CIVIL LAW CREDIT TRANSACTIONS (Act No.

3135)
Bank of the Philippine Islands Vs. Sps. Johnson & Evelyn Co & Jupiter Real Estate
Ventures, Inc./Sps. Johnson & Evelyn Co Vs. Bank of the Philippine Islands
G.R. No. 171172/G.R. No. 200061. November 9, 2015
FACTS:
Jupiter Real Estate Ventures, Inc. (Jupiter) and Spouses Co obtained a loan from Far
East Bank and Trust Company (FEBTC). Jupiter and Spouses Co mortgaged in favor of
FEBTC parcels of land including their improvements covered by Transfer Certificates of Title.
Meanwhile, BPI and FEBTC merged, with BPI as the surviving corporation. Jupiter and Spouses
Co defaulted on the payment of the loan. BPI, as successor-in-interest of FEBTC, foreclosed the
real estate mortgage pursuant to Act No. 3135, as amended. An auction sale was held where the
mortgaged properties were sold to BPI as the highest bidder. The Certificate of Sale was
registered and annotated at the back of the certificates of title on. After the expiration of the
period of redemption, BPI consolidated its ownership over the real properties, and new titles
were issued in its name. Spouses Co and Jupiter filed a complaint for the nullification of
foreclosure proceedings and damages and BPI also filed a petition for the issuance of a writ of
possession. Jupiter filed a petition for corporate rehabilitation and moved for the suspension of
the proceedings since among the properties covered were those subject of the real estate
mortgage. BPI opposed alleging that as registered owner of the properties subject of the
foreclosure, it has the right to the immediate possession of the property and its right to immediate
possession is impaired by the grant of the appeal.
ISSUE:
Whether or not a purchaser in a foreclosure sale may apply for a writ of possession even
during the redemption period.
RULING:
In the affirmative.
Under Section 752 of Act No. 3135, as amended by Act No. 4118, the purchaser in a
foreclosure sale may apply for a writ of possession during the redemption period. and well
settled is the rule that a writ of possession will issue as a matter of course, even without the filing
and approval of a bond, after consolidation of ownership and the issuance of a new TCT in the
name of the purchaser. Upon expiration of the redemption period, the right of the purchaser to
the possession of the foreclosed property becomes absolute. This right to possession is based on
the purchasers ownership of the property. In like manner, the mere filing of an ex parte motion
for the issuance of the writ of possession would suffice and the filing of a bond is no longer
necessary. This is because possession has become the absolute right of the purchaser as the
confirmed owner.
Thus, as the new registered owner, BPI is even more entitled to the possession of the
properties and has the unmistakable right to file an ex parte motion for the issuance of a writ of
possession.
 CIVIL LAW OBLIGATIONS and CONTRACTS
BF Corporation Vs. Verdenberg International Corporation
G.R. No. 174387. December 9, 2015
FACTS:
Petitioner and respondent entered into a Construction Agreement, under which petitioner
would construct for respondent a three-story building housing a meat processing plant and a
showroom office. The parties agreed on a contract price and a completion and delivery date. Due
to several delays, however, petitioner turned over the building only after 4 months. Respondent
did not accept the building, asserting it had many deficiencies. Respondent paid petitioner lower
than the agreed price. Thus, petitioner filed a complaint for sum of money against respondent for
the balance.
Petitioner alleged in its complaint that demolition, excavation, and initial construction
works are the reasons why the project was delayed. Respondent even ordered substantial changes
and additional works after. In total, petitioner claimed it was entitled to an extension of 243 days,
yet asked for only 130 days. Respondent, however, granted petitioner with a mere 60-day
extension and held it in default for the remaining 70 days. In its defense, respondent attributed
the delays to the fault of petitioner. As to the changes and additional works, respondent blamed
petitioner's poor workmanship, persistent inaction in satisfying respondent's complaints, and lack
of, or defective equipment, for the delays and for that reason, the turnover was merely partial
because there were several works that needed to be corrected. Respondent allegedly incurred
additional expenses for the repainting work of the other contractor.
ISSUE/S:
Whether or not the respondent is bound by the construction agreement;
Whether or not the petitioner is liable for the repainting expenses of the respondent.
RULING:
FIRST ISSUE- AFFIRMATIVE. The Respondent is bound by the foregoing terms in the
Construction Agreement and as reflected in the minutes. Contracts constitute the law between the
parties, and they are bound by its stipulations. For as long as they are not contrary to law, morals,
good customs, public order, or public policy, the contracting parties may establish such
stipulations, clauses, terms and conditions as they may deem convenient.
SECOND ISSUE- AFFIRMATIVE. The Petitioner should answer for these expenses,
pursuant to Article 1167 of the Civil Code which provides that: If a person obliged to do
something fails to do it, the same shall be executed at his cost. This same rule shall be observed
if he does it in contravention of the tenor of the obligation. Furthermore, it may be decreed that
what has been poorly done be undone.
Further, the Construction Agreement also provides, in part, that if the work is found
defective in any material respect due to the fault of the contractor, the defects should be removed
and replaced and all expenses of satisfactory reconstruction of the replaced materials shall be for
its sole account.
 CIVIL LAW AGENCY ( In relation to Contracts)
Farida Yap Bitte and the heirs of Benjamin Bitte, namely Jacob Yap Bitte, Shira Dayanara
Yap Bitte, Fatima Yap Bitte and Allan Robert Yap Bitte Vs. Spouses Jonas and Rosa Elsa
Serrano-Jonas
G.R. No. 212256. December 9, 2016
FACTS:

