ECE REALTY and DEVELOPMENT, INC., vs. HAYDYN HERNANDEZ, (G.R. No.

212689, August 06, 2014, J. Reyes)

Facts: Respondent filed a complaint for specifi performance with damages against Emir Realty
and petitioner before the HLURB alleging that Emir Realty and petitioner sold to him a 30sqm
condominium unit. Respondent paid the reservation fee of P35k and paid P104k to complete the
downpayment.
In the parties' contract to sell, Emir and petitioner promised that the unit would be ready for
occupancy in 1999 but failed to deliver the unit at said date. By this time, respondent had already
paid P452.6k. Moreover, respondent discovered that the unit only contained 26sqm thus, he
asked for a corresponding reduction of the price. Instead, Emir and petitioner demanded that
respondent settle all his amortizations in arrears with interest. Sometime in 2005, respondent
discovered that Emir and petitioner had sold the unit to a third party. HLURB dropped Emir as
defendant and ordered petitioner to reimburse respondent. OP dismissed petitioner's appeal. CA
affirmed OP decision.
Issue: WON the rescission of the contract to sell and order of refund was proper with legal
interest from filing of the complaint along with the award of moral and exemplary damages and
attorney's fees to respondent. YES.
HELD: Art. 2209, CC: "If the obligation consists in the payment of a sum of money, and the
debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall
be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest,
which is six per cent per annum."
There is no doubt that ECE incurred in delay in delivering the subject condominium unit, for
which reason the trial court was justified in awarding interest to respondent from the filing of his
complaint. There being no stipulation as to interest, under Article 2209 the imposable rate is 6%
by way of damages, following the guidelines laid down in the landmark case of Eastern
Shipping Lines v. CA: The 12% per annum rate under CB Circular No. 416 shall apply only to
loans or forbearance of money, goods, or credits, as well as to judgments involving such loan or
forbearance of money, goods, or credit, while the 6% per annum under Art. 2209, CC applies
"when the transaction involves the payment of indemnities in the concept of damage arising from
the breach or a delay in the performance of obligations in general," with the application of both
rates reckoned "from the time the complaint was filed until the [adjudged] amount is fully paid."
But since July 1, 2013, the rate of 12% per annum from finality of the judgment until satisfaction
has been brought back to 6%. Section 1 of Resolution No. 796 of the Monetary Board of BSP
(May 16, 2013): "The rate of interest for the loan or forbearance of any money, goods or credits
and the rate allowed in judgments, in the absence of an express contract as to such rate of
interest, shall be 6% per annum."

KRYSTLE REALTY DEVELOPMENT CORPORATION vs. DOMINGO ALIBIN(G.R. No.

196117, August 13, 2014,

PERLAS -BERNABE, J.:)

