Civil Law

Faculty of Civil Law Digest Pool 2010

VICENTE S. ALMARIO v. PHILIPPINE AIRLINES, INC.

532 SCRA 614 (2007), SECOND DIVISION (Carpio Morales, J.)

Courts will not allow one party to enrich himself at the expense of another.

On April 28, 1995, Almario, then about 39 years of age and a Boeing 737 (B-737) First Officer at

PAL, successfully bid for the higher position of Airbus 300 (A-300) First Officer. Since said higher

position required additional training, he underwent, at PALs expense, more than five months of training

consisting of ground schooling in Manila and flight simulation in Melbourne, Australia. After completing

the training course, Almario served as A-300 First Officer of PAL, but after eight months of service as

such, he tendered his resignation, for personal reasons. Despite a letter coming from PAL to

reconsider his resignation otherwise he will bear the cost of training, Mr. Almario still proceeded with his

resignation.

Later on, PAL filed a Complaint against Almario before the Regional Trial Court (RTC), for

reimbursement of P851,107 worth of training costs, attorneys fees equivalent to 20% of the said

amount, and costs of litigation. PAL invoked the existence of an innominate contract of do ut facias (I

give that you may do) with Almario in that by spending for his training, he would render service to it

until the costs of training were recovered in at least three (3) years. Almario having resigned before the 3-

year period, PAL prayed that he should be ordered to reimburse the costs for his training. In his Answer,

Almario denied the existence of any agreement with PAL that he would have to render service to it for

three years after his training failing which he would reimburse the training costs. He pointed out that the

Collective Bargaining Agreement (CBA) between PAL and the Airline Pilots Association of the

Philippines (ALPAP), of which he was a member, carried no such agreement.

Mr. Almarios contention was confirmed by the RTC but was reversed by the Court of Appeals

(CA). The CA found Almario liable under the CBA between PAL and ALPAP and, in any event, under

Article 22 of the Civil Code. Thus, this action for review on Certiorari by Mr. Almario.

ISSUE:

Whether or not the act of Mr. Almario is in violation of the CBA

HELD:

Article XXIII, Section 1 of the CBA provides that pilots fifty-seven (57) years of age shall be

frozen in their position and shall not be permitted to occupy any position in the companys turbo-jet

fleet. The reason why pilots who are 57 years of age are no longer qualified to bid for a higher position is

because they have only three (3) years left before the mandatory retirement age of 60 and to send them

to training at that age, PAL would no longer be able to recover whatever training expenses it will have to

incur.


Simply put, the foregoing provision clearly and unequivocally recognizes the

prohibitive training cost principle such that it will take a period of at least three (3) years

before PAL could recover from the training expenses it incurred.

Admittedly, PAL invested for the training of Almario to enable him to acquire a higher level of

skill, proficiency, or technical competence so that he could efficiently discharge the position of A-300

First Officer. Given that, PAL expected to recover the training costs by availing of Almarios services for

at least three years. The expectation of PAL was not fully realized, however, due to Almarios resignation

after only eight months of service following the completion of his training course. He cannot, therefore,

refuse to reimburse the costs of training without violating the principle of unjust enrichment.

MANUEL B. ALORIA v. ESTRELLITA B. CLEMENTE 483 SCRA 634 (2006), THIRD DIVISION (Carpio Morales, J.)

The burden of proving the status of a purchaser in good faith lies upon one who asserts that status, and the onus

cannot be discharged by mere invocation of the legal presumption of good faith.

Manuel Aloria learned that Transfer Certificate of Title (TCT) No. 195684 covering his land and two-storey residential building was canceled. In lieu thereof, TCT No. C-342854 was issued in the name of Estrellita B. Clemente on the basis of a notarized Deed of Absolute Sale allegedly executed by him and Clemente. Aloria thereafter filed a Complaint against Clemente and the Register of Deeds before the Regional Trial Court (RTC) of Caloocan City for annulment of the Deed and TCT No. C-342854, reconveyance and damages alleging therein that the Deed was falsified and the signature appearing thereon was not his.

In defense, Clemente claimed that she bought the property from Alorias parents-in-law as

evidenced by a Deed of Sale. The trial court rendered its decision holding that the Deed of Sale and cancellation of Alorias title were null and void. On appeal, the Court of Appeals reversed the decision of the trial court. It held that Aloria failed to overcome by clear, strong, and convincing evidence the presumption of regularity. Furthermore, the CA held that Clemente is a purchaser for value in good faith. Hence, this petition.

ISSUES: Whether or not the Court of Appeals erred in finding Clemente as a purchaser for value and in good faith

HELD:

The burden of proving the status of a purchaser in good faith lies upon one who asserts that

status, and the onus cannot be discharged by mere invocation of the legal presumption of good faith. By Clementes account, she purchased the property via Deed of Sale from the Spouses Diego

whom she claims showed her a Deed of Sale executed in their favor by Aloria. Given Bernardino Diegos denial that his signature in Deed of Sale executed by the Diegos in Clementes favor is his which, as earlier observed, is starkly different from his acknowledged genuine signature, Clementes claim that


Bernardino Diego signed the Deed of Sale in her presence fails, as does her witness Ernesto Tanigues testimony on the same point. A comparison between her acknowledged signature and the signature appearing above her name

in the Deed of Sale reveals no marked differences. The presumption that Clemente's signature in the

Deed of Sale is genuine, thus stands. Upon the other hand, as reflected above, Aloria presented clear and

convincing evidence that the signature attributed to him in the same document is forged.

GELLIA ALTIZO, et al. v. BRYC-V DEVELOPMENT CORPORATION

203 SCRA 544 (2006), THIRD DIVISION (Carpio Morales J.)

Occupation by mere tolerance by a corporation ceases upon transfer of title of the property in favor of another corporation.

Sea Foods Corporation Inc. (SFC) was the registered owner of Lot 300 situated in Zamboanga City. It appears that in the early 60s, herein petitioners Gellia Altizo et al. started to occupy a portion of Lot 300.

In 1989, Altizo et al., together with other occupants of a portion of of the said land, organized

themselves into an association, United Muslim Christian Urban Poor Association, Inc. (UMCUPAI), for the purpose of negotiating the sale of the lands they occupy in their favor. SFC and UMCUPAI subsequently entered into an agreement where SFC signified its intent to sell to UMCUPAI Lot 300 and the latters intention to buy the said lot at a stipulated price.

SFC later subdivided Lot 300 into three lots: Lot 300-A, Lot 300-B and Lot 300-C. Lot 300-A was thereafter sold to UMCAPAI. It then sold to BRYC-V Development Corporation (BRYC-V) Lot 300-C where Altizo et al. had constructed their houses. Over the objection of UMCUPAI, BRYC-V was issued Transfer Certificate of Title No. T-121523. BRYC-V later asked, verbally and in writing, Altizo et al. to vacate Lot 300-C but they refused. ISSUE:

Whether or not petitioners Altizo et al. has the right of continued possession based on the agreement they entered into with SFC HELD:

Altizo et al.s occupation of subject lot was on the mere tolerance of the previous owner SFC. Such right to occupy ceased when the SFC sold the subject lot to BRYC-V which has been issued a title thereto, hence, entitled to its possession. Altizo et al. having withheld possession of subject lot, despite BRYCVs demand, they have become deforciant occupants.

Altizo et al.s claim that they can continue to possess the subject lot, they having been granted by the previous owner preferential right to buy Lot 300 under the Letter of Intent, does not lie. No right of possession, which is the only issue in an unlawful detainer case, arises from such Letter of Intent which, as it clearly states, merely signifies intent to, not actually transfer ownership.

FELIPE R. ANGELES and GREGORIA ANGELES v. FERMIN TAN, et al. G.R. No. 146678, 29 September 2004, THIRD DIVISION (Carpio Morales, J.)


Entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated, the assailed decision must remain. Spouses Felipe and Gregoria Angeles filed a complaint for reconveyance with damages against Spouses Fermin and Teresita Tan. The complaint involves the return of a parcel of land originally owned by the former which was mortgaged to a certain Prudencio Reyes who subsequently sold the same to spouses Tan after the redemption period expired without any redemption having been made by Angeles. The Regional Trial Court (RTC) dismissed the complaint and the subsequent Motion to Reconsider was likewise denied which prompted a filing of a Notice of Appeal. However during the pendency of the Notice of Appeal, Angeles proceeded with a Petition for Review with the Court of Appeals (CA). However, due to the procedural infirmity in the filing of the Petition for Review, the CA ordered that the RTC decision has become final and executory. ISSUE: Whether or not Spouses Angeles right to due process was violated by the outright dismissal of the case without full dress trial on the merit HELD: On procedural grounds alone, no reversible error on the part of the CA in dismissing the appeal is appreciated. The records indubitably show that although spouses Angeles Notice of Appeal was filed on time and was given due course by the trial court, they subsequently filed a Petition for Review before the CA, hence, they were deemed to have abandoned the appeal. Spouses Angeles petition for review was, however, denied by the CA.

