S

ANBEDAUNI
VERSI
TY
COLLEGEOFLAW
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izedBarOper
ati
ons

COVEREDCASESAND
J.
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BERNABE
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NES

CASEDI
GESTS

Ci
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 EXECUTIVE COMMITTEE
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SUBJECT COMMITTEE
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Atty. ROWELL D. ILAGAN NUEVE-CO
 PREFACE
The COVERED CASES AND J. PERLAS-BERNABE CASE DOCTRINES was
crafted as an apt response for the need to provide a comprehensive compilation of
jurisprudence, promulgated by the Supreme Court, covered for this year’s Bar
Examinations. This complement significantly the other bar review materials in the
repository of the San Beda Centralized Bar Operations.

On this year’s edition, the COVERED CASES is in two forms: a printed copy of
the Covered Cases: Case Doctrines, and a digital copy of the Covered Cases: Case
Digests which include the Supreme Court decisions released from July 1, 2017 to June
30, 2018; while the J. PERLAS-BERNABE CASE DOCTRINES includes the
summary of the rulings pronounced by the 2019 Bar Examination Chairperson, the
Honorable Justice Estela M. Perlas-Bernabe, from September 16, 2011 to December
31, 2018.

In addition to that, the cases herein are categorized and arranged based on the
2019 Supreme Court Bar Exam Syllabus in order to guide its readers in their
appreciation and understanding of the court decisions.

With this material, the San Beda Centralized Bar Operations seeks to uphold
its legacy of service and excellence in helping the examinees achieve their goal of
becoming worthy members of the legal profession.

UT IN OMNIBUS GLORIFICETUR DEUS!

THIS IS THE INTELLECTUAL PROPERTY OF THE

SAN BEDA UNIVERSITY COLLEGE OF LAW
CENTRALIZED BAR OPERATIONS.

THE UNAUTHORIZED COPYING, REPRODUCTION,

MODIFICATION OR DISTRIBUTION
OF ANY OF THE CONTENTS OF THIS BOOK IS
STRICTLY PROHIBITED.
 TABLE OF CONTENTS
CIVIL LAW
Page
Number

Manila Public Schools Teachers’ Association vs. Garcia ……………………………… 1

G.R. No. 192708; October 2, 2017

In Re Yuhares Jan Barcelote Tinitigan ……………………………………………………….. 2

G.R. No. 222095; August 7, 2017
Eric Sibayan Chua vs. Republic of the Philippines ………………………………………… 3
G.R. No. 231998; November 20, 2017
Republic of the Philippines vs. Ludyson Catubag ……………………………………….. 4
G.R. No. 210580; April 18, 2018
Estrellita Tadeo-Matias vs. Republic of the Philippines,………………………………… 5
G.R. No. 230751, April 25, 2018

Rosilanda Keuppers vs. Judge Virgilio Murcia …………………………………………… 6

A.M. No. MTJ-15-1860, April 3, 2018
Republic of the Philippines vs. Florie Grace Cote………………………………………… 7
G.R. No. 212860, March 14, 2018
Republic of the Philippines vs. Marelyn Tanedo Manalo ………………………………….. 8
G.R. No. 221029, April 24, 2018
Rhodora Racho vs. Seiichi Tanaka………………………………………………………….. 9
G.R. No. 199515, June 25, 2018
Jerrysus l. Tilar vs. Elizabeth A. Tilar and the Republic of the Philippines…………. 10
G.R. No. 214529; July 12, 2017
Maria Concepcion N. Singson vs. Benjamin L. Singson….……………………………….. 11
G.R. No. 210766; January 8, 2018
Yolanda E. Garlet vs. Vencidor T. Garlet…………………………………………………… 12
G.R. No. 193544; August 2, 2017
Manuel R. Bakunawa III vs. Nora Reyes Bakunawa……………………………………… 13
G.R. No. 217993. August 9, 2017
Maria Victoria Socorro Lontoc-Cruz vs. Nilo Santos Cruz……………………………….. 14
G.R. No. 201988; October 11, 2017
Republic of the Philippines vs. Katrina S. Tobora-Tionglico………………………………. 15
G.R. No. 218630; January 11, 2018
Abigael An Espiña-Dan vs. Marco Dan……………………………………………………… 16
G.R. No. 209031; April 16, 2018
Republic of the Philippines vs. Martin Nikolai Z. Javier…………………………………. 17
and Michelle K. Mercado- Javier
G.R. No 210518; April 18, 2018
Heirs of Gilberto Roldan vs. Heirs of Silvela Roldan and………………………….……… 18
Heirs of Leopoldo Magtulis
G.R. No. 202578; September 27, 2017

Richelle P. Abella vs. Policarpio Cabañero ……………………………………………….. 19

G.R. No. 206647; August 9, 2017

Esmeraldo Gatchalian vs. Cesar Flores, Jose Luis Araneta, Corazon Quing,………. 20
and Cynthia Flores
G.R. No. 225176; January 19, 2018

Joseph Regalado vs. Emma De la Rama vda. De La Peña,……………………………… 21

Jesusa De La Peña, et.al
G.R. No. 2012448; December 13, 2017
Norma Baleares, Desiderio Baleares, et.al. vs. Felipe Espanto………………………… 22
G.R. No. 229645; June 6, 2018
Spouses Ewrin and Marinela Santiago, et. al. vs. Northbay Knitting Inc. (NKI)…….. 23
G.R. No. 217296; October 11, 2017
Florencia Arjonillo vs. Demetria Pagulayan, as substituted by her heirs namely:… 24
Hermana Vda. De Cambri, Porfirio T. Pagulayan, et.al.
G.R. No. 196074; October 4, 2017
Spouses Maximo Espinoza and Winifreda de Vera vs…………………………………… 25
Spouses Antonio Mayandoc and Erlinda Cayabyab Mayandoc
G.R. No. 211170; July 3, 2017
Leviste Management System, Inc., vs. Legaspi Towers 200, Inc………………………. 26
G.R. No. 199353; April 4, 2018
Heirs of Cayetano Cascayan vs. Spouses Oliver and Evelyn Gumallaoi and the……. 27
Municipal Engineer of Bangui, Ilocos Norte
G.R. No. 211947; July 3, 2017
Josephine Delos Reyes and Julius Peralta vs. Municipality of Kalibo, Aklan,…………. 28
its Sangguniang Bayan and Mayor Raymar Rebaldo
G.R. No. 214587; February 26, 2018
Spouses Jaime and Catherine Basa, et.al. vs...…………………………………………… 29
Angeling Loy vda. De Senly Loy et.al
G.R. No. 204131; June 4, 2018
Jose S. Ocampo vs. Ricardo S. Ocampo, Sr……………………………………………….. 30
G.R. No. 227894; July 5, 2017

Spouses Julieta and Fernando Carlos vs. Juan Cruz Tolentino……………………….. 31

G.R. No. 234533; June 27, 2018

Spouses Janet Uri Fahrenbach and Dirk Fahrenbach vs. Josefina Pangilinan……… 32
G.R. No. 224549; August 8, 2017
Municipal Rural Bank of Libmanan, Camarines Sur vs. Virginia Ordoñez…………… 33
G.R. No. 204663; September 27, 2017
Pen Development Corporation and Las Brisas Resort Corporation vs………………. 34
Martinez Leyba Inc.
G.R. No. 211845, August 9, 2017
Department of Education vs. Heirs of Regino Banguila…………………………………. 35
G.R. No. 230399; June 20, 2018
AMA Land Inc. vs. Wack Wack Residents’ Association Inc………………………………. 36
G.R. No. 202342; July 19, 2017

Jose Gambito vs. Adrian Oscar Bacena……………………………………………………… 37

G.R. No. 225929; January 24, 2018
Heirs of Jose Mariano and Helen S. Mariano and…………………………………………… 38
Heirs of Erlinda Mariano-Villanueva vs. City of Naga
G.R. No. 197743; March 12, 2018
Spouses Yu Hwa Ping and Mary Gaw vs. Ayala Land, Inc………………………………. 39
G.R. No. 173120; July 26, 2017
Jose S. Ramsical Jr. vs. Commission on Audit (COA)…………………………………… 40
G.R. No. 213716; October 10, 2017

Conchita Gloria and Maria Lourdes Gloria-Payduan vs. ………………………………… 41

Builders Savings and Loan Association, Inc.
G.R. No. 202324; June 4, 2018

Margie Santos Mitra vs. Perpetua L. Sablan-Guevarra…………………………………… 42

G.R. No. 213994; April 18, 2018

Astrid A. Van de Brug vs. Philippine National Bank………………………………………. 43

G.R. No. 207004; June 6, 2018
Ramon E. Reyes and Clara R. Pastor vs. BANCOM Development Corp……………… 44
G.R. No. 190286; January 11, 2018
Specified Contractors and Development Inc. and Spouses Olonan vs. Pobocan….. 45
G.R. No. 212472; January 11, 2018
Orient Freight International, Inc. vs. Keihin-Everett Forwarding Co., Inc. …………… 46
G.R. No. 191937; August 9, 2017
Federal Express Corp. vs. Luwalhati R. Antonino and…………………………………… 47
Eliza Bettina Ricasa Antonino
G.R. No. 199455; June 27, 2018
Chinatrust (Phils.) Commercial Bank vs. Philip Turner………………………………….. 48
G.R. No. 191458; July 3, 2017
Encarnacion Construction vs. Phoenix Ready Mix Concrete Development ………… 49
and Construction
G.R. No. 225402; September 4, 2017
Benjamin Evangelista vs. Screenex, Inc., Represented by Alexander Yu……………. 50
G.R. No. 211564; November 20, 2017
H. Villarica Pawnshop v. Social Security Commission……………………………………... 51
G.R. No. 228087; January 24, 2018

Asian Terminals, Inc. v. Padoson Stainless Steel Corporation…………………………. 52

G.R. No. 211876; June 25, 2018
Norma Diampoc vs. Jessie Buenaventura and……………………………………………. 53
The Registry of Deeds for the City of Taguig
G.R. No. 200383; March 19, 2018
Rafael Almeda, Emerlina Almeda-Lirio, et.al. vs. Heirs of Ponciano Almeda………… 54
G.R. No. 194189; September 14, 2017
Spouses Francisco and Betty Ong and Spouses Joseph……………………………….. 55
and Esperanza Ong Chuan vs. BPI Family
G.R. No. 208638; January 24, 2018
Lolita Espiritu Santo Mendoza and Sps. Alexander and………………………………… 56
Elizabeth Gutierrez vs. Sps. Ramon, Sr. and Natividad Palugod
G.R. No. 220517; June 20, 2018
Northern Mindanao Industrial Port and Services Corporation vs. …………………….. 57
Iligan Cement Corporation
G.R. No. 215387; April 23, 2018
Team Image Entertainment, Inc., and Felix Co vs. Solar Team Entertainment,………. 58
G.R. No. 191658; September 13, 2017
Makati Tuscany Condominium Corp. vs. Multi-Realty Development Corp…………… 59
G.R. No. 185530; April 18, 2018
G Holdings vs. Cagayan Electric Power and Light Company Co. (CEPALCO)……… 60
and Ferochrome Phils. Inc.
G.R. No. 226213; September 27, 2017

Sps. Felix and Carmen Chua et.al. vs. United Coconut Planters Bank, ……………… 61
Asset Pool A (SPV-AMC), Revere Realty and Development Corp, Jose Go and
Registrar of Deeds of Lucena
G.R. No. 215999; August 16, 2017

Rogelia R. Gatan and Heirs of Bernardino Gatan vs. Jesusa Vinarao and…………… 62
Sps. Mildred and Nomar Cabauatan
G.R. No. 205912; October 18, 2017
Hi-Lon Manufacturing, Inc. vs. Commission on Audit……………………………………. 63
G.R. No. 210669; August 01, 2017
Desiderio Dalisay Investments, Inc. vs. Social Security System……………………….. 64
G.R. No. 208185; September 06, 2017
Spouses Cipriano Pamplona and Bibiana Intac vs. Spouses Lilia……………………. 65
and Vedasto Cueto
G.R. No. 204735; February 19, 2018
Lily S. Villamil substituted by her heirs Rudy VIllamil et.al. vs. ……………………….. 66
Sps. Juanito and Mila Erguiza
G.R. No. 195999; June 20, 2018

Christopher R. Santos vs. Atty. Joseph A. Arrojado……………………………………….. 67

A.C. No. 8502; June 27, 2018

Marianito Padilla and Alfredo Javaluyas vs. Universal Robina Corporation………….. 68

G.R. No. 214805; December 14, 2017

Pilipinas Makro, Inc. vs. Coco Charcoal Philippines, Inc. ……………………………….. 69

G.R. No. 196419; October 04, 2017
Joseph Harry Walter Poole-Blunden vs. Union Bank of the Philippines………………. 70
G.R. No. 205838; November 29, 2017
Philippine National Bank vs. Antonio Bacani, Rodolfo Bacani et.al. ………………….. 71
G.R. No. 194983; June 20, 2018
Priscilla Zafra Orbe vs. Filinvest Land, Inc. ……………………………………………….. 72
G.R. No. 208185; September 06, 2017

Hilltop Market Fish Vendors' Association, Inc. vs. ……………………………………… 73

Hon. Braulio Yaranon, City Mayor, Baguio City et.al.
G.R. No. 188057; December 7, 2017
D.M. Ragasa Enterprises, Inc., vs. Banco De Oro, Inc. ………………………………….. 74
(formerly Equitable PCI Bank, Inc.)
G.R. No. 190512; June 20, 2018

Victoria N. Racelis, in her capacity as administrator vs. Spouses Germil…………… 75

and Rebecca Javier
G.R. No. 189609; January 29, 2018

Citystate Savings Bank vs. Teresita Tobias and Shellidie Valdez…………………….. 76

G.R. No. 227990; March 7, 2018
Calubad vs. Ricarcen Development Corporation………………………………………….. 77
G.R. No. 202364; August 30, 2017

Arch. Eusebio Bernal, Doing Business Under the Name and………………………….. 78

Style Contemporary Builders, vs. Castor A. Dr. Vivencio Villaflor
and Dra. Gregoria Villaflor
G.R. No. 213617; April 18, 2018

FGU Insurance Corporation vs. Spouses Floro Roxas and Eufemia Roxas………… 79
G.R. No. 189526 & 189656; August 09, 2017
Erma Industries, Inc., Ernesto Marcelo and Flerida Marcelo vs. Security Bank…….. 80
Corporation and Sergio Ortiz-Luiz
G.R. No. 191274; December 06, 2017

United Coconut Planters Bank vs. Spouses Walter Uy and Lily Uy…………………… 81
G.R. No. 204039; January 10, 2018

Vicente Luntao and Nanette Luntao, vs. BAP Credit Guaranty Corporation…………… 82
and Efren Pineda
G.R. No. 204412; September 20, 2017
Spouses Ellis Miles and Caroline Ronquillo-Miles, vs. Bonnie Bautista Laob……… 83
G.R. No. 209544; November 22, 2017
Security Bank Corporation, vs. Spouses Rodrigo and Erlinda Mercadob…………… 84
G.R. No. 192934 & 197010; June 27, 2018
Gotesco Properties, Inc. vs. Solidbank Corp. 85
G.R. No. 209452; July 26, 2017
Boston Equity Resources, Inc. and William Hernandez vs. Edgardo Del Rosario….. 86
G.R. No. 193228; November 27, 2017
Coca-Cola Bottlers Phils., Inc, vs. Spouses Efren and Lolita Soriano……………….. 87
G.R. No. 211232; April 11, 2018
Norma Baring vs. Elena Loan and Credit Company, Inc. ………………………………….. 88
G.R. No. 224225; August 14, 2017
Spouses Godfrey and Ma. Teresa Teves vs. Intergrated Credit &……………………… 89
Corporate Services Co. (now Carol Aqui)
G.R. No. 216714; April 4, 2018

Heirs of Spouses Corazon P. De Guzman and Fortunato De Guzman vs. …………… 90

Heirs of Marceliano Bandong
G.R. No. 215454; August 9, 2017
Jerome Solco vs. Megaworld Corporation…………………………………………………. 91
G.R. No. 213669. March 5, 2018
Alicia Galindez v. Salvacion Firmalan………………………………………………………. 92
G.R. 187186; June 6, 2018
Heirs of Paz Macalalad vs. Rural Bank of Pola, Inc………………………………………. 93
G.R. 200899; June 20, 2018
Republic of the Philippines vs. Lakambini C. Jabson, et al. …………………………….. 94
G.R. No. 200223; June 6, 2018
Republic of the Philippines vs. Heirs of Cabrera…………………………………………. 95
G.R. No. 218418, November 08, 2017
Republic of the Philippines vs. Filemon Saromo…………………………………………. 96
G.R. No. 189803; March 14, 2018
Heirs of Victor Amistoso vs. Elmer T. Vallecer……………………………………………. 97
G.R. No. 227124; December 06, 2017

Trinidad Diaz-Enriquez vs. Director of Lands, Court of Appeals, ……………………… 98

Geronimo Saclolo et.al.
G.R. Nos. 168065 & 168070; September 6, 2017
Tomas R. Leonidas v. Tancredo Vargas and Republic of the Philippines……………. 99
G.R. No. 201031; December 14, 2017
Republic of the Philippines vs. Laureana Malijan-Javier and Iden Malijan-Javier….. 100
G.R. No. 214367; April 4, 2018
Republic of the Philippines vs. Margarita C. Mendiola, Lualhati T. Talavera et.al. … 101
G.R. No. 211144; December 13, 2017
Republic of the Philippines vs. Rovency Realty and Development Corporation……. 102
G.R. No. 190817; January 10, 2018
Republic of the Philippines vs. Spouses Danilo Go and Amorlina Go……………….. 103
G.R. No. 197297; August 2, 2017
Republic of the Philippines vs. Northern Cement Corporation………………………… 104
G.R. No. 200256; April 11, 2018
Remedios V. Geñorga vs. Heirs of Julian Meliton………………………………………… 105
G.R. No. 224515; July 3, 2017
Republic of the Philippines vs. Spouses Joel and Andrea Noval, ……………………. 106
Ellen Delos Reyes, et.al.
G.R. No. 170316; September 18, 2017
Republic of the Philippines vs. Rosario L. Nicolas………………………………………. 107
G.R. No. 181435. October 2, 2017
Republic of the Philippines v. Metro Cebu Pacific Savings Bank and Cordova……. 108
Trading Post, Inc.
G.R. No. 205665; October 4, 2017
Spouses Juan and Antonino Cano, et.al. v. Spouses Arturo and ……………………. 109
Emerenciana Cano
G.R. No. 188666 and 190750; December 14, 2017
Emilio Calma vs. Atty Jose M. Lachica Jr…………………………………………………. 110
G.R.No.222031; November 22, 2017
Republic of the Philippines vs. Claro Yap…………………………………………………. 111
G.R. No. 231116; February 7, 2018

National Housing Authority vs. Dominador Laurito, ……………………………………. 112

Hermina Laurito, Necitas Laurito, et.al.
G.R. No. 191657; July 31, 2017
Araceli Mayuga vs. Antonio Atienza, Benjamin Atienza………………………………… 113
G.R. No. 208197; January 10, 2018
Marcelino Dela Paz vs. Republic of the Philippines……………………………………... 114
G.R. No. 195726, November 20, 2017
Mamerto Dy v. Maria Lourdes Rosell Aldea……………………………………………….. 115
G.R. No. 219500; August 9, 2017
SN Aboitiz Power-Magat, Inc. vs. The Municipality of Alfonso Lista, Ifugao………….. 116
G.R. No. 198647; November 20,2 017
Aurelia Narcise, et. al. v. Valbuelco Inc. …………………………………………………… 117
G.R. No. 196888; July 19, 2017

Lourdes Valderama vs. Sonia Arguelles and Lorna Arguelles………………………… 118

G.R. No. 223660; April 2, 2018

Spouses Ed Dante Latonio and Mary Ann Latonio vs. …………………………………. 119
McGeorge Food Industries, et al.
G.R. No. 206184; December 6, 2017

St. Martin Polyclinic, Inc. v. LWV Construction Corporation…………………………... 120

G.R. No. 217426; December 04, 2017
Linda Cacho et.al. vs. Gerardo Manahan, Dagupan Bus Co., Inc. et.al. ……………. 121
G.R. No. 203081; January 17, 2018
S/Sgt. Cornelio Paman vs. People of the Philippines…………………………………….. 122
G.R. No. 210129; July 05, 2017
Manila Electric Co. et.al. vs. Nordec Philippines and/or Marvex Industrial Corp. …. 123
G.R. No. 196020; April 18, 2018
F.F. Cruz & Co., Inc. vs. Philippine Iron Construction and Marine Works, Inc. ……. 124
G.R. Nos. 188144 & 188301; August 30, 2017
Al Dela Cruz vs. Captain Renato Octaviano……………………………………………….. 125
G.R. No. 219649; July 26, 2017
Teresa Gutierrez Yamauchi vs. Romeo F. Suñiga……………………………………….. 126
G.R. No. 199513; April 18, 2018
Ka Kuen Chua vs. Colorite Marketing Corp. ………………………………………………. 127
G.R. Nos. 193969-70 & 194027-28; July 5, 2017
Jose T. Ong Bun vs. Bank of the Philippine Islands ……………………………………… 128
G.R. No. 212362; March 14, 2018
Coca-Cola Bottlers Phils., Inc. vs. Meñez …………………………………………………. 129
G.R. No. 209906; November 22, 2017
Spouses Estrada vs. Philippine Rabbit Bus Lines, Inc. ………………………………… 130
G.R. No. 203902; July 19, 2017
Judith and Joyce Darines vs. Eduardo Quinones and Rolando Quitan………………. 131
G.R. No. 206468; August 02, 2017
Vivian B. Torreon and Felomina F. Abellana v. Generoso Aparra, Jr, et al. ………… 132
G.R. No. 188493; December 13, 2017

Francisco Taar, et.al. vs. Claudio Lawan, Marcelino Galo, et.al. ……………………….. 133
G.R. No.190922; October 11, 2017

Regino Dela Cruz vs. Ireneo Domingo, Maro, Quezon, Nueva Ecija………………….. 134
and Register of Deeds North, Talavera, Nueva Ecija
G.R. No. 210592; November 22, 2017

Corazon Liwat-Moya vs. Executive Secretary Eduardo Ermita and…………………… 135

Rapid City Realty & Development Corporation
G.R. No. 191249; March 14, 2018
Asiga Mining Corporation vs. Manila Mining Corporation and Basiana Mining……. 136
Exploration Corporation
G.R. No. 199081; January 24, 2018

Victoria P. Cabral v. Heirs of Florencio Adolfo and Heirs of Elias Policarpio………. 137
G.R. No. 191615; August 2, 2017
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ADMINISTRATIVE RULES AND REGULATIONS MUST ALSO BE PUBLISHED IF THEIR

PURPOSE IS TO ENFORCE OR IMPLEMENT EXISTING LAW PURSUANT ALSO TO A
VALID DELEGATION

Manila Public Schools Teachers’ Association vs. Garcia

G.R. No. 192708; October 2, 2017
Sereno, C.J.

FACTS:
This is a Petition for Review on Certiorari of the CA Decision which ordered the Department
of Education (DepEd) to procure the appropriation in the national budget of the amounts needed
to keep current its employer premium share contributions, and to remit all payment deficiencies to
the GSIS.

Under R.A. No.8291 or the “The GSIS Act of 1997," the employee-member and the
employer-agency are required by law to pay monthly contributions to the system. One of the
changes made in R.A. 8291 was the increase in the employer's contribution from 9.5% to 12%.
However, there was no concomitant increase in the budget appropriation. As a result, DepEd was
unable to pay GSIS the equivalent of the 2.5% increase in the employer's share. DepEd incurred
premium deficiencies totaling. The DepEd personnel also incurred premium deficiencies pertaining
to the employee’s salary.

Neither DepEd nor GSIS denies that there is a problem with the reconciliation of their
records. The GSIS, instead of denying that its nonposting may result in the nonpayment of benefits,
merely offered an excuse by issuing Resolution No. 179 which states that GSIS then increased
the unpaid premium of DepEd. These Resolutions were not published in a newspaper of general
circulation and were enforced before they were even filed with the Office of the National
Administrative Register. Petitioners seek to nullify the resolutions for being "intrinsically
unconstitutional, illegal, unjust, oppressive, arbitrary, immoral, ultra vires, and unconscionable.”

ISSUE:
Should Administrative rules and regulations be published if their purpose is to enforce or
implement existing law pursuant also to a valid delegation?

RULING:
Yes. Administrative rules and regulations be published if their purpose is to enforce or
implement existing law pursuant also to a valid delegation.

The Court in Tañada v. Tuvera laid down a definitive interpretation of Article 2 of the Civil
Code: All statutes, including those of local application and private laws, shall be published as a
condition for their effectivity, which shall begin fifteen days after publication unless a different
effectivity date is fixed by the legislature. Administrative rules and regulations must be published if
their purpose is to enforce or implement existing law pursuant also to a valid delegation. When an
administrative rule goes beyond merely providing for the means that can facilitate or render least
cumbersome the implementation of the law but substantially adds to or increases the burden of
those governed, it behooves the agency to accord at least to those directly affected a chance to
be duly informed, before that new issuance is given the force and effect of law.

In this case, while GSIS filed copies of the subject resolutions with the Office of the National
Administrative Register (ONAR), the resolutions were not published in either the Official Gazette
or a newspaper of general circulation in the country. Resolution 179 is declared invalid and of no
force and effect.

Hence, the CA erred in ordering DepEd to remit all payment deficiencies to the GSIS.

1
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

USE OF THE MOTHER’S SURNAME AND SIGNATURE IS REQUIRED FOR HER

ILLEGITIMATE CHILDREN’S BIRTH CERTIFICATES

In re Yuhares Jan Barcelote Tinitigan

G.R. No. 222095; August 7, 2017
Carpio, J.

FACTS:
This petition for review assails Decision of the CA that reversed the Decision of the RTC
which ordered the cancellation of the subject birth certificates.

In June 2008, petitioner Jonna Karla Baguio Barcelote (Barcelote) bore a child out of
wedlock with a married man named Ricky O. Tinitigan (Tinitigan). She named her child Yohan
Grace Barcelote. However, she was not able to register the latter’s birth. In August 2011, she bore
another child with Tinitigan, whom she named as Joshua Miguel Barcelote. Again, she did not
register his birth to avoid humiliation. Thereafter, she lost contact with Tinitigan. When her first
child needed a certificate of live birth for school admission, Barcelote finally decided to register the
births of both children. The Local Civil Registrar approved the late registration of the births of Yohan
Grace Barcelote and Joshua Miguel Barcelote. However, upon submission of the copies of the late
registration of the births to the NSO, Barcelote was informed that there were two certificates of live
birth with the same name of the mother and the years of birth of the children in their office. The
subject birth certificates registered by the Local Civil Registrar stated that her children were
registered as Avee Kynna Noelle Barcelote Tinitigan and Yuhares Jan Barcelote Tinitigan by their
father.

Barcelote filed for cancellation of the subject birth certificates with the RTC, which ruled in
favor of Barcelote and ordered the such cancellation. The CA reversed and set aside the decision
of the RTC. The CA ruled that the registrations of the children's births, caused by Tinitigan were
valid under Act No. 3753, and such registrations did not require the consent of Barcelote.

ISSUE:
Is the signature of the mother required in the birth certificates of her children?

RULING:
Yes. The signature of the mother is required in the birth certificates of her children.

R.A. 9255 states that illegitimate children shall use the surname and shall be under the
parental authority of their mother. The use of the word shall underscore its mandatory character.
The discretion on the part of the illegitimate child to use the surname of the father is conditional
upon proof of compliance with R.A. 9255 and its IRR.

The children shall use the surname of their mother, Barcelote. The entry in the subject birth
certificates as to the surname of the children is therefore incorrect; their surname should have
been "Barcelote" and not "Tinitigan." It is mandatory that the mother of an illegitimate child signs
the birth certificate of her child in all cases, irrespective of whether the father recognizes the child
as his or not. The only legally known parent of an illegitimate child, by the fact of illegitimacy, is the
mother of the child who conclusively carries the blood of the mother. Clearly, the subject birth
certificates were not executed consistent with the provisions of the law respecting the registration
of birth of illegitimate children. Aside from the fact that the entry in the subject birth certificates as
to the surname of the children is incorrect since it should have been that of the mother, the subject
birth certificates are also incomplete as they lacked the signature of the mother. The signature of
the mother is required in the birth certificate of her children.

Thus, the RTC correctly cancelled the birth certificates.

2
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

AVOIDANCE OF CONFUSION IS A COMPELLING GROUND TO CHANGE ONE’S NAME

Eric Sibayan Chua vs. Republic of the Philippines

G.R. No. 231998; November 20, 2017
Velasco, Jr., J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision and Resolution of CA. The assailed rulings disallowed petitioner from changing the name
registered in his birth certificate from "Eric Sibayan Kiat" (Eric) to "Eric Sibayan Chua."

Eric filed a petition for change of surname from "Kiat" to "Chua." In his petition, Eric alleged
that he was born to a Chinese father named "Cheong Kiat" (Cheong) and a Filipino mother named
"Melania Sibayan" (Melania). However, after his birth, his father Cheong allegedly secured a
favorable judgment allowing him (Cheong) to change his surname from "Kiat" to "Chua." Thus, Eric
adopted the new surname of his father, "Chua," and had been using the name "Eric Sibayan Chua"
in all his credentials. Eric likewise averred in his petition that he is known in their community as
"Eric Chua" instead of "Eric Kiat" and that his Certificate of Live Birth is the only document where
his surname appears as "Kiat."

Finding the change of name as nothing more than a straightening of the records, the RTC
granted the petition. The CA reversed the decision of the RTC and reasoned Eric failed to establish
a compelling ground for changing his name and that no proof was offered to show that Eric will be
prejudiced by his use of his registered name.

ISSUE:
Was the ground based on avoidance of confusion a compelling reason for changing one’s
name?

RULING:
Yes. Avoidance of confusion is a compelling ground for changing one’s name.

In Republic v. Coseteng-Magpayo, the Court enumerated several recognized grounds that

can be invoked by a person desirous of changing his name, viz. xxx (c) when the change will avoid
confusion xxx; Avoidance of confusion was invoked in Alfon v. Republic, wherein the Court granted
the petition for change of name: “There is therefore ample justification to grant fully her petition
which is not whimsical but on the contrary is based on a solid and reasonable ground, i.e. to avoid
confusion.

As Eric has established, he is known in his community as "Eric Chua," rather than "Eric
Kiat." Moreover, all his credentials exhibited before the Court, other than his Certificate of Live
Birth, bear the name "Eric Chua." Guilty of reiteration, Eric's Certificate of Baptism, Voter
Certification, Police Clearance, National Bureau of Investigation Clearance, Passport, and High
School Diploma all reflect his surname to be "Chua." Thus, to compel him to use the name "Eric
Kiat" at this point would inevitably lead to confusion. It would result in an alteration of all his official
documents, save for his Certificate of Live Birth. His children, too, will correspondingly be
compelled to have their records changed. For even their own Certificates of Live Birth state that
their father's surname is "Chua." To deny this petition would then have ramifications not only to
Eric's identity in his community, but also to that of his children.

The imperatives of avoiding confusion dictate that the instant petition be granted.
Additionally, public respondent failed to demonstrate that allowing petitioner to change his surname
will prejudice the State, strengthening the resolve to grant the sought-after relief.

3
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CLAIMS BASED ON BARE ASSERTIONS UNCORROBORATED BY ANY KIND OF

EVIDENCE FALLS SHORT OF THE DILIGENCE REQUIRED TO ENGENDER A WELL-
FOUNDED BELIEF THAT THE ABSENTEE SPOUSE IS DEAD

Republic of the Philippines vs. Ludyson Catubag

G.R. No. 210580; April 18, 2018
Reyes, Jr. J.

FACTS:
Petitioner Republic of the Philippines filed a Petition for Review on Certiorari under Rule
45 of the Rules of Court the Resolution of the Court of Appeals and likewise challenging the
Decision of the RTC declaring Ludyson C. Catubag's (private respondent) spouse, Shanaviv G.
Alvarez-Catubag (Shanaviv), as presumptively dead.

In July 2006, Private respondent Ludyson Catubag, while working abroad, was informed
by his relatives that his wife Shanaviv Alvarez Catubag left their house and never returned. He
returned and looked for his wife. He inquired from his close friends and relatives; went to Bicol,
where her wife was born and raised; and sought the help of radio networks in the Philippines.
Moreover, private respondent searched various hospitals and funeral parlors in Tuguegarao and
in Bicol, to no avail. In 2002, after almost seven (7) years of waiting, private respondent filed a
petition to declare his wife presumptively dead. RTC granted the petition.

The petitioner opposed and contended that private respondent failed to establish a "well-
founded belief" that his missing wife was already dead.

ISSUE:
Did the private respondent establish a well-founded belief that his missing wife is dead
based on bare assertions uncorroborated by any kind of evidence?

RULING:
No. The private respondent did not establish a well-founded belief that his missing wife is
dead based on bare assertions uncorroborated by any kind of evidence

Although there is no exact definition of the term “well-founded belief,” it was held in the
case of Republic vs. Orcelino-Villanueva that such belief must result from diligent efforts to locate
the absent spouse. Such diligence entails an active effort on the part of the present spouse to
locate the missing one. The mere absence of a spouse, devoid of any attempt by the present
spouse to locate the former, will not suffice.

In this case, the private respondent’s efforts fall short of the degree of diligence required
by jurisprudence for the following reasons: First, private respondent claims to have inquired about
his missing wife's whereabouts from both friends and relatives. Further, he claims to have carried
out such inquiries in the place where they lived and, in the place, where his wife was born and
raised. However, private respondent failed to present any of these alleged friends or relatives to
corroborate these "inquiries." Second, private respondent did not seek the help of other concerned
government agencies, namely, the local police authorities and the National Bureau of Investigation
(NBI). Absent such efforts to employ the help of local authorities, the present spouse cannot be
said to have actively and diligently searched for the absentee spouse. Finally, aside from the
certification of Bombo Radyo's manager, private respondent bases his "well-founded belief" on
bare assertions that he exercised earnest efforts in looking for his wife.

Again, the present spouse's bare assertions, uncorroborated by any kind of evidence, falls
short of the diligence required to engender a well-founded belief that the absentee spouse is dead.

4
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ARTICLE 41 OF THE FAMILY CODE ONLY APPLIES WHEN THE PETITIONER SEEKS TO
REMARRY

Estrellita Tadeo-Matias vs. Republic of the Philippines

G.R. No. 230751; April 25, 2018
Velasco, Jr. J.

FACTS:
Petitioner Estrellita Tadeo Matias (Estrellita) filed an appeal assailing the Decision and
Resolution of the Court of Appeals, which set aside the decision of the RTC granting the petition
in accordance with Article 41 of the Family Code (FC). CA held that Article 41 does not apply when
the petitioner does not seek to remarry.

Petitioner’s husband, Wilfredo Matias, was a member of the Philippine constabulary. In

1979, he left for his tour duty but he never came back. Since then, he never communicated with
the petitioner nor his relatives. He was declared missing by the National Police Commission. In
2012, petitioner filed a petition for the declaration of presumptive death of her husband. Petitioner
alleged that she constantly pestered the Philippine Constabulary for any news regarding her
husband but there was no answer to his whereabouts.

Republic argued that Article 41 of the FC does not apply to the instant petition as it was
clear that petitioner does not seek to remarry. If anything, the petition was invoking the presumption
of death established under Articles 390 and 391 of the Civil Code, and not that provided for under
Article 41 of the FC.

ISSUE:
Was the petition for the declaration of presumptive death under Article 41 by a spouse not
seeking to remarry proper?

RULING:
No. The petition for the declaration of presumptive death filed by petitioner is not an action
that would have warranted the application of Article 41 of the FC. Article 41 provides that “xxx For
the purpose of contracting the subsequent marriage under the preceding paragraph the spouse
present must institute a summary proceeding as provided in this Code for the declaration of
presumptive death of the absentee, without prejudice to the effect of reappearance of the absent
spouse.”

The considerations why a petition for declaration of presumptive death based on the Civil
Code was disallowed, viz: (1) Articles 390 and 391 of the Civil Code merely express rules of
evidence that only allow a court or a tribunal to presume that a person is dead upon the
establishment of certain facts; (2) Since Articles 390 and 391 of the Civil Code merely express
rules of evidence, an action brought exclusively to declare a person presumptively dead under
either of the said articles actually presents no actual controversy that a court could decide. In such
action, there would be no actual rights to be enforces, no wrong to be remedied nor any status to
be established; (3) A judicial pronouncement declaring a person presumptively dead under Article
390 or Article 391 of the Civil Code, in an action exclusively based thereon, would never really
become "final" as the same only confirms the existence of a prima facie or disputable presumption.
The function of a court to render decisions that is supposed to be final and binding between litigants
is thereby compromised; (4) Moreover, a court action to declare a person presumptively dead
under Articles 390 and 391 of the Civil Code would be unnecessary. The presumption in the said
articles is already established by law.

Here, petitioner was forthright that she was not seeking the declaration of the presumptive
death Wilfredo as a prerequisite for remarriage. In her petition for the declaration of presumptive
death, petitioner categorically stated that the same was filed "not for any other purpose but solely
to claim for the benefit under P.D. No. 1638 as amended.

Hence, petition for declaration of presumptive death by Estrellita is not proper.

5
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ARTICLE 8 OF THE FAMILY CODE REQUIRES THAT MARRIAGE BY A JUDGE SHOULD

ONLY BE IN HIS OFFICE OR COURTROOM

Rosilanda Keuppers vs. Judge Virgilio Murcia

A.M. No. MTJ-15-1860; April 3, 2018
Bersamin, J.

FACTS:
Petitioner Rosilanda Keuppers filed an administrative complaint against respondent Judge
Virgilio Murcia. She charged the respondent judge with estafa; violation of R.A. No. 6713; and
grave misconduct and conduct prejudicial to the best interest of the service.

She alleged that she and her husband were married in the premises of the DLS Travel and
Tours in Davao City, but the marriage certificate as well as the application for marriage license
state that their marriage was solemnized in the Office of MTCC Judge, Island Garden City of
Samal; that the statement in the application for marriage license states that she and her husband
had applied for the marriage license in Sta. Cruz, Davao City on May 8, 2008 although they had
accomplished their application on May 12, 2008 in the office of the DLS Travel and Tours; and that
the statement in their application for marriage license that they appeared before Mario Tizon, the
Civil Registrar of Sta. Cruz, Davao del Sur, which was untrue.

In the course of investigation, the respondent judge admitted that the claims of the
petitioner are true but alleged that he did it out of pity.

ISSUE:
Is the office of DLS Travel and Tours a valid place of solemnization of marriage under the
Family Code?

RULING:
No. The office of DLS Travel and Tours is not a valid place of solemnization of marriage
under the Family Code

Article 8 of the Family Code disallows solemnizing the marriage in a venue other than the
judge's courtroom or chambers. The same provision contains the limiting phrase and not
elsewhere, which emphasizes that the place of the solemnization of the marriage by a judge like
him should only be in his office or courtroom. Indeed, the limiting phrase highlighted the nature
and status of the marriage of the complainant and her husband as "a special contract of permanent
union between a man and a woman," and as "the foundation of the family and an inviolable social
institution whose nature, consequences, and incidents are governed by law and not subject to
stipulation." The only exceptions to the limitation are when the marriage was to be contracted on
the point of death of one or both of the complainant and her husband, or in a remote place in
accordance with Article 29 of the Family Code, or where both of the complainant and her husband
had requested him as the solemnizing officer in writing to solemnize the marriage at a house or
place designated by them in their sworn statement to that effect.

By agreeing to solemnize the marriage outside of his territorial jurisdiction and at a place
that had nothing to do with the performance of his duties as a Municipal Trial Judge, he demeaned
and cheapened the inviolable social institution of marriage.

Thus, being the office of DLS Travel and Tours not a valid place for marriage, respondent
Judge was guilty of grave, not simple, misconduct because he had at the very least the willful intent
to violate the Family Code on the venue of a marriage solemnized by a judge, and to flagrantly
disregard the relevant rules for such solemnization set forth in the law.

6
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

AM NO. 02-11-10-SC ON THE RULE ON DECLARATION OF ABSOLUTE NULLITY OF

MARRIAGE AND ANNULMENT OF VOID MARRIAGES DOES NOT APPLY IN A CASE
INVOLVING RECOGNITION OF A FOREIGN DECREE OF DIVORCE

Republic of the Philippines vs. Florie Grace Cote

G.R. No. 212860; March 14, 2018
Reyes, Jr. J.

FACTS:
Petitioner Republic of the Philippines filed a Petition for Review under Rule 45 of the Rules
of Court which seeks to reverse and set aside the decision of the Court of Appeals which held that
the RTC did not commit a grave abuse of discretion in ruling that the petition of the respondent is
covered by AM No. 02-11-10-SC or the Rule on Declaration of Absolute Nullity of Void Marriages
on the ground that Respondent’s husband, Rhomel Gagarin Cote (Rhomel) was already an
American Citizen when he obtained the divorce decree.

Rhomel and respondent Florie Grace Cote (Florie) were married, at that time, they were
both Filipinos. Few years after, Rhomel, who is already naturalized citizen of another country, filed
a Petition for Divorce before the Family Court of the First Circuit of Hawaii on the ground that their
marriage was irretrievably broken. The petition was granted. Seven years later, the RTC, upon
petition for recognition of foreign judgment granting the divorce, declared Florie to be capacitated
to remarry after its declaration of absolute nullity attained finality.

Republic filed a Notice of Appeal. However, the RTC believing that the petition was covered
by A.M. No. 02-11-10-SC applied Section 20 of said Rule and denied the appeal. Petitioner then
filed a petition for Certiorari with the CA claiming that the RTC committed grave abuse of discretion
which was then denied by the CA. Hence, this petition. Petitioner posits that A.M. No. 02-11-10-
SC does not cover cases involving recognition of foreign divorce because the wording of Section
1 thereof clearly states that it shall only apply to petitions for declaration of absolute nullity of void
marriages and annulment of voidable marriages.

ISSUE:
Do the provisions of AM No. 02-11-10-SC apply in a case involving recognition of a foreign
decree of divorce?

RULING:
No, AM No. 02-11-10-SC provisions do not apply.

The starting point in any recognition of a foreign divorce judgment is the acknowledgment
that our courts do not take judicial notice of foreign judgments and laws. This means that the foreign
judgment and its authenticity must be proven as facts under our rules on evidence, together with
the alien's applicable national law to show the effect of the judgment on the alien himself or herself.
A decree of absolute divorce procured abroad is different from annulment as defined by our family
laws. A.M. No. 02-11-10-SC only covers void and voidable marriages that are specifically cited
and enumerated in the Family Code of the Philippines. Void and voidable marriages contemplate
a situation wherein the basis for the judicial declaration of absolute nullity or annulment of the
marriage exists before or at the time of the marriage. It treats the marriage as if it never existed.
Divorce, on the other hand, ends a legally valid marriage and is usually due to circumstances
arising after the marriage. It was error for the RTC to use as basis for denial of petitioner's appeal
Section 20 of A.M. No. 02-11-10-SC.

Thus, since Florie followed the procedure for cancellation of entry in the civil registry, a
special proceeding governed by Rule 108 of the Rules of Court, an appeal from the RTC decision
should be governed by Section 3 of Rule 41 of the Rules of Court and not A.M. No. 02-11-10-SC.

7
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ARTICLE 26 OF THE FAMILY CODE COVERS A FILIPINO CITIZEN WHO INITIATED

AND OBTAINED A FOREIGN DIVORCE

Republic of the Philippines vs. Marelyn Tanedo Manalo

G.R. No. 221029; April 24, 2018
Peralta, J.

FACTS:
Petitioner Republic of the Philippines filed a Petition for Review on Certiorari under Rule
45 of the Rules of Court to reverse and set aside the Decision and Resolution of the CA granting
the appeal of the respondent Marely Tanedo Manalo (Manalo).

Respondent Marelyn Tanedo Manalo is previously married in the Philippines to a Japanese

national. A case for divorce was filed by Manalo in Japan and after due proceedings, a divorce
decree was rendered by the Japanese Court. Manalo filed a petition for cancellation of entry of
marriage in the Civil Registry of San Juan, Metro Manila, by virtue of a judgment of divorce
rendered by the Japanese court. RTC denied the petition on the ground that the Philippine Law
does not afford Filipinos the right to file for divorce.

The CA, on the other hand, held that Article 26 of the Family Code is applicable even if it
was Manalo who filed for divorce against her Japanese husband because the decree, they
obtained makes the latter no longer married to the former, capacitating him to remarry.

ISSUE:
Is the foreign divorce decree, initiated and obtained by the Filipino spouse against the alien
spouse recognizable in the Philippines as to capacitate the Filipino citizen to remarry?

RULING:
Yes. The foreign divorce decree, initiated and obtained by the Filipino spouse against the
alien spouse is recognizable in the Philippines as to capacitate the Filipino citizen to remarry

In Dacasin v. Dacasin and Van Dorn, the Court recognized a foreign divorce decree that
was initiated and obtained by the Filipino spouse and extended its legal effects on the issues of
child custody and property relation. It should not stop short in likewise acknowledging that one of
the usual and necessary consequences of absolute divorce is the right to remarry. Indeed, there
is no longer a mutual obligation to live together and observe fidelity. When the marriage tie is
severed and ceased to exist, the civil status and the domestic relation of the former spouses
change as both of them are freed from the marital bond.Paragraph 2 of Article 26 speaks of "a
divorce validly obtained abroad by the alien spouse capacitating him or her to remarry." Based on
a clear and plain reading of the provision, it only requires that there be a divorce validly obtained
abroad. The letter of the law does not demand that the alien spouse should be the one who initiated
the proceeding wherein the divorce decree was granted. It does not distinguish whether the Filipino
spouse is the petitioner or the respondent in the foreign divorce proceeding. The purpose of
Paragraph 2 of Article 26 is to avoid the absurd situation where the Filipino spouse remains married
to the alien spouse who, after a foreign divorce decree that is effective in the country where it was
rendered, is no longer married to the Filipino spouse. The provision is a corrective measure to
address an anomaly where the Filipino spouse is tied to the marriage while the foreign spouse is
free to marry under the laws of his or her country. Whether the Filipino spouse initiated the foreign
divorce proceeding or not, a favorable decree dissolving the marriage bond and capacitating his
or her alien spouse to remarry will have the same result: the Filipino spouse will effectively be
without a husband or wife. A Filipino who initiated a foreign divorce proceeding is in the same place
and in like circumstance as a Filipino who is at the receiving end of an alien-initiated proceeding.
Therefore, the subject provision should not make a distinction. In both instances, it is extended as
a means to recognize the residual effect of the foreign divorce decree on Filipinos whose marital
ties to their alien spouses are severed by operation of the latter's national law.

Here, while Manalo submitted relevant documents to prove the divorce decree, the
Japanese law on divorce is yet still to be proved thus the case was remanded to the court of origin
for further proceedings and reception of evidence.

8
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A VALID FOREIGN DIVORCE MAY BE RECOGNIZED REGARDLESS OF WHO AMONG

THE SPOUSES INITIATED THE DIVORCE PROCEEDINGS

Rhodora Racho vs. Seiichi Tanaka

G.R. No. 199515; June 25, 2018
Leonen, J.

FACTS:
Petitioner Rhodora Racho filed a Petition for Review on Certiorari assailing the Decision
and Order of the RTC which denied her petition for Judicial Determination and Declaration of
Capacity to Marry due to insufficiency of evidence.

Petitioner alleged that she was married to the respondent Seiichi Tanaka (Tanaka), a
Japanese national. Tanaka was able to secure a Divorce Certificate from Consul Kenichiro
Takayama of the Japanese Consulate in the Philippines and had it authenticated by the
Department of Foreign Affairs. Racho filed the Divorce Certificate with the Philippine Consulate
General in Tokyo, where she was informed that she is required to return to the Philippines to report
the documents for registration and to file the appropriate case for judicial recognition of divorce.

Petitioner argued that the Divorce Certificate issued by the Consulate General of the
Japanese Embassy was sufficient proof of the fact of divorce. She insisted that she is now legally
capacitated to marry since Article 728 of the Civil Code of Japan states that a matrimonial
relationship is terminated by divorce. The Office of the Solicitor General, on the other hand argued
that only the foreign spouse may initiate divorce proceedings.

ISSUES:
(1) Is a duly authenticated Certificate of Acceptance of the Report of Divorce sufficient to
prove the fact that a divorce was validly obtained according to one’s national law?; and
(2) May a foreign divorce be recognized in this jurisdiction regardless of who among the
spouses initiated the divorce proceedings?

RULING:
1. Yes. Mere presentation of the divorce decree before a trial court is insufficient.

Before a foreign divorce decree is recognized in this jurisdiction, a separate action must
be instituted for that purpose. Courts do not take judicial notice of foreign laws and foreign
judgments; thus, our laws require that the divorce decree and the national law of the foreign spouse
must be pleaded and proved like any other fact before trial courts. Petitioner submitted a Certificate
of Acceptance of the Report of Divorce, certifying that the divorce issued by Susumu Kojima, Mayor
of Fukaya City, Saitama Prefecture, has been accepted. The seal on the document was
authenticated by Kazutoyo Oyabe, Consular Service Division, Ministry of Foreign Affairs, Japan.
Considering that the Certificate of Acceptance of the Report of Divorce was duly authenticated,
the divorce between petitioner and respondent was validly obtained according to respondent's
national law.

2. Yes. Article 26 should be interpreted to mean that it is irrelevant for courts to determine
if it is the foreign spouse that procures the divorce abroad.

Once a divorce decree is issued, the divorce becomes "validly obtained" and capacitates
the foreign spouse to marry. As held in Republic v. Manalo, paragraph 2 of Article 26 speaks of "a
divorce . . . validly obtained abroad by the alien spouse capacitating him or her to remarry." Based
on a clear and plain reading of the provision, it only requires that there be a divorce validly obtained
abroad. The letter of the law does not demand that the alien spouse should be the one who initiated
the proceeding wherein the divorce decree was granted. It does not distinguish whether the Filipino
spouse is the petitioner or the respondent in the foreign divorce proceeding.” Recent jurisprudence,
therefore, holds that a foreign divorce may be recognized in this jurisdiction as long as it is validly
obtained, regardless of who among the spouses initiated the divorce proceedings.

9
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

REGIONAL TRIAL COURTS SHALL EXERCISE EXCLUSIVE ORIGINAL JURISDICTION

IN ALL ACTIONS INVOLVING THE CONTRACT OF MARRIAGE AND MARITAL
RELATIONS

Jerrysus l. Tilar vs. Elizabeth A. Tilar and the Republic of the Philippines
G.R. No. 214529; July 12, 2017
Peralta, J.

FACTS:
This is direct recourse from the Decision and Order both issued by the RTC dismissing the
petition for declaration of nullity of marriage on the ground of lack of jurisdiction over the subject
matter, and denying reconsideration thereof, respectively.

Petitioner Jerrysus Tilar married respondent Elizabeth Tilar in a Catholic Church with Rev.
Fr. Vicente Igot as the solemnizing officer. Their union produced one son and their marriage went
well in the first few months. However, respondent later became an extremely jealous, frequent
gambler, violent and extravagant type of person. This resulted to their quarrels and petitioner being
threatened and physically harmed. The spouses eventually separated, and respondent is now
living with another man. Petitioner consulted a clinical psychologist and respondent was said to be
suffering from "aggressive personality disorder as well as histrionic personality disorder" which
made her psychologically incapacitated to comply with her essential marital obligations.

Petitioner filed with the RTC a petition for declaration of nullity of marriage based on Article
36 of the Family Code. The RTC dismissed the petition for lack of jurisdiction and reasoned that
marriages solemnized by the Church are governed by its Canon Law and not by the civil law
observed by the State in nullity cases involving civil marriages. The Office of the Solicitor General
(OSG) argued that courts have jurisdiction to rule on the validity of marriage pursuant to the
provision of the Family Code, and that the RTC has exclusive jurisdiction over cases involving
contracts of marriage.

ISSUE:
Did the RTC have jurisdiction to rule on the validity of marriage solemnized and celebrated
by the Church pursuant to the provision of the Family Code?

RULING:
Yes. The RTC has jurisdiction to rule on the validity of marriage solemnized and celebrated
by the Church pursuant to the provision of the Family Code.

Although, marriage is considered a sacrament in the Catholic church, it has civil and legal
consequences which are governed by the Family Code. As petitioner correctly pointed out, the
instant petition only seeks to nullify the marriage contract between the parties as postulated in the
Family Code of the Philippines; and the declaration of nullity of the parties' marriage in the religious
and ecclesiastical aspect is another matter. Notably, the proceedings for church annulment which
is in accordance with the norms of Canon Law is not binding upon the State as the couple is still
considered married to each other in the eyes of the civil law. Thus, the principle of separation of
the church and state finds no application in this case.

As marriage is a lifetime commitment which the parties cannot just dissolve at whim, the
Family Code has provided for the grounds for the termination of marriage. These grounds may be
invoked and proved in a petition for annulment of voidable marriage or in a petition for declaration
of nullity of marriage, which can be decided upon only by the court exercising jurisdiction over the
matter. Section 19 of BP Blg. 129 provides that: “RTCs shall exercise exclusive original jurisdiction:
In all actions involving the contract of marriage and marital relations.”

