FEBRUARY

REPUBLIC V. ROASA
G.R. NO. 176022 FEBRUARY 2, 2015

FACTS: In her application, respondent alleged, among others, that she is the owner in
fee simple of the subject lot, having acquired the same by purchase as evidenced by a
Deed of Absolute Sale dated December 2, 1994; that the said property is an agricultural
land planted with corn, palay, bananas, coconut and coffee by respondent's
predecessors-in-interest; that respondent and her predecessors-in-interest had been in
open, continuous, exclusive and uninterrupted possession and occupation of the land
under bona fide claim of ownership since the 1930's and that they have declared the
land for taxation purposes.

Subsequently, the Republic of the Philippines, through the Office of the Solicitor
General (OSG), opposed the application contending that the muniments of title, such as
tax declarations and tax payment receipts, did not constitute competent and sufficient
evidence of a bona fide acquisition of the land applied for nor of the alleged open,
continuous, exclusive and notorious possession by respondent and her predecessors-in-
interest as owners for the period required by law.

ISSUE: Whether or not the computation of the applicants possession reckoned from the
time of declaration that the subject land is already alienable and disposable.

HELD: Therefore, what is important in computing the period of possession is that the
land has already been declared alienable and disposable at the time of the application
for registration. Upon satisfaction of this requirement, the computation of the period may
include the period of adverse possession prior to the declaration that land is alienable
and disposable.
Although adverse, open, continuous, and notorious possession in the concept of an
owner is a conclusion of law to be determined by courts, it has more to do with a
person's belief in good faith that he or she has just title to the property that he or she is
occupying. It is unrelated to the declaration that land is alienable or disposable. A
possessor or occupant of property may, therefore, be a possessor in the concept of an
owner prior to the determination that the property is alienable and disposable agricultural
land.
 SPOUSES SALVADOR vs. SPOUSES RABAJA and ROSARIO GONZALES
G.R. NO. 199990 FEBRUARY 4, 2015

FACTS: Sometime in July 1998, Spouses Rabaja learned that Spouses Salvador were
looking for a buyer of the subject property. Petitioner Herminia
Salvador (Herminia) personally introduced Gonzales to them as the administrator of the
said property. Spouses Salvador even handed to Gonzales the owner's duplicate
certificate of title over the subject property. On July, 3, 1998, Spouses Rabaja made an
initial payment of P48,000.00 to Gonzales in the presence of Herminia. Gonzales then
presented the Special Power of Attorney (SPA), executed by Rolando
Salvador (Rolando) and dated July 24, 1998. On the same day, the parties executed the
Contract to Sell which stipulated that for a consideration of P5,000,000.00, Spouses
Salvador sold, transferred and conveyed in favor of Spouses Rabaja the subject
property. Spouses Rabaja made several payments totalling P950,000.00, which were
received by Gonzales pursuant to the SPA provided earlier as evidenced by the check
vouchers signed by Gonzales and the improvised receipts signed by Herminia.
Sometime in June 1999, however, Spouses Salvador complained to Spouses Rabaja
that they did not receive any payment from Gonzales. This prompted Spouses Rabaja to
suspend further payment of the purchase price; and as a consequence, they received a
notice to vacate the subject property from Spouses Salvador for non-payment of rentals.
ISSUE: (1) Whether or not there is a valid contract of sale between spouses Rabaja and
spouses Salvador.

(2) Whether or not Rosario Gonzales is an agent of sps. Salvador.