At all events, Spouses Angeles brief was filed beyond the reglementary period, no explanation for which was even offered. Section 1, Rule 50 of the 1997 Revised Rules of Civil Procedure reads that an appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, among others, on the ground of failure of the appellant to serve and file the required number of copies of his brief or memorandum within the time provided by these Rules;

On the merits, the petition fails just the same. Spouses Angeles contention that they were

denied due process does not lie. The records show that hearings were conducted on spouses Tans motion to dismiss during which both parties were given the opportunity to present evidence.

As pointed out by respondents, the records show there was a full dress trial on the merits before the motion to dismiss was granted. Like the CA then, the Court found no reason to order the remand of the case, not however, for the reasons advanced by the CA, but on the ground that petitioners failed to discharge the onus of proving their allegation that respondents fraudulently caused the transfer to them of the title of the disputed property.

Absent then any clear, competent and convincing proof as to exclude all reasonable controversy as to the falsity and nullity of spouses Tans documentary evidence consisting of public instruments and


official entries in the Register of Deeds, following Section 44, Rule 130 of the Revised Rules on Evidence which provides that entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated, the assailed decision must remain.

ROSENDO BACALSO, et al. v. MAXIMO PADIGOS, et al. 552 SCRA 185 (2008), SECOND DIVISION, (Carpio-Morales, J.)

It is an enshrined rule that even a registered owner may be barred from recovering possession of property by virtue

of laches

Padigos et.al. filed before the Regional Trial Court (RTC) of Cebu City a complaint against

Bacalso et al. for quieting of title, declaration of nullity of documents, recover of possession, and

damages.

A parcel of land (the lot) located in Cebu was registered in the name of thirteen (13) co-owners

to which Maximo Padigos, et al are all heirs. Rosendo Bacalso et al occupied the disputed land for a

couple of decades in which they turned it into farmland. Padigos et al. alleged that Rosendo Bacalso et

al., heirs of Alipio Bacalso Sr. (Alipio, Sr.), secured a fraudulent Tax Declaration covering the disputed

potions of the lot without any legal basis. In their answer, Bacalso et. al. claimed that their father Alipio,

Sr. bought shares corresponding to some of the 13 co-owners via deed of sale decades ago. Alipio, Sr.

only failed to register the land to his name but subsequently occupied the land and passed it on to his

heirs.

Bacalso et. al also alleged that even if Padigos et als claim over the land is valid, the action to

recover is barred by laches since Padigos et al did not claim the land at the earliest possible time. After

trial, RTC ruled in favor of Padigos et. al. Bacalso et. al. appealed. The Court of Appeals found the deed

of sale valid Bacalso et. al s property and also cited laches as a means of loosing of a right over the

property.

ISSUE:

Whether or not Padigos et. al.s claim is barred by laches

HELD:

Having failed to establish their claim by preponderance of evidence, Padigos et.als action for

quieting of title, declaration of nullity of documents, recovery of possession, and damages must fail.

Padigos et. al. lost the right of action to the property by laches - the negligence or omission to

assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has

either abandoned it or declined to assert it. While, by express provision of law, no title to registered land

in derogation of that of the registered owner shall be acquired by prescription or adverse possession, it is


an enshrined rule that even a registered owner may be barred from recovering possession

of property by virtue of laches.

Upon the other hand, Bacalso et. al have been vigilant in protecting their rights over the lot,

which their predecessor-in-interest Alipio, Sr. had declared in his name for tax purposes as early as 1960,

and for which he had been paying taxes until his death in 1994, by continuing to pay the taxes thereon.

BANCO FILIPINO SAVINGS AND MORTGAGE BANK v. TALA REALTY SERVICES CORPORATION

503 SCRA 631 (2006), THIRD DIVISION, (CARPIO MORALES J.)

If the parties are in pari delicto, no affirmative relief must be given to one against the other. The majority of the stockholders of Banco Filipino Savings and Mortgage Bank agreed to form a corporation known as the Tala Realty Services Corporation (Tala) to which some of Banco Filipinos existing branch sites could be unloaded. The arrangement was that Banco Filipino would transfer some of its existing branch sites to Tala, and the latter would simultaneously lease them back to it. Banco Filipino executed in favor of Tala a Deed of Absolute Sale transferring to it one of its branch sites located at Poblacion, San Fernando, La Union (the property) at the agreed purchase price. On even date, Tala in turn leased the property to Banco Filipino for a period of 20-years, renewable for another 20 years at the option of Banco Filipino, at a monthly rental rate. The contract further required Banco Filipino to pay Tala a certain amount as advance rentals for the 11th to the 20th years of the lease. Tala claims that on that same day, the parties executed another lease contract which modified the previous lease contract. The second lease contract shortened the term of the lease to 11 years, renewable for 9 years at the option of Banco Filipino. The contract required Banco Filipino to pay a certain amount as security deposit to secure its faithful compliance with its obligations, to answer for any damage to the property, or for any damage that may be sustained by Tala on account of any breach or default on the part of Banco Filipino. More than 11 years after the execution of the contract of lease, Talas director, Elizabeth H. Palma, sent Banco Filipino a letter informing it that the lease contract had expired as of August 1992, and that starting September 1992, the contract had been extended on a monthly basis under different terms and conditions including the monthly lease rental. Tala noted, however, that as Banco Filipino had failed to take any definite action towards the renewal of the contract, Tala was free to lease, dispose, sell and/or alienate the property. Tala subsequently notified Banco Filipino that the lease contract would no longer be renewed, hence, it demanded that it vacate the property and pay the unpaid rentals.

ISSUE:

Whether or not Banco Filipino is required to pay Tala the unpaid rental fees during the time when the Bank was declared to have been arbitrarily closed


HELD:

Clearly, the Bank was well aware of the limitations on its real estate holdings under the General

Banking Act and that its "warehousing agreement" with Tala was a scheme to circumvent the limitation.

Thus, the Bank opted not to put the agreement in writing and call a spade a spade, but instead phrased

its right to reconveyance of the subject property at any time as a "first preference to buy" at the "same

transfer price." This agreement which the Bank claims to be an implied trust is contrary to law. Thus,

while the Court finds the sale and lease of the subject property genuine and binding upon the parties, the

Court cannot enforce the implied trust even assuming the parties intended to create it. In the words of

the Court in the Ramos case, "the courts will not assist the payor in achieving his improper purpose by

enforcing a resultant trust for him in accordance with the clean hands doctrine." The Bank cannot thus

demand reconveyance of the property based on its alleged implied trust relationship with Tala.

The Bank and Tala are in pari delicto, thus, no affirmative relief should be given to one against the

other. The Bank should not be allowed to dispute the sale of its lands to Tala nor should Tala be allowed

to further collect rent from the Bank. The clean hands doctrine will not allow the creation nor the use of

a juridical relation such as a trust to subvert, directly or indirectly, the law. Neither the Bank nor Tala

came to court with clean hands; neither will obtain relief from the court as the one who seeks equity and

justice must come to court with clean hands.

SOCORRO TAOPO BANGA v. SPOUSES JOSE AND EMELINE BELLO 471 SCRA 653 (2005), THIRD DIVISION (Carpio Morales, J.)

It is the intention of the parties and not the terminology used in the contract that determines whether a deed of

absolute sale in form is an equitable mortgage. Nelson Banga, as mortgagor, with the consent of his wife Socorro, executed a Deed of Real Estate Mortgage in favor of Jose V. Bello over their real property as security for a loan extended by Jose to Nelson. The said mortgage was amended twice increasing the amount of the loan. It appears that a Deed on Absolute Sale was subsequently executed involving the same property. Socorro filed a complaint for the declaration of nullity of the sale for making it appear that she consented to the absolute sale. Also, Socorro questions the unconscionably low consideration for the sale of the property.

Bello contends that the sale was personally and voluntarily executed by Spouses Banga before the notary public and that the consideration of the sale is fair and reasonable because it is also based on the real estate mortgage and its amendments. Nelson, on the other hand, claims that the executed Deed was actually a third amendment to the mortgage and that he had already paid in full their principal indebtedness. ISSUE: Whether or not the parties intended the deed of absolute sale to be merely an equitable mortgage HELD:

Article 1602 of the Civil Code enumerates instances when a contract shall be presumed to be an

equitable mortgage. Some of these cases are: (1) When the price of a sale with right to repurchase is


unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) In any other cases where it may be fairly inferred that the real intention of the parties is that the transaction shall ensure the payment of a debt or the performance of an obligation. Also, Article 1604 of the Civil Code provides that the provisions of Article 1602 shall also apply to a contract purporting to be an absolute sale.