Hence, a petition for declaration of nullity of marriage, which petitioner filed before the RTC
falls within its exclusive jurisdiction; thus, the RTC erred in dismissing the petition for lack of
jurisdiction.

10
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PATHOLOGICAL GAMBLING, IRRESPONSIBILITY, AND INABILITY TO KEEP A JOB

DO NOT AMOUNT TO PSYCHOLOGICAL INCAPACITY

Maria Concepcion N. Singson vs. Benjamin L. Singson

G.R. No. 210766; January 8, 2018
Del Castillo, J.

FACTS:
This is a Petition for Review on Certiorari on the Decision and Resolution of the CA which
reversed and set aside the Decision of the RTC which declared the marriage between petitioner
Maria Concepcion N. Singson (Maria) and respondent Benjamin L. Singson (Benjamin) void ab
initio.

Maria and Benjamin were married in 1974. When they started living together, petitioner
noticed that respondent was dishonest, vain, immature, infidel, unreasonably extravagant, and was
a compulsive gambler. Petitioner averred that at the time she filed the Petition for declaration of
nullity of marriage, respondent was confined at Metro Psych Facility and that respondent's
psychiatrist diagnosed him to be suffering from Pathological Gambling as evidenced by his
preoccupation with gambling, gambling with increasing amounts of money, being unable to support
their family due to gambling, and losing his job because of gambling.

The RTC granted the Petition and declared the marriage between petitioner and
respondent void ab initio on the ground of the latter's psychological incapacity. The CA overturned
the decision and held that the totality of evidence presented by petitioner failed to establish
respondent's alleged psychological incapacity to perform the essential marital obligations.

ISSUE:
Do pathological gambling, irresponsibility and inability to keep a job all amount to
psychological incapacity under Art. 26 of the Family Code?

RULING:
No. The above circumstances do not amount to psychological incapacity contemplated
under Art. 26 of the Family Code

It is settled that "psychological incapacity under Article 36 of the Family Code contemplates
an incapacity or inability to take cognizance of and to assume basic marital obligations, and is not
merely the difficulty, refusal, or neglect in the performance of marital obligations or ill will." "[I]t is
not enough to prove that a spouse failed to meet his responsibility and duty as a married person;
it is essential that he or she must be shown to be incapable of doing so because of some
psychological, not physical, illness."

The CA correctly found that respondent has the capability and ability to perform his duties
as a husband and father as against the RTC's rather general statement that respondent's
psychological or personality disorder hinders the performance of his basic obligations as a
husband and a father. Petitioner’s bare claim that respondent is a pathological gambler, is
irresponsible, and is unable to keep a job, does not necessarily translate into unassailable proof
that respondent is psychologically incapacitated to perform the essential marital obligations.
Unless the evidence presented clearly reveals a situation where the parties or one of them, by
reason of a grave and incurable psychological illness existing at the time the marriage was
celebrated, was incapacitated to fulfill the obligations of marital life (and thus could not then have
validly entered into a marriage), then the Court is compelled to uphold the indissolubility of the
marital tie.

Thus, given that the above-mentioned circumstances do not amount to psychological

incapacity, marriage between petitioner and respondent remains valid.

11
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

FAILINGS AS HUSBAND AND FATHER ARE NOT TANTAMOUNT TO PSYCHOLOGICAL

INCAPACITY

Yolanda E. Garlet vs. Vencidor T. Garlet

G.R. No. 193544; August 2, 2017
Leonardo-De Castro, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court
which assails the Decision of the CA which reversed and set aside the Decision of the RTC.

Petitioner Yolanda Garlet and respondent Vencidor Garlet were married with two children.
During their marriage, petitioner worked in Japan to support their family. Petitioner then acquired
parcels of land, a mini-grocery store, and a jeepney. Petitioner alleged that she was the only one
working for their family as respondent turned into a selfish, irresponsible, philandering and abusive
husband. Petitioner alleged that respondent never bothered to look for a stable job and maintained
his vices of gambling, drinking, and womanizing. Petitioner and respondent were fighting
constantly. Petitioner and respondent tried to settle their marital issues before the barangay. There,
respondent admitted taking petitioner's money and jewelry because he had no means to support
the family. Realizing that there was no more love and respect between them and that respondent
was just using her, petitioner finally separated from respondent. A clinical psychologist concluded
that respondent was suffering from narcissistic type of personality disorder.

Petitioner filed with the RTC a petition for declaration of nullity of marriage on the ground
of respondent’s psychological incapacity to fulfill his essential marital obligations to petitioner and
their children. The RTC ruled in favor of petitioner and gave weight to the clinical psychologist’s
conclusion. The CA reversed the RTC judgment and reasoned that the evidence adduced by
petitioner was not enough to sustain a finding that respondent was psychologically incapacitated.

ISSUE:
Were failings as husband and father tantamount to psychological incapacity to declare the
marriage null and void?

RULING:
No. Failings as husband and father are not tantamount to psychological incapacity to
declare the marriage null and void.

While the Court does not hold respondent totally without blame or free of shortcomings,
his failings as husband and father are not tantamount to psychological incapacity which renders
their marriage void from the very beginning. Worthy of reiterating herein is the declaration of the
Court in Agraviador v. Amparo-Agraviado that: “These acts, in our view, do not rise to the level of
psychological incapacity that the law requires, and should be distinguished from the "difficulty," if
not outright "refusal" or "neglect," in the performance of some marital obligations that characterize
some marriages. The intent of the law has been to confine the meaning of psychological incapacity
to the most serious cases of personality disorders — existing at the time of the marriage — clearly
demonstrating an utter insensitivity or inability to give meaning and significance to the marriage.”

The psychological illness that must have afflicted a party at the inception of the marriage
should be a malady so grave and permanent as to deprive one of awareness of the duties and
responsibilities of the matrimonial bond he or she is about to assume.

Hence, failings as husband and father are not tantamount to psychological incapacity to
declare the marriage null and void.

12
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE TESTIMONY OF THE PSYCHIATRIST IS INSUFFICIENT TO PROVE THE PARTIES’

PSYCHOLOGICAL INCAPACITY

Manuel R. Bakunawa III vs. Nora Reyes Bakunawa

G.R. No. 217993; August 9, 2017
Reyes, JR., J.

FACTS:
This is a petition for review on Certiorari filed by Manuel R. Bakunawa III (Manuel)
challenging the Decision and Resolution CA which upheld the validity of his marriage to Nora
Bakunawa (Nora).

Manuel and Nora were college sweethearts. When Nora became pregnant, she and
Manuel were married. Manuel was assigned to several provincial projects and would come home
only during weekends. Manuel would choose to spend his limited time with friends instead of his
family. Manuel also depended on his father and on Nora for their family’s needs. The spouses had
frequent quarrels. Manuel observed Nora’s passiveness and laziness. Nora alleged that Manuel
spent most of his time drinking with his friends and having extramarital affairs. Manuel eventually
left Nora and the children to cohabit with his girlfriend. They considered themselves separated.

Manuel filed a petition for declaration of nullity of marriage on the ground that he and Nora
are psychologically incapacitated to comply with the essential obligations of marriage. He
presented a psychiatrist who testified that Manuel has Intermittent Explosive Disorder and Nora
with Passive Aggressive Personality Disorder. Her findings were based on her interview with
Manuel and their eldest son because Nora did not participate in the psychological assessment.

The RTC granted the petition. The CA reversed and set aside the RTC ruling stating that
the totality of evidence presented by Manuel comprising of his testimony and that of Dr. Villegas,
as well as the latter's psychological evaluation report, is insufficient to prove that he and Nora are
psychologically incapacitated to perform the essential obligations of marriage.

ISSUE:
Was the testimony of the psychiatrist sufficient to prove the parties’ psychological
incapacity?

RULING:
No. The testimony of the psychiatrist is insufficient to prove the parties’ psychological
incapacity.

In Republic v. Galang, the Court held that "[i]f the incapacity can be proven by independent
means, no reason exists why such independent proof cannot be admitted to support a conclusion
of psychological incapacity, independently of a psychologist's examination and report." In this case,
the only person interviewed by Dr. Villegas aside from Manuel for the spouses' psychological
evaluation was their eldest child, who could not be considered as a reliable witness to establish
the psychological incapacity of his parents in relation to Article 36 of the Family Code, since he
could not have been there at the time his parents were married. The Court also notes that Dr.
Villegas did not administer any psychological tests on Manuel despite having had the opportunity
to do so.

While the Court has declared that there is no requirement that the person to be declared
psychologically incapacitated should be personally examined by a physician, much less be
subjected to psychological tests, this rule finds application only if the totality of evidence presented
is enough to sustain a finding of psychological incapacity. In this case, the supposed personality
disorder of Manuel could have been established by means of psychometric and neurological tests
which are objective means designed to measure specific aspects of people's intelligence, or
personality.

Hence, the testimony of the psychiatrist is insufficient to prove the parties’ psychological
incapacity.

13
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

BREAKDOWN OF MARITAL RELATION IS NOT NECESSARILY ATTRIBUTABLE TO

PSYCHOLOGICAL INCAPACITY

Maria Victoria Socorro Lontoc-Cruz vs. Nilo Santos Cruz

G.R. No. 201988; October 11, 2017
Del Castillo, J.

FACTS:
This Petition for Review on Certiorari challenges the Decision and Resolution CA that
affirmed the Decision of the RTC which refused to declare the marriage void ab initio under Article
36 of the Family Code.

Petitioner Marivi Lontoc-Cruz (Marivi) married respondent Nilo Santos Cruz (Nilo) a few
months after they met so that she could join the latter in Hong Kong where he was then working.
Marivi narrated that during their marriage, Nilo would rarely spend time with her and would devote
his time acting like a bachelor – partying with friends and meeting other women. Nilo was also
unable to sexually perform adequately. Nilo acknowledged his contribution to the breakdown of
the marriage because his job required him to come home late and he had had extramarital affairs.
At the same time, Nilo insisted that Marivi also contributed to the collapse of their union because
she was always jealous, conceited, and had a “prima donna attitude.”

Marivi filed a petition for declaration of nullity of marriage based on psychological

incapacity. She averred that it had been medically ascertained that Nilo was suffering from
"inadequate personality disorder related to masculine strivings associated with unresolved oedipal
complex," while she herself was found to be suffering from a "personality disorder of the mixed
type, histrionic, narcissistic with immaturity. The RTC denied the Petition. From the RTC's verdict,
petitioner appealed to the CA. The CA found that the psychiatrists failed to paint a clear picture of
the supposed gravity or seriousness of Nilo's psychological incapacity and ruled that it was the
couple's irreconcilable differences that marred their marriage.

ISSUE:
Does breakdown of marital relation necessarily amount to psychological incapacity?

RULING:
No, breakdown of marital relation does not necessarily amount to psychological incapacity.

In Marcos v. Marcos, the actual medical examination of the one claimed to have
psychological incapacity is not a condition sine qua non, for what matters is the totality of evidence
to sustain a finding of such psychological incapacity. "It bears repeating that the trial courts, as in
all the other cases they try, must always base their judgments not solely on the expert opinions
presented by the parties but on the totality of evidence adduced in the course of the proceedings."

In the case of Nilo, what brought about the breakdown of his relationship with Marivi was
not necessarily attributable to his so-called "psychological disorder" but can be imputed to his work
and marital stress, and his ordinary human failings. With regard to his failure to sexually perform
"adequately," the same appeared to be a case of "selective impotency," as he was turned off by
Marivi's disclosure of their bed secrets to her family. Nor can it be said that Nilo's failure to provide
quality time for the family was caused by his "inadequate personality disorder" or "unresolved
oedipal complex." Nilo explained that he has a taxing and demanding job, and that unfortunately,
with his working hours eating up his home life. It is significant to note that Marivi failed to
substantiate Nilo's penchant for womanizing as a manifestation of his psychological incapacity.

Thus, the Court believes that the protagonists in this case are in reality simply unwilling to
work out a solution for each other's personality differences and have thus become overwhelmed
by feelings of disappointment or disillusionment toward one another. Sadly, a marriage, even if
unsatisfactory, is not a null and void marriage.

14
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

TOTALITY OF EVIDENCE IS ESSENTIAL TO PROVE PSYCHOLOGICAL INCAPACITY

Republic of the Philippines vs. Katrina S. Tobora-Tionglico

G.R. No. 218630; January 11, 2018
Tijam, J.

FACTS:
This is a petition for review on Certiorari of the Decision of CA which affirmed the Decision
rendered by the RTC granting the petition for declaration of nullity of marriage on the ground of
Article 36 of the Family Code and declaring the marriage of Katrina S. Tabora-Tionglico (Katrina)
and Lawrence C. Tionglico (Lawrence) void ab initio.

Katrina and Lawrence were married. The early stage of their marriage was marred by
quarrels. When their child was born, Lawrence was distant and did not help in rearing the child.
He would spend almost every night out for parties and drinking sprees. Lawrence would repeatedly
taunt Katrina to fight with him and they lost all intimacy between them. Due to their incessant
fighting, Lawrence asked Katrina to leave and never to come back. They have been separated in
fact since then.

Katrina consulted with a psychiatrist who based on the narrations of Katrina, diagnosed
Lawrence with Narcissistic Personality Disorder, which is permanent and incurable. The Office of
the Solicitor General (OSG) points out that there has been a myriad of cases declaring that
psychological assessment based solely on the information coming from either party in a petition
for declaration of nullity of marriage is considered as hearsay evidence. It is evident that in this
case, the psychiatrist obtained his data, in concluding that Lawrence is psychologically
incapacitated, exclusively from Katrina.

ISSUE:
Did the totality of evidence presented by Katrina support the findings of both the RTC and
the CA that Lawrence is psychologically incapacitated to perform his essential marital obligations,
meriting the dissolution of his marriage with Katrina?

RULING:
No, the totality of evidence presented by Katrina does not support the findings of both the
RTC and the CA that Lawrence is psychologically incapacitated to perform his essential marital
obligations.

Time and again, it has been held that "psychological incapacity" has been intended by law
to be confined to the most serious cases of personality disorders clearly demonstrative of an utter
insensitivity or inability to give meaning and significance to the marriage. Psychological incapacity
must be characterized by (a) gravity, i.e., it must be grave and serious such that the party would
be incapable of carrying out the ordinary duties required in a marriage, (b) juridical antecedence,
i.e., it must be rooted in the history of the party antedating the marriage, although the overt
manifestations may emerge only after the marriage, and (c) incurability, i.e., it must be incurable,
or even if it were otherwise, the cure would be beyond the means of the party involved.

We find the totality of evidence clearly wanting. First, Dr. Juan Arellano's (Dr. Arellano)
findings that Lawrence is psychologically incapacitated were based solely on Katrina's statements.
It bears to stress that Lawrence, despite notice did not participate in the proceedings below, nor
was he interviewed by Dr. Arellano despite being invited to do so. Second, the testimony of Katrina
as regards the behavior of Lawrence hardly depicts the picture of a psychologically incapacitated
husband. Their frequent fights, his insensitivity, immaturity and frequent night-outs can hardly be
said to be a psychological illness. Apart from the psychiatrist, Katrina did not present other
witnesses to substantiate her allegations on Lawrence's psychological incapacity. Her testimony,
therefore, is considered self-serving and had no serious evidentiary value.

The totality of evidence is clearly lacking to support the factual and legal conclusion that
Lawrence and Katrina's marriage is void ab initio.

15
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PRESENCE OF EVIDENCE THAT CAN ADEQUATELY ESTABLISH THE PARTY’S

PSYCHOLOGICAL CONDITION IS IMPORTANT

Abigael An Espiña-Dan vs. Marco Dan

G.R. No. 209031; April 16, 2018
Del Castillo, J.

FACTS:
Petitioner Abigael An Espiña-Dan (Espiña-Dan) filed a Petition for Review on Certiorari
and seeks to set aside the Resolution of the Court of Appeals affirming the decision of the RTC
dismissing her petition for declaration of nullity of her marriage with respondent Dan Marco, an
Italian National.

Espiña-Dan and respondent Marco Dan - an Italian national - met in a chatroom on the
internet. They soon became chatmates and later got married. Few days into the marriage,
petitioner observed that respondent was immature, childish, irresponsible and dependent on his
mother. Respondent was also addicted to video games and was extremely lazy that he never
helped her in doing all the household chores. He also had extremely poor hygiene. Further, on one
occasion, she caught him in their house while using marijuana. Petitioner then filed for a
declaration of nullity of her marriage on the ground of psychological incapacity.

Petitioner argues that the root cause of respondent's psychological incapacity was clinically
identified, sufficiently alleged in the petition, and proved by adequate evidence. Petitioner adds
that her allegations in the petition for declaration of nullity are specifically linked to medical and
clinical causes as diagnosed by Dr. Nedy Tayag. Furthermore, petitioner argues that it is not
necessary that personal examination of respondent be conducted in order that he may be
diagnosed or declared as psychologically incapacitated.

ISSUE:
Were the pieces of evidence presented by the petitioner sufficient to establish
psychological incapacity of the respondent?

RULING:
No. 'Psychological incapacity,' as a ground to nullify a marriage under Article 36 of the
Family Code, should refer to no less than a mental — not merely physical — incapacity that causes
a party to be truly incognitive of basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage which, as so expressed in Article 68 of the Family Code,
among others, include their mutual obligations to live together, observe love, respect and fidelity
and render help and support. What is important is the presence of evidence that can adequately
establish the party's psychological condition.[T]he complete facts should allege the physical
manifestations, if any, as are indicative of psychological incapacity at the time of the celebration of
the marriage” such that "[i]f the totality of evidence presented is enough to sustain a finding of
psychological incapacity, then actual medical examination of the person concerned need not be
resorted to.

With the declared insufficiency of the testimonies of petitioner and her witness, the weight
of proving psychological incapacity shifts to Dr. Tayag's expert findings. However, her
determinations were not based on actual tests or interviews conducted on respondent himself —
but on personal accounts of petitioner alone. This will not do as well.

Indeed, the incapacity should be established by the totality of evidence presented during
trial, making it incumbent upon the petitioner to sufficiently prove the existence of the psychological
incapacity.

16
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

DIAGNOSIS OF NARCISSISTIC PERSONALITY DISORDER WITH TENDENCIES

TOWARD SADISM, TAKEN WITH OTHER CIRCUMSTANCES, MEET THE THREE
ESSENTIAL CHARACTERISTICS OF PSYCHOLOGICAL INCAPACITY

Republic of the Philippines vs. Martin Nikolai Z. Javier and Michelle K. Mercado- Javier
G.R. No. 210518; April 18, 2018
Reyes, Jr. J.

FACTS:
Petitioner Republic of the Philippines filed a Petition for Review on Certiorari under Rule
45 of the Rules of Court seeking to set aside the Decision and Resolution of the CA which reversed
the ruling of the RTC dismissing the petition for the declaration of nullity of marriage of Martin
Nikolai Z. Javier and Michelle K. Mercado-Javier (Michelle) under Article 36 of the Family Code.

Martin alleged that both he and Michelle were psychologically incapacitated to comply with
the essential obligations of marriage. To support his allegations, he presented his Psychological
Evaluation Report, which states that he was suffering from Narcissistic Personality Disorder with
tendencies toward sadism.

The Republic argues that there was no basis in granting the petition for declaration of nullity
of marriage. It argues that the testimony of Martin was self-serving, especially in relation to Dr.
Elias Adamos' diagnosis that Michelle was psychologically incapacitated to comply with the
essential marital obligations under the Family Code.

ISSUE:
Does Narcissistic Personality Disorder with tendencies toward sadism amount to
psychological incapacity in Art. 36 of the Family Code?

RULING:
Yes. The totality of evidence supports the finding that Martin is psychologically
incapacitated to perform the essential obligations of marriage.

Under Article 36 of the Family Code, the psychological incapacity of a spouse must be
characterized by (a) gravity; (b) juridical antecedence; and (c) incurability. The incapacity must be
grave or serious such that the party would be incapable of carrying out the ordinary duties required
in marriage; it must be rooted in the history of the party antedating the marriage, although the overt
manifestations may emerge only after the marriage; and it must be incurable or, even if it were
otherwise, the cure would be beyond the means of the party involved. The Court later clarified in
Marcos v. Marcos that for purposes of establishing the psychological incapacity of a spouse, it is
not required that a physician conduct an actual medical examination of the person concerned. It is
enough that the totality of evidence is strong enough to sustain the finding of psychological
incapacity.

The Court disagrees with the CA's findings that Michelle was psychologically incapacitated
as it cannot absolutely rely on the Psychological Impression Report on Michelle. There were no
other independent evidence establishing the root cause or juridical antecedence of Michelle's
alleged psychological incapacity. As for Martin, he was diagnosed with Narcissistic Personality
Disorder, with tendencies toward sadism. Dr. Adamos concluded from the tests administered on
Martin that this disorder was rooted in the traumatic experiences he experienced during his
childhood, having grown up around a violent father who was abusive of his mother. This adversely
affected Martin in such a manner that he formed unrealistic values and standards on his own
marriage and proposed unconventional sexual practices. When Michelle would disagree with his
ideals, Martin would not only quarrel with Michelle, but would also inflict harm on her.

These circumstances, taken together, prove the three essential characteristics of

psychological incapacity on the part of Martin.

17
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

BAPTISMAL CERTIFICATE ALONE IS INSUFFICIENT TO PROVE FILIATION

Heirs of Gilberto Roldan vs. Heirs of Silvela Roldan and Heirs of Leopoldo Magtulis
G.R. No. 202578; September 27, 2017
Sereno, C.J.

FACTS:
This is a Petition for Review on Certiorari assailing the CA Decision and Resolution, which
affirmed the Decision of the RTC ruling that the heirs of Silvela remained co-owners of the property
as they had inherited from Natalia Magtulis (Natalia).

Natalia owned an agricultural land. She had three heirs: Gilberto Roldan (Gilberto) and
Silvela Roldan, her two children by her first marriage; and allegedly Leopoldo Magtulis (Leopoldo),
her child with another man. After her death, Natalia left the lot to her children. However, Gilberto
and his heirs took possession of the property to the exclusion of respondents, heirs of Silvela and
Leopoldo.

Respondents filed before the RTC a Complaint for Partition and Damages against
petitioners. The latter refused to yield the property since respondent heirs of Leopoldo had no
cause of action, given that he was not a child of Natalia. The RTC ruled that the heirs of Silvela
remained co-owners of the property as they had inherited from Natalia. As regards Leopoldo
Magtulis, the trial court concluded that he was a son of Natalia based on his Certificate of Baptism
and Marriage Contract. The CA affirmed the ruling of the RTC. They held that Leopoldo was the
son of Natalia, since his Certificate of Baptism and Marriage Contract indicated her as his mother.

ISSUE:
Were the baptismal certificate and marriage contract presented by Leopoldo sufficient to
prove that Natalia is his mother?

RULING:
No. The baptismal certificate and marriage contract presented by Leopoldo are not
sufficient to prove that Natalia is his mother.

Jurisprudence has already assessed the probative value of baptismal certificates. In

Fernandez v. Court of Appeals, the Court explained that because the putative parent has no hand
in the preparation of a baptismal certificate, that document has scant evidentiary value. The
canonical certificate is simply a proof of the act to which the priest may certify, i.e., the
administration of the sacrament. In other words, a baptismal certificate is "no proof of the
declarations in the record with respect to the parentage of the child baptized, or of prior and distinct
facts which require separate and concrete evidence." But in Makati Shangri-La Hotel and Resort,
Inc. v. Harper, this Court clarified that a baptismal certificate has evidentiary value to prove kinship
"if considered alongside other evidence of filiation." Therefore, to resolve one's lineage, courts
must peruse other pieces of evidence instead of relying only on a canonical record. In Reyes v.
Court of Appeals, we held that even if the marriage contract therein stated that the alleged father
of the bride was the bride's father, that document could not be taken as evidence of filiation,
because it was not signed by the alleged father of the bride.

In this case, the courts below did not appreciate any other material proof related to the
baptismal certificate and marriage contract of Leopoldo that would establish his filiation with
Natalia. The only other document considered by the RTC and the CA was the Marriage Contract
of Leopoldo. But, like his baptismal certificate, his Marriage Contract also lacks probative value as
the latter was prepared without the participation of Natalia.

Therefore, the CA erred in presuming the hereditary rights of Leopoldo to be equal to those
of the legitimate heirs of Natalia.

18
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE ISSUE OF COMPULSORY RECOGNITION MAY BE INTEGRATED IN A DIRECT ACTION

FOR SUPPORT

Richelle P. Abella vs. Policarpio Cabañero

G.R. No. 206647; August 9, 2017
Leonen, J.

FACTS:
This resolves a Petition for Review on Certiorari under Rule 45 praying that the assailed
Decision and Resolution of the Court of Appeals be reversed and set aside.

Petitioner Richelle Abella (Richelle) alleged that she was repeatedly sexually abused by
respondent Policarpio Cabañero (Cabañero) inside his rest house. As a result, she allegedly gave
birth to a child. Richelle filed a Complaint for Support for her minor daughter and prayed for the
child's monthly allowance in the amount of P3,000.00. In his Answer, Cabañero denied sexually
abusing Richelle, or otherwise having any sexual relations with her. Thus, he asserted that he
could not have been the father of Richelle's child.

The RTC dismissed Richelle's Complaint without prejudice, on account of her failure to
implead her minor child as plaintiff. The CA sustained the dismissal of the Complaint. The CA
reasoned that the child's birth certificate did not indicate that Cabañero was the father and as
Cabañero had not done anything to voluntarily recognize the child as his own, the CA asserted
that Richelle "should have first instituted filiation proceedings to adjudicate the minor child's
paternity.

ISSUE:
Should filiation proceedings be first separately instituted to ascertain the minor child's
paternity before a complaint for support could be filed?

RULING:
No, filiation proceedings need not be separately instituted to ascertain the minor child's
paternity.

In Dolina v. Vallecera, the Court clarified that since an action for compulsory recognition
may be filed ahead of an action for support, the direct filing of an action for support, "where the
issue of compulsory recognition may be integrated and resolved," is an equally valid alternative:
To be entitled to legal support, petitioner must, in proper action, first establish the filiation of the
child, if the same is not admitted or acknowledged. Dolina's remedy is to file for the benefit of her
child an action against Vallecera for compulsory recognition in order to establish filiation and then
demand support. Alternatively, she may directly file an action for support, where the issue of
compulsory recognition may be integrated and resolved.

Without meaning to lend credence to the minutiae of petitioner's claims, it is quite apparent
that the rigors of judicial proceedings have been taxing enough for a mother and her daughter
whose claim for support amounts to a modest P3,000.00 every month. When petitioner initiated
her action, her daughter was a toddler; she is, by now, well into her adolescence. The primordial
interest of justice and the basic dictum that procedural rules are to be "liberally construed in order
to promote their objective of securing a just, speedy and inexpensive disposition of every action
and proceeding" impel us to grant the present Petition.

Thus, it was improper to rule here, as the Court of Appeals did, that it was impossible to
entertain petitioner's child's plea for support without her and petitioner first surmounting the
encumbrance of an entirely different judicial proceeding.

19
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

MUNICIPAL ORDINANCE DOES NOT CONVERT PRIVATE PROPERTY TO PUBLIC

PROPERTY ABSENT ANY EXPROPRIATION PROCEEDINGS

Esmeraldo Gatchalian vs. Cesar Flores, Jose Luis Araneta, Corazon Quing and Cynthia Flores
G.R. No. 225176; January 19, 2018
Tijam, J.

FACTS:
In a Petition for Review on Certiorari under Rule 45, Petitioner Esmeraldo Gatchalian,
assails the Amended Decision of the CA, dismissing the Complaint for Ejectment with damages
against respondents Cesar Flores, Jose Luis Araneta, Corazon Quing, and Cynthia Flores ruling
that the private character of the lot has been stripped by Municipal Ordinance No. 88-04, series of
1988 road lot has been converted to public property.

Petitioner is one of the co-owners of a parcel of land, Road Lot 23. Road Lot 23 is registered
under the name of petitioner’s parents. A survey was conducted finding that the lot of Segundo
Mendoza (Mendoza) encroached a portion of Road Lot 23 which the Gatchalian’s tolerated.
Subsequently, Mendoza’s lot was sold and subdivided among the new owners, including the herein
respondents. The Gatchalian family eventually withdrew the tolerated possession, use and
occupation of the respondents. Verbal and written demands to vacate were then served upon the
latter but remained unheeded. Hence, the filing of the ejectment case.

Petitioners allege that the road is still private property, it being covered by TCT. No. 79180
under the name of the spouses Gatchalian and that the mere usage by the public of the road does
not make it public property. To convert such property, it must be expropriated, or the registered
owner must donate or sell the same to the government.

Respondents argued that although they do not claim ownership of the Road lot 23, it is
now public property by virtue of Ordinance No. 88-04. As such, Petitioner cannot evict
respondents.

ISSUE:
Was Road Lot 23 converted to public property by virtue of the Municipal ordinance and use
by the public?

RULING:
No. Road Lot 23 was not converted to public property by virtue of the municipal ordinance.
Absent any expropriation proceedings and without any evidence that the petitioner donated or sold
the subject property to the municipal government, the same is still private property.

In the case of Abellana, Sr. v. Court of Appeals, the Court held that "the road lots in a
private subdivision are private property, hence, the local government should first acquire them by
donation, purchase or expropriation, if they are to be utilized as a public road." Otherwise, they
remain to be private properties of the owner-developer. As there is no such thing as an automatic
cessation to the government of subdivision road lots, an actual transfer must first be effected by
the subdivision owner.

Since the local government of Parañaque has not purchased nor undertaken any
expropriation proceedings, neither did the petitioner and his siblings donate the subject property,
the latter is still a private property and Ordinance No. 88-04 did not convert the same to public
property.

Thus, a municipal ordinance without any expropriation proceedings, the Road Lot 23 was
not converted to public property.

20
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

JURISDICTION OVER PLENARY ACTION FOR RECOVERY OF POSSESSION IS

DETERMINED NOT ONLY BY THE TYPE OF ACTION FILED BUT ALSO BY THE
ASSESSED VALUE OF THE PROPERTY

Joseph Regalado vs. Emma De la Rama vda. De La Peña, Jesusa De La Peña, et.al.
G.R. No. 202448; December 13, 2017
Del Castillo, J.

FACTS:
This a Petition for Review on Certiorari challenging the decision of the CA, which upheld
the Decision of the RTC for the recovery of possession with damages against petitioner Joseph
Regalado.

The respondents Emma De la Rama vda. De La Peña et.al. are the registered owners of
2 parcels of land, which are covered by TCTs. Purportedly, in 1994, without the knowledge and
consent of respondents, petitioner entered, took possession of, and planted sugar cane on the
properties without paying rent. In the crop year 1995-1996, respondents discovered such illegal
entry, which prompted them to verbally demand petitioner to vacate the property but to no avail.
The parties also failed to arrive at any amicable settlement before the Lupon Tagapamayapa. In
1998, respondents filed a complaint for recovery of possession and damages with injunction
against petitioner before the RTC.

Petitioner posits that based on the allegations of the complaint, the action involved
recovery of physical possession of the properties and said complaint was filed within one year from
the date the parties had a confrontation before the Barangay and thus the case was one for
Ejectment and must be filed with the MTC and not the RTC. Furthermore, petitioner also posits
that even granting that this action is a plenary action to recover right of possession, the RTC has
no jurisdiction because the value of the property was not alleged in the complaint. Respondents,
on the other hand, contend that the RTC had jurisdiction because their demand from the petitioner
was made during crop year 1995-1996, which was earlier than the referral of the matter to the
barangay.

ISSUE:
Did the RTC have jurisdiction for plenary action for recovery of possession despite the
failure to specify the assessed value of the subject properties?

RULING:
No. Jurisdiction is determined not only by the type of action filed but also by the assessed
value of the property.

Pursuant to Republic Act No. 7691 (RA 7691), in accion publiciana and reinvindicatoria,
the assessed value of the real property is a jurisdictional element to determine the court that could
take cognizance of the action. In the absence of any allegation in the Complaint of the assessed
value of the subject properties, it cannot be determined which court has exclusive original
jurisdiction over respondents’ complaint.

Here, the RTC took cognizance of the complaint only on the presumption that the assessed
value of the proper exceeds ₱20,000.00. Aside from affirming such presumption, the CA, in turn,
declared that the RTC had jurisdiction because the parties stipulated on it. However, jurisdiction
cannot be presumed. It cannot be conferred by the agreement of the parties, or on the erroneous
belief of the court that it had jurisdiction over a case.

Indeed, in the absence of any allegation in the Complaint of the assessed value of the
subject properties, it cannot be determined which court has exclusive original jurisdiction over
respondents' Complaint.

21
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE ONLY ISSUE TO BE RESOLVED IN AN UNLAWFUL DETAINER IS WHO IS

ENTITLED TO PHYSICAL POSSESSION

Norma Baleares, Desiderio Baleares, et.al. vs. Felipe Espanto

G.R. No. 229645; June 6, 2018
Velasco, Jr., J.

FACTS:
This is a Petition for review of the Decision by the CA affirming the Decision of the RTC
likewise affirming the MeTC’s order against Norma Baleares et.al. (petitioners) to vacate the
subject property and to peaceably surrender its possession to the respondent Felipe Espanto.

Way back in 1988, the Baleares siblings mortgaged the subject property to Arnold Maranan
(Arnold). Unknown to the petitioners, the subject property was apparently foreclosed and sold at a
public auction in 1996, where Arnold appeared to be the highest bidder. Believing that Arnold failed
to enforce his mortgage right, petitioners filed for the cancellation of mortgage inscription on the
TCT. During the pendency, a certificate of Sale was issued to Arnold and a new TCT was issued
in his favor. RTC rendered a decision for the cancellation of mortgage inscription ruling that there
was no valid extrajudicial foreclosure and that Arnold’s mortgage right has prescribed. Such
decision became final and executory.

All this notwithstanding, Arnold was able to sell the subject property to the respondent and
a TCT was issued in respondent’s name. Respondent did not immediately take possession of the
subject property. Instead, he allowed the petitioners to remain therein. However, when respondent
sent a demand letter for them to vacate, they refused maintaining that they have a better right of
possession over the subject property being the heirs of its original owners. Thus, respondent filed
a complaint for unlawful detainer before the MTC of Makati City. MTC ruled in favor of respondent,
which was affirmed by the RTC and the CA.

ISSUE:
Can the court rule on the issue of ownership in a case for unlawful detainer?

RULING:
No. An action for unlawful detainer is summary in nature and the only issue that needs to
be resolved is who is entitled to physical possession of the premises.

Nonetheless, where the parties to an ejectment case raise the issue of ownership and such
is inseparably linked to that of possession, the courts may pass upon that issue to determine who
between the parties has the better right to possess the property. The adjudication of the ownership
issue is not final.

Here, the petitioners claim that they have a better right of possession over the subject
property as they are the heirs of one of its original co-owners and they have been in lawful
possession and occupation thereof ever since, thus, they cannot be dispossessed of the subject
property. The respondent based his claim of ownership and right of possession over the subject
property on a certificate of title issued in his name. However, the respondent, being a mere
transferee of the subject property who has knowledge that his transferor's mortgaged right over
the same has been cancelled with finality by the court, merely stepped into his transferor's shoes,
thus, he has no right over the subject property. Under these circumstances, the respondent cannot
simply oust the petitioners from possession through the summary procedure of an ejectment
proceeding.

It bears stressing that the herein ruling is limited only to the determination as to who
between the parties has the better right of possession. It will not in any way bar any of the parties
from filing an action with the proper court to resolve conclusively the issue of ownership.

22
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

IN UNLAWFUL DETAINER, IT DOES NOT MATTER IF A PARTY'S TITLE TO THE

PROPERTY IS QUESTIONABLE AS THE ONLY ISSUE FOR RESOLUTION IS PHYSICAL
OR MATERIAL POSSESSION OF THE PREMISES

Spouses Ewrin and Marinela Santiago, et. al. vs. Northbay Knitting Inc. (NKI)
G.R. No. 217296; October 11, 2017
Peralta, J.

FACTS:
This is a petition for review on Certiorari assailing the decision and the resolution of the CA
reversing the decision of the RTC which set aside the MeTC decision for lack of jurisdiction as
respondent failed to show a case of unlawful detainer.

Respondent Northbay Knitting Inc. (NKI) owns a parcel of land covered by a TCT which it
acquired from a sale transaction with the National Housing Authority (NHA). NKI allowed the
petitioners Spouses Ewrin and Marinela Santiago, et. al. to occupy the premises without paying
any rent. Later, it sent demand letters to the petitioners to pay rents or vacate the land within five
(5) days from the receipt thereof. Despite the respondent’s demand, petitioners refused to vacate
or pay the necessary rent. Hence, respondent filed an ejectment complaint against them.
Petitioners who are actual occupants of the lot refuse to vacate on the ground that the sale between
NHA and the respondent is invalid for it violated their right of first refusal.

According to them, the sale was invalid and hence, respondent has no basis to eject them.
Petitioners filed a case questioning the validity of such sale. They contend that the determination
of the validity of the sale is a prejudicial question which bars the MeTC from taking cognizance of
the case. The MeTC ruled in favor of respondent but the RTC reversed, ruling that respondent
failed to make a case for unlawful detainer. On appeal, the CA reversed the RTC’s decision. Hence,
this case.

ISSUE:
Was the respondent able to make a case for unlawful detainer despite the claim of
petitioners that there is a pending action questioning the validity of the sale of the disputed
property?

RULING:
Yes. NKI's complaint sufficiently shows all the allegations required to support a case for
unlawful detainer.

The only issue for resolution in an unlawful detainer case is physical or material possession
of the premises, independent of any claim of ownership by any of the party litigants. It does not
even matter if a party's title to the property is questionable. Where the parties to an ejectment case
raise the issue of ownership, the courts may pass upon that issue to determine who between the
parties has the better right to possess the property. However, where the issue of ownership is
inseparably linked to that of possession, as in this case, adjudication of the ownership issue is not
final and binding, but merely for the purpose of resolving the issue of possession. The adjudication
of the issue of ownership is only provisional, and not a bar to an action between the same parties
involving title to the property.

The petitioner’s argument that there is a pending action questioning the validity of the sale
of the disputed property to NKI, consequently affecting the validity of its title to said property is
clearly a collateral attack on NKI's title, which is not allowed in an unlawful detainer case. A
certificate of title cannot be subject to a collateral attack and can be altered, modified, or cancelled
only in a direct proceeding in accordance with law.

Thus, the respondent was able to make a case for unlawful detainer.

23
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

IN ORDER TO SUCCESSFULLY MAINTAIN ACTIONS FOR RECOVERY OF OWNERSHIP

OF A REAL PROPERTY, THE COMPLAINANTS MUST PROVE THE IDENTITY OF THE
LAND AND THEIR TITLE THERETO

Florencia Arjonillo vs. Demetria Pagulayan, as substituted by her heirs namely: Hermana Vda.
De Cambri, Porfirio T. Pagulayan, et.al.
G.R. No. 196074; October 4, 2017
Martires, J.

FACTS:
This is a petition for review on Certiorari assailing the decision of the CA which reversed
and set aside the earlier ruling of the RTC which held that the subject lot must be returned to
petitioner Florencia Arjonillo (Arjonillo) because the respondent failed to prove her ownership over
the subject lot.

Petitioner is the niece of the late Avelardo Cue (Cue). Among the listed properties of Cue
was a lot which was in the name of respondent Demeteria Pagulayan. Petitioner Arjonillo and some
of her co-heirs filed an accion reivindicatoria to recover the property from respondent. They alleged
that although the property was registered in the name of Pagulayan, it was Cue who purchased it
using his own funds; that being his paramour, Pagulayan exercised undue influence on him in
order to register the property exclusively in her own name; and that the registration of the property
in the name of Pagulayan is void as it is against public policy. Finally, petitioner alleges that
respondent had failed to prove her financial capability to purchase the subject lot.

Respondent contends that she acquired the property from Spouses Chua Bun
Gui and Esmeralda Valdepanas Chua (Spouses Chua) for and in consideration of ₱20,000.00
which was acknowledged to have been received in full by the vendors as evidenced by a deed
of absolute sale. Respondent alleges that the petitioner has neither legal personality nor cause of
action against her. The trial court ruled in favor of Arjonillo and her co-heirs but the CA reversed
the same. Hence, this case.

ISSUE:
Were the petitioners able to prove the identity of the land and their title thereto in asserting
that the same form part of their predecessor’s estate?

RULING:
No. The petitioners were not able to prove the identity of the land and their title thereto.

Arjonillo and her co-heirs claim that the subject properties were owned by their
predecessor, Cue. They sought to recover its full possession from Pagulayan by filing an accion
reivindicatoria before the RTC. It is then incumbent upon them to convince the court by
competent evidence that the subject properties form part of Cue's estate because in order to
successfully maintain actions for recovery of ownership of a real property, the complainants
must prove the identity of the land and their title thereto as provided under Article 434 of the
Civil Code. They have the burden of proof to establish the averments in the complaint by
preponderance of evidence, relying on the strength of their own evidence and not upon the
weakness of their opponent's evidence.

Rather than dispensing with their burden of proof as required under the law, Arjonillo and
her co-heirs concentrated on attacking Pagulayan's claim of ownership over the subject properties
on the ground of the latter's alleged lack of financial capability to purchase the land and erect a
building thereon.

Thus, Arjonillo, together with her co-heirs failed to discharge the burden of proving their
claim by a preponderance of evidence as required under the law.

24
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

TO BE A BUILDER IN GOOD FAITH, IT IS ESSENTIAL THAT A PERSON ASSERTS TITLE

TO THE LAND ON WHICH HE BUILDS AND BE UNAWARE OF ANY FLAW IN HIS TITLE

Sps. Maximo Espinoza and Winifreda de Vera vs. Sps. Antonio and Erlinda Mayandoc
G.R. No. 211170; July 3, 2017
Peralta, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45, of petitioners-spouses Maximo
Espinoza and Winifreda De Vera, that seeks to reverse and set aside the Decision of the CA,
which affirmed the Decision of the RTC, in a complaint for useful expenses under Articles 448 and
546 of the Civil Code of the Philippines.

A parcel of land located in Dagupan City was originally owned by Eusebio Espinoza
(Eusebio). After the death of Eusebio, the parcel of land was divided among his heirs, namely:
Pastora Espinoza (Pastora), Domingo Espinoza, and Pablo Espinoza. Pastora executed a Deed
of Sale conveying her share of the same property to respondents and Leopoldo Espinoza.
Subsequently, a fictitious deed of sale was executed by Nemesio Cayabyab, Candida Cruz,
petitioner-spouses Maximo Espinoza and Winifreda De Vera and Leopoldo Espinoza over the land
in favor of respondents-spouses Antonio and Erlinda Mayandoc and a TCT was issued under the
names of the latter.

Petitioners filed for annulment of document with prayer for the nullification of the TCT. The
RTC ruled in favor of the petitioners which was affirmed by the CA. As a result, respondents filed
a complaint for reimbursement of useful expenses, pursuant to Articles 448 and 546 of the Civil
Code, alleging that the house in question was built on the disputed land in good faith. They further
asserted that they were possessors in good faith, having lived over the land in question for many
years. Petitioners argued that respondents can never be considered builders in good faith because
the latter were aware that the deeds of sale over the land in question were fictitious and therefore,
null and void. The RTC, as affirmed by the CA, found respondents to be builders in good faith since
the house was built on the lot prior to the complaint for nullity of the documents and reconveyance.

ISSUE:
Were the respondents builders in good faith when they constructed their house on the lot
of the petitioners, believing they have a claim of title?

RULING:
Yes. Respondents were builders in good faith.

To be deemed a builder in good faith, it is essential that a person asserts title to the land
on which he builds, i.e., that he be a possessor in the concept of owner, and that he be unaware
that there exists in his title or mode of acquisition any flaw which invalidates it. The settled rule is
bad faith should be established by clear and convincing evidence since the law always presumes
good faith.

In this case, petitioners were not able to prove that respondents were in bad faith in
constructing the house on the subject land. Bad faith does not simply connote bad judgment or
negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong. It means breach of a known duty through some motive, interest or ill will that partakes of
the nature of fraud. For anyone who claims that someone is in bad faith, the former has the duty
to prove such.

Hence, petitioners err in their argument that respondents failed to prove that they are
builders in good faith despite the findings of the RTC and the CA that they are. As such, Article
448 of the Civil Code must be applied.

25
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ARTICLE 448 AND 546 OF THE CIVIL CODE ON BUILDERS IN GOOD FAITH IS NOT
APPLICABLE TO CASES COVERED BY THE CONDOMINIUM CODE

Leviste Management System, Inc., vs. Legaspi Towers 200, Inc.

G.R. No. 199353; April 4, 2018
Del Castillo, J.

FACTS:
These are consolidated petitions under Rule 45 filed by Leviste Management System, Inc.
(LEMANS) and Legaspi Towers 200, Inc. (Legaspi Towers), both assailing the Decision of the CA
which affirmed the Decision of the RTC.

Legaspi Towers is a condominium building located in Makati City. It consists of seven (7)
floors, with a unit on the roof deck and two (2) levels above said unit called Concession 2 and
Concession 3. Concession 3 was originally owned by Leon Antonio Mercado. LEMANS bought
Concession 3 from Mercado. On the same year, LEMANS decided to build another unit
(Concession 4) on the roof deck of Concession 3. Despite Legaspi Corporation’s notice that the
construction of the Concession 4 was illegal, Lemans refused to stop its construction. Legaspi
Corporation forbade the entry of Lemans’ construction materials to be used in Concession 4.

LEMANS filed a complaint with the RTC praying that a writ of mandatory injunction be
issued to allow the completion of the construction of Concession 4. RTC denied the petition ruling
that LEMANS is not the owner of the air space above its unit and that Leman’s claim of ownership
is without basis in fact and in law. In another proceeding, Lemans adduced evidence before the
RTC to establish the actual cost for the construction of Concession 4. RTC ordered that Legaspi
Towers to exercise its option to appropriate the additional structure on top of the Penthouse owned
by Lemans. Should Legaspi towers choose not to appropriate, parties shall agree upon the terms
of lease pursuant to Article 448 of the Civil Code.

ISSUE:
Are Articles 448 and 546 of the Civil Code on builders in good faith applicable in this case
where the land belongs to a condominium corporation and is covered by the Condominium Act?

RULING:
No. Article 448 on builders in good faith does not apply where there is a contractual relation
between the parties.

The raison d'etre for this is where the builder, planter or sower has acted in good faith, a
conflict of rights arises between the owners, and it becomes necessary to protect the owner of the
improvements without causing injustice to the owner of the land. In view of the impracticability of
creating a state of forced co-ownership, the law has provided a just solution by giving the owner of
the land the option to acquire the improvements after payment of the proper indemnity, or to oblige
the builder or planter to pay for the land and the sower the proper rent.

In the case at bar, however, the land belongs to a condominium corporation, wherein the
builder, as a unit owner, is considered a stockholder or member in accordance with Section 10 of
the Condominium Act. Articles 448 and 546 of the Civil Code on builders in good faith are therefore
inapplicable in cases covered by the Condominium Act where the owner of the land and the builder
are already bound by specific legislation on the subject property (the Condominium Act), and by
contract (the Master Deed and the By-Laws of the condominium corporation). Upon acquisition of
a condominium unit, the purchaser not only affixes his conformity to the sale; he also binds himself
to a contract with other unit owners.

Thus, Article 448 and consequently Article 546 of the Civil Code on builders are not
applicable in this case.

26
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CLAIMS MERELY BASED ON TAX DECLARATIONS THAT ARE FULL OF

INCONSISTENT ENTRIES DO NOT SUFFICIENTLY PROVE PETITIONERS' CLAIMS OF
POSSESSION OR OWNERSHIP

Heirs of Cayetano Cascayan vs. Spouses Oliver and Evelyn Gumallaoi and the Municipal
Engineer of Bangui, Ilocos Norte
G.R. No. 211947; July 3, 2017
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court praying that
the CA Decision be reversed and set aside.

All heirs of Cayetano Cascayan (Cascayan Heirs) filed a Complaint for the Recovery of
Possession, Demolition, and Damages against spouses Oliver and Evelyn Gumallaoi (Spouses
Gumallaoi) before the RTC, alleging that by virtue of a free patent, they are co-owners of a parcel
of land covered by an OCT and the respondent spouses encroached upon their property when the
latter built their residential house. In response, and by way of counterclaim, the spouses Gumallaoi
maintained that they were the true owners of both parcels of land. They claimed that the Cascayan
Heirs secured a free patent to 1 parcel of land through manipulation, fraud, and deception.

RTC rendered a Decision declaring the Spouses Gumallaoi the legal owners of the subject
lot. It ruled that petitioners did not prove that they or their predecessor-in-interest had been in
possession of it. After investigation, it was shown that the lot being declared then to an unknown
person, plaintiffs took it upon themselves and claimed it, secured a tax declaration in their name
in 2003 and applied thereafter for a free patent therefor the following year. CA affirmed RTC. Hence
this petition.

ISSUE:
Were the pieces of evidence of petitioners, consisting of a redacted affidavit and tax
declarations full of inconsistencies, sufficient to prove the validity of their free patent?

RULING:
No. The petitioners applied for a free patent without any basis.

The pieces of evidence were manipulated as shown by the redaction of Estrelita Balbag of
her affidavit in support of their supposed continuous possession, claiming that she did not know
the contents of the said instrument, and Jalibert Malapit who stated that his signature on the
affidavit presented is not his real signature. Additionally, the series of tax declarations they have
presented to show that their family has possessed the land since 1925 is full of inconsistencies
which were never explained and only casted more doubts as to the identity of the land being
claimed by them.
The CA and RTC conclude that petitioners obtained the free patent fraudulently based on the facts
that petitioners were never in possession of Lot No. 20028. There was not even an allegation on
how Cayetano took possession of the land and in what way he derived his title thereto. Even the
documents submitted to support their application were flawed: the tax declarations were
inconsistent and the affidavits and Certifications were subsequently retracted. The Heirs of
Cascayan merely based their claim of possession on a series of tax declarations purportedly
showing that Cayetano, their predecessor-in-interest, had been religiously paying the taxes thereof
and even built a residential house thereon. However, and as aptly noted by the RTC, these tax
declarations are full of inconsistent entries that were never explained and only cast doubt as to the
identity of the land being claimed by the Heirs of Cascayan.

Thus, as the petitioners applied for a free patent without any basis, the Court finds it proper
to declare the respondents as the legal owners of the subject lot and to cancel petitioners' title to
it.

27
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE TO, OR INTEREST IN THE

PROPERTY FOR AN ACTION FOR QUIETING OF TITLE TO PROSPER

Josephine Delos Reyes and Julius Peralta vs. Municipality of Kalibo, Aklan, its Sangguniang
Bayan and Mayor Raymar Rebaldo
G.R. No. 214587; February 26, 2018
Peralta, J.

FACTS:
This is a petition for review seeking to annul and set aside the Decision of the CA which
reversed and set aside the Decision of the RTC, thereby declaring the subject properties as part
of public land.

Jose Peralta (Jose) inherited land from his sister, Ana, upon her demise. Allegedly through
accretion, land was added to the lot. Upon Jose’s demise, the area of accretion was apportioned
and registered under Tax Declaration Nos. 21162-A, 21163-A, 21164-A, and 21165-A in the names
of siblings Juanito Peralta (Juanitos), Javier Peralta, Josephine Delos Reyes, and Julius Peralta
(Peraltas). On the other hand, the Municipality of Kalibo, through its then Mayor Diego Luces and
the members of its Sangguniang Bayan, sought to convert more or less four hectares of the said
area of accretion into a garbage dumpsite. Juanito, in his capacity as his siblings’ representative,
opposed said project in a letter. He also wrote a formal protest to the Secretary of the Department
of Environment and Natural Resources (DENR). Despite Peraltas’ opposition, the Municipality of
Kalibo continued the project under the justification that the contested property is actually part of
public domain. Thus, the municipality built a retaining wall on the property and later was enclosed
with a perimeter fence.

The Peraltas filed a complaint for quieting of title over two (2) portions of accretion declared
in their names for taxation purposes. The RTC ruled in favor of the Peraltas, ruling that the area of
accretion is not public land. On appeal, CA reversed the assailed ruling of the RTC.

ISSUE:
Will the action for quieting of title prosper despite the Peraltas’ failure to register the area
of accretion?

RULING:
No. In order that an action for quieting of title may prosper, the plaintiff must have legal or
equitable title to, or interest in, the property which is the subject matter of the action.

While legal title denotes registered ownership, equitable title means beneficial ownership.
In the absence of such legal or equitable title, or interest, there is no cloud to be prevented or
removed. Likewise, the plaintiff must show that the deed, claim, encumbrance, or proceeding that
purportedly casts a cloud on their title is in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.

The petitioners in the instant case, are not even registered owners of the area adjacent to
the increment claimed, much less of the subject parcels of land. Only the late Juanito became the
registered owner of the lot, the lot next to the supposed accretion. Assuming that the petitioners
are Juanito’s rightful successors, they still did not register the subject increment under their names.
It is settled that an accretion does not automatically become registered land just because the lot
that receives such accretion is covered by a Torrens Title.

Thus, the action for quieting of title by the Peraltas will not prosper.

28
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE, OR INTEREST IN THE SUBJECT

PROPERTY FOR AN ACTION QUIETING OF TITLE TO PROSPER

Spouses Jaime and Catherine Basa, et.al. vs. Angeling Loy vda. De Senly Loy et.al
G.R. No. 204131; June 4, 2018
Del Castillo, J.