HELD: (1) Yes. Persons dealing with an agent must ascertain not only the fact of
agency, but also the nature and extent of the agent's authority. A third person with whom
the agent wishes to contract on behalf of the principal may require the presentation of
the power of attorney, or the instructions as regards the agency. The basis for agency is
representation and a person dealing with an agent is put upon inquiry and must discover
on his own peril the authority of the agent.
According to Article 1990 of the New Civil Code, insofar as third persons are concerned,
an act is deemed to have been performed within the scope of the agent's authority, if
such act is within the terms of the power of attorney, as written. In this case, Spouses
Rabaja did not recklessly enter into a contract to sell with Gonzales. They required her
presentation of the power of attorney before they transacted with her principal. And
when Gonzales presented the SPA to Spouses Rabaja, the latter had no reason not to
rely on it.
(2) Perhaps the most significant point which defeats the petition would be the fact that it
was Herminia herself who personally introduced Gonzalez to Spouses Rabaja as the
administrator of the subject property. By their own ostensible acts, Spouses Salvador
made third persons believe that Gonzales was duly authorized to administer, negotiate
and sell the subject property. This fact was even affirmed by Spouses Salvador
themselves in their petition where they stated that they had authorized Gonzales to look
for a buyer of their property. It is already too late in the day for Spouses Salvador to
retract the representation to unjustifiably escape their principal obligation.
As correctly held by the CA and the RTC, considering that there was a valid SPA, then
Spouses Rabaja properly made payments to Gonzales, as agent of Spouses Salvador;
and it was as if they paid to Spouses Salvador. It is of no moment, insofar as Spouses
Rabaja are concerned, whether or not the payments were actually remitted to Spouses
Salvador. Any internal matter, arrangement, grievance or strife between the principal
and the agent is theirs alone and should not affect third persons. If Spouses Salvador
did not receive the payments or they wish to specifically revoke the SPA, then their
recourse is to institute a separate action against Gonzales. Such action, however, is not
any more covered by the present proceeding.
 SECRETARY OF THE DAR V. DUMAGPI
G.R. NO. 195412 FEBRUARY 4, 2015

FACTS: On August 12, 1997, Nemesio Dumagpi (Nemesio), filed a complaint

denominated Accion Reivindicatoria, Quieting of Title, and Damagesbefore the RTC
against Juan Aguilar, Sr. (Aguilar), Rosalino C. Valencia (Valencia), Dionito B. Custodio
(Custodio) and the Secretary of DAR (defendants), wherein he alleged that he is the
owner of land in Siay, Zamboanga del Sur designated as Lot No. F-18-5483-D,
containing 211,967 square meters and covered by Tax Declaration No. 1203 issued in
1957; that due to his open, notorious, adverse and exclusive possession, occupation
and cultivation of the said land in the concept of owner since July 4, 1945, during which
he introduced improvements thereon such as a residential house of light materials,
canals, dikes, and rice paddies and planted coconut and fruit trees and exclusively
enjoyed the produce, the said lot has long been converted into his private property by
operation of law.
In 1964, Nemesio applied for a free patent over the subject lot under Application No. 18-
5483, which he said was approved in 1966, but the patent was never released due to
opposition from the defendants; that sometime in 1973, defendant Aguilar forcibly
entered and occupied the northwest portion of
ISSUE: Whether or not Nemensios occupation and possession of the land for thirty
years converted the land to a private one making it susceptible to ownership through
acquisitive prescription.

HELD: Article XII, Section 2 of the 1987 Constitution provides that "[a]ll lands of the
public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural lands, all other
natural resources shall not be alienated."

As asserted by the DAR and testified to by Labrador, from 1938 to 1984 the subject lot
was part of a coal mine reservation, established under Proclamation No. 234, Series of
1938, as amended by Proclamation No. 402, Series of 1953.

There is no dispute that the land Nemesio is claiming was not alienable public
agricultural land but in truth was classified and reserved as a coal mine from 1938 to
1984, a period which overlapped with his claimed acquisitive possession. Clearly, he
cannot invoke Section 48 (b) of Commonwealth Act No. 141 and assert an acquisitive
title thereto by reason of open, continuous, exclusive, and notorious possession for 30
years.
 HERMINIO M. DE GUZMAN vs. TABANGAO REALTY INCORPORATED
G.R. No. 154262 February 11, 2015

FACTS: Gilbert averred that sometime in 1999, he, through an undated contract of
lease, leased a portion of the subject property, registered in his name, to Robert, which
the latter intended to use as a lottery outlet. Gilbert claimed that Robert and Gil failed to
pay their rental arrears to him and refused to vacate the subject property, despite
repeated demands, thus, the first ejectment complaint.
In their defense, Robert and Gil posited that the aforementioned lease contract was
simulated and, hence, not binding on the parties.
ISSUE: Whether or not the Contract of Lease is simulated.

