Arellano University School of Law

ARELLANO UNIVERSITY SCHOOL OF LAW
Arellano Law Foundation

Taft Ave., Cor. Menlo St., Pasay City
CIVIL LAW 2013 &

2014
Republic Acts
Supreme Court Decisions
STATUTORY CONSTRUCTION
Sunday Class, 8:00 am 10:00 am
Submitted by GROUP I
ALMEDA, GEORGE D.
ARGOSINO, STEPHEN ROY F.
BAUTISTA, MICHAEL LORENZ F.
BERMUDEZ, JAIVEE M.
ALIPARO, JOCELYN T.
ARAUJO, MICHELLE M.
ARIZALA, VENUS KEIZYL A.
BINALAY, CAROL P.
Submitted to
DR. JOSE TEODORICO V. MOLINA
CPA-Economist-Legal Practitioner
Professorial Lecturer
29 November 2015
GROUP 1 | CIVIL LAW
Statutory Construction
SUPREME COURT DECISIONS

CIVIL CASES 2013 and 2014
TABLE OF CONTENTS
DATE
CASE
Page
GR
NO.
192289
January 8, 2013
170022
January 9, 2013
179382
January 14, 2013
179628
January 16, 2013
174436
January 23, 2013
151334
February 13,
2013
180269
February 20,
2013
196577
177116
10
195825
11
182449
February 25,
2013
February 27,
2013
February 27,
2013
March 6, 2013
12
172588
March 13, 2013
13
173166
March 13, 2013
14
180321
March 20, 2013
15
174844
March 20, 2013
KAMARUDIN
K.
IBRAHIM
vs.
COMMISSION ON ELECTIONS AND
ROLAN G. BUAGAS
REPUBLIC OF THE PHILIPPINES vs.
CESAR ENCELAN
SPOUSES BENJAMIN C. MAMARIL AND
SONIA P. MAMARIL vs. THE BOY SCOUT
OF THE PHILIPPINES, AIB SECURITY
AGENCY, INC., CESARIO PEA AND
VICENTE GADDI
THE MANILA INSURANCE COMPANY,
INC. vs. SPOUSES ROBERTO and AIDA
AMURAO
JUANITA ERMITAO vs. LAILANIE M.
PAGLAS
CAROLINA
(CARLINA)
VDA.
DE
FIGURACION, ET. AL. vs. EMILIA
FIGURACION-GERILLA
JOSE Z. CASILANG, SR., ET. AL. vs.
ROSARIO Z. CASILANG-DIZON, MARIO
A. CASILANG, ANGELO A. CASILANG,
RODOLFO A. CASILANG, AND ATTY.
ALICIA B. FABIA
LANDBANK OF THE PHILIPPINES vs.
BARABARA SAMPAGA POBLETE
ASIAN TERMINALS, INC. vs. SIMON
ENTERPRISES, INC.
SPOUSES
ALFONSO
AND
MARIA
ANGELES CUSI vs. LILIA V. DOMINGO
MARTIN T. NG
ISABEL N. GUZMAN vs. ANIANO N.
GUZMAN
AND
PRIMITIVA
G.
MONTEALTO
PURIFICACION
ESTANISLAO
AND
RUPERTO ESTANISLAO vs. SPOUSES
NORMA
GUDITO
AND
DAMIANO
GUDITO
EDITHA
PADLAN
vs.
ELENITA
DINGLASAN
and
FELICISIMO
DINGLASAN
VEVENCIA ECHIN PABALAN, ET AL. vs.
THE HEIRS OF SIMEON A.B. MAAMO,
SR.
Dr. Jose Teodorico V. Molina

Sunday Class 8:00 am to 10:00 am
6
7
9
10
12
14
16
18
20
21
22
24
26
Page 2 of 92
GROUP 1 | CIVIL LAW

16
188633
April 10, 2013
17
182760
April 10, 2013
18
171298
April 15, 2013
19
171555
April 17, 2013
20
191667
April 17, 2013
21
179643
June 3, 2013
22
186475
June 26, 2013
23
194836
June 28, 2013
24
189316
July 1, 2013
25
179334
July 1, 2013
26
196741
July 17, 2013
27
197725
July 31, 2013
28
172504
July 31, 2013
29
174727
August 12, 2013
30
181692
August 14, 2013
31
170942
August 28, 2013

SANDOVAL SHIPYARDS, INC. vs.
PHILIPPINE
MERCHANT
MARINE
ACADEMY (PMMA)
ROBERTO P. NARCEDA
SPOUSES
OSCAR
and
THELMA
CACAYORIN vs. ARMED FORCES and
POLICE
MUTUAL
BENEFIT
ASSOCIATION, INC.
EVANGELINE
RIVERA-CALINGASAN
AND E. RICAL ENTERPRISES vs.
WILFREDO RIVERA, substituted by MA.
LYDIA S. RlVERA, FREIDA LEAH S.
RIVERA and WILFREDO S. RIVERA, JR.
LAND BANK OF THE PHILIPPINES vs.
EDUARDO M. CACAYURAN
ERNESTO L. NATIVIDAD vs.
FERNANDO MARIANO, ET. AL.
J
PLUS
ASIA
DEVELOPMENT
CORPORATION vs.
UTILITY ASSURANCE CORPORATION
HOSPICIO D. ROSAROSO, ET. AL. vs.
LUCILA LABORTE SORIA, SPOUSES
HAM AND LAILA SOLUTAN AND
MERIDIAN REALTY CORPORATION
PHILIPPINE
NATIONAL
BANK
vs.
SPOUSES
BERNARD
AND
CRESENCIAMARAON
SECRETARY OF THE DEPARTMENT OF
PUBLIC WORKS AND HIGHWAYS and
DISTRICT ENGINEER CELESTINO R.
CONTRERAS vs. SPOUSES HERACLEO
and RAMONA TECSON
PHILIPPINE TOURISM AUTHORITY vs.
MARCOSA
A.
SABANDALHERZENSTIEL, PEDRO TAPALES, LUIS
TAPALES, AND ROMEO TAPALES
MARK
ANTHONY
ESTEBAN
vs.
SPOUSES RODRIGO C. MARCELO AND
CARMEN T. MARCELO
DONNA C. NAGTALON vs. UNITED
COCONUT PLANTERS BANK
ANTIPOLO
INING
(DECEASED),
SURVIVED BY MANUEL VILLANUEVA,
TEODORA
VILLANUEVA-FRANCISCO,
ET. AL. vs. LEONARDO R. VEGA,
SUBSTITUTED BY LOURDES VEGA,
RESTONILO I. VEGA, CRISPULO M.
VEGA, MILBUENA VEGA-RESTITUTO,
AND LENARD VEGA
ADELAIDA SORIANO vs. PEOPLE OF
THE PHILIPPINES
COMSAVINGS BANK (NOW GSIS FAMILY
28
29
30
31
32
34
35
37
39
41
43
45
46
47
49
51
Page 3 of 92
GROUP 1 | CIVIL LAW
32
196723
August 28, 2013
33
181983
November 13,
2013
34
202358
35
192383
36
183204
November 27,
2013
December 4,
2013
January 13, 2014
37
185798
January 13, 2014
38
160600
January 15, 2014
39
160758
January 15, 2014
40
192371
January 15, 2014
41
189248
February 5, 2014
42
182128
43
179625
44
193684
February 19,
2014
February 24,
2014
March 5, 2014
45
188539
March 12, 2014
46
189420
March 26, 2014
47
188832
April 23, 2014
48
204626
June 9, 2014
49
195549
September 3,
2014
50
198878
October 15,
2014
51
176492
October 20,
2014

BANK) vs. SPS. DANILO AND ESTRELLA
CAPISTRANO
ASIAN
CONSTRUCTION
AND
DEVELOPMENT
CORPORATION
vs.
SUMITOMO CORPORATION
CONSOLIDATED INDUSTRIAL GASES
INC. vs.
ALABANG MEDICAL CENTER
GATCHALIAN REALTY INC. vs.
EVELYN ANGELES
ISABELO C. DELA CRUZ vs. LUCILLA C.
DELA CRUZ
METROPOLITAN
BANK
&
TRUST
COMPANY vs. ANA GRACE ROSALES
AND YO YUK TO
FIL-ESTATE PROPERTIES, INC. AND FILESTATE NETWORK, INC. vs. SPOUSES
CONRADO AND MARIA VICTORIA
RONQUILLO
DOMINGO
GONZALO
vs.
JOHN
TARNATE, JR.
DEVELOPMENT
BANK
OF
THE
PHILIPPINES
(DBP)
vs.
GUARIA
AGRICULTURAL
AND
REALTY
DEVELOPMENT CORPORATION
LAND BANK OF THE PHILIPPINES vs.
EMMANUEL C. OATE
TEODORO S. TEODORO, ET AL. vs.
DANILO ESPINO, ET AL.
PHILIPPINE
NATIONAL
BANK
vs.
TERESITA TAN DEE, ET AL.
NICANORA G. vs. RURAL BANK OF EL
SALVADOR, INC. ET AL.
ONE NETWORK RURAL BANK, INC. vs.
DANILO G. BARIC
MARIANO LIM vs. SECURITY BANK
CORPORATION
RAUL V. ARAMBULO AND TERESITA
DELA CRUZ vs. GENARO NOLASCO
AND JEREMY SPENCER NOLASCO
VIVENCIO VILLAGRACIA vs. FIFTH
SHARIA DISTRICT COURT
PAUL P. GABRIEL, Jr. ET.AL. vs
CARMELING CRISOLOGO
WILLAWARE PRODUCTS CORPORATION
vs.
JESICHRIS
MANUFACTURING
CORPORATION
RESIDENTS OF LOWER ATAB &
TEACHERS' VILLAGE, STO. TOMAS
PROPER BARANGAY, BAGUIO CITY vs.
STA.
MONICA
INDUSTRIAL
&
DEVELOPMENT CORPORATION
MARIETTA N. BARRIDO vs. LEONARDO
V. NONATO
53
55
56
57
58
59
60
61
62
63
65
66
67
68
69
70
71
73
74
75
Page 4 of 92
GROUP 1 | CIVIL LAW

52
192531
November 12,
2014

BERNARDINA P. BARTOLOME vs.
SOCIAL
SECURITY
SYSTEM
and
SCANMAR MARITIME SERVICES, INC.
76
Page 5 of 92
GROUP 1 | CIVIL LAW
REPUBLIC ACTS
CIVIL LAW 2013 AND 2014
TABLE OF CONTENTS
1
2
RA NO.
10356
10572

DATE
January 9, 2013
May 24, 2013
Page
79
79
Page 6 of 92
GROUP 1 | CIVIL LAW
GR No. 192289
January 8, 2013
KAMARUDIN K. IBRAHIM, petitioner,
vs.
COMMISSION ON ELECTIONS and ROLAN G. BUAGAS, respondents.
Facts:
Petitioner Kamarudin Ibrahim filed his certificate of candidacy to run as municipal
Vice Mayor. Thereafter, respondent Rolan Buagas, then Acting Election Officer in the said
municipality, forwarded to the COMELECs Law Department (Law Department) the names
of candidates who were not registered voters therein. The list included Ibrahims name.
Consequently, COMELEC en banc issued a Resolution dated December 22, 2009
disqualifying Ibrahim for not being a registered voter of the municipality where he seeks
to be elected without prejudice to his filing of an opposition.
It prompted Ibrahim to file Petition/Opposition but was denied by the COMELEC en
banc through a Resolution dated May 6, 2010. In this resolution, the COMELEC declared
that the Resolution dated December 22, 2009 was anchored on the certification, which
was issued by Buagas and Acting Provincial Election Supervisor of Maguindanao, Estelita
B. Orbase, stating that Ibrahim was not a registered voter of the municipality where he
seeks to be elected.
On the day of the election, during which time the Resolution dated May 6, 2010
had not yet attained finality, Ibrahim obtained the highest number cast for the Vice
Mayoralty race. However, the Municipal Board of Canvassers (MBOC), which was then
chaired by Buagas, suspended Ibrahims proclamation.
Thus, this petition.
Issue:
Whether or not the COMELEC en banc acted with grave abuse of discretion in
issuing the assailed resolutions.
Ruling:
Yes, the COMELEC en banc is devoid of authority to disqualify Ibrahim as a
candidate for the position of Vice Mayor.
In the case at bar, the COMELEC en banc, through the herein assailed resolutions,
ordered Ibrahims disqualification even when no complaint or petition was filed against
him yet. Let it be stressed that if filed before the conduct of the elections, a petition to
deny due course or cancel a certificate of candidacy under Section 78 of the OEC is the
appropriate petition which should have been instituted against Ibrahim considering that
his allegedly being an unregistered voter of his municipality disqualified him from
running as Vice Mayor.
His supposed misrepresentation as an eligible candidate was an act falling within
the purview of Section 78 of the OEC. Moreover, even if we were to assume that a proper
petition had been filed, the COMELEC en banc still acted with grave abuse of discretion
when it took cognizance of a matter, which by both constitutional prescription and
jurisprudential declaration, instead aptly pertains to one of its divisions.
Page 7 of 92
GROUP 1 | CIVIL LAW
Petition for Certiorari under Rule 64, Ibrahim properly resorted to the instant
Petition filed under Rule 64 of the Rules of Court to assail the Resolutions dated
December 22, 2009 and May 6, 2010 of the COMELEC en banc.
Under the Constitution and the Rules of Court, the said resolutions can be
reviewed by way of filing before us a petition for certiorari. What the instant Petition
challenges is the authority of the MBOC to suspend Ibrahims proclamation and of the
COMELEC en banc to issue the assailed resolutions. The crux of the instant Petition does
not qualify as one which can be raised as a pre-proclamation controversy.

Page 8 of 92
GROUP 1 | CIVIL LAW
GR No. 170022
January 09, 2013
REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
CESAR ENCELAN, respondent.
Facts:
Cesar Married Lolita, and they had two children. To support the family, Cesar went
abroad and worked as an OFW in Saudi Arabia. After two years of working abroad, Cesar
learned that Lolita is having an illicit affair with Alvin Perez, and thereafter, left the
conjugal dwelling together with the two children. But even with such circumstances,
Cesar never failed to send financial support for the family.
On June 1995, Cesar filed a petition against Lolita for the declaration of the nullity
of his marriage based on Lolitas psychological incapacity. Cesar, during a hearing even
presented a psychological evaluation report on Lolita with the finding that
Lolita was not suffering from any form of psychiatric illness, but had been unable to
provide the expectations expected of her for a good and lasting marital relationship....
and her transferring from one job to another depicts some interpersonal problem with
coworkers as well as her impatience in attaining her ambitions .... and her refusal to go
with her husband abroad signifies her reluctance to work out a good marital and family
relationship...
Cesar found ally in RTC as it gave him a favorable decision that declared his
marriage to Lolita null and void. The court of Appeals also affirmed the decision of RTC,
and thereafter, the case was elevated to the Supreme Court, thus, this case.
Issue:
Whether or not psychological incapacity is indeed present in the person of Lolita
as to nullify a valid marriage.
Ruling:
No. Marriage is an inviolable social institution protected by the State and any
doubt should be resolved in favor of its existence and continuation against its dissolution
and nullity. In this case, sexual infidelity and abandonment of the conjugal dwelling do
not necessarily constitute psychological incapacity these are simply grounds for legal
separation.
To constitute psychological incapacity, it must be shown that the unfaithfulness and

abandonment are manifestations of a disordered personality that actually prevented the
erring spouse from discharging the essential marital obligations, which the court found
not present in the person of Lolita.
Page 9 of 92
GROUP 1 | CIVIL LAW
GR No. 179382
January 14, 2013
SPOUSES BENJAMIN C. MAMARIL AND SONIA P. MAMARIL, petitioners,

vs.
THE BOY SCOUT OF THE PHILIPPINES, AIB SECURITY AGENCY, INC., CESARIO
PEA,* AND VICENTE GADDI, respondents.
Facts:
PUJ operators Sps. Mamaril would park their 6 passenger jeepneys every night at
BSPs compound in Malate, Manila for a fee of P300.00 per month for each unit. One day,
one of the vehicles was missing and was never recovered. According to the security
guards Pea and Gaddi of AIB Security Agency with whom BSP had contracted for its
security and protection, a male person who looked familiar to them took the subject
vehicle out of the compound. Sps. Mamaril prayed that Pea and Gaddi, together with
AIB and BSP, be held liable for: (a) the value of the subject vehicle (b) amount
representing daily loss of income/boundary reckoned from the day the vehicle was lost
(c) Exemplary damages (d) moral damages (e) attorney's fees and (f) costof suit.
BSP denied any liability contending that not only did Sps. Mamaril directly deal
with AIB with respect to the manner by which the parked vehicles would be handled, but
the parking ticket itself expressly stated that the "Management shall not be responsible
for loss of vehicle or any of its accessories or article left therein." It also claimed that Sps.
Mamaril erroneously relied on the Guard Service Contract. Apart from not being parties
thereto, its provisions cover only the protection of BSP's properties, its officers, and
employees.
Issue:
Whether or not BSP may be held liable for the loss of the vehicle caused by the
negligence of its security guards.
Ruling:
No. The proximate cause of the loss of Sps. Mamaril's vehicle was the negligent
act of security guards Pea and Gaddi in allowing an unidentified person to drive out the
subject vehicle. The records are bereft of any finding of negligence on the part of BSP.
Neither will the vicarious liability of an employer under Article 2180 of the Civil Code
apply in this case. Pea and Gaddi were assigned as security guards by AIB to BSP
pursuant to the Guard Service Contract. No employer-employee relationship existed
between BSP and the security guards assigned in its premises. Sps. Mamaril is not party
to the Guard Service Contract. Guard Service Contract between defendant appellant BSP
and defendant AIB Security Agency is purely between the parties therein.
There is absolutely nothing in the contract that would indicate any obligation
and/or liability on the part of the parties therein infavor of third persons such as herein
plaintiffs-appellees. Moreover, the Court concurs with the finding of the CA that the
contract between the parties herein was one of lease as defined under Article 1643 of the
Civil Code. It has been held that the act of parking a vehicle in a garage, upon payment
of a fixed amount, is a lease. The agreement with respect to the ingress and egress of
Page 10 of 92
GROUP 1 | CIVIL LAW
Sps. Mamaril's vehicles were coordinated only with AIB and its security guards, without
the knowledge and consent of BSP. Accordingly, the mishandling of the parked vehicles
that resulted in herein complained loss should be recovered only from the tort feasors
(Pea and Gaddi) and their employer, AIB and not against the lessor, BSP.
GR No. 179628
January 16, 2013
THE MANILA INSURANCE COMPANY, INC., petitioner,

vs.
SPOUSES ROBERTO and AIDA AMURAO, respondents.
Facts:
Spouses Roberto and Aida Amurao (Sps. Amurao) entered into a Construction
Contract Agreement (CCA) with Aegean Construction and Development Corp. (Aegean)
for the construction of a six storey commercial building. To guarantee its obligation,
Aegean posted performance bonds secured by petitioner Manila Insurance Company, Inc.
(Manila Insurance) and Intra Strata Assurance Corporation (Intra Strata). Aegean failed to
comply with its obligation. Hence, the spouses filed a complaint before the RTC to enforce
its claim against the sureties.
During the pretrial, Manila Insurance and Intra Strata discovered that the CCA
contained an arbitration clause. Consequently, they filed a Motion to Dismiss on the
grounds of lack of cause of action and lack of jurisdiction. The RTC denied the Motion to
Dismiss.
Manila Insurance appealed to the Court of Appeals. The CA dismissed the petition.
Hence, Manila Insurance elevated the matter to the Supreme Court. Manila Insurance
argues that it cannot be held liable as a surety because the claim of the respondents is
premature. Manila Insurance contends that the dispute between the spouses and Aegean
should be brought first before the CIAC for arbitration.
Issue:
Whether or not Manila Insurance can be held liable as surety of Aegean?
Ruling:
Yes, Manila Insurance is liable as surety. A contract of suretyship is defined as an

agreement whereby a party, called the surety, guarantees the performance by another
party, called the principal or obligor, of an obligation or undertaking in favor of a third
party, called the obligee.
The Court has consistently held that a suretys liability is joint and several, limited
to the amount of the bond, and determined strictly by the terms of contract of suretyship