FACTS:
This is a Petition for Review on Certiorari assailing the Decision of the CA affirming the
Decision of the RTC denying Spouses Jaime and Catherine Basa, et.al. (petitioners) claims for
failing to discharge their burden of proving the truth of their claims even by preponderance of
evidence.

The subject property was registered in the name of the late Busa Carantes, who is the
predecessor-in-interest of Manual Carantes and herein respondent Robert Carantes. The property
was mortgaged to respondent Angeline Loy and her husband. They eventually foreclosed the
property and at the auction sale, they emerged as the highest bidder. After consolidating ownership
over the property, RTC issued a writ of possession in their favor.

Subsequently, petitioners filed a petition for quieting of title with prayer for injunctive relief
and damages against respondents claiming that portions of the subject property were sold to them
by Robert Carantes and that they took possession of the portions sold to them. The titles issued
in favor of Angeline Loy, therefor created a cloud upon their title and are prejudicial to their claim
of ownership. The RTC denied the petition and was affirmed by the CA for failure of the petitioners
to append the original deeds of sale of the subject property.

ISSUE:
Did petitioners prove by preponderance of evidence their case for quieting of title despite
not presenting the deeds of sale?

RULING:
No. In order that an action for quieting of title may prosper, it is essential that the plaintiff
must have legal or equitable title to, or interest in, the property which is the subject-matter of the
action.

Legal title denotes registered ownership, while equitable title means beneficial ownership.
In the absence of such legal or equitable title, or interest, there is no cloud to be prevented or
removed. 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.

By petitioners' failure to present the original copies of the purported deeds of sale in their
favor, the case for quieting of title did not have a leg to stand on. Petitioners were unable to show
their claimed right or title to the disputed property, which is an essential element in a suit for quieting
of title. Their belated presentation of the supposed originals of the deeds of sale by attaching the
same to their motion for reconsideration does not deserve consideration as well; the documents
hardly qualify as evidence.

Thus, petitioners did not prove by preponderance of evidence their case for quieting of title.

29
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

AN ACTION FOR RECONVEYANCE BASED ON IMPLIED TRUST PARTAKES THE

NATURE OF AN ACTION FOR QUIETING OF TITLE IF THE PLAINTIFF REMAINS IN
POSSESSION OF THE SUBJECT PROPERTY, THEREBY MAKING THE ACTION
IMPRESCRIPTIBLE

Jose S. Ocampo vs. Ricardo S. Ocampo, Sr.

G.R. No. 227894; July 5, 2017
Velasco, Jr., J.

FACTS:
Petitioner filed this petition for review on Certiorari under Rule 45 before the SC questioning
the earlier orders of the CA and the RTC ordering the partition of the subject parcel of land and the
annulment and cancellation of petitioner’s title over the same.

Jose S. Ocampo (petitioner) and Ricardo S. Ocampo (respondent) are brothers who are
co-owners of a piece of land which was a conjugal property left behind by their parents (subject
property). Both parties reside at the two (2)-storey building erected on the subject property.

Respondent filed a complaint for partition and annulment of the petitioner’s title over the
subject property on June 29, 1992, alleging therein that the petitioner and his wife conspired to
falsify his signature on a notarized document called Extra-judicial Settlement with Waiver (ESW).
Petitioner contends that the subject property was conveyed to him by his parents though donation
propter nuptias. He further claimed that their father executed the ESW and secured the
respondent’s signature. Through the ESW, petitioner was able to have the old title cancelled and
a new one issued in his name on November 27, 1971. Petitioner questions the lower courts’ orders
in favor of the respondent because his title over the subject property became indefeasible a year
after the issuance of a certificate of title in his favor and that the respondent is already barred by
prescription for the complaint was filed 21 years and 7 months from the issuance of the certificate
of title.

ISSUE:
Was the respondent’s complaint for partition and annulment of the petitioner’s title over the
subject land which was filed 21 years and 7 months after the issuance of the certificate of title
barred by prescription?

RULING:
No, action is not yet barred by prescription.

As a general rule, P.D. No. 1529 makes the decree of registration and the certificate of title
incontrovertible upon the expiration of one (1) year from the date of entry of the decree of
registration unless there is wrongful registration which registration gives occasion to the creation
of an implied or constructive trust under Article 1456 of the New Civil Code which prescribes in 10
years. However, if the plaintiff remains in possession of the property, the prescriptive period to
recover title of possession does not run against him. In such case, his action is deemed in the
nature of a quieting of title, an action that is imprescriptible.

Here, the certificate of title over the subject property was issued on November
24, 1970. Yet, the complaint for partition and annulment of the title was only filed on July
1992, more than twenty (20) years since the assailed title was issued. Respondent's complaint
before the RTC would have been barred by prescription. However, based on the records, both
petitioner and respondent were residing at the subject property at the time the complaint was filed.
Considering that respondent was in actual possession of the disputed land at the time of the filing
of the complaint, the present case may be treated as an action for quieting of title.

Thus, the present action is not barred by prescription.

30
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A SPOUSE WHO DONATES CONJUGAL PARTNERSHIP PROPERTY TO THE SPOUSES’

GRANDSON, WITHOUT THE CONSENT OF THE OTHER SPOUSE, ONLY CONVEYS HER
ONE-HALF UNDIVIDED PORTION IN THE PROPERTY

Spouses Julieta and Fernando Carlos vs. Juan Cruz Tolentino

G.R. No. 234533; June 27, 2018
Velasco, Jr., J.

FACTS:
This is a petition for review on Certiorari under Rule 45 assailing the CA’s decision in
reversing and setting aside the RTC’s decision of dismissing respondent's complaint for annulment
of title against the petitioners.

Without respondent Juan Tolentino’s (Juan) knowledge and consent, Mercedes, his wife
and Kristoff, his grandson forged a Deed of Donation (Deed) involving a property owned by the
spouses Juan and Mercedes. The Deed donated the property to Kristoff. By virtue of the Deed,
the title of the land was transferred to Kristoff. Kristoff then sold the property to the Spouses Carlos.
An agreement and a Deed of Absolute Sale were executed to signify the sale.

Upon learning of the foregoing events, Juan executed an Affidavit of Adverse Claim which
was annotated on the title of the property. When the title to the property was transferred to the
spouses Carlos, the adverse claim was duly carried over. Juan also filed a complaint for annulment
of title with damages against Mercedes, Kristoff and the Spouses Carlos. The RTC found the
signature of Juan on the Deed of Donation a forgery but nonetheless dismissed the complaint. The
CA reversed the decision.

ISSUE:
Was the donation of a conjugal property by one spouse (Mercedes), without the consent
of the other (Juan) null and void?

RULING:
No. The Deed of Donation is not wholly void ab initio.

Juan and Mercedes appear to have been married before the effectivity of the Family Code
on August 3, 1988. There being no indication that they have adopted a different property regime,
the presumption is that their property relations is governed by the regime of conjugal partnership
of gains. Since the subject property was acquired during their marriage, it formed part of their
conjugal partnership. It follows then that Juan and Mercedes are the absolute owners of their
undivided one-half interest, respectively, over the subject property. It is apparent that Mercedes,
during her lifetime, relinquished all her rights thereon in favor of her grandson, Kristoff. Mercedes
also gave acquiescence to the subsequent sale of the property to Spouses Carlos is evidenced by
her signature appearing in the MOA and the Deed of Absolute Sale. The Deed of Donation is valid
but only to the extent of Mercedes' one-half share in the subject property. Accordingly, the right of
Kristoff, as donee, is limited only to the one-half undivided portion that Mercedes owned. The Deed
of Donation insofar as it covered the remaining one-half undivided portion of Juan of the subject
property is null and void, Juan not having consented to the donation of his undivided half.

Upon the foregoing perspective, Spouses Carlos' right, as vendees in the subsequent sale
of the subject property, is confined only to the one-half undivided portion thereof. The other
undivided half still belongs to Juan. Kristoff should be liable to reimburse Spouses Carlos of the
amount corresponding to one-half of the purchase price of the subject property.

31
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

LAW DOES NOT REQUIRE A PERSON TO HAVE HIS FEET ON EVERY SQUARE METER
OF THE GROUND BEFORE IT CAN BE SAID THAT HE IS IN POSSESSION THEREOF;
PAYING TAXES AND OCCASIONAL VISITS ON THE SUBJECT LOT SUFFICE

Spouses Janet Uri Fahrenbach and Dirk Fahrenbach vs. Josefina Pangilinan
G.R. No. 224549; August 8, 2017
Leonen, J.

FACTS:
This is a petition for review on Certiorari of the Decision of the CA which affirmed the
Decision of the RTC ordering Spouses Janet Uri Fahrenbach and Dirk Fahrenbach (petitioners) to
vacate the parcel of land claimed by Josefina R. Pangilinan (respondent).

On September 6, 1995, respondent acquired a parcel of unregistered land (subject lot)

from her aunt, Felomina Abid (Abid), through a Waiver of Rights. The said lot measured 5.78
hectares. However, unknown to respondent, Abid also executed a Deed of Sale in favor of
Columbino Alvarez (Alvarez) covering the same land. On August 2, 2005, after purportedly learning
that the description of the property he bought under the Deed of Sale was erroneous, Alvarez
executed a handwritten letter stating that the subject lot, with an area of 5.78 hectares belonged
to respondent. In September 2005, respondent learned that petitioners were occupying the 5.78-
hectare subject lot she acquired from Abid and built structures thereon without respondent's
consent. Despite demands, petitioners refused to vacate the premises. Thus, respondent filed a
complaint for forcible entry against petitioners.

The MCTC ruled in favor of the petitioners ruling that anent the respondent’s casual visits
to the property, the same was not sufficient to constitute actual possession contemplated by law
in ejectment cases. On appeal, the RTC reversed the Decision which was subsequently affirmed
by the CA. Hence this petition for review on certiorari.

ISSUE:
Was respondent’s occasional visits to the land considered as possession as to make her
a possessor prior to that of petitioners?

RULING:
Yes, respondent was the prior possessor of the subject lot.

Jurisprudence states that the law does not require a person to have his feet on every
square meter of the ground before it can be said that he is in possession thereof. In Bunyi v. Factor,
the Court held that "visiting the property on weekends and holidays is evidence of actual or physical
possession. The fact of her residence somewhere else, by itself, does not result in loss of
possession of the subject property.” In contrast, petitioners themselves claim that they began
occupying the subject lot only in August 2005, after Alvarez executed the corresponding Deed of
Sale in their favor. Hence, in light of the foregoing, there is no doubt that respondent had prior de
facto possession.

Records disclose that respondent occasionally visited the subject lot since she acquired
the same from Abid in September 1995. She even paid the lot's realty taxes, as well as requested
for a survey authority thereon. In fact, she submitted old photographs showing herself on the
subject lot, the identity of which petitioners did not contend.

Thus, the respondent is considered as the prior possessor despite of mere occasional visits
to the property.

32
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

OCCUPATION OF THE CARETAKER MAY BE CONSIDERED AS PROOF OF THE OWNER’S

PRIOR POSSESSION AS POSSESSION IS NOT ONLY BY MATERIAL OCCUPATION, BUT
ALSO BY THE FACT THAT A THING IS SUBJECT TO THE ACTION OF ONE'S WILL

Municipal Rural Bank of Libmanan, Camarines Sur vs. Virginia Ordoñez

G.R. No. 204663; September 27, 2017
Peralta, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 assailing the order of the CA which
reversed the RTC’s earlier dismissal of the respondent Virginia Ordoñez’ complaint for quieting of
title against the petitioner Municipal Rural Bank of Libmanan, Camarines Sur.

Petitioner was the creditor of a certain Roberto Hermita who used the subject property as
a security for his loan. His loan remained unpaid; hence, the petitioner caused the foreclosure of
the same and emerged as the highest bidder. It found out, however, that the subject land is being
occupied by one Ramon Zamudio who was the alleged caretaker of the land for the respondent.

Respondent claims ownership over the subject lot. It is her claim that her caretaker
Zamudio occupied the premises at the instance of her predecessors-in-interest who had been in
an open, peaceful, adverse, and uninterrupted possession of the land. Hence, she filed an action
for quieting of title to remove the cloud over her ownership.

Petitioner contends that the respondent could not properly institute the action since she
was not in actual physical possession of the subject lot as the actual possessor was Zamudio. It is
petitioner’s belief that the possession required by the law means actual possession. The trial court
dismissed the complaint but on appeal, the CA reversed the RTC. Hence, this case.

ISSUE:
Was the possession of the respondent of the subject land through her caretaker sufficient
to give her capacity to bring an action for quieting of title?

RULING:
Yes. For one to be considered in possession, one need not have actual or physical
occupation of every square inch of the property at all times.

Possession can be acquired not only by material occupation, but also by the fact that a
thing is subject to the action of one's will or by the proper acts and legal formalities established for
acquiring such right. Possession can be acquired by juridical acts. These are acts to which the law
gives the force of acts of possession. In one case, this Court has considered a claimant's act of
assigning a caretaker over the disputed land, who cultivated the same and built a hut thereon, as
evidence of the claimant's possession of the said land.

In the present case, it has been established that respondent and her predecessors-in-
interest authorized Zamudio as caretaker of the subject land. Thus, Zamudio's occupation of the
disputed land, as respondent's caretaker, as early as 1975, is considered as evidence of the latter's
occupation of the said property. Petitioner's argument that respondent's possession must not be a
mere fiction but must, in fact, be actual is unavailing as this requirement is applicable only in
proceedings for land registration under Presidential Decree 1529, otherwise known as the Land
Registration Decree, which is not the case here.

Thus, Zamuido’s occupation of disputed land serves as evidence of respondent physicial

occupation over the same, capacitating the latter to bring an action for quieting of title.

33
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

POSSESSION IN GOOD FAITH CEASES FROM THE MOMENT DEFECTS IN THE TITLE
ARE MADE KNOWN THROUGH LETTERS INFORMING OF POSSIBLE
ENCROACHMENT TO THE POSSESSORS

Pen Development Corporation and Las Brisas Resort Corporation vs. Martinez Leyba Inc.
G.R. No. 211845; August 9, 2017
Del Castillo, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 assailing the decision of the CA
and the RTC which both ruled in favor of the respondent and ruled that petitioners were in bad
faith for building over the overlapping portion of the land despite having notice of the respondent’s
title over the same.

Las Brisas is the registered owner of a parcel of land where it built Las Brisas Resort
Complex. A portion of the land in question overlaps with that of the respondent’s land which
resulted in Las Brisas building improvements over some parts of the respondent’s land.
Respondent Martinez Leyba Inc. (Martinez), is the registered owner of a parcel of land adjacent to
the one owned by Las Brisas. Martinez noticed that Las Brisas’ fence seems to encroach upon its
land. Martinez, through counsel, sent a letter informing Las Brisas of the same but the letter was
ignored. Five more letters were sent until Las Brisas responded and claimed that it cannot trace
the origin of the title of Martinez’ land. Hence, Martinez was compelled to file an action for quieting
of title, cancellation of title, and recovery of ownership with damages against Las Brisas. Martinez
hired a geodetic engineer to establish that Las Brisas was encroaching upon its land but Las Brisas
disclaimed liability by citing that it was in good faith.

ISSUE:
Can Las Brisas validly claim good faith to resist the claim of Martinez despite the latter
having sent letters to the former regarding the encroachment on the former’s land?

RULING:
No. Good faith is an intangible and abstract quality with no technical meaning or statutory
definition, and it encompasses, among other things, an honest belief, the absence of malice and
the absence of design to defraud or to seek an unconscionable advantage.

Article 528 of the New Civil Code provide that possession acquired in good faith does not
lose its character, except from the moment facts exist which show that the possessor is not
unaware that he possesses the thing improperly or wrongfully. Possession in good faith ceases
from the moment defects in the title are made known to the possessors, by extraneous evidence
or by suit for recovery of the property by the true owner. Whatever may be the cause or the fact
from which it can be deduced that the possessor has knowledge of the defect of his title or mode
of acquisition, it must be considered sufficient to show bad faith.

Here, while Las Brisas’ possession was initially in good faith, it ceased to be so when
Martinez sent letters but Las Brisas ignored the same. Hence, Las Brisas cannot interpose good
faith to disclaim liability as despite being apprised of the encroachment, petitioners turned a blind
eye and deaf ear and continued to construct on the disputed area. They did not bother to conduct
their own survey to put the issue to rest, and to avoid the possibility of being adjudged as builders
in bad faith upon land that did not belong to them.

Thus, Las Brisas cannot validly claim good faith.

34
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

LACHES IS NOT A BAR TO RECOVERY OF POSSESSION WHEN THE SAME IS MERELY

TOLERATED

Department of Education, Culture and Sports (now Department of Education) vs. Heirs of
Regino Banguilan
G.R. No. 230399; June 20, 2018.
Reyes Jr., J.

FACTS:
In a petition for Certiorari under Rule 45, Department of Education (DepEd) assails the CA
decision granting the appeal of the heirs of Regina Banguilan. The CA ruled that laches would not
work in favor of DepEd since the subject lot was registered under the Torrens System and because
their possession was merely by tolerance.

Before WWII, DepEd sought permission from Regino Banguilan (the original owner) to
build temporary structures in the contested land to be used as classrooms. Regino consented.
Over time, structures were added until the permanent building of the Caritan Norte Elementary
School (CNES) was established. After Regino’s death, respondents’ predecessors-in-interest
demanded from school officials reasonable rent for the use of their property, and for petitioner to
purchase the same if it so desired.

Then, respondents claim that DepEd’s non-adherence to the agreement prejudiced them
because they were deprived of the use and enjoyment of the subject property since 1960. DepEd
denied respondents’ claim since the school’s occupation and possession over the property was in
the concept of an owner for more than 50 years until 2001.

The RTC declared Regino as the undisputed owner, however, respondents have been
barred by laches in assailing their right over the property.

ISSUE:
Can DepEd be considered the owner of the land in dispute considering that they had been
in possession of it for over 50 years?

RULING:
No, DepEd cannot be considered the owner of the land in dispute.

In the case of Heirs of Jose Maligaso vs. Spouses Encinas, the Court explained that
possession over the property by anyone other than the registered owner gives rise to the
presumption that said possession is only by mere tolerance. Likewise, when faced with
unsubstantiated self-serving claims as opposed to a duly registered Torrens title, the latter must
prevail. The Court unequivocally stated that laches can only apply to one whose possession of the
property was open, continuous, exclusive, adverse, notorious, and in the concept of an owner for
a prolonged period of time. Additionally, physical possession must be coupled with intent to
possess as an owner in order for it to be considered as adverse.

Notably, petitioner failed to adduce any evidence to substantiate its claim that it acquired
the subject property and possessed it in the concept of an owner. Considering that CNES'
possession was merely being tolerated, respondents cannot be said to have delayed in asserting
their rights over the subject property. A registered owner who is merely tolerating another's
possession of his land is not required to perform any act in order to recover it. This is because the
occupation of the latter is only through the continuing permission of the former. Consequently,
once said permission ceases, the party whose possession is merely being tolerated is bound to
vacate the subject property.

Therefore, the petitioner's claim that their possession of the subject lot was adverse and in
the concept of an owner, must fail. Being the owners of the subject property, respondents have
the right to recover possession from the petitioner because such right is imprescriptible.

35
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THERE MUST BE A REAL, NOT FICTITIOUS OR ARTIFICIAL, NECESSITY FOR THE

RIGHT OF WAY, AND THE RIGHT CANNOT BE CLAIMED MERELY FOR THE
CONVENIENCE OF THE OWNER OF THE ENCLOSED ESTATE. THE BURDEN OF
PROVING THE EXISTENCE OF THE FOREGOING REQUISITES LIES ON THE OWNER
OF THE DOMINANT ESTATE

AMA Land Inc. vs. Wack Wack Residents’ Association Inc.

G.R. No. 202342; July 19, 2017
Caguioa, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 seeking to reverse the order of the
CA which set aside the earlier order of the RTC denying the respondent’s application for the
issuance of a temporary restraining order and writ of preliminary injunction to enjoin petitioner from
the use of Fordham Street.

AMA Land Inc. (AMALI) proposed a commercial and residential building project (AMA
Tower) in Wack Wack, Mandaluyong City which will use Fordham Street as an access road and a
staging area for the project, alleging that the use of Fordham Street is indispensable to the
construction of AMA Tower and it is the least prejudicial to the parties involved. AMALI expressed
its willingness to pay indemnity to respondent. It sent a letter to respondent but respondent did not
reply. Hence, it applied for a temporary and a permanent right of way before the trial court, citing
Arts. 646 and 659 of the Civil Code as grounds. Wack Wack Residents’ Association Inc. (WWRAI)
is the registered homeowners' association of Wack Wack Village and the owner of the Fordham
Street sought to be used by AMALI. WWRAI contended that the project of AMALI violates the
applicable zoning ordinances; that the licenses and permits issued in favor of AMAL! were irregular
and unlawful and that the project is a nuisance.

ISSUE:
Is AMALI entitled to a temporary easement of right of way over a portion of Fordham Street
belonging to WWRAI pending the resolution of its petition for declaration of easement of right of
way?

RULING:
No. The denial of WWRAI's application for a writ of preliminary injunction against the
construction of the AMA Tower does not necessarily translate to AMALI's entitlement to a
temporary easement of right of way over a portion of Fordham Street belonging to WWRAI for use
as an access road and staging area of its AMA Tower project before the resolution of its petition
for declaration of easement of right of way (original petition) by the RTC.

Firstly, the CA Decision categorically found that WWRAI is the owner of the subject
Fordham Street as this was expressly admitted by AMALI and pursuant to the RTC's pre-trial order.
Secondly, the question of whether or not AMALI, as owner of the dominant estate, may validly
claim against WWRAI a compulsory permanent right of way under Articles 649 and 650 of the Civil
Code, will depend on a finding that AMALI has established the existence of the following requisites,
namely: (1) the dominant estate is surrounded by other immovables; (2) it is without adequate
outlet to a public highway; (3) after the proper indemnity has been paid; (4) the isolation was not
due to the proprietor of the dominant estate's own acts; and (5) the right of way claimed is at a
point least prejudicial to the servient estate. A sixth requisite is that the right of way must be
absolutely necessary for the normal enjoyment of the dominant estate by its owner. There must
be a real, not fictitious or artificial, necessity for the right of way, and the right cannot be claimed
merely for the convenience of the owner of the enclosed estate. The burden of proving the
existence of the foregoing requisites lies on AMALI, being the owner of the dominant estate.

However, this issue remains pending before the RTC and as such, the final determination
of this question remains before the same court.

36
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CONCEPT OF INNOCENT PURCHASER FOR VALUE DOES NOT APPLY TO

GRATUITOUS TRANSFERS

Jose Gambito vs. Adrian Oscar Bacena

G.R. No. 225929; January 24, 2018
Reyes, Jr., J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing
the Decision of the CA which affirmed the Decision of the RTC ruling in favor of the respondent
Adrian Bacena (Bacena).

Petitioner Jose Gambito (Gambito) claims that he is the true and registered owner of a
certain parcel of land in Nueva Vizcaya. The said parcel of land was acquired by him through a
Deed of Donation executed by his mother, Luz, who bought the same property from Dominga
Pascual and her co-owner Rosalina Covita. He discovered that Bacena secured before the
Community Environment and Natural Resources Office (CENRO) a patent title which was a part
and portion of the same lot registered in Gambito’s name.

On the other hand, Bacena avers that Gambito’s title is null and void because it was derived
from a deed of sale, dated December 16, 1994, which supposedly was signed by vendor Pascual
although she was already dead for seven (7) years.

MTC ruled in favor of Gambito but was reversed in the RTC, ruling that Gambito has no
legal or equitable title to or interest in the real property of the subject of the action since his title
was based on a falsified Deed of Sale.

ISSUE:
Can Gambito inherit the lot in question as a transferee in good faith despite fraud on the
transfer of property from Pascual and Covita to Luz?

RULING:
No, Gambino cannot inherit the lot in question as a transferee in good faith.

Under Section 53 of Presidential Decree No. 1529, known as the Property Registration
Decree, in all cases of registration procured by fraud, the owner may pursue all his legal and
equitable remedies against the parties to such fraud without prejudice, however, to the rights of
any innocent holder for value of a certificate of title. After the entry of the decree of registration on
the original petition or application, any subsequent registration procured by the presentation of a
forged duplicate certificate of title, or a forged deed or other instrument, shall be null and void.

In this case, Gambito is not an innocent holder for value for the reason that he is a donee
acquiring the property gratuitously by a Deed of Donation and not by purchase. Hence, the concept
of an innocent purchaser for value cannot apply to him. It is an established fact that the fraud
referred to by the CA is the fraud on the transfer of the property from Pascual and Covita to Luz
on the basis of fake signatures considering that the vendor signatories therein are all dead. As
such, by applicability of the foregoing jurisprudence, the deed is considered a forged deed and
hence null and void.

Thus, Luz's title is null and void which transferred nothing by Deed of Donation to her son
Gambito, the petitioner herein.

37
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

DONATION MUST BE MADE IN A PUBLIC INSTRUMENT; DEFECTIVE NOTARIZATION

REDUCES DOCUMENT TO A PRIVATE DOCUMENT

Heirs of Jose and Helen Mariano and Heirs of Erlinda Mariano-Villanueva vs. City of Naga
G.R. No. 197743; March 12, 2018
Tijam, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing
the Decision of the CA which reconsidered its Decision, annulling the Decision of the RTC and
reinstating the Decision of the MTC, dismissing the ejectment case instituted by Heirs of Mariano
(petitioners).

Officers of the City Heights Subdivision wrote to the Mayor of Naga City, offering to
construct the Naga City Hall within the premises of the subdivision. Resolution No. 89 accepted
the Subdivision’s offer of donation and its proposed contract. The Resolution also authorized the
City Mayor to execute the deed of donation on the City’s behalf. According to the City, Macario
Mariano and Jose Gimenez executed a Deed of Donation whereby the latter donated five hectares
of land to be used as a City Hall site, public plaza and for the public market. By virtue of the said
Deed, the City entered the property and began the construction of the government center.
Thereafter, other government agencies and instrumentalities entered the same property and built
their offices thereon. On the other hand, petitioners averred that the donation did not materialize
as the contract to build the City Hall was not awarded to the Subdivision. Petitioners met with the
Mayor to demand the return of the five-hectare lot as the condition for the donation was not
complied with. The mayor assured the petitioner that the city will purchase the lot but no sale
materialized. The MTC gave weight to the Deed of Donation

The petitioners then filed a complaint before the MTC to order the City and all agencies or
offices claiming rights under it to vacate the subject property and to return possession thereof to
them. The City countered that by a Deed of Donation, the City the owner and lawful possessor of
the subject property. RTC noted some irregularities in the Deed of Donation.

ISSUE:
Was the Deed of Donation in favor of the City valid despite the defect with its notarization
as the Acknowledgment was made neither by the alleged donors nor donees and the latter affixing
his signature four days after deed was notarized?

RULING:
No, the deed of donation is not valid.

Article 749 of the Civil Code requires that donation of real property must be made in a
public instrument to be valid. Donation of real property is void without the formalities specified in
the foregoing provision. A void or inexistent contract has no force and effect from the very
beginning, as if it had never been entered into. It is equivalent to nothing and is absolutely wanting
in civil effects. It cannot be validated either by ratification or prescription. The purported Deed of
Donation submitted by the City cannot be considered a public document. While it contains an
Acknowledgment before a notary public, the same is manifestly defective as it was made neither
by the alleged donors (Macario and Gimenez) and their respective spouses, or by the donee (the
City, through Mayor Imperial), but only by Eusebio M. Lopez, Faustino Dolor, Soledad Lirio Dolor
and Lopez, Jr., as the Subdivision's President, Vice President, Secretary and General Manager
respectively. Said Deed also shows that Mayor Imperial affixed his signature thereon on August
21, 1954, or four days after it was notarized, thus he could not have acknowledged the same before
the notary public on August 16, 1954. Verily, the notary public could not have certified to knowing
the parties to the donation, or to their execution of the instrument, or to the voluntariness of their
act.

It is settled that a defective notarization will strip the document of its public character and
reduce it to a private instrument. Not being a public document, the purported Deed of Donation is
void.

38
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ACTION FOR RECONVEYANCE BASED ON SPURIOUS, MANIPULATED AND VOID

SURVEYS IS IMPRESCRIPTIBLE UNDER ARTICLE 1410

Spouses Yu Hwa Ping and Mary Gaw vs. Ayala Land, Inc.
G. R. No. 173120; July 26, 2017
Mendoza, J.

FACTS:
This is a petition for review on Certiorari of seeking to reverse the order of the CA
dismissing the action of Spouses Yu against Ayala Land, Inc. (ALI) for reconveyance and
annulment of title because of the expiration of the one-year reglementary period from the time of
registration, making the TCT indefeasible.

ALI was the successor-in-interest of CPJ Corporation while Spouses Yu was the
successor-in-interest of Spouses Diaz. Spouses Diaz and CPJ Corporation were parties to a case
involving a parcel of land purportedly arising from the same land survey. Spouses Yu filed an action
against ALI for reconveyance and declaration of nullity of the TCTs issued in the name of the latter.

Petitioners argue that their complaint is not barred by prescription under Act No. 496
because an action to annul the fraudulent registration of land is imprescriptible. Respondents argue
that that the registration of a land under the Torrens system carries with it a presumption of
regularity and that the expiration of one-year period after the issuance of the TCT in its name
makes its title indefeasible. It further argues that the fact that case was brought only on December
4, 1996 when the TCT was issued on 1992 bars the petitioners from questioning its title over the
subject property under Section 38 of Act 496.

ISSUE:
Was the action for reconveyance of Spouses Yu based on spurious, manipulated and void
surveys barred by prescription for filing the case in 1996 when the TCT covering the lot was issued
to ALI on 1992?

RULING:
No. Spouses Yu are not barred by prescription.

Section 53, paragraph 3 of PD No. 1529 in relation to Article 1456 of the Civil Code and
Article 1144 (2) of the Civil Code provides that the prescriptive period for the reconveyance of
fraudulently registered real property is 10 years from the date of the issuance of the certificate of
title. The 10-year period begins to run from the date the adverse party repudiates the implied trust,
i.e. when the adverse party registers the land. The foregoing cases on the prescriptibility of actions
for reconveyance apply when the action is based on fraud, or when the contract used as basis for
the action is voidable. When the action for reconveyance is based on an implied or constructive
trust, the prescriptive period is ten (10) years, or it is imprescriptible if the movant is in the actual,
continuous and peaceful possession of the property involved. On the other hand, when the action
for reconveyance is based on a void deed or contract the action is imprescriptible under Article
1410 of the New Civil Code.

Here, a reading of Spouses Yu's complaint reveals that they are seeking to declare void
ab initio the titles of ALI and their predecessors-in-interest as these were based on spurious,
manipulated and void surveys. If successful, the original titles of ALI's predecessors-in-interest
shall be declared void and, hence, they had no valid object to convey. It would result to
a void contract or deed because the subject properties did not belong to the said predecessors-in-
interest.

Accordingly, the Yu case involves an action for reconveyance based on a void deed or
contract which is imprescriptible under Article 1410 of the New Civil Code.

39
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PRESCRIPTION DOES NOT RUN AGAINST THE STATE AND ITS SUBDIVISIONS
REGARDLESS OF THE NATURE OF THE GOVERNMENT PROPERTY

Jose S. Ramsical Jr. vs. Commission on Audit (COA)

G.R. No. 213716; October 10, 2017
Jardeleza, J.

FACTS:
This is a petition for review on Certiorari under Rule 64 in relation to Rule 65 assailing the
decision and resolution of the Commission on Audit (COA) denying the petitioner’s appeal to be
excluded from liability in relation to a Notice of Disallowance (ND) and a Notice of Charge (NC)
issued in relation to an anomalous transaction where he was cited as a party.

Petitioner Jose S. Ramsical Jr. represented the AFP-RSBS in the anomalous sale
transactions between the AFP-RSBS and Concord Resources Inc. where two deeds of sale were
procured, one representing a lower purchase price. The transaction caused heavy losses to the
government not only with regards to the overpriced consideration but also to the underpayment of
capital gains and documentary stamp taxes. Respondent was asked to form a special audit team
to investigate the matter. Hence, respondent issued an Audit Observation Memorandum (AOM),
ND, and NC.

Petitioner assails the order of the respondent denying his appeal to be excluded from
liability. He claims that the ND and the NC issued in 2010 against him had already prescribed
because the transaction occurred in 1997 and COA only had five (5) years or until 2003 to issue
the ND and NC pursuant to Articles 1149 and 1153 of the Civil Code.

ISSUE:
Did the five-year prescriptive period under Articles 1149 and 1153 bar the respondent COA
from issuing a valid ND and NC?

RULING:
No. Petitioner is mistaken. The right of the State, through the COA, to recover public funds
that have been established to be irregularly and illegally disbursed does not prescribe.

Article 1108 (4) of the Civil Code expressly provides that prescription does not run against
the State and its subdivisions. This rule has been consistently adhered to in a long line of cases
involving reversion of public lands, where it is often repeated that when the government is the real
party in interest, and it is proceeding mainly to assert its own right to recover its own property, thee
can, as a rule, be no defense grounded on laches or prescription. We find that this rule applies,
regardless of the nature of the government property. Article 1108 (4) does not distinguish between
real or personal properties of the State. There is also no reason why the logic behind the rule's
application to reversion cases should not equally apply to the recovery of any form of government
property.

Even if we follow petitioner's argument that Articles 1149 and 1153 of the Civil Code apply
here, the action of the COA is still not barred by the statute of limitations. Indeed, petitioner's
actions occurred in 1997, after the consummated sale of the Calamba properties and its supposed
inclusion in the account of the AFP-RSBS. However, the COA's cause of action would accrue later,
for it was only in 2004 when it was informed of a possible irregularity of the sale when the
Ombudsman requested it to conduct an audit of prior transactions of the AFP-RSBS. It would be
from the issuance of an Audit Observation Memorandum (AOM) in 2005 that the COA's right of
action against petitioner, or its right to disallow or charge AFP-RSBS' accounts, would have only
accrued. It was only then that the COA would have had actual or presumptive knowledge of any
illegal or irregular disbursement of public funds.

Hence, the five-year prescriptive period under Articles 1149 and 1153 did not bar the
respondent from issuing a valid ND and NC.

40
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

JUDICIAL DECLARATION OF HEIRSHIP IS NOT REQUIRED BEFORE AN HEIR CAN

ASSERT HIS RIGHT TO THE PROPERTY OF THE DECEASED

Conchita Gloria and Maria Lourdes Gloria-Payduan vs. Builders Savings and
Loan Association, Inc.
G.R. No. 202324; June 4, 2018
Del Castillo, J.

FACTS:
This Petition for Review on Certiorari assailing the Decision of the CA which reversed the
order of the RTC and denied herein petitioner' Motion for Reconsideration

Spouses Juan and petitioner Conchita Gloria (Conchita) are registered owners of a parcel
of land. Petitioner Maria Lourdes Gloria-Payduan is their daughter. After Juan passed away,
Conchita and Lourdes filed before the RTC a complaint against respondent Builders Savings and
Loan Association, Inc, Benildo Biag and Manuel Lorenzo for “declaration of null and void real estate
mortgage, promissory note, cancellation of notation in the transfer certificate of title and damages”
with prayer for injunctive relief for fraud.

Builder Savings argued that Lourdes had neither capacity to sue nor the authority and
interest to file the case because she was merely “palaki” of the spouse and was not legally adopted
by them. Conchita neither signed the verification attached to the complaint nor executed a special
power of attorney to authorize her daughter Lourdes to pursue the case.

The RTC dismissed the petitioners’ complaint. The RTC later granted the motion for
reconsideration and ordered the cancellation of the annotations in the TCT of the lot. The CA
reversed the decision of the RTC, ruling that Lourdes was not a real party in interest for failing to
establish that she has a real interest which would suffer any detriment by its performance or
annulment.

ISSUE:
Is there a need to judicially declare Lourdes as an heir for her to validly assert his or her
right to the property of the deceased?

RULING:
No. No judicial declaration of heirship is necessary in order that an heir may assert his or
her right to the property of the deceased.

Under the Civil Code and Code of Civil Procedure, the title to the property owned by a
person who dies intestate passes at once to his heirs. Such transmission is, under the present law,
subject to the claims of administration and the property may be taken from the heirs for the purpose
of paying debts and expenses, but this does not prevent an immediate passage of the title, upon
the death of the intestate, from himself to his heirs. Without some showing that a judicial
administrator had been appointed in proceedings to settle the estate, the right of the heirs to
maintain this action is established.

Being the daughter of the deceased Juan and Conchita, Lourdes has an interest in the
subject property as heir to Juan and co-owner with Conchita. The fact that she was not judicially
declared as heir is of no moment, for, as correctly argued by petitioners, there was no need for a
prior declaration of heirship before heirs may commence an action arising from any right of their
predecessor, such as one for annulment of mortgage.

Thus, Lourdes as an heir can validly assert her right to the property of the deceased.

41
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

FAILURE TO SIGN THE LAST PAGE OF THE WILL WHICH CONTAINED THE
ACKNOWLEDGEMENT SHALL NOT AUTOMATICALLY RESULT IN ITS INVALIDITY

Margie Santos Mitra vs. Perpetua L. Sablan-Guevarra

G.R. No. 213994; April 18, 2018
Reyes, Jr., J.

FACTS:
This is a Petition for Review on Certiorari of the Decision of the CA, which reversed the
Decision of the RTC allowing that the will of testator Remedios Legaspi (Legaspi).

Petitioner Margie Santos Mitra (Mitra) alleges that she is the de facto adopted daughter of
Legaspi, the decedent who left a notarial will. Perpetua L. Sablan-Guevarra and Remegio L.
Sablan (respondents) on the other hand claim to be the legal heirs of Legaspi. Petitioner filed a
petition for the allowance of the notarial will of Legaspi before RTC. Mitra alleged that she is a de
facto daughter of Legaspi and which makes her entitled to her share In Legaspi’s estate as stated
in Legaspi’s will. Respondent moved for the dismissal of the petition alleging that the will is void
for non-compliance with the formalities required by the law, particularly, the last page of the will
which contained the Acknowledgment was not signed by any of the instrumental witnesses and by
Legaspi. Petitioner alleges that the original copy of the will contains the signature of Legaspi and
the instrumental witnesses of the will as opposed to the photocopy being presented by the
respondents which does not bear the signature on the last page of the will.

The RTC ruled on the validity of the will and its allowance for probate. On appeal, the CA
reversed the RTC’s decision ruling that failure to comply with the formalities of the will constitutes
a fatal defect on the validity of the will.

ISSUE:
Does the lack of signature on the last page of the will which contained the Acknowledgment
automatically result to its invalidity?

RULING:
No, failure to sign the last page of the will, will not automatically result in its invalidity.

When Article 805 of the Civil Code requires the testator to subscribe at the end of the will,
it necessarily refers to the logical end thereof, which is where the last testamentary disposition
ends. As the probate court correctly appreciated, the last page of the will does not contain any
testamentary disposition; it is but a mere continuation of the Acknowledgment. As to whether the
failure to state the number of pages of the will in the attestation clause renders such will defective,
the court held in Taboada vs. Hon. Rosal, the Court allowed the probate of a will notwithstanding
that the number of pages was stated not in the attestation clause, but in the Acknowledgment.
What is imperative for the allowance of a will despite the existence of omissions is that such
omissions must be supplied by an examination of the will itself, without the need of resorting to
extrinsic evidence. "However, those omissions which cannot be supplied except by
evidence aliunde would result in the invalidation of the attestation clause and ultimately, of the will
itself."

In sum, Legaspi's last will and testament has substantially complied with all the formalities
required of a notarial will. It has been proven that Legaspi and the instrumental witnesses signed
on every page of the will, except on the last, which refers to the Acknowledgment page. Regarding
the omission of the number of pages in the attestation clause, this was supplied by the
Acknowledgment portion of the will itself without the need to resort to extrinsic evidence.

Thus, despite the lack of signature on the last page of the will which contained the
Acknowledgment, the will allowed.

42
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

RIGHT OF PERSON TO DEMAND COMPLIANCE WITH AN OBLIGATION MUST COME

FROM A SOURCE

Astrid A. Van de Brug vs. Philippine National Bank

G.R. No. 207004; June 06, 2018
Caguioa, J.

FACTS:
This is a petition for review under Rule 45 seeking for the restitution of excess payment
made to Philippine National Bank (PNB).

Spouses Aguilar, petitioners, used to be the borrowing clients of Philippine National Bank
(PNB), respondent, by virtue of the sugar crop loans extended by PNB. Due to the corresponding
failure of Spouses Aguilar to comply with their obligation, the real estate mortgage was foreclosed
by PNB. With the enactment of R.A. 7202, Spouses Aguilar asked PNB for reconsideration of their
account based on the Sugar Restitution Law. PNB required the Spouses to comply with certain
requirements for the granting of the reconsideration. After the subsequent issuance of the
Memorandum of Valuation, the Spouses requested to commence restructuring of the loan account.
The PNB later refused to allow the restructuring of the account since the Spouses did not formally
signify their conformity to PNB's re-computation of the account.

The RTC ruled in favor of the plaintiff justifying the reconveyance of the lot. On appeal, the
CA reversed the decision, ruling that the Aguilars were not entitled to restitution absent any excess
payment after recomputation. Spouses Aguilar insisted that PNB should likewise grant them the
accommodation made to Spouses Pfleider since they are similarly situated. On its part, PNB
argued that R.A. 7202 only allows restitution if there is an excess payment on the loan account.

ISSUE:
Does the PNB have an obligation to accord the Aguilars the same treatment as it accorded
the spouses Pfleider?

RULING:
No. The Aguilars and the Spouses Pfleider are not similarly situated.

The sources of obligations under Article 1157 of the Civil Code are: (1) law; (2) contracts;
(3) quasi-contracts; (4) acts or omissions punished by law; and (5) quasi-delicts. Immediately,
sources (2), (3) and (4) are inapplicable in this case. The Aguilars are not privies to the
Compromise Agreement between PNB and the spouses Pfleider. Regarding law, as PNB's source
of obligation, the Aguilars are not entitled to restitution under RA 7202. Thus, RA 7202 cannot be
invoked as the statutory basis to compel PNB to treat the Aguilars similarly with the spouses
Pfleider. PNB has explained that there are differences in the circumstances of its two sugar crop
loan debtors which, to PNB, justify the different accommodations that it accorded to them. The
settlement agreement between PNB and the spouses Pfleider was to the effect that PNB would
credit as payment the CARP proceeds of the foreclosed agricultural properties in the Compromise
Agreement provided that the case filed against PNB was withdrawn. The Aguilars, on the other
hand, did not signify their conformity to the recomputation as audited and certified by the COA and
refused to sign the restructuring agreement because they insisted that the CARP proceeds be first
considered as loan payments and should be deducted from their loan accounts.

From the Compromise Agreement between the spouses Pfleider and PNB the accounts of
the former to the latter were crop loans and, thus, covered by RA 7202 unlike the accounts of the
Aguilars which included non-RA 7202 accounts. Since the Aguilars were delinquent in their
accounts, PNB had no option but to foreclose the mortgage.

43
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE TERMS OF THE PROMISSORY NOTES, AND "CONTINUING GUARANTY” BEING

CLEAR AND UNEQUIVOCAL, HAS THE FORCE OF LAW AND SHOULD BE COMPLIED
WITH IN GOOD FAITH

Ramon E. Reyes and Clara R. Pastor vs. BANCOM Development Corp.

G.R. No. 190286; January 11, 2018
Sereno, C.J.

FACTS:
This is a Petition for Review on Certiorari filed by Ramon E. Reyes and Clara R. Pastor
seeking to reverse the Decision of CA holding petitioners jointly and severally liable to respondent
Bancom Development Corporation (Bancom) as guarantors of certain loans obtained by Marbella
Realty, Inc. (Marbella).

Angel Reyes, Sr., Florencio Reyes, Jr., Rosario Du and the Reyes Group executed a
continuing guaranty in the name of Bancom, to guarantee the full and due payment of obligations
incurred by Marbella under an Underwriting Agreement with Bancom. These obligations included
certain Promissory Notes issued by Marbella in favor of Bancom. Marbella was not able to pay
back the notes at maturity date, thus a complaint for sum of money with a prayer for damages was
filed against (a) Marbella as principal debtor; and (b) the individuals comprising the Reyes Group
as guarantors of the loan.

Marbella and the Reyes Group argued that they had been forced to execute the documents
against their will and that the Promissory Notes were not meant to be binding, given that the funds
released to Marbella by Bancom were not loans, but merely additional financing. Also, they pointed
out that the Certificate of Registration issued to Bancom had been revoked by the SEC, and that
no trustee or receiver had been appointed to continue the suit.

ISSUE:
Do the terms of the promissory notes and "Continuing Guaranty”, being clear and
unequivocal, have the force of law and should be complied with in good faith by the parties?

RULING:
Yes, the terms of the promissory notes and "Continuing Guaranty" are clear and
unequivocal, leaving no room for interpretation.

For not being contrary to law, morals, good customs, public order and public policy,
defendants' obligation pursuant to Article 1159 of the Civil Code has the force of law and should
be complied with in good faith.

The obligations of Marbella and the Reyes Group under the Promissory Notes and the
Continuing Guaranty, respectively, are plain and unqualified. Under the notes, Marbella promised
to pay Bancom the amounts stated on the maturity dates indicated. The Reyes Group, on the other
hand, agreed to become liable if any of Marbella's guaranteed obligations were not duly paid on
the due date. There is absolutely no support for the assertion that these agreements were not
meant to be binding. The clear terms of these agreements cannot be negated and deemed non-
binding simply on the basis of the self-serving testimony of Angel Reyes, one of the guarantors of
the loan. Hence, as guarantors of the loans of Marbella, petitioners are liable to Bancom.

Thus, the Civil Code provision on the contract being the force of law between the parties
is apparent here.

44
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PERSONAL ACTION FOUNDED UPON AN ORAL CONTRACT PRESCRIBES WITHIN SIX

YEARS FROM THE ACCRUAL OF THE RIGHT

Specified Contractors and Development Inc. and Spouses Olonan vs. Pobocan
G.R. No. 212472; January 11, 2018
Tijam, J.

FACTS:
In a Petition for Review on Certiorari under Rule 45, Specified Contractors and
Development Inc. (SCDI) and Spouses Olonan seek to set aside the dismissal of the action for
specific performance filed by respondent Jose A. Pobocan.

Architect Olonan allegedly agreed to give respondent, an employee of the SCDI, one (1)
unit for every building SCDI was able to construct as part of respondent's compensation package
to entice him to stay with the company. Two (2) of these projects that SCDI and respondent were
able to build were the Xavierville Square Condominium in Quezon City and the Sunrise Holiday
Mansion Bldg. in Alfonso, Cavite. Pursuant to the alleged oral agreement, SCDI supposedly ceded,
assigned and transferred Unit 708 of Xavierville Square Condominium and Unit 208 of Sunrise
Holiday Mansion Bldg. I (subject units) in favor of respondent.

Respondent requested the execution of Deeds of Assignment or Deeds of Sale over the
subject units in his favor, along with various other benefits, in view of his impending retirement on
March 19, 2011. Petitioner denied the existence of the alleged oral contract.

ISSUE:
Has the personal action founded upon an oral contract already prescribed as the alleged
agreements were supposedly entered into in 1994 and 1999 as indicated in respondent's March
14, 2011 demand letter?

RULING:
Yes, as a personal action based upon an oral contract, Article 1145 providing a prescriptive
period of six years applies in this case instead.

The shorter period provided by law to institute an action based on an oral contract is due to
the frailty of human memory. While the respondent's complaint was ingeniously silent as to when
the alleged oral agreement came about, his March 14, 2011 demand letter annexed to his
complaint categorically cites the year 1994 as when he and Architect Olonan allegedly had an oral
agreement to become "industrial partners" for which he would be given a unit from every building
they constructed. From this, Unit 208 of Sunrise Holiday Mansion I was allegedly assigned to him.
The complaint for specific performance was instituted on November 21, 2011, or 17 years from the
oral agreement of 1994 and almost 12 years after the December 1,1999 oral agreement.

Thus, the respondent's action upon an oral contract was filed beyond the six-year period
within which he should have instituted the same.

45
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ARTICLE 1170 OF THE CIVIL CODE APPLIES WHEN A BREACH OF DUTY IS NEITHER
PART OF A CONTRACT NOR A QUASI-DELICT

Orient Freight International, Inc. vs. Keihin-Everett Forwarding Co., Inc.

G.R. No. 191937; August 09, 2017
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing
the Decision of the CA which affirmed the RTC holding that petitioner Orient Freight International,
Inc.'s (Orient) negligence caused the cancellation of Keihin-Everett Forwarding Company, Inc.'s
(Keihin) contract with Matsushita Communication Industrial Corporation of the Philippines
(Matsushita).

When the Trucking Service Agreement (TSA) between Keihin and Matsushita expired,
Keihin executed an In-House Brokerage Service Agreement for Matsushita's export operations
and Keihin continued to retain the services of Orient, which sub-contracted its work to Schmitz
Transport and Brokerage Corporation. Matsushita called Keihin's Sales Manager about a column
in a Tempo tabloid which narrated that there was a stolen truck filled with shipment of video
monitors and CCTV systems owned by Matsushita in Caloocan City. When contacted by Keihin
about this news, Orient stated that the tabloid report was not true claiming that the incident simply
involved the breakdown and towing of the truck. Investigation was done by Orient but when the
shipment arrived in Japan, it was discovered that 10 pallets of the shipment's 218 cartons were
missing.

Keihin discovered through the police report that the truck helper informed Orient that the
truck had gone missing. When confronted with Keihin's findings, Orient admitted that its previous
report was erroneous and that pilferage was apparently proven. Matushita terminated the
agreement with Keihin and cited loss of confidence due to the fact non-disclosure of this incident's
relevant facts which "amounted to fraud and signified an utter disregard of the rule of law." Keihin
asked Orient to pay for lost income but the latter refused thus, a complaint for damages was filed
alleging that Orient’s "misrepresentation, malice, negligence and fraud" caused the termination of
its In-House Brokerage Service Agreement with Matsushita.

ISSUE:
Was Orient negligent for failing to disclose facts on hijacking incident despite the same
being not part of their contract?

RULING:
Yes. Petitioner denies that it was obliged to disclose the facts regarding the hijacking
incident since this was not among the provisions of its TSA with respondent. There being no
contractual obligation, respondent had no cause of action against petitioner. Petitioner's
negligence did not create the vinculum juris or legal relationship with the respondent, which would
have otherwise given rise to a quasi-delict. Petitioner's duty to respondent existed prior to its
negligent act. When respondent contacted petitioner regarding the news report and asked it to
investigate the incident, petitioner's obligation was created.

The doctrine "the act that breaks the contract may also be a tort is inapplicable here, neither
does Art. 21 of the Civil Code. Consequently, Articles 1170, 1172, and 1173 of the Civil Code on
negligence in the performance of an obligation should apply. Under Article 1170 of the Civil Code,
liability for damages arises when those in the performance of their obligations are guilty of
negligence, among others. In this case, petitioner was negligent in failing to adequately report the
hijacking incident to respondent and not conducting a thorough investigation despite being directed
to do so.

Thus, petitioner is responsible for the damages that respondent incurred due to the former's
negligent performance of its obligation.

46
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A CONDITION SHALL BE DEEMED FULFILLED WHEN THE OBLIGOR VOLUNTARILY

PREVENTS ITS FULFILLMENT

Federal Express Corp. vs. Luwalhati R. Antonino and Eliza Bettina Ricasa Antonino
G.R. No. 199455; June 27, 2018.
Leonen, J.

FACTS:
In a petition for Certiorari under Rule 45, Federal Express Corp (FedEx) assails the CA’s
decision affirming the RTC’s ruling awarding damages to Luwalhati and Eliza Antonino (Luwalhati
and Eliza, respectively) for non-delivery of their package.

Eliza was the owner of a Condominium Unit in New York, USA. Being the in the Philippines,
Luwalhati and Eliza sent several Citibank checks, through FedEx, to Veronica Z. Sison (Sison),
who was based in New York. The checks were for the payment of monthly charges and real estate
taxes. Sison was tasked to deliver the checks to Maxwell-Kates, Inc. and to the New York County
Department of Finance; however, Sison allegedly did not receive said checks resulting in non-
payment and foreclosure of the Unit.

Sison contacted FedEx to inquire about the non-delivery. Apparently, the package was
delivered to her neighbor but there was no signed receipt. Thereafter, Luwalhati and Eliza sent a
demand letter to FedEx for payment of damages for non-delivery of the package.

FedEx was unable to refute the testimony given by the respondent’s witness that its
responses were ambiguous and evasive, that it was nonchalant in handling respondents’ concerns.
Instead, it claims that respondents failed to comply with a condition precedent (filing of a written
notice of a claim for non-delivery or misdelivery within 45 days from acceptance of the shipment)
as provided in the Air Way Bill.

ISSUE:
Did respondents fail to comply with the condition precedent, that of filing a written notice of
claim within 45 days from acceptance of shipment, and as such, have no cause of action against
petitioner?

RULING:
No, the respondents complied with the condition precedent.

Pursuant to Article 1186 of the New Civil Code which provides that "[t]he condition shall be
deemed fulfilled when the obligor voluntarily prevents its fulfillment." The CA detailed the efforts
made by respondent Luwalhati and consignee Sison. It also noted petitioner's ambiguous and
evasive responses, nonchalant handling of respondents' concerns, and how these bogged down
respondents' actions and impaired their compliance with the required 45-day period. Respondents'
inability to expediently file a formal claim can only be attributed to petitioner hampering its
fulfillment.

