OBLICON

Joey R. Pea vs. Jesus Delos Santos and the Heirs of Rosita Delos Santos Flores
G.R. No. 202223 March 2, 2016
Reyes, J.
FACTS:
Jesus Delos Santos and Rosita Delos Santos Flores were the judgment
awardees of the two-thirds portion or 9,915 square meters of four adjoining lots designated as
Lots 393-A, 393-B, 394-D and 394-E, located in Boracay Island, Malay, Aklan, representing as
their shares in the intestate estate of Leonardo delos Santos.
Pea averred that he is the transferee of Jesus and Rosita's adjudged allotments over
the subject lots. He claimed that he bought the same from Atty. Romeo Robiso who acquired the
properties from Jesus and Rosita through assignment and sale.
The plaintiffs opposed Pefia's motion claiming that the conveyance made by Jesus and
Rosita in favor of Atty. Robiso was null and void for being a prohibited transaction because the
latter was their counsel in the case.
RTC upheld that the conveyance made by Jesus and Rosita in favor of Atty. Robiso is
valid since it was not made during the pendency of litigation but after judgment has been
rendered. CA reversed the decision of the RTC.

ISSUE:
were void.

Whether the deeds of conveyance between Atty. Robiso and Jesus and Rosita

RULING:
Yes. Article 1491(5) of the Civil Code expressly prohibits lawyers from acquiring
property or rights that may be the object of any litigation in which they may take part by virtue of
their profession. Records show that the judicial action over the subject lots was still in the
appellate proceedings stage when they were conveyed to Jesus and Rosita's counsel, Atty.
Robiso.
Clearly then, since the property conveyed to Atty. Robiso by Jesus and Rosita was still
the object o f litigation, the deeds o f conveyance executed by the latter are deemed inexistent.
Under Article 1409 of the Code, contracts, which are expressly prohibited or declared void by
law, are considered inexistent and void from the beginning.
WHEREFORE, foregoing considered, the Motion for Reconsideration is hereby DENIED
for lack of merit.

OBLICON

Florita Liam vs. United Coconut Planters Bank

G.R. No. 194664 June 15, 2016
Reyes, J.

FACTS:
Liam entered into a contract to sell with developer Primetown Property Group,
Inc. (PPGI) for the purchase of Condominium Unit No. 603 of the latter's Makati Prime City
(MPC) condominium project. The parties also stipulated that the unit would be delivered not
later than 35 months from the start of actual construction.
To finance the construction o f the condominium project, PPGI obtained a loan from
UCPB. PPGI thereafter partially settled its loan by transferring to UCPB its right to collect all
receivables from condominium buyers, including Liam. PPGI notified Liam of the sale of its
receivables to UCPB. PPGI directed her to remit any remaining balance of the condominium
unit's purchase price to UCPB.
Liam wrote UCPB asking for the deferment of her
amortization payments until such time that the unit is ready for delivery. Liam also complained
about the delayed delivery of the unit. Liam demanded for the refund of all the payments she
made for PPGI's failure to deliver the unit on the stipulated date. Liam filed a Complaint for
specific performance before the HLURB against PPGI and UCPB.

PPGI denied receiving any demand from Liam and averred that she is already estopped
from making any claims against PPGI because she agreed to the substitution of PPGI by
UCPB. UCPB maintained that it is merely a creditor of PPGI. UCPB explained that it only
acquired PPGI's right to collect its receivables from Liam and other condominium buyers. UCPB
denied giving a specific date for the completion of Liam's unit because such matter was beyond
its control but rather devolved upon PPGI as the developer.
HLURB Arbiter ruled in favor of Liam. HLURB Board of Commissioners affirmed the
Arbiters Decision. The appeal before the Office of the President was dismissed. However, the
CA reversed the decision and ruled in favor of UCPB.

ISSUE:
Whether the transaction between UCPB and PPGI was an assignment of credit
and not subrogation.

