Chairmans Case Digests (Civ)

UP Bar Review Institute
UP Law Center
in partnership with UP Bar Operations Commission
Maitim v. Aguila
G.R. No. 218344 (March 21,2022) | Hernando, J
Topic: Special Contracts: Torts and Damages; Res Ipsa Loquitur
Doctrine
In vehicular accidents, it is sufficient that the accident itself be established, and once
established through the admission of evidence, whether hearsay or not, the rule on res
ipsa loquitur already starts to apply. [UCPB General Insurance Co. v. Pascual Liner, Inc.]
Facts
When Maitim was onboard her vehicle being driven by Santos, the car sideswiped
Angela, the six-year old daughter of Aguila. Angela suffered a leg fracture, and was
later diagnosed with multiple injuries. After the surgery, she was wheelchair bound for
3 months. Due to the failure of Maitim and Santos to attend barangay conciliation and
to reply to the demand letters, Aguila filed for damages based on quasi-delict.
RTC ruled for Aguila, finding that Santos was presumed to be negligent under the
doctrine of res ipsa loquitur, and that Maitim was vicariously liable for failing to prove
she exercised due diligence in the selection and supervision of her employee. The CA
affirmed the RTC ruling, finding that Maitim and Santos are solidarily liable for
damages, and that there was no contributory negligence on the part of Aguila or her
daughter.
Issue
Whether Santos and Maitim are liable for the accident.
Held + Ratio
Yes, Santos is directly liable, while Maitim is vicariously liable for the accident based on
the RTC’s correct application of the doctrine of res ipsa loquitur.
Res ipsa loquitur is literally translated as "the thing or the transaction speaks for itself".
As held by the Court in the case of Solidum v. People, the doctrine of res ipsa loquitur
means that "where the thing which causes injury is shown to be under the management
of the defendant, and the accident is such as in the ordinary course of things does not
happen if those who have the management use proper care, it affords reasonable
evidence, in the absence of an explanation by the defendant, that the accident arose
from want of care."
Page 1
UP Law Center
Purificacion v. Gobing
G.R. No. 191359 (November 11, 2020) | Hernando, J
Topic: Different Modes of Acquiring Ownership: Prescription
Doctrine
A claim for an action must lie within the prescriptive period given, else it will be
barred.
Facts
Petitioner spouses filed a complaint for disturbance compensation. The respondents
claim that Lucila has no legal right to demand additional compensation since she was
already well paid in the amount she can legally claim for pursuant to the DAR
Administrative Order No. 1, series of 1999. The Provincial Agrarian Reform Adjudicator
(PARAD) initially ruled for the respondents, finding that the action was barred already
by the 3 year prescriptive period under the Statute of Limitations under RA 3844, and
that Lucila’s tenancy was no longer warranted and thus had to vacate.
Upon a Motion for Reconsideration (MR), the PARAD reversed their decision, ruling for
Lucila. On appeal to the Department of Agrarian Reform Adjudication Board (DARAB),
the DARAB reversed the PARAD’s ruling, finding that:
(1) The tenancy relations were served when the land was converted from
agricultural to residential, thus the essential requisite of tenancy (where the land
must be agricultural land) is no longer present;
(2) Per RA 3844, the tenants have already been paid the required compensation; and
(3) Assuming Lucila is still entitled to compensation of the 1,000 sqm, the claim has
prescribed as it has been 6 years already.
Issue
1. Whether Lucila’s action had prescribed.
2. Whether Lucila received the proper compensation.
Held + Ratio
1. Yes, Lucila’s action has prescribed.
RA 3844 (Agricultural Land Redeem Code) provides that any action under the
Code has a prescriptive period of 3 years from when the cause of action accrued.
In this case, it took more than 6 years before they filed the complaint.
2. Yes, Lucila has already received her fair share of disturbance compensation.
DAR AO No. 1, series of 1999 provides that disturbance compensation shall be

paid according to the terms mutually agreed upon by the landowner and the
tenant, but in no case shall it be less than five (5) times the average of the gross
harvests on their landholding during the last five (5) calendar years.
In this case, Lucila was paid but did not disclose how the amount was arrived at
nor how much is the average annual harvest of the landholding. Meanwhile the
respondents claimed that the disturbance compensation was more than five (5)
times the average of the gross value of the harvest for the five (5) preceding
calendar years. That the DARAB, an administrative body, also arrived at this
Page 2
UP Law Center
conclusion through substantial evidence is also controlling.
Page 3
UP Law Center
Pulido v. People
G.R. No. 220149 (July 27, 2021) | Hernando, J
Topic: Marriage: Void marriages
Doctrine
A judicial declaration of absolute nullity is not necessary to prove a void ab initio
prior and subsequent marriages in a bigamy case. Consequently, a judicial declaration
of absolute nullity of the first and/or second marriages presented by the accused in
the prosecution for bigamy is a valid defense, irrespective of the time within which
they are secured.
Facts
In 1983, 22-year-old Pulido and 16 year old Arcon got married in a civil wedding in
Cavite, solemnized by the mayor of Rosario. In 2007, Pulido stopped going to their
home and admitted he was having an affair. It was also found that Pulido got married
to his paramour, Baleda, in 1995. Thus, Arcon filed for bigamy.
RTC convicted Pulido but acquitted Baleda, finding that the certifications by the Civil
Registrar were only that the marriage license and application could not be found, not
that they never existed. The CA affirmed the RTC decision, finding that Pulido indeed
entered into a second marriage without getting a judicial declaration of nullity of his
first marriage, which is a requirement as per Article 40 of the Family Code.
Additionally, the CA ruled that the subsequent judicial declaration of nullity of the
second marriage does not bar the prosecution for bigamy as what matters is that his
first marriage was still subsisting during the celebration of the second marriage.
During the pendency of the case at the Supreme Court, the first marriage was declared
null by the RTC for lack of a marriage license.
Issue
1. Whether Article 40 of the Family Code applies retroactively since Pulido’s first
marriage was governed by the Civil Code.
2. Whether a judicial declaration of nullity of the first /second marriage is required
before the lack of marriage may be used as a defense in bigamy cases.
Held + Ratio
1. Yes, Article 40 of the Family Code applies retroactively to marriages celebrated
before the Family Code insofar as it does not impair vested rights.
When the first marriage was contracted before the effectivity of the Family Code,
while the second marriage was contracted after the effectivity of the Family
Code, there is already a requirement by the time of the second marriage to obtain
the judicial declaration of nullity for purposes of remarriage under Article 40.
2. No, a judicial declaration of nullity of the first /second marriage is no longer

required before it may be used as a defense in bigamy cases.
Since the first marriage is void, then it would not satisfy the element of bigamy
which requires a prior valid marriage. In this case, an element of bigamy that the
first marriage has not been legally dissolved is not present as there was never a
Page 4
UP Law Center
valid marriage in the first place.
At the same time, the second marriage being void means there is no second
marriage at all, hence no basis for the crime of bigamy. A void ab initio marriage
is a valid defense in the prosecution for bigamy even without a judicial
declaration of absolute nullity. As a result, a judicial declaration of absolute
nullity of either the first or second marriage is considered a valid defense in
bigamy. In this case, since the first marriage was declared void by the RTC, then
there is no case for bigamy. Pulido is acquitted.
Page 5
UP Law Center
Pryce Properties Corp. v. Nolasco, Jr.

G.R. No. 203990 (August 24, 2020) | Hernando, J
Topic: Sales: Breach of Contract of Sale: Maceda Law
Doctrine
Section 4 of the Maceda Law requires four (4) conditions before the seller may actually
cancel the contract thereunder:
(1) The defaulting buyer has paid less than two (2) years of installments;
(2) The seller must give such defaulting buyer a sixty (60)-day grace period, reckoned
from the date the installment became due;
(3) If the buyer fails to pay the installments due at the expiration of the said grace period,
the seller must give the buyer a notice of cancellation and/or a demand for rescission
by notarial act; and
(4) The seller may actually cancel the contract only after the lapse of thirty (30) days from
the buyer’s receipt of the said notice of cancellation and/or demand for rescission by
notarial act.
Facts
Nolasco claims that in 1995, he bought 3 lots in Cagayan De Oro City from Pryce, and
deposited a total of P393,435.00 through checks in favor of Pryce. However, Pryce did
not deliver the certificates of title, and when Nolasco received the Sales Agreement, it
contained unacceptable conditions. Since he did not sign the sales agreement yet, he
demanded a refund of the deposits but Pryce failed to comply.
Pryce meanwhile claims that Nolasco could not yet be issued certificates of title since
their transaction was not a contract of sale, but a contract to sell. Nolasco was allegedly
furnished a contract to sell already, and that he was not entitled to a refund of his
deposits since he failed to complete the payments within the grace period as per the
Maceda Law (RA 6552). Hence, the contract was rescinded.
The RTC ruled for Nolasco, finding that there was already a perfected contract of sale as
per Article 1482 of the Civil Code, and that under the Maceda Law, Pryce can rescind
the contract for failure of Nolasco to pay at least 2 years installments. Pryce, however,
did not rescind the contract, and that Nolasco is entitled to refund of the payments
made. The CA affirmed the RTC decision.
Issue
Whether Nolasco is entitled to a refund.
Held + Ratio
Yes, Nolasco is entitled to a refund.
While the parties were able to perfect an unwritten contract to sell, the written contract
does not bind Nolasco as it is ineffectual. First is that the conditions in the contract to
sell conflict with the Maceda Law. The contract to sell provides that mere service of the
notice of rescission to the buyer as the reckoning point for the 30 grace period is
enough, however, the Maceda Law requires actual receipt.
Another is that the contract was not signed by Nolasco, and even if it was signed, it was
not worded to effect its automatic cancellation upon Nolasco’s default. While the phrase
used was ‘Automatic Cancellation’, the body of the condition betrays its title by
Page 6
UP Law Center
effectively mirroring the requirements found in Section 4 of the Maceda Law.
While Pryce complied with the first two requirements, by sending the notice of grace
period, he did not meet the last two conditions as there was no notice of notarial
rescission served, and 30 days could not have lapsed from a non-existent service of
notice.
Another reason for the entitlement to a refund is that Pryce’s answer with counterclaims
cannot be considered a notarial rescission under the Maceda Law. His answer with
counterclaims were notarized through a jurat, rather than it being an acknowledgement.
Also, Pryce himself was not present before the notary upon the making of the jurat, only
having his Senior Vice President go in his place. Most fatal is the lack of clear and
positive notification to Nolasco that Pryce was going to rescind the contract.
Page 7
UP Law Center
PNB v. BAL
Topic: Obligations: Different Kinds of Obligations
Doctrine
Solidarity is never presumed. There is solidary liability when the obligation so states,
or when the law or the nature of the obligation requires the same.
As to the uncollected check deposits, the bank may honor the check at its discretion in
favor of clients.
Facts
PNB filed a complaint for sum of money against Tan and Bal for the latter approving
various cash withdrawals by the former against several checks without waiting for
them to be cleared. Bal had also allegedly allowed Tan to deposit several checks to
partially cover Tan’s cash withdrawals, but these were dishonored for being insufficient.
Thus, Bal violated the bank’s policy on drawing on uncollected deposits, and exceeding
his limited authority to approve encashment of other bank checks under its Manual of
Signing Authority.
Meanwhile, Tan allegedly already acknowledged his outstanding obligation in the

amount of P520,000.00 and had executed a promissory note. Despite this, Tan failed to
pay PNB.
The RTC ruled for Bal, finding Tan solely liable. CA upheld the RTC ruling, finding that
while Bal may have exceeded his authority in accommodating several checks presented
for deposit by Tan, PNB failed to prove that Bal financially gained from this, nor that
there was any collusion. There was also not enough proof to hold Bal personally liable
for his acts as officer of the bank.
Issue
Whether Bal may be held personally liable on the drawings against uncollected check
deposits in view of his violation of the existing policies.
Held + Ratio
No, Bal should not be personally liable.
First, PNB had already acknowledged Bal’s claim that his act of approving the
withdrawals had been a mere act of accommodation to the valued clients of the bank,
such as Tan. He had made a judgement call based on his appraisal of Tan’s banking
history with PNB and the regularity of the checks presented on payment. His acts were
made within his discretion as branch manager.
Second, PNB’s Administrative Adjudication Panel already penalized Bal for the same
infraction. While it had the decision was without prejudice to the filing of an
appropriate court action on the part of the bank, it referred only to the recovery of the
amount involved from the one who actually benefitted from the fraud, Tan. It is
therefore Tan who should be pursued by PNB for the amounts allegedly lost.
Bal may not be held personally or solidarily liable as he was never made one in the first
Page 8
UP Law Center
place according to the bank’s policies.
Page 9
UP Law Center
Panacan v. Solid Bank

G.R. No. 226272 (September 16, 2020) | Hernando, J
Topic: Credit Transactions: Real Estate Mortgage
Doctrine
Personal notice to the mortgagor in extrajudicial foreclosure proceedings is not
necessary. Section 3 of Act No. 3135, as amended by Act No. 4118, requires only the
posting of the notice of sale in three public places and the publication of that notice in
a newspaper of general circulation.
An exception to this rule is when the parties stipulate that personal notice is
additionally required to be given to the mortgagor. Failure to abide by the general
rule or its exception renders the foreclosure proceedings null and void.
Facts
Petitioners filed a complaint against Solidbank, praying for the issuance of a TRO with a
Writ of Preliminary injunction (WPI), claiming they suffered damages by way of
unrealized profits on account of Solidbank’s refusal to release the shipping documents
for its lumber. Solidbank opposed the application, arguing that it acted within its rights
since PLC did not submit the necessary documents required to effect payment of their
LIC despite several extensions given. As to the foreclosure of the REM, Solidbank insists
it included any and all existing indebtedness which may be granted to PLC in its Deed
of REM.
The RTC ruled for PLC, ordering Solidbank to pay a total of P500,000.00, and that the
foreclosure proceedings and sale are nullified. The CA partially granted Solidbank’s
appeal, affirming the remaining balance of the loan under the letter of credit in the
amount of US$108,000.00, affirming the loan obligation of P700,000.00 under renewal
promissory note, declaring the consolidation of title over the mortgaged property now
in the name of MBTC as null and void for being in violation of the WPI issued by the
trial court, and by deleting the award of damages.
Issue
1. Whether the extra-judicial foreclosure of the REM is null and void due to the lack
of personal notice to the petitioners of the two amended petitions for
extra-judicial foreclosure filed by Solidbank
2. Whether the mortgage contract covers all other existing and future obligations.
Held + Ratio
1. Yes, the extra-judicial foreclosure of the REM is null and void as there was no
personal notice.
2. While the general rule is that there is no need for personal notice to the
mortgagor, parties can stipulate otherwise. In this case, the parties had a
stipulation in the deed of REM that all legal correspondences are to be sent to the
mortgagor. While the petitioners were notified of the foreclosure proceedings
through the application of the extra-judicial foreclosure, they were not sent
notices when Solidbank twice amended the petition which increased the debt.
No, the mortgage contract does not cover all other existing and future
obligations.
Page 10
UP Law Center
The Deed of REM provides a blanket mortgage or dragnet clause. These clauses
are generally valid, although to cover the other obligations, they must be
specifically described within the terms of the mortgage contract. In this case, the
clause specifically covers extensions or renewals of the loan, hence as to the
renewal promissory note, it is covered. However, as to the FLC, the Deed of REM
is bereft of any reference regarding the security of the obligation as the Deed of
REM clearly only covers loans from Solidbank, and not to past obligations such
as to the FLC.
Despite the nullity of the foreclosure sale as to the P9,151,667.89, petitioners’

obligations to Solidbank under the FLC remain. Solidbank, as the issuing bank,
was within its right to refuse to release the documents of title to PLC due to the
latter’s failure to pay the amount of US$168,000.00 despite being secured by
PCIB’S local letter of credit due to their stipulation that Solidbank has the right to
enforce payment on the obligation of PLC under the FLC first rather than going
after the collateral security first. PCIB’s DLC pertains to a different transaction.
Page 11
UP Law Center
Municipality of Corella v. Philkonstrak

G.R. No. 218663. (February 28, 2022) | Hernando, J
Topic: Damages
Doctrine
Quantum meruit literally means “as much as he deserves”. This legal principle, a
principle predicated on equity, states that a person may recover a reasonable value of
the thing he delivered or the service he rendered. It is a device to prevent undue
enrichment based on the equitable postulate that it is unjust for a person to retain a
benefit without paying for it.
Recovery based on quantum meruit is allowed despite the invalidity or absence of a

written contract between a contractor and a government agency. The absence or
invalidity of required documents would not necessarily preclude the contractor from
receiving payment for the services he or she has rendered for the government.
Facts
Corella, a municipality in Bohol, conducted a public bidding for the rehabilitation and
improvement of its municipal waterworks system project. Philkonstrak won, and a
contract agreement was entered into worth P15,997,732.63. By the time Philkonstrak
accomplished more than 50% of the essential work, Corella, through Mayor Tocmo,
refused to pay and denied liability, hence the former stopped construction and sent a
demand letter. Tocmo denied liability, questioning the validity of the contract, and
claiming Rapal, the current Vice Mayor but also the previoius mayor who signed the
contract, had no authority to enter into a contract. Philkonstrak filed a complaint for
sum of money before the CIAC. The CIAC found the contract valid and ordered
payment for Philkonstrak. The CA affirmed the ruling.
Issue
Whether Philkonstrak is entitled to be paid for work done despite the basis for work
(the contract) not being valid and binding.
Held + Ratio
Yes, Corella is obliged to pay Philkonstrak on the basis of quantum meruit.
The contract is not valid and binding. The general rule is that no ordinance or resolution
shall be passed by the Sanggunian without prior approval of a majority of all members
present. The exception is when it involves the payment of money or creation of a
liability. In that case, the affirmative vote of a majority of all the sanggunian members is
required, whether present or not. This case involved both the payment of money and
creation of a liability; hence it required the affirmative vote of all 11 Sanggunian
members. However, the municipality was mistaken in thinking that its vote of 5 out of 8
members was enough, thinking they only needed a quorum from those present. As a
result, the contract is not valid and binding.
In the end, Philkonstrak is still entitled to receive payment for the services it rendered as
Corella cannot be unjustly enriched and allowed to retain the benefits without payment
being made. Philkonstrak was proven to have entered into the contract in good faith
and for the good interest of Corella.
Page 12
UP Law Center
Lopez v. Saludo, Jr.

G.R. No. 233775. (September 15, 2021) | Hernando, J
Topic: Trust: Implied Trust
Doctrine
An implied trust arises, not from any presumed intention of the parties, but by
operation of law to satisfy the demands of justice and equity and to protect against
unfair dealing or downright fraud.
Facts
Aniceto Saludo claims that in 1997, Doris Lopez offered him two parcels of land at a
reasonable price, which after consideration he eventually bought due to the persistent
assurances of Lopez, that the transfer certificate of title (TCT) would be issued in Saludo’s
name, and that the offer price was very reasonable. Lopez offered to pose as the buyer since
the seller, Lopez’s close friend, allegedly wanted to deal only with her problems. Saludo
then paid the purchase price of P15,000,000.00 with the agreement that Lopez would be the
signatory in the Deed of Sale but will hold the properties and eventually reconvey the same
to Saludo. However, after execution of the sale, Lopez became evasive, and it was found out
that the properties were already registered in Lopez’s name. Saludo then responded by
immediately assuming possession of the properties, introducing major renovations on the
house amounting to P9,000,000.00, paying the real property taxes (for 13 years) and
homeowner’s association dues.
After several unanswered demands, Saludo filed for Reconveyance and Damages, imputing
bad faith on the part of Lopez. Lopez replied that she bought the properties from BRC in
1997 via a pacto de retro sale. Since the properties were not repurchased, she claims she has
gotten the properties already. She claims Saludo volunteered to finance the renovation of
the house due to their special relationship, for which Saludo’s relatives were allowed to stay
in the house. The relationship eventually turned sour and Lopez was forced to file for
ejectment.
The RTC ruled for Saludo, finding that an implied trust existed between the two parties.
Saludo was able to prove he was the one who paid for the properties, and that his actual
possession of the properties from the moment of the purchase price had been paid in full is
clear proof of ownership. While the sale was made through Lopez, she was a mere trustee.
The CA affirmed the RTC ruling.
Issue
Whether an implied trust was created.
Held + Ratio
Yes, an implied trust was created.
The RTC and CA affirmed the factual findings that Saludo indeed paid the purchase
price through Lopez, who would then reconvey the same to him. Clearly Saludo had
intention to acquire the properties for his own account and benefit. Also, the claim of
Lopez that the purchase money was gratuitously given to her by Saludo was due to
their special relationship is faulty. If such were the case, then it should be considered a
donation as per Article 748 of the Civil Code. Under the said provision, the donation of
a movable whose value exceeds five thousand pesos shall be in writing, else the
Page 13
UP Law Center
donation is void. In this case, Lopez failed to prove compliance with the formalities.
Page 14
UP Law Center
Purisima v. Purisima
G.R. No. 200484. (November 18, 2020) | Hernando, J
Topic: Contracts: Basic Principles of Contracts
Doctrine
By Article 1403 (2) (e) of the Civil Code, a verbal contract for the sale of real property
is unenforceable, unless ratified. Such a contract offends the Statute of Frauds.
However, long accepted and well settled is the rule that the Statute of Frauds is
applicable only to executory contracts — not to contracts either totally or partially
performed.
Facts
In 1978, the petitioners executed an Extrajudicial Settlement and Sale over the
unregistered property of their father which included the sale of the properties
apportioned to the respondents. This was registered in the Registry of Deeds. Upon
discovery, the respondents requested Purisima Jr. to surrender the OCT to annotate the
Extrajudicial Settlement and Sale, register the previous subdivision plan, and finally
secure their own titles.
Due to a failure to do so, the respondents filed for reconveyance, cancellation, and
quieting of title. The petitioners claim there was no sale at all, and that the amounts
given by the respondents were due to the fact that their father was sick. While the
petitioners signed the Extrajudicial Settlement and Sale, they did not understand its
import and were convinced by the respondents (their aunts), that the document was
merely an advance for their indebtedness. Petitioners claim they only allowed
possession of the property by mere tolerance and as a form of payment for the financial
help extended to their father.
The RTC ruled for the petitioners, finding that there was no written evidence of the sale
of the properties, and that even if there was a sale, it was not enforceable since it was
not in a written document. On appeal, the CA reversed the RTC decision, finding that
respondents were the rightful owners.
Issue
Whether the 1960 sale of real property was valid despite not being in written form.
Held + Ratio
Yes, there was a valid sale in 1960.
While the payment was made as Purisima Sr. needed money due to his poor health, it
was still valid as payment of the purchase price. Moreover, the Statute of Frauds is not
applicable in the case as it merely affected the enforceability of the contract. In this case,
the 1960 sale was already fully consummated as evidenced by the Extrajudicial
Settlement and Sale, hence the Statute of Frauds has no application.
Since the 1960 sale was valid, it transferred to respondents the ownership over the
properties despite the issuance of the OCT in favor of petitioners as while the latter had
the title, the question of ownership had already passed prior to that (the 1960 sale).
Meaning the true owner (the respondents) had the better right.
Page 15
UP Law Center
Willy v. Julian
G.R. No. 207051. (December 1, 2021) | Hernando, J
Topic: Contracts: Defective contracts
Doctrine
The Statute of Frauds, Article 1403 (2) of the Civil Code, is not applicable to totally or
partially performed contracts.
Facts
Ricardo allowed Modesto’s son, Lorenzo, to possess and cultivate his land on his
behalf, while remitting to Ricardo his share of the fruits. Upon Modesto’s death and
upon learning that the petitioners (Modesto’s heirs) attempted to sell his portion of the
property, Ricardo executed an affidavit of adverse claim on the tax declaration of the
property and securing an advisory opinion from the DAR. Moreover, he demanded
from petitioners the partition of the property and actual conveyance of his portion, to
no avail. Ricardo thus filed for partition and damages against the heirs of Modesto.
The heirs claim that Modesto was an illiterate and thus could not have signed the Deeds
of Sale, that the 1963 agreement did not comply with the suspensive conditions stated,
that Ricardo’s cause of action to enforce the 1963 agreement prescribed in 1973, and that
they are not privies to the contracts of sale between Dongpaen and Ricardo.
The MCTC ruled in favor of Ricardo, finding that the 1963 agreement and 1969 Deed of
Sale executed by Modesto were public documents, and were already absolute sales, not
conditional. Modesto had validly conveyed the 15,000 sqm to Dongpaen, who then
validly conveyed it to Ricardo. Ricardo, as co-owner of the property, has the right to
demand partition which is an imprescriptible action.
On appeal to the RTC, the decision was reversed. The RTC held that the 1963 agreement
was a private document which did not have the effect of constructive delivery to the
intended transferee Dongpaen. Thus, Dongpaen did not acquire ownership over the
10,000 sqm portion of the property and hence could not transfer ownership to Ricardo.
As a result, Ricardo is not a co-owner who is entitled to a partition.
On appeal to the CA, Ricardo died and was substituted by his heirs. The CA reversed
the RTC decision, reinstating the MCTC decision. It was ruled that the 1963 agreement
was a fully consummated contract, and that the 1968 survey, as well as the execution of
the deeds of conveyances were already constructive delivery.
Issue
Whether the transfers were valid conveyances.
Held + Ratio
Yes, the transfers were valid conveyances.
First, the 1963 agreement is not purely a sales contract, but an innominate contract
reflecting a sales contract, a contract of agency to sell the subject property; and contract
to transfer ownership of property in exchange for services. It is clear that Dongpaen
merely holds title to the subject property as Modesto’s sales agent for the further sale of
Page 16
UP Law Center
a portion. In furtherance of the arrangement, the contemporaneous acts of Modesto,

Dongpaen and Ricardo point to a meeting of the minds for the sale of the lots.
All the contracts involved in this case have been either partially or totally performed by
Modesto, Dongpaen and Ricardo. Hence the contracts are removed from the Statute of
Frauds and cannot be considered unenforceable.
Furthermore, there was already constructive delivery of the two lots to Ricardo. That
Ricardo did not physically possess the purchased lots is of no moment as the possession
was exercised by Lorenzo, who agreed to take care of his land, on his behalf. Ricardo’s
indicia of ownership are his possession in the concept of an owner and the regular
remittance of fruits to him.
Page 17
UP Law Center
Viloria v. Heirs of Gaetos

G.R. No. 206240. (May 12, 2021) | Hernando, J
Topic: Bundle of Rights: Actions to Recover Ownership and Possession of Property - Quieting of Title
Doctrine
Tax declarations and receipts are not conclusive evidence of ownership or of the right
to possess land when not supported by other evidence.
Facts
The petitioners claim that they owned a 10,000 sq. m. lot in Taboc, La Union, having
inherited it from their predecessor-in-interest who had openly, publicly, continuously,
and peacefully possessed it without interruption for more than 30 years in the concept
of an owner, and that the respondents (heirs of Gaetos), without their knowledge and
consent, had it surveyed for purpose of claiming ownership. The respondents denied
the allegations, claiming the petitioners were not the owners as it was the Gaetos that
owned the property by virtue of succession from a common ancestor several years
before World War II. The said property was later surveyed and partitioned among the
Gaetos. The petitioners thus filed for Quieting of Title as well as damages. RTC
dismissed the complaint of the petitioners, finding that they failed to convincingly
establish that they possessed the property publicly, exclusively, and peacefully in the
concept of owners. They also did not have the requisite title to pursue an action for
quieting of title.
On appeal to the CA, the RTC decision was affirmed. The CA found that they failed to
prove their title over the property, and that the tax declarations under the name of their
deceased mother, coupled with their allegations of possession of the subject property,
did not sufficiently substantiate their claims.
Issue
Whether tax declarations alone may serve as indicia of ownership for purposes of
quieting of title.
Held + Ratio
No, tax declarations alone may not serve as indicia of ownership.
In this case, the petitioners did not have legal title as there were no certificates of title in
their names. They also failed to show they have an equitable title. The tax declarations
under the names of their predecessors in interests, documentation alluding to
mortgages, and testimonial evidence did not convincingly establish their equitable title.
As held by the Court in Spouses Basa v. Loy, in order that an action for quieting of title
may prosper, it is essential that the plaintiff must have legal or equitable title to, or
interest in, the property which is the subject- matter of the action. Legal title denotes
registered ownership, while equitable title means beneficial ownership. In the absence
of such legal or equitable title, or interest, there is no cloud to be prevented or removed.
The deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy.
Page 18
UP Law Center
Page 19
UP Law Center
Apolinario v. Heirs of Catabas

