Civil Law Case Digests

CIVIL LAW CASE DIGESTS
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San Beda College Alabang School of Law
2018 Centralized Bar Operations
EXECUTIVE COMMITTEE 2018 - 2019

CHAIRPERSON Catriona Janelle Gayatin
VICE CHAIRPERSON FOR ACADEMICS Jerekko Cadorna
VICE CHAIRPERSON FOR ACADEMIC OPERATIONS Rodel Cadorniga Jr.
VICE CHAIRPERSON FOR HOTEL OPERATIONS Emmanuel Josef Jovellanos
EXECUTIVE OFFICER FOR HOTEL OPERATIONS Christian Boy Benedict Tiangco
VICE CHAIRPERSON FOR FINANCE Katreena Frances Monje
VICE CHAIRPERSON FOR SECRETARIAT Odette Marie Jumao-as
VICE CHAIRPERSON FOR COMMUNICATIONS Maryll Ann Ragpala
VICE CHAIRPERSON FOR RECRUITMENT AND MEMBERSHIP Giulia Ingrid Calub
VICE CHAIRPERSON FOR ELECTRONIC DATA PROCESSING John Eli Zuriel Bitong
San Beda College Alabang School of Law Administration

Dr. Ulpiano P. Sarmiento III
Dean and Adviser
ATTY. Anna Marie Melanie B. Trinidad

Vice Dean
ATTY. Carlo D. Busmente

Prefect of Student Affairs
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CIVIL LAW TEAM

SUBJECT HEAD Mariko Iwaki
MEMBERS Sarah Alcazaren
Edward Paul Mendoza
Darla Enriquez
Earlo Santillan
Maria Mimette Adea
Timothy Pilar
Miguel Pillas
Peewai Panganiban
Maila Pacson
Ronald Pablo Villanueva
Tracey Fragante
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CASE DOCTRINES
LAND, TITLES AND DEEDS
1. As owners, respondents' substantive rights must be protected in the first instance; With the
clear realization that they are settling on land that they do not own, occupants of
registered private lands by mere tolerance of the owners should always expect that one
day, they would have to vacate the same. (RODANTE F. GUYAMIN et al vs.JACINTO G.
FLORES and MAXIMO G. FLORES, represented by RAMON G. FLORES, G.R. No. 202189 April
25, 2017)
2. Judicial record shall be reconstituted to the extent that the parties agree. It can
reconstitute only that part of the record which can stand on its own, and then continue
proceedings upon such record so reconstituted. (HEIRS OF BABAI GUIAMBANGAN VS.
MUNICIPALITY OF KALAMANSIG et al. G.R. No. 204899; July 27, 2016)
3. An inalienable public land cannot be appropriated and thus may not be the proper
object of possession. Hence, injunction cannot be issued in order to protect one's
alleged right of possession over the same. (REPUBLIC VS.CORTEZ Sr., G.R. No. 197472 ,
[September 7, 2015])
4. The general rule is that where two certificates of title purport to include the same land,
the earlier in date prevails. (JOSE YULO AGRICULTURAL CORPORATIONvs. SPOUSES PERLA
CABAYLO DAVIS and SCOTT DAVISG.R. No. 197709, August 3, 2015)
5. When the instrument presented is forged, even if accompanied by the owner's duplicate
certificate of title, the registered owner does not thereby lose his title, and neither does
the assignee in the forged deed acquire any right or title to the property.
(CONSOLACION D. ROMERO and ROSARIO S.D. DOMINGOvs. ENGRACIA D. SINGSON G.R.
No. 200969, August 3, 2015)
6. Under the Regalian doctrine, all lands of the public domain belong to the State. The
classification and reclassification of such lands are the prerogative of the Executive
Department. The President may at any time transfer these public lands from one class to
another. Mere notations appearing in survey plans are inadequate proof of the covered
properties' alienable and disposable character. These notations, at the very least, only
establish that the land subject of the application for registration falls within the approved
alienable and disposable area per verification through survey by the proper government
office. (REPUBLIC OF THE PHILIPPINES vs. ANGELINE L. DAYAOEN, AGUSTINA TAUEL and
LAWANA T. BATCAGAN G.R. No. 200773, July 8, 2015)
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7. The survey plan and technical description are not competent and sufficient sources of
reconstitution when the petition is based on Section 2(f) of RA 26. They are mere
additional documentary requirements.(REPUBLIC OF THE PHILIPPINES vs. CESAR C.
PASICOLAN AND GREGORIO C. PASICOLAN G.R. No. 198543, April 15, 2015)
8. The well-entrenched rule is that all lands not appearing to be clearly of private dominion
presumably belong to the State. The onus to overturn, by incontrovertible evidence, the
presumption that the land subject of an application for registration is alienable and
disposable rests with the applicant. Public lands remain part of the inalienable land of
the public domain unless the State is shown to have reclassified or alienated them to
private persons. Unless public land is shown to have been reclassified or alienated to a
private person by the State, it remains part of the inalienable public domain. Indeed,
occupation thereof in the concept of owner, no matter how long, cannot ripen into
ownership and be registered as a title. (REPUBLIC OF THE PHILIPPINES vs. SPOUSES DANTE
and LOLITA BENIGNO G.R. No. 205492, March 11, 2015)
9. The plaintiff, therefore, is duty-bound to clearly identify the land sought to be recovered,
in accordance with the title on which he anchors his right of ownership. (HEIRS OF
TELESFORO JULAO VS SPS. ALEJANDRO and MORENITA DE JESUS, G.R. No. 176020,
[September 29, 2014], 744 PHIL 287-298)
10. The burden of proving the status of a purchaser in good faith and for value lies upon him
who asserts that standing. (HEIRS OF SPS MANGUARDIA VS. HEIRS OF VALLES, G.R. No.
177616, [August 27, 2014])
11. When the property is registered under the Torrens system, the registered owner's title to
the property is presumed legal and cannot be collaterally attacked, especially in a mere
action for unlawful detainer.(SPOUSES DELA CRUZ VS SPOUSES CAPCO, G.R. No. 176055,
March 17, 2014)
12. The issuance of a writ of possession becomes a ministerial act of the court after title to
the property has been consolidated in the mortgage in foreclosure proceedings.
(AGUILAR VS. O’PALLICK, G.R. No. 182280 July 29, 2013)
13. The rule that a Torrens Certificate of Title is conclusive evidence of ownership of the land
described therein does not apply when such land, or a portion thereof, was illegally or
erroneously included in said title. (SPOUSES VALENZUELA VS. SPOUSES MANO JR., GR No.
172611, July 9, 2010)
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RODANTE F. GUYAMIN et. al VS. JACINTO G. FLORES and MAXIMO G. FLORES,

represented by RAMON G. FLORES
G.R. No. 202189 April 25, 2017
Doctrine: As owners, respondents' substantive rights must be protected in the first instance; With
the clear realization that they are settling on land that they do not own, occupants of registered
private lands by mere tolerance of the owners should always expect that one day, they would
have to vacate the same
Facts: Respondents alleged in their Complaint that they are the registered owners of a 984-
square meter lot covered by Transfer Certificate of Title No. T-308589 (the subject property); that
petitioners are their relatives who for many years have been occupying the subject property by
mere tolerance of respondents' predecessors and parents, the original owners of the same; that
petitioners have been "reminded to vacate the premises" because respondents have decided
to sell the property; that petitioners failed to vacate; Summons were given to the petitioners but
they refused to sign such summon and thus reasoned that they were not informed of the notice
to vacate therefore the action against them is premature.
Issue: WON the complaint filed by the respondent against the petitioners is premature?
Held: No. As owners, respondents' substantive rights must be protected in the first instance; they
cannot be defeated by a resort to procedural hairsplitting that gets the parties and this Court
nowhere. With the clear realization that they are settling on land that they do not own,
occupants of registered private lands by mere tolerance of the owners should always expect
that one day, they would have to vacate the same. Their time is merely borrowed; they have no
right to the property whatsoever, and their presence is merely tolerated and under the good
graces of the owners. As it were, they 1ive under constant threat of being evicted; they cannot
pretend that this threat of eviction does not exist. It is never too much to ask them to give a little
leeway to the property owners; after all, they have benefited from their tolerated use of the
lands, while the owners have clearly lost by their inability to use the same.
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HEIRS OF BABAI GUIAMBANGAN VS. MUNICIPALITY OF KALAMANSIG et al.

G.R. No. 204899; July 27, 2016
DOCTRINE: Judicial record shall be reconstituted to the extent that the parties agree. It can
reconstitute only that part of the record which can stand on its own, and then continue
proceedings upon such record so reconstituted.
FACTS: Eishmael, heir of Babai and ascendant and predecessor-in-interest of petitioners, filed a
case against respondents for recovery of possession of real property (Civil Case No. 989), in
connection with a lot which Eishmael claimed to be registered in Babai’s name. In 2002, a
judgment was rendered in favor of Eishmael which became final and executory. The Trial court
issued a writ of execution. However, it was not enforced. Subsequently, in 2008, a fire gutted the
Hall of Justice where the files of the said civil case were kept. The record was not reconstituted.
In 2010, another Sheriff’s partial return of service and a notice of garnishment were sent to
execute the judgment. Respondents filed an Urgent Motion to Issue an Order to the Sheriff
prohibiting him from executing an alleged judgment on the ground that since the record was
not reconstituted, there is no judgment to be enforced; that for failure to reconstitute,
petitioner’s recourse is to file the case anew, as Act. No. 3110 requires.
ISSUE: Whether or not reconstitution of the record is still necessary
HELD: No. Under Act No. 3110, the judicial record shall be reconstituted to the extent that the
parties agree. Thereafter, the court shall intervene and determine what proper action to take. It
can reconstitute only that part of the record which can stand on its own, and then continue
proceedings upon such record so reconstituted. All these facts need not be further proved, and
reconstitution of the record is irrelevant and unnecessary on this score given the admission of all
concerned. In the present case, it can be said that the Judgment in Civil Case No. 989 and
record of subsequent actions taken are deemed reconstituted by agreement of the parties and
with the approval of the trial court.
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REPUBLIC VS. CORTEZ SR.

G.R. No. 197472 , [September 7, 2015]
DOCTRINE: An inalienable public land cannot be appropriated and thus may not be the proper
object of possession. Hence, injunction cannot be issued in order to protect one's alleged right
of possession over the same.
FACTS: Respondent Cortez, a missionary by vocation engaged in humanitarian and charitable

activities, established an orphanage and school in Palaui Island, Cagayan. He claimed that he
has been in peaceful possession of about 50 hectares of land located in the western portion of
Palaui. Subsequently, President Marcos issued Proclamation No. 201 reserving for military
purposes a parcel of the public domain situated in Palaui Island. Pursuant thereto, 2,000
hectares of the southern half portion of the Palaui Island were withdrawn from sale or settlement
and reserved for the use of the Philippine Navy, subject, however, to private rights if there be
any. More than two decades later, President Ramos issued Proclamation No. 447 declaring
Palaui Island and the surrounding waters situated in the Municipality of Sta. Ana, Cagayan as
marine reserve. Rev. Cortez filed a Petition for Injunction against Biñas in his capacity as
Commanding Officer of the Philippine Naval Command where some members of the Philippine
Navy, upon orders of Biñas, disturbed his peaceful and lawful possession of the said subject
property when they commanded him and his men, through the use of force and intimidation, to
vacate the area
ISSUE: Whether Rev. Cortez is entitled to a final writ of mandatory injunction.
HELD: Cortez failed to show that the subject area over which he has a claim is not part of the
public domain and therefore can be the proper object of possession Pursuant to the Regalian
Doctrine, all lands of the public domain belong to the State. Hence, "all lands not appearing to
be clearly under private ownership are presumed to belong to the State. Also, public lands
remain part of the inalienable land of the public domain unless the State is shown to have
reclassified or alienated them to private persons." To prove that a land is alienable, the existence
of a positive act of the government, such as presidential proclamation or an executive order, an
administrative action, and a legislative act or a statute declaring the land as alienable and
disposable must be established. It must be considered as still inalienable public domain. The
respondents had to prove that the subject properties were alienable or disposable land of the
public domain prior to its withdrawal from sale and settlement and reservation for military
purposes under Presidential Proclamation No. 265.Without first determining the nature and
character of the land, all other requirements such as length and nature of possession and
occupation over such land do not come into play.
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JOSE YULO AGRICULTURAL CORPORATIONVS. SPOUSES DAVIS

G.R. No. 197709, August 3, 2015
DOCTRINE: The general rule is that where two certificates of title purport to include the same
land, the earlier in date prevails.
FACTS: A Lot in Binalbagan, Negros Occidental, consisting of 204,560 square meters, was
registered as TCT T-1081 in the name of Jose L. Yulo (Yulo). It was subdivided in 1963 into 29 lots
covered by TCTs. Lot 29, was further subdivided in 1969 into several lots which were all registered
in Yulo's name. Among these lots are Lots 24, 25, 72, 91, 92, and 96. The titles to Lots 91, 92 and 96
were issued in 1971. Yulo sold Lots 91, 92 and 96 to Madrinas in 1975. Lots 24, 25, 91, 92 and 96
were subsequently mortgaged to Nation Bank, which eventually foreclosed and became owner
of the lots. At the time of the foreclosure and sale to Nation Bank, the said lots already
contained improvements constructed by the previous occupants, the Gabayerons. In 1992,
Nation Bank sold these five lots with existing improvements to the herein respondents, spouses
Scott and Perla Cabaylo Davis. Lots 91, 92 and 96, respectively, were issued in respondents' favor
on December 11, 1992. In 1982, Lot 72 was further subdivided into several lots and registered in
petitioner's name. Among these lots are Lots 3, 4, and 5. In 1994, Lot 5 was sold to spouses
Trajera, and thus TCT over said lot was issued in their favor. In 1999, respondents received
separate demand letters from petitioner and the Trajeras requiring them to remove a portion of
the Gabayeron home and fence which they claim encroached upon their respective properties
petitioner's Lots 3 and 4, and the Trajeras' Lot 5. Respondents filed a case for quieting of title and
damages against the Trajeras, Yulo, Nation Bank and the Binalbagan Local Building Official.
ISSUE: Whether or not the respondents have better rights than the petitioner
HELD: Respondents' title must be upheld over that of the petitioner's as it is derived from titles that
were issued earlier — in 1971, as opposed to 1979 with respect to petitioner's and the Trajeras'
properties. The general rule is that where two certificates of title purport to include the same
land, the earlier in date prevails. Yulo was the sole owner of the properties involved, and he and
his outfit were the sellers of the properties which eventually were acquired by the respondents
and the Trajeras. They cannot be allowed to benefit from their own mistakes at the expense of
the respondents. Indeed, if there is anybody who must be considered in bad faith, it is they; they
should have known that there was an overlapping of titles in their very own lands. And if it is true
that Lots 91, 92 and 96 are non-existent lots, Yulo and petitioner would have known it; yet Yulo
sold them in 1975 to the Madrinas, and eventually found their way to respondents.
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CONSOLACION D. ROMERO and ROSARIO S.D. DOMINGOvs. ENGRACIA D. SINGSON

G.R. No. 200969, August 3, 2015
DOCTRINE: When the instrument presented is forged, even if accompanied by the owner's
duplicate certificate of title, the registered owner does not thereby lose his title, and neither
does the assignee in the forged deed acquire any right or title to the property.
FACTS: The parties herein — petitioners Consolacion Domingo Romero and Rosario S.D. Domingo
and respondent Engracia Domingo Singson — are siblings. Their parents, Macario and Felicidad
Domingo, own a 223-square meter piece of property (the subject property) located at San
Juan, Metro Manila covered by Transfer Certificate of Title which was issued in 1953. It appears
that petitioners and their other siblings, Rafael and Ramon Domingo, are the actual occupants
of the subject property, having stayed there with their parents since birth. On the other hand,
respondent took up residence in Mandaluyong City after getting married. On February 22, 1981,
Macario passed away, while Felicidad died on September 14, 1997. On June 7, 2006, a new
certificate of title was issued in respondent's name, by virtue of a notarized "Absolute Deed of
Sale" ostensibly executed on June 6, 2006 by and between Macario and Felicidad — as sellers,
and respondent — as buyer. And this despite the fact thatMacario and Felicidad were then
already deceased. Soon thereafter, respondent sent letters to her siblings demanding that they
vacate the subject property, under pain of litigation.
ISSUE: Whether or not the respondents have better rights than the petitioner
HELD: Determination of ownership should have been resolved in petitioners' favor. It is perfectly
obvious that the signatures of the vendors therein, Macario and Felicidad, were forged. They
could not have signed the same, because both were by then long deceased: Macario died on
February 22, 1981, while Felicidad passed away on September 14, 1997. This makes the June 6,
2006 deed of sale null and void; being so, it is "equivalent to nothing; it produces no civil effect;
and it does not create, modify or extinguish a juridical relation." And while it is true that
respondent has in her favor a Torrens title over the subject property, she nonetheless acquired
no right or title in her favor by virtue of the null and void June 6, 2006 deed. Verily, when the
instrument presented is forged, even if accompanied by the owner's duplicate certificate of
title, the registered owner does not thereby lose his title, and neither does the assignee in the
forged deed acquire any right or title to the property. In sum, the fact that respondent has in her
favor a certificate of title is of no moment; her title cannot be used to validate the forgery or
cure the void sale. Since respondent acquired no right over the subject property, the same
remained in the name of the original registered owners, Macario and Felicidad. Being heirs of
the owners, petitioners and respondent thus became, and remain co-owners — by succession —
of the subject property.
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REPUBLIC OF THE PHILIPPINESvs. ANGELINE L. DAYAOEN, AGUSTINA TAUEL and LAWANA T.

BATCAGAN
G.R. No. 200773, July 8, 2015
DOCTRINE: Under the Regalian doctrine, all lands of the public domain belong to the State. The
classification and reclassification of such lands are the prerogative of the Executive Department.
The President may at any time transfer these public lands from one class to another. Mere
notations appearing in survey plans are inadequate proof of the covered properties' alienable
and disposable character. These notations, at the very least, only establish that the land subject
of the application for registration falls within the approved alienable and disposable area per
verification through survey by the proper government office.
FACTS: Appellees Angeline Dayaoen (Angeline), Agustina Taule (Agustina) and Lawana
Batcagan (Lawana) filed an Application for Registration5 of three parcels of land located in
Barangay Tabangaoen, La Trinidad, Benguet, described as Lots 1, 6 and 7.The subject parcels of
land were originally owned and possessed since pre-war time by Antonio Pablo (Antonio), the
grandfather of Dado Pablo (Dado), husband of appellee Angeline. In 1963, Antonio gave the
parcels of land in question to appellee Angeline and Dado as a wedding gift. From that time on,
they continuously occupied and possessed the properties. In 1976 and 1977, appellee Angeline
sold Lots 6 and 7 to co-appellees Agustina and Lawana, pursuant to an Affidavit of Quitclaim
and a Deed of Absolute Sale of a Portion of Unregistered Land, respectively. Since 12 June 1945,
appellees and their predecessor-in-interest have been in public, open, exclusive, uninterrupted
and continuous possession thereof in the concept of an owner. November 2007, the court a quo
granted appellees' application for registration.
ISSUE: Whether or not the subject properties are alienable and disposable lands
HELD: No. Under the Regalian doctrine, all lands of the public domain belong to the State. The
classification and reclassification of such lands are the prerogative of the Executive Department.
The President may at any time transfer these public lands from one class to another. While in
1955 the President — through Presidential Proclamation No. 209 — declared particular lands in
Baguio City as alienable and disposable, they may have been re-classified by the President
thereafter. This is precisely the reason why an applicant for registration of title based on an
executive Thus, while respondents have complied with most of the requirements in connection
with their application for registration, they have not sufficiently shown that the property applied
for is alienable and disposable at the time their application for registration was filed. The Court is
left with no alternative but to deny their application for registration.
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REPUBLIC OF THE PHILIPPINESvs. CESAR C. PASICOLAN AND GREGORIO C. PASICOLAN

G.R. No. 198543, April 15, 2015
DOCTRINE: The survey plan and technical description are not competent and sufficient sources
of reconstitution when the petition is based on Section 2(f) of RA 26. They are mere additional
documentary requirements.
FACTS: Respondents Cesar C. Pasicolan (Cesar) and Gregorio C. Pasicolan (Gregorio) filed a
Petition for Reconstitution of OCT No. 8450 in the name of Pedro Callueng (Pedro) before the
RTC of Tuguegarao City. Respondents claimed to be the legal and forced heirs of the late
Pedro. Respondents submitted the following pieces of evidence: Decree No. 339880; Technical
Description; Sepia Film Plan; Certification issued by the Registry of Deeds; Certification issued by
the Land Registration Authority etc. RTC ruled in favor of the respondents. Believing that the RTC
erred in granting the Petition for Reconstitution, petitioner Republic of the Philippines (petitioner),
through the Office of the Solicitor General (OSG), appealed to the CA, that respondents failed
to present competent evidence to show that the alleged lost certificate of title was valid and
subsisting at the time of its alleged loss and that a mere copy of decree. After both parties filed
their respective Briefs, the CA rendered the assailed Decision dismissing the appeal. It gave
credence to the pieces of documentary evidence presented by the respondents and the report
of the LRA.
ISSUE: Whether or not reconstitution is justified on the basis of a copy of an unauthenticated

decree and the evidence on record
HELD: No. This Court finds that the other pieces of documentary evidence submitted by
respondents do not warrant the reconstitution of their alleged lost title. Under the principle of
ejusdem generis, where general words follow an enumeration of persons or things by words of a
particular and specific meaning, such general words are not to be construed in their widest
extent, but are to be held as applying only to persons or things of the same kind or class as those
specifically mentioned. Also, the survey plan and technical description are not competent and
sufficient sources of reconstitution when the petition is based on Section 2(f) of RA 26. They are
mere additional documentary requirements. This is the clear import of the last sentence of
Section 12, RA 26. Furthermore, the Certificationissued by the LRA stating that Decree No. 339880
was issued for Lot No. 1921 would not serve to help respondents' Petition for Reconstitution any
better. Neither do the tax declarations submitted support respondents' cause. The court also
held that the non-submission of an affidavit of loss by the person who was allegedly in actual
possession of OCT No. 8450 at the time of its loss casts doubt on respondents' claim that OCT No.
8450 once existed and subsequently got lost.
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REPUBLIC OF THE PHILIPPINESvs. SPOUSES DANTE and LOLITA BENIGNO

G.R. No. 205492, March 11, 2015
DOCTRINE: The well-entrenched rule is that all lands not appearing to be clearly of private
dominion presumably belong to the State. The onus to overturn, by incontrovertible evidence,
the presumption that the land subject of an application for registration is alienable and
disposable rests with the applicant. Public lands remain part of the inalienable land of the public
domain unless the State is shown to have reclassified or alienated them to private persons. Unless
public land is shown to have been reclassified or alienated to a private person by the State, it
remains part of the inalienable public domain. Indeed, occupation thereof in the concept of
owner, no matter how long, cannot ripen into ownership and be registered as a title.
FACTS: On November 2, 1995, spouses Dante and Lolita Benigno filed with the Calamba RTC an
Application for Registration of title under the Property Registration Decree (PD 1529) to a 293-
square meter lot in Barangay BatongMalake, Los Baños, Laguna. After trial, the Calamba RTC
issued a Decision granting respondents' application for registration. Petitioner filed its notice of
appeal on January 10, 2006. Court of Appeals denied the Petitioners motion as it does not raise
any matter of substance that would justify the reconsideration being sought. But in a July 2, 2010
Order, the Calamba RTC denied both motions, stating that it was respondents' failure to submit
certain required documents — the Affidavit of Publication and Certificate of Posting— as earlier
directed by the court in a March 26, 2010 Order which caused the non-transmittal of the records
of the case to the CA, thus delaying the appeal proceedings.
ISSUE: Whether or not the subject properties are alienable and disposable lands
HELD: Applicants for registration of title under PD 1529 must prove: (1) that the subject land forms
part of the disposable and alienable lands of the public domain; and (2) that they have been in
open, continuous, exclusive and notorious possession and occupation of the land under a bona
fide claim of ownership since 12 June 1945 or earlier. Section 14 (1) of the law requires that the
property sought to be registered is already alienable and disposable at the time the application
for registration is filed.And, in order to prove that the land subject of the application is alienable
and disposable public land, "the general rule remains: all applications for original registration
under the Property Registration Decree must include both (1) a CENRO or PENRO certification
and (2) a certified true copy of the original classification made by the DENR Secretary.
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HEIRS OF TELESFORO JULAO VS SPS. ALEJANDRO and MORENITA DE JESUS

