgaged by way of security G.R. No. 202947; December 9, 2015
for the payment of the principal obligation Q: Can respondent validly rescind the Deed
and b) that there should be a stipulation for of Sale due to the failure of the assignor and
an automatic appropriation by the creditor its assignee (petitioner) to fulfil the
of the thing pledged or mortgaged in the covenants under the Deed of Sale?
event of non-payment of the principal
obligation within the stipulated period. The A: No. The petitioner is vested with the
first element was present considering that ownership of the parcel of land “free from
the property of the respondents was any lien or encumbrance except those that
mortgaged by Linda in favor of Adelaida as are duly annotated on the title” from the
security for the former's indebtedness. As to time of the execution of the Deed of
the second, the authorization for Adelaida Assignment in Liquidation.
to appropriate the property subject of the Respondent recognized without any
mortgage upon Linda's default was implied reservation the issuance of the new certificate
from Linda's having singed the blank deed of title in the name of the assignor and the
of sale simultaneously with her signing of subsequent transfer of the assignor by
the real estate mortgage. The haste with assignment to the petitioner that resulted in
which the transfer of property was made the issuance of the new certificate of title
upon the default by Linda on her obligation under the name of the petitioner. As such,
and the eventual transfer of the property in Ortigas was estopped from assailing the
a manner not in the form of a valid dacion petitioner’s acquisition and ownership of
en pago ultimately confirmed the nature of the property.
the transaction as a pactum commissorium. The application of estoppel was
appropriate. The doctrine of estoppel was
based on public policy, fair dealing, good
MACTAN CEBU INTERNATIONAL faith and justice, and its purpose was to
AIRPORT AUTHORITY vs. HEIRS OF forbid a party to speak against his own act
GAVINA IJORDANON or omission, representation, or commitment
G.R. No. 173140; January 11, 2016 to the injury of another to whom the act,
Q: Is the sale of jointly owned real omission, representation, or commitment
property by a co-owner without the express was directed and who reasonably relied
authority of the others valid? thereon. The doctrine sprang from equitable
principles and the equities in the case, and of the other. They are to be performed
was designed to aid the law in the simultaneously, so that the performance by
administration of justice where without its one is conditioned upon the simultaneous
aid injustice would result. fulfillment by the other. In reciprocal
obligations, before a party can demand the
performance of the obligation of the other,
ASB REALTY CORP. vs. ORTIGAS & CO. the former must also perform its own
LTD. obligation. Should either party cease to
G.R. No. 202947; December 9, 2015 perform a continuous obligation, the other's
Q: Do the covenants annotated on the subsequent activity obligation would not
transfer certificate of title (TCT) bound the accrue.
petitioner (assignee) to the performance of Under the JVA , being reciprocal in
the obligations assumed by assignor under nature, their respective obligations as the
the Deed of Sale. owner and the developer were dependent
upon the performance by the other of its
A: Yes, the annotations on the TCT bound obligations; hence, any claim of delay or
the petitioner but not to the extent that non-performance against the other could
rendered the petitioner liable for the non- prosper only if the complaining party had
performance of the covenants stipulated in faithfully complied with its own correlative
the Deed of Sale. obligation.
By acquiring the parcel of land with notice The owner did not perform its correlative
of the covenants contained in the Deed of obligation under the JVA as to place itself in
Sale between the vendor and the vendee, the the position to demand that the developer
petitioner bound itself to acknowledge and should already perform its obligation of
respect the encumbrance. Even so, the providing the round-the-clock security on
petitioner did not step into the shoes of the property, thus the owner had no right to
vendee as a party in the Deed of Sale. Thus, demand from the developer the round-the-
the annotation of the covenants contained in clock security over the 215 hectares of land.
the Deed of Sale did not give rise to a liability
on the part of the petitioner as the
purchaser/successor-in-interest without its RURAL BANK OF MALASIQUI, INC., vs.
express assumption of the duties or CERALDE, et al.
obligations subject of the annotation. G.R. No. 162032; November 25, 2015
Q: Expropriation proceedings were
commenced on parcels of land. The lands
MEGAWORLD PROPERTIES AND were subsequently mortgaged by the
HOLDINGS, INC., et al., vs. MAJESTIC registered owners, then foreclosed and
FINANCE AND INVESTMENT CO., acquired by mortgagee bank. Who is
INC., et al. entitled to payment of the just
G.R. No. 169694; December 09, 2015 compensation, the mortgagee-bank or the
Q: Are petitioners obligated to perform registered owners-mortgagors?
their obligations under the JVA despite
respondents' failure or refusal to A: The registered owners (mortgagors).