Page 11 of 92
GROUP 1 | CIVIL LAW
in relation to the principal contract between the obligor and the obligee.It bears
stressing, however, that although the contract of suretyship is secondary to the principal
contract, the suretys liability to the obligee is nevertheless direct, primary, and absolute.
But while there is a cause of action against Manila Insurance, the complaint must still be
dismissed for lack of jurisdiction.
GR No. 174436
January 23, 2013
JUANITA ERMITAO, represented by her Attorney-in-Fact, ISABELO
ERMITAO, petitioner,
vs.
LAILANIE M. PAGLAS, respondent.
Facts:
On November 5, 1999, Juanita and Lailane executed a Contract of Lease wherein

petitioner leased in favor of respondent a 336 square meter residential lot and a house
The contract period is one (1) year, which commenced on November 4, 1999, with a
monthly rental rate of P13,500.00. In March 1999, petitioner mortgaged the subject
property in favor of Charlie Yap (Yap). For failure to pay the loan, Yap extra judicially
foreclosed the disputed lot and the foreclosure sale was registered on February 22, 2000.
On June 1, 2000, respondent bought the subject property from Yap for P950, 000.00. On
May 25, 2000, petitioner sent a letter demanding the respondent to pay the rentals,
which are due, and to vacate the leased premises. On August 13, 2001, petitioner filed
with the Municipal Trial Court in Cities (MTCC), Davao City, a case of unlawful detainer
against respondent.
Issues:
Whether or not the owner and mortgagor is entitled to the possession, rents,
earnings and income derived from such property.
Ruling:
In an unlawful detainer case, the sole issue for resolution is the physical or
material possession of the property involved, independent of any claim of ownership by
any of the party litigants. It is settled that during the period of redemption, it cannot be
said that the mortgagor is no longer the owner of the foreclosed property, since the rule
up to now is that the right of a purchaser at a foreclosure sale is merely inchoate until
after the period of redemption has expired without the right being exercised. Under Act.
No. 3135, the purchaser in a foreclosure sale has, during the redemption period, only an
inchoate right and not the absolute right to the property with all the accompanying
incidents. He only becomes an absolute owner of the property if it is not redeemed
during the redemption period.
On the other hand, petitioner, as mortgagor and owner, was entitled not only to
the possession of the disputed house and lot but also to the rents, earnings and income
derived there from. The situation became different, however, after the expiration of the
redemption period on February 23, 2001. Since there is no allegation, much less
evidence, that petitioner redeemed the subject property within one year from the date of
registration of the certificate of sale, respondent became the owner thereof. Petitioner's
Page 12 of 92
GROUP 1 | CIVIL LAW
ejectment suit filed against respondent was rendered moot when the period of
redemption expired on February 23, 2001.
GR No. 151334
February 13, 2013
CAROLINA (CARLINA) VDA. DE FIGURACION, HEIRS OF ELENA FIGURACIONANCHETA, namely: LEONCIO ANCHETA, JR., and ROMULO ANCHETA, HEIRS OF
HILARIA A. FIGURACION, namely: FELIPA FIGURACION-MANUEL, MARY
FIGURACION-GINEZ, and EMILIA FIGURACION-GERILLA, AND HEIRS OF QUINTIN
FIGURACION, namely: LINDA M. FIGURACION, LEANDRO M. FIGURACION, II, and
ALLAN M. FIGURACION, petitioners,
vs.
EMILIA FIGURACION-GERILLA, respondent.
Facts:
The parties are the heirs of Leandro Figuracion who died intestate in 1958.
Petitioner Carolina is the surviving spouse. Subject of the dispute are two parcels of land
both situated in Urdaneta, Pangasinan, which were acquired by Leandro during his
lifetime. Both lands were registered in the name of Leandro Figuracion married to
Carolina Adviento.
Leandro executed a Deed of Quitclaim over the two real properties in favor of his
six (6) children on August 23, 1955. Their shares, however, were not delineated with
particularity because spouses Leandro and Carolina reserved the lots and its fruits for
their expenses. Also involved in the controversy is Lot No. 707 of the CadastralSurvey of
Urdaneta, Pangasinan which was originally owned by EulalioAdviento (Eulalio).
On November 28, 1961, a Deed of Quitclaim over the eastern half of Lot No. 707
was executed in favor of Emilia. Soon thereafter or on December 11, 1962, petitioner
Carolina executed an Affidavit of Self-Adjudication adjudicating unto herself the entire Lot
No. 707 as the sole and exclusive heir of her deceased parents, Eulalio and Faustina. On
the same date, Carolina also executed a Deed of Absolute Sale over Lot No. 707 in favor
of petitioners Hilaria and Felipa.
In 1971, Emilia and her family went to the United States and returned to the
Philippines only in 1981. Upon her return and relying on the Deed of Quitclaim, she built
a house on the eastern half of Lot No. 707. The legal debacle of the Figuracions started in
1994 when Hilaria and her agents threatened to demolish the house of Emilia who, in

Page 13 of 92
GROUP 1 | CIVIL LAW
retaliation, was prompted to seek the partition of Lot No. 707 as well as Lot Nos. 2299
and 705.
Issues:
(1) Whether or not the respondent can compel the partition of Lot No. 707.
(2) Whether or not the respondents right to demand for partition is not barred by
acquisitive prescription or laches.
Ruling:
(1) The respondent can compel the partition of Lot No. 707
In this case, co-ownership of Lot No. 707 was precisely what respondent Em
ilia
was able to successfully establish, as correctly found by the RTC and affirmed by the CA.
Lot No. 707 was a co-owned property of Agripina and Carolina. As co-owners, each of
them had full ownership of her part and of the fruits and benefits pertaining thereto.
Each of them also had the right to alienate the lot but only in so far as the extent of her
portion was affected.
Accordingly, the deed of sale executed by Carolina in favor of Hilaria and Felipa
was a valid conveyance but only insofar as the share of Carolina in the co-ownership is
concerned. As Carolinas successors-in-interest to the property, Hilaria and Felipa could
not acquire any superior right in the property than what Carolina is entitled to or could
transfer or alienate after partition.
In a contract of sale of co-owned property, what the vendee obtains by virtue of
such a sale are the same rights as the vendor had as co-owner, and the vendee merely
steps into the shoes of the vendor as co-owner. Hilaria and Felipa did not acquire the
undivided portion pertaining to Agripina, which has already been effectively bequeathed
to respondent Emilia as early as November 28, 1961 thru the Deed of Quitclaim. In turn,
being the successor-in-interest of Agripinas share in Lot No. 707, respondent Emilia took
the formers place in the co-ownership and as such co-owner, has the right to compel
partition at any time
(2) The respondents right to demand for partition is not barred by acquisitive
prescription or laches
Co-heirs or co-owners cannot acquire by acquisitive prescription the share of the
other co-heirs or co-owners absent a clear repudiation of the co ownership. The act of
repudiation, as a mode of terminating co-ownership, is subject to certain conditions, to
wit: (1) a co-owner repudiates the coownership; (2) such an act of repudiation is clearly
made known to the other co-owners; (3) the evidence thereon is clear and conclusive;
and (4) he has been in possession through open, continuous, exclusive, and notorious
possession of the property for the period required by law. The petitioners failed to comply
with these conditions.
Further, records do not reflect conclusive evidence showing the manner of
occupation and possession exercised by Hilaria and Felipa over the lot from the time it
was registered in their names. The only evidence of possession extant in the records
dates back only to 1985 when Hilaria and Felipa declared the lot in their names for
taxation purposes.

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Prescription can only produce all its effects when acts of ownership, or in this
case, possession, do not evince any doubt as to the ouster of the rights of the other coowners. Hence, prescription among co-owners cannot take place when acts of ownership
exercised are vague.
The petition is denied.
GR No. 180269
February 20, 2013
JOSE Z. CASILANG, SR., substituted by his heirs, namely: FELICIDAD CUD lAMA
T VDA. DE CASILANG, JOSE C. CASILANG, JR., RICARDO C. CASILANG, MARIA
LOURDES C. CASILANG, CHRISTOPHER C. CASILANG, BEN C. CASILANG, DANTE
C. CASILANG, GREGORIO C. CASILANG, HERALD C. CASILANG; and FELICIDAD Z.
CASILANG, MARCELINA Z. CASILANG, JACINTA Z. CASILANG, BONIFACIO Z.
CASILANG, LEONORA Z. CASILANG, and FLORA Z. CASILANG, Petitioners,
vs.
ROSARIO Z. CASILANG-DIZON, MARIO A. CASILANG, ANGELO A. CASILANG,
RODOLFO A. CASILANG, and ATTY. ALICIA B. FABIA, in her capacity as Clerk of
Court and Ex-Officio Sheriff of Pangasinan and/or her duly authorized
representative, Respondents.
Facts:
Spouses Liborio and Francisca owns three parcels of land: (1) Lot No. 4676;
(2)Lot No. 4618; (3) Lot No. 4704. They have 8 children namely: Felicidad, Ireneo
(deceased), Marcelina, Jacinta, Bonifacio (deceased), Leonara, Jose (petitioner),
Flora.Respondents are the heirs of Ireneo: Rosario Casilang-Dizon, Mario, Angelo, Rodolfo
Casilang. Rosario filed with the MTC a complaint for unlawful detainer against her uncle
Jose Casilang for the lot hes currently occupying, Lot No. 4618.
In his answer he stated that hes the lawful, absolute, exclusive owner and in
actual possession of said lot, which he acquired through intestate succession from his
late father.
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MTC: in favor of Rosario and ordering Jose to remove his house and vacate the
said lot. That the lot was owned by Ireneo through extrajudicial partition and his heirs are
entitled to the land. Petitioners (children of Liborio and Francisca), filed with the RTC a
complaint for Annulment of Documents, Ownership and Peaceful Possession with
Damages against respondents. They also moved for the issuance of a writ of preliminary
injunction or temporary restraining order which was denied by the RTC.Among the
documents sought to be annulled was the 1997 Deed of Extrajudicial Partition executed
by Ireneos children over lot no. 4618.
RTC affirmed Joses ownership and possession of Lot No. 4618. While, CA reversed
the RTC ruling mainly on the factual findings and conclusions of the RTC.
Issue:
Whether or not the Deed of Extrajudicial Partition with Quitclaim executed by the
heirs of Ireneo is valid?
Ruling:
No. It grossly violated the substantive right of Jose Casilang Sr. as direct
compulsory heir. Petition is granted and CA decision is reversed and set aside.
From the conclusion of the RTC is well-supported that there was indeed a verbal
partition among the heirs of Liborio, pursuant to which each of his eight children received
his or her share of his estate, and that Joses share was Lot No. 4618.
The parties verbal partition is valid, and has been ratified by their taking
possession of their respective shares.
An agreement of partition may be made orally or in writing. An oral agreement for
the partition of the property owned in common is valid and enforceable upon the parties.
The Statute of Frauds has no operation in this kind of agreements, for partition is not a
conveyance of property but simply a segregation and designation of the part of the
property which belong to the co-owners."
Joses possession of Lot No. 4618 under a claim of ownership is well borne out by
the records. It is also consistent with the claimed verbal partition with his siblings, and
fully corroborated by his sisters Felicidad, Jacinta, Leonora, and Flora, who further
testified that they each had taken possession of their own shares and built their houses
thereon.
A possessor of real estate property is presumed to have title thereto unless the
adverse claimant establishes a better right.
Tax declarations and tax receipts are not conclusive evidence of ownership.

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GR. No. 196577

February 25, 2013
LANDBAANK OF THE PHILIPPINES, petitioner,

vs.
BARBARA SAMPAGA POBLETE, respondent.
Facts:
On October 1997, respondent Poblete obtained a loan worth P300,000.00 from
Kapantay Multi-Purpose. She mortgaged her Lot No. 29 located in Buenavista, Sablayan,
Occidental Mindoro, under OCT No. P-12026. Kapantay, in turn, used OCT No. P-12026 as
collateral under its Account No. 97-OC-013 with Landbank Sablayan Branch.
After a year, Poblete instructed her son-in-law Domingo Balen to look for a buyer
for the Lot No. 29 in order to pay her loan and he referred Angelito Joseph Maniego. Both
parties agreed that the lot shall amount to P900,000.00 but in order to reduce taxes they
will execute a P300,000.00 agreed price appearing in the Deed of Absolute Sale dated
November 9, 1998. In the Deed, Poblete specifically described herself as a widow.
Baledn, then, delivered the Deed to Maniego. Instead of paying the price, Maniego
promised in an affidavit dated November 19, 1998 stating that the said amount will be
deposited to her Landbank Savings Account but he failed to do so.
On August 1999, Maniego paid Kapantays Loan Account for 448,202.08 and on
subsequent year he applied for a loan worth 1,000,000.00 from Land Bank using OCT No.
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P-12026 as a collateral in a condition that the title must be first transferred on his name.
On August 14, 2000, the Registry of Deeds issued TCT No. T-20151 in Maniegos name
pursuant to a Deed of Absolute Sale with the signatures of Mrs. Poblete and her husband
date August 11, 2000 and Maniego successfully availed the Credit Line Agreement for
P1000,000,000.00 and a Real Estate Mortgage over TCT No. T-20151 on August 15, 2000.
On November 2002, Landbank filed an Application for an Extra-judicial Foreclosure
against the said Mortgage stating Maniego failed to pay his loan.
Poblete filed a complaint for nullification of the Deed of Sale dated August 11,
2000 and TCT NO. T-20251, Reconveyance Order of the Title and Damages with a Prayer
for Temporary Restraining Order and/or Issuance of Writ of Preliminary Injunction against
Maniego, Landbank and the Register of Deeds.
The judgment of RTC, affirmed by the CA upon the appeal, favors the plaintiff
Poblete.
Hence, the petition.
Issues:
Whether or not:
(1) The CA erred in upholding the finding of the trial court declaring theTCT NO. T20251 as null and void. The CA misconstrued and misappreciated the evidence
and the law in not finding the title registered in the name of Maniego.
(2) The CA promulgated a decision and not misconstrued the evidence and the law in
not finding the Land Bank a mortgagee in good faith
(3) The CA misconstrued the evidence and the law in not finding the respondent and
Maniego in pari delicto
(4) The CA erred in not applying the principle of estoppels or laches on respondent in
that the proximate cause of her loss was negligence to safeguard her rights over
the subject property, thereby enabling Maniego to mortgage the same with Land
Bank
Ruling:
The petition is meritorious.
It is well entrenched rule, as applied, by the CA, that a forged or fraudulent deed
is a nullity and conveys no title. Moreover, where the deed of sale states that the
purchase price has been paid out bu tin fact has never been, the deed is void ab initio for
lack of consideration. Since the deed is void, the title is also void.
Since the land title has been declared void by final judgment, the Real Estate
Mortgage over it is also void. It is essential that the mortgagor be the absolute owner of
the mortgage; otherwise, the mortgage is void. The doctrine the mortgagee in good
faith as a rule does not apply to banks which are required to observe a higher standard
of diligence. A bank cannot assume that, simply because the title offered as security is
on its face, free of any encumbrances or lien, it is relieved of the responsibility of taking
further steps to verify the title and inspect the properties to be mortgage. The records
not even show that Land Bank investigated and inspected the actual occupants. Lanbank
merely mentioned Maniegos loan upon his presentation of OCT No. P=12026, which was
still in the name of Poblete. Where said mortgagee acted with haste in granting the
mortgage loan and did not ascertain the ownership of the land being mortgaged, it
cannot be considered innocent mortgagee.

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The pari dilecto rule provides when two parties are equally at fault, the law
leaves them as they are and denies recovery by either one of them. This court adopts
the decision of RTC and CA that only Maniego is at fault.
Finally, on the issue of estoppels and laches, such question were not raised before
the trial court. It is settled that an issue which are neither alleged in the complaint nor
raised during the trial cannot be raised for the time of an appeal.
GR. No. 177116

February 27, 2013
ASIAN TERMINALS, INC., petitioner,

vs.
SIMON ENTERPRISES, INC., respondent.
Facts:
Simon Enterprise Inc. (Simon) has entered into contract with Contiquincybunge
Export Company (Contiquincybunge) as its consignee of the shipped Soybean Meal. On
October 25, 1995 and on November 25, 1995 Contiquincybunge has made a shipment
through M/V Sea Dream and M/V Tern respectively at the Port of Darrow, Louisiana, U.S.A.
For the first shipment, Contiquincybunge made a shipment of 6,825.144 metric tons of
U.S. Soybean Meal which when the M/V Sea Dream arrived at the Port of Manila the bulk
of soybean meal was received by the Asian Terminals, Inc. (ATI), for shipment to Simon.
However, when it reached its receiver Simon, it was already short by 18.556 metric tons.
For the second shipment, Contiquincybunge made shipment, through M/V Tern, of
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3,300.000 metric tons of U.S. Soybean Meal in Bulk for delivery to Simon at the Port of
Manila. The shipment was received by ATI again for delivery to Simon. However, the
shipped cargos were found lacking 199.863 metric tons.
Simon has filed an action for damages against the unknown owner of the vessels
M/V Sea Dream and M/V Tern, its local agent Inter-Asia Marine Transport, Inc., and
petitioner ATI alleging that it suffered the losses through the fault or negligence of the
said defendants. The case of the unknown owner of the vessel M/V Sea Dream has been
settled in release and quitclaim and therefore has been stricken out of the case, leaving
M/V Tern, its local agent Inter-Asia Marine Transport, Inc., and petitioner ATIs case
remaining. The RTC has ruled that the defendants be solidarily liable for the damages
incurred by Simon. Unsatisfied with the RTC ruling, the owner of the M/V Tern, and InterAsia Marine Transport, Inc. appealed to CA on the issue whether RTC has erred in finding
that they did not exercise extraordinary diligence in the handling of the goods. On the
other hand, the petitioner ATI has also appealed to CA on the issue that the RTC, the
court-a-quo, committed serious and reversible error in holding ATI solidarily liable with
co-defendant appellant Inter-Asia Marine Transport, Inc. contrary to the evidence
presented. The CA ruled that the RTC ruling be assailed with some modifications on the
basis that M/V Tern and Inter-Asia Marine Transport, Inc. have failed to establish that they
exercised extraordinary diligence in transporting the goods or exercised due diligence to
forestall or lessen the loss as provided in Article 1742 of the Civil Code. And on ATIs RTC
ruling, it was assailed as well on the basis that the stevedore of the M/V Tern has
witnessed that during the dischargement of the cargo, there has been spillage done by
the stevedores of ATI which is an evidence that ATI has been negligible in handling the
goods.
ATI filed a motion for reconsideration at CA but was denied. It then filed a petition for
certiorari with the sole issue of whether the appellate court erred in affirming the
decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for
the shortage incurred in the shipment of the goods to respondent.
The issue involves questions of facts which cannot be entertained by SC for it is
not a trier of facts under rule 45 of the 1997 rules of civil procedure. However, the said
rule 45 is not ironclad and has certain exceptions. The issue raised by ATI was merited to
be entertained by SC under the rule 4, when the judgment is based on a
misapprehension of fact.
Issue:
Whether the appellate court erred in affirming the decision of the trial court
holding petitioner ATI solidarily liable with its co-defendants for the shortage incurred in
the shipment of the goods to respondent.
Ruling:
The petition for review on certiorari was granted to ATI. The SC agreed to ATIs
claim that the CA erred in affirming the decision of the trial court holding petitioner ATI
solidarily liable with its co-defendants for the shortage incurred in the shipment of the
goods to respondent. The CA misapprehended the following facts:
First, petitioner ATI is correct in arguing that the respondent failed to prove that
the subject shipment suffered actual shortage, as there was no competent evidence to
prove that it actually weighed 3,300 metric tons at the port of origin.

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Second, as correctly asserted by petitioner ATI, the shortage, if any, may have
been due to the inherent nature of the subject shipment or its packaging since the
subject cargo was shipped in bulk and had a moisture content of 12.5%.
Third, SC agreed with the petitioner ATI that respondent has not proven any
negligence on the part of the former.
GR No. 195825
February 27, 2013
SPOUSES ALFONSO and MARIA ANGELES CUSI, petitioners,

vs.
LILIA V. DOMINGO, respondent.
Facts:
Respondent Lilia V. Domingo was the owner of the lot in dispute covered under
Transfer Certificate of Title (TCT) No. N-165606.On July 18, 1997, without her consent,
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Radelia Sy (Sy) petitioned before the RTC for reissuance of new owners copy and, as
proof, presented a deed of sale dated July 14, 1997 executed by Domingo in her favor,
and an affidavit of loss dated July 17, 1997, stating that her bag containing the owners
copy of TCT No. N-165606 had been snatched while she was at the SM City, North EDSA.
After the RTC granted the petition, the Register of Deeds cancelled the TCT No. N165606 and issued a new TCT No. 186142 in favor of Sy by virtue of the deed of absolute
sale date July 14, 1997. Sy immediately subdivided the property and sold each half to
Spouses De Vera and Spouses Cusi, and were issued TCT Nos. 189568 and 189569
respectively, annotated on the TCT a consideration of only Php 1M each but the entire lot
had an actual value of not less than Php 14M.
It was only on July 1999 when the respondent learned the situation. She filed an
action against Spouses Sy, Spouses De Vera, and the Spouses Cusi seeking annulment of
titles, injunction, and damages. She also applied for the issuance of writ of preliminary
prohibition and mandatory injunction, and a temporary restraining order (TRO).
The RTC granted her application, however, the title of Spouses De Vera and
Spouses Cusi remain valid as they were held purchasers in good faith. Dissatisfied with
the decision, Domingo filed a motion for reconsideration. The RTC set aside its first
decision and declaring the sale between the respondent and Sy void; the buyers were not
purchasers in good faith; cancellation of TCT Nos. 189568 and 189569; the TCT No.
165606 shall be revalidated in the name of Domingo.
This decision was brought up to the CA filed by the petitioners but was denied. A
motion for reconsideration was also filed but the same was denied.
Issue:
Whether or not the petitioners are purchasers in good faith and for value.
Ruling:
The petitioners were NOT purchasers in good faith.
Under the Torrens System of land registration, a person dealing in the registered
land has the right to rely on the Torrens certificate title and to dispense with the need of
inquiring further, except when the party has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to make such inquiry.
Their observance of a certain degree of diligence within the context of the
principles underlying the Torrens System was not the only barometer for them to verify
the acquisition of title. Under the law and jurisprudence, it was not enough for them to
show that the property was unfenced and vacant nor it was safe for them to rely on the
face of Sys TCT No. 186142 because they were aware that the TCT was derived only
from a duplicate owners copy reissued by virtue of the loss of the original duplicate
owners copy. That circumstance should have already alerted them to the need to
inquire beyond the face of the Sys TCT. Other circumstances that would impel a
reasonably cautious man to make such inquiry in dealing with the property are the
almost simultaneous transactions affecting the acquisition of the property that the
petitioners were also aware of and the material, undervaluation of the property in the
deed of sale, e.i. the price in consideration of the property of Php 1M each half when the
market value is at least Php 14Mostensibly at the request of Sy to minimize her liabilities
for Capital Gains Tax.

