Persons and Family Relations

G.R. No. 196049 June

Manreal, Bryan 26, 2013 MINORU FUJIKI,
vs.MARIA PAZ GALELA
MARINAY, SHINICHI
MAEKARA, LOCAL CIVIL
REGISTRAR OF QUEZON
CITY, AND THE
ADMINISTRATOR AND
CIVIL REGISTRAR
GENERAL OF THE
NATIONAL STATISTICS
OFFICE, RESPONDENTS.

G.R. No. 198780

October 16, 2013 REPUBLIC OF
THE PHILIPPINES, Petitioner,
Vs. LIBERTY D. ALBIOS

Property
Bradford United Church of
Christ, Inc. v. Ando

Heirs of Malabanan v. Republic

Obligations and Contracts Philippine Trust Company vs.

Floro Roxas 2016

Marquez vs. Ilisan Credit 2015

Succession Bascara vs. Javier

Mayuga vs. Atienza

Partnership, Trust, Agency Calubad v. Ricarcen

Development Corp., G.R. No.
202364, August 30, 2017
 JOSE JUAN TONG, ET
AL., Petitioners, vs. GO TIAT
KUN, ET AL., Respondents.
G.R. No. 196023
April 21, 2014

Sales PHILIPPINE STEEL

COATING CORP. v. EDUARD
QUINONES G. R. No. 194533,
APR 19, 2017

SPOUSES GODFREY and MA.

TERESA TEVES, Petitioners, -
versus- INTEGRATED
CREDIT & CORPORATE
SERVICES, CO. (now CAROL
AQUI), Respondent. G.R. No.
216714, FIRST DIVISION,
April 4, 2018

Credit Transactions SPOUSES FRANCISCO and

MERCED RABAT, Petitioners,
-versus- PHILIPPINE
NATIONAL BANK,
Respondent. G.R. No. 158755,
FIRST DIVISION, June 18,
2012

SPOUSES ELLIS R. MILES

and CAROLINA
RONQUILLO-MILES,
Petitioners -versusBONNIE
BAUTISTA LAO, Respondent.
G.R. No. 209544, FIRST
DIVISION, November 22, 2017

Land Titles and Deeds REPUBLIC OF THE

PHILIPPINES v.
APOSTOLITA SAN MATEO,
BRIGIDA TAPANG, ROSITA
ACCION, AND CELSO
MERCADO
G.R. No. 203560,
November 10, 2014

ENRIQUETA M. LOCSIN v.
BERNARDO HIZON,
CARLOS HIZON, SPS. JOSE
MANUEL & LOURDES
GUEVARA G.R. No. 204369,
September 17, 2014
MINORU FUJIKI VS. MARIA PAZ GAELA MARINAY
GR No. 196049
June 26, 2013

Minoru Fujiki is a Japanese national who married respondent Maria Paz Galela Marinay in the
Philippines. The marriage did not sit well with petitioner’s parents. Thus, Fujiki could not bring his wife
to Japan where he resides. Eventually, they lost contact with each other. Marinay met another Japanese,
Shinichi Maekara (Maekara). Without the first marriage being dissolved, Marinay and Maekara got
married in Quezon City. Maekara brought Marinay to Japan. However, Marinay allegedly suffered
physical abuse from Maekara. She left Maekara and started to contact Fujiki. Fujiki and Marinay met in
Japan and they were able to re-establish their relationship. Fujiki then helped Marinay obtain a judgment
from a family court in Japan declaring her marriage in Maekara void on the ground of bigamy. Later,
back in the Philippines, Fujiki filed a petition for a Judicial Recognition of Foreign Judgment before the
RTC. However, the trial court dismissed the petition maintaining that Fujiki lacks personality file the
petition.
Q: Can a husband or wife of a prior marriage can file a petition to recognize a foreign judgment
nullifying the subsequent marriage between his or her spouse and a foreign citizen on the ground of
bigamy.
A: Yes, a husband or wife of a prior marriage can file a petition to recognize a foreign judgment
nullifying the subsequent marriage between his or her spouse and a foreign citizen.
Since the recognition of a foreign judgment only requires proof of fact of the judgment, it may be made in
a special proceeding for cancellation or correction of entries in the civil registry under Rule 108 of the
Rules of Court. Section 1 of the said rule provides for who may file such petition, to wit:
Sec. 1: Who may file petition. — Any person interested in any act, event, order or decree concerning the
civil status of persons which has been recorded in the civil register, may file a verified petition for the
cancellation or correction of any entry relating thereto, with the Regional Trial Court of the province
where the corresponding civil registry is located.
In this case, there is no doubt that the prior spouse, Fujiki, has a personal and material interest in
maintaining the integrity of the marriage he contracted and the property relations arising from it. Thus, he
has the legal personality to file the petition.
REPUBLIC OF THE PHILIPPINES v. LIBERTY D. ALBIOS.
G.R. No. 198780
October 16, 2013

Q: On October 22, 2004, Fringer, an American citizen, and Albios were married, as evidenced by a
Certificate of Marriage. On December 6, 2006, Albios filed with the RTC a petition for declaration of
nullity of her marriage with Fringer, alleging that immediately after their marriage, they separated and
never lived as husband and wife because they never really had any intention of entering a married state or
complying with any of their essential marital obligations.

Fringer did not file his answer. On September 13, 2007, Albios filed a motion to set case for pre-trial and
to admit her pre-trial brief. After the pre-trial, only Albios, her counsel and the prosecutor appeared.
Fringer did not attend the hearing despite being duly notified of the schedule.

The RTC declared the marriage void ab initio. The RTC opined that the parties married each other for
convenience only. Albios stated that she contracted Fringer to enter into a marriage to enable her to
acquire American citizenship and that in consideration thereof, she agreed to pay him the sum of
$2,000.00. However, she did not pay Fringer $2,000.00 because the latter never processed her petition for
citizenship

Can the marriage contracted by Fringer and Albios for the sole purpose of acquiring American citizenship
be void ab initio on the ground of lack of consent?

A: No, the marriage contracted by Fringer and Albios for the sole purpose of acquiring American
citizenship be void ab initio on the ground of lack of consent?

Under the Family Code, for consent to be valid, it must be (1) freely given and (2) made in the presence
of a solemnizing officer. A freely given consent requires that the contracting parties willingly and
deliberately enter the marriage. Consent must be real in the sense that it is not vitiated nor rendered
defective by any of the vices of consent under Articles 45 and 46 of the Family Code, such as fraud,
force, intimidation, and undue influence. Consent must also be conscious or intelligent, in that the parties
must be capable of intelligently understanding the nature of, and both the beneficial or unfavorable
consequences of their act.