G.R. No. 201655. (August 24, 2020) | Hernando, J.
Topic: Land Titles and Deeds
Doctrine
A possessor or occupant of property may be a possessor in the concept of an owner
prior to the determination that the property is alienable and disposable agricultural
land. Thus, the computation of the period of possession may include the period of
adverse possession prior to the declaration that the land is alienable and disposable.
Facts
Antero filed a Free Patent Application for Lot No. 4967. Pursuant to Proclamation 427,
Lot 4967 was subdivided into three where Lots A and B were reserved for public
purposes. Antero thus amended his application to only cover Lot C. Later, a Cadastral
Subdivision Survey was conducted pursuant to Proclamation 247 where Lot C was
further subdivided to several lots for disposition to qualified claimants. Meanwhile,
Antero’s free patent application was recommended for approval and the notices of
which were posted in different conspicuous places. In the meantime, petitioners
(including Valdez) filed sales patent applications over lots which originally formed part
of Lot C, and which were included in the Free Patent application filed by Antero. The
respondents (heirs of Catabas aka Antero) then filed a protest over the sales applications
due to the existing free patent application filed by Antero who acquired a vested right
over it due to his early possession since 1929 as evidenced by Tax Declarations.
Respondents further claim that the case of Municipality of Santiago, Isabela vs. Court of
Appeals already confirmed their possession and claim over the lots when it recognized
that Antero filed his answer during the cadastral proceedings conducted for the said
case to record his claim on Lot No. 4967 while another claimant, Eulalio Bayaua,
petitioners’ predecessor-in-interest, did not file any answer. Petitioners meanwhile
claim that in 1953, they bought from a certain Cavinian, the spouse of Bayaua, a portion
of 3,500 sqm of Lot 4967 and Lot 8000. Then in 1957, pursuant to proclamation No. 247,
the Lots were subdivided including the lot their predecessors bought, and that
miscellaneous sales patent applications were approved in favor of the petitioners.
In 1988, Land Investigator Salatan was assigned to investigate the claims where he
recommended the dismissal of the respondent’s complaint due to Antero’s failure to
formally oppose the exclusion of that portion of Lot No. 4967 which was petitioned as
per Proclamation No. 427 from exclusion from the operation of the said proclamation
which allocated the area for disposition to disqualified claimants, and for Antero’s
failure to protect his rights and interests over the property when a subdivision survey
was conducted in the area
The Regional Executive Director ruled for the respondents, finding that the issuance of
petitioners’ sales patent to be premature, illegal, and fraudulent and their possession
was characterized by bad faith since their sales patents were issued while Antero’s
application was still subsisting. The DENR Secretary affirmed the ruling.
On appeal to the Office of the President, the decision was affirmed. It was ruled that
Antero’s Free Patent Application had already met the requirements for the issuance of a
Free Patent, hence Antero already obtained a vested right over the property.
Page 20
UP Law Center
Issue
Whether Antero has vested rights over the properties based on his free patent
application which was never cancelled.
Held + Ratio
Yes, Antero has vested rights.
In this case, the law applicable at the time of Antero’s alleged acquisition of Lot No.
4967 is Act No. 2874. Section 45 (b) of the said Act provides that those who by
themselves or through their predecessor-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition of ownership, except as against the
Government, since July 26, 1894 except when prevented by war or force majeure may
apply with the Court of First Instance of the province for the confirmation of their
claims and the issuance of a certificate of title under the Land Registration Act. Sec. 49
of the same Act provides that in cadastral proceedings, instead of an application, an
answer or claim may be filed. In this case, Antero filed his answer in 1935 to claim his
title/interest, which was confirmed in the case of Municipality of Santiago, Isabela v. CA.
Before the issuance of Proclamation No. 247 in 1956, Antero already filed his claim on
Lot C in 1949 through a FPA which was later amended in 1952. In choosing to apply for
the free patent, Antero acknowledged that the land covered by his application still
belongs to the government and is part of the public domain.
Under Section 44 of C.A. No. 141, he is required to prove continuous occupation and
cultivation of agricultural land subject to disposition since July 4, 1926, or prior thereto
and payment of real estate taxes while the land has not been occupied by others.
Notwithstanding that when Antero filed his amended free patent application in 1952,
Lot C was still inalienable, he still has preference due to his possession of the land since
1929 over the petitioners’ late claims. The subsequent declaration of Lot C as open for
disposition to qualified claimants effectively cured the defect of Antero’s free patent
application. Antero’s possession of the property as evidenced by the payment of real
estate taxes from 1929 has strengthened his continuous and notorious possession of the
property which is earlier than July 4, 1945
Though at the time of his application, the property was not yet classified as alienable
and disposable, the subsequent declaration should be considered in favor of Antero
whose free patent application was still pending and not cancelled at that time.
Page 21
UP Law Center
Valdes v. La Collina Dev't Corp

G.R. No. 208140. (July 12, 2021) | Hernando, J
Topic: Obligations: Novation
Doctrine
1. When the terms of the contract are clear, its literal meaning shall control.
2. The cancellation of the old obligation by the new one is a necessary element of
novation which may be effected either expressly or impliedly.
3. To constitute fraud that provides basis to annul contracts, it must fulfill two
conditions:
a. First, the fraud must be dolo causante or it must be fraud in obtaining
the consent of the party; and
b. Second, the fraud must be proven by clear and convincing evidence and
not merely by a preponderance thereof.
4. Rescission is a remedy granted by law to the contracting parties and third
persons thereto, to secure the reparation of damages caused to them by a
contract, even if it should be valid by reason of external causes resulting in a
pecuniary prejudice to one of the contracting parties or their creditors, the
result of which, is the restoration of things to their condition at the moment
prior to the celebration of said contract.
Facts
The Valdeses and LCDC entered into a joint venture agreement, whereby the former
would contribute to the joint venture involving the Bataan Resorts Corporation
(BARECO) properties in Bagac, Bataan, and in return, LCDC would develop and
improve them into a residential subdivision or the Montemar Villas. This would be
implemented by the Valdeses transferring their shares of stock in BARECO in favor of
LCDC through a Deed of Sale for P20M.
However, during the years 1981 up to 1985, there was a delay in the remittances of the
shares to the Valdeses in the net proceeds from the sale of the Montemar Villas lots.
Around P16,125,717.31 had been paid to the Valdeses. Carlos Valdes, Sr. then filed a
Complaint for Annulment or Rescission of Contract or Specific Performance and
Damages with Prayers for Receivership Pendente Lite and Preliminary Injunction
against LCDC. The case was settled on a Joint Motion to Dismiss filed by both parties
pursuant to a letter agreement which provided that LCDC vowed to continue to
undertake the marketing of the Montemar Villas lots for the purpose of remitting to the
Valdeses their 40% share in the sale of the lots until full payment of the purchase price
of BARECO shares amounting to P20 Million. Meanwhile, as the loans obtained by
LCDC from DBP/APT remained unpaid, the mortgaged properties of LCDC, LCRC,
and MBCI were eventually foreclosed by DBP/ATP.
Later on, the Valdeses then filed a complaint for Reconveyance, Annulment and/or
Rescission of Contract, Specific Performance and Damages with Prayer for Temporary
Restraining Order and Writ of Preliminary Injunction against LCDC, LCRC, Philcomsat,
MRDC, Jose Mari, and MRDC. The RTC ruled that the MOA and Consolidated Deed of
Sale were null and void as despite the Valdeses refusal to allow Philcomsat to take part
in the joint venture agreement, LCDC, LCRC, MBCI, and Philcomsat nevertheless
executed the MOA which effectively disregarded the rights and interests of the
Valdeses, particularly their 40% share in the proceeds of the sale of the lots. There was
Page 22
UP Law Center
lack of consent by the Valdeses and evident bad faith.
On appeal to the CA, the decision was reversed. It was ruled that the Deed of Sale,
promissory notes executed by LCDC, and Assignment of Rights negated the existence
of a joint venture agreement between the Valdeses and LCDC. The relationship between
the two parties was that of a vendor-vendee relationship as there was no contract to
contribute properties to a common fund to share the profits between themselves, nor
was there even a common fund to speak of.
Issues
Whether there was a valid novation of the initial agreement between LCDC and the
Valdeses to develop and sell the Montemar Villas lots which extinguished LCDC’s
original obligation to the Valdeses.
Held + Ratio
Yes, there was a valid novation.
Clearly LCDC was obligated to sell the Montemar Villas lots and remit a portion of the
proceeds to the Valdeses. In this case though, the new concept of the Montemar Project
would entail the development of a golf course or sports complex on the unsold lots of
the Montemar Villas. Clearly the old and new obligations are incompatible. Hence,
there was a need for Valdeses express conformity, which was fulfilled by the consent
given by their representative, Gabriel. This was shown by the latter’s signature on the
conforme portion, his appearance and participation in the board meetings of MBCI
where they discussed Philcomsat as a possible investor, and notices sent to LCRC
stockholders to discuss the new project.
Page 23
UP Law Center
Uy-Belleza v. The Civil Registrar

G.R. No. 218354 (September 15, 2021) | Hernando, J
Topic: Persons: Human Relations in relation to Persons
Doctrine
A passport proves that the country which issued it recognizes the person named
therein as its national. (Maquiling v. COMELEC)
The requirement of electing Filipino citizenship when a child reached the age of
majority under Article IV, Section 1 of the 1935 Constitution applied only to legitimate
children. An illegitimate child with a Filipino mother born during the effectivity of the
1935 Constitution automatically became a Filipino upon birth. (Republic v. Lim)
Facts
Uy-Belleza filed a Petition for Correction of Entry in the Civil Registry before the RTC.
She wanted to change the entry in her birth certificate regarding the nationality of her
mother (Adelaida Go) from “Chinese” to “Filipino”. The RTC gave due course to the
petition, had it published in a newspaper of general circulation for three consecutive
weeks, and gave a copy to the Office of the Solicitor General (OSG).
Uy-Belleza submitted the following evidence:

1. Her Birth Certificate issued by the National Statistics Office (NSO),
2. Her Birth Certificate issued by the Local Civil Registrar,
3. Her parents’ Marriage Contract issued by the NSO showing that Adelaida is a
Filipino citizen,
4. Adelaida’s Certificate of Registration as a Voter issued by COMELEC,
5. Her brother’s Birth Certificate, which states that Adelaida’s citizenship was “Fil,”
6. Adelaida’s Expired Philippine Passport,
7. Her testimony that Adelaida was a Filipino citizen,
8. Adelaida’s testimony that that she was an illegitimate daughter of a Chinese
national and a Filipino citizen, and that her failure to present her birth certificate
was because she was born during World War II and could not have registered her
birth.
The RTC granted Uy-Belleza’s petition. The RTC gave weight to Adelaida’s passport
and voter’s certification to prove her citizenship. The OSG also did NOT present any
countervailing evidence. Upon the OSG’s appeal to the CA, the CA reversed the RTC.
The CA held that the evidence was insufficient to prove Adelaida’s Filipino citizenship.
Hence this appeal.
Issue
Whether Uy-Belleza sufficiently established her petition for correction of entry as to her
mother Adelaida’s Filipino citizenship.
Held + Ratio
Yes, Uy-Belleza sufficiently established her petition for correction of entry as to her
mother Adelaida’s Filipino citizenship through the passport of Adelaida, the birth
certificate of Uy-Belleza’s brother, and Adelaida’s testimony, all of which were not
questioned by the OSG.
Page 24
UP Law Center
-
The government’s issuance of a Philippine passport to Adelaida is a recognition of her
Filipino citizenship. It enjoys the presumption of regularity in its issuance, even if
Adelaida merely executed an affidavit when she applied for a passport.
The birth certificate of Uy-Belleza’s brother stated that Adelaida’s citizenship was “Fil.”
To disallow the correction in Uy-Belleza’s birth certificate of her mother’s citizenship
would lead to inconsistency in the records of the siblings’ birth.
Adelaida’s testimony regarding her illegitimacy and the Filipino citizenship of her
mother was never questioned by the prosecutor. Further, Uy-Belleza did not have to
prove that Adelaida complied with the requirements to become a Filipino citizen in the
1935 Constitution and Commonwealth Act No. 625. Although these were the governing
laws when Adelaida was born, these only covered legitimate children. Since she was an
illegitimate child, such requirements did not apply to her. She was thus a Filipino from
birth without having to elect Filipino citizenship when she reached the age of majority.
Page 25
UP Law Center
In Re Will of Consuelo Santiago Garcia

G.R. No. 204793 (June 8, 2020) | Hernando, J
Topic: Testamentary Succession: Form of Notarial and Holographic Wills
Doctrine
It is settled that “the law favors testacy over intestacy”. Even if the attestation clause
does not state the number of pages comprising the will, the indication of such number
of pages in the acknowledgment portion is substantial compliance with Article 809 of
the Civil Code. The lawyers are not disqualified from being witnesses to a will.
Facts
Consuelo died on August 14, 1985, at 91 years old. Thus, Catalino, as grandson, and son
of Remedios, filed a petition before the RTC Pasay to settle the intestate estate of
Consuelo. Catalino prayed for his appointment as the special administrator of
Consuelo’s intestate estate, and issuance of letters of administration in his favor. He also
sought action against Natividad, for her to produce Consuelo’s alleged will to
determine its validity and for Natividad to desist from disposing of the properties of
Consuelo’s estate.
Natividad filed a Motion to Dismiss on the ground that she already filed a petition for
the probate of the Last Will and Testament of Consuelo before Branch 15 of RTC Pasay.
So, Natividad asked that the purported will of Consuelo be allowed and approved, and
that letters testamentary be issued in her favor. The Tanchancos filed an Opposition to
Natividad’s petition, alleging non-compliance with Art. 805, NCC. The will’s attestation
clause did not state the number of pages and that the will was written in Tagalog, and
not the English language usually used by Consuelo in most of her legal documents.
Moreover, they alleged that Consuelo’s signature was forged. They thus prayed for the
disallowance of probate and for the proceedings to be converted into an intestate one.
The RTC found the will to be dubious and disallowed probate. It noted that the
witnesses and the notary public were all associates of the same law firm, which is the
counsel of Natividad. Further, none of Consuelo’s relatives witnessed the execution of
the alleged will. The CA reversed, finding among others that the positive testimonies of
the witnesses established the due execution and authenticity of the will. The witnesses,
who were all lawyers, are not disqualified from being witnesses under the law.
Issue
Whether the will should be allowed probate despite allegedly missing formal requisites
such as lacking the number of pages in the attestation clause, the lawyers as witnesses
and use of Tagalog instead of English language.
Held + Ratio
Yes, the will should be allowed probate.
An examination of Consuelo’s will shows that it complied with the formalities required
by the law, except that the attestation clause failed to indicate the total number of pages
upon which the will was written. To address this concern, Natividad enumerated
attributes of the attestation clause and the will itself, which the Court affirms. In this
case, the attestation clause indisputably omitted to mention the number of pages
comprising the will.
Page 26
UP Law Center
Nevertheless, the acknowledgment portion of the will supplied the omission by stating
that the will has five pages. Undoubtedly, such substantially complied with Article 809
of the Civil Code. Mere reading and observation of the will, without resorting to other
extrinsic evidence, yields the conclusion that there are actually five pages even if the
said information was not provided in the attestation clause. When the number of pages
was provided in the acknowledgment portion instead of the attestation clause, the spirit
behind the law was served though the letter was not. Although there should be strict
compliance with the substantial requirements of the law in order to insure the
authenticity of the will, the formal imperfections should be brushed aside when they do
not affect its purpose and which, when taken into account, may only defeat the
testator’s will.
Page 27
UP Law Center
Sps. De Vera v. Catungal

G.R. No. 211687 (February 10, 2021) | Hernando, J
Topic: Contracts: Essential Requisites of a Contract - Consent
Doctrine
In case one of the parties to a contract is unable to read and fraud is alleged, the
person enforcing the contract must show that the terms thereof have been fully
explained to the former. Where a party is unable to read, and he expressly pleads in
his reply that he signed the voucher in question “without knowing (its) contents
which have not been explained to him”, this plea is tantamount to one of mistake or
fraud in the execution of the voucher or receipt in question and the burden is shifted
to the other party to show that the former fully understood the contents of the
document; and if he fails to prove this, the presumption of mistake (if not fraud)
stands unrebutted and controlling.
Facts
Vicente owned two (2) parcels of land. He died later on and was survived by his five
children, two of whom are Fausta and Genaro. On July 23, 1994, Fausto and Genaro
executed a Deed adjudicating between themselves the two parcels of land owned by
Vicente and transferring ownership of the properties to spouses De Vera. Fausta affixed
her thumb mark in lieu of her signature. The Deed was also signed in the presence of
witnesses. Consequently, new tax declarations were issued in the name of the Spouses
De Vera. After the transaction, the Spouses De Vera allowed Fausta to stay and continue
residing on the parcels of land.
Years later, Fausta filed a complaint for Declaration of Nullity of Documents, Recovery
of Ownership, Reconveyance, Damages, among others. She alleged that the Spouses De
Vera took advantage of her illiteracy and old age and succeeded in making her affix her
thumb mark on the Deed by employing deceit, false pretenses, and false
misrepresentations. She claimed that petitioners represented that the Deed is merely
evidence of her indebtedness to them, when in fact, it transfers ownership of the parcels
of land to them. Fausta specifically testified that she was 84 years old at the time of the
execution of the Deed and that she was illiterate. She also stated that her children were
not with her when petitioners deceived her into affixing her thumb mark and failed to
explain the contents of the Deed.
Issue
Whether Fausta freely gave her consent to the Deed.
Held + Ratio
No, Fausta did not freely give her consent.
Fausta was able to establish that she was unable to read at the time of the execution of
the Deed due to her illiteracy. She stated in her testimony that she was an illiterate
person. Her testimony was also corroborated by two other witnesses. Therefore, there is
a presumption of fraud or mistake in giving consent. To rebut this presumption, the
Spouses De Vera must show, by clear and convincing evidence, that the contents of the
Deed were sufficiently explained to Fausta at that time. In this regard, they have failed.
That she was allegedly present during the execution of the Deed does not mean that
they explained to her the contents when she affixed her thumbmark to the Deed.
Page 28
UP Law Center
Page 29
UP Law Center
Sps. Ponce v. Aldanese

G.R. No. 216587 (August 4, 2021) | Hernando, J
Topic: Bundle of Rights: Actions to Recover Ownership and Possession of Property - Quieting of Title
Doctrine
Although tax declarations or realty tax payment of property are not conclusive
evidence of ownership, nevertheless, they are good indicia of possession in the
concept of owner, for no one in his right mind would be paying taxes for a property
that is not in his actual or constructive possession—they constitute at least proof that
the holder has a claim of title over the property.
Facts
In 1973, Aldanese inherited Lot No. 6890 from his father. He diligently paid its real
property taxes from that time on under Tax Declaration No. 13003 which is in his name.
TD 13003 was subsequently canceled and TD 13163-A6 was issued by the Municipal
Assessor of Sibonga, still in Aldanese’s name, as the owner and possessor thereof.
Several years later, he was surprised when he discovered that the Sps. Ponce
encroached upon the entire portion of his lot. He immediately demanded that they
vacate his land and return it to him. However, the Sps. Ponce refused to heed
Aldanese’s demand on the ground that Lot No. 6890 is part of the land that they bought
from his brother.
Aldanese then asked his brother about the purported sale of his land, however, Teodoro,
Jr., denied selling his brother’s land to the Ponces. He explained to him that what he
sold to the Sps. Ponce was a parcel of land that he owned known as Lot No. 11203
located in Masa, Dumanjug, Cebu. Lot No. 11203 is adjacent to Lot No. 6890. His
brother showed him a photocopy of the Deed of Absolute Sale dated March 13, 1976.
Thereafter, Jesus and the Sps. Ponce met at the barangay for conciliation. The latter
nonetheless refused to vacate his land. The Ponces also remained firm in possessing the
subject land thus prompting Aldanese to file a Complaint for recovery of possession
and damages with receivership against them before the RTC.
The RTC ruled that Aldanese sufficiently established that he owned Lot No. 6890 so as
to be entitled to its possession. This was affirmed by the CA reiterating that Aldanese
sufficiently proved his ownership over the subject land as shown by the tax declaration
in his name.
Issue
Whether Jesus is the registered owner of Lot No. 6890 to be entitled of possession
thereof against a buyer of the adjacent land.
Held + Ratio
Yes, there is preponderant evidence on record to support the conclusion of both the
CA and the RTC that Jesus, being the lawful owner of the subject property, is entitled
to the possession of Lot No. 6890.
There is sufficient evidence indicating that Jesus has been diligently paying the real
property tax of the subject land as early as 1980. He was recognized as the owner of the
land as evidenced by the Municipal Treasurer’s Certificate, and Teodoro, Jr., his brother,
Page 30
UP Law Center
corroborated and bolstered his claim that Jesus owned the subject land by way of
inheritance from their father, Teodoro Aldanese.
Interestingly, the Ponces failed to present any proof of ownership such as payment of
real property taxes or a certificate of title in their names over Lot No. 6890. The Sps.
Ponce presented TD 22-006688 to support their claim over the land, however, it did not
state the lot number of the land for which it was issued. Moreover, a careful perusal of
the declaration reveals that the land for which it was issued is located in Masa,
Dumanjug, Cebu and has different boundaries compared to Lot No. 6890.
Lastly, in the absence of competent evidence showing that Lot No. 6890 is covered by
the Deed of Absolute Sale, the Ponces have no right to possess the property, much less
in the concept of an owner, and they cannot be deemed possessors in good faith since
they were aware that the subject land is not part of the land that Teodoro, Jr., sold to
them. Assuming that Teodoro, Jr., sold Lot No. 6890 to the Ponces, the sale would be
invalid as it was owned by Jesus.
Page 31
UP Law Center
Torrecampo v. Wealth Development Bank

G.R. No. 221845 (March 21, 2022) | Hernando, J
Topic: Bundle of Rights: Co-Ownership - Redemption
Doctrine
The general rule is that in extra-judicial foreclosures, a writ of possession may be
issued to the purchaser in two different instances and based on two different sources:
(1) within the redemption period, in accordance with Act No. 3135, particularly
Section 7, as amended; and
(2) after the lapse of the redemption period, based on the purchaser’s right of
ownership.
Under the second instance, a writ of possession may also be issued after consolidation
of ownership of the property in the name of the purchaser or, in this case, the
respondent bank. The purchaser becomes the absolute owner of the property
purchased in the foreclosure sale, if it is not redeemed during the one-year period
after the registration of the sale. After consolidation of ownership in the purchaser’s
name and issuance of a new TCT, possession of the land, too, becomes an absolute
right of the purchaser.
Facts
Spouses Gemma and Jaime Torrecampo (“Spouses”) entered into a housing loan with
Wealth Development Bank Corp. (“Bank”) which was secured by a real estate mortgage
(“REM”) over a property owned by the Spouses under TCT No. 187864. The Spouses
defaulted on their loan which gave effect to the loan’s acceleration clause. This made the
entire amount due and demandable.
The Bank commenced an action to extrajudicially foreclose mortgaged property under

the provisions of Act. 3135 (an Act to Regulate the Sale of Property under Special
Powers Inserted in or Annexed to Real-Estate Mortgages, as amended). The foreclosure
sale took place. The land was sold to the Bank. The sale was registered with the Register
of Deeds on June 24, 2010. The property was consolidated in favor of the Bank a year
later. By this time, the redemption period of the Spouses has passed. On Sept. 1, 2011,
TCT No. 187864 under the Spouses was canceled and a new one was issued under the
Bank’s name.
The Bank issued demands for the Spouses to vacate the property, a demand which they
did not heed. In response to this, the Bank prayed for the issuance of a writ of
possession which was granted by the RTC and affirmed by the CA.
The spouses now seek to annul the foreclosure sale saying that the extra-judicial
foreclosure is invalid and set aside the writ of possession, they claim to exercise this via
Section 8 of Act. 3135, which provides that a judgment debtor may file a petition for
cancellation of the writ of possession within 30 days only after the purchaser has
obtained possession of the property.
Issue
Whether the Spouses may file for the cancellation of the writ of possession even after
the lapse of their redemption period.
Page 32
UP Law Center
Page 33
UP Law Center
Held + Ratio
No, the spouses may not file for the cancellation beyond the redemption period.
The remedies in Act 3135 are only applicable to instances where the one-year
redemption period of the previous property owner has not yet lapsed. In this case, the
bank registered the foreclosure sale on June 24, 2010. After the lapse of one year or after
June 24, 2011, the provisions of Act No. 3135 no longer applied to the parties. The bank
became the absolute owner of the subject property as a matter of right. In line with this,
the writ of possession was issued as a ministerial duty of the trial court. It was issued to
the respondent bank as a matter of right, a mere incident of the bank’s ownership, and
not in accordance with the remedy provided under Section 8.
Page 34
UP Law Center
Sps. Liu v. Espinosa

G.R. No. 238513 (July 31, 2019) | Hernando, J
Topic: Bundle of Rights: Actions to Recover Ownership and Possession of Property
Doctrine
An action for unlawful detainer will stand if the following requisites are present:
1. Initially, possession of property by the defendant was by contract with or by
tolerance of the plaintiff;
2. Eventually, such possession became illegal upon notice by plaintiff to
defendant of the termination of the latter’s right of possession;
3. Thereafter, the defendant remained in possession of the property and deprived
the plaintiff of the enjoyment thereof; and
4. Within one year from the last demand of the defendant to vacate the property,
the plaintiff instituted the complaint for ejectment.
The only issue to be resolved in an unlawful detainer case is physical or material

possession of the property involved, independent of any claim of ownership by any of
the parties involved.
Facts
Petitioner Liu owned a parcel of land. Her predecessor-in-interest merely tolerated the
occupation of the present occupants, the respondents. The petitioners, Liu, and her
husband, also merely tolerated the respondents’ occupation upon the understanding
that they will peacefully vacate the land once the petitioners’ need to use the same
arises. However, the respondents refused to vacate despite the petitioners’ demands.
Thus, the petitioners filed a complaint for unlawful detainer against the respondents.
The respondents argued that (1) the MTCC had no jurisdiction because the defendants
were in possession of the land in the concept of an owner; (2) they were entitled to the
possession and occupation of the land because they had been in possession of the same
in the concept of an owner for more than twenty years and they introduced valuable
improvements therein; (3) they have priority in rights to apply for title of their
respective lots because the OCT and its derivative titles were declared null and void by
the CA.
Issue
Whether the action for unlawful detainer against the respondents should prosper.
Held + Ratio
Yes, the action should prosper as the requisites for an action of unlawful detainer to
stand have been sufficiently established in this case.
First, the petitioners are the registered owners of the property and the respondents’
occupation of the subject property was merely tolerated by the petitioners’
predecessor-in-interest and the petitioners themselves based on the understanding that
the said respondents will peacefully vacate the same once the need to use the land by
the petitioners arises. Second, the occupation became illegal due to the defendant’s
refusal to vacate based upon the plaintiff’s demand. Third, the defendants remained in
possession of the property at the expense of the plaintiff. Lastly, the complaint for
unlawful detainer, filed on August 6, 2013, was made within one year from the time the
Page 35
UP Law Center
last formal demand to vacate was made, February 12, 2013.
Also, the respondents would not have made an offer to purchase the subject land from
petitioners had they been truly in possession of the property in the concept of an owner.
Their claim is thus negated by the fact that the subject land is registered in the name of
the petitioners. Hence, petitioners as the titleholders are entitled to all the attributes of
ownership of the property including possession.
Even then, the respondents’ claim of possession of the property in the concept of an
owner is a collateral issue that may not be decided upon in a case for unlawful detainer.
Page 36
UP Law Center
Sps. Genotiva v. Equitable-PCI