It has been observed by the Trial Court that the Deed of Absolute Sale was prepared in 1987, the same year that the original deed of real estate mortgage was executed. Such is because the residence certificate numbers issued to the parties in 1987 appearing in the real estate mortgage of 1987 are the same as those appearing in the Deed of Absolute Sale purportedly executed in 1989. In fact, in the acknowledgement portion of the 1989 Deed of Absolute Sale whereon the phrase Series of 1987 appears, the number 9 was superimposed on the number 7, which this Court takes as a clear design to make it appear that it was notarized in 1989.

In determining whether a deed absolute in form is a mortgage, the court is not limited to the

written memorials of the transaction. The decisive factor in evaluating such agreement is the intention of the parties, as shown not necessarily by the terminology used in the contract but by all the surrounding circumstances, such as the relative situation of the parties at that time, the attitude, acts, conduct, 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.

Revealing the true intention of the parties is the undisputed relationship of Nelson and the Bello spouses as debtor and creditors respectively, which, together with the circumstances mentioned above, draws the Supreme Court to affirm the trial court's ruling that the deed of absolute sale was executed to serve as additional security for the loan extended to Nelson.

TEOFILO BAUTISTA, represented by FRANCISCO MUOZ, Attorney-in-Fact v.

ALLEGRIA BAUTISTA, et al.


Since the deed of extra-judicial partition is invalid, it confers no rights upon the transferees under the principle of

nemo dat quod non habet.

During her lifetime, Teodora Rosario was the owner of a 211.80 square meter parcel of land (the

property) in Pangasinan. She died intestate leaving the said property behind to her spouse Isidro Bautista,

and five children namely: Teofilo, Alegria, Angelica, Pacita, and Gil Bautista. Later on, Isidro and four of

his five children, Pacita, Gil, Alegria and Angelica (Teofilo not included), executed a Deed of Extra-

Judicial Partition of the property where Isidro waived his share in favor of his four children.

Alegria and Angelica, sold the of the property they have acquired to Pacita and her common-

law husband Pedro Tandoc, by Deed of Absolute Sale. Pacita, with Pedros consent, later sold of the

property in favor of Cesar Tamondong, Pedros nephew via Deed of Absolute Sale. Teofilo, represented

by his Attorney-in-Fact Francisco Muoz, then filed a complaint in the Regional Trial Court against his

siblings claiming that his co-heirs defrauded him of his rightful share of the property and that the Deed

of Sale executed by Pacita in favor of Cesar was fictitious because she was already seriously ill that time.


The RTC ruled in favor of Teofilo declaring null and void and no force and effect

the documents mentioned. On appeal by Tandoc and Tamondong, the Court of Appeals

(CA) reversed the trial courts decision and dismissed Teofilos complaint on the ground of prescription.

The CA denied the Motion for Reconsideration filed by Teofilo. Thus, this Petition for Review on

Certiorari.

ISSUE:

Whether or not the extra-judicial partition executed by Teofilo Bautistas co-heirs is valid

HELD:

The Court of Appeals applied the prescriptive periods for annulment on the ground of fraud and

for reconveyance of property under a constructive trust.

The extra-judicial partition executed by Teofilos co-heirs was invalid, however. As previously

held by this Court in Segura v. Segura, no extra-judicial settlement shall be binding upon any person who

has not participated therein or had no notice thereof. As the partition was a total nullity and did not

affect the excluded heirs, it was not correct for the trial court to hold that their right to challenge the

partition had prescribed after two years.

The deed of extra-judicial partition in the case at bar being invalid, the action to have it annulled

does not prescribe.

Since the deed of extra-judicial partition is invalid, it transmitted no rights to Teofilos co-heirs.

Consequently, the subsequent transfer by Angelica and Alegria of of the property to Pacita and her

husband Pedro, as well as the transfer of of the property to Cesar Tamondong is invalid, hence,

conferring no rights upon the transferees under the principle of nemo dat quod non habet.

SPOUSES ISABELO BERGADO and JUANA HERMINIA BERGARDO v. THE COURT OF

APPEALS, HON. CARLOTA P. VALENZUELA, in her capacity as the Liquidator of Banco

Filipino Savings and Mortgage Bank

463 SCRA 504 (2005), THIRD DIVISION (Carpio Morales, J.)

A purchaser is necessarily bound to acknowledge and respect the encumbrance constituted on the purchased thing.

Manila International Construction Corporation (MICC) secured a loan of 1,885,000.00 to Banco

Filipino Savings and Mortgage Bank (Banco Filipino), by mortgaging its 21 properties including its

improvements. The same was registered in the Registry of Deeds.

Subsequently, MICC sold part of the mortgage land to Spouses Rodrigo and Sonia Paderes, then

another part to Spouses Isabelo and Juana Bergado. For failure of MICC to settle its obligation, Banco

Filipino filed a petition for extra-judicial foreclosure of MICCs mortgage. Banco Filipino won the


bidding. Consequently, a certificate of sale was issued and the same was registered with the

Registry of Deeds.

Banco Filipino thereafter filed before the Regional Trial Court Makati a petition for issuance of

writ of possession. The RTC granted the petition. Pursuant to the Writ of Possession, Spouses Bergado

et al. were ordered to vacate the premises. However, they filed an action to Court of Appeals (CA)

questioning the validity of writ of possession. CA rendered decision against the Bergado et al. and upheld

the writ of possession. Hence, this petition.

ISSUE:

Whether or not the Bergado et al. have superior rights over Banco Filipino

HELD:

That Bergado et al.s purchased their properties from MICC in good faith is of no moment. The

purchases took place after MICCs mortgage to Banco Filipino had been registered in accordance with

Article 2125 of the Civil Code and the provisions of P.D. 1529 (PROPERTY REGISTRY DECREE).

As such, under Articles 1312 and 2126 of the Civil Code, a real right or lien in favor of Banco Filipino

had already been established, subsisting over the properties until the discharge of the principal

obligation, whoever the possessor(s) of the land might be.

Respecting Bergado et al.s claim that their houses should have been excluded from the auction

sale of the mortgaged properties, it does not lie. The provision of Article 448 of the Civil Code, cited by Bergado et al, which pertain to those who, in good faith, mistakenly build, plant or sow on the land of

another, has no application to the case at bar. Here, the record clearly shows that Bergado et al purchased their respective houses from MICC,

as evidenced by the Addendum to Deed of Sale dated October 1, 1983 and the Deed of Absolute Sale dated January 9, 1984.

Being improvements on the subject properties constructed by mortgagor MICC, there is no

question that they were also covered by MICCs real estate mortgage following the terms of its contract with Banco Filipino and Article 2127 of the Civil Code the mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or income not yet received when the obligation becomes due, and to the amount of the indemnity granted or owing to the proprietor from the insurers of the property mortgaged, or in virtue of expropriation for public use, with the declarations, amplifications and limitations established by law, whether the estate remains in the possession of the mortgagor, or it passes

into the hands of a third person.

The established doctrine that the issuance of a writ of possession is a ministerial function whereby

the issuing court exercises neither discretion nor judgment bears reiterating. The writ issues as a matter

of course upon the filing of the proper motion and, if filed before the lapse of the redemption period,

the approval of the corresponding bond.


BANK OF THE PHILIPPINE ISLANDS v. SPS. HOMOBONO AND

LUZDELDIA TARAMPI

574 SCRA 537 (2008), SECOND DIVISION, (Carpio Morales, J.)

A writ of possession, unless annulled by a court of competent jurisdiction, remains the ministerial duty of the trial

court.

Spouses Homobono and Lusdeldia Tarampi (Spouses Tarampi) obtained loans from the Bank of

the Philippine Islands (BPI), which were secured by real estate mortgages over a parcel of land. Spouses

Tarampi failed to comply with their obligation, prompting BPI to institute extrajudicial foreclosure

proceedings. During the auction, BPI was the highest bidder and a Certificate of Sale was issued in its

name. The same was registered and annotated on the Transfer Certificate of Title (TCT) of the said

parcel of land.

Since the one-year redemption period expired without Spouses Tarampi redeeming the

mortgage, BPI executed an Affidavit of Consolidation. A new TCT was issued in favor of BPI. In the

meantime, Spouses Tarampi filed an action for annulment of the real estate mortgages. BPI, on the other

hand, filed a Petition for Writ of Possession over the property including all improvements thereon which

was granted by the Regional Trial Court of Quezon City. A Notice of Appeal was filed by Spouses

Tarampi alleging therein that a writ cannot be issued on the ground that there is a pending action

concerning the validity of the mortgages. The RTC ordered the suspension of issuance of writ of

possession.

On appeal, the Court of Appeals, held that since BPI is now the registered owner of the

property, it is entitled to a writ of possession as a matter of right; and that any question regarding the

validity of the mortgages or their foreclosure cannot be a legal ground for refusing the issuance of a writ

of possession after the consolidation of title in the buyers name, following the debtor-mortgagors

failure to redeem the mortgages.