Thus, respondents must be deemed to have substantially complied with the requisite 45-
day period for filing a formal claim.

47
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

AGREEMENT TO REMIT MONEY CREATES A CONTRACTUAL OBLIGATION AND

ONCE CREDITED TO THE ACCOUNT OF THE PAYEE, THE BANK HAS FULLY
EXECUTED ITS OBLIGATION AND AGREEMENT CAN NO LONGER BE RESCINDED

Chinatrust (Phils.) Commercial Bank vs. Philip Turner

G.R. No. 191458; July 3, 2017
Leonen, J.

FACTS:
This is a Petition for Review assailing the CA’s Decision affirming the RTC’s Decision
ordering petitioner Chinatrust Commercial Bank's (CCB) to restore several sums of money to the
account of respondent Philip Turner (Turner).

British national Turner initiated via CCB-Ayala Branch the telegraphic transfer of
US$430.00 to the account of "MIN TRAVEL/ESMAT AZMY” with Citibank, Heliopolis Branch, in
Cairo, Egypt as partial payment to Turner's travel agent for his and his wife's 11-day tour in Egypt.
Both amounts were debited from his dollar savings account with CCB. On the same day, CCB
remitted the funds through the Union Bank of California, its paying bank, to Citibank-New York, to
credit them to the bank account of Min Travel/Esmat Azmy in Citibank-Cairo, Egypt.

Subsequently, CCB received a discrepancy notice from Citibank-Cairo as the beneficiary’s

name did not match the account name on file of Citibank-Cairo. The next business day, CCB
relayed this information to Turner, with a request that he verify from his beneficiary the correct
bank account name. Turner had to cancel his travel-tour because his wife got ill and requested
from Chinatrust the refund of his money. However, the successful remittance was later confirmed
by Citibank-Cairo stating that the funds were credited to the account of Min Travel.

Chinatrust argued that since the funds were already remitted to his beneficiary's account,
they could no longer be withdrawn or retrieved without Citibank-Cairo's consent. Turner was
advised to seek the refund of his payment directly from his travel agency. Turner filed a complaint
against Chinatrust demanding a refund of his telegraphic transfer.

ISSUE:
Did the petitioner bank have a duty to immediately return the money to respondent Turner
upon the first instance that it relayed the discrepancy notice to him?

RULING:
No, petitioner had no duty to immediately return the money to Turner together with the
service fee upon the first instance that it relayed the discrepancy notice to him.

Turner could no longer rescind the telegraphic transfer agreement. As the transaction is
for the establishment of a telegraphic or cable transfer, the agreement to remit creates a
contractual obligation and has been termed a purchase and sale. The purchaser of a telegraphic
transfer upon making payment completes the transaction insofar as he is concerned, though
insofar as the remitting bank is concerned the contract is executory until the credit is established.
Thus, once the amount represented by the telegraphic transfer order is credited to the account of
the payee or appears in the name of the payee in the books of the receiving bank, the ownership
of the telegraphic transfer order is deemed to have been transmitted to the receiving bank. The
local bank is deemed to have fully executed the telegraphic transfer and is no longer the owner of
this telegraphic transfer order.

It was established that the subject amount was actually credited to the account of Min
Travel two (2) days after respondent applied for the telegraphic transfer and even before petitioner
received its "discrepancy notice" Chinatrust is, thus, deemed to have fully executed the telegraphic
transfer agreement and its obligation to respondent was extinguished.

Hence, respondent could no longer ask for rescission of the agreement.

48
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CONTRACTS OF ADHESION ARE NOT INVALID PER SE AS THEY ARE BINDING AS

ORDINARY CONTRACTS

Encarnacion Construction vs. Phoenix Ready Mix Concrete Development and Construction
G.R. No. 225402; September 4, 2017
Perlas-Bernabe, J.

FACTS:
This is a petition for review on Certiorari assailing the Decision of the CA which affirmed
the Decision of the RTC granting the complaint for sum of money filed by respondent Phoenix
Ready Mix Concrete Development and Construction, Inc. (Phoenix) against petitioner Encarnacion
Construction & Industrial Corporation (ECIC), and dismissing the latter's counterclaim for
damages.

Phoenix entered into two (2) separate Contract Proposals and Agreements (Agreement)
with ECIC for the delivery of various quantities of ready-mix concrete. However, despite written
demands from Phoenix, ECIC refused to pay.

ECIC claimed that it opted to suspend payment since Phoenix delivered substandard
ready-mix concrete, such that the City Engineer's Office of Valenzuela (City Engineer's Office)
required the demolition and reconstruction of the VNHS building's 3rd floor. It contended that since
the samples taken from the 3rd floor slab failed to reach the comprehensive strength of 6,015psi
in 100 days, the City Engineer's Office ordered the dismantling of the VNHS building's 3rd floor,
and thus, incurred additional expenses amounting to P3,858,587.84 for the dismantling and
reconstruction. Phoenix denied the same.

ISSUE:
Is the contract between ECIC and Phoenix void since the contract is a contract of
adhesion?

RULING:
No, the contract between Encarnacion and Phoenix is valid.

A contract of adhesion is one wherein one party imposes a ready-made form of contract on
the other. It is a contract whereby almost all of its provisions are drafted by one party, with the
participation of the other party being limited to affixing his or her signature or "adhesion" to the
contract. However, contracts of adhesion are not invalid per se as they are binding as ordinary
contracts. While the Court has occasionally struck down contracts of adhesion as void, it did so
when the weaker party has been imposed upon in dealing with the dominant bargaining party and
reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain
on equal footing. Thus, the validity or enforceability of the impugned contracts will have to be
determined by the peculiar circumstances obtained in each case and the situation of the parties
concerned.

In this case, there is no proof that ECIC was disadvantaged or utterly inexperienced in
dealing with Phoenix. There were likewise no allegations and proof that its representative (and
owner/proprietor) Ramon Encarnacion (Encarnacion) was uneducated, or under duress or force
when he signed the Agreement on its behalf. In fact, Encarnacion is presumably an astute
businessman who signed the Agreement with full knowledge of its import. Further, the terms and
conditions of the parties' Agreement are plain, clear, and unambiguous and thus could not have
caused any confusion. Paragraph 15 of the Agreement provides that: x x x x Any claim on the
quality, strength, or quantity of the transit mixed concrete delivered must be made at the time of
delivery. Failure to make the claim constitutes a waiver on the part of the SECOND PARTY for
such claim and the FIRST PARTY is released from any liability for any subsequent claims on the
quality, strength or [sic] the ready mixed concrete. Hence, the stipulations in the contract should
be complied with.

49
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

FAILURE TO ENCASH A CHECK DELIVERED TO THE CREDITOR-PAYEE WITHIN

REASONABLE TIME IMPAIRS AND PRODUCES PRODUCES THE EFFECT OF PAYMENT

Benjamin Evangelista vs. Screenex, Inc., Represented by Alexander Yu

G.R. No. 211564; November 20, 2017
Sereno, C.J.

FACTS:
In this petition for review on Certiorari under Rule 45, petitioner Evangelista seeks the
reversal of the Decision of the CA which denied his motion to be released from an order to pay his
alleged civil obligation to private complainant.

In 1991, petitioner Evangelista obtained a loan from respondent Screenex, Inc. As security
for the payment of the loan, petitioner gave two open-dated checks, both payable to the order of
respondent. From the time the checks were issued, they were held in a safe, kept together with
other documents and papers of the company by Philip Gotuaco, Sr., father-in-law of respondent
Yu, until Gotuaco’s death on November 19, 2004. When the checks were discovered, demand was
made to the petitioner who refused to pay. Respondent thus dated then deposited said checks on
December 22, 2004. Predictably, the checks were dishonored. The petitioner was charged with
the violation of BP Blg. 22 before the MeTC on August 25, 2005.

Among other defenses, petitioner raised the defense that his obligation is deemed paid
since the check delivered to the respondent had been impaired.

ISSUE:
Is the obligation to pay the loan evidenced by the checks deemed fulfilled by operation of
law?

RULING:
Yes, petitioner Evangelista is absolved from any liability to pay the amount of the loan.

Article 1249 of the Civil Code specifically provides that the delivery of promissory notes
payable to order, or bills of exchange, or other mercantile documents shall produce the effect of
payment only when they have been cashed, or when, through the fault of the creditor, they have
been impaired.

The payee of a check would be a creditor under this provision and if its non-payment is
caused by the creditor-payee’s negligence, payment will be deemed effected and the obligation
for which the check was given as conditional payment will be discharged.

In this case, the delivery of the checks by petitioner, despite the subsequent failure to
encash them within a period of 10 years or more, had the effect of payment. Philip Gotuaco Sr.’s
act of keeping the checks in a safe and forgetting to demand the payment of the petitioner’s loan,
either by encashing the checks or demanding from petitioner, constitute an impairment of the
checks’ function as security or conditional payment of the loan amount. Hence, petitioner is
considered discharged from his obligation to pay and can no longer be pronounced civilly liable for
the amounts indicated thereon.

50
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

COURT CONDONATION STATUTES BEING AN ACT OF LIBERALITY ON THE PART OF

THE STATE ARE STRICTLY CONSTRUED AGAINST THE APPLICANTS UNLESS THE
LAWS THEMSELVES CLEARLY STATE A CONTRARY RULE OF INTERPRETATION

H. Villarica Pawnshop vs. Social Security Commission

G.R. No. 228087; January 24, 2018
Gesmundo, J.

FACTS:
This is a Petition for review on Certiorari under Rule 45 of the Rules of Court filed by H.
Villarica Pawnshop, Inc., HL Villarica Pawnshop, Inc., HRV Villarica Pawnshop, Inc. and Villarica
Pawnshop, Inc., (petitioners) seeking to reverse and set aside the Decision of Social Security’s
Commission (SSC) denying petitioners’ claim for refund.

H. Villarica Pawnshop, Inc. paid their delinquent contributions and accrued penalties with
different branches of the SSS. Congress thereafter, enacted R.A. No. 9903, otherwise known as
the Social Security Condonation Law of 2009, which took effect on February 1, 2010. It offered
delinquent employers the opportunity to settle, without penalty, their accountabilities or overdue
contributions within six (6) months from the date of its effectivity. Villarica Pawnshop seeks
reimbursement from different SSS branches invoking the said law.

Villarica claimed that the benefits of the condonation program extend to all employees who
have settled their arrears or unpaid contributions even prior to the effectivity of the law. SSC denied
the reimbursement claims and stated that there was no provision in the said law allowing
reimbursement before its effectivity.

ISSUE:
Is Villarica entitled to condonation of its obligations before the effectivity of the law, given
that the court condonation statutes are strictly construed?

RULING:
No, Villarica is not entitled to condonation since there was no provision in the said law
allowing condonation before the law’s effectivity.

Condonation or remission of debt is an act of liberality, by virtue of which, without receiving

any equivalent, the creditor renounces the enforcement of the obligation, which is extinguished in
its entirety or in that part or aspect of the same to which the remission refers. It is essentially
gratuitous for no equivalent is received for the benefit given.

Here, the State stands to lose its resources in the form of receivables whenever it condones
the collection of its receivables or unpaid penalties. Since a loss of funds ultimately results in the
Government being deprived of its means to pursue its objectives, all monetary claims based on
condonation should be construed strictly against the applicants. A plain reading of Section 4 of
R.A. No. 9903 providing for the effectivity of condonation, shows that it does not give employers
who have already settled their delinquent contributions as well as their corresponding penalties
the right to a refund of the penalties paid. What was waived here was the amount of accrued
penalties that have not been paid prior to the law's effectivity it does not include those that have
already been settled.

Hence, Villarica’s obligations are not condoned.

51
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

WHERE THERE IS NO PRIVITY OF CONTRACT, THERE IS LIKEWISE NO OBLIGATION

OR LIABILITY TO SPEAK ABOUT

Asian Terminal, Inc. vs. Padoson Stainless Steel Corporation

G.R. No. 211876; June 25, 2018
Tijam, J.

FACTS:
In a petition for Certiorari under Rule 45, Asia Terminals (ATI) assails the CA’s decision
affirming the RTC’s ruling that by virtue of the Hold-Order over Padoson Stainless Steel Corp’s.
(Padoson) shipments, the Bureau of Customs acquired constructive possession over the same.
Hence, the BOC is liable to ATI, not Padoson.

Padoson hired ATI to provide arrastre, wharfage, and storage services over its shipments.
Meanwhile, the shipments became subject to a Hold-Order due to a case filed by the Bureau of
Customs (BOC) against Padoson due to its tax liability. ATI made several demands for its storage
services which went unheeded.

ATI filed a complaint against Padoson praying for payment of the unpaid storage fees.
Padoson, on the other hand, contended that the Hold-Order issued by the BOC was merely a
leverage to claim Padoson's alleged unpaid duties. RTC dismissed ATI's complaint, which was
affirmed by the CA ruling further that since the BOC had acquired constructive possession over
the shipments, neither ATI could be held liable for damages nor Padoson be held liable for the
storage fees.

ISSUE:
Was respondent Padoson liable to pay ATI for the latter’s storage services despite the
constructive possession by BOC of the shipments?

RULING:
Yes. Granting, without admitting, that the BOC has constructive possession over
Padoson's shipment, this does not, by itself, release Padoson from its obligation to pay the storage
fees due to ATI.

The basic principle of relativity of contracts is that contracts can only bind the parties who
entered into it, and cannot favor or prejudice a third person, even if he is aware of such contract
and has acted with knowledge thereof. Indeed, "[w]here there is no privity of contract, there is
likewise no obligation or liability to speak about."

Padoson, cannot shift the burden of paying the storage fees to BOC since the latter has
never been privy to the contract. Moreover, BOC’s Hold-Order is not in any way related to the
contract of service between ATI and Padoson. The BOC's interest over the shipment was limited
to discharging its duty to collect Padoson's tax liability. BOC's Hold-Order is extraneous to
Padoson's obligation to pay the storage fees in favor of ATI. Clearly, Padoson has two monetary
obligations, albeit of different characters — one is its liability for storage fees with ATI based on its
contract of service, and the other is its tax liability with the BOC which is the subject of the Customs
case pending with the RTC. Further, the BOC's Hold-Order is extraneous to Padoson's obligation
to pay the storage fees in favor of ATI.

In this case, the ultimate relief sought by ATI in its complaint for a sum of money with
damages, is the recovery of the storage fees from Padoson, which arose from the contract of
service which they have validly entered into. BOC, as explained earlier, was never privy to this
contract. It was Padoson who engaged ATI's storage services. It was Padoson who benefited from
ATI's storage services. It was Padoson who subsequently sold the shipments and suffered losses.

52
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ONE WHO SIGNS A CONTRACT IS PRESUMED TO KNOW ITS CONTENTS

Norma Diampoc vs. Jessie Buenaventura and The Registry of Deeds for the City of Taguig
G.R. No. 200383; March 19, 2018
Del Castillo, J.

FACTS:
In this Petition for Review on Certiorari, petitioner Norma M. Diampoc and her husband
Wilbur L. Diampoc seek to set aside the CA’s decision to annul the deed of sale and recovery of
duplicate original copy of title, with damages, against respondent Jessie Buenaventura
(Buenaventura) and the Registry of Deeds for the Province of Rizal.

Diampocs alleged in their Complaint that they owned a 174-square meter parcel of land
(subject property) covered by a TCT; that Buenaventura became their friend; that Buenaventura
asked to borrow the owner's copy of TCT to be used as security for a P1 million loan she wished
to secure; that they acceded, on the condition that Buenaventura should not sell the subject
property; that Buenaventura promised to give them P300,000.00 out of the P1 million loan
proceeds.

Petitioners alleged that Buenaventura caused them to sign a folded document without
giving them the opportunity to read its contents; that Buenaventura failed to give them a copy of
the document which they signed; that they discovered later on that Buenaventura became the
owner of a one-half portion (87 square meters) of the subject property by virtue of a supposed
deed of sale in her favor; that they immediately proceeded to the notary public who notarized the
said purported deed of sale, and discovered that the said 87-square meter portion was purportedly
sold to Buenaventura for P200,000.00; and that the deed was secured through fraud and deceit,
and thus null and void. Buenaventura claimed that the Diampocs have no cause of action; that the
case is a rehash of an estafa case they previously filed against her but which was dismissed; and
that the case is dismissible for lack of merit and due to procedural lapses.

ISSUE:
Were the petitioners alleging to have not read the contract but sign it thereafter, presumed
to know its contents?

RULING:
Yes, the petitioners by signing the contract are presumed to know its contents.

The rule that one who signs a contract is presumed to know its contents has been applied
even to contracts of illiterate persons on the ground that if such persons are unable to read, they
are negligent if they fail to have the contract read to them. If a person cannot read the instrument,
it is as much his duty to procure some reliable persons to read and explain it to him, before he
signs it, as it would be to read it before he signed it if he were able to do so and his failure to obtain
a reading and explanation of it is such gross negligence as will estop him from avoiding it on the
ground that he was ignorant of its contents. It is a well-settled principle that "the law will not relieve
parties from the effects of an unwise, foolish or disastrous agreement they entered into with all the
required formalities and with full awareness of what they were doing” as held in Fernandez v.
Spouses Tanm.

Indeed, petitioner and her husband conceded that there was such a deed of sale, but only
that they were induced to sign it without being given the opportunity to read its contents -believing
that the document they were signing was a mere authorization to obtain a bank loan. According to
petitioner, the document was "folded" when she affixed her signature thereon; on the other hand,
her husband added that at the time he signed the same, it was "dark". These circumstances,
however, did not prevent them from discovering the true nature of the document; being high school
graduates and thus literate, they were not completely precluded from reading the contents thereof,
as they should have done if they were prudent enough.

Petitioner's excuses are therefore flimsy and specious, hence must bear the consequences
flowing from their own negligence.

53
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

MERE FORGETFULNESS, WITHOUT EVIDENCE THAT THE SAME HAS REMOVED

FROM A PERSON THE ABILITY TO INTELLIGENTLY AND FIRMLY PROTECT HIS
PROPERTY RIGHTS, WILL NOT BY ITSELF INCAPACITATE A PERSON FROM
ENTERING INTO CONTRACTS

Rafael Almeda, Emerlina Almeda-Lirio, et.al. vs. Heirs of Ponciano Almeda

G.R. No. 194189; September 14, 2017
Tijam, J.

FACTS:
In a petition for Review on Certiorari Spouses Venancio Almeda (Venancio) and Leonila
Laurel-Almeda (Leonila) assails the CA decision denying Rafael Almeda (Rafael), Emerlina
Almeda-Lirio (Emerlina), Alodia Almeda-Tan (Alodia), Leticia Almeda-Magno(Leticia), Norma
Almeda-Matias (Norma) and PublioTibi's (Publio) (collectively, the petitioners) appeal from the
Order which dismissed their Complaint for Nullity of Contracts, Partition of Properties and
Reconveyance of Title with Damages.

A Power of Attorney was executed by Venancio and Leonila, who were then 80 and 81
years old respectively, granting Ponciano, among others, the authority to sell parcels of land in
Tagaytay City, which Leonila inherited from her parents. Venancio died at the age of 90 on
February 27, 1985; Leonila died eight years later, on April 3, 1993, aged 97. Within the year of
Leonila's death on April 17, 1993, Rafael, Emerlina, Alodia, Leticia and Norma filed a notice of
adverse claim with the Register of Deeds of Tagaytay City over their parents' properties.

Petitioners claimed that Ponciano, taking advantage of his being the eldest child and his
close relationship with their parents, caused the simulation and forgery of the two deeds of absolute
sale. Petitioners also assert that their parents were "uliyanin" or forgetful, of advanced age and "at
times" sickly during the time of the execution of the 1978 Deed in favor of Ponciano. Ponciano and
his wife, Eufemia, denied this and asserts the deeds’ genuineness and execution for valuable
consideration from which some of the petitioners, including Rafael, received substantial pecuniary
benefits.

ISSUE:
Is mere forgetfulness by itself, without evidence that the same has removed from a person
the ability to intelligently and firmly protect his property rights, incapacitate a person from entering
into contracts?

RULING:
No. Mere forgetfulness without evidence that the same has removed from a person the
ability to intelligently and firmly protect his property rights, will not by itself incapacitate a person
from entering into contracts.

The law presumes that every person is fully competent to enter into a contract until
satisfactory proof to the contrary is presented. The party claiming absence of capacity to contract
has the burden of proof and discharging this burden requires that clear and convincing evidence
be adduced.

Petitioners have not satisfactorily shown that their parents' mental faculties were impaired
as to deprive them of reason or hinder them from freely exercising their own will or from
comprehending the provisions of the sale in favor of Ponciano. Hence, the contracts executed by
Spouses Almeda are valid and binding.

54
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CONTRACT IS PERFECTED UPON MEETING OF THE MINDS OF PARTIES EVEN IF

THERE IS A DELAY IN THE RELEASE OF AMOUNT OF LOAN

Spouses Francisco and Betty Ong and Spouses Joseph and Esperanza Ong Chuan vs. BPI Family
Savings Bank
G.R. No. 208638; January 24, 2018
Reyes Jr., J.

FACTS:
The Spouses Francisco Ong and Betty Lim Ong (Spouses Ong) via Petition for Review
under Rule 45 of the Rules of Court assails CA’s decision that there was no perfected contract
between the parties with respect to the omnibus credit line and that being so, no delay could be
attributed to BPI Family Savings Bank (BPI).

Spouses Ong and Spouses Joseph Ong Chuan and Esperanza Ong Chuan (collectively
referred to as the petitioners) applied for the credit facilities offered by the Bank of Southeast Asia
(BSA). They executed a real estate mortgage (REM) over their property situated in Paco, Manila,
covered by TCT No. 143457, in favor of BSA as security for a P15,000,000.00 term loan and
P5,000,000.00 credit line or a total of P20,000,000.00.With regard to the term loan, only
P10,444,271.49 was released by BSA (the amount needed by the petitioners to pay out their loan
with Ayala life assurance, the balance was credited to their account with BSA). Regarding the
P5,000,000.00 credit line, only P3,000,000.00 was released. BSA promised to release the
remaining P2,000,000.00 conditioned upon the payment of the P3,000,000.00 initially released to
petitioners. Petitioners acceded to the condition and paid the P3,000,000.00 in full. However, BSA
still refused to release the P2,000,000.00. Petitioners then refused to pay the amortizations due
on their term loan. BPI Family Savings Bank (BPI) merged with BSA, thus, acquired all the latter's
rights and assumed its obligations. BPI filed a petition for extrajudicial foreclosure of the REM for
petitioners' default in the payment of their term loan. In order to enjoin the foreclosure, petitioners
instituted an action for damages with Temporary Restraining Order and Preliminary Injunction
against BPI.

BPI contended that there was no perfected contract between the parties with respect to
the omnibus credit line and that being so, no delay could be attributed to BPI, the successor-in-
interest of BSA. Spouses Ong argued that there is no need delve into the matter regarding
existence or perfection of a contract, especially when such issue was never raised by BPI in any
of its pleadings or proceedings in the lower court.

ISSUE:
Is there a perfected contract among the parties despite the BSA’s delay in releasing the
amounts of loan?

RULING:
Yes, the contract is perfected among the parties even if a party incurred in delay in the
release of loan.

As a rule, a contract is perfected upon the meeting of the minds of the two parties. It is
perfected by mere consent, that is, from the moment that there is a meeting of the offer and
acceptance upon the thing and the cause that constitute the contract.

Under Article 1934 of the Civil Code, a loan contract is perfected only upon the delivery of
the object of the contract. Applying this to the case at bench, there is no iota of doubt that when
BSA approved and released the P3,000,000.00 out of the original P5,000,000.00 credit facility, the
contract was perfected. Such approval and subsequent release of the amounts, albeit delayed,
perfected the contract between the parties. Hence, both parties are bound by the said contract, it
being perfected.

55
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PREPONDERANCE OF EVIDENCE IS REQUIRED TO OVERTURN THE PRESUMPTION

OF CONSIDERATION OF A CONTRACT

Lolita Espiritu Santo Mendoza and Sps. Alexander and Elizabeth Gutierrez vs. Sps. Ramon, Sr.
and Natividad Palugod
G.R. No. 220517; June 20, 2018
Caguioa, J.

FACTS:
In a petition for Certiorari under Rule 45, Lolita and Sps. Alexander and Elizabeth Gutierrez
(Sps. Gutierrez) assail the CA’s decision affirming the RTC decision nullifying the sale and
mortgage of the subject property on the ground that the sale was absolutely simulated for lack of
monetary consideration.

Lolita Mendoza and Jasminia Palugod (daughter of respondent Sps.Palugod) bought the
subject lot, and together, constructed a house on said lot. Eventually, Jasminia was afflicted with
cancer; however, prior to her death, she executed a deed of absolute sale of the subject property
in favor of Lolita, who in turn, mortgaged the same to petitioner Gutierrez as security for a loan.

On the other hand, Respondents claim that it was Jasminia who acquired the subject
property and that, as her “lesbian partner”, Lolita convinced Jasminia to execute a deed of sale in
her favor. Other than the testimony of Natividad, they relied on Lolita’s testimony that the sale was
without consideration and that she had no receipts showing the staggered payment of P400,000
or any agreement made between her and Jasminia as to the consideration of the property.

ISSUE:
Is respondents’ reliance on petitioner’s testimony enough to overthrow the presumption of
consideration in the contract of sale?

RULING:
No. A contract is presumed to be supported by cause or consideration. 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."

The presumption that a contract has sufficient consideration cannot be overthrown by a

mere assertion that it has no consideration. To overcome the presumption, the alleged lack of
consideration must be shown by preponderance of evidence. The burden to prove lack of
consideration rests upon whoever alleges it, which, in the present case, is respondent. By
"preponderance of evidence” is meant simply evidence which is of greater weight, or more
convincing than that which is offered in opposition to it. Where the evidence on an issue of fact is
in equipoise or there is doubt on which side the evidence preponderates, the party having the
burden of proof fails upon that issue.

Here, while petitioner Lolita concedes that she did not pay the consideration for the
purchase of the subject property before Notary Public Atty. Jesus Bongon, she asserts that the
payment was made prior to the notarization of the DAS as shown in her testimony. the 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." Respondents have not discharged their
burden of proof to rebut either the presumption of sufficient consideration of the DAS or the
evidence of petitioner Lolita. In fine, respondents failed to establish their cause of action by
preponderance of evidence.

56
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ADVERTISEMENTS FOR BIDDERS ARE SIMPLY INVITATIONS TO MAKE PROPOSALS

Northern Mindanao Industrial Port and Services Corporation vs. Iligan Cement Corporation
G.R. No. 215387; April 23, 2018
Del Castillo, J.

FACTS:
Assailed in this Petition for Review on Certiorari are the March 18, 2014 Decision of the
Court of Appeals (CA) in CA-G.R. SP No. 03789. MIN, which set aside the August 6, 2009 Order
of the Regional Trial Court of Iligan City, Branch 3 (RTC) in Civil Case No. 7201, and the CA'S
October 17, 2014 Resolution denying herein petitioner's motion for reconsideration.

In the course of the conference, Iligan Cement Corporation (ICC), through Nestor Camus
(Camus), required the participants to submit their respective technical proposals and commercial
bids on or before 5 July 2007. NOMIPSCO thereafter submitted its proposal in which it offered the
lowest bid of ₱1.788 per a 40-kilogram bag. ICC awarded the cargo handling contract to Europort
Logistics and Equipment Incorporated (Europort).

NOMIPSCO filed a Complaint for Damages and Attorney's fees against ICC claiming that
ICC was guilty of bad faith when it still invited NOMIPSCO to join the prebidding conference despite
prior knowledge of its status as an old contractor, NOMIPSCO, thus, contended that the acts of
ICC amounted to an abuse of its rights or authority, the same acts that led NOMIPSCO to suffer
great losses and unearned income. ICC countered that NOMIPSCO had no cause of action since
its complaint failed to state a cause of action. ICC stressed that 'for abuse of right to exist there
must be an act which is legal; but which is contrary to morals, good customs, public order, or public
policy; and it is done with intent to injure.' The RTC denied ICC’s defenses. The CA ruled that
considering that NOMIPSCO was not selected as the winner and that ICC cannot be legally obliged
to accept its bid, the former therefore has no legal right against the latter

ISSUE:
Is the petitioner as the advertiser bound to accept the respondent’s proposal as lowest
bidder?

RULING:
No, it is the prerogative of the petitioner which to accept among the bidder. On the claim
that it became the policy of respondent to award the contract to a new contractor, the Court finds
nothing wrong with this. It is the prerogative of respondent, and petitioner had no right to interfere
in the exercise thereof.

The court said that an advertisement to possible bidders is simply an invitation to make
proposals, and that an advertiser is not bound to accept the lowest bidder unless the contrary
appears; respondent had the right to reject bids, and it cannot be compelled to accept a bidder's
proposal and execute a contract in its favor. Indeed, under Article 1326 of the Civil Code, which
specifically tackles offer and acceptance of bids, provides that advertisements for bidders are
simply invitations to make proposals, and that an advertiser is not bound to accept the highest or
lowest bidder unless the contrary appears. The court ruled in National Power Corporation v.
Pinatubo Commercial, as the discretion to accept or reject bids and award contracts is of such
wide latitude, courts will not interfere, unless it is apparent that such discretion is exercised
arbitrarily or used as a shield to a fraudulent award. The exercise of that discretion is a policy
decision that necessitates prior inquiry, investigation, comparison, evaluation, and deliberation."

Therefore, advertisement are just invitations and not offers, hence, petitioner is not bound
to accept the lowest bidder nor the highest.

57
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CRIMINAL LIABILITY CANNOT BE SUBJECT OF A COMPROMISE AGREEMENT

Team Image Entertainment, Inc., and Felix Co vs. Solar Team Entertainment
G.R. No. 191658; September 13, 2017
Leonen, J.

FACTS:
The Petitioner Team Image Entertainment, Inc. (Team Image) assails via a Petition for
Review on Certiorari the CA’s decision directing it to pay damages for failure to settle its monetary
obligation to Solar Team Entertainment (Solar Team) within the period provided in the Compromise
Agreement.

The Solar Team entered into a Marketing Agreement with Team Image, which agreed to
act as Solar Team's exclusive marketing agent by selling advertising spots to business enterprises
on behalf of Solar Team. According to Solar Team, Team Image breached their Marketing
Agreement by failing to disclose the names of the entities to which Team Image sold advertising
spots. Further, Team Image allegedly represented itself as the owner of Solar Team's television
programs, series, and telenovelas, hence collecting the proceeds of the sale without remitting them
to Solar Team. For these reasons, Solar Team demanded that Team Image render an accounting
of all the transactions the latter had entered into pursuant to the Marketing Agreement and that it
remit all the proceeds it had received in selling Solar Team's television programs, series, and
telenovelas.

Solar Team and Team Image entered into a Compromise Agreement and likewise agreed
to waive all their claims against each other and to cause the provisional dismissal of all the criminal
and civil actions that they had filed against each other.

Team Image argued that Solar Team's Tieng violated the terms of Compromise Agreement
by failing to cause the dismissal of the criminal cases he had earlier filed against Team Image's
Co. Solar Team denied the same and said that it can validly do so since Team Image Co. failed to
settle its monetary obligation.

ISSUE:
Can criminal liability be the subject of a compromise agreement?

RULING:
No, it is settled that criminal liability cannot be the subject of a compromise.

A criminal case is committed against the People, and the offended party may not waive or
extinguish the criminal liability that the law imposes for its commission. This explains why "a
compromise is not one of the grounds prescribed by the Revised Penal Code for the extinction of
criminal liability.”

Team Image confused the Presidential Commission on Good Government's power to grant
criminal immunity with the act of compromising criminal liability. Granting criminal immunity is
allowed because no criminal case has yet been filed in court, and therefore, there is no criminal
liability to compromise. On the other hand, compromising criminal liability presupposes that a
criminal case has already been filed in court, the dismissal of which is already based on the sound
discretion of the trial court. The cases involved here are cases not under the jurisdiction of the
Presidential Commission on Good Government.

Team Image and Solar Team cannot agree on the dismissal of the criminal cases. Solar
Team did not violate the Compromise Agreement when Tieng failed to cause the dismissal of the
criminal cases for estafa he had filed against Co.

58
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

REFORMATION OF AN INSTRUMENT MAY BE ALLOWED IF SUBSEQUENT AND

CONTEMPORANEOUS ACTS OF THE PARTIES SHOW THAT THEIR TRUE INTENTION
WAS NOT ACCURATELY REFLECTED IN THE WRITTEN INSTRUMENT

Makati Tuscany Condominium Corporation vs. Multi-Realty Development Corporation

G.R. No. 185530; April 18, 2018.
Leonen, J.

FACTS:
In a petition for Certiorari, Makati Tuscany Condominium Corp. (MATUSCO) assails the
CA’s resolution allowing for the reformation of the Master Deed and Declaration of Restrictions of
Makati Tuscany, a 26-storey condominium built by Multi-Realty Development Corp. (Multi-Realty).

Multi-Realty created MATUSCO to hold title over and manage the common areas of Makati
Tuscany. The Master Deed stipulated 106 parking slots as part of the common area. However,
Multi-Realty claims that the true intent of the parties is not reflected in the Master Deed as 98 of
these slots were supposedly retained by Multi-Realty. MATUSCO asserts that there was no
mistake, fraud, inequitable conduct, or accident in the execution of the instruments; and that the
instruments clearly expressed the true intention of the parties; thus, reformation should not be
allowed.

Multi-Realty contends that it never intended to hand over the 98 parking slots; that being a
novice in the condominium business, it had made a mistake in good faith in including said slots in
the Master Deed and Deed of Transfer; that it had already sold 26 of the 98 slots without objection
from MATUSCO; and that the Board of Directors of MATUSCO offered to buy said slots, signifying
recognition Multi-Realty’s ownership.

ISSUE:
Should there be reformation of an instrument considering that what was written in the
Master Deed and Deed of Transfer failed to fully capture what was actually intended by the parties?

RULING:
Yes. Reformation of an instrument is a remedy in equity where a valid existing contract is
allowed by law to be revised to express the true intentions of the contracting parties.

An action for reformation of an instrument finds its basis in Article 1359 of the Civil Code.
The National Irrigation Administration v. Gamit provides for the requisites of reformation, to wit: (1)
there must have been a meeting of the minds of the parties to the contract; (2) the instrument does
not express the true intention of the parties; and (3) the failure of the instrument to express the true
intention of the parties is due to mistake, fraud, inequitable conduct or accident. The rationale is
that it would be unjust to enforce a written instrument which does not truly reflect the real
agreement of the parties. In reforming an instrument, no new contract is created for the parties,
rather, the reformed instrument establishes the real agreement between the parties.

However, intentions involve a state of mind, making them difficult to decipher; therefore,
the subsequent and contemporaneous acts of the parties must be presented into evidence to
reflect the parties' intentions.

The facts show that it was the intention of the parties all along for Multi-Realty to retain
ownership of the 98 parking slots and then sell them to unit owners who wanted additional parking
slots. Respondent, through a preponderance of evidence, was able to prove its claim that the
Master Deed and Deed of Transfer failed to capture the true intentions of the parties.

Hence, it is but right that the instruments be reformed to accurately reflect the agreement
of the parties.

59
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

WHERE THE INTENTION WAS NOT TO TRANSFER ABSOLUTELY THE ASSIGNED

ASSETS IN PAYMENT OF OBLIGATIONS IS AN ABSOLUTELY SIMULATED CONTRACT,
THUS VOID

G Holdings, Inc. vs. Cagayan Electric Power and Light Company Co. Inc. (CEPALCO)
Ferochrome Phils. Inc.
G.R. No. 226213; September 27, 2017
Caguioa, J.

FACTS:
The Petitioner G Holdings, Inc. (GHI) assails via a Petition for Review on Certiorari under
Rule 45 the CA’s decision affirming the Decision of the RTC holding that the Deed of Assignment
was done in fraud of creditors and badges of fraud accompanied its execution.

Cagayan Electric Power and Light Company, Inc. (CEPALCO), which operates a light and
power distribution system in Cagayan de Oro City, supplied power to the ferro-alloy smelting plant
of Ferrochrome Philippines, Inc. (FPI). FPI defaulted in the payment of its electric power bills. In
the unilateral Deed of Assignment, FPI, as the assignor, through its stockholders and Board of
Directors' duly authorized representative and Acting President, Juanito E. Figueroa, in
consideration of obligations amounting to more than P50M , assigned, transferred, ceded and
conveyed absolutely in favor of GHI, as the assignee, all of the assignor's properties, equipment
and facilities, located in Phividec Industrial Estate, Tagoloan, Misamis Oriental.

CEPALCO contended that the Deed of Assignment was null and void for being absolutely
simulated and, as a dacion en pago, it did not bear the conformity of the creditor and that GHI and
FPI have substantially the same directors. GHI and FPI denied the same.

ISSUE:
Was the Deed of Assignment null and void for being absolutely simulated given that FPI's
intention was not to transfer absolutely the assigned assets to GHI in payment of FPI's obligations?

RULING:
Yes, the Deed of Assignment was null and void for being absolutely simulated contract.

Under Article 1345 of the Civil Code, simulation of a contract may be absolute, when the
parties do not intend to be bound at all, or relative, when the parties conceal their true agreement.
The former is known as contracto simulado while the latter is known as contracto disimulado. An
absolutely simulated or fictitious contract is void while a relatively simulated contract 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.

Thus, in executing the Deed of Assignment, FPI's intention was not to transfer absolutely
the assigned assets to GHI in payment of FPI's obligations. It did not really intend to divest itself
of its title and control of the assigned properties. The letter by FPI dated February 28, 2003, reveals
the true intention of FPI and GHI, that it is provided that the right to the work process, otherwise
known as "Outokumpo," was to be retained by FPI and would only be made available to GHI under
two options. Therefore, in the delineation of the different options available to FPI and GHI in the
settlement of FPI's obligations to the latter is that FPI did not intend to really assign its assets
"absolutely" to GHI. Further, according to FPI's Acting President, "GHI cannot operate the
equipment, machinery and smelting facilities without the patented 'Outokumpo' process and GHI
has not been operating the same." Moreover, the equipment and machinery remain physically in
the plant premises and there appears to be no effective delivery thereof as it remains to be under
the control of FPI.

Hence the Deed of Assignment was not really to transfer absolutely the assigned assets
to GHI.

60
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A REAL ESTATE MORTGAGE EXECUTED BY THE TRUSTEE ON PROPERTIES HELD-

IN-TRUST IN CONTRAVENTION OF THE DEED OF TRUST IS VOID

Sps. Felix and Carmen Chua et.al. vs. United Coconut Planters Bank, Asset Pool A (SPV-AMC),
Revere Realty and Development Corp, Jose Go and Registrar of Deeds of Lucena
G.R. No. 215999; August 16, 2017
Bersamin, J.

FACTS:
This is a petition for review on Certiorari which assails the CA decision which reversed the
Decision of the RTC and granted the appeal of respondent United Coconut Planters Bank (UCPB),
Revere Realty and Development Corporation (Revere), Jose Go (representing the Chuas and
Gotesco) and The Register of Deeds of Lucena City; and denied the petitioners' motion for
reconsideration.

The Chuas and Gotesco entered into a Joint Venture Agreement (JVA). Pursuant to the
JVA, deeds of absolute sale were executed over 12 lands of petitioners in favor of Revere
(corporation controlled by Jose Go) along with a deed of trust, which stated that Go did not pay
anything for the lands. Another deed of trust over 20 lands were executed in favor of Gotesco.
Petitioners and Jose Go had loan obligations with UCPB. Sps. Chua executed a REM in favor of
UCPB to secure their loans and that of Lucena Grand Central Terminal, Inc. (LGCTI), in the Chuas’
capacities as officers and stockholders of LGCTI. Petitioners and UCPB entered into a MOA to
consolidate the outstanding obligations of the Chuas and LGCTI, amounting to P204 million.

Jose Go, on behalf of Revere and unknown to petitioners, executed a REM (Revere REM)
over the properties he held in trust for petitioners, securing all obligations of the Chuas, LGCTI,
and Jose Go. UCPB foreclosed the mortgages and the properties were sold for P227M. The Chuas
requested from UCPB an accounting of Jose Go’s liabilities that were mistakenly secured by the
mortgage on petitioners’ properties and that the proceeds be applied only to the obligation of
petitioners of P204M. UCPB did not heed the requests. UCPB had applied P75M out of the P227M
proceeds to the obligations of Jose Go and Revere, pursuing petitioners for a P68M deficiency.
Thus, petitioners filed a complaint against UCPB, Revere, and Jose Go with RTC.

ISSUE:
Did the trustee Revere breach its undertaking under the Deed of Trust when it mortgaged
the properties in trust to UCPB?

RULING:
Yes, the trustee breached its undertaking under the Deed of Trust.

The deeds of trust expressly provided that: "The TRUSTEE hereby acknowledges and
obliges itself not to dispose of, sell, transfer, convey, lease or mortgage the said 12 parcels of land
without the written consent of the TRUSTORS first obtained." By entering into the Revere REM,
therefore, Revere openly breached its undertakings under the deeds of trust in contravention of
the express prohibition therein against the disposition or mortgage of the properties. Absent proof
showing that petitioners had transferred the ownership of some or all of the properties covered by
the deeds of trust in favor or Revere or Jose Go, the deeds of trust remained as the controlling
documents as to the parcels of land therein covered. Additionally, UCPB could not feign ignorance
of the deeds of trust. UCPB's own Vice President expressly mentioned in writing that UCPB would
secure from Jose Go the titles necessary for the execution of the mortgages. As such, UCPB's
actual knowledge of the deeds of trust became undeniable. Further, being a banking institution, it
was expected to exercise much greater care and due diligence in its dealings with the public. By
approving the loan application of Revere obviously without making prior verification of the
mortgaged properties' real owners, UCPB became a mortgagee in bad faith.

Hence, deed of REM executed between Revere, Jose Go and UCPB on the properties
held-in-trust is nullified.

61
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A DULY NOTARIZED CONTRACT ENJOYS THE PRESUMPTION OF AUTHENTICITY

AND DUE EXECUTION

Rogelia R. Gatan and Heirs of Bernardino Gatan vs. Jesusa Vinarao and Sps. Mildred and
Nomar Cabauatan
G.R. No. 205912; October 18, 2017
Leonardo-De Castro, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision of the CA which affirmed the RTC Decision which upheld the validity of the Deed of
Absolute Sale executed between the parties.

Bernardino Gatan (Bernardino), deceased, and his wife, Petitioner Rogelia, acquired a
parcel of land in Isabela. Respondent Spouses Cabauatan asked petitioner if they could
temporarily erect a house on the property. Petitioner agreed. After four (4) years, petitioner learned
of a Deed of Absolute Sale executed by Bernardino in favor of respondent’s parents, spouses
Vinarao. Petitioner averred that her husband could not have signed the deed because he was
illiterate. Petitioner confronted spouses Vinarao regarding the deed and demanded that spouses
Cabauatan to vacate the property.

Respondents denied that allegation and insisted that Bernardino could write his own name.
They countered that the property was previously owned by Pedro Gatan, father of Bernardino.
They also asserted that the spouses Gatan sold the subject property to spouses Vinarao by virtue
of the said deed which was notarized by Atty. Alfredo C Mabbayad.

ISSUE:
Does a notarized Deed of Absolute Sale enjoy a presumption of genuineness and due
execution despite allegation of forgery?

RULING:
Yes, a notarized document enjoys the presumption of its genuineness and due execution,
which the petitioners have failed to rebut.

It is a well-settled principle that a duly notarized contract enjoys the prima facie
presumption of authenticity and due execution, as well as the full faith and credence attached to a
public instrument. To overturn this legal presumption, evidence must be clear, convincing, and
more than merely preponderant to establish that there was forgery that gave rise to a spurious
contract. In Gepulle-Garbo v. Garabato, it was held that forgery cannot be presumed and must be
proved by clear, positive and convincing evidence, the burden of proof lies on the party alleging
forgery. One who alleges forgery has the burden to establish his case by a preponderance of
evidence, or evidence which is of greater weight or more convincing than that which is offered in
opposition to it.

On one hand, herein petitioners presented petitioner Rogelia's testimony that Bernardino
was unschooled. On the other hand, respondents called to the witness stand Carlos Vinarao, who
personally saw Bernardino and petitioner Rogelia sign the Deed of Absolute Sale before Atty.
Mabbayad, the notary public. Weighing the evidence submitted by both sides, the RTC which was
subsequently sustained by the CA and thus binding and conclusive to this Court, ruled in favor of
the validity of the Deed of Absolute of Sale as genuineness of a handwriting may be proven, under
Rule 132, Section 22, by anyone who actually saw the person write or affix his signature.

Thus, petitioners failed to overcome the presumption of authenticity and due execution of
the notarized Deed of Absolute Sale and to prove that signatures are forgeries.

62
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

BUYER CANNOT INSIST TO HAVE ACQUIRED MORE THAN WHAT ITS

PREDECESSOR-IN-INTEREST ACQUIRED

Hi-Lon Manufacturing, Inc. vs. Commission on Audit

G.R. No. 210669; August 01, 2017
Peralta, J.

FACTS:
This Petition for Certiorari under Rule 64, in relation to Rule 65 of the Rules of Court, seeks
to annul and set aside the Commission on Audit (COA) Decision which denied HI-LON
Manufacturing, Inc .'s (HI-LON) petition for review, and affirmed with modification the Notice of
Disallowance (ND) of COA's Legal and Adjudication Office-National Legal and Adjudication
Section (LAO-N) on the amount representing the just compensation for the road right-of-way taken
by the government from the subject property supposedly owned by HI-LON.

In 1978, Ministry of Public Works and Highways (now DPWH) converted to a road right-of-
way (RROW) a portion of a parcel of land (subject property) located in Laguna for the Manila South
Expressway Extension Project. Despite the public use, the government neither annotated its claim
or lien on the titles nor initiated expropriation proceedings. DBP, who acquired the property,
submitted all its acquired assets, including the subject property, to the Asset Privatization Trust
(APT) for disposal. APT disposed of a portion of the subject property in a public bidding, where
Fibertex was the highest bidder. APT supposedly agreed with Fibertex that the land would be
registered in the name of TG Property, Inc. (TGPI) and the improvements to Fibertex.

TGPI executed a Deed of Absolute Sale in favor of HI-LON over the entire subject property.
Rupert P. Quijano, Attorney-in-Fact of HI-LON, requested assistance from the Urban Road Project
Office (URPO) DPWH for payment of just compensation for portion of the subject property
converted to a RROW. A Deed of Sale was executed between HI-LON and the Republic of the
Philippines. COA rejected HI-LON’s ownership over the RROW because it has been the property
of the Republic of the Philippines since its transfer from DBP in 1987.

ISSUE:
Is HI-LON entitled to the ownership of the RROW and in connection thereto, just
compensation?

RULING:
No, HI-LON is not the owner of the portion used for road right-of-way.

Article 1370 of the New Civil Code provides that 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. Every contracting party is presumed to know the contents of the contract before
signing and delivering it, and that the words used therein embody the will of the parties.

HI-LON's assertions are contradicted by the clear and unequivocal terms of the Deed of
Sale between APT and TGPI, which state that the subject thereof is the total usable area of 59,380
sq. m. of the subject property. HI-LON cannot insist to have acquired more than what its
predecessor-in-interest (TGPI) acquired from APT. Perforce, HI-LON's bare allegation that the
object of the Deed of
Sale is the entire 89,070 sq. m. area of the subject property, is self-serving and deserves short
shrift.

The government cannot enter into a contract with the highest bidder and incorporate
substantial provisions beneficial to the latter which are not included or contemplated in the terms
and specifications upon which the bids were solicited. Thus, since the area of [29,690 sq. m. which
later became] 26,997 sq. m. covered by the ROW was not subject of the public bidding, Hi-Lon
cannot validly acquire and own the same. The owner of this property is still the Republic of the
Philippines.

63
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

DACION EN PAGO PARTAKES THE NATURE OF A CONTRACT OF SALE

Desiderio Dalisay Investments, Inc. vs. Social Security System

G.R. No. 231053; April 4, 2018
Velasco, Jr., J.

FACTS:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks the
reversal and setting aside of the Decision CA reversing the RTC Decision which held that there
was no perfected dation in payment between the parties.

In 1976, respondent SSS filed a case before the Social Security Commission (SSC)
against the Dalisay Group of Companies (DGC) for the collection of unremitted SSS premium
contributions. Desiderio Dalisay offered SSS a property to offset DGC's liabilities. SSC agreed. On
May 21, 1982, the real estate appraisers Joson, Capili and Associates informed Dalisay that the
total value of the lots is P1,954,777.78. During a meeting of the SSS, Atty. Cabarroguis explained
that the DGC is in financial distress. The offer for dacion en pago was accepted at the appraised
value of P2,000,000. On March 20, 1998, Eddie A. Jara (Jara), Assistant Vice-President of the
SSS sent a letter to Dalisay-Tirol formally demanding the certificates of title over the properties
subject of the dacion en pago Despite repeated demands made by SSS for DDII to deliver the
titles of the subject property, free from all liens and encumbrances, DDII still failed to comply.

DDII filed a complaint for Quieting of Title and recovery of possession against SSS alleging
that the late Desiderio Dalisay as then President offered the property appraised for the offsetting
of amount against DGC’s total liability to SSS. The latter accepted but negotiations were not fruitful
as they failed to agree on the terms and conditions set forth by SSS, thus there was no meeting of
the minds, and no dation in payment to speak of.

ISSUE:
Has the dacion en pago entered into by the parties perfected?

RULING:
Yes, the dacion en pago has been perfected.

In dacion en pago, property is alienated to the creditor in satisfaction of a debt in money.

Article 1245 provides that the law on sales shall apply, since the undertaking really partakes of the
nature of sale; that is, the creditor is really buying the thing or property of the debtor, the payment
for which is to be charged against the debtor's obligation. Dacion en pago extinguishes the
obligation to the extent of the value of the thing delivered, either as agreed upon by the parties or
as may be proved, unless the parties by agreement consider the thing as equivalent to the
obligation. It requires delivery of ownership of a thing owned by the debtor to the creditor as an
accepted equivalent of the performance of the obligation.

In order to determine whether there was a perfected or consummated dation in payment,

the stages of a contract of sale must have transpired. As to the first stage (negotiation), the late
Desiderio Dalisay offered to SSS that they partially settle their obligations to the latter via dacion
and SSC accepted DDII's proposed dacion en pago at P2,000,000. As to the second stage
(perfection), a contract of sale is perfected by mere consent, upon a meeting of the minds on the
offer and the acceptance thereof based on subject matter, price and terms of payment. SSS'
acceptance of the offer at P2,000,000 resulted in a perfected dation. As to the third stage
(consummation), the delivery of the thing signifies that title has passed from the seller to the buyer.
The agreement on dacion en pago was consummated by DDII's delivery of the property to SSS.

64
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE SUSPENSIVE CONDITION IN A CONTRACT TO SELL IS COMMONLY FULL

PAYMENT OF THE PURCHASE PRICE

Spouses Cipriano Pamplona and Bibiana Intac vs. Spouses Lilia and Vedasto Cueto
G.R. No. 204735; February 19, 2018
Bersamin, J.

FACTS:
This is a petition for review assailing the Decision of the CA which reversed the Decision
of the RTC ordering the petitioners to execute a deed of sale on the property in favor of the
respondents upon the release of the consigned amount.

On January 1989, plaintiffs Sps. Lilia I. Cueto and Vedasto Cueto, and Sps. Cipriano
Pamplona and Bibiana Intac mutually agreed that the latter would sell on installment a parcel of
land situated in Batangas City including the house standing thereon for the total sum of
US$25,000.00. The agreement was verbal considering that Spouses Cueto and Spouses
Pamplona are siblings-in-law and completely trusted each other. A notebook with the personal
inscription of defendant Bibiana was sent to Lilia at the latter's address in Italy, affirming their oral
agreement and wherein the list of all the remittances would be entered.

Since January 1989, Lilia allowed her son Rolando Cueto to reside at the subject property
as Lilia had to leave for Italy. On 13 August 1997, Sps. Pampalona filed before the MTC a case for
unlawful detainer against Rolando and his wife Liza. Lilia, having learned of the eviction case,
executed an Affidavit of Adverse Claim. On 17 June 1998, a written tender of payment of
US$11,000.00 was sent to defendants by registered mail and received by Bibiana on 30 June
1998. Bibiana refused to recognize the payment. Lilia was constrained to consign the
US$11,000.00, as final payment to Sps. Pampalona

ISSUE:
Is there a partially executed contract to sell between Bibiana and Lilia?

RULING:
Yes, there is a partially executed contract to sell between Bibiana and Lilia.

A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the
vendor's obligation to transfer title is subordinated to the happening of a future and uncertain event,
so that if the suspensive condition does not take place, the parties would stand as if the conditional
obligation had never existed. The suspensive condition is commonly full payment of the purchase
price.

A distinction must be made between a contract of sale in which title passes to the buyer
upon delivery of the thing sold and a contract to sell whereby agreement the ownership is reserved
in the seller and is not to pass until the full payment of the purchase price is made. In the first case,
non-payment of the price is a negative resolutory condition; in the second case, full payment is a
positive suspensive condition. Being contraries, their effect in law cannot be identical. In the first
case, the vendor has lost and cannot recover the ownership of the land sold until and unless the
contract of sale is itself resolved and set aside. In the second case, however, the title remains in
the vendor if the vendee does not comply with the condition precedent of making payment at the
time specified in the contract.