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GR No. 182449
March 6, 2013
REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
MARTIN T. NG, respondent.
Facts:

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The office of the Solicitor General in behalf of the Republic of the Philippines filed
a motion for review, assailing the decision of the Court of Appeals in affirming Martin T.
Ngs decree of Registration of Title. The Republic argues that the grant of Decree of
Registration of Title over six parcels of land situated in Consolacion, Cebu was premature,
considering that the respondent failed to comply with the requirements of Original
Registration of Title. The Petitioner contends that Martin failed to substantiate the claim
of possession and occupation, also arguing that the testimony of respondents principal
witness is heavily biased. The tax declarations made by Ng is not a conclusive proof of
ownership. In summation, the Republic avers that the Court of Appeals erred in affirming
the Regional Trial Courts appreciation that the respondent has established a claim of
ownership by reason of an open, continuous, exclusive and notorious possession of the
subject lots.
Issue:
Has the respondent Martin T. Ng failed in establishing a conclusive claim of
ownership through an open, continuous, exclusive and notorious possession of the
subject lots?
Ruling:
The contention of the petitioner is without merit. It is clear from the records that
respondent presented several pieces of documentary evidence to prove that he openly
possessed the properties. He submitted notarized deeds of sale, Agreements of Partition,
and Extra-judicial settlement of Estate and Sale to show the acquisition of lands from his
predecessors in interest. He also submitted the original cloth-tracing plan in which the
advance survey plan shows that the subject lots had been under the names of the
vendors, the previous transferors, and the original owners of the lots.
While tax declarations and realty tax payments or property are not conclusive
evidence of ownership, they are nevertheless good indicia of possession in the concept of
owner, for no one in the right frame of mind would be paying taxes for a property that is
not in ones actual or at least constructive possession. As to the biasness of the principal
testimony of the witness presented, the witness asserted with certainty that no other
person laid claim to the lots. The DENR Certification corroborated this fact that the lots
were not covered by any other subsisting public land application. As a result, respondent
supplied proof of his exclusive possession of the realties.
Therefore, given these pieces of documentary evidence-consisting of Muniments
of Title, tax declarations and realty payments which were not disputed by petitioner; and
the testimony as regards the actual possession for more than thirty years by
respondents predecessor-in-interest-the OSG inaccurately portrayed respondent as
merely making general submissions in proving his claims. Rather, he amply established
that he and his predecessors in interest owned and possessed the subject lots openly,
continuously and notoriously, as required by our registration laws.
GR No. 172588
March 13, 2013
ISABEL N. GUZMAN, petitioner,

vs.
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ANIANO N. GUZMAN and PRIMITIVA G. MONTEALTO, respondents.
Facts:
Isabel N. Guzman, spouse of Arnold N. Guzman, owned 6/7th and 1/7th portions,
respectively of a parcel of land in Tuguegarao City, Cagayan. She filed an ejectment suit
with the MTC against her children, Aniano N. Guzman and Primitiva G. Montealto,
claiming that they occupied the land by mere tolerance and they failed to comply upon
her written demand to vacate the property; subsequently barangay conciliation
proceedings failed to settle their differences.
In respondents defense, the children argued that their mother transferred all her
property rights of the said property in their favor, except her usufructuary right, as
evidenced by a document. They also alleged that she engaged in forum shopping since
she already raised the issue of ownership in a pending case in the RTC for petition for
cancellation of adverse claim against them.
The MTC found the petitioner to be the lawful owner of the land with a right to its
possession since respondents had no vested right to the land since they are merely her
children to whom no ownership or possessory rights have passed. It also held that she
did not commit forum shopping since she asserted ownership only to establish her right
of possession and the lower courts can provisionally resolve the issue of ownership to
determine who has the better right of possession.
Aggrieved, respondents appealed to the RTC. The RTC reversed the MTC ruling. It
took into account the petitioners transfer of rights in the respondents favor which, it
held, could not be unilaterally revoked without a court action. It also noted that there was
no earnest effort at a compromise which was exerted prior to the filing of the complaint.
Petitioner filed 3 Motions for Reconsideration at the RTC on different dates and
were denied by the court on those occasions.
Petitioner appealed on certiorari with the CA. CA ruled against her favor. It held
that petitioner cannot validly claim that the respondents occupied the properties through
mere tolerance since they were co-owners of the property as compulsory heirs of Alfonso
N. Guzman, the original owner. It also noted that petition for review would have been the
proper remedy. It found that under the Rules, she lost her chance to appeal when she
filed a second motion for reconsideration.
Issue:
Whether or not CAs finding of co-ownership is bereft of factual and legal basis in
its case for ejectment.
Ruling:
No. The Court affirming the decision of CA has ruled that Ejectment cases are
summary proceedings intended to provide an expeditious means of protecting actual
possession or right of possession of property. Title is not involved; hence, it is a special
civil action with a special procedure. The only issue to be resolved in ejectment cases is
the question of entitlement to the physical or material possession of the premises or
possession de facto. Thus, any ruling on the question of ownership is only provisional,
made solely for the purpose of determining who is entitled to possession de facto.
Accordingly, any ruling on the validity of the petitioners transfer of rights is provisional
and should be resolved in a proper proceeding.
G.R No.173166
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March 13, 2013
PURIFICACION ESTANISLAO and RUPERTO ESTANISLAO, Petitioners,

vs.
SPOUSES NORMA GUDITO and DAMIANO GUDITO, Respondents.
Facts:
The respondent couple is the owner of a residential lot being leased by the
petitioners on a month-month basis. They have acquired the property through a Deed of
Donation executed by the Vasquez couple, who inherited the land from GazparVascuez.
Petitioners had been renting and occupying the subject lot since 1934 and built a house
thereon in accordance with their lease agreement with GazparVasques.
Several demands and formal notice had been made by the respondents for the
petitioner to remove their house and vacate the subject lot and pay the rental
arrearages. However, petitioners failed to comply. Thus, the respondent filed a complaint
for Unlawful Detainer/Ejectment against the petitioner before the MetC of Manila.
MetC ruled in favor of the respondent. Thereafter, petitioners elevated the case
before the RTC of Manila, which rendered a decision reversing the MetCs decision. RTC
ruled that the Guditos should respect the lease agreement and possession of the
petitioners over the property and that they have the right of first refusal pursuant to PD
1517 and 2018 if the respondent decide to sell the property to a third person. If the
purpose of the respondents is for residential, they can avail of the remaining 205.50 sq.m
of the same lot. Dissatisfied, respondent interposed appeal to the CA.
CA annulled and set aside RTCs decision and reinstated the MEtCs decision with
modification ordering the petitioner to pay the reasonable compensation for the use and
occupancy of the subject lot in the amount of 500 pesos per month from Nov.1995 and
every month thereafter until they finally vacated the subject lot. Hence, petitioners filed
instant petition.
Issue:
Who has the better right of possession over the subject property?
Ruling:
Respondents have overwhelmingly established their right of possession by virtue
of the Deed of Donation made in their favor. They have complied with the provisions of
the law in order for them to legally eject the petitioners. Sec 5 of BLg 25 provide that
legitimate need of owner /lessor to repossess his property for his own use or for the use
of any of his immediate member of his family as a residential unit, such owner not being
owner of any other available unit in the same city or municipality. Provided, however
that the lease for a definite period has expired, the lessor has given the lessor formal
notice within 3months in advance of his intention to repossess the property. Provide that
the lessor/owner is prohibited from leasing the residential unit or allowing its use by third
person for at least 1 yr. The ground for judicial ejectment has been clearly complied by
the respondents.
Petitioners have failed to prove that the transfer of the subject property was
merely a ploy designed to defeat and circumvent their right of first refusal under the law.
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The deed of Donation was signed by the parties and their witnesses and was even
notarized by a notary public. And so it is admissible evidence and is entitled to full faith
and credit upon its face. The said Deed is vested with public interest, the sanctity of
which deserves to be upheld unless overwhelmed by clear and convincing evidence.
Thus, the donation is valid and the respondents are entitled legally to the said property
as donees.
Sec.6 of PD 1517 cannot be invoked by the petitioners since the right of first refusal
applies only to a case where the owner of the property intends to sell it to a third party. It
is clear that the intention of the respondent is to use the property for his own residential
purposes. Therefore, the CAs decision is hereby affirmed.

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GR No. 180321
March 20, 2013
EDITHA PADLAN, petitioner,

vs.
ELENITA DINGLASAN and FELICISIMO DINGLASAN, respondents.
Facts:
Petition for certiorari assailing the decision of the CA dated June 29 2007. Elenita
Dinglasan is the registered owner of Lot No. 625 with an area of 82, 972 sq m. While
riding the jeepney, Elenitas mother, Lilia, had a conversation with one Maura Passion
and believed her to be a real estate agent. Lilia borrowed the owners copy of the TCT
from Elenita and gave it to Maura from there, the latter was able to subdivide the lots
and through falsified deeds of sale was able to sell the lots to different buyers. One of
them was Lorna Ong who bought Lot No. 625-K and was later sold to petitioner
EdithaPadlan for P4000, where a new title was issued in her favour. Upon discovery,
respondents demanded that petitioner surrender possession of said lot but she refused.
Later, they filed a case for Cancellation of Transfer Certificate of Title before the RTC of
Balanga, Bataan.
Petitioner claims that RTC did not acquire jurisdiction over her person because the
summons was not validly served upon her but only through her mother and the she has
been living in Japan for a long time after marrying a Japanese national. Documents were
submitted to support this contention but RTC declared her in default upon motion of the
respondents. The trial ensued and she was found to be a buyer in good faith by the RTC.
Upon appeal, CA set aside RTCs findings stating that based on the surrounding
circumstances, the petitioner should have inquired further before buying the disputed
property and not just simply rely on the title. CA concluded that the title issued in her
favour was fraudulent and was therefore null and void. Petitioner then filed for a motion
for reconsideration claiming that the lower court failed to acquire jurisdiction over the
subject matter as well as her person but the same was subsequently denied.
Issues:
(1) WON the Honorable Court had jurisdiction over the person of the Petitioner
(2) WON the Honorable Court had jurisdiction over the subject matter of the case
(3) WON the petitioner was a buyer in good faith for value
Ruling:
Petition is meritorious.
SC ruled that before resolving the other issues raised by the petitioner, RTCs
jurisdiction of the subject matter must first be ascertained. The same is conferred by law
and determined by the factual allegations in the complaint as well as the relief sought
therefrom.

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An action involving title to real property means that the plaintiffs cause of
action is based on a claim that he owns such property or that he has the legal rights to
have exclusive control, possession, enjoyment, or disposition of the same. Title is the
legal link between (1) a person who owns property and (2) the property itself. Title is
different from a certificate of title which is the document of ownership under the
Torrens system of registration issued by the government through the Register of Deeds.
While title is the claim, right or interest in real property, a certificate of title is the
evidence of such claim.
From the Complaint, the case filed by respondent is not simply a case for the
cancellation of a particular certificate of title and the revival of another. The
determination of such issue merely follows after a court of competent jurisdiction shall
have first resolved the matter of who between the conflicting parties is the lawful owner
of the subject property and ultimately entitled to its possession and enjoyment. The
action is, therefore, about ascertaining which of these parties is the lawful owner of the
subject lot, jurisdiction over which is determined by the assessed value of such lot. In the
case at bar, the only basis of valuation of the subject property is the value alleged in the
complaint that the lot was sold by Lorna to petitioner in the amount of P4,000.00. No tax
declaration was even presented that would show the valuation of the subject property.
Where the ultimate objective of the plaintiffs is to obtain title to real property, it
should be filed in the proper court having jurisdiction over the assessed value of the
property subject thereof. Since the amount alleged in the Complaint by respondents for
the disputed lot is only P4,000.00, the MTC and not the RTC has jurisdiction over the
action. Therefore all proceedings therefrom are null and void.
SC did not find it necessary to discuss the remaining issues raised by the
petitioner. Decision of the CA is reversed and set aside and complaint is dismissed
without prejudice.

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GR 174844
March 20, 2013
VEVENCIA ECHIN PABALAN, ET AL., Petitioner,

vs.
THE HEIRS OF SIMEON A.B. MAAMO, SR., Respondents.
Facts:
In 1910 OnofrePalapo sold parcel of land to PlacidoCansoy. Placido in turn
executed notarized deed in favor of Miguel Maamos wife Antonia Bayon.
Later on, Antonia, faulting SimplecioPalapo with forcible entry, filed an ejectment
complaint against him. In his answer, Simplecio asserted that he is one of the heirs of
Concepcion Palapo who has been in legal and peaceful possession of the same or many
years.
Court of the Justice of the Peace rendered decision in favor or Antonia. A
certification was thereafter issued stating that the writ of execution issued in the case
was later returned duly served.
Later on, the Maamo, children of Miguel and Antonia filed a suit against
Simplecios children, for recovery of real property and damages as co-owners. The
Palapos alleged open, continuous and adverse possession including payment of taxes
since 1906.
RTC ruled in favor of the Palapos. It was found that the supposed forcible entry
into property preceded the deed Palacio executed in favor of Antonia, and having
possessed the litigated portion in the concept of owner for more than thirty years, they
were also declared to have acquired the property through prescription.
CA reversed the decision ruling that Maamo heirs were true and lawful owners. CA
found that 1) the deed executed in favor of Antonia was mere affirmation of earlier sale,
2) defendants were referring to a different parcel of land , (3) the claim that the litigated
portion was inherited from Concepcion had been rejected in in a previous civil case which
appears to have been returned duly served and executed; and, (4) Simplecios continued
possession of the portion in litigation was by mere tolerance and could not, therefore,
ripen into ownership acquired by prescription, laches or estoppel.
In the meantime, the death of some of the original parties to the case resulted in
their substitution by their respective heirs.
Issues:
(1) Whether or not Simplecios possession was upon the tolerance of Resondents
predecessor-in-interest.
(2) Whether or not petitioners lawfully acquired said parcel of land through
prescription
(3)
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Ruling:
Contrary to the RTCs finding, Antonia already owned the property when
petitioners own predecessor-in-interest, Simplecio, was alleged to have forcibly entered
into the property.
The fact that the writ of execution issued in ejectment case against Simplecio was
returned duly served also lends credence to respondents claim that Simplecios
possession of the property was upon Miguel Maamos tolerance.
Since acts of a possessory character executed due to license or by mere tolerance

of the owner are inadequate for purposes of acquisitive prescription, petitioners cannot
claim to have acquired ownership of the property by virtue of their possession thereof.
The Civil Code provides that possession must be en concepto de dueo or adverse in
order to constitute the foundation of a prescriptive right. If not, such possessory acts, no
matter how long, do not start the running of the period of prescription.
All three allegations of prescription, laches and estoppel by the petitioners are
therefore rendered unavailing in this case.
The instant petition for review on certiorari is denied for lack of merit.

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GR No. 188633
April 10, 2013
Sandoval Shipyards, Inc., petitioner,

vs.
Philippine Merchant Marine Academy (PMMA), respondent
Facts:
The PMMA entered into Ship Building Contract with Sandoval Shipyards, Inc. with
the latter obliging itself to construct two units of lifeboats to be used by the students of
PMMA for training. The parties agreed on the specifications of the boats, the date of
delivery and the amount of payment as stated in the contract. However, upon inspection
by the PMMA, it found that the construction being done by the petitioner was not in
conformity with the approved plan. Because of this, respondents dean submitted a
report and recommendation for ratification of the contract to its President. A meeting
was held in order to settle the issue. Sandoval asked for extension of the time of delivery
of the lifeboats which was granted by PMMA. However, Sandoval was not able to comply
with the agreed specifications for the boats and the agreed time of delivery despite
repeated demands from PMMA. As a result, PMMA filed a Complaint for Rescission of
Contract with damages against the petitioners.
The RTC held that although the caption for the complaint filed by PMMA was for
Rescission for Contract, the allegations in the body were for breach of contract. Thus, the
respondents were made jointly and severally liable for actual damages plus attorneys
fees plus cost of suits. The petitioners appealed the case to the CA where it found that
indeed the petitioners committed a clear substantial breach of contract which warranted
its rescission. However, since rescission requires mutual restoration of benefits received,
the respondents cannot be compelled to return what it does not possess - the lifeboats
which the petitioners failed to deliver. A motion for reconsideration was filed by the
petitioners but was denied by the CA hence the petition for certiorari filed under rule 45.
Issue:
Whether or not the case is for rescission and not for damages due to breach of
contract.
Ruling:
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No, the case is for damages due to breach of contract. It held that the RTC was
correct in determining whether there was a breach of contract and if such breach would
warrant rescission and or damages. In this case, it found that the breach was found to be
substantial and sufficient to warrant a rescission of the contract. However, since
rescission entails a mutual restitution of benefits received and the factual circumstances
rendered this mutual restitution impossible, an injured party who has chosen rescission is
also entitled to the payment of damages.
GR No. 182760
April 10, 2013
REPUBLIC OF THE PHILIPPINES, petitioner

vs.
ROBERTO P. NARCEDA, respondent.
Facts:
Robert P. Narceda (respondent) married Marina Narceda on July 22, 1987.
Sometime in 1994, Marina went to Singapore and never returned since. There was never
any communication between them. He tried to look for her but he could not find her.
Several years after she left, one of their townmates came home from Singapore and told
him that the last time she saw his wife, the latter is already living with a Singaporean
husband. In view of her absence and his desire to remarry, respondent filed a petition for
a judicial declaration of the presumptive death and/or absence in the RTC. Accordingly,
the RTC granted respondent's petition, after which, through the Office of the Solicitor
General (OSG), appealed the foregoing decision to the CA. According to petitioner,
repondent failed to conduct a search for his missing wife with diligence required by law
and enough to give rise to a well-founded belief that she was dead. CA dismissed the
appeal on the ground of lack of jurisdiction contending that the hearing of a petition for
presumptive death is a summary proceeding under the Family Code. Article 247 of the
Family Code provides that the judgment of the trial court in summary court proceedings
shall be immediately final and executory.
Issue:
Whether or not the decision for the declaration of presumptive death of Marina
has become final and executory.
Ruling:
Yes. The Court affirmed the decision of the Court Appeals. As pointed out hy CA,
since the resolutipn of a petition for the declaration of a presumptive death requires a
summary proceeding, the procedural rules to be followed are those enumerated in Title
XI of the Family Code. Articles 238, 247 and 253 thereof read:
Art 238: Until modified by the Supreme Court, the procedural rules provided for in
this Title shall apply as regards to separation infact between husband and wife,
abandonment by one of the other, and incidents involving parental authority.
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xxxxx
Art 247: The judgement of the Court shall be immediately final and executory.
xxxxx
Art 253: The foregoing rules in Chapter 2 and 3 hereof shall likewise govern
summary proceedings filed under Articles 41, 51, 69, 73, 96, 124 and 217, insofar as
they are applicable.
Hence, by express provision of Article 247, declaration of presumptive death is
immediately final and executory upon notice to the parties, there is no reglementary
period within which to perfect an appeal and the appelate cpurt acquires no jurisdiction
to review the foregoing judgment.
It should be remembered that the right to appeal is not a natural right nor is it a
part of due process, but it is merely a statutory privilege. This does not mean that
aggrieved party has no longer any remedy, he or she may file a petition for certiorari to
question abuse of discretion amounting to lack of jurisdiction. Such petition should be
filed in the Court of Appeals in accordance with the Doctrine of Hierarchy of Courts.
GR No. 171298
April 15, 2013
Spouses Oscar and Thelma Cacayorin, petitioners,

vs.
Armed Forces and Police Mutual Benefit Association,
respondent.
Inc.
(AFPMBAI),
Facts:
Oscar Cacayorin filed an application with AFPMBAI to purchase a property which
the latter owned through a loan facility. Oscar and his wife, Thelma, and the Rural Bank of
San Teodoro executed a Loan and Mortgage Agreement with the former as borrowers and
the Rural Bank as lender, under the auspices of PAG-IBIG. On the basis of the Rural
Bank's letter of guaranty, AFPMBAI executed in petitioners' favor a Deed of Absolute Sale,
and a new title was issued in their name. Then, the PAG-IBIG loan facility did not push
through and the Rural Bank closed. Meanwhile, AFPMBAI somehow was able to take
possession of petitioners' loan documents and the TCT, while petitioners were unable to
pay the loan for the property. AFPMBAI made written demands for petitioners to pay the
loan for the property. Then, petitioners filed with the RTC a complaint for consignation of
loan payment, recovery of title and cancellation of mortgage annotation against
AFPMBAI, PDIC and the Register of Deeds of Puerto Princesa City. AFPMBAI filed a motion
to dismiss claiming that petitioners' Complaint falls within the jurisdiction of the Housing
and Land Use Regulatory Board (HLURB), as it was filed by petitioners in their capacity as
buyers of a subdivision lot and it prays for specific performance of contractual and legal
obligations decreed under Presidential Decree No. 957(PD 957). It added that since no
prior valid tender of payment was made by petitioners, the consignation case was fatally
defective and susceptible to dismissal.
Issue:
Whether or not the case falls within the exclusive jurisdiction of the HLURB.
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Ruling:
No. Unlike tender of payment which is extrajudicial, consignation is necessarily
judicial; hence, jurisdiction lies with the RTC, not with the HLURB. Under Article 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 the 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. The said provision clearly precludes consignation in venues
other than the courts.
GR No.171555
April 17, 2013
EVANGELINE RIVERA-CALINGASAN and E. RICAL ENTERPRISES, petitioners,
vs.
WILFREDO RIVERA, substituted by MA. LYDIA S. RlVERA, FREIDA LEAH S.
RIVERA and WILFREDO S. RIVERA, JR.., respondents.
Facts:
Spouses Wilfredor Rivera and Loreta Inciong were owners of several parcels of
land located in Lipa City, Batangas. Lorete died and left Wilfredo and two daughters,
Evangeline and Brigida Luz as her surviving heirs. Eleven years later, Loretss heirs
entered into extrajudicial settlement of her share in the conjugal estate in favor of sisters
Evangeline and Brigida. Wilfredo waived his rights on the said parcels of land that he
lawfully possessed but reserved his usufructuary rights and the same were annotated on
the titles that were issued.
On March 13, 2013, respondent Wilfredo filed a case of forcible entry in the MTCC
against the petitioners and Star Honda caliming that while he was in the hospital,
petitioners and said company took possession of the two parcels of land that he lawfully
possessed and occupied and with the aid of armed men, they barred him from entering
said property
According to the petitioners and Star Honda, respondent has renounced his
usufructuary rights as evidenced by two petitions that he filed in the RTC of Lipa praying
for the same.
MTCC dismissed Wilfredos complaint because it found no evidence of his prior
possession and subsequent disposition of the property, Upon appeal, RTC affirmed
MTCCs ruling but it was eventually set aside upon respondents filing of a motion for
reconsideration Petitioners and Star Honda were ordered to pay Wilfredo P620,000.00as
compensation and as attorneys fees. Petitioners and Star Honda then filed separate