Facts:
Respondent Domingo Alibin (Domingo) owned an undivided one-half portion of Lot No. 1680
(subject lot) situated at Tahao, Legazpi City, Albay, and registered in his name and that of
Mariano Rodrigueza (Mariano) under Original Certificate of Title (OCT) No. 0-206. On the
strength of a contract to sell which was notarized on July 10, 1962 and a Deed of Sale dated
August 23, 1962 purporting to convey Domingos one-half () share of the said lot to Caridad
Rodrigueza (Caridad), as well as a Deed of Absolute Sale dated December 5, 1994 whereby
Mariano and Caridad (the Rodriguezas) transferred their respective rights to the subject lot in
favor of petitioner Krystle Realty Development Corporation (Krystle Realty), the original
certificate of title was cancelled. In lieu thereof, three (3) TCTs were issued all on the same day
of December 5, 1994, as follows: TCT Nos. 40467 and 40468 in the names of the Rodriguezas at
one-half () share each, and TCT No. 40469 in the name of Krystle Realty covering the entire
lot.red
Claiming that he had not sold his share to Caridad nor received any consideration for the alleged
transfer, and that the signature on the deed of sale was not his, Domingo sought to annul the said
deed, as well as TCT Nos. 40467, 40468, and 40469, in Civil Case No. 9033 before the RTC of
Legazpi City, Branch 4. He died, however, during the pendency of the case, and was
consequently substituted by his heirs, herein respondents Beatriz A. Torzar, Virginia A. Taraya,
Rosario A. Marco, Jesus A. Alibin, and Jay Alibin, as substituted by his children, namely: Jaynes
Alibin, Jay Alibin, and Jesus Alibin, Jr. (respondents).ralawred
Caridad, on the other hand, insisted that she had paid Domingo in two (2) installments: 500.00 as
down payment on July 10, 1962, and the balance of P400.00 on August 23, 1962 during which
he signed the Deed of Sale. She then took possession of Domingos one-half () portion of the
subject lot and declared the same for taxation purposes. For its part, Krystle Realty claimed that
it was a purchaser in good faith, and that the action, if at all, should be directed against Caridad.
In addition, it argued that the action of respondents had already prescribed considering that the
questioned deed of sale between Caridad and Domingo was executed on August 23, 1962,
whereas the latters complaint was filed only on February 15, 1995.
On the basis of the said finding, and upon motion of Krystle Realty, the RTC rendered a
Judgment on October 2, 1996 dismissing the case, which prompted Domingo to file apetition
for certiorari before the Court, docketed as G.R. No. 127995. The petition was dismissed,
however, in a Resolution dated April 28, 1997 for non-compliance with certain formal
requirements for its filing. Meanwhile, Domingos appeal, from the aforesaid judgment of the
RTC proceeded, and was decided in his favor by the CA which set aside and remanded the case
to the court a quo for further proceedings. The CA ruled that, even if the question of forgery
was to be considered as already settled, there are other issues of fact and law that should still be
resolved, such as the absence of consideration in the questioned sale, the supposed irregularities
which attended the execution of the deed of sale, and the legality of the issuance of the
certificates of title. Hence, the judgment of the RTC, which could have only been rendered in the
absence of a veritable issue on a material fact, was improper under the circumstances. CA
rendered decision affirming RTC on the ground that respondents were able to establish that the
Deed of Sale was not valid and, hence, should be annulled.

ISSUE: whether or not the CA correctly affirmed the nullification of the Deed of Sale dated
August 23, 1962 and the declaration of Krystle Realty as a purchaser in bad faith.
HELD: As correctly pointed out by the CA, the authenticity of a signature is a matter that is not
so highly technical as to preclude a judge from examining the signature himself and ruling upon
the question of whether the signature on a document is forged or not.The opinion of a
handwriting expert, therefore, does not mandatorily bind the court, the expert's function being to
place before the court data upon which it can form its own opinion.wred
In this case, both the RTC and the CA conducted independent examinations of the specimen
signatures, which is authorized by law, and unanimously concluded that the questioned signature
on the Deed of Sale dated August 23, 1962 is different from the standard signatures of Domingo
as appearing on documents submitted in evidence by petitioner Caridad Rodrigueza. Absent any
cogent reason to deviate from such finding of forgery, which is the basis for the annulment of the
said deed, the same should be deemed conclusive and binding upon the Court.
records show that Krystle Realty proceeded with the transaction without further examining the
sellers title and thus, could not claim to have purchased the subject lot in good faith. Verily, one
is considered a buyer in bad faith not only when he purchases real estate with knowledge of a
defect or lack of title in his seller but also when he has knowledge of facts which should have
alerted him to conduct further inquiry or investigation, as Krystle Realty in this case. Further, the
irregularities attending the issuance of TCT Nos. 40467, 40468, and 40469 as pointed out by the
CA are equally indicative of lack of good faith on Krystle Realtys part. Indeed, what it failed to
realize is that, as one asserting the status of a buyer in good faith and for value, it had the burden
of proving such status, which goes beyond a mere invocation of the ordinary presumption of
good faith.

