LOLITA ESPIRITU SANTO MENDOZA AND SPS.

ALEXANDER AND ELIZABETH

GUTIERREZ, Petitioners, v. SPS. RAMON, SR. AND NATIVIDAD PALUGOD, Respondents.
G.R. No. 220517, June 20, 2018
J. CAGUIOA

FACTS:
 In 1991, Lolita Mendoza and Jasminia Palugod who were lesbian lovers bought the subject
lot in which they constructed a residential house in 1996.
 In 2004, Jasminia executed a Deed of Absolute Sale in favor of Lolita who eventually
mortgaged the property to Elizabeth Gutierrez as a security for a loan in the amount of
PHP800,000.00. Jasminia later on died due to breast cancer.
 On the other hand, Sps. Palugod alleged that their daughter, Jasminia acquired the subject
property and when she was nearing her death, she told her mother that her house and lot
shall go to her brother.
 Sps. Palugod alleged that Lolita, taking advantage of her relationship with Jasminia, caused
the latter to sign a Deed of Absolute Sale in her favor. Thereafter, Lolita, aided by her other
brother as witness, entered it for registration with the Office of the Registry of Deeds. Thus
the TCT was transferred in the name of Lolita.
 Upon learning from the Office of the Registry of Deeds that Jasminia's certificate of title has
been cancelled, executed an Affidavit of Adverse Claim of their right and interest over the
property as the only compulsory and legitimate heirs of Jasminia. However, Lolita, knowing
fully well of the impending suit, made it appear that she mortgaged the property to Sps.
Gutierrez as a security for a loan amounting to Php800,000.00.
 Thus, Sps. Palugod filed a complaint for Declaration of Nullity of the Deed of Absolute
Sale and the Deed of Real Estate Mortgage with RTC Bacoor.
 RTC Bacoor ruled in favor of Sps. Palugod declaring that the sale is void for being simulated
because there was lack of monetary consideration upon failure of Lolita to show receipts.
Hence, the mortgage is likewise void, since, in a real estate mortgage, it is essential that the
mortgagor be the absolute owner of the property to be mortgaged.
 CA affirmed the RTC.

ISSUE:
Whether or not a sale is void for being fictitious or simulated upon mere failure of showing receipts
as proof of monetary consideration? – No.

HELD:
 The Deed of Absolute Sale (DAS) is itself the proof that the sale of the property is supported
by sufficient consideration. This is anchored on the disputable presumption of consideration
inherent in every contract. Thus, Article 1354 of the Civil Code provides: "Although the cause
is not stated in the contract, it is presumed that it exists and is lawful, unless the debtor
proves the contrary."
 Guided by the above provisions of the Civil Code and the Rules as well as jurisprudence,
petitioners stand to benefit from the disputable presumption of consideration with the
presentation of the DAS. Indeed, they can rely on the DAS as proof that it has consideration
- "FOR AND IN CONSIDERATION of the sum of FOUR HUNDRED THOUSAND PESOS
(P400,000.00) Philippine Currency, receipt of which is hereby acknowledged and confessed."
 With the presumption in favor of petitioner Lolita who is the vendee, it became incumbent
upon respondents to present preponderant evidence to prove lack of consideration.
Respondents' mere assertion that the DAS has no consideration is inadequate.
 Petitioners' evidence has superior weight. While petitioner Lolita could not present receipts
to show her payments to the late Jasminia, her sworn testimony which in certain portions
were corroborated by pertinent documents, remains more credible than that of respondent
Natividad. Indeed, the lack of receipts may be explained by the "close friendship" between
petitioner Lolita and Jasminia. The non-admission by petitioner Lolita of the "husband and
wife" relationship that she shared with Jasminia and her being a "lesbian or tomboy," as
respondent Natividad claimed, is of no moment. Whatever transpired between her and
Jasminia is a private matter, which the Court would not even speculate on. As to the gender
identity and sexual preference of petitioner Lolita, that is likewise a private matter.
 Consequently, the DAS executed by Jasminia in favor of petitioner Lolita over the subject
property is valid, the presumption that it has sufficient consideration not having been
 rebutted. The same holds true regarding the Real Estate Mortgage between petitioner Lolita
and petitioners spouses Alexander and Elizabeth Gutierrez.