G.R. 172020 September 29, 2014
DOCTRINE:The plaintiff, therefore, is duty-bound to clearly identify the land sought to be

recovered, in accordance with the title on which he anchors his right of ownership.
FACTS: Telesforo Julao filed before DENR two Town site Sales Applications. Upon his death on, his
applications were transferred to his heirs. Solito Julao (Solito) executed a Deed of Transfer of
Rights, transferring his hereditary share in the property to respondent spouses Alejandro and
Morenita De Jesus. Respondent spouses constructed a house on the property they acquired
from Solito. Thereafter, Solito went missing. Consequently, the OCT was issued in favor of the heirs
of Telesforo. Petitioners represented themselves to be the heirs of Telesforo and filed before the
RTC of Baguio City, a Complaint or Recovery of Possession of Real Property against respondent
spouses. Petitioners alleged that they are the true and lawful owners of a 641-square meter
parcel of land; that respondent spouses’ house encroached on 70 square meters of the subject
property, among others. The RTC ruled in favor of petitioners. CA reversed the decision on two
grounds: (1) failure on the part of petitioners to identify the property sought to be recovered;
and (2) lack of jurisdiction. Hence, this case.
ISSUE: Whether or not the CA committed reversible error in ruling that petitioners failed to prove
the identity of the property in question.
HELD: No. Article 434 of the Civil Code states that, “In an action to recover, the property must be
identified, and the plaintiff must rely on the strength of his title and not on the weakness of the
defendant's claim." The plaintiff, therefore, is duty-bound to clearly identify the land sought to be
recovered, in accordance with the title on which he anchors his right of ownership. It bears
stressing that the failure of the plaintiff to establish the identity of the property claimed is fatal to
his case. In this case, petitioners failed to identify the property they seek to recover as they failed
to describe the location, the area, as well as the boundaries thereof. In fact, no survey plan was
presented by petitioners to prove that respondent spouses actually encroached upon the 70-
square meter portion of petitioners' property. Failing to prove their allegation, petitioners are not
entitled to the relief prayed for in their Complaint.
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HEIRS OF SPS. MANGUARDIA VS. HEIRS OF SPS. VALLES

G.R. No. 177616, August 27, 2014
DOCTRINE: The burden of proving the status of a purchaser in good faith and for value lies upon
him who asserts that standing.
FACTS: Respondents filed an action for Declaration of Nullity of Title when they allegedly
discovered that the various documents of sale and titles covering Lot 835 was subdivided
among the heirs of Simplicio and Marta. 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. Petitioners 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.
ISSUE: Whether or not the heirs of Manguardia are buyers in good faith.
HELD: No. The general rule is that a person dealing with registered land has a right to rely on the
Torrens Certificate of title without need of inquiring further cannot apply when the party has
actual knowledge of facts and circumstances that would impel a reasonably cautious man to
make such inquiry or when the purchaser has knowledge of a defect or lack of title in his vendor
or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of
the property in litigation (Voluntad vs. Dizon, 313 SCRA 209). However, if circumstances exist that
require a prudent man to investigate and he does not, he is deemed to have acted in mala
fide, and his mere refusal to believe that a defect exists or his willful closing of his eyes to the
possibility of the existence of a defect in his vendor’s title will not make him an innocent
purchaser for value (Voluntad vs. Dizon, supra). The burden of proving the status of a purchaser
in good faith and for value lies upon him who asserts that standing. In this case, the petitioners
failed to prove that they were buyers in good faith.
15
SPOUSES DELA CRUZ VS SPOUSES CAPCO

G.R. No. 176055, March 17, 2014
DOCTRINE: When the property is registered under the Torrens system, the registered owner's title
to the property is presumed legal and cannot be collaterally attacked, especially in a mere
action for unlawful detainer.
FACTS: Spouses Dela Cruz filed a complaint for unlawful detainer against spouses Capco. The
petitioner’s mother (Teodora) acquired ownership of the land by virtue of a court decision,
subsequently, it was registered in her name. Petitioner’s mother tolerated the spouses Capco’s
occupation thereof. The land was later conveyed to the petitioners. The spouses Capco
asserted that they have all the rights to occupy the subject property since respondent is an heir
of its true owner. MTC found that prior to the issuance in the name of petitioner’s mother, the
subject property used to form part of one-half of a property. The original property dispute
between the petitioner’s mother and the respondent’s grandfather resulted to the grant of half
of the said parcel of land to the former and the other half to the latter. MTC ruled in favor of
SpouesDela Cruz. The RTC affirmed the decision. The CA set aside the decision, declaring that
there is a need to physically determine the boundaries of land because it was not clear whether
the Capco’s were occupying the land originally registered under the name of petitioner’s
mother or the defendant’s grandfather.
ISSUE: Whether or not spouses Dela Cruz have a better right over the property.
HELD: YES, spouses Dela Cruz have a better right over the property.Their allegation that the
subject property was adjudicated to Teodora (Petitioner’s mother) by virtue of a decision in a
land registration case and was later conveyed in their favor, is supported by (1) a copy of the
Decision in the said land registration case; (2) the title of the land issued to Teodora (TCT No.
31873), and, (3) the Deed of Extra-Judicial Settlement of the Estate of Teodora wherein the
latter’s heirs agreed to convey the said property to Amelia.
The spouses Capco, on the other hand, aside from their bare allegation that respondent is an
heir of the true owners thereof, presented nothing to support their claim. The spouses Capco’s
attempt to attack the title of Teodora is futile. "It has repeatedly been emphasized that when
the property is registered under the Torrens system, the registered owner's title to the property is
presumed legal and cannot be collaterally attacked, especially in a mere action for unlawful
detainer. It has even been held that it does not even matter if the party's title to the property is
questionable."
AGUILAR VS. O’PALLICK

16
G.R. No. 182280 July 29, 2013
DOCTRINE:The issuance of a writ of possession becomes a ministerial act of the court after title to
the property has been consolidated in the mortgage in foreclosure proceedings
FACTS: A Contract to Sell was executed between Primetown Property (PPGI) on one hand, and
Reynaldo Poblete and Tomas Villanueva on the other, over the subject property. Poblete and
Villanueva in turn executed in favor of Michael J. O’Pallick a Deed of Assignment covering the
unit. PPGI issued a Deed of Sale in favor of O’Pallick after the latter paid the purchase price in
full. Although O’Pallick took possession of the unit, the Deed of Sale in his favor was never
registered nor annotated. Meanwhile, in a case between PPGI and petitioner Aguilar, Aguilar
was able to obtain a final and executory Decision in her favor, and caused several properties of
PPGI to be levied, including the subject property. Raagas conducted the public auction sale
where Aguilar was declared the highest bidder for the subject unit. A certificate of sale was
issued in her favor. Because PPGI failed to redeem the property, a final Deed of Sale was issued
in favor of Aguilar. O’Pallick instituted a case for quieting of title and to set aside the levy on
execution of the subject unit, to annul the certificate of sale issued in favor of Aguilar, as well as
to recover the unit.
ISSUE: Whether or not Aguilar is entitled to the possession of the property
HELD: 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. The issuance of
the writ of possession had become ministerial on the part of HLURB since the respondent Aguilar
had sufficiently shown her proof of title over the subject condominium. Being the registered
owner of the condominium unit, she is entitled to its possession. The case at bar is akin to
foreclosure proceedings where the issuance of a writ of possession becomes a ministerial act of
the court after title to the property has been consolidated in the mortgage.
SPOUSES VALENZUELA VS. SPOUSES MANO JR.

GR No. 172611, July 9, 2010
17
DOCTRINE:The rule that a Torrens Certificate of Title is conclusive evidence of ownership of the
land described therein does not apply when such land, or a portion thereof, was illegally or
erroneously included in said title.
FACTS: Petitioner Federico Valenzuela (Federico) is the son of Andres Valenzuela (Andres) who
was the owner and possessor of a parcel of land in Pulilan, Bulacan. Andres died, and the
possession of said property was transferred to Federico, a document denominated as
PagmanasaLabas ng Hukuman at Pagpaparaya o Pagkakaloob was executed by the heirs of
Andres who waived all their rights to the property in favor of Federico. Meanwhile, a Deed of
Conditional Sale was executed between Feliciano Geronimo (Feliciano) and herein respondent
Jose Mano Jr. (Jose), wherein the former agreed to sell to the latter a parcel of land located at
Pulilan, Bulacan. Jose thereafter applied for a Free Patent and was then issued an Original
Certificate of Title. Subsequently, Jose sold a portion of the land to Roberto Balingcongan
(Balingcongan)and a Transfer Certificate of Title was then issued in his name. Federico
transferred his residence to Malabon and so he left the care of the property to his nephew
Vicente Joson, and instructed him to construct a perimeter fence on his property but was then
prevented by Jose, claiming that the 447 sq. meter was reflected in his TCT and on the other
hand, Federico claimed that his property was inherited from his father, Andres. The RTC found
that the disputed area belongs to Federico. The respondents appealed to the CA, which
subsequently reversed the ruling.
ISSUE: Whether the CA erred in not holding that the petitioners are the rightful owners, and that
Jose erroneously obtained the TCT and should be held liable.
HELD: YES. Settled is the rule that a person, whose certificate of title included by mistake or
oversight the land owned by another, does not become the owner of such land by virtue of the
certificate alone. The Torrens System is intended to guarantee the integrity and conclusiveness
of the certificate of registration but is not intended to perpetrate fraud against the real owner of
the land. Jose committed fraud in obtaining the title to the disputed property, because when he
applied for the TCT, he stated that the land applied and described for is not claimed or
occupied by any person when in reality the same is owned and possessed by Federico.
OBLIGATIONS AND CONTRACTS

18
1. Breach of contract may give rise to an action for specific performance or rescission
of contract. It may also be the cause of action in a complaint for damages filed
pursuant to Art. 1170 of the Civil Code. In the specific performance and rescission of
contract cases, the subject matter is incapable of pecuniary estimation, hence
jurisdiction belongs to the Regional Trial Court (RTC). In the case for damages,
however, the court that has jurisdiction depends upon the total amount of the
damages claimed. (SPOUSES ROMEO PAJARES and IDA T. PAJARES, Petitioners vs.
REMARKABLE LAUNDRY AND DRY CLEANING, represented by ARCHEMEDES G. SOLIS,
RespondentG.R. No. 212690 February 20, 2017)
2. A void contract is equivalent to nothing; it produces no civil effect. It does not

create, modify, or extinguish a juridical relation. Parties to a void agreement cannot
expect the aid of the law. The courts leave them as they are, because they are
deemed in pari delicto or in equal fault. (LUZ S. NICOLAS VS. LEONORA C. MARIANO
G.R. No. 201070, August 1, 2016)
3. It’s a basic principle in law that contracts have the force of law between the parties
and should be complied with in good faith.A breach occurs where the contractor
inexcusably fails to conform substantially in accordance with the terms of the
contract. (MOVETRADE CORP. VS. COMMISSION ON AUDIT G.R. No. 204835,
September 22, 2015)
4. Article 1236 of the Civil Code, which states that whoever pays for another may
demand from the debtor what he has paid, except that if he paid without the
knowledge or against the will of the debtor, he can recover only insofar as the
payment has been beneficial to the debtor.(SPOUSES ROSETE VS. BRIONES, G.R. No.
176121, [September 22, 2014])
5. Consignation is necessarily judicial. Article 1258 of the Civil Code specifically provides
that consignation shall be made by depositing the thing or things due at the disposal
of judicial authority. The said provision clearly precludes consignation in venues other
than the courts. (SPS. CACAYORIN VS. ARMED FORCES AND POLICE MUTUAL BENEFIT
ASSOC., G.R. No. 171298, April 15, 2013)
6. The nature of a contract to sell is that the ownership vests upon full payment of the
purchase price. Hence, there was no impediment on the Dacionen Pago. Delta
cannot be held liable should Enriquez gain ownership over the land. The effect of
dacion is that the bank becomes a party to the contract to sell between Enriquez
and Delta. (LUZON DEVELOPMENT BANK VS. ENRIQUEZ, GR No. 168646 January 12,
2011)
19
7. Parties would do well to always be conscious of their freedom to accept or reject

printed stipulations supplied by only one party that form part of the contract they
enter into. Failure to object to such stipulations, which are not excessive or
unconscionable, will bind them to its performance.(ASIAN CONSTRUCTION AND
DEVELOPMENT CORP. VS. CATHAY PACIFIC STEEL CORP., GR No. 167942, June 29,
2010)
8. Compensation shall take place when two persons, in their own right, are creditors
and debtors of each other, and if all necessary requirements for compensation to be
proper be fulfilled.(LAO VS. SPECIAL PLANS, INC., GR No. 164791, June 29, 2010)
9. Article 1192 of the civil code applies in case both parties have committed a breach
of the obligation when the liability of the first infractor shall be equitably tempered by
the courts. If it cannot be determined which of the parties first violated the contract,
the same shall be deemed extinguished, and each shall bear his own
damages.(GOLDLOOP PROPERTIES INC. VS. GSIS G.R. No. 171076 August 1, 2012)
20
SPOUSES ROMEO PAJARES and IDA T. PAJARES vs. REMARKABLE LAUNDRY AND DRY
CLEANING, represented by ARCHEMEDES G. SOLIS
G.R. No. 212690 February 20, 2017
DOCTRINE: Breach of contract may give rise to an action for specific performance or rescission
of contract. It may also be the cause of action in a complaint for damages filed pursuant to Art.
1170 of the Civil Code. In the specific performance and rescission of contract cases, the subject
matter is incapable of pecuniary estimation, hence jurisdiction belongs to the Regional Trial
Court (RTC). In the case for damages, however, the court that has jurisdiction depends upon the
total amount of the damages claimed.
FACTS: Remarkable Laundry and Dry Cleaning filed a Complaint for Breach of Contract and
Damages against spouses Romeo and Ida Pajares where respondent entered into a
Remarkable Dealer Outlet Contract with petitioners whereby the latter, acting as a dealer
outlet, shall accept and receive items or materials for laundry which are then picked up and
processed by the former in its main plant or laundry outlet; that petitioners violated Article IV
(Standard Required Quota & Penalties) of said contract, which required them to produce at
least 200 kilos of laundry items each week. Respondent made written demands upon petitioners
for the payment but the latter failed to pay
ISSUE: WON respondent complaint is one for specific performance or rescission of contract.
HELD: Neither. The principal obligation of petitioners under the Remarkable Laundry Dealership
Contract is to act as respondent's dealer outlet. Respondent, however, neither asked the RTC to
compel petitioners to perfom1 such obligation as contemplated in said contract nor sought the
rescission thereof. There is no such thing as an "action for breach of contract." Rather, "breach of
contract is a cause of action but not the action or relief itself"33 Breach of contract may be the
cause of action in a complaint for specific performance or rescission of contract, both of which
are incapable of pecuniary estimation and, therefore, cognizable by the RTC.
21
LUZ S. NICOLAS VS. LEONORA C. MARIANO

G.R. No. 201070, August 1, 2016
DOCTRINE: A void contract is equivalent to nothing; it produces no civil effect. It does not
create, modify, or extinguish a juridical relation. Parties to a void agreement cannot expect the
aid of the law. The courts leave them as they are, because they are deemed in pari delicto or in
equal fault.
FACTS: Respondent is leasing an apartment which is a part of NHA’s Bagong Barrio project
where he filed a land grant and was approved where he was given a photocopy only of the
TCT with the condition that the original will be given upon full payment of the loan. He was not
fully paid as she still has an outstanding obligation which remained unpaid. He obtained a loan
from the petitioner and executed mortgage over the subject property. A year after, Mariano
once again defaulted on the second obligation, she then executed a deed of Absolute Sale of
Real Property, conveying to Luz Nicolas ownership of the subject property and the
improvements thereon for a purchase price of P600,000.00. However, the tenants of Mariano’s
five-unit apartment have been remitting monthly rentals to Luz Nicolas in the amount of
P2,000.00, or P10,000.00 in the aggregate. From said period until June 2004, Luz Nicolas’ rentals
amounted to P600,000.00. Luz Nicolas was able to collect P612,000.00 from the tenants of
Mariano, which exceeds the amount of the alleged indebtedness of Mariano to Luz Nicolas in
the increased amount of P552,000.00.
ISSUE: Whether or not Mariano may recover damages on account of her claimed losses arising
from her entering into contract with Nicolas
HELD: No. She is not the owner of the subject property and knowing that she has not fully paid
the price therefor, she is as guilty as Luz Nicolas for knowingly mortgaging and thereafter selling
what is not hers. As held by the Court of Appeals, both parties herein are not in good faith; they
are deemed in pari delicto or in equal fault, and for this “neither one may expect positive relief
from courts of justice in the interpretation of their contract. The courts will leave them as they
were at the time the case was filed.”
22
MOVETRADE CORP. VS. COMMISSION ON AUDIT

G.R. No. 204835, [September 22, 2015])
DOCTRINE: It’s a basic principle in law that contracts have the force of law between the parties
and should be complied with in good faith. A breach occurs where the contractor inexcusably
fails to conform substantially in accordance with the terms of the contract.
FACTS: Petitioner and respondent DPWH entered into a contract agreement for dredging and
other related works in Pampanga Bay and the primary Pasac-Guagua-San Fernando waterways
in Pampanga, which were affected by the Mt. Pinatubo eruptions and mudflows. Subsequently,
due to the alleged absence of spoil sites, petitioner requested permission from Director Soriquez
to allow it to undertake side dumping chargeable against the dredging works. Dir. Soriquez then
issued a letter denying the request but petitioner continued to side dump. When the project was
in its final phase, petitioner, throught its President, Zingapan, wrote a letter to then DPWH Sec.
Vigilar asking for payment for the dredging work it rendered. Dir. Soriquez then issued a letter
informing petitioner of the denial of its request for payment. Accordingly, petitioner filed with the
respondent COA a money claim against respondent DPWH for payment amounting to P7,
354,897.10. Respondent COA ruled that petitioner is not entitled to payment. Petitioner insist that
there was no breach of contract and that even if there was a breach, it’s still entitled to
payment under the principle of quantum meruit. COA explained that the principle applies only
when there is no written contract between the parties.
ISSUE: WON petitioner is entitled to the payment of P7,354,897.10 for dredging works.
HELD: No. It’s a basic principle in law that contracts have the force of law between the parties
and should be complied with in good faith. In this case, the contract specifically provides the
manner of disposing dredge spoils. Thus, petitioner can’t unilaterally change the manner of
disposal without first amending the contract or obtaining the express consent of respondent
DPWH. Otherwise, petitioner would be guilty of breaching the contract. “A breach occurs where
the contractor inexcusably fails to conform substantially in accordance with the terms of the
contract.” Without a doubt, petitioner’s failure to dump the dredge spoils at the designated spoil
sites constitutes a breach.
23
SPOUSES ROSETE VS. BRIONES

G.R. No. 176121September 22, 2014
DOCTRINE: Article 1236 of the Civil Code, which states that whoever pays for another may
demand from the debtor what he has paid, except that if he paid without the knowledge or
against the will of the debtor, he can recover only insofar as the payment has been beneficial to
the debtor.
FACTS: The 152sqm subject lot located at Malate, Manila is owned by the NHA. It awarded the
subject lot to petitioner Rosete. A Declaration of Real Property was filed and issued in Rosete’s
name. He paid the value of the subject lot as well as its real property taxes. Thereafter, the NHA
informed Rosete that the award has been cancelled and will be subdivided among him and the
respondents. NHA also informed Rosete that his payments shall be adjusted, but his excess
payments will not be refunded; instead, they will be applied to his co-awardees’ amortizations.
His coawardees shall in turn pay him, under pain of cancellation of their respective awards.
Rosete protested and sought a reconsideration of the decision to cancel the award. The OP
dismissed Rosete’s appeal and issued a Resolution declaring that its Decision is final and
executory. Rosete, through his counsel, wrote to the NHA about his request to subdivide the
subject lot on an "as is, where is" basis and to be reimbursed by his co-awardees for his
overpayments, with interest. He then contested that the Decision of the NHA containing the
award/allocation of the subject lot to the parties is null and void as it violated the provisions of
PD 1517 and PD 2016; that the award of 40 square meters to the Brioneses is null and void as they
were mere "renters" (lessees);
ISSUE: Whether or not the Petitioners can recover from the payments made
HELD: Petitioners did not have the personality to intervene in O.P. Case, then Rosete had no
standing to file a motion for reconsideration. Petitioners are indeed entitled to be indemnified for
paying for the value of the subject lot and the real property taxes thereon over and above what
was awarded to them, pursuant to Article 1236 of the Civil Code, which states that whoever
pays for another may demand from the debtor what he has paid, except that if he paid without
the knowledge or against the will of the debtor, he can recover only insofar as the payment has
been beneficial to the debtor. They may also recover from the NHA, applying the principle of
solutio indebiti.
24
SPS. CACAYORIN v. ARMED FORCES AND POLICE MUTUAL BENEFIT ASSOCIATION

G.R. No. 171298, April 15, 2013
DOCTRINE: Consignation is necessarily judicial. Article 1258 of the Civil Code specifically provides
that consignation shall be made by depositing the thing or things due at the disposal of judicial
authority. The said provision clearly precludes consignation in venues other than the courts.
FACTS: Petitioner Oscar Cacayorin is a member of the Respondent Association engaged in the
business of developing low cost housing projects for personnel of the AFP, PNP, BFP, BJMP, and
the Philippine Coast Guard. He filed an application to purchase a piece of property owned by
the association in Puerto Princesa through a loan facility.On July 1994, the Spouses executed a
Loan and Mortgage Agreement with the Rural Bank of San Teodora under the Pag-Ibig Fund’s
Financing Program. On the basis of the Rural Bank’s letter of guaranty, AFPMBAI executed a
Deed of Sale in favor of the Petitioners and the subject property was thereafter transferred in
their name. Unfortunately, the Pag-Ibig Loan did not push through and the Rural Bank was
placed under receivership by the PDIC which prompted the association to take possession of
the Petitioner’s Loan Documents and Transfer Certificate of Title. Petitioners filed for consignation
of loan payment, recovery of title, and cancellation of mortgage against the Association, PDIC,
and the Register of Deeds of Puerto Princesa. The Association filed a motion to dismiss on the
ground that the jurisdiction of the case falls within the auspices of the HLURB.
ISSUE: Whether or not the Complaint falls within the jurisdiction of the HLURB.
HELD: The Supreme Court held that the Complaint makes out a case for consignation. It is well
settled that the allegations of the complaint are determinative of the nature of the action and
consequently the jurisdiction of the courts. Under Art. 1256 of the Civil Code, the debtor shall be
released from responsibility by the consignation of the thing or sum due, without need of prior
tender of payment, when the creditor is absent or unknown or when he is incapacitated to
receive such payment at the time it is due, or when two or more persons claim the same right to
collect, or when the title to the obligation has been lost. As to jurisdiction, the Civil Code
provides under Art. 1258 that Consignation shall be made by depositing the things due at the
disposal of Judicial Authority, before whom the tender of payment shall be provided, in a proper
case, and the announcement of the consignation in other cases. Thus, Consignation is
necessarily judicial and outside the jurisdiction of the HLURB.
25
LUZON DEVELOPMENT BANK VS. ENRIQUEZ

GR No. 168646 January 12, 2011
DOCTRINE: The nature of a contract to sell is that the ownership vests upon full payment of the
purchase price. Hence, there was no impediment on the DacionenPago. Delta cannot be held
liable should Enriquez gain ownership over the land. The effect of dacion is that the bank
becomes a party to the contract to sell between Enriquez and Delta.
FACTS: Delta entered into a loan with Luzon Development Bank secured by a real estate
mortgage. The REM was amended to include a bigger sum loaned from the bank. The proceeds
of the loan were applied to the project of developing subdivision. Delta subsequently entered
into a contract to sell with Enriquez and the latter was able to pay half the price of the lot. Delta
failed to pay the amortization, thus entered into a DacionenPago by turning over the properties
to the bank including the lot of Enriquez. The latter protested the transaction to the HLURB asking
for the refund of the purchase price. HLURB ruled in favor of Enriquez but did not approve the
refund.
ISSUE: Whether or not the Dacionenpago was valid.
HELD: The mortgage entered into by Delta and LDB is void for the violation of PD 957- Subdivision
and Condominium Buyer Protective Decree. However, it does not; in any way invalidate the
dacionenpago. The CA erred when it ruled that Delta lost ownership over the property subject
of the contract to sell. The nature of such contract is that the ownership vests upon full payment
of the purchase price. Hence, there was no impediment on the Sacionenpago. Delta cannot be
held liable should Enriquez gain ownership over the land. The effect of Dacion is that the bank
becomes a party to the contract to sell between Enriquez and Delta. The intention of Dacion is
to extinguish the obligation of Delta for the properties. Likewise, the bank, being a financial
institution, should have exercised greater diligence and cannot claim to be transferee in good
faith. Furthermore, Enriquez is liable for the agreed amount done in good faith, thus cannot be
challenged anymore.
26
ASIAN CONSTRUCTION AND DEVELOPMENT CORP. VS. CATHAY PACIFIC STEEL CORP.
GR No. 167942, June 29, 2010
DOCTRINE: Parties would do well to always be conscious of their freedom to accept or reject
printed stipulations supplied by only one party that form part of the contract they enter into.
Failure to object to such stipulations, which are not excessive or unconscionable, will bind them
to its performance.
FACTS: On several occasions between June and July of 1997, petitioner Asian Construction and
Development Corp. purchased from respondent Cathay Pacific Steel Corp. various reinforcing
steel bars worth Php 2,650,916.40 covered by a total of 12 invoices. Petitioner made a partial
payment of Php 2,159,211.49 and another partial payment of Php 250,000 leaving a balance of
Php 214,704.91. The respondent sent two demand letters but no payment was made by
petitioner. A complaint for a sum of money and damages were thereafter filed. The petitioner
denied that it authorized the purchases/purchase orders from the respondent; it alleged that no
demand for payment was made or received by the former, it had no knowledge as to the truth
of the invoices, statement of accounts and letters as they were never received by the petitioner.
The RTC rendered a decision in favor of the respondent. Petitioner then appealed to the CA
which affirmed the RTC’s decision. Hence this petition.
ISSUE: Whether the sales invoices are in the nature of contracts of adhesion, and should
therefore binding, if no objection has been made.
HELD: YES. In the present case, the sales invoices expressly stipulated the payment of interest and
attorney’s fees in case of overdue accounts and collection suits. The court has repeatedly held
that contracts of adhesion are binding as ordinary contracts. Those who adhere to the contract
are in reality free to reject it entirely and if they adhere, they give their consent. Petitioner was
free to contract the services of another supplier if the respondent’s terms were not acceptable.
27
LAO VS. SPECIAL PLANS, INC.