acknowledge, or perform their reciprocal Section 80 of R.A. 3844 provides that the
obligations? Land Bank of the Philippines would pay the
landowners the net value of the land minus
A: The obligations of the parties under the outstanding balance of the obligations in
the JVA were unquestionably reciprocal. favor of the lending institutions in the event
Reciprocal obligations are those that arise of an existing lien or encumbrance on the
from the same cause, and in which each land in favor of private parties or
party is a debtor and a creditor of the other institutions.
at the same time, such that the obligations
of one are dependent upon the obligations
RURAL BANK OF MALASIQUI, INC., vs. execution except in compliance with a
CERALDE, et al. judicial compromise. Such means of dispute
G.R. No. 162032; November 25, 2015 settlement is an accepted, even desirable
Q: What is the prescriptive period for and encouraged, practice in courts of law
bringing an action to annul the foreclosure and administrative tribunals.
of a mortgage?
A: Ten years from the time the right of BPI vs. Sps. YUJUICO
action accrues. G.R. No. 175796; July 22, 2015
The petitioner is correct about the Q: Is an action to recover the deficiency
erroneous reliance on Article 1142 of the after extrajudicial foreclosure of a real
Civil Code, a legal provision on prescription property mortgage a personal action
that states: “A mortgage action prescribes after because it does not affect title to or
ten years.” The phrase mortgage action used possession of real property, or any interest
in Article 1142 refers to an action to therein?
foreclose a mortgage, and has nothing to do
with an action to annul the foreclosure of A: Yes. An action to recover the
the mortgage, like this one. deficiency after the extrajudicial foreclosure
This action to annul the foreclosure of the real property mortgage is a personal
of the mortgage was not yet barred by action, for it does not affect title to or
prescription because the applicable period possession of real property, or any interest
of prescription was 10 years from the time therein. The venue of a personal action is
the right of action accrued by virtue of the the place where the plaintiff or any of the
action being upon a written contract. principal plaintiffs resides, or where the
Indeed, the reckoning of the period of defendant or any of the principal
prescription should start from July 12, 1983, defendants resides, or in the case of a non-
when the foreclosure of the mortgage was resident defendant where he may be found,
made, indicating that this action, being at the election of the plaintiff.
commenced on July 12, 1993, was not Assuming that the venue had been
barred by prescription. improperly laid, considering that the
respondents had not raised such ground in
their Motion to Dismiss, they did so
ASSET POOL A (SPV-AMC), INC., vs. belatedly. Venue is procedural, not
CLARK DEVELOPMENT jurisdictional, and may be waived by the
CORPORATION defendant if not seasonably raised either in
G.R. No. 205915; November 10, 2015 a motion to dismiss or in the answer.
A compromise agreement is a
contract whereby the parties, by making
reciprocal concessions, avoid a litigation or REPUBLIC vs. MANCAO
put an end to one already commenced. G.R. No. 174185; July 22, 2015
According to Article 2029 of the Civil Code, Q: Can a petition for the judicial
the court shall endeavor to persuade the reconstitution of a Torrens title that does
parties in a civil case to agree upon some not strictly adhere to the requirements of
fair compromise. The contracting parties Republic Act No. 26 be granted?
may establish such stipulations, clauses,
terms and conditions as they may deem A: No petition for the judicial reconstitution
convenient, provided such stipulations, of a Torrens title that does not strictly
clauses, terms and conditions are not adhere to the requirements of Republic Act
contrary to law, morals, good customs, No. 26, albeit unopposed, should be granted
public order, or public policy. Once the even on the pretext that the reconstitution
parties have entered into a compromise, would not affect the ownership or
their agreement has the effect and authority possession of the property.
of res judicata, but there shall be no
REPUBLIC vs. MANCAO
G.R. No. 174185; July 22, 2015 Sps. BAYSA vs. Sps. PLANTILLA
Q: Can petitioner validly establish his G.R. No. 159271; July 13, 2015
interest in the property by purely Q: The extrajudicial foreclosure of the
testimonial evidence? REM is void, does the right of the
mortgagor to redeem be considered
A: No. It is essential that the person expired?
initiating the petition for reconstitution
must have an interest in the property and A: Having found and declared the
such interest must be adequately extrajudicial foreclosure of the REM and the
established by the petitioner. The evidence foreclosure sale of the mortgaged property
of the petitioner to establish this fact is of the petitioner void for want of the special
solely testimonial as he did not present any power to sell, we deem it unnecessary to
documentary evidence to support his oral consider and determine the final issue on
declarations. He failed to present evidence whether or not the petitioners had lost their
as to how he became one of the owners of right to redeem. In other words, there is no
the subject lot. His testimony as regards this right of redemption to speak of if the foreclosure
fact was sketchy, leaving so much room for was void.