The distinctions delineate why the admissions by Roilan and Vedasto were consistent with
the existence of the oral contract to sell between Lilia and Bibiana. Under the oral contract to sell,
the ownership had yet to pass to Lilia, and Bibiana retained ownership pending the full payment of
the purchase price agreed upon.

65
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THERE IS A CONTRACT TO SELL WHEN EXECUTION OF A DEED OF ABSOLUTE SALE

WAS MADE DEPENDENT UPON THE PROPER COURT'S APPROVAL OF THE SALE OF
THE SHARES OF THE MINOR OWNERS

Lily S. Villamil substituted by her heirs Rudy VIllamil et.al. vs. Sps. Juanito and Mila Erguiza
G.R. No. 195999; June 20, 2018
Martires, J.

FACTS:
This is a petition for review on Certiorari seeking to reverse and set aside the Decision of
the CA which nullified the Decision of the RTC in an action for recovery of possession.

On 20 September 1972, plaintiff together with her sister (now deceased) and brother (now
deceased), entered into an agreement with Juanito Erguiza for the purpose of selling their property
on the condition that plaintiff and her siblings would file a petition to secure authorization for minor
children from the proper courts; that in case of failure of the plaintiff and her siblings to obtain said
authority, the partial payment made by the defendant Juanito Erguiza shall be applied as rent for
twenty (20) years of the premises. Sometime in 1992 or after the expiration of the twenty (20) years
lease, plaintiff demanded from the defendants to return possession of the property but the latter
failed and refused and continued to occupy said property.

Plaintiff again demanded from the defendants to return the possession of the property by
way of a formal letter but defendants just ignored the pleas. Plaintiff then filed a complaint to which
the respondent answered averring that the agreement between their co-heirs is for the sale on
condition of the subject property and a sale even if conditional transfers ownership to the vendees.

ISSUE:
Is the contract entered into by the parties a contract to sell, and not a contract of conditional
sale?

RULING:
Yes, the contract entered into by the parties is a contract to sell.

A contract to sell is a bilateral contract whereby the prospective seller, while expressly
reserving the ownership of the subject property despite delivery thereof to the prospective buyer,
binds himself to sell the said property exclusively to the latter upon his fulfillment of the conditions
agreed upon. The fulfillment of the suspensive condition will not automatically transfer ownership
to the buyer although the property may have been previously delivered to him. The prospective
seller still has to convey title to the prospective buyer by entering into a contract of absolute sale.
A Contract to Sell may not be considered as a Contract of Sale because the first essential element
(Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price)
is lacking. In a conditional contract of sale, the fulfillment of the suspensive condition renders the
sale absolute and the previous delivery of the property has the effect of automatically transferring
the seller's ownership or title to the property to the buyer.

Here, petitioner and her siblings who were then co-owners merely promised to sell the
subject property, thus, intention to reserve ownership. The execution of a deed of absolute sale
was made dependent upon the proper court's approval of the sale of the shares of the minor
owners. The agreement between the parties was not embodied in a deed of sale. Petitioner
retained possession of the certificate of title and finally, respondent admitted that they have not
finalized the sale in 1972 because there were minor owners such that when they constructed their
house thereon, they sought the permission of petitioner.

66
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE PROHIBITION IN ARTICLE 1491 (5) OF THE CIVIL CODE ON LAWYERS DOES NOT
EXTEND TO THEIR RESPECTIVE IMMEDIATE FAMILIES OR RELATIVES

Christopher R. Santos vs. Atty. Joseph A. Arrojado

A.C. No. 8502; June 27, 2018
Del Castillo, J.

FACTS:
This is a disbarment case against respondent Atty. Joseph Arrojado (Atty. Arojado) for
violation of Article 1491 of the Civil Code.

Lilia Rodriguez (Lilia) filed an unlawful detainer case against ccomplainant Christopher R.
Santos (Complainant Santos). Atty. Arrojando was Lilia’s counsel. While the case was pending
before the Supreme Court (SC), Lilia sold one of the properties in litis pendentia to Atty. Arrojado's
son, Julius. By reason of the purchase, complainant instituted the disbarment complaint against
respondent for violation of Article 1491 of the Civil Code when Atty. Arrojando acquired an interest
in the land involved in a litigation in which a lawyer had taken part in by reason of their profession.

Atty. Arrojado admitted the purchase but maintained that he did not violate Article 1491 of
the Civil Code as he had absolutely no interest in the property purchased by his son; and that the
proscription in the said article did not extend to the relatives of the enumerated persons mentioned
therein.

ISSUE:
Does the prohibition in Article 1491 (5) of the Civil Code from purchasing property and
rights which may be the object of any litigation in which lawyers may take part by virtue of their
profession, extend to their respective immediate families or relatives?

RULING:
No. The prohibition in Article 1491 (5) of the Civil Code does not extend to their respective
immediate families or relatives.

As worded, Article 1491 (5) of the Civil Code covers only (1) justices; (2) judges; (3)
prosecuting attorneys; (4) clerks of court; (5) other officers and employees connected with the
administration of justice; and (6) lawyers. The enumeration cannot be stretched or extended to
include relatives of the lawyer — in this case, Julius, son of respondent lawyer. Were we to include
within the purview of the law the members of the immediate family or relatives of the lawyer laboring
under disqualification, we would in effect be amending the law. We apply to this case the old and
familiar Latin maxim expressio unius est exclusio alterius, which means that the express mention
of one person, thing, act, or consequence excludes all others.

Undeniably, Article 1491 (5) of the Civil Code prohibits the purchase by lawyers of any
interest in the subject matter of the litigation in which they participated by reason of their profession.
Here, however, respondent lawyer was not the purchaser or buyer of the property or rights in
litigation. For, in point of fact, it was his son Julius, and not respondent lawyer, who purchased the
subject property. Concededly, Article 1491 provides that "[t]he following persons cannot acquire
by purchase, even at a public or judicial auction, either in person or through the mediation of
another x xx." However, perusal of the records would show that complainant failed to adduce any
shred of evidence that Julius acted or mediated on behalf of respondent lawyer, or that respondent
lawyer was the ultimate beneficiary of the sale transaction. The mere fact that it was Julius, son of
respondent lawyer, who purchased the property, will not support the allegation that respondent
lawyer violated Article 1491 (5) of the Civil Code.

67
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

MANUFACTURER OR SELLER OF ANIMAL FEEDS CANNOT BE HELD LIABLE FOR ANY

DAMAGE ALLEGEDLY CAUSED BY THE PRODUCT IN THE ABSENCE OF PROOF THAT
THE PRODUCT WAS DEFECTIVE

Marianito Padilla and Alfredo Javaluyas vs. Universal Robina Corporation

G.R. No. 214805; December 14, 2017
Del Castillo, J.

FACTS:
This Petition for Review on Certiorari assailing the Decision of the CA reversing and setting
aside the Decision of RTC declaring the obligations of petitioners Marianito Padilla (Padilla) and
Alfredo Javaluyas (Javaluyas) to respondent Universal Robina Corporation (URC) extinguished.

For various years, URC, a corporation engaged in the manufacture and sale of various
agro-industrial products, sold/supplied on credit day-old chicks and poultry feeds to petitioners
who, in turn, provided the labor, poultry houses, electricity and water facilities to care and grow
these chicks until they are ready for harvest. URC had the option of buying from complainants the
full-grown broiler chickens that met the target harvest weight at an agreed price per kilo.

Documents entitled Continuing Credit Accommodation with Real Estate Mortgage

(CCAREM) were executed by the parties whereby URC agreed to extend a continuous credit
accommodation in favor of petitioners, for the latter's purchases of day-old chicks, poultry feeds,
and other agricultural products from the former, while each complainant put up a real estate
mortgage. Sometime in the year 1993, petitioners informed URC of the stunting or slow growth
and high mortality rate of the chickens. They claimed that URC supplied them with low quality
feeds and class B or junior day-old chicks. Meanwhile, the stunted chickens that failed to meet the
standard target weight for harvest were rejected by URC. As a result, petitioners incurred
outstanding obligations. URC made several demands for complainants to settle their unpaid
obligations under the CCAREMs, but they refused to pay. Hence, URC filed an application for
extrajudicial foreclosure under CCAREM.

ISSUE:
Was there sufficient evidence to establish URC's fault or negligence for the
defective/stunted growth of the broiler chickens as would extinguish petitioners' obligation under
the CCAREM?

RULING:
No. There was no basis to the allegation that the stunted growth of the broiler chickens
was caused by the purported low-quality poultry feeds supplied by URC.

It was held, in the case of Nutrimix Feeds Corporation v. Court of Appeals, that the
manufacturer or seller of animal feeds cannot be held liable for any damage allegedly caused by
the product in the absence of proof that the product was defective. The defect of the product
requires evidence that there was no tampering with or changing of the animal feeds. The Court
explained that "in the sale of animal feeds, there is an implied warranty that it is reasonably fit and
suitable to be used for the purpose which both parties contemplated."

It is incumbent on petitioners to establish the liability of URC on the basis of breach of

implied warranty. No evidence, however, was adduced. There was nothing in the records, except
self-serving claims, which proves that URC delivered low-quality feeds tainted with high aflatoxin
and other harmful components. There were no veterinarians/nutritionists or any other credible
evidence presented by petitioners to confirm that the poultry feeds supplied by URC were
contaminated or affected the growth of the broiler chicks. Petitioners failed to prove by
preponderance of evidence the fault or negligence of URC. For this reason, petitioners can be held
liable for their unsettled obligations under the CCAREMs they executed in favor of URC.

68
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A WARRANTY IS A COLLATERAL UNDERTAKING IN SALETHAT IF THE PROPERTY

SOLD DOES NOT POSSESS CERTAIN INCIDENTS OR QUALITIES, THE PURCHASER
MAY EITHER CONSIDER THE SALE VOID OR CLAIM DAMAGES FOR BREACH OF
WARRANTY

Pilipinas Makro, Inc. vs. Coco Charcoal Philippines, Inc.

G.R. No. 196419; October 04, 2017
Martires, J.

FACTS:
This Petition for Review on Certiorari seeks to reverse and set aside the Decision of the
CA which reversed the Decision of the RTC ordering respondents to refund the amount
corresponding to the value of the encroached area.

On 26 November 1999, Petitioner Makro and respondent Coco Charcoal executed a

notarized Deed of Absolute Sale wherein the latter would sell its parcel of land, with a total area of
1,000 sqm.to the former for P8,500,000.00. On the same date, Makro entered another notarized
Deed of Absolute Sale with respondent Lim for the sale of the latter's land, with a total area of
1,000 square meters for the same consideration. Both deeds of sale contained identical provisions,
similar terms, conditions, and warranties.

As a result of a resurvey, it was discovered that 131 square meters of the lot purchased
from Coco Charcoal and 130 square meters of the land bought from Lim had been encroached
upon by the DPWH for its road widening project and construction of a drainage canal to develop
and expand the Davao-Cotabato National Highway. Makro offered a compromise agreement in
consideration of a refund of 75% of the value of the encroached portions. Failing to recover such,
Makro filed separate complaints against Coco Charcoal and Lim to collect the refund sought.

ISSUE:
Is petitioner entitled to a refund from respondents for violation of an express warranty?

RULING:
Yes, the petitioner is entitled to a refund from respondents.

A warranty is a collateral undertaking in a sale of either real or personal property, express

or implied; that if the property sold does not possess certain incidents or qualities, the purchaser
may either consider the sale void or claim damages for breach of warranty. An express warranty
pertains to any affirmation of fact or any promise by the seller relating to the thing, the natural
tendency of which is to induce the buyer to purchase the same. An implied warranty is one which
the law derives by application or inference from the nature of transaction or the relative situation
or circumstances of the parties, irrespective of any intention of the seller to create it.

Section 4(i) of the deeds of sale states that “xxx xxx xxx The Property is and shall continue
to be free and clear of all easements, liens and encumbrances of any nature whatsoever xxx”. The
sellers assure that the properties sold were free from any encumbrances which may prevent Makro
from fully and absolutely possessing the properties in question. Such provision cannot be
considered as an implied warranty. In order for the implied warranty against eviction to be
enforceable, the following requisites must concur: (a) there must be a final judgment; (b) the
purchaser has been deprived of the whole or part of the thing sold; (c) said deprivation was by
virtue of a prior right to the sale made by the vendor; and (d) the vendor has been summoned and
made codefendant in the suit for eviction at the instance of the vendee. Evidently, there was no
final judgment and no opportunity for the vendors to have been summoned precisely because no
judicial action was instituted.

69
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE FRAUD REQUIRED TO ANNUL OR AVOID A CONTRACT TO SELL MUST BE SO

MATERIAL THAT HAD IT NOT BEEN PRESENT, THE DEFRAUDED PARTY WOULD
NOT HAVE ENTERED INTO THE CONTRACT

Joseph Harry Walter Poole-Blunden vs. Union Bank of the Philippines

G.R. No. 205838; November 29, 2017
Leonen, J.

FACTS:
This resolves a Petition for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Decision of the CA and praying that judgment be rendered annulling or rescinding
the Contract to Sell between petitioner Joseph Harry Walter Poole-Blunden (Poole-Blunden) and
respondent Union Bank of the Philippines (UnionBank).

Sometime in March 2001, Poole-Blunden came across an advertisement placed by Union

Bank in the Manila Bulletin for the public auction of certain properties. One of these properties was
a condominium unit located in Makati City, which Union Bank had acquired through foreclosure
proceedings. The Unit was advertised to have an area of 95 square meters. About a week prior to
the auction, Poole-Blunden visited the unit for inspection. Poole-Blunden placed his bid and won
the unit. On May 7, 2001, Poole-Blunden entered into a Contract to Sell with Union Bank.

Upon closely examining it, he noticed apparent problems in its dimensions. He took rough
measurements of the Unit, which indicated that its floor area was just about 70 square meters.
Union Bank informed Poole-Blunden that after inquiring with the HLURB, the Homeowners'
Association of T-Tower Condominium, and its appraisers, the Unit was confirmed to be 95 square
meters, inclusive of the terrace and the common areas surrounding it. Poole-Blunden's
dissatisfaction with Union Bank’s answer prompted him to file his Complaint for Rescission of
Contract and Damages

ISSUE:
Is there fraud sufficient for rescission of the contract to sell where a condominium unit
represented to be 95 square meters turns out to be only 70 square meters?

RULING:
Yes, the presence of fraud in this case is sufficient to cause the rescission of the contract.

Under Article 1338 of the Civil Code there is fraud when, through insidious words or
machinations of one of the contracting parties, the other is induced to enter into a contract which,
without them, he would not have agreed to. Article 1344 clarifies that in order to make a contract
voidable, the fraud should be serious and should not have been employed by both contracting
parties. There are two types of fraud contemplated in the performance of contracts: dolo incidente
or incidental fraud and dolo causante or fraud serious enough to render a contract voidable. The
fraud required to annul or avoid a contract must be so material that had it not been present, the
defrauded party would not have entered into the contract. The fraud must be the determining
cause of the contract or must have caused the consent to be given.

Here, the significance of space and dimensions to any buyer of real property is plain to
see. This is particularly significant to buyers of condominium units in urban areas, and even more
so in central business districts, where the scarcity of space drives vertical construction and propels
property values. It would be immensely guileless of this Court to fail to appreciate how the
advertised area of the Unit was material or even indispensable to petitioner's consent. As petitioner
emphasized, he opted to register for and participate in the auction for the Unit only after
determining that its advertised area was spacious enough for his residential needs.

Thus, it is evident that respondent orchestrated a situation rife for defrauding buyers of the
advertised unit and the Contract to Sell between petitioner and respondent be annulled, and
petitioner be refunded all the amounts he paid to respondent in respect of the purchase of the Unit.

70
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

UPON EXPIRATION OF THE PERIOD TO REDEEM, THE BUYER IN A FORECLOSURE

SALE BECOMES THE ABSOLUTE OWNER OF THE PROPERTY AND CANNOT BE
COMPELLED TO SELL THE SUBJECT PROPERTY TO SPECIFIC PERSONS WITHOUT ITS
CONSENT

Philippine National Bank vs. Antonio Bacani, Rodolfo Bacani et.al.

G.R. No. 194983; June 20, 2018
Reyes, Jr., J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court, seeking to
reverse the Decision of the CA affirming the trial court's decision, which held that petitioner
Philippine National Bank (PNB) fraudulently sold the subject property to the prejudice of the
respondents, which resulted in the nullification of the sale and the buyer's certificate of title over
the subject property.

Rodolfo Bacani was the registered owner of a parcel of land located in Isabela which was
used to secure the Php 80,000.00 loan that the Spouses Bacani obtained from PNB. When the
Spouses Bacani failed to pay their loan, PNB extrajudicially foreclosed the subject property on
September 9, 1986. It was awarded to PNB as the highest bidder. Spouses Bacani failed to redeem
the property. On June 6, 1989, Rodolfo's title was cancelled, and in its place, TCT No. T-185028
was issued in the name of PNB. On November 29, 1989, PNB issued a circular, revising its policy
on the disposition of acquired assets. Subject to certain conditions, former owners or their heirs
were given priority in the re-acquisition of their foreclosed assets '"on negotiated basis without
public bidding. "The Spouses Bacani initiated negotiations with PNB regarding the re-acquisition
of their property.

PNB informed the Spouses Bacani that the request for repurchase was refused and the
subject property would be sold in a public auction. The reason for the rejection was the low offer
from the Spouses Bacani, which amounted to less than the fair market value of the subject property
and PNB's total claim. PNB sold the subject property through a negotiated sale to Renato de Leon.
On March 19, 1997, the respondents filed a complaint for the annulment of the sale and Renato's
title over the subject property, together with a prayer for the payment of damages.

ISSUE:
Does the respondent have the right to redeem the property even after the expiration of the
period to redeem?

RULING:
No, upon the expiration of the period to redeem, the Spouses Bacani do not have an
enforceable right to repurchase the subject property.

In extrajudicial foreclosures of real estate mortgage, the debtor, his or her successors-in-
interest, or any judicial creditor or judgment creditor of said debtor, is granted a period of one year
within which to redeem the property. The redemption period is reckoned from the registration of
the certificate of sale with the Register of Deeds. When the debtor or the successors-in-interest fail
to redeem the property within the prescribed statutory period, the consolidation of ownership in
favor of the purchaser becomes a matter of right. At that point, the purchaser becomes the absolute
owner of the property, and may, as a necessary consequence, exercise all the essential attributes
of ownership.

When the Spouses Bacani made its initial offer to repurchase the subject property on
August 26, 1991, almost four (4) years passed since the redemption period expired on October
10, 1987. Thus, by the time the parties started negotiating the Spouses Bacani's reacquisition of
the subject property, PNB was already the absolute owner. Clearly, PNB had full discretion as to
the terms and conditions relating to the disposition of the subject property. PNB cannot be
compelled to sell the subject property to specific persons without its consent. Neither may the
courts nullify the alienation of the property on grounds other than those established by law.

71
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE NOTICE OF CANCELLATION ACCOMPANIED BY A JURAT IS NOT THE VALID

NOTARIAL ACT CONTEMPLATED BY THE MACEDA LAW

Priscilla Zafra Orbe vs. Filinvest Land, Inc.

G.R. No. 208185; September 06, 2017
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil
Procedure assailing the Decision of the CA which reversed the prior rulings of the Office of the
President which held that petitioner Priscilla Zafra Orbe (Orbe) is entitled to the benefits of Section
3 of Republic Act No. 6552, that is entitlement to a 50% refund.

In June 2001, Orbe entered into a purchase agreement with respondent Filinvest Land,
Inc. (Filinvest) over a lot in Taytay, Rizal for the total contract price was P2,566,795.00, payable
on installment basis. From June 17, 2001 to July 14, 2004, Orbe paid a total of P608,648.20. After,
Orbe was unable to make further payments allegedly on account of financial difficulties. On
October 4, 2004, Filinvest sent a notice of cancellation, accompanied by a jurat, which was
received by Orbe on October 18, 2004.

Noting that "efforts to seek for a reconsideration of said cancellation proved futile," and that
the parcel had since been sold by Filinvest to a certain Ruel Ymana "in evident bad faith," Orbe
filed against Filinvest a Complaint for refund with damages dated November 13, 2007 before the
HLURB Field Office. Orbe emphasized that she had made payments "beginning June, 2001 up to
October, 2004." She further asserted that the October 4, 2004 Notice did not amount to an
"effective cancellation by notarial act."

ISSUE:
Is the notarial act in the form of a jurat accompanying the notice of cancellation valid under
the Maceda Law as to fall within Section 4?

RULING:
No, a jurat is not a valid notarial act contemplated in the Maceda Law.

For cancellations under Section 4 to be valid, three (3) requisites must concur, First, the
buyer must have been given a 60-day grace period but failed to utilize it. Second, the seller must
have sent a notice of cancellation or demand for rescission by notarial act; and third, the
cancellation shall take effect only after 30 days of the buyer's receipt of the notice of cancellation.
Rule 132, Section 19 of the Revised Rules of Evidence specifically requires that a document be
"acknowledged before a notary public.”

Notarization under the Maceda Law extends beyond converting private documents into
public ones. Under Sections 3 and 4, notarization enables the exercise of the statutory right of
unilateral cancellation by the seller of a perfected contract. Through an acknowledgement,
individuals acting as representatives declare that they are authorized to act as such
representatives. It is imperative that the officer signing for the seller indicate that he or she is duly
authorized to effect the cancellation of an otherwise perfected contract. Individuals purporting to
do so must demonstrate their specific authority. In the case of corporations, this authority is vested
through board resolutions, or by stipulations in the articles of incorporation or by-laws.
Respondent's notice of cancellation here was executed by an individual identified only as
belonging to respondent's Collection Department. A jurat is a distinct notarial act, which makes no
averment concerning the authority of a representative.

72
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ISSUANCE OF THE CERTIFICATE BY THE CITY ENGINEER'S OFFICE IS NOT

REQUIRED FOR THE PERFECTION OF A CONTRACT OF LEASE

Hilltop Market Fish Vendors' Association, Inc. vs. Hon. Braulio Yaranon, City Mayor, Baguio
City et.al.
G.R. No. 188057; December 7, 2017
Carpio, J.

FACTS:
This petition for review assailing the Decision of the CA affirming the Decision of the RTC
finding the contract of lease automatically expired following a period of 25 years as expressly
provided in the contract.

Petitioner Hilltop Market Fish Vendors’ Association (Hilltop) and Respondent the City of
Baguio entered into a lease contract over a lot owned by the respondent. The contract provided
that first payment of the annual lease rental shall commence upon the issuance by the City
Engineer's Office of the Certificate of full occupancy of the building to be constructed by Hilltop.
Hilltop constructed the Rillera building on the lot and Hilltop’s members began occupying it without
the issuance of the City Engineer of the required certificate. Respondent Mayor Yaranon, through
an administrative order, ordered the closure of the Rillera building to have it cleaned, sanitized,
and enclosed; to prevent illegal activities in it; and for its completion and preparation for commercial
use.

Hilltop filed an Urgent Application for Temporary Restraining Order and Writ of Preliminary
Injunction praying that the court issue an injunction against the implementation of the AO and order
the City Engineer's Office to issue the Certificate to make the contract of lease effective.
Respondent argued that the issuance of the Certificate shall only signal the start of payment of
annual lease rental and not the effectivity of the contract

ISSUE:
Is the issuance of the certificate by the City Engineer's Office required for the perfection of
the contract of lease?

RULING:
No, the issuance of the certificate is not required for the perfection of the lease contract.

In a contract of lease, one of the parties binds himself to give to another the enjoyment or
use of a thing for a price certain, and for a period which may be definite or indefinite. Being a
consensual contract, a lease is perfected at the moment there is a meeting of the minds upon the
thing and the cause or consideration which are to constitute the contract. Thereafter, the lessor is
obliged to deliver the thing which is the object of the contract in such a condition as to render it fit
for the use intended, and the lessee is obliged to use the thing leased as a diligent father of a
family, devoting it to the use stipulated or that which may be inferred from the nature of the thing
leased.

From the moment that the contract is perfected, the parties are bound to fulfill what they
have expressly stipulated. Since Hilltop exercised its right as lessee based on the contract of lease
and the law, it has no basis in claiming that the contract of lease did not commence. The issuance
of the Certificate was not a suspensive condition which determines the perfection of the contract
or its effectivity. The contract of lease specifically provides that: "x xx the annual lease rental shall
be P25,000 payable within the first 30 days of each and every year; the first payment to commence
immediately upon issuance by the City Engineer's Office of the Certificate of full occupancy of the
entire building to be constructed thereon x xx." Clearly, the issuance of the Certificate is only a
condition that will make Hilltop start paying the annual lease rental to the City of Baguio. Because
the Certificate was not issued, the payment of annual lease rental did not commence.

73
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

PARTIES MAY STIPULATE AUTOMATIC RESCISSION OF A LEASE CONTRACT IN

CASE OF BREACH

D.M. Ragasa Enterprises, Inc., vs. Banco De Oro, Inc. (formerly Equitable PCI Bank, Inc.)
G.R. No. 190512; June 20, 2018.
Caguioa, J.

FACTS:
In a petition for Certiorari under Rule 45, D.M. Ragasa Enterprises, Inc., (Ragasa) assails
the CA’s decision reversing the rulings by the RTC that the bank may not unilaterally pre-terminate
the lease contract; hence, it is still liable to pay the rentals.

Equitable Banking Corp (Equitable Bank) leased office spaces of a commercial building
(subject premises) for a period of five years (Ragasa as lessor). Following a series of mergers -
Equitable Bank with Phil. Commercial International Bank (PCI Bank), then Equitable PCI Bank with
Banco De Oro (BDO) - the bank closed and joined certain branches including the branch located
in the subject premises. Thus, the bank sent a notice of pre-termination of the lease contract.

Ragasa demanded payment of the rentals for the remaining of the term inasmuch as there
is no express provision in their contract allowing for pre-termination. The bank countered that its
only liability is the forfeiture of the security deposit. Item 8(m) of the Lease Contract provides that
the tenant voluntarily binds himself and agrees, without any coercion or force by the lessor, to
forfeit in favor of the lessor the full deposit upon non-compliance of the Term of the Contract of
Lease by the tenant. Such deposit cannot be applied to Rental.

ISSUES:
(1) Is the bank liable for its act of pre-terminating the lease?; and
(2) If so, is Ragasa entitled to damages in the form of unpaid rentals?

RULING:
1. Yes. Article 1170 of the Civil Code mandates that those who, in the performance of their
obligations, are guilty of fraud, negligence, or delay, and those who, in any manner, contravene
the tenor thereof, are liable for damages. Thus, having contravened the tenor of the Lease Contract
regarding its term or period, the bank should be liable for damages. Generally, if the lessor or the
lessee should not comply with their obligations, the aggrieved party may ask for either the
rescission of the contract and indemnification for damages, or only the latter, allowing the contract
to remain.

2. No. In the present case, there is an express stipulation in item 8 (p) of the Lease Contract
that "[b]reach or non-compliance of any of the provisions of this Contract, especially non-payment
of two consecutive monthly rentals on time, shall mean the termination of this Contract."

There is nothing wrong if the parties to the lease contract agreed on certain mandatory
provisions concerning their respective rights and obligations, such as the procurement of the
insurance and rescission clause. For it is well to recall that contracts are respected as the law
between the contracting parties, and may establish such stipulations, clauses, terms and
conditions as they may want to include. Pursuant to the automatic termination clause of the Lease
Contract, which is in furtherance of the autonomy characteristic of contracts, the Lease Contract
was terminated upon its unauthorized pre-termination by the bank on June 30, 2001. Ragasa is,
thus, precluded from availing of the second option which is to claim damages by reason of the
breach and allow the lease to remain in force. With the lease having been automatically resolved
or terminated by agreement of the parties, Ragasa is entitled only to indemnification for damages.
Entitlement to rentals after the termination of the lease pursuant to an automatic rescission or
termination clause is possible in the case where the lessor invokes the clause and the lessee
refuses to vacate the leased premises. The same is not applicable in this case.

74
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

LESSEES ARE ENTITLED TO SUSPEND THE PAYMENT OF RENT UNDER ARTICLE 1658
OF THE CIVIL CODE IF THEIR LEGAL POSSESSION IS DISTURBED. ACTS OF PHYSICAL
DISTURBANCE THAT DO NOT AFFECT LEGAL POSSESSION IS BEYOND THE SCOPE
OF THIS RULE

Victoria N. Racelis, in her capacity as administrator vs. Spouses Germil and Rebecca Javier
G.R. No. 189609; January 29, 2018
Leonen, J.

FACTS:
This is a Petition for Review, where petitioner Victoria N. Racelis (Racelis) challenges the
Decision of the CA declaring the Sps. Javier was justified in withholding rental payments due to
the disconnection of electrical service over the property.

Racelis advertised a residential house and lot in Marikina for sale. Respondent Sps. Javier
offered to purchase but they could not afford to pay the full price. They offered instead to lease the
property while they raise enough money, to which petitioner eventually agreed. The Sps. Javier
tendered the sum of P65,000.00 representing "initial payment or goodwill money." They tendered
small sums of money to complete the promised P100,000, but fell short. They consistently paid
rent but started to fall behind sometime thereafter. Realizing that the Sps. Javier had no intention
of purchasing, Racelis wrote to inform them that her family had decided to terminate the lease
agreement. However, the Sps. Javier refused vacate the property and even refused to pay rent for
the succeeding months. Racelis caused the disconnection of the electrical service over the
property.

Racelis filed a complaint for ejectment against the Sps. Javier alleging that that she agreed
to lease the property to the Sps. Javier based on the understanding that they would eventually
purchase it. On the other hand, Sps. Javier averred that they never agreed to purchase and the
amount given was actually an advanced rent. The MTC ruled that the Sps. Javier were entitled to
suspend the payment of rent under Article 1658 of the Civil Code due to Racelis' act of
disconnecting electric service over the property.

ISSUE:
May respondent invoke their right to suspend the payment of rent after the petitioner
requested for the temporary disconnection of electrical service?

RULING:
No. Article 1658 of the Civil Code allows a lessee to postpone the payment of rent if the
lessor fails to either (1) "make the necessary repairs" on the property or (2) "maintain the lessee
in peaceful and adequate enjoyment of the property leased."

This provision implements the obligation imposed on lessors under Article 1654 (3) of the
Civil Code. The failure to maintain the lessee in the peaceful and adequate enjoyment of the
property leased does not contemplate all acts of disturbance. Lessees may suspend the payment
of rent under Article 1658 of the Civil Code only if their legal possession is disrupted. The duty 'to
maintain the lessee in the peaceful and adequate enjoyment of the lease for the duration of the
contract' mentioned in [N]o. 3 of [Article 1654] is merely a warranty that the lessee shall not be
disturbed in his legal, and not physical, possession."

Here, there was no disturbance in the lessee's legal possession because her right to
possess the property was neither questioned nor raised as an issue in any legal proceeding.
Hence, she was not entitled to suspend the payment of rent. In this case, the disconnection of
electrical service over the leased premises on was not just an act of physical disturbance but one
that is meant to remove respondents from the leased premises and disturb their legal possession
as lessees. Ordinarily, this would have entitled respondents to invoke the right accorded by Article
1658 of the Civil Code. However, this rule will not apply in the present case because the lease had
already expired when petitioner requested for the temporary disconnection of electrical service.

75
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE PRINCIPAL SHALL BE SOLIDARILY LIABLE WITH THE AGENT IF THE FORMER
ALLOWED THE LATTER TO ACT AS THOUGH HE HAD FULL POWERS

Citystate Savings Bank vs. Teresita Tobias and Shellidie Valdez

G.R. No. 227990; March 7, 2018
Reyes, Jr., J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the Decision of the CA finding Citystate Savings Bank (petitioner) and Rolando
Robles (Robles) jointly and solidarily liable to the respondents.

Robles was employed by petitioner as an Accountant-trainee before being promoted as

Acting Manager while Teresita Tobias (Tobias) was a meat vendor who was introduced by her son
to Robles. Robles persuaded Tobias to open an account with the petitioner to place her money in
some high interest rate mechanism, to which the latter agreed. Robles would then deliver to her
the interest earned while she handed her passbook for updating. He later offered to sign-up Tobias
to a back-to-back scheme where the bank is authorized by depositors to use their deposits and
invest the same in business ventures that yield high interest. Tobias agreed and signed the
documents without reading them and invested P1.8M to the petitioner. Robles later failed to remit
to Tobias and Valdez (Tobias’ daughter) the interest as scheduled. They learned that Robles
withdrew the money for his personal use and refused to return it despite their demands. Thus, they
filed a complaint for sum of money and damages.

The RTC found Robles guilty and ordered him to pay damages. The CA found the petitioner
and Robles solidarily liable to Tobias and Valdez for damages. Petitioner contended that: 1) it took
proper measures in hiring Robles and 2) the latter acted in his personal capacity in dealing with
Tobias, who agreed with full knowledge and consent.

ISSUE:
Is the petitioner as the principal, solidarily liable with Robles for vesting the latter with
apparent authority in offering and facilitating banking transactions?

HELD:
Yes, the petitioner is solidarily liable with Robles.

Article 1911 of the Civil Code provides: Even when the agent has exceeded his authority,
the principal is solidarily liable with the agent if the former allowed the latter to act as though he
had full powers. The case of Prudential Bank v. CA laid down the doctrine of apparent authority,
with specific reference to banks, viz: banks are liable to innocent third persons where
representation is made in the course of its business by an agent acting within the general scope
of his authority eventhough, in a case, the agent is secretly abusing his authority and attempting
to perpetrate a fraud upon his principal or some other person, for his own ultimate benefit.

The evidence on record sufficiently established that Robles, as branch manager, was
'clothed' or 'held out' as having the power to enter into the subject agreements with the
respondents. He has been vested with the apparent or implied authority to act for the petitioner in
offering and facilitating banking transactions. There was nothing irregular in the manner in which
Robles transacted with the respondents. Petitioner further admitted that for valued clients, the
branch manager has the authority to transact outside of the bank premises. Petitioner
acknowledged Robles' authority and it honored the accounts so opened outside the bank
premises. Consequently, petitioner is estopped from denying Robles' authority.

Thus, as the employer of Robles, petitioner is solidarily liable to the respondents for
damages caused by the acts of the former, pursuant to Article 1911 of the Civil Code.

76
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

EVEN IF NO ACTUAL AUTHORITY HAS BEEN CONFERRED ON AN AGENT, HIS OR

HER ACTS, AS LONG AS THEY ARE WITHIN HIS OR HER APPARENT SCOPE OF
AUTHORITY, BIND THE PRINCIPAL

Calubad vs. Ricarcen Development Corporation

G.R. No. 202364; August 30, 2017
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari filed by petitioner Arturo C. Calubad (Calubad),
appealing rulings of the CA and RTC which declared as null and void the real estate mortgages
executed in his favor by Marilyn Soliman (Soliman) on behalf of Ricarcen Development Corporation
(Ricarcen).

Respondent Ricarcen is a domestic corporation engaged in renting out real estate, and the
registered owner of a parcel of land subject of the dispute. Soliman, acting on Ricarcen's behalf as
its president, took out a loan from Calubad. This loan was secured by a real estate mortgage over
Ricarcen's property. To prove her authority to execute the mortgage contracts in Ricarcen's behalf,
Soliman presented Calubad with a Board Resolution empowering her to borrow money and use
the Quezon City property as collateral for the loans.

Sometime in 2003, after Ricarcen failed to pay its loan, Calubad initiated extrajudicial
foreclosure proceedings on the real estate mortgage. To prevent the foreclosure, Ricarcen filed a
complaint to annul the real estate mortgages. Both the RTC and CA found that Soliman did not
have sufficient proof of authority to bind the property of Ricarcen, hence this appeal.

Petitioner argues that Ricarcen is barred by estoppel from denying Soliman's authority to
enter into a contract of loan and mortgage with Calubad when it clothed Marilyn with apparent
authority to act in its behalf; that it benefited from the loan’s proceeds.

ISSUE:
Is Ricarcen estopped from denying the authority of Soliman, its former President, from
entering into a contract of loan and mortgage with Calubad?

RULING:
Yes. Law and jurisprudence recognize actual authority and apparent authority as the two
(2) types of authorities conferred upon a corporate officer or agent in dealing with third persons.

Apparent authority is based on the principle of estoppel. The doctrine of apparent authority
provides that even if no actual authority has been conferred on an agent, his or her acts, as long
as they are within his or her apparent scope of authority, bind the principal. However, the principal's
liability is limited to third persons who are reasonably led to believe that the agent was authorized
to act for the principal due to the principal's conduct. Apparent authority is determined by the acts
of the principal and not by the acts of the agent.

As the former president of Ricarcen, it was within Marilyn's scope of apparent authority to
act for and enter into contracts in Ricarcen's behalf. She also had possession of the owner's
duplicate copy of the land title covering the property mortgaged to Calubad. Moreover, Ricarcen's
officers clearly knew of the mortgage contracts when they issued checks as payments for the
monthly interest and principal of the loan obtained by Marilyn. Therefore, Calubad could not be
faulted for transacting with Soliman because Ricarcen clearly clothed her with apparent authority.

77
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

INTEREST SHALL BEGIN TO RUN FROM THE TIME THAT THE QUANTIFICATION OF
THE DAMAGES HAVE BEEN REASONABLY ASCERTAINED

Arch. Eusebio Bernal, Doing Business Under the Name and Style Contemporary Builders, vs.
Castor A. Dr. Vivencio Villaflor and Dra. Gregoria Villaflor
G.R. No. 213617; April 18, 2018
Reyes, Jr., J.

FACTS:
In this petition for review under Rule 45, petitioner Architect Eusebio B. Bengal assailed
the decision and resolution of the CA for declaring respondents Dr. Vivencio Villaflor and Dra.
Gregoria Villaflor liable for interests at a rate of only 6% per annum, computed from the finality of
the judgment until satisfaction.

Petitioner demanded from the respondents the payment of the monetary award granted to
the petitioner in a civil action for sum of money with damages. Petitioners were granted the
monetary award due to unpaid construction work rendered by them for the building of respondents’
Medical Arts Building. Numerous change orders happened while such building was being
constructed. Respondents appealed to the CA. CA modified the RTC by reducing the amount due
because of some unproven billing and declaring that the principal amount be paid plus the legal
interest at the rate of 6% per annum, computed from the finality of the judgment until satisfaction.

Petitioner argued that the interest should be computed at the rate of 6% per annum from
the time of either the last extrajudicial demand or judicial demand plus 12% per annum interest
from the date of judgment until full payment.

ISSUE:
Should the interest rate of 6% per annum be computed from the time of last demand, as
petitioners asserted?

RULING:
No, the interest of 6% per annum on the award granted shall be reckoned from the time of
the CA Decision's promulgation.

When an obligation, not constituting a loan or forbearance of money, is breached, an

interest on the amount of damages awarded may be imposed at the discretion of the court at the
rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages
except when or until the demand can be established with reasonable certainty. Accordingly, where
the demand is established with reasonable certainty, the interest shall begin to run from the time
the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot
be so reasonably established at the time the demand is made, the interest shall begin to run only
from the date the judgment of the court is made (at which time the quantification of damages may
be deemed to have been reasonably ascertained).

The petitioner's original demand does not equate to a loan or forbearance of money but
pertains to the cost of construction and services, the amount of which has not yet been determined
with certainty even up to the time of the complaint's filing with the RTC. The uncertainty was
brought about by the numerous change orders that happened while the subject Medical Arts
Building was being constructed. Clearly, at the time of the petitioner's judicial and extrajudicial
demands, the amount of the respondents' obligation remained uncertain. Thus, interest shall begin
to run from the time the quantification of damages had been reasonably ascertained. Respondents’
liability was reasonably ascertained only at the time CA rendered its decision because the award
of P1.7M was no longer questioned in petitioner’s MR with CA or in his petition for review with SC.

78
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A SURETY MAY SET UP COMPENSATION AGAINST AMOUNT OWED BY THE

CREDITOR TO THE PRINCIPAL

FGU Insurance Corporation vs. Spouses Floro Roxas and Eufemia Roxas
G.R. No.189526 & 189656; August 09, 2017
Leonen, J.

FACTS:
FGU Insurance Corporation (FGU) and Spouses Floro and Eufemia Roxas (Sps. Roxas)
both filed separate Petitions for Review to set aside the CA decision which modified the RTC ruling
by declaring that FGU was solidarily liable with Rosendo Dominguez to pay Sps. Roxas.

Sps. Roxas entered into a Contract of Building Construction with Dominguez and Philtrust
Bank. The latter was to finance the cost of materials and supplies while Dominguez was to
undertake the construction works for P300,000, thus he entered into an agreement with Sps.
Roxas as to the payment terms. Dominguez secured a performance bond in the amount of
P450,000 from FGU to pay jointly and severally Sps. Roxas and Philtrust Bank in the event of non-
performance by Dominguez. Sps. Roxas failed to make payment to Dominguez on agreed terms.
Dominguez stopped construction work and filed a complaint against Philtrust Bank and Sps. Roxas
for non-payment. Philtrust Bank sent demand letters to FGU to pay under their surety bond for
Dominguez’s non-performance but FGU refused.

FGU argued that the P450,000 only indicates the maximum amount that can be recovered
and that they should only be liable for the actual damages sustained by Spouses Roxas or the cost
incurred by them to finish the work. FGU alleged that it should not be held to pay the liabilities
incurred by Spouses Roxas owing to Dominguez and that such liabilities be set off against FGU’s
liability. Spouses Roxas claimed that they are entitled to the full amount of the bond.

ISSUES:
(1) Was the surety still liable for the full-face value amount of the surety bond despite the
noncompletion of the obligation by the principal?; and
(2) May the liabilities of the creditor to the principal be set off against any liability of the
surety?

RULING:
1. Yes, the terms of the bond were clear; hence, the literal meaning of its stipulation should
control. From the terms, FGU guaranteed to pay the amount of P450,000.00 in the event of
Dominguez's breach of his contractual undertaking. Hence, FGU was bound to pay the stipulated
indemnity upon proof of Dominguez's default without the necessity of proof on the measure of
damages caused by the breach. FGU, on the other hand, has the right to be indemnified for any
payments made, both under the law and the indemnity agreement. Even as the surety is solidarily
bound with the principal debtor to the creditor, the surety who does pay the creditor has the right
to recover the full amount paid, and not just any proportional share, from the principal debtor or
debtors. Such right to full reimbursement falls within the other rights, actions and benefits which
pertain to the surety by reason of the subsidiary obligation assumed by the surety.

2. Yes, it may set up compensation against the amount owed by the creditor to the
principal. The liability of a surety is determined strictly in accordance with the actual terms of the
performance bond it issued. Article 1280 provides that "the guarantor may set up compensation
as regards what the creditor may owe the principal debtor.” While it specifically pertains to a
guarantor, the provision nonetheless applies to a surety. Contracts of guaranty and surety are
closely related in the sense that in both, "there is a promise to answer for the debt or default of
another." The difference lies in that "a guarantor is the insurer of the solvency of the debtor and
thus binds himself to pay if the principal is unable to pay while a surety is the insurer of the debt,
and he obligates himself to pay if the principal does not pay." Hence, FGU could offset its liability
under the Surety Bond against Dominguez's collectibles from the Sps. Roxas.

79
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

STRICT CONSTRUCTION OF SURETY CONTRACT IS NOT EXTENDED TO FAVOR A

COMPENSATED CORPORATE SURETY

Erma Industries, Inc., Ernesto Marcelo and Flerida Marcelo vs. Security Bank Corporation and
Sergio Ortiz-Luiz
G.R. No. 191274; December 06, 2017
Leonen, J.

FACTS:
In this petition for review under Rule 45, Petitioner Erma Industries, Inc. (Erma) challenged
the CA decision which affirmed the RTC decision in holding Petitioner liable to pay their loans and
declared Respondent Sergio Ortiz-Luiz liable as surety.

Erma obtained from respondent Security Bank Corporation (Security Bank) a credit facility
embodied in a credit agreement. Spouses Marcelo and Spouses Ortiz Luiz signed a Continuing
Suretyship agreement in favor of Security Bank. Both pairs of spouses were to be jointly and
severally liable with Erma in case the latter defaults in the payment according to the terms of the
Continuing Suretyship agreement. Erma obtained various loans from Security Bank and defaulted
in the payment of the obligations. Erma requested for a restructuring of the whole loan. Erma
offered as security a certain property registered in the name of petitioner Ernesto Marcelo. Security
Bank received the title of such property and remained in its possession but only approved the
restructuring up to a certain amount. Security Bank eventually demanded payment of the balance
from Erma and its sureties but the former was refused payment. Security Bank filed a complaint
for payment. Erma requested the return of the TCT of the property which was in Security Bank’s
possession but latter refused to return.

Sergio Ortiz-Luiz claimed that he is a mere accommodation party and nominal surety being
that he only signed the suretyship agreement as the Administrative Vice President of Erma at that
time. Thus, he should be discharged as surety.

ISSUE:
Can Ortiz-Luiz, signing as a mere officer of Erma Industries, Inc. but who subsequently
executed a Continuing Suretyship agreement be held liable as surety in his personal capacity?

RULING:
Yes. An accommodation surety acts without motive of pecuniary gain and, hence, should
be protected against unjust pecuniary impoverishment by imposing on the principal duties akin to
those of a fiduciary.

However, this cannot be said of a compensated corporate surety which is a business

association organized for the purpose of assuming classified risks in large numbers, for profit and
on an impersonal basis, through the medium of standardized written contractual forms drawn by
its own representatives with the primary aim of protecting its own interests. In the case of the
corporate surety, the rule of strictissimi juris is not applicable, and courts apply the rules of
interpretation of appertaining to contracts of insurance.

The lower courts found that while respondent Ortiz signed the Credit Agreement as an
officer of Erma, as shown by his signature under Erma Industries, Inc. (Borrower), this does not
absolve him from liability because he subsequently executed a Continuing Suretyship agreement
wherein he guaranteed the "due and full payment and performance" of all credit accommodations
granted to Erma and bound himself solidarily liable with Ernesto Marcelo for the obligations of
Erma. Furthermore, respondent Ortiz's claim that he is a mere accommodation party is immaterial
and does not discharge him as a surety. He remains to be liable according to the character of his
undertaking and the terms and conditions of the Continuing Suretyship, which he signed in his
personal capacity and not in representation of Erma.

80
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ASSIGNEE OF RIGHTS AND RECEIVABLES IS NOT SOLIDARILY LIABLE WITH

ASSIGNOR FOR LATTER’S OBLIGATIONS TO HIS CREDITOR UNLESS EXPRESSLY
STIPULATED IN THE ASSIGNMENT

United Coconut Planters Bank vs. Spouses Walter Uy and Lily Uy

G.R. No. 204039; January 10, 2018
Martires, J.

FACTS:
In this petition for review on certiorari, Petitioner United Coconut Planters Bank (UCPB)
challenged the CA decision which affirmed with modification the OP decision by declaring UCPB
as only jointly liable for payment of Prime Town Property Group, Inc.’s (PPGI) obligations to
Respondents Spouses Walter and Lily Uy (Spouses Uy) and limited its liability to amounts that
respondents already paid.

Respondents entered into a contract to sell with PPGI for a condominium unit that the latter
was developing. PPGI and petitioner entered into a Memorandum of Agreement (MOA), Sale of
Receivables, and Assignment of Rights and Interests by virtue of which PPGI transferred the right
to collect the receivables of respondents to petitioner as partial settlement of PPGI’s loan with
petitioner. The Agreement conveys the straightforward intention of PPGI to "sell, assign, transfer,
convey and set over" to UCPB the receivables, rights, titles, interests and participation over the
units covered by the contracts to sell. Respondents filed a claim for sum of money against PPGI
and petitioner with HLURB because PPGI failed to complete the construction of the condominium
unit.

HLURB held that petitioner was not solidarily liable with PPGI. HLURB Board reversed such
decision by holding petitioner solidarily liable because it stepped into PPGI's shoes insofar as the
condominium unit is concerned pursuant to the MOA and that petitioner was PPGI’s successor-in-
interest; thus, delay in the completion of the unit could be attributable to it. The OP affirmed HLURB
board’s decision. CA declared that petitioner was only jointly liable.

ISSUE:
Was petitioner-assignee solidarily liable with its assignor for the latter’s obligations to the
creditor?

RULING:
No, an assignment will be construed in accordance with the rules of construction governing
contracts generally, the primary object being always to ascertain and carry out the intention of the
parties.

This intention is to be derived from a consideration of the whole instrument, all parts of
which should be given effect, and is to be sought in the words and language employed. An
assignment of credit has been defined as an agreement by virtue of which the owner of a credit,
known as the assignor, by a legal cause -such as sale, dation in payment or exchange or donation-
and without need of the debtor's consent, transfers that credit and its accessory rights to another,
known as the assignee, who acquires the power to enforce it to the same extent as the assignor
could have enforced it against the debtor. In every case, the obligations between assignor and
assignee will depend upon the judicial relation which is the basis of the assignment.

The agreement explicitly excluded any and all liabilities and obligations, which PPGI
assumed under the contracts to sell. The intention to exclude PPGI's liabilities and obligations is
further shown by PPGI's subsequent letters to the buyers, which stated that "this payment
arrangement shall in no way cause any amendment of the other terms and conditions, nor the
cancellation of the Contract to Sell you have executed with PPGI.”

81
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

AS AN ACCESSORY CONTRACT, A MORTGAGE CONTRACT'S VALIDITY DEPENDS ON

THE VALIDITY OF THE PRINCIPAL CONTRACT

Vicente Luntao and Nanette Luntao, vs. BAP Credit Guaranty Corporation and Efren Pineda
G.R. No. 204412; September 20, 2017
Leonen, J.

FACTS:
In this petition for Certiorari under Rule 45, Petitioners Vicente and Nanette Luntao prayed
for the reversal of the decision of the CA which affirmed the RTC in denying the complaint for
declaration of nullity of the real estate mortgage and the issuance of the writ in favor of BAP Credit
Guaranty Corporation (BAP).

Petitioners Luntao applied for a loan in the amount of P900,000 with BAP and used
Vicente’s property as collateral. Petitioners failed to pay when the obligation became due despite
demand letters. Respondent filed for extrajudicial foreclosure of the property. Petitioners filed a
complaint for declaration of nullity of real estate mortgage with a prayer for the issuance of a
temporary restraining order and a writ of preliminary injunction against BAP on the ground that
they never received the proceeds of the loan.

Petitioners argued that there was absence of consideration in the principal contract of loan,
thus the loan contract is void. Petitioners further alleged that a void loan contract will necessarily
result in a void mortgage contract as the latter is merely an accessory contract. Respondent argued
that Security Bank released the loan proceeds and debited BAP’s account.

ISSUE:
Does the validity of the loan contract affect the validity of the mortgage contract?

RULING:
Yes, as an accessory contract, a mortgage contract's validity depends on the loan
contract's validity.

It is, thus, imperative for the Court to determine if the contract of loan between petitioners
and private respondent is valid. The Court held in Pentacapital Investment Corporation v. Mahinay
that "like any other contract, a contract of loan is subject to the rules governing the requisites and
validity of contracts in general." The elements of a valid contract are enumerated in Article 1318 of
the Civil Code. All elements should be present in a contract; otherwise, it cannot be perfected.

In this case, petitioners insist that they did not receive the loan proceeds, which is the
object of the loan contract. Here, both the trial court and the Court of Appeals found that petitioners
received the proceeds of the loan through the account under the name of Holy Infant Medical
Clinic/Nanette Luntao/Eleanor Luntao. This finding was supported by evidence presented by the
parties. Although the general rule that resolution of Rule 45 petitions is limited to questions of law,
it admits of certain exceptions. Nonetheless, petitioners failed to convince this Court to re-examine
the facts already considered by both the trial court and the Court of Appeals.

82
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A MORTGAGEE HAS NO OBLIGATION TO GO BEYOND THE CERTIFICATE OF TITLE

IN THE ABSENCE OF ANY SIGN THAT MAY AROUSE SUSPICION

Spouses Ellis Miles and Caroline Ronquillo-Miles, vs. Bonnie Bautista Lao
G.R. No. 209544; November 22, 2017
Tijam, J.

FACTS:
In this petition for Certiorari under Rule 45, Petitioner Spouses Ellis Miles and Caroline
Ronquillo-Miles (Spouses Miles) questioned the CA ruling which reversed the RTC ruling by
declaring that respondent Bonnie Bautista Lao (Lao) is a mortgagee in good faith.

Petitioners left for the US and entrusted a duplicate of the TCT of their property to their
niece Rodora Jimenez for her to offer to interested buyers. Petitioners claimed that no SPA was
written in favor of Rodora. Petitioners alleged that Rodora and Spouses Ocampo conspired to
falsify a deed of donation in favor of Spouses Ocampo which resulted into the cancellation of the
old TCT and an issuance of a new one in favor of Spouses Ocampo. Spouses Ocampo were able
to cause the execution of a falsified deed of real estate mortgage in favor of respondent in
exchange for a loan amounting to P2,500,000.

Petitioners alleged that respondent never conducted an investigation on the title and
property before entering into the contract of mortgage and was thus negligent. Respondent argued
that the property was in the name of Spouses Ocampo at the time of mortgage and that she even
conducted an ocular inspection which showed her that there were no other occupants.