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motions for reconsiderations and from which the RTC absolved the latter from any
liability.
Petitioners filed a Rule 42 petition for review with the CA which affirmed RTCs
decision noting that Evangelines admission that she lived elsewhere rendered her claim
of possession and occupation a improbable. On Dec. 27, 2006, Wilfredo died and has
been substituted by his second wife and two children.
Issue:
Whether or not the petitioners had been in prior physical possession of the
property.
Ruling:
SC is convinced that Wilfredo had prior possession of the property and was
deprived of it through force, strategy and stealth. Ejectment cases such as forcible entry
and unlawful detainer aim only to resolve who is entitled to physical possession de facto
and will not necessarily be decided in favor who has presented proof of ownership. In a
forcible entry case, prior physical possession is the primary consideration and can even
be used as evidence against the owner himself.
SC also ruled that the right to the usufruct was extinguished by Wilfredos death
but the judgment in the jectment case is conclusive between the parties and their
successors-in-interest. Hence, Wilfredos heirs are entitled for damages by way of
compensation for the use and occupation of the property from the time of the RTCs
decision up to the time of Wilfredos death.
GR No. 191667
April 17, 2013
LAND BANK OF THE PHILIPPINES, petitioner,
vs.
EDUARDO M. CACAYURAN, respondent.
Facts:
From 2005 to 2006, the Municipalitys Sangguniang Bayan passed certain
resolutions to implement a multi-phased plan (Redevelopment Plan) to redevelop the
Agoo Public Plaza (Agoo Plaza) where the Imelda Garden and Jose Rizal Monument were
situated. To finance phase 1 of the said plan, the SB initially passed Resolution No. 682005 authorizing then Mayor Eufranio Eriguel to obtain a loan from Land Bank and
incidental thereto, mortgage a 2,323.75 square meter lot, a portion of the Agoo Plaza as
collateral. To serve as additional security, it further authorized the assignment of a
portion of its internal revenue allotment (IRA) and the monthly income from the proposed
project in favor of Land Bank. The foregoing terms were confirmed, approved and ratified.
Consequently, Land Bank extended a P4,000,000.00 loan in favor of the Municipality
(First Loan), the proceeds of which were used to construct ten kiosks of the Imelda
Garden. After completion, these kiosks were rented out. Later on, the SB passed another
Resolution, approving the construction of a commercial center on the Plaza Lot as part of
phase II. To finance it, Mayor Eriguel was again authorized to obtain a loan from Land
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Bank, posting as well the same securities as that of the first loan. All previous
representations and warranties of Mayor Eriguel related to the negotiation and obtention
of the new loan were then ratified. In consequence, Land Bank granted a second loan in
favor of the Municipality in the amount of P28,000,000.00.
Unlike phase 1, the construction of the commercial center at the Agoo Plaza was
vehemently objected to by some residents of the Municipality. Led by respondent
Eduardo Cacayuran (Cacayuran), these residents claimed that the conversion of the Agoo
Plaza into a commercial center, as funded by the proceeds from the loans, were "highly
irregular, violative of the law, and detrimental to public interests, and will result to
wanton desecration of the said historical and public park." The foregoing was embodied
in a Manifesto, launched through a signature campaign conducted by the residents and
Cacayuran.
In addition, Cacayuran wrote a letter to Mayor Eriguel, Vice Mayor Antonio Eslao,
and the members of the SB expressing the growing public clamor against the conversion
of the Agoo Plaza into a commercial center. He then requested the foregoing officers to
furnish him certified copies of various documents related to the aforementioned
conversion including, among others, the resolutions approving the Redevelopment Plan
as well as the loan agreements for the sake of public information and transparency.
Unable to get any response, Cacayuran, invoking his right as a taxpayer, filed a
complaint against the implicated officers and Land Bank, assailing, among others, the
validity of the Subject Loans on the ground that the Plaza Lot used as collateral thereof is
property of public dominion and therefore, beyond the commerce of man.
The RTC ruled in favor of Cacayuran, declaring the nullity of the Subject Loans.
However, the CA affirmed with modification the RTCs ruling, excluding Vice Mayor Eslao
from any personal liability arising from the Subject Loans.
Issues:
(1) Whether or not the resolutions are valid.
(2) Whether or not the contracted loans are valid.
Rulings:
(1) No. The said loans and even the Redevelopment Plan itself were not approved
pursuant to any law or ordinance but through mere resolutions. The distinction
between ordinances and resolutions is well perceived. While ordinances are laws
and possess a general and permanent character, resolutions are merely
declarations of the sentiment or opinion of a lawmaking body on a specific matter
and are temporary in nature.39 As opposed to ordinances, "no rights can be
conferred by and be inferred from a resolution."40 In this accord, it cannot be
denied that the SB violated Section 444(b)(1)(vi) of the LGC altogether.
Noticeably, the passage of the Subject Resolutions was also tainted with
other irregularities, such as (1) the SBs failure to submit the Subject Resolutions
to the Sangguniang Panlalawigan of La Union for its review contrary to Section 56
of the LGC;41 and (2) the lack of publication and posting in contravention of
Section 59 of the LGC.42

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In fine, Land Bank cannot rely on the Subject Resolutions as basis to

validate the Subject Loans.
(2) No. It is clear that the subject loans belong to the first class of ultra vires acts
deemed as void. Records disclose that the said loans were executed by the
Municipality for the purpose of funding the conversion of the Agoo Plaza into a
commercial center pursuant to the Redevelopment Plan. However, the conversion
of the said plaza is beyond the Municipalitys jurisdiction considering the
propertys nature as one for public use and thereby, forming part of the public
dominion. Accordingly, it cannot be the object of appropriation either by the State
or by private persons.46 Nor can it be the subject of lease or any other
contractual undertaking.4
GR No. 179643
June 3, 2013
ERNESTO L. NATIVIDAD, petitioner

vs.
FERNANDO MARIANO, et al.,respondents.
Facts:
Ernesto Natividad purchased a 66,997 lot from Esperanza Yuson at a public
auction in 1988. The lot was, however, covered by a lease tenancy agreement under RA
6657 (CARL) between Yuzon and the respondents Fernando and Andres Mariano and
Dorotea Garcia.
In 1998, Natividad filed with the PARAD a petition for ejectment and payment of
back lease rentals against Mariano, et al. Natividad alleged that despite repeated verbal
demands said tenants failed to pay him rentals. This prompted him to orally demand that
they vacate the lot and eventually his petition for ejectment.
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When Mariano, et al failed to answer the summons and did not rebut Natividads
petition, PARAD decided the case ex parte and granted the petition for ejectment and
ordered payment of back rentals in favor of Natividad.
The first petition for reconsideration filed by the respondents is on the ground of
excusable negligence for inexperience and lack of knowledge of agrarian reform laws
and the DARAB implementing rules and regulations. In their second petition, filed by the
DAR Agrarian Legal Assistance, the respondents added as justification their lack of
sufficient financial means. Both petitions were denied by PARAD in view that they filed
beyond the prescribed reglementary period and the decision has become final and
executory.
The case was raised to the DARAB, which reversed the decision of PARAD, and
ordered Natividad to maintain the respondents peaceful possession of the property.
DARABs decision was later on affirmed by the Court of Appeals; Hence, this petition for
certiorari with the Supreme Court.
Issue:
Whether or not, Ernesto had sufficient cause to eject the respondents from the
subject property.
Ruling:
The Supreme Court affirmed with modification the decision of the DARAB and the
Court of Appeals; finding that:
1. For the broader interest of justice and equity, despite the Doctrine of Immutability of
Final Judgments (by PARAD), appellate courts did not err in re-opening, and ruling on the
merits of the case;
2. Review of the DAR implementing rules revealed that the petition of the respondents
were well within the prescribed reglementery period;
3. Natividad did not show evidence to prove he demanded from respondents payment of
lease rentals since 1988 when he acquired the land; demand was considered made only
in 1998 upon his petition;
4. The alleged non-payment of lease rentals did not last for two (2) years; thus ejection is
NOT YET DUE as required by the statute;
5. Natividads prolonged inaction in making his demand led the respondents to consider
Corazon and Laureano Yusons representatives to still be the authorized payees of the
lease.
GR No. 186475
June 26. 2013
J PLUS ASIA DEVELOPMENT CORPORATION, petitioner,

vs.
UTILITY ASSURANCE CORPORATION, respondent.
Facts:
Petitioner J Plus Asia Development Corporation and Martin E. Mabunay entered
into a Construction Agreement on December 24, 2007 whereby the latter undertook to
build the formers 72-room condominium/hotel located in Boracay Island.
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The project, costing P42M, was to be completed within one year or 365 days
reckoned from the first calendar day after signing of the Notice of Award and Notice to
Proceed and receipt of down payment (20% of contract price). The P8.4M down payment
was fully paid on January 14, 2008. Payment of the balance of the contract price will be
based on actual work finished within 15 days from receipt of the monthly progress
billings. Per the agreed work schedule, the completion date of the project was December
2008. Mabunay also submitted the required Performance Bond issued by Respondent
Utility Assurance Corporation in the amount equivalent to 20% down payment or P8.4M.
Mabunay commenced work at the project site on January 7, 2008. Petitioner paid
up to the 7th monthly progress billing sent by Mabunay. As of September 16, 2008,
Petitioner had paid the total amount of P15.98M inclusive of the 20% down payment.
However, as of said date, Mabunay had accomplished only 27.5% of the project. It was
later found out by the joint inspection and evaluation by the Petitioner and Mabunay that,
as of November 14, 2008, the project was only 31.39% complete and that the
uncompleted portion was 68.61%.
On November 19, 2008, Petitioner terminated the contract and sent Demand
Letters to Mabunay and Respondent surety. As its demands went unheeded, Petitioner
filed a Request for Arbitration before the Construction Industry Arbitration Commission
(CIAC).
In his answer, Mabunay claimed that the delay was caused by retrofitting and
other revision works ordered by Petitioner. He asserted that he actually had until April
30, 2009 to finish the project since the 365 days period of completion started only on
May 2, 2008 after clearing the retrofitted old structure. Hence, the termination of the
contract by Petitioner was premature and the filing of the Complaint against him was
baseless, malicious and in bad faith.
Respondent, on the other hand, filed a Motion to Dismiss on the ground that
Petitioner has no cause of action and the complaint states no cause of action against it.
The CIAC denied the Motion to Dismiss.
In its answer Ex Abundante Ad Cautelam with Compulsory Counterclaims and
Cross-claims, Respondent argued that the Performance Bond merely guaranteed the 20%
down payment and not the entire obligation of Mabunay under the Construction
Agreement. Since the value of the projects accomplishment already exceeded the said
amount, Respondents obligation under the Performance Bond had been fully
extinguished. As to the claim for alleged overpayment to Mabunay, Respondent
contended that it should not be credited against the 20% down payment which was
already exhausted and such application by Petitioner is tantamount to reviving an
obligation that had been legally extinguished by payment. Respondent also set up a
cross-claim against Mabunay who executed in its favor an Indemnity Agreement whereby
Mabunay undertook to indemnify Respondent for whatever amounts it may be adjudged
liable to pay Petitioner under the surety bond.
On February 2, 2010, CIAC rendered its Decision and made Awards in favor of
Petitioner. CIAC ruled that Mabunay had incurred delay which entitled Petitioner to the
stipulated liquidated damages and recouped down payment.
Dissatisfied, Respondent filed in the CA a Petition for Review under Rule 43 of the
1997 Rules of Civil Procedure, as amended, which reversed the CIACs ruling.
Hence, the present Petition for Review on Certiorari under Rule 45 seeking to
reverse the CA insofar as it denied its claims under the Performance Bond and to
reinstate in its entirety the February 2, 2010 CIAC Decision.
Issue:

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Whether or not the Alternative Dispute Resolution Act of 2004 and the Special
ADR Rules have stripped the CA of jurisdiction to review arbitral awards?
Ruling:
No. The Petitioners contention is without merit. Petitioner erroneously relied on
the provision in RA No. 9285 allowing any party to a domestic arbitration to file in the RTC
a petition either to confirm, correct or vacate a domestic arbitral award.
The Petition is GRANTED. The assailed decision of the CA is REVERSED and SET
ASIDE. The Award made in the Decision rendered by CIAC dated February 2, 2010 is
REINSTATED with MODIFICATIONS.
GR No. 194836
June 28, 2013
Hospicio D. Rosaroso, Antonio D. Rosaroso, Manuel D. Rosaroso, Algerica D.

Rosaroso, and Cleofe R. Labindao, petitioners,
vs.
Lucila Laborte Soria, Spouses Ham and Laila Solutan and Meridian Realty
Corporation, respondents.
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Facts:
This is a petition for certiorari under Rule 45 of the Rules of Court assailing the
December 4, 2009 Decision of the Court of Appeals which reversed and set aside the July
30, 2004 decision of the Regional Trial Court, an action for declaration of nullity of
documents.
Spouses Luis Rosaroso (Luis) and Honorata Duazo (Honorata) acquired several
real properties in Daan Bantayan, Cebu City including the subject properties. The couple
had nine children namely: Hospicio, Arturo, Florita, Lucila, Eduardo, Manuel, Cleofe,
Antonio and Angelica. On April 25, 1952, Honorata died. Later on, Luis married Lourdes
Pastor Rosaroso (Lourdes).
On January 16, 1995, a complaint for Declaration of Nullity of Documents with
damages was filed by Luis, as one of the plaintiffs, against his daughter, Lucila R. Soria
(Lucila); Lucilas daughter Laila S. Solutan (Laila); and Meridian Realty Corporation
(Meridian). Due to Luis untimely death, however, an amended complaint was filed on
January 6, 1996with the spouse of Laila, Ham Solutan (Ham); and Luis second wife,
Lourdes, included as defendants.
In the amended complaint, petitioners herein alleged that on November 4, 1991,
Luis, with full knowledge and consent of his second wife, Lourdes executed the Deed of
Absolute Sale (First Sale) covering the concerned properties in their favor.
They also alleged that, despite the fact that the said properties had already been
sold to them, respondent Laila, in conspiracy with her mother, Lucila, obtained the
Special Power of Attorney (SPA), from Luis (first SPA); that Luis was then sick, infirm,
blind, blind and unsound mind; that Lucila and Laila accomplished this by affixing Luis
thumb mark on the SPA which purportedly authorized Laila to sell and convey, among
others, Lot Nos. 8, 22 and 23, which had already been sold to them; and that on the
strength of another SPA by Luis, sometime in July 1993 (second SPA), respondents Laila
and Ham mortgaged Lot No. 19 to Vital Lending Investors, Inc. for and in consideration of
the amount of P150,000.00 with the concurrence of Lourdes.
Petitioners further averred that a second sale took place on August 23, 1994,
when the repondents made Luis sign the Deed of Absolute Sale conveying to Meridian
three parcels of residential land for P960,500.00 (Second Sale); that Meridian was in bad
faith when it did not make any inquiry as to who were the occupants and owners of said
lot; and that if Meridian had only investigated, it would have been informed as to the true
status of the subject properties and would have desisted in pursuing their acquisition.
Petitioners. thus, prayed that they be awarded moral damages, exemplary
damages, attorneys fees, actual damages, and litigation expenses and that the two SPAs
and the deed of sale in favor of Meridian be declared null and void ab initio.
The RTC ruled in favor of the petitioners. On appeal, CA reversed and set aside the
RTC decision, thus this petition.
Issue:
Whether or not CA has erred in reversing the decision of the RTC.
Ruling:
Yes. The Honorobale Court of Appeals greatly erred when it declared as void the
first sale executed by the late Luis Rosaroso in favor of his children of his first marriage. It
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also greatly erred in not sustaining and affirming the ruling of the trial court declaring the
Meridian Realty Corp. a buyer in bad faith, despite the trial courts findings that the deed
of sale (First Sale), is genuine and had fully complied with all the legal formalities. It rst
marriage. furthered erred in not holding the second sale null and void from the very
beginning since Luis since Luis Rosaroso was no longer the owner of the subject lots as
he had earlier disposed said lots in favor of the children of his first marriage.
GR No. 189316
July 01, 2013
PHILIPPINE NATIONAL BANK, petitioner,

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vs.
SPOUSES BERNARD AND CRESENCIAMARAON, respondents.
Facts:
A 152 square meter lot in downtown Bacolod with a building leased to various
tenants was subjected to a loan and mortgage by Spouses Montealegre with Philippine
National Bank. The property was under the name of EmolieMontalegre under TCT
156512. The Spouses Montealegre failed to pay the loan and PNB foreclosed on said lot
and building. During auction sale PNB was the highest bidder on August 16, 1991, then
was issued a Certificate of Sale on December 17, 1991 and registered on February 4,
1992.
Spouses Maraon filed on July 29, 1992 before the RTC a complaint for Annulment
of Title, Reconveyance and Damages against the Montealegres, PNB, the Register of
Deeds and Provincial Sherriff. The civil case alleged that the Maraons are rightful
owners of the lot and the Montealegres forged their names in a Deed of Sale to transfer
the property to the Montealegres. PNB averred it is a mortgagee in good faith and the
mortgage is binding and valid.
During the trial PaterioTolete deposited with the Clerk of Court of Bacolod
P144,000 and P30,000 with PNB of rental payments.
RTC found in favor of the Maraon after it was determined that their signatures
were in deed forged and the conveyance to the Montealegres was null and void. PNB was
also adjudged as a mortgagee in good faith and to respect the lien on the property.
Neither parties dissented.
Current controversy is the rental monies deposited. Maraons filed an Urgent
Motions for Withdrawal of Deposited Rental for the P144,000 and P30,000 deposited by
Tolete. The RTC granted the motion for both rental payments because the Spouses are
the rightful owners and they are entitled to the civil fruits of their property. The RTC
issued Orders to return the P30,000 to the Spouses.
PNB dissented saying the mortgage lien was decided to be respected and they are
entitled to both the P144,000 and the P30,000 rental payments and filed petitions for
certiorari and mandamus to the Court of Appeals.
Court of Appeals denied the petition rationalizing that the mortgage transaction
was not between the current petitioners and respondents and that PNB was not a
mortgagee in good faith because as a financial institution should have looked beyond the
title presented by the Montealegres. Motion for reconsideration was denied.
Issues:
(1) Whether or not that the mortgage the RTC decided should be respected should
also include the fruits deposited to answer for the debt.
(2) Whether or not the CA erred in reversing the RTC decision that PNB was a
mortgagee in good faith.
Ruling:
(1) No. Rent as an accessory follows the principal is the general rule. Normally when
the principal property is mortgaged and there is failure of the mortgagor to pay,
the fruits pass on to the mortgagee as accorded by the Article 2127 of the Civil
Code. But this is subject to qualfications.

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This rule is under the presumption that the mortgagor was the rightful owner to
encumber such property. There was no juridical tie made between PNB and the Maraons
because of the fraudulent acts of the Montealegres. The building and fruits are not
subjected to the lien, only the lot. Thus the rents paid are not subjected to be passed
upon to PNB.
(2) Yes. The RTC has already determined that PNB was a mortgagor in good faith and
was given finality because it was not disputed by the parties at present. This is
called the Doctrine of Immutability of Judgements.
The doctrine espouses two purposes: to avoid delay in the administration of justice
and thus, procedurally, to make orderly the discharge of judicial business; and to put an
end to judicial controversies, at the risk of occasional errors, which is precisely why
courts exist.
The Supreme Court though agreed in toto the resolutions given the CA although
the High Court opined that PNB is in good faith, for the sake of reiterating that the
Maraons are the rightful owners. The standing as purchaser of PNB has not been yet
decided and cannot be entertained yet by the SC.
The petition is denied.