ISSUE:

Whether or not the writ of possession should be implemented during the pendency of the case

for annulment of mortgages

HELD:

In the case at bar, Spouses Tarampi failed to redeem the mortgages within the reglementary

period, hence, ownership of the property covered thereby was consolidated in the name of BPI who had

in fact been issued a new TCT. Issuance of a writ of possession thus became a ministerial duty of the

court.


It is settled that the buyer in a foreclosure sale becomes the absolute owner of the

property purchased if it is not redeemed during the period of one year after the registration

of sale. As such, he is entitled to the possession of the property and can demand it any time following

the consolidation of ownership in his name and the issuance of a new transfer certificate of title.

The rationale for the rule is to allow the purchaser to have possession of the foreclosed property

without delay, such possession being founded on the right of ownership. To underscore this mandate,

the law further provides that the debtor-mortgagor may petition that the sale be set aside and the writ of

possession cancelled in the proceedings in which possession was requested; and the courts decision

thereon may be appealed by either party, but the order of possession shall continue in effect during the

pendency of the appeal.

To stress the ministerial character of the writ of possession, the Court has disallowed injunction

to prohibit its issuance, just as it has held that its issuance may not be stayed by a pending action for

annulment of mortgage or the foreclosure itself.

Clearly then, until the foreclosure sale of the property in question is annulled by a court of

competent jurisdiction, the issuance of a writ of possession remains the ministerial duty of the trial court.

The same is true with its implementation; otherwise, the writ will be a useless paper judgment a result

inimical to the mandate of Act No. 3135 to vest possession in the purchaser immediately.

SPOUSES ILUMINADA and CIRILO CAPITLE v. FORTUNATA ELBAMBUENA et al. 509 SCRA 444 (2006), THIRD DIVISION, (Carpio Morales, J.)

Absent evidence to the contrary, the presumption is that public officers adhered to the provisions of Section 22 of

the Comprehensive Agrarian Reform Law (CARL).

A Certificate of Land Ownership Award (CLOA) was issued to Cristobal Olar covering a parcel of agricultural land situated in Nueva Ecija. Consequently, a Transfer Certificate of Title in his name was issued. When Olar died, respondents Fortunata Elbambuena and Rosalinda Olar, spouse and daughter-in-law, respectively, claim that Olar relinquished one-half of the lot in favour of Rosalinda; and that the remaining portion of the lot was surrendered to Fortunata. Spouses Iluminada and Cirilo Capitle, on the other hand, claim that they have been in possession of the lot since 1960 and presented a "Waiver of Rights" executed by Olar, wherein he acknowledged that he co-possessed the lot with petitioners Capitle. A Pinagsamang Patunay certifying that they are the actual tillers and possessors of the lot was likewise presened.

While Elbambuena and Olars petition was pending before the Provincial Agrarian Reform

Adjudicator (PARAD), petitioners Capitle filed before the Municipal Agrarian Reform Officer (MARO), Nueva Ecija a petition for cancellation of the CLOA issued to Olar, on the ground that they are the new farmer-beneficiaries as shown by, among other things, the "Waiver of Rights" executed by Olar.

PARAD ruled in favor of petitioners Capitle. Elbambuena and Olar appealed the decision to the DARAB. The DARAB set aside PARADs decision. The case was then elevated to the Court of Appeals via petition for review. The appellate court affirmed in toto the DARAB decision.


ISSUES:

Whether or not the presumption that the CLOA was issued to Olar in the regular course of official function was overcome by contrary evidence

HELD:

Petitioners Capitle argument that "it would be absurd for Olar to bequeath his property to his estranged wife not to a relative who had indeed helped him in tilling the property and took good care of his needs," is a virtual admission that their possession was not in the concept of owners, they having merely "helped" in tilling the lot, thereby acknowledging that Olar was the actual possessor and tiller.

Absent evidence to the contrary, the presumption that the public officers who issued the CLOA

to Olar regularly performed their duties, including adhering to the provisions of Section 22 of the Comprehensive Agrarian Reform Law (CARL) which provides that lands covered by the CARP shall be distributed as much as possible to landless residents of the same barangay, or in the absence thereof, landless residents of the same municipality in the order of priority provided.

MARIA B. CHING v. JOSEPH C. GOYANKO, JR., et al. 506 SCRA 735 (2006), THIRD DIVISION, (Carpio-Morales, J.)

In line with the policy of the State, the law emphatically prohibits the sale of properties between spouses.

Respondents Joseph Goyanko et al. filed with the Regional Trial Court of Cebu City a complaint

for recovery of property and damages against Maria Ching, praying for the nullification of the deed of sale and of transfer certificate and the issuance of a new one. Goyanko et al. aver that they are the real owners of the property involved. They further contend that it was after their fathers death that they found out that a contract of sale involving the same property has been executed by their father and common-law wife Ching. However, Ching claimed that she is the actual owner of the property as it was she who provided its purchase price. The RTC dismissed the complaint against Ching, declaring that there is no valid and sufficient ground to declare the sale as null and void, fictitious and simulated.

On appeal, the Court of Appeals reversed the decision of the trial court and declared null and void the questioned deed of sale and TCT No. 138405. ISSUES:

Whether or not the contract of sale and TCT No. 138405, in favor of the Maria Ching, was null and void for being contrary to morals and public policy HELD:


The subject property having been acquired during the existence of a valid marriage between Joseph Sr. and Epifania dela Cruz-Goyanko, is presumed to belong to the conjugal partnership. Moreover, while this presumption in favor of conjugality is rebuttable with clear and convincing proof to the contrary, the court find no evidence on record to conclude otherwise. The record shows that while Joseph Sr. and his wife Epifania have been estranged for years and that he and defendant-appellant Maria Ching, have in fact been living together as common-law husband and wife, there has never been a judicial decree declaring the dissolution of his marriage to Epifania nor their conjugal partnership. It is therefore undeniable that the property located at Cebu City belongs to the conjugal partnership. Assuming that the subject property was not conjugal, still the court cannot sustain the validity of the sale of the property by Joseph, Sr. to defendant-appellant Maria Ching, there being overwhelming evidence on records that they have been living together as common-law husband and wife.

The court therefore finds the contract of sale in favor of the defendant-appellant Maria Ching

null and void for being contrary to morals and public policy. The purported sale, having been made by Joseph Sr. in favor of his concubine, undermines the stability of the family, a basic social institution which public policy vigilantly protects.

DARREL CORDERO, et al. v. F.S. MANAGEMENT & DEVELOPMENT CORPORATION 506 SCRA 451 (2006), THIRD DIVISION, (Carpio Morales, J.)

Non-fulfillment of a suspensive condition in a contract of sale renders the latter ineffective and without force and effect.

Belen Cordero, in her own behalf and as attorney-in-fact of her co-petitioners, entered into a contract to sell with respondent F.S. Management and Development Corporation (FSMDC) over five (5) parcels of land located in Batangas. Pursuant to the terms and conditions of the contract, FSMDC paid earnest money. No further payments were made thereafter. Cordero sent FSMDC a demand letter, revoking the contract to sell and treating the payments already made as payment for damages suffered. FSMDC likewise demanded the payment for actual damages suffered due to loss of income.

Cordero thereafter filed before the Regional Trial Court of Paraaque a complaint for rescission of contract with damages alleging FSMDC failed to comply with its obligations under the contract to sell; and that consequently entitled to rescind the contract to sell as well as demand the payment of damages. FSMDC, on the other hand, alleged that Cordero has no cause of action considering that they were the first to violate the contract to sell. It was Cordero who prevented FSMDC from complying with its obligation to pay in full by refusing to execute the final contract of sale unless additional payment of legal interest is made. Moreover, Corderos refusal to execute the final contract of sale was due to the willingness of another buyer to pay a higher price.

The RTC issued its decision, finding in favor of Cordero et al. and ordered FSMDC to pay damages and attorneys fees. The Court of Appeals affirmed the decision of the lower court and denied their motion for reconsideration. ISSUE: Whether or not contract to sell may be subject to rescission under Article 1191 of the Civil Code


HELD:

Under a contract to sell, the seller retains title to the thing to be sold until the purchaser fully pays the agreed purchase price. The full payment is a positive suspensive condition, the non-fulfillment of which is not a breach of contract but merely an event that prevents the seller from conveying title to the purchaser. The non-payment of the purchase price renders the contract to sell ineffective and without force and effect.

Since the obligation of Cordero et al. did not arise because of the failure of FSMDC to fully pay

the purchase price, Article 1191 of the Civil Code would have no application. The non-fulfillment by the FSMDC of his obligation to pay, which is a suspensive condition to

the obligation of the Cordero et al. to sell and deliver the title to the property, rendered the contract to sell ineffective and without force and effect. The parties stand as if the conditional obligation had never existed. Article 1191 of the New Civil Code will not apply because it presupposes an obligation already extant. There can be no rescission of an obligation that is still non-existing, the suspensive condition not having happened.

