ROYAL SAVINGS BANK, formerly Comsavings Bank, now GSIS FAMILY BANK -versus- FERNANDO ASIA, LATAG, MARANAN,

ONG, MACARALAYA, SABA, GALLEGA, FEDELIMO, HAGUTAY and GABATIC (referred to as respondents Asia, et al.) G.R. No. 183658; April 10, 2013; Sereno Action: Petition for review. Facts: Salita and her nephew, Valenderia, borrowed the amount of 25,000 from petitioner. The latter loaned to them an additional 20,000. To secure the payment of the aforementioned amounts loaned, Salita executed a Real Estate Mortgage over her property. Notwithstanding demands, neither Salita nor Valenderia were able to pay off their debts. As a result of their failure to settle their loans, petitioner instituted an extra-judicial foreclosure proceeding against the Real Estate Mortgage. Salita filed with the RTC a case for Reconveyance, Annulment of Title and Damages against petitioner. RTC ruled in her prayer. It was appealed to the CA which reversed the RTC decision. The CA ruling became final and executory. Pursuant to Section 7 of Act 3135, petitioner filed with the RTC an Ex-Parte Petition for the Issuance of a Writ of Possession. The RTC ordered the issuance of the Writ of Possession. Respondents claimed to have been in open continuous, exclusive and notorious possession in the concept of owners of the land in question for 40 years.8 Allegedly, they had no knowledge and notice of all proceedings involving the property until they were served a Notice to Vacate9 by RTC Sheriff. they filed an Urgent Motion to Quash Writ of Possession and Writ of Execution. RTC granted the motion to quash. Petitioner is saying that, as a government financial institution (GFI), it cannot be enjoined from foreclosing on its delinquent accounts in observance of the mandate of P.D. 385 . RULING: It was only proper for the RTC to quash the Writ of Possession until a determination is made as to who, between petitioner and respondents, has the better right to possess the property. It is true that once the property of a debtor is foreclosed and sold to a GFI, it would be mandatory for the court to place the GFI in the possession and control of the propertypursuant to Section 4 of P.D. No. 385this rule should not be construed as absolute or without exception. The evident purpose underlying P.D. 385 is sufficiently served by allowing foreclosure proceedings initiated by GFIs to continue until a judgment therein becomes final and executory, without a restraining order, temporary or permanent injunction against it being issued. But if a parcel of land is occupied by a party other than the judgment debtor, the proper procedure is for the court to order a hearing to determine the nature of said adverse possession before it issues a writ of possession. This is because a third party, who is not privy to the debtor, is protected by the law. Such third party may be ejected from the premises only after he has been given an opportunity to be heard, to comply with the time-honored principle of due process. WHEREFORE, the instant petition is DENIED.

NOT SO RELATED! ART. 2047. / EJECTMENT/ COMPROMISE

G.R. No. 179011 April 15, 2013 REY CASTIGADOR CATEDRILLA vs. MARIO and MARGIE LAURON PERALTA, J.: Petition for review on certiorari is the Decision Facts Lorenza Lizada is the owner of a parcel of land known as Lot 183, located in Mabini Street, Lambunao, Iloilo. Lorenza died and was succeeded to her properties by her sole heir Jesusa Lizada Losaes, who was married to Hilarion Castigador (Castigador); that the spouses Jesusa and Hilarion Castigador had a number of children, which included Lilia Castigador (Lilia). that after the death of the spouses Castigador, their heirs agreed among themselves to subdivide Lot 183. Lilia was succeeded by her heirs, her husband Maximo and their children, one of whom is herein petitioner; that petitioner filed the complaint as a co-owner of Lot No. 5; that sometime in 1980, respondents Mario and Margie Lauron, through the tolerance of the heirs of Lilia, constructed a residential building of strong materials on the northwest portion of Lot No. 5 covering an area of one hundred square meters; that the heirs of Lilia made various demands for respondents to vacate the premises and even exerted earnest efforts to compromise with them but the same was unavailing; and that petitioner reiterated the demand on respondents to vacate the subject lot on January 15, 2003, but respondents continued to unlawfully withhold such possession. respondents claimed that petitioner had no cause of action against them, since they are not the owners of the residential building standing on petitioner's lot, but Mildred Kascher (Mildred), sister of respondent Margie, as shown by the tax declaration in Mildred's name; that in 1992, Mildred had already paid P10,000.00 as downpayment for the subject lot to Teresito Castigador; that there were several instances that the heirs of Lilia offered the subject Lot 183 for sale to respondents and Mildred and demanded payment, however, the latter was only interested in asking money without any intention of delivering or registering the subject lot; that in 1998, Maximo, petitioner's father, and respondent Margie entered into an amicable settlement before the Barangay Lupon of Poblacion Ilawod, Lambunao, Iloilo wherein Maximo offered the subject lot to the spouses Alfons and Mildred Kascher in the amount of P90,000.00 with the agreement that all documents related to the transfer of the subject lot to Maximo and his children be prepared by Maximo, but the latter failed to comply; and that the amicable settlement should have the force and effect of a final judgment of a court, hence, the instant suit is barred by prior judgment. Respondents counterclaimed for damages. ISSUES: THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT HELD THAT THE DECISION OF THE TRIAL COURT WAS A NULLITY . THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT HELD THAT PETITIONER KNEW ALL ALONG THAT MILDRED KASCHER, AND NOT RESPONDENTS, WERE THE REAL OWNERS OF THE RESIDENTIAL BUILDING. RULING: Petitioner can file the action for ejectment without impleading his co-owners. In this case, although petitioner alone filed the complaint for unlawful detainer, he stated in the complaint that he is one of the heirs of the late Lilia Castigador, his mother, who inherited the subject lot, from her parents. Petitioner did not claim exclusive ownership of the subject lot, but he filed the complaint for the purpose of recovering its possession which would redound to the benefit of the coowners. Since petitioner recognized the existence of a co-ownership, he, as a co-owner, can bring the action without the necessity of joining all the other co-owners as co-plaintiffs. Mildred is not an indispensable party.