RCBC v. MaGwin Enterprises

402 SCRA
Facts: RCBC filed a complaint for recovery of sum of money with writ of preliminary attachment against Magwin
and 4 others. The writ was partially satisfied. Petitioner did not cause the case to be set for pre-trial. For about 6
months the parties tried to settle through loan restricting program but only one of the defendants signed the
agreement.
RTC Makati dismissed the case without prejudice for failure to prosecute for unreasonable length of time.
A motion for reconsideration is filed informing the court of the on-going amicable settlement. The judgment was set
aside and the plaintiffs are directed to submit the compromise agreement.
Motion to set the case for pre-trial was filed by petitioner for the failure of the parties to compromise. The trial
court denied the motion. The CA approved the decision and said that the order of trial court setting aside is
dependent on two conditions.
1) Submission of compromise agreement within 15 days, and
2) Failure to submit shall cause the imposition of payment of docket fees for refilling of the case
The CA said that the order of the RTC was been set aside because a party need not pay docket fees for refilling
if the original case is revived.
In the instant case, petitioner maintains that the trial court cannot coerce the parties in Civil Case No. 99-518 to
execute a compromise agreement and penalize their failure to do so by refusing to go forward with the pre-trial
conference. To hold otherwise, so petitioner avers, would violate Art. 2029 of the Civil Code which provides that
[t]he court shall endeavor to persuade the litigants in a civil case to agree upon some fair compromise, and this
Courts ruling in Goldloop Properties, Inc. v. Court of Appeals [23] where it was held that the trial court cannot
dismiss a complaint for failure of the parties to submit a compromise agreement.
On the other hand, respondent Anderson Uy filed his comment after several extensions asserting that there are
no special and important reasons for undertaking this review. He also alleges that petitioners attack is limited to
the Order dated 8 September 2000 as to whether it is conditional as the Court of Appeals so found and the
applicability to this case of the ruling inGoldloop Properties, Inc. v. Court of Appeals. Respondent Uy claims that
the Order reconsidering the dismissal of Civil Case No. 99-518 without prejudice is on its face contingent upon the
submission of the compromise agreement which in the first place was the principal reason of petitioner to justify the
withdrawal of the Order declaring his failure to prosecute the civil case. He further contends that the trial court did
not force the parties in the civil case to execute a compromise agreement, the truth being that it dismissed the
complaint therein for petitioners dereliction.

Held: The petition of Rizal Commercial Banking Corporation is meritorious. It directs our attention to questions of
substance decided by the courts a quo plainly in a way not in accord with applicable precedents as well as the
accepted and usual course of judicial proceedings; it offers special and important reasons that demand the exercise
of our power of supervision and review. Furthermore, petitioners objections to the proceedings below encompass
not only the Order of 8 September 2000 but include the cognate Orders of the trial court of 6 and 16 November
2000. This is evident from the prayer of the instant petition which seeks to reverse and set aside the Decision of the
appellate court and to direct the trial court to proceed with the pre-trial conference in Civil Case No. 99518. Evidently, the substantive issue involved herein is whether the proceedings in the civil case should progress, a
question which at bottom embroils all the Orders affirmed by the Court of Appeals.
On the task at hand, we see no reason why RTC-Br. 135 of Makati City should stop short of hearing the civil
case on the merits. There is no substantial policy worth pursuing by requiring petitioner to pay again the docket fees
when it has already discharged this obligation simultaneously with the filing of the complaint for collection of a sum
of money. The procedure for dismissed cases when re-filed is the same as though it was initially lodged, i.e., the
filing of answer, reply, answer to counter-claim, including other foot-dragging maneuvers, except for the rigmarole
of raffling cases which is dispensed with since the re-filed complaint is automatically assigned to the branch to
which the original case pertained. [25] A complaint that is re-filed leads to the re-enactment of past proceedings with
the concomitant full attention of the same trial court exercising an immaculate slew of jurisdiction and control over
the case that was previously dismissed,[26] which in the context of the instant case is a waste of judicial time, capital
and energy.
he proper course of action that should have been taken by the court a quo, upon manifestation of the parties of
their willingness to discuss a settlement, was to suspend the proceedings and allow them reasonable time to come to
terms (a) If willingness to discuss a possible compromise is expressed by one or both parties; or (b) If it appears that
one of the parties, before the commencement of the action or proceeding, offered to discuss a possible compromise
but the other party refused the offer, pursuant to Art. 2030 of the Civil Code. If despite efforts exerted by the trial
court and the parties the negotiations still fail, only then should the action continue as if no suspension had taken
place.[33]
Ostensibly, while the rules allow the trial court to suspend its proceedings consistent with the policy to
encourage the use of alternative mechanisms of dispute resolution, in the instant case, the trial court only gave the
parties fifteen (15) days to conclude a deal. This was, to say the least, a passive and paltry attempt of the court a