GR No. 164791, June 29, 2010
DOCTRINE: Compensation shall take place when two persons, in their own right, are creditors
and debtors of each other, and if all necessary requirements for compensation to be proper be
fulfilled.
FACTS: Petitioners Selwyn Lao (Lao) and Edgar Manansala (Manansala), together with Benjamin
Jim (Jim), entered into a Contract of Lease with respondent Special Plans, Inc. (SPI). Upon
expiration of the lease contract, it was renewed for a period of eight months. On June 1996, SPI
sent a Demand Letter to the petitioners asking for full payment of rentals in arrears. Receiving no
payment, SPI filed a Complaint for sum of money with the MTC, claiming that Jim and petitioners
have accumulated unpaid rentals of Php 118, 000. Petitioners alleged that SPI made them
believe that it owns the leased property, and likewise did not deliver the leased premises in a
condition fit for petitioners intended to use. Thus, they were constrained to incur expenses for
necessary repairs as well as expenses for the repair of structural defects, which SPI failed and
refused to reimburse. The MeTC found that SPI is solely responsible for repairs, and dismissed the
complaint for lack of cause of action. SPI filed and appeal before the RTC, which rendered a
decision affirming the MeTC. Thereafter, Lao and Manansala filed a Petition for Review with the
CA, which affirmed in toto the RTC Decision.
ISSUE: Whether the amount spent for repairs by the petitioners should be judicially compensated
against the said unpaid rentals.
HELD: NO. The Civil Code provides that compensation shall take place when two persons, in their
own right, are creditors and debtors of each other. In order for compensation to be proper, it is
necessary that: (1) Each one of the obligors be bound principally and that he be at the same
time a principal creditor of the other; (2) Both debts consist in a sum of money, or if the things
due are consumable, they be of the same kind and also for the same quality if the latter has
been stated; (3) The two debt are due; (4) The debts are liquidated and demandable; (5) Over
neither of them be any retention or controversy, commenced by third parties and
communicated in due time to the debtor. The petitioners failed to properly discharge their
burden to show that the debts are liquidated and demandable. Consequently, legal
compensation is inapplicable.
28
GOLDLOOP PROPERTIES INC. VS. GSIS

G.R. No. 171076 August 1, 2012
DOCTRINE:Article 1192 of the civil code applies in case both parties have committed a breach
of the obligation when the liability of the first infractor shall be equitably tempered by the courts.
If it cannot be determined which of the parties first violated the contract, the same shall be
deemed extinguished, and each shall bear his own damages.
FACTS: Government Service Insurance System (GSIS) and Goldloop executed a Memorandum of
Agreement whereby Goldloop, at its own expense and account, would renovate the façade of
the Philcomenbuilding as well as construct a condominium building. However, Goldloop failed
to proceed with the construction as provided in their agreement.Goldloop contented that they
were ready, willing and able to perform all of its obligations under the agreement as shown by
the preparatory works it had undertaken. But due to noncompliance of the non-issuance of
building permits by the Mayor of Pasig due to failure of GSIS in paying taxes, the project could
not push through. This resulted to the petition to rescind the contract filed by the GSISagainst
Goldloop.
ISSUE: Whether or not the rescission of contract shall prosper?
HELD: No. The court ruled that it cannot be determined with certainty which between the parties
is the first infractor, there exists as uncertainty as to which between the failure to comply on the
part of each party came first, hence the last portion of article 1192 finds application pursuant
thereto, the parties respective claims for damages are thus deemed extinguished and each of
them shall bear its own damages. It is the duty of both parties to surrender whatever amount
received or property to part with, wherein Goldloop should return to GSIS the possession and
control of the property subject of their agreements while GSIS should reimburse Goldloop
whatever amount it had received from the latter by reason of the MOA and the Addendum.
29
PERSONS AND FAMILY RELATIONS
1. 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 in cognitive of the basic marital covenants that concomitantly
must be assumed and discharged by the parties to the marriage(NICOLAS S. MATUDAN
VS. REPUBLIC OF THE PHILIPPINES and MARILYN B. MATUDANG.R. No. 203284 November 14,
2016)
2. The provisions of the Civil Code, unless expressly providing to the contrary as in Article
144, when referring to a "spouse" contemplate a lawfully wedded spouse. (ROSARIO
BANGUIS-TAMBUYAT vs. WENIFREDA BALCOM-TAMBUYAT G.R. No. 202805, March 23,
2015)
3. Petitioner failed to prove that his wife suffers from psychological incapacity. He presented the
testimonies of two supposed expert witnesses who concluded that respondent is psychologically
incapacitated, but the conclusions of these witnesses were premised on the alleged acts or
behavior of respondent which had not been sufficiently proven.(KALAW VS. FERNANDEZ, G.R.
No. 166357 September 19, 2011)
4. The marriage between the late Sen. Tamano and Zorayda was celebrated in 1958,
solemnized under civil and Muslim rites. The only law in force governing marriage
relationships between Muslims and non-Muslims alike was the Civil Code of 1950, under
the provisions of which only one marriage can exist at any given time. As far as Estrellita is
concerned, Sen. Tamano’s prior marriage to Zorayda has been severed by way of
divorce under PD 1083, the law that codified Muslim personal laws. Article 13(1) thereof
provides that the law applies to “marriage and divorce wherein both parties are Muslims,
or wherein only the male party is a Muslim and the marriage is solemnized in accordance
with Muslim law or this Code in any part of the Philippines.” But Article 13 of PD 1083 does
not provide for a situation where the parties were married both in civil and Muslim
rites.(JULIANO-LLAVE VS. REPUBLIC, GR No 169766 March 30, 2011)
5. The filiation of legitimate children is established by any of the following as provided by

article 172 of family code; the record of birth appearing in the civil registry or a final
judgement; or an admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned. however, in the absence
of foregoing evidence, the legitimate filiation shall be proved by the open and
continuous possession of the status of a legitimate child; or any other means allowed by
the rules of court and special laws. (ANTONIO PERLA VS. MIRASOL BARING AND RANDY
PERLA, G.R. No. 172471 November 12, 2012)
30
NICOLAS S. MATUDAN VS. REPUBLIC OF THE PHILIPPINES and MARILYN B. MATUDAN

G.R. No. 203284 November 14, 2016
DOCTRINE: 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 in cognitive of the basic marital covenants that concomitantly must be
assumed and discharged by the parties to the marriage
FACTS: Nicolas and Marilyn were married and had four children. In 1985, Marilyn left to work
abroad. From then on, petitioner and the children lost contact with her; she had not been seen
nor heard from again. Twenty-three years later, or on June 20, 2008, petitioner filed a Petition for
Declaration of Nullity of Marriage. Petitioner alleged that before, during, and after his marriage
to Marilyn, the latter was psychologically incapable of fulfilling her obligations as a wife and
mother; that she consistently neglected and failed to provide petitioner and her children with
the necessary emotional and financial care, support, and sustenance, and even so after leaving
for work abroad; and that Marilyn is "not ready for a lasting and commitment like marriage" as
she never gave him and their children financial and emotional support. The Republic of the
Philippines (Republic), opposed the Petition, for failure to prove Marilyn's claimed psychological
incapacity
ISSUE: WON Petitioner was able to prove her psychological incapacity
HELD: No. what is important is the presence of evidence that can adequately establish the
party's psychological condition. The complete facts should allege the physical manifestations, if
any, as are indicative of psychological incapacity at the time of the celebration of the
marriage. Petitioner's judicial affidavit and testimony during trial, however, fail to show gravity
and juridical antecedence. While he complained that Marilyn lacked a sense of guilt and was
involved in "activities defying social and moral ethics," and that she was, among others,
irrational, irresponsible, immature, and self-centered, he nonetheless failed to sufficiently and
particularly elaborate on these allegations, particularly the degree of Marilyn's claimed
irresponsibility, immaturity, or selfishness; and the only reason for his filing Civil Case No. Q-08-
62827 was Marilyn's complete abandonment of the marriage and family when she left to work
abroad.
31
ROSARIO BANGUIS-TAMBUYATvs. WENIFREDA BALCOM-TAMBUYAT

G.R. No. 202805, March 23, 2015
DOCTRINE: The provisions of the Civil Code, unless expressly providing to the contrary as in Article
144, when referring to a "spouse" contemplate a lawfully wedded spouse.
FACTS: Adriano M. Tambuyat and respondent WenifredaBalcom-Tambuyat were married on

September 16, 1965. During their marriage, Adriano acquired several real properties, including a
700-square meter parcel of land (the subject property), The deed of sale over the said property
was signed by Adriano alone as vendee; one of the signing witnesses to the deed of sale was
petitioner Rosario Banguis-Tambuyat, who signed therein as "Rosario Banguis." When Transfer
Certificate of Title covering the subject property was issued, however, it was made under the
name of "ADRIANO M. TAMBUYAT married to ROSARIO E. BANGUIS." All this time, petitioner
Banguis remained married to Eduardo Nolasco. They were married on October 15, 1975, and at
all times material to this case, Nolasco was alive, and his marriage to petitioner subsisted and
was never annulled. On June 7, 1998, Adriano died intestate. Wenifreda filed a Petition for
Cancellation of TCT. She alleged therein that she was the surviving spouse of Adriano; that the
issuance of the title in Banguis's name as Adriano's spouse was due to "an insidious machination
by her and the person who brokered the sale of the subject property, allegedly a cousin or
relative of hers;" She claimed that on the other hand, she alone bought the subject property
using her personal funds; that she and Adriano were married on September 2, 1988 and
thereafter lived together as a married couple;
ISSUE: Whether or not the corrected and cancelled the questioned entry in TCT is in clear
violation of article 148 of the family code
HELD: As correctly ruled by the appellate court, the preponderance of evidence points to the
fact that Wenifreda is the legitimate spouse of Adriano. Documentary evidence — among
others, the parties' respective marriage contracts, which, together with marriage certificates, are
considered the primary evidence of a marital union— indicates that Adriano was married to
Wenifreda, while Banguis was married to Nolasco — and both marriages were subsisting at the
time of the acquisition of the subject property and issuance of the certificate of title thereto. The
right and privilege belonged to Wenifreda alone. The provisions of the Civil Code, unless
expressly providing to the contrary as in Article 144, when referring to a "spouse" contemplate a
lawfully wedded spouse.
32
KALAW VS. FERNANDEZ
G.R. No. 166357 September 19, 2011
DOCTRINE:Petitioner failed to prove that his wife suffers from psychological incapacity. He presented the
testimonies of two supposed expert witnesses who concluded that respondent is psychologically
incapacitated, but the conclusions of these witnesses were premised on the alleged acts or behavior of
respondent which had not been sufficiently proven.
FACTS: Tyrone filed a petition for declaration of nullity of marriage based on Article 36 of the
Family Code. He alleged that Malyn was psychologically incapacitated to perform and comply
with the essential marital obligations at the time of the celebration of their marriage alleging that
she leaves the children without proper care and attention as she played mahjong all day and
all night; she leaves the house to party with male friends and returned in the early hours of the
following day; and she committed adultery with one Benjie whom he saw half-naked in the hotel
room. Tyrone presented a psychologist, Dr. Gates, and a Catholic canon law expert, Fr. Healy, to
testify on Malyn’s psychological incapacity. Dr. Gates explained that Malyn suffers from
Narcissistic Personality Disorder and that it “may have been evident even prior to her marriage”
because it is rooted in her family background and upbringing. Fr. Healy concluded that Malyn
was psychologically incapacitated to perform her marital duties. He explained that her
psychological incapacity is rooted in her role as the breadwinner of her family. This role allegedly
inflated Malyn’s ego to the point that her needs became priority, while her kids’ and husband’s
needs became secondary.
ISSUE: Whether or not petitioner has sufficiently proved that respondent suffers from
psychological incapacity
HELD: NO. In the case at bar, petitioner failed to prove that his wife (respondent) suffers from
psychological incapacity. He presented the testimonies of two supposed expert witnesses who
concluded that respondent is psychologically incapacitated, but the conclusions of these
witnesses were premised on the alleged acts or behavior of respondent which had not been
sufficiently proven. Petitioners experts heavily relied on petitioner’s allegations of respondents
constant mahjong sessions, visits to the beauty parlor, going out with friends, adultery, and
neglect of their children. Petitioners experts opined that respondents alleged habits, when
performed constantly to the detriment of quality and quantity of time devoted to her duties as
mother and wife, constitute a psychological incapacity in the form of NPD. But petitioner’s
allegations, which served as the bases or underlying premises of the conclusions of his experts,
were not actually proven. In fact, respondent presented contrary evidence refuting these
allegations of the petitioner.
33
JULIANO-LLAVE VS. REPUBLIC

GR No 169766 March 30, 2011
DOCTRINE: The marriage between the late Sen. Tamano and Zorayda was celebrated in 1958,
solemnized under civil and Muslim rites. The only law in force governing marriage relationships
between Muslims and non-Muslims alike was the Civil Code of 1950, under the provisions of
which only one marriage can exist at any given time. As far as Estrellita is concerned, Sen.
Tamano’s prior marriage to Zorayda has been severed by way of divorce under PD 1083, the
law that codified Muslim personal laws. Article 13(1) thereof provides that the law applies to
“marriage and divorce wherein both parties are Muslims, or wherein only the male party is a
Muslim and the marriage is solemnized in accordance with Muslim law or this Code in any part
of the Philippines.” But Article 13 of PD 1083 does not provide for a situation where the parties
were married both in civil and Muslim rites.
FACTS: Around 11 months before his death, Sen. Tamano married Estrellita twice – initially under
the Islamic laws and tradition on May 27, 1993 in Cotabato City and, subsequently, under a civil
ceremony officiated by an RTC Judge at Malabang, Lanaodel Sur on June 2, 1993. In their
marriage contracts, Sen. Tamano s civil status was indicated as “divorced”. Since then, Estrellita
has been representing herself to the whole world as Sen. Tamano s wife, and upon his death, his
widow. On November 23, 1994, private respondents HajaPutriZorayda A. Tamano (Zorayda) and
her son Adib Ahmad A. Tamano (Adib), in their own behalf and in behalf of the rest of Sen.
Tamano s legitimate children with Zorayda, filed a complaint with the RTC of Quezon City for the
declaration of nullity of marriage between Estrellita and Sen. Tamano for being bigamous. The
complaint alleged that Sen. Tamano married Zorayda on May 31, 1958 under civil rites, and that
this marriage remained subsisting when he married Estrellita in 1993.
ISSUE: Whether the marriage between Estrellita and the late Sen. Tamano was bigamous.
HELD: Yes. The civil code governs the marriage of Zoraydaand late Sen. Tamano; their marriage
was never invalidated by PD 1083. Sen. Tamano s subsequent marriage to Estrellita is void ab
initio. The marriage between the late Sen. Tamano and Zorayda was celebrated in 1958,
solemnized under civil and Muslim rites. The only law in force governing marriage relationships
between Muslims and non-Muslims alike was the Civil Code of 1950, under the provisions of
which only one marriage can exist at any given time. Under the marriage provisions of the Civil
Code, divorce is not recognized except during the effectivity of Republic Act No. 394 which was
not availed of during its effectivity. As far as Estrellita is concerned, Sen. Tamano s prior marriage
to Zorayda has been severed by way of divorce under PD 1083, the law that codified Muslim
personal laws. However, PD 1083 cannot benefit Estrellita. Firstly, Article 13(1) thereof provides
that the law applies to “marriage and divorce wherein both parties are Muslims, or wherein only
the male party is a Muslim and the marriage is solemnized in accordance with Muslim law or this
Code in any part of the Philippines.” But Article 13 of PD 1083 does not provide for a situation
where the parties were married both in civil and Muslim rites.
34
ANTONIO PERLA VS. MIRASOL BARING AND RANDY PERLA

G.R. No. 172471 November 12, 2012
DOCTRINE: The filiation of legitimate children is established by any of the following as provided
by article 172 of family code; the record of birth appearing in the civil registry or a final
judgement; or an admission of legitimate filiation in a public document or a private handwritten
instrument and signed by the parent concerned.however, in the absence of foregoing
evidence, the legitimate filiation shall be proved by the open and continuous possession of the
status of a legitimate child; or any other means allowed by the rules of court and special laws.
FACTS: In the case at bar, the respondents filed a complaint for support before the RTC against
Antonio. They presented the certificate of live birth, baptismal certificate and testimonies to
justify their claim.However, the petitioner contends that there was an error in his middle initial “E”
and not “A” and there was no signature made by him in the documents presented.
The court then granted the petition for support against Antonio. However, the petitioner
filed a certiorari for lack of merit.
ISSUE: Whether or not the Randy’s illegitimate filiation was proven?
HELD No. The court ruled that the lack of participation of the supposed father in the preparation
of a baptismal certificate and even in the birth certificate render the evidence incompetent to
prove paternity. Also, the testimony of randy will not constitute continuous possession of the
status of a legitimate child when he stated that he kissed Antonio’s hand and Antonio hugged
him and told him that he will give him support.
35
PARTNERSHIP, AGENCY AND TRUSTS
1. The basis of agency is representation and the same may be constituted expressly or
impliedly. In an implied agency, the principal can be bound by the acts of the implied
agent (WILLIAM ANGIDAN SIY VS. ALVIN TOMLIN G.R. No. 205998 April 24, 2017)
2. The mere fact that the agent was authorized to mortgage the property is not sufficient to
bind the principal, unless the deed was executed and signed by the agent for and on
behalf of his principal. (BUCTON VS. RURAL BANK OF EL SALVADOR INC., G.R. No. 179625,
February 24, 2014)
3. Cresencia’s co-heirs executed a SPA, designating the former as their attorney-in-fact and
empowering her to file cases for collection of all the accounts due to Filomena or her
estate. No court should shield a party from compliance with valid obligations based on
wholly unsubstantiated claims of mistake or fraud. Having refused to abide by a
compromise agreement, the aggrieved party may either enforce it or regard it as
rescinded and insist upon the original demand.(LAZARO PASCO and LAURO PASCO VS.
HEIRS OF FILOMENA DE GUZMAN, GR No. 165554, July 26, 2010)
36
WILLIAM ANGIDAN SIY VS. ALVIN TOMLIN

G.R. No. 205998 April 24, 2017
DOCTRINE: The basis of agency is representation and the same may be constituted expressly or
impliedly. In an implied agency, the principal can be bound by the acts of the implied agent.
FACTS: Petitioner is the owner of a 2007 model Range Rover with Plate Number ZMG 272 which
he purchased from Alberto Lopez III (Lopez) and entrusted the said vehicle to Ong, a
businessman who owned a second-hand car sales showroom ("Motortrend" in Katipunan,
Quezon City) which the latter failed to remit the proceeds of the purported sale nor return the
vehicle; that petitioner later found out that the vehicle had been transferred to Chua. Petitioner
filed a complaint before the Quezon City Police District's Anti-Carnapping Section; and Ong still
failed to surrender the vehicle; that petitioner learned that the vehicle was being transferred to
respondent; and that the vehicle was later impounded and taken into custody by the PNP-
Highway Patrol Group (HPG). Petitioner prayed that a writ of replevin be issued for the return of
the vehicle to him. Respondent argues that the writ of replevin could not be made effect for the
petitioner is no longer the owner.
ISSUE: WON the writ of replevin could be implemented?
HELD: No. The basis of agency is representation and the same may be constituted expressly or
impliedly. In an implied agency, the principal can be bound by the acts of the implied agent.
"35 The same is true with an oral agency. Acting for and in petitioner's behalf by virtue of the
implied or oral agency, Ong was thus able to sell the vehicle to Chua, but he failed to remit the
proceeds thereof to petitioner; his guarantee checks bounced as well. This entitled petitioner to
sue for Estafa through abuse of confidence. Since Ong was able to sell the subject vehicle to
Chua, petitioner thus ceased to be the owner thereof. Nor is he entitled to the possession of the
vehicle; together with his ownership, petitioner lost his right of possession over the vehicle. His
argument that respondent is a buyer in bad faith is unavailing. Petitioner had no right to file said
report, as he was no longer the owner of the vehicle at the time; indeed, his right of action is
only against Ong, for collection of the proceeds of the sale. Considering that he was no longer
the owner or rightful possessor of the subject vehicle at the time he filed Civil Case No. Q-11-
69644 in July, 2011, petitioner may not seek a return of the same through replevin
37
BUCTON VS RURAL BANK OF EL SALVADOR INC.

G.R. No. 179625, February 24, 2014
DOCTRINE:The mere fact that the agent was authorized to mortgage the property is not
sufficient to bind the principal, unless the deed was executed and signed by the agent for and
on behalf of his principal
FACTS: Bucton filed for the nullification of foreclosure against Concepcion and the Rural Bank of
El Salvador. Petitioner alleged that she was the owner of a parcel of land and that Concepcion
borrowed the title of the land on the pretext that she was going to show it to an interested
buyer. She constituted a mortgage with the respondent bank using an SPA allegedly executed
by Bucton to Concepcion. The bank contends that the SPA was valid.
ISSUE
Whether or not the Real Estate Mortgage was entered into by Concepcion in her own
personal Capacity.
HELD
Yes, Concepcion acted in her own personal capacity. SC already ruled that "in order to
bind the principal by a deed executed by an agent, the deed must upon its face purport to be
made, signed and sealed in the name of the principal." In other words, the mere fact that the
agent was authorized to mortgage the property is not sufficient to bind the principal, unless the
deed was executed and signed by the agent for and on behalf of his principal.In this case, the
authorized agent failed to indicate in the mortgage that she was acting for and on behalf of her
principal. The Real Estate Mortgage, explicitly shows on its face, that it was signed by
Concepcion in her own name and in her own personal capacity. In fact, there is nothing in the
document to show that she was acting or signing as an agent of petitioner. Thus, consistent with
the law on agency and established jurisprudence, petitioner cannot be bound by the acts of
Concepcion.
38
LAZARO PASCO and LAURO PASCO VS. HEIRS OF FILOMENA DE GUZMAN

GR No. 165554, July 26, 2010
DOCTRINE: Cresencia’s co-heirs executed a SPA, designating the former as their attorney-in-fact
and empowering her to file cases for collection of all the accounts due to Filomena or her
estate. No court should shield a party from compliance with valid obligations based on wholly
unsubstantiated claims of mistake or fraud. Having refused to abide by a compromise
agreement, the aggrieved party may either enforce it or regard it as rescinded and insist upon
the original demand.
FACTS
The present petition began with a Complaint for Sum of Money and Damages filed by
the heirs of Filomena de Guzman against petitioners Lauro Pasco and Lazaro Pasco. It was
alleged then Lauro and Lazaro obtained a loan in the amount of Php 140, 000.00 from Filomena
(now deceased). To secure the loan, Lauro executed a chattel mortgage on his Isuzu Jeep in
favor of Filomena. Upon her death, her heirs sought to collect from the petitioners, to no avail.
The respondents then filed a collection case authorizing Cresencia de Guzman-Principe to act
as their attorney-in-fact through a SPA. During the pre-trial, the parties verbally agreed to settle
the case and thereafter jointly filed a Compromise Agreement that was signed by the parties
and their respective counsel. The MTC approved such agreement. Subsequently the petitioners
filed a Motion to Set Aside Decision, alleging that the Agreement was written in a language not
understood by them, and the terms and conditions thereof were not fully explained to them.
ISSUES
Whether the SPA validly authorized Cresencia to enter into the Compromise Agreement
on behalf of her co-heirs.
HELD
YES. The petitioners maintain that the SPA was fatally defective because Cresencia was
not specifically authorized to enter into a compromise agreement. However, it was undisputed
that Cresencia’s co-heirs executed a SPA, designating the former as their attorney-in-fact and
empowering her to file cases for collection of all the accounts due to Filomena or her estate.
Consequently, Cresencia entered into the subject Compromise Agreement in order to collect
the overdue loan obtained by Pasco from Filomena. In doing so, Cresencia was merely
performing her duty as attorney-in-fact of her co-heirs pursuant to the SPA given to her.
39
PROPERTY
1. Genaro may not dispose of the property which does not belong to him although he may
have executed a document awarding the same to Augusto. No one can give that
which he does not own - nemodat quod non habet. (TRINIDAD II VS. SPOUSES PALAD,
G.R. No. 203397, December 9, 2015)
2. Not all may demand for an easement of right-of-way. Under the law, an easement of
right-of-way may only be demanded by the owner of an immovable property or by any
person who by virtue of a real right may cultivate or use the same. If the mode of
acquisition is prescription, whether ordinary or extraordinary, it must first be shown that
the land has already been converted to private ownership prior to the requisite
acquisitive prescriptive period. (LIWAYWAY ANDRES, RONNIE ANDRES, and PABLO B.
FRANCISCO vs. STA. LUCIA REALTY & DEVELOPMENT, INCORPORATED G.R. No. 201405,
August 24, 2015)
3. In easement of right of way, there is no alienation of the land occupied. Should the right
of way no longer be necessary because the owner of the dominant estate has joined it
to another abutting on a public highway, the servient estate demands that the
easement be extinguished, the value of the property received by the servient estate by
way of indemnity shall be returned in full to the dominant estate. (DE GUZMAN VS.
FILINVEST DEVELOPMENT CORP., G.R. No. 191710, [January 14, 2015])
4. For an action to quiet title to prosper, two indispensable requisites must be present,
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.Legal title
denotes registered ownership, while equitable title means beneficial
ownership.(RESIDENTS OF LOWER ATAB & TEACHERS' VILLAGE vs. STA. MONICA INDUSTRIAL
& DEVELOPMENT CORPORATION G.R. No. 198878, [October 15, 2014], 745 PHIL 554-565)
5. The Registered owner of a property may transfer his title at any time and the lease merely
follows the property as a lien or encumbrance.(ONE NETWORK RURAL BANK INC. VS
BARIC, G.R. No. 193684, March 5, 2014)
40
6. Abandonment of the awarded land continuously for 2 years amounts to cancellation of