RULING:
YES. The crucial distinction between assignment and subrogation actually deals
with the necessity of the consent of the debtor in the original transaction. In an assignment of
credit, the consent of the debtor is not necessary in order that the assignment may fully produce
legal effects. What the law requires in an assignment of credit is not the consent of the debtor
but merely notice to him as the assignment takes effect only from the time he has knowledge
thereof. A creditor may, therefore, validly assign his credit and its accessories without the
debtor's consent.
Meanwhile, subrogation requires an agreement among the three parties concerned - the
original creditor, the debtor, and the new creditor. lt is a new contractual relation based on the
mutual agreement among all the necessary parties.
The terms of the MOA and Deed of Sale/Assignment between PPGI and UCPB
unequivocally show that the parties intended an assignment of PPGl's credit in favor of UCPB.
Section 1 of the MOA is explicit that as partial settlement of its loan, PPGI sold in favor of UCPB
its unsold condominium units in MPC as well as its outstanding receivables from the 539 units
covered by Contracts to Sell.
"The primary consideration in determining the true nature of a contract is the intention o f
the parties. If the words of a contract appear to contravene the evident intention of the parties,
the latter shall prevail. Such intention is determined not only from the express terms of their
agreement, but also from the contemporaneous and subsequent acts of the parties." However, if
the terms of a contract are clear and leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulations shall control.
The provisions of the foregoing agreements between PPGI and UCPB are clear, explicit
and unambiguous as to leave no doubt about their objective of executing an assignment of
credit instead of subrogation. The MOA and the Deed of Sale/Assignment clearly state that
UCPB became an assignee of UCPB's outstanding receivables of its condominium buyers. The
Court perceives no proviso or any extraneous factor that incites a contrary interpretation. Even
the simultaneous and subsequent acts of the parties accentuate their intention to treat their
agreements as assignment of credit.

The absence of Liam's consent to the transactions between PPGI and UCPB affirms
their nature as assignment of credit. As already mentioned, the consent of the debtor is not
essential in assignment of credit. What the law requires is merely notice to him.
WHEREFORE, premises considered, the petition is DENIED. The Decision dated
September 24, 2010 of the Court of Appeals in CA-G.R. SP No. 112195 is hereby AFFIRMED.

PROPERTY

Banco De Oro Unibank, Inc. vs. Sunnyside Heights Homeowners Association, Inc.
G.R. No. 198745 January 13, 2016
Reyes, J.

FACTS:
Mover Enterprises, Inc. is the owner and developer of the Sunnyside Heights
Subdivision located in Batasan Hills, Quezon City. In March 1988, Mover mortgaged Lot 5,
Block 10 of Phase I of the said subdivision containing 5,764 square meters to the Philippine
Commercial International Bank (PCIB) to secure a loan of Pl ,700,000.00. Mover failed to pay its
loan and PCIB foreclosed on the mortgage. After title was consolidated in PCIB, the Registry of
Deeds of Quezon City issued Transfer Certificate of Title (TCT) No. 86389 to the said bank on
May 17, 1993. Sometime in mid-1994, PCIB advertised the aforesaid lot for sale in the
newspapers. This prompted the Sunnyside Heights Homeowners Association (SI-IHA) to file
before the Housing and Land Use Regulatory Board (I-ILURB) a letter-complaint, docketed as
HLURB Case No. REM-091594-6077, to declare the mortgage between Mover and PCIB void
on the ground that the subject property, originally covered by TCT No. 366219, has been
allocated as SHJ-IA's open space pursuant to law. SHI-IA, thus sought reconveyance of the
property.
The HLURB Arbiter dismissed SHHA's complaint. The HLURB Board of Commissioners
set aside the decision of the Arbiter. The appeal to the OP was dismissed. The CA affirmed the
decision of the OP.

ISSUE:

Whether the HLURB has jurisdiction over the case.

RULING:
YES. Section 3 of P.D. No. 957 granted to the National Housing Authority (NBA)
exclusive jurisdiction to regulate the real estate trade and business in order to curb swindling
and fraudulent manipulations by unscrupulous subdivision and condominium sellers and
operators, such as failure to deliver titles to the buyers or titles free from liens and
encumbrances, or to pay real estate taxes, and fraudulent sales of the same subdivision lots to
different innocent purchasers for value.
Under Executive Order (E.O.) No. 648, which reorganized the Human Settlements
Regulatory Commission in 1981, the regulatory and quasi-judicial functions of the NI-IA were
transferred to the Human Settlements Regulatory Commission, later renamed as HLURB under
E.O. No. 90. In the cases reaching this Court, the consistent ruling has been that the HLURB
has jurisdiction over complaints arising from contracts between the subdivision developer and
the lot buyer, or those aimed at compelling the developer to comply with its contractual and
statutory obligations.
WHEREFORE, the petition is DENIED. The Decision dated March 11, 2011 of the Court
of Appeals in CA-G.R. SP No. 101740 is AFFIRMED with CLARIFICATION, in that Mover
Enterprises, Inc. shall pay Banco de Oro-EPCI, Inc., now Banco de Oro Unibank, Inc., the
amount of P1,700,000.00 plus legal interest at twelve percent (12%) per annum from
September 14, 1994, the date of the letter-complaint of Sunnyside Heights Homeowners
Association, Inc., the said rate to be reduced to six percent (6%) per annum starting July 1,
2013 until finality hereof. Thereafter, interest as thus computed shall, along with the principal,
earn interest at six percent (6%) per annum until fully paid.