ISSUE:
Is a mortgagee of a mortgagor with a fraudulent title to the property a mortgagee-in-good
faith?

RULING:
Yes, a mortgagee has a right to rely in good faith on the certificate of title of the mortgagor
of the property given as security, and in the absence of any sign that might arouse suspicion, the
mortgagee has no obligation to undertake further investigation.

The issue of whether a mortgagee is in good faith generally cannot be entertained in a

petition filed under Rule 45. However, a recognized exception to this rule is when the RTC and the
CA have divergent findings of fact as in the case at bar. There is indeed a situation where, despite
the fact that the mortgagor is not the owner of the mortgaged property, his title being fraudulent,
the mortgage contract and any foreclosure sale arising therefrom are given effect by reason of
public policy. This is the doctrine of "the mortgagee in good faith" based on the rule that buyers or
mortgagees dealing with property covered by a Torrens Certificate of Title are not required to go
beyond what appears on the face of the title.

This doctrine presupposes, however, that the mortgagor, who is not the rightful owner of
the property, has already succeeded in obtaining Torrens title over the property in his name and
that, after obtaining the said title, he succeeds in mortgaging the property to another who relies on
what appears on the title.

Hence, it is clear that respondent had every right to rely on the TCT presented to her insofar
as the mortgagors' right of ownership over the subject property is concerned.

83
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

SLIGHT DEVIATIONS FROM THE STATUTORY PROVISIONS GOVERNING

PUBLICATION OF NOTICE OF FORECLOSURE SALES IN THE FORM OF INCORRECT
LOT NUMBERS WILL INVALIDATE NOTICE

Security Bank Corporation, vs. Spouses Rodrigo and Erlinda Mercado

G.R. No. 192934 & 197010; June 27, 2018
Jardeleza, J.

FACTS:
These are consolidated petitions seeking to nullify the CA decision and resolution which
reversed the RTC decision nullifying the extrajudicial foreclosure sales over petitioners-spouses
Rodrigo and Erlinda Mercado’s (Spouses Mercado) properties together with the interest rates
imposed on such by petitioner Security Bank Corporation (Security Bank).

Security Bank granted Spouses Mercado a revolving credit line agreement which was
secured by a real estate mortgage over two of the spouses’ properties. Security Bank put in
provisions stating that the interest on outstanding availments will be determined according to
Security bank’s prevailing lending rate at the date of availment. Spouses Mercado executed
another REM over three more of their properties in favor of Security Bank to secure an additional
amount under the same credit line. Spouses Mercado defaulted in their payment and extrajudicial
foreclosure proceedings were initiated.

The publication of the notices located in San Jose and Batangas City contained errors of
the lot numbers in their respective technical descriptions. Security Bank published an erratum once
in a newspaper to correct such errors. Security Bank was the highest bidder in all of foreclosure
sales thus certificates of sale were issued and registered.

Spouses Mercado argued that the foreclosure was invalid because the publication
requirement pursuant to Act 3135 was not followed. Further, Spouses Mercado alleged that the
interests were unconscionable. On the other hand, Security Bank argued that the mistake in the
notice is minor and not substantial. Secondly, they averred that the interest provisions observe the
principle of mutuality of contracts as there is a ceiling on the maximum applicable rate.

ISSUES:
(1) Did misstating the lot number in the technical description attached to the notice of sale
invalidate the foreclosure?; and
(2) Does an interest which is to be determined according to a bank’s prevailing lending rate
violate the principle of mutuality of contracts?

RULING:
1. Yes, failure to advertise a mortgage foreclosure sale in compliance with the statutory
requirements constitutes a jurisdictional defect and any substantial error in a notice of sale will
render the notice insufficient and will consequently vitiate the sale. In the case of Caubang v.
Crisologo, the court ruled that statutory provisions governing publication of notice of mortgage
foreclosure sales must be strictly complied with and slight deviations therefrom will invalidate the
notice and render the sale, at the very least, voidable. An error is substantial if it will deter or
mislead bidders, depreciate the value of the property or prevent it from bringing a fair price. The
published notice misidentified the identity of the properties. Since the lot numbers are misstated,
the notice effectively identified lots other than the ones sought to be sold.

2. Yes, the determination of interest rates cannot be left solely to the will of one party. ART.
1308 states that the contract must bind both contracting parties; its validity or compliance cannot
be left to the will of one of them.” The authority to change the interest rate was given to Security
Bank alone as the lender, without need of the written assent of the spouses Mercado.

84
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

REQUIREMENT OF POSTING OF A NOTICE FOR EXTRAJUDICIAL FORECLOSURE IS

COMPLIED WITH WHEN NEWSPAPER IS CIRCULATED WHERE PROPERTY IS
LOCATED

Gotesco Properties, Inc. vs. Solidbank Corp.

G.R. No. 209452; July 26, 2017
Leonen, J.

FACTS:
This is a petition for review on Certiorari seeking to reverse the ruling of the CA affirming
the RTC in dismissing Petitioner Gotesco Properties, Inc.’s (Gotesco) complaint for the annulment
of the foreclosure proceeding against Respondent Solidbank Corp. (Solidbank).

Gotesco entered into a P300 million loan with Solidbank evidenced by a Mortgage Trust
Indenture. Gotesco was obliged to mortgage several parcels of land in favor of Solidbank with one
of the mortgaged properties being situated in San Fernando, Pampanga. Solidbank sought to
foreclose the mortgaged properties when Gotesco defaulted in the payment of the loan.

Gotesco filed a complaint with the RTC for the annulment of the foreclosure proceeding on
grounds such as non-compliance with Section 3 of Act No. 3135 which states that notice shall also
be published once a week for at least three consecutive weeks in a newspaper of general
circulation in the municipality or city where the property is located. Gotesco alleged that the
foreclosure proceeding was not valid because the newspaper Remate, which published the notice,
was a newspaper that was not printed and published in San Fernando, Pampanga. Solidbank
claimed that it has complied with Act No. 3135 and that Remate was a newspaper of general
circulation which was accredited by the RTC as one where a notice of sale can be published. CA
affirmed the RTC which ruled that the requirements of Act No. 3135 was satisfied and the fact that
Remate was printed in Manila did not mean that it was not a newspaper of general circulation.

ISSUE:
Was the requirement of publication of a Notice of Sale for an extrajudicial foreclosure
complied with even if the newspaper was not printed in the location where the property is located?

RULING:
Yes, the crucial factor is not where the newspaper is printed but whether the newspaper is
being circulated in the city where the property is located.

What the law requires is the publication of the Notice of Sale in a "newspaper of general
circulation," which is defined as: “is published for the dissemination of local news and general
information; that it has a bona fide subscription list of paying subscribers; that it is published at
regular intervals.” The newspaper need not have the largest circulation so long as it is of general
circulation. If notices are only published in newspapers printed in the city where the property is
located, even newspapers that are circulated nationwide will be disqualified from announcing
auction sales outside their city of publication. This runs contrary to the spirit of the law which is to
attain wide enough publicity so all parties interested in acquiring the property can be informed of
the upcoming sale.

Remate is an accredited publication by the RTC of Pampanga and is one of the most widely
circulated tabloids in the country. Hence, the publication of the notice of sale in the newspaper of
general circulation alone is more than sufficient compliance with the notice-posting requirement of
the law.

85
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

TWO-BIDDER RULE IS NOT APPLICABLE DURING THE PUBLIC AUCTION OF THE

MORTGAGED ASSETS (PRIVATE PROPERTY) PURSUANT TO ACT NO. 3135

Boston Equity Resources, Inc. and William Hernandez vs. Edgardo Del Rosario
G.R. No. 193228; November 27, 2017
Bersamin, J.

FACTS:
In this petition for review, Petitioner Boston Equity Resources, Inc. (Boston Equity) seeks
the reversal of the CA decision which reversed the RTC by annulling the real estate mortgage, its
amendment and the foreclosure proceedings.

Respondent Edgardo Del Rosario (Del Rosario) represented himself as single and entered
into a real estate mortgage with the petitioner. Del Rosario defaulted in the payment of the loan
obligations. Petitioner proceeded to foreclose the properties according to the formalities of Act
3135 and was declared the sole bidder.

Respondent filed a complaint for declaration of the nullity of the extrajudicial foreclosure
and the sheriff’s sale but such was dismissed by the RTC. CA reversed on the ground that the
REM involved conjugal properties and required the consent of respondent’s wife for validity and
that the extrajudicial foreclosure was further null and void for failing to comply with the procedure
mandated by A.M. No. 99-10-05-0 requiring at least two bidders during the public auction.

ISSUE:
1. Does an extrajudicial foreclosure sale of properties require at least two or more bidders
in the auction sale?
2. Did the lack of written consent to the mortgage of conjugal assets by the spouse of the
mortgagor nullify the mortgage and the extrajudicial foreclosure?

RULING:
1. No, the two-bidder rule is not applicable during the public auction of the mortgaged
assets foreclosed pursuant to Act No. 3135.

The two-bidder rule is provided under P.D. No. 1594 and its implementing rules with
respect to contracts for government infrastructure projects because of the public interest involved.
Although there is a public interest in the regularity of extrajudicial foreclosure of mortgages, the
private interest is predominant. The reason, therefore, for the requirement that there must be at
least two bidders is not as exigent as in the case of contracts for government infrastructure projects.
That only Boston Equity had participated in the bidding during the foreclosure sale did not
constitute a defect that nullified or voided the foreclosure sale considering that the Court had
already dispensed with the two-bidder rule for purposes of the foreclosure sale of private
properties.

2. Yes, since the REM was an encumbrance on the conjugal properties, the contracting
thereof by Edgardo sans the written consent of Rosie rendered only the REM void and legally
inexistent.

However, the liability of the debtor under the principal contract of the loan subsisted despite
the illegality of the REM. That obligation matured and became demandable in accordance with the
stipulation pertaining to it. What was lost was only the right to foreclose the REM as a special
remedy for satisfying or settling the debt that was the principal obligation. In case of its nullity, the
mortgage deed remained as evidence or proof of the debtor's personal obligation, and the amount
due to the creditor could be enforced in an ordinary action.

86
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

NON-REGISTRATION OF A DEED OF REAL ESTATE MORTGAGE DOES NOT AFFECT

ITS VALIDITY

Coca-Cola Bottlers Phils., Inc, vs. Spouses Efren and Lolita Soriano
G.R. No. 211232; April 11, 2018
Tijam, J.

FACTS:
In this petition for review on Certiorari under Rule 45, petitioner Coca-Cola Bottlers Phils.,
Inc. (Coca-Cola) seek to reverse the decision and resolution of the CA in affirming the RTC
decision which nullified the real estate mortgage and foreclosure executed in their favor.

Respondents Spouse Efren and Lolita Soriano (Spouses Soriano) are engaged in the
selling of Coca-Cola’s products. Coca-Cola required security for the continuation of respondent’s
business. Respondents gave two certificates of title over their property and were made to sign a
document. Coca-Cola assured that the signed document will never be notarized. Respondents
decided to stop selling the products and verbally demanded the return of their titles but such was
not given back. Respondents found out that their land was already mortgaged and foreclosed in
favor of Coca-Cola. Respondents filed a complaint for the annulment of the foreclosure sale.

Respondents argued that they never signed a mortgage document, never appeared before
a notary public and were never notified of the foreclosure sale thus non-compliance with the
requirements of PD 1529 invalidated the mortgage and foreclosure. Respondents alleged that
REM agreement is not a public document as it was notarized by a clerk of court. Coca-Cola alleged
that respondents’ admission of signing a document indicated that the mortgage was validly
executed. Coca-Cola further alleged that the defect in the notarization did not affect its validity as
the requirement in PD 1529 was only provided for registrability and not its validity thus it only failed
to bind third parties.

ISSUES:
(1) Is a real estate mortgage executed without complying with the formal requirement of
registration under PD 1529 constitute a valid mortgage?; and
(2) Is a REM agreement notarized by a clerk of court considered a valid public document?

RULING:
1. Yes, registration of a REM deed is not essential to its validity as the law is clear on the
requisites for the validity of a mortgage in Art. 2085 in relation to Art. 2125 of the New Civil Code.

Thus, as between the parties to a mortgage, the non-registration of a REM deed is

immaterial to its validity. In the case of Paradigm Development Corporation of the Philippines v.
Bank of the Philippine Islands, the mortgagee allegedly represented that it will not register one of
the REMs signed by the mortgagor. In upholding the validity of the questioned REM between the
said parties, the Court ruled that "with or without the registration of the REMs, as between the
parties thereto, the same is valid and [the mortgagor] is bound thereby."

2. No, Jurisprudence is replete with cases declaring that the notarization of documents that
have no relation to the performance of official functions of the clerk of courts is now considered to
be beyond the scope of their authority as notaries public ex officio. Nonetheless, the defective
notarization of the REM agreement merely strips it of its public character and reduces it to a private
document. Although Article 1358 of the New Civil Code requires that the form of a contract
transmitting or extinguishing real rights over immovable property should be in a public document,
the failure to observe such required form does not render the transaction invalid.

87
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A PENDING ACTION FOR ANNULMENT OF MORTGAGE OR FORECLOSURE DOES NOT

STAY THE ISSUANCE OF A WRIT OF POSSESSION

Norma Baring vs. Elena Loan and Credit Company, Inc.

G.R. No. 224225; August 14, 2017
Peralta, J.

FACTS:
In this petition for review on certiorari, petitioner Norma Baring (Baring) challenged the
decision of the CA in affirming the RTC’s issuance of a writ of possession in favor of respondent
Elena Loan and Credit Co., Inc. (Elena Loan).

Baring obtained loans and other credit accommodations from Elena Loan secured by a
deed of real estate mortgage which was duly registered with the Register of Deeds. Baring failed
to pay her obligations despite demands. Elena Loan filed a petition for foreclosure and complied
with all the formalities prescribed by Act No. 3135. Elena Loan was the highest bidder in the public
auction. Baring did not redeem during the redemption period and Elena Loan was eventually
successful in obtaining the issuance of a TCT. Elena Loan filed an ex-parte petition for the issuance
of a writ of possession as Baring refused to vacate. The petition was granted in favor of Elena
Loan.

Baring argued that Elena Loan was not authorized by the SEC to conduct its business as
a lending company under R.A. No. 9474 and that the latter had charged usurious interests. Barring
further alleged that Elena Loan cannot be party to a civil action thus is not entitled to the issuance
of a writ of possession.

ISSUE:
Was Elena Loan, respondent-purchaser in an extrajudicial foreclosure, entitled to the
issuance of a writ of possession despite questions regarding the validity of the mortgage or
foreclosure?

RULING:
Yes, given the ministerial nature of the RTC's duty to issue the writ of possession after the
purchaser has consolidated its ownership, any question regarding the regularity and validity of the
mortgage or its foreclosure cannot be raised as justification for opposing the issuance of the writ.

In the case of Bank of the Philippine Islands v. Spouses Tarampi, the Court ruled that 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.

Petitioner's assertion that respondent has not been granted any authority to operate as a
lending company, as well as the allegations of unconscionable and exorbitant interest rates
imposed on her loans, cannot be raised as a legal basis to prevent the issuance of the writ of
possession.

Thus, pending action for annulment of mortgage or foreclosure does not stay the issuance
of a writ of possession.

88
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE BUYER IN AN EXTRAJUDICIAL 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 THE SALE. HENCE, HE IS
ENTITLED TO ITS POSSESSION AND TO RECEIVE THE RENTS AND FRUITS THEREOF
AFTER THE CONSOLIDATION OF OWNERSHIP

Spouses Godfrey and Ma. Teresa Teves vs. Intergrated Credit & Corporate Services Co. (now
Carol Aqui)
G.R. No. 216714; April 4, 2018
Del Castillo, J.

FACTS:
This is a petition for review on Certiorari assailing the decision of the CA which dismissed
the petition for Certiorari filed by petitioners questioning the judgment of the RTC in favor of
respondent.

Petitioners obtained various loans from Standard Chartered Bank (Standard) using the
subject lot as a security for their debts. However, the petitioners defaulted. Hence, Standard
extrajudicially foreclosed the subject lot where respondent emerged as the highest bidder. The
petitioners failed to redeem the property within the redemption period. Hence, the ownership of the
respondent became consolidated.

Respondent filed a petition for the issuance of a writ of possession in its favor but during
the pendency of the proceedings, it was substituted by Carol Aqui who has acquired the property
from the respondent. A writ of possession was issued in favor of Aqui but she also petitioned the
court to order the Spouses to surrender not only the physical possession of the lot but also the
rentals that they have earned as fruits of the property. She relied on Article 544 of the Civil Code,
alleging that the monthly rentals of the subject property which were collected by the respondents
who have no more right over the same after the lapse of the period for them to redeem the subject
property should be given to her as the absolute owner of the subject lot.

ISSUE:
Was Aqui entitled to the rents which the petitioners collected after the expiration of their
right to redeem the subject lot?

RULING:
Yes, when the redemption period expired, ICCS became the owner of the subject property
and was, from then on, entitled to the fruits thereof. Petitioners ceased to be the owners of the
subject property and had no right to the same as well as to its fruits.

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 the sale. As
such, he is entitled to the possession of the said property and can demand it at any time following
the consolidation of ownership in his name and the issuance to him of a new transfer certificate of
title. The buyer can in fact demand possession of the land even during the redemption period
except that he has to post a bond in accordance with Section 7 of Act No. 3135, as amended. No
such bond is required after the redemption period if the property is not redeemed. Possession of
the land then becomes an absolute right of the purchaser as confirmed owner. Upon proper
application and proof of title, the issuance of the writ of possession becomes a ministerial duty of
the court.

Thus, if petitioners leased out the property to third parties after their period for redemption
expired, as was in fact the case here, the rentals collected properly belonged to ICCS or Aqui, as
the case may be. Petitioners had no right to collect them. Aqui acquired the subject property from
ICCS only in 2010.

Hence, Aqui cannot claim the subject rental collections from 2007, because she was not
yet the owner of the subject property at the time; they belonged to ICCS. She is entitled to rentals
collected only from the time she became the owner of the property.

89
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

REGISTRATION OF A PATENT UNDER THE TORRENS SYSTEM MERELY CONFIRMS

THE REGISTRANT'S TITLE BUT DOES NOT VEST OWNERSHIP

Heirs of Spouses Corazon and Fortunato De Guzman vs. Heirs of Marceliano Bandong
G.R. No. 215454; August 9, 2017
Peralta, J.

FACTS:
This is a petition for review on Certiorari filed by the Heirs of Sps. Corazon and Fortunato
De Guzman (petitioners) assailing the Decision of the CA which reversed the Decision RTC.

Domingo Calzada (Domingo) was the owner of a parcel of unregistered land with an area
of 3,018 square meters (sq. m.) (Real property). Through a Deed of Absolute Sale of Unregistered
Land dated March 17, 1960 (1960 Deed), Domingo sold a 660 square meters portion of the
property in favor of Emilio Bandong (Emilio) who then allegedly donated the same to his son Pedro
Bandong (Pedro). Subsequently, by way of a Deed of Absolute Sale dated May 17, 1979 (1979
Deed), instead of selling only the 660 sq. m. portion, Pedro sold a 1,320 square meters portion of
the subject property to his brother Marceliano.

On July 10, 1961, Domingo died intestate. Thereafter, his heirs executed an Extrajudicial
Settlement of Estate and Deed of Absolute Sale dated August 29, 1984 (1984 Deed) conveying
the supposedly remaining 2,358 sq. m. of the Real property to the Spouses De Guzman.

On August 3, 1999, Marceliano Bandong applied for a free patent for 3,221 square meters
before the DENR-CENRO. Upon learning that a portion of their land was included under Spouses
Bandong’s name, Spouses De Guzman filed a Complaint before the RTC which ruled that there
being no satisfactory explanation as to why the area of the respondents' lot grew bigger, the Court
cannot but deduce that it encroached upon the petitioners' lot. On appeal, the CA reversed the
decision after not finding any clear and convincing evidence for the cancellation of the Spouses’
Bandong’s free patent. Hence this petition for review on certiorari.

ISSUE:
Should the free patent issued in favor of Spouses Bandong be nullified?

RULING:
Yes, the Spouses De Guzman have sufficiently established their title over the disputed
portion of the Real property before the issuance of free patent and title in favor of the Spouses
Bandong.

It is emphasized that the registration of a patent under the Torrens System merely confirms
the registrant's title. It does not vest title where there is none because registration under this system
is not a mode of acquiring ownership.

The 1984 Deed in their favor, the 1960 Deed disputing the Spouses Bandong's claim of
the entire subject property, and their actual possession demonstrate that the Spouses De Guzman
held the disputed portion as their private property. As such, the DENR had no authority to grant to
the Spouses Bandong the free patent for the whole Real property since a portion thereof has
ceased to be public land and has passed to the private ownership of the Spouses De Guzman.
Moreover, the trial court found that the Spouses De Guzman actually possessed the eastern
portion, while the Spouses Bandong possessed the western portion based on the result of the
ocular inspection conducted. The registration of the Spouses Bandong's free patent over the real
property did not vest them the ownership thereof. The Spouses De Guzman successfully
ascertained their prior title, as well as the Spouses Bandong's title based on their predecessors'
interest, which both corresponded with the area they actually occupied.

90
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

LAND REGISTRATION COURTS CAN NOW HEAR AND DECIDE CONTROVERSIAL

AND CONTENTIOUS CASES SUCH AS VALIDITY OF A TAX SALE

Jerome Solco vs. Megaworld Corporation

G.R. No. 213669; March 5, 2018.
Tijam, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45, assailing the Decision and
Resolution of the Court of Appeals (CA).

The City of Makati issued a Warrant of Levy against Megaworld Corporation for failure to
pay real property taxes over its two parking slots covered by Condominium Certificates of Title
(CCT). The properties were sold in a public auction and petitioner Solco was the highest bidder.
City of Makati issued the certificates of sale to Solco. There being no redemption by Megaworld,
the local treasurer executed a Final Deed of Conveyance. As the CCTs are still under Megaworld's
name and the owner's duplicate copies of the same are still in Megaworld's possession, Solco filed
a Petition for Issuance of Four New CCT and to Declare Null and Void the first issued CCTs before
the RTC of Makati.

Megaworld filed a Comment on/Opposition to the Petition averring that it entered into a
Contract to Buy and Sell with other buyers. By virtue of such transfers, the buyers assumed all the
respective obligations, assessments, and taxes on the property from the time of delivery pursuant
to their agreements. Hence, starting year 2000, Megaworld admittedly did not pay the real property
taxes thereon. It also alleged that the auction proceedings were tainted with anomalies. RTC
rendered an order in favor of Solco.

On appeal, CA found merit on Megaworld's arguments as to the irregularities which

attended the entire delinquency proceedings. The CA found that Solco failed to present proof of
compliance under the Local Government Code. Solco contends that the issue on the validity of a
tax sale should be threshed out in a proper forum as the land registration court has limited
jurisdiction, and that he was a buyer in good faith.

ISSUE:
May the validity of a tax sale be the subject of a land registration case?

RULING:
Yes, the validity of a tax sale may be the subject of a land registration case.

Court has declared that Presidential Decree (PD) No. 1529, with the intention to avoid
multiplicity of suits and to promote expeditious termination of cases, had eliminated the distinction
between the general jurisdiction vested in the regional trial court and the latter's limited jurisdiction
when acting merely as a land registration court. Land registration courts, as such, can now hear
and decide even controversial and contentious cases, as well as those involving substantial issues.
Certainly, thus, the courts a quo had jurisdiction to rule on all matters necessary for the
determination of the issue of ownership, including the validity of the tax sale.

Lastly, in arguing that he was a buyer in good faith, Solco merely relied upon the
presumption of good faith. In consonance with the strict and mandatory character of the
requirements for validity of a tax delinquency sale, well-established is the rule that the presumption
of regularity in the performance of a duty enjoyed by public officials, cannot be applied to those
involved in the conduct of a tax sale. No presumption of regularity exists in any administrative
action which resulted in depriving a citizen or taxpayer of his property. This is an exception to the
rule that administrative proceedings are presumed to be regular.

91
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

QUESTIONS OF FACT DETERMINED BY THE DIRECTOR OF LANDS ARE CONCLUSIVE

WHEN APPROVED BY THE SECRETARY OF AGRICULTURE

Alicia C. Galindez vs. Salvacion Firmalan

G.R. No. 187186; June 6, 2018.
Leonen, J.

FACTS:
In a petition for Certiorari under Rule 45, petitioner assails the CA decision upholding the
Office of the President’s decision affirming the DENR’s decision.

In 1967, respondent (Salvacion Firmalan) filed a Miscellaneous Sales Application (MSA)

with the Bureau of Lands for a parcel of land (subject lot). Petitioner Alicia Galindez filed a protest
claiming that from November 1951, she and her family had been in constant possession of a
portion of the subject lot. Alicia stated that she filed an application over the lot in 1964. As such,
Firmalan’s application was held in abeyance due to the protest.

Land Inspector Main Fabreo conducted an investigation and concluded that it was Elmer
Galindez (Elmer), son of Alicia, who was occupying the portion of the subject lot, not Fimalan.
Firmalan filed a complaint for forcible entry against Elmer. The MTC dismissed the complaint and
declared that only the Bureau of Lands could determine who between the two had the better right
over the subject lot. Supervising Land Examiner Gabay of the Bureau of Lands submitted a report
opining that Firmalan had a better right because she was the rightful applicant.

The DENR Regional Executive Director concluded that Firmalan filed her miscellaneous
sales application over the disputed portion earlier than Alicia. Alicia appealed to the DENR, which
affirmed the Regional Executive Director’s Orders. Petitioners asserts her long years of continued
and uninterrupted stay over the disputed lot.

ISSUE:
Is the Regional Executive Director correct in giving preference to the respondent’s
application over petitioner’s application, even with the latter’s long-time possession of the disputed
lot?

RULING:
Yes, the Public Land Act states that the decisions of the Director of Lands "as to questions
of fact shall be conclusive when approved by the Secretary of Agriculture and Commerce." (now
the Department of Environment and Natural Resources)

In Solid Homes v. Payawal, this Court explained that administrative agencies are
considered specialists in the fields assigned to them; hence, they can resolve problems in their
respective fields "with more expertise and dispatch than can be expected from the legislature or
the courts of justice." This Court has consistently accorded respect and even finality to the findings
of fact of administrative bodies, in recognition of their expertise and technical knowledge over
matters falling within their jurisdiction. Moreover, Rule 43, Section 10 of the Rules of Civil
Procedure provides that findings of fact of a quasi-judicial agency, when supported by substantial
evidence, shall be binding on the Court of Appeals. Consequently, the Court of Appeals did not err
in upholding the findings of fact of the Department of Environment and Natural Resources and of
the Office of the President.

The Regional Executive Director concluded that petitioner never occupied the disputed lot
continuously and confirmed that respondent had a better right than petitioner over the disputed lot
because respondent filed her miscellaneous sales application ahead of petitioner and complied
with the rules and regulations governing her application.

Thus, decisions of the Director of Lands and the Secretary of Agriculture and Natural
Resources shall not be disturbed.

92
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

BANKS CANNOT MERELY RELY ON THE FACE OF THE TORRENS TITLE; IT IS DUTY-
BOUND TO BE MORE CAUTIOUS EVEN IN DEALING WITH REGISTERED LANDS

Heirs of Paz Macalalad vs. Rural Bank of Pola, Inc.

G.R. No. 200899; June 20, 2018.
Peralta, J.

FACTS:
In a petition for Certiorari under Rule 45, petitioners assail the CA decision upholding the
RTC’s ruling dismissing the complaint for declaration of nullity of TCT filed by Paz Macalalad (Paz)
against respondents for lack of merit.

Paz alleged that she is the sole surviving legal heir of Leopoldo Constantino, Jr.
(Leopoldo), who owned the subject parcel of land; that after the latter’s death, Sps. Pimentel made
it appear that the land was sold to them; that thereafter, Sps. Pimentel obtained a loan from
respondent bank and used the land as collateral; that respondent bank, in bad faith, did not
investigate the title of Sps. Pimentel; that after they defaulted, respondent bank foreclosed the
mortgage and emerged as the highest bidder, and as such, a new TCT was issued in its favor.

Respondent bank argued that a title procured through fraud and misrepresentation can still
be the source of a completely valid and legal title if the same is in the hands of an innocent
purchaser for value.

ISSUE:
Is the bank required to investigate further the ownership of the mortgaged property, beyond
the Torrens title?

RULING:
Yes. Where the mortgagee is a bank, it cannot rely merely on the certificate of title offered
by the mortgagor in ascertaining the status of mortgaged properties. Since its business is
impressed with public interest, the mortgagee-bank is duty-bound to be more cautious even in
dealing with registered lands. Indeed, the rule that a person dealing with registered lands can rely
solely on the certificate of title does not apply to banks. Thus, before approving a loan application,
it is a standard operating practice for these institutions to conduct an ocular inspection of the
property offered for mortgage and to verify the genuineness of the title to determine the real owners
thereof. The apparent purpose of an ocular inspection is to protect the "true owner" of the property
as well as innocent third parties with a right, interest or claim thereon from a usurper who may
have acquired a fraudulent certificate of title thereto.

In this case, even assuming that the deed of sale between Leopoldo and the Spouses
Pimentel was indeed forged, the same may, nonetheless, give rise to a valid title in favor of
respondent bank if it is shown that the latter is a mortgagee in good faith. Such good faith will
entitle respondent bank to protection such that its mortgage contract with the Spouses Pimentel,
as well as respondent bank's consequent purchase of the subject lot, may no longer be nullified.
Here, the representative/appraiser was able to ascertain the owner thereof, the nature of the
subject property, its location and area, its assessed value and its annual yield. Defendant-appellee
bank made a verification from the Office of the Register of Deeds of Oriental Mindoro if the subject
property is indeed titled in the name of the mortgagors.

The Court finds no sufficient evidence to reverse the findings of both the RTC and the CA
that respondent bank indeed sent a representative to inspect the subject lot. There is nothing in
the representative's Report of Inspection and Credit Investigation which indicates such presence.

93
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THERE IS NO PRESUMPTION THAT A LAND HAS BEEN REMOVED FROM THE SCOPE
OF THE REGALIAN DOCTRINE AND RECLASSIFIED AS PART OF THE PUBLIC
DOMAIN

Republic of the Philippines vs. Lakambini C. Jabson, et al.

G.R. No. 200223; June 6, 2018.
Leonardo-De Castro, J.

FACTS:
In a petition for Certiorari under Rule 45, petitioner assails the CA decision upholding the
RTC’s allowing the registration and ruling that respondents satisfactorily proved their rights over
the subject properties, in compliance with Section 14(1) and (2) of PD 1529. Petitioners claim
otherwise.

Respondents Jabson Family filed for the second time an Application for Registration of
Title. The Application involves two parcels of land, both used to form part of seven parcels of land
owned and possessed by the Jabsons as early as 1909. Respondents acquired the properties via
inheritance and purchase from their predecessors-in-interest. It is not disputed that they have
already built their residences in one parcel, with the remaining portions occupied by third parties
either thru lease or acquiescence.

ISSUE:
Did the respondents establish all the requirements under the law to warrant the registration
in their favor of the lots in question?

RULING:
No. The general rule prevailing over claims of land is the Regalian Doctrine, which, as
enshrined in the 1987 Constitution, declares that the State owns all lands of the public domain.

Section 14(1) of PD 1529 provides that any applicant for registration of title to land derived
through a public grant must sufficiently establish three things: (a) the subject land's alienable and
disposable nature; (b) his or her predecessors' adverse possession thereof, and (c) the reckoning
date from which such adverse possession was under a bona fide claim of ownership, that is, since
June 12, 1945 or earlier.

That land has been removed from the scope of the Regalian Doctrine and reclassified as
part of the public domain's alienable and disposable portion cannot be assumed or implied. The
prevailing rule is that the applicant must clearly establish the existence of a positive act of the
government, such as a presidential proclamation or an executive order; an administrative action;
investigation reports of Bureau of Lands investigators; and a legislative act or a statute to prove
the alienable and disposable nature of the subject land. Respondents Jabson failed to present
during trial any evidence establishing the subject properties' alienable and disposable nature. Also,
as correctly pointed out by petitioner Republic, Carlito P. Castañeda, a DENR Sr. Forest
Management Specialist, was not authorized to issue certifications as to land classification, much
less order for the release of lands of the public domain as alienable and disposable.

The Public Land Act vested in the President the authority to classify lands of the public
domain into alienable and disposable. Subsequently, the Revised Forestry Code of the Philippines
also empowered the DENR Secretary to determine and approve land classification as well as
declare the same as alienable and disposable.

94
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A POSITIVE ACT OF GOVERNMENT, THROUGH THE EXECUTIVE DEPARTMENT, IS

NECESSARY FOR THE RECLASSIFICATION OF LAND

Republic of the Philippines vs. Heirs of Cabrera

G.R. No. 218418; November 08, 2017
Caguioa, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court against the
Decision rendered by the CA affirming the Decision of the RTC ruling that the Republic failed to
present proof that the Roxas properties have been reclassified as forest land.

Sometime in 1971, Meynardo filed an Application for Free Patent concerning an 8,072
square-meter parcel of land. In said application, Meynardo alleged that he had been in possession
of such parcel of land since 1936, through his predecessor-in interest Marcelo Cabrera. The
Bureau of Lands issued Free Patent No. 516197 in favor of Meynardo, covering the lots.

A portion of Lot 1 was transferred to Consolacion, who sold portions of Lot 1-A to several
purchasers. Jose and Leticia De Castro, claiming to be the actual possessors of Lot 1-A, filed
before the DENR a petition urging the department to conduct an investigation to determine Lot 1-
A's land classification status. In the DENR Final Report, Free Patent No. 516197 covering Lots 1,
1-A, and 2 (collectively, Roxas Properties) was declared null and void for having been issued over
land forming part of the public domain. The Republic based its claim on the (i) DENR Final Report;
and (ii) NAMRIA certifications, all stating that the Roxas Properties had been reclassified as forest
land as early as November 24, 1949.

ISSUE:
Is a positive act of government necessary to evince the reclassification of land from
alienable and disposable to forest?

RULING:
Yes, a positive act of government is necessary for the reclassification of land.

Pursuant to Sections 6 and 7 of the Commonwealth Act No. 141, otherwise known as the
Public Land Act, the classification and reclassification of public lands into alienable or disposable,
mineral or forest land is the exclusive prerogative of the Executive Department, and is exercised
by the latter through the President, or such other persons vested with authority to exercise the
same on his behalf. Since the power to classify and reclassify land are executive in nature, such
acts, effected without executive authority, are void, and essentially ultra vires.

The Republic presented the following pieces of evidence to support its complaint for
reversion: (i) DENR Final Report; (ii) NAMRIA certifications; and (iii) LC Map 209. However, these
documents, whether taken individually or collectively, do not evince a positive act of reclassification
by the Executive Department. Engineer Mendez admitted that there was no presidential order or
act reverting the classification of the subject property from alienable and disposable to forest land.
The foregoing testimony confirms that the alleged reclassification of the Roxas Properties is bereft
of basis, as it was done by Engineer Mendez on his sole account, without any prior directive from
the President, or a duly authorized officer from the Executive Department. In fact, the annotation
appearing on LC Map 209 upon which the Republic relies does not even state upon whose
authority the alleged reclassification had been made, placing the annotation's validity, veracity and
worth in serious doubt.

95
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

TESTIMONIAL EVIDENCE ON THE PHYSICAL LAYOUT OR CONDITION OF THE

SUBJECT LAND ARE NOT CONCLUSIVE ON THE CLASSIFICATION OF THE SUBJECT
LAND AS ALIENABLE AGRICULTURAL LAND; IT IS THE OFFICIAL PROCLAMATION
WHICH IS DEFINITIVE

Republic of the Philippines vs. Filemon Saromo

G.R. No. 189803; March 14, 2018
Caguioa, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision CA, denying the appeal of the petitioner Republic of the Philippines (Republic) and
affirming the Decision of the RTC dismissing the reversion and cancellation of title complaint filed
by the Republic against respondent Filemon Saromo (Saromo).

Respondent Saromo executed an Application of Free Patent, covering the subject

property, filed with the Bureau of Lands stating among others that the land is an agricultural public
land covered by a survey plan prepared by Engr. Francisco Guevarra. A note in the survey
indicated that the land was inside an unclassified public forest land and is apparently inside the
area covered by Proclamation No. 1801. The application was granted and an OCT was issued in
respondent’s name. The Director of Lands created an investigation team based on a protest filed
against respondent. Upon investigation it was found out that the land was not alienable and
disposable at the time of the issuance and that it is found inside an unclassified public forest.
Hence, the issuance of the Free Patent is null and void ab initio.

The Republic, through the Land Management Bureau, filed a complaint against respondent
for declaration of the subject land as part of the public dominion. Saromo presented the testimonies
of Engr. Guevara, Land Inspector Alberto Aguilar and Engineer Carlita Cabrera to rebut the land
classification. The RTC concluded that the findings of the field investigator of the then Bureau of
Lands as to the nature of the subject land after conducting his ocular inspection at the time of the
application for free patent should be given more weight since that is the foremost issue to be
considered by the concerned agency before granting the application for free patent.

ISSUE:
Is testimonial evidence on the physical layout or condition of the subject land conclusive
on the classification of the subject land?

RULING:
No. The classification is descriptive of its legal nature or status and does not have to be
descriptive of what the land actually looks like.

It is the official proclamation releasing the land classified as public forest land to form part
of disposable agricultural lands of the public domain that is definitive. Such official proclamation, if
there is any, is conspicuously missing in the instant case. Without the official declaration that the
subject land is alienable and disposable or proof of its declassification into disposable agricultural
land, the "unclassified public forest land's" legal classification of the subject land remains.

From the foregoing, testimonial evidence on the physical layout or condition of the subject
land — that it was planted with coconut trees and beach houses had been constructed thereon —
are not conclusive on the classification of the subject land as alienable agricultural land. Here, the
Republic presented credible evidence to show that the subject land remains within unclassified
forest land, which conforms with the NOTE in the survey plan for Saromo.

The subject land, is therefore, inalienable and non-disposable and could not have been
the valid subject of a free patent application.

96
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ANY DECLARATION THAT MAY HAVE BEEN MADE IN AN ACTION FOR RECOVERY
OF POSSESSION CANNOT AFFECT OWNERSHIP OVER THE PROPERTY NOR NULLIFY
A TORRENS TITLE AS THE ADJUDICATION COULD ONLY BE FOR THE PURPOSE OF
RESOLVING THE ISSUE OF POSSESSION

Heirs of Victor Amistoso vs. Elmer T. Vallecer

G.R. No. 227124; December 6, 2017
Perlas-Bernabe, J.

FACTS:
This is a petition for review on certiorari appealing the CA’s decision which upheld the
RTC’s denial of petitioners’ Motion to Hear and Resolve Affirmative Defenses for their failure to
substantiate their affirmative defenses of res judicata, prescription, and laches.

Civil Case No. S-606 was a complaint for recovery of possession of a parcel of land in
Zamboanga del Norte filed by respondent Elmer Vallecer against petitioners Heirs of Victor
Amistoso. It alleged that the property was purchased after confirming with the DAR that it was not
tenanted. In due course of proceedings, the CA ruled that under the Certificate of Land Transfer
(CLT) issued in favor of the petitioners, the petitioners are "deemed owner" of the land after full
payment of its value. Having proven full compliance for the grant of title, petitioners have a right to
possess the land which must be respected.

In a subsequent complaint for quieting of title filed by respondent, petitioners invoked res
judicata, prescription and laches and point out that the Court already declared them to be “deemed
owners” in Civil Case No. S-606. The RTC denied petitioners' motion to dismiss in the subsequent
case declaring that res judicata would not apply in view of the lack of identity of causes of action.
On appeal, the CA affirmed the RTC ruling. Hence, this petition.

ISSUE:
Did the declaration of “deemed owner” in Civil Case S-606 conclusively decide the issue
of ownership of the subject parcel of land among the parties?

RULING:
No, the Civil Case did not conclusively decide the issue of ownership over the subject
parcel of land.

Time and again, it has been held that a certificate of title shall not be subject to a collateral
attack and that the issue of the validity of title can only be assailed in an action expressly instituted
for such purpose. Hence, any declaration that may have been made in Civil Case No. S-
606 cannot affect respondent's ownership over the property nor nullify his Torrens title, as the
adjudication was only for the purpose of resolving the issue of possession.

Petitioners' attack on the validity of respondent's Torrens title in Civil Case No. S-606 by
claiming that their father Victor became the owner of the subject property by virtue of the CLT
issued to him constitutes a collateral attack on said title. It is an attack incidental to their quest to
defend their possession of the property in an accion publiciana, not in a direct action aimed at
impugning the validity of the judgment granting the title.

In Civil Case No. S-606, respondent never asked that he be declared the owner, but only
prayed for recovery of possession from petitioners. Hence, while petitioners were acknowledged
by the DAR as "deemed owners" of the land, such declaration was merely provisional as it was
only for the purpose of determining possession.

97
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

BURDEN OF PROOF IN OVERCOMING THE PRESUMPTION OF STATE OWNERSHIP OF

THE LANDS OF THE PUBLIC DOMAIN IS ON THE PERSON APPLYING FOR
REGISTRATION

Trinidad Diaz-Enriquez vs. Director of Lands, Court of Appeals, Geronimo Saclolo et.al.
G.R. Nos. 168065 & 168070; September 6, 2017
Martires, J.

FACTS:
These consolidated petitions for review on Certiorari seek to reverse and set aside the
Decision of the CA which nullified the RTC Decision in a case for application of registration of title.

Geronimo, Josefino, and Rodrigo Saclolo (the Saclolos) filed before the RTC, a joint
application for registration of title over three parcels of land, with a total area of 3,752,142 square
meters. The government, thru the Director of Lands, Abdon Riego de Dios, and Angelina Samson
filed oppositions to the application arguing that the subject lands are not alienable and disposable
since they are located within the Calumpang Point Naval Reservation.

Trinidad Diaz-Enriquez (Enriquez) filed a motion for intervention alleging that the Saclolos
had sold to her all their interests and rights over the subject lands on 19 September 1976. The
RTC allowed Enriquez' claim to be litigated. It further ruled that the subject lands are alienable and
disposable lands of the public domain because Proclamation No. 307 itself stressed that the
segregation of the Calumpang Point Naval Reservation was subject to private rights. On appeal,
the CA declared that the subject lands are all within the Calumpang Point Naval Reservation, as
testified to by Eleuterio R. Paz, Chief of the Survey Division of the Bureau of Lands-Region 4; thus,
the said lands could not be privately titled. Hence this consolidated petition for review on certiorari.

ISSUE:
Did the petitioners sufficiently prove their private rights in subject lands located within the
Calumpang Point Naval Reservation?

RULING:
No, petitioners did not prove their private rights over the subject lands. Proclamation No.
307 recognizes private rights over parcels of land included in the reservation. Further,
Proclamation No. 1582-A provides that the occupied portions which remained after segregating
the 8,089,990 square meters shall be released to bona fide occupants. However, a mere invocation
of "private rights" does not automatically entitle an applicant to have the property registered in his
name. The burden of proof in overcoming the presumption of State ownership of the lands of the
public domain is on the person applying for registration (or claiming ownership), who must prove
that the land subject of the application is alienable or disposable. To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application (or claim) is
alienable or disposable. There must still be a positive act declaring land of the public domain as
alienable and disposable.

In this case, however, none of the documents presented by the Saclolos and Enriquez
prove that the subject lands are alienable and disposable. First, the Investigator's Report even
contradicted the claim that the subject lands are alienable and disposable as it noted that these
lands are "within the extensive Calumpang Point Reservation however, the applicants assert their
private rights to the subject area." Further, the informacion possessoria upon which the Saclolos
heavily rely to support their claim neither states that the subject lands were declared alienable and
disposable nor indicates the area covered thereby. It merely describes it as "capacity of three
cavans seed in palay." Finally, the exact area covered thereof lack factual bases since it is
inconsistent with the Deed of Sale of the parcel of land was described as containing only 170
hectares, whereas the Saclolo’s registration of title provides a total area of 375.2 hectares.

Hence, in view of the glaring lack of evidence, petitioners did not prove their rights over the
subject lands, and their application for registration is denied.

98
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE TRIPLE REQUIREMENTS OF ALIENABILITY AND POSSESSION AND

OCCUPATION SINCE JUNE 12, 1945 OR EARLIER ARE INDISPENSABLE
PREREQUISITES TO REGISTRATION OF TITLE

Tomas R. Leonidas vs. Tancredo Vargas and Republic of the Philippines

G.R. No. 201031; December 14, 2017
Del Castillo, J.

FACTS:
Assailed in this Petition for Review on Certiorari are the Decision and Resolution of the CA
which affirmed the Decision of the RTC ordering registration of the subject land in favor of the
petitioner.

Leonidas alleged that he inherited the subject lots from his parents that as evidenced by
the May 17, 1937 Certificate of Sale issued by the Provincial Treasurer of Iloilo, the subject lots,
were purchased by his mother when auctioned due to delinquency in the payment of real property
taxes by the original owners, the heirs of Inis Luching.

Petitioner thus prayed that the subject lots be brought under the operation of the Property
Registration Decree (PD 1529) and that the titles thereto be registered and confirmed in his name.
The Republic of the Philippines represented by the Office of the Solicitor General opposed the said
Application claiming that neither the petitioner nor his predecessors-in-interest had been in
continuous, exclusive, and notorious possession and occupation of the subject lots since June 12,
1945, or prior thereto.

ISSUE:
Should the lots be brought under the operation of PD 1529 and the titles thereto be
registered and confirmed in the name of the petitioner?

RULING:
No. Petitioner failed to prove possession and occupation of the subject lots in the manner
and for the period required by law. The triple requirements of alienability and possession and
occupation since June 12, 1945 or earlier under Section 14 (1) are indispensable prerequisites to
a favorable registration of title to the property.

Applicants for registration of title under Section 14 (1) must sufficiently establish: (1) that
the subject land forms part of the disposable and alienable lands of the public domain; (2) that the
applicant and his predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of the same; and (3) that his possession has been under a bonafide
claim of ownership since June 12, 1945, or earlier.

The first requirement is complied with in the case at bench. However, petitioner failed to
establish bona fide possession and ownership over the subject lots since June 12, 1945, or earlier.
The Certificate of Public Sale indicated that the balance of the purchase price in the amount of
P29.44, was yet to be paid on or before December 31, 1937. No incontrovertible proof was,
however, presented to establish the fact that this balance of the purchase price in the said amount
of P29.44 had indeed been paid on or before December 31, 1937. Also, petitioner failed to explain
why he or his predecessors-in-interest declared the subject lots for taxation purposes only in 1976
was inconsistent with his claim of possession thereover since 1937; and that it is an axiom of the
law that the burden of proof in a land registration case rests upon the applicant.

Hence, petitioner failed to prove that he or his predecessors-in-interest had indeed

performed the required acts of possession and occupation, or specific acts of dominion over the
subject lots, it stands to reason that registration thereof in his name cannot be allowed.

99
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

LAND MUST BE ALIENABLE AND DISPOSABLE IN ORDER TO REGISTER IT UNDER

SECTION 14(1) P.D. 1529

Republic of the Philippines vs. Laureana Malijan-Javier and Iden Malijan-Javier

G.R. No. 214367; April4, 2018
Leonen, J.

FACTS:
In a petition for Certiorari under Rule 45, petitioner assails the CA decision which upheld
the MCTC’s ruling allowing the registration of the land in favor of respondents.

Respondents Spouses Javier and their son, Iden, bought the land from Sps. Lumbres in
October 1985. The Sps. Lumbres, in turn, received the land from Luisa and Juan Paison who
owned the property as early as 1937.

Petitioner argues that the application for land registration should be dismissed because it
was not accompanied by “a copy of the original classification approved by the DENR Secretary
and certified as true copy by its legal custodian.”; that a CENRO Certification is not sufficient to
prove that a land is alienable and disposable; that the testimony failed to mention that respondents’
predecessors-in-interest occupied, developed, maintained, or cultivated the property, which could
have shown that the former owners possessed the property by virtue of a bona fide ownership
claim.

Respondents counter that Maglinao’s, Forester I of DENR-CENRO, certification and

Hernandez’, Special Land Investigator I DENR-CENRO, report prove substantial compliance; that
the Survey Plan also stated that the land was alienable and disposable; and that the LRA did not
question the classification of the property, despite notice of application.

ISSUE:
Did respondents substantially comply with the requirements of Section 14(1) of PD 1529?

RULING:
No, respondents did not substantially comply with the requirements of Section 14(1) of PD
1529.

Respondents need to establish the following: First, that the subject land forms part of the
disposable and alienable lands of the public domain; second, that the applicant and his
predecessors-in- interest have been in open, continuous, exclusive and notorious possession and
occupation of the [land]; and third, that it is under a bona de claim ownership since June 12, 1945,
or earlier.

A CENRO or PENRO certification is not enough to establish that a land is alienable and
disposable. It should be "accompanied by an official publication of the DENR Secretary's issuance
declaring the land alienable and disposable." The certification issued by the DENR Secretary is
necessary since he or she is the official authorized to approve land classification, including the
release of land from public domain.

In this case, although respondents were able to present a CENRO certification, a DENR-
CENRO report with the testimony of the DENR officer who made the report, and the survey plan
showing that the property is already considered alienable and disposable, these pieces of evidence
are still not sufficient to prove that the land sought to be registered is alienable and disposable.
Absent the DENR Secretary's issuance declaring the land alienable and disposable, the land
remains part of the public domain.

Thus, even if respondents have shown, through their testimonial evidence, that they and
their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession
and occupation of the property since June 12, 1945, they still cannot register the land for failing to
establish that the land is alienable and disposable.

100
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

DENR CERTIFICATION STATING THAT THE SUBJECT LOTS ARE ALIENABLE, DO

NOT CONSTITUTE INCONTROVERTIBLE EVIDENCE TO OVERCOME THE
PRESUMPTION THAT THE PROPERTY IS INALIENABLE

Republic of the Philippines vs. Margarita C. Mendiola, Lualhati T. Talavera et.al.

G.R. No. 211144; December 13, 2017
Tijam, J.

FACTS:
This is a petition for review on Certiorari filed under Rule 45 of the Rules of Court assailing
the Decision of the CA which upheld the Order of the RTC confirming the title of the applicants
over a parcel of land covered by conversion survey-plan.

Respondents filed a verified application for registration of title to land under Presidential
Decree No. 1529 over the subject property before the RTC. They claimed that they inherited the
subject property from their late parents and have been in physical and continuous possession
thereof in the concept of an owner even before June 17, 1945. Respondents presented the
following as evidence: Conversion Plan and Geodetic Engineer's Certificate of the subject
property; (ii) Tax Declarations; and (iii) the Certification from the Department of Environment and
Natural Resources (DENR)-National Capital Region (NCR) verifying the subject property as
alienable and disposable.

RTC held that the subject property was determined to be alienable and disposable as per
certification issued by the DENR-NCR. Thus, respondents have sufficient title deemed proper for
registration under PD 1529. CA then affirmed RTC decision.

ISSUE:
Does the certification of the DENR-NCR that the land is alienable and disposable
sufficiently prove that the land is alienable and disposable?

RULING:
No. Respondents did not acquire sufficient title for registration as they failed to observe the
rules and requirements under Sec 14 (1) of PD1529.

Sec 14 (1) of PD 1529 provides that the applicant for registration of title over a parcel of
land should establish the following: (i) possession of the parcel of land under a bona fide claim of
ownership, by himself and/or through his predecessors-in-interest since June 12, 1945, or earlier;
and (ii) that the property sought to be registered is already declared alienable and disposable at
the time of the application.

It has been repeatedly ruled that certifications issued by the CENRO, or specialists of the
DENR, as well as Survey Plans prepared by the DENR containing annotations that the subject lots
are alienable, do not constitute incontrovertible evidence to overcome the presumption that the
property sought to be registered belongs to the inalienable public domain. Rather, this Court
stressed the importance of proving alienability by presenting a copy of the original classification of
the land approved by the DENR Secretary and certified as true copy by the legal custodian of the
official records.

In the present case, respondents only submitted DENR-NCR's Certification stating that the
subject property was alienable and disposable. Respondents failed to present any evidence
showing that the DENR Secretary had indeed released the subject property as alienable and
disposable.

101
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

FAILURE TO PRESENT A CERTIFIED TRUE COPY OF THE ORIGINAL CLASSIFICATION

APPROVED BY THE DENR SECRETARY IS FATAL IN SECURING REGISTRATION OF
TITLE

Republic of the Philippines vs. Rovency Realty and Development Corporation

G.R. No. 190817; January 10, 2018
Martires, J.

FACTS:
This is a petition for review on Certiorari seeking to reverse and set aside the Resolution
of the CA which affirmed the Decision of the RTC which granted the application for original
registration of title to land by respondent Rovency Realty and Development Corporation (RRDC).

RRDC filed an Amended Application for Registration. RRDC alleged that it is the absolute
owner of the subject land having acquired the same from its previous owner, P.N. Roa Enterprises,
Inc., by virtue of a notarized deed of absolute sale. An opposition to the application was filed by
the Heirs of Paulino Avanceña. They alleged, that the subject land was already claimed and owned
by the late Atty. Paulino Avanceña, their father and predecessor-in-interest, as early as 1926. That
their parents merely allowed and tolerated Pedro N. Roa's possession of the subject land after the
latter approached them and requested that he be allowed to use the subject land for his
businesses; that their parents never sold the subject land to Pedro nor to RRDC, and as such, no
right or title over the subject land was passed on to RRDC. Thus, they prayed that RRDC's
application be dismissed, and that their opposition be treated as their own application for
registration.