CORINTHIAN REALTY, INC. v. HON. COURT OF APPEALS, et al. 394 SCRA 260 (2002), THIRD DIVISION (Carpio Morales, J.)

A co-owner who sells the entire property without obtaining the consent of the other co-owners does not render the

sale null and void. The sale will affect only his own share but not those of the other co-owners who did not consent to the sale.

A parcel of land situated in Las Pinas is co-owned by Emilio Martin and Matilde Martin

(Martins) together with private respondent Delfin Guinto (Delfin), Teofilo Guinto, Prudencio Guinto and Margarita Guinto (Guintos) and the heirs of Spouses Tomas de Leon and Francisca Medina (Heirs of de Leon). The Martins and Guintos entered into a Deed of Conditional Sale with Corinthian Realty Inc. (Corinthian). However, Delfin and the Heirs of de Leon did not affix their signature in the said instrument although their names appeared therein. Before the execution of the Deed of Conditional Sale, Corinthian paid several amounts to Martins and Guintos. Corinthian however failed to pay the balance of the purchase price within ninety (90) days, as stipulated.

The action for specific performance was filed by Corinthian against the Martins and Guintos for

not executing a Deed of Absolute Sale. The Regional Trial Court of Makati (RTC) dismissed the complaint concluding that it was Corinthian who violated the deed. The Court of Appeals affirmed the RTC decision. Hence, the filing of this petition. ISSUE:

1. Whether or not the Court of Appeals erred in holding that the Deed of Conditional Sale was entered into with the co-owners individually

2. Whether or not the Court of Appeals erred in holding that the payment of the purchase price is a suspensive condition to the execution of the Deed of Absolute Sale, hence Petitioner Corinthian cannot file an action for specific performance


HELD: First Issue: Deed of Conditional Sale was entered into Individually

A co-owner has the right to sell his undivided share. If he sells the entire property without obtaining the consent of the other co-owners, the sale is not null and void. Only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property. The transferee gets only what his transferor would have been entitled to after partition. Even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. This is because under Article 493 of the New Civil Code, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common.

This Court does not find any mistake on the part of the appellate court. Indeed, only the pro-indiviso shares in the property of the co-owners signatories Martins and Guintos to the deed were affected by the deed. That Petitioner Corinthian paid specific amounts of money to the co-owners-private respondents-signatories Martins and Guintos to the deed and even had said -deed notarized inspite of the absence of the signatures of private respondent Delfin and Heirs bars the claim of petitioner Corinthian that it dealt with the co-owners of the property collectively. Second Issue: Payment of the Purchase Price as a Suspensive Condition

Corinthians contention that its obligation to pay the balance of the purchase price within 90

days was not a condition precedent to the execution by private respondent Martins and Guintos of the Deed of Absolute Sale is bereft of merit. The deed could not be any clearer on the matter Petitioner Corinthians compliance with its obligation to pay the balance of the purchase price was a condition precedent to the execution by private respondent Martins and Guintos of an absolute sale. Since it failed to comply with such obligation, the obligation of private respondent Martins and Guintos to execute a deed of absolute sale had not arisen. Furthermore, where one of the parties to a contract does not perform the undertaking which he is bound by its terms, he is not entitled to insist upon the performance of the other party.

GILBERT T. DE LA PAZ v. MARIKINA FOOTWEAR DEVELOPMENT COOPERATIVE, INC.


The Court cannot allow unjust enrichment on the part of one party and unjust poverty on the part of another. Marikina Footwear Development Cooperative, Inc (MAFODECO) represented by its chairman

Rodolfo de Guzman (de Guzman), leased a space to Gilbert T. de la Paz (de la Paz), operator of a water-refilling station for a period of one year. It was found out that the real owner was Bayani Vergara who only allowed MAFODECO to use the property as its office for free. Upun the demise of Vergara, the ownership was transferred to his wife, Severina. De la Paz, de Guzman and Severina entered into an Agreement on Advance Rental and agreed to split the rental payments of de la Paz between Severina and MAFODECO.

Severina later decided to discontinue the split rental arrangement and entered into a lease

contract with de la Paz. MAFODECO sent a letter to de la Paz demanding him to pay Seventy Eight Thousand (P78, 000) Pesos for his rent and to vacate the property within five days. Petitioner de la Paz


refused to comply with the demand prompting MAFODECO to file a complaint for unlawful detainer against petitioner before Metropolitan Trial Court of Marikina City. MALFODECO alleged that it is the OWNER and LESSOR of the property under a verbal lease which was denied by the de la Paz. He further alleged that MAFODECO has no cause of action against him because he already have a contract of lease with Severina. The Metropolitan Trial Court ruled in favor of MAFODECO which was affirmed by the Regional Trial Court of Marikina. On appeal, the Court of Appeals affirmed the decision of the lower court. Hence, this petition. ISSUE: Whether or not MAFODECO can demand payment of rentals from de la Paz and demand him to vacate the property HELD: MAFODECO, in misrepresenting in its complaint for unlawful detainer that it is the OWNER of the property, attached a document entitled Pahintulot Sa Paghahanap-buhay, which document, as the title itself says, is simply a permit or authority to engage in business. Apparently, MAFODECO made such false declaration of ownership to make it appear that it had the right to lease the property to de la Paz.

When MAFODECO filed on February 11, 2002 the complaint for unlawful detainer against de

la Paz, it could not also have anchored its right to lease the property on the "tolerance" of its previous owner Bayani who had died more than 11 years earlier or on October 16, 1993. Bayanis act of tolerance in favor of MAFODECO had automatically ceased with his demise.

To allow de la Paz, under the circumstances, to vacate the property and pay MAFODECO

rentals until the property shall have been vacated, as ordered by the MeTC and affirmed by both the RTC and Court of Appeals, de la Pazs existing lease contract with Severina notwithstanding, would constitute unjust enrichment in favor of MAFODECO and cause unjust poverty to de la Paz.

SUSAN D. DEGOLLACION v. REGISTER OF DEEDS OF CAVITE, et al.

500 SCRA 108 (2006), THIRD DIVISION (CARPIO-MORALES J.)

Where two transfer certificates of title have been issued on different dates, to two different persons, for the same parcel of land, even if both are presumed to be title holders in good faith, it does not necessarily follow that he who holds the earlier title should prevail. On the assumption that there was regularity in the registration leading to the eventual issuance of subject transfer certificates of title, the better approach is to trace the original certificates from which the certificates of title in dispute were derived. Should there be only one common original certificate of title, the transfer certificate issued on an earlier date along the line must prevail, absent any anomaly or irregularity tainting the process of registration.

Susan D. Degollacion purchased from Antonio Dizon two parcels of land situated at Dasmarias, Cavite covered by Transfer Certificate of Title (TCT) No. T-20726 and TCT No. 26796. Dizons titles were accordingly cancelled and TCT No. T-96011 and TCT No. T-96019 were issued in the name of Degollacion.

Degollacion allegedly learned that a portion of TCT T-96010 was covered by TCT T-26877

issued in the name of Pilar Development Corporation (Pilar Development). She thereafter instituted a Complaint for Cancellation of Transfer Certificate of Title with Damages and Prayer for a Temporary


Restraining Order or Writ of Preliminary Injunction against the Register of Deeds of Cavite and Pilar Development with the Regional Trial Court of Cavite.

Degollacion claimed that the title of the corporation, which was issued on November 8, 1967,

was derived from spurious sources.

The trial court dismissed Degollacions complaint on the ground that the latter failed to prove through evidence that the documents of Pilar Development were derived from spurious sources. The trial court also held that it could be possible that it was Degollacions documents that were derived from spurious sources.

Degollacion appealed to the Court of Appeals heavily relying on her witnesses and on the

statement of then Land Registration Authority Administrator saying that her Transfer Certificate of Titles were regularly issued and her tax payments are up to date. Later on however, the Court of Appeals ruled on the contrary.

Hence, the present petition relying heavily on the statements of the Land Registration Authority Administrator and arguing that Pilar Developments Transfer Certificate of Titles were spuriously produced.

ISSUE:

Whether or not the Degollacion has satisfactorily proved that the Transfer Certificate of Titles of Pilar Development Corporation came from spurious sources HELD:

Where two certificates of title purport to include the same land, whether wholly or partly, the better approach is to trace the original certificates from which the certificates of title were derived.

Respecting the testimony of Degollacions witness Melanie Victoria, she merely declared that she could not produce the original of the corporations title as it was, by her claim, taken by a certain Atty. Basa of the Investigation Division of the LRA for investigation, and that the photocopy she brought along with her was handed to her by the vault-keeper.