Emancipation Patent. (JOSE VS. NOVIDA, GR No. 177374, July 2, 2014)
7. Title issued pursuant to emancipation patents become indefeasible and incontrovertible

upon the expiration of one year from the date of the issuance of the order for the
issuance of the patent. Registration is not necessary for donation 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).(BUMAGAT VS. ARRIBAY,
G.R. No. 194818, June 9, 2014)
8. If a person claiming to be the owner thereof is in actual possession of the property, as the
defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet
title to the property, does not prescribe. The reason for this is that one who is in actual possession
of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his
title is attacked before taking steps to vindicate his right, the reason for the rule being, that his
undisturbed possession gives him a continuing right to seek the aid of a court of equity to
ascertain and determine the nature of the adverse claim of a third party and its effect on his
own title, which right can be claimed only by one who is in possession. (PHILIPPINE NATIONAL
BANK VS. JUMAMOY, G.R. No. 169901 August 3, 2011)
9. In an action for recovery of possession of realty, who has the better right of possession,
the registered owner armed with a Torrens title or the occupants brandishing a notarized
but unregistered deed of sale executed before the land was registered under the Torrens
system? We resolve in favor of the title holder. (VDA. DE AGUILAR VS. SPOUSES ALFARO,
GR No. 164402, July 5, 2010)
10. The lack of any factual basis for the third-party claim of ownership was not cured when
the petitioner filed its motion for reconsideration before the trial court. At that point, the
evidence should have been adduced to support the petitioner’s claim. Given the
absence of any admissible evidence of third party-ownership and the failure to comply
with article 45 requirement, the court’s order is deemed valid. (SEA LION FISHING
CORPORATION V PEOPLE OF THE PHILIPPINES, GR NO. 172678 March 23, 2011)
11. An action for quieting of title is essentially a common law remedy grounded on equity. In
order for this action to prosper, two indispensable requisites must concur: the plaintiff or
complainant has a legal or an equitable title to or interest in real property subject of the
action, and the deed of proceeding claimed to be casting cloud on his title must be
shown to be in fact invalid or inoperative despite the prima facie appearance of validity
on legal efficacy.(MANANQUIL VS. MOICO, G.R. No. 180076, November 21, 2012)
12. the plaintiff need to prove only two things, 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)
that the deed, claim, encumbrance or proceeding claimed to be casting a cloud on his
41
title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.(CHUNG JR. VS. MONDRAGON, G.R. No. 179754,
November 21, 2012)
13. It is not necessary that the owner of a parcel of land should himself occupy the property
as someone in his name may perform the act. In other words, the owner of real estate
has possession, either when he himself is physically in occupation of the property, or
when another person who recognizes his rights as owner is in such occupancy. This
declaration is in conformity with Art. 524 of the Civil Code providing that possession may
be exercised in one’s own name or in the name of another. (HEIRS OF ISIP SR. VS.
QUINTOS, G.R. No. 172008 August 1, 2012)
42
TRINIDAD II VS. SPOUSES PALAD

G.R. No. 203397, December 9, 2015
DOCTRINE: Genaro may not dispose of the property which does not belong to him although he
may have executed a document awarding the same to Augusto. No one can give that which
he does not own - nemodat quod non habet.
FACTS
Respondent spouses Felicidad bought from Ramos an eight-hectare parcel of land

which was later registered. Ramos claimed that respondents were not the owners of the subject
property and secured their title through dubious means. He said that the subject property
formed part of the property that was given to him by his father who acquired it from one
Kausapin; that said five-hectare property was declared for taxation purposes by his father; and
since 1980, he has been in possession of the subject property; Ramos passed away during the
trial and was substituted by his widow, herein petitioner Trinidad and children. RTC dismissed the
case stating that the possession by the defendants of the area in question antedates by five
years the claim who should have questioned the entry of the defendants into the property.
Respondents appealed to CA contending that they cannot be bound by the supposed
agreement between Genaro and Atty. Trinidad because it is void since, being a mere tenant of
the property, Genaro cannot award the same to Atty. Trinidad. Hence, petitioners filed a motion
for reconsideration.
ISSUE
WON Respondents shall have a better right on the property in question
HELD
The fact is undisputed that the subject property lies within Lot 13-C which is registered in
the name of respondents. The evidence on record also suggests that contrary to petitioners'
claim, the subject property constitutes a portion of an eight-hectare parcel of land acquired by
respondents from Ramos by purchase in 1985, and was not the result of a June 5, 1985 deed of
extrajudicial settlement and September 9, 1985 segregation agreement between the original
owners and respondent Felicidad. They claim that the subject property was awarded as
attorney's fees in 1977 to Augusto by Genaro. However, in seeking the annulment of
respondents' title, they claim at the same time that the property was acquired by Felicidad
through inheritance from Navarro, who happens to be the grandmother of Ramos. Genaro may
not dispose of the property which does not belong to him although he may have executed a
document awarding the same to Augusto. No one can give that which he does not own -
nemodat quod non habet. Evidently, Augusto had no right over Lot 13-C which he wrongly
occupied.
43
LIWAYWAY ANDRES, RONNIE ANDRES, and PABLO B. FRANCISCO vs. STA. LUCIA REALTY &
DEVELOPMENT, INCORPORATED
G.R. No. 201405, August 24, 2015
DOCTRINE
Not all may demand for an easement of right-of-way. Under the law, an easement of
right-of-way may only be demanded by the owner of an immovable property or by any person
who by virtue of a real right may cultivate or use the same. If the mode of acquisition is
prescription, whether ordinary or extraordinary, it must first be shown that the land has already
been converted to private ownership prior to the requisite acquisitive prescriptive period.
FACTS
Petitioners alleged that they are co-owners and possessors for more than 50 years of
three parcels of unregistered agricultural land in Pag-asa, Binangonan, Rizal with a total area of
more or less 10,500 square meters (subject property). A few years back, however, respondent
acquired the lands surrounding the subject property, developed the same into a residential
subdivision known as the Binangonan Metropolis East, and built a concrete perimeter fence
around it such that petitioners and Liza were denied access from subject property to the nearest
public road and vice versa. They thus prayed for a right-of-way within Binangonan Metropolis
East in order for them to have access to Col. Guido Street, a public road. Respondent denied
knowledge of any property adjoining its subdivision owned by petitioners. At any rate, it pointed
out that petitioners and Liza failed to sufficiently allege in their complaint the existence of the
requisites for the grant of an easement of right-of-way.
ISSUE
Whether petitioners are entitled to demand an easement of right-of-way from

respondent
HELD
No. Under Article 649 of the Civil Code, an easement of right-of-way may be demanded
by the owner of an immovable or by any person who by virtue of a real right may cultivate or
use the same. Petitioners argue that they are entitled to demand an easement of right-of-way
from respondent because they are the owners of the subject property intended to be the
dominant estate. In the alternative, petitioners assert that they have already become owners of
the subject property through extraordinary acquisitive prescription. It must first be shown that the
land has already been converted to private ownership prior to the requisite acquisitive
prescriptive period. Otherwise, Article 1113 of the Civil Code, which provides that property of the
State not patrimonial in character shall not be the subject of prescription, applies.
44
DE GUZMAN VS. FILINVEST DEVELOPMENT CORP.
G.R. No. 191710, January 14, 2015
DOCTRINE: In easement of right of way, there is no alienation of the land occupied. Should the
right of way no longer be necessary because the owner of the dominant estate has joined it to
another abutting on a public highway, the servient estate demands that the easement be
extinguished, the value of the property received by the servient estate by way of indemnity shall
be returned in full to the dominant estate.
FACTS
Petitioners Demetria de Guzman et. Al. were co-owners in fee simple of a parcel of land
situated in Barrio Bulao, Cainta, Rizal, which was later subdivided among the petitioners and for
which individual titles were issued. The property is enclosed and surrounded by other real
properties belonging to various owners. One of its adjoining properties is Filinvest Home
Subdivision Phase IV-A, a subdivision owned and developed by respondent which, coming from
petitioners' property, has a potential direct access to Marcos highway either by foot or vehicle.
As such, petitioners filed a Complaint for Easement of Right of Way against respondent before
the RTC. Petitioners have an access toSumulong Highway through another property adjoining
the latter's property. In fact, the distance from petitioners' property to Sumulong Highway using
the said other property is only 1,500 meters or shorter as compared to the 2,500-meter distance
between petitioners' property and Marcos Highway using respondent's subdivision. The RTC
rendered a Decision granting petitioners the right of way across respondent's subdivision.
Respondent contended that under Articles 649 and 650 of the Civil Code, the measurement of
the land comprising a right of way should be the distance of the dominant estate to the public
highway.
ISSUE
Whether or not the respondent is entitled to indemnity.
HELD
Yes. In easement of right of way, there is no alienation of the land occupied. Petitioners
argue that it is unfair to require them to pay the value of the affected road lots since the same is
tantamount to buying the property without them being issued titles and not having the right to
exercise dominion over it. The argument is untenable. Payment of the value of the land for
permanent use of the easement does not mean an alienation of the land occupied. Should the
right of way no longer be necessary because the owner of the dominant estate has joined it to
another abutting on a public highway, the servient estate demands that the easement be
extinguished, the value of the property received by the servient estate by way of indemnity shall
be returned in full to the dominant estate. This only reinforces the concept that the payment of
indemnity is merely for the use of the right of way and not for its alienation.
45
RESIDENTS OF LOWER ATAB & TEACHERS' VILLAGE vs. STA. MONICA INDUSTRIAL &
DEVELOPMENT CORPORATION
G.R. No. 198878, October 15, 2014
DOCTRINE: For an action to quiet title to prosper, two indispensable requisites must be present,
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.Legal title denotes registered ownership,
while equitable title means beneficial ownership.
FACTS
Residents of LowerAtab& Teachers’ Village, Sto. Tomas– filed a civil case for quieting of
title with damages against respondent. That petitioners are successors and transferees-in-interest
of Torres, the supposed owner of an unregistered parcel of land in Baguio City where they are in
possession of the subject property in the concept of owner, declared their respective lots and
homes for tax purposes, and paid the real estate taxes thereon; that in May 2000, respondent
began to erect a fence on the subject property, claiming that it is the owner of a large portion
thereof by virtue of TCT No. T-63184; that said TCT No. T-63184 is null and void, as it was derived
from Original Certificate of Title No. O-281 (OCT No. O-281), which was declared void pursuant
to Presidential Decree No. 127110 (PD 1271) Respondent claimed that it is a valid and subsisting
title; that the case for quieting of title constitutes a collateral attack upon TCT No. T-63184; and
that petitioners have no title to the subject property and are mere illegal occupants thereof.
ISSUE
Whether or not the action to quiet title shall prosper
HELD
No. For an action to quiet title to prosper, two indispensable requisites must be present,
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." Petitioners do not have legal or equitable
title to the subject property. Evidently, there are no certificates of title in their respective names.
They acknowledged that they applied for the purchase of the property from the government,
through town site sales applications coursed through the DENR. In their Petition before this Court,
they particularly prayed that TCT No. T-63184 be nullified in order that the said title would not
hinder the approval of their town site sales applications pending with the DENR.Thus, petitioners
admitted that they are not the owners of the subject property; the same constitutes state or
government land which they would like to acquire by purchase.
46
ONE NETWORK RURAL BANK INC. VS BARIC
G.R. No. 193684, March 5, 2014
DOCTRINE:The Registered owner of a property may transfer his title at any time and the lease
merely follows the property as a lien or encumbrance.
FACTS
Palado, registered owner of a commercial property being leased to Baric, demanded

that the latter return the leased property. Baric took the matter to the LupongTagapamayapa,
however, the office was already being demolished. Baric filed a case of forcible entry against
Palado and One Network Rural Bank Inc. Network Bank essentially claimed that as a buyer in
good faith and having acquired the property after the cancellation of the notice of lispendens,
it should not be held solidarily liable with Palado for nominal damages in favor of Baric.
ISSUE
Whether or not the bank should be liable for damages.
HELD
No, it should not be liable for damages. Network Bank did not violate any of Baric's rights;
it was merely a purchaser or transferee of the property. Surely, it is not prohibited from acquiring
the property even while the forcible entry case was pending, because as the registered owner
of the subject property, Palado may transfer his title at any time and the lease merely follows the
property as a lien or encumbrance. Any invasion or violation of Baric's rights as lessee was
committed solely by Palado, and Network Bank may not be implicated or found guilty unless it
actually took part in the commission of illegal acts, which does not appear to be so from the
evidence on record. On the contrary, it appears that Baric was ousted through Palado's acts
even before Network Bank acquired the subject property or came into the picture.
47
JOSE VS NOVIDA
GR No. 177374, July 2, 2014
DOCTRINE: Abandonment of the awarded land continuously for 2 years amounts to cancellation
of Emancipation Patent
FACTS
Respondents were farmer beneficiaries of emancipation patents. Petitioners filed for the
cancellation of emancipation patents against the respondents claiming that they were the
actual tenant-tillers of the subject property. Respondents alleged that petitioner, Felicismo Jose,
was the original tenant of the subject property but he obtained loans secured by real mortgage
on the property and migrated to the USA abandoning the said property. They alleged that
Felicismo usurped from the respondents the subject property after returning from the USA with
the use of force, stealth, threats and intimidation.
ISSUE
Whether or not Felicisimo’s right to the Emancipation Patent was extinguished upon his
naturalization.
HELD
Yes, Felicisimo’s right was extinguished.When Felicisimo Jose left to pursue his desire to acquire
his naturalization of citizenship in the United States which amounted to a circumstance
advantageous to him and his family, in effect, there was literally an implied extinguishment
and/or voluntary termination of the agricultural tenancy relation on the part of the respondent-
appellant as contemplated in Section 8 (2) in relation to Section 28 (5) of RA 3844. 23 Both the
elements of physical relinquishment of possession and intention to vacate were consummated
and remained undisputed findings of facts of the case.
48
PHILIPPINE NATIONAL BANK VS. JUMAMOY

G.R. No. 169901 August 3, 2011
DOCTRINE: If a person claiming to be the owner thereof is in actual possession of the property, as the
defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to
the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of
land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked
before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession
gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of
the adverse claim of a third party and its effect on his own title, which right can be claimed only by one
who is in possession
FACTS
Sesinado, Ciraco’s predecessor-in-interest, sought the reconveyance of a lot which was

erroneously included in Antonio’s free patent application. RTC then ordered the heirs of Antonio
to reconvey said portion to Ciriaco and acknowledged Ciriacos actual and exclusive
possession, cultivation, and claim of ownership over the subject lot. The Deed of Conveyance
issued in favor of Ciriaco could not be annotated on since said title was already cancelled.
Antonio and his wife Rosalia mortgaged the lot to PNB as security for a series of loans. After
Antonio and Rosalia failed to pay their obligation, PNB foreclosed the mortgage.
ISSUE
Whether or not the reconveyance of the property is proper
HELD
If a person claiming to be the owner thereof is in actual possession of the property, as

the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to
quiet title to the property, does not prescribe. The reason for this is that one who is in actual
possession of a piece of land claiming to be the owner thereof may wait until his possession is
disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule
being, that his undisturbed possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a third party and its effect
on his own title, which right can be claimed only by one who is in possession. Therefore, as it has
been judicially established that he is in actual possession of the property he claims as his and
that he has a better right to the disputed portion, his suit for reconveyance is in effect an action
for quieting of title. Hence, petitioners defense of prescription against Ciriaco does not lie.
49
BUMAGAT VS ARRIBAY
G.R. No. 194818, June 9, 2014
DOCTRINE:Title issued pursuant to emancipation patents become indefeasible and

incontrovertible upon the expiration of one year from the date of the issuance of the order for
the issuance of the patent.Registration is not necessary for donation 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).
FACTS
Petitioners were owners of the agricultural land, the titles of which were issued pursuant
to emancipation patents. Petitioners filed a complaint for forcible entry against the respondents.
Petitioners contended that when certificates of title were issued in their favor, they ceased to be
tenant-tillers of the land but became owners thereof. Respondents alleged that they obtained
title through Romulo Sr.’s heirs, whose claim to the property is by virtue of an unregistered deed
of donation in their favor before the enactment of the Agrarian Reform Law. Respondents
allegedly obtained an order from the Department of Agrarian Reform exempting the property
from the coverage of PD 27 (Decreeing the emancipation of tenants from bondage of the soil).
Respondent adds that with the cancellation of petitioners’ titles, they were directed to enter into
a leasehold relationship with the owners of the subject parcels of land, or the heirs of Romulo Sr.
ISSUE
Whether or not the petitioners are the owners of the land
HELD
Yes, the petitioners are the owners of the land.When petitioners’ titles were issued in 1986,
these became indefeasible and incontrovertible. Certificates of title issued pursuant to
emancipation patents acquire the same protection accorded to other titles, and become
indefeasible and incontrovertible upon the expiration of one year from the date of the issuance
of the order for the issuance of the patent. Lands so titled may no longer be the subject matter
of a cadastral proceeding; nor can they be decreed to other individuals.
Article 749 of the Civil Code provides inter alia that "in order that the donation of an
immovable may be valid, it must be made in a public document, specifying therein the property
donated and the value of the charges which the donee must satisfy." Corollarily, Article 709 of
the same Code explicitly states that "the titles of ownership, or other rights over immovable
property, which are not duly inscribed or annotated in the Registry of property shall not
prejudice third persons." From the foregoing provisions, it may be inferred that as between the
parties to a donation of an immovable property, all that is required is for said donation to be
contained in a public document. 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, as in the case at bar.
50
VDA. DE AGUILAR VS. SPOUSES ALFARO

GR No. 164402, July 5, 2010
DOCTRINE:In an action for recovery of possession of realty, who has the better right of possession,
the registered owner armed with a Torrens title or the occupants brandishing a notarized but
unregistered deed of sale executed before the land was registered under the Torrens system?
We resolve in favor of the title holder.
FACTS
Asuncion Aguilar alleged that her husband Ignacio Aguilar (Ignacio) was issued an OCT
over a parcel of land in Sablayan, Occidental Mindoro. Prior thereto, Ignacio allowed Anastacia
Urieta (Anastacia) mother of respondent Ederlina Alfaro (Ederlina), to construct a house on the
southern portion of said land and to stay therein temporarily. Ignacio died and his heirs decided
to partition the lot, and asked the respondents to vacate the lot. They did not do so. Thus, a
case for accionpubliciana was filed. During the trial, the petitioner presented the testimonies of
Orlando Aguilar (Orlando) and Zenaida Baldeo (Zenaida) saying that Orlando has been staying
in said lot and had built the house thereon, and that his mother, herein petitioner, denied having
sold the property or having signed any document for that matter. The RTC held that the
respondents are guilty of laches and that the reconveyance of the disputed property in their
favor would violate the rule or indefeasibility of Torrens title. The respondents appealed to the
CA, which reversed the RTC’s decision and dismissing the complaint, as well as the
counterclaim.
ISSUE
Whether the CA erred in upholding the validity/genuineness and due execution of the
purported deed of sale of the portion of the lot despite the vehement denial of the alleged
vendors.
HELD
YES. The objective of the plaintiffs in accionpubliciana is to recover possession only, not
ownership. However, where the parties raise the issue of ownership, the courts may pass upon
the issue to determine who between the parties has the right to possess the property. It is settled
that a Torrens title is evidence of indefeasible title to property in favor of the person in whose
name the title appears. It is conclusive evidence with respect to the ownership of the land
described therein. It is also settled that the title holder is entitled to all attributes of ownership of
property, including possession. In the present case, there is no dispute that the petition is the
holder of a Torrens title over the lot.
51
SEA LION FISHING CORPORATION V PEOPLE OF THE PHILIPPINES

GR NO. 172678 MARCH 23 2011
DOCTRINE: The lack of any factual basis for the third-party claim of ownership was not cured
when the petitioner filed its motion for reconsideration before the trial court. At that point, the
evidence should have been adduced to support the petitioner’s claim. Given the absence of
any admissible evidence of third party-ownership and the failure to comply with article 45
requirement, the court’s order is deemed valid.
FACTS
The marine coast guard and the barangay officials of mangsee island in balacbac,
Palawan conducted a search and seizure operation on F/V Sea Lion due to complaints of
poaching. The captain, a Filipino was apprehended along with other Filipino crew members and
chinese fishermen. The provincial prosecutor dismissed the charges except those against the
chinese fishermen which were saved by the crew of F/V Sea Lion from a distressed chinese
vessel. The prosecutor concluded that the crew were unarmed, outnumbered and hampered
by language barrirer, acted only out of uncontrollable fear of imminent danger to their lives and
property which hindered them from asserting their authority to the chinese nationals. With the
crew of F/V Sea lion exculpated, F/V Sea lion was thus recommended to be released to the
petitioner upon proper showing of evidence of its ownership of the aforesaid vessel. Petitioner
however, failed to act in accordance with its resolution. The petitioner filed a motion for
reconsideration to delete from the sentences the confiscation of the vessel but was denied by
RTC, and CA, thus this petition.
ISSUE
Whether or not the confiscation of F/V Sea Lion was valid.
HELD
Yes. The petition has no merit. The CA did not find lack or error of jurisdiction. The
penalties imposable under the law were within its jurisdiction. As a necessary consequence, the
trial court had the authority to determine how the fishing vessel should be disposed of. Likewise,
no grave abuse of discretion attended the issuance of the trial court’s order to confiscate F/V
Sea Lion considering the absence of evidence showing that said vessel is owned by a third
party. Evidently, the remedial relief pursued by the petitioner was infirm and improper.
Significantly, the lack of any factual basis for the third-party claim of ownership was not cured
when the petitioner filed its motion for reconsideration before the trial court. At that point, the
evidence should have been adduced to support the petitioner’s claim. Given the absence of
any admissible evidence of third party-ownership and the failure to comply with article 45
requirement, the court’s order is deemed valid.
52
MANANQUIL VS. MOICO

G.R. No. 180076, November 21, 2012
DOCTRINE:An action for quieting of title is essentially a common law remedy grounded on
equity. In order for this action to prosper, two indispensable requisites must concur: the plaintiff or
complainant has a legal or an equitable title to or interest in real property subject of the action,
and the deed of proceeding claimed to be casting cloud on his title must be shown to be in
fact invalid or inoperative despite the prima facie appearance of validity on legal efficacy.
FACTS
After the death of Illuminardo and PrescillaMananquil, their heirs executed extrajudicial
settlement and adjudicated ownership in favor of Dianita over the lots sold and awarded to the
spouses by the National Housing Authority. After some time, they discovered that the child of
Prescilla from her first marriage and two others executed an extrajudicial settlement and deed
of absolute sale in favor of Roberto Moico and eventually started to evict the tenants and
demolish the structures they built on the said lots. This resulted to institution of civil case no. 2741
for quieting of title. Respondent contends that petitioners have failed to show that Illuminardo
and Prescilla have perfected their grant or award from the NHAso as to secure a firm, a perfect
and confirmed title over the subject lots.
ISSUE
Whether or not the action for quieting of title and injustice relied filed by the Mananquil
heirs shall prosper
HELD
The court ruled that instead of resolving the case, the petitioners shall be required to
have proof of either a certificate of title, award, or grant from the proper agency in the name of
their predecessor Illuminardo, or in the absence thereof, a right to succeed to illuminardo’s right
to subject lots, not only as his heirs, but also as qualified legitimate beneficiaries or successors.An
action for quieting of title is essentially a common law remedy grounded on equity. In order for
this action to prosper, two indispensable requisites must concur: the plaintiff or complainant has
a legal or an equitable title to or interest in real property subject of the action, and the deed of
proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or
inoperative despite the prima facie appearance of validity on legal efficacy.
53
CHUNG JR. VS. MONDRAGON