Topic: Contracts: Defective Contracts - Voidable Contracts
Doctrine
1. For intimidation to vitiate consent, the following requisites must be present:
a. The intimidation must be the determining cause of the contract, or must
have caused the consent to be given;
b. The threatened act must be unjust or unlawful;
c. The threat must be real and serious, there being an evident
disproportion between the evil and the resistance which all men can
offer, leading to the choice of the contract as the lesser evil; and
d. It produces reasonable and well-grounded fear from the fact that the
person from whom it comes has the necessary means or ability to inflict
the threatened injury.
2. The court has held that “for undue influence to be present, the influence
exerted must have so overpowered or subjugated the mind of a contracting
party as to destroy their free agency, making them express the will of another
rather than their own.”
Facts
Calvin Genotiva (Calvin), together with his business colleagues through their business
under the registered name Goldland Equity, Inc. (Goldland) applied for a “clean loan”
with BDO Cagayan de Oro City Branch where Violet Genotiva (Violet), Calvin’s spouse,
is an employee. BDO granted the loan in the amount of P2M as evidenced by a
promissory note dated November 12, 1996. The Sps. Genotiva also executed a Deed of
Suretyship binding them solidarily liable with Goldland. When Violet retired on
October 15, 1998, BDO refused to release her retirement benefits and the owner’s copy
of TCT of the subject property which was retained by the latter unless the Sps. Genotiva
would execute a real estate mortgage over the subject property to secure Goldland’s
loan. Since the Sps. Genotiva were pressed for money, they had no choice but to comply
and to sign a Real Estate Mortgage contract (subject contract) in March 1999 in favor of
BDO. The Sps. Genotiva alleged that sometime after the execution of the contract, they
offered to pay BDO the amount of P500,000 to redeem the property. However, instead of
applying the property for redemption, BDO applied it to the payment of the interest
due on Goldland’s loan. Moreover, when Goldalnd defaulted in the payment of the
loan, BDO foreclosed on the subject property and scheduled an auction sale.
Thus, the Sps. Genotiva filed for a complaint to annul the real estate mortgage contract
and to release the P500,000 deposit. They argued that their consent was vitiated when
they signed the subject contract since BDO would not release Violet’s retirement
benefits if the spouses did not secure the loan. Moreover, they argued that the deed of
suretyship was already novated due to BDO’s application of the P500,000 deposit.
BDO alleged that it withheld the issuance of Violet’s clearance because of an existing
obligation to the bank due to the Deed of Suretyship executed by the spouses. It did not
exert undue influence upon the Sps. Genotiva when they executed the subject contract.
Its application of the P500,000 deposit to Goldland’s loan was merely an exercise of its
right as a creditor under the Deed of Suretyship.
Page 37
UP Law Center
Issue
1. Whether the subject contract is voidable in view of the claim of the Sps. Genotiva
was executed under BDO’s intimidation and undue influence.
2. Whether BDO has the right to apply the P500,000 deposit payment to Goldland’s
interest based on the Deed of Suretyship executed by the Sps. Genotiva.
Held + Ratio
1. No, the contract is not voidable.
For there to be intimidation in the execution of the contract, there must be a

reasonable and well-grounded fear upon one of the parties on their person and
property to consent thereto. Moreover, for consent to be vitiated by undue
influence, such must be used to take advantage over another depriving them of
their free will.
There were no circumstances which showed that BDO exerted intimidation or

undue influence in gaining the consent of the Sps. Genotiva to execute the
contract. BDO’s withholding of Violet’s retirement benefits is not considered as
intimidation by law because such act is neither unjust nor unlawful because it is
based on the existing liability of Violet to the respondents.
There was also no undue influence because there was no showing that the Sps.
Genotiva were deprived of free agency when they signed the contract, although
the Sps. Genotiva may have desperately needed the retirement benefits.
Moreover, the spouses willingly offered to execute the subject contract in
exchange for the release of Violet’s retirement benefits, as expressly admitted
through a letter to BDO.
2. No, BDO does not have the right to apply the payment.
The right of a creditor to proceed against the surety refers to the right to sue the
surety independently of the right to sue the principal or other sureties; however,
such right does not give the creditor the right to deprive the surety of their
property without due process. While BDO has the right to collect from the Sps.
Genotiva based on the Deed of Suretyship, BDO cannot unilaterally set-off the
amount of P500,000 to answer for Goldland’s due interest. BDO must proceed
against the Sps. Genotiva through the institution of proceedings for collection or
enforcement of the surety contract, and not through unilateral compensation.
Obviously, the creditor’s right to proceed against the surety does not give him
any right to deprive said surety of his property without due process of the law. It
does not contemplate a situation where the creditor is allowed to take by force or
without consent the property of the surety. Much like collecting from the
principal debtor, the creditor may recover only through lawful means. The
creditor may not simply take the law in his own hands and summarily take the
property of the debtor or surety.
Page 38
UP Law Center
Silva v. Lo
Topic: Bundle of Rights: Co-Ownership ; Agency
Doctrine
As a co-owner pro indiviso, Conchita exercises her right to the entire co-owned
property.
Law and jurisprudence recognize actual authority and apparent authority. Apparent
authority is based on the principle of estoppel.
Facts
In 1975, Carlos Jr. died intestate and left behind a sizable estate to his compulsory heirs
consisting of his wife Concepcion and their seven children. Included in Carlos’s estate is
the subject property, a private agricultural land, which is owned in pro indiviso by the
decedent’s heirs.
A few of Carlos’s children wanted to terminate the co-ownership of the subject

property. They manifested their intention by executing a Memorandum of Agreement
with the other co-owners, which was never implemented. This eventually led to an
action for partition filed with the RTC. The other children including their mother
opposed the partition as such would diminish the value and use of the property should
it be physically divided. In the course of the trial, the heirs finally agreed that the
property be divided via a raffle conducted by the trial court. The heirs drew lots for an
aliquot of the property and everyone got their designated portions therein. The terms of
the property’s partition were later on embodied in a compromise agreement.
However, after the plaintiffs signed the compromise agreement, the other children
including their mother Concepcion refused to do so for the same reasons. The RTC even
issued an Order of Partition honoring the terms of the compromise agreement, but the
property remained undivided and not distributed among the heirs.
Thus, on August 29, 2003, the plaintiffs filed a Motion to Appoint Commissioners to
Make Partition. In their reply, the defendants opposed the appointment of
commissioners on the ground that the tenants of the agricultural land have already
agreed to the subdivision of the subject property. Apparently, the subject property is
covered by The Comprehensive Agrarian Reform Law (CARL) which requires it to be
distributed among tenant-farmers. The heirs executed the 1999 Kasunduan to comply
with the law, which provided for the 50-50 sharing of the subject property: half goes to
Carlos’s heirs and the remaining half goes to the tenants. A similar 2006 Kasunduan
was likewise executed stipulating the same and eventually became the basis for the
RTC’s decision on April 13, 2007 approving the Motion for Approval of New
Agreement and Subdivision Plan filed by the defendants. The RTC also ordered the
plaintiffs to sign the new agreement and they appear to have acquiesced to such.
However, on November 6, 2009, Conchita, one of the children and defendant in the civil
case, filed a motion opposing the Motion to Order Register of Deeds to Enter New Titles
filed by her mother Concepcion. The 2006 Kasunduan was signed by Concepcion on
behalf of her three children, which included Conchita, due to a Special Power of
Attorney executed by the latter in favor of their mother.
Page 39
UP Law Center
However, on June 26, 2000, Conchita executed a Revocation of the SPA but failed to
furnish her mother a copy thereof. The RTC denied Conchita’s motion on the grounds
that the April 2007 decision of the RTC is already final and executory. On appeal to the
CA, Conchita through a petition for certiorari alleged that the RTC committed grave
abuse of discretion in rendering its decision and furthermore alleged that the April 2007
Order did not attain finality as it was a void judgment based, in turn, on a void
agreement.
Issues
1. Whether there was a valid transfer of title of the half of the subject property to
the tenant-farmers who were not heirs of the decedent.
2. Whether the revocation of SPA by Conchita effectively revoked Concepcion’s
authority to represent the former and sign the 2006 Kasunduan on her behalf.
.
Held + Ratio
1. Yes, there was a valid transfer.
The transferred portion of the property, which consists of half of it, can be
considered as the share of Concepcion in the conjugal partnership property
regime during her marriage to the decedent. As co-owner therefore, she is
allowed to alienate her share in the co-owned property as provided by theNCC.
Conchita’s right to the subject property is by virtue of succession, but even that
pertains to only to a portion of one half thereof. Conchita’s full rights as
co-owner do not pertain to Concepcion’s half of the subject property.
2. No, the revocation of the SPA did not revoke Concepcion’s authority.
Law and jurisprudence recognize actual and apparent authority, the latter being
based on the principle of estoppel. To begin with, Conchita failed to inform her
agent, Concepcion, of the fact of revocation. She continued to clothe her mother,
Concepcion, with apparent authority to act on her behalf in Civil Case No.
Q-893137. Conchita’s failure to give her mother notice of revocation clothed her
mother with apparent authority to continue acting on her behalf. Furthermore,
even if authority was effectively revoked, the NCC provides that a contract
entered into in the name of another by someone who has no authority is
enforceable when ratified, expressly or impliedly, by the person on whose behalf
it has been executed. Conchita’s failure to assail the RTC’s decision constituted
implied ratification.
Page 40
UP Law Center
Equitable-PCI v. Manila Adjusters

Topic: Credit Transactions: Loans - Interest
Doctrine
As laid down by the Court in Nacar v. Gallery Frames, “[i]n the absence of an express
stipulation as to the rate of interest that would govern the parties, the rate of legal
interest for loans or forbearance of any money, goods or credits and the rate
allowed in judgments shall no longer be twelve percent (12%) per annum…but will
now be six percent (6%) per annum effective July 1, 2013. It should be noted,
nonetheless, that the new rate could only be applied prospectively and not
retroactively. Consequently, the twelve percent (12%) per annum legal interest shall
apply only until June 30, 2013. Come July 1, 2013, the new rate of six percent (6%) per
annum shall be the prevailing rate of interest when applicable.
Facts
The Ilocos Sur Federation of Farmers Cooperatives (Federation) executed a Deed of Sale
with Philippine American General Insurance Co. (Philam), who was represented by
respondent Manila Adjusters and Surveyors, Inc. (MASCO). The Deed of Sale involved
the sale of salvaged fertilizers, by which the Federation would pay for the stocks of
fertilizers in installments for the total amount of about P5,000,000. The Federation was
also required to open a recourse Letter of Credit (LOC) amounting to P1,000,000 which
will be forfeited in favor of MASCO in case of Federation’s non-compliance with the
terms and conditions of the contract.
Pursuant to this, the Federation then availed of an LOC from petitioner Equitable PCI
Bank (Bank) with a face value of P1,000,000 in favor of MASCO. In order for MASCO to
be able to claim from the LOC, the Bank noted certain documents that needed to be
presented. Incidentally, the Federation only managed to pay the first installment and a
part of the second installment. Despite repeated demands from MASCO, the Federation
still failed to render payment of the subsequent installments that fell due. As such,
MASCO signified its resolve to demand for the proceeds of the LOC from the Bank.
Despite this, the Bank refused to pay MASCO the proceeds of the LOC. As justification
for refusal to pay, the Bank’s Account Officer Assistant stated that the Federation
instructed the Bank not to pay MASCO because of its violation of the provisions of the
Deed of Sale. He explained that non-compliance with the terms and conditions will
result in the cancellation of the LOC. Furthermore, MASCO failed to present the draft of
the Federation drawn under the LOC, which was one of the requirements in order to
claim from the LOC.
Meanwhile, in another case filed against the Bank, an injunctive order was issued
which, as the Bank alleged, prevented it from paying the proceeds of the LOC. The said
injunction was eventually dissolved by the Supreme Court in a decision promulgated
on February 28, 1977.
The RTC ruled in favor of MASCO. It held that the Federation did not comply with the
terms and conditions of the Deed of Sale since it failed to pay the entire sum. On the
other hand, RTC found that MASCO properly filed its claim against the LOC with the
Bank. The CA affirmed the RTC’s findings and likewise found that MASCO complied
with the conditions to claim the proceeds of the LOC upon presentation of the required
Page 41
UP Law Center
documents to the Bank.
Issue
Whether the Bank can be held liable for payment of interest despite the existence of an
injunctive order that prevented it from paying.
Held + Ratio
Yes the bank may still be held liable for paying interest.
The bank failed to present sufficient factual or legal basis to support its contention that
the time in which the injunction was in effect should not be included in the computation
of the legal interest, it being established that the parties to the Deed of Sale did not
stipulate an interest rate in case of default when they entered into the sale. The legal
interest on the face amount of the LOC or P1,000,000.00 shall commence to run from the
time extrajudicial demand was made, or the date when the letter-claim along with the
documents were submitted to the Bank. However, the Court modifies the interest on the
monetary awards. The amount of P1,000,000.00 shall be subject to interest at the rate of
12% per annum from the date the extrajudicial demand was made until June 30, 2013,
and thereafter, 6% per annum from July 1, 2013 until finality of this judgment.
Page 42
UP Law Center
Seming v. Alamag
G.R. No. 202284 (March 17, 2021) | Hernando, J
Topic: Sales: Contract of Sale
Doctrine
The elements of a contract of sale are:
1. Consent or meeting of the minds, that is, consent to transfer ownership in
exchange for the price;
2. Determinate or determinable subject matter; and
3. Price certain in money or its equivalent.
Facts
Petitioner and her spouse, Eutiquo Seming (collectively Sps Seming) filed an action for
specific performance and damages against the Sps Pamat alleging that they purchased
Jesusa’s 1/2 share—771 sqm—in Lot 512-C (subject property) on which they built their
conjugal dwelling and Jesusa accordingly executed a Deed of Sale in their favor; they
also purchased the other half of the subject property belonging to Natividad Pamat
admittedly through a verbal agreement;
As payment of the purchase price, petitioner, with the consent of Jesusa and the Sps
Pamat, shouldered the litigation expenses as part of petitioner’s payment for the
purchase price of the subject property in relation to the complaint for quieting of title
against Jesusa and the Sps Pamat filed by one Maria Aguilar Avecilla. Sps Seming also
paid a portion of the said purchase price both in cash and in kind, and Natividad Pamat
acknowledged receipt of petitioner’s payment in the amount of Php12k in total (2
payments of P6k) as evidenced by receipts. Petitioner offered to buy the remaining
171sqm from the Sps Pamat for a total of P10k and further requested that the sale of the
600sqm be embodied in a deed of sale, however, the Sps Pamat refused on grounds that
they never sold any portion of their share in Lot 512-C.
Petitioner in turn argued that the Sps Pamat’s denial of the sale is belied by the
allegation that they [Sps Pamat] never possessed, actually or constructively, any part of
the said property from the time petitioner and her husband took possession of the same.
On the other hand, Sps Pamat maintained that the subject property has been and
remains under their ownership, control, and possession.
The RTC ruled in favor of petitioner ordering respondents to execute a Deed of

Absolute Sale covering the 600 sq. m. of the subject property on the ground that there
was a perfected contract of sale. On appeal, the CA reversed the RTC ruling holding
that no contract of sale existed between petitioner and respondents.
Issue
Whether there was a perfected contract of sale between the parties.
Held + Ratio
No, there is no contract of sale between petitioner and Natividad because all the
elements of a contract of sale are absent.
Page 43
UP Law Center
First, there was no consent as Natividad Pamat did not consent to enter any contract of
sale involving her half portion of Lot 512-C because there is no clear and convincing
evidence to prove such. Also, the receipts presented by petitioner to prove that there
was a perfected contract of sale have no evidentiary value since petitioner failed to
prove that Natividad’s signatures therein were genuine. Moreover, the testimonies of
petitioner and Jesusa reveal that while there may have been initial talk as to the sale of
Lot 512-C, there was no actual transfer or conveyance of Natividad’s portion thereof
that took place.
Second, there is no determinate subject matter as the object of the supposed sale in this
case is ambiguous because they could not even define the metes and bounds of the lots
which are supposedly the subject of the sale.
Lastly, the price for the sale of the subject property is also uncertain. Other than her bare
testimonies, petitioner’s claim that she extended financial aid to Natividad was not
supported by corroborating evidence. Although the litigation expenses spent by
petitioner form part of the purchase price of the subject property, no receipt of expenses
was presented by petitioner which would aid the Court to determine the exact amount
thereof—this undetermined amount of expenses even more renders the price or
consideration of the sale ambiguous.
Page 44
UP Law Center
Rico v. Union Bank

G.R. No. 210928 (February 14, 2022) | Hernando, J
Topic: Credit Transactions: Loans
Doctrine
A credit card is a form of credit accommodation granted by the credit card company
to the card holder for the latter’s use in the purchase of goods and services
Facts
Rico filed a complaint for damages before the RTC, claiming Union Bank (UB)
negligently handled his credit card account. He alleged that UB charged him exorbitant
fees, declined his transactions (including his purchase at the restaurant Gourdo’s), made
erroneous late payment charges, and dishonored his card for alleged non-payment,
among others.
The RTC ruled in favor of Rico, finding that UB should have protected Rico from a
potentially humiliating situation when it received the complaints from Rico. Moreover,
UB also acted in bad faith because it was reckless and wanton with Rico’s account; and
thus, it was ordered to pay moral and exemplary damages, attorney’s fees, and costs of
suit. On appeal to the CA, the decision was affirmed, but the damages were lessened.
Issue
1. Whether Rico is entitled to moral, exemplary, and atty’s fees from UB for having
disapproved his credit transaction.
2. Whether UB was grossly negligent when it dishonoured the credit card purchase
request of Rico in Gourdo’s because this caused him embarrassment and
humiliation.
Held + Ratio
1. No, Rico is not entitled to moral, exemplary, and attorney’s fees from UB for
having disapproved his credit transaction.
Union Bank had no obligation to enter into a loan agreement with Rico when the
latter tendered his UB Visa credit card to pay for his purchase at Gourdo’;s
Restaurant. Rico cannot, therefore, demand from UB to loan him or to pay for his
purchase at Gourdo’s Restaurant by virtue of the issued Visa credit card. The
disapproval of the credit card transaction which allegedly caused him
embarrassment and humiliation worthy of moral damages cannot be solely
attributed to UB when there is no demandable right to begin with. In the same
manner, Rico is not compelled nor obliged to use his UB Visa credit card to pay
for any of his purchases.
2. No, UB was not grossly negligent when it dishonoured the credit card purchase
request of Rico in Gourdo’s, because this caused him embarrassment and
humiliation. The disapproval of Rico’scredit card on November 20, 2005, is
justified and done in good faith. UB neither breached its contract with Rico nor
acted with willful intent to cause harm when it revoked Rico’s credit card
privileges when he failed to pay the minimum amount due on his SOA dated
October 16, 2005. Nobody can be faulted for Rico’s alleged humiliation or
embarrassment in Gourdo’s Restaurant but himself.
Page 45
UP Law Center
Reyes v. Sps. Garcia

G.R. No. 225159 (March 21, 2022)|Hernando, J.
Topic: Bundle of Rights; Co-Ownership; Partition
Doctrine
The action for ejectment and recovery of possession instituted by herein respondents
in the lower court is premature, for what must be settled first is the action for
partition. Unless a project of partition is effected, each heir cannot claim ownership
over a definite portion of the inheritance.
Facts
Julian, owner of an unregistered parcel of land in Taguig, and his spouse, Marcela, had
nine children - Vitaliano, Maria, Felicidad, Ireneo, Isidoro, Anastacio, Julia, Vicente and
Isadora. Spouses Julian and Marcela died. Their heirs executed a Partihan at Bilihan nang
Kalahating Bahagi ng Lupang Tirahan sa Labas ng Hukuman and sold half of the property to
one of the heirs, Anastacio. The remaining quarter of the property was occupied by
Vitaliano’s children, namely, petitioner and Fermin Reyes (Fermin), while the other
quarter was sold by Isidoro to respondent Spouses Garcia. The Garcias filed an
ejectment case against Fermin. The latter, in turn, filed a complaint for recovery of
ownership, quieting of title and annulment of deed of sale against the former alleging
that the Deed of Sale is void since Isidoro is not the true and real owner of the subject
property which originally belongs to Julian's estate.
Issue
Whether the filing of a complaint for nullification of sale and recovery of ownership
was the proper action to assert the right of a pro-indiviso co-owner
Held + Ratio
No, the appropriate remedy is not a nullification of the sale or for the recovery of the
thing owned in common but a division of the common property.
Isidoro, as one of the heirs of Julian and Marcela, has the right to alienate his pro
indiviso share in the co-owned property even without the consent of the other co-heirs.
However, as mere part owner, he cannot alienate the shares of the other co-owners. The
spouses Garcia will only get Isidoro's undivided share in the subject property.
Despite the foregoing, petitioner's recourse of filing a complaint for nullification of sale
and recovery of ownership is not the proper action. The appropriate remedy is not a
nullification of the sale or for the recovery of the thing owned in common but a division
of the common property.
To demand a partition or division of the common property is in accord with Article 494
of the Civil Code, that is, no co-owner shall be obliged to remain in the co-ownership
and that each co-owner may demand at any time partition of the thing owned in
common insofar as his or her share is concerned.
Page 46
UP Law Center
Nevertheless, the spouses Garcia, as co-owner of the 231.5 sqm subject property by
virtue of the deed of sale executed by Isidoro in their favor, cannot claim a specific
portion of the subject property prior to its partition. With the subsistence of
co-ownership, the spouses Garcia only owns Isidoro's undivided aliquot share of the
subject property.
Page 47
UP Law Center
Republic v. Tapay
GR No. 157719 (March 2, 2022)|Hernando, J
Topic: Land Titles and Deeds; Subsequent Registration
Doctrine
Considering that it is the decree of registration that binds the land and quiets the title,
and not the decision, the registration should be allowed especially where no decree of
registration covering the subject land had yet been issued and only the existence of
the supposed decision (which has not yet even attained finality) bars respondents'
application.
Facts
Respondents filed an application for registration for a certain lot. They alleged that they
inherited the said property from Teofilo who purchased the same from Francisca who
had been in possession of the property since 1925. The registration was opposed by the
Republic. During the RTC proceedings, the Land Registration Authority issued a report
saying that the Property is the subject of registration in another case, that it had already
been adjudicated to the registrant, and that the decree of registration has yet to be
issued. Notwithstanding the report of the LRA, the RTC granted the registration, with
the decree of registration to be issued upon the decision reaching finality, which it did,
and the decree was eventually issued to direct the LRA to register the Property. The
Republic appealed claiming that the RTC has no authority to set aside the decision of a
Cadastral Court as it amounts to interference with another co-equal court.
Issue
Whether the RTC can set aside the decision of a cadastral court and order a subsequent
registration
Held + Ratio
Yes, as the RTC does not have the capacity to nullify the decision of a co-equal court
in a land registration case, that supposes that Cadastral Case No. 33 really existed and
that there actually is a decision in that case. Unfortunately, aside from the single entry
“Cadastral Case No. 33, LRC (GLRO) Cadastral Record No. 1305,” no other record,
including a copy of the decision, exists to support the theory.
The Court agrees with the CA that the doctrine of judicial stability finds no application
in this case. Practical considerations now demand that the proceedings in the RTC no
longer be disturbed and the August 14, 1996 Order no longer set aside.
In Republic v. Heirs of Sta. Ana, the Court allowed the registration of the property since
“it would be the height of injustice for the heirs to be held hostage or punished by
reason of the plain scarcity of the records”.
Notably, in that case, the LRA reported that a prior decree of registration had already
been issued, yet the Court still decided to allow the subsequent registration because
there was no way to verify the truthfulness of the alleged prior case. Considering that it
Page 48
UP Law Center
is the decree of registration that binds the land and quiets the title thereto, and not the
decision, the registration should be allowed with much more reason here where no
decree of registration covering the subject land had yet been issued and only the
existence of the supposed decision (which has not yet even attained finality) bars
respondents’ application. It is in keeping with the purpose of land registration to finally
allow respondents to be granted a registration decree.
Page 49
UP Law Center
Republic v. Ponce-Pilapil
GR No. 219185 (November 25, 2020)|Hernando, J.
Topic: Presumption of Death
Doctrine
The well-founded belief in the absentee’s death requires the present spouse to prove
that his/her belief was the result of diligent and reasonable efforts to locate the absent
spouse and that based on these efforts and inquiries, he/she believes that under the
circumstances, the absent spouse is already dead. It necessitates exertion of active
effort (not a mere passive one). Mere absence of the spouse (even beyond the period
required by law), lack of any news that the absentee spouse is still alive, mere failure
to communicate, or general presumption of absence under the Civil Code would not
suffice.
Facts
Josephine filed a petition to declare her husband Agapito presumptively dead after the
lapse of more than 6 years without knowing his whereabouts so that she could remarry.
She alleged that Agapito left without information where he was going, that she tried to
look for him from Agapito’s only surviving relative and that she inquired from their
friends if they heard from him, but to no avail. She presented a witness, their childhood
friend and neighbor, who testified that she knew of Agapito’s disappearance and
Josephine’s abovementioned efforts to locate him. RTC declared Agapito as
presumptively dead. The OSG filed a Petition for Review on Certiorari, arguing that
Josephine failed to prove that she had a well-founded belief that Agapito was already
dead, and that she exerted the required amount of diligence in searching for her missing
husband.
Issue
Whether Josephine exerted the required amount of diligence in searching for her
missing husband
Held + Ratio
No, since a declaration of presumptive death must be predicated upon a
well-founded fact of death. The fact that the absent spouse is merely missing, no
matter how certain and undisputed, will never yield a judicial presumption of the
absent spouse’s death.
Josephine’s efforts to search for Agapito only consisted of inquiries not even done
personally but by mere letter-correspondence facilitated by another person. Her
personal knowledge of a growing cyst on Agapito’s jaw does not produce an inevitable
conclusion that the latter was already suffering from some terminal illness prior to his
disappearance. Her supposed informers and their information were unreliable.
Josephine could have resorted to police assistance in seeking out her husband.
Josephine’s acts fail to convince the Court that she indeed went out of her way to locate
Agapito, and her search for Agapito’s whereabouts cannot be said to have been
diligently and exhaustively conducted. In all, Josephine’s efforts were just too flimsy to
serve as a concrete basis of a well-founded belief that Agapito is indeed dead.
Page 50
UP Law Center
Josephine in this case only successfully established that the whereabouts of Agapito are
indeterminable. As circumstances that suggest Agapito’s death remain to be seen, the
Court cannot consider Josephine’s civil status as that of a widow.
Page 51
UP Law Center
Republic v. PNP
GR No. 198277 (February 8, 2021)|Hernando, J.
Topic: Land Titles and Deeds; Original Registration (PD 1529)
Doctrine
An application for original registration must be accompanied by:
(1) a CENRO or [Provincial Environment and Natural Resources Office (PENRO)]
Certification; and
(2) a copy of the original classification approved by the DENR Secretary and
certified as a true copy by the legal custodian of the official records.
Facts
The PNP filed an application for land title registration of Iba Cadastre before the RTC.
The PNP submitted a subdivision plan, containing an annotation which indicates that
the subject lots are alienable and disposable. The RTC granted the application for land
registration. The Republic appealed, arguing that the PNP failed to prove the alienable
and disposable character of the subject lots since according to a Report of the
CENRO-DENR, the lots had been reserved for military purposes per E.O. No. 87 (1915).
Thus, the subject lots remain unregistrable, in the absence of a positive act from the
government withdrawing the land from the reservation.
Issue
Whether annotation on the subdivision plan indicating the lots are alienable and
disposable is enough proof that the same are alienable and disposable lands of the
public domain
Held + Ratio
No, the PNP has not proven the lots are alienable and disposable lands of the public
domain.
The prevailing rule during the pendency of the PNP's application for registration of
land title in the RTC was that a DENR certification stating that the land subject for
registration is entirely within the alienable and disposable zone constitutes as
substantial compliance, which the PNP failed to comply with.
The PNP did not submit a DENR Certification to the effect that the subject lots are
alienable and disposable lands of the public domain, which was the prevailing
requirement when its application for land registration was pending with the RTC. The
PNP merely submitted a subdivision plan containing an annotation indicating that the
subject lots are alienable and disposable. The foregoing annotation, however, is
insufficient to prove the classification of the subject lots as alienable and disposable
lands of the public domain.
The fact that the OSG presented the CENRO Report for the first time on appeal and not
during trial will not affect the outcome of this case. Settled is the rule that an applicant
Page 52
UP Law Center
for land registration, such as the PNP, bears the burden of proving that the land applied
for registration is alienable and disposable.
While the requirement of strict compliance laid down in the case of T.A.N. Properties is
the prevailing rule, substantial compliance was allowed as an exception as pronounced
in the Vega case. However, the case of respondent does not fall under the exception
because unlike in the Vega case, respondent here had all the opportunity to comply with
the requirements under the T.A.N. Properties case while its case was pending before the
appellate court where the OSG brought forth the CENRO Report to its attention.
Page 53
UP Law Center
Republic v. Herederos de Ciriaco Chunaco Destileria Inc.