In the case at hand, consent was not lacking between Albios and Fringer. In fact, there was real consent
because it was not vitiated nor rendered defective by any vice of consent. Their consent was also
conscious and intelligent as they understood the nature and the beneficial and inconvenient consequences
of their marriage, as nothing impaired their ability to do so. That their consent was freely given is best
evidenced by their conscious purpose of acquiring American citizenship through marriage. Such plainly
demonstrates that they willingly and deliberately contracted the marriage. There was a clear intention to
enter into a real and valid marriage so as to fully comply with the requirements of an application for
citizenship. There was a full and complete understanding of the legal tie that would be created between
them, since it was that precise legal tie which was necessary to accomplish their goal. GR
BRADFORD UNITED CHURCH OF CHRIST v. DANTE ANDO,
GR No. 195669
May 30, 2016

Q: The petitioner Bradford United Church of Christ, Inc. (BUCCI) filed a Complaint for unlawful
detainer and damages against herein respondents Dante Ando, Abenigo Augis, Edgar Cardones, Zacarias
Gutierrez, Cornelio Ibarra, Jr., Zenaida Ibarra, Teofilo Lirasan, Eunice Lirasan, Ruth Mission, Dolly
Resales and Eunice Tambangan, in their capacities as Members of the Mandaue Bradford Church
Council, the Mandaue Bradford Church (MBC), and the United Church of Christ in the Philippines, Inc.
(UCCPI). This Complaint was docketed thereat as Civil Case No. 4936. In an Order dated February 9,
2005, the MTCC directed BUCCI to show cause why its Complaint should not be dismissed for its failure
to comply with the requirement on the certification against forum-shopping under Rule 7, Section 5 of the
Rules of Court. According to the MTCC, BUCCI failed to mention in its certification against non-forum-
shopping a complete statement of the present status of another case concerning the recovery of ownership
of certain parcels of land earlier filed before the Regional Trial Court (RTC) by the UCCPI and the MBC
against BUCCI. (Civil Case No. MAN-1669, captioned "United Church of Christ in the Philippines, Inc.
and Mandaue Bradford Church, Plaintiff v. Bradford United Church of Christ in the Philippines,
Defendant, for Recovery of Ownership with Preliminary Injunction".). The recovery of ownership case
also involved Lot 3-F, the same parcel of land subject of the unlawful detainer case, and yet another
parcel of land, denominated simply as Lot 3-C. On October 13, 1997, the RTC of Mandaue City-rendered
its judgment in the recovery of ownership case against therein plaintiffs UCCPI and MBC and in favor of
therein defendant BUCCI. On November 19, 1997, both the MBC and the UCCPI filed a motion for
reconsideration of said decision but their motion was denied by Order of March 10, 2005. Meanwhile, the
MTCC Branch 2 of Mandaue City, issued an Order dated March 31,2005 dismissing the unlawful
detainer case with prejudice for BUCCI's failure to comply with the rule on certification against forum
shopping. BUCCI appealed to the RTC which was docketed as Civil Case No. MAN-5126-A.
In its Decision of March 13, 2006 in the unlawful detainer case, the RTC of Mandaue City, Branch 56,
affirmed the MTCC's dismissal thereof, with prejudice. The RTC held that BUCCI was guilty of forum-
shopping because it failed to certify under oath that there was another action involving the same parties
and the same Lot 3-F still pending before another court.
In its Decision of December 10, 2010, the CA held that the MTCC and the RTC correctly dismissed the
unlawful detainer case. The CA opined that whatever decision would be rendered in the action for
recovery of ownership of the parcels of land in question would amount to res judicata in the unlawful
detainer case.
Is the Court of Appeals correct in holding that petitioner is guilty of forum shopping for filing the case for
ejectment or unlawful detainer (civil case no. 4936) during the pendency of the [action for] recovery of
ownership (civil case no. Man-1669), and for failing to [disclose] the pendency of the [latter civil case no.
Man-1669] in the certification of non-forum shopping in the [former civil case no. 4936]?
A: No, The Court of Appeals correct in holding that petitioner is guilty of forum shopping for filing the
case for ejectment or unlawful detainer.
Section 5, Rule 7 of the Rules of Court, The above-stated rule requires a twofold compliance, and this
covers both the non-commission of forum-shopping itself, and the submission of the certification against
forum-shopping. The essence of forum-shopping is the filing of multiple suits involving the same parties
for the same cause of action, either simultaneously or successively, for the purpose of obtaining a
favorable judgment. It exists where the elements of litis pendentia are present or where a final judgment
in one case will amount to res judicata in another. On the other hand, for litis pendentia to be a ground for
the dismissal of an action, the following requisites must concur: (a) identity of parties, or at least such
parties who represent the same interests in both actions; (b) identity of rights asserted and relief prayed
for, the relief being founded on the same facts; and (c) the identity with respect to the two preceding
particulars in the two cases is such that any judgment that may be rendered in the pending case, regardless
of which party is successful, would amount to res judicata in the other case.
Here, there is only identity of parties between the summary action of unlawful detainer and the land
ownership recovery case. However, the issues raised are not identical or similar in the two cases. The
issue in the unlawful detainer case is which party is entitled to, or should be awarded, the material or
physical possession of the disputed parcel of land, (or possession thereof as a fact); whereas the issue in
the action for recovery of ownership is which party has the right to be recognized as lawful owner of the
disputed parcels of land. Well-settled is the rule that the filing of the summary action for unlawful
detainer during the pendency of an action for recovery of ownership of the same parcel of Land subject of
the summary action of unlawful detainer does not amount to forum-shopping.
HEIRS OF MARIO MALABANAN v. REPUBLIC
G.R. No. 179987
September 3, 2013

Q: On 20 February 1998, Mario Malabanan filed an application for land registration covering a parcel of
land identified as Lot 9864-A, Cad-452-D, Silang Cadastre. Malabanan claimed that he had purchased the
property from Eduardo Velazco,[3] and that he and his predecessors-in-interest had been in open,
notorious, and continuous adverse and peaceful possession of the land for more than thirty (30) years.
Apart from presenting documentary evidence, Malabanan himself and his witness, Aristedes Velazco,
testified at the hearing. Velazco testified that the property was originally belonged to a twenty-two
hectare property owned by his great-grandfather, Lino Velazco. The Republic of the Philippines likewise
did not present any evidence to controvert the application. Among the evidence presented by Malabanan
during trial was a Certification dated 11 June 2001, issued by the Community Environment & Natural
Resources Office, Department of Environment and Natural Resources (CENRO-DENR), which stated
that the subject property was "verified to be within the Alienable or Disposable land The Republic
interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to prove that the property
belonged to the alienable and disposable land of the public domain, and that the RTC had erred in finding
that he had been in possession of the property in the manner and for the length of time required by law for
confirmation of imperfect title.
The appellate court held that under Section 14(1) of the Property Registration Decree any period of
possession prior to the... classification of the lots as alienable and disposable was inconsequential and
should be excluded from the computation of the period of possession. Thus, the appellate court noted that
since the CENRO-DENR certification had verified that the property was declared alienable and
disposable only on 15 March 1982, the Velazcos' possession prior to that date could not be factored in the
computation of the period of possession.
Are petitioners entitled to the registration of the subject land in their names under Section 14(1) or
Section 14(2) of the Property Registration Decree or both?
A: The arguments submitted by the OSG with respect to Section 14(2) are more extensive. The OSG
notes that under Article 1113 of the Civil Code, the acquisitive prescription of properties of the State
refers to "patrimonial property," while Section 14(2) speaks of "private lands."
It observes that the Court has yet to decide a case that presented Section 14(2) as a ground for application
for registration, and that the 30-year possession period refers to the period of possession under Section
48(b) of the Public Land Act, and not the concept of prescription under the Civil Code. The OSG further
submits that, assuming that the 30-year prescriptive period can run against public lands, said period
should be reckoned from the time the public land was declared alienable and disposable.
Accordingly, there must be an express declaration by the State that the public dominion property is no
longer intended for public service or the development of the national wealth or that the property has been
converted into patrimonial. Without such express declaration, the property, even if classified as alienable
or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable of
acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by
the State to be no longer intended for public service or for the development of the national wealth that the
period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly
enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by
law.
It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired
ownership over the subject property under Section 48(b) of the Public Land Act. There is no substantive
evidence to establish that Malabanan or petitioners as his predecessors-in-interest have been in possession
of the property since 12 June 1945 or earlier. The earliest that petitioners can date back their possession,
according to their own evidence the Tax Declarations they presented in particular is to the year 1948.
Thus, they cannot avail themselves of registration under Section 14(1) of the Property Registration
Decree.
Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property
was declared as alienable or disposable in 1982, there is no competent evidence that is no longer intended
for public use service or for the development of the national evidence, conformably with Article 422 of
the Civil Code. The classification of the subject property as alienable and disposable land of the public
domain does not change its status as property of the public dominion under Article 420(2) of the Civil
Code. Thus, it is insusceptible to acquisition by prescription.
PHILIPPINE TRUST COMPANY v. FLORO ROXAS AND EUFEMIA ROXAS
G.R. No. 171897,
October 14, 2015