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GR No. 179334
July 01, 2013
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and

DISTRICT ENGINEER CELESTINO R. CONTRERAS, petitioners
vs.
SPOUSES HERACLEO and RAMONA TECSON, respondents
Facts:
Respondent spouses Heracleo and Ramona Tecson are co-owners of a parcel of
land with an area of 7,268 square meters located in San Pablo, Malolos, Bulacan and
covered by Transfer Certificate of Title (TCT) No. T-43006 of the Register of Deeds of
Bulacan. Said parcel of land was among the properties taken by the government
sometime in 1940 without the owners consent and without the necessary expropriation
proceedings and used for the construction of the MacArthur Highway.
In a letter dated December 15, 1994, respondents demanded the payment of the
fair market value of the subject parcel of land. Petitioner Celestino R. Contreras, then
District Engineer of the First Bulacan Engineering District of DPWH, offered to pay the
subject land at the rate of P0.70 per square meter per Resolution of the Provincial
Appraisal Committee (PAC) of Bulacan. Unsatisfied with the offer, respondents demanded
for the return of their property or the payment of compensation at the current fair market
value.
As their demand remained unheeded, respondents filed a Complaint for recovery
of possession with damages against petitioners, praying that they be restored to the
possession of the subject parcel of land and that they be paid attorneys fees.
Instead of filing their Answer, petitioners moved for the dismissal of the complaint
on the following grounds: (1) that the suit is against the State which may not be sued
without its consent; (2) that the case has already prescribed; (3) that respondents have
no cause of action for failure to exhaust administrative remedies; and (4) if respondents
are entitled to compensation, they should be paid only the value of the property in 1940
or 1941.
On June 28, 1995, the RTC issued an Order granting the motion to dismiss based
on the doctrine of state immunity from suit.
The CA reversed and set aside the dismissal of the complaint and consequently
remanded the case to the trial court for the purpose of determining the just
compensation because the doctrine of state immunity from suit is not applicable and the
recovery of compensation is the only relief available. To deny such relief would
undeniably cause injustice to the landowner.
The trial proceeded in the RTC with the Branch Clerk of Court appointed as the
Commissioner and designated as the Chairman of the Committee that would determine
just compensation.
Later the case was referred to the PAC for the submission of a recommendation
report on the value of the subject property. The PAC recommended the amount of
P1,500.00 per square meter as the just compensation for the subject property per PAC
Resolution No. 99- 007 dated December 19, 2001.
On March 22, 2002, the RTC rendered a Decision directing DPWH to pay the
amount of One Thousand Five Hundred Pesos (P1,500.00) per square meter for the
subject lot in accordance with PAC Resolution.

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The CA affirmed the above decision with the modification that the just
compensation stated above should earn interest of six percent (6%) per annum
computed from the filing of the action on March 17, 1995 until full payment.
Hence, this petition.
Issues:
(1) Whether or not the Court of Appeals gravely erred in granting just compensation
to respondents considering the highly dubious and questionable circumstances of
their alleged ownership of the subject property.
(2) Whether or not the court of appeals gravely erred in awarding just compensation
to respondents because their complaint for recovery of possession and damages
is already barred by prescription and laches.
(3) Whether or not the court of appeals gravely erred in affirming the trial courts
decision ordering the payment of just compensation based on the current market
value of the alleged property of respondents.
Ruling:
It is undisputed that the subject property was taken by petitioners without the
benefit of expropriation proceedings for the construction of the MacArthur Highway. After
the lapse of more than fifty years, the property owners sought recovery of the possession
of their property.
Both equity and the law direct that a property owner should be compensated if his
property is taken for public use. There is a long-standing rule that where private property
is taken by the Government for public use without first acquiring title thereto either
through expropriation or negotiated sale, the owners action to recover the land or the
value thereof does not prescribe.
For failure of respondents to question the lack of expropriation proceedings for a
long period of time, they are deemed to have waived and are estopped from assailing the
power of the government to expropriate or the public use for which the power was
exercised. What is left to respondents is the right of compensation.
Just compensation is the fair value of the property as between one who receives,
and one who desires to sell fixed as of the date when it was taken and not the date of the
filing of the proceedings. The owner of private property should be compensated only for
what he actually loses; it is not intended that his compensation shall extend beyond his
loss or injury. And what he loses is only the actual value of his property at the time it is
taken. The fair market value of the subject property in 1940 was P0.70/square meter.
Hence, it should therefore be used in determining the amount due respondents instead of
the higher value which is P1,500.00.
WHEREFORE, premises considered, the petition is partially granted. The decision
of the Court of Appeals is modified. The valuation of the subject property owned by
respondents shall be P0.70 instead of Pl,500.00 per square meter, with interest at six
percent (6%) per annum from the date of taking in 1940 instead of March 17, 1995, until
full payment.

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GR No. 196741
July 17, 2013
PHILIPPINE TOURISM AUTHORITY

(Now Known as TOURISM INFRASTRUCTURE AND ENTREPRISE ZONE
AUTHORITY), petitioner,
vs.
MARCOSA A. SABANDAL-HERZENSTIEL, PEDRO TAPALES,
LUIS TAPALES, AND ROMEO TAPALES, respondents.
Facts:
This is a petition for review on certiorari assailing the January 11, 2011 Decision
and April 14, 2011 Resolution of the Court of Appeals, Cebu City in CA-GR SP No. 03888
declaring respondent Sabandal-Herzenstiel as the lawful possessor of the subject
property, Lot No. 2574, in Brgy. Basdiot, Moalboal, Cebu.
Petitioner, Phil. Tourism Authority (PTA), now known as Tourism Infrastructure and
Enterprise Zone Authority is the owner of the subject property and other parcel of lands
located in Brgy. Basdiot, Moalboal, Cebu when it bought the property from Tri-Island
Corporate Holdings, Inc (Tri-Island) on February 12, 1981. It had been in actual, physical,
continuous and uninterrupted possession of the subject land and had declared the same
for taxation purposes. Sometime in 1997, Sabandal-Herzenstiel and other respondents
entered into the 2,940 sq.m. portion of the subject property by means of stealth, force
and strategy. They cut down coconut trees, make improvements and fenced the area.
Petitioner demanded the respondents to vacate the portion of the subject land; the last
of which was a letter dated January 5, 1998 but the respondents ignored, prompting the
petitioner to file a case of forcible entry against them at the 12th MCTC of MoalboalAlcantara,Badian and Alegria, Cebu on March 18, 1998, docketed as Civil Case No.118.
In their answer with counterclaim, some of the respondents acknowledged that
the subject property had already been sold by Josefina Abrenica, the administrator of the
subject land to Tri-Island. However, they claimed that the sale was tainted with force and
intimidation thus, it was void including the subsequent transactions covering the said
property. Consequently, absent of any proof of prior possession on the part of the
petitioner, they claimed that the case of forcible entry against them be dismissed.
MTC ruled in favor of the petitioners. Respondents appeal to the RTC was
dismissed. However, The CA rendered the assailed Decision, nullifying and setting aside
the Decisions of both the MCTC and RTC.
Thus, this petition.
Issue:

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Whether or Not the Respondents may be lawfully ejected from the subject
property.
Ruling:
The petition is meritorious.
In an action for forcible entry, the plaintiff must prove that he is in prior
possession of the disputed property and that the defendant deprived him of any means
provided in Section 1, Rule 70 of the Rules, namely: FISTS.
The respondents failed to establish their prior and continued possession of the
subject property when it was sold to the petitioner in 1981. They even admitted in their
answer to the complaint that petitioner exercised dominion over the same by instituting
caretakers and leased portions thereof to third persons. The Court affirmed the lower
courts decision that it properly adjudged petitioner to have prior possession over subject
land as against Sabandal-Herzenstiel, who never claimed ownership or possession
thereof. The petitioners failure to describe in detail the manner of respondents entry in
the property is inconsequential.
xxx Unlawfully entering the subject property and excluding therefrom the prior
possessor would necessarily imply the use of force and this is all that is necessary. xxx
In finality, the Court upholds and Reinstated the findings and conclusions of the
MCTC and RTC. Square as they are with existing laws and jurisprudence. And the
Resolution of the CA is hereby Reversed and Set Aside. The Petition was granted.

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GR No. 197725
July 31, 2013
MARK ANTHONY ESTEBAN (in substitution of the deceased GABRIEL O.

ESTEBAN), petitioner,
vs.
SPOUSES RODRIGO C. MARCELO AND CARMEN T. MARCELO, respondents.
Facts:
Since 1950, the late Gabriel O. Esteban, substituted by his son, petitioner Mark
Anthony Esteban, had been in possession of a piece of land located at 702 Tiaga St,
Barangka Drive, Mandaluyong City. In the 1960s, the late Estebans sister constructed a
foundry shop at the property. In the 1970s, due to being unproductive of the foundry
operations, respondents-spouses Rodrigo and Carmen Marcelo were allowed to reside
therein with a monthly rental fee and thereafter were not able to pay the rent. On
October 31, 2005, the late Esteban sent a letter of demand to the respondents-spouses
requiring them to settle their arrears and vacate within five days from receipt thereof.
Due to the failure to comply with the demand, an unlawful detainer case was filed by the
late Esteban to the respondents-spouses on December 6, 2005.
MTC ruled that there was a valid ground for ejectment due to the expiration of the
lease and non-payment of monthly rentals.
On appeal, the RTC fully affirmed the MTCs ruling.
Respondents-spouses appealed the RTCs ruling to the CA. RTCs ruling was
reversed by CA on the ground that the case is no longer involving an accion interdictal
cognizable by the MeTC but an accionpubliciana that should have been filed before the
RTC. According to CA, from the year of disposition on 2001, when respondent stopped
payment until the date of the filing of the complaint for ejectment on 2005, more than a
year had already passed.
CA also ruled that the respondents- spouses cannot be evicted as they are
protected by Section 6 of PD 1517.
Issues:
(1) Whether CA erred in reversing RTCs ruling for finding a ground for ejectment case
(2) Whether respondents-spouses are covered by PD 1517

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(3) Whether there is a need that all compulsory heirs must be made parties to the
ejectment case
Ruling:
The Court finds it proper to file an unlawful detainer case in the MeTC. The oneyear prescription period is counted from the date of the last demand to pay and vacate.
It is the owners demand for the tenant to vacate the premises and the tenants refusal
to do so which makes unlawful the withholding of possession. The demand was made on
October 31, 2005 and the filing of the case was made on December 6, 2005. From this
period, it can be adduced that MeTC had a jurisdiction.
PD 1517 does not apply. It was not shown that the subject land has been declared
and classified as an Area for Priority Development and as a Land Reform Zone.
It is not necessary that all compulsory heirs must be made parties to the
ejectment case. Any one of the co-owners may bring an action for ejectment. Only the
co-owner who filed the suit for the recovery of the co-owned property becomes an
indispensable party thereto. The other co-owners are neither indispensable nor
necessary parties.
In view of the foregoing, the Court granted the petition for review on certiorari.
CAs decision is reversed and set aside. RTCs decision is hereby reinstated. Costs are
against the respondents-spouses.
GR No. 172504
July 31, 2013
DONNA C. NAGTALON, petitioner,

vs.
UNITED COCONUT PLANTERS BANK, respondent.
Facts:
This is a petition for review on certiorari.
Roman Nagtalon and petitioner, Donna Nagtalon, mortgaged some properties in
order to secure a credit agreement they made with respondent United Coconut Planters
Bank. The spouses failed to comply with the terms of conditions thereof so the properties
were foreclosed and sold at public auction. The UCPB was the sole and highest bidder. It
was issued a certificate of sale and caused the entry of the sale in the records of the
Registry of Deeds. After the one-year redemption period had expired with Nagtalon
having failed to redeem the properties, the UCPB consolidated the ownership over the
properties, cancelling the Nagtalon titles while issuing new TCTs in UCPBs name. UCPB
then filed an ex parte petition for the issuance of a writ of possession from the RTC, but
Nagtalon opposed this petition by reason of a pending civil case concerning the credit
agreement. The RTC agreed with Nagtalon, but the UCPB brought this to the CA after its
motion for reconsideration was denied and the CA reversed the RTC decision. Thus,
Nagtalons petitioned the SC to review the CAs decision.
Issue:
Whether or not the pendency of a civil case challenging the validity of the credit
agreement, the promissory notes, and the mortgage can bar the issuance of a writ of
possession after the foreclosure and sale of the mortgaged properties and the lapse of
the one-year redemption period.
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Ruling:
No, it cannot be a bar.
a) THE ISSUANCE OF A WRIT OF POSSESSION IS A MINISTERIAL FUNCTION OF THE COURT.
The rule is that once the title to the property has been consolidated in the buyers name
upon failure of the mortgagor to redeem the property within the one-year redemption
period, the writ of possession becomes a matter of right belonging to the buyer.
b) PENDENCY OF A CIVIL CASE QUESTIONAING THE MORTGAGE AND FORECLOSURE IS
NOT A BAR TO THE ISSUANCE OF A WRIT OF EXECUTION. As a ministerial function of
court, the judge need not look into the validity of the mortgage or the manner of its
foreclosure, as these are questions that should properly be decided by a court of
competent jurisdiction in the pending case filed before it.
c) EXCEPTIONS TO THE RULE: 1) Gross inadequacy of purchase price 2) Third party
claiming right adverse to debtor/mortgagor 3) Failure to pay the surplus proceeds of sale
to mortgagor. Nagtalon did not qualify for any of these.
d) PETITIONER WAS ACCORDED DUE PROCESS. Issuance of a writ of possession is an ex
parte petition, a non-litigious proceeding where the relief is granted without requiring an
opportunity to be heard for the person from whom relief is sought.
GR No. 174727
August 12, 2013
ANTIPOLO INING (DECEASED), SURVIVED BY MANUEL VILLANUEVA, TEODORA

VILLANUEVA-FRANCISCO, et.al., petitioners,
vs.
LEONARDO R. VEGA, SUBSTITUTED BY LOURDES VEGA, RESTONILO I. VEGA,
CRISPULO M. VEGA, MILBUENA VEGA-RESTITUTO, AND LENARD VEGA,
respondents.
Facts:
Leon Roldan (Leon), married to Rafaela Menez (Rafaela), is the owner of a 3,120square meter parcel of land (subject property) in Kalibo, Aklan. Leon and Rafaela died
without issue. Leon was survived by his siblings Romana Roldan (Romana) and Gregoria
Roldan Ining (Gregoria), who are now both deceased.
Sibling #1: Romana was survived by her daughter Anunciacion Vega and
grandson, herein respondent Leonardo R. Vega (Leonardo) (also both deceased).
Leonardo in turn is survived by his wife Lourdes and children Restonilo I. Vega, Crispulo
M. Vega, Milbuena Vega-Restituto and Lenard Vega, the substituted respondents.
Sibling # 2: Gregoria, on the other hand, was survived by her six children. In
short, herein petitioners, except for Ramon Tresvalles (Tresvalles) and Roberto Tajonera
(Tajonera), are Gregorias grandchildren or spouses thereof (Gregorias heirs). Tresvalles
and Tajonera are transferees of the said property.
In 1997, acting on the claim that one-half of subject property belonged to him as
Romanas surviving heir, Leonardo filed with the Regional Trial Court (RTC) of Kalibo,
Aklan Civil Case No. 5275 for partition, recovery of ownership and possession, with
damages, against Gregorias heirs.

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In their Answer with counterclaim, Gregorias heirs (through son Antipolo) 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
Juan Enriquez (Enriquez), who in turn acquired the same from Leon, and Leonardo was
aware of this fact.
Issues:
(1) Whether or not the appellate court committed grave abuse of discretion in
reversing the decision of the trial court on the ground that lucimo francisco
repudiated the co-ownership only on February 9, 1979.
(2) Whether or not the appellate court erred in not upholding the decision of the
trial court dismissing the complaint on the ground of prescription and laches.
Ruling:
No, the Court of Appeals is correct based on the following reasons:
1. The finding that Leon did not sell the property to Lucimo Sr. had long been settled and
had become final for failure of petitioners to appeal. Thus, the property remained part of
Leons estate.
2. Leon died without issue; his heirs are his siblings Romana and Gregoria.
3. Gregorias and Romanas heirs are co-owners of the subject property. no prescription
shall run in favor of one of the co-heirs against the others so long as he expressly or
impliedly recognizes the co-ownership.
4. For prescription to set in, the repudiation must be done by a co-owner. The CA held
that prescription began to run against Leonardo only in 1979 or even in 1980 when it
has been made sufficiently clear to him that Lucimo Sr. has renounced the co-ownership
and has claimed sole ownership over the property. The CA thus concluded that the filing
of Civil Case No. 5275 in 1997, or just under 20 years counted from 1979, is clearly within
the period prescribed under Article 1141.
Lucimo Sr. is not a co-owner of the property. Indeed, he is not an heir of Gregoria; he is
merely Antipolos son-in-law, being married to Antipolos daughter Teodora.
One who is merely related by affinity to the decedent does not inherit from the latter and
cannot become a co-owner of the decedents property. Consequently, he cannot effect a
repudiation of the co-ownership of the estate that was formed among the decedents
heirs.

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GR No. 181692
August 14, 2013
ADELAIDA SORIANO, petitioner,

vs.
PEOPLE OF THE PHILIPPINES, respondent.
Facts:
Evelyn Alago (Evelyn), daughter of private complainant Consolacion Alagao, as
borrower-mortgagor, executed a "Contract of Loan Secured by Real Estate Mortgage with
Special Power to Sell Mortgage Property without Judicial Proceedings" in-favor of
petitioner lender-mortgagee. The instrument provides for a P40,000 loan secured by a
parcel of land registered in Evelyn's name. It likewise provides that the loan was to be
paid two years from the date of execution of the contract and that Evelyn agrees to give
petitioner 1/4 of every harvest from her cornland until the full amount of the loan has
been paid, starting from the first harvest. Based on Alagao's testimony, the first harvest
was made only in September 1994 Petitioner on the other hand claims that from the time
the loan was obtained until September 1994, there were already four harvests. During
pre-trial, it was admitted by Alagao that she did not only receive P40,000 as provided in
the contract but P51,730 in the form of fertilizers and cash advances.
Alagao and some companions delivered 398 sacks of corn grains to petitioner.
Petitioner prepared a voucher indicating that Alagao had received the amount of P85,607
as full payment for the 398 sacks of corn grains. Alagao signed said voucher even if she
only received P3,000. According to Alagao, 64 of the 398 sacks will serve as partial
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payment of her P40,000 loan with petitioner while the remaining balance will come from
the P85,607 cash she was supposed to receive as payment for the corn grains delivered
so she can redeem her daughter's land title.
The RTC rendered a decision finding petitioner guilty beyond reasonable doubt of
the crime estafa. However, the CA set petitioner's conviction aside in the assailes
decision. The Ca ruled that the prosecution failed to establish that petitoner made false
pretenses, fraudulent acts or fraudulent means to induce Alagao to del8ver to her the
398 of corn grains. In fact, in Alagao's testimony she admitted that she delivered the corn
grains to petitioner because the latter was demanding payment from her and she wanted
to pay her obl8gation of P40,000 to petitioner so that she could get back the title of her
daughter's mortgaged property and the balance of the total cash value of the 398 sacks
of corn. Thus, the CA held, in the absence od deceit, petitioner's liability is only civil.
Unsatisfied, petitioner is now before the Supreme Court questioning her civil liability.
Issue:
Whether or not legal compensation is proper.
Ruling:
Yes. Compensation is a mode of extinguishing to the concurrent amount the debts
of the persons, who in their own right are creditors and debtors of each other. The object
of compensation is the prevention of unnecessary suits and payments through the
mutual extinction by operation of law of concurring debts Article 1279 of the Civil Code
provides for the requisites for compensation to take effect and the Court ruled that all the
requisites for compensation are present in the instant case.
First, petitioner and Alagao are debtors and creditors of each other. It is
undisputable that petitioner and Alagao owe each other sums of money. Petitioner owes
P85,607 for the value of the corn grains delivered to her by Alagao in September 1994
while Alagao owes petitioner P51,730 by virtue of a loan extended by the latter in
February 1994. Second, both debts consist in a sum of money. As to the P51,730 received
by Alagao from petitioner, though what was extended by petitioner consists of cash
advances and fertilizers, there is no dispute that said amount is payable in money. Third,
both debts are due. Upon delivery of the 398 sacks to petitioner, she was under the
obligation to pay for the value thereof as buyer. As to Alagao's debt, the contract of loan
provided that it is payable in February 1996. Though it was not yet due in September
1994 when she delivered the 398 sacks, it eventually became due of trial of the instant
case. Fourth, both debts are liquidated and demandable A debt is liquidated when the
amount is known or determinable be inspection of the terms and conditions of relevant
documents. There is no dispute that the value of the 398 sacks of corn grains os P85,607.
And lastly, neither of the debts are subject of a controversy commenced by a third
person. There are no third-party claims with respect to Alagao's P51,730 loan. As to
petitioner's P85,607 debt representing the 398 sacks of corn grains, the alleged other
owners have not commenced any action to protect their claim over it. Thus, the P85,607
debt cannot be considered subject of a controversy by a third person.
With respect to the 1/4 share in the harvest due to petitioner as provided in the
contract of loan, the same cannot be considered in the legal compensation of the debts
of the parties since it does not consist in a sum of money, said share being in the form of
harvests. More importantly, it is not yet liquidated. There is still a dispute as to how many
harvests were made from the time of the execution of contract of loan up to the time
the action was commenced against petitioner and even when the principal obligation
became due in February 1996. Thus, the harvest due petitioner is not capable of
determination.
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GR No. 170942
August 28, 2013
COMSAVINGS BANK (NOW GSIS FAMILY BANK)

VS.
SPS. DANILO AND ESTRELLA CAPISTRANO
Facts:
Respondents were the owners of a residential lot in Bacoor, Cavite. Desirous of
building their own house on the lot, they availed themselves of the UHLP implemented by
the National Home Mortgage Finance Corporation
(NHMFC). They executed a
construction contract with Carmencita Cruz-Bay, the proprietor of the GCB Builders. To
finance the construction, GCB Builders facilitated their loan application with ComSavings
Bank, an NHFMC-accredited originator. The executed in favor of GCB Builders a deed of
assignment. Comsavings Bank informed respondent Estrella that she would have to sign
varipus documents as part of the requirements for the release of the loan Among the
documents was a certificate of house completion and acceptance. Comsavings Bank