speculation. His testimonial evidence does
not satisfactorily establish his interest in the
property. Sps. BAYSA vs. Sps. PLANTILLA
G.R. No. 159271; July 13, 2015
Q: Is the 2.5% monthly interest (30%
Sps. BAYSA vs. Sps. PLANTILLA per annum) illegal and usurious,
G.R. No. 159271; July 13, 2015 considering that the 8% interest was already
Q: Can the extrajudicial foreclosure be declared as invalid and unwarranted?
valid despite the lack of provision in the
mortgage deed granting special power to A: The petitioners are now estopped
sell to the mortgagee? from assailing the validity of the monthly
interest payments made. They expressly
A: No. Section 1 of Act No. 3135 consented to be liable to pay 2.5%/month on the
provides: When a sale is made under a principal loan of P2.3 Million, and actually
special power inserted in or attached to any made several payments of interest at that rate.
real estate mortgage hereafter made as Secondly, they did not assail the rate of
security for the payment of money or the 2.5%/month as interest in the lower courts,
fulfillment of any other obligation, the doing so only in this appeal.
provisions of the following section shall
govern as to the manner in which the sale
and redemption shall be effected, whether CALUZOR vs. LLANILLO, et al.
or not provision for the same is made in the G.R. No. 155580; July 1, 2015
power. The remedies of appeal and
Accordingly, to enable the extra certiorari were mutually exclusive, for the
judicial foreclosure of the REM of the special civil action for certiorari, being an
petitioners, the special power to sell should extraordinary remedy, is available only if
have been either inserted in the REM itself or there is no appeal, or other plain, speedy
embodied in a separate instrument attached to and adequate remedy in the ordinary
the REM. The omission of the special power course of law. In certiorari, only errors of
to sell the property subject of the mortgage jurisdiction are to be addressed by the
was fatal to the validity and efficacy of the higher court, such that a review of the facts
extrajudicial foreclosure, and warranted the and evidence is not done; but in appeal, the
invalidation of the entire proceedings superior court corrects errors of judgment,
conducted by the sheriff. and in so doing, reviews issues of fact and
law to cure errors in the appreciation and METRO MANILA TRANSIT CORP. vs.
evaluation of the evidence. Based on such REYNALDO CUEVAS et al.,
distinctions, certiorari cannot be a substitute GR No. 167797; June 15, 2015
for a lost appeal. It is clear that the Court of Q: Whether or not the MMTC was
Appeals promulgated the assailed decision liable for the injuries sustained by the
in the exercise of its appellate jurisdiction to respondents despite the provision in the
review and pass upon the DARAB’s agreement to sell that shielded it from
adjudication of the petitioner’s appeal of the liability.
PARAD’s ruling. As such, his only proper
recourse from such decision of the CA was A: Yes. This is because of the
to further appeal to the court by petition for registered-owner rule, whereby the
review on certiorari under Rule 45 of the registered owner of the motor vehicle
Rules of Court. Despite his allegation of involved in a vehicular accident could be
grave abuse of discretion against the CA, he held liable for the consequences. The
could not come to the Court by special civil registered owner rule has remained good
action for certiorari. law in this jurisdiction considering its
impeccable and timeless rationale as
enunciated in subsequent cases. Indeed,
ALLIED BANKING CORPORATION vs. MMTC could not evade liability by passing
YUJUICO the buck to Mina’s Transit. The stipulation
G.R. No. 163116; June 29, 2015 in the agreement to sell did not bind third
Q: Whether or not respondent Yujuico parties like the Cuevases, who were
is a surety. expected to simply rely on the data
contained in the registration certificate of
A: Yes, Yujuico is a surety. the erring bus.
A surety is distinguished from a Although the registered-owner rule
guaranty in that a guarantor is the insurer might seem to be unjust towards MMTC,
of the solvency of the debtor and thus binds the law did not leave it without any remedy
himself to pay if the principal is unable to or recourse. MMTC could recover from
pay while surety is the insurer of the debt, Mina's Transit, the actual employer of the
and he obligates himself to pay if the negligent driver, under the principle of
principal does not pay. unjust enrichment, by means of a cross-
With the stipulations in the claim seeking reimbursement of all the
continuing guaranties indicating that he amounts that it could be required to pay as
was the surety of the credit line extended to damages arising from the driver's
YLTC, Jesus was solidarily liable to negligence. Thus, when MMTC set up its
Genbank for the indebtedness of YLTC. In cross-claim against Mina's Transit, it is
other words, he thereby rendered himself precisely to ensure that Mina's Transit
"directly and primarily responsible" with would reimburse whatever liability would
YLTC, "without reference to the solvency of be adjudged against MMTC.
the principal”. This is so even if the first
part of the continuing guaranties showed
that Jesus as the signatory had agreed to be KALAW vs. FERNANDEZ
bound "either as guarantor or otherwise". G.R. No. 166357; January 14, 2015
The usage of term guaranty or guarantee in Q: Valerio filed a petition for
the caption of the documents, or of the declaration of nullity of marriage against his
word guarantor in the contents of the spouse, Elena. He reasoned that his wife
documents did not conclusively was psychologically incapacitated to
characterize the nature of the obligations comply with the essential marital
assumed therein. obligations of marriage. He presented the
testimonies of two supposed expert
witnesses who concluded that his wife was
suffering from a psychological incapacity in
the form of NPD (Narcissistic Personality otherwise already owned by other parties.