GR No. 200863 (October 14, 2020)|Hernando, J.
Doctrine
The intermittent and sporadic assertion of alleged ownership does not prove open,
continuous, exclusive and notorious possession, and occupation. In the absence of
other competent evidence, tax declarations do not conclusively establish either
possession or declarant's right to registration of title.
Facts
Respondent HCCDI claimed ownership and actual possession of a certain lot on the
ground of its continuous, adverse, public and uninterrupted possession in the concept
of an owner since 1976 by virtue of a Deed of Assignment executed by the heirs of
Ciriaco who, in turn, had been in continuous, adverse, public, and uninterrupted
possession of the subject lot in the concept of an owner since 1945 or earlier. The
Republic opposed on the ground that, among others, the tax declarations submitted by
the HCCDI in its land registration, arguing that they did not constitute as competent
and sufficient evidence of a bona fide acquisition of the subject lot or of its open,
continuous, exclusive, and notorious possession and occupation.
Issue
Whether the fact that the land was declared for taxation purposes only in 1980 negates
the open, continuous, exclusive, and notorious possession of applicant and its
predecessors-in-interest since 1943.
Held + Ratio
Yes, the intermittent and sporadic assertion of alleged ownership does not prove
open, continuous, exclusive, and notorious possession and occupation.
The court found that despite the absence of a certification by the CENRO and a certified
true copy of the original classification by the DENR Secretary or the President, HCCDI
substantially complied with the requirement to show that the subject property is indeed
alienable and disposable based on the evidence on record.
However, while the court held that Lot No. 3246 is part of alienable and disposable land
of the public domain, HCCDI's application must fail due to non-compliance with
Section 14(1) of P.D. No. 1529. In this case, HCCDI and its predecessors-in-interest
admittedly have been in possession of the subject lot only from 1980, which is the
earliest date of the tax declaration presented by HCCDI.
It bears stressing that the subject lot was declared for taxation purposes only in 1980 or
four years after the heirs of Ciriaco executed the Deed of Assignment in 1976 in favor of
HCCDI. This gives rise to the presumption that HCCDI claimed ownership or
possession of the subject lot starting in the year 1980 only. It is worth noting that Ciriaco
and his heirs did not declare the subject lot for taxation purposes during their alleged
Page 54
UP Law Center
possession and occupation of the subject property from 1943 until 1976. In fact, HCCDI
presented only the tax declarations for the years 1980, 1983, 1985, 1991, 1994, 1997, 2000,
2003 and 2004 to prove its alleged actual and physical possession of Lot No. 3246
without any interruption for more than 30 years.
Page 55
UP Law Center
Republic v. Caraig
G.R. No. 197389 (October 12, 2020)|Hernando, J.
Doctrine
The grant of an application for land registration based on substantial compliance may
be applied subject to the discretion of the courts and only if the trial court rendered its
decision on the application prior to June 26, 2008, the date of the promulgation of
TA.N. Properties. Further, tax declarations or tax receipts are good indicia of possession
in the concept of owner. However, it does not follow that belated declaration of the
same for tax purposes negates the fact of possession.
Facts
Manuel claims he bought a certain lot from Reynaldo, who had been in open, peaceful,
continuous, and exclusive possession of the land. Manuel filed an Application for
Original Registration of Title over the same. He attached, among others, a tax
declaration in his name, a Deed of Absolute Sale executed by Reynaldo in his favor, and
a Certification in lieu of Geodetic Engineer's Certificate for registration purposes. The
OSG opposed, arguing that the land is inalienable and part of the public domain for
failure to comply with the twin requirements under TA.N. Properties case; and the
evidence attached to the application is insufficient to prove continuous, exclusive and
notorious possession and occupation thereof since the earliest tax declaration on record
is 1955.
Issue
Whether Manuel sufficiently proved all the requirements necessary for the application
for registration of land
Held + Ratio
Yes, Manuel adequately met all requirements for the application for registration of
land.
Manuel filed his application for original registration on September 2, 2002. The MTC
granted the same on February 28, 2007 or 15 months before the promulgation of T.A.N.
Properties. Substantial compliance with the legal requirements should therefore be
applied in this case.
Manuel presented the February 11, 2003 and March 21, 2003 Certificates from the
CENRO stating that Lot No. 5525-B is disposable and alienable. The CENRO Certificate
dated February 11, 2003 stated that Lot No. 5525-B is not covered by any public land
application or patent. Neither the Land Registration Authority nor the DENR opposed
Manuel's application on the ground that Lot No. 5525-B is inalienable. The CENRO
Certificates dated February 11, 2003 and March 21, 2003 sufficiently showed that the
government executed a positive act of declaration that Lot No. 5525-B is alienable and
disposable land of public domain as of December 31, 1925.
Page 56
UP Law Center
Manuel sufficiently established his possession in the concept of owner of the property
since June 12, 1945, or earlier. The testimonies of the witnesses are credible enough to
support Manuel's claim of possession. Worthy to note that the witnesses unswervingly
declared that Evaristo, in the concept of an owner, occupied and possessed Lot No. 5525
even before June 12, 1945. Remarkably, Arcadio, who frequented the land since he was
a child, categorically testified that it was Evaristo who possessed and owned Lot No.
5525 as early as 1942. Evaristo performed specific acts of ownership such as planting
banana and coffee in the land and hiring the services of other workers to help him till
the soil. Thereafter, Lot No. 5525 was transferred to Reynaldo, Evaristo's son, who
continued to cultivate the same.
The possession and occupation as bona fide owner of Evaristo and Reynaldo can be
tacked to the possession of Manuel who acquired Lot No. 5525-B by virtue of a Deed of
Absolute Sale dated September 25, 1989 executed by Reynaldo in his favor. The fact that
the earliest tax declaration on record is 1955 does not necessarily show that the
predecessors were not in possession of Lot No. 5525 since 1945.
Page 57
UP Law Center
Republic vs. Abellanosa

GR No. 205817 (October 6, 2021)|Hernando, J.
Topic: Land Titles and Deeds; Reconstitution of Title
Doctrine
The reconstitution of title is an action in rem, which means it is one directed not only
against particular persons, but against the thing itself. The essence of posting and
publication is to give notice to the whole world that such petition has been filed and
that interested parties may intervene or oppose in the case. This purpose was
achieved in this case when notices on the first and second amendments were duly
served upon the parties in interest of the case and proper posting and publication was
made to the original petition for reconstitution.
Facts
A petition for reconstitution was filed by respondent spouses Manalo, claiming that
they were once registered owners of two parcels of land. They sold the same Valero for
which the corresponding tax declaration was issued under the latter's name. Valero then
sold one lot FEPI while another was developed into a first-class subdivision with FEPI
as the developer. However, Valero was unable to surrender the owner's duplicate copy
of the titles to FEPI because such were lost during a fire in the City Hall of Lucena City.
The petition was amended twice without another posting and publication.
FIRST AMENDMENT: respondent spouses sought to amend the petition for reconstitution by
attaching thereto the respective sketch plans of the subject lots including the technical
descriptions thereof.
SECOND AMENDMENT: after the death of respondent spouses Manalo, their counsel filed a
motion to admit a second amended petition to propose the substitution of parties by impleading
Valero as co-petitioner and to use the LRA-verified plans and technical descriptions of the subject
lots as bases for the reconstitution of the lost titles.
Issue
Whether failure to cause posting and publication of the amended petitions divested the
trial court of its jurisdiction over the reconstitution case
Held + Ratio
No, the Court found that the foregoing does not affect the nature of the action that
necessitates another posting and publication.
The revisions merely refer to the substitution of the parties in view of the deaths of the
spouses Manalo and the mention of RA 26 as the applicable law. These are minor
matters that simply tend to assist and guide the RTC in conducting the proceedings.
Hence, the earlier posting and publication of the petition for reconstitution prior to the
second amendment were sufficient for the RTC to acquire jurisdiction on the subject
matter of the case.
Page 58
UP Law Center
Nevertheless, assuming arguendo that another posting and publication was necessary
in view of the second amendment, the absence of the same does not divest the RTC of
its jurisdiction that it validly acquired in the first instance. Settled is the rule that
jurisdiction once acquired is not lost upon the instance of the parties but continues until
the case is terminated. Moreover, the use of the technical descriptions as embodied in
the blueprints and such other documents adduced as bases for the production of the
new title, likewise does not necessitate another posting and publication because while
they were newly mentioned in the second amendment, the same were already available
for the court to scrutinize during the first amendment.
Thus, the court found that the RTC validly acquired jurisdiction over the case.
Page 59
UP Law Center
KLM Royal Dutch Airlines v. Tiongco

GR No., 212136 (October 4, 2021)|Hernando, J.
Topic: Torts and Damages; Damages; Kinds of Damages; Moral Damages; Exemplary or Corrective
Damages
Doctrine
The courts must adhere to the principle that the amount of damages awarded should
not be palpably excessive as to indicate that it was the result of prejudice or
corruption on the part of the trial court. It must therefore be fair, reasonable, and
proportionate to the injury suffered.
Facts
Dr. Tiongco, a prominent surgeon, was going to Kazakhstan for a speaking engagement.
Before boarding a Turkish Airlines flight, the personnel asked the passengers to identify
their luggages on the tarmac, but Dr. Tiongco could not locate his suitcase. He was
assured that his suitcase would be loaded in the next available flight to Almaty as soon
as it is found. So, he boarded the plane with only his carry-on bag. When he arrived in
Almaty, his suitcase was still nowhere to be found so he went to the hotel where the
conference was to be held. Initially, Dr. Tiongco was not allowed entry into the venue
because of his inappropriate attire (sweatshirt and slacks). It was only when he
explained the situation that he was allowed inside the venue. He delivered his lecture
without any of his visual aids and despite being inappropriately attired. When he
finished his speech, some of the attendees approached him and asked for his resource
materials. However, he was unable to give them the materials since these were also in
his missing suitcase. Three months after he finally arrived back in Manila, there was still
no news about what happened to his luggage. He then demanded compensation for his
lost luggage and the inconvenience he suffered.
Issue
Whether KLM is guilty of bad faith for failure to update Dr. Tiongco on the status of his
luggage, and hence, liable for moral and exemplary damages.
Held + Ratio
Yes, KLM is in bad faith.
The bad faith on the part of KLM as found by the RTC and the CA thus renders KLM
liable for moral and exemplary damages. However, the amounts thereof must be
modified further to be fair, reasonable, and commensurate with the injury sustained by
the passenger.
At the outset, KLM breached its contract with Dr. Tiangco when it failed to deliver his
checked-in suitcase at the designated place and time. Worse, Dr. Tiangco's suitcase was
never returned to him even after he arrived in Manila from Almaty.
It is undisputed that Dr. Tiongco's luggage went missing during his flight. Even after his
return to the Philippines, Dr. Tiongco's suitcase was still missing. Nobody from KLM's
Page 60
UP Law Center
personnel updated him on what happened to the search. It was only when Dr. Tiongco
wrote KLM a demand letter that the latter reached out to him asking for time to
investigate the matter. Yet, it did not even notify him of the result of the purported
investigation. To make matters even worse, the Customer Relations Officer of KLM
categorically testified that the suitcase was eventually found in Almaty as shown in the
baggage report of Turkish Airlines. The said airline immediately notified KLM.
However, KLM did not bother to inform Dr. Tiongco that his suitcase had been found or
took the necessary steps to transport it back to Manila.
Page 61
UP Law Center
Integrated Credit and Corporate Services v. Cabreza

Topic: Sales; Definition and Essential Requisites; Breach of Contract of Sale; Maceda Law
Doctrine
Despite not being denominated as “Deed of Sale”, a contract is what the law defines it
to be, and not what the contracting parties call it. The Maceda Law provides that
actual cancellation can only be effected after 30 days from buyer's receipt of the
notarial rescission.
Facts
Respondent Cabreza was the registered owner of a house and lot. He applied with
petitioner bank Citibank a credit line and secured a real estate mortgage over the subject
property. After defaulting on his loan, Citibank instituted foreclosure proceedings and
on the public auction conducted, petitioner ICCS emerged as the highest bidder. ICCs
and Cabrera entered into a MOA stipulating that although the redemption period has
already expired, ICCS agreed to postpone the consolidation of title over the subject
property and allowed Cabreza to redeem such on their agreed redemption price.
Notably, the MOA submitted as evidence was not dated. Pursuant to this, checks were
issued in favor of ICCS. However, the fourth check was dishonored due to insufficient
funds. ICCS then sent a letter to Cabreza informing the latter that they had already
consolidated its title to the subject property and demanded that they vacate the
premises as it has already sold the property to another. Cabreza alleged that although
they agree that their failure to pay the fourth installment gave ICCS the right to rescind
the MOA, such right was effectively waived when it deposited the fifth check to their
account.
Issue
Whether unilateral rescission of the MOA by ICCS is valid without complying with the
requirements under the Maceda Law
Held + Ratio
No, ICCS could not have validly rescinded the MOA because the conditions
provided under the Maceda Law were not complied with.
Despite not being denominated as “Deed of Sale”, a contract is what the law defines it
to be, and not what the contracting parties call it. The essential elements of a contract of
sale, namely consent, object, and consideration are present in the MOA between ICCS
and Cabreza. Furthermore, the MOA could not have been a mere extension of the
redemption period because the date when the MOA became effective could not be
ascertained to be before the redemption period ends. Also, the requisites for a valid
extension were not me due to the express stipulation on the MOA that it was not an
extension of the redemption period but rather a postponement of ICCS to consolidate
the title to its name.
Page 62
UP Law Center
The MOA admitted in evidence, however, was not dated, making it doubtful as to when
a voluntary agreement for the extension of the redemption period was reached by the
parties. The MOA nevertheless remains to be a valid agreement that is in the form of a
contract of sale of real property in installments.
Hence, Maceda Law is applicable in this case. Consequently, the letter ICCS sent on
December 23, 1994 would have been sufficient to comply with the condition if it was
notarized. It is not accompanied by an acknowledgment or even a jurat. It is a simple
letter addressed to Cabreza and the spouses Aguilar and signed by the managing
partner of ICCS. Furthermore, the letter itself expressly states that the cancellation is
effective immediately, hence the rescission could not have been valid due to the lack of
compliance with the 30-day period.
Page 63
UP Law Center
Home Guaranty Corp. v. Manlapaz

GR No. 202820 (January 13, 2021)|Hernando, J.
Topic: Contracts; Basic Principles of Contracts; Privity of Contract
Doctrine
The basic principle of relativity of contracts is that contracts can only bind the parties
who entered into it, and cannot favor or prejudice a third person, even if he is aware
of such contract and has acted with knowledge thereof'.
Facts
VELI, Planters Bank (Bank), and petitioner HGC entered into an Asset Pool for the
development of the lots in Eagle Crest Village, with one of the lots being the property in
dispute. Due to the delay in the project’s development, the Asset Pool was declared in
default. Hence, the investors called on guaranty issued by HGC. Following this, the
Bank assigned and transferred the possession and ownership of the assets of the Asset
Pool to HGC through a Deed of Assignment and Conveyance. This transfer included
the property in dispute. However, even before the Asset Pool was declared in default,
VELI had entered into a Contract to Sell with FLPPI over the disputed property. In turn,
FLPPI sold the same to respondent Manlapaz.
Manlapaz filed a Complaint for delivery of title with prayer for damages. She claimed
that despite full payment and demands for delivery, FLPPI failed to execute the final
deed of sale and to deliver the title of the lot in her favor.
Issue
Whether Manlapaz may demand the delivery of the title as an innocent purchaser even
when she continued paying despite the existence of contracts after her contract to sell
with FLPPI
Held + Ratio
Yes, FLPPI did not notify her of the changes and continued to receive her payments
and issued the corresponding receipts therefor.
HGC did not sufficiently dispute Manlapaz's claim that she had no information about
the said contracts involving HGC, VELI and FLPPI; it merely insisted that Manlapaz
was not an innocent purchaser for value.
HGC should execute a deed of absolute sale and cause the transfer of the certificate of
title. Facts show that FLPPI sold the contested property to Manlapaz prior to the
declaration of default of the Asset Pool and before the Bank issued the Deed of
Assignment and Conveyance in favor of HGC. The sale to Manlapaz likewise occurred
prior to the execution of the MOA among VELI, FLPPI and HGC, and before the
execution of the Contract to Sell between HGC and FLPPI pursuant to the said MOA.
Moreover, it should be noted that Manlapaz was not privy to the MOA and the third
contract. Hence, HGC cannot expect Manlapaz to meddle in its dealings with VELI and
Page 64
UP Law Center
FLPPI as she has no business doing so, and, as she alleged, she was not made aware of
these developments in the first place.
Notably, Manlapaz remitted all her installment payments to FLPPI and eventually paid
the purchase price for the disputed property in full. Thus, she is entitled to the issuance
of the deed of absolute sale and the transfer certificate of title in her favor, even if the
disputed property has already been transferred to HGC's name due to FLPPI's default
in the third contract.
By virtue of the Memorandum of Agreement and the third contract, HGC not only
acquired the rights to the assets, but also the obligations attached thereto. Since
Manlapaz paid the full price, FLPPI, as the seller when the second contract was
executed, should issue the title in her favor. However, given that the assets were already
transferred to HGC, it is now HGC's obligation to turn over the disputed property to
Manlapaz and then issue the corresponding deed of absolute sale and certificate of title
in her name.
Nevertheless, HGC is not without recourse. To prevent unjust enrichment and to abide
by the intent of the Memorandum of Agreement and the third contract, FLPPI should
turn over Manlapaz's full payment to HGC with legal interest.
Page 65
UP Law Center
Heirs of Marquez v. Heirs of Hernandez

GR No 236826 (March 23, 2022)|Hernando, J.
Topic: Bundle of Rights; Co-Ownership
Doctrine
A co-owner cannot sell a definite portion of a land without the consent of his or her
co-owners. This is based on the principle that a sale of a portion of the property is
considered an alteration of the thing owned in common, and, therefore, requires the
unanimous consent of the other co-owners.
Facts
Sps Sakay and Sps Cruz sold the 1,417-sqm property to petitioner Herminio. The latter
sold to Epifania the 200-sqm portion of the land on which her house was built.
According to respondents, Epifania was able to pay in full the agreed purchase for the
subject property before her death. Meanwhile, respondents received from Marquez, to
whom Herminio waived all his rights, interest and participation over the 1,417-sqm
property, demand letters to vacate the premises of the subject property. Herminio
argued that Epifania reneged on her obligation to complete the payment of the purchase
price. Marquez, for her part, alleged that Epifania did not make any subsequent
payments after the initial payment. Marquez also maintains that no valid contract
existed between Epifania and Herminio because at the time that Herminio sold the
subject property to Epifania in 1985, the whole 1,417-square meter property was
co-owned by Herminio and Marquez, and Herminio failed to obtain her consent, hence,
the sale agreement is void and cannot bind her as the property’s current registered
owner.
Issue
Whether a sale agreement over a definite portion co-owned property is necessarily void
when, at the time the same was executed, a co-owner failed to obtain consent another
co-owner.
Held + Ratio
No, the previous case of Cabrera does not apply to this case.
In Cabrera, it was held that "[a] contract of sale which purports to sell a specific or
definite portion of unpartitioned land is null and void ab initio."
Unlike in Cabrera, however, no evidence was adduced during trial to show that
Marquez had no knowledge of or disapproved the sale of the subject property to
Epifania and respondents; in fact, Marquez made it known that she is aware that
Epifania and respondents were occupying the subject property, and the existence of a
sale agreement between Herminio and Epifania involving the said property.
The parcel of land in Cabrera, on one hand, was held in common by various owners at
the time the sale agreement was entered into by the plaintiff and respondent as
evidenced by the original certificate of title covering the said property, whereas in the
Page 66
UP Law Center
instant case, the only evidence of co-ownership presented by Marquez is the

Extra-Judicial Settlement of Estate with Waiver of Rights executed by and between
Herminio and Marquez in 1994, or nine (9) years after the contract of sale was entered
into by Herminio and Epifania.
Even if the 1,417-sqm property was owned in common by Herminio and Marquez, the
sale of a definite portion thereof [200sqm] by Herminio to Epifania is entirely valid
because the moment Herminio pointed out the boundaries of the subject property, and
Marquez made no objection thereto, there is, in effect a partial partition of the co-owned
property.
Accordingly, the sale of a definite portion thereof can no longer be questioned or

assailed by Marquez.
Page 67
UP Law Center
Heirs of Leonarda Latoja, namely Antonia D. Fabilane, Prudencia D. Bello,

represented by Petra F. Negado Vs. Heirs of Gavino Latoja, et al.
Topic: Land Titles and Deeds; Certificate of Title
Doctrine
An action for reconveyance based on fraud is a direct attack on a Torrens title. Despite
the finality accorded to a Torrens title, reconveyance may prosper as an equitable
remedy given to the rightful owner of a land that was erroneously registered in the
name of another.
Facts
Both parties were alleging that they are entitled to the subject property by virtue of their
respective possession and occupation of the same. Heirs of Gavino were able to secure a
free patent over said lot through the CENRO. An OCT was registered in the name of the
Heirs of Gavino, as represented by Friolan. The Heirs of Leonarda instituted before the
RTC a Complaint for Declaration of Nullity of Title, Reconveyance and Damages
contending that they inherited the lot from their predecessors-in-interest, as real owners
and possessors of the lot since time immemorial. They asserted that the Heirs of Gavino
and Friolan obtained the free patent and the OCT 20783 through fraud and false
representation that they were owners and possessors of Lot 5366. The RTC found that
while the OCT had already become indefeasible when the Complaint was filed, the
Heirs of Leonarda sufficiently proved that Friolan committed misrepresentation
coupled with bad faith in the application for free patent, because despite knowing that
the Heirs of Leonarda were in actual possession, Friolan represented in the application
that Gavino occupied said lot since 1920.
Issue
Whether an action for reconveyance may be filed despite the indefeasibility of a title.
Held + Ratio
Yes, as the Torrens System frowns upon those who fraudulently secure a certificate of
title to the prejudice of the real owner of the land. Hence, usurpers who intend to
enrich themselves cannot hide under the mantle of the Torrens System, which may only
be cancelled, altered or modified through a direct attack where the objective of the
action is to annul or set aside the judgment or enjoin its enforcement.
Despite the lapse of one year from the issuance of OCT 20783, the action for
reconveyance is still an appropriate and available remedy for the Leonarda heirs.
The Heirs of Leonarda's evidence on record established that Leonarda was the lawful
owner and possessor of Lot 5366 since time immemorial. Upon her demise, said lot was
inherited by her five children including Antonia who was adjudged to be the rightful
possessor of the 4/5 portion of Lot 5366. Meanwhile, fraud had been sufficiently proven
by the heirs of Leonarda. Section 91 of the Public Land Act is specific to the effect that
Page 68
UP Law Center
omission of facts or false statements on the material facts set forth in the application for
patent shall ipso facto produce the cancellation of the concession, title, or permit.
Perusing the records, it is apparent that Friolan made false statements in his application
for free patent notwithstanding his knowledge and awareness that the Heirs of
Leonarda were the actual occupants of Lot 5366 at the time when he applied for free
patent. In his testimony. In the Application for Free Patent, Friolan indicated Lot 5366 as
the land subject for the free patent and represented that Gavino first entered and
cultivated such lot since 1920. Glaringly, he further claimed that no other individuals
were occupying said lot.
It is evident that the application was secured though misrepresentation and fraud, and
the consequent issuance of OCT 20783 was marked with undue haste in the name of the
Heirs of Gavino as represented by Friolan. Tersely, the two requisites of an action for
reconveyance were complied with, and the Heirs of Leonarda discharged their burden
of proving through clear and convincing evidence that misrepresentation and fraud
attended the application and processing of the free patent in favor of the Heirs of
Gavino.
Page 69
UP Law Center
Heirs of Godines v. Demaymay

GR No. 230573 (June 28, 2021)|Hernando, J.
Topic: Contracts; Defective Contracts; Unenforceable Contracts
Doctrine
The Statute of Frauds is confined to executory contracts where there is a wide field of
fraud as there is no palpable evidence of the intention of the contracting parties. It has
no application to executed contracts because the exclusion of parol evidence would
promote fraud or bad faith as it would allow parties to keep the benefits derived from
the transaction and at the same time evade the obligations imposed therefrom.
Facts
Anselma Godines obtained a loan from Sps. Demaymay and in consideration thereof,
the latter were allowed to use Anselma’s residential land for a period of 15 years. This
agreement was not reduced into writing. After Anselma’s death, her heirs found out at
the Office of Provincial Assessor that the tax declaration in the name of Anselma was
cancelled and issued under name of Sps. Demaymay by virtue of a Deed of
Confirmation of Sale executed by Alma, one of the heirs. The Heirs filed a complaint for
recovery of ownership and possession and declaration of the deed of confirmation as
null and void. The Sps. Demaymay alleged that they acquired the land through a sale
with initial payment given but did not execute a contract since Anselma was about to
give birth that time, and that Anselma and her husband died before any contract was
executed that is why it was Anselma’s uncle who executed a receipt for their initial
payment.
Issue
Whether the oral contract of sale executed by Anselma in favor of Sps Demaymay is
valid, hence binding to the heirs of Anselma.
Held + Ratio
Yes, the oral contract of sale is valid. Our jurisdiction has long recognized the validity
of oral contracts, including oral contracts of sale. The Statute of Frauds is inapplicable in
the present case as the verbal sale between Anselma and the Sps. Demaymay had
already been partially consummated when the former received the initial payment from
the latter.
Indeed, contracts that have all the essential requisites for their validity are obligatory
regardless of the form they are entered into, except when the law requires that a
contract be in some form to be valid or enforceable. Failure to observe the prescribed
form of contracts does not invalidate the transaction.
Further, the Statute of Frauds applies only to executory contracts and not to those which
have been executed either fully or partially. While the Statute of Frauds aims to
safeguard the parties to a contract from fraud or perjury, its non-observance does not
adversely affect the intrinsic validity of their agreement. The form prescribed by law is
Page 70
UP Law Center
for evidentiary purposes, non-compliance of which does not make the contract void or
voidable, but only renders the contract unenforceable by any action.
Page 71
UP Law Center
Goldwell Properties Tagaytay Inc. v. Metrobank