Moreover, it appears however, that while there was a settlement, Liah C. Catedrilla, one of petitioner's co-heirs, wrote a letter dated October 30, 2002, to the Spouses Loraa and respondent Margie stating that the latter had made a change on the purchase price for the subject lot which was different from that agreed upon in the amicable settlement. Records neither show that respondent Margie had taken steps to meet with Liah or any of her co-heirs to settle the matter of the purchase price nor rebut such allegation in the letter if it was not true. The letter dated July 5, 2003 of respondent Margie's counsel addressed to petitioner's counsel, stating that his client is amenable in the amount as proposed in the amicable settlement, would not alter the fact of respondents' non-compliance with the settlement since the letter was sent after the ejectment case had already been filed by petitioner. If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand. When the new Civil Code came into being, its Article 2041 x x x created for the first time the right of rescission. That provision gives to the aggrieved party the right to "either enforce the compromise or regard it as rescinded and insist upon his original demand." Article 2041 should obviously be deemed to qualify the broad precept enunciated in Article 2037 that "a compromise has upon the parties the effect and authority of res judicata. In exercising the second option under Art. 2041, the aggrieved party may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission. This is because he may regard the compromise as already rescinded by the breach thereof of the other party. While the amicable settlement executed between Maximo and respondent Margie before the Barangay had the force and effect of a final judgment of a court, it appears that there was noncompliance thereto by respondent Margie on behalf of her parents which may be construed as repudiation. The settlement is considered rescinded in accordance with the provision of Article 2041 of the Civil Code. Since the settlement was rescinded, petitioner, as a co-owner, properly instituted the action for ejectment to recover possession of the subject lot against respondents who are in possession of the same. WHEREFORE, premises considered, the petition is hereby GRANTED.

SALES REPUBLIC OF THE PHILIPPINES, represented by the DPWH vs. HEIRS OF SPOUSES PEDRO BAUTISTA and VALENTINA MALABANAN G.R. No. 181218; January 28, 2013; DEL CASTILLO, J.: Action: This Petition for Review on Certiorari Facts: Pedro Bautista and Valentina Malabanan (spouses Bautista) are the registered owners of a 1,893-square meter parcel of land (the lot). Respondents are their children. Sometime in 2000, herein petitioner Republic of the Philippines, through the Department of Public Works and Highways (DPWH), acquired a parcel of land to become a project (STAR). It also offered to purchase an additional 1,155 square meters of the lot at P100.00 per square meter, but the spouses Bautista refused to sell. On July 7, 2004, the petitioner filed a Complaint for the expropriation of the said 1,155-square meter portion (the subject portion). Petitioner alleged that the zonal valuation of the lot at the time of the filing of the Complaint as determined by the Bureau of Internal Revenue (BIR) is P100.00 per square meter, which is thus the fair value of the property for purposes of expropriation. During the expropriation proceedings, the spouses Bautista passed away, and were accordingly substituted by the respondents. In their Answer, respondents claimed that the valuation of P100.00 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 P1,300.00 per square meter. They added that the current fair market value of the lot should be pegged at more thanP3,000.00 per square meter.