Q: Spouses Roxas procured loans from Philippine Trust Company (PTC) to finance their real estate
business, which were secured by real estate mortgages on the Spouses Roxas’ real properties.
Subsequently, the Spouses Roxas, PTC, and Roben Construction entered into “a contract of building
construction,” under which PTC granted an additional loan to the Spouses Roxas. Such contract was
superseded by a new “contract of building construction” wherein Rosendo P. Dominguez, Jr.
(Dominguez) substituted Roben Construction as the contractor under the same terms and conditions of the
previous contract. Spouses Roxas did not finish the housing project due to financial difficulties resulting
in non-payment of the loans. As a result, Dominguez sued PTC and Spouses Roxas for breach of
contract. On the other hand, Spouses Roxas in turn filed a complaint against Dominguez and the
insurance company.In the first case, Spouses Roxas filed an answer with a cross-claim against PTC. PTC
also filed an answer with a counterclaim against Spouses Roxas for unpaid loan obligation and, in default
of such payments, the foreclosure of the real estate mortgages. The RTC ruled in favor of Dominguez
and denied PTC’s counterclaim for insufficiency of evidence without prejudice to the filing of a
complaint against Spouses Roxas. Both PTC and Spouses Roxas appealed to the CA but the same is still
pending (CA-G.R. CV No.30340). PTC in the meantime filed a petition for extrajudicial foreclosure
against Spouses Roxas in Bataan RTC. The latter in turn filed an opposition and a complaint for damages
with Preliminary Injunction which was granted by the court. The CA affirmed the RTC’s decision. The
decision became final and executory, prompting the Spouses Roxas to file a motion for execution to
enforce the judgment against PTC. PTC filed an Opposition where it raised for the first time the defense
of legal compensation to offset the judgment debt due to the Spouses Roxas. The same was denied by the
RTC. PTC filed two motions for reconsideration but both were denied again. PTC filed a Petition for
Certiorari with the CA which was dismissed. Hence, this Petition for Review on Certiorari.
WON legal compensation is present in the case.
A: NO. Under Article 1279, in order for legal compensation to take place, the following requisites must
concur: (a) that each one of the obligors be bound principally, and that he be at the same time a principal
creditor of the other; (b) 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; (c) that the two debts
be due; (d) that they be liquidated and demandable; and (e) that over neither of them there be any
retention or controversy, commenced by third persons and communicated in due time to the debtor. Here,
the fourth requisite is absent. A debt is liquidated when its existence and amount are determined.37
Compensation can only take place between certain and liquidated debts; it cannot extend to unliquidated,
disputed claims.38 Since the loan obligation, including its amount and demandability, is still being
disputed in CA-G.R. CVNo. 30340, PTC's credit cannot be considered liquidated yet. Consequently, no
legal compensation could have taken place between PTC's loan credit and the Spouses Roxas' judgment
credit.
NUNELON R. MARQUEZ, Petitioner, vs ELISAN CREDIT CORPORATION, Respondent.
G.R. No. 194642,
April 6, 2015

Q: On December 16, 1991, Nunelon Marquez (Marquez) obtained a loan from Elisan Credit Corporation
(Elisan Credit) for PHP 53,000.00 payable in 180 days. The petitioner signed a promissory note which
provided that it is payable in weekly installments and subject to 26 % annual interest. In case of non-
payment, the petitioner agreed to pay a 10% monthly penalty based on the total amount unpaid and
another 25% of such amount for attorney’s fees. To further secure payment of the loan, the petitioner
executed a chattel mortgage over a motor vehicle. Subsequently, the petitioner obtained another loan from
the respondent for PHP 55,000.00 evidenced by a promissory note and a cash voucher. The promissory
note covering the second loan contained the same terms and conditions as the first promissory note. When
the second loan matured, the petitioner had only paid PHP 29,960.00. Due to liquidity problems, Marquez
asked Elisan Credit if he could pay in daily installments until the second loan is paid which was granted.
As of September 1994 or 21 months after the second loan’s maturity, the petitioner had already paid a
total of PHP 56,440.00, an amount greater than the principal but despite this, Elisan Credit filed a judicial
complaint for judicial foreclosure of the chattel mortgage because the petitioner allegedly failed to settle
the balance of the second loan despite demand. The respondent further alleged that pursuant to the terms
of the promissory note, the petitioner’s failure to fully pay upon maturity triggered the imposition of 10%
monthly penalty and 25% attorney’s fees. The Municipal Trial Court (MTC) found for the petitioner and
held that the second loan was fully extinguished as of September 1994. The court held that when a
creditor accepts the performance or payment of an obligation, knowing its incompleteness or irregularity
and without expressing any protest or objection, the obligation is deemed fully complied with. The
Regional Trial Court initially affirmed the decision of the MTC but reversed itself acting on Elisan
Credit’s motion for reconsideration and ruled that, pursuant to Article 1253 of the Civil Code, if the debt
produces interest, payment of the principal shall not be deemed to have been made until the interests have
been covered.
Did Marquez paid his obligation accordingly?
A: No, Marquez did not paid such obligation accordingly.
Under Article 1176 and Article 1253 respectively provides that: The receipt of the principal by the
creditor, without reservation with respect to the interest, shall give rise to the presumption that said
interest has been paid. If the debt produces interest, payment of the principal shall not be deemed to have
been made until the interests have been covered. There are two undisputed facts crucial in resolving the
first issue: (1) the petitioner failed to pay the full amount of the second loan upon maturity; and (2) the
second loan was subject to interest, and in case of default, to penalty and attorney's fees. The structuring
of these provisions, properly taken into account, means that Article 1176 should be treated as a general
presumption subject to the more specific presumption under Article 1253. Article 1176 is relevant on
questions pertaining to the effects and nature of obligations in general, while Article 1253 is specifically
pertinent on questions involving application of payments and extinguishment of obligations. Correlating
the two provisions, the rule under Article 1253 that payments shall first be applied to the interest and not
to the principal shall govern if two facts exist: (1) the debt produces interest (e.g., the payment of interest
is expressly stipulated) and (2) the principal remains unpaid. The exception is a situation covered under
Article 1176, i.e., when the creditor waives payment of the interest despite the presence of (1) and (2)
above. In such case, the payments shall obviously be credited to the principal. However, in this case, there
was no waiver of interest on the part of Elisan Credit. The fact that the official receipts did not indicate
whether the payments were made for the principal, or the interest does not prove that Elisan Credit
waived the interest.
REYNALDO P. BASCARA, Petitioner, v. SHERIFF ROLANDO G. JAVIER AND EVANGELINE
PANGILINAN, Respondent.
G.R. No. 188069,
June 17, 2015