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informed respondents of the approval of the interim-financing loan which was goven to
GCB builders as construction cost.
Respondent inquired from GCB Builder when their house would be completed that
their contract stipulated a completion period of 75 days. Cruz-Baye gave various excuses
for the delay. The uear 1992 ended with the construction of the house unfinished. When
repondents demanded the completion of the house, GCB Builders asked for an additional
construction cost. Respondents received a letter from NHMFC advisong that they should
already start paying their monthly amortizations because their loan had been released
directly to Comsavings Bank. Estrella went to the construction site and found her dismay
that the house was still unfinished. Respondents wrote to NHFMC protesting the demands
for amortization payments considering that they had not signed any certification of
completion and acceptance, and even if there was such, it would have been forged.
Respondents sued GCB Builders and Comsavings Bank for breach of contract and
damages, and amended their complaint to implead NHFMC as an additional defendant.
RTC rendered a decision in favor of the respondents. The CA promulgated the appealed
decision, affirming to the RTC subject to the modification that NHMFC was basolved of
liability, and that the moral exemplary damages were reduced. Hence, Comsavings Bank
appealed the case to the Supreme Court.
Issue:
Whether or not peritioner bank is liable with GCB Builders for breach of obligation.
Ruling:
Yes. The CA rightfully declared Comsavings Bank solidarily liable with GCB
Builders for the damages sustained by respondents. However, the Court pointed out that
such liability did not arise from Comsavings Bank's breach of warranties under its
purchase of loan agreement with NHMFC. Under the purchase of loan agreement, it
undertook, for value received to sell, transfer and deliver to NHMFC the loan agreement,
promissory notes and other supporting documents that it had entered into and executed
with the respondents, and warranted the genuineness of the loan documents and the
"construction of the residential units." Having made the warranties in favor of NHFMC, it
would be liable in case of breach of thw warranties to the NHMFC, not respondents,
eliminating breach of such warraties as a source of its liability towards respondents.
Instead, the liability of Comsavings Bank towards respondents was based on
Article 20 and Article 1170 of the Civil Code. Based on the provisions, a banking
institution like Comsavings Bank is obliged to exercise the highest degree of diligence as
well as high standards of integrity and performance in all its transactions because its
business is imbued with public interest. Gross negligence connotes want of care in the
performance of one's suties; it is a negligence characterized by the want of even slight
care, acting or omitting to act in situation where there is duty to act, not inadvertently
but wilfully and intentionally, with a conscious indifference to consequences insofar as
other persons maybe affected. It evinces a thoughtless disregard of consequences
without exerting any effor to avoid them.
There is no question that Comsavings Bank was grossly negligent in its dealings
with respondents because it did not comply with its legal obligation to exercise the
required diligence and integrity. As a banking institution serving as an originator under
the UHLP and being the maker of the certificate of acceptance and completion, it was
fullr aware that the purpose of the signed certificate was tp affirm that the house had
been completely constructed according to the approved plans and specifications, and
that respondents had thereby accepted the delivery of a complete house. Given the
purpose of the certificate, it should have desisted from presenting the certificate to
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respondents for their signature without such conditions having been fulfilled. Had
Comsavings been fair towards them as its clients, it should not have made them pre-sign
the certificate until it had confirmed that the construction of the house had been
completed.
Comsavings Bank asserts that it submitted the certificate to NHMFC after the
construction of the house had been completed. The assertion could not be true,
however, because Atty. Corona of NHMFC testified that he had inspected the house on
August 4, 1993 and had found the construction to be incomplete and defective. Had
Comsavings Bank complied with its duty of observing the highest degree of diligence, it
would have checked first whether the pictures carried the signatures of respondents on
their dorsal sides, and whether the house depicted on the pictures was really the house
of the respondents, before releasing the proceeds of the loan to GCB Builders and before
submitting the pictures to NHMFC for the reimbursement. Again, this is an indication of
Comsaving Bank's gross negligence.
GR No. 196723
August 28, 2013
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, petitioner

vs.
SUMITOMO CORPORATION, respondent.
Facts:
In 2008, Petitioner filed a complaint before the Construction Industry Arbitration
Commission ("CIAC") against Respondent for alleged losses and reimbursements
amounting to US $9M and attorney's fees of PhP 2M to which Respondent set up a
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counterclaim amounting to PhP 10M. An Arbitral Tribunal was constituted and it rendered
a Partial Award dismissing the claims and counterclaims of both parties for being timebarred under New York State Law, the agreed governing law. Petitioner filed a Petition for
Review before the Court of Appeals under Rule 43 ("First Petition") seeking the reversal of
the Partial Award. While the First Petition was pending, the Arbitral Tribunal ordered both
parties to submit proof of costs and attorney's fees incurred due to the arbitration
proceedings. Respondent complied but Petitioner did not and instead filed an Opposition
against the claims for costs by Respondent. The Arbitral Tribunal did not act on the
Opposition because it treated it as a Motion for Reconsideration of the Partial Award
which was a prohibited pleading under the CIAC Rules. The Arbitral Tribunal rendered a
Final Award granting attorney's fees in favor for Respondent, reasoning that Respondent
was merely forced to litigate to defend its interest. Aggrieved, Petitioner filed before the
Court of Appeals another Petition for Review under Rule 43 ("Second Petition") assailing,
this time, the Final Award. The Court of Appeals dismissed the First Petition on the
ground of forum shopping but gave due course to the Second Petition. In deciding the
Second Petition, the Court of Appeals modified the Final Award by deleting the attorney's
fees awarded to Respondent. Petitioner filed a petition for certiorari under Rule 65 to set
aside the denial of the First Petition while Respondent filed a separate petition for
certiorari to assail the modification made in the Second Petition. The cases were
consolidated before the Supreme Court.
Issues:
(1) Was the dismissal of the Petition for Review of a Partial Award of the Arbitral
Tribunal on the ground of forum shopping proper?
(2) Can the Court of Appeals modify a final and non-appealable award of the Arbitral
Tribunal?
Ruling:
(1) Yes. The Supreme Court enumerated three ways by which forum shopping can be
committed: (a) by filing multiple cases with same cause of action and prayer when
neither of the cases filed has yet been terminated; (b) by filing multiple cases with
the same cause of action and prayer when one case has already been finally
resolved; and (c) by filing multiple cases with the same cause of action but with
different prayers for relief.
The filing of the First Petition before the Court of Appeals and the Opposition
before the Arbitral Tribunal when both were still pending constituted forum shopping
under the first mode. This is true even if one was not a court but an arbitral tribunal,
since the Petitioner was asking for the same relief--the reversal of the Partial Award.
In passing, the Supreme Court held that in any case, the First Petition was
dismissible because only final awards, as opposed to partial awards, are subject to review
pursuant to the CIAC Revised Rules.
(2) Yes. The Supreme Court ruled that notwithstanding a statement in the law (E.O.
1008) that the decision of the CIAC arbitral tribunal shall be final and non-appealable,
the same is still subject to judicial review.
Courts may take cognizance of the case when there is a showing of (1) want of
jurisdiction, (2) violation of due process, (3) denial of substantial justice, or (4) erroneous
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interpretation of the law. This is sanctioned both by Rule 43 of the Rules of Court and the
CIAC Revised Rules which provide that decisions of the CIAC arbitral tribunals may be
appealed to the Court of Appeals on questions of fact, law or mixed questions of fact and
law.
Since the Arbitral Tribunal made an erroneous interpretation of the law, the Court of
Appeals was justified in modifying the Final Award. The error consisted in attributing bad
faith on the part of Petitioner when it refused to settle the case amicably. The
acceptance of a compromise agreement the Supreme Court said, is contractual in nature
and consent to a compromise is discretionary on the part of Petitioner. Hence, refusing
to accept an offered compromise is not tantamount to bad faith justifying an award of
attorney's fees.
GR No. 181983
November 13, 2013
CONSOLIDATED INDUSTRIAL GASES INC., petitioner

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vs.
ALABANG MEDICAL CENTER, respondent.
Facts:
On August 14, 1955, CIGI, as contractor and AMC, as owner entered into contract
whereby the former bound itself to provide labor and materials for the installation of a
medical gas pipeline system for the first, second and third floors of the hospital for the
contract price of P9,856,725.18 which AMC duly paid on full.
Controversy arose after the parties entered into another agreement on October 3,
1196 this time for the continuation of the centralized medical oxygen and vacuum
pipeline system for the hospitals fourth and fifth floors at the cost of P2,267,344.42. This
second contract followed the same terms and conditions of the contract for Phase 1
installation project. CIGI forthwith commenced installation works for Phase 2 while AMC
paid the partial amount of P1,000,000.00 with the agreement that the balance shall be
paid through progress billing and within 15 daysfrom the date of receipt of the original
invoice.
On August 4, 1997, CIGI sent AMC Charge sales Invoice No. 125847 as completion
for billing for the unpaid balance of P1,267,344.42 for the Phase 2. When the sales voice
was left unheeded, CIGI sent a demand letter to AMC on January 7, 1998. AMC, however
still failed to pay thus prompting CIGI to file a collection suit before the RTC on
September 15, 1998.
CIGI claimed that AMCs obligation to pay the balance of the contract price has
not yet accrued because CIGI still has not turned over a complete and functional medical
oxygen and vacuum pipeline system. AMC alleged that CIGI has not yet tested Phases 1
and 2 of the hospital despite substantial payments already made.
Issue:
Is CIGIs demand for payment upon AMC proper?
Ruling:
No.Reciprocal obligations are those which arise from the same cause, and [in]
which each party is a debor and a creditor of the other, such that the obligation of one is
dependent upon the obligation of the other. They are to be performed simultaneously, so
that the performance of one is conditioned upon the simultaneous fulfillment of the
other. In reciprocal obligations, neither party incurs in delay if the other does not comply
or is not ready to comply in a proper manner with what is incumbent upon him.
The Court has painstakingly evaluated the records of the case and based thereon,
there can be no other conclusion than that CIGIs allegations failed to muster merit. The
Court finds that CIGI did not faithfully complete its obligations and hence, its demand for
payment cannot prosper based on the following grounds: (a) under two installation
contracts, CIGI was bound to perform more prestations than merely supplying labor and
materials; and (b) CIGI failed to prove by substantial evidence that it requested AMC for
electrical facilities as such, its failure to conduct a test run is unjustified.
GR No. 202358
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November 27, 2013
GATCHALIAN REALTY INC., petitioner,

vs.
EVELYN ANGELES, respondent.
Facts:
Angeles purchased a house and lot from GRI valued at P750,000.00 and
P450,000.00 respectively, with (24%) interest per annum to be paid in installment within
a period of ten years. The house and lot were delivered to Angeles. Nonetheless, under
contracts to sell executed between the parties, GRI retained ownership of the property
until full payment of the purchase price. After sometime, Angeles failed to satisfy her
monthly installments with GRI. According to GRI, she was given at least 12 notices for
payment in a span of 3 years but she still failed to settle her account despite receipt of
said notices and without any valid reason. Angeles was furnished with a demand letter
demanding her to pay the amount of rentals for her use and occupation of the house and
lot and to vacate the same. She was informed in said letter that fifty percent refundable
amount that she is entitled to have already been deducted with the reasonable value for
the use of the properties. Thus this complaint.
Issue:
Whether or not the court erred in holding that the actual cancellation of the
contract between the parties did not take place.
Ruling:
There was no actual cancellation of the contracts because of GRIs failure to
actually refund the cash surrender value to Angeles.
Cancellation of the contracts for the house and lot was contained in a notice of
notarial rescission dated 11 September 2003. The registry return receipts show that
Angeles received this notice on 19 September 2003. GRIs demand for rentals on the
properties, where GRI offset Angeles accrued rentals by the refundable cash surrender
value was contained in another letter. GRI filed an unlawful detainer against Angeles 61
days after the date of its notarial rescission. For her part Angeles sent GRI postal money
amounting P120,000.00.
The METC ruled that it was proper for GRI to compensate the rentals due from
Angeles occupation of the property from the cash surrender value due to Angeles from
GRI. The METC stated that compensation legally took effect in accordance with Art 1290
of the Civil Code which reads: When l the requi mentioned in Article 1279 are present,
compensation takes effect by operation of law and extinguishes both debts to the
concurrent amount, even though the creditors and debtors are not aware of the
compensation.
However, it was error for the METC to apply Art 1279 as there was nothing in the
contracts which provided for the amount of rentals in case the buyer defaults in her
installment payments.

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G.R No. 192383

December 4, 2013
ISABELO C. DELA CRUZ, petitioner,

vs.
LUCILLA C. DELA CRUZ, respondent.
Facts:
Petitioner Isabelo Dela Cruz and his sisters/respondents Lucila and Cornelia were
co-owners of a 240-square meter land in Las Pinas which they bought on installment from
Gatchalian Realty, Inc. Isabelo and Cornelia paid for the down payment and religiously
paid for the monthly amortizations.
Upon Lucias plea to help out a financially distressed cousin (Corazon), the siblings
agreed to make use of the lot as collateral and security for a loan from the Philippine
Veterans Bank.
In order to make this possible, Lucia paid the P8,000 outstanding
balance to Gatchalian Realty and had the deed of title registered in her name. The title
was then mortgaged for Corazons benefit. However, Corazon was not able to pay for the
loan and the mortgaged lot was then foreclosed by the bank. The foreclosed lot was
however redeemed by Lucia.
In 2002, Lucila executed an affidavit of waiver relinquishing all her share, interest
and participation to her brother Isabelo and her niece Emelinda. Isabelo then filed an
action for partition seeking the segregation of his portion of said lot and the
corresponding title in his name. This action was, however, contested by Lucila claiming
that the waiver she executed ceding ownership of her share to Isabelo was subject to a
condition that their family problems would be resolved. She claims that this condition did
not happen and that she had every right to revoke the waiver. This was made evident by
the revocation she made through an affidavit dated September 24, 2004. The RTC ruled
in favor of Lucia and this was affirmed by the CA.
Issue:
Whether or not the CA erred in ruling that Lucilas cession of the property through
waiver did not have the effect of making Isabelo part owner thereof.
Ruling:
In deciding this case, the SC considered the wordings used by Lucila in her waiver.
The court noted that the phrase used To put everything in order, I hereby waive all my
share, interest and participation means that the intention of Lucila was to waive her
right to the property, irreversibly divesting herself of her existing right to it. It disagreed
with the lower courts interpretation that such wordings intends a precondition of waiver
for if such was the intent, the phrase containing words such as subject to the condition
that everything is put in order would have been used. Therefore, the SC ruled that the
affidavit of waiver executed by Lucila makes Isabelo and Emelinda co-owners of the
waived share of Lucila. Isabelo then has the right to demand partition.

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GR No. 183204
January 13, 2014
THE METROPOLITAN BANK AND TRUST COMPANY, petitioner,
vs.
ANA GRACE ROSALES AND YO YUK TO, respondents.
Facts:
Petitioner Metropolitan Bank and Trust Company is a domestic banking
corporation duly organized and existing under the laws of the Philippines. Respondent
Ana Grace Rosales (Rosales) is the owner of China Golden Bridge Travel Services, a travel
agency. Respondent Yo Yuk To is the mother of respondent Rosales. In 2000, respondents
opened a Joint Peso Account with petitioners Pritil-Tondo Branch. In May 2002,
respondent Rosales accompanied her client Liu Chiu Fang, a Taiwanese National applying
for a retirees visa from the Philippine Leisure and Retirement Authority (PLRA), to
petitioners Escolta branch to open a savings account. Respondent Rosales acted as an
interpreter of Liu Chiu Fang, who could speak only in Mandarin. On March 3, 2003,
respondents opened with petitioners Pritil-Tondo Branch a Joint Dollar Account with an
initial deposit of US$14,000.00. On July 31, 2003, petitioner issued a Hold Out order
against respondents accounts. On September 3, 2003, petitioner, through its Special
Audit Department Head Antonio Ivan Aguirre, filed before the Office of the Prosecutor of
Manila a criminal case for Estafa through False Pretenses, Misrepresentation, Deceit, and
Use of Falsified Documents against respondent Rosales. Respondent Rosales, however,
denied taking part in the fraudulent and unauthorized withdrawal from the dollar account
of Liu Chiu Fang. On December 15, 2003, the Office of the City Prosecutor of Manila
issued a Resolution dismissing the criminal case for lack of probable cause. On
September 10, 2004, respondents filed before the RTC of Manila a complaint for Breach
of Obligation and Contract with Damages against petitioner.
Issue:
Whether or not the petitioner breached its contract with respondents
Ruling:
YES. Petitioner is guilty of breach of contract when it unjustifiably refused to
release respondents deposit despite demand. Having breached its contract with
respondents, petitioner is liable for damages. Respondents are entitled to moral and
exemplary damages and attorneys fees.
The petitioner issued the "Hold Out" order in bad faith. First of all, the order was
issued without any legal basis. Second, petitioner did not inform respondents of the
reason for the Hold Out. Third, the order was issued prior to the filing of the criminal
complaint. The Hold Out clause applies only if there is a valid and existing obligation
arising from any of the sources of obligation enumerated in Article 1157 of the Civil Code.
And although a criminal case was filed by petitioner against respondent Rosales, this is
not enough reason for petitioner to issue a Hold Out order as the case is still pending
and no final judgment of conviction has been rendered against respondent Rosales. In
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fact, it is significant to note that at the time petitioner issued the Hold Out order, the
criminal complaint had not yet been filed.
While the petitioner has the right to protect itself from fraud or suspicions of
fraud, the exercise of his right should be done within the bounds of the law and in
accordance with due process, and not in bad faith or in a wanton disregard of its
contractual obligation to respondents.
WHEREFORE, the Petition is hereby DENIED.

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GR No. 185798
January 13, 2014
FIL-ESTATE PROPERTIES, INC. AND FIL-ESTATE NETWORK INC., petitioners,
vs.
SPOUSES CONRADO AND MARIA VICTORIA RONQUILLO, pespondents.
Facts:
Petitioner Fil-Estate Properties, Inc. is the owner and developer of the Central Park
Place Tower while co-petitioner Fil-Estate Network, Inc. is its authorized marketing agent.
Respondent Spouses Conrado and Maria Victoria Ronquillo purchased from petitioners an
82-sqm condominium unit at Central Park Place Tower in Mandaluyong City for a preselling. On 29 August 1997, respondents executed and signed a Reservation Application
Agreement. As agreed upon, respondents paid the full downpayment and had been
paying monthly amortizations until September 1998. Upon learning that construction
works had stopped, respondents likewise stopped paying their monthly amortization.
Respondents demanded a full refund of their payment with interest. When their demands
went unheeded, respondents were constrained to file a Complaint for Refund and
Damages before the Housing and Land Use Regulatory Board (HLURB). Respondents
prayed for refund of the total amortization payments, moral damages, attorneys fees
and other litigation expenses. On 21 October 2000, the HLURB issued an Order of Default
against petitioners for failing to file their Answer within the reglementary period.
Petitioners filed a motion to lift order of default and attached their position paper
attributing the delay in construction to the 1997 Asian financial crisis. Petitioners denied
committing fraud or misrepresentation which could entitle respondents to an award of
moral damages. On 13 June 2002, the HLURB rendered judgment ordering petitioners to
jointly and severally pay respondents: (a) total amount paid with interest thereon at
twelve percent (12%) per annum to be computed from the time of the complainants
demand for refund on October 08, 1998 until fully paid; (b) moral damages; (c) attorneys
fee; (d) cost of the suit; and (e) an administrative fine for violation of Section 20 in
relation to Section 38 of PD 957.
Issues:
(1) Whether or not the Asian financial crisis constitute a fortuitous event which would
justify delay by petitioners in the performance of their contractual obligation;
(2) Assuming that petitioners are liable, whether or not 12% interest was correctly
imposed on the judgment award; and
(3) Whether the award of moral damages, attorneys fees and administrative fine was
proper.
Ruling:
(1) No. The Asian financial crisis in 1997 cannot be generalized as unforeseeable and
beyond the control of a business corporation. The fluctuating movement of the
Philippine peso in the foreign exchange market is an everyday occurrence, and
fluctuations in currency exchange rates happen every day, thus, not an instance
of caso fortuito.
(2) No. The Court ordered the refund of the total amortizations paid by respondents
plus 6% legal interest computed from the date of demand. The resulting
modification of the award of legal interest is in line with the recent ruling in Nacar
v. Gallery Frames, embodying the amendment introduced by the BSP-MB Circular
No. 799 which pegged the interest rate at 6% regardless of the source of
obligation.
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(3) Yes. Moral damages may be awarded as the petitioners acted in bad faith when
they breached their contract, when they failed to address respondents grievances
and when they adamantly refused to refund respondents' payment. An award of
attorneys fees is affirmed because respondents were forced to litigate for 14
years and incur expenses. The imposition of administrative fine is correct
pursuant to Section 38 of Presidential Decree No. 957.