PROPERTY
Heirs of Delfin and Maria Tappa vs. Heirs of Jose Bacud, et al.
G.R. No. 187633 April 14, 2016
Jardeleza, J.
FACTS:
Sps. Delfin filed a complaint for Quieting of Title, Recovery of Possession and
Damages against Bacud, Calabarzon and Malupeng. The subject property is Lot No. 3341
located in Peablanca, Cagayan. Sps. Tappa alleged that they are the registered owners of Lot
No. 3341 by virtue of Free Patent. Delfin allegedly inherited the lot from his father, Lorenzo
Tappa. Sps. Tappa claimed that both Delfin and Lorenzo were in open, continuous, notorious,
exclusive possession of the lot since time immemorial.
Respondents Bacud, Calabarzon and Malupeng claimed that the original owner was
Genaro Tappa who had two children, Loranzo and Irene. Calabarzon claimed that he became
the owner of a portion of Lot No. 3341 by virtue of Deeds of Sale executed in his favor by
Demetria and Juanita, daughters of Irene. After the sale, he entered into possession of such
portion. Malupeng claimed that Pantaleon, son of Irene, sold a portion of the land to him. He
also took possession of his portion after the sale. Bacud claimed ownership over 1690 sq.m. of
the Lot in his own right as heir of Irene.
ISSUE:

Whether the action for quieting of title should prosper.

RULING:
No. The action filed by Spouses Tappa was one for quieting of title and recovery
of possession. In our jurisdiction, the remedy is governed by Article 476 and 477 of the Civil
Code, which state:
Article 476. Whenever there is a cloud on title to real property or any interest therein, by
reason of any instrument, record, claim, encumbrance or proceeding which is apparently
valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable,
and may be prejudicial to said title, an action may be brought to remove such cloud or to
quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.
Article 477. The plaintiff must have legal or equitable title to, or interest in the real
property which is the subject matter of the action. He need not be in possession of said
property.
From the foregoing provisions, we reiterate the rule that for an action to quiet title to
prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a
legal or an equitable title to or interest in the real property subject of the action; and (2) 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.
Spouses Tappa failed to meet these two requisites. First, Spouses Tappa's claim of iegal
title over Lot No. 3341 by virtue of the free patent and the certificate of title, OCT No. P-69103
issued in their name cannot stand. The certificate of title indicates that it was issued by virtue of
Patent No. 021519-92-3194. We agree with the CA that at the time of the application for free
patent, Lot No. 3341 had already become private land by virtue of the open, continuous,
exclusive, and notorious possession by respondents. Hence, Lot No. 3341 had been removed
from the coverage of the Public Land Act, which governs public patent applications.
In an action to quiet title, legal title denotes registered ownership, while equitable title
means beneficial ownership. As discussed, the free patent and the certificate of title issued to
Spouses Tappa could not be the source of their legal title.
The second requisite for an action to quiet title is likewise wanting. We find that although
an instrument (the 1963 Affidavit) exists, and which allegedly casts cloud on Spouses Tappa's
title, it was not shown to be in fact invalid or ineffective against Spouses Tappas rights to the
property.
A cloud on a title exists when (1) there is an instrument ( deed or contract) or record or
claim or encumbrance or proceeding; (2) which is apparently valid or effective; (3) but is, in truth
and in fact, invalid, ineffective, voidable, or unenforceable. or extinguished (or terminated) or
barred by extinctive prescription; and(4) and may be prejudicial to the title.
The 1963 Affidavit was not proven to be, in fact, invalid, ineffective, voidable or
unenforceable or extinguished (terminated) or barred by extinctive prescription.
Thus, the requisites for an action to quiet title are wanting in this case.
WHEREFORE, in view of the foregoing, the petition is DENIED and the Decision of the
Court of Appeals in CA-G.R. CV No. 90026 is AFFIRMED.