GR No. 209837 (May 12, 2021)|Hernando, J.
Topic: Contracts; Basic Principles of Contracts
Doctrine
Contracts of adhesion are not invalid per se and they are not entirely prohibited. The
one who adheres to the contract is free to reject it entirely. If he adheres, he gives his
consent.
Facts
The petitioners debtor companies and respondent Metrobank executed two (2) Debt
Settlement Agreements (DSAs) which brought about the former’s restructured balance
of P62,447,492.33. The debtor companies still paid their dues until August 2004 but
Metrobank clarified that they only paid the interest amortizations and/or penalty
charges. Nevertheless, the petitioners asked for the release of some of their collaterals
equivalent to their loan values upon payment of P20 million. Petitioners employed
further restructuring proposals but Metrobank still refused to partially release the
collaterals. When the debtor companies failed to fulfill their loan obligation, Metrobank
subjected the collaterals to extrajudicial sale. The lower courts ruled in favor of
Metrobank and held that the DSAs stipulated that in case of default, Metrobank could
revert to the original obligation, enforce the terms of the original loan documents, and
proceed with the extrajudicial foreclosure of the mortgages.
Issue
Whether the DSAs were considered contracts of adhesion and thus, should be held
void.
Held + Ratio
No, the DSAs were not contracts of adhesion. A contract of adhesion is when its terms
are prepared by only one party while the other party merely affixes his signature
signifying his adhesion thereto. Such a contract is not invalid per se and is just as
binding as ordinary contracts, if the one who adheres to the contract gives his consent.
considering the original loan contracts, the promissory notes, the DSAs, and even the
deeds of real estate mortgage, the petitioners bound themselves to settle the amounts
being demanded by Metrobank.
The principle of mutuality of contracts, found in Article 1308 of the Civil Code, states
that a "contract must bind both contracting parties; its validity or compliance cannot be
left to the will of one of them." By inference, the petitioners are bound by the valid
terms and conditions of the DSAs as their representatives willingly executed the said
contracts. In accordance with this principle, when the execution of the contract's terms
is skewed in favor of one party, the contract must be rendered void. This relates to the
petitioners' claim that the DSAs were contracts of adhesion, which the Court does not
completely agree because contracts of adhesion are not invalid per se and they are not
entirely prohibited. The one who adheres to the contract is in reality free to reject it
entirely, if he adheres, he gives his consent.
Page 72
UP Law Center
Since the provisions of the DSAs are unambiguous, at least regarding the petitioners'
obligation to pay the principal amount of the loans and the interests applicable prior to
the execution of the DSAs, as well as the partial waiver and reduction parts of the prior
interests, these are controlling and should be enforced.
Page 73
UP Law Center
Garcia v. Esclito
GR No. 207210 (March 21, 2022)|Hernando, J.
Topic: Land Titles and Deeds; Torrens System
Doctrine
The assailed Deed of Sale is the link between the original owner and the respondents.
Ultimately, the annulment and/or declaration of nullity would lead to a nullification
of the titles of the respondents. If allowed, this case will constitute a collateral attack
on the respondents.
Facts
Petitioner Garcia purchased from Matute a parcel of land through a deed of sale, which
he later divided and donated portions of to his children and grandchildren (the other
petitioners) through deeds of transfer of rights. The petitioners then filed applications
for the issuance of land titles pursuant to the DENR’s Handog Titulo program. In
November 1997, petitioners were issued their respective patents. Upon registration, the
petitioners were also issued respective patents. Respondents, who are holders of
certificates of land ownership award (CLOA) issued by the Department of Agrarian
Reform (DAR) filed a petition for the annulment/declaration of nullity of deed of sale
and all the deeds, documents and proceedings relying thereon. The Provincial
Adjudicator dismissed the respondents’ petition for lack of jurisdiction and held that
the annulment of the deed of sale constitutes a collateral attack on the validity of the
title.
Issue
Whether the Petitioners’ Torrens certificates of title can be cancelled by the DARAB
based on the collateral attack instituted by respondents
Held + Ratio
No, the certificate of title cannot be cancelled based on a collateral attack. In this case,
the petitioners are holders of certificates of title registered under the Torrens system.
Thus, their certificates can only be attacked directly. The respondents instituted a
collateral attack in their petition before the Provincial Adjudicator. Although they
mainly sought the nullification of the deed of sale, they also alleged that such
instrument ultimately gave rise to the issuance of certificates of title in favor of
petitioners.
To attack the deed of sale would be to effectively attack the certificates of title. Once the
DARAB nullifies the deed, the cancellation of the certificates will logically follow,
reducing the succeeding cancellation proceedings to a mere formality. Petitioners'
certificates of title, being registered in the Torrens system, can only be attacked in an
action expressly instituted for that purpose. It cannot be assailed even incidentally in an
action mainly seeking a different relief, such as in respondents' petition to nullify the
deed of sale.
Page 74
UP Law Center
A collateral attack is prohibited because the integrity of land titles and their
indefeasibility are guaranteed by the Torrens system of registration. The Torrens system
was adopted precisely to quiet titles to lands and to put a stop forever to any question
of legality of the titles, except claims which were noted at the time of registration, or
which may arise subsequent thereto.
Page 75
UP Law Center
Pastora Ganancial vs. Betty Cabugao

GR No.203348 (June 7, 2020)|Hernando, J.
Topic: Contracts; Defective Contracts
Doctrine
Errors in, or even absence of, notarization on a deed of mortgage will not invalidate
an already perfected mortgage agreement. If anything, these would only depreciate
the evidentiary value of the said written deed, as the same would be demoted from a
public document to a private one.
Facts
Ganancial owed Cabugao 130,000 pesos payable in three years. This was guaranteed by
entrusting to Cabugao the TCT and Tax Declaration covering a parcel of land owned by
Ganancial. The transaction later turned sour and various lawsuits for foreclosure of
mortgage and declaration of nullity of mortgage ensued. Cabugao alleges that
Ganancial executed a Deed of Mortgage over the property and since she was not able to
pay Cabugao, she is seeking judicial foreclosure of the mortgage. Ganancial on the other
hand says that while she entrusted the TCT with Cabugao, she never executed the
supposed Deed of Mortgage nor appeared for its notarization. According to her,
Cabugao required both Ganancial and her children to affix their signatures on a blank
bond paper which Cabugao filled out only later. Thus, she prays for declaration of the
Deed of Mortgage as null and void.
Issue
Whether the formal infirmities in the notarization of the Deed of Mortgage invalidates
the same.
Held + Ratio
No, mere formal infirmities in the notarization of the instrument does not invalidate
the mortgage.
Apart from the testimonies of the appellant and her children, which the court found to
be self-serving, there is nothing on record which bolsters her stance. It must be stressed
that the deed in question is a notarized document. Jurisprudential rule dictates that to
successfully impugn a notarized document, the party concerned must present a strong,
complete, and conclusive proof of its falsity, lest the validity thereof must be sustained
in full force and effect. Sadly, in this case, the appellant failed to support her claim.
Even if Ganancial alleged fraud or vitiation of consent, this would still not nullify the
mortgage. Vitiation of consent is ground for the annulment of a voidable contract and
not for nullification of a void contract. Even if the present case is one for annulment of
contract, the fraud alleged must still be proven by clear and convincing evidence. This is
less than proof beyond reasonable doubt but more than preponderance of evidence.
This burden rests on the party alleging fraud to which Ganancial failed to overcome.
Page 76
UP Law Center
Even assuming that Ganancial’s complaint for declaration of nullity was truly grounded
on its nonexistence or absolute simulation, it would still have no basis in fact and in law.
Under Article 1409 of the Civil Code, absolute simulation voids a contract. In absolute
simulation there appears to be a colorable contract but there is actually none as the
parties never intended to be bound by it. The intention of the parties is used to
determine the true nature of the contract. Such is determinable not only from the
express terms of the agreement but also the contemporaneous and subsequent acts of
the parties.
The totality of circumstances negates the contention that the Deed of Mortgage was
absolutely simulated. Ganancial conveyed the TCT to secure her indebtedness to
Cabugao. Their agreement was reduced into writing as a Deed of Mortgage and
Ganancial’s signature was on that document.
Page 77
UP Law Center
Estate of Rodriguez v. Republic of the Philippines

GR No. 214590 (April 27, 2022)|Hernando, J.
Topic: Obligations; Different Kinds of Obligations
Doctrine
The prohibition in the deed of donation that the Republic cannot lease, let, convey,
dispose, or encumber the donated property without specifying the duration of the
restriction should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code as it is contrary to public policy.
Facts
Rodriguez executed a deed of conditional donation in favor of the Republic over a
parcel of land for the construction of a mental facility. One of the conditions was that the
Republic shall not under any circumstance or in any manner lease, convey, dispose, or
encumber the property donated or any part or portion thereof to any person or entity,
except with the prior and express knowledge and approval of the donor Rodriguez, it
being the desire and intention of the latter to have the said property for the exclusive
use of the said hospital. The estate, represented by its attorney-in-fact Valenzuela, filed a
complaint against the Republic for revocation of the donation and forfeiture of
improvements. It alleged that the Republic allowed a portion of the donated property to
be used for residential and commercial purposes in violation of one of the conditions of
the donation.
Issue
Whether the condition prohibiting the Republic from disposing or encumbering the
donated property without the knowledge and approval of the donor is valid
Held + Ratio
No, the condition was not valid. The donor could not unduly restrict the right of the
donee to dispose of the donated property perpetually or for an unreasonable period
of time.
The prohibition in the deed of donation that the Republic cannot lease, let, convey,
dispose or encumber the donated property without specifying the duration of the
restriction should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code as it is contrary to public policy.
The provision in the deed of conditional donation did not expressly state a period of
restriction on the Republic's right to dispose of the donated property. It simply stated
that the Republic could not lease, let, convey, dispose or encumber the donated property
without the prior and express knowledge of the donor as it was the latter's intention to
devote the use of the donated property exclusively for the mental hospital.
Page 78
UP Law Center
Gaoiran v. Court of Appeals

Topic: Land Titles and Deeds; Certificate of Title
Doctrine
A certificate of title cannot be collaterally attacked in a petition for annulment of
judgment under Rule 47 of the Rules of Court. It can only be altered, modified or
cancelled only in a direct proceeding.
Facts
Petitioner entered into a contract to purchase a property covered by a TCT in the name
of Perlita, married to Timoteo with Timoteo upon representation that he was authorized
by his wife to sell the same. Petitioner paid P500,000 and in exchange, Timoteo in
exchange surrendered the owner’s duplicate title of the TCT petitioner and undertook
to deliver a deed of absolute sale. Mary Alcantara, the niece of Perlita and trustee of the
TCT, filed before the RTC Laoag reconstitution proceedings praying that the owner’s
duplicate copy of the TCT has been lost and be declared null and void, and for the
issuance of a second owner’s duplicate TCT. The RTC granted the petition. Petitioner
instituted before the CA a petition for annulment of judgment with the CA. The CA
dismissed the petition declaring that a petition under Rule 47 of the Rules of Court
cannot be used to impugn the second owner’s duplicate certificate of title because to do
so would constitute a collateral attack upon the issued certificate of title which is
sanctioned by Sec. 48 of P.D. 1529.
Issue
Whether the filing of the petitioner of a Rule 47 petition constitutes as a collateral attack
of the issued certificate of title.
Held + Ratio
No, the filing of a Rule 47 petition is not considered a collateral attack on the title.
The Court has ruled that a certificate of title cannot be collaterally attacked in a petition
for annulment of judgment under Rule 47. In petitioner’s petition for annulment of
judgment, she never questioned Perlita’s ownership of the subject property. What
petitioner sought was the annulment of the RTC division reconstituting the TCT on the
ground that the first owner’s duplicate was never lost. In fact, petitioner acknowledged
Perlita's ownership. Neither did respondents Perlita and Mary in any way challenge the
genuineness and authenticity of the first owner's duplicate copy of TCT T-34540
submitted by petitioner.
What petitioner sought in her Rule 47 petition with the CA was the annulment of the
RTC Decision reconstituting TCT T-34540, on the ground that the first owner's duplicate
copy thereof was never lost but was in fact in her possession all along. Petitioner only
needed to show the fact that the owner's duplicate copy was not, in truth, missing in
order to determine the lack of jurisdiction of the trial court resulting in the annulment of
judgment thereof.
Page 79
UP Law Center
Ende v. Roman Catholic Prelate of the Prelature Nullius of Cotabato, Inc.

GR No. 191867 (December 6, 2021)|Hernando, J.
Topic: Wills and Succession; Intestate Succession
Doctrine
The Spanish Civil Code also provides that only in default of legitimate children and
their descendants, ascendants, and acknowledged natural children, if any, may the
collateral relatives and the surviving spouse inherit from the decedent.
Facts
Spouses Ende, both Manobo natives, were the registered owners of the subject lot.
Amado, Daniel, Felipe, and Pilar, claiming to be the surviving heirs of the spouses
Ende, filed a complaint for quieting of title and recovery of possession thereof. They
claimed that respondents took advantage of the ignorance and illiteracy of the Spouses
Ende and gradually took possession of portions of the subject property through
deceitful machinations. On the other hand, respondents claimed that they acquired
ownership over their respective portions of the subject property from Damagi (wife in
Spouses Ende) or from third persons who, in turn, acquired the same from Damagi.
Petitioners Amlayon and Quezon, claiming to be the surviving children and legitimate
heirs of the spouses Ende, intervened, claiming that they are the children and legitimate
heirs of the spouses Ende and that Amado, Daniel, Felipe, and Pilar are mere impostors,
hence not the real parties-in-interest in the action for quieting of title.
Issue
Whether the RTC correctly ruled that Damagi, Amlayon, and Quezon each owned ⅓ of
the entire subject lot
Held + Ratio
No. Under the Spanish Civil Code, which was operative when Butas died, all the
estate of the married couple is considered as conjugal partnership property unless
and until it is proven that it is a part of the separate estate of the husband or the wife.
The presumption exists in this case which therefore makes the subject lot part of the
conjugal partnership. Consequently, upon the death of Butas in 1939, Damagi is entitled
to one-half of the subject lot.
However, the Spanish Civil Code also provides that only in default of legitimate
children and their descendants, ascendants, and acknowledged natural children, if any,
may the collateral relatives and the surviving spouse inherit from the decedent. Hence,
with the existence of petitioners Amlayon and Quezon as Butas' legitimate children,
Damagi, as Butas' widow, is therefore excluded to inherit from Butas’s estate which is
the other half of the subject lot. The other half shall therefore be divided equally among
Amlayon and Quezon.
Only in default of legitimate children and their descendants, ascendants, and

acknowledged natural children, if any, may the collateral relatives and the surviving
spouse inherit from the decedent. Hence, with the existence of petitioners Amlayon and
Page 80
UP Law Center
Quezon as Butas' legitimate children, Damagi, as Butas' widow, is therefore excluded to

inherit from Butas. In this case, the remaining half of the subject property, shall be
divided equally among the legitimate children of Butas, i.e., Amlayon, Matias, and
Quezon. Since Matias died without any descendants who can inherit by right of
representation, or surviving spouse, his share redounded to his brothers Amlayon and
Quezon, who survived him, with each inheriting the estate of their father Butas in equal
shares or equivalent to 5.5 hectares and 95.1925 square meters.
Note that it was determined that the overwhelming testimonies of petitioners' relatives
proved that petitioners Amlayon and Quezon are the legitimate children of the spouses
Ende.
Page 81
UP Law Center
Development Bank of the Philippines v. Danico

GR No. 196476 (September 28, 2020)|Hernando, J.
Topic: Contracts
Doctrine
Article 1370 of the Civil Code provides that if the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulation shall control. The contract is the law between the parties; thus, it should be
interpreted according to their literal meaning and should not be interpreted beyond
their obvious intendment.
Facts
The Sps Danico obtained a loan from petitioner DBP in the amount of P150k, secured by
real estate mortgage over 4 properties (covered by OCT P-1439, TCT T-8127, TCT T-3278
and OCT P-537), and a chattel mortgage over one unit of Massey Fergusson tractor and
accessories.
Later, National Power Corporation (NPC) bought from the Sps Danico the lot covered
by OCT P-1439 for P511,290.00, a portion of the land covered by TCT T-3278 in the
amount of P242,644.50, as the two lots are part of the NPC’s Reservoir Area. DBP agreed
to the sale of the two lots to NPC on the condition that a portion of the proceeds would
be applied to the Sps Danico’s outstanding obligation with DBP. However, NPC paid
DBP only the total amount of P92,003.47 from the proceeds of the sale of a portion of
land covered by TCT T-3278. Moreover, NPC did not remit to DBP the amount
P301,350.50 from the proceeds of the sale of the land covered by OCT P-1439.
Meanwhile, DBP and Daniel Danico entered into a Deed of Conditional Sale of the
parcel of land covered by now TCT T-19241, for a total consideration of P491,600.00.
Then, NPC requested DBP to release the copy of OCT P-1439 (now TCT T-21793 in the
name of NPC) reasoning the amount of P301,350.50 had already been issued by NPC to
DBP in payment for the sale of the land covered by OCT P-1439. However, payment to
DBP was put on hold pending compliance with the requirement of the COA. In
response, DBP issued a Certification that it will only release the original copy of OCT
P-1439 if the proceeds of the sale of the said property in the amount of P301,350.50 had
already been paid.
Julieta Danico and her heirs filed a complaint against DBP and NPC for the cancellation
or release of mortgage over the 4 properties covered by the real estate mortgage
contending that the Sps Danico’s total loan obligation in the amount of P393,353.97 had
already been satisfied when NPC paid DBP P394,069.75 through a disbursement
voucher.
The RTC ruled that 1) the extrajudicial foreclosure of TCT T-8127 and its subsequent
consolidation under TCT T-19241 in the name of DBP was valid and legal; and 2) DBP
Page 82
UP Law Center
was to accept the amount of P301,350.50 as full payment of the Sps Danico’s loan
obligation and NPC is without any liability. On appeal, the CA reduced the amount to
be paid by NPC because the 2 deeds of sale of the real properties covered by OCT
P-1439 and TCT T-3278 stated that the obligation of the Spouses Danico was only
P393,353.97. Hence this petition wherein DBP argues that since NPC and the Sps Danico
failed to comply with the 2 Deeds of Sale by delivering the proceeds of the sale and
applying the same on their loan accounts, DBP’s consent to the Deeds of Sale is deemed
not to have been given which renders both NPC as vendee, and the Spouses Danico as
vendors, jointly and severally liable for the mortgage obligation including interests and
penalty charges for default payment in the total amount of P902,674.79.
Issue
Whether the NPC is liable to pay the total amount of P902,674.79
Held + Ratio
No, NPC is not liable.
Article 1370 of the Civil Code provides that if the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulation shall control. The contract is the law between the parties, thus, it should
be interpreted according to their literal meaning and should not be interpreted
beyond their obvious intendment.
In this case, the two deeds of sale are clear that NPC’s obligation pertains only to the
purchase of Lot No. 861 covered by OCT P-1439 and Lot No. 857-B covered by TCT
T-3278, and nowhere is it stated therein that respondent NPC assumed the total
obligation of the Sps Danico.
NPC and the Sps Danico entered into two (2) deeds of sale and stipulated that of the
two Statements of Account, the Statement of Account as of December 31, 1985 pertained
to the first deed of sale while the Statement of Account as of April 30, 1985 pertained to
the second deed of sale. The two (2) deeds of sale are clear and unambiguous as to the
existence of the two statements of account—in fact, both the Sps Danico and the NPC
adhered and agreed to the terms, conditions and stipulations embodied in the two
deeds of sale knowing fully well the existence of the two statements of account. If,
indeed, the stipulations in the said two deeds of sale did not express the true intention
of the parties, both the Sps Danico and the NPC could have filed the corresponding
action for reformation of the contract, but they did not do so. Thus, they cannot now
impugn the existence of Statement of Account as of April 30, 1985 when the words of
both contracts are clear and readily understandable.
Hence, NPC is liable to DBP for only the P301,350.50 out of the proceeds of the first
deed of sale in the fulfillment of the obligation of the Sps Danico in the total amount of
P393,353.97 as per Statement of Account as of December 31, 1985; and P150,641.03 out of
Page 83
UP Law Center
the proceeds of the second deed of sale in the fulfillment of the Sps Danico’s obligation
in the total amount of P509,320.82 as per Statement of Account as of April 30, 1985.
Daniel v. Magkaisa
G.R. No. 203815 (December 7, 2020)|Hernando, J.
Topic: Trusts
Doctrine
A trust is the legal relationship between one person having an equitable ownership of
property and another person owning the legal title to such property, the equitable
ownership of the former entitling him to the performance of certain duties and the
exercise of certain powers by the latter.
Facts
During her lifetime, Consuelo Jimenez Oda owned three parcels of land which she sold
to Nelidia, her sister. Consuelo instructed Nelidia that upon the latter's death, the
properties should be transferred to the respondents (her grandchildren Nancy, Cecilia
and Imelda, all surnamed Magkaisa, and Marissa Oda). Pursuant to said instructions,
Nelidia executed a Declaration of Trust (Declaration), which was also signed by Efraim,
petitioner and husband of Nelidia. In the said document, Nelidia acknowledged that
she held in trust the three parcels of land in favor of the respondents. Eventually,
Nelidia caused the issuance of new TCTs in her name. Upon Nelidia's death, the
respondents discovered the existence of the Declaration. The parcels of land were then
in the possession of Efraim, who refused to surrender possession of the titles to the
respondents.
The respondents then sued Efraim for reconveyance and damages. For his part, Efraim
admitted the existence of the trust but presented several documents which tend to
prove the revocation of the trust. The documents, however, were all unsigned. Efraim
also argued that there is no showing that the respondents accepted the trust and that it
was not registered with the Registry of Deeds as to bind third parties.
The RTC ruled in favor of the respondents, holding, among others, that there was no
dispute as to the existence of the trust, and that there was no need for the acceptance of
the respondents. The Declaration was thus valid, and upon the death of the trustee
Nelidia, ownership, both naked and beneficial, over the properties reverted by
operation of law to the beneficiaries, the respondents. The decision was affirmed by the
CA. Hence, the present appeal.
Issue
Whether the respondents are entitled to reconveyance of the properties.
Held + Ratio
Yes, the respondents are so entitled. A trust is the legal relationship between one
person having an equitable ownership of property and another person owning the
legal title to such property, the equitable ownership of the former entitling him to the
performance of certain duties and the exercise of certain powers by the latter.
Page 84
UP Law Center
In the present case, Nelidia, as the trustee, had the duty to properly manage the
properties for the benefit of the beneficiaries, respondents herein. Notably, Efraim is not
a party to this trust, and he only signed the document evidencing the trust as Nelidia's
husband. Nonetheless, there is no dispute that Efraim readily admitted the due
execution and validity of the Declaration. Thus, as a signatory, he is bound by the intent
and contents of the said document and thus should honor the directives contained
therein.
There is no contest that since the trust is now considered as terminated after the trustee's
(Nelidia) death, the properties should be transferred to the names of the respondents as
the beneficiaries of the said trust.
This finding, however, should not prejudice an action, if any, which would involve the
settlement of the estate of Consuelo and Nelidia, given that Efraim claimed (and which
Atty. Florentino mentioned) that disinheritance or preterition may occur. Such matter
should be resolved in a separate probate or intestate proceeding, whichever is
applicable, and not in the case at bench.
Pursuant to the Declaration, the respondents have a superior right to reconveyance of

the subject properties in their favor. Efraim should likewise be required to find the titles
to the properties and subsequently turn them over to the respondents.
Page 85
UP Law Center
Dacquel v. Sps. Sotelo
G.R. No. 203946 (August 4, 2021)|Hernando, J.

Topic: Sales; Equitable Mortgage
Doctrine
1. When in doubt, courts are generally inclined to construe a transaction

purporting to be a sale as an equitable mortgage, which involves a lesser
transmission of rights and interests over the property in controversy.
2. A creditor cannot appropriate the things given by way of pledge or mortgage
or dispose of them. Any stipulation to the contrary is null and void.
Facts
The Spouses Ernesto and Flora Costelo began the construction of a 7-door apartment on
the subject land. Due to budget constraints, the Sotelos had to borrow the amount of
P140,000.00 from Atty. Arturo Dacquel, Flora’s brother. The debt was supposedly
P280,000, the balance of which was to be collected by Dacquel from the rental income of
the apartment. As security, Dacquel required the Sotelos to cede to him the subject land
as security for the loan. A Deed of Sale was executed by the spouses in favor of Dacquel,
and the latter was constituted as the new owner of the parcels of land. When Dacquel
had collected the full amount of P280,000.00 in rental income, the Sotelos asked for the
return of the lot. Dacquel, however, allegedly held on to the title and refused to yield
the subject lot to the Sotelos.
The Sotelos filed a complaint for annulment of title and reconveyance against Dacquel.
The RTC ruled in favor of Dacquel. This decision was reversed by the CA, holding that
under Arts. 1602 and 1604, NCC, the Deed of Sale evidenced an equitable mortgage.
The appellate court found two badges of fraud: gross inadequacy of the price and the
continued possession by the Sotelos of the subject property.
Issue
1. Whether the Deed of Sale was constituted as an equitable mortgage.