Disorder). The conclusions of the witnesses Jurisprudence is to the effect settled that in
were premised on respondents’ constant petitions for reconstitution of titles, actual
mah-jong sessions wherein she would even owners and possessors of the land involved
bring along her children. Would this must be duly served with actual and
constitute psychological incapacity? personal notice of the petition.
PRIETO vs. CA
HEIRS OF SERVANDO FRANCO vs. SPS. G.R. No. 158597; June 18, 2012
GONZALES Under Article 1898 of the Civil Code,
G.R. No. 159709; June 27, 2012 the acts of an agent done beyond the scope
Q: Was there a novation of the August 23, of his authority do not bind the principal
1986 promissory note when respondent unless the latter expressly or impliedly
issued the February 5, 1992 receipt? ratifies the same.
In agency, ratification is the adoption or con
A: No. Novation did not transpire because firmation by one person of an act performed
no irreconcilable incompatibility existed on his behalf by another without authority.
between the promissory note and the The substance of ratification is the
receipt. confirmation after the act, amounting to a
Novation is not presumed. The substitute for a prior authority. Here, there
parties to a contract should expressly agree was such ratification by Marcos, as borne
to abrogate the old contract in favor of a out by his execution of the letter of
new one. In the absence of the express acknowledgement on September 2, 1996.
agreement, the old and the new obligations
must be incompatible on every point. There
is incompatibility when the two obligations SPS. RABAT vs. PNB
cannot stand together, each one having its G.R. No. 158755; June 18, 2012
independent existence. If the two Q: Is the inadequacy of the bid price
obligations cannot stand together, the latter invalidated the forced sale of the
obligation novates the first. properties?
In light of the foregoing, the
issuance of the receipt created no new A: No. The inadequacy of the bid price at a
obligation. The receipt dated February 5, forced sale, unlike that in an ordinary sale,
1992 was only the proof of payment of is immaterial and does not nullify the sale;
obligation. It did not establish any novation in fact, in a forced sale, a low price is
agreement of the parties. considered more beneficial to the mortgage
debtor because it makes redemption of the
property easier.
LBP vs. NABLE
G.R. 176692; June 27, 2012
Q: What must be considered in SPS. RABAT vs. PNB
determining just compensation? G.R. No. 158755; June 18, 2012
Q: In an extrajudicial foreclosure of
A: Any determination of just mortgage, is a mortgagee entitled to recover
compensation should consider the any deficiency amount from the mortgagor?
following factors, namely: (a) the cost of the
acquisition of the land; (b) the current value A: Yes. It is settled that if the proceeds of the
of like properties; (c) the nature, actual use sale are insufficient to cover the debt in an
and income of the land; (d) the sworn extrajudicial foreclosure of the mortgage,
valuation by the owner; (e) the tax the mortgagee is entitled to claim the
declarations; (f) the assessment made by deficiency from the debtor. For when the
government assessors; (g) the social and legislature intends to deny the right of a
creditor to sue for any deficiency resulting b. when new interests have arisen
from foreclosure of security given to or been created which do not
guarantee an obligation it expressly appear upon the certificate;
provides as in the case of pledges and in c. when any error, omission or
chattel mortgages of a thing sold on mistake was made in entering a
installment basis. Act No. 3135, which certificate or any memorandum
governs the extrajudicial foreclosure of thereon or on any duplicate
mortgages, while silent as to the mortgagees certificate;
right to recover, does not, on the other d. when the name of any person on
hand, prohibit recovery of deficiency. the certificate has been changed;
Accordingly, it has been held that a e. when the registered owner has
deficiency claim arising from the been married, or, registered as
extrajudicial foreclosure is allowed. married, the marriage has been
terminated and no right or
interest of heirs or creditors will
CALILAP-ASMERON vs. DBP thereby be affected;
G.R. No. 157330; November 23, 2011 f. when a corporation, which
Q: Petitioner and Respondent entered owned registered land and has
into a deed of conditional sale, wherein been dissolved, has not
petitioner sought to repurchase 2 parcels of conveyed the same within three
land which she mortgaged to and was years after its dissolution; and
foreclosed by the respondent. May g. when there is reasonable ground
respondent bank rescind the deed of for the amendment or alteration
conditional sale if petitioner fails to pay the of title.
agreed quarterly amortizations?