Sno-Ann M.

Digon
L01
RESWRI UNO-R LAW SCHOOL

July 22, 2009

Case 1
Sps. Tito Alvaro And Maria Valelo Vs. Sps. Osmundo Ternida And Julita Returban
G.R. No. 166183, 20 January 2006
FACTS:
1. On May 26, 1986, Julita mortgaged the land to spouses Salvador de Vera
and Juanita Orinion for P28,000. She signed a mortgage document that
provides Julita with 3 years to repurchase the land from the date of
execution.
2. After a year, Salvador executed a Deed of Transfer of Mortgage in favor of
spouses Jose Calpito and Zoraida Valelo for P32,000. Julita requested
P3,000 additional from Jose Calpito and Zoraida Valelo. Julita signed a
Deed of Sale with Right to Repurchase.
3. On May 22, 1990, Julita asked for an additional P1,000 from Calpito, but
Calpito told her that they transferred the mortgage to Tito Alvaro and
Maria Valelo. Julita asked for P1,000 from Alvaro, and she was asked to
sign a Deed of Absolute Sale whom she thought at that time was a
mortgage document.
4. Julita tried to redeem the property from Alvaro but she was refused.
Alvaro claimed that they purchased the property and were issued a Tax
Declaration No. 2747.9
5. October 1, 1997, Julita filed a complaint for Annulment of Deed of Sale
Documents and Tax Declaration No. 2747 w/ RTC. Trial court dismissed the
complaint for lack of cause of action. Julita filed a motion for
reconsideration but was denied.
6. On appeal, Court of Appeals (CA) reversed the decision of the RTC in
dismissing the case of Julita. CA decided that the Deed of Absolute Sale
dated May 22, 1990 that was signed by Julita in favor of Alvaro must be
construed as an equitable mortgage, giving Julita the right to redeem the
property which would take effect upon payment of their mortgage to
Alvaro.
ISSUES:
1. Did the CA committed an error in law when it declared the transaction
between the parties as equitable mortgage and not an absolute sale;
2. Did the CA committed an error in law when it declared the annulment of
tax declaration 2747 in the names of the petitioners;
3. Did the CA committed an error in law when it failed to apply the
jurisprudential rule laid down in abilla vs. gobonseng, jr., 374 scra 51;
4. Did the CA committed an error in law when it failed to apply the principle of
laches and estoppel;
5. Did the CA committed an error in law when it failed to award damages in
favor of the petitioners.

RULING:
1. The decision of the CA was sustained. The transaction between Julita and
Alvaro in May 22, 1990 was an equitable mortgage and not an absolute
sale.
The Deed of Absolute Sale that Julita signed did not define Julitas
intention of totally conveying the ownership of the property to Alvaro. The
true intention of Julita in the execution of the Deed of Absolute Sale was
not to convey the ownership of the property to Alvaro but merely to
secure the loan obtained by Julita as seen in the circumstances
surrounding the execution and performance of the terms of the contracts
which Julita was made to sign involving the subject property, are
inconsistent with the theory that the property was sold.

Case 2
Manuel B. Aloria Vs. Estrellita B. Clemente
G.R. No. 165644, 28 February 2006
FACTS:
1. Manuel Aloria is a resident of the U.S. since Dec. 1992 and the registered
owner of a parcel of land w/ a 2-storey bldg under TCT 195684.
2. Aloria learned upon his visit to the Philippines that his TCT 195684 was
canceled, and in lieu thereof, Estrellita Clemente was issued TCT C342854
on the basis of Apr. 18, 2000 notarized Deed of Absolute Sale (Exh.D)
purportedly executed by him and respondent.
3. Aloria filed a complaint at the Caloocan Regional Trial Court (RTC) against
Clemente and the Register of Deeds (ROD) for annulment of TCT
C342854, as well for reconveyance, damages, and costs of suit. He
claimed that his signature in Exh. D was falsified, and that he was in the
U.S. during that time.
4. Clemente filed a counterclaim stating that she had nothing to do with
Exh.D and that her signature was also falsified. She claimed that she
bought the property for Alorias parents-in-law, Bernardino Diego &
Melinda Diego via a Mar. 13, 2000 Deed of Absolute Sale (Exh.1). At the
time of the sale, TCT 195684 was in the possession of Diego & they have
a Deed of Absolute Sale (Exh. J) dated Oct. 20, 1994 purportedly
executed by Aloria and his wife in favor of the Diegos. She claimed that it
was Bernardino Diego who represented to her that they did not transfer
the title to their name because they intended to resell it, and that it was
also Bernardino Diego who caused the transfer of title to her name. She
immediately took possession of the property and made improvements
amounting to P800,000. She prayed for the grant of moral damages,
attorneys fees, and other just and equitable reliefs and remedies.
5. The RTC ruled in favor of Aloria, thereby declaring void the cancellation of
TCT 195684 and the issuance of TCT C342854, and ordered the ROD to
issue a new transfer certificate of title in favor of Aloria. It ordered the
reimbursement of of the amount spent by Clemente for the
improvements of the property. It also found Clemente not a purchaser of
good faith.

6. Clemente filed an appeal in the Court of Appeals (CA) on the grounds that
Aloria did not prove in any way that he was at the United States at the
time of the execution of Exh.2 and Exh. D. She stated that Aloria failed to
substantiate his claim that he was in the U.S. and that the Affidavit
General dated Apr.18, 2000 did not prove that Aloria was indeed in the
U.S.
7. On July 26, 2004, the CA reversed the decision of the RTC. CA declared
that the parties are bound by the terms of their written agreements.
ISSUES:
1. Was there a valid transfer of the property to Clemente?
2. Was Clemente a purchaser in good faith?
RULING:
1. The transfer of the property in favor of Clemente was done by means of a
fictitious Deed of Sale, and therefore a valid cause of action for its nullity.
It finds TCT C342854 and Exh. D null and void.
It was ascertained that in comparison of the signatures of Aloria with
those signatures in Exh. D and Exh. J, revealed glaring differences which
affirms that the Deed was forged. The signature of Bernardino Diego in
Exh.1 which transfers the title to Clemente also revealed stark differences
and therefore was forged.
2. Clemente was not a purchaser in good faith. Her signatures were identical
in all of the foregoing documents.
3. Aloria was not made to pay the P400,000 reimbursement due to the
premise that Clemente could have collected the rent of P8,000/month
from 2000 up to the present would suffice to cover the intended
reimbursement.
4. The case was remanded to the RTC and was directed to receive evidence,
with dispatch, only for the purpose of determining the amounts due and
the rights of the parties under Arts. 549, 443 and 546, par. 1, for the
application of Art. 1278 of the Civil Code, and to thereafter immediately
render a complete judgment in the case.