2. Whether title to the property must revert to the Sps. Sotelo.
Held + Ratio
1. Yes, the Deed of Sale was actually an equitable mortgage. Under Art. 1602 of
the Civil Code, a contract shall be presumed to be an equitable mortgage, in any
of the following cases:
a. When the price of a sale with a right to repurchase is unusually inadequate;
b. When the vendor remains in possession as lessee or otherwise;
c. When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed;
d. When the purchaser retains for himself a part of the purchase price;
e. When the vendor binds himself to pay the taxes on the thing sold;
f. In any other case where it may be fairly inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or the performance of any other
obligation.
Page 86
UP Law Center
g. In any of the foregoing cases, any money, fruits or other benefit to be received by the
vendee as rent or otherwise shall be considered as interest which shall be subject to the
usury laws.
Decisive for the proper determination of the true nature of the transaction
between the parties is their intent, shown not merely by the contract's
terminology but by the totality of the surrounding circumstances, such as the
relative situations of the parties at that time; the attitudes, acts, conduct, and
declarations of the parties; the negotiations between them leading to the deed;
and generally, all pertinent facts having a tendency to fix and determine the real
nature of their design and understanding. When in doubt, courts are generally
inclined to construe a transaction purporting to be a sale as an equitable
mortgage, which involves a lesser transmission of rights and interests over the
property in controversy.
Applying the foregoing principles, the CA found two badges of fraud against
petitioner — gross inadequacy of price in the Deed of Sale and continued
possession of the subject property by respondents-spouses as debtors of
petitioner.
The actuations of spouses show that they were preserving their hold on the
subject property and had no intent at all to relinquish their ownership over the
same by sale. Moreover, Dacquel cannot simply claim that Ernesto had been
acting only in representative capacity on the sole premise that they are
brothers-in-law. Close-knit familial relationships, whether by consanguinity or
by affinity, are not presumptive evidence of a contract of agency on their
lonesome.
2. Yes. Given that the transaction between the parties was one of an equitable
mortgage, Daquel did not become owner of the subject property, and was a mere
mortgagee.
Art. 2088 provides that the creditor cannot appropriate the things given by way
of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null
and void.
The mortgagee's consolidation of ownership over the mortgaged property upon

the mortgagor's mere failure to pay the obligation is the essence of pactum
commissorium. The mortgagor's default does not operate to automatically vest on
the mortgagee the ownership of the encumbered property. Such arrangements
have been held as contrary to morals and public policy and thus void. If a
mortgagee in equity desires to obtain title to a mortgaged property, the
mortgagee's proper remedy is to cause the foreclosure of the mortgage in equity
and buy it at a foreclosure sale.
As such, Dacquel was bound by the prohibition against pactum commissorium

Having proceeded to cause the cancellation of respondents-spouses title to the
Page 87
UP Law Center
mortgaged property and its transfer to his name without availing of the remedy
of foreclosure, he can be concluded to have dabbled in the prohibited practice of
pactum commissorium. Title to the subject property should be reverted to spouses.
Page 88
UP Law Center
City of Tanauan v. Millonte

Topic: Different Modes of Acquiring Ownership; Prescription
Doctrine
Article 1410 of the Civil Code relevantly states that "the action or defense for the
declaration of the inexistence of a contract does not prescribe." In other words, "an
action that is predicated on the fact that the conveyance complained of was null and
void ab initio is imprescriptible."
Facts
The Gonzaga siblings and the City of Tanauan entered into a Deed of Sale (DOAS)
dated February 10, 1970 covering a parcel of land. Years later, respondent Gloria
Millonte, a direct descendant of one of the siblings, found that some of the siblings
could not have signed the DOAS as they were already dead at the time of execution.
Thus, there was no valid agreement, and the DOAS was void.
The RTC ruled in favor of Millonte, ruling that if any one party to a contract was
already dead at the time of its execution, such contract would undoubtedly be
simulated and therefore, null and void. The death of a person terminates contractual
capacity, and thus, the sale produced no legal effect and transmitted no rights
whatsoever. Hence, the City of Tanauan did not acquire ownership over the lot. Said
decision was affirmed by the CA. Hence, the present appeal where the City of Tanauan
averred that the action is barred by laches since the case was filed more than 34 years
after the execution of the DOAS and more than 12 years after the recording of the sale
with the Register of Deeds.
Issue
Whether an action to annul a sale on grounds of a null conveyance can prescribe.
Held + Ratio
No, it cannot prescribe. Millonte, as an heir, could assail the validity of the Deed of
Absolute Sale even years after the execution of the document, and even if the title of the
property has already been transferred in the name of the City of Tanauan.
Article 1410 of the Civil Code relevantly states that "the action or defense for the
declaration of the inexistence of a contract does not prescribe." In other words, "an
action that is predicated on the fact that the conveyance complained of was null and
void ab initio is imprescriptible." Jurisprudence teaches that "the 'declaration of nullity
of a contract which is void ab initio operated to restore things to the state and
condition in which they were found before the execution thereof.”
The passage of time in this case could not defeat the legal principle that a null and void
contract can be assailed anytime due to the imprescriptibility of the action. In like
Page 89
UP Law Center
manner, given that the action is imprescriptible, the City of Tanauan cannot invoke
laches as a defense.
Page 90
UP Law Center
Carullo-Padua v. Padua
Topic: Void Marriages
Doctrine
Psychological incapacity must now be incurable, not in the medical, but in the legal
sense. An undeniable pattern of such persisting failure [to be a present, loving,
faithful, respectful, and supportive spouse] must be established to demonstrate that
there is indeed a psychological anomaly or incongruity in the spouse relative to the
other. Psychological incapacity is now also neither a mental incapacity nor a
personality disorder that must be proven by expert opinion. There is no requirement
for one to be personally examined by a physician before he may be declared
psychologically incapacitated because what is important is the presence of evidence
that adequately establishes the party's psychological incapacity. To emphasize, the
testimonies of ordinary witnesses who have been present in the life of the spouses
before the latter contracted marriage should include behaviors that they have
consistently observed from the supposedly incapacitated spouse.
Facts
Maria and Joselito were married in 1982. Maria, in 1997, filed a petition for declaration
of absolute nullity of marriage on the ground of psychological incapacity under Art. 36
Family Code, alleging that: during their cohabitation, Joselito exhibited excessive sexual
desire and forced her to perform oral and anal sex with him; that there were attempts to
sexually molest her sister, nieces and their household help; that Joselito admitted to said
attempts of molestations but begged her to keep said incidents a secret; that Joselito
misrepresented himself as a Roman Catholic when he was actually a born-again
Christian; that when Maria refused to convert to Joselito's religion, he began insulting
her religious beliefs; that Joselito attempted to kill Maria by threatening to stab her; that
Joselito failed to provide emotional and financial support for her and their child.
The RTC ruled in favor of Joselito, ruling that Joselito’s supposed sexual perversion
after the marriage, standing as it is, cannot be said to be a permanent sickness so serious
as to prevent him from assuming his marital obligations. This decision was upheld by
the CA, holding that, at best, the grounds invoked by Maria were for legal separation
under Art. 55, not psychological incapacity under Art. 36. Hence, the present appeal.
Issue
Whether Joselito is psychologically incapacitated to perform his essential marital
obligations.
Held + Ratio
No, Joselito is not psychologically incapacitated.
Page 91
UP Law Center
The Court, in Tan-Andal v. Andal, provided the parameters in determining what

constitutes psychological incapacity, namely:
(1) The psychological incapacity must be shown to have been existing at the time of the celebration of
marriage;
(2) Caused by a durable aspect of one's personality structure, one that was formed prior to their
marriage;
(3) Caused by a genuinely serious psychic cause; and
(4) Proven by clear and convincing evidence.
Psychological incapacity must now be incurable, not in the medical, but in the legal
sense. An undeniable pattern of such persisting failure [to be a present, loving,
faithful, respectful, and supportive spouse] must be established so as to demonstrate
that there is indeed a psychological anomaly or incongruity in the spouse relative to
the other. Psychological incapacity is now also neither a mental incapacity nor a
personality disorder that must be proven by expert opinion. There is no requirement
for one to be personally examined by a physician before he may be declared
psychologically incapacitated because what is important is the presence of evidence
that adequately establishes the party's psychological incapacity. To emphasize, the
testimonies of ordinary witnesses who have been present in the life of the spouses
consistently observed from the supposedly incapacitated spouse. Irreconcilable
differences, conflicting personalities, emotional immaturity and irresponsibility,
physical abuse, habitual alcoholism, sexual infidelity or perversion, and abandonment,
by themselves, also do not warrant a finding of psychological incapacity under Article
36 of Family Code. Any doubt should be resolved in favor of the existence and
preservation of the marriage and against its dissolution and nullity. Presumption is
always in favor of the validity of marriage. Semper praesumitur pro matrimonio.
The psychiatrist's description of Joselito's parents' traits does not give this Court a
deeper intuitive understanding of Joselito's psychological state. Notably, there was no
information how Joselito reacted towards the supposed contrasting personalities of his
parents during his formative years. Neither was there any account as to how the said
contrasting parenting behavior affected Joselito's social, intellectual, moral, and
emotional growth. Maria should have presented witnesses who have been present in
their lives before the contracted marriage and who could very well testify on the
respondent's behavior. As it stands, the evidence at hand is insufficient to prove
juridical antecedence.
The testimonies of ordinary witnesses who have been present in the life of the spouses
consistently observed from the supposedly incapacitated spouse. Here, not only was
there no interview or psychological test conducted upon Joselito, there was nobody
who testified on vital information regarding his personality structure, upbringing and
childhood such as members of his family, relatives, friends, and co-workers. The
evaluation of Dr. Villegas on Joselito was based merely on information, accounts and
descriptions relayed solely by Maria which glaringly and expectedly are biased. With
regard to the other grounds relied upon by Maria—sexual infidelity and abandonment,
Page 92
UP Law Center
assuming that they were true, are grounds for legal separation under Article 55 of the
Family Code and not for declaration of nullity of marriage under Article 36 of the
Family Code.
Page 93
UP Law Center
Cardinez v. Sps. Prudencio

GR No. 213001 (August 4, 2021)|Hernando, J.
Topic: Different Modes of Acquiring Ownership; Donation; Features / Different Modes of Acquiring
Ownership; Prescription
Doctrine
1. An agreement between the donor and the donee is essential like in any other
contract. As such, the requisites of a valid contract under Article 1318 of the
Civil Code must concur, namely: (1) consent of the contracting parties, that is
consent to donate the subject land to petitioners; (2) object certain which is the
subject matter of the contract; (3) cause of the obligation which is established.
2. An action to declare the inexistence of a void contract does not prescribe.
Facts
Prudencio, Florentino and Valentin Cardinez inherited a parcel of land from their
mother. In 1994, Valentin requested Prudencio to donate the 10-sq. m. portion of his
land being encroached by the former’s balcony. Prudencio agreed to Valentin’s request
out of love and trust for his brother. Prudencio and his wife were asked by Valentin to
sign a document written in English. The spouses signed without reading the contents.
They also were not given a copy of the document.
In June 2008, Prudencio was informed that he donated his inherited portion to
Valentin’s children, through the document he allegedly executed with his wife in 1994.
In November 2008, the respondents filed a complaint to annul the document and
recover possession. They averred that Valentin took advantage of their low level of
education when he made them believe that the document they were signing was only
for the partition of the inherited land. The petitioners filed a Demurrer to Evidence on
grounds of lack of cause of action and prescription.
RTC ruled that the Deed of Donation was voidable, with the respondents’ consent being
vitiated due to the deceit employed by Valentin. Since the complaint was instituted by
the respondents within four years from discovery of the fraudulent act, the action had
not yet prescribed. CA affirmed with modification. The Deed of Donation was void ab
initio, and not just voidable. The indispensable element of consent was totally absent.
Issue
1. Whether the donation was valid
2. Whether the action had prescribed.
Held + Ratio
1. No, the donation was not valid as the spouses Prudencio did not give their
consent at all. An agreement between the donor and the donee is essential like
in any other contract. As such, the requisites of a valid contract under Article
Page 94
UP Law Center
1318 of the Civil Code must concur, namely: (1) consent of the contracting
parties, that is consent to donate the subject land to petitioners; (2) object
certain which is the subject matter of the contract; (3) cause of the obligation
which is established.
Consent is absent in the instant case. The Court agreed with the CA that
respondents did not give their consent to the donation of their land to
petitioners. Hence, no valid donation had transpired between the parties.
Prudencio categorically and firmly stated that he did not know that the
document which Valentin asked him to sign was a Deed of Donation. In fact,
Prudencio did not read the document before affixing his signature because he
trusted his brother that it was for the partition of their inherited land and the
cancellation of its title. Valentin neither read the contents of the document to
respondents nor gave them a copy thereof. The notary public likewise did not
explain its contents to respondents and only asked them to affix their signatures
therein. It is therefore clear that respondents did not donate their land to
petitioners. They never understood the full import of the document because it
was neither shown to them nor read by either Valentin or the notary public.
Considering that they did not give their consent at all to the Deed of Donation, it
is therefore null and void.
2. No, the action had not prescribed. The Deed of Donation is an absolute nullity
hence it is subject to attack at any time. The action is imprescriptible. This is in
accord with Article 1410 of the Civil Code which states that an action to declare
the inexistence of a void contract does not prescribe. Since the Deed of Donation
is void ab initio due to the illegality in its execution, the disputed land is deemed
to be simply held by petitioners in trust for respondents who are the real owners.
Respondents therefore have the right to institute a case against petitioners for the
reconveyance of the property at any time. Since the Deed of Donation is an
absolute nullity, it is subject to attack at any time and the action is
imprescriptible.
Page 95
UP Law Center
Cabilao v. Tampan
Topic: Contracts; Essential Requisites; Consent/Cause or Consideration
Doctrine
When a party claims that one is unable to read or is otherwise illiterate, and fraud is
alleged, a presumption that there is fraud or mistake in obtaining consent of that
party arises under NCC 1332. However, for Art. 1332 to be applicable, the contracting
party who alleges fraud or vitiated consent must establish the same by full, clear and
convincing evidence. Likewise, inadequacy of cause will not invalidate a contract
unless there has been fraud, mistake or undue influence.
Facts
Tampan bought a house from Cabilao through a notarized Deed of Sale for P10,000.
When Lorna filed a petition for the issuance of a new owner’s duplicate title, the
spouses Buyser opposed on the ground that they were in possession of the said title
after buying the same from Cabilao. Hence, Tampan’s petition was dismissed. When the
spouses Buyser informed Cabilao about the petition for the issuance of a new owner's
copy of the title, the latter denied having sold the subject property to Tampan. However,
due to the controversy, Cabilao repurchased the subject property and the owner's
duplicate was surrendered back to her.
Cabilao then filed an action to annul the Deed of Sale and alleged that: (1) her signature
was obtained through fraud; and (2) the price consideration of P10,000 was grossly
inadequate against the true consideration of P100,000. The RTC ruled in Cabilao’s favor,
but the CA reversed, hence the present appeal.
Issue
Whether the Deed of Sale between Tampan and Cabilao remained valid.
Held + Ratio
Yes, the Deed of Sale between Tampan and Cabilao was valid.
Art. 1305 of the NCC provides that a contract is "a meeting of minds between two
persons whereby one binds himself, with respect to the other, to give something or to
render some service." The essential requisites are: (1) consent of the contracting parties;
(2) object certain which is the subject matter of the contract; and (3) cause of the
obligation which is established. In the present case, all the elements of a valid contract
are present. In the case at bar, the Deed of Sale validly transferred the ownership over
the property from Cabilao to Tampan in consideration of P10,000.00. Arguing the
absence of consent on her part, Cabilao claims that the Deed of Sale is null and void
since her signature thereon was obtained through fraud, or under the guise of a
contract of loan. These contentions, however, were not supported by evidence.
It is a well-settled rule that a duly notarized document enjoys the prima facie
presumption of authenticity and due execution, as well as the full faith and credence
attached to a public instrument. Thus, a party assailing the authenticity and due
Page 96
UP Law Center
execution of a notarized document is required to present evidence that is clear,

convincing, and more than merely preponderant.
While Cabilao claimed that she was an illiterate person, she failed to prove this. When a
party claims that one is unable to read or is otherwise illiterate, and fraud is alleged,
a presumption that there is fraud or mistake in obtaining consent of that party arises
under NCC 1332.1 However, for Art. 1332 to be applicable, the contracting party who
alleges fraud or vitiated consent must establish the same by full, clear and
convincing evidence. The party must show clear and convincing evidence of one's
personal circumstances and that he or she is unable to read at the time of execution of
the contested contract. However, Cabilao failed to do so. It is likewise noted that the
title over the subject property remained under Cabilao’s name despite the execution of
the Deed of Sale. However, this does not also affect the validity of the deed of sale.
Transfer of the certificate of title in the name of buyer and transfer of ownership to the
buyer are two different concepts.
It is also of no moment that the consideration was in the amount of P10,000.00. Gross
inadequacy of price does not affect the validity of a contract of sale, unless it signifies a
defect in the consent or that the parties actually intended a donation or some other
contract. Inadequacy of cause will not invalidate a contract unless there has been
fraud, mistake or undue influence. As above-intimated, fraud was not proven. Hence,
the consideration in the amount of P10,000.00 did not invalidate the sale.
Between the seller and buyer, ownership is transferred not by the issuance of the new
certificate of title in the name of the buyer but by the execution of the instrument of sale
in a public document, in relation to Art. 1498 of the NCC.2
1
CIVIL CODE, art. 1332. When one of the parties is unable to read, or if the contract is in a language not understood
by him, and mistake or fraud is alleged, that person enforcing the contract must show that the terms thereof have
been fully explained to the former.
2
CIVIL CODE, art. 1498. When the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not
appear or cannot clearly be inferred.
Page 97
UP Law Center
BPI v. Central Bank of the Philippines

G.R. No. 197593 (October 12, 2020) |Hernando, J.
Topic: Torts and Damages
Doctrine
The State in the performance of its governmental functions is liable only for the
tortious acts of its special agents. A special agent is defined as one who receives a
definite and fixed order or commission, foreign to the exercise of the duties of his
office.
Facts
BPI Laoag City Branch discovered outstanding discrepancies in its inter-bank
reconciliation statements in CBP in the amount of P9 million. Thus, BPI filed a
letter-complaint before the CBP. Both CBP and BPI agreed to refer the matter to the NBI.
The NBI uncovered a “pilferage scheme,” by an organized criminal syndicate.
It was disclosed that among those party to the scheme were employees of CBP:
Valentino, a bookkeeper, and Estacio, a Janitor-Messenger Estacio. They intercepted and
pilfered the BPI Laoag City Branch checks and tampered with the clearing envelope.
They reduced the amounts appearing on the clearing manifest, the BPI clearing
statement and the CBP manifest to conceal the fact that the BPI Laoag City Branch
checks showing the original amounts were deposited with Citibank Greenhills Branch.
BPI requested CBP to credit back to its demand deposit account the amount of P9
million with interest. However, CBP credited only the amount of P4.5 million to BPI's
demand deposit account. Despite several requests made by BPI, CBP refused to credit
back the remaining amount of P4.5 million plus interest. Hence, BPI filed a complaint
for sum of money against CBP. The RTC ruled in favor of BPI. The CA reversed.
Issue
Whether CBP may be held liable for the fraudulent activities committed by its
employees.
Held + Ratio
No, CBP is not liable.
The State in the performance of its governmental functions is liable only for the
tortious acts of its special agents. A special agent is defined as one who receives a
definite and fixed order or commission, foreign to the exercise of the duties of his office.
Further, an employer shall be liable for the damages caused by their employees acting
within the scope of their assigned tasks. An act is deemed an assigned task if it is "done
by an employee, in furtherance of the interests of the employer or for the account of the
Page 98
UP Law Center
employer at the time of the infliction of the injury or damage. Where a public officer
acts without or in excess of jurisdiction, any injury or damage caused by such acts is his
or her own personal liability and cannot be imputed to the State.
In the present case, the employees cannot be considered as special agents of CBP during
their commission of the fraudulent acts against BPI as they were regular employees
performing tasks pertaining to their offices, namely, bookkeeping and
janitorial-messenger.
CBP is not liable for the acts of its employees because Valentino and Estacio were not
"special agents". Evidently, both Valentino [Bookkeeper] and Estacio
[Janitor-Messenger] are not considered as special agents of CBP during their
commission of the fraudulent acts against petitioner BPI as they were regular
employees performing tasks pertaining to their offices, namely, bookkeeping and
janitorial-messenger. Thus, CBP cannot be held liable for any damage caused to
petitioner BPI by reason of Valentino and Estacio's unlawful acts.
CBP is a corporate body performing governmental functions. Operating a clearing

house facility for regional checks is within CBP's governmental functions and duties as
the central monetary authority. While at present, the PCHC handles the clearing of all
checks issued by its member banks, this does not necessarily mean that CBP was
performing a proprietary function during that time by providing a clearing house
facility for regional checks. It bears stressing that establishing clearing house facilities
for the member banks is a necessary incident to its primary governmental function of
administering monetary, banking and credit system of the Philippines as per Section 107
of RA 265, as amended.
Nonetheless, while the CBP performed a governmental function in providing clearing

house facilities, it is not immune from suit as its Charter, by express provision, waived
its immunity from suit. However, although the CBP allowed itself to be sued, it did not
necessarily mean that it conceded its liability.
Even on the assumption that CBP is performing proprietary functions, still, it cannot be
held liable because Valentino and Estacio acted beyond the scope of their duties. The
fraudulent acts of CBP's employees Valentino and Estacio, were evidently not pursuant
to their functions and were in excess of or without authority; therefore, any injury or
damage caused by such acts to petitioner BPI shall be Valentino's and Estacio's own
personal liabilities which should not be imputed to CBP as their employer.
Page 99
UP Law Center
BDO v. Ypil, Sr.

G.R. No. 212024 (October 12, 2020) | Hernando, J.
Topic: Extinguishment of Obligations; Compensation; Requisites
Doctrine
Article 1290 of the Civil Code states that "when all the requisites mentioned in Article
1279 are present, compensation takes effect by operation of law, and extinguishes both
debts to the concurrent amount, even though the creditors and debtors are not aware
of the compensation." A claim, further, is liquidated when the amount and time of
payment is fixed. If acknowledged by the debtor, although not in writing, the claim
must be treated as liquidated.
Facts
Leopoldo Kho, EVP of Cebu Sureway Trading Corporation (CSTC), offered a proposal
to Edgardo C. Ypil, Sr. to invest in the Prudentialife Plan - Millionaires in Business
scheme. Ypil acquiesced and Kho was able to solicit P300,000.00 from the former. Ypil,
however, opted to get a refund of the amounts he paid through a letter. However, CSTC
or Kho did not answer. Ypil likewise made several oral demands but to no avail.
Subsequently, Ypil 's lawyer sent a demand letter to Kho but it was never answered.
Ypil filed a Complaint for Specific Performance with Attachment, Damages and
Attorney's fees against CSTC and Kho before the RTC of Cebu, asking for the sum
hepaid plus interests, damages, and attorney’s fees. The RTC eventually granted Ypil’s
prayer for attachment.
The Sheriff of the RTC of Cebu, pursuant to the above order, issued a Notice of
Garnishment of the amount of P300,000.00 plus lawful expenses from the accounts of
CSTC and/or Kho addressed to the Manager and/or Cashier of the Bank's North
Mandaue Branch. The Bank received the said notice on the same day. Yet, the Bank,
through its North Mandaue Branch Head Cyrus M. Polloso, sent its Reply to Sheriff
Guaren informing him that CSTC and/or Kho have no available garnishable funds.
The Bank filed its Compliance/Explanation as a forced intervenor to the trial court's
Order. It averred that since CSTC defaulted on its obligations to the Bank as embodied
in a credit agreement and promissory note, its entire obligation immediately became
due and demandable without need of demand or notice. In other words, it asserted that
since the Bank and CSTC were creditors and debtors of each other, legal compensation
already took effect.
CSTC and Kho then filed their Comment stating that the provisions of the Promissory
Note should not affect third parties and court processes such as garnishment. They
alleged that the Bank resorted to legal compensation to frustrate the order of
Page 100
UP Law Center
garnishment. Moreover, they averred that legal compensation cannot take effect because
CSTC's loan was not yet due and demandable.
The RTC ruled in favor of Ypil and ordered the Bank to make available the garnished
deposits of CSTC and Kho pursuant to the Notice of Garnishment. The Bank moved for
partial reconsideration, insisting that legal compensation took place ipso jure and
retroacted to the date when all the requisites were fulfilled. When this was denied, the
Bank filed a petition for certiorari before the CA. The appellate court ruled that not all
elements of legal compensation were present in the case.
Issue
Whether CA erred in not holding that the disputed deposit had been the subject of legal
compensation.
Held + Ratio
No, there was no error on the part of the CA. In order that compensation may be
proper, it is necessary:
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;
e. That over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor
It is settled that "compensation is a mode of extinguishing to the concurrent amount the

debts of persons who in their own right are creditors and debtors of each other. The
object of compensation is the prevention of unnecessary suits and payments thru the
mutual extinction by operation of law of concurring debts." The said mode of payment
is encapsulated in Article 1279 of the Civil Code.
In relation to this, Article 1290 of the Civil Code states that "when all the requisites
mentioned in Article 1279 are present, compensation takes effect by operation of law,
and extinguishes both debts to the concurrent amount, even though the creditors and
debtors are not aware of the compensation." A claim, further, is liquidated when the
amount and time of payment is fixed. If acknowledged by the debtor, although not in
writing, the claim must be treated as liquidated.
There is no dispute that the Bank and CSTC are both creditors and debtors of each other.
Moreover, the debts consist in or involve a sum of money, particularly CSTC's loan and
its deposit with the Bank. Notably, the Bank argues that CSTC's debts became due given
that it defaulted on its loan obligations even without need of demand pursuant to the
Promissory Note. Neither CSTC nor Kho categorically refuted that CSTC indeed
defaulted.
Page 101
UP Law Center
However, similar to the CA's ruling, the flaw in the Bank's argument is its failure to
specify the date when CSTC actually defaulted in its obligation or particularly pinpoint
which installment it failed to pay. The Bank revealed that CSTC owed it the amount of
P3,823,000.00 without presenting a detailed computation or proof thereof except for the
Promissory Note. Although CSTC and Kho did not question the computation made by
the Bank, the fact remains that the actual date of default was not disclosed and verified
with corroborating preponderant proof. The Bank only stated that CSTC has not been
paying its monthly obligations prior to February 4, 2004, which is not particular
enough, even if the Promissory Note indicates that CSTC's obligation will immediately
become due after default and without need of notice.
Thus, CSTC's indebtedness cannot be considered as due and liquidated. In this case,
the time of default and the amount due were not specific and particular. Without this
information, a simple arithmetic computation cannot possibly be done without
risking errors especially about the application of interest and penalties. Similarly,
despite CSTC's failure to contest the Bank's computation, its debt still cannot be
considered liquidated. Further confirmation is necessary to treat CSTC's debt as due,
demandable, and liquidated, which the Bank unfortunately did not bother to elaborate
on.
Page 102
UP Law Center
Bacala v. Heirs of Sps. Poliño

G.R. No. 200608 (February 10, 2021) | Hernando, J.
Topic: Sales; Definition and Essential Requisites
Doctrine
Gross inadequacy or simulation of price neither affects nor invalidates a sale, but it
can be shown that the parties may have really intended a donation or some other act
or contract.
Facts
Spouses Anecito and Clara were the registered owners of a parcel of land planted with
coconuts located at Davao Oriental. They died intestate and were survived by their
sons, Aquilino and Ducepino. However, A Deed of Sale and an Agreement, executed
between Anecito and Juan on April 13, 1992 resurfaced wherein Anecito allegedly
ceded unto Juan the subject property for a consideration of P15,000. The Agreement
stipulated that during Anecito's lifetime, Juan shall allow Anecito to enjoy the usufruct
of the subject property, and that upon Anecito's death, Juan shall continue to support
and provide financial assistance to Aquilino and Ducepino. The Agreement provided
that in case of breach thereof, the terms shall be non-effective and nugatory.
Aproniana, as guardian of Aquilino and Ducepino, filed a complaint, assailing the

validity of both documents for being fictitious and without consideration. The
consideration was far below the market value and Juan had no means of livelihood
sufficient to pay for the lot. She claimed that the transaction was in reality a donation
mortis causa, and since it was not executed in accordance with the formalities of the law,
it was null and void. Aproniana also claimed that while Juan knew that Aquilino and
Ducepino were mentally incapacitated, the sale transpired without the two brothers
being represented therein. She further averred that Juan and Corazon took possession of
the property and arrogated unto themselves the full enjoyment thereof and its fruits to
the detriment of Aquilino and Ducepino.
RTC ruled in favor of Aproniana and the CA reversed, citing Article 1354 of the Civil
Code and the best evidence rule. The CA presumed the existence of a cause and
consideration in the Deed of Sale in question
Issue
Whether the Deed of Sale is valid.
Held + Ratio
Yes, the Deed of Sale is valid.
Page 103
UP Law Center
Gross inadequacy of price, by itself, does not mean an invalid contract. Gross
inadequacy or simulation of price neither affects nor invalidates a sale, but it can be
shown that the parties may have really intended a donation or some other act or
contract.
First, the gross inadequacy of the price did not invalidate the subject contract. The Deed
of Sale states in plain terms that the subject property is being sold for P15,000. Anecito
had expressly acknowledged in the Deed of Sale his receipt of the said amount as
consideration of the contract. No further issue on the regularity of the notarization was
raised on appeal. To debunk the existence of consideration in the Deed of Sale, there
must be more than mere preponderant evidence showing that Anecito did not truly
execute the disputed document or that the parties had not truly intended a contract of
sale.
The Contract between Anecito and Juan was a sale subject to a resolutory condition. The
CA determined that Anecito and Juan entered into a valid contract of sale. The Court
agreed, but with qualifications. Contrary to the findings of the CA, the contract of sale
between Anecito and Juan is not an absolute sale. The Agreement that was appended to
and executed simultaneously with the Deed of Sale constituted a resolutory condition.
Had animus donandi really been the true motive for the transfer of the subject property,
Anecito and Juan would have so stated in the documents that they executed. However,
the Deed of Sale clearly states that the conveyance was for a consideration of the
amount of P15,000
A resolutory condition extinguishes a transaction that, for a time, existed and

discharges the obligations created thereunder. It was stipulated in the Agreement that
Anecito shall enjoy the usufruct of the subject property, and that upon Anecito's death,
Juan shall support and give financial assistance to Aquilino and Ducepino. These
stipulations in the Agreement are resolutory as Anecito and Juan also agreed that
breach of the terms and conditions of the Agreement shall render the Deed of Sale non-
effective and nugatory.
Page 104
UP Law Center
Atienza v. Golden Ram Engineering