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GR No. 160600,
January 15, 2014
DOMINGO GONZALO, petitioner,
vs.
JOHN TARNATE, JR., respondent.
Facts:
On 22 July 1997, Domingo Gonzalo, the owner of Gonzalo Construction, was
awarded by the DPWH to improve the Sadsadan-Mabay-an Section of the Mountain
Province-Benguet Road. John Tarnate, Jr., under his business company JNT Aggregates,
was subcontracted by Gonzalo for the supply of labor and materials with an agreement
that to pay eight percent and four percent of the contract price, respectively, upon first
and second billing in the project. Gonzalo later executed a Deed of Assignment,
submitted to DPWH on 15 April 1999, whereby (i) assigning Tarnate 10 percent of the
total collection from the DPWH and (ii) authorizing Tarnate to use the official receipts of
Gonzalo Construction in processing documents for the collection of the 10 percent
retention fee and encashment of checks to be issued by DPWH. During the processing
documents for the retention fee, however, Tarnate learned that Gonzalo had unilaterally
rescinded the deed of assignment filed in the DPWH on 22 April 1999; and that the
retention fee had been issued and released to Gonzalo.
When Tarnate failed to collect from Gonzalo, Tarmate filed a suit in the Regional
Trial Court (RTC) to recover from Gonzalo the retention fee, moral and exemplary
damages for breach of contract, and attorneys fees.
Gonzalo admitted the deed of assignment and the authority given to Tarnate, but
averred that the project had not been fully implemented because of its cancellation by
the DPWH, and that he had then revoked the deed of assignment. He insisted that the
assignment could not stand independently due to its being a mere product of the
subcontract that had been based on his contract with the DPWH; and that Tarnate,
having been fully aware of the illegality and ineffectuality of the deed of assignment from
the time of its execution, could not go to court with unclean hands to invoke any right
based on the invalid deed of assignment or on the product of such deed of assignment.
The RTC ruled in favor of Tarnate, which the Court of Appeals (CA) affirmed.
Although the CA agreed that the contract was void being in violation of PD 1594, the
appellate court did not apply the doctrine of in pari delicto as it applies only when the
guilt of the parties were more or less equivalent.
Issues:
Whether or not (i) the subcontract and the deed of assignment have no force and
effect; (ii) the rule of in pare delicto should have been applied; and (iii) the grant of moral
damages, attorneys fees and litigation expenses to Tarnate inappropriate.
Ruling:
The Supreme Court AFFIRM the decision of the CA, but DELETE the awards of
moral damages, attorneys fees and litigation expenses; IMPOSE legal interest of 6
percent per annum on the principal; and DIRECT the petitioner to pay the costs of suit.
On the issues:
i. Yes. Pursuant to Section 6 of Presidential Decree No. 1594, there is no question
that every contractor is prohibited from subcontracting with or assigning to
another person any contract or project that he has with the DPWH unless the
DPWH Secretary has approved the subcontracting or assignment. The intention of
the parties in executing the Deed of Assignment was merely to cover up the
illegality of the sub-contract agreement.
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ii. No. According to Article 1412 (1) of the Civil Code, the guilty parties to an illegal
contract cannot recover from one another and are not entitled to an affirmative
relief because they are in pari delicto or in equal fault. The doctrine of in pari
delicto is a universal doctrine that holds that no action arises, in equity or at law,
from an illegal contract; no suit can be maintained for its specific performance, or
to recover the property agreed to be sold or delivered, or the money agreed to be
paid, or damages for its violation; and where the parties are in pari delicto, no
affirmative relief of any kind will be given to one against the other.
iii. No. The Court regards the grant of moral damages, attorneys fees and litigation
expenses to Tarnate to be inappropriate. No damages may be recovered under a
void contract, which, being nonexistent, produces no juridical tie between the
parties involved. It is notable, too, that the RTC and the CA did not spell out the
sufficient factual and legal justifications for such damages to be granted.

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GR No. 160758
January 15, 2014
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,

vs.
GUARIA AGRICULTURAL AND REALTY DEVELOPMENT CORPORATION,
respondent.
Facts:
In July 1976, Guaria Corporation applied for a loan from DBP to finance the
development of its resort complex. The loan, in the amount of P3,387,000.00, was
approved on August 5, 1976. Guaria Corporation executed a promissory note that would
be due on November 3, 1988. On October 5, 1976, Guaria Corporation executed a real
estate mortgage over several real properties in favor of DBP as security for the
repayment of the loan. On May 17, 1977, Guaria Corporation executed a chattel
mortgage over the personal properties existing at the resort complex and those yet to be
acquired out of the proceeds of the loan, also to secure the performance of the
obligation. Prior to the release of the loan, DBP required Guaria Corporation to put up a
cash equity of P1,470,951.00 for the construction of the buildings and other
improvements on the resort complex.
The loan was released in several installments, and Guaria Corporation used the
proceeds to defray the cost of additional improvements in the resort complex. In all, the
amount released totaled P3,003,617.49, from which DBP withheld P148,102.98 as
interest.
Guaria Corporation demanded the release of the balance of the loan, but DBP
refused. Instead, DBP directly paid some suppliers of Guaria Corporation over the
latters objection. DBP found upon inspection of the resort project, its developments and
improvements that Guaria Corporation had not completed the construction works. In a
letter dated February 27, 1978, and a telegram dated June 9, 1978, DBP thus demanded
that Guaria Corporation expedite the completion of the project, and warned that it
would initiate foreclosure proceedings should Guaria Corporation not do so.
Unsatisfied with the non-action and objection of Guaria Corporation, DBP
initiated extrajudicial foreclosure proceedings.
Issue:
Whether or not Guarina was in delay in performing its obligation making DBPs
action to foreclose the mortgage proper
Ruling:
No. Having found and pronounced that the extrajudicial foreclosure by DBP was
premature, and that the ensuing foreclosure sale was void and ineffectual, the Court
affirms the order for the restoration of possession to Guarifia Corporation and the
payment of reasonable rentals for the use of the resort. The CA properly held that the
premature and invalid foreclosure had unjustly dispossessed Guarifia Corporation of its
properties. Consequently, the restoration of possession and the payment of reasonable
rentals were in accordance with Article 561 of the Civil Code, which expressly states that
one who recovers, according to law, possession unjustly lost shall be deemed for all
purposes which may redound to his benefit to have enjoyed it without interruption.
It is true that loans are often secured by a mortgage constituted on real or
personal property to protect the creditors interest in case of the default of the debtor. By
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its nature, however, a mortgage remains an accessory contract dependent on the

principal obligation, such that enforcement of the mortgage contract will depend on
whether or not there has been a violation of the principal obligation. While a creditor and
a debtor could regulate the order in which they should comply with their reciprocal
obligations, it is presupposed that in a loan the lender should perform its obligation the
release of the full loan amount before it could demand that the borrower repay the
loaned amount. Considering that it had yet to release the entire proceeds of the loan,
DBP could not yet make an effective demand for payment.

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GR No. 192371
January 15, 2014
LAND BANK OF THE PHILIPPINES, petitioner,

vs.
EMMANUEL OATE, respondent.
Facts:
In 1980, ECO Management Corporation (ECO) obtained loans amounting to about
P26 million from Land Bank. ECO defaulted in its payment but in 1981, ECO submitted a
Payment Plan with the hope of restructuring its loan. The plan was rejected and Land
Bank sued ECO. It impleaded Emmanuel C. Oate, the majority stockholder of ECO who is
serving as the Chairman and treasurer of ECO.
The trial court ruled in favor of Land Bank but Oate was absolved from liabilities.
The Court of Appeals affirmed the decision of the trial court.
Land Bank appealed as it wanted Oate to be personally liable on the following
grounds (among others): a) ECO stands for Emmanuel C. Oate, b) Oate is the majority
stockholder, c) ECO was formed ostensibly to allow Oate to acquire loans from Land
Bank which he used for his personal advantage, d) Oate holds two positions in the
corporation, and e) ECO never held any board meeting which just shows only Oate was
in control of the corporation.
Issue:
Whether or not Oate should be held personally liable
Ruling:
No. Land Bank was not able to produce sufficient evidence to prove its claim. A
corporation, upon coming into existence, is invested by law with a personality separate
and distinct from those persons composing it as well as from any other legal entity to
which it may be related. The corporate fiction is only disregarded when the fiction is used
to defeat public convenience, justify wrong, protect fraud, defend crime, confuse
legitimate legal or judicial issues, perpetrate deception or otherwise circumvent the law.
This is likewise true where the corporate entity is being used as an alter ego, adjunct, or
business conduit for the sole benefit of the stockholders or of another corporate entity.
None of the foregoing was proved by Land Bank.
The mere fact that Oate owned the majority of the shares of ECO is not a ground
to conclude that Oate and ECO is one and the same. Mere ownership by a single
stockholder of all or nearly all of the capital stock of a corporation is not by itself
sufficient reason for disregarding the fiction of separate corporate personalities.
Anent the issue of the corporate name, the fact that Oates initials coincide with
the corporate name ECO is not sufficient to disregard the corporate fiction. Even if ECO
does stand for Emmanuel C. Oate, it does not mean that the said corporation is
merely a dummy of Oate. A corporation may assume any name provided it is lawful.
There is nothing illegal in a corporation acquiring the name or as in this case, the initials
of one of its shareholders.
During the pendency of this case, however, the Monetary Board issued Resolution
No. 796 dated May 16, 2013, stating that in the absence of express stipulation between
the parties, the rate of interest in loan or forbearance of any money, goods or credits and
the rate allowed in judgments shall be 6 percent per annum. Said Resolution is embodied
in Bangko Sentral ng Pilipinas Circular No. 799, Series of2013, which took effect on July 1,
2013. Hence, the 12 percent annual interest mentioned above shall apply only up to June
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30, 2013. Thereafter, or starting July 1, 2013, the applicable rate of interest for both the
debited amount and undocumented withdrawals shall be 6 percent per annum
compounded annually, until fully paid.

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GR No. 189248,
February 5, 2014
TEODORO S. TEODORO (Deceased), Substituted by his heirs/sons NELSON
TEODORO and ROLANDO TEODORO, petitioners,
vs.
DANILO ESPINO, ROSARIO SANTIAGO, JULIANA CASTILLO, PAULINA LITAO,
RAQUEL RODRIGUEZ, RUFINA DELA CRUZ, and LEONILA CRUZ, respondents.
Facts:
The case is for Forcible Entry filed by the predecessor-in-interest of petitioners
heirs of Teodoro S. Teodoro (Teodoro Teodoro), against respondents a squabble for
physical possession of a portion of a real property, the ownership of which is traceable to
Genaro Teodoro (Genaro), long deceased ascendant of all the parties. The subject
property pertains to the vacant lot where the old ancestral house of Genaro stood until its
demolition in June 2004, at the instance of Teodoro Teodoro. Only Petra, of all Genaros
children, occupied the ancestral house. Genaros other children, specifically Santiago,
Maria and Mariano were bequeathed, and stayed at, a different property within the same
locality, still from the estate of their father. After Petras death, her purported will, a
holographic will, was probated in Special Proceedings before RTC which Decision on the
wills extrinsic validity has become final and executory. In the will, Petra, asserting
ownership, devised the subject property to Teodoro Teodoro, her nephew. Teodoro
Teodoro effected the demolition of the ancestral house, intending to use the subject
property for other purposes. Respondents, who resided at portions of the lot that
surround the subject property on which the ancestral house previously stood, erected a
fence on the surrounding portion, barricaded its frontage, and put up a sign thereat,
effectively dispossessing Teodoro Teodoro of the property bequeathed to him by Petra.
After Teodoro Teodoros demand for respondents to vacate the subject property went
unheeded, he filed the complaint for forcible entry against respondents.
DECISION OF LOWER COURTS:
(1)
MTC: against Teodoro, dismissing the complaint and the counterclaim
interposed in relation thereto, without pronouncement as to costs.
(2)
RTC: ruled in favor of Teodoro, vacated & set aside the decision of the MTC.
(3)
CA: against Teodoro, reversed & set aside the decision of the RTC, found that
Teodoro Teodoro (substituted by his heirs Nelson and Rolando Teodoro at that
juncture) "failed to discharge the burden of proof that he had prior actual
physical possession of the subject [property] before it was barricaded by
[respondents] to warrant the institution of the forcible entry suit."
Issue:
Whether or not the act of respondents in barricading the frontage of the portion of
Lot which stood the ancestral house occupied by Petra amounted to Teodoro Teodoros
unlawful dispossession thereof through the forcible entry of respondents.
Ruling:
Yes, there was unlawful dispossession. The whole of Lot including the portion now
litigated is, owing to the fact that it has remained registered in the name of Genaro who
is the common ancestor of both parties herein, co-owned property. All, or both Teodoro
Teodoro and respondents are entitled to exercise the right of possession as co-owners.
Neither party can exclude the other from possession. Although the property remains
unpartitioned, the respondents in fact possess specific areas. Teodoro Teodoro can
likewise point to a specific area, which is that which was possessed by Petra. Teodoro
Teodoro cannot be dispossessed of such area, not only by virtue of Petra's bequeathal in
his favor but also because of his own right of possession that comes from his coownership of the property. As the RTC concluded, petitioners, as heirs substituting
Teodoro Teodoro in this suit, should be restored in the lawful possession of the disputed
area.

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GR No. 182128
February 19, 2014.
PHILIPPINE NATIONAL BANK, petitioner,
vs.
TERESITA TAN DEE, ANTIPOLO PROPERTIES, INC.,
PROPERTIES, INC.) and AFP-RSBS, INC., respondents.
(now
PRIME
EAST
Facts:
In July 1994, respondent Teresita Tan Dee (Dee) bought from respondent Prime
East Properties Inc. (PEPI) on an installment basis a residential lot with an area of 204
square meters, located in Rizal. Subsequently, PEPI assigned its rights over a 213,093
square meter property on August 1996 to respondent Armed Forces of the PhilippinesRetirement and Separation Benefits System, Inc. (AFP-RSBS), which included the property
purchased by Dee.
On September 10, 1996, PEPI obtained a P205,000,000.00 loan from petitioner
PNB, secured by a mortgage over several properties, including Dees property. The
mortgage was cleared by the Housing and Land Use Regulatory Board (HLURB). After
Dees full payment of the purchase price, a deed of sale was executed by respondents
PEPI and AFP-RSBS in Dees favor. Dee sought from petitioner the delivery of the owners
duplicate title over the property, to no avail. Thus, she filed with the HLURB a complaint
for specific performance to compel delivery by the petitioner, PEPI and AFP-RSBS.
The HLURB ruled in favor of Dee. The HLURB decision was affirmed by its Board of
Commissioners. On appeal, the Board of Commissioners decision was affirmed by the OP.
The CA then affirmed the OP decision. The CA also denied the motion for reconsideration.
Petitioner claims that it has a valid mortgage over Dees property, which was part of the
property mortgaged by PEPI to it to secure its loan obligation, and that Dee and PEPI are
bound by such mortgage.
Respondent AFP-RSBS contends that it cannot be compelled to pay or settle the
obligation under the mortgage contract between PEPI and petitioner as it is merely an
investor in the subdivision project and is not privy to the mortgage. Respondent PEPI, on
the other hand, claims that the title over the subject property is one of the properties due
for release by the petitioner as it has already been subject of a Memorandum of
Agreement and dacion en pago entered into between them. The agreement was reached
after PEPI filed a petition for rehabilitation, and contained the stipulation that the
petitioner agreed to release the mortgage lien on fully paid mortgaged properties upon
the issuance of the certificates of title over the dacioned properties.
Issue:
Whether or not petitioner is privy to the transactions between the subdivision

project buyers and PEPI, and has no obligation to perform any of their respective
undertakings under their contract
Ruling:
No. The petitioner is not being tasked to undertake the obligations of PEPI and
AFP-RSBS. In this case, there are two phases involved in the transactions between
respondents PEPI and Dee the first phase is the contract to sell, which eventually
became the second phase, the absolute sale, after Dees full payment of the purchase
price. In a contract of sale, the parties obligations are plain and simple. The law obliges
the vendor to transfer the ownership of and to deliver the thing that is the object of sale.
On the other hand, the principal obligation of a vendee is to pay the full purchase price at
the agreed time. Based on the final contract of sale between them, the obligation of PEPI,
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as owners and vendors, is to transfer the ownership of and to deliver the subject lot to
Dee, who, in turn, shall pay, and has in fact paid, the full purchase price of the property.
There is nothing in the decision of the HLURB, as affirmed by the OP and the CA, which
shows that the petitioner is being ordered to assume the obligation of any of the
respondents. There is also nothing in the HLURB decision, which validates the petitioners
claim that the mortgage has been nullified. The order of cancellation/release of the
mortgage is simply a consequence of Dees full payment of the purchase price. Note that
at the time PEPI mortgaged the property to the petitioner, the prevailing contract
between respondents PEPI and Dee was still the Contract to Sell, as Dee was yet to fully
pay the purchase price of the property. On this point, PEPI was acting fully well within its
right when it mortgaged the property to the petitioner, for in a contract to sell, ownership
is retained by the seller and is not to pass until full payment of the purchase price. In
other words, at the time of the mortgage, PEPI was still the owner of the property.
Thus, in China Banking Corporation v. Spouses Lozada, the Court affirmed the
right of the owner/developer to mortgage the property subject of development, to wit:
P.D. No. 957 cannot totally prevent the owner or developer from mortgaging the
subdivision lot or condominium unit when the title thereto still resides in the owner or
developer awaiting the full payment of the purchase price by the installment buyer."
Moreover, the mortgage bore the clearance of the HLURB, in compliance with Section 18
of P.D. No. 957, which provides that "no mortgage on any unit or lot shall be made by the
owner or developer without prior written approval of the HLURB."
Nevertheless, despite the apparent validity of the mortgage between the
petitioner and PEPI, the former is still bound to respect the transactions between
respondents PEPI and Dee. The petitioner was well aware that the properties mortgaged
by PEPI were also the subject of existing contracts to sell with other buyers. While it may
be that the petitioner is protected by Act No. 3135, as amended, it cannot claim any
superior right as against the installment buyers.

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GR No. 179625
February 24, 2014
NICANORA G. BUCTON (DECEASED), SUBSTITUTED BY REQUILDA B. YRAY,

petitioner,
vs.
RURAL BANK OF EL SALVADOR, INC., MISAMIS ORIENTAL, AND REYNALDO
CUYONG, RESPONDENTS, VS. ERLINDA CONCEPCION AND HER HUSBAND AND
AGNES BUCTON LUGOD, THIRD PARTY, respondents.
Facts:
Petitioner is the owner of a parcel of land located in Cagayan de Oro. Concepcion
borrowed the title of the land on the pretext that she is going to show it to an interested
buyer. Concepcion obtained a loan from respondent bank and as a security for the loan,
Concepcion mortgaged the property of petitioner using a SPA which was allegedly
executed in favor of Concepcion. When Concepcion failed to pay the loan, the house and
lot of petitioner were foreclosed. Petitioner insisted that she did not obtain any loan from
the bank and that her signature was forged by Concepcion that the loan was entered into
by the latter in her own personal capacity. The bank on the other hand maintains that it
was not negligent in inspecting the properties and relied on the presumption of regularity
of the notarized SPA.
Issue:
Whether or not the Real Estate Mortgage was entered into by Concepcion in her
personal capacity
Ruling:
Yes. For the principal to be bound by a deed executed by an agent, the deed must
be signed by the agent for and in behalf of his principal. As early as the case of Philippine
Sugar Estates Development Co. v. Poizat, the Supreme Court 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 Philippine Sugar Estates Development Co., the wife authorized her husband to
obtain a loan and to secure it with mortgage on her property. Unfortunately, although the
real estate mortgage stated that it was executed by the husband in his capacity as
attorney-in-fact of his wife, the husband signed the contract in his own name without
indicating that he also signed it as the attorney-in-fact of his wife.
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.
In light of the foregoing, there is no need to delve on the issues of forgery of the
SPA and the nullity of the foreclosure sale. For even if the SPA was valid, the Real Estate
Mortgage would still not bind petitioner as it was signed by Concepcion in her personal
capacity and not as an agent of petitioner. Simply put, the Real Estate Mortgage is void
and unenforceable against petitioner.

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GR No. 193684
March 5, 2014
ONE NETWORK RURAL BANK, INC., petitioner,
vs.
DANILO G. BARIC, respondent.
Facts:
Respondent Danilo G. Baric, owner of a barber shop, was a lessee to a building
containing commercial spaces for lease owned by Jaime Palado located in Barangay Piapi,
Davao City. In December 2000, Baric received a written notice from Palado demanding
the return of the leased commercial space within 40 days from December 15, 2000.
Baric took the matter to the office of the barangay Lupong Tagapamayapa.
However, Baric failed to attend the scheduled dates of conciliation/mediation hearing
held on January 19 and 24, 2001. This prompted the Barangay Chairman to issue a
Certificate to Bar Action.
The building was demolished. In February 2001, Baric filed a case for forcible
entry with prayer for injunctive relief against Palado and herein petitioner One Network
Rural Bank, Inc. (Network Bank).
MTCC rendered its decision dismissing Barics complaint for forcible entry stating
that his voluntary departure from the premises and the posting of a signboard that his
barber shop has already transferred to a different area constituted clear and categorical
evidence of his departure to voluntarily vacate the premises. On appeal, the RTC
sustained the decision of the MTCC. On appeal to the CA however, the court reversed the
decision of the lower courts and ordered herein petitioner to be solidarily liable for
nominal damages with Palado.
Issue:
Whether or not petitioner may be held liable for nominal damages
Ruling:
No. The Resolution of the Court of Appeals is MODIFIED in that petitioner One
Network Rural Bank, Inc. is ABSOLVED from liability.
Nominal damages are recoverable where a legal right is technically violated and
must be vindicated against an invasion that has produced no actual present loss of any
kind or where there has been a breach of contract and no substantial injury or actual
damages whatsoever have been or can be shown. Under Article 2221 of the Civil Code,
nominal damages may be awarded to a plaintiff whose right has been violated or invaded
by the defendant, for the purpose of vindicating or recognizing that right, not for
indemnifying the plaintiff for any loss suffered. "Nominal damages are not for
indemnification of loss suffered but for the vindication or recognition of a right violated or
invaded."
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 Barie was ousted
through Palado's acts even before Network Bank acquired the subject property or came
into the picture. Thus, it was error to hold the bank liable for nominal damages.