HELD: The distinction between the two was discussed in Heirs of Intac v. CA, viz.:
Articles 1345 and 1346 of the Civil Code provide:
Art. 1345. Simulation of a contract may be absolute or relative.
The former takes place when the parties do not intend to be
bound at all; the latter, when the parties conceal their true
agreement.
Art. 1346. An absolutely simulated or fictitious contract is void. A
relative simulation, when it does not prejudice a third person and
is not intended for any purpose contrary to law, morals, good
customs, public order or public policy binds the parties to their
real agreement.
If the parties state a false cause in the contract to conceal their real
agreement, the contract is only relatively simulated and the parties are
still bound by their real agreement. Hence, where the essential
requisites of a contract are present and the simulation refers only to the
content or terms of the contract, the agreement is absolutely binding
and enforceable between the parties and their successors in interest.
In absolute simulation, there is a colorable contract but it has no
substance as the parties have no intention to be bound by it. "The
main characteristic of an absolute simulation is that the apparent
contract is not really desired or intended to produce legal effect or
in any way alter the juridical situation of the parties." "As a result,
an absolutely simulated or fictitious contract is void, and the
parties may recover from each other what they may have given
under the contract."
As may be gleaned from the foregoing, it is quite apparent that the MCTC-Nabunturan-
Mawab actually intended to mean that the undated lease contract subject of this case
was absolutely simulated. Its pronouncement that the parties did not intend to be bound
by their agreement is simply inconsistent with relative simulation. Note that regardless of
the correctness of its ruling on the contract's simulated character, the fact of the matter is
that the same had already attained finality.
 R TRANSPORT CORP. V. YU
G.R. NO. 174161 FEBRUARY 18, 2015

FACTS: At around 8:45 in the morning of December 12, 1993, Loreta J. Yu, after having
alighted from a passenger bus in front of Robinson's Galleria along the north-bound lane
of Epifanio de los Santos Avenue (EDSA), was hit and run over by a bus driven by
Antonio P. Gimena, who was then employed by petitioner R Transport Corporation.
Loreta was immediately rushed to Medical City Hospital where she was pronounced
dead on arrival.

ISSUE: Whether or not Petitioner is liable for the damages caused by its employee.

HELD: However, it must be noted that the case at hand does not involve a breach of
contract of carnage, as in Tamayo, but a tort or quasi-delict under Article 2176, in
relation to Article 2180 of the New Civil Code. As such, the liability for which petitioner is
being made responsible actually arises not from a pre-existing contractual relation
between petitioner and the deceased, but from a damage caused by the negligence of
its employee. Petitioner cannot, therefore, rely on our ruling in Tamayo and escape its
solidary liability for the liability of the employer for the negligent conduct of its
subordinate is direct and primary, subject only to the defense of due diligence in the
selection and supervision of the employee.
Indeed, this Court has consistently been of the view that it is for the better protection of
the public for both the owner of record and the actual operator to be adjudged jointly and
severally liable with the driver. As aptly stated by the appellate court, "the principle of
holding the registered owner liable for damages notwithstanding that ownership of the
offending vehicle has already been transferred to another is designed to protect the
public and not as a shield on the part of unscrupulous transferees of the vehicle to take
refuge in, inorder to free itself from liability arising from its own negligent act."
 NAPOCOR vs. LUCMAN M. IBRAHIM
G.R. No. 175863 February 18, 2015

FACTS: In 1978, petitioner took possession of a 21,995 square meter parcel of land in
Marawi City (subject land) for the purpose of building thereon a hydroelectric power plant
pursuant to its Agus 1 project. The subject land, while in truth a portion of a private
estate registered under Transfer Certificate of Title (TCT) No. 378-A in the name of
herein respondent Macapanton K. Mangondato (Mangondato), was occupied by
petitioner under the mistaken belief that such land is part of the vast tract of public land
reserved for its use by the government under Proclamation No. 1354, s. 1974.

Mangondato first discovered petitioners occupation of the subject land in 1979the

year that petitioner started its construction of the Agus 1plant. Shortly after such
discovery, Mangondato began demanding compensation for the subject land from
petitioner.

On the otherhand, Ibrahims and Maruhoms disputed Mangondatos ownership of the

lands covered by TCT No. 378-A, including the subject land.

ISSUE: Whether or not Petitioner should be solidarily liable with Mangondato in paying
Ibrahims and Maruhoms the rental fees and expropriation indemnity adjudges against
them,

HELD: Petitioner is correct. No "bad faith" may be taken against it in paying Mangondato
the rental fees and expropriation indemnity due the subject land.