G.R. No. 205405 (June 28, 2021) | Hernando, J.
Topic: Obligations; Nature and Effects; Remedies for Breach
Doctrine
Bad faith, under the law, does not simply connote bad judgment or negligence. It
imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong, a breach of a known duty through some motive or interest or ill will that
partakes of the nature of fraud.
Facts
Eduardo Atienza bought two vessel engines from Golden Ram, and as proof of his
payment, he was issued a Proforma Invoice which stated the warranty period of 12
months. Atienza paid P2.5 million after the two engines were delivered and
commissioned by GRESEC sometime in March 1994.
One of the engines suffered a major dysfunction, the diagnosis of which revealed that
the connecting rod had split resulting in the engine stuck-up. Atienza reported the
incident to Golden Ram and the latter sent Engr. Raymond Torres to inspect and
determine the extent of the damage. Engr. Torres confirmed that the “defect was
inherent being attributable to factory defect.” This finding was reported to MAN B&W
Diesel, Singapore Pte. (MAN Diesel) which is the foreign supplier of the engine. In turn,
it promised that the malfunctioning engine would be replaced in accordance with the
warranty.
Atienza repeatedly reached out to Golden Ram and Torres due to the subpar
performance of the engine. Atienza had reported that the right engine was not
functioning properly as it was slow in acceleration and there are a few incidents where
the right engine emitted black smoke. Still, Golden Ram and Engr. Torres had only
provided advice to Atienza and they hadn’t replaced the engine. Finally, when the right
engine broke down, Atienza was verbally assured that the respondents will replace the
engine. They did not say that they will refer the matter to MAN Diesel nor did they
furnish Atienza with a copy of the findings of MAN Singapore.
Due to inaction, Atienza sent a demand letter to Golden Ram, but the latter paid no
heed to the demand. This impelled Atienza to file a complaint for damages arising from
the breach of warranty. The RTC held in favor of Atienza, finding that Golden Ram had
breached the warranty. Golden Ram and Torres, further, were found to have been in bad
faith for their refusal to replace the engine. The CA affirmed the decision, but found that
Golden Ram and Torres did not act in bad faith. Torres was exculpated from solidary
liability with Golden Ram due to the latter’s separate juridical personality.
Page 105
UP Law Center
Issue
Whether Golden Ram and Torres acted in bad faith so as to hold the latter solidarily
liable with the former for damages.
Held + Ratio
Yes, both the respondents were in bad faith.
Bad faith, under the law, does not simply connote bad judgment or negligence. It
imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong, a breach of a known duty through some motive or interest or ill will that
partakes of the nature of fraud.
The bad faith in this case consisted of the refusal to repair and subsequently replace a
defective engine which already underperformed during sea trial and began
malfunctioning six months after its commissioning has been clearly established.
Respondents' uncaring attitude towards fixing the engine which relates to MV Ace I's
seaworthiness amounts to bad faith.
There is solidary liability when the obligation expressly so states, when the law so
provides, or when the nature of the obligation so requires. It cannot be lightly
inferred. Settled is the rule that a director or officer shall only be personally liable for
the obligations of the corporation, if the following conditions concur: (1) the
complainant alleged in the complaint that the director or officer assented to patently
unlawful acts of the corporation, or that the officer was guilty of gross negligence or
bad faith; and (2) the complainant clearly and convincingly proved such unlawful
acts, negligence or bad faith.
Basic is the principle that a corporation is vested by law with a personality separate and
distinct from that of each person composing or representing it. Equally fundamental is
the general rule that corporate officers cannot be held personally liable for the
consequences of their acts, for as long as these are for and on behalf of the corporation,
within the scope of their authority and in good faith. The separate corporate personality
is a shield against the personal liability of corporate officers, whose acts are properly
attributed to the corporation.
In Tramat Mercantile v. CA, the Court held that personal liability of a corporate director,
trustee or officer along (although not necessarily) with the corporation may so validly
attach, as a rule, only when:
a. He assents (a) to a patently unlawful act of the corporation, or (b) for bad faith or gross
negligence in directing its affairs , or (c) for conflict of interest, resulting in damages to the
corporation, its stockholders or other persons;
b. He consents to the issuance of watered stocks or who, having knowledge thereof, does not
forthwith file with the corporate secretary his written objection thereto;
c. He agrees to hold himself personally and solidarily liable with the corporation; or
d. He is made, by a specific provision of law, to personally answer for his corporate action.
Page 106
UP Law Center
In this case, Torres is also solidarily liable with Golden Ram as Atienza established
sufficient and specific evidence to show that Torres had acted in bad faith or gross
negligence in the sale of the defective vessel engine and the delivery and installation of
demo units instead of a new engine which Atienza paid for.
Page 107
UP Law Center
Asset Pool A (SPV-AMC), Inc. v. Sps. Berris

Topic: Special Contracts; Credit Transactions; Real Estate Mortgage
Doctrine
NCC Article 2089 provides that a pledge or mortgage is indivisible, even though the
debt may be divided among the successors in interest of the debtor or of the creditor.
Therefore, the debtor's heir who has paid a part of the debt cannot ask for the
proportionate extinguishment of the pledge or mortgage as long as the debt is not
completely satisfied. Neither can the creditor's heir who received his share of the debt
return the pledge or cancel the mortgage, to the prejudice of the other heirs who have
not been paid. From these provisions is excepted the case in which, there being
several things given in mortgage or pledge, each one of them guarantees only a
determinate portion of the credit. The debtor, in this case, shall have a right to the
extinguishment of the pledge or mortgage as the portion of the debt for which each
thing is specially answerable is satisfied. In essence, indivisibility means that the
mortgage obligation cannot be divided among the different lots, that is, each parcel
under mortgage answers for the totality of the debt.
Facts
Far East Bank and Trust Company (FEBTC) and B. Berris Merchandising (BBM) entered
into a Loan Agreement for P5M with interest payable for five years. The loan was
secured by a real estate mortgage executed by the Sps. Berris over 2 parcels of land, a
chattel mortgage on their rice mill, and a comprehensive surety agreement. BBM was
also granted a P15M Discounting Line Facility by FEBTC with expiry on July 31, 1997.
The discounting line was renewed for the same amount, valid until July 31, 1998. The
parties increased the discounting facility to P18M with the same expiry on July 31, 1998
and provided that the discounting accommodation shall be partially secured by a real
estate mortgage over 5 parcels of land (2 of which were also the ones securing the loan).
Meanwhile, the spouses Berris, for and on behalf of BBM, executed a Promissory Note
for the amount of P5M due on April 16, 2001 with an interest of 14.5% per annum and
carrying the same provisions as the Term Loan Agreement. Four more PNs were
executed by the spouses Berris for and on behalf of BBM. All PNs bore similar
provisions which entitled FEBTC to 25% of the amount due by way of attorney's fees in
case of default. In addition, the last four PNs provided that FEBTC is entitled to
liquidated damages of 1% for every 30 days or a fraction thereof on the amount due in
case of default.
The spouses Berris failed to pay their obligations under the PNs. FEBTC demanded the
payment of the availment on the Discounting Line and Loan (P21,055,555.54). When the
demands went unheeded, the bank filed a Petition for Extra-Judicial Foreclosure of Real
Estate Mortgage over two of the properties securing the PNs and subsequently a
Page 108
UP Law Center
complaint for the collection of the amounts of the other PNs. The spouses Berris filed a
Complaint for the Annulment of Sale with Prayer for Injunction and Restraining Order,
assailing the extra-judicial foreclosure of mortgage.
The spouses Berris claim that the institution of the extra-judicial foreclosure for the
payment of PN Nos. 2-104-980258 BDC and 2-104-980888 BDC under the discounting
facility bars the collection suit filed by petitioner to demand payment of PN No.
2-104-961106/TLS under the Term Loan Agreement; and PN Nos. 2-104-980259/bdc,
2-104- 980296/bdc, 2-104-980975 BD/C and 2-104-981149/BDC under the Discounting
Line as it is considered as splitting of cause of action.
Issue
1. Whether the Loan Agreement and Discounting Line are separate and distinct
obligations of the spouses Berris.
2. Whether the institution of the extrajudicial foreclosure of mortgage barred the
filing of the herein collection suit.
Held + Ratio
1. Yes, the two are separate. The reference of one contract to the other does not
automatically make them a single contract in the absence of evidence to the
contrary, express or implied.
A Discounting Line is a credit facility in which the financing company or bank

buys the receivables of a business entity and makes profit out of the difference
between the face value of the receivable and the discounted price.
The first PN (2-104-961106/TLS) was executed upon the release of the loan
amount of P5M under the Loan Agreement. The first PN, the subject of the
collection suit, was not drawn against the Discounting Line. On the other hand,
the loan proceeds of the four subsequent PNs (Nos. 2-104-980259/bdc,
2-104-980296/bdc, 2-104-980975 BD/C and 2-104-981149) which were all drawn
against the discounting line were already net of interests and/or other charges
when released to the spouses Berris. Even the marking at the end of the
promissory note numbers, i.e., TLS and BDC shows that the first PN should not
be treated as the same obligation as the other four PNs.
The fact that both the Loan Agreement and the PNs issued under the
Discounting Line contained acceleration clauses, in that, failure to pay any
amount due shall make all contracts or credit accommodations granted to the
spouses Berris due and demandable and payable prior to the expiration of the
stipulated term, do not make the two contracts one and the same.
2. Yes, but only with respect to PN Nos. 2-104-980259/bdc, 2-104- 980296/bdc,

2-104-980975 BD/C and 2-104-981149/BDC under the Discounting Line.
Page 109
UP Law Center
Although it is settled that the right of the mortgage creditor to recover the
deficiency when the mortgaged properties are not enough to satisfy the entire
obligation, the action is only instituted after the termination of the foreclosure
proceedings and not during its pendency, so as not to violate the prohibition
against splitting of cause of action.
Further, the real estate mortgage is just an accessory contract, thus, it does not
control the principal agreements, i.e., the Loan Agreement and the Discounting
Line, as it is only dependent upon the latter obligations. Hence, even if the real
estate mortgage secured all the obligations of the spouses Berris to the bank,
whether existing or future indebtedness, it will not modify nor change the fact
that they entered into two separate and distinct obligations which give rise to
separate actions regardless of whether they become due and demandable at the
same time or not. To note, the Loan Agreement was secured by a real estate
mortgage on only two of the five real properties, i.e., TCT Nos. 129163 and 74496,
of the spouses Berris. This further bolsters the fact that the Loan Agreement gives
rise to a separate cause of action of either an extrajudicial foreclosure or a
collection suit, alternatively.
The indivisibility of the mortgage was also not violated when the bank filed an
extra-judicial foreclosure of TCT Nos. 129163 and 74496 to effect payment under
the Discounting Line and thereafter, filed a collection suit for PN No.
2-104-961106/TLS under the Loan Agreement during the pendency of the
foreclosure.
NCC Article 2089 provides that a pledge or mortgage is indivisible, even

though the debt may be divided among the successors in interest of the debtor
or of the creditor. Therefore, the debtor's heir who has paid a part of the debt
cannot ask for the proportionate extinguishment of the pledge or mortgage as
long as the debt is not completely satisfied. Neither can the creditor's heir who
received his share of the debt return the pledge or cancel the mortgage, to the
prejudice of the other heirs who have not been paid. From these provisions is
excepted the case in which, there being several things given in mortgage or
pledge, each one of them guarantees only a determinate portion of the credit.
The debtor, in this case, shall have a right to the extinguishment of the pledge
or mortgage as the portion of the debt for which each thing is especially
answerable is satisfied. In essence, indivisibility means that the mortgage
obligation cannot be divided among the different lots, that is, each parcel
under mortgage answers for the totality of the debt.
Page 110
UP Law Center
Asian Construction and Development Corporation v. Metro Structures, Inc.

GR No. 221147 (September 29, 2021) | Hernando, J.
Topic: Obligations; Extinguishment; Novation
Doctrine
Novation may also be express or implied. It is express when the new obligation
declares in unequivocal terms that the old obligation is extinguished. It is implied
when the new obligation is incompatible with the old one on every point. The test of
incompatibility is whether the two obligations can stand together, each one with its
own independent existence. The consent of the third party must also be secured for
the novation to be valid.
Facts
On March 16, 1998, First Centennial Clark Corporation (FCCC) entered into a
Construction Agreement with petitioner Asian Construction and Development
Corporation (Asiakonstrukt) to work on the architectural works approved by the
National Centennial Commission and the necessary construction works for the
Exposition Theme Park. On the same date, MERO Structures, Inc. (MERO), an
American Corporation, submitted a Materials Only proposal to Asiakonstrukt for the
supply of materials in constructing a Philippine flag structure for USD 570,000. This was
accepted by Asiakonstrukt on March 17.
Asiakonstrukt submitted to FCCC a proposal for the installation of the flag structure
using MERO’s materials. This was approved by FCCC. In a Memorandum, FCCC’s
president requested the National Dev’t Corporation (NDC) to finance the installation of
the flag structure. NDC would in turn source the advances from a loan provided by
certain government financial institutions to FCCC. Asiakonstrukt informed MERO that
FCCC awarded to the former the contract for the installation of the flag structure and
the latter would pay MERO after FCCC’s payment of the materials not later than June
26, 1998.
After seeking payment from Asiakonstrukt, MERO requested that it be paid directly by
the FCCC and that Asiakonstrukt notify FCCC that the work is complete and that full
payment should be made. Asiakonstrukt acceded to the request to collect payment
directly from the FCCC. MERO sought the assistance of DTI and DOF to seek payment
from FCCC but was unsuccessful. Thus, through counsel, MERO made a final demand
on Asiakonstrukt for USD 570,000 plus interest of 18% annually. Asiakonstrukt failed to
pay prompting MERO to file a complaint for collection of sum of money praying that
Asiakonstrukt or FCCC be ordered to pay them the sought amounts plus damages, and
NDC be directed to furnish FCCC with advances.
Asiakonstrukt mainly argued that a new contract was entered into by it and MERO,
wherein MERO waives its rights to collect from Asiakonstrukt and is subrogated to
Asiakonstrukt’s place to collect directly from FCCC and NDC.
Page 111
UP Law Center
Issue
Whether there was a novation of contract between Asiakonstrukt and MERO.
Held + Ratio
No, there was no novation.
Novation extinguishes an obligation between two parties when there is a substitution of

objects or debtors or when there is subrogation of the creditor. It occurs only when the
new contract declares so "in unequivocal terms" or that "the old and the new obligations
be on every point incompatible with each other."
Novation occurs only when the new contract declares in unequivocal terms that the old
obligation has been novated, or when the old and new obligations are completely
incompatible with each other. As discussed by the court in Garcia v. Llamas, the Court
held that for novation to take place, the following requisites must concur:
1. There must be a previous valid obligation.

2. The parties concerned must agree to a new contract.
3. The old contract must be extinguished.
4. There must be a valid new contract.
Novation may also be express or implied. It is express when the new obligation
declares in unequivocal terms that the old obligation is extinguished. It is implied
when the new obligation is incompatible with the old one on every point. The test of
incompatibility is whether the two obligations can stand together, each one with its own
independent existence. The consent of the third party must also be secured for the
novation to be valid.
In this case, there was neither express novation nor implied novation. First, there is
nothing in the letters that unequivocally states that the obligation of Asiakonstrukt to
pay MERO would be extinguished.
Second, there is also no mention that MERO would substitute or subrogate

Asiakonstrukt as FCCC's payee/obligee as the letters merely show that MERO was
allowed by Asiakonstrukt to try collecting from FCCC directly.
Lastly, using the test of incompatibility, Asiakonstrukt's non-objection to MERO's

request to collect from FCCC directly is not incompatible with the obligation of
Asiakonstrukt to pay MERO. It merely provided an alternative mode of collecting
payment to MERO, which is not even valid as far as FCCC is concerned since the latter
did not even consent to the same, not to mention there is no existing contractual
relationship between MERO and FCCC.
Also, consent is a requirement to the novation. FCCC was never a part of the letters
exchanged between MERO and Asiakonstrukt. Thus, FCCC clearly could not have
consented to any substitution or subrogation of the parties.
Page 112
UP Law Center
Since there was clearly no novation, Asiakonstrukt's obligation to MERO remains valid
and existing. Asiakonstrukt, therefore, must still pay respondent the full amount of
US$570,000.00 with the applicable interest.
Page 113
UP Law Center
Aromin v. Heirs of Spouses Somis

GR No. 204447 (May 3, 2021)|Hernando, J.
Topic: Special Contracts; Compromise
Doctrine
When a decision becomes final and executory, it becomes valid and binding upon the
parties and their successors in interest. Such decision or order can no longer be
disturbed or reopened no matter how erroneous it may have been
Facts
Maria Aromin owned three parcels of land denominated as Lots A, B, in C, all located in
La Union. In February 2007, when Maria went to pay the realty tax for the foregoing
lots, she discovered that both Lots A and C were sold to Spouses Somis through a Deed
of Sale allegedly signed by the former and her spouse. On June 18, 2007, Maria filed a
Complaint for Annulment of Documents with Damages alleging that she did not sign
the Deed of Sale transferring Lot C to Spouses Somis, hence it is void. Summonses were
served to Spouses Somis who filed their answer on August 30, 2007.
On November 28, 2007, before the RTC reached its decision, both parties entered into a
Compromise Agreement which stipulated that Maria would withdraw her complaint if
Spouses Somis agree that Lot A shall belong to Maria and in return, Maria agrees that
Lot B shall belong to Spouses Somin. Both parties signed the Compromise Agreement
and was subsequently approved by the RTC in its January 17, 2008 decision which
became final. Subsequently, the RTC issued a Writ of execution to this effect.
On July 8, 2008, Maria filed a motion to set aside the order granting the issuance of writ
of execution and claimed that she intended to give Lot C, and not Lot B to Spouses
Somis. She asserted that the designation or PIN of the property on the Compromise
Agreement was written erroneously. RTC granted the motion and directed that the PIN
in the Compromise Agreement be changed from Lot B to Lot C. Aggrieved, Spouses
Somis appealed to the CA where it set aside RTC’s Order and reinstated the previous
January 17, 2008 order because the latter already became final and executory.
In February 15, 2010, Maria filed with the RTC a separate motion to Annul the
Compromise Agreement which the trial court denied since the agreement was already
final and executory. On appeal, the CA dismissed the same because both grounds for
annulment of judgment, namely lack of jurisdiction and extrinsic fraud are lacking.
Hence this appeal to the Supreme Court.
Issue
Whether the Compromise between both parties is valid and binding
Held + Ratio
Yes, the compromise is valid and binding.
Page 114
UP Law Center
When a decision becomes final and executory, it becomes valid and binding upon the
parties and their successors in interest. Such decision or order can no longer be
disturbed or reopened no matter how erroneous it may have been.
As the Court held repeatedly, when a decision becomes final and executory, it becomes
valid and binding upon the parties and their successors in interest and such decision or
order can no longer be disturbed or reopened no matter how erroneous it may have
been. The Compromise Agreement was approved by the trial court in its January 17,
2008 decision which became final and executory. Moreover, the Compromise Agreement
is also valid and binding since there was a meeting of the minds between Maria and
Spouses Somis over the properties indicated to be transferred therein.
The appellate court correctly ruled that the Compromise Agreement was valid and
binding since there was a meeting of the minds between the parties. The Compromise
Agreement was clear that the contracting parties mutually agreed to transfer to each
other the properties indicated therein. Even if it was Maria's counsel who prepared the
written instrument, she or her representative was expected to exercise due diligence in
reviewing the entries therein before signing the instrument. Moreover, if indeed there
was a mistake on which property should be transferred to the spouses Somis, Maria
should have availed of her remedies immediately.
Page 115
UP Law Center
Arakor Construction and Development Corporation v. Sta. Maria et al.

GR No. 215006 (January 11, 2021)|Hernando, J.
Topic: Sales; Definition and Essential Requisities
Doctrine
1. [N]o one can give what one does not have; nemo dat quad non habet. One can sell
only what one owns or is authorized to sell, and the buyer can acquire no more
right than what the seller can transfer legally.
2. Buyers must show that they inquired not only into the title of the seller but also
into the seller's capacity to sell. Thus, the buyers of conjugal property must
observe two kinds of requisite diligence, namely the diligence in verifying the
validity of the title covering the property; and the diligence in inquiring into
the authority of the transacting spouse to sell conjugal property in behalf of the
other spouse.
3. An action that is predicated on the fact that the conveyance complained of was
null and void ab initio is imprescriptible.
Facts
Fernando Gaddi Sr. and Felicidad Gaddi (Spouses Gaddi) owned five contested parcels
of land. Felicidad died intestate on November 18, 1985 and was survived by Fernando
Sr. and her eight children, herein respondents. On February 7, 1996, Fernando Sr. passed
away as well. After the death of Fernando Sr., Atty. Legaspi, president of Arakor
(petitioner), informed the Gaddis children that their parents had already sold the
contested five lots to Arakor, as evidenced by two undated Deeds of Absolute Sale.
This prompted the Gaddi children to file a Complaint for Annulment of Deeds of
Absolute Sale and Transfer Certificates of Title against Arakor. They alleged that the two
contracts of sale were forged and the conveyance of the properties was fraudulent since
Felicidad could not have signed the documents and given her consent thereon since she
has been dead for seven years before the alleged execution of the said contracts.
Arakor, however, denied employing fraud. It contended that the Deeds Absolute Sale
were already signed and notarized. Atty. Legaspi also disclaimed any knowledge about
the prior death of Felicidad. Arakor also alleged that the Gaddis children had already
assigned their rights to Fernando Sr. through the two Joint Waiver of Claim and/or
Right that they executed. Thus, full ownership and title over the contested properties
had been consolidated in favor of Fernando Sr. at the time of the sale. Thus, the
signature of Felicidad in the Deeds of Absolute Sale is no longer material in determining
the sale's validity.
Moreover, Arakor averred that the Gaddis' claims are barred by prescription since the
company has been in open, continuous and lawful possession of the properties as the
owner thereof since September 1992.
Page 116
UP Law Center
Issues
1. Whether the Deeds of Absolute Sale are null and void for being forged and
fictitious.
2. Whether Arakor is considered a buyer in good faith, even assuming the null and
void nature of the contracts.
3. Whether the Gaddis’ claims for Annulment of Deeds of Absolute Sale have been
barred by prescription.
Held + Ratio
1. Yes, the Deeds of Absolute Sale are null and void. Forgery cannot be presumed
and must be proven by clear, positive, and convincing evidence by the party
alleging the same. Furthermore, if any one party to a supposed contract was
already dead at the time of its execution, such contract is undoubtedly
simulated and false, and, therefore, null and void by reason of its having been
made after the death of the party who appears as one of the contracting parties
therein. Indeed, no one can give what one does not have; nemo dat quad non
habet. One can sell only what one owns or is authorized to sell, and the buyer
can acquire no more right than what the seller can transfer legally.
In this case, the Certificate of Death of Felicidad shows that her demise preceded
the execution of the contracts of sale. Obviously, she could not have signed any
document which leads to no other conclusion than that her signatures in the
deeds were forged. Considering that Felicidad's signatures were forged, the
Deeds of Absolute Sale are null and void and convey no title to Arakor.
2. No, Arakor cannot claim to be an innocent purchaser for value. The standard to
determine the good faith of the buyers dealing with a seller who had title to and
possession of the land but whose capacity to sell was restricted, in that the
consent of the other spouse was required before the conveyance, declaring that in
order to prove good faith in such a situation, the buyers must show that they
inquired not only into the title of the seller but also into the seller's capacity to
sell. Thus, the buyers of conjugal property must observe two kinds of
requisite diligence, namely the diligence in verifying the validity of the title
covering the property; and the diligence in inquiring into the authority of the
transacting spouse to sell conjugal property in behalf of the other spouse.
In the present case, Atty. Legaspi did not diligently ascertain the genuineness of
the signatures of the owners, Spouses Gaddi, especially that of Felicidad's. He
merely relied on Fernando Sr.'s representations that Felicidad's signature was
genuine. Atty. Legaspi, being a lawyer, should have been more circumspect to
determine if Spouses Gaddi both had the capacity to sell and if they voluntarily
and validly signed the deeds of sale. Atty. Legaspi could have requested or even
demanded to personally talk to Felicidad in order to affirm if she consented to
the disposition of the properties.
Page 117
UP Law Center
3. No, the claims are not barred by prescription. Under Art. 1410 of the NCC, an
action or defense for the declaration of the inexistence of a contract does not
prescribe. An action that is predicated on the fact that the conveyance
complained of was null and void ab initio is imprescriptible.
In this case, the lack of immediate challenge on the part of the Gaddis did not
negate the fact that the contracts were null and void and assailable anytime due
to the imprescriptibility of the action. Similarly, Arakor cannot invoke laches as a
defense given that the action is imprescriptible. The Gaddis cannot be estopped
from assailing the validity of the deeds precisely because Felicidad's signatures
were forged and therefore produced no legal effect.
Page 118
UP Law Center
Allied Banking Corporation v. Sps. Macam

Topic: Obligations and Contracts; Obligations; Nature and Effects; Breaches
Doctrine
All banks are charged with extraordinary diligence in the handling and care of its
deposits as well as the highest degree of diligence in the selection and supervision of
its employees—such obligation is absolute and deemed written into every deposit
agreement with its depositors. The bank’s liability under the deposit agreement is
PRIMARY, not vicarious.
Facts
Mario Macam (Mario), on the recommendation of his brother Manuel and facilitation of
Elena Valerio (Valerio), invested P1,572,000.00 in the cellular card business of
respondent Helen Garcia (Helen). Mario deposited the said amount in Valerio’s Savings
Account with Allied Bank-Pasay Road Branch. In turn, Valerio issued a check to Mario
covering the principal amount of his investment.
A few months after, a series of transactions occurred at the Allied Bank-Alabang Las
Piñas Branch (AB-ALP), headed by respondent Maribel Caña (Caña) starting with a
P46M deposit which ultimately resulted to the debit of the remaining P1.1M from the
savings account of the Sps. Macam with Allied Bank-Pasong Tamo (AB-PT) Branch and
the closure of such account. After having learned of the closure after they were unable
to withdraw from their account, the Sps Mario Macam filed the complaint for Damages
against the bank and the AB-PT Branch Head, Dimog. Allied Bank denied any liability
for the closure of the Sps Mario Macam’s account and claimed ownership of the P1.1M
deposit. Allied Bank traced its title to the dubious transfers amounting to P46M on
beginning from the crediting of Helen’s account and the ensuing fund transfers to
various deposit accounts maintained by particular individuals with different branches
of Allied Bank, thus it filed a Third Party Complaint against respondents, the Spouses
Willar Felix and Maribel Caña and the Spouses Melchor and Helen Garcia (Sps Garcia).
Of course, the respondents denied any liability.
The RTC ruled in favor of Sps Mario Macam and ordered petitioners Allied Bank and
Dimog to pay them the amount of P1.1M with interest. In turn, the third-party
defendants are to reimburse Allied Bank and Dimog such amount with interest. On
appeal, the CA affirmed the RTC Ruling reiterating that Allied Bank is liable to the Sps
Mario Macam for breach of contract or culpa contractual. Hence the present appeal
wherein Allied Bank argues that it is not liable because it holds valid title not only to
the P1.1M that it debited from the account of the Sps Mario Macam but to the entire
P1,590,000.00 used to open the subject deposit account of the Spouses Mario Macam
with AB-PT Branch as well.
Page 119
UP Law Center
Issue
Whether Allied Bank is liable for unilaterally debiting and closing the deposit account
of the Sps Mario Macam.
Held + Ratio
Yes, the bank is liable for culpa contractual stemming from the deposit agreement
between the bank and the spouses.
All banks are charged with extraordinary diligence in the handling and care of its
deposits as well as the highest degree of diligence in the selection and supervision of
its employees—such obligation is absolute and deemed written into every deposit
agreement with its depositors. The bank’s liability under the deposit agreement is
PRIMARY, not vicarious.
With the bank’s acceptance of the Spouses Mario Macam's deposit and their opening of
an account with the bank’s Pasong Tamo Branch, Allied Bank explicitly recognized the
spouses’ ownership and title over the P1,590,000.00. As such, Allied Bank cannot
obliquely repudiate the resulting banking relationship with the Sps Mario Macam and
the fiduciary nature thereof.
Moreover, Allied Bank cannot evade liability by simply ascribing all blame to the acts of
its employee, Caña, because Allied Bank clothed Caña, its Manager. The doctrine of
"apparent authority," with special reference to banks, has long been recognized in this
jurisdiction, and its existence may be ascertained through the general manner in which
the corporation holds out an officer or agent as having the power to act, or in other
words, the apparent authority to act in general, with which it clothes him; or the
acquiescence in his acts of a particular nature, with actual or constructive knowledge
thereof, within or beyond the scope of his ordinary powers.
In this case, the manager had sufficient authority to effect the ostensible crediting of
Helen’s account and approve the subsequent fund transfers to five (5) different accounts
in the total amount of P46M. Indeed, the subsequent transfers (of funds) were approved
by several Branch Heads.
Page 120
UP Law Center
Domilos v. Spouses Pastor