G.R. No. 179754, November 21, 2012
DOCTRINE: the plaintiff need to prove only two things, 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)
that the deed, claim, encumbrance or proceeding claimed to be casting a cloud on his title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity
or legal efficacy.
FACTS
Petitioners are descendants of Rafael Mondragon by his first wife, EleuteriaCalunia (while
respondent Jack Daniel Mondragon is Rafaels descendant by his second wife, Andrea
Baldos.OCT No. 22447 is registered in the name of "Heirs of Andrea Baldos" and covers 16,177
square meters of land in Southern Leyte. Chung, et al. claim that from 1921 up to 2000, Rafael
appeared as owner of the land in its tax declaration, and that a free patent was issued in 1987
in the name of Andreas heirs upon application of Teofila G.Maceda, petitioners sister. Bourbon,
et al. claim that Andrea is the exclusive owner of the land, having inherited the same from her
father and that after Andrea died, his son Fortunato inherited the land; and when the latter
died, his son Jack Daniel (herein respondent) came into possession and enjoyment thereof.
Sometime in the year 2000, he sold a 1,500-square meter portion of the land to his co-
respondent Regis-Schmitz.On the claim that Jack Daniel had no right to sell a portion of the land
and that the sale to Regis-Schmitz created a cloud upon their title, Chung, Jr., et al. filed an
action to quiet title.
ISSUE
Whether or not the action to quiet the title should prosper
HELD
No. The court ruled that the petitioners cannot on the pretext of maintaining a suit for
quieting of title. The land could not have belonged to Rafael, because he is not even named in
OCT No. 22447.With greater reason may it be said that the land could not belong to petitioners,
who are Rafaels children by his first wife Eleuteria. Unless Eleuteria and Andrea were related by
blood such fact is not borne out by the record they could not be heirs to each other. Add to this
is the fact that petitioners are not in possession of the land. Petitioners do not possess legal or
equitable title to the land.
54
HEIRS OF ISIP SR. VS. QUINTOS

G.R. No. 172008 August 1, 2012
DOCTRINE:It is not necessary that the owner of a parcel of land should himself occupy the
property as someone in his name may perform the act. In other words, the owner of real estate
has possession, either when he himself is physically in occupation of the property, or when
another person who recognizes his rights as owner is in such occupancy. This declaration is in
conformity with Art. 524 of the Civil Code providing that possession may be exercised in one’s
own name or in the name of another.
FACTS
Petitioners argue that respondents deprived them of the possession of their lot through
deceit, strategy and stealth. They aver that respondents deceived them to temporarily vacate
the premises on the pretext that they must convince the insurance inspectors that the premises
are being used solely for commercial purposes. They were thus, allegedly tricked to move out
and once the respondents achieved their goal, they were prevented from entering the premises
by posting security guards at the gates.However, the respondent posit that through a series of
various transfers originating from Pontino, they now legally occupy the subject premises and do
their business therein under the name of Roniro enterprises.
ISSUE
Whether or not the petitioner has the better right possession over the subject property?
HELD
No. The court ruled that Rogelio sr. was able to occupy the lot and was in fact possessing
the same in the name of the respondents. Verily, whatever right to possess petitioners have in this
case cannot be superior to that of the respondents since it was from the latter that their
predecessor in interest derived his claim of possession. This decision is in conformity with article
524 of the civil code providing the possession may be exercised in one’s own name or in the
name of another.
55
WILLS AND SUCCESSION
1. Under Article 777 of the Civil Code, “The rights to the succession are transmitted from the
moment of the death of the decedent.” Thus, petitioner and her coheirs should have
been favored on the question of possession, being heirs who succeeded the registered
owner of the properties in dispute. (GINA ANDAYA VS. ERNESTO VILLAOS; G.R. No. 202426;
January 27, 2016)
2. Filiation may be proved by an admission of legitimate filiation in a public document or a

private handwritten instrument and signed by the parent concerned, and such due
recognition in any authentic writing is, in itself, a consummated act of acknowledgment
of the child, and no further court action is required. Where the private handwritten
instrument is the lone piece of evidence submitted to prove filiation, there should be strict
compliance with the requirement that the same must be signed by the acknowledging
parent. (RODOLFO S. AGUILAR vs . EDNA G. SIASAT G.R. No. 200169, January 28, 2015)
3. Under Article 777 of the Civil Code, the rights to the succession are transmitted from the
moment of death. As co-owners, they may use the property owned in common,
provided they do so in accordance with the purpose for which it is intended and in such
a way as not to injure the interest of the co-ownership or prevent the other co-owners
from using it according to their rights. (INING VS. VEGA, G.R. No. 17472, August 12, 2013)
4. The state of being forgetful does not necessarily make a person mentally unsound to render him
unfit to execute a Will. Forgetfulness is not equivalent to being of unsound mind. (BALTAZAR VS.
LAXA, G.R. No. 174489 April 11, 2012)
56
GINA ENDAYA VS. ERNESTO VILLAOS

G.R. No. 202426; January 27, 2016
DOCTRINE: Under Article 777 of the Civil Code, “The rights to the succession are transmitted from
the moment of the death of the decedent.” Thus, petitioner and her coheirs should have been
favored on the question of possession, being heirs who succeeded the registered owner of the
properties in dispute.
FACTS
Petitioner Endaya and the other heirs of AtilanoVillaos filed before the RTC of Palawan
City, a complaint for declaration of nullity of deeds of sale of the Palawan Village Hotel (PVH)
against respondent Villaos. The complaint sought the recovery of several lots, including that on
which the PVH and Wooden Summer Homes are located. The complaint stated that the
purported sale of the affected lots, from Atilano to respondent, was spurious. Subsequently,
respondent filed an ejectment case with preliminary mandatory injunction against petitioner
Endaya and Rivera before the (MTCC). Respondent said that he bought from Atilano eight
parcels of land including those where PVH and WSH stood. Respondent then took possession of
the lots and started to manage and operate the said hotels and upon taking possession of said
lots he told petitioner and those who lived in within the lots in question to vacate the premises,
giving them a period of six months to do so. However, instead of leaving, petitioner even
participated in a violent take-over of portions of PVH and WSH, thus, an ejectment case was
filed. Petitioner stated that during the alleged execution of said deeds, Atilano was no longer
ambulatory and could no longer talk and give assent to the deeds of sale. She added that
Atilano, an educated and successful businessman, could have affixed his to the documents and
not merely put his thumbmark on it. She claims that the deeds of sale were forged and were not
executed with Atilano’s consent.
ISSUE
Who has a better right over the subject property
HELD
While respondent has in his favor deeds of sale over the eight parcels of land, these
deeds were not registered; thus, title remained in the name of the owner and seller Atilano.
When he died, title passed to petitioner, who is his illegitimate child. Under Article 777 of the Civil
Code, “The rights to the succession are transmitted from the moment of the death of the
decedent.” Thus, petitioner and her coheirs should have been favored on the question of
possession, being heirs who succeeded the registered owner of the properties in dispute. The
facts indicate that petitioner and her co-heirs have established residence on the subject
premises; the fact that they were given a long period of six months within which to vacate the
same shows how deep they have established roots therein. If they vacate the premises, serious
irreversible consequences – such as demolition of their respective residences – might ensue.
57
RODOLFO S. AGUILAR vs. EDNA G. SIASAT

G.R. No. 200169, January 28, 2015
DOCTRINE:Filiation may be proved by an admission of legitimate filiation in a public document or

a private handwritten instrument and signed by the parent concerned, and such due
recognition in any authentic writing is, in itself, a consummated act of acknowledgment of the
child, and no further court action is required. Where the private handwritten instrument is the
lone piece of evidence submitted to prove filiation, there should be strict compliance with the
requirement that the same must be signed by the acknowledging parent.
FACTS
Spouses Alfredo Aguilar and Candelaria Siasat-Aguilar died, intestate and without debts,
on August 26, 1983 and February 8, 1994, respectively. Included in their estate are two parcels of
land. In June 1996, petitioner Rodolfo S. Aguilar filed with Bacolod RTC a civil case for mandatory
injunction with damages against respondent Edna G. Siasat. The Complaint alleged that
petitioner is the only son and sole surviving heir of the Aguilar spouses; that he discovered that
the subject titles were missing, and thus he suspected that someone from the Siasat clan could
have stolen the same; that on June 22, 1996, he filed before the Bacolod RTC a Petition for the
issuance of second owner's copy of Certificate of Title, which respondent opposed; Respondent
claimed that petitioner is not the son and sole surviving heir of the Aguilar spouses, but a mere
stranger who was raised by the Aguilar spouses; that petitioner is not a natural or adopted child
of the Aguilar spouses; that since Alfredo Aguilar predeceased his wife, Candelaria Siasat-
Aguilar, the latter inherited the conjugal share of the former; that upon the death of Candelaria
Siasat-Aguilar, her brothers and sisters inherited her estate; and that the subject titles were not
stolen, but entrusted to her for safekeeping by Candelaria Siasat-Aguilar, who is her aunt.
ISSUE
Whether or not the acknowledgement executed by Alfredo Aguilar, recognizing the

petitioner as his son satisfies the requirement in the establishment of the legitimate filiation
HELD
Yes. It must be concluded that petitioner — who was born on March 5, 1945, or during
the marriage of Alfredo Aguilar and Candelaria Siasat-Aguilarand before their respective
deaths— has sufficiently proved that he is the legitimate issue of the Aguilar spouses. As
petitioner correctly argues, Alfredo Aguilar's SSS Form E-1 (Exhibit "G") satisfies the requirement for
proof of filiation and relationship to the Aguilar spouses under Article 172 of the Family Code; by
itself, said document constitutes an "admission of legitimate filiation in a public document or a
private handwritten instrument and signed by the parent concerned."
58
INING VS. VEGA

G.R. No. 174727 August 12, 2013
DOCTRINE: Under Article 777 of the Civil Code, the rights to the succession are transmitted from
the moment of death. As co-owners, they may use the property owned in common, provided
they do so in accordance with the purpose for which it is intended and in such a way as not to
injure the interest of the co-ownership or prevent the other co-owners from using it according to
their rights.
FACTS
Leon Roldan is the owner of the subject property and was survived by his siblings
Romana and Gregoria. Romana was survived by her daughter Anunciacion Vega and
grandson, Leonardo (also both deceased). Leonardo in turn is survived by his wife Lourdes and
children. Gregoria, on the other hand, was survived by her six children: petitioners. Leonardo
filed with a Civil Case for partition, recovery of ownership and possession, with damages, against
Gregoria’s heirs. In his Amended Complaint, Leonardo alleged that on several occasions, he
demanded the partition of the property but Gregoria’s heirs refused to heed his demands.
Leonardo thus prayed that he be declared the owner of half of the subject property. Teodora,
Camilo, Adolfo, Lucimo Jr. and Herminigildo claimed that Leonardo had no cause of action
against them; that they have become the sole owners of the subject property through Lucimo
Sr. who acquired the same in good faith by sale from Enriquez, who in turn acquired the same
from Leon;
ISSUE
Whether or not Leonardo is entitled to the subject property.
HELD
The trial court concluded that no such sale from Leon to Lucimo Sr. ever took place.
Despite this finding, petitioners did not appeal hence the issue became final. Since Leon died
without issue, his heirs are his siblings, Romana and Gregoria, who thus inherited the property in
equal shares. In turn, Romana’s and Gregoria’s heirs – the parties herein – became entitled to
the property upon the sisters’ passing. Under Article 777 of the Civil Code, the rights to the
succession are transmitted from the moment of death. As co-owners, they may use the property
owned in common, provided they do so in accordance with the purpose for which it is intended
and in such a way as not to injure the interest of the co-ownership or prevent the other co-
owners from using it according to their rights. They have the full ownership of their parts and of
the fruits and benefits pertaining thereto, and may alienate, assign or mortgage them, and even
substitute another person in their enjoyment, except when personal rights are involved. Each co-
owner may demand at any time the partition of the thing owned in common, insofar as his share
is concerned.
59
BALTAZAR VS. LAXA

G.R. No. 174489 April 11, 2012
DOCTRINE: The state of being forgetful does not necessarily make a person mentally unsound to render
him unfit to execute a Will. Forgetfulness is not equivalent to being of unsound mind.
FACTS
Paciencia was a 78 y/o spinster when she made her last will and testament which was
executed in the house of retired Judge Limpin and was read to Paciencia twice. Paciencia
expressed in the presence of the instrumental witnesses that the document is her last will and
testament. She thereafter affixed her signature at the end of the said document on page 3 and
then on the left margin of pages 1, 2 and 4 thereof. Childless and without any brothers or sisters,
Paciencia bequeathed all her properties to respondent Lorenzo Laxa, his nephew, and his wife
Corazon Laza and their children Luna and Katherine. Paciencia left for USA where she resided
with Lorenzo and his family until her death. Lorenzo filed a petition for the probate of the Will of
Paciencia and for the issuance of Letters of Administration in his favor. Antonio Baltazar filed an
opposition to Lorenzo’s petition. Antonio averred that the properties subject of Paciencia’sWill
belong to NicomedaMangalindan, his predecessor-in-interest; hence, Paciencia had no right to
bequeath them to Lorenzo. Also, one of the petitioners, Rosie Mateo testified that Paciencia is in
the state of being “mangulyan” or forgetful making her unfit for executing a will
ISSUE
Whether or not Pacencia was of sound mind at the time the will was allegedly
executed.
HELD
The state of being forgetful does not necessarily make a person mentally unsound so as
to render him unfit to execute a Will. Forgetfulness is not equivalent to being of unsound mind.
Apart from the testimony of Rosie pertaining to Paciencias forgetfulness, there is no substantial
evidence, medical or otherwise, that would show that Paciencia was of unsound mind at the
time of the execution of the Will. On the other hand, we find worthier of credence Dra. Limpins
testimony as to the soundness of mind of Paciencia when the latter went to Judge Limpins house
and voluntarily executed the Will. The testimony of subscribing witnesses to a Will concerning the
testators mental condition is entitled to great weight where they are truthful and intelligent.
60
CREDIT TRANSACTIONS
1. To be a mortgagee in good faith, the innocent purchaser for value must show that
he/she purchased a property in good faith relying on the face of the title believing that
the title is clean provided that said purchaser took the necessary steps in determining
that fraud is not present. (EVELYN V. RUIZ VS. BERNARDO F. DIMAILIG G.R. No. 204280,
November 9, 2016)
2. The interest in a contract cannot produce any effect if it is not in writing. Under Art. 1956
of the New Civil Code, “No interest shall be due unless it has been expressly stipulated in
writing.” (IBM PHILIPPINES INC. VS. PRIME SYSTEMS PLUS, INC. G.R. No. 203192, August 15,
2016)
3. The collection of interest without any stipulation in writing is prohibited by law. No interest
shall be due unless it has been expressly stipulated in writing. (DE LA PAZ VS. L&J
DEVELOPMENT CORP G.R. No. 183360, [September 8, 2014])
4. P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties to
stipulate freely regarding any subsequent adjustment in the interest rate that shall accrue
on a loan or forbearance of money, goods or credits. In fine, they can agree to adjust,
upward or downward, the interest previously stipulated.(SILOS VS. PHILIPPINE NATIONAL
BANK, G.R. No. 181045, July 2, 2014)
5. The PNB had a reason to rely on what appears on the certificates of title of the properties
mortgaged. For all legal purposes, a mortgagee in good faith for at the time the
mortgages covering said properties was not aware to any flaw of the title of the
mortgagor shall have a right to the same.(LIM VS. EQUITABLE PCI BANK, G.R. No. 183918,
January 15, 2014)
6. Forbearance of money, goods or credits should therefore refer to arrangements other

than loan agreements, where a person acquiesces to the temporary use of his money,
goods or credits pending happening of certain events or fulfillment of certain conditions.
Petitioners unwarranted withholding of the money which rightfully pertains to respondent-
spouses amounts to forbearance of money which can be considered as an involuntary
loan. (ESTORES VS. SPOUSES SUPANGAN, G.R. No. 175139 April 18, 2012)
61
7. Eiji’s incapacity to own real property in the Philippines and their contention that he need
not consent to the Real Estate Mortgage contract for its validity as Evelyn and Pafin’s
defense to the suit does not negate Eiji’s right to rely on the Order of the Makati RTC of
Evelyn’s commitment not to dispose of or encumber the property and to hold third
persons, who deal with the registered property, to the annotations entered on the title.
(PACIFIC ACE FINANCE, LTD VS. YANAGISAWA, G.R. No. 175303 April 11, 2012)
8. A perusal of the Agreement dated May 9, 1992 clearly shows that the sewing machines, snap
machines and boilers were pledged to Nonwoven by Juniat to guarantee his obligation.
However, under Article 2096 of the Civil Code, [a] pledge shall not take effect against third
persons if a description of the thing pledged and the date of the pledge do not appear in a
public instrument. Hence, just like the chattel mortgage executed in favor of petitioner, the
pledge executed by Juniat in favor of Nonwoven cannot bind petitioner. (UNION BANK OF THE
PHILIPPINES VS. JUNIAT, G.R. No. 171569 August 1, 2011)
9. The general rule that a mortgagee need not look beyond the title does not apply to
banks and other financial institutions as greater care and due diligence is required of
them. Imbued with public interest, they are expected to be more cautious than ordinary
individuals. Thus, before approving a loan, the standard practice for banks and other
institution is to conduct an ocular inspection of the property offered to be mortgaged
and verify the genuineness of the title to determine the real owner/s thereof. Failure to do
so makes them mortgagee in bad faith. (ALANO VS PLANTER’S DEVELOPMENT, GR
No.171628 June 13 2011)
10. A party to a contract cannot deny the validity thereof after enjoying its benefits without
outrage to one’s sense of justice and fairness. It is a long established doctrine that a law
does not relieve a party from the effects of unwise, foolish and disastrous contracts,
entered into with all the required formalities and full awareness of what she was doing.
Courts have no power to relieve the parties from obligations voluntarily assumed simply
because their contracts turned out to be disastrous and unwise investments.(TOLEDO VS.
HYDEN, GR NO. 172139 December 8, 2010)
62
EVELYN V. RUIZ VS. BERNARDO F. DIMAILIG

G.R. No. 204280, November 9, 2016
DOCTRINE: To be a mortgagee in good faith, the innocent purchaser for value must show that
he/she purchased a property in good faith relying on the face of the title believing that the title
is clean provided that said purchaser took the necessary steps in determining that fraud is not
present.
FACTS
Bernardo is the owner of a parcel of land in Cavite where he entrusted the owner’s copy
of the said TCT to his brother Jovannie who then gave it to Editha Sanggalang, a broker, for its
intended sale. The property, however, was mortgaged to Evelyn V. Ruiz (Evelyn) Jovannie
inquired from Evelyn if Editha mortgaged Bernardo’s property to which she confirmed and told
him that she will not return the owner’s copy of the TCT. Jovannie informed her that Bernardo’s
alleged signature in the REM was not genuine since he was abroad at the time of its execution.
Evelyn claims that she is an “innocent purchaser for value” since before she accepted the
mortgage of the subject property she went to visit the property. She also admitted that she did
not verify the neighborhood regarding the owner of the property and the occupant thereof.
Evelyn transacted only with Editha, not with “Bernardo” throughout the negotiation despite the
fact that Editha had no power of attorney.
ISSUE
Whether or not Evelyn is a mortgagee in good faith
HELD
No. Evelyn is not a mortgagee in good faith. During the time of its execution, Bernardo
was abroad and Jovannie informed Evelyn regarding such matter therefore he could not have
signed the REM. It being a forged instrument, the Deed of REM is a nullity and conveys no title. To
be considered as a mortgagee in good faith, Evelyn must take the necessary steps to determine
any defect in the title and if the alleged owner of the mortgaged property is the real owner, but
she did not make sure that the person claiming to be Bernardo is not an impostor. “Bernardo’s”
failure to sufficiently establish his identity should have aroused suspicion on the part of Evelyn
whether the person she was transacting with is the real Bernardo or a mere impostor. Lastly, even
assuming that the impostor has caused the property to be titled in his name as if he had rightful
ownership thereof, Evelyn would still not be deemed a mortgagee in good faith because
“Bernardo” did not participate in the negotiations/transactions leading to the execution of the
Deed of REM and the person she transacted was Editha who had no power of attorney. Evelyn
acted with haste in granting the loan, without first determining the ownership of the property
mortgaged, the mortgagee cannot be considered as an innocent mortgagee in good faith.
63
IBM PHILIPPINES INC. VS. PRIME SYSTEMS PLUS, INC.

G.R. No. 203192, August 15, 2016
DOCTRINE: The interest in a contract cannot produce any effect if it is not in writing. Under Art.
1956 of the New Civil Code, “No interest shall be due unless it has been expressly stipulated in
writing.”
FACTS
Petitioner entered into an agreement with respondent whereby the former will deliver 45
automated teller machines (ATMs) and several computer hardware to respondent’s customers
for the total amount of P24,743,610.43. Petitioner sought to have respondent pay the former
P45,997,266.22 representing respondent’s unpaid obligation with 3% monthly interest.
Respondent denied the allegations and alleged that it had fully paid. Petitioner claims that
there was an express agreement for a 3% monthly interest, which petitioner placed in writing in
its letter and that respondent’s employee duly received the letter, that respondent did not
object or comment to the letter after it received the same (thus making respondent in estoppel),
that respondent even asked for a reduction of the interest rate, which shows that respondent
originally agreed to its letter, that even if employee’s act of receiving the letter was not an
acceptance, respondent still wanted to push through with the delivery of the ATMs, shows that
respondent knew and agreed to the 3% monthly interest and that the parties entered into an
Agreement for Assignment of Receivables and respondent executed an Assignment of
Receivables - which documents expressly stated that interest was to be included in the unpaid
balance.
ISSUE
Did petitioner’s imposition of 3% monthly interest constitute a written stipulation under

Art.1956 of the New Civil Code?
HELD
It has been a long-standing rule that for interest to become due and demandable, two
requisites must be present: (1) that there must be an express stipulation for the payment of
interest and (2) the agreement to pay interest is in writing.
There was a lack of consent to the 3% monthly interest from respondent. Petitioner claims that
the respondent’s act of requesting a lower interest rate shows the latter’s agreement to a 3%
monthly interest. Although respondent did agree to the imposition of interest per se, the fact that
there was never a clear rate of interest still leaves room to guess as to how much interest
respondent will pay. This is precisely the reason why Article 1956 was included in the Civil Code -
so that both parties clearly agree to and are fully aware of the price to be paid in a contract
64
DE LA PAZ VS. L & J DEVELOPMENT CO.