Verily, the clear denominator in all of the foregoing judicial pronouncements is that the
essence of bad faith consists in the deliberate commission of a wrong. Indeed, the
concept has often been equated with malicious or fraudulent motives, yet distinguished
from the mere unintentional wrongs resulting from mere simple negligence or oversight. 6
A finding of bad faith, thus, usually assumes the presence of two (2) elements: first, that
the actor knew or should have known that a particular course of action is wrong or
illegal, and second, that despite such actual or imputable knowledge, the actor,
voluntarily, consciously and out of his own free will, proceeds with such course of action.
Only with the concurrence of these two elements can we begin to consider that the
wrong committed had been done deliberately and, thus, in bad faith.

Contrary then to the view of Branch 10 of the Marawi City RTC and of the Court of
Appeals, it was not the petitioner that "allowed" the payment of the rental fees and
expropriation indemnity to Mangondato. Indeed, given the circumstances, the more
accurate rumination would be that it was the trial court in Civil Case No. 605-92 and Civil
Case No. 610-92 that ordered or allowed the payment to Mangondato and that petitioner
merely complied with the order or allowance by the trial court. Since petitioner was only
acting under the lawful orders of a court in paying Mangondato, we find that no bad faith
can be taken against it, even assuming that petitioner may have had prior knowledge
about the claims of the Ibrahims and Maruhoms upon the subject land and the TRO
issued in Civil Case No. 967-93.

"Payment made in good faith to any person in possession of the credit shall release the
debtor." Article 1242 of the Civil Code is an exception to the rule that a valid payment of
an obligation can only be made to the person to whom such obligation is rightfully
owed.64 It contemplates a situation where a debtor pays a "possessor of credit" i.e.,
someone who is not the real creditor but appears, under the circumstances, to be the
real creditor. In such scenario, the law considers the payment to the "possessor of
credit" as valid even as against the real creditor taking into account the good faith of the
debtor.

Borrowing the principles behind Article 1242 of the Civil Code, we find that
Mangondatobeing the judgment creditor in Civil Case No. 605-92 and Civil Case No.
610-92 as well as the registered owner of the subject land at the timemay be
considered as a "possessor of credit" with respect to the rental fees and expropriation
indemnity adjudged due for the subject land in the two cases, if the Ibrahims and
Maruhoms turn out to be the real owners of the subject land. Hence, petitioners
payment to Mangondato of the fees and indemnity due for the subject land as a
consequence of the execution of Civil Case No. 605-92 and Civil Case No. 610-92 could
still validly extinguish its obligation to pay for the same even as against the Ibrahims and
Maruhoms.
 HEIRS OF TIMBANG DAROMIMBANG DIMAAMPAO vs. ATTY. ABDULLAH ALUG
G.R. No. 198223 February 18, 2015

FACTS: Petitioners alleged that they are the owner of the land covered by OCT No. RP-
355. Their deceased grandmother Timbang is the true owner of the subject property, as
it was among the dowry given to by Cota in accordance to muslim rites. Cota and
Timbang got divorced while their daughters continued possession of the properties. Cota
without the knowledge and of the petitioners sold the subject property to the respondent.
Respondent on the other hand, allegedly bought the properties in bad faith since they
have knowledge of the possession of the property by Petitioners during the sale.

ISSUE: Whether or not CA is correct in ruling that the petitioners action has prescribed.

HELD: We also agree with the CA's finding that petitioners' action had already
prescribed. The subject land was bought by respondents from Cota as evidenced by a
Deed of Sale dated April 10, 1978. Cota executed an Affidavit of adverse claim attaching
thereto the deed of sale and such affidavit was registered and annotated in OCT No.
RP-335 on April 11, 1978. Article 1144 (1) of the Civil Code provides that an action upon
a written contract must be brought within ten years from the time the right of action
accrues. Here, the period of prescription should be counted from the time of the
registration of sale which was a notice to all the world. The affidavit of adverse claim was
annotated on OCT No. RP-335 on April 11, 1978, thus petitioners' complaint filed only in
2005 is indeed beyond the prescriptive period to do so.
 YULIM INTERNATIONAL COMPANY LTD vs. INTERNATIONAL EXCHANGE BANK
G.R. No. 203133 February 18, 2015

FACTS: On June 2, 2000, iBank, a commercial bank, granted Yulim, a domestic

partnership, a credit facility in the form of an Omnibus Loan Line for P5,000,000.00, as
evidenced by a Credit Agreement which was secured by a Chattel Mortgage over
Yulim's inventories. As further guarantee, the partners, namely, James, Jonathan and
Almerick, executed a Continuing Surety Agreement in favor of iBank.
The above promissory notes (PN) were later consolidated under a single promissory
note, PN No. SADDK001014188, for P4,246,310.00, to mature on February 28,
2002. Yulim defaulted on the said note. On April 5, 2002, iBank sent demand letters to
Yulim, through its President, James, and through Almerick, but without success. iBank
then filed a Complaint for Sum of Money with Replevin against Yulim and its sureties.
ISSUE: (1) Whether or not Yulim's loans have in fact been extinguished with the
execution of a Deed of Assignment of their condominium unit in favor of iBank.