Q: On August 1, 2006, respondent Evangeline C. Pangilinan (Pangilinan) filed an ex parte petition for the
issuance of a writ of possession. Essentially, the petition alleged that, on August 13, 2004, Rosalina P.
Pardo (Pardo) executed in favor of Pangilinan a real estate mortgage (REM) over a parcel of land covered
by Transfer Certificate of Title (TCT) No. 135066 as a security for the payment of a loan in the amount of
P200,000.00; that Pardo failed to comply with the terms and conditions of the promissory note with
REM; that upon compliance with the statutory requirements, the mortgaged property was sold at public
auction to Pangilinan as the highest bidder; that the one-year redemption period already elapsed without
Pardo exercising the right to redeem the subject property; that the title over the lot was consolidated and
transferred in the name of Pangilinan as evidenced by TCT No. 147777; and, that Pardo, her agents, and
persons claiming rights under her failed and refused to vacate the subject premises despite several
demands. On January 31, 2007, the trial court granted the petition. The Notice to Vacate and Surrender
Possession was issued by respondent Sheriff Rolando G. Javier (Javier) on April 15, 2007, pursuant to the
writ of possession issued by the court on March 26, 2007. Claiming as the true, lawful, and absolute
owner of the subject property that is in his possession, petitioner filed an Affidavit of Third-Party Claim
and a Motion to Recall Writ of Possession on April 23, 2007. The motion alleged, among others, that
during her lifetime, or on May 15, 1999, Pardo executed a duly notarized deed of Donation Mortis Causa
donating the Subject Property to and in favor of Petitioner, and Pardo having passed away intestate and
without issue and by virtue of the Donation Mortis Causa, Petitioner became the owner of the Subject
Property.
Is the execution of Pardo of a donation mortis causa automatically transferred the title of the property in
favor of the Petitioner.
A: No, the execution of Pardo of donation mortis causa in favor of petitioner does not immediately
transfer title to the property to the latter. Considering that the alleged donation is one of mortis causa, the
same partake of the nature of testamentary provision. As such, said deed must be executed in accordance
with the requisites on solemnities of wills and testaments under Articles 805 and 806 of the New Civil
Code; otherwise, the donation is void and would produce no effect. Unless and until the alleged donation
is probated, proved and allowed in the proper court, no right to the subject property has been transmitted
to petitioner.
ARACELI MAYUGA, SUBSTITUTED BY MARILYN MAYUGA SANTILLAN FOR and ON
BEHALF OF ALL THE HEIRS, Petitioner, vs. ANTONIO ATIENZA, REPRESENTING THE
HEIRS OF ARMANDO* ATIENZA; BENJAMIN ATIENZA, JR., REPRESENTING THE HEIRS
OF BENJAMIN A. ATIENZA, SR., Respondents.
G.R. No. 208197,
January 10, 2018

Q: On May 4, 2000, Araceli Mayuga instituted a petition for Cancellation and Recall of Free Patent and
Reconveyance against Antonio Atienza, representing the heirs of Armando Atienza, Benjamin Atienza,
Jr., representing the heirs of Benjamin Atienza, Sr., Community Environment and Natural Resource
Officer and Register of Deeds of Romblon, as defendants. In her Petition, Araceli, alleged, that she,
Benjamin A. Atienza, Sr. and Armando A. Atienza are the surviving legitimate, legal and forced heirs of
the late Perfecto Atienza who died intestate and that he left estates, LOT 61-A, and LOT 61-B or a total
area of 574 square meters, both lots are located at Budiong, Odiongan, Romblon to which the three (3)
compulsory/forced heirs are entitled to an equal share of 1/3 each; and that through manipulation and
misrepresentation with intent to defraud a coheir, respondent Antonio L. Atienza, son of the deceased
Armando Atienza, was able to secure Free Patent (NRDN-21) 11636 while respondent Benjamin A.
Atienza was able to secure Free Patent (NRDN- 21) 11637. Petitioner alleged that he was not notified of
the application filed with public respondent Community Environment & Natural Resource Officer nor
any notice of hearings of proceedings as required by law, being a co-heir and party- in-interest. She
prayed for the cancellation of their FPAs and the division of the 2 lots into 3 equal parts. Defendants
denied the material allegations of the complaint, and by way of affirmative defenses, averred that, the
petition is moot and academic; the Free Patent Titles have become indefeasible after the lapse of one year
from its issuance in 1992; fraud as a ground for review of title under Section 38 of Act 496 is not
applicable to a case where a certificate of title was issued in pursuance of a patent application; that they
and their predecessors-in-interest have been in open, public, continuous possession of the subject property
for over 30 years; the basis for their Application for Free Patent with the CENRO is a Confirmation
Affidavit of Distribution of Real Estate executed by their father, Perfecto Atienza, confirming partition in
1960. The RTC ruled in favor of Plaintiff Araceli. It ruled that the application by the defendants for a Free
Patent with the CENRO is tainted with fraud because said application was processed without the
plaintiff’s knowledge nor a notice of hearing of any proceeding was sent to her. In fact, the defendants
took advantage while the latter was in the United States. Moreover, the titling of the fraudulently
registered real property will not bar the action for reconveyance. Defendants filed a motion for
reconsideration but the same was denied in the Order dated July 29, 2010. Aggrieved, defendants
interposed an appeal. The CA granted the appeal. It dismissed the Amended Complaint for Recall and
Cancellation of Free Patent Application (FPA) No. 11636 and FPA No. 11637 and Action for
Reconveyance. It held that the free patents issued in favor of the respondents can no longer be assailed
under the rule of indefeasibility and incontrovertibility of the certificate of title upon the expiration of one
year from and after the date of the entry of the decree of registration pursuant to Section 32 of Presidential
Decree No. 1529. It ruled that the claims of fraud were unsubstantiated. It held that the RTC erred in
ordering the reconveyance of 1/3 of the subject properties to the petitioner since she failed to establish her
title and ownership over such portion.
Whether the CA erred in dismissing the amended complaint of the petitioner for cancellation of free
patent and reconveyance?
A: No, The action for declaration of nullity of the free patents issued in favor of the respondents must fail,
as the CA correctly ruled. The respondents satisfactorily complied with the requirements for the issuance
of a free patent. The grant of free patents to defendants-appellants, having been performed in the course
of the official functions of the DENR officers, enjoys the presumption of regularity. This presumption of
regularity was not successfully rebutted by plaintiff-appellee. All told, there is no clear and convincing
evidence of fraud and plaintiff-appellee's failure to prove it is fatal to her own cause. The averment that
she was not notified of the applications for the free patent as well as of the proceedings which transpired
leading to the granting and registration of the land in the respondent’s name is bare and self-serving. The
records negate this claim because a Notice of Application for Free Patent was 'posted in a conspicuous
place on the land applied for, on the bulletin board of the barrio where the land is located, and at the door
of the municipal building. The CA was likewise not convinced with the petitioner's allegation of fraud
and misrepresentation in the execution of the Confirmation Affidavit of Distribution of Real Estate by the
petitioner's father, the late Perfecto Atienza (Perfecto). Being a notarized document, the CA imbued it
with the legal presumption of validity, its due execution and authenticity not having been impugned by
the mere self-serving allegations of the petitioner. Fraud and misrepresentation, as grounds for
cancellation of patent and annulment of title, should never be presumed, but must be proved by clear and
convincing evidence. In this case, the allegations of fraud were never proven. There was no evidence at
all specifically showing actual fraud or misrepresentation. Petitioner likewise failed to prove that she is
entitled to an action for reconveyance. In such, two facts must be alleged in the complaint and proved
during the trial, namely: (1) the plaintiff was the owner of the land or possessed it in the concept of
owner, and (2) the defendant illegally divested him of ownership and dispossessed him of the land. Such
facts, as the CA observed, were not only not alleged in the amended complaint, the petitioner Araceli
Mayuga also failed to prove that she was entitled to 1/3 of the two lots in dispute by succession.
Assuming that Perfecto owned the disputed lots and the Confirmation Affidavit was a deed of partition,
Perfecto could have legally partitioned his estate during his lifetime. Under Article 1080 of the Civil
Code, should a person make a partition of his estate by an act inter vivos, or by will, such partition shall
be respected, insofar as it does not prejudice the legitime of the compulsory heirs. Since the Civil Code
allows partition inter vivos, it is incumbent upon the compulsory heir questioning its validity to show that
his legitime is impaired. Unfortunately, Araceli has not shown to what extent the Confirmation Affidavit
prejudiced her legitime. Araceli could not also claim preterition by virtue of the Confirmation Affidavit
on the assumption that the disputed two lots pertained to Perfecto's inheritance, he had only three legal
heirs and he left Araceli with no share in the two lots. Article 854 of the Civil Code partly provides: the
preterition or omission of one, some, or all of the compulsory heirs in the direct line, whether living at the
time of the execution of the will or born after the death of the testator, shall annul the institution of heir;
but the devises and legacies shall be valid insofar as they are not inofficious. Preterition consists in the
omission in the testator's will of a compulsory heir in the direct line or anyone of them either because they
are not mentioned therein or although mentioned they are neither instituted as heir nor expressly
disinherited. The act of totally depriving a compulsory heir of his legitime can take place either expressly
or tacitly. The express deprivation of the legitime constitutes disinheritance. Although Araceli was a
compulsory heir in the direct descending line, she could not have been preterited. Firstly, Perfecto left no
will. As contemplated in Article 854, the presence of a will is necessary. Secondly, before his death,
Perfecto had properties in Limon, Rizal which was almost 50 hectares, part of which was developed for
residential and agricultural purposes, and in Odiongan. Araceli could not have been totally excluded in
the inheritance of Perfecto even if she was not allegedly given any share in the disputed two lots. If
Araceli's share in the inheritance of Perfecto as claimed by her was indeed impaired, she could have
instituted an action for partition or a settlement of estate proceedings instead of her complaint for
cancellation of free patent and reconveyance. The free patents having been issued by the Department of
Environment and Natural Resources on February 28, 1992 and recorded in the Book of Entries at the
Office of the Registry of Deeds in June 1992, the respondents' certificates of title have already become
indefeasible pursuant to Section 32 of Presidential Decree No. 1529 (the Property Registration Decree),
which pertinently provides that upon the expiration of said period of one year from and after the date of
entry of the decree of registration, the decree of registration and the certificate of title issued shall become
incontrovertible.
ARTURO C. CALUBAD v. RICARCEN DEVELOPMENT CORPORATION,
GR No. 202364,
August 30, 2017