quo in its task of persuading litigants to agree upon a reasonable concession. [34] Hence, if only to inspire confidence
in the pursuit of a middle ground between petitioner and respondents, we must not interpret the trial courtsOrders as
dismissing the action on its own motion because the parties, specifically petitioner, were anxious to litigate their
case as exhibited in their several manifestations and motions.
A court may dismiss a case on the ground of non prosequitur but the real test of the judicious exercise of such
power is whether under the circumstances plaintiff is chargeable with want of fitting assiduousness in not acting on
his complaint with reasonable promptitude. Unless a partys conduct is so indifferent, irresponsible, contumacious
or slothful as to provide substantial grounds for dismissal, i.e., equivalent to default or non-appearance in the case,
the courts should consider lesser sanctions which would still amount to achieving the desired end. [38] In the absence
of a pattern or scheme to delay the disposition of the case or of a wanton failure to observe the mandatory
requirement of the rules on the part of the plaintiff, as in the case at bar, courts should decide to dispense rather than
wield their authority to dismiss.[3
There is no substantial policy requiring petitioner to pay again the docket fees when it had already discharge the
obligation simultaneously with filing a complaint for sum of money. The procedure in dismissed cases when refilled
is the same as it was initially filed. It is a re-enactment of the past proceedings.
The addition of second sentence failure on part of plaintiff to submit agreement will cause to payment of docket fee
for refilling is not a direction to pay but a statement of event that may result in its imposition. Such payment is not
obligatory in civil cases since docket fees are deluged only after dismissal becomes executor.
Once dismissal attained finality, the trial court cannot impose legal fees again because executory dismissal divest the
trial court jurisdiction as well as residual powers to order anything relative to the case. It would have to wait till the
case is decided again. In that case, no need to file docket fees for continuation of hearing wont set aside order of
dismissal and reinstatement of complaint.

G.R. No. 188539

MARIANO LIM, petitioner, vs. SECURITY BANK CORPORATION, * respondent.|
March 12, 2014|J. Peralta
Facts
Petitioner executed a continuing suretyship in favor of respondent to secure
"any and all types of credit accommodation that may be granted by the bank
hereinto and hereinafter" in favor of Raul Arroyo for P2M covered by a credit
agreement/PN.
In turn, the continuing suretyship stated that "If any of the Guaranteed
Obligations is not paid or performed on due date (at stated maturity or by
acceleration), the Surety shall, without need for any notice, demand or any other
act or deed, immediately become liable therefor and the Surety shall pay and
perform the same."
Arroyo defaulted. Petitioner received a notice informing him his liability to
pay Arroyo's loan inclluding interest and penalty fees. Petitioner failed to comply
thus respondent filed a complaint for collection of sum of money against him and
the Arroyo spouses. RTC ruled against petitioner. CA affirmed RTC but modified
the ruling on interest that it be computed from 28 Aug. 1997.
Issue: WON petitioner may be validly held liable for the principal debtor's loan
obtained six months after execution of the continuing suretyship. YES.
Ruling:
Held
Stronghold Insurance Company, Inc. v. Republic-Asahi Glass Corporation:
The surety's obligation is not an original and direct one for the performance of his
own act, but merely accessory or collateral to the obligation contracted by the
principal. Nevertheless, although the contract of a surety is in essence secondary
only to a valid principal obligation, his liability to the creditor or promisee of the
principal is said to be direct, primary and absolute; in other words, he is directly
and equally bound with the principal. A surety is considered in law as being the
same party as the debtor in relation to whatever is adjudged touching the
obligation of the latter, and their liabilities are interwoven as to be inseparable.
Totanes v. China Banking Corporation(describes a continuing surety): A bank
or financing company which anticipates entering into a series of credit
transactions with a particular company, normally requires the projected principal
debtor to execute a continuing surety agreement along with its sureties. By
executing such an agreement, the principal places itself in a position to enter into
the projected series of transactions with its creditor; with such suretyship
agreement, there would be no need to execute a separate surety contract or bond
for each financing or credit accommodation extended to the principal debtor.
In the continuing suretyship, it states that petitioner, as surety, shall, without
need for any notice, demand or any other act or deed, immediately become liable
and shall pay "all credit accommodations extended by the Bank to the Debtor.
Such stipulations are valid and legal and constitute the law between the
parties. "[A] guaranty may also be given as security for future debts, the amount of
which is not yet known; . . . ." (Art. 2035, CC). Thus, petitioner is unequivocally
bound by the terms of the Continuing Suretyship. There can be no cavil then that
petitioner is liable for the principal of the loan, together with the interest and
penalties due thereon, even if said loan was obtained by the principal debtor even
after the date of execution of the Continuing Suretyship.