DISPOSITIVE:
Petition GRANTED.

FIRST SARMIENTO PROPERTY HOLDINGS, INC., Petitioner, v. PHILIPPINE BANK OF

COMMUNICATIONS, Respondent.
G.R. No. 202836, June 19, 2018
J. LEONEN

FACTS:
 In 2002, First Sarmiento obtained a P40,000,000.00 loan from PBCOM which was secured by
a real estate mortgage over 1,076 parcels of land. The loan was further amended twice with
the increase of the loan amount to P100,000,000.00.
 In 2011, PBCOM filed a Petition for Extrajudicial Foreclosure of Real Estate Mortgage. It
claimed in its Petition that it sent First Sarmiento several demand letters, yet First Sarmiento
still failed to pay the principal amount and accrued interest on the loan. This prompted PBCOM
to resort to extrajudicial foreclosure of the mortgaged properties, a recourse granted to it
under the loan agreement.
 First Sarmiento attempted to file a Complaint for annulment of real estate mortgage with the
Regional Trial Court. However, the Clerk of Court refused to accept the Complaint in the
absence of the mortgaged properties' tax declarations, which would be used to assess the
docket fees.
 Judges of RTC Malolos granted First Sarmiento's Urgent Motion to Consider the Value of
Subject Matter of the Complaint as Not Capable of Pecuniary Estimation, and ruled that First
Sarmiento's action for annulment of real estate mortgage was incapable of pecuniary
estimation.
 First Sarmiento filed a Complaint for annulment of real estate mortgage and its amendments,
with prayer for the issuance of temporary restraining order and preliminary injunction from
foreclosure. It paid a filing fee of P5,545.00.
 PBCOM asserted that the RTC failed to acquire jurisdiction over First Sarmiento's Complaint
because the action for annulment of mortgage was a real action; thus, the filing fees filed
should have been based on the fair market value of the mortgaged properties.

ISSUE:
Whether or not an action for annulment of real estate mortgage is an action incapable of pecuniary
estimation? – Yes.

HELD:
 Whatever confusion there might have been regarding the nature of actions for nullity of
contracts or legality of conveyances, which would also involve recovery of sum of money or
real property, was directly addressed by Lu v. Lu Ym. Lu underscored that "where the basic
issue is something other than the right to recover a sum of money, the money claim being
only incidental to or merely a consequence of, the principal relief sought, the action is
incapable of pecuniary estimation.
 This finds support in numerous decisions where this Court proclaimed that the test to
determine whether an action is capable or incapable of pecuniary estimation is to ascertain
the nature of the principal action or relief sought. Thus, if the principal relief sought is the
recovery of a sum of money or real property, then the action is capable of pecuniary
estimation. However, if the principal relief sought is not for the recovery of money or real
property and the money claim is only a consequence of the principal relief, then the action is
incapable of pecuniary estimation.
 In the case at bar, petitioner contends that its complaint prayed for the annulment of the real
estate mortgage it entered into with respondent and not for the recovery or reconveyance of
the mortgaged properties because it was still the registered owner when it filed its complaint.
The evidence on record supports petitioner's claim; hence, there was no reason for the
dismissal of its Complaint for lack of jurisdiction.
  In light of the foregoing, this Court reaffirms that the nature of an action is determined by
the principal relief sought in the complaint, irrespective of the other causes of actions that
may also crop up as a consequence of the principal relief prayed for. The contrary rule
espoused in Home Guaranty v. R-II Builders is thereby set aside.

DISPOSITIVE:
Petition GRANTED.