Before Rosa Elsa went to Australia, she had executed a Special Power of Attorney
(SPA) authorizing her mother, Andrea, to sell the property. Cipriano, son of Andrea and brother
of Rosa Elsa, offered the property for sale to Spouses Bitte showing them the authority of
Andrea. Spouses Bitte sought a meeting for final negotiation with Rosa Elsa, the registered
owner of the subject property. To enable Rosa to come to the country, Spouses Bitte paid for her
round trip ticket. After her arrival in the Philippines, Rosa Elsa revoked the SPA, through an
instrument of even date, and handed a copy to Andrea. Rosa Elsa withdrew from the transaction.
Spouses Bitte filed a Complaint for Specific Performance seeking to compel Rosa Elsa, Andrea
and Cipriano to transfer to their names the title over the subject property. While the case was
pending, Andrea sold the subject property to Spouses Bitte, through a deed of absolute sale.
Spouses Bitte posit that the deed must be recognized and enforced for the reason that, despite
the revocation of the authority of Andrea prior to the execution of the deed, they should not be
bound by that revocation for lack of notice. Consequently, they contend that as far as they are
concerned, the contract of sale should be given effect for having been executed by someone
appearing to them as authorized to sell.

ISSUE/S:

Whether or not the deed is enforceable even if the authority to enter such transaction was
revoked.

RULING:

The deed is not enforceable. Under Article 1924 of the New Civil Code, an agency is
revoked if the principal directly manages the business entrusted to the agent, dealing directly
with third persons.
Logic dictates that when a principal disregards or bypasses the agent and directly deals
with such person in an incompatible or exclusionary manner, said third person is deemed to have
knowledge of the revocation of the agency. They are expected to know circumstances that
should have put them on guard as to the continuing authority of that agent. The mere fact of the
principal dealing directly with the third person, after the latter had dealt with an agent, should be
enough to excite the third persons inquiring mind on the continuation of his authority.
 CIVIL LAW LEASE

Filinvest Alabang, Inc. Vs. Century Iro Works, Inc.