(2)Whether or not Yulims partners are solidarily liable to the credit agreement.

HELD: (1) Even more unmistakably, Section 2.02 of the Deed of Assignment provides
that as soon as title to the condominium unit is issued in its name, Yulim
shall"immediately execute the necessary Deed of Real Estate Mortgage in favor of the
BANK to secure the loan obligations of the ASSIGNOR and/or the BORROWER." This is
a plain and direct acknowledgement that the parties really intended to merely constitute
a real estate mortgage over the property. In fact, the Deed of Assignment expressly
states, by way of a resolutory condition concerning the purpose or use of the Deed of
Assignment, that after the petitioners have delivered or caused the delivery of their title
to iBank, the Deed of Assignment shall then become null and void. Shorn of its legal
efficacy as an interim security, the Deed of Assignment would then become functus
officio once title to the condominium unit has been delivered to iBank.

o stress, the assignment being in its essence a mortgage, it was but a security and not a
satisfaction of the petitioners' indebtedness. Article 1255 of the Civil Code invoked by the
petitioners contemplates the existence of two or more creditors and involves the
assignment of the entire debtor's property, not a dacion en pago. Under Article 1245 of
theCivil Code, "[d]ation in payment, whereby property is alienated to the creditor in
satisfaction of a debt in money, shall be governed by the law on sales." Nowhere in the
Deed of Assignment can it be remotely said that a sale of the condominium unit was
contemplated by the parties, the consideration for which would consist of the amount of
outstanding loan due to iBank from the petitioners.

(2) "A surety is considered in law as being the same party as the debtor in
relation to whatever is adjudged touching the obligation of the latter, and their liabilities
are interwoven as to be inseparable." And it is well settled that when the obligor or
obligors undertake to be "jointly and severally" liable, it means that the obligation is
solidary, as in this case.
Thereunder, in addition to binding themselves "jointly and severally" with Yulim
to "unconditionally and irrevocably guarantee full and complete payment" of any and all
credit accommodations that have been granted to Yulim, the petitioners further warrant
that their liability as sureties "shall be direct, immediate and not contingent upon the
pursuit [by] the BANK of whatever remedies it may have against the PRINCIPAL of other
securities."There can thus be no doubt that the individual petitioners have bound
themselves to be solidarily liable with Yulim for the payment of its loan with iBank.
 REPUBLIC V. SORIANO
G.R. NO. 211666 FEBRUARY 25, 2015

FACTS: On October 20, 2010, petitioner Republic of the Philippines, represented by the
DPWH, filed a Complaint for expropriation against respondent Arlene R. Soriano, the
registered owner of a parcel of land consisting of an area of 200 square meters, situated
at Gen. T. De Leon, Valenzuela City, and covered by TCT No. V-13790. In its Complaint,
petitioner averred that pursuant to Republic Act No. 8974, otherwise known as "An Act to
Facilitate the Acquisition of Right-Of-Way, Site or Location for National Government
Infrastructure Projects and for other Purposes," the property sought to be expropriated
shall be used in implementing the construction of the North Luzon
Expressway (NLEX) Harbor Link Project (Segment 9) from NLEX to MacArthur
Highway, Valenzuela City.
Petitioner duly deposited to the Acting Branch Clerk of Court the amount of P420,000.00
representing 100% of the zonal value of the subject property.
ISSUE: Whether or not Soriano is entitled to the award of consequential damages and
legal interest.
HELD: The award of legal interest is unwarranted. The award of interest is imposed in
the nature of damages for delay in payment which, in effect, makes the obligation on the
part of the government one of forbearance to ensure prompt payment of the value of the
land and limit the opportunity loss of the owner. However, when there is no delay in the
payment of just compensation, we have not hesitated in deleting the imposition of
interest thereon for the same is justified only in cases where delay has been sufficiently
established.