The Lipa City Assessor and the Registrar of Deeds concluded in their Joint Commissioners Report that just compensation for the subject portion should be within the range of P1,960.00 and P2,500.00 per square meter. RTC of Lipa fixed the just compensation for the subject portion, including all its improvements, at P1,960.00 per square meter. The CA sustained the trial courts reliance on the Lipa City Assessor and the Registrar of Deedss May 3, 2005 Joint Commissioners Report, finding that the same took into consideration the fair market value of the subject portion, the condition of the surroundings, the improvements introduced, the character of the property, and the value of adjacent and nearby properties as shown by the deeds of sale covering the same. The CA also noted that in 2000, petitioner bought a 36-square meter portion of respondents property at P1,300.00 per square meter, which means that as of 2000, respondents property already had a market value of P1,300.00 per square meter. The CA added that with the passage of time and construction of the STAR tollway beside respondents property, the value thereof has appreciated. These factors and circumstances were not taken into consideration in Mecates April 25, 2005 report. ISSUES: WON THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURTS DECISION FIXING THE JUST COMPENSATION AT P1,960.00 PER SQUARE METER DESPITE ITS FAILURE TO CONSIDER ALL FACTORS IN ARRIVING AT SAID AMOUNT OF JUST COMPENSATION PRESCRIBED UNDER THE APPLICABLE LAWS. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURTS ERRONEOUS RELIANCE ON THE JOINT COMMISSIONERS REPORT RECOMMENDING THE AMOUNT OF P1,960.00 PER SQUARE METER, AN AMOUNT WHICH IS EXCESSIVE, HIGHLY SPECULATIVE, UNSUBSTANTIATED AND CONTRARY TO THE RULES AND APPLICABLE JURISPRUDENCE FOR DETERMINING JUST COMPENSATION. RULING: PETITION DENIED The only legal question raised by the petitioner relates to the commissioners and the t rial courts 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. Besides, a cursory review of the May 3, 2005 Joint Commissioners Report leads one to the conclusion, without need of further elaboration, that the commissioners and the trial court did not ignore absolutely the standards enumerated in Section 5. It is quite evident that petitioner is a desperate buyer of the subject portion.1wphi1 It needs the property for the Balete-Lipa City Interchange Ramp B, and no property other than the subject portion could answer this need. Having purchased a portion of respondents property in 2000 at P1,300.00 per square meter by negotiated sale at that there appears to be no reason why it should not be made to pay just compensation at a premium four years later. It is evidently unfair and absurd that, after negotiating a sale at a higher price of P1,300.00, petitioner should later insist on a lower P600.00, P400.00, or even P100.00 valuation for the same land four years after such negotiated sale. It should be bound by the higher P1,300.00 valuation, at the very least. Given the increase in population and rate of growth and progress in the country, it is highly unlikely if not impossible that property values would take a downward trend. This applies to Lipa City especially; the Joint Commissioners' Report indicates how the city has rapidly progressed through the years -- where once there was grass, concrete structures now stand. Moreover, of note are petitioner's several purchases of land within the vicinity, ranging from P500.00 up toP3,000.00 per square meter, from 1997 up to 2003. The average price of all these purchases within the vicinity amounts to P 1 ,960.00 per square meter. Although it may be said that from the facts this amount is low, the respondents have nonetheless given their assent to this valuation in their June 23, 2005 Comment as well as in their July 25, 2008 Comment filed before this Court. Thus, as to them, the market value of the subject portion isP1,960.00 per square meter. As for the petitionera desperate buyer of the subject portion which is absolutely necessary to link the existing highway to the city- this is what it should be made to pay for the subject portion. It must be remembered that "the

market value of the property is the price that may be agreed upon by parties willing but not compelled to enter into a sale. Not unlikely, a buyer desperate to acquire it would agree to pay more, and a seller in urgent need of funds would agree to accept less, than what it is actually worth." WHEREFORE, the Petition is DENIED. The assailed October 31, 2007 Decision and January 11, 2008 Resolution of the Court of Appeals in CA-G.R. CV No. 85751 are AFFIRMED.

NUCCIO SAVERIO and NS INTERNATIONAL INC. vs. ALFONSO G. PUYAT, G.R. No. 186433 ; November 27, 2013; BRION, J.: Action: Petition for Review on Certiorari Facts:

On July 22, 1996, the respondent granted a loan to NSI. The loan was made pursuant to the Memorandum of Agreement and Promissory Note (MOA) between the respondent and NSI, represented by Nuccio. It was agreed that the respondent would extend a credit line with a limit of P500,000.00 to NSI, to be paid within thirty (30) days from the time of the signing of the document. The loan carried an interest rate of 17% per annum, or at an adjusted rate of 25% per annum if payment is beyond the stipulated period. The petitioners received a total amount of P300,000.00 and certain machineries intended for their fertilizer processing plant business (business). The proposed business, however, failed to materialize. On several occasions, Nuccio made personal payments amounting to P600,000.00. However, as of December 16, 1999, the petitioners allegedly had an outstanding balance of P460,505.86. When the petitioners defaulted in the payment of the loan, the respondent filed a collection suit with the RTC, alleging mainly that the petitioners still owe him the value of the machineries as shown by the Breakdown of Account he presented. The petitioners refuted the respondents allegation and insisted that they have already paid the loan, evidenced by the respondents receipt for the amount of P600,000.00. They submitted that their remaining obligation to pay the machineries value, if any, had long been extinguished by their business failure to materialize. They posited that, even assuming without conceding that they are liable, the amount being claimed is inaccurate, the penalty and the interest imposed are unconscionable, and an independent accounting is needed to determine the exact amount of their liability. The RTC thus ruled that the payment of P600,000.00 did not completely extinguish the petitioners obligation. The RTC also found merit in the respondents contention that the petitioners are one and the same. The RTC, moreover, concluded that the interest rates stipulated in the MOA were not usurious and that the respondent is entitled to attorneys fees on account of the petitioners willful breach of the loan obligation. Thus, principally relying on the submitted Breakdown of Account, the RTC ordered the The petitioners appealed the RTC ruling to the CA. On October 27, 2008, the CA rendered a decisiondeclaring the petitioners jointly and severally liable for the amount that the respondent sought. The CA also affirmed the RTC ruling that petitioners are one and the same. ISSUE

The case presents to us the issue of whether the CA committed a reversible error in affirming the RTCs decision holding the petitioners jointly and severally liable for the amount claimed. HELD After a review of the parties contentions, we hold that a remand of the case to the court of origin for a complete accounting and determination of the actual amount of the petitioners indebtedness is called for. We note in this regard that the RTC, in awarding the amount of P460,505.86 in favor of the respondent, principally relied on the Breakdown of Account. Under this document, numerous entries, including the cash loan, were enumerated and identified with their corresponding amounts. It included the items of expenses allegedly chargeable to the petitioners, the value of the machineries, the amount credited as paid, and the interest and penalty allegedly incurred. A careful perusal of the records, however, reveals that the entries in the Breakdown of Account and their corresponding amounts are not supported by the respondents presented evidence. The itemized expenses, as repeatedly pointed out by the petitioners, were not proven, and the remaining indebtedness, after the partial payment of P600,000.00, was merely derived by the RTC from the Breakdown of Account. Significantly, the RTC ruling neither showed how the award was computed nor how the interest and penalty were calculated. In fact, it merely declared the petitioners liable for the amount claimed by the respondent and adopted the breakdown of liability in the Breakdown of Account. This irregularity is even aggravated by the RTCs explicit refusal to explain why the payment of P600,000.00 did not extinguish the debt. While it may be true that the petitioners indebtedness, aside from the cash loan of P300,000.00, undoubtedly covered the value of the machineries, the RTC decision was far from clear and instructive on the actual remaining indebtedness (inclusive of the machineries value, penalties and interests) after the partial payment was made and how these were all computed. We, thus, find it unacceptable for the RTC to simply come up with a conclusion that the payment of P600,000.00 did not extinguish the debt, or, assuming it really did not, that the remaining amount of indebtedness amounts exactly to P460,505.86, without any showing of how this balance was arrived at. To our mind, the RTCs ruling, in so far as the determination of the actual indebtedness is concerned, is incomplete. What happened at the RTC likewise transpired at the CA when the latter affirmed the appealed decision; the CA merely glossed over the contention of the petitioners, and adopted the RTCs findings without giving any enlightenment. To reiterate, nowhere in the decisions of the RTC and the CA did they specify how the award, including the penalty and interest, was determined. The petitioners were left in the dark as to how their indebtedness of P300,000.00, after making a payment of P600,000.00, ballooned to P460,505.86. Worse, unsubstantiated expenses, appearing in the Breakdown of Account, were charged to them. We, therefore, hold it inescapable that the prayer for proper accounting to determine the petitioners actual remaining indebtedness should be granted. As this requires presentation of additional evidence, a remand of the case is only proper and in order. WHEREFORE, the petition is GRANTED. The October 27, 2008 decision and the February 10, 2009 resolution of the Court of Appeals in CA-G.R. CV. No. 87879 are REVERSED AND SET ASIDE. The case is REMANDED to the Regional Trial Court of Makati City, Branch 136, for proper accounting and reception of such evidence as may be needed to determine the actual amount of petitioner NS International, Inc.s indebtedness, and to adjudicate respondent Alfonso G. Puyats claims as such evidence may warrant.