Q: Respondent Ricarcen Development Corporation (Ricarcen) was a domestic corporation engaged in

renting out real estate. It was the registered owner of a parcel of land located at 53 Linaw St., Sta. Mesa
Heights, Quezon City. The parcel of land was subdivided into two (2) lots. Ricarcen was a family
corporation. Marilyn R. Soliman (Marilyn) was its president from 2001 to August 2003. The other
members of the board of directors during that time were Marilyn's mother, Erlinda Villanueva (Erlinda),
her brother, Josefelix R. Villanueva (Josefelix), her aunt, Maura Rico, and her sisters, Ma. Elizabeth V.
Chamorro (Elizabeth), Ma. Theresa R. Villanueva, and Annabelle R. Villanueva. Marilyn, acting on
Ricarcen's behalf as its president, took out a P4,000,000.00 loan from Calubad. This loan was secured by
a real estate mortgage over Ricarcen's Quezon City property as evidenced by a Deed of Real Estate
Mortgage. The terms of the loan provided that Ricarcen would pay the P4,000,000.00 loan within a
period of six (6) months with "a compounded interest at the rate of FIVE (5%) percent for the first month
and THREE (3%) percent for the succeeding months and a penalty of ONE (1%) percent per month on
the principal sum in case of delay in payment." The terms of the loan also provided that the first monthly
interest payment of P200,000.00 would be deducted from the loan proceeds. Ricarcen, through Marilyn,
and Calubad amended and increased the loan to P5,000,000.00 in the Amendment of Deed of Mortgage
with the same property used as security and under the same terms and conditions as those of the original
Deed of Real Estate Mortgage. Ricarcen, again acting through Marilyn, took out an additional loan of
2,000,000.00 from Calubad, as evidenced by the executed Second Amendment of Deed of Mortgage. To
prove her authority to execute the three (3) mortgage contracts in Ricarcen's behalf, Marilyn presented
Calubad with a Board Resolution
After Ricarcen failed to pay its loan, Calubad initiated extrajudicial foreclosure proceedings on the real
estate mortgage. The auction sale was set. Calubad was the highest bidder during the scheduled auction
sale; thus, he was issued a Certificate of Sale. Ricarcen claimed that it only learned of Marilyn's
transactions with Calubad sometime in July 2003. Upon confirming that the Quezon City property had
indeed been mortgaged, foreclosed, and sold to Calubad as a result of Marilyn's actions, Ricarcen's board
of directors removed her as president and appointed Josefelix as its new president. Josefelix was also
authorized to initiate the necessary court actions to protect Ricarcen's interests over the Quezon City
property.
Ricarcen filed its Complaint for Annulment of Real Estate Mortgage and Extrajudicial Foreclosure of
Mortgage and Sale with Damages against Marilyn, Calubad, and employees of the Registry of Deeds of
Quezon City and of the Regional Trial Court of Quezon City.
Ricarcen claimed that it never authorized its former president Marilyn to obtain loans from Calubad or
use the Quezon City property as collateral for the loans.
On the other hand, Calubad insisted that the incidents which led to the foreclosure and sale of the Quezon
City property were all above board and were not marked with irregularity. Furthermore, he asserted that
he exercised the necessary diligence required under the circumstances by requiring Marilyn to submit the
necessary documents to prove her authority from Ricarcen. Calubad likewise argued that even if Ricarcen
did not authorize Marilyn, it was already estopped from denying her authority since the loan proceeds had
been released and Ricarcen had benefited from them.
For their part, spouses Marilyn and Napoleon Soliman denied any knowledge of or participation in the
allegedly falsified documents and claimed that the falsification was perpetrated by their broker, Nena leo,
and Calubad's broker, a certain Malou, without their permission.
WON Ricarcen Development Corporation is estopped from denying or disowning the authority of
Marilyn R. Soliman, its former President, from entering into a contract of loan and mortgage with Arturo
C. Calubad?
A: As a corporation, Ricarcen exercises its powers and conducts its business through its board of
directors, However, the board of directors may validly delegate its functions and powers to its officers or
agents. The authority to bind the corporation is derived from law, its corporate by-laws, or directly from
the board of directors, "either expressly or impliedly by habit, custom or acquiescence in the general
course of business."
The general principles of agency govern the relationship between a corporation and its representatives.
Civil Code similarly provides that the principal must delegate the necessary authority before anyone can
act on his or her behalf. Nonetheless, law and jurisprudence recognize actual authority and apparent
authority as the two (2) types of authorities conferred upon a corporate officer or agent in dealing with
third persons. Actual authority can either be express or implied. Express actual authority refers to the
power delegated to the agent by the corporation, while an agent's implied authority can be measured by
his or her prior acts which have been ratified by the corporation or whose benefits have been accepted by
the corporation. The doctrine of apparent authority provides that even if no actual authority has been
conferred on an agent, his or her acts, as long as they are within his or her apparent scope of authority,
bind the principal. However, the principal's liability is limited to third persons who are reasonably led to
believe that the agent was authorized to act for the principal due to the principal's conduct. Apparent
authority is determined by the acts of the principal and not by the acts of the agent.
As the former president of Ricarcen, it was within Marilyn's scope of authority to act for and enter into
contracts in Ricarcen's behalf. Her broad authority from Ricarcen can be seen with how the corporate
secretary entrusted her with blank yet signed sheets of paper to be used at her discretion. She also had
possession of the owner's duplicate copy of the land title covering the property mortgaged to Calubad,
further proving her authority from Ricarcen.
Calubad could not be faulted for continuing to transact with Marilyn, even agreeing to give out additional
loans, because Ricarcen clearly clothed her with apparent authority. Likewise, it reasonably appeared that
Ricarcen's officers knew of the mortgage contracts entered into by Marilyn in Ricarcen's behalf as proven
by the issued Banco De Oro checks as payments for the monthly interest and the principal loan.
Ricarcen claimed that it never granted Marilyn authority to transact with Calubad or use the Quezon City
property as collateral for the loans, but its actuations say otherwise. It appears as if Ricarcen and its
officers gravely erred in putting too much trust in Marilyn. However, Calubad, as an innocent third party
dealing in good faith with Marilyn, should not be made to suffer because of Ricarcen's negligence in
conducting its own business affairs.
Also, "if a private corporation intentionally or negligently clothes its officers or agents with apparent
power to perform acts for it, the corporation will be estopped to deny that such apparent authority is real,
as to innocent third persons dealing in good faith with such officers or agents."