On 3 August 2001, the petitioner Republic of the Philippines through the Office of the
Solicitor General filed its opposition to the application on the ground that respondent’s evidence is
insufficient to prove open, continuous, exclusive and notorious possession. RTC granted RRDC’s
application for registration of the subject land. CA affirmed the RTC decision.

ISSUE:
Did the respondent in presenting the CENRO certification sans a certified true copy of the
original classification approved by the DENR Secretary meet the requirements for original
registration of title to land?

RULING:
No. Under Section 14(1), applicants for registration of title must sufficiently establish the
following requisites: first, that the subject land forms part of the disposable and alienable lands of
the public domain; second, that the applicant and his predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of the same; and third, that the
possession is under a bona fide claim of ownership since 12 June 1945, or earlier.

The first requisite of Section 14 (1) entails only that the property sought to be registered be
alienable and disposable at the time of the filing of the application for registration. To prove that
the land sought to be registered is alienable and disposable, the present rule is that the application
for original registration must be accompanied by (1) a CENRO or PENRO Certification; and (2) a
copy of the original classification approved by the DENR Secretary, and certified as true copy by
the legal custodian of the official records.

Here, RRDC presented a CENRO certification stating that the subject land is "alienable
and disposable and not covered by any public land application." RRDC, however, failed to present
a certified true copy of the original classification approved by the DENR Secretary declaring the
subject land alienable and disposable. Aside from the deeds of absolute sale which were executed
prior to 12 June 1945, RRDC did not present any evidence which would show that its
predecessors-in-interest actually exercised acts of dominion over the subject land even. Thus,
RRDC failed to satisfy all the requisites for registration of title to land under either Sections 14(1)
or (2) of PD No. 1529.

102
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A CENRO CERTIFICATION, BY ITSELF, IS INSUFFICIENT TO PROVE THE

ALIENABILITY AND DISPOSABILITY OF LAND SOUGHT TO BE REGISTERED

Republic of the Philippines vs. Spouses Danilo Go and Amorlina Go

G.R. No. 197297; August 2, 2017
Leonen, J.

FACTS:
This is a Petition for Review assailing the CA Decision which affirmed the Decision of the
MTCC issuing the Decree of Registration for Lot in favor of the Spouses Danilo and Amorlina Go
(Spouses Go).

On August 26, 2006, respondents Spouses Go applied for the registration and confirmation
of title over Cadastral Lot No. 4699-B (Lot No. 4699-B), a parcel of land in Barangay Balagtas,
Batangas City covering an area of 1,000 square meters. Such land was acquired from Anselmo
Torres who claimed that such land was in the possession of his parents since 1945, and upon the
death of the latter, he and his siblings inherited such land in the 1960s.

On November 3, 2006, the Republic of the Philippines opposed respondents' application

for registration for the following reasons: 1) Lot No. 4699-B was part of the public domain; 2) neither
the Spouses Go nor their predecessors-in-interest had been in open, continuous, exclusive, and
notorious possession and occupation of the property since June 12, 1945 or even before then; 3)
the tax declaration and payment were not competent or sufficient proof of ownership, especially
considering that these were relatively recent.

Nevertheless, the MTCC confirmed the title of the lot in the name of spouses Go. This
Decision was affirmed by the CA.

ISSUE:
Did Spouses Go, by submitting a CENRO certification, sufficiently prove the alienable and
disposable character of the land?

RULING:
No, an applicant has the burden of proving that the public land has been classified as
alienable and disposable.

To do this, the applicant must show a positive act from the government declassifying the
land from the public domain and converting it into an alienable and disposable land. The exclusive
prerogative to classify public lands under existing laws is vested in the Executive Department. It is
established that before an inalienable land of the public domain becomes private land, the DENR
Secretary must first approve the land classification into an agricultural land and release it as
alienable and disposable. The DENR Secretary's official acts "may be evidenced by an official
publication thereof or by a copy attested by the officer having legal custody of the record, or by his
deputy. The CENRO or the Provincial Environment and Natural Resources Officer will then
conduct a survey to verify that the land for original registration falls within the DENR Secretary-
approved alienable and disposable zone. The CENRO certification is issued only to verify the
DENR Secretary issuance through a survey. Thus, the CENRO Certification should have been
accompanied by an official publication of the DENR Secretary's issuance declaring the land
alienable and disposable. A CENRO certification, by itself, is insufficient to prove the alienability
and disposability of land sought to be registered. To establish that a land is indeed alienable and
disposable, applicants must submit the application for original registration with the CENRO
certification and a copy of the original classification approved by the DENR Secretary and certified
as a true copy by the legal custodian of the official record.

Here, the Spouses Go failed to present a certified true copy of the original classification of
the DENR Secretary. The Spouses Go have the burden to show that the land for registration is
alienable or disposable, which they miserably failed to do so. Without the original land classification
approved by the DENR Secretary, the Spouses Go's application for registration must be denied.
The land remains inalienable.

103
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

ACQUISITION BY PRESCRIPTION UNDER SECTION 14(2) PD 1529 SHOULD BE READ

IN CONJUNCTION WITH THE PROVISIONS OF THE NEW CIVIL CODE ON
PRESCRIPTION AND UNINTERRUPTED POSSESSION

Republic of the Philippines vs. Northern Cement Corporation

G.R. No. 200256; April 11, 2018.
Caguioa, J.

FACTS:
In a petition for Certiorari under Rule 45, the petitioner Republic of the Philippines assails
the CA’s decision affirming in toto the ruling of the RTC granting the application for registration
filed by respondent Northern Cement Corporation (Northern Cement) over a parcel of land. As
proof of possession, Northern Cement submitted evidence of episodic and random payments of
realty taxes. It relied as well on the improvements it made on the subject lot, such as “cogon” and
“unirrigated rice”.

The Republic claims that Northern Cement failed to observe the requirement for original
registration of title under PD 1529. It does not qualify for registration by acquisitive prescription
under Section 14(2), thereof. The Republic pointed out that, among others, the CENRO Report
and the Approved Plan submitted in evidence by Northern Cement hardly suffice to prove that the
subject lot is an alienable portion of the public domain.

ISSUE:
Has Northern Cement proved its possession for purposes of prescription under PD
No.1529, Sec. 14(2)?

RULING:
No, the respondent did not prove its possession for purposes of prescription under PD
No.1529, Sec. 14(2).

Section 14 (2) is silent as to the nature and period of such possession and occupation
necessary. This necessitates a reference to the relevant provisions of the Civil Code on
prescription — in this case, Articles 1137 and 1118. In Heirs of Crisologo v. Rañon, the Court held
that prescription is another mode of acquiring ownership and other real rights over immovable
property. It is concerned with lapse of time in the manner and under conditions laid down by law,
namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted
and adverse. Possession is open when it is patent, visible, apparent, notorious and not clandestine.
It is continuous when uninterrupted, unbroken and not intermittent or occasional; exclusive when
the adverse possessor can show exclusive dominion over the land and an appropriation of it to his
own use and benefit; and notorious when it is so conspicuous that it is generally known and talked
of by the public or the people in the neighborhood. The phrase "adverse, continuous, open, public,
and in concept of owner," is a conclusion of law. The burden of proof is on the person seeking
original registration of land to prove by clear, positive and convincing evidence that his possession
and that of his predecessors-in-interest was of the nature and duration required by law.

Applying the foregoing, the Court is unconvinced by the pieces of evidence submitted by
Northern Cement to prove compliance with the requirement of possession under the law. It has
been held that this type of intermittent and sporadic assertion of alleged ownership does not prove
open, continuous, exclusive and notorious possession and occupation. Moreover, Tax
Declarations are not conclusive evidence of ownership but only a basis for inferring possession. It
is only when these tax declarations are coupled with proof of actual possession of the property that
they may become the basis of a claim of ownership. Northern Cement failed to prove possession
of the Subject Lot in the concept of an owner, with the records bare as to any acts of occupation,
development, cultivation or maintenance by it over the property. The importance of exercising acts
of dominion on a land sought to be registered cannot be downplayed.

Thus, Northern Cement failed to satisfy the required possession under PD 1529, Section
14(2).

104
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CONTINUED FAILURE OF THE CONCERNED BUYERS TO COMPLY WITH THE

REQUIREMENTS FOR THE REGISTRATION DOES NOT WARRANT A PREFERENTIAL
RIGHT TO THE POSSESSION OF THE SUBJECT OWNER'S DUPLICATE TITLE

Remedios V. Geñorga vs. Heirs of Julian Meliton

G.R. No. 224515; July 3, 2017
Perlas-Bernabe, J.

FACTS:
This is a Petition for Review on Certiorari assailing the Decision of the CA which affirmed
the Decision of the RTC directing petitioner and/or the Register of Deeds of Naga City (RD-Naga)
to deliver or surrender possession of the owner's duplicate copy of TCT No. 8027 to respondents.

Julian and Isabel Meliton, and respondents Irene, Henry, Roberto, Haide, all surnamed
Meliton, and Ma. Fe Meliton Espinosa are the registered owners of a parcel of land. Julian owns
8/14 portion of the land, while the rest of the co-owners own 1/14 each. During his lifetime, Julian
sold portions of the subject land to various persons, among others, to petitioner Remedios V.
Geñorga's (petitioner) husband, Gaspar Geñorga, who took possession and introduced
improvements on the portions respectively sold to them. Julian failed to surrender the owner's
duplicate copy of TCT No. 8027 to enable the buyers, including petitioner's husband, to register
their respective deeds of sale, which eventually led to the filing of a Petition for the surrender of
the owner's duplicate before the RTC. RTC ruled in favor of the buyers and then declared the TCT
void and issued a new one. Subsequently, the respondents filed a Complaint against the petitioner
seeking the surrender of the subject owner's duplicate title with damages, claiming that they are
entitled to the possession thereof as registered owners.

The petitioner answered that considering that their possession of the subject owner's
duplicate title was by virtue of a court decision, and for the legitimate purpose of registering the
sales in their favor and the issuance of titles in their names, they should be allowed to retain
possession until the completion of the requirements for registration therefor. The RTC ruled in
favor of the respondents, noting the long period of time that had lapsed for the registration of
buyers. The CA affirmed the decision.

ISSUE:
Was the order directing the surrender and delivery of possession of the subject owner's
duplicate title to respondents proper where the buyers have failed to register the title for four (4)
years?

RULING:
Yes, in this case, there is a partial factual partition or termination of the co-ownership, which
entitles the buyers to the segregation of their respective portions, and the issuance of new
certificates of title in their names upon compliance with the requirements of law.

Notably, from the time petitioner received possession of the subject owner's duplicate title
in 2009, a considerable amount of time had passed until she submitted the same to the RD-Naga.
She failed to show any sufficient justification for the continued failure of the concerned buyers to
comply with the requirements for the registration of their respective deeds of sale and the issuance
of certificates of title in their names to warrant a preferential right to the possession of the subject
owner's duplicate title as against respondents who undisputedly own the bigger portion of the
subject land. Consequently, the petitioner or the RD-Naga must deliver or surrender the subject
owner's duplicate title to respondents.

It must, however, be clarified that the above-pronounced delivery or surrender is without

prejudice to the rights of the concerned buyers who would be able to subsequently complete the
necessary registration requirements and thereupon, duly request the surrender of the subject
owner's duplicate title anew to the RD-Naga.

105
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

WHEN THE STATE HAS NO EFFECTIVE OPPOSITION, EXCEPT FOR A PRO FORMA
OPPOSITION, TO CONTROVERT AN APPLICANT'S CONVINCING EVIDENCE OF
POSSESSION AND OCCUPATION, PRESUMPTIONS ARE TILTED TO THIS APPLICANT'S
FAVOR

Republic of the Philippines vs. Spouses Joel and Andrea Noval, Ellen Delos Reyes, et.al.
G.R. No. 170316; September 18, 2017
Leonen, J.

FACTS:
This Petition for Review on Certiorari which seeks to reverse and set aside the Decision of
the CA sustaining the MTC in granting the application for registration of title filed by Spouses Joel
and Andrea Noval (the Spouses Naval), et.al. (collectively, respondents).

The respondents sought the registration of their titles over the subdivided portions of a land
alleging to have acquired their respective portions of this land by "purchase, coupled with
continuous, public, notorious, exclusive and peaceful possession in the concept of an owner for
more than 30 years including [the possession] of their predecessors-in-interest." Petitioner
Republic argues that respondents failed to show that they or their predecessor-in-interest have
been in open, continuous, exclusive, and notorious possession and occupation of the land for the
period required by law. It also contends that the tax declarations presented by respondents are not
conclusive evidence of ownership and possession and asserts that the property may not be
registered without a certification from the DENR that it has been declared alienable and disposable.
It submits that the burden of proof is upon respondents to show that Lot 4287 had already been
declared alienable and disposable at the time of their application.

Respondents countered that their immediate predecessor-in-interest, Cecilia, who was

already 73 years old when she testified before the trial court is sufficient and that while the DENR
did not issue a certification, it did approve their survey plan when the property was partitioned. The
RTC decided in favor of the respondent establishing that respondents and their predecessor-in-
interest were the exclusive owners and possessors of the land. On appeal, CA affirmed the
Decision.

ISSUE:
As against respondents’ evidence of possession since 1942, has petitioner sufficiently
proved that the land possessed is public land?

RULING:
No, the burden of proving that the property is an alienable and disposable agricultural land
of the public domain falls on the applicant, not the State. The Office of the Solicitor General,
however, has the correlative burden to present effective evidence of the public character of the
land.

Respondents have failed to present any document from the Secretary of DENR certifying
that the property is part of the alienable and disposable land of the public domain. On the other
hand, the Court of Appeals observed, as this Court has, that the OSG has failed to "present any
evidence, testimonial or documentary evidence to support its opposition. When the State has no
effective opposition, except for a pro forma opposition, to controvert an applicant's convincing
evidence of possession and occupation, presumptions are tilted to this applicant's favor. Hence,
when a land has been in the possession of the applicants and their predecessor-in-interest since
time immemorial and there is no manifest indication that it is unregistrable, it is upon the State to
demonstrate that the land is not alienable and disposable.

Therefore, the Court is constrained to hold that respondents' evidence, coupled with the
absence of contradictory evidence from petitioner, substantially establishes that respondents have
complied with the requisites of Section 48(b) of the Public Land Act and Section 14(1) of the
Property Registration Decree.

106
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A SURVEY PLAN IS NOT SUFFICIENT TO PROVE LAND CLASSIFICATION OR ITS

ALIENABLE CHARACTER

Republic of the Philippines vs. Rosario L. Nicolas

G.R. No. 181435; October 2, 2017
Sereno, C.J.

FACTS:
This is a Petition for Review on Certiorari filed by the Republic of the Philippines to assail
the CA Decision and Resolution. The CA affirmed the RTC Decision, which granted the Petition
filed by respondent Rosario Nicolas.

Respondent filed a Petition before the RTC seeking to register her title over Lot 2 located
in Rizal. She asserted that she was entitled to confirmation and registration of title, as she had
been in "natural, open, public, adverse, continuous, uninterrupted" possession of the land in the
concept of an owner since October 1964. Respondent presented three witnesses to prove her right
to register the property who testified that respondent had occupied the land since 1940 and the
land has been planted with fruit-bearing trees and vegetables by their caretakers. The following
documents was likewise submitted: Survey Plan, various tax declarations and receipts and a
Certification issued by the CENRO that the land applied for was not covered by any public land
application. Petitioner Republic of the Philippines filed an Opposition.

RTC granted the petition and ordered the issuance of Decree of Registration in favor of
respondent. Petitioner Republic of the Philippines appealed the RTC Decision to the CA asserting
that there was no basis for the finding that respondent had occupied the land since 1940. However,
the CA dismissed the petitioner’s appeal.

ISSUE:
Is the alienable and disposable character of a land sought to be registered under PD No.
1529 sufficiently proven by a private survey plan or tracing cloth plan, and testimony that the land
is agricultural?

RULING:
No, respondent has failed to prove that the property is alienable and disposable agricultural
land that may be registered under section 14(1) of PD 1529 or under Section 14(2) of PD 1529.

To prove that the property subject of an application for original registration is part of the
alienable and disposable lands of the public domain, applicants must identify a positive act of the
government. To sufficiently establish this positive act, they must submit (1) a certification from the
CENRO or the Provincial Environment and Natural Resources Office (PENRO); and (2) a copy of
the original classification approved by the DENR Secretary and certified as a true copy by the legal
custodian of the official records.

In this case, respondent not only neglected to submit the required CENRO/PENRO
certification and DENR classification, but also presented evidence that completely failed to prove
her assertion. First, the testimonies of witnesses that they consider the property agricultural in
nature is irrelevant as their statements are mere opinions bereft of any legal significance. Second,
none of the documents submitted by respondent to the trial court indicated that the subject property
was agricultural or part of the alienable and disposable lands of the public domain. Also, the fact
that the land has been privately surveyed is not sufficient to prove its classification or alienable
character. While the conduct of a survey and the submission of the original tracing cloth plan are
mandatory requirements for applications for original registration of land under P.D. 1529, they only
serve to establish the true identity of the land and to ensure that the property does not overlap with
another one covered by a previous registration. These documents do not, by themselves, prove
alienability and disposability of the property.

Thus, failing to submit the requirements and prove its alienability, no length of possession
or occupation would vest any right of ownership over the property, and registration under P.D.
1529 cannot be sanctioned.

107
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

TAX DECLARATIONS COUPLED WITH PROOF OF ACTUAL POSSESSION MAY

BECOME THE BASIS OF A CLAIM OF OWNERSHIP

Republic of the Philippines vs. Metro Cebu Pacific Savings Bank and Cordova Trading Post,
Inc.
G.R. No. 205665; October 4, 2017
Reyes, Jr., J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the Decision of the CA affirming the MCTC’s ruling.

Metro Cebu Public Savings Bank and Cordova Trading Post, Inc. (CTPI) filed with MCTC
separate applications for original registration of two parcels of land situated in Cebu. Metro Cebu
averred that it acquired Lot No.325-A through foreclosure proceeding against Dalumpines who
mortgaged the same as a security for a loan. CTPI claimed that it acquired Lot No. 325-B from
Benthel Development Corporation. Respondents alleged that the entire Lot No. 325 was previously
possessed and owned by Dalumpines since 1967; by Daro from 1966 until 1967; and by Pablo
from 1948 until 1966. To support their application for registration, respondents attached the
Certification issued by the CENRO that the subject properties are alienable and disposable and
the latest tax declaration. OSG opposed the application for original registration.

MCTC granted the respondent’s application on the ground that the evidence presented by
the respondents reflect the twin requirements of ownership and possession over the subject
properties for at least 30 years and respondents were able to prove that the subject properties
form part of the alienable and disposable lands of the public domain. The OSG maintained that the
respondents failed to prove that the subject properties were occupied and possessed by the
respondents for the period required by law.
ISSUE:
Did the respondents prove claim of ownership over the subject properties based on tax
declarations presented?

RULING:
No, respondents failed to sufficiently establish their claim of ownership over the subject
properties based on tax declarations presented and prove that the subject properties form part of
the alienable and disposable lands of public domain.

It is only when these tax declarations are coupled with proof of actual possession of the
property that they may become the basis of a claim of ownership. In this case, the respondents
miserably failed to prove that they and their predecessors-in-interest actually possessed the
properties since June 12, 1945 or earlier as provided under Section 14(1) of P.D. No. 1529. The
earliest tax declaration that was presented in the name of Dalumpines was issued only in 1967.
Although the respondents presented a tax declaration over the subject property issued to Pablo in
1948, they failed to establish the relationship of Pablo to Dalumpines.

Also, respondent failed to present any evidence showing that the Department of
Environment and Natural Resources (DENR) Secretary had approved the land classification and
released the land of the public domain as alienable and disposable, and that the land subject of
the application for registration falls within the approved area per verification through survey by the
Provincial Environment and Natural Resources Office (PENRO) or CENRO. They failed to
establish the existence of a positive act from the government declaring the subject properties as
alienable and disposable.

Absent the primary and preliminary requisite that the lands applied for are alienable and
disposable, all other requisites allegedly complied with by the respondents becomes irrelevant and
unnecessary.

108
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE UNREGISTERED DONATION PROPTER NUPTIAS DOES NOT BIND THIRD

PERSONS

Spouses Juan and Antonino Cano, et.al. v. Spouses Arturo and Emerenciana Cano
G.R. No. 188666 and 190750; December 14,2017
Sereno, C.J.

FACTS:
This is a Petition for review assailing the Decision of the CA which affirmed RTC Resolution
ordering petitioners to vacate the property and surrender possession thereof to respondents.
Meanwhile, the Petition in G.R. No. 190750 questions the CA Decision and the Resolution, which
affirmed the RTC Decision confirming respondents' ownership of the property.

These consolidated Petitions for Review involve a dispute over possession and ownership
of a parcel of land located in Pangasinan. Petitioners Juan and Antonina Cano (GR. No.190750)
anchor their claim upon a donation propter nuptias allegedly made by Feliza Baun in their favor in
1962. They alleged that the quieting of title was necessary, because respondents were claiming
ownership over the same lot on the basis of a spurious and simulated deed of sale. Respondents
Arturo and Emerenciana Cano (GR.No 188666), on the other hand, claim that they purchased the
land from Feliza in 1982 and caused the annotation of the Deed of Absolute Sale on the Original
Certificate of Title (OCT) No. 62276 covering the property. Respondents asserted that they
benevolently allowed petitioners to take actual possession of the property after the sale because
the parties were all blood relatives. This peaceful arrangement continued until 3 October 1999, the
day petitioners allegedly harassed and threw stones at the individuals hired by respondents to
spray the mango trees with chemical fruit inducers. This incident prompted respondents to send
petitioners a demand letter to vacate the property.

Because the demand to vacate went unheeded, respondents filed an ejectment complaint
before the MTCC. The MTCC upheld the validity of the donation propter nuptias in view of the
absence of a declaration by a proper forum that the instrument was null and void. RTC reversed
this and the CA upheld the RTC ruling. Petitioners contend that the non-registration of the donation
propternuptias in their favor does not make their claim inferior to that of respondents.

ISSUE:
Does the unregistered donation propter nuptias bind the respondents who are not parties
thereto?

RULING:
No, prior unregistered donation does not bind respondents, who are innocent purchasers
for value.

In Gonzales v. Court of Appeals, it was held that registration is not necessary for it to be
considered valid and effective. However, in order to bind third persons, the donation must be
registered in the Registry of Property (now Registry of Land Titles and Deeds). Although the non-
registration of a deed of donation shall not affect its validity, the necessity of registration comes
into play when the rights of third persons are affected.

In this case, petitioners do not deny that the donation propter nuptias was never registered.
The conveyance of the property in their favor is not considered binding on third persons, who had
no participation in the deed or any actual knowledge thereof. The records of both the cases for
ejectment and the quieting of title are bereft of evidence of respondents' participation in or actual
knowledge of the deed. In fact, petitioners never made that assertion in any of their submissions
before the courts. Instead, they focused on their claim that respondents were aware of the former’s
possession of the property. Also, the subject property is registered land.

Hence, even assuming that petitioners occupied it for a considerable period after the sale,
their possession could not have ever ripened into ownership.

109
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

INNOCENT PURCHASER FOR VALUE HAS THE RIGHT TO RELY ON CLEAN A TITLE

Emilio Calma vs. Atty Jose M. Lachica, Jr.

G.R. No. 222031; November 22, 2017
Tijam, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45, assailing the Decision of the CA
which reversed and set aside the Decision of the RTC.

Respondent Atty. Jose M. Lachica, Jr. alleged that he was the absolute owner and actual
physical possessor of a 20,000-square meter parcel of land, having acquired the same from
Ceferino Tolentino who is Ricardo’s father. Unfortunately, the 1974 Deed of Sale was allegedly
lost, thus respondent and Ceferino agreed to execute another deed of sale. He entrusted the
notarized Deed of Sale, TCT No. T-28380, and other documents to Ceferino and Ricardo for the
transfer of title to his name. In 1981, before his assignment to a far-away province respondent
caused the annotation of a Notice of Adverse Claim on TCT No. T-28380 to protect his claimed
rights and interest in the subject property. In 2001, respondent discovered that the title over the
subject property was transferred under the name of Ricardo, which had been later transferred to
the petitioner upon Ricardo's sale thereof to the latter.

Respondent filed a complaint for Annulment of Void Deeds of Sale, Annulment of Titles,
Reconveyance, and Damages. RTC ruled that petitioner is an innocent purchaser for value and
that he had already acquired his indefeasible rights over the title and while it may be true that
respondent's adverse claim was annotated in Ricardo's title; the same title also shows that such
adverse claim had already been cancelled more than four years before he bought the property.
The CA reversed the RTC’s ruling finding that both Ricardo and petitioner were in bad faith in their
respective acquisitions of the subject property. Hence this petition

ISSUE:
Did the petitioner, who acquired title to the property without annotations and who
investigated the authenticity of said title in the register of deeds and the bank where it is mortgaged,
acquire the subject property in good faith thus has indefeasible rights over the title?

RULING:
Yes. Petitioner is an innocent purchaser for value who exercised the necessary diligence
in purchasing the property.

Section 44 of Presidential Decree No. 1529 or the Property Registration Decree recognizes
innocent purchasers for value and their right to rely on a clean title: Every registered owner
receiving certificates of title in pursuance of a decree of registration, and every subsequent
purchaser of registered land taking a certificate of title for value and good faith, shall hold the same
free from all encumbrances except those noted in said certificate. It is clearly manifest in the
records that while respondent's adverse claim appears in Ricardo's title, it also appears therein
that the said adverse claim had already been cancelled on April 26, 1994 or more than four years
before petitioner purchased the subject property. Therefore, Ricardo's title is already clean on its
face, way before petitioner purchased the same. Despite Ricardo's title being clean on its face,
petitioner still conducted an investigation of his own by proceeding to the Register of Deeds, as
well as to the bank where said title was mortgaged, to check on the authenticity and the status of
the title.

Even the defect in Ricardo's title due to his bad faith in the acquisition of the subject
property, should not affect petitioner's rights as an innocent purchaser for value. It is settled that a
defective title may still be the source of a completely legal and valid title in the hands of an innocent
purchaser for value.

110
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

NO FURTHER PROCEEDING IS NEEDED TO EXECUTE A JUDICIAL DECLARATION OF

OWNERSHIP, AS IT BECOMES FINAL WITHOUT ANY FURTHER ACTION UPON THE
EXPIRATION OF THE PERIOD FOR PERFECTING AN APPEAL

Republic of the Philippines vs. Claro Yap

G.R. No. 231116; February 7, 2018
Velasco, Jr., J.

FACTS:
In a Petition for Review on Certiorari under Rule 45 before the Court, Petitioner Republic
of the Philippines challenges the decision of the RTC and CA, granting the respondent Claro Yap’s
(Yap) petition for registration of a parcel of land.

Respondent Yap filed for cancellation and re-issuance of Decree No. 99500 covering Lot
No. 922 of the Carcar Cadastre, and for the issuance of the corresponding OCT pursuant to the
reissued decree. He alleged that Lot No 922 with an area of 34 sq. meters is covered by Decree
No. 99500 issued in the name of Andres Abellana (Abellana), as administrator of the Estate of
Juan Rodriguez and such lot was inherited by Yap and that his predecessors-in-interest have been
in open, continuous, exclusive and notorious possession of the said lot since June 12, 1945, or
earlier, and by acquisitive prescription being possessors in good faith in the concept of an owner
for more than thirty years. He further alleges that although a valid decree was issued for the lot,
there is no showing that an OCT was issued covering the said lot. RTC granted the petition and
ordered the Register of Deeds of the Province to cancel Decree No. 99500, and issue an OCT in
the name of Andres Abellana, as administrator of the Estate of Juan Rodriguez.

Yap filed a Partial Motion for Reconsideration stating that the OCT should be issued under
his name instead of Abellana. On the other hand, petitioner, through the OSG filed its comment
that the petition should be denied since Republic was not furnished with copies thereof. RTC
denied the motions of Yap and OSG. The CA upheld the RTC’s ruling finding that the pieces of
evidence submitted by Yap was sufficient to support the petition and cancelling Decree No. 99500
issued on November 29, 1920 and to re-issue a new copy thereof. Thus, the OSG filed the instant
petition alleging that Yap’s action had already prescribed.

ISSUE:
Should the petition be denied due to Yap and his predecessors’ failure to file the proper
motion to execute Decree No. 99500 and thus barring the petition due to laches since nine decades
had already passed since issuance of the said decree?

RULING:
No, after the ownership has been proved and confirmed by judicial declaration, no further
proceeding to enforce said ownership is necessary.

There is no provision in the Land Registration Act similar to sec. 6, Rule 39 of the Rules of
Court, regarding the execution of a judgment in a civil action, except the proceedings to place the
winner in possession by virtue of a writ of possession. The decision in a land registration case,
unless the adverse or losing party is in possession, becomes final without any further action, upon
expiration of the period for perfecting an appeal. The reason is that the judgment is merely
declaratory in character and does not need to be asserted or enforced against the adverse party.
Decree No. 99500 covering Lot No. 922 had been issued on November 29, 1920 by the Court of
First Instance, Province of Cebu pursuant to the court's decision in Cadastral Case No. 1, GLRO
Cadastral Record No. 58. The issuance of the said decree creates a strong presumption that the
decision in Cadastral Case No. 1 had become final and executory.

The fact that the ownership over Lot No. 922 had been confirmed by judicial declaration
several decades ago does not, however, give room for the application of the statute of limitations
or laches, nor bars an application for the re-issuance of the corresponding decree.

Thus, despite the lapse of time, issuance of OCT in favor of original adjudicate, Abellana
is proper.

111
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

WHERE TWO CERTIFICATES OF TITLE ARE ISSUED TO DIFFERENT PERSONS

COVERING THE SAME PARCEL OF LAND IN WHOLE OR IN PART, THE EARLIER IN
DATE MUST PREVAIL

National Housing Authority vs. Dominador Laurito, Hermina Laurito, Necitas Laurito, et.al.
G.R. No. 191657; July 31, 2017
Tijam, J.

FACTS:
This a Petition for Review under Rule 45 seeking to reverse the Decision of the CA which
affirmed the Decision of RTC Bacoor, Cavite confirming respondent’s ownership over a parcel of
land located at Carmona, Cavite.

The controversy is anchored on the conflicting claims of ownership over subject land with
an area of 224,287 square meters based on different TCTs. Prompted by their discovery that title
to the property had been subdivided and later on transferred to National Housing Authority (NHA),
with the latter subdividing and offering the same to the public, respondents sent demand letters for
NHA to recall the subdivision scheme plan it submitted to the Register of Deeds (RD) for
registration.

When said demands went unheeded, respondents filed the complaint for quieting of title,
annulment of title and recovery of possession against NHA. Respondents alleged that their parents
Spouses Laurito, were the registered owners of the subject property and covered by Transfer
Certificate of Title (TCT) No. T-9943 registered with the RD for the Province of Cavite on
September 7, 1956. The title of the Spouses Laurito was a transfer from TCT No. T-8237. When
the RD was gutted by fire in 1959, the Spouses Laurito caused the administrative reconstitution of
their title and a replacement title, TCT No. (T-9943) RT-8747 was issued on March 23, 1962. The
source of reconstitution was the owner's duplicate certificate of title. On the other hand, NHA based
their claims on derivative titles dating back to February 21, 1960. The RTC and CA ruled in favor
of the respondents as their title was registered earlier.

ISSUE:
Was the title of Spouses Laurito having been registered earlier in time preferred over that
of NHA?

RULING:
Yes. It clear that as early as September 7, 1956, TCT No. T-8237 had already been
cancelled and a new title was issued in favor of the Spouses Laurito. In other words, as early as
1956, there was no such TCT No. T-8237 to reconstruct. Thus, on this point alone, it is evident
that the Spouses Laurito's transfer certificate of title prevails over NHA's title which was derived
from a dubious administrative reconstitution of TCT No. T- 8237.

Even assuming that TCT No. T-8237 was indeed administratively reconstituted in due
course and replaced by TCT No. (T-8237) RT 3909, preference still lies with the title of the Spouses
Laurito for having been registered earlier in time. The rule is that where two certificates of title are
issued to different persons covering the same parcel of land in whole or in part, the earlier in date
must prevail as between the original parties and, in case of successive registration where more
than one certificate is issued over the land, the person holding title under the prior certificate is
entitled to the property as against the person who relies on the second certificate.

The title of the Spouses Laurito was registered in 1956 while the earliest derivative titles of
NHA were registered in 1960. The title of the Spouses Laurito preceded Santos' title and the
Spouses Lope Gener's title by four years. Therefore, as between the respective sources of NHA's
titles and the title of the Spouses Laurito, that of the latter prevails.

112
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CERTIFICATES OF TITLE BECOME INDEFEASIBLE ONE YEAR AFTER ITS ISSUANCE

Araceli Mayuga vs. Antonio Atienza, Benjamin Atienza

G.R. No. 208197; January 10, 2018
Caguioa, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision of the CA which granted the appeal by the respondents Antonio Atienza and Benjamin
Atienza, Jr. and reversed and set aside the Decision of the Regional Trial Court.

Aracelli Mayuga instituted a petition for cancellation and recall of Free Patent Application
and Reconveyance. Petitioner alleged that she, Benjamin A. Atienza, Sr. and Armando A. Atienza,
are the surviving legitimate, legal and forced heirs of the late Perfecto Atienza who died intestate
in 1978. That through manipulation and misrepresentation with intent to defraud her,
respondents were able to secure Free Patents over the two lots. Defendants averred that, the
petition is moot and academic since the Free Patent Titles have become indefeasible after the
lapse of one year from its issuance in 1992 and the basis for their application for free patent is a
Confirmation Affidavit of Distribution of Real Estate executed by their father.

RTC granted the petition of Araceli on the ground that the application by the defendants
for a free patent was tainted by fraud.

ISSUE:
Had the respondents' certificates of title already become indefeasible after one year from
the date of entry of the decree of registration?

RULING:
Yes. As the persons who applied for and were awarded free patents, the respondents are
the rightful, legal owners of the disputed lots.

The free patents having been issued by the DENR on February 28, 1992 and recorded in
the Book of Entries at the Office of the Registry of Deeds in June 1992, the respondents' certificates
of title have already become indefeasible pursuant to Section 32 of Presidential Decree No. 1529
(the Property Registration Decree), which pertinently provides: "Upon the expiration of said period
of one year [from and after the date of entry of the decree of registration], the decree of registration
and the certificate of title issued shall become incontrovertible.

Thus, free patents issued in favor of the respondents can no longer be assailed under the
rule of indefeasibility and incontrovertibility of the certificate of title.

113
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE REQUIREMENTS UNDER R.A. NO 26 FOR JUDICIAL RECONSTITUTION ARE

INDISPENSABLE AND MUST BE STRICTLY COMPLIED WITH

Marcelino Dela Paz vs. Republic of the Philippines

G.R. No. 195726; November 20,2017
Martires, J.

FACTS:
Before this Court is a Rule 45 petition assailing the Decision and the Resolution of the CA
which reversed the of the order of the Regional Trial Court to reconstitute TCT of the petitioner.

Petitioner Marcelino Dela Paz (Marcelino) filed a verified petition for reconstitution of TCT
No. 206714 covering a parcel of land which was destroyed by a fire that razed the Quezon City
Hall building in 1988, thus, the owner's duplicate copy was lost as evidenced by the affidavit of
loss duly registered and recorded with the Registry of Deeds of Quezon City. Marcelino submitted
the following as evidence: (1) a photocopy of TCT No. 206714; (2) real property tax declarations;
(3) receipts of payments of real property tax; and (4) the land's sketch plan and subdivision plan.

RTC granted the petition and ordered the reconstitution of TCT No. 206714 based on the
approved subdivision plan and technical description submitted. The CA however reversed the
decision holding that evidence in support of the petition for reconsideration was not enough.

ISSUE:
Are the following evidence in a petition for judicial reconstitution of lost title under RA 26:
photocopy of title, tax declarations, receipts of realty tax payments, and the land’s subdivision plan,
sufficient?

RULING:
No. Not one of the documentary evidence Marcelino presented falls under the enumeration
laid down in RA.26.

Section 110 of Presidential Decree No. 1529, otherwise known as the Property
Registration Decree, as amended by R.A. No. 6732, allows the reconstitution of lost or destroyed
original Torrens title. Reconstitution may be done judicially under RA 26 or administratively under
RA 6732. Petitioner sought judicial reconstitution. Evidence proving the petitioner's allegations in
a petition for reconstitution is needed because, without proof that a certificate of title existed and
was eventually lost or destroyed, this alleged lost or destroyed title is still presumed to exist.
Section 3 of R.A. No. 26 enumerates the sources for reconstitution of TCTs.

In this case, Marcelino presented the following: the extrajudicial settlement and the deed
of absolute sale cannot fall under paragraph (d); the photocopy of TCT No. 206714 that Marcelino
offered as evidence is not a certified copy previously issued by the Registry of Deeds of Quezon
City or by the legal custodian thereof. None of the documents submitted by Marcelino fall under
paragraph (f) because they are not similar to those mentioned in paragraphs (a) to (e). The
documents alluded to in paragraph (f) must be resorted to in the absence of those preceding in
order. If the petitioner for reconstitution fails to show that he had, in fact, sought to secure such
prior documents and had failed to find them, the presentation of the succeeding documents as
substitutionary evidence is proscribed.

The requirements under R.A. No. 26 are indispensable and must be strictly complied with.
In a reconstitution proceeding, the petitioner is burdened to adduce in evidence the documents in
the order stated in Section 3 of R.A. No. 26 as sources of the deed to be reconstituted, and likewise
burdened to prove the execution or existence of the original copy of the title, which is the copy on
file with the Registry of Deeds, and the contents thereof.

Thus, Marcelino failing to adduce such evidence, the petition for reconstitution was
properly dismissed.

114
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

WHEN THE OWNER'S DUPLICATE CERTIFICATE OF TITLE WAS NOT ACTUALLY

LOST, BUT IS, IN FACT, IN THE POSSESSION OF ANOTHER PERSON, THE
RECONSTITUTED CERTIFICATE IS VOID

Mamerto Dy vs. Maria Lourdes Rosell Aldea

G.R. No. 219500; August 09, 2017
Mendoza, J.

FACTS:
This is a petition for review on Certiorari seeking to reverse and set aside the Decision of
the CA, which nullified the RTC Decision.

In June 2005, Mamerto Dy agreed to sell Lot 5158, with an area of 6,738 square meters,
and covered by TCT No. T-24849 to his brothers Nelson and Sancho. He asked them to secure
copies of the tax declarations covering the subject land from the Municipal Assessor's Office.
Nelson found out that the subject land had gone through a series of anomalous transactions. The
owner's duplicate copy of TCT No. T-24849 was declared lost. As a result, a new owner's duplicate
copy of the same TCT was issued and the subject land was subsequently mortgaged. When
Mamerto discovered that the subject land was being fenced upon the instruction of respondent
Lourdes, he immediately filed a complaint against the latter before the barangay office. Lourdes
contends that she bought the land with the help of a certain Mila Labang who introduced her to a
person claiming to be Mamerto. She paid the impostor and after weeks of waiting, Lourdes was
informed by Fatima that the impostor was dead and he had not given any money to process the
transfer of the subject land. Lourdes went to the Office of the Provincial Assessor to process the
payment of capital gains tax and the transfer of title in her name. Eventually, the Register of Deeds
issued TCT No. T-134753 under her name.

Mamerto filed a complaint for declaration of nullity of deed and recovery of the real property
in the RTC. The court ruled in favor of Mamerto which was later reversed by the CA upon Lourdes’
appeal. Hence, this petition for review on certiorari. Mamerto argues that the fact that the title
was reconstituted should have urged Lourdes to conduct further investigation on the identity of the
vendor while Lourdes contends that she is an innocent purchaser for value.

ISSUE:
Was the reconstituted title issued in favor of Lourdes valid, despite the fact that the owner’s
duplicate copy was never lost?

RULING:
No. The following requisites must be complied with for an order for reconstitution to be
issued: (a) that the certificate of title had been lost or destroyed; (b) that the documents presented
by petitioner are sufficient and proper to warrant reconstitution of the lost or destroyed certificate
of title; (c) that the petitioner is the registered owner of the property or had an interest therein; (d)
that the certificate of title was in force at the time it was lost and destroyed; and (e) that the
description, area and boundaries of the property are substantially the same as those contained in
the lost or destroyed certificate of title. The Court has held that when the owner's duplicate
certificate of title has not been lost, but is, in fact, in the possession of another person, then the
reconstituted certificate is void, because the court that rendered the decision had no jurisdiction.

In this case, Mamerto asserted that he never lost his owner's duplicate copy. The fact of
loss or destruction of the owner's duplicate certificate of title, which is the primordial element in the
validity of reconstitution proceedings, is clearly missing. Accordingly, the RTC never acquired
jurisdiction over the reconstitution proceedings initiated by the impostor, and its judgment rendered
thereafter is null and void. Lourdes cannot be considered a purchaser in good faith since she was
deficient in her vigilance as buyer of the subject land.

Hence, the fact that Lourdes was able to secure a title in her name neither operates to vest
ownership upon her of the subject land nor cures the void sale.

115
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

MUNICIPALITY'S TERRITORIAL CLAIM CAN NEITHER BE RESOLVED IN AN ACTION

FOR NULLIFICATION OF TITLE NOR IN AN ACTION TO AMEND TITLE

SN Aboitiz Power-Magat, Inc. vs. The Municipality of Alfonso Lista, Ifugao

G.R. No. 198647; November 20,2017
Tijam, J.

FACTS:
This is a petition for Review on Certiorari under Rule 45, which seeks to assail the Decision
and Resolution of the CA affirming the RTC’s denial of Motion to Dismiss filed by the petitioner.

Respondent Municipality of Alfonso Lista, Ifugao filed an Amended Complaint, alleging that
the National Power Corporation (NPC) fraudulently secured Special Patent No. 3723 by making it
appear in the survey plans that certain parcels of land were located in Barangay General
Aguinaldo, Ramon, Isabela when these parcels of land were actually located in Barangay Sto.
Domingo in Alfonso Lista, Ifugao. NPC subsequently succeeded in having the Special Patent No.
3723 entered in the registry of books of the Register of Deeds of Santiago City in 2004.
Consequently, Original Certificate of Title (OCT) No. 0-1 was issued. Later, NPC alienated such
parcels of land in favor of Power Sector Assets and Liabilities Management Corporation (PSALM)
which in turn transferred the same to petitioner SN Aboitiz Power Magat, Inc. (SNAP). In its
amended complaint, respondent municipality prayed for the declaration of nullity of Special Patent
No. 3723 and OCT No. 0-1 because the same were void for failure to reflect the true location of
the subject parcels of land. Instead of filing an answer, SNAP filed a motion to Dismiss on the
grounds of prescription and failure to state a cause of action.

RTC denied the motion to dismiss. SNAP filed a Petition for Certiorari and Prohibition with
the CA. CA likewise denied the petition and added the issue of the validity of petitioner's claim of
title over the subject property should be threshed out through the presentation of evidence.

ISSUE:
Did the complaint sufficiently allege a cause of action for declaration of nullity of special
patent and original certificate of title or to amend the certificate of title?

RULING:
No. The amended complaint lacks a cause of action for declaration of nullity of special
patent and original certificate of title or to amend the certificate of title

In an action for nullification of title or declaration of its nullity, the complaint must contain
the following allegations for the sufficiency of cause of action: (1) that the claimant is the owner of
the subject land prior to the issuance of the title to the defendant; and (2) that fraud or mistake was
perpetrated in obtaining said title over the subject land. In this case, it is apparent, that respondent
municipality does not claim ownership over the property. Without the claim of ownership, there was
no supposed right upon which respondent municipality may anchor its claim and which SNAP may
violate.

An action to amend the certificate of title is covered by Section 108 of PD No.1529. It can
only be granted if there is unanimity among the parties, or there is no adverse claim or serious
objection on the part of any party in interest, otherwise the case becomes controversial and should
be threshed out in an ordinary cause. Here, the issues are controversial in nature and cannot be
summarily disposed of. As aforementioned, the gist of respondent municipality's amended
complaint revolves around its territorial claim over the subject property. Evidently, the boundary
dispute is between the Municipality of Alfonso Lista in the Province of Ifugao and the Municipality
of Ramon in the Province of Isabela. Such issue and its corollary incidents cannot be resolved in
the complaint and the subsequent amended complaint led by the respondent municipality.

116
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

AN ACTION FOR REVERSION CAN ONLY BE BROUGHT BY THE OSG BECAUSE IF

SUCCESSFUL, THE LAND WILL REVERT TO THE STATE WHILE AN ACTION FOR
ANNULMENT OF FREE PATENTS AND CERTIFICATES OF TITLE MAY BE BROUGHT
BY PERSONS WHO HAVE INTEREST IN THE SUBJECT PROPERTY

Aurelia Narcise, et. al. vs. Valbuelco Inc.

G.R. No. 196888; July 19, 2017
Tijam, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the CA’s order reversing the
earlier decision of the RTC which dismissed the case.

Respondent Valbueco Inc. alleged that it peacefully possessed the subject land since 1970
and that its presence along with that of its predecessors-in-interest was never disturbed until 2000.
In 2005, respondent filed an action for annulment of free patent and certificate against petitioners
Narcise, et al., the DENR and the Register of Deeds of Bataan. A reading of the complaint reveals
that respondent claims acquisitive prescription as its basis for the annulment of patents and titles.

From 1977 until 1999, petitioners Aurelia Narcise et.al. were named as the beneficiaries of
free patents, OCTs, and TCTs covering the same lot. Instead of filing an Answer, petitioners filed
several Motions to Dismiss on the ground of lack of cause of action, failure to state cause of action,
defect in the certificate of non-forum shopping and prescription. The trial court dismissed the case
holding that only the OSG has the standing to file the case but the CA reversed the trial court.
Petitioner interposed whether the respondent is the real party-in-interest.

ISSUE:
Did the respondent have the proper legal standing to file a case for the annulment of the
free patents and the certificate of title?

RULING:
Yes, the respondent has the proper legal standing to file a case for the annulment of the
free patents and the certificate of title.

An action for reversion, a remedy provided under Commonwealth Act No. 141, seeks to
cancel the original certificate of registration, and nullify the original certificate of title, including the
transfer of certificate of title of the successors-in-interest because the same were all procured
through fraud and misrepresentation. In cancelling and nullifying such title, it restores the public
land fraudulently awarded and disposed of to private individuals or corporations to the mass of
public domain. Such action is filed by the OSG pursuant to its authority under the Administrative
Code. On the other hand, an action for annulment of free patents and certificates of title also seeks
for the cancellation and nullification of the certificate of title, but once the same is granted, it does
not operate to revert the property back to the State, but to its lawful owner. In such action, the
nullity arises not from fraud or deceit, but from the fact that the director of the Land Management
Bureau had no jurisdiction to bestow title; hence, the issued patent or certificate of title was void
ab initio. Thus, the difference between them lies in the allegations as to the character of ownership
of the realty whose title is sought to be nullified. In an action for reversion, the pertinent allegations
in the complaint would admit State ownership of the disputed land, while in an action for annulment
of patent and certificate of title, pertinent allegations deal with plaintiff's ownership of the contested
land prior to the issuance of the same as well as defendant's fraud or mistake in successfully
obtaining these documents of title over the parcel of land claimed by the plaintiff.

Here, the action is one of annulment of patents and titles. The allegations in the complaint
show that respondent asserts its ownership over the subject properties by acquisitive prescription.

Thus, being an action for annulment of patents and titles, it is the respondent who is the
real party-in-interest for it is the one claiming title or ownership adverse to that of the registered
owner.

117
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

NOTICE OF ADVERSE CLAIM AND NOTICE OF LIS PENDENS ARE DIFFERENT

REMEDIES WHICH MAY BE AVAILED OF AT THE SAME TIME

Lourdes Valderama vs. Sonia Arguelles and Lorna Arguelles

G.R. No. 223660. April 2, 2018.
Tijam, J.

FACTS:
In a petition for Certiorari under Rule 45, petitioner assails the CA decision which upheld
the RTC’s ruling that a Notice of Lis Pendens between the parties concerning Notice of Adverse
Claim calls for the cancellation thereof. Hence, the RTC ordered the cancellation of the Adverse
Claim in view of the Notice of Lis Pendens annotated on the TCT of the subject property.

Respondents filed a petition to cancel adverse claim. They alleged that Conchita Amongo
Francia (Conchita) executed a deed of sale over the subject property in favor of respondents. The
subject property was thereafter registered in the respondent’s names. Years later, Conchita filed
an affidavit of adverse claim which was registered and annotated in the TCT. Conchita died a few
months after.

Meanwhile, respondents filed a complaint for recovery of ownership and physical

possession of a piece of realty and its improvements with damages. In light of this, petitioner and
Tarcila Lopez (sisters of Conchita) filed a notice of lis pendens with respect to the subject property.
Hence, respondents filed a motion for the outright cancellation of the adverse claim because the
filing of lis pendens rendered the issue moot and academic.

ISSUE:
Should the adverse claim be cancelled because another person caused the annotation of
a notice of lis pendens on the same title?

RULING:
No. An adverse claim and a notice of lis pendens are both involuntary dealings expressly
recognized under Presidential Decree No. 1529 (P.D. 1529), otherwise known as the Property
Registration Decree.

The main differences between the two are as follows: (1) an adverse claim protects the
right of a claimant during the pendency of a controversy while a notice of lis pendens protects the
right of the claimant during the pendency of the action or litigation; and (2) an adverse claim may
only be cancelled upon filing of a petition before the court which shall conduct a hearing on its
validity while a notice of lis pendens may be cancelled without a court hearing. The notice of lis
pendens is ordinarily recorded without the intervention of the court where the action is pending.

In Paz Ty Sin Tei v. Jose Lee Dy Piao, the Court ruled that it would not only be
unreasonable but also oppressive to hold that the subsequent institution of an ordinary civil action
would work to divest the adverse claim of its validity, for a notice of lis pendens may be cancelled
even before the action is finally terminated for causes which may not be attributable to the claimant.

Both remedies may be availed of at the same time. In a later case, the Court ruled that the
annotation of a notice of lis pendens at the back of a certificate of title does not preclude the
subsequent registration on the same certificate of title of an adverse claim.

118
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

A DILIGENT MOTHER WOULD NATURALLY ENSURE SAFETY OF HER CHILD BEFORE

RELEASING HOLD ON HIM

Spouses Ed Dante Latonio and Mary Ann Latonio vs. McGeorge Food Industries, et al.
G.R. No. 206184; December 6, 2017
Peralta, J.

FACTS:
This is a petition for review via Rule 45 of the Rules of Court assailing the Decision of the
CA which reversed and set aside the Decision of the RTC finding defendant Tyke Philip Lomibao
liable for acts of negligence and defendant Cebu Golden Foods, Inc. solidarily liable.

Petitioner spouses Ed Dante (Ed) and Mary Ann Latonio (Mary Ann); accompanied their
eight-month-old child Ed Christian to a birthday party at the McDonald's Restaurant, Ayala Center,
Cebu City. During the party and as part of the birthday package, McDonald's presented two
mascots – "Birdie" and "Grimace" - to entertain and dance for the guests. Respondent Tyke Philip
Lomibao (Lomibao) was the person inside the "Birdie" mascot suit. Intending to have her child's
photo taken with the mascots, Mary Ann placed Ed Christian on a chair in front of the mascot
"Birdie." The mascot positioned itself behind the child and extended its "wings" to give a good pose
for the camera. As photos were about to be taken, Mary Ann released her hold of Ed Christian.
Seconds later, the child fell head first from the chair onto the floor.

The Latonios sent a Letter to McGeorge demanding for compensation in the amount of
Fifteen Million Pesos (₱15,000,000.00). As their demand remained unheeded, the Latonios
caused the publication of the accident in the local newspaper, Sun Star Cebu on February 8, 2001
with a headline "Food outlet sued for ₱.9 M damages". Simultaneously, the Latonios also instituted
a complaint for damages and attorney's fees against McGeorge.

ISSUE:
Was the proximate cause of the child’s fall the negligence of petitioner-mother Mary Ann
Latonia for placing the child on a chair and expecting a bird mascot to ensure his safety?

RULING:
Yes. It is irresponsible for a mother to entrust the safety, even momentarily, of her eight-
month-old child to a mascot, in thick leather suit that had no arms to hold the child and whose
diminished ability to see, hear, feel, and move freely was readily apparent. Releasing her grasp of
the baby without waiting for any indication that the mascot heard and understood her is just plain
negligence.

A diligent mother would naturally ensure first and foremost the safety of her child before
releasing her hold on him. Such is not the case here. Mary Ann Latonio, in placing Ed Christian on
a chair and expecting a bird mascot to ensure the child's safety, utterly failed to observe the degree
of diligence expected of her as a mother of an eight-month- old baby. Proximate cause is defined
as that cause, which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not have occurred. Here, it is beyond
dispute that the cause of Ed Christian’s fall is traceable to the negligent act of Mary Ann of leaving
him in the "hands" of Lomibao who was wearing the Birdie mascot suit. Even if she already
informed and told the mascot that she was leaving the baby to his hold she should not have let go
of her grip because as a mother she ought to exercise the commensurate prudence and case.