That Degolacion lost the Deed of Sale in her favor covering Lot 5766-B, from which deed material or relevant facts decisive of the case could be gathered, did not preclude her from procuring a certified true copy of the deed from the Register of Deeds, or the notary public, or Dizon failing which she then could have presented any of them to testify thereon in light of the following pertinent provisions of Rule 130 of the Rules of Court:

SEC. 3. Original document must be produced; exceptions. When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:

(a)When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;


b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and (d) When the original is a public record in the custody of a public officer or is recorded in a public office.

x x x

SEC. 5. When original document is unavailable. When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.

x x x SEC. 7. Evidence admissible when original document is a public record. When the original of a document is in the custody of a public officer or is recorded in a public office, its contents may be proved by a certified true copy issued by the public officer in custody thereof.

x x x

While Degollacion alleged in her complaint that the alleged spurious titles of the above-named Cristina Caro and Leonilo and Roberto Javier from which the Pilar Developments title was allegedly derived, were attached thereto as Annexes G and H, respectively, nowhere in the records could the same be found. As reflected earlier, Susan in fact failed to furnish copies the annexes to her complaint including Annexes G and H to the corporation, despite the order of the trial court.

GERARDA A. DIZON-ABILLA and the HEIRS OF RONALDO P. ABILLA v. SPS. CARLOS AND THERESITA GOBONSENG


A litigant whose rights have been adjudicated by a final judgment does not have unbridled license to litigate for another try. Gerarda A. Dizon-Abilla and the Heirs of Ronaldo P. Abilla extended to Spouses Carlos and Theresita Gobonseng a loan in the amount of Five Hundred Fifty Thousand Pesos (P550, 000.00). Spouses Gobonseng, however, failed to settle the same. They then executed a Deed of Sale covering Seventeen (17) lots in favor of Dizon-Abilla and Heirs of Abilla. The Deed provides an option to buy the lots within six (6) months in favor of Spouses Gobonseng which they failed to exercise.


Dizon-Abilla and Heir of Abilla filed a case of specific performance and damages for the expenses attendant to the Preparation and Registration of the Deed of Sale. The RTC of Dumaguete City ruled the option to buy was null and void. On appeal, the Court of Appeals affirmed the trial courts decision.

Nineteen (19) days after the decision of the CA became final, an Urgent Motion to Repurchase was filed to the trial court by Spouses Gobonseng alleging that they made a tender of payment to RCBC Dumaguete Branch, but was denied. The case was raffled to a new judge which ordered the release of the deposited money as payment for the repurchase. Dizon-Abilla and Heirs of Abilla filed a Petition for Review on Certiorari challenging the trial courts decision allowing Spouses Gobonsengs repurchase. The Supreme Court denied their petition. Dizon-Abilla and Heirs of Abilla subsequently filed another case to the trial court asserting that they are entitled to 2% monthly interest. The trial court ruled in favor of Spouses Gobonseng which was affirmed by the CA. The appellate court ruled that the case has already been closed and terminated. ISSUE: Whether or not the Court of Appeals erred in its decision to consider the case closed and terminated HELD: The amount tendered by Spouses Domonseng, the correctness of which had already been passed upon by the appellate court, has been determined with finality. Every litigation must necessarily come to an end. Access to courts is guaranteed, but once a litigants right has been adjudicated in a valid final judgment of a competent court, he should not be granted an unbridled license to go back for another try. The prevailing party should not be harassed by subsequent suits. For, if endless litigations were to be encouraged, unscrupulous litigations would multiply in number to the detriment of the administration of justice.

LEONARDO ACABAL, et al. v. VILLANER ACABAL, et al. 454 SCRA 555 (2005), THIRD DIVISION (Carpio Morales, J.)

Mere inadequacy of the price per se will not rule out the transaction as one of sale.

Alejandro Acabal and Felicidad Balasbas executed a Deed of Absolute Sale over a parcel of land in favor of their son, respondent Villaner Acabal (Villaner). Villaner was then married to Justiniana Lipajan. When he became a widower, he executed a deed conveying the same parcel of land in favor of petitioner Leonardo Acabal (Leonardo). However, Villaner later claims that the document he signed was a document captioned Lease Contract, wherein he leased for the property for 3 years to Leonardo. Villaner filed a complaint with the Regional Trial Court (RTC) against Leonardo and Ramon Nicolas to whom Leonardo in turn conveyed the property for annulment of the deeds of sale.


The RTC ruled in favor of Acabal and dismissed the complaint. The Court of Appeals (CA) however reversed the decision of RTC and held that the Deed of Absolute Sale executed by Villaner in favor of Leonardo was simulated and fictitious. ISSUE: Whether or not the deed executed by respondent Villaner in favor of petitioner Leonardo is a Deed of Absolute Sale. HELD:

It bears noting, however, that Villaner failed to present evidence on the fair market value of the property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of the fair market value of a land as of the time of its sale, it cannot be concluded that the price at which it was sold was inadequate. Inadequacy of price must be proven because mere speculation or conjecture has no place in our judicial system.

Even, however, on the assumption that the price of P10,000.00 was below the fair market value of the property in 1990, mere inadequacy of the price per se will not rule out the transaction as one of sale. For the price must be grossly inadequate or shocking to the conscience such that the mind revolts at it and such that a reasonable man would neither directly nor indirectly be likely to consent to it.

ANECITO CALIMPONG et al. v. HEIRS OF FILOMENA GUMELA


The jurisdiction of the Director of Lands is limited only to public lands and does not cover lands privately owned.

The subject lot was acquired by the heirs through a cadastral proceeding. The heirs of Gumelas

(heirs) decreed the owners in fee simple of a lot located in Zamboanga Del Norte without certificate

of title was issued and registered in their names. The respondent heirs of Gumelas learned that the lot

was being occupied by petitioner Calimpong.

It turned out that Calimpong filed in 1976 an application for Free Patent over the lot, which the

application he followed up with the Bureau of Lands when his possession was disturbed by the heirs.

The heirs thereafter filed before the Regional Trial Court of Dipolog City a complaint for quieting of

title, damages, with prayer for preliminary injunction against Calimpong and his wife. Subsequently, the

Original Certificate of Title (OCT) was issued in the name of Calimpong.

The RTC rendered judgment in favor of the heirs. It held that the title of the heirs is based on a

grant thereof to the predecessors-in-interest by the government in cadastral proceedings and by such

grant, the lot ceased to be part of the public domain as it become private property. It concluded that the

free patent and the title issued to Calimpong were null and void. On appeal, the Court of Appeals

affirmed the decision of the trial court.

ISSUE:


Whether or not the Bureau of Lands has the authority to grant a Free Patent for a

land ceased to be a public land

HELD:

Under the provision of Act No. 2874 pursuant to which the title of Heirs predecessor in interest

was issued, the President of the Philippines or his alter ego, the Director of Lands, has no authority to

grant a free patent for land that has ceased to be a public land and has passed to private ownership, and a

title so issued is null and void. The nullity arises not, from the fraud or deceit, but from the fact that the

land is not under the jurisdiction of the Bureau of Lands. The jurisdiction of the Director of Lands is

limited only to public lands and does not cover lands privately owned. The purpose of the legislature in

adopting the former Public Land Act, Act No. 2874, was and is to limit its application to lands of the

public domain, and lands held in private ownership are not included therein and are not affected in any

manner whatsoever thereby. Land held in freehold or fee title, or of private ownership, constitute no

part of the public domain and cannot possibly come within the purview of said Act No. 2874, inasmuch

as the "subject" of such freehold or private land is not embraced in any manner in the title of the Act

and the same are excluded from the provisions of the text thereof.

Since the DENR had no authority to grant a free patent over the lot, Free Patent No.

09721093961 issued on August 17, 1993 by the PENRO of Zamboanga del Norte and Original

Certificate of Title No. P-33780 issued on August 19, 1993 by the Register of Deeds of Zamboanga del

Norte in favor of petitioner Calimpong are null and void.

JAIME D. ANG v. COURT OF APPEALS AND BRUNO SOLEDAD

567 SCRA 53 (2008), SECOND DIVISION (Morales, J.)

Even under the principle of solutio indebiti, Ang cannot recover from Soledad the amount he paid BA Finance

since Ang settled the mortgage debt on his own volition and that Soledad did not benefit therein, the latter not being the one

who mortgaged the vehicle.

Under a "car-swapping" scheme, Bruno Soledad sold his Mitsubishi GSR sedan 1982 model to

Jaime Ang. For his part, Ang conveyed to Soledad his Mitsubishi Lancer model 1988. Ang, a buyer and

seller of used vehicles, later offered the Mitsubishi GSR for sale through Far Eastern Motors, a second-

hand auto display center. The vehicle was eventually sold to Paul Bugash. Before the deed could be

registered in Bugashs name, however, the vehicle was seized by virtue of a writ of replevin on account

of the alleged failure of Ronaldo Panes, the owner of the vehicle prior to Soledad, to pay the mortgage

debt constituted thereon.