JOSE JUAN TONG, ET AL., Petitioners, vs. GO TIAT KUN, ET AL., Respondents.
G.R. No. 196023
April 21, 2014

Q: Juan Tong met all his children to inform them of his intention to purchase a lot for the family’s lumber
business. Since he was a Chinese citizen the title to the property will be registered to Luis, Sr., his only
Filipino child among his children. Accordingly, the title was issued to Luis, Sr.
Luis, Sr. predeceased Juan Tong. The heirs of the former claimed ownership over the lot by succession
causing a new TCT in their names. The other children of Juan Tong discovered the breach of the trust
agreement when Luis, Jr. sold his share of the lot to Fine Rock Development Corporation, which in turn
sold the same to Visayas Goodwill Credit Corporation. The other children succeeded in recovering Luis,
Jr.’s share of the lot. The share of the wife of Luis, Sr. was divided in favor of her children. The other
children of Juan Tong filed a case to nullify the title and deeds. The trial court rendered its judgement in
favor of the plaintiffs, ruling that there was an implied trust. However, the Court of Appeals reversed the
set aside the trial court’s decision, ruling that there was an express trust created. The CA also ruled that
even granting that an implied trust was created, the said resulting trust was converted into a constructive
trust upon Luis, Sr.’s death.
Whether the case falls under an express trust?
A: No. The Court held that “The principle of a resulting trust is based on the equitable doctrine that
valuable consideration and not legal title determines the equitable title or interest and are presumed
always to have been contemplated by the parties. They arise from the nature or circumstances of the
consideration involved in a transaction whereby one person thereby becomes invested with legal title but
is obligated in equity to hold his legal title for the benefit of another. On the other hand, a constructive
trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. Constructive trusts
are created by the construction of equity in order to satisfy the demands of justice and prevent unjust
enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence,
obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold.”
PHILIPPINE STEEL COATING CORP. v. EDUARD QUINONES
G. R. No. 194533,
APR 19, 2017

Q: In 1994, Lopez, a sales engineer of PhilSteel, offered Quinones their new product: primer-coated,
long-span, rolled galvanized iron (G.I.) sheets. The latter showed interest, but asked Lopez if the primer-
coated sheets were compatible with the Guilder acrylic paint process used its company in the finishing of
its assembled buses. Angbengco, the Sales Manager, to whom Lopez referred the question, assured
Quinones that the quality of their new product was superior to that of the non-primer coated G.I. sheets
being used by the latter in his business. However, sometime in 1995, Quinones received several
complaints from customers who had bought bus units, claiming that the paint or finish used on the
purchased vehicles was breaking and peeling off. Quinones then sent a letter-complaint to PhilSteel
invoking the warranties given by the latter. According to Quinones, the damage to the vehicles was
attributable to the hidden defects of the primer-coated sheets and/or their incompatibility with the Guilder
acrylic paint process, contrary to the prior evaluations and assurances of PhilSteel. Because of the barrage
of complaints, Quinones was forced to repair the damaged buses. PhilSteel counters that Quinones
himself offered to purchase the subject product directly from the former without being induced by any of
PhilSteel's representatives. According to its own investigation, PhilSteel discovered that the breaking and
peeling off of the paint was caused by the erroneous painting application done by Quinones.
Unconvinced, Quinones filed a complaint for damages.
WON vague oral statements made by seller on the characteristics of a generic good can be considered
warranties that may be invoked to warrant payment of damages?
A: Yes. An express warranty can be oral when it is a positive affirmation of a fact that the buyer relied
on.
These “vague oral statements” were express affirmations not only of the costs that could be saved if the
buyer used PhilSteel’s G.I. sheets, but also of the compatibility of those sheets with the acrylic painting
process customarily used in Amianan Motors. Angbengco did not aimlessly utter those “vague oral
statements” for nothing, but with a clear goal of persuading Quinones to buy PhilSteel’s product. Taken
together, the oral statements of Angbengco created an express warranty. They were positive affirmations
of fact that the buyer relied on, and that induced him to buy petitioner’s primer-coated G.I. sheets. Under
Article 1546 of the Civil Code, “No affirmation of the value of the thing, nor any statement purporting to
be a statement of the seller's opinion only, shall be construed as a warranty, unless the seller made such
affirmation or statement as an expert and it was relied upon by the buyer.” Despite its claims to the
contrary, Angbengco was an expert in the eyes of the buyer Quinones. Quinones did not talk to an
ordinary sales clerk such as can be found in a department store or even a sari-sari store. If Lopez, a sales
agent, had made the assertions of Angbengco without true knowledge about the compatibility or the
authority to warrant it, then his would be considered dealer’s talk. But sensing that a person of greater
competence and knowledge of the product had to answer Quinones’ concerns, Lopez wisely deferred to
his boss, Angbengco.