G.R. No. 189563

GILAT SATELLITE NETWORKS, LTD., petitioner, vs. UNITED COCONUT
PLANTERS BANK GENERAL INSURANCE CO., INC., respondent.|April 07, 2014|
CJ Sereno
Facts
One Virtual placed with petitioner a purchase order for various
telecommunications products and equipment for a total purchase price of US$2M.
Of the said purchase price, One Virtual promised to pay a portion thereof totallng
$1.2M. To ensure prompt payment, it obtained from respondent a surety bond in
favor of petitioner. One Virtual failed to pay $400k on the due date. Petitioner
wrote the respondent a demand letter for payment of the amount. The amount was
left unpaid thus prompting petitioner to send a second demand letter for the
payment of the full amount of $1.2M guaranteed under the surety bond plus
interests and expenses. Respondent failed to settle the amount.
Petitioner filed a complaint with RTC who rendered judgment in favor of
petitioner. CA vacated the RTC ruling and ordered the parties to proceed to
arbitration.
Issues: WON petitioner is entitled to legal interest due to the delay in the
fulfillment by respondent of its obligation under the suretyship agreement. YES.
Ruling: WHEREFORE, the Petition for Review on Certiorari is hereby GRANTED. The
assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 89263 are
REVERSED. The Decision of the Regional Trial Court, Branch 141, Makati City is
REINSTATED, with MODIFICATION insofar as the award of legal interest is concerned.
Respondent is hereby ordered to pay legal interest at the rate of 6% per annum from 5 June
2000 until the satisfaction of its obligation under the Suretyship Contract and Purchase
Agreement. SO ORDERED.

Ratio
Interest, as a form of indemnity, may be awarded to a creditor for the delay
incurred by a debtor in the payment of the latter's obligation, provided that the
delay is inexcusable.
Art. 2209, CC: [i]f an obligation consists in the payment of a sum of money,
and the debtor incurs a delay, the indemnity for damages, there being no
stipulation to the contrary, shall be the payment of the interest agreed upon, and in
the absence of stipulation, the legal interest.
In order for the debtor (in this case, the surety) to be in default, it is
necessary that the following requisites be present: (1) that the obligation be
demandable and already liquidated; (2) that the debtor delays performance; and
(3) that the creditor requires the performance judicially or extrajudicially.
Interest accrues from the time judicial or extrajudicial demand is made on
the surety. Considering that respondent failed to pay its obligation on 30 May 2000

in accordance with the Purchase Agreement, and that the extrajudicial demand of
petitioner was sent on 5 June 2000 interest must start to run from the time
petitioner sent its first demand letter (5 June 2000).
As to the interest rate to be imposed, Nacar v. Gallery Frames modified
Eastern Shipping v. CA in relation to Bangko Sentral Monetary Board Circular 799
(S. 2013): (1) When the obligation is breached, and it consists in the payment of a
sum of money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 6% per annum to be computed from
default. (2) When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until
its satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.

HEIRS OF SPOUSES JOAQUIN MANGUARDIA and SUSANA MANALO vs. HEIRS OF

SIMPLICIO VALLES and MARTA VALLES, (G.R. No. 177616, August 27, 2014, DEL
CASTILLO, J)
Facts: Marta, Simplicio, Melquiades, Rustico, Visitacion and Catalina, all surnamed Valles, were
siblings. Simplicio and Marta were the registered owners of a 42,215-square meter property in
Barrio Cudian, Ivisan, Capiz known as Lot 835 and covered by Original Certificate of Title
(OCT) No. RO-4017. Marta died in 1943 and was survived by her illegitimate daughter,
Encarnacion Ordas (Encarnacion). On the other hand, Simplicio died on April 20, 1957. He was
survived by his wife Villarica8 Ordas, who passed away sometime in 1969, and his children,
Felicisimo, Adelaida, Rosario, Juan, and Dominica, all surnamed Valles. With the exception of
Felicisimo, all of Simplicios children died single and childless. Felicisimo was survived by his
wife, Presentacion9 Capapas, and his children Graciano, Sulpicio, Teresita and Antonio (now
deceased). It appears, however, that on October 28, 1968, a notarized Deed of Absolute Sale10
over Lot 835 was executed by Simplicio and Marta in favor of their brothers, Melquiades and
Rustico; Simplicios daughter, Adelaida Valles (Adelaida); and Martas daughter, Encarnacion.
The Deed of Absolute Sale ostensibly bore the signature of Marta and the thumb marks of
Simplicio and his wife. On even date, said deed was registered in the Registry of Deeds of
Capiz, resulting in the cancellation of OCT No. RO-4017 and the issuance of Transfer Certificate
of Title (TCT) No.T-9409.11 The following day, or on October 29, 1968, the alleged buyers and
new registered owners executed a Subdivision Agreement,12 subdividing Lot 835 into four lots.
Said Subdivision Agreement was also registered on the same day in the Registry of Deeds of
Capiz. Heirs of Simplicio and Marta, the respondents, commenced an action for the Declaration
of Nullity of Certificates of Title and Deeds of Sale, Cancellation of Certificates of Title,
Recovery of Possession and Damages37 against the heirs of spouses Manguardia and the heirs of
spouses Leonardo and Rebecca (petitioners) in the RTC of Roxas City. Respondents alleged that
in September 1998 they discovered the various documents of sale and titles covering Lot 835
when Teresita and her siblings agreed to subdivide the lot among the heirs of Simplicio and
Marta and searched for the title of the property in the Registry of Deeds of Capiz. They averred
that the purported Deed of Absolute Sale dated October 28, 1968 is a forgery because Marta and