To secure the release of the vehicle, Ang paid BA Finance. Soledad refused to reimburse, despite

repeated demands, drawing Ang to charge him for Estafa with abuse of confidence. By Resolution, the

City Prosecutors Office dismissed the complaint for insufficiency of evidence, drawing Ang to file for

consecutive complaints for damages against Soledad before the Regional Trial Court (RTC) of Cebu


City. Subsequently, the RTC rendered judgment in favor of Ang "for the sake of justice

and equity, and in consonance with the salutary principle of non-enrichment at anothers

expense. The RTC then ordered Soledad to pay Ang the amount the latter paid to BA Finance.

Soledad then appealed to the Appellate Court, which reverses the decision of the RTC. The

Court of Appeals dismissed Angs petition on the ground that the filing of said complaint seeking the

awarding of damages for breach of warranty has already prescribed.

Hence, this petition to the High Court.

ISSUE:

1) Whether or not Angs cause of action had not yet prescribed when he filed the complaint

2) Whether or not Ang can recover from Soledad the amount he paid BA Finance on account of

the mortgage debt

HELD:

First Issue

The resolution of the sole issue of whether the complaint had prescribed hinges on a

determination of what kind of warranty is provided in the Deed of Absolute Sale subject of the present

case.

A warranty is a statement or representation made by the seller of goods, contemporaneously and

as part of the contract of sale, having reference to the character, quality or title of the goods, and by

which he promises or undertakes to insure that certain facts are or shall be as he then represents them.

Warranties by the seller may be express or implied. Art. 1546 of the Civil Code defines express warranty

Any affirmation of fact or any promise by the seller relating to the thing is an express warranty if the

natural tendency of such affirmation or promise is to induce the buyer to purchase the same, and if the

buyer purchases the thing relying thereon. On the other hand, an implied warranty is that which the law

derives by application or inference from the nature of the transaction or the relative situation or

circumstances of the parties, irrespective of any intention of the seller to create it.

The ruling in Engineering & Machinery Corporation vs. Court of Appeals states that "the prescriptive

period for instituting actions based on a breach of express warranty is that specified in the contract, and

in the absence of such period, the general rule on rescission of contract, which is four years (Article

1389, Civil Code)."

As for actions based on breach of implied warranty, the prescriptive period is, under Art. 1571

(warranty against hidden defects of or encumbrances upon the thing sold) and Art. 1548 (warranty

against eviction), six months from the date of delivery of the thing sold.


In declaring that he owned and had clean title to the vehicle at the time the Deed

of Absolute Sale was forged, Soledad gave an implied warranty of title. In pledging that he

"will defend the same from all claims or any claim whatsoever and will save the vendee from any suit by

the government of the Republic of the Philippines," Soledad gave a warranty against eviction.

Given Angs business of buying and selling used vehicles, he could not have merely relied on

Soledads affirmation that the car was free from liens and encumbrances. He was expected to have

thoroughly verified the cars registration and related documents.

Since what Soledad, as seller, gave was an implied warranty, the prescriptive period to file a

breach thereof is six months after the delivery of the vehicle, following Art. 1571. But even if the date of

filing of the action is reckoned from the date petitioner instituted his first complaint for damages on

November 9, 1993, and not on July 15, 1996 when he filed the complaint subject of the present petition,

the action just the same had prescribed, it having been filed 16 months after July 28, 1992, the date of

delivery of the vehicle.

Second Issue

On the merits of his complaint for damages, even if Ang invokes breach of warranty against

eviction as inferred from the second part of the earlier-quoted provision of the Deed of Absolute Sale,

the following essential requisites for such breach: (1) The purchaser has been deprived of the whole or

part of the thing sold; (2) This eviction is by a final judgment; (3) The basis thereof is by virtue of a right

prior to the sale made by the vendor; and (4) The vendor has been summoned and made co-defendant in

the suit for eviction at the instance of the vendee, have not been met. For one, there is no judgment

which deprived Ang of the vehicle. For another, there was no suit for eviction in which Soledad as seller

was impleaded as co-defendant at the instance of the vendee.

Finally, even under the principle of solutio indebiti which the RTC applied, Ang cannot recover

from Soledad the amount he paid BA Finance. For, as the appellate court observed, Ang settled the

mortgage debt on his own volition under the supposition that he would resell the car. It turned out that

he did pay BA Finance in order to avoid returning the payment made by the ultimate buyer Bugash. It

need not be stressed that Soledad did not benefit from Angs paying BA Finance, he not being the one

who mortgaged the vehicle, hence, did not benefit from the proceeds thereof.

GREGORIO F. AVERIA, et al. v. DOMINGO AVERIA, et al.


The Statute of Frauds applies only to executory contracts and not to contracts which are either partially or totally performed


Macaria Francisco (Macaria) was married to Marcos Averia in which they had six children namely: petitioners Gregorio and Teresa and respondents Domingo, Angel, Felipe and Felimon. Upon the death of Marcos, Macaria contracted a second marriage with Roberto Romero in which they had no children. Upon the death of Roberto, he left three adjoining residential lots. In a Deed of Extrajudicial Partition and Summary Settlement of the Estate of Romero, a house and lot (Extremadura property) was apportioned to Macaria.

Macaria then filed an action for annulment of title and damages alleging that fraud was employed by her co-heirs in which she was represented by Atty. Mario C.R. Domingo. The case lasted for 10 years until the Court of Appeals (CA) decided in favor of Macaria entitling her to an additional 30 square meters of the estate of Romero. Her son Gregorio and his family and Teresas family lived with her in the Extremadura property until her death. After six years, respondents Domingo, Angel, Felipe and Filemon filed an action for judicial partition against petitioners Gregorio and Teresa.

In their defense Gregorio contends that Macaria verbally sold of her Extramadura property to him and his wife Agripina because they were the ones who spent for the litigation expenses in the former civil case and that Agripina took care of her. Gregorio and co-petitioner Sylvana claimed that Domingo sold to Gregorio and Agripina his 1/6 share in the remaining portion of the property. Upon hearing, Gregorio presented oral evidence to establish their claim of the sale of the property to them by Macaria and also the sale of Domingo of his share. The Regional Trial Court of (RTC) decided in favor of Gregorio. The CA however, reversed the decision of the RTC on the ground that since the sale executed by Macaria in favor of Gregorio was in violation of the statute of frauds and it cannot be proven by oral

evidence.

Issue:

Whether or not parol evidence may be admitted in proving partial performance

Held:

With respect to the application by the appellate court of the Statute of Frauds, Gregorio

contends that the same refers only to purely executory contracts and not to partially or completely

executed contracts as in the instant case. The finding of the CA that the testimonies of Gregorios

witnesses were timely objected to by Domingo is not, as Gregorio insist, borne out in the records of the

case except with respect to his testimony.

Indeed, except for the testimony of petitioner Gregorio bearing on the verbal sale to him by Macaria of the property, the testimonies of Gregorios witnesses Sylvanna Vergara Clutario and Flora Lazaro Rivera bearing on the same matter were not objected to by respondents. Just as the testimonies of Gregorio, Jr. and Veronica Bautista bearing on the receipt by respondent Domingo on July 23, 1983 from Gregorios wife of P5,000.00 representing partial payment of the P10,000.00 valuation of his (Domingos) 1/6 share in the property, and of the testimony of Felimon Dagondon bearing on the receipt by Domingo of P5,000.00 from Gregorio were not objected to. Following Article 1405 of the Civil Code, the contracts which infringed the Statute of Frauds were ratified by the failure to object to the presentation of parol evidence, hence, enforceable.


Contrary then to the finding of the CA, the admission of parol evidence upon which the trial court anchored its decision in favor of respondents is not irregular and is not foreclosed by Article 1405.

In any event, the Statute of Frauds applies only to executory contracts and not to contracts which are either partially or totally performed. In the case at bar, petitioners claimed that there was total performance of the contracts, full payment of the objects thereof having already been made and the vendee Gregorio having, even after Macarias death in 1983, continued to occupy the property until and after the filing on January 19, 1989 of the complaint subject of the case at bar as in fact he is still occupying it.

However it is not enough for a party to allege partial performance in order to render the Statute of Frauds inapplicable; such partial performance must be duly proved. But neither is such party required to establish such partial performance by documentary proof before he could have the opportunity to introduce oral testimony on the transaction. The partial performance may be proved by either documentary or oral evidence.

WENONAH L. MARQUEZ AZARCON v. HOUSING AND LAND USE ARBITER, et al. 399 SCRA 365 (2003), THIRD DIVISION (Carpio Morales, J.)

The agreement of the parties becomes the law between them and the same shall stand in the absence of evidence showing that it is contrary to public policy.