SPOUSES GODFREY and MA. TERESA TEVES, Petitioners, -versus- INTEGRATED CREDIT
& CORPORATE SERVICES, CO. (now CAROL AQUI), Respondent.
G.R. No. 216714,
April 4, 2018

Q: Sometime in 1996, Standard Chartered Bank extended various loans to petitioners Godfrey and Ma.
Teresa Teves. As security, petitioners mortgaged their property covered by Transfer Certificate of Title
No. 107520 (the subject property). Petitioners defaulted in their loan payments. Standard extrajudicially
foreclosed on the mortgage, and the property was sold to Integrated Credit and Corporate Services Co.
(ICCS). A new certificate of title was issued in favor of ICCS after petitioners failed to redeem the subject
property upon the expiration of the redemption period on May 23, 2007. ICCS filed a petition for the
issuance of a wit of possession. During the proceedings, ICCS was substituted by respondent Carol Aqui
who appears to have acquired the property from ICCS, and a new certificate of title was issued in Aqui's
favor. On July 14, 2010, the RTC issued two Orders. The first, issued the writ of possession. The second,
ordered the defendants to deliver to petitioner and/or deposit with the Court the monthly rentals of the
subject property covering the period from May 24, 2007 up to the time they surrender the possession
thereof to the petitioner. Petitioners filed a Partial Motion for Reconsideration of the Second Order, but
RTC denied the same. Petitioners filed a Petition for Certiorari before the CA. The latter dismissed the
Petition filed under Rule 65 being an improper remedy. It ratiocinated that the orders subject of the
petition partakes the nature of a judgment or final order which is appealable under Rule 41 of the Rules of
Court.
Petitioners, praying that this Court set aside the second order of the RTC, argue that Aqui should file an
independent action and not simply seek the same in her petition for issuance of a writ of possession, since
(a) the RTC, sitting as a land registration court, does not have jurisdiction to award back rentals or grant
relief which should otherwise be sought in an ordinary civil action; and (b) Act No. 3135, as amended by
Act No. 4118, contains no provision authorizing the award of back rentals to the purchaser at auction.
Whether back rentals can be awarded in an ex parte application for writ of possession under Act 3135?
A: Yes, Back rentals can be awarded in an ex parte application for writ of possession under Act 3135.
When the redemption period expired on May 23, 2007, ICCS became the owner of the subject property
and was, from then on, entitled to the fruits thereof. Petitioners ceased to be the owners of the subject
property, and had no right to the same as well as to its fruits. Under Section 32, Rule 39 of the Rules, on
Execution, Satisfaction and Effect of Judgments, all rents, earnings and income derived from the property
pending redemption shall belong to the judgment obligor, but only until the expiration of his period of
redemption. Thus, if petitioners leased out the property to third parties after their period for redemption
expired, as was in fact the case here, the rentals collected properly belonged to ICCS or Aqui, as the case
may be. Petitioners had no right to collect them.

SPOUSES FRANCISCO and MERCED RABAT, Petitioners, -versus- PHILIPPINE NATIONAL

BANK, Respondent.
G.R. No. 158755,
June 18, 2012

Q: In 1980, the spouses Francisco and Merced Rabat (spouses Rabat) was granted a medium-term loan by
the Philippine National Bank (PNB) in the amount of P4M to mature three years from the date of
implementation. Subsequently, the spouses Rabat signed a Credit Agreement and executed a Real Estate
Mortgage over 12 parcels of land which stipulated that the loan would be subject to interest at the rate of
17% per annum, plus the appropriate service charge and penalty charge of 3% per annum on any amount
remaining unpaid or not renewed when due. A few months later, the spouses Rabat executed another
document denominated as “Amendment to the Credit Agreement” purposely to increase the interest rate
from 17% to 21% per annum, inclusive of service charge and a penalty charge of 3% per annum to be
imposed on any amount remaining unpaid or not renewed when due. They also executed another Real
Estate Mortgage over 9 parcels of land as additional security for their medium-term loan of P4 M. The
several availments of the loan accommodation on various dates by the spouses Rabat reached the
aggregate amount of P3,517,380, as evidenced by several promissory notes.
The spouses RABATs failed to pay their outstanding balance on due date. Thus, the PNB filed a petition
for the extrajudicial foreclosure of the real estate mortgage executed by the spouses Rabat. After due
notice and publication, the mortgaged parcels of land were sold at a public auction held on February 1987
and April 1987. The PNB was the lone and highest bidder with a bid of P3,874,800.
As the proceeds of the public auction were not enough to satisfy the entire obligation of the spouses
Rabat, the PNB sent demand letters. Upon failure of the spouses Rabat to comply with the demand to
settle their remaining outstanding obligation which then stood at P14,745,398.25, including interest,
penalties and other charges, PNB eventually filed a complaint for a sum of money before a Regional Trial
Court.
Whether or not the inadequacy of PNB’s bid price renders the forced sale of the properties invalid?
A: No, The inadequacy of PNB’s bid price does not render the forced sale of the properties invalid.
The mode of forced sale utilized by petitioner was an extrajudicial foreclosure of real estate mortgage
which is governed by Act No. 3135, as amended. Law reveals nothing to the effect that there should be a
minimum bid price or that the winning bid should be equal to the appraised value of the foreclosed
property or to the amount owed by the mortgage debtor. What is clearly provided is that a mortgage
debtor is given the opportunity to redeem the foreclosed property "within the term of one year from and
after the date of sale."
Unlike in an ordinary sale, inadequacy of the price at a forced sale is immaterial and does not nullify a
sale since, in a forced sale, a low price is more beneficial to the mortgage debtor for it makes redemption
of the property easier.
In the case at bar, other than the mere inadequacy of the bid price at the foreclosure sale, respondent did
not allege any irregularity in the foreclosure proceedings nor did she prove that a better price could be had
for her property under the circumstances. PNB’s bid price of P 3,874,800.00 was not outrageously low as
to be shocking to the conscience. It was almost equal to both the P 4M applied for by RABATS, to the
total sum of P 3,517,380.00 of their actual availment from PNB.
SPOUSES ELLIS R. MILES and CAROLINA RONQUILLO-MILES, Petitioners -versusBONNIE
BAUTISTA LAO, Respondent. G.R. No. 209544, FIRST DIVISION, November 22, 2017, TIJAM,
J.
FACTS:
Petitioners claimed that on March 28, 1983, they became registered owners in fee simple of a parcel of
land in Makati City, covered by Transfer Certificate of Title (TCT) No. 1204275 (subject property). They
averred that before they left for the United States, they entrusted the duplicate of the TCT of the subject
property to their niece, defendant Rodora Jimenez (Rodora) so that she may offer it to interested buyers.
They claimed that no written Special Power of Attorney (SPA) to sell the property was given to Rodora.
They alleged that Rodora and spouses Ocampo conspired and made it appear, through a falsified Deed of
Donation dated April 21, 1998, that petitioners were donating the subject property to spouses Ocampo. As
a result, TCT No. 120427 was cancelled and a new one, TCT No. 2123146 was issued in the name of
spouses Ocampo.
Later on, petitioners claimed that through falsification, evident bad faith and fraud, spouses Ocampo
caused the execution of a falsified Real Estate Mortgage in favor of respondent Lao, with the subject
property as security, in exchange of a loan in the amount of Php2,500,000. Since the spouses Ocampo
failed to pay the loan, respondent foreclosed the mortgage.
Alleging that there was collusion among the defendants, petitioners prayed that TCT No. 21234 in the
name of spouses Ocampo be cancelled, and TCT No. 120427 under their name be restored. They also
prayed for the nullification of the Deed of Donation dated April 21, 1998, the mortgage executed by
spouses Ocampo in favor of respondent and the cancellation of the mortgage inscription on the title of the
property.
The RTC ruled in favor of petitioners. The appellate court reversed the trial court and ruled that
respondent is a mortgagee in good faith.
Whether the respondent is a mortgagee in good faith?
A: Yes, the respondent is a mortgagee in good faith. Indeed, a mortgagee has a right to rely in good faith
on the certificate of title of the mortgagor of the property given as security, and in the absence of any sign
that might arouse suspicion, the mortgagee has no obligation to undertake further investigation. This
doctrine presupposes, however, that the mortgagor, who is not the rightful owner of the property, has
already succeeded in obtaining Torrens title over the property in his name and that, after obtaining the
said title, he succeeds in mortgaging the property to another who relies on what appears on the title.
In this case, the title of the property under the name of spouses Ocampo was already registered as early as
May 6, 1998, while the real estate mortgage was executed December 16, 1998. Hence, it is clear that
respondent had every right to rely on the TCT presented to her insofar as the mortgagors' right of
ownership over the subject property is concerned.
In ascertaining good faith, or the lack of it, which is a question of intention, courts are necessarily
controlled by the evidence as to the conduct and outward acts by which alone the inward motive may,
with safety, be determined. Good faith, or want of it, is capable of being ascertained only from the acts of
one claiming its presence, for it is a condition of the mind which can be judged by actual or fancied token
or signs. Good faith, or want of it, is not a visible, tangible fact that can be seen or touched, but rather a
state or condition of mind which can only be judged by actual or fancied token or signs. Good faith
connotes an honest intention to abstain from taking unconscientious advantage of another.