Topic: Compromise
Doctrine
[A compromise] agreement, being a contract that has the force of law, is also
governed by the requisites and principles of contracts under Title II of the Civil
Code. It is a contract that created real rights as it was a contract for division of
property.
Facts
Following his victory in a forcible entry case in 1977, Lino Domilos executed a
compromise agreement with Nabunat and Palichang, the respondents in the said case.
In said agreement, they partitioned the subject land among them and agreed to dismiss
and drop all related cases filed in court.
From 1987 to 1989, however, Nabunat and Palichang sold different portions of the
property. Among the buyers are the Sps. Pastor. Sometime in May 1989, Domilos sought
the execution of the 1977 decision by filing a motion to order demolition and to restore
physical possession of the land. Subsequently, Nabunat and Palichang executed a
revocation and cancellation of the 1986 compromise agreement. The city court granted
Lino’s motion.
Sps Pastor then filed a suit of the annulment of the order, and the revocation of
compromise agreement. They claimed that Domilos wrongfully sold a portion of his
property even if he had none left to sell, according to the compromise agreement, and
that to get rid of the other lawful owners, he revoked the compromise agreement to
deliver the disputed properties to the buyer. Domilos argued, among others, that the
Sps. Pastor are not parties to the compromise agreement and as such, they have no legal
personality to sue Lino for revoking the same.
Issue
Whether the revocation and cancellation of the compromise agreement by Nabunat and
Palichang in 1989 may take place
Held + Ratio
No, the compromise agreement may not be revoked or canceled.
Under Art. 1385 of the NCC, the rescission, or in this case, revocation or cancellation of
the compromise agreement cannot take place because the objects of the contract are
already in the legal possession of the Pastors who did not act in bad faith. The subject
compromise agreement, being a contract that has the force of law, is also governed by
the requisites and principles of contracts under Title II of the Civil Code. It is a
contract that created real rights as it was a contract for the division of property.
Page 121
UP Law Center
Thus, the third persons, the Pastors, who came into possession of the object of the
contract are bound by the contract or compromise agreement. At the time the
compromise agreement was revoked by Lino and Palichang, the Pastors were already
legal co-owners of the property by virtue of a valid sale. As such, their respective shares
in the disputed property may not be validly included in the revocation of the
compromise agreement without their knowledge and consent. Although the Pastors are
not parties to the compromise agreement, their objection to its revocation can be treated
as an adverse claim over the disputed property.
Page 122
UP Law Center
Republic v. Heirs of Booc

Topic: Land Titles and Deeds; Reconstitution of Title
Doctrine
1. The trial court can only acquire jurisdiction over a petition for reconstitution if
the mandatory requirements and procedures laid down in RA 26 have been
strictly complied with. These requirements are mandatory and jurisdictional in
nature. Hence, non-observance thereof fatally affects the whole proceedings in
all its aspects and renders the same void.
2. A petition for reconstitution requires the presentment of evidence indicating
the number of the purported OCTs of the subject lots.
Facts
The respondent heirs of Booc filed a petition for reconstitution of the OCT over Lot Nos.
4749, 4765 and 4777. The OCTs were allegedly issued to the Boocs but were lost or
destroyed during World War II. The Mactan-Cebu International Airport Authority
(MCIAA) filed its opposition, asserting that the government owned the subject lots
through the Civil Aeronautics Administration (CAA), with the CAA having purchased
them as evidenced by three Deeds of Absolute Sale. The ownership over the lots were
transferred to the MCIAA pursuant to RA 6985.
The RTC ruled in favor of the Boocs, holding that they sufficiently proved that the OCTs
of thelots were issued in their name and were lost or destroyed during the war.
The Republic appealed, arguing that the RTC erred in granting the petition since the
respondents failed to prove that the OCTs existed because the numbers of the purported
OCTs were not identified in any of the documentary evidence submitted by the
respondents. CA ruled that the failure to mention the numbers of the lost OCTs of the
three lots is not fatal to the reconstitution. The evidence presented by the respondents as
to the existence of the CFI decisions and decrees awarding the lots and declaring the
Boocs as the owners, and the certification by the Register of Deeds that the lots were lost
or destroyed, are sufficient to warrant the reconstitution.
Issue
1. Whether the RTC acquired jurisdiction over the petition for reconstitution
2. Whether the respondents are entitled to the reconstitution of the OCTs of the
subject lots
Held + Ratio
1. No, the RTC failed to acquire jurisdiction over the petition for reconstitution
due to procedural infirmities. The trial court can only acquire jurisdiction over
Page 123
UP Law Center
a petition for reconstitution if the mandatory requirements and procedures

laid down in RA 263 have been strictly complied with.
The purpose of the reconstitution is to enable, after observing the procedures

prescribed by law, the reproduction of the lost or destroyed Torrens certificate
in the same form and in exactly the same way it was at the time of the loss or
destruction. The requirements in Section 12, on the contents of a petition, and
Section 13, on the publication of the notice of petition, are mandatory and
jurisdictional in nature. Hence, non-observance thereof fatally affects the whole
proceedings in all its aspects and renders the same void. The strict observance of
the rules laid down in the law is necessary to prevent parties from resorting and
exploiting reconstitution proceedings to obtain Torrens title over a parcel of land
In this case, the petition for reconstitution did not comply with the requirements
laid down in Section 12 of RA 26. Although respondents stated in their petition
that MEPZA possesses Lot No. 4749 while the MIAA occupies Lot Nos. 4765 and
4777, they failed to indicate their present addresses. Despite being aware that the
subject lots are in the material possession of the MIAA and MEPZA, respondents
did not stipulate if a building or improvements which do not belong to the Boocs
are erected in the subject lots, and the nature thereof. They also did not state the
encumbrances affecting the property, which are the deeds of absolute sale
executed in 1957 and 1958 in favor MCIAA.
Not only did respondents violate Section 12 of RA 26, they likewise did not
strictly adhere to the procedures on notice of hearing laid down in Section 13 of
the said law. A scrutiny of the amended notice shows that it did not indicate the
number of the lost or destroyed OCTs. It simply stated, "Original Certificate of
Title of Lot Nos. 4749, 4765 and 4777." Consequently, the failure to identify the
exact title number "defeats the purpose of the twin notice and publication
requirements since persons who have interest in the property or who may
otherwise be affected by the reconstitution of the supposed title thereto would
not be able to readily identify the said property or could even be misled by the
vague or uncertain title reference." The amended notice also failed to indicate the
following in violation of the in rem character of the reconstitution proceedings
and the mandatory nature of the requirements under RA 26:
a. The names of MEPZA and MIAA who are the occupants and possessors of
the subject lots;
b. The area and the boundaries of the subject lots; and
c. The date on which all persons having any interest therein must appear
and file their claim or objections to the petition.
2. No, the respondents are not entitled to reconstitution. A petition for

reconstitution requires the presentment of evidence indicating the number of the
purported OCTs of the subject lots.
3
Special Procedure for Reconstitution of Lost or Destroyed Torrens Certificate of Title
Page 124
UP Law Center
Even if the respondents complied with the procedural rules under RA 26, the
petition for reconstitution should still be denied. The failure of the respondents to
present evidence indicating the number of the purported OCTs of the subject lots
is a fatal defect which warrants the dismissal of their petition for reconstitution.
Respondents anchored their petition for reconstitution on Sections 2(d)4 and 2 (f)
of RA 26. Respondents attached to their petition the following documentary
evidence:
a. Decisions of the CFI-Cebu awarding the subject lots to the Boocs;

b. Decrees issued by the cadastral court pursuant to which an original certificate of title of
the subject lots was issued in favor of the Boocs;
c. Register of Deeds' certification;
d. Technical description of the subject lots; and
e. Certifications from the Branch Clerk of Court, and Branch Clerks of Court of Branch Nos.
27, 53 and 54 of RTC of Lapu-Lapu City stating that no application for reconstitution of
original certificate of title for the subject lots was filed before the said trial courts; and
f. Sketch plans of the subject lots.
Unfortunately, however, these pieces of evidence are not adequate proof that
certificates of title were in fact issued to the Boocs, and the same were in force at
the time they were lost or destroyed. At best, the CFI-Cebu decisions and Decree
Nos. 531367, 531382 and 531394 only proved that Lot Nos. 4749, 4765 and 4777
were awarded to the Boocs and that the lots were to be registered in their names
pursuant to Land Registration Act. Neither can the Register of Deeds'
certification be considered as a competent evidence as it simply states that "the
Original Certificate of Title of Lot No./s. 4749, 4765 and 4777 of Opon Cadastre
as per records on file has/have been lost or destroyed during the last Global
War," without even stating the title numbers of the certificates of title, and the
names for which they were issued.
4
Sec. 2. Original certificates of title shall be reconstituted from such of the sources hereunder
enumerated as may be available in the following order:
(d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which
the original certificate of title was issued;
(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting
the lost or destroyed certificate of title.
Page 125
UP Law Center
Dayrit v. Norquillas
GR No. 201631 (July 12, 2021)|Hernando, J.
Topic: Property; Bundle of Rights; Actions to Recover Ownership and Possession of Property; Accion
Interdictal
Doctrine
In determining whether regular first-level courts or the DARAB has jurisdiction, the
controlling aspect is the nature of the dispute (i.e., whether it is agrarian or not), and
NOT the character of the subject land.
Facts
The Petitioner Angelina Dayrit owned two parcels of land that were placed under the
Comprehensive Agrarian Reform Program (CARP). Thus, Dayrit’s titles were cancelled,
and three (3) Certificates of Land Ownership Award (CLOAs) were issued to
Respondent-farmers Norquillas. Dayrit then filed a petition to annul the CLOAs and
applied for CARP exemption before the Department of Agrarian Reform Adjudication
Board (DARAB). While these were pending, Norquillas took possession of the lands
and refused to vacate. Dayrit then filed this complaint for forcible entry against
Respondents Norquillas before the MCTC.
The MCTC ruled in favor of Dayrit. Dayrit proved she had prior possession of the
lands. Norquillas should have filed the proper action to enforce their ownership instead
of entering the property. The forcible entry case is also NOT barred by the pending
DARAB case because the former only resolves the issue of possession, and NOT
ownership of the lands. The RTC affirmed the MCTC.
The CA reversed the lower courts. The MCTC should have dismissed the complaint.
This case involves an agrarian dispute, which falls under the DARAB’s jurisdiction, and
NOT the MCTC. This case is also barred by litis pendentia because of the pending
DARAB case.
Issue
Whether an action for forcible entry involving an agrarian dispute falls within the
jurisdiction of the MCTC or the DARAB
Held + Ratio
The DAR, through the DARAB, has jurisdiction over this action for forcible entry
because it is an agrarian dispute.
In determining whether regular first-level courts or the DARAB has jurisdiction, the
controlling aspect is the nature of the dispute (i.e., whether it is agrarian or not), and
NOT the character of the subject land.
Page 126
UP Law Center
Ejectment cases like actions for forcible entry are generally cognizable by the first-level
courts (i.e., MTCs, MCTCs, or MTCCs).
“Land” includes all kinds of land, whether agricultural or mineral. Even the public
character of the land does NOT preclude inferior courts from exercising jurisdiction
over forcible entry cases. One exception is agrarian disputes, which are cognizable only
by the DARAB. If a case involves an agrarian dispute, the judge or prosecutor shall
automatically refer the case to the DAR. The DARAB has primary jurisdiction over
agrarian disputes, which refers to any controversy relating to tenancy over lands
devoted to agriculture and transfer of ownership from landowner to farmworkers,
tenants, and other agrarian reform beneficiaries.
The requisites of an agrarian dispute are: (1) there is an allegation from any of the
parties that the case is agrarian in nature; and (2) one of the parties is a farmer,
farmworker, or tenant. Any doubts as to the jurisdiction of the DAR on the
implementation of the CARP should be resolved in its favor.
In this case, all the requisites for an agrarian dispute are present. First, Norquillas
consistently alleged the existence of an agrarian dispute pursuant to the CLOAs issued
to them. Second, the CA and the DAR recognized the status of Norquillos as farmers of
the lands. This was not disputed by Dayrit. Therefore, The MCTC should have
dismissed the case on the ground of lack of jurisdiction.
Page 127
UP Law Center
Heirs of De Lara, Sr. v. Rural Bank of Jaen, Inc.

Doctrine
As for the propriety of the foreclosure, Section 63 of PD 1529, otherwise known as the
Property Registration Decree, states that “[i]f the mortgage was foreclosed
extrajudicially, a certificate of sale executed by the officer who conducted the sale
shall be filed with the Register of Deeds who shall make a brief memorandum
thereof on the certificate of title.”
Facts
Jose, a farmer-beneficiary under the Operation Land Transfer of PD 27, was awarded a
parcel of land. A TCT under the DAR Emancipation Patent (EP) covering the subject
land was issued in favor of Jose.
Subsequently, Jose obtained a loan from respondent bank secured by a mortgage over
the subject land. When he failed to pay his obligation, the mortgage was foreclosed.
Ownership over the land was consolidated in favor of the bank after the lapse of the
1-year redemption period. The bank then sought to cancel the EP covering the land
before the Provincial Agrarian Reform Adjudicator (PARAD).
The PARAD granted respondent bank's petition for cancellation of TCT, holding that
the respondent bank substantially proved that Jose obtained and failed to pay his loan,
and that the extrajudicial foreclosure of mortgage was in accord with Act No. 3135, as
amended. Thus, the TCT covered by an EP ought to be cancelled, and a new one issued
in the name of respondent bank.
Upon appeal, the DARAB reversed the PARAD, The CA, however, reversed the DARAB
and reinstated the PARAD Decision, hence the present appeal.
Issue
Whether the subject land covered by an EP can be foreclosed and its title cancelled by
the PARAD in favor of the respondent bank
Held + Ratio
No, the subject land cannot be foreclosed.
Preliminarily, DARAB had no jurisdiction over the case as there was no agrarian
dispute between that parties. Further, the respondent bank’s recourse should have been
before the Register of Deeds and not DARAB, and that subject land is deemed
non-transferrable under the provisions of PD 27 and RA 6657, as amended by RA 9700.
Page 128
UP Law Center
The DARAB Rules of Procedure provides that the Adjudicator has the primary and
exclusive jurisdiction over cases involving correction, partition, cancellation, secondary
and subsequent issuances of CLOAs and EPs which are registered with the Land
Registration Authority. The DARAB, on the other hand, has exclusive appellate
jurisdiction to review, reverse, modify, alter, or affirm resolutions, orders, and decisions
of its Adjudicators.
The Court, in Vda. de Tangub v. Court of Appeals, held that the jurisdiction of the DAR
concerns the (1) determination and adjudication of all matters involving
implementation of agrarian reform; (2) resolution of agrarian conflicts and land-tenure
related problems; and (3) approval or disapproval of the conversion, restructuring, or
readjustment of agricultural lands into residential, commercial, industrial, and other
non-agricultural uses. The DAR, in turn, exercises this jurisdiction through its
adjudicating arm, the DARAB. The enactment of RA 9700, as the amendatory law to RA
6657, now transfers the exclusive and original jurisdiction over these cases to the
Secretary of the DAR. Even if the case involves cancellation of an EP, an agrarian
dispute between the parties should first exist for the then DARAB or DAR Secretary to
acquire jurisdiction.
As for the propriety of the foreclosure, Section 63 of PD 1529, otherwise known as the
Property Registration Decree, states that “[i]f the mortgage was foreclosed
extrajudicially, a certificate of sale executed by the officer who conducted the sale
shall be filed with the Register of Deeds who shall make a brief memorandum
thereof on the certificate of title.”
In the event of redemption by the mortgagor, the same rule provided for in the second
paragraph of this section shall apply. In case of non-redemption, the purchaser at
foreclosure sale shall file with the Register of Deeds, either a final deed of sale executed
by the person authorized by virtue of the power of attorney embodied in the deed of
mortgage, or his sworn statement attesting to the fact of non-redemption; whereupon,
the Register of Deeds shall issue a new certificate in favor of the purchaser after the
owner's duplicate of the certificate has been previously delivered and canceled. PD 27
states that title to land acquired pursuant to it or the Land Reform Program of the
Government shall not be transferable except by hereditary succession or to the
Government. Thus, what the bank should have done was seek recourse before the
Register of Deeds, not the DARAB.
Page 129
UP Law Center
Heirs of Gonzales v. Sps. Basas

Topic: Sales; Definition and Essential Requisites / Double Sale
Doctrine
1. The elements of a valid contract of sale were met in both the DOAS and the
Agreement: (1) consent or meeting of the minds, (2) determinate subject matter,
and (3) price certain in money or its equivalent.
2. There is a double sale when the same thing is sold to multiple buyers by one
seller. It, however, does not apply to sales of the same thing by multiple sellers.
For there to be double sale, Art. 1544 of the Civil Code provides that the
following circumstances must concur:
a. The two (or more) sales transactions in the issue must pertain to exactly the same
subject matter, and must be valid sales transactions;
b. The two (or more) buyers at odds over the rightful ownership of the subject matter
must each represent conflicting interests; and
c. The two (or more) buyers at odds over the rightful ownership of the subject matter
must each have bought from the very same seller.
3. As a rule, a party’s contractual rights and obligations are transmissible to the
successors.
Facts
Zenaida Gonzales, the predecessor of petitioners, purchased from respondent spouses
Dominador and Estefania Basas a parcel of land including the house thereon, subject to
the condition that the consent of the National Housing Authority be first obtained.
Zenaida and the spouses Basas thus executed 3 documents to reflect their mutual
agreement on the sale and purchase of the subject property:
1. Contract to Sell dated May 10, 1996, which reflects the total price of the subject property at
P800,000;
2. Deed of Absolute Sale (DOAS) dated May 13, 1996, which indicates the consideration of the
subject property at P300,000; and
3. Agreement to Purchase and to Sell, allegedly dated August 14, 1996 (Agreement), which states
that the total price of the subject property is at P1,050,000.
According to petitioners, once the foregoing documents were executed, the spouses
Basas requested Zenaida to allow them to stay in the subject property until they can
transfer to another place, with agreed monthly rentals. These rentals, however, were not
paid. Petitioners further alleged that the spouses promised to procure the NHA’s
consent for the sale of the property and that Zenaida paid the spouses an aggregate
amount of more than P800,000. Once the spouses received the said amount, they
promised to deliver the title to the property to Zenaida as soon as they secured the
NHA’s consent. Meanwhile, the spouses Basas borrowed the certificate of title of the
property which at that time was already in the possession of Zenaida after she paid
Page 130
UP Law Center
them the amount of P650,000.00, so they can work on the cancellation of the mortgage
on the subject property.
Petitioners point out that Zenaida has not paid the balance of the selling price because
the spouses have not yet obtained the NHA’s consent. On Jan. 14, 1997, Zenaida sent a
written demand to the spouses Basas to vacate the property, to deliver the title to said
property, and to get the NHA’s consent.
Despite demand, the spouses failed to comply with their obligations. Eventually,
Zenaida discovered that the subject property was sold by the spouses to Romeo Munda
(Munda) who immediately occupied the property. Petitioners asserted that the second
sale to Munda was done maliciously and in bad faith.
Thus, Zenaida filed a complaint for the nullity of sale, specific performance, and
damages against respondents.
On their part, the spouses Basas argued that Zenaida did not purchase the subject
property. They alleged that the Agreement dated Aug. 14, 1996 superseded the 2
previously signed documents and that it was their agreement that until the balance of
the purchase price as reflected in Agreement (P1.050M) is fully paid, they will continue
to occupy the subject property. In other words, they argue that there was no
consummated sale and the contract is actually a contract to sell.
Meanwhile, Munda argued that he purchased the property in good faith and for value.
At the time he bought the subject property on August 25, 1997, its title was clean and
there was no encumbrance or adverse claim annotated on it. The adverse claim of
Zenaida was filed and dated only on October 29, 1997. The subject property was
eventually registered under his name on March 2, 1998 under TCT 237326.
The RTC ruled in favor of petitioners, finding Zenaida as the rightful owner of the
property. The CA reversed the RTC and found Munda as a buyer in good faith and for
value.
During the pendency of the proceedings, Zenaida died and was substituted by
petitioners. Likewise, Estefania and Dominador Basas died on June 1999 and March
2005, respectively.
Issues
1. Whether the Agreement dated Aug 14, 1996 is a contract of sale
2. Whether there was double sale
3. Whether the liabilities of spouses Basas are transmittable to their heirs
Held + Ratio
1. Yes, the Agreement is a contract of sale. It is one subject to resolutory
conditions, which reinforced their DOAS. Both contracts are not in conflict with
each other, but instead reflect the intention of the parties during their execution.
Page 131
UP Law Center
The elements of a valid contract of sale were met in both the DOAS and the
Agreement: (1) consent or meeting of the minds, (2) determinate subject matter,
and (3) price certain in money or its equivalent.
Registration is not a recognized mode of acquiring ownership but binds the

whole world, especially innocent purchasers for value. It bears emphasis that the
nature of a sale is a consensual contract because it is perfected by mere consent.
The essential elements of a contract of sale are the following: (a) consent or
meeting of the minds, that is, consent to transfer ownership in exchange for the
price; (b) determinate subject matter; and (c) price certain in money or its
equivalent.
2. No, there was no double sale in this case. There is double sale when the same
thing is sold to multiple buyers by one seller. It, however, does not apply to
sales of the same thing by multiple sellers. In order for there to be double sale,
Art. 1544 of the Civil Code provides that the following circumstances must
concur:
a. The two (or more) sales transactions in the issue must pertain to exactly the same
subject matter, and must be valid sales transactions;
b. The two (or more) buyers at odds over the rightful ownership of the subject matter
must each represent conflicting interests; and
c. The two (or more) buyers at odds over the rightful ownership of the subject matter
must each have bought from the very same seller.
In this case, Art. 1544 is inapplicable. The spouses were no longer the owners of
the subject property when they transferred the same to Munda. Since the
ownership of the property had already been transferred by the spouses to
Zenaida, then no right could be transmitted on to Munda.
Even assuming that there was a double sale, Zenaida had a better right to the
subject property since Munda was not a buyer and registrant in good faith. One
is considered a purchaser in good faith if he or she buys the property of
another without notice that some other person has a right to or interest in such
property and pays its full and fair price before he or she has notice of the
adverse claims and interest of another person in the same property. Conversely,
one is considered a buyer in bad faith when he or she purchases a property
despite knowledge of a defect or lack of title in his or her seller or when he or she
has knowledge of facts which should have cautioned him or her to conduct
further inquiry or investigation. Furthermore, purchasers must continuously
possess their status as buyers in good faith from the time they acquired the
property until they register the property under their name. Thus, they must both
be buyers and registrants in good faith.
In this case, Munda failed to show that he continuously possessed his status as a
buyer and registrant in good faith. He unsuccessfully convinced the Court that
Page 132
UP Law Center
he acted in good faith all throughout, from the time of his acquisition of the
subject property until the title is transferred to him for registration because when
he submitted the documents to fully comply with his application for registration
with the Register of Deeds, he already had knowledge of the defect of the title of
the spouses Basas as seller in view of the annotation on Oct. 29, 1997 of the
adverse claim of Zenaida.
3. Yes, the liabilities are transmittable to the successors. As a rule, a party’s

contractual rights and obligations are transmissible to the successors. A
contract of sale involving land or immovable property involves patrimonial
rights and obligations, which by their nature are essentially transmissible or
transferable. Thus, the liabilities of the spouses Basas are transmittable to their
heirs.
Page 133

Chairmans Case Digests (Civ)

Uploaded by

Copyright:

Available Formats

You might also like

Chairmans Case Digests (Civ)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chairmans Case Digests (Civ)

Uploaded by

Copyright:

Available Formats

UP Bar Review Institute

Topic: Special Contracts: Torts and Damages; Res Ipsa Loquitur

Topic: Different Modes of Acquiring Ownership: Prescription

DAR AO No. 1, series of 1999 provides that disturbance compensation shall be

conclusion through substantial evidence is also controlling.

Topic: Marriage: Void marriages

2. No, a judicial declaration of nullity of the first /second marriage is no longer

valid marriage in the first place.

Pryce Properties Corp. v. Nolasco, Jr.

Topic: Sales: Breach of Contract of Sale: Maceda Law

effectively mirroring the requirements found in Section 4 of the Maceda Law.

Topic: Obligations: Different Kinds of Obligations

Meanwhile, Tan allegedly already acknowledged his outstanding obligation in the

place according to the bank’s policies.

Panacan v. Solid Bank

Topic: Credit Transactions: Real Estate Mortgage

Despite the nullity of the foreclosure sale as to the P9,151,667.89, petitioners’

Municipality of Corella v. Philkonstrak

Recovery based on quantum meruit is allowed despite the invalidity or absence of a

Lopez v. Saludo, Jr.

Topic: Trust: Implied Trust

Topic: Contracts: Basic Principles of Contracts

Topic: Contracts: Defective contracts

a portion. In furtherance of the arrangement, the contemporaneous acts of Modesto,

Viloria v. Heirs of Gaetos

Apolinario v. Heirs of Catabas

Topic: Land Titles and Deeds

Valdes v. La Collina Dev't Corp

Topic: Obligations: Novation

lack of consent by the Valdeses and evident bad faith.

Uy-Belleza v. The Civil Registrar

Topic: Persons: Human Relations in relation to Persons

Uy-Belleza submitted the following evidence:

In Re Will of Consuelo Santiago Garcia

Topic: Testamentary Succession: Form of Notarial and Holographic Wills

Sps. De Vera v. Catungal

Topic: Contracts: Essential Requisites of a Contract - Consent

Sps. Ponce v. Aldanese

Torrecampo v. Wealth Development Bank

Topic: Bundle of Rights: Co-Ownership - Redemption

The Bank commenced an action to extrajudicially foreclose mortgaged property under

Sps. Liu v. Espinosa

Topic: Bundle of Rights: Actions to Recover Ownership and Possession of Property

The only issue to be resolved in an unlawful detainer case is physical or material

last formal demand to vacate was made, February 12, 2013.

Sps. Genotiva v. Equitable-PCI

Topic: Contracts: Defective Contracts - Voidable Contracts

For there to be intimidation in the execution of the contract, there must be a

There were no circumstances which showed that BDO exerted intimidation or

Topic: Bundle of Rights: Co-Ownership ; Agency

A few of Carlos’s children wanted to terminate the co-ownership of the subject

Equitable-PCI v. Manila Adjusters

Topic: Credit Transactions: Loans - Interest

documents to the Bank.

Topic: Sales: Contract of Sale

The RTC ruled in favor of petitioner ordering respondents to execute a Deed of

Rico v. Union Bank

Topic: Credit Transactions: Loans