All told, in the absence of negligence on the part of respondents Cebu Golden Foods and
Lomibao, as well as their management and staff, they cannot be made liable to pay for the
damages prayed for by the petitioners.

119
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

NEGLIGENCE OR FAULT MUST BE CLEARLY ESTABLISHED, PLAINTIFF HAVING THE

BURDEN OF PROOF

St. Martin Polyclinic, Inc. vs. LWV Construction Corporation

G.R. No. 217426; December 4, 2017
Perlas-Bernabe J.

FACTS:
This is a petition for review on Certiorari assailing the Decision of the CA which affirmed
the Decision of the RTC and thereby ordered herein petitioner St. Martin Polyclinic, Inc. (petitioner)
to pay respondent LWV Construction Corporation (respondent) temperate damages.

Respondent is engaged in the business of recruiting Filipino workers for deployment to

Saudi Arabia. Petitioner is authorized to conduct medical examinations of prospective applicants
for overseas employment. On January 10, 2008, respondent referred prospective applicant
Jonathan V. Raguindin (Raguindin) to petitioner for a pre-deployment medical examination. After
undergoing the required examinations, petitioner cleared Raguindin and found him "fit for
employment.” Respondent then deployed Raguindin to Saudi Arabia. When Raguindin underwent
another medical examination with the General Care Dispensary of Saudi Arabia on March 24,
2008, he tested positive for HCV or the hepatitis C virus. The Ministry of Health of the Kingdom of
Saudi Arabia required a re-examination of Raguindin which however showed the same result.
Raguindin was repatriated to the Philippines.

Respondent filed a complaint for sum of money and damages against petitioner claiming
that it relied on petitioner's Medical Report stating that Raguindin is "fit for employment" when in
fact he was not and as a result of petitioner’s recklessness in issuing such report, it incurred
expenses. Petitioner denied liability and claimed that Raguindin may have contracted the disease
after his medical examination in the Philippines up to the time of his deployment.

ISSUE:
Was the petitioner negligent in issuing the Medical Report, which was relied upon by the
respondent, declaring Raguindin "fit for employment" where Raguindin was found to have hepatitis
C when medically examined 2 months later?

RULING:
No, petitioner cannot be adjudged negligent in the absence of proof.

Negligence is defined as the failure to observe for the protection of the interests of another
person, that degree of care, precaution and vigilance which the circumstances justly demand,
whereby such other person suffers injury. The negligence or fault should be clearly established as
it is the basis of her action. The burden of proof is upon the plaintiff.

The examination conducted by the General Care Dispensary, which was later affirmed by
the Ministry of Health, was conducted only on March 24, 2008, or at least two (2) months after
petitioner issued its Medical Report on January 11, 2008. Even assuming that Raguindin's
diagnosis for HCV was correct, the fact that he later tested positive for the same does not
convincingly prove that he was already under the same medical state at the time petitioner issued
the Medical Report on January 11, 2008. It was incumbent upon respondent to show that there
was already negligence at the time the Medical Report was issued, may it be that standard medical
procedures were not carefully observed or that there were already palpable signs that exhibited
Raguindin's unfitness for deployment at that time. There is a reasonable possibility that Raguindin
became exposed to the HCV only after his medical examination with petitioner. Raguindin was not
deployed to Saudi Arabia immediately after petitioner's medical examination and could have
possibly contracted the same only when he arrived thereat. There being no negligence proven by
respondent through credible and admissible evidence, petitioner cannot be held liable under Article
2176 of the Civil Code.

120
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

COMMON CARRIERS SHOULD OBSERVE EXTRAORDINARY DILIGENCE; DRIVING

BEYOND THE ALLOWABLE SPEED GIVES RISE TO A PRESUMPTION OF NEGLIGENCE
OF THE DRIVER

Linda Cacho et.al. vs. Gerardo Manahan, Dagupan Bus Co., Inc. et.al.
G.R. No. 203081; January 17, 2018
Martires, J.

FACTS:
This is a petition for review on Certiorari seeking to hold defendant liable for damages on
account of his negligence. Defendant Gerardo Manahan, the bus driver of Dagupan Bus Co. Inc.,
collided with the vehicle of Bismark Cacho while traversing the national highway near Embarcedo
Bridge resulting to Cacho’s death. Linda Cacho, the petitioner and the wife of the deceased,
alleged that the car was hit by the bus due to Manahan’s negligence when it tried to swerve to the
opposite lane to avoid the pile of boulders placed by De Vera Construction. Complainant also
alleged that Manahan was over speeding at the time of the incident. On the other hand, defendants
claimed that it was on full stop and it was Cacho who was over speeding causing him to bump into
the bus.

Complainants filed a case for damages. The Regional Trial Court (RTC) held that Manahan
is negligent and thus liable. On appeal, the Court of Appeals (CA) reversed the Decision, it found
that the proximate cause of the accident was the negligence of Cacho. Hence, this petition.

ISSUE:
Does the act of over speeding while traversing a narrow highway and approaching a narrow
bridge constitute negligence?

RULING:
Yes, the act of over speeding on a narrow highway and while approaching the bridge
constitutes negligence.

As held in Picart v. Smith “The test by which to determine the existence of negligence in a
particular case may be stated as follows: Did the defendant in doing the alleged negligent act use
that reasonable care and caution which an ordinary prudent person would have used in the same
situation? If not, then he is guilty of negligence.” Using this test, Manahan was clearly negligent
when he was relatively driving fast on a narrow highway and approaching a similarly narrow bridge.
It must be remembered that a bus is a significantly large vehicle which would be difficult to
maneuver and stop if it were travelling at a high speed. On top of this, the time of the accident was
on or about sunrise when visibility on the road was compromised.

Moreover, it can be presumed that Manahan was negligent under Article 2185 of the Civil
Code, which provides: "unless there is proof to the contrary, it is presumed that a person driving a
motor vehicle has been negligent if at the time of the mishap, he was in violation of any traffic
regulation.” Manahan should have been more prudent and careful in his driving the bus especially
considering that Dagupan Bus is a common carrier. Given the nature of the business and for
reasons of public policy, the common carrier is bound "to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by them, according to
all the circumstances of each case.”

121
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

DRIVING ON THE WRONG SIDE OF THE ROAD IS A VIOLATION OF A TRAFFIC

REGULATION, GIVING RISE TO A PRESUMPTION OF NEGLIGENCE

S/Sgt. Cornelio Paman vs. People of the Philippines

G.R. No. 210129; July 05, 2017
Reyes, J.

FACTS:
This is a petition for review on Certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the Decision and Resolution issued by the CA.

On October 14, 2004, Arambala was on board a motorcycle traversing Roxas Street,
Pagadian City towards the direction of the Southern Mindanao Colleges Main Campus. When he
was nearing the intersection of Roxas and Broca Streets in Pagadian City, a multicab driven by
S/Sgt. Cornelio Paman (Paman), a military personnel, crossed his path and collided with his
motorcycle. Paman was driving at the wrong side of the road. Emilda Salabit, who was then
standing beside the road, saw Arambala being thrown away after the collision; she went to
Arambala and hailed a tricycle and rushed him to the hospital. Arambala suffered hematoma at
the cerebral portion of his brain. After his confinement at the Mercy Community Hospital on October
15, 2004, Arambala was again admitted on October 24, 2004 at the Zamboanga del Sur Provincial
Hospital due to erratic blood pressure and slurring speech caused by the hematoma.

The MTCC convicted Paman of reckless imprudence resulting to serious physical injuries
but the RTC reversed it pointing out that Arambala was the cause of the collision since he already
saw the multicab driven by Paman ahead of time; that he had the opportunity to take precaution to
avoid the accident, but he failed to do so. The OSG, in its petition, claims that Judge Absin
committed grave abuse of discretion in ruling that it was Arambala who was at fault and in finding
that the prosecution's evidence was insufficient to convict Paman of the offense charged beyond
reasonable doubt. CA granted it. Hence this petition.

ISSUE:
Is Paman presumed negligent for driving at the wrong side of the road?

RULING:
Yes. It was Paman who was at fault since he was driving at the wrong side of the road.

Under Article 2185 of the Civil Code, unless there is proof to the contrary, a person driving
a vehicle is presumed negligent if, at the time of the mishap, he was violating any traffic regulation.
Here, Paman was violating a traffic regulation. He is thus presumed to be negligent at the time of
the incident, which presumption he failed to overcome. For failing to observe the duty of diligence
and care imposed on drivers of vehicles abandoning their lane, Paman, as correctly held by the
CA, must be held liable. It is a settled rule that a driver abandoning his proper lane for the purpose
of overtaking another vehicle in an ordinary situation has the duty to see to it that the road is clear,
and he should not proceed if he cannot do so in safety. If, after attempting to pass, the driver of
the overtaking vehicle finds that he cannot make the passage in safety, the latter must slacken his
speed so as to avoid the danger of a collision, even bringing his car to a stop if necessary. This
rule is consistent the Land Transportation and Traffic Code.

The evidence indubitably shows that before the collision, Arambala's motorcycle was
cruising along its rightful lane when S/Sgt. Paman's multicab suddenly crossed his (Arambala)
path coming from his left side along Broca Street using the wrong lane to cross the said
intersection. Paman's act of driving on the wrong side of the road, in an attempt to overtake the
motorcycle driven by Arambala, and suddenly crossing the path, which is being traversed by the
latter, is sheer negligence.

122
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

DISTRIBUTION UTILITIES ARE PUBLIC UTILITIES VESTED WITH PUBLIC INTEREST,

AND THUS, ARE HELD TO A HIGHER DEGREE OF DILIGENCE

Manila Electric Co. et.al. vs. Nordec Philippines and/or Marvex Industrial Corp.
G.R. No. 196020; April 18, 2018
Leonen, J.

FACTS:
Two petitions for review on Certiorari under Rule 45 from both parties, Manila Electric Co.
(Meralco) and Nordec Philippines (Nordec) assail the awards granted by the CA in its decision
finding negligence on the part of Meralco. Nordec is the new owner of Marvex Industrial
Corporation (Marvex).

Meralco contracted to supply electricity to Marvex and installed electric metering devices
on January 1985. Thereafter, Meralco service inspectors found there has been tampering in
Marvex’s electric facilities. Meralco assessed Marvex a differential billing, sent some demand
letters, and disconnected the electric service when Marvex was unable to pay. Nordec sued for
damages and a writ of preliminary injunction was issued in its favor. Then, Meralco conducted
another inspection in the presence of Nordec’s president and observed that the metering devices
continued to register power consumption even though the entire building’s equipment power supply
was turned off.

Meralco and Nordec accused each other of tampering. Meralco argues that it is not
negligent in discovering the tampering four months after it was installed because it is only required
to discover the tampering once every two years under CA No. 349, and that the inspections did
not require the consent of the customer under PD No. 401. On the other hand, Nordec argues that
CA No. 349 applies to Standardizing Meter Laboratory and not to distribution utilities themselves,
that Meralco inspected its premises without its consent, and that the electric supply was
disconnected without prior notice.

ISSUE:
Did Meralco comply with proper procedures before disconnecting the electric supply?

RULING:
No, and Meralco was in fact negligent in performing its duties.

As held in Ridjo Tape & Chemical Corp. v. CA, public utilities such as Meralco have the
duty to make reasonable and proper inspection of its apparatus and equipment, and the due
diligence to discover and repair tampering. Failure to perform such duties constitute negligence
and risk forfeiting the amount due from their customers. Notice of a defect may be constructive
when it has conspicuously existed for a considerable length of time.

Further, contrary to Meralco's claim, the duty imposed upon it pursuant to Ridjo is not
beyond the standard of care imposed by law. Distribution utilities are public utilities vested with
public interest, and thus, are held to a higher degree of diligence. Should a distribution utility not
exercise the standard of care required of it due to its negligence in the inspection and repair of its
apparatus, then it can no longer recover the amounts of allegedly used but uncharged electricity.

Meralco is also duty-bound to explain the basis for its billings, especially when these are
for unregistered consumption, to prevent consumers from being solely at its mercy. Here, the
Power Field Orders given to Nordec following the inspections did not mention the alleged defects
that were discovered. Nordec's request for recomputation of the alleged unregistered electric bill
was still pending when its electric supply was disconnected on December 18, 1986. Finally, as
found by the Court of Appeals, Meralco also failed to comply with the 48-hour disconnection notice
rule. Thus, the Court granted Nordec the reimbursement representing overbilling.

123
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

FACTUAL FINDINGS SUPPORTED BY SUBSTANTIAL EVIDENCE ARE SUFFICIENT TO

ESTABLISH CONTRIBUTORY NEGLIGENCE

F.F. Cruz & Co., Inc. vs. Philippine Iron Construction and Marine Works, Inc.
G.R. Nos. 188144 & 188301; August 30, 2017
Jardeleza, J.

FACTS:
These are consolidated petitions for review on certiorari challenging the of the CA which
held that Ancho Metals Corporation (AMC) is liable to pay F.F. Cruz and Company (F.F. Cruz) for
the damage caused by AMC's vessels to the barges owned by F.F. Cruz, but mitigated the former's
liability due to F.F. Cruz's contributory negligence.

On November 4, 1988, tugboat M/T "Jasaan" docked at Brooke's Point for the purpose of
towing Barge "Florida". AMC owned Florida and leased Jasaan from Philippine Iron Construction
& Marine Works, Inc. (PICMW) through a bareboat charter agreement. In the evening of November
4, 1988, typhoon “Welpring” hit Brooke's Point. F.F. Cruz's Barges 609 and Pilipino sank, while
Barge 1001 collided with the driven piles at the construction site. That same evening, Jasaan
towed Florida to a safer place because the latter's anchor line was cut off. In the process, however,
the rudder cable snapped and both Jasaan and Florida drifted towards the seashore. The following
day, the master of Imma, Antonio Bundal filed a marine protest alleging that Jasaan and Florida
were responsible for the damage to F.F. Cruz's vessels and the driven piles. He alleged that there
was an allision between Jasaan and Barge 1001, which caused the latter to hit the driven piles. In
tum, Florida bumped Barge 609 causing the latter to eventually sink. Pilipino likewise hit the
concrete piles as a result of the allision.

F.F. Cruz filed a complaint for damages with RTC against both AMC and PICMW. The
RTC ordered AMC and PICMW to pay solidarily F.F. Cruz. CA affirmed RTC’s decision. Hence
this petition: F.F. Cruz contests the finding that it was guilty of contributory negligence while AMC
questions its liability for actual damages.

ISSUE:
Was F.F. Cruz guilty of contributory negligence for failing to properly secure Barge 609
and Barge 1001 at the time of the typhoon and letting these vessels be very near the driven piles?

RULING:
Yes. F.F. Cruz was guilty of contributory negligence.

The CA relied on the factual findings set forth in the Board of Marine Inquiry (BMI) report
that it appears that Barge 609 and Barge 1001 were not individually or separately well secured at
the time the strong typhoon "Welpring" was hitting the area of Palawan particularly Brooke’s Point;
that the F.F. Cruz's vessels were located very near the driven piles of Brooke's Point Pier under
construction by F.F. Cruz & Co. The crew did not move the barges to keep away from the driven
concrete piles to avoid the unfinished pier from being hit by their vessels in case the anchors
dragged, or the mooring lines are cut off at the height of the typhoon. When the fore-end mooring
lines of the barges were cut off or dragged because of the strong winds and big waves, the vessels
bumped/rammed the driven piles of the unfinished pier thus damaging their hulls resulting to the
sinking of Barge 609 and Pilipino. Because of the ramming/bumping/smashing by the F.F. Cruz's
vessels, the driven piles that were hit were destroyed and/or had fallen down mercilessly.

In finding that F.F. Cruz was negligent, the BMI clearly identified the evidentiary basis in
support of its conclusion. The CA cannot thus be faulted for relying on the BMI's factual findings to
support its own conclusion that F.F. Cruz was guilty of contributory negligence because such
findings are supported by substantial evidence.

124
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

VIOLATION OF MUNICIPAL ORDINANCE IS NOT CONTRIBUTORY NEGLIGENCE IN

THE ABSENCE OF CAUSAL LINK BETWEEN THE NEGLIGENCE AND THE INJURY

Al Dela Cruz vs. Captain Renato Octaviano

G.R. No. 219649; July 26, 2017
Peralta, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court of petitioner
Al Dela Cruz seeking to reverse and set aside the Decision of the CA reversing the Decision of the
RTC which held that liability rests on the tricycle driver who drove without license.

Respondent Wilma and Janet were inside the sidecar of the vehicle, while Captain Renato
Octaviano rode at the back of the tricycle driver. The car, driven by petitioner, hit the back portion
of the tricycle where Renato was riding. Thus, Renato was thrown from the tricycle and landed on
the gutter about two meters away. They pulled Renato out of the gutter and carried him to the car.
Renato, his mother, and Janet were brought to Perpetual Help Medical Center where Renato's leg
was amputated from below the knee on that same night. He also suffered bone infection and was
operated on thrice for bone infection. Renato spent a total of P623,268.00 for his medical bills and
prosthetics and now claims for damages.

The RTC dismissed the claim of respondents. The RTC ruled that petitioner did everything
that was expected of a cautious driver. The CA reversed the RTC's decision stating petitioner was
negligent because as shown in the police report, petitioner was positive for alcoholic breath, thus,
he violated Republic Act No. 4136 that prohibits any person from driving a motor vehicle while
under the influence of alcohol or narcotic drug. Petitioner imputes contributory negligence on the
part of the tricycle driver and respondent Renato when the latter had violated a municipal ordinance
that limits the number of passengers for each tricycle for hire to three persons including the driver.

ISSUE:
Will the violation of a municipal ordinance constitute contributory negligence that would
exculpate a tortfeasor from liability?

RULING:
No, it is not correct to impute contributory negligence on the part of the tricycle driver and
respondent Renato when the latter had violated a municipal ordinance that limits the number of
passengers for each tricycle for hire to three persons including the driver.

Contributory negligence is conduct on the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls below the standard to which he is required to
conform for his own protection. To hold a person as having contributed to his injuries, it must be
shown that he performed an act that brought about his injuries in disregard of warning or signs of
an impending danger to health and body. To prove contributory negligence, it is still necessary to
establish a causal link, although not proximate, between the negligence of the party and the
succeeding injury. In a legal sense, negligence is contributory only when it contributes proximately
to the injury, and not simply a condition for its occurrence.

In this case, the causal link between the alleged negligence of the tricycle driver and
respondent Renato was not established. This court has appreciated that negligence per se, arising
from the mere violation of a traffic statute, need not be sufficient in itself in establishing liability for
damages.

125
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

DAMAGES MAY BE AWARDED FOR FAILURE TO COMPLY WITH CONTRACTUAL

OBLIGATIONS

Teresa Gutierrez Yamauchi vs. Romeo F. Suñiga

G.R. No. 199513; April 18, 2018
Martires, J.

FACTS:
This is a petition for review on Certiorari contesting the CA’s reduction and deletion of the
award for damages.

A contract for the renovation of Teresa Yamauichi’s house was entered into between
Yamauchi and defendant Romeo Suñiga. However, after some time, the renovation was
suspended due to a misunderstanding with respect to the terms of the agreement particularly the
changes on the subject house and the cost of the renovation. As there is a substantial breach of
the contractual obligation, Yamauchi alleged that she is entitled to the rescission of the contract,
plus award of damages and attorney's fees. On his part, Suñiga argued that he is the one who is
entitled to rescission and to the payment of the unpaid obligation.

The RTC ruled for the rescission of the contract and the award of actual, moral and
exemplary damages in favor of Yamauchi. On appeal, the CA modified the decision of the RTC as
to the award of damages and ruled that in rescission, both parties should be placed in their original
situation thus ordering return of the entire amount paid by Yamauchi. Hence, this petition.

ISSUE:
Does the failure to comply with an obligation entitle a person to an award of damages?

RULING:
Yes, failure to comply with contractual obligations entitles a person for an award of
damages.

Actual or compensatory damages are those damages which the injured party is entitled to
recover for the wrong done and injuries received when none were intended. These are
compensation for an injury and will supposedly put the injured party in the position in which he was
before he was injured. Nonetheless, in the absence of competent proof on the amount of actual
damages suffered, a party is entitled to temperate damages. The amount of loss of Yamauchi
cannot be proved with certainty, but the fact that there has been loss on her part was established.
Thus, the Court find it proper to award temperate damages in lieu of actual or compensatory
damages.

With regard to moral damages, this type of damages is recoverable only if the party from
whom it is claimed has acted fraudulently or in bad faith or in wanton disregard of his contractual
obligations. In the case at bar, Suñiga acted in bad faith when he misrepresented himself to be a
licensed architect and bloated the figures of the renovation expenses. Gathered from the records
is Suñiga's admission that he never took the licensure exam for architects, yet he signed
documents pertaining to the renovation as if he was an architect.

Exemplary damages are also granted in favor of Yamauchi to set an example to contractors
like Suñiga who deal with the general public. Exemplary damages are given to serve as a warning
to the public and as a deterrent against the repetition of this kind of underhanded actions.

126
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

LIQUIDATED DAMAGES MAY BE REDUCED IF FOUND INIQUITOUS OR

UNCONSCIONABLE

Ka Kuen Chua vs. Colorite Marketing Corp.

G.R. Nos. 193969-70 & 194027-28; July 5, 2017
Reyes, J.

FACTS:
These are consolidated petitions for review on Certiorari assailing the Decision and
Resolution of the Court of Appeals (CA) which affirmed with modifications the Final Award of the
Construction Industry Arbitration Commission (CIAC).

Respondent Colorite Marketing Corporation (Colorite) and Petitioner Ka Kuen Chua

Architectural (KKCA) signed a construction contract where KKCA will build a 4 storey
residential/commercial building for Colorite on a parcel of land in Makati City. Colorite engaged
the services of WE Construction Company (WCC) to undertake excavation work. However, on
January 17, 2004, the excavation resulted in erosion, which caused damage to the adjacent
property owned by the Hontiveros family. After 878 days of delay, Colorite demanded that KKCA
pay the damages pursuant to the contract. KKCA refused because the completion period was
suspended due to the hold order issued by the City of Makati and the failure of Colorite to pay its
share in the soil protection and restoration costs of the Hontiveros property.

Colorite filed a claim for damages before the CIAC alleging that KKCA is liable for
liquidated damages for P8,780,000 plus P10,000 per additional day of delay until the project is
completed. The CIAC rendered its decision awarding Colorite 50% of the liquidated damages for
being equally responsible for the delay. Both parties filed their respective petitions for review
before the CA which thereafter affirmed the CIAC’s final award.

ISSUE:
Was the KKCA liable for liquidated damages in case of delay as stipulated in their contract
and may the same be reduced if found iniquitous or unconscionable?

HELD:
Yes to both. Article 2226 of the Civil Code allows the parties to a contract to stipulate on
liquidated damages to be paid in case of breach. It is attached to an obligation in order to insure
performance and has a double function: (1) to provide for liquidated damages; and (2) to
strengthen the coercive force of the obligation by the threat of greater responsibility in the event
of breach.

The fact that Article V, paragraph (a) of the construction contract provides that the
stipulated liquidated damages was not meant to penalize the contractor for the delay, but in order
to compensate the owner for the loss it may suffer brought about by the delay is inconsequential;
it does not operate to remove the stipulation's character as a penal clause. Neither does it require
that the loss suffered be proved. "Liquidated damages are identical to penalty, so far as legal
results are concerned. In either case, the injured party need not prove the damages suffered by
him." Applying the stipulated daily rate, the totality of recoverable liquidated damages shall
amount to more than a staggering Php 43,800,000.00, which sum even surpasses the total
contract price. This cannot be decreed without running afoul of the spirit and express letters of
the law. Under Article 2227 of the Civil Code, liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable.
Moreover, the fact that KKCA was not able to perform substantial amount of work on the project
is immaterial because it is also expressly provided under Article 1229 of the Civil Code that, "even
if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous
or unconscionable."

Thus, the amount of liquidated damages is reduced to Php 4,210,000.00.

127
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

IN CONTRACTS AND QUASI-CONTRACTS, THE COURT HAS NO DISCRETION TO

AWARD EXEMPLARY DAMAGES IF THE DEFENDANT DID NOT ACT IN A WANTON,
FRAUDULENT, RECKLESS, OPPRESSIVE, OR MALEVOLENT MANNER

Jose T. Ong Bun vs. Bank of the Philippine Islands

G.R. No. 212362; March 14, 2018
Peralta, J.

FACTS:
This is a petition for Review on Certiorari under Rule 45 where petitioner Jose T. Ong Bun
seeks to reverse and set aside CA’s decision dismissing petitioner's complaint for collection of sum
of money and damages against respondent Bank of the Philippine Islands (BPI).

Ma. Lourdes Ong, the wife of petitioner, purchased three (3) silver custodian certificates
(CC) in the Spouses' name from the Far East Bank & Trust Company (FEBTC). The three CCs
have common provisions, 1) that the instrument is transferable only in the books of the Custodian
by the holder 2) The Holder hereof or transferee can withdraw at any time during office hours
his/her Silver Certificate of Deposit herein held in custody and 3) This instrument shall not be valid
unless duly signed by the authorized signatories of the Bank and shall cease to have force and
effect upon payment under the terms hereof.

FEBTC merged with BPI after about eleven years since the said CCs were purchased.
After the death of Ma. Lourdes Ong in December 2002, petitioner discovered that the three CCs
bought from FEBTC were still in the safety vault of his deceased wife and were not surrendered to
FEBTC.

Petitioner argued that he is entitled to the collection of sum of money as he is a valid

custodian of the CCs. BPI contends that upon its merger with FEBTC in 2000, there were no Silver
Certificates of Deposit outstanding, which meant that the certificates were fully paid on their
respective participation's maturity dates which did not go beyond 1991. Thus, petitioner, with the
assistance of counsel, made a final demand in writing for the payment of the certificates and
exemplary damages claiming that the respondent bank acted fraudulently.

ISSUE:
Does the Court have discretion in awarding exemplary damages if the defendant bank
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner?

RULING:
Yes. Courts have discretion in awarding exemplary damages if the defendant bank acted in
a wanton, fraudulent, reckless, oppressive or malevolent manner.

The award of moral and exemplary damages, however, must be deleted for failure of
petitioner to show that respondent was in bad faith or acted in any wanton, fraudulent, reckless,
oppressive or malevolent manner in its dealings with petitioner. "The person claiming moral
damages must prove the existence of bad faith by clear and convincing evidence for the law always
presumes good faith.

In this case, it appears that respondent had an honest belief that before its merger with
FEBTC, the subject CCs were already paid and cleared from its books, hence, belying any claim
that it acted in any manner that would warrant the grant of moral and exemplary damages to the
petitioner.

Hence, Petitioner Ong Bun is not entitled to exemplary damages.

128
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

CASES WHEN MORAL DAMAGES MAY BE AWARDED ARE SPECIFICALLY PROVIDED

UNDER THE LAW

Coca-Cola Bottlers Phils., Inc. vs. Meñez

G.R. No. 209906; November 22, 2017
Caguioa, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision of the CA and the Resolution denying the motion for reconsideration filed by petitioner,
Coca-Cola Bottlers Phils., Inc. (CCBPI).

Research scientist Ernani Guingona Meñez was a frequent customer of Rosante Bar and
Restaurant Rosante of Dumaguete City. On March 28, 1995, at about 3:00 o'clock in the afternoon,
Meñez went to Rosante and ordered two (2) bottles of beer. Thereafter, he ordered pizza and a
bottle of "Sprite". Meñez then took a bite of pizza and drank from the straw the contents of the
Sprite bottle. He noticed that the taste of the softdrink was not one of Sprite but of a different
substance repulsive to taste. The substance smelled of kerosene. He then felt a burning sensation
in his throat and stomach and could not control the urge to vomit. He left his table for the toilet to
vomit but was unable to reach the toilet room. Instead, he vomited on the lavatory found
immediately outside the said toilet. All the waitresses confirmed that the bottle smelled of kerosene
and not of Sprite.

Respondent Menez filed a complaint for damages. In answer to the complaint filed, CCBPI
and Rosante set out their own version of facts. Rosante alleged that Meñez was heard to have
only felt nausea but did not vomit when he went to the comfort room. Rosante further denied that
the waitresses confirmed the content of the bottle to be kerosene. In fact, Meñez refused to have
the waitresses smell it. CCBPI interposed that a perusal of the complaint revealed that there are
no allegation therein which states that CCBPI uses noxious or harmful substance in the
manufacture of its products. What the complaint repeatedly stated is that the bottle with the name
SPRITE on it contained a substance which was later identified as pure kerosene.

ISSUE:
Was respondent entitled to moral damages even if his ground did not fall under Articles
2219 and 2220 of the Civil Code?

RULING:
No. The cases when moral damages may be awarded are specific. Unless the case falls
under the enumeration as provided in Article 2219, which is exclusive, and Article 2220 of the Civil
Code, moral damages may not be awarded.

Apparently, the only ground which could sustain an award of moral damages in favor of
Meñez and against CCBPI is Article 2219 (2) — quasi-delict under Article 2187 causing physical
injuries. Unfortunately, Meñez has not presented competent, credible and preponderant evidence
to prove that he suffered physical injuries when he allegedly ingested kerosene from the "Sprite"
bottle in question. Nowhere in the CA Decision is the physical injury of Meñez discussed. The
statements of the doctors who tended to the medical needs of Meñez were equivocal. "Physical
effects on the body" and "adverse effect on his body" are not very clear and definite as to whether
or not Meñez suffered physical injuries and if these statements indicate that he did, what their
nature was or how extensive they were.

Consequently, in the absence of sufficient evidence on physical injuries that Meñez

sustained, he is not entitled to moral damages.

129
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

MORAL DAMAGES, AS A GENERAL RULE, ARE NOT RECOVERABLE IN ACTION FOR

BREACH OF CONTRACT

Spouses Estrada vs. Philippine Rabbit Bus Lines, Inc.

G.R. No.203902; July 19, 2017
Del Castillo, J.

FACTS:
This Petition for Review on Certiorari assails the Decision and Resolution of the CA, which
partially granted the appeal filed therewith by respondent Philippine Rabbit Bus Lines, Inc. and
denied petitioners spouses Dionisio C. Estrada and Jovita R. Estrada's motion for reconsideration
thereto.

On April 9, 2002, a passenger bus owned by Philippine Rabbit Bus, Lines, Inc. had a
collision with another vehicle along the national highway in Barangay Alipangpang, Pozorrubio,
Pangasinan. Dionisio Estrada was a passenger of the said bus, and due to the accident, his right
arm was amputated. Petitioner sued respondent and its driver Eduardo Saylan for damages before
the RTC of Urdaneta City, Pangasinan. Dionisio argued that pursuant to the contract of carriage
between him and Philippine Rabbit, respondents were duty-bound to carry him safely from the
point of his origin in Urdaneta City to his destination in Pugo, La Union. However, through the fault
and negligence of Philippine Rabbit's driver, Eduardo, and without human care, foresight, and due
regard for all circumstances, respondents failed to transport him safely by reason of the
aforementioned collision, which resulted in the amputation of Dionisio's right arm.

Petitioner raised the issue before the SC, stating that their claim for moral damages is
based purely on the fact that Dionisio lost his right arm. They argue that while in a strict sense,
Dionisio incurred actual damages through the amputation of his right arm, such loss may rightly be
considered as falling under moral damages. This is because a right arm is beyond the commerce
of man and loss thereof necessarily brings physical suffering, mental anguish, besmirched
reputation, social humiliation and similar injury to a person.

ISSUE:
Should the petitioner’s claim of moral damages be granted on the ground that Dionisio lost
his right arm by reason of the accident?

RULING:
No. Under Article 2219 of the Civil Code, moral damages are recoverable in the following
and analogous cases: (1) a criminal offense resulting in physical injuries; (2) quasi-delicts causing
physical injuries; (3) seduction, abduction, rape or other lascivious acts; (4) adultery or
concubinage; (5) illegal or arbitrary detention or arrest; (6) illegal search; (7) libel, slander, or any
other form of defamation; (8) malicious prosecution; (9) acts mentioned in Article 309; and (10)
acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

Since breach of contract is not one of the items enumerated under Article 2219, moral
damages, as a general rule, are not recoverable in actions for damages predicated on breach of
contract like in this case since Dionisio did not die in the mishap but merely suffered an injury. As
an exception, such damages are recoverable in an action for breach of contract: (1) in cases in
which the mishap results in the death of a passenger; and (2) in cases in which the carrier is guilty
of fraud or bad faith.

In this case, the fraud or bad faith that must be convincingly proved by petitioners should
be one which was committed by Philippine Rabbit in breaching its contract of carriage with Dionisio.
Unfortunately, the Court finds no persuasive proof of such fraud or bad faith.

130
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

BAD FAITH OR FRAUD IS NECESSARY IN CLAIMING MORAL DAMAGES IN BREACH

OF CONTRACT OF CARRIAGE

Judith and Joyce Darines vs. Eduardo Quinones and Rolando Quitan
G.R. No. 206468; August 2, 2017
Del Castillo, J.

FACTS:
This Petition for Review on Certiorari assails the Decision of the CA which reversed and
set aside the Decision of the RTC of Baguio City, in a Civil Case for "Breach of Contract of Carriage
& Damages."

Judith and Joyce are mother and daughter who boarded Amianan Bus Line, going from
Carmen, Rosales, Pangasinan, to Baguio City. The bus crashed into a parked truck on the
shoulder of Kennon Road. Both vehicles were damaged, and petitioners were injured. Petitioners
argue that respondents breached their contract of carriage for failure to bring them safely to their
destination and that the bus driver Quitan was reckless and negligent, causing the collision.
Respondents countered that Quitan was driving at a moderate speed, and the proximate cause of
the accident was the negligence of the truck driver, Fernandez who was parked at roadside right
after the curve without any early warning device. Additionally, Quiñones claimed to have observed
due diligence in the selection and supervision of Quitan by conducting seminars on road safety
measures.

Judith failed to report for two months and presented receipts for medicine, expenses for
the dao-is ritual, a tribal ritual in their tribe when a member meets an accident and is released from
the hospital, to prove actual damages. She also claimed moral damages for sleepless nights.
Respondents testified that through Benitez, they bought petitioners’ medicines and paid for their
hospital expenses, shown by receipts.

The RTC ruled to pay petitioners moral and exemplary damages, plus attorney’s fees and
appearance fees. No actual damages for lack of proof of such expenses. The CA deleted moral
damages for failure to prove fraud and bad faith, as shown by the fact that respondents paid for
petitioners’ hospitalization. Since no moral damages are awarded, no exemplary damages too,
and consequently, attorney’s fees must be deleted.

ISSUE:
Were petitioners entitled to moral damages despite not imputing fraud or bad faith against
the respondents?

RULING:
No. The principle is that, in an action for breach of contract of carriage, moral damages
may be awarded only in case (1) an accident results in the death of a passenger; or (2) the carrier
is guilty of fraud or bad faith, pursuant to Article 1764 in relation to Article 2206(3) of the Civil Code
and Article 2220 thereof. Neither of these circumstances were present in the case at bar.

Here, petitioners impute negligence on the part of respondents when, as paying

passengers, they sustained injuries when the bus owned and operated by respondent Quifiones,
and driven by respondent Quitan, collided with another vehicle. Petitioners propounded on the
negligence of respondents but did not discuss or impute fraud or bad faith, or such gross
negligence which would amount to bad faith, against respondents.

There being neither allegation nor proof that respondents acted in fraud or in bad faith in
performing their duties arising from their contract of carriage, they are then not liable for moral
damages.

131
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

LACK OF DOCUMENTARY EVIDENCE NOT FATAL TO A CLAIM FOR LOSS OF

EARNING CAPACITY

Vivian B. Torreon and Felomina F. Abellana vs. Generoso Aparra, Jr, et al.
G.R. No. 188493; December 13, 2017
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of petitioner
Vivian B. Torreon (Vivian) praying that an award of actual or compensatory damages for loss of
earning capacity be granted, among others.

Vivian's husband, Rodolfo Torreon, and daughters, Monalisa and Johanna Ava, arrived
with Felomina Abellana at the municipal wharf of Jetafe, Bohol. A cargo truck owned by Simolde
entered the wharf. Rodolfo, Monalisa, Johanna, and Abellana boarded it. Abellana was seated in
front, while Rodolfo and his daughters were with the rest of the passengers at the back of the truck.
Felix Caballes was the official truck driver but Generoso Aparra, Jr., Simolde's chief diesel
mechanic, started driving the truck. Aparra lost control of the truck and they fell off the wharf.
Rodolfo and Monalisa died while Johanna and Abellana were injured. Vivian and Abellana filed a
separate complaint for damages against Simolde, Caballes, and Aparra. Abellana testified that
Rodolfo was the General Manager of her businesses in Butuan City. As manager, Rodolfo was in
charge of three (3) drugstores, an apartment, and rice fields. He was earning a basic salary of
P10,000.00 and received a 20% commission on the profit of the businesses, thus, earning more
or less P15,000.00. Abellana claimed that she could not present her accounting books to the court
because she had already disposed of them.

The RTC ruled in favor of petitioners. The CA affirmed the decision of the RTC but deleted
the award of actual damages for Rodolfo's loss of earning capacity reasoning that documentary
evidence should be presented to substantiate the same. Petitioner Vivian argues that the CA
gravely erred in deleting the compensatory damages awarded for Rodolfo's loss of earning
capacity. She posits that Abellana's testimony is enough to prove Rodolfo's income. As Rodolfo's
employer, Abellana had direct and personal knowledge of the compensation that he was receiving
prior to his death; thus, she is qualified to testify on his income.

ISSUE:
Can actual damages for loss of earning capacity be awarded based on testimonial
evidence in the absence of documentary evidence?

RULING:
Yes. Nothing in the Rules of Court requires that only documentary evidence is allowed in
civil cases. All that is required is the satisfaction of the quantum of evidence, that is, preponderance
of evidence. In addition, the Civil Code does not prohibit a claim for loss of earning capacity on the
basis that it is not proven by documentary evidence.

Testimonial evidence, if not questioned for credibility, bears the same weight as
documentary evidence. Testimonies given by the deceased's spouse, parent, or child should be
given weight because these individuals are presumed to know the income of their spouse, child,
or parent. If the amount of income testified to seem incredible or unrealistic, the defense could
always raise their objections and discredit the witness or, better yet, present evidence that would
outweigh the evidence of the prosecution.

Thus, using the formula [2/3 x 80 - age] x [gross annual income - necessary expenses
equivalent to 50% of the gross annual income], respondents are liable to pay P1,919,700.00 to
compensate for the income Rodolfo's heirs would have received had he lived.

132
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

THE VALIDITY OR THE INVALIDITY OF FREE PATENTS IS A MATTER BETWEEN THE

GRANTEE AND THE GOVERNMENT

Francisco Taar, et.al. vs. Claudio Lawan, Marcelino Galo, et.al.

G.R. No.190922; October 11,2017
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari assailing the Decision of the CA dismissing the
case for being an inappropriate remedy to annul the resolution of the Office of the President.

Narcisa, Alipio, Fortunata, and Pantaleon inherited two (2) tracts of land. Narcisa sold her
share to Adaoag Spouses and Gragasin Spouses. Later, Pantaleon, Alipio, Fortunata, Adaoag
Spouses, and Gragasin Spouses agreed to partition the second parcel of land. Petitioners
Francisco Taar et.al. prepared a subdivision plan over the property which was approved and then
applied for free patents over the property. Private respondents Claudio Lawan et.al. filed a verified
protest alleging that their predecessors-in-interest had been in actual, physical, exclusive and
notorious possession and occupation of the land since 1948. DENR Region III Director Leonardo
Sibbaluca found that private respondents were the actual occupants of the Property; thus, he
ordered the cancellation of the Subdivision Plan and denied petitioners free patent applications.
Later that year, private respondents filed their free patent applications before the Tarlac CENRO
which was approved; thus, free patents and certificate of title were issued in their favor.

Petitioners filed before the DENR Secretary a Petition to annul Sibbaluca's Order on the
ground of extrinsic fraud and to cancel private respondents' free patents and certificates of title.
DENR Secretary Reyes granted the petition. The office of the President reversed Secretary Reyes’
decision and reinstated Director’s Sibbaluca’s. Petitioners filed a petition for Certiorari against
private respondents and executive secretary Ermita before the CA. CA dismissed the said petition.

ISSUE:
Should the private respondents’ free patents and certificate of title be cancelled on the
ground of extrinsic fraud?

RULING:
No, private respondents’ free patent should not be cancelled as the petitioners failed to
substantiate their claims.

Only extrinsic fraud may be raised as a ground to "review or reopen a decree of

registration." It refers to that type of fraud that "is employed to deprive parties of their day in court
and thus prevent them from asserting their right to the property.”

Here, petitioners failed to substantiate their claims by failing to establish the circumstances
constituting them. They could have pointed to irregularities during the proceedings to prove that
the issuance of the free patents was not made in accordance with the Public Land Act. Also,
petitioners are not the proper parties to bring an action for the cancellation of free patents and
certificates of title. The validity or the invalidity of free patents granted by the government and the
corresponding certificates of title is a matter between the grantee and the government. Private
persons may not bring an action for reversion or any action which would have the effect of
canceling a land patent and the corresponding certificate of title issued on the basis of the patent,
such that the land covered thereby ·will again form part of the public domain. Only the OSG or the
officer acting in his stead may do so. Since the title originated from a grant by the government, its

133
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

cancellation is a matter between the grantor and the grantee.

Thus, even assuming that there was extrinsic fraud, the petition must still be denied.

CERTIFICATE OF LAND TRANSFER IS NOT A MUNIMENT OF TITLE THAT VESTS

UPON THE FARMER/GRANTEE ABSOLUTE OWNERSHIP

Regino Dela Cruz vs. Ireneo Domingo, Maro, Quezon, Nueva Ecija and Register of Deeds North,
Talavera, Nueva Ecija
G.R No. 210592; November 22, 2017
Del Castillo, J.

FACTS:
This is a petition for Review on Certiorari of the Decision and Resolution of the CA
dismissing the Petition for Review in the CA on the ground of forum shopping.

Respondent Ireneo Domingo is the registered owner of a parcel of land covered by

Transfer Certificates of Title EP-82013 and EP-82015. Domingo filed three cases for recovery of
possession against Dela Cruz claiming that petitioner’s possession was by mere tolerance and the
latter refused to vacate the same even after the demand and mediation before the Barangay
Agrarian Reform Committee. In a consolidated decision, Department of Agrarian Reform
Adjudication Board (DARAB) ordered petitioner to vacate the land. Petitioner then filed a motion
for reconsideration. Without awaiting the resolution of said motion, petitioner filed a case for the
annulment of TCT EP-82013 and EP-82015 alleging that Domingo sold his lands to Fernando; that
Fernando sold the same to him as evidenced by the Certificate of Land Transfer (CLT) No.
0401815 and Domingo could not have been a valid beneficiary of the said lands, since he was
physically disabled since birth.

DARAB Provincial Board Adjudicator held that Dela Cruz merely holds a certificate of land
transfer covering the subject lands, which does not grant ownership and Domingo’s disability, does
not disqualify him from becoming a farmer beneficiary under agrarian laws. DARAB affirmed the
decision of DARAB Provincial Board Adjudicator. Petitioner then filed a Petition for Review.

ISSUE:
Did the petitioner acquire ownership over the subject land by virtue of the Certificate of
land transfer?

RULING:
No. A certificate of land transfer does not vest ownership in the holder thereof.

A certificate of land transfer merely evinces that the grantee thereof is qualified to avail of
the statutory mechanisms for the acquisition of ownership of the land tilled by him as provided
under Pres. Decree No. 27. It is not a muniment of title that vests upon the farmer/grantee absolute
ownership of his tillage. On the other hand, an emancipation patent, while it presupposes that the
grantee thereof shall have already complied with all the requirements prescribed under Presidential
Decree No. 27, serves as a basis for the issuance of a transfer certificate of title. It is the issuance
of this emancipation patent that conclusively entitles the farmer/grantee of the rights of absolute
ownership.

Dela Cruz was not issued an Emancipation Patent (EP) over the subject property; he only
has CLT 0401815. On the other hand, Domingo was issued EPs over the same property, after
which transfer certificates of title, TCT EP-82013 and TCT EP- 82015, were issued to him. Between
the two of them, Domingo is deemed the owner of the subject lands, and Dela Cruz has no valid
claim. For this reason alone, it is clear that Dela Cruz has no cause of action against Domingo. His
claim of ownership, which is the sole foundation for his case in DARAB Case No. 372, has fallen.

134
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

AN MPSA APPLICATION SHALL BE DENIED THE MOMENT AN APPLICANT FAILS TO

COMPLY WITH THE REQUIREMENTS WITHIN THE PRESCRIBED PERIOD

Corazon Liwat-Moya vs. Executive Secretary Eduardo Ermita and

Rapid City Realty & Development Corporation
G.R. No. 191249; March 14, 2018
Martires, J.

FACTS:
This a Petition for Review on Certiorari challenging the decision of the CA, which upheld
the Decision of the Office of the President regarding the application of Ms. Corazon Liwat-Moya
for Mineral Production Sharing Agreement (MPSA).

Petitioner filed an application for Mineral Production Sharing Agreement (MPSA) with the
Mines and Geosciences Bureau (MGB) covering 650 hectares of land located at Loreto, Surigao
del Norte. Petitioner undertook the required publications and alleged that she had substantially
complied with the mandatory documentary requirements of her application for MPSA. MGB sent
notice-letters to petitioner, requiring her to submit additional requirements for her application. The
MGB did not receive any response.

Subsequently, R.A. No. 7942, or the Philippine Mining Act of 1995 was enacted and
pursuant to the preferential rights given under the new law, the DENR issued DENR Memorandum
Order 97-07 providing for deadlines for pending mining applications for MPSA to comply with the
new mandatory requirements under the new law. MGB notified petitioner notifying petitioner of her
failure to submit all mandatory requirements. MGB Director denied petitioner’s application for
MPSA on the ground on noncompliance with pertinent laws, rules and regulations despite due
notice. Consequently, respondent Rapid City Realty & Development Corporation (RCRDC) filed
with the MGB three exploration permit applications covering the area covered by the petitioner’s
application for MPSA. Petitioner then filed a motion for reconsideration of the MGB’s order alleging
that there was improper service of the letters-notice. The DENR Secretary rendered a decision
which reversed and set aside the order of the MGB Director and also directing MGB to set a
schedule for compliance with the mandatory requirements. RCRDC filed an appeal before the
Office of the President, which reversed the decision of DENR Secretary.

ISSUE:
Is petitioner’s failure to submit all the documentary requirements within the deadline
rendered her MPSA application ipso facto cancelled pursuant to DMO No. 97-07 in relation to R.A.
No. 7942?

RULING:
Yes. The rules expressly provided that the application shall be denied the moment an
applicant fails to comply with the requirements within the deadline.

No executive action or pronouncement was even necessary because DMO No. 97-07
already provided the consequence for failure to meet the deadline. Petitioner’s application for
MPSA is deemed to have been automatically denied when the deadline lapsed without her
submission of the pertinent requirements.

Furthermore, it is well-settled that duly published administrative rules and regulations which
implement the law that they have been entrusted to enforce have the force and effect of that law
and are just as binding as if they have been written into the statute. They enjoy the presumption of
regularity and validity until finally declared otherwise by the courts. Their publication serves as
constructive notice to the general public. It appears on record, undisputed, that DMO No. 97-07
was duly published in The Manila Times on 28 August 1997. Thus, petitioner was presumed to
have known that her compliance with certain requirements was mandated within a specific
deadline in order to retain her MPSA application.

135
COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

NO AUTOMATIC ABANDONMENT OF MINING CLAIMS FOR NON-SUBMISSION OF

AFFIDAVIT OF ANNUAL WORK OBLIGATION ALONE

Asiga Mining Corporation vs. Manila Mining Corporation and Basiana Mining
Exploration Corporation
G.R. No. 199081; January 24, 2018
Reyes, Jr., J.

FACTS:
In a Petition for Review on Certiorari under Rule 45 before the SC, Petitioner Asiga Mining
Corporation challenges the decision of the CA and the Mines Adjudication Board (MAB) ruling that
Asiga cannot be considered a holder of valid and existing mining claims.

Petitioner Asiga Mining Corporation (Asiga) was the holder of mining claims over hectares
of land located in Santiago, Agusan del Norte granted by virtue of the Mining Act of 1936. It has
subsequently undergone registration procedures so that its mining claims could be recognized
anew under the Mineral Resources Decree of 1974 and the Mining Act of 1995. Asiga applied with
the Mines and Geosciences Bureau to convert its mining claims into a Mineral Production Sharing
Agreement (MPSA) as required by the Mining Act of 1995. During the application process, Asiga
discovered that its mining claims overlapped with that of respondent Manila Mining Corporation
(MMC) and Basiana Mining corporation (BMEC). MMC and BMEC, as it turned out, applied for
MPSA way earlier than Asiga. (Mines and Geosciences Bureau) MGB-CARAGA rendered a
decision in favor of Asiga. However, the MAB reversed the decision upon appeal of the
respondents.

Aggrieved, Asiga filed a Petition for Review under Rule 43 before the CA. The CA ruled
that Asiga by failing to file an Affidavit of Annual Work Obligation nor to conduct actual work on its
mining claims ever since it was granted a leasehold right over the same, pursuant to Section 27 of
the Mineral Resources Development Decree of 1974, Asiga’s mining claims were deemed
abandoned by operation law.

ISSUE:
Can Asiga be considered to have abandoned its mining claim on the basis of non-
submission of the affidavit of annual work obligations?

RULING:
No. There is no rule of automatic abandonment with respect to mining claims for failure to
file the affidavit of annual work obligations. It is the actual non-compliance of the annual work
obligation for two consecutive years that would become the basis for the declaration of
abandonment of mining claims and not the non-submission of the prof of the compliance- the
affidavit of annual work obligation. Thus, when Section 27 included the phrase “failure of the claim
owner therewith,” the phrase was referring to the actual work obligations required of the claim
owners, and not merely the submission of the proof of the actual work obligations.

If the claim owners or lessees did indeed fail to perform their obligations as required in
Section 27 of the Mineral Resources Development Decree of 1974, as amended, then the
cancellation of their mining claims could only be considered proper upon observance of due
process, which take the form of: (1) a written notice of non-compliance to the claim owners and
lessees and an ample opportunity to comply; and (2) in the event of the claim owners' and lessees'
failure to comply, a written notice effecting the cancellation of their mining claims.

In this case, nothing on record indicates that the foregoing requirements have been
complied with. There were no notices sent to Asiga, which either notified of its non-compliance to
Section 27 or notified it of the cancellation of its mining claims. Thus, on the basis of the foregoing,
it could not be said that the petitioner has abandoned its mining claims over the disputed parcels
of land.

136
 COVERED CASES (JULY 01, 2017 TO JUNE 30, 2018)
ON CIVIL LAW

RESIDENTIAL LANDS ARE NOT COVERED BY THE OLT PROGRAM PURSUANT TO

P.D.27

Victoria P. Cabral vs. Heirs of Florencio Adolfo and Heirs of Elias Policarpio
G.R. No. 191615; August 2, 2017
Tijam, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 assailing the Decision of the CA
reversing the DARAB Decision.

In July 1973, petitioner Victoria Cabral sought to convert her landholdings, which include
not only the subject property but also her lands in Marilao and Meycauayan, to non-agricultural
purposes. In his 2nd Indorsement Letter to the DAR Secretary dated October 1, 1973, DAR District
Officer Fernando Ortega, stated that per the reports of the Agrarian Reform Team, the subject
property was not included in the Operation Land Transfer program under P.D. No. 27, nor has any
portion thereof been transferred to a tenant. Thus, District Officer Ortega recommended the
conversion of the same into residential, commercial, industrial, or other purposes. However, on
April 25, 1988, Emancipation Patents (EPs) were issued to Gregoria Adolfo, Gregorio Lazaro,
Florencio Adolfo, and Elias Policarpio pursuant to the OLT program covering the subject property.

The petitioner’s petition to cancel the EPs issued in favor of the respondents was dismissed
by the DAR Secretary. The Provincial Agrarian Reform Adjudicator (PARAD) reversed DAR
Secretary’s decision. The Department of Agrarian Reform Adjudication Board (DARAB) affirmed
PARAD. But CA reversed DARAB, finding that the subject was never converted into a residential
land.

ISSUE:
Was the subject residential land covered by the OLT program under PD No. 27?

RULING:
No. P.D. No. 27, which implemented the OLT program, covers only tenanted rice or com
lands. The requisites for coverage under the OLT program are the following: (1) the land must be
devoted to rice or corn crops; and (2) there must be a system of share-crop or lease tenancy
obtaining therein. Neither of these requirements are present in this case.

First, the subject property is not covered by the OLT because of its residential nature.
Certifications issued by the zoning administrator attest to the classification of the property as being
within the residential zone. Second, this Court has, time and again, held that occupancy and
cultivation of an agricultural land will not ipso facto make one a de jure tenant. Independent and
concrete evidence is necessary to prove personal cultivation, sharing of harvest, or consent of the
landowner. Tenancy relationship cannot be presumed; the elements for its existence are explicit
in law and cannot be done away by conjectures.

Thus, as petitioner denies such tenancy relationship and it is respondents who assert the
same, the latter has the burden to prove their affirmative allegation of tenancy. Again, the
respondents failed to discharge such burden as there is nothing on record that will provide this
Court factual basis to determine that indeed a crop-sharing agreement exists between the parties.

137
 ABOUTTHEBOOK

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