In Manaloto, et al. v. Veloso III, the Court defined good faith as"an honest intention to abstain from
taking any unconscientious advantage of another, even through the forms or technicalities of the law,
together with an absence of all information or belief of fact which would render the transaction
unconscientious. In business relations, it means good faith as understood by men of affairs. "
In this case, respondent's decision to deal with the mortgagors through a middleman, does not equate to
bad faith. At the outset, it bears to stress that the spouses Ocampo were already the registered owners of
the property at the time they entered into a mortgage contract with respondent. Hence, respondent was
justified in relying on the contents of TCT No. 212314 and is under no legal" obligation to further
investigate. Likewise, there is nothing in the records, and neither did petitioners point to anything in the
title which would arouse suspicions as to the spouses Ocampo's defective title to the subject property.
REPUBLIC OF THE PHILIPPINES v. APOSTOLITA SAN MATEO, BRIGIDA TAPANG,
ROSITA ACCION, AND CELSO MERCADO
G.R. No. 203560,
November 10, 2014

Q: A petition for registration of title was filed by the respondents. The respondents merely relied on the
certification of DENR-CENRO to the effect that the subject property is alienable. The concerned
government agencies and the owners of the adjoining lots were notified of the hearing. The notice was
also posted in several public places and was published in a newspaper of general circulation and the
Official Gazette. RTC granted the petition for registration. On appeal, the Republic posited that RTC did
not acquire jurisdiction over the case, because the notice of hearing failed to include the names of all the
owners of the adjoining properties; that the respondents failed to prove their claim of absolute ownership,
because they failed to prove possession over the land sought to be registered; and that they failed to show
that the land sought to be registered is part of the alienable and disposable part of the public domain. The
CA affirmed the RTC decision.
Whether or not the subject property is alienable and disposable?
A: NO. The Court held that, to establish that the land subject of the application is alienable and
disposable public land, the general rule remains: all applications for original registration under the
Property Registration Decree must include both (1) a CENRO or PENRO certification and (2) a certified
true copy of the original classification made by the DENR Secretary. As an exception, however, the
courts – in their sound discretion and based solely on the evidence presented on record – may approve the
application, pro hac vice, on the ground of substantial compliance showing that there has been a positive
act of government to show the nature and character of the land and an absence of effective opposition
from the government. This exception shall only apply to applications for registration currently pending
before the trial court prior to this decision and shall be inapplicable to all future applications. In this case,
when the RTC rendered its decision, the rule on strict compliance was already in effect, pursuant to the
rule laid down in Republic v. T.A.N. Properties, G.R. No. 154953, June 26, 2008, as opposed to the rule
on substantial compliance in the case of Republic v. Vega [654 Phil. 511, (2011)], which is pro hac vice.
Thus, there was ample opportunity for the respondents to comply with the new rule, and present before
the RTC evidence of the DENR Secretary's approval of the DENR-South CENRO Certification. This,
they failed to do.

ENRIQUETA M. LOCSIN v. BERNARDO HIZON, CARLOS HIZON, SPS. JOSE MANUEL &
LOURDES GUEVARA G.R. No. 204369,
September 17, 2014

Q: Enriqueta M. Locsin, owner of the subject property located in Quezon City went to the United States
after entering into a compromise agreement in 1993 with Billy Aceron against whom the former filed an
ejectment case. However Locsin, did not know that Marylou Bolos had secured a new TCT in her favor
by registering a Deed of Absolute Sale allegedly executed by Locsin in 1979. Bolos later sold the subject
lot to Bernardo Hizon for P1,000,000 but the land was titled to Carlos’ name who is Bernardo’s son.
Despite Bernardo’s promise for a win-win situation with Locsin, he still sold the property for P1,000,000
to Spouses Guevarra who in turn mortgaged the property. Locsin then filed an action for reconveyance,
annulment and cancellation of the mortgage lien. The CA affirmed the RTC’s finding that the respondents
were innocent purchasers for value.

Whether or not the Respondents were innocent purchasers for value?

A: No. Bernardo knew that Bolos never acquired possession over the lot. In his direct testimony,
Bernardo admitted that he knew of the prior compromise agreement entered by Locsin with Aceron which
recognized Locsin as the registered owner of the land. Having knowledge of the foregoing facts, Bernardo
and Carlos should have been impelled to investigate the reason behind the arrangement. If Bolos already
acquired ownership of the property as early as 1979, it should have been her who entered into a
compromise agreement with Aceron in 1993, not her predecessor-ininterest, Locsin, who, theoretically,
had already divested herself of ownership thereof. The transfer to Spouses Guevara was also suspicious
since there was no deed evidencing the sale. It appeared that the mortgage was a mere ploy to make it
appear that the Sps. Guevara exercised acts of dominion over the subject property when in fact the
Spouses had lack of interest in protecting themselves in the case.