G.R. 183360 September 8, 2014
DOCTRINE:The collection of interest without any stipulation in writing is prohibited by law. No

interest shall be due unless it has been expressly stipulated in writing.
FACTS
Dela Paz lent a sum of money worth Php 350K to L & J Devt. Corp., a property developer
represented by Atty. Salonga as its president and general manager.The loan was executed
without any security and no maturity date. However, the parties agreed the loan will have a 6%
monthly interest. L&J paid a total of Php 576K including interest charges from December 2000 to
August 2003. It later failed to make payments due to financial difficulties in the business. Rolando
then filed a collection case with the MTC. L&J did not deny that they did incurred a debt from
Rolando, and admitted that they failed to pay due to a fortuitous event (financial difficulties).
They also contended that the 6% monthly interest is unconscionable. Rolando also contends
that Atty. Salonga tricked him to execute the said loan plus interest without reducing the
agreement in writing. The MTC rendered judgment in favor of Rolando but reduced the legal
interest rate to 12% per annum on the remaining loan for reasons of equity. L&J appealed the
decision to the RTC – contending once again that the 6% interest rate is unconscionable, and
that their previous payment which totaled Php 576K should be used to set off the principal loan
of Php 350K. The RTC affirmed the decision of the MTC. On appeal, the CA ruled in favor of L&J;
ruled that the loan was already paid, and that Rolando should return the excess Php 226,000
with interest of 12% per annum.
ISSUE
Whether or not the judgment of the CA that the principal loan is deemed paid is
dependent on the validity of the monthly interest rate imposed must be upheld.
HELD
No. Under Article 1956 of the Civil Code, no interest shall be due unless it has been
expressly stipulated in writing. Jurisprudence on the matter also holds that for interest to be due
and payable, two conditions must concur: a) express stipulation for the payment of interest; and
b) the agreement to pay interest is reduced in writing. Here, the parties did not put down in
writing their agreement. Thus, no interest is due. The collection of interest without any stipulation
in writing is prohibited by law. Moreover, even if the payment of interest has been reduced in
writing, a 6% monthly interest rate on a loan is unconscionable, regardless of who between the
parties proposed the rate. In this case, there is no specified period as to the payment of the
loan. Hence, levying 6% monthly or 72% interest per annumis "definitely outrageous and
inordinate."The situation that it was the debtor who insisted on the interest rate will not exempt
Rolando from a ruling that the rate is void.
65
SILOS VS PHILIPPINE NATIONAL BANK

G.R. No. 181045, July 2, 2014
DOCTRINE: P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties to
stipulate freely regarding any subsequent adjustment in the interest rate that shall accrue on a
loan or forbearance of money, goods or credits. In fine, they can agree to adjust, upward or
downward, the interest previously stipulated.
FACTS
Spouses Silos obtained a revolving credit line from PNB. The Credit Line Agreement stated
that the loan shall be subject to interest at the rate of 19.5% per annum and that interest rate
may be modified by the bank without notice to the borrower. The petitioners eventually faltered
in paying the interests when the interest rates soared due to the Asian financial crisis. The penalty
for such default was equivalent to 24% per annum. The spouses Silos alleged that since the
interest rates were modified without their consent or agreement, they should not be held liable
therefor.
ISSUE
Whether or not the interest rates are null and void
HELD
Yes, the interest rates are null and void. P.D. No. 1684 and C.B. Circular No. 905 no more
than allow contracting parties to stipulate freely regarding any subsequent adjustment in the
interest rate that shall accrue on a loan or forbearance of money, goods or credits. In fine, they
can agree to adjust, upward or downward, the interest previously stipulated. However, contrary
to the stubborn insistence of petitioner bank, the said law and circular did not authorize either
party to unilaterally raise the interest rate without the other’s consent. We cannot countenance
petitioner bank’s posturing that the escalation clause at bench gives it unbridled right to
unilaterally upwardly adjust the interest on private respondents’ loan. That would completely
take away from private respondents the right to assent to an important modification in their
agreement, and would negate the element of mutuality in contracts.
66
LIM VS. EQUITABLE PCI BANK

G.R. No. 183918, January 15, 2014
DOCTRINE:The PNB had a reason to rely on what appears on the certificates of title of the
properties mortgaged. For all legal purposes, a mortgagee in good faith for at the time the
mortgages covering said properties was not aware to any flaw of the title of the mortgagor shall
have a right to the same.
FACTS
Petitioner Lim executed an Irrevocable Special Power of Attorney in favor of Franco,

authorizing the latter to mortgage his share in the property which they co-owned. As a result,
Banco De Oro Savings and Mortgage Bank released a loan in the amount of ₱8.5 million. Later,
the loan was fully paid by Franco. Later, petitioner, Franco, and Victoria obtained from
respondent a loan in the amount of ₱30 million in favor of Sun Paper Products, Inc. To secure the
loan, petitioner and Franco executed in favor of respondent a Real Estate Mortgage over the
same property. However, when the loan was not paid, respondent foreclosed the mortgaged
property. Petitioner alleged that he did not authorize Franco to mortgage the subject property
to respondent and that his signatures in the Real Estate Mortgage and the Surety Agreement
were forged.
ISSUE
Whether or not Respondent Bank was failed to exercise due diligence when granting
the loan without the signature of Petitioner's wife in the mortgage contract.
HELD
Petitioner failed to prove that his signature was forged. Petitioner failed to prove
negligence on the part of respondent. Article 160 of the Civil Code provides as follows: "Art. 160.
All property of the marriage is presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to the wife." The presumption applies to
property acquired during the lifetime of the husband and wife. In this case, it appears on the
face of the title that the properties were acquired by Donata Montemayor when she was
already a widow. And this presumption under Article 160 of the Civil Code cannot prevail when
the title is in the name of only one spouse and the rights of innocent third parties are involved.
The PNB had a reason to rely on what appears on the certificates of title of the properties
mortgaged. For all legal purposes, the PNB is a mortgagee in good faith for at the time the
mortgages covering said properties were constituted the PNB was not aware to any flaw of the
title of the mortgagor. 
67
ESTORES VS. SPOUSES SUPANGAN

G.R. No. 175139 April 18, 2012
DOCTRINE: Forbearance of money, goods or credits should therefore refer to arrangements

other than loan agreements, where a person acquiesces to the temporary use of his money,
goods or credits pending happening of certain events or fulfillment of certain conditions.
Petitioners unwarranted withholding of the money which rightfully pertains to respondent-
spouses amounts to forbearance of money which can be considered as an involuntary loan.
FACTS
On October 3, 1993, Petitioner Estores and respondent-spouses Supanganentered into a

Conditional Deed of Sale whereby petitioner offered to sell, and respondent-spouses offered to
buy a parcel of land. After almost seven years from the time of the execution of the contract
and notwithstanding payment of P3.5 million on the part of respondent-spouses, petitioner still
failed to comply with her obligation to handle the peaceful ownership as stated in the provisions
of the contract. Hence, in a letter dated September 27, 2000, respondent-spouses demanded
the return of the amount of P3.5 million within 15 days from receipt of the letter. Petitioner
acknowledged receipt of the P3.5 million and promised to return the same within 120 days.
Respondent-spouses were amenable to the proposal provided an interest of 12% compounded
annually shall be imposed on the P3.5 million. Petitioner still failed to return the amount despite
demand, respondent-spouses were constrained to file a Complaint for sum of money to pay the
principal amount of P3,500,000.00 plus interest of 12% compounded annually starting October 1,
1993 or an estimated amount of P8,558,591.65. Petitioner and Arias averred that they are willing
to return the principal amount of P3.5 million but without any interest as the same was not
agreed upon.
ISSUE
Whether or not the imposition of interest is proper.
HELD
Forbearance of money, goods or credits should therefore refer to arrangements other

than loan agreements, where a person acquiesces to the temporary use of his money, goods or
credits pending happening of certain events or fulfillment of certain conditions. Petitioners
unwarranted withholding of the money which rightfully pertains to respondent-spouses amounts
to forbearance of money which can be considered as an involuntary loan. 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 12% per annum to be computed from default,
i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of
the Civil Code. Thus, the applicable rate of interest is 12% per annum.
68
PACIFIC ACE FINANCE, LTD VS. YANAGISAWA

G.R. No. 175303 April 11, 2012
DOCTRINE: Eiji’s incapacity to own real property in the Philippines and their contention that he
need not consent to the Real Estate Mortgage contract for its validity as Evelyn and Pafin’s
defense to the suit does not negate Eiji’s right to rely on the Order of the Makati RTC of Evelyn’s
commitment not to dispose of or encumber the property and to hold third persons, who deal
with the registered property, to the annotations entered on the title.
FACTS
Respondent Yanagisawa, a Japanese national, and Evelyn F. Castaeda (Evelyn), a

Filipina, contracted marriage. Evelyn purchased townhouse unit. The Registry of Deeds issued
Transfer Certificate of Title to Evelyn P. Castaneda, Filipino, married to Ejie Yanagisawa,
Japanese citizen. Eiji filed a complaint in Makati RTC for the declaration of nullity of his marriage
with Evelyn on the ground of bigamy. Eiji asked that Evelyn be enjoined from disposing or
encumbering all the properties registered in her name. Makati RTC rendered in view of the
commitment made in open court by counsel for the defendant, together with his client, that the
properties registered in the name of the defendant would not be disposed of, alienated or
encumbered in any manner during the pendency of this petition. Evelyn obtained a loan from
petitioner Pacific Ace Finance Ltd. (PAFIN). To secure the loan, Evelyn executed a real estate
mortgage in favor of PAFIN over the Paranaque townhouse unit.At the time of the mortgage,
Eijis appeal in the nullity of marriage case was pending before the CA. The Makati RTC had
dissolved Eiji and Evelyn’s marriage, and had ordered the liquidation of their registered
properties, including the Paranaque townhouse unit, with its proceeds to be divided between
the parties. The Decision of the Makati RTC did not lift or dissolve its October 2, 1996 Order on
Evelyn’s commitment not to dispose of or encumber the properties registered in her name.
ISSUE
Whether or not the Paranaque RTC can rule on the issue of ownership, even as the same
issue was already ruled upon by the Makati RTC and is pending appeal in the CA.
HELD
No. A review of the complaint shows that Eiji did not claim ownership of the Paranaque
townhouse unit or his right to consent to the REM as his bases for seeking its annulment. Instead,
Eiji invoked his right to rely on Evelyns commitment not to dispose of or encumber the property. It
was Evelyn and PAFIN that raised Eiji’s incapacity to own real property as their defense to the
suit. They maintained that Eiji, as an alien incapacitated to own real estate in the Philippines,
need not consent to the Real Estate Mortgage contract for its validity. But this argument is
beside the point and is not a proper defense to the right asserted by Eiji. This defense does not
negate Eijis right to rely on the October 2, 1996 Order of the Makati RTC and to hold third
persons, who deal with the registered property, to the annotations entered on the title. Thus, the
RTC erred in dismissing the complaint based on this defense.
69
UNION BANK OF THE PHILIPPINES VS. JUNIAT

G.R. No. 171569 August 1, 2011
DOCTRINE: A perusal of the Agreement dated May 9, 1992 clearly shows that the sewing machines,
snap machines and boilers were pledged to Nonwoven by Juniat to guarantee his obligation. However,
under Article 2096 of the Civil Code, [a] pledge shall not take effect against third persons if a description
of the thing pledged and the date of the pledge do not appear in a public instrument. Hence, just like
the chattel mortgage executed in favor of petitioner, the pledge executed by Juniat in favor of
Nonwoven cannot bind petitioner.
FACTS
Petitioner alleged that Juniat, acting for and in behalf of Winwood and Wingyan,
executed a promissory note over several motorized sewing machines and other allied
equipment to secure their obligation arising from export bills transactions to petitioner that as
additional security for the obligation, Juniat executed a Continuing Surety Agreement ; that the
loan remains unpaid; and that the mortgaged motorized sewing machines are insufficient to
answer for the obligation. Nonwoven filed an Answer, contended that the unnotarized Chattel
Mortgage executed in favor of petitioner has no binding effect on Nonwoven and that it has a
better title over the motorized sewing machines and equipment because these were assigned
to it by Juniat pursuant to their Agreement.
ISSUE
Whether or not Nonwoven has a better right of ownership or possession over the
attached properties.
HELD
NO. A perusal of the Agreement dated May 9, 1992 clearly shows that the sewing
machines, snap machines and boilers were pledged to Nonwoven by Juniat to guarantee his
obligation. However, under Article 2096 of the Civil Code, [a] pledge shall not take effect
against third persons if a description of the thing pledged and the date of the pledge do not
appear in a public instrument. Hence, just like the chattel mortgage executed in favor of
petitioner, the pledge executed by Juniat in favor of Nonwoven cannot bind petitioner.
70
ALANO VS PLANTER’S DEVELOPMENT

GR No.171628 June13 2011
DOCTRINE
The general rule that a mortgagee need not look beyond the title does not apply to
banks and other financial institutions as greater care and due diligence is required of them.
Imbued with public interest, they are expected to be more cautious than ordinary individuals.
Thus, before approving a loan, the standard practice for banks and other institution is to
conduct an ocular inspection of the property offered to be mortgaged and verify the
genuineness of the title to determine the real owner/s thereof. Failure to do so makes them
mortgagee in bad faith.
FACTS
Armando and AgapitoAlano inherited a parcel of land Armando signed a Special Power
of Attorney in his brother’s favour, to sell the land. However, the title of the land was not
immediately transferred to them due to destruction of original copies of title by a fire. Upon the
death of Agapito, his wife and his children adjudicated to themselves the land which prompted
Armando to file an adverse claim on such land being the co-owner thereof. Since his nieces
promised to properly put things right, Armando delayed the filing of a case in court. Meanwhile,
the wife of agapito, Lydia, filed a cancellation of adverse claim and thereafter,by virtue of a
deed of absolute sale allegedly executed by her children, the title was transferred to her name.
Lydia mortgaged the property to Maunlad Savings and Loan Association. Armando sought the
cancellation of title in the name of Lydia considering his ½ share of the property. Maunlad
Savings and Loans association argued that it is a mortgagee in good faith upon relying on the
certificate of title.
ISSUE
Whether or not Maunlad Savings and Loan Inc. is a mortgagee in good faith.
HELD
No. The general rule that a mortgagee need not look beyond the title does not
apply to banks and other financial institutions as greater care and due diligence is required of
them. Imbued with public interest, they are expected to be more cautious than ordinary
individuals. Thus, before approving a loan, the standard practice for banks and other institution is
to conduct an ocular inspection of the property offered to be mortgaged and verify the
genuineness of the title to determine the real owner/s thereof. Failure to do so makes them
mortgagee in bad faith. Armando contends that Maunlad Savings and Loans Association failed
to exercise due diligence in inspecting and ascertaining the status of the mortgaged property.
During the ocular inspection, the credit investigator failed to ascertain the actual occupants of
the subject property and to discover the apartment of Armando at the back portion of the land.
71
TOLEDO VS. HYDEN

GR NO. 172139 December 8, 2010
DOCTRINE: A party to a contract cannot deny the validity thereof after enjoying its benefits
without outrage to one’s sense of justice and fairness. It is a long established doctrine that a law
does not relieve a party from the effects of unwise, foolish and disastrous contracts, entered into
with all the required formalities and full awareness of what she was doing. Courts have no power
to relieve the parties from obligations voluntarily assumed simply because their contracts turned
out to be disastrous and unwise investments.
FACTS
Jocelyn Toledo was the vice president of the College Assurance Plan Phils. Inc when she
obtained a loan from Hyden. The former was religiously paying the interest to the latter by issuing
checks and depositing sums of money in the bank account of hyden. However, Toledo failed to
pay the amount of principal thus, a document entitled “Acknowledgement of Debt” was signed
by her along with issuance of checks to cover such amount. Subsequently, Jocelyn ordered the
stop payment of such checks and filed with the RTC of Cebu City a complaint against Hyden for
declaration of nullity and payment, sum of money, damages etc. Toledo averred that her total
payment of interest alone is illegal, unfounded, unjust and oppressive, and contrary to law,
likewise, there was no written agreement to pay interest. Hyden, on the other hand filed an
answer claiming that Toledo voluntarily obtained the loan knowingly the interest rate of 6%-7%
per month.
ISSUE
Whether or not the imposition of 6% to 7% interest is unconscionable
HELD
No. the interest rate paid by Toledo is not excessive under the circumstances and the
document “acknowledgment of Debt” is valid. A party to a contract cannot deny the validity
thereof after enjoying its benefits without outrage to one’s sense of justice and fairness. It is a
longestablished doctrine that a law does not relieve a party from the effects of unwise, foolish
and disastrous contracts, entered into with all the required formalities and full awareness of what
she was doing. Courts have no power to relieve the parties from obligations voluntarily assumed
simply because their contracts turned out to be disastrous and unwise investments.
72
TORTS AND DAMAGES
1. It is essential that for damages to be awarded, a claimant must satisfactorily prove

during the trial that they have a factual basis and that the defendant’s acts have a causal
connection to them (CHING v. BANTOLO, G.R. No. 177086, December 5, 2012)
2. Among the compensable damages are actual damages, which encompass the value
of the loss sustained by the plaintiff, and the profits that the plaintiff failed to obtain. Interest
payments, which SSPI claims, fall under the second category of actual damages. SSPI did not
recover interest payments at the stipulated rate from Interco because it agreed that the delay
was not Intercos fault, but that of the defendants. If that is the case, then Interco is not in delay
(at least not after issuance of the checks) and the stipulated interest payments in their contract
did not become operational.(EQUITABLE BANKING CORP. VS. SPECIAL STEEL PRODUCTS, INC.G.R.
No. 175350 June 13, 2012)
3. The ‘Emergency Rule’ invoked by petitioners will not apply. Considering the wet and
slippery condition of the road that night, Antonio should have been prudent to reduce his speed
and increase his distance from the Pathfinder. Had he done so, it would be improbable for him
to have hit the vehicle in front of him or if he really could not avoid hitting it, prevent such
extensive wreck to the vehicle in front. With the glaring evidence, he obviously failed to exercise
proper care in his driving. (ORIX METRO LEASING AND FINANCE CORP. VS. MANGALINAO Y
DIZON, G.R. Nos. 174089 & 174266 January 25, 2012)
4. Having breached the contract it entered with petitioner, respondent ABB is liable for damages
pursuant to Articles 1167, 1170, and 2201 of the Civil Code.Based on the foregoing, a repairman who fails
to perform his obligation is liable to pay for the cost of the execution of the obligation plus
damages.(CONTINENTAL CEMENT CORP. VS. ASEA BROWN BOVERI INC., G.R. No. 171660 October
17, 2011)
5. Where the bank’s negligence is the proximate cause of the loss and the depositor is
guilty of contributory negligence, the 60-40 ratio shall apply for the damage between the bank
and the depositor. (PHILIPPINE NATIONAL BANK VS F.F. CRUZ & CO., INC., G.R no 173259 July 25,
2011)
6. Acquittal from a crime does not necessarily mean absolution from civil liability.
Conversely, the lack of such proof of dishonor does not mean that Emilia has no existing debt
with Mindanao Wines, a civil aspect which is proven by another quantum of evidence, a mere
preponderance of evidence. (LIM VS. MINDANAO WINES AND LIQUOR GALLERIA, G.R. No.
175851 July 4, 2012)
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7. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant's wrongful act for omission.(HEIRS OF OCHOA VS. G AND S
TRANSPORT CORP., G.R. Nos. 170071 & 170125 July 16, 2012)
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CHING v. BANTOLO
G.R. No. 177086, December 5, 2012
DOCTRINE: It is essential that for damages to be awarded, a claimant must satisfactorily prove
during the trial that they have a factual basis and that the defendant’s acts have a causal
connection to them
FACTS
Respondents are the owners of several properties located in Tagaytay City. On April 3,
2000, respondents executed in favor of petitioners Albert Ching (Ching) and Romeo J. Bautista a
Special Power of Attorney authorizing petitioners to obtain a loan using respondents’ properties
as collateral. Thereafter, without notice to petitioners, respondents executed a Revocation of
Power of Attorney9 effective at the end of business hours. The Philippine Veterans Bank (PVB)
approved the loan application of petitioner Ching in the amount of P25 million for a term of five
years. On July 31, 2000, petitioner Ching thru a letter informed respondents of the approval of
the loan. Sometime in the first week of August 2000, petitioners learned about the revocation of
the SPA. Consequently, petitioners sent a letter to respondents demanding that the latter
comply with the agreement by annulling the revocation of the SPA.
Petitioners alleged that the SPA is irrevocable because it is a contract of agency coupled with
interest. According to them, they agreed to defray the costs or expenses involved in processing
the loan because respondents promised that they would have an equal share in the proceeds
of the loan or the subject properties.
ISSUE
Whether or not Respondents are liable to pay exemplary damages for revoking the SPA
in bad faith.
HELD
The Supreme Court held that It is essential that for damages to be awarded, a claimant
must satisfactorily prove during the trial that they have a factual basis, and that the defendant’s
acts have a causal connection to them. Article 2229 of the Civil Code provides that exemplary
damages may be imposed “by way of example or correction for the public good, in addition to
the moral, temperate, liquidated or compensatory damages.” They are, however, not
recoverable as a matter of right. They are awarded only if the guilty party acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner.
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EQUITABLE BANKING CORP. VS. SPECIAL STEEL PRODUCTS, INC.

G.R. No. 175350 June 13, 2012
DOCTRINE: Among the compensable damages are actual damages, which encompass the
value of the loss sustained by the plaintiff, and the profits that the plaintiff failed to obtain.
Interest payments, which SSPI claims, fall under the second category of actual damages. SSPI
did not recover interest payments at the stipulated rate from Interco because it agreed that the
delay was not Intercos fault, but that of the defendants. If that is the case, then Interco is not in
delay (at least not after issuance of the checks) and the stipulated interest payments in their
contract did not become operational.
FACTS: In 1991, SSPI sold welding electrodes to Interco. In payment for the above welding
electrodes, Interco issued three checks payable to the order of SSPI dated February 14, 1991,
April 11, 1991, and April 11, 1991. The due dates for these invoices were March 16, 1991 and May
11, 1991 for the others. The invoices provided that Interco would pay interest at the rate of 36%
per annum in case of delay.In payment for the above welding electrodes, Interco issued three
checks payable to the order of SSPI on July 10, 1991, July 16, 1991, and July 29, 1991. Each check
was crossed with the notation account payee only and was drawn against Equitable. Uy
presented each crossed check to Equitable on the day of its issuance and claimed that he had
good title thereto. He demanded the deposit of the checks in his personal accounts in
Equitable. Equitable acceded to Uy’s demands on the assumption that Uy was acting pursuant
to Intercos orders and him being a valued client.In October 1991, SSPI reminded Interco of the
unpaid welding electrodes.It reiterated its demand on January 14, 1992. SSPI explained its
immediate need for payment as it was experiencing some financial crisis of its own. Interco
replied that it had already issued three checks payable to SSPI and drawn against Equitable.
SSPI denied receipt of these checks. On June 30, 1993 (twenty-three months after the issuance of
the three checks), Interco finally paid the value of the three checks to SSPI, plus a portion of the
accrued interests. Interco refused to pay the entire accrued interest on the ground that it was
not responsible for the delay.
ISSUE: Whether or not SSPI can recover, as actual damages, the stipulated 36% per annum
interest from Equitable
HELD: Among the compensable damages are actual damages, which encompass the value of
the loss sustained by the plaintiff, and the profits that the plaintiff failed to obtain. Interest
payments, which SSPI claims, fall under the second category of actual damages.SSPI did not
recover interest payments at the stipulated rate from Interco because it agreed that the delay
was not Intercos fault, but that of the defendants. If that is the case, then Interco is not in delay
(at least not after issuance of the checks) and the stipulated interest payments in their contract
did not become operational. If Interco is not liable to pay for the 36% per annum interest rate,
then SSPI did not lose that income. SSPI cannot lose something that it was not entitled to in the
first place. Thus, SSPIs claim that it was entitled to interest income at the rate stipulated in its
contract with Interco, as a measure of its actual damage, is fallacious.Nevertheless, it is clear
that defendants actions deprived SSPI of the present use of its money for a period of two years.
SSPI is therefore entitled to obtain from the tortfeasors the profits that it failed to obtain from July
1991 to June 1993. SSPI should recover interest at the legal rate of 6% per annum, this being an
award for damages based on quasi-delict and not for a loan or forbearance of money.
76
ORIX METRO LEASING AND FINANCE CORP. VS. MANGALINAO Y DIZON

G.R. Nos. 174089 & 174266 January 25, 2012
DOCTRINE: The ‘Emergency Rule’ invoked by petitioners will not apply. Considering the wet and
slippery condition of the road that night, Antonio should have been prudent to reduce his speed
and increase his distance from the Pathfinder. Had he done so, it would be improbable for him
to have hit the vehicle in front of him or if he really could not avoid hitting it, prevent such
extensive wreck to the vehicle in front. With the glaring evidence, he obviously failed to exercise
proper care in his driving.
FACTS
Edurese was driving a Pathfinder and before them on the outer lane Fuso 10-wheeler
truck driven by Loreto, who was with truck helper Charlie. The Fuso was then already moving in
an erratic and swerving motion. Following behind the Pathfinder was another 10-wheeler truck,
an Isuzu Cargo driven by Antonio, who was then with helper Rodolfo. Just when the Pathfinder
was already cruising along the NLEX’s fast lane and about to overtake the Fuso, which was
driven by Loreto, the latter suddenly swerved to the left and cut into the Pathfinder’s lane
thereby blocking its way. As a result, the Pathfinder hit the Fuso’s left door and left body. The
impact caused both vehicles to stop in the middle of the expressway. Almost instantly, the
inevitable pileup happened. Although Antonio stepped on the brakes, the Isuzu’s front crashed
into the rear of the Pathfinder leaving it a total wreck.
ISSUE
Whether or not Antonio, the Isuzu Cargo truck’s driver, should be held liable.
HELD
No. The smashed front of the Isuzu strongly indicates the strong impact of the ramming of
the rear of the Pathfinder that pinned its passengers. Antonio admitted that despite stepping on
the brakes, the Isuzu still suddenly smashed into the rear of the Pathfinder causing extensive
damage to it, as well as hitting the right side of the Fuso. These militate against Antonio’s claim
that he was driving at a safe speed, that he had slowed down, and that he was three cars
away. Clearly, the Isuzu was not within the safe stopping distance to avoid the Pathfinder in
case of emergency. Thus, the ‘Emergency Rule’ invoked by petitioners will not apply.
Considering the wet and slippery condition of the road that night, Antonio should have been
prudent to reduce his speed and increase his distance from the Pathfinder. Had he done so, it
would be improbable for him to have hit the vehicle in front of him or if he really could not avoid
hitting it, prevent such extensive wreck to the vehicle in front. With the glaring evidence, he
obviously failed to exercise proper care in his driving.
77
CONTINENTAL CEMENT CORP. VS. ASEA BROWN BOVERI INC.