G.R. No. 213229. December 9, 2015
FACTS:

Petitioner awarded various contracts to respondent, including a contract for the

completion of the metal works requirement of Filinvest Festival Supermall amounting to
29,000,000.00, as evidenced by the Agreement for Construction executed by both parties
(subject contract), as well as the General Conditions of Contract (General Conditions) which
supplements the subject contract. They agreed that the respondent shall furnish all materials,
labor, equipment, supervision and all other accessories, fixings and incidentals necessary to
complete the Supply and Installation of Metal Works Requirements of petitioners Filinvest
Festival Supermall. In exchange for such works, respondent shall be remunerated the Lump
Sum Contract Price. After the completion of said project, respondent tried to fully settle its
credit with petitioner, but the latter, despite demands, allegedly withheld without any reasonable
ground the payment of the aggregate amount of 1,392,088.68, broken down as follows: (a)
balance of the retention fee; (b) additional deduction from the latters total payments; and (c) the
cost of an additional scenic elevator enclosure. This prompted respondent to file the instant case
for sum of money. In defense, petitioner maintained that the subject contract is lump sum in
nature; hence, it cannot be liable for the amount representing the additional scenic elevator
enclosure absent any instruction authorizing the construction of the same.

ISSUES:
Whether or not the subject contract is fixed lump sum in nature.

RULING:

The subject contract is fixed lump sum. Fixed lump sum contracts are governed by
Article 1724 of the Civil Code. In a fixed lump sum contract, the project owner agrees to pay the
contractor a specified amount for completing a scope of work involving a variety of unspecified
items of work without requiring a cost breakdown. The contractor estimates the project cost
based on the scope of work and schedule and considers probable errors in measurement and
changes in the price of materials. Otherwise stated, in fixed lump sum contracts, the project
owners liability to the contractor is generally limited to what is stipulated therein.
Article 1724 of the Civil Code allows contractors to recover from project owners
additional costs in fixed lump sum contracts, as well as the increase in price for any additional
work due to a subsequent change in the original plans and specifications, provided that there
exists: (a) a written authority from the developer or project owner ordering or allowing the
written changes in work; and(b) written agreement of the parties with regard to the increase in
price or cost due to the change in work or design modification.
 CIVIL LAW PROPERTY RELATIONS

Heirs of Spouses Hilario Marinas and Bernardina N. Marinas Vs. Bernardo Frianeza, et
al.
G.R. No. 179741. December 9, 2015
FACTS:

Deceased Hilario was the registered owner of a parcel of land located in Pangasinan,
covered by Transfer Certificate of Title. He died and was survived by his wife Bernardina and
ten (10) children. Bernardina, with the consent of her children, entered into several Agricultural
Leasehold Contracts with respondents Bernardo, Rodrig, Hilario, Saturnino ,Federico ,Pedro,
Nestor, and Emiliano covering different portions of the property. Bernardina and respondents
signed a Landowner-Tenant Farmers Deed of Undertaking whereby the former, pursuant to
Presidential Decree No. 27, transferred ownership over portions of the property to respondents.
Bernardina died.

Almost twelve years later, petitioners, all heirs of deceased Hilario and Bernardina, filed
a Complaint for Nullification of Patent before the Department of Agrarian Reform (DAR). In
their Complaint, petitioners claim that respondents knew of their co-ownership over the property.
Despite this knowledge, respondents chose to deal exclusively with Bernardina who, as surviving
spouse, was entitled only to a 1/11 share in the property. Petitioners argue that since the mode of
acquisition of the properties involved was through voluntary sale or direct payment scheme, the
civil law rules on co-ownership apply. Thus, the sale contracts entered into by Bernardina
should only affect her own share and not those of her children.
ISSUE/S:
Whether or not the rule on co-ownership applies since the mode of acquisition of the
properties involved was through voluntary sale or direct payment scheme.
RULING:

NO. Voluntary Land Transfer or Direct Payment scheme are merely modes of
implementation. It is settled that land transfers mandated under PD 27 are not considered
conventional sales under our civil laws. Generally, sale arises out of a contractual obligation.
Thus, it must meet the first essential requisite of every contract that is the presence of consent.
Consent implies an act of volition in entering into the agreement. The absence or vitiation of
consent renders the sale either void or voidable. As long as the property is covered under
PD 27, the obligation to transfer ownership of the property arises. Consent of one, some or all
of the co-owners to the transfer is immaterial to its validity.

Transfer of land under PD 27 not akin to a conventional sale under our civil laws;
Consent is not necessary for the validity of the transfer.