Simplicio were long dead when the said document was executed. Consequently, all titles
emanating therefrom including the titles covering the subdivided lots of Lot 835 registered in the
names of spouses Manguardia, Leonardo and Rebecca, and Adelaida, are all null and void.
Respondents, therefore, prayed that petitioners be ordered to remove the improvements
introduced on the disputed lot and vacate the same, and that a new title be issued over Lot 835 in
the names of Marta and Simplicio as owners. The heirs of spouses Manguardia averred that their
predecessors-in-interest were innocent purchasers in good faith and for value, having acquired
Lots 835-B and 835-C in 1980 from their registered owners and occupants, Pedro and Soledad.
They further averred that their parents had been in possession of the lots since they purchased
them in 1980, and had since then constructed four buildings thereon for their poultry business,
without opposition from anyone, including Graciano who occupies the adjacent Lot 835-A. They
maintained that the titles in the names of the spouses Manguardia are valid and legal. In
addition, since the documents of sale and Torrens titles were duly registered in the Registry of
Deeds, and that actual possession by the different transferees spanning a period of over 30 years
were known to the respondents and their predecessors without any complaint or opposition, the
claim of respondents is barred by prescription, estoppel and laches. The heirs of the spouses
Manguardia moreover asserted that the Complaint against them fails to allege a cause of action
and that the same was not brought by the real parties-in-interest.
RTC rendering a Decision in favor of herein respondents. It declared the Deed of Absolute
Sale dated October 28, 1968 void ab initio because there was no proof that the vendors, Marta
and Simplicio, were still alive in 1968 and had signed/thumb marked the sale document. CA
rendered its Decision affirming in toto the trial courts Decision. Just like the RTC, the CA found
that petitioners predecessors-in-interest are not buyers in good faith and for value. The appellate
court further held that petitioners cannot be considered to have acquired the subject properties
through prescription since the whole lot is covered by a Torrens title under the name of Marta
and Simplicio.
ISSUE: [WHETHER] THE HONORABLE COURT OF APPEALS TWENTIETH (20TH)
DIVISION ERRED IN DENYING THE APPEAL OF [PETITIONERS] AND [IN]
AFFIRMING THE ASSAILED DECISION OF THE COURT A QUO PETITIONERS HEREIN
BEING BUYERS IN GOOD FAITH.
HELD: Petitioners do not dispute that the original Deed of Absolute Sale is a forgery because the
alleged vendors were already long dead when the questioned deed was executed. While their
ownership rights are ultimately based upon this forged deed, petitioners assert that the good faith
of their predecessors-in-interest validates their title over the lots.
It must be emphasized that the burden of proving the status of a purchaser in good faith and for
value lies upon him who asserts that standing. In discharging the burden, it is not enough to
invoke the ordinary presumption of good faith that everyone is presumed to act in good faith.
The good faith that is here essential is integral with the very status that must be proved. x x x
Petitioners have failed to discharge that burden.
Petitioners contention of acquisitive prescription cannot prevail over the rights of respondents.
To begin with, the disputed property is a duly registered land under the Torrens system. It is
well-settled that no title to registered land in derogation of that of the registered owner shall be
acquired by prescription or adverse possession. Neither can prescription be allowed against the
hereditary successors of the registered owner, because they merely step into the shoes of the
decedent and are merely the continuation of the personality of their predecessor[-]in[-]interest.
Consequently, since a certificate of registration covers it, the disputed land cannot be acquired by
prescription regardless of petitioner's good faith.