Sagana Construction and Development Corporation (Sagana) and Wenonah Marquez-Azarcon (Azarcon) entered into a contract to sell a house and lot (subject property). Azarcons loan application was disapproved, however, on account partly of Saganas failure to submit certain requirements including the title to the subject property which had been burned and was pending reconstitution. Consequently, Azarcon offered to pay the balance in cash but Sagana refused to accept the same unless she pays interest.

As Azarcon refused to pay interest on the balance of the purchase price, she filed a complaint against Sagana before the Housing and Land Use Regulatory Board (Board). After hearing, a Housing and Land Use Arbiter (HLA) rendered a decision ordering Azarcon to pay the balance of the purchase price, and Sagana to deliver the Deed of Sale and the title covering the subject property.

Upon reconsideration, the Board deleted a previous order for Azarcon to pay interest. The Board also required Azarcon to pay rentals during the time of her occupancy which shall form part of the purchase price of the premises. Azarcon thus filed a Petition for Certiorari with the Court of Appeals alleging therein that the Order issued by the HLA varied the terms of the Board decision and, as such, the Board acted with grave abuse of discretion amounting to lack of jurisdiction. CA nevertheless dismissed the petition holding that the HLA decision is in accordance with the Board Resolution. Hence, this petition.

ISSUE:

Whether or not the Court of Appeals erred in dismissing the case HELD:


The dispute arises from the parties conflicting understanding or interpretation of the phrase the said amount of rental shall form part of the purchase price as adjusted found in the fallo, Azarcon contending that the payment of rentals is an alternative to the payment of the balance of the purchase price, and SAGANA contending that the rental payments shall be in addition to the balance of the purchase price.

Of the parties interpretations, Saganas is contrary to their agreement. They agreed upon the purchase price of the subject property in 1995 when they entered into the contract to sell. The amount agreed upon became the law between them. In the absence of any showing that the agreement is contrary to law, courts are without power to alter what parties have clearly, voluntarily and knowingly agreed upon.

It is clear that the payment of rentals was devised by the Board merely as an interim scheme, until a substitute method of payment of the balance of the purchase price was agreed upon by the parties.

Since Azarcon fully paid the balance of the purchase price less than three months after the Board decision was promulgated on May 10, 1993, that part of the decision respecting payment through other means devised by the Board for Azarcon to, in the meantime, pay rentals as equitable payment for the use of the premises, which can be applied to the balance of the purchase price, had become functus oficio.

To hold otherwise would be to fault Azarcon in whom none was, as reflected above, found by

the Board. It would also gloss over Azarcons initial payment of a substantial amount when they entered into the contract to sell and her tender of payment of the balance which was, however, rejected by Sagana. It would thus ignore the interest of justice and equity which underlies all systems of justice.

HEIRS OF ANTONIO BOBADILLA v. JAIME CASTILLO


If the land is not embraced in Areas for Priority Development/Urban Land Reform Zones, no preemptive right

under Presidential Decree No. 1517 can be invoked.

For over 20 years, Antonio Bobadilla, Maria Del Mundo and Ernesto, Danilo, Policarpio, have

been leasing portions of a 348 square meter parcel of land located at Gen. Luna Street in Caloocan City

on a verbal agreement from owner Virginia Rayo. After August 1991, Rayo offered to sell the land to

Bobadilla. Rayo gave Bobadilla two months to decide whether to purchase the land. Having heard

nothing from Bobadilla after two months, Rayo sold the parcel of land to Jaime Castillo.

Castillo required Bobadilla, Del Mundo and the Serranos to vacate the land after failing to heed

his previous demands to pay a monthly rental of P10 per square meter. Bobadilla instituted a complaint

at the Caloocan City Regional Trial Court (RTC) to annul the sale between Rayo and Castillo based on

fraud and bad faith. Bobadilla asserted the right of first refusal of their predecessor-in-interest under

Presidential Decree No. 1517, otherwise known as the Urban Land Reform Act. As the decree is not

self-executing, Proclamation No. 1967 was issued identifying 244 specific sites in Metropolitan Manila as

Areas for Priority Development (APD) and Urban Land Reform Zones.


ISSUE:

Whether or not P.D. 1517 and P.D. 1967 can be applied to Bobadillas claim

HELD:

In Caloocan City where the land is situated, only 11 such areas/zones were identified, none of

which was found to encompass the subject land. Such finding of fact, as affirmed by the appellate court,

is final, conclusive and binding on this Court.

Only legitimate tenants then who have resided for ten years or more on specific parcels of land,

and who have built their homes thereon, have the right not to be dispossessed therefrom and the right of

first refusal to purchase them under reasonable terms and conditions to be determined by the

appropriate government agency.

NATIVIDAD BAUTISTA-BORJA v. ILUMINADA BAUTISTA, et al. 574 SCRA 375 (2008), SECOND DIVISION (Carpio Morales, J.)

An action for declaration of nullity of an alleged fraudulent deed of sale is imprescriptible under the Civil Code.

Petitioner Natividad Bautista- Borja (Natividad), one of the five children of deceased Spouses

Pablo and Segundina Tadiaman Bautista (spouses Bautista), claimed that Iluminada Bautista, et al.,

through fraud and deception, convinced her to take possession and cultivate some agricultural lands that

will eventually be partitioned. Unknown to Natividad, however, the titles to the lands were cancelled by

virtue of Deeds of Sale executed on different dates by her parents in favor of her siblings Simplicio and

Francisco, a fact which she found out subsequent to her possession and cultivation of the said lands.

Natividad thus filed a complaint before the Regional Trial Court (RTC) for Annulment of the Deeds of

Sale and/or Partition of Properties.

The RTC dismissed the complaint for lack of cause of action, prescription and laches. Natividad

thus elevated the case to the Court of Appeals (CA), contending that the nature of her complaint was

one for annulment of void contracts which is imprescriptible. The CA, however, affirmed the trial

courts decision.

ISSUES:

Whether or not the Natividads cause of action has already prescribed

HELD:


From the earlier quoted-allegations in Natividads complaint, it is clear that her action is one for declaration of the nullity of the Deeds of Sale which she claims to be either falsified because at the time of the execution thereof, Pablo was already gravely ill and bedridden, hence he could not have gone and appeared before the Notary Public, much less understood the significance and legal deeds and/or because there was no consideration therefor. Clearly, following Article 1410 of the Civil Code, petitioners action is imprescriptible.

But even if Natividads complaint were to be taken as one for reconveyance, given that it is

based on an alleged void contract, it is just the same as imprescriptible.

JESUS CALDO v. VICTORIA CALDO-ATIENZA et al. 485 SCRA 504, (2006), THIRD DIVISION (Carpio Morales, J.)

Estoppel is not one of the modes of acquiring ownership.

Petitioner Jesus Caldo is the only child of Francisco Caldo to his first wife Pilar Sayaman.

Francisco Caldo filed an Application to Purchase Friar Lands covering Lot No. 5749-D of the Municipality of Dasmarias, Cavite. Pilar Sayaman later died and Francisco Caldo subsequently married Juana Manareza, with whom he had three children, herein respondents Victoria Caldo-Atienza and Feliciana Caldo-Sabado, and the now deceased Alberto Caldofather of respondent Zosimo Caldo. Juana (deceased) and the Republic of the Philippines forged a private sale, covering Lot No. 5749-D. After Juana had fully paid for the lot, she registered it in her name.

Petitioner Jesus Caldo and respondents Victoria Caldo-Atienza, Feliciana Caldo-Sabado and

Zosimo Caldos executed a Salaysay ng Pag-aari ng Ibat-Ibang Lupa. Atienza et al. thereafter executed a Deed of Extrajudicial Partition with Waiver adjudicating the lot to themselves, prompting Jesus Caldo to file a Complaint against Atienza et al. for Annulment of Title before the Regional Trial Court of Imus, Cavite. The Court ruled that Jesus Caldo is entitled to inherit a share of the lot which was subsequently reversed by the Court of Appeals.

ISSUE

Whether or not Atienza, et al. are in estoppels to deny the claim of Jesus as co-owner

HELD: Under the New Civil Code, the modes of acquiring ownership are as follows: (a) occupation; (b)

intellectual creation; (c) donation; (d) succession; and (e) prescription. Estoppel is not one of them x x x. The recognition by the defendants-appellants Victoria Caldo-Atienza, Feliciana Caldo-Sabado and Zosimo Caldo of the plaintiff-appellee Jesus Caldo as co-owner of the subject parcel of land in the Salaysay ng Pag-aari ng Ibat Ibang Lupa was based on the mistaken belief that the said land was a conjugal property of Francisco Caldo and Juana Manaresa. To rule otherwise, will not only cause injustice to the vested right of the defendants-appellants but also will run counter to the provisions of the law and applicable jurisprudence. In accordance with the settled rule, an innocent mistake on the

Documents

Civil Law