G.R. No. 171660 October 17, 2011
DOCTRINE: Having breached the contract it entered with petitioner, respondent ABB is liable for
damages pursuant to Articles 1167, 1170, and 2201 of the Civil Code.Based on the foregoing, a
repairman who fails to perform his obligation is liable to pay for the cost of the execution of the obligation
plus damages.
FACTS
Petitioner Continental Cement Corporation (CCC) obtained the services of respondents

Asea Brown Boveri, Inc. (ABB) and BBC Brown Boveri, Corp. to repair its 160 KW Kiln DC Drive
Motor (Kiln Drive Motor). Due to the repeated failure of respondents to repair the Kiln Drive
Motor, petitioner filed a Complaint for sum of money and damages for the losses allegedly
suffered. Respondents, however, claimed that under Clause 7 of the General Conditions,
attached to the letter of offer issued by respondent ABB to petitioner, the liability of respondent
ABB does not extend to consequential damages either direct or indirect. Moreover, as to
respondent Eriksson, there is no lawful and tenable reason for petitioner to sue him in his personal
capacity because he did not personally direct the repair of the Kiln Drive Motor.
ISSUE
Whether or not respondent ABB should be held liable.
HELD
Clause 7 of the General Conditions is not binding on petitioner. Respondents contend

that under Clause 7 of the General Conditions their liability does not extend to consequential
damages either direct or indirect. This contention, however, is unavailing because respondents
failed to show that petitioner was duly furnished with a copy of said General Conditions. Hence,
it is not binding on petitioner. Having breached the contract it entered with petitioner,
respondent ABB is liable for damages pursuant to Articles 1167, 1170, and 2201 of the Civil Code.
Based on the foregoing, a repairman who fails to perform his obligation is liable to pay for the
cost of the execution of the obligation plus damages. Though entitled, petitioner in this case is
not claiming reimbursement for the repair allegedly done by Newton Contractor, but is instead
asking for damages for the delay caused by respondent ABB.
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PHILIPPINE NATIONAL BANK VS F.F. CRUZ & CO., INC.

G.R no 173259 July 25, 2011
DOCTRINE: Where the bank’s negligence is the proximate cause of the loss and the depositor is
guilty of contributory negligence, the 60-40 ratio shall apply for the damage between the bank
and the depositor.
FACTS
F.F. Cruz has an account in PNB timog avenue branch,. It avers that PNB has been
negligent to deduct the cashier and manager’s check, which were fraudulently issued and
made by the company’s accountant. The Company also argued that PNB failed to personally
call or inform the former because the amount involved is huge. PNB refused to credit back the
amount of checks because it passed the standard bank procedure thus, not liable on the
amount of the checks.
ISSUE
Whether or not PNB is liable for the amount of the checks.
HELD
The court ruled that PNB failed to make a proper verification of the manager’s check
evidenced by absence of the signature of the bank verifier. PNB was indeed negligent in
handling the account of F. F. Cruz, and failure to detect forgeries, which could have prevented
the loss. Furthermore, PNB failed to meet the high standard of diligence required for banking
institutions required to prevent the fraud. Where the bank’s negligence is the proximate cause of
the loss and the depositor is guilty of contributory negligence, the 60-40 ratio shall apply for the
damage between the bank and the depositor.
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LIM VS. MINDANAO WINES AND LIQUOR GALLERIA

G.R. No. 175851 July 4, 2012
DOCTRINE:Acquittal from a crime does not necessarily mean absolution from civil liability.
preponderance of evidence.
FACTS
Emilia was charged of BP 22 or the Bouncing Checks Law. However, petitioner filed a
demurer to evidence claiming insufficiency of evidence. She asserted that not one of the
elements of BP 22 was proven because the witness merely relied upon the reports of the
salesman; that the purchases covered by sales invoice no.1711 were unauthorized because the
corresponding job order was unsigned; and that it was never established that the bank
dishonored the checks or that she was even sent a notice of dishonor. The MTC granted the
petition which resulted to her acquittal from the charges of violation of Batas Pambansa bilang
22. However, the lower courts still found petitioner civilly liable and ordered her to pay the value
of the bounced checks.
ISSUE
Whether or not despite the acquittal of the petitioner from a crime, she is still civilly liable?
HELD
Yes. The court ruled that the lack of such proof of dishonor does not mean that Emilia has
no existing debt with Mindanao wine. The evidence was insufficient to prove said element of the
crime as no proof of dishonor of the checks was presented by the prosecution. This, however,
only means that the trial court cannot convict Emilia of the crime since the prosecution failed to
prove her guilt beyond reasonable doubt, the quantum of evidence required in criminal cases.
preponderance of evidence.
80
HEIRS OF OCHOA VS. G AND S TRANSPORT CORP.

G.R. Nos. 170071 & 170125 July 16, 2012
DOCTRINE:Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant's wrongful act for omission.
FACTS
Ochoa died while on board in a taxicab owned and operated by G & S transport
corporation, due to an accident. The heirs of the deceased filed a petition for damages against
the common carrier of the taxicab before the RTC. The heirs alleged that the G & S as a
common carrier is under legal obligation to observe and exercise extraordinary diligence in
transporting its passengers to their destination safely and securely.The court eventually granted
the petition after the trial. However, the respondent filed a motion of certiorari, claiming that the
accident is a fortuitous event and their driver had exercised the diligence required of a good
father of a family.
ISSUE
Whether or not the petitioner is entitled for the amount of damages presented before the court?
HELD
Yes. The court ruled that the spouse, legitimate and illegitimate descendants and the
ascendants of the deceased may demand moral damages of P100,000.00 for mental anguish
by reason of the death of the deceased as provided by article 2206 of civil code. Moral
damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the
proximate result of the defendant's wrongful act for omission.
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SALES AND LEASE
1. A contract to sell is one where the prospective seller reserves the transfer of title to the
prospective buyer until the happening of an event, such as full payment of the purchase
price. What the seller obliges himself to do is to sell the subject property only when the
entire amount of the purchase price has already been delivered to him. 'In other words,
the full payment of the purchase price partakes of a suspensive condition, the non-
fulfillment of which prevents the obligation to sell from arising and thus, ownership is
retained by the prospective seller without further remedies by the prospective buyer
(SPOUSES DESIDERIO and TERESA DOMINGO VS. SPOUSES EMMANUEL and TITA MANZANO,
G.R. No. 201883 November 16, 2016)
2. While a tenancy relationship cannot be extinguished by the sale, alienation, or transfer of

the legal possession of the landholding,the same may nevertheless be terminated due to
circumstances more advantageous to the tenant and his/her family. The principal factor
in determining whether a tenancy relationship exists is intent. Tenancy is not a purely
factual relationship dependent on what the alleged tenant does upon the land. It is also
a legal relationship. (IRENE D. OFILADA vs. SPOUSES RUBEN ANDAL and MIRAFLOR ANDAL
G.R. No. 192270, January 26, 2015)
3. Under Article 1715 of the Civil Code, if the work of a contractor has defects which
destroy or lessen its value or fitness for its ordinary or stipulated use, he may be required
to remove the defect or execute another work. If he fails to do so, he shall be liable for
the expenses by the employer for the correction of the work. (MACKAY VS. SPOUSES
CASWELL G.R. No. 183872, [November 17, 2014])
4. Once the failure to pay rent is established, a cause of action for unlawful detainer arises.
(SPOUSES MANZANILLA VS. WATERFIELDS INDUSTRIES CORP.,GR. No. 177484, July 18, 2014)
5. In a contract to sell, the seller retains ownership of the property until the buyer has paid
the price in full. A buyer who covertly usurps the seller's ownership of the property prior to
the full payment of the price is in breach of the contract and the seller is entitled to
rescission because the breach is substantial and fundamental as it defeats the very
object of the parties in entering into the contract to sell.(SPS. TUMIBAY v. SPS. LOPEZ, G.R.
No. 171692, June 3, 2013)
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6. The lack of a license to sell or the failure on the part of a subdivision developer to register
the contract to sell or deed of conveyance with the Register of Deeds does not result to
the nullification or invalidation of the contract to sell it entered into with a buyer. The
contract to sell remains valid and subsisting. (MOLDEX REALTY INC. VS. SABERON, G.R. No.
176289, April 8, 2013)
7. The Courts may not presume the existence of a sale of land, absent any direct proof of
the same.(ROBERN DEVT. CORP VS. PEOPLE’S LANDLESS ASSOCIATION G.R. No. 173622,
March 11, 2013)
8. It is settled jurisprudence, that an agreement which stipulates that the seller shall execute
a deed of sale only upon or after payment of the purchase price is a contract to sell, not
a contract of sale. The vendors reserved title to the subject property until full payment of
the purchase price.(DIEGO VS. DIEGO, G.R. No. 179965, February 20, 2013)
9. The market value of a piece of property is the price that may be agreed upon by parties
willing but not compelled to enter into a sale. As expected, a seller in dire need of funds
will accept less, and a buyer desperate to acquire naturally agrees to pay more, than
what the property is truly worth.(REPUBLIC VS. HEIRS OF SPS. BAUTISTA, G.R. No. 181218,
January 28, 2013)
10. In case eviction occurs, the vendee shall have the right to demand of the vendor,
among others, the return of the value which the thing sold had at the time of the
eviction, be it greater or less than the price of the sale; the expenses of the contract, if
the vendee has paid them; and the damages and interests, and ornamental expenses, if
the sale was made in bad faith.(BIGNAY VS. UNION BANK OF THE PHILIPPINES, GR no.
171590 February 12, 2014)
11. Levy on attachment, duly registered, takes preference over a prior unregistered sale. This
result is a necessary consequence of the fact that the properties involved were duly
covered by the Torrens system which works under the fundamental principle that
registration is the operative act which gives validity to the transfer or creates a lien upon
the land.(SPOUSES VILBAR VS. OPINION, G.R. No. 176043 January 15, 2014)
12. In a contract to sell, payment of the price is a positive suspensive condition, failure of
which is not a breach of contract warranting rescission under Article 1191 of the Civil
Code but rather just an event that prevents the supposed seller from being bound to
convey title to the supposed buyer.(SPOUSES BONROSTRO VS. SPOUSES LUNA, G.R. No.
172346 July 24, 2013)
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13. The petitioners are well aware of the prior possession of and claim of ownership by
Magallanes when they visited the lot on several occasion. In sum, the petitioners were
negligent in not taking necessary steps to determine the status of the lot despite the
presence of circumstance which would have impelled a reasonably cautious man to do
so. Thus, the court affirms the ruling of the trial court that the petitioners are not buyers
and registrants in good faith. Magallanes, as the first buyer was correctly adjudged as
the rightful owner of the subject lot and the conveyance thereof is proper under the
premises. (SPOUSES PUDADERA VS. MAGALLANES, GR. No. 170073, October 18, 2010)
14. Jurisprudence is replete with rulings that in civil cases, the party who alleges a fact has
the burden of proving it. In a contract of sale to be valid, the following elements must be
present: (a) consent; (b) determining subject matter; (c) price certain in money or its
equivalent. (SPOUSES MONTECALVO VS. HEIRS OF PRIMERO, GR No. 165168, July 9, 2010)
15. Art 1324 of the NCC provides a great difference between the effects of an option
founded on consideration from which without consideration. If the option is without any
consideration, it may be withdrawn by the offeror by communicating such to the offeree
before the latter’s acceptance. If the offer is founded upon any consideration, the
offeror cannot withdraw the offer before the lapse of the period stipulated.(TUAZON VS.
DEL ROSARIO-SUAREZ, GR NO. 168325 December 13, 2010)
16. A.M. No. 99-10-05-0, as amended no longer prescribes the requirement of at least two
bidders for a valid auction sale. Except for error or omissions in the notice of sale which
are calculated to deter or mislead bidders to depreciate the value of the property, or to
prevent it from bringing a fair price, simple mistakes or omissions are not considered fatal
to the validity of the notice and sale made pursuant thereto.(SPOUSES CERTEZA, JR. VS.
PHILIPPINE SAVINGS BANK, GR No. 190078, March 5, 2010)
17. Republic Act no. 6552, otherwise known as the Maceda Law, section 3(b) states that if
the contract is cancelled, the seller shall refund to the buyer the cash surrender value of
the payments on the property equivalent to fifty per cent of the total payments made,
and after five years of installments, an additional five per cent every year but not to
exceed ninety per cent of the total payments. (COMMUNITIES CAGAYAN INC. VS.
SPOUSES NANOL, G.R. No. 176791, November 14, 2012)
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SPOUSES DESIDERIO and TERESA DOMINGO VS. SPOUSES EMMANUEL and TITA MANZANO
G.R. No. 201883 November 16, 2016
DOCTRINE: A contract to sell is one where the prospective seller reserves the transfer of title to
the prospective buyer until the happening of an event, such as full payment of the purchase
price. What the seller obliges himself to do is to sell the subject property only when the entire
amount of the purchase price has already been delivered to him. 'In other words, the full
payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which
prevents the obligation to sell from arising and thus, ownership is retained by the prospective
seller without further remedies by the prospective buyer
FACTS: Respondents were the registered owners of a 35,281-square meter parcel of land. The
Manzanos executed a notarized agreement with petitioners for the transfer and reservation of
the purchase of land, with a condition that such land shall be transferred upon full payment.
Petitioners paid the ₱100,000.00 reservation fee upon the execution of the agreement.
Thereafter, they also made payments on several occasions, amounting to ₱160,000.00. However,
they failed to tender full payment of the balance when the March 2001 deadline came. Even
then, Estabillo advised petitioners to continue their payments; thus, they made additional
payments totaling ₱85,000.00. All in all, as of November 2001, petitioners had made payment in
the amount of ₱345,000.00.All this time, the Manzanos remained in possession of the subject
property. In December 2001, petitioners offered to pay the remaining ₱555,000.00 balance, but
Estabillo refused to accept payment.
ISSUE: WON the contract to sell could be enforced
HELD: No. Since failure to pay the price in full in a contract to sell renders the same ineffective
and without force and effect, then there is no sale to speak of. There could be no double sale
which would justify the application of Article 1544. Petitioners failed to pay the purchase price in
full, while Aquino did, and thereafter she was able to register her purchase and obtain a new
certificate of title in her name. As far as this Court is concerned, there is only one sale - and that
is, the one in Aquino's favor. "Since there is only one valid sale, the rule on double sales under
Article 1544 of the Civil Code does not apply."
85
IRENE D. OFILADAvs. SPOUSES RUBEN ANDAL and MIRAFLOR ANDAL

G.R. No. 192270, January 26, 2015
DOCTRINE: While a tenancy relationship cannot be extinguished by the sale, alienation, or

transfer of the legal possession of the landholding, the same may nevertheless be terminated
due to circumstances more advantageous to the tenant and his/her family. The principal factor
in determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual
relationship dependent on what the alleged tenant does upon the land. It is also a legal
relationship.
FACTS
Irene, together with her husband Carlos Ofilada (Carlos), bought from the heirs of Teresita
Liwag a 27,974-square meter parcel of land principally planted with rambutan, a number of
coconut trees and other fruit-bearing plants located in Quezon. The sale is evidenced by a
February 13, 1997 Extra-Judicial Settlement of Estate with Absolute Sale wherein respondent
signed as 'tenant.' Apparently, ten days prior to the sale, Miraflor appeared before the then
Barangay Agrarian Reform Council, and executed a Pagpatunay, transferring the land to Sps.
Ofilada. Two weeks after the sale, Miraflor, with the consent of her husband, respondent Ruben
Andal, executed a SinumpaangSalaysaywherein she acknowledged Irene and Carlos as the
new owners of the property. While it was stated therein that she will continue to take care of the
property, she nevertheless waived any tenancy rights that she and her husband might have over
the land. Eventually, the land was registered in the names of Irene and Carlos. Eight years later
or in October 2005, Irene filed against the spouses Andal a Complaint for Ejectment and
Damages before the MTC. The spouses Andal denied Irene's allegations and claimed that they
were tenants of Irene's predecessor-in-interest and continued to be such despite the transfer of
ownership of the properties to Irene.
ISSUE
Whether tenancy relationship between Irene and the spouses Andal exists as to strip off
the MTC of its jurisdiction over Irene's suit for unlawful detainer
HELD
Certainly telling are the Pagpapatunayand the SinumpaangSalaysaywhich were

voluntarily executed and never impugned by the spouses Andal. Both contain express
declarations that at the time Irene and her husband bought the property, the tenancy then
existing between the heirs of Teresita as former owners and the spouses Andal as tenants had
already ceased, and that no tenancy relations would continue between the latter and the new
owner, Irene. For tenancy to be proven, all indispensable elements must be established, the
absence of one or more requisites will not make the alleged tenant a de facto one. These are:
1) the parties are the landowner and the tenant; 2) the subject is agricultural land; 3) there is
consent by the landowner; 4) the purpose is agricultural production; 5) there is personal
cultivation; and 6) there is sharing of the harvests.
86
OWEN MACKAY VS. SPS. CASWELLS

G.R. No. 183872, November 17, 2014
DOCTRINE: Under Article 1715 of the Civil Code, if the work of a contractor has defects which
destroy or lessen its value or fitness for its ordinary or stipulated use, he may be required to
remove the defect or execute another work. If he fails to do so, he shall be liable for the
expenses by the employer for the correction of the work.
FACTS
Spouses Caswell asked the sole distributor of electricity in the area Engr. Pulangco for the
electrical installation service of their newly built home in Zambales where Pulangco quoted an
estimate of ₱456,000.00.However, the Caswells hired Owen who offered to do the job for only
₱250,000.00. Owen claimed that the installation was completed and ready for power service
connection as of August 1998. By then, the Caswells had paid him ₱227,000.00. Zameco II
inspected the installation work and tested the distribution transformers. The inspection showed
that there were defects. This resulted to the disapproval of the Zamecoll to provide electricity
supply to the Caswells. The Caswells executed a Joint Affidavit to charge Owen and his group
where it alleged that Owen and his group misrepresented themselves to be people from the
NAPOCOR. Still unpaid for the remaining ₱23,000.00 for his installation work, Owen in turn filed a
Complaint for Collection of Sum of Money with Damages against the Caswells.
ISSUE
Are Spouses Caswell entitled to damages for failure of Owen to the completion of work?
HELD
Yes. Under Article 1715 of the Civil Code, if the work of a contractor has defects which
destroy or lessen its value or fitness for its ordinary or stipulated use, he may be required to
remove the defect or execute another work. If he fails to do so, he shall be liable for the
expenses by the employer for the correction of the work. They looked for Owen to demand a
rectification of the work, but Owen and his group were nowhere to be found. Without doubt, the
Caswells exercised due diligence when they demanded from Owen the proper rectification of
his work. As correctly held by the CA, the Caswells substantially complied with the requirement
of Article 1715 of the Civil Code. To Our mind, however, the effort to communicate with Owen
effectively served as the Caswells’ request for the former to rectify the flaws in the contracted
work. In fact, the Caswells’ act of demanding that [Owen] secure the permit and to subject the
transformer to testing can already be construed as a substantial compliance with Article 1715.
Hence, sps. Caswell are entitled to damages.
87
SPOUSES MANZANILLA VS WATERFIELDS INDUSTRIES CORPORATION

GR. No. 177484, July 18, 2014
DOCTRINE:Once the failure to pay rent is established, a cause of action for unlawful detainer
arises
FACTS
Spouses Manzanilla, owners of a parcel of land, leased the property to Waterfields. The
parties later executed an amendment to the Contract of Lease. Waterfields did not pay the
monthly rentals on time and it had back rentals amounting to 108,000 pesos. A demand to pay
rentals and vacate the property was made, but they were unheeded. The spouses instituted an
ejectment case against Waterfields. However, Waterfields alleged that it was merely utilizing the
rental deposit in the amount of 216,000 pesos as rental payment, in accordance with the original
contract of lease. It argues that the Spouses Manzanilla has no cause of action against them.
Metropolitan Trial Court decided in favor of the spouses. It ruled that Section 4 of the
original contract of lease, which provides that the rental deposit shall answer for any unpaid
rentals, was superseded by the by the amended contract of lease, stating that the rental
deposit shall answer for payment of unpaid utilities and other incidental expenses only. The
Regional Trial Court sustained the MTC’s decision.
The Court of Appeals, however, held that since the spouses Manzanilla did not allege
that there were unpaid utilities or incidental expenses for the account of Waterfields, the whole
216,000 pesos should be returned to the latter. And since Waterfields still owes the spouses
unpaid rentals, compensation should take place.
ISSUE
Whether or not CA erred in declaring that there should be compensation.
HELD
Yes, the CA erred in declaring that there should be compensation. It must be stressed
that in this case, the violation of the lease through non-payment of rent is what constitutes the
cause of action. Hence, once the failure to pay rent is established, a cause of action for
unlawful detainer arises. The CA should have therefore limited itself to the determination of
whether Waterfields failed to pay rents for the months of December 1997 to May 1998 as
complained of by the spouses Manzanilla. Upon coming up with an answer to this, the CA
should have stopped there since at that point, it can already conclude whether there exists a
cause of action for unlawful detainer, which as mentioned is the only contentious issue involved
in this case.
88
SPS. TUMIBAY v. SPS. LOPEZ

G.R. No. 171692, June 3, 2013
DOCTRINE: In a contract to sell, the seller retains ownership of the property until the buyer has
paid the price in full. A buyer who covertly usurps the seller's ownership of the property prior to
the full payment of the price is in breach of the contract and the seller is entitled to rescission
because the breach is substantial and fundamental as it defeats the very object of the parties in
entering into the contract to sell.
FACTS
Petitioners filed a complaint alleging that they are the owners of a parcel of land in
Malaybalay, Bukidnon. They further alleged that on July 23, 1997 when Reynalda Visitacion
(Sister of Petitioner Aurora Tumibay) sold the said property to her daughter, Respondent Rowena
Lopez, through a Deed of Sale for a lower price. The Petitioners allege that the sale was done
without their knowledge and consent and thus the Deed of Sale must be declared void and the
subject land reconveyed to the Petitioners with damages from the Respondents.Respondents
contended that Reynalda was in possession of the Special Power of Attorney executed by the
Petitioners, granting her the authority to sell the subject property and that Rowena had in fact
come into an agreement on the purchase price on installments as shown by presented money
orders. Respondents in turn prayed for the dismissal of the Petitioner’s complaint.
ISSUE
Whether or not there was a valid contract between the parties
HELD
The Supreme Court Held that there was indeed a valid Contract to Sell. A contract to sell
has been defined as a bilateral contract whereby the prospective seller, while expressly
reserving the right of ownership of the subject property despite delivery to the subject buyer,
binds himself to sell the same exclusively to the latter upon fulfillment of the condition agreed
upon, that is full payment of the purchase price. The Court ruled that the agreement between
the Parties partook of an Orally Executed Contract to Sell and, taken in conjunction with the
numerous payments made by the Respondents, clearly evidence the existence of such an
agreement. When the Deed of Sale was executed, there was yet to be full payment on the
subject property. The Premature Transfer of the said property without the consent of the
Petitioners renders such Contract rescissible. Under Article 1191 of the Civil Code, the power to
rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply
with what is incumbent upon him.
89
MOLDEX REALTY, INC. v. SABERON

G.R. No. 176289, April 8, 2013
DOCTRINE:The lack of a license to sell or the failure on the part of a subdivision developer to
register the contract to sell or deed of conveyance with the Register of Deeds does not result to
the nullification or invalidation of the contract to sell it entered into with a buyer. The contract to
sell remains valid and subsisting.
FACTS
Respondent Flora entered a contract to sell of a lot with the petitioner Moldex.Flora
opted to pay on installment. Later on, Moldex sent Flora notices reminding her to update her
account. For failure to settle accounts, Notarized Notice of Cancellation of Reservation
Application and/or Contract to Sell.Flora, on the other hand, filed for the annulment of the
contract to sell, recovery of all herpayments with interests, damages, and the cancellation of
Moldex’s license to sell.Flora alleged that the contract to sell between her and Moldex is void
from its inception. According to Flora, Moldex violated Section 5 of PD No. 957 when it sold the
subject lot to her before it was issued a license to sell. Flora likewise claimed that Moldex violated
Section 17 of the same law because it failed to register the contract to sell in the Registry of
Deeds
ISSUE
Is the contract to sell between Moldex and Flora void for violating Sections 5 and 17 of
PD 957
HELD
The Supreme Court held that no, the lack of a certificate of registration and a license to
sell on the part of a subdivision developer does not result to the nullification or invalidation of the
contract to sell it entered into with a buyer. The contract to sell remains valid and subsisting. The
court upheld the validity of the contract to sell notwithstanding violations by the developer of
the provisions of PD 957. We held that nothing in PD 957 provides for the nullity of a contract
validly entered into in cases of violation of any of its provisions such as the lack of a license to
sell.
90
ROBERN DEVELOPMENT CORP. v. PEOPLE’S LANDLESS ASSOCIATION

G.R. No. 173622, March 11, 2013
DOCTRINE: The Courts may not presume the existence of a sale of land, absent any direct proof
of the same.
FACTS
Al-Amanah owned a 2000 sqm lot in Davao City. On December 12, 1992, Al-Amanah
Davao Branch asked some of the members of the Respondent Association to desist from
building their houses on the property and vacate the same unless they are interested in
purchasing it. The informal settlers thus expressed their interest to purchase the property but Al-
Amanah turned down due to their offer being far below the asking price.
Subsequently, numerous letter requests were sent to the settlers asking for them to
vacate the said property. In response, PELA replied that it had already reached an agreement
with Al-Amanah regarding the sale based on their offered price. Subsequently, Petitioner
corporation made an offer on the said property which Al-Amanah accepted, however they
were informed that the responsibility of asking the settlers to vacate fell on their shoulders within
15 days otherwise, their deposit would be forfeited. Thereafter, a deed of sale was executed
between the parties and PELA filed a suit for annulment thereof claiming that there was already
a perfected contract between PELA and Al-Amanah.
ISSUE
Whether or not there was a perfected contract between PELA and Al-Amanah.
HELD
The Supreme Court ruled that the transaction between Al-Amanah and PELA remained
in the negotiation stage. The offer of PELA never materialized into a perfected sale for no oral or
documentary evidence was proferred to support this contention. Rather, Al-Amanah expressly
refused this offer made by PELA before the lapse of the 1 year period agreed upon by the
Parties. Thus, there is no reason to disturb the consummated sale between Robern and Al-
Amanah.
91
DIEGO v. DIEGO
G.R. No. 179965, February 20, 2013
DOCTRINE:It is settled jurisprudence, that an agreement which stipulates that the seller shall
execute a deed of sale only upon or after payment of the purchase price is a contract to
sell, not a contract of sale. The vendors reserved title to the subject property until full payment of
the purchase price.
FACTS
Petitioner Nicolas P. Diego (Nicolas) and his brother Rodolfo, respondent herein, entered
into an oral contract to sell covering Nicolas's share, fixed at P500,000.00, as co-owner of the
family's Diego Building situated in Dagupan City. Rodolfo made a down payment of
P250,000.00. It was agreed that the deed of sale shall be executed upon payment of the
remaining balance of P250,000.00. However, Rodolfo failed to pay the remaining balance.
Meanwhile, the building was leased out to third parties, but Nicolas's share in the rents were not
remitted to him by herein respondent Eduardo, another brother of Nicolas and designated
administrator of the Diego Building. Instead, Eduardo gave Nicolas's monthly share in the rents
to Rodolfo. Despite demands and protestations by Nicolas, Rodolfo and Eduardo failed to
render an accounting and remit his share in the rents and fruits of the building, and Eduardo
continued to hand them over to Rodolfo.
ISSUE
Whether or not there was a perfected Contract of Sale between the Parties
HELD
There is no dispute that in 1993, Rodolfo agreed to buy Nicolas's share in the Diego
Building for the price of P500,000.00. There is also no dispute that of the total purchase price,
Rodolfo paid, and Nicolas received, P250,000.00. Significantly, it is also not disputed that the
parties agreed that the remaining amount of P250,000.00 would be paid after Nicolas shall have
executed a deed of sale.Where the vendor promises to execute a deed of absolute sale upon
the completion by the vendee of the payment of the price," indicates that the parties entered
into a contract to sell. According to this Court, this particular provision is tantamount to a
reservation of ownership on the part of the vendor. Explicitly stated, the Court ruled that the
agreement to execute a deed of sale upon full payment of the purchase price "shows that the
vendors reserved title to the subject property until full payment of the purchase price."
92
REPUBLIC v. HEIRS OF SPS. BAUTISTA

G.R. No. 181218, January 28, 2013
DOCTRINE: The market value of a piece of property is the price that may be agreed upon by
parties willing but not compelled to enter into a sale. As expected, a seller in dire need of funds
will accept less, and a buyer desperate to acquire naturally agrees to pay more, than what the
property is truly worth.
FACTS
Spouses Bautista are the registered owners of a parcel of land in Barangay

Bulacnin North, Lipa City. Respondents are their children.The Republic of the Philippines, through
the DPWH, acquired by negotiated sale a portion of the lot for P46,800 for use in the STAR
Tollway project. The sale was annotated on the title on June 1, 2000.Petitioner offered to
purchase an additional 1,155 square meters of the lot at P100 per square meter, but the spouses
Bautista refused to sell. The portion sought to be purchased was to be used for the Balete-Lipa
City Interchange Ramp B.On July 7, 2004, the petitioner filed a Complaint with the RTC of Lipa
City for the expropriation of the 1,155-square meter portion. In its Amended Complaint,
petitioner alleged that the zonal valuation of the lot at the time of the filing of the Complaint as
determined by the BIR is P100 per square meter, which is thus the fair value of the property for
purposes of expropriation.Respondents claimed that the valuation of P100 per square meter
based on the BIR zonal valuation is not fair considering that the petitioner in the past bought a
portion of the same property at P1,300 per square meter. They added that the current fair
market value of the lot should be pegged at more than P3,000 per square meter.
ISSUE
Whether or not the Court of Appeals erred in relying on the Joint Commissioner’s Report
HELD
The Supreme Court ruled that the only legal question raised by the petitioner relates to
the commissioners’ and the trial court’s alleged failure to take into consideration, in arriving at
the amount of just compensation, Section 5 of RA 8974 enumerating the standards for assessing
the value of expropriated land taken for national government infrastructure projects. What
escapes petitioner, however, is that the courts are not bound to consider these standards; the
exact wording of the said provision is that "in order to facilitate the determination of just
compensation, the courts may consider" them. The use of the word "May" in the provision is
construed as permissive and operating to confer discretion. In the absence of a finding of
abuse, the exercise of such discretion may not be interfered with. For this case, the Court finds
no such abuse of discretion.
93
BIGNAY VS. UNION BANK OF THE PHILIPPINES

GR no. 171590 February 12, 2014
DOCTRINE:In case eviction occurs, the vendee shall have the right to demand of the vendor,
among others, the return of the value which the thing sold had at the time of the eviction, be it
greater or less than the price of the sale; the expenses of the contract, if the vendee has paid
them; and the damages and interests, and ornamental expenses, if the sale was made in bad
faith. 
FACTS
Alfonso de Leon mortgaged in favor of Union Bank real property which was registered in
his and his wife, Rosarios. The property was foreclosed and sold at auction to Union Bank. In 1988,
Rosario filed against Alfonso and Union claiming that Alfonso mortgaged the property without
her consent, and for reconveyance. Bignay offered to purchase the property. Thus, a Deed of
Absolute Sale was executed by and between Union Bank and Bignay. That The VENDEE hereby
recognizes that the Parcel/s of Land with improvements thereon is acquired through foreclosure
proceedings and agrees to buy the Parcel/s of Land with improvement[s] thereon in its present
state and condition. The VENDOR therefore does not make representations or warranty with
respect to the Parcel/s of Land but that it will defend its title to the Parcel/s of Land with
improvement[s] thereon against the claims of any person whomsoever. Thereafter, the court
ruled that the mortgage contract executed by Alfonso and Union Bank was null and void.
ISSUE
Whether or not Petitioner entitled to the warranties against Eviction under Article 1555 of
the Civil Code?
HELD
Yes. Bignay purchased the property without knowledge of the pending Civil Case. It was
ruled that in culpa contractual or breach of contract, gross negligence of a party amounting to
bad faith is a ground for the recovery of damages by the injured party. Eviction shall take place
whenever by a final judgment based on a right prior to the sale or an act imputable to the
vendor, the vendee is deprived of the whole or of a part of the thing purchased. In case
eviction occurs, the vendee shall have the right to demand of the vendor, among others, the
return of the value which the thing sold had at the time of the eviction, be it greater or less than
the price of the sale; the expenses of the contract, if the vendee has paid them; and the
damages and interests, and ornamental expenses, if the sale was made in bad faith. 
94
SPOUSES VILBAR VS. OPINION

G.R. No. 176043 January 15, 2014
DOCTRINE: Levy on attachment, duly registered, takes preference over a prior unregistered sale.
This result is a necessary consequence of the fact that the properties involved were duly
covered by the Torrens system which works under the fundamental principle that registration is
the operative act which gives validity to the transfer or creates a lien upon the land.
FACTS
Spouses Vilbar and Dulos Realty and Development Corp., entered into a Contract to Sell
a parcel of land, “lot 20-B”. While Lot 20-A is the subject of another Contract to Sell between
Elena Guingon (Elena) and Dulos Realty. Upon full payment of the purchase price, spouses
Vilbar were not able to register and transfer the title in their names because Dulos Realty
allegedly failed to have the lot formally subdivided. Spouses Vilbar and Dulos Realty also
executed a Contract to Sell covering Lot 21. The spouses Vilbar were able to pay the loan in full.
Opinion claimed that he legally acquired Lots 20 and 21 through extra-judicial foreclosure of
mortgage constituted over the said properties by the Gorospes in his favor. A Certificate of Sale
was issued in his favor on December 18, 1995 and subsequently annotated on the TCTs of the
properties. Thus, Lot 21 and Lot 20 in the name of Opinion were issued on January 22, 1997 by
the Registry of Deeds of Las Piñas City. Opinion stated that he was informed by the Gorospes
that the occupants, spouses Vilbar and Elena, were mere tenants renting from them.
ISSUE
Whether or not Opinion has a better right over the property
HELD
Gorospe, Sr. had no knowledge of the transactions between Dulos Realty and the
spouses Vilbar because it was Juan who executed and signed the documents. The Court finds
no bad faith on Gorospe, Sr.’s part when he bought the properties at public auction free from
liens and encumbrances. "[t]he settled rule that levy on attachment, duly registered, takes
preference over a prior unregistered sale. This result is a necessary consequence of the fact that
the [properties] involved [were] duly covered by the Torrens system which works under the
fundamental principle that registration is the operative act which gives validity to the transfer or
creates a lien upon the land.” Opinion acted in good faith in dealing with the registered owners
of the properties. He relied on the titles presented to him, which were confirmed by the Registry
of Deeds to be authentic, issued in accordance with the law, and without any liens or
encumbrances. 
95
SPOUSES BONROSTRO VS. SPOUSES LUNA

G.R. No. 172346 July 24, 2013
DOCTRINE:In a contract to sell, payment of the price is a positive suspensive condition, failure of
which is not a breach of contract warranting rescission under Article 1191 of the Civil Code but
rather just an event that prevents the supposed seller from being bound to convey title to the
supposed buyer.
FACTS
Respondententered into a Contract to Sell with Bliss Development Corporation involving

a house and lot. Barely a year after, Constancia, this time as the seller, entered into another
Contract to Sell with petitioner Lourdes Bonrostro concerning the same property with the
condition that “In the event the VENDEE fails to pay the installment, the CONTRACT TO SELL shall
be deemed cancelled and rescinded and 5% of the contract price shall be deemed forfeited in
favor of the VENDOR. Unpaid monthly amortization shall likewise be deducted from the initial
down payment in favor of the VENDOR.” Immediately after the execution of the said second
contract, the spouses Bonrostro took possession of the property. However, except for the
₱200,000.00 down payment, Lourdes failed to pay any of the stipulated subsequent amortization
payments. Spouses Luna, filed a Complaint against the spouses Bonrostro praying for the
rescission of the contract, delivery of possession of the subject property, payment by the latter of
their unpaid obligation.
ISSUE
Whether or not the spouses Bonrostro’s delay in their payment of the installments
constitutes a substantial breach of their obligation under the contract warranting rescission.
HELD
In a contract to sell, payment of the price is a positive suspensive condition, failure of

which is not a breach of contract warranting rescission under Article 1191 of the Civil Code but
rather just an event that prevents the supposed seller from being bound to convey title to the
supposed buyer. Also, Article 1191 cannot be applied to sales of real property on installment
since they are governed by the Maceda Law. The spouses Bonrostro are liable for interest on the
installments due from the date of default until fully paid.
96
SPOUSES PUDADERA VS. MAGALLANES

GR. No. 170073, October 18, 2010
DOCTRINE: The petitioners are well aware of the prior possession of and claim of ownership by
Magallanes when they visited the lot on several occasion. In sum, the petitioners were negligent
in not taking necessary steps to determine the status of the lot despite the presence of
circumstance which would have impelled a reasonably cautious man to do so. Thus, the court
affirms the ruling of the trial court that the petitioners are not buyers and registrants in good faith.
Magallanes, as the first buyer was correctly adjudged as the rightful owner of the subject lot and
the conveyance thereof is proper under the premises.
FACTS
A parcel of land was owned by Lazaro which she sold to several persons. Upon the
partition of the land, lazaro refused to surrender the mother title which caused the buyers of
partitioned land to file an adverse claim. Subsequently, lazaro sold the mother title to natividad
which also sold it to spouses pudadera whom was issued a new title. Magallanes asserted his
claim by constructing house and fence upon the disputed land which caused SPS pudadera to
file a case against him of forcible entry which was dismissed. It was undisputed that before the
SpsPudadera bought the land from Natividad, the latter had notice that someone else is
already in possession of the property.
ISSUE
Whether or not SpsPudadera are buyers in good faith
HELD
No. based on the established facts, petitioners correctly argue that the said notice of
lispendens cannot be made basis for holding that they are buyers in good faith. Indeed, at the
time of the sale of the subject lot by Sps Natividad, civil case instituted by Magallanes against
the former has already been dismissed for lack of jurisdiction and the said order of dismissal had
become final and executor. Likewise, the petitioners cannot be considered buyers in good faith
because of their knowledge of other circumstance pointing to a possible flaw in the title of Sps
Natividad. Despite these circumstances, petitioners did not take steps to ascertain the status of
the subject lot but insisted to proceed with the purchase of the land. Thus, in the case of double
sale of immovable, ownership shall belong to 1. Registrant in good faith; 2.Possessor in good
faith; 3.Buyer in good faith who presents oldest title. In this case, the petitioners are well aware of
the prior possession of and claim of ownership by Magallanes when they visited the lot on
several occasion. In sum, the petitioners were negligent in not taking necessary steps to
determine the status of the lot despite the presence of circumstance which would have
impelled a reasonably cautious man to do so. Thus, the court affirms the ruling of the trial court
that the petitioners are not buyers and registrants in good faith. Magallanes, as the first buyer
was correctly adjudged as the rightful owner of the subject lot and the conveyance thereof is
proper under the premises.
97
SPOUSES MONTECALVO VS. HEIRS OF PRIMERO

GR No. 165168, July 9, 2010
DOCTRINE:Jurisprudence is replete with rulings that in civil cases, the party who alleges a fact has
the burden of proving it. In a contract of sale to be valid, the following elements must be
present: (a) consent; (b) determining subject matter; (c) price certain in money or its equivalent.
FACTS
In the early 1980s, Eugenia leased the lot to the petitioner Irene Montecalvo (Irene).
Eugenia subsequently entered into an un-notarized Agreement with Irene, where the former
offered to sell the property to the latter for Php 1,000 per sq. meter. They also agreed that Irene
would deposit the amount of Php 40,000 which shall form part of the down payment equivalent
to 50% of the purchase price, and in case Irene defaulted in the payment of the down payment,
the deposit would be returned within 10 days and the Agreement would be deemed
terminated. Irene failed to pay the full down payment. Nonetheless, she continued to stay in the
property, and still made several payment with an aggregate amount of Php 293,000. On the
other hand, Eugenia did not return the Php 40,000 deposit to Irene, and refused to accept
further payment. Eugenia then filed a complaint for unlawful detainer against Irene before the
MTC. The MTC dismissed the case. The RTC rendered likewise dismissed the complaint, thereafter
the petitioners appealed to the CA. The CA affirmed the RTC’s decision.
ISSUE
Whether a seller in an oral contract of sale can be compelled to execute the required
deed of sale after the agreed consideration was paid and possession thereof delivered to and
enjoyed by the buyer.
HELD
NO. The CA found that the Agreement is not a contract of sale but a mere contract to
sell, the efficacy of which is dependent upon the resolutory condition that Irene pay at least 50%
of the purchase price as down payment. Said court further found that such condition was not
met. Until the contract of sale if perfected, it cannot, as an independent source of obligation,
serve as a binding juridical relation between the parties. Further, the alleged contract of sale
was not proved by preponderant evidence. Hence, petitioners cannot compel the successors-
in-interest of the deceased Eugenia to execute a deed of absolute sale in their favor.
98
TUAZON VS. DEL ROSARIO-SUAREZ

GR NO. 168325 December 13, 2010
DOCTRINE:Art 1324 of the NCC provides a great difference between the effects of an option
founded on consideration from which without consideration. If the option is without any
consideration, it may be withdrawn by the offeror by communicating such to the offeree before
the latter’s acceptance. If the offer is founded upon any consideration, the offeror cannot
withdraw the offer before the lapse of the period stipulated.
FACTS
Petitioner and respondent entered into a contract of lease wherein Tuazon will occupy
the parcel of land owned by the Del Rosario- Tuarez. During the effectivity of the lease, Tuarez
send a letter to petitioner offering to sell the leased property and gave Tuazon a period of two
years to decide. Four months after the expiration of the contract of lease, Suarez sold the land to
Catalina. The new owners notified the petitioner to vacate the premises on grounds of non
payment of rentals and expiration of the contract. The petitioner claims that respondent
violated the right of first refusal by not giving him notice and opportunity to buy the property. The
respondent averred that such principle cannot be applied because of the failure of petitioner to
accept.
ISSUE
Whether or not a lessee loses right to buy the property upon failure to accept an offer to
purchase on time within period stipulated.
HELD
Yes. The matter involves an option contract and not a contract of right of first refusal.
There is a separate and distinct offer made through a letter to the petitioner wherein the
property is offered to her. The petitioner was not given the right of first refusal because such letter
was sent 6 months after commencement of the lease. Art 1324 of the NCC provides a great
difference between the effects of an option founded on consideration from which without
consideration. If the option is without any consideration, it may be withdrawn by the offeror by
communicating such to the offeree before the latter’s acceptance. If the offer is founded upon
any consideration, the offeror cannot withdraw the offer before the lapse of the period
stipulated.
99
SPOUSES CERTEZA, JR. VS. PHILIPPINE SAVINGS BANK

GR No. 190078, March 5, 2010
DOCTRINE:A.M. No. 99-10-05-0, as amended no longer prescribes the requirement of at least two
bidders for a valid auction sale. Except for error or omissions in the notice of sale which are
calculated to deter or mislead bidders to depreciate the value of the property, or to prevent it
from bringing a fair price, simple mistakes or omissions are not considered fatal to the validity of
the notice and sale made pursuant thereto.
FACTS
Petitioners obtained a loan from respondent Philippine Savings Bank (PS Bank), secured
by two parcels of land, with all the buildings and improvements existing thereon. Petitioners
subsequently failed to pay their outstanding obligation despite demands, hence PS Bank
instituted an action for Extrajudicial Foreclosure of the Real Estate Mortgage. During the auction
sale, PS Bank emerged as the sole and highest bidder, a corresponding Certificate of Sale was
issued there after and registered with the Registry of Deeds. During the redemption period, PS
Bank filed an Ex-parte Petition for Writ of Possession with the RTC, which was granted after the
period of redemption for the foreclosed property had already expired. Petitioners then filed an
Omnibus Motion for Leave to Intervene and to Stay Issuance or Implementation of Writ of
Possession. They sought the nullification of the extrajudicial foreclosure sale for allegedly having
been conducted in contravention of the procedural requirements and in violation of herein
petitioners right to due process. The RTC denied the motion for intervention. The petitioners
appealed to the CA, which affirmed the RTC’s decision.
ISSUE
Whether the CA erred in ruling that there may be only one bidder in a foreclosure sale
HELD
NO. The requirement for at least two participating bidders provided in the original version
of paragraph 5 of A.M. No. 99-10-05-0 is not found in Act. No. 3135. Hence the Supreme Court en
banc made the following pronouncements: It is contended that this requirement is now found in
Act No. 3135 and that it is impractical and burdensome, considering that not all auction sales
are commercially attractive to prospective bidders. And subsequently the use of the word bids
does not make it a mandatory requirement to have more than one bidder for an auction sale to
be valid.
100
COMMUNITIES CAGAYAN INC. VS. SPOUSES NANOL

G.R. No. 176791, November 14, 2012
DOCTRINE:Republic Act no. 6552, otherwise known as the MacedaLaw, section 3(b) states that if
the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the
payments on the property equivalent to fifty per cent of the total payments made, and after
five years of installments, an additional five per cent every year but not to exceed ninety per
cent of the total payments.
FACTS
In the case at bar, the regional trial court held that the deed of absolute sale is void.
Accordingly, transfer certificatesof title nos.105202 and 105203 on the names of the respondents
are ordered cancelled for lack of consideration. The respondents any person claiming rights
under them are directed to turn over the possession of the house and lot to communities of
Cagayan inc., subject to the latter’s payment of their total monthly installments and the value of
the new house, minus the cost of the original house.
ISSUE: Whether or not the petitioner is obliged to return the total monthly installments and the
value of the new house minus the cost of the original house?
HELD: Yes. The court ruled that the petitioner is hereby ordered to return the cash surrender value
of the payments made by respondent spouses in the properties which equivalent to 50% of the
total payment made in accordance with section 3(b) of republic act no. 6552, otherwise known
as the Maceda law.
101

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CIVIL LAW CASE DIGESTS

EXECUTIVE COMMITTEE 2018 - 2019

VICE CHAIRPERSON FOR ACADEMICS Jerekko Cadorna

VICE CHAIRPERSON FOR ACADEMIC OPERATIONS Rodel Cadorniga Jr.

VICE CHAIRPERSON FOR HOTEL OPERATIONS Emmanuel Josef Jovellanos

EXECUTIVE OFFICER FOR HOTEL OPERATIONS Christian Boy Benedict Tiangco

VICE CHAIRPERSON FOR FINANCE Katreena Frances Monje

VICE CHAIRPERSON FOR SECRETARIAT Odette Marie Jumao-as

VICE CHAIRPERSON FOR COMMUNICATIONS Maryll Ann Ragpala

VICE CHAIRPERSON FOR RECRUITMENT AND MEMBERSHIP Giulia Ingrid Calub

San Beda College Alabang School of Law Administration

ATTY. Anna Marie Melanie B. Trinidad

ATTY. Carlo D. Busmente

CIVIL LAW TEAM

RODANTE F. GUYAMIN et. al VS. JACINTO G. FLORES and MAXIMO G. FLORES,

HEIRS OF BABAI GUIAMBANGAN VS. MUNICIPALITY OF KALAMANSIG et al.

ISSUE: Whether or not reconstitution of the record is still necessary

REPUBLIC VS. CORTEZ SR.

FACTS: Respondent Cortez, a missionary by vocation engaged in humanitarian and charitable

ISSUE: Whether Rev. Cortez is entitled to a final writ of mandatory injunction.

JOSE YULO AGRICULTURAL CORPORATIONVS. SPOUSES DAVIS

CONSOLACION D. ROMERO and ROSARIO S.D. DOMINGOvs. ENGRACIA D. SINGSON

REPUBLIC OF THE PHILIPPINESvs. ANGELINE L. DAYAOEN, AGUSTINA TAUEL and LAWANA T.

REPUBLIC OF THE PHILIPPINESvs. CESAR C. PASICOLAN AND GREGORIO C. PASICOLAN

ISSUE: Whether or not reconstitution is justified on the basis of a copy of an unauthenticated

REPUBLIC OF THE PHILIPPINESvs. SPOUSES DANTE and LOLITA BENIGNO

HEIRS OF TELESFORO JULAO VS SPS. ALEJANDRO and MORENITA DE JESUS

DOCTRINE:The plaintiff, therefore, is duty-bound to clearly identify the land sought to be

HEIRS OF SPS. MANGUARDIA VS. HEIRS OF SPS. VALLES

SPOUSES DELA CRUZ VS SPOUSES CAPCO

AGUILAR VS. O’PALLICK

G.R. No. 182280 July 29, 2013

ISSUE: Whether or not Aguilar is entitled to the possession of the property

SPOUSES VALENZUELA VS. SPOUSES MANO JR.

OBLIGATIONS AND CONTRACTS

2. A void contract is equivalent to nothing; it produces no civil effect. It does not

7. Parties would do well to always be conscious of their freedom to accept or reject

LUZ S. NICOLAS VS. LEONORA C. MARIANO

MOVETRADE CORP. VS. COMMISSION ON AUDIT

SPOUSES ROSETE VS. BRIONES

SPS. CACAYORIN v. ARMED FORCES AND POLICE MUTUAL BENEFIT ASSOCIATION

LUZON DEVELOPMENT BANK VS. ENRIQUEZ

ISSUE: Whether or not the Dacionenpago was valid.

LAO VS. SPECIAL PLANS, INC.

GOLDLOOP PROPERTIES INC. VS. GSIS

ISSUE: Whether or not the rescission of contract shall prosper?

PERSONS AND FAMILY RELATIONS

1. Psychological incapacity,' as a ground to nullify a marriage under Article 36 of the Family

5. The filiation of legitimate children is established by any of the following as provided by

NICOLAS S. MATUDAN VS. REPUBLIC OF THE PHILIPPINES and MARILYN B. MATUDAN

DOCTRINE: Psychological incapacity,' as a ground to nullify a marriage under Article 36 of the

ISSUE: WON Petitioner was able to prove her psychological incapacity

ROSARIO BANGUIS-TAMBUYATvs. WENIFREDA BALCOM-TAMBUYAT

FACTS: Adriano M. Tambuyat and respondent WenifredaBalcom-Tambuyat were married on

KALAW VS. FERNANDEZ

G.R. No. 166357 September 19, 2011

JULIANO-LLAVE VS. REPUBLIC

ANTONIO PERLA VS. MIRASOL BARING AND RANDY PERLA

ISSUE: Whether or not the Randy’s illegitimate filiation was proven?

PARTNERSHIP, AGENCY AND TRUSTS

WILLIAM ANGIDAN SIY VS. ALVIN TOMLIN

ISSUE: WON the writ of replevin could be implemented?

BUCTON VS RURAL BANK OF EL SALVADOR INC.