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GR No. 188539
March 12, 2014
MARIANO LIM, petitioner,
vs.
SECURITY BANK CORPORATION, respondent.
Facts:
Raul Arroyo executed a Promissory Note in favor of Security Bank for a P2.0 Million
loan. In turn, Mariano Lim executed a Continuing Suretyship Agreement with the bank to
secure any and all types of accommodation (Guaranteed Obligations) that may be
granted by the bank in favor of Arroyo.
Arroyo failed to pay his loan. Hence, the bank sent a Notice of Final Demand
informing Mariano that he was liable to pay the loan of Spouses Raul and Edwina Arroyo.
For failure to heed the Notice of Final Demand, the bank filed a complaint for collection of
sum of money against him and the spouses Arroyo. The RTC rendered judgment in favor
of the bank and against Lim only, in as much as the Arroyos cannot be located anymore,
and held Mariano liable to pay the bank the principal sum, plus interest and penalties,
attorneys and litigation expenses. His appeal to the CA denied, Lim elevated the case to
the Supreme Court.
Issue:
Whether or not Mariano Lim is liable to pay the unpaid loans of the spouses
Arroyo under the Continuing Suretyship Agreement he signed with the bank, six months
after execution of the Continuing Suretyship Agreement.
Ruling:
Petition is PARTIALLY GRANTED. The Decision of the Court of Appeals is AFFIRMED
with MODIFICATION in that the award of attorneys fees is reduced to ten percent of the
principal debt only.
In this case, the petitioner executed Continuing Suretyship. Comprehensive or
continuing surety agreements are, in fact, quite common place in present day financial
and commercial practice. A bank or financing company which anticipates entering into a
series of credit transactions with a particular company normally requires the projected
principal debtor to execute a continuing surety agreement along with its sureties. By
executing such an agreement, the principal places itself in a position to enter into the
projected series of transactions with its creditor; with such suretyship agreement, there
would be no need to execute a separate surety contract or bond for each financing or
credit accommodation extended to the principal.
The terms of the Continuing Suretyship executed by petitioner states that
petitioner, as surety, shall, without need for any notice, demand or any other act or deed,
immediately become liable and shall pay all credit accommodations extended by the
Bank to the Debtor, including increases, renewals, roll-overs, extensions, restructurings,
amendments or novations thereof, as well as (i) all obligations of the Debtor presently or
hereafter owing to the Bank, as appears in the accounts, books and records of the Bank,
whether direct or indirect, and (ii) any and all expenses which the Bank may incur in
enforcing any of its rights, powers and remedies under the Credit Instruments as defined
herein below. Such stipulations are valid and legal and constitute the law between the
parties.
With regard to the award of attorneys fees, it should be noted that Article 2208 of
the Civil Code does not prohibit recovery of attorneys fees if there is a stipulation in the
contract for payment of the same.

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GR No. 189420
March 26, 2014
RAUL V. ARAMBULO AND TERESITA A. DELA CRUZ, petitioners,
vs.
GENARO NOLASCO AND JEREMY SPENCER NOLASCO, respondents.
Facts:
Petitioners, together with their siblings and their mother co-owned a 233 sq.m.
land in Tondo, Manila. When their mother died, she was succeeded by her husband,
Genero Nolasco and their children.
On January 8, 1999, petitioners filed a petition for relief alleging that all coowners, except for Nolasco, have authorized to sell their respective shares to the
properties, saying that in the Civil Code, if one or more co-owners shall withhold their
consent to the alterations in the thing owned in common, the courts may afford adequate
relief.
Nolasco responded that they did not know about the intention to sell, because
they were not called to participate in the negotiations regarding the sale of the property.
The RTC ruled in favor with petitioners and ordered Nolasco to give their consent
to sale. Nolasco filed a notice of appeal to the CA. The CA reversed the RTC decision,
saying that the petitioners cannot compel Nolasco to give their consent.
Issue:
Whether the respondents are withholding their consent and whether this
withholding is prejudicial to the petitioners
Ruling:
The Court of Appeals was right. From the foregoing, it may be deduced that since
a coowner is entitled to sell his undivided share, a sale of the entire property by one co
owner without the consent of the other coowners is not null and void. However, only the
rights of the coownerseller are transferred, thereby making the buyer a coowner of
the property.
To be a coowner of a property does not mean that one is deprived of every
recognition of the disposal of the thing, of the free use of his right within the
circumstantial conditions of such judicial status, nor is it necessary, for the use and
enjoyment, or the right of free disposal, that the previous consent of all the interested
parties be obtained.

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GR No. 188832
April 23, 2014
VIVENCIO B. VILLAGRACIA, petitioner,
vs.
FIFTH (5th) SHARI'A DISTRICT COURT and ROLDAN E. MALA, represented by his
father Hadji Kalam T. Mala, respondents.
Facts:
On February 15, 1986, Roldan E. Mala purchased a 300-square meter parcel of
land located in Poblacion, Parang, Maguindanao, from one Ceres Caete. On March 3,
1996, a TCT No. T-15633 covering the parcel of land was issues in Roldans name. At the
time of the purchase, Vivencio B. Villagracia occupied the said parcel of land. Failing to
settle with Vivencio at the barangay level, Roldan filed an action to recover the
possession of the parcel of land with respondent Fifth Sharia District Court. In its decision
dated June 11, 2008, respondent ruled that Roldan, as registered owner, had the better
right to possess the parcel of land. It ordered Vivencio to vacate the property, turn it over
to Roldan, and pay damages as well as attorneys fees. A notice of writ of execution was
sent to Vevencio, giving him 30 days from receipt of the notice to comply with the
decision. Meanwhile, Vivencio files a petition for relief from judgment with prayer for
issuance of wirt of preliminary injunction. He cited Article 155, paragraph (2) of the Code
of Muslim Personal Laws of the Philippines and argued that Sharia District Courts may
only hear civil actions and proceedings if both parties are Muslims. Considering that he is
a Christian, hence the respondent had no jurisdiction to take cognizance of Roldans
action for recovery of possession of a parcel of land. However, respondent denied
Vivencios petition for relief from judgment for lack of merit. Hence, this petition for
certiorari with prayer for issuance of temporary restraining order enjoins the
implementation of the writ of execution issued against Vivencio. Roldan argued that since
respondent had jurisdiction to decide the action for recovery of possession, he argued
that the proceedings before it were valid. Respondent acquired jurisdiction over the
person of Vivencio upon service on him of summons. When Vivencio failed to file his
answer, he effectively waived his right to participate in the proceedings and he cannot
argue that his rights were prejudiced.
Issue:
(1) Whether or not a Sharia District Court has jurisdiction over a real action where
one of the parties is not a Muslim
(2) Whether or not proceedings before respondent were valid since the latter
acquired jurisdiction over the person of Vivencio
Ruling:
(1) No. The law conferring the jurisdiction of Sharia District Court is the Code of
Muslim Personal Laws of the Philippines. Under Article 143 of the Muslim Code,
the respondent have concurrent original jurisdiction with existing civil courts
over real actions not arising from customary contracts wherein the parties
involved are Muslims. When Vivencio stated in his petition for relief from judgment
that he is not a Muslim, Roldan did not dispute this claim. Thus, the respondent
had no jurisdiction over ROldans action.
(2) All proceedings before respondent Sharia District Court, including the service of
summons on Vivencio, are void. As discussed, respondent has no jurisdiction over
subject matter as Vivencio is not a Muslim.

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GR No. 204626
June 9, 2014
PAUL P. GABRIEL, JR., IRENEO C. CALWAG, THOMAS L. TINGGA-AN, and the Heirs
of JULIET B. PULKERA, petitioners,
vs.
CARMELING CRISOLOGO, respondent.
Facts:
Carmeling Crisologo (Crisologo), represented by her attorney-in-fact, Pedro Isican
(Isican), filed her complaint for Recovery of Possession and/or Ownership with Damages
against Juliet B. Pulkera, Paul P. Gabriel, Ireneo C. Calwag, and Thomas L. Tingga-an
(petitioners) before the MTCC.
Crisologo alleged, among others, that she was the registered owner of two parcels
of land, Transfer Certificate of Title (TCT) Nos. T-13935 and T-13936. Properties were
covered by an Assessment of Real Property. Sometime in 2006, she discovered that
petitioners unlawfully entered, occupied her properties by stealth, by force and without
her prior consent and knowledge, and constructed their houses thereon. Upon discovery
of their illegal occupation, Atty. Carmelita Crisologo (daughter of Carmeling) and Isican
personally went to the properties and verbally demanded that petitioners vacate the
premises and remove their structures thereon. The petitioners begged and promised to
buy the said properties for 3,500.00 per square meter. Petitioners refused to vacate the
subject properties despite several demands.
On the other hand, petitioners countered (i) that Crisologo failed to comply with
the conditions provided in Section 1 of P.D. No. 1271 for the validation of said titles,
hence, the titles were void; and (ii) that Crisologo was never in prior possession and had
no valid title over the subject land. The petitioners had been in open, actual, exclusive,
notorious, uninterrupted, and continuous possession of the subject land, in good faith.
LOWER COURT DECISIONS:
1. MTCC: Ruled in favor of Crisologo
2. RTC: Ruled in favor of Petitioners
3. CA: Reinstated the decision of the MTCC
Issue:
Whether or not the Petitioners have a better right of possession over the
properties
Ruling:
Crisologo has a better right of possession over the subject parcels of land. The
case is an accion publiciana (also known as accion plenaria de posesion), which is an
ordinary civil proceeding to determine the better right of possession of realty
independently of title. It refers to an ejectment suit filed after the expiration of one year
from the accrual of the cause of action or from the unlawful withholding of possession of
the realty.
The objective of the plaintiffs in accion publiciana is to recover possession only,
not ownership. When parties, however, raise the issue of ownership, the court may pass
upon the issue to determine who between the parties has the right to possess the
property. This adjudication, nonetheless, is not a final and binding determination of the
issue of ownership; it is only for the purpose of resolving the issue of possession, where
the issue of ownership is inseparably linked to the issue of possession. The adjudication
of the issue of ownership, being provisional, is not a bar to an action between the same
parties involving title to the property. The adjudication, in short, is not conclusive on the
issue of ownership.
Nonetheless, the petitioners have raised the issue of ownership in their pleadings.
They mainly argue that Crisologos titles on the subject properties are void and that they

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have been in open, actual, exclusive, notorious, uninterrupted and continuous possession
over the subject properties in good faith.
The Court agrees with the CA that the only question that needs to be resolved in
this suit to recover possession is who between the parties is entitled to the physical or
material possession of the subject parcels of land. Therefore, the foremost relevant issue
that needs to be determined here is simply possession, not ownership.
The testimonial and documentary evidence on record prove that Crisologo has a
preferred claim of possession over that of petitioners. It cannot be denied that she
bought the subject properties from the previous owner in 1967, which was why the
transfer certificates of title were subsequently issued in her name. Records further show
that she has been paying the realty taxes on the said properties since 1969. She likewise
appointed Isican as administrator of the disputed lands. More importantly, there is no
question that she offered to sell to petitioners the portions of the subject properties
occupied by them. Hence, she deserves to be respected and restored to her lawful
possession as provided in Article 539 of the New Civil Code.

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GR No. 195549
September 3, 2014
WILLAWARE PRODUCTS CORPORATION, petitioner,
vs.
JESICHRIS MANUFACTURING CORPORATION, respondent.
Facts:
Jesichris Manufacuring Company (Jesichris) alleges in its complaint for damages
for unfair competition that it is a company engaged in the manufacture and distribution
of plastic and metal products. It pioneered the use of plastic in place of rubber in the
manufacture of automotive underchassis parts such as spring eye bushing, stabiliser
bushing, and others. Willaware Products Corporation, on the other hand is engaged in
the manufacture of kitchenware items made of plastic and metal, has an office with
physical proximity to its office, and in view of the fact that some of its employees had
transferred to it, Jesichris discovered that Willaware had been manufacturing and
distributing the same automotive parts with exactly similar design, same material and
colours as Jesichris manufactures and distributes, but at a lower price. Willware
deliberately copied its product designs which constitute unfair competition. It thus
prayed for damages in terms of unrealised profits in the amount of P2Million. On the
other hand, Willaware, in its defense, denied all the allegations in the complaint except
as to the proximity of their office to that of Jesichris, and that some of its employees
transferred to Willaware. As an affirmative defense, Willaware posits that there was no
unfair competition as the plastic products were mere reproductions of the original parts
which merely conform to their original designs and specifications. Thus, Jesichris cannot
claim that it originated the use of the plastic automotive parts, and even assuming that it
did so, it still has no exclusive right to sell these products since it has no patent over
these products. In fact, other establishments were offering them for sale.
After trial, the RTC rendered a decision in favour of Jesichris. It ruled that
Willaware clearly invaded the right of Jesichris by deliberately copying and performing
acts amounting to unfair competition. It enjoined Willaware from continuing its activity,
and awarded damages in favor of Jesichris. On appeal to the CA, the latter affirmed with
modification that RTC decision.
Willaware is now before the Supreme Court assailing the RTC and CA decisions.
Whether or not there is unfair competition under human relations when the parties are
not competitors and there is actually no damage on the part of Jesichris?
Issue:
Whether or not the addition of nominal damages is proper although no rights have
been established? Consequently, if there is no unfair competition, should there be moral
damages and attorneys fees? If ever the right of Jesichris refers to its copyright on
automotive parts, should it be considered in the light of the said copyrights were
considered to be void by no less than this Honorable Court in SC GR No. 161295?
If the right involved is goodwill then the issue is: whether or not Jesichris has
established goodwill?

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Ruling:
No. It is evident that petitioner is engaged in unfair competition as shown by his
act of suddenly shifting his business from manufacturing kitchenware to plastic-made
automotive parts; his luring the employees of the respondent to transfer to his employ
and trying to discover the trade secrets of the respondent.6
Moreover, when a person starts an opposing place of business, not for the sake of
profit to himself, but regardless of loss and for the sole purpose of driving his competitor
out of business so that later on he can take advantage of the effects of his malevolent
purpose, he is guilty of wanton wrong
GR No.198878
October 15, 2014
RESIDENTS OF LOWER ATAB & TEACHERS' VILLAGE, STO. TOMAS PROPER
BARANGAY, BAGUIO CITY, represented by BEATRICE T. PULAS, CRISTINA A. LAPP
AO. MICHAEL MADIGUID, FLORENCIO MABUDYANG and FERNANDO
DOSALIN, petitioners,
vs.
STA. MONICA INDUSTRIAL & DEVELOPMENT CORPORATION, respondent.
Facts:
The petitioners, residents of Lower Atab Village in Baguio City, claiming to
the the successors-in-interest of Torres, the owner of an unregistered parcel of
land, filed an action for quieting of title with damages against Sta. Monica
Industrial and Development Corporation. The latter, they claim, began to erect a
fence on the property in the year 2000, and claimed the land by virtue of TCT No.
T-63184, despite the fact that they possessed the property in the concept of an
owner and declared their homes for tax purposes, paying the real estate taxes
thereon. TCT No. T-63184 is null and void, having been derived from OCT No. O281 which was declared void pursuant to PD 1271 and the decided case
of Republic vs Marcos. On the other hand, the corporation averred that the
petitioners have no cause of action; the case for quieting of title constitutes a
collateral attack on TCT No. T-63184; and the petitioners have no title to the
property and were mere illegal occupants. Petitioners admitted in their Pre-Trial
Brief and Memorandum that they applied for the purchase of the lots through
Townsite Sales Application with the DENR.
After trial, the RTC ruled in favour of the corporation and dismissed the
complaint. It held that the case was a collateral attack on the title of Sta.
Monica; TCT No. T-63184 is a valid title, based on the annotation of the Registry
of Deeds that TCT No. T-27096 from which TCT No. T-63184 was derived, was
validated by the PD 1271 Committee as valid; and petitioners could not present
any valid title to the property upon which to base their quieting of title, thus
failed to prove that they have a cause of action against the respondent.
The CA affirmed the RTC decision. It held that the petitioners are without
any title to be cleared of or to be quieted nor can they be regarded as having
equitable title over the subject property. It affirmed the RTCs view that TCT No.
63184 is a valid title and the case constitutes a collateral attack on the title.
Petitioners elevated the case to the Supreme Court via petition for review on
certiorari.

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Issue:
Whether the petitioners have beneficial or legal title to the property
entitling them to quieting of title.
Ruling:
No. The Court denies the Petition. 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. And by
their own admission in their pleadings, specifically in their pre-trial brief and
memorandum before the trial court, they acknowledged that they applied for the
purchase of the property from the government, through townsite 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 townsite 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. In short, petitioners recognize that legal and equitable title
to the subject property lies in the State. Thus, as to them, quieting of title is not
an available remedy.
The petition is DENIED. The assailed August 5, 2011 Decision and October
3, 2011 Resolution of the Court of Appeals in CA-GR CV No. 84561 are AFFIRMED.
GR. No. 176492
October 20, 2014
MARIETTA N. BARRIDO, petitioner,
vs.
LEONARDO V. NONATO, respondent,
Facts:
In the course of the marriage of respondent Leonardo V. Nonato and petitioner
Marietta N. Barrido, they were able to acquire a property situated in Eroreco, Bacolod
City, consisting of a house and lot. On March 15, 1996, their marriage was declared void
on the ground of psychological incapacity. Nonato asked Barrido for partition, but the
latter refused. On January 29, 2003, Nonato filed a Complaint for partition, Barrido
claimed, by way of affirmative defense, that the subject property had already been sold
to their children, Joseph Raymund and Joseph Leo. Lower court used Art. 129.
Issue:
Whether or not Art. 129 is applicable
HELD:
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No. The records reveal that Nonato and Barridos marriage had been declared void
for psychological incapacity under Article 36 of the family code. During their marriage,
however, the conjugal partnership regime governed their property relations. Although
Article 129 provides for the procedure in case of dissolution of the conjugal partnership
regime, Article 147 specifically covers the effects of void marriages on the spouses
property relations.
The petition is DENIED. The Decision of the Court of Appeals, dated November 16,
2006, as well as its Resolution dated January 24, 2007 in CA-GR SP No. 00235, are hereby
AFFIRMED.
GR No. 192531
November 12, 2014
BERNARDINA P. BARTOLOME, petitioner,
vs.
SOCIAL SECURITY SYSTEM and SCANMAR MARITIME SERVICES,
INC., respondents.
Facts:
John Colcol (John), born on June 9, 1983, was employed as electrician by Scanmar
Maritime Services, Inc., on board the vessel Maersk Danville, since February 2008. As
such, he was enrolled under the government's Employees' Compensation Program
(ECP). Unfortunately, on June 2, 2008, an accident occurred on board the vessel whereby
steel plates fell on John, which led to his untimely death the following day.
John was, at the time of his death, childless and unmarried. Thus, petitioner Bernardina P.
Bartolome, Johns biological mother and, allegedly, sole remaining beneficiary, filed a
claim for death benefits under PD 626 with the Social Security System (SSS) at San
Fernando City, La Union. However, the SSS La Union office, in a letter dated June 10,
2009 addressed to petitioner, denied the claim, stating:

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We regret to inform you that we cannot give due course to your claim because you are
no longer considered as the parent of JOHN COLCOL as he was legally adopted by
CORNELIO COLCOL based on documents you submitted to us.
The denial was appealed to the Employees Compensation Commission (ECC),
which affirmed the ruling of the SSS La Union Branch through the assailed Decision, the
dispositive portion of which reads:
WHEREFORE, the appealed decision is AFFIRMED and the claim is hereby dismissed for
lack of merit.
In denying the claim, both the SSS La Union branch and the ECC ruled against
petitioners entitlement to the death benefits sought after under PD 626 on the ground
she can no longer be considered Johns primary beneficiary. As culled from the records,
John and his sister Elizabeth were adopted by their great grandfather, petitioners
grandfather, Cornelio Colcol (Cornelio), by virtue of the Decision 7 in Spec. Proc. No. 8220XII of the Regional Trial Court in Laoag City dated February 4, 1985, which decree of
adoption attained finality. Consequently, as argued by the agencies, it is Cornelio who
qualifies as Johns primary beneficiary, not petitioner. Neither, the ECC reasoned, would
petitioner qualify as Johns secondary beneficiary even if it were proven that Cornelio has
already passed away. As the ECC ratiocinated:
Under Article 167 (j) of P.D. 626, as amended, provides (sic) that beneficiaries are
the "dependent spouse until he remarries and dependent children, who are the primary
beneficiaries. In their absence, the dependent parents and subject to the restrictions
imposed on dependent children, the illegitimate children and legitimate descendants who
are the secondary
beneficiaries; Provided; that the dependent acknowledged natural child shall be
considered as a primary beneficiary when there are no other dependent children who are
qualified and eligible for monthly income benefit."
The dependent parent referred to by the above provision relates to the legitimate
parent of the covered member, as provided for by Rule XV, Section 1 (c) (1) of the
Amended Rules on Employees Compensation. This Commission believes that the
appellant is not considered a legitimate parent of the deceased, having given up the
latter for adoption to Mr. Cornelio C. Colcol. Thus, in effect, the adoption divested her of
the status as the legitimate parent of the deceased even though she is Johns biological
mother, it was allegedly not proven that his adoptive parent, Cornelio, was no longer
alive. As intimated by the ECC:assuming that appellant is indeed a qualified beneficiary
under the Social Security law, in view of her status as other beneficiary, she cannot claim
the benefit legally provided by law to the primary beneficiary, in this case the adoptive
father since he is still alive.
Based on Cornelios death certificate, it appears that Johns adoptive father died
on October 26, 1987, or only less than three (3) years since the decree of adoption on
February 4, 1985, which attained finality. As such, it was error for the ECC to have ruled
that it was not duly proven that the adoptive parent, Cornelio, has already passed away.
Issue:
Whether or not petitioner is entitled to the death benefits claim in view of Johns
work-related demise.
Ruling:
No. The Court finds support on the fact that even though parental authority is
severed by virtue of adoption, the ties between the adoptee and the biological parents
are not entirely eliminated. To demonstrate, the biological parents, in some instances, are
able to inherit from the adopted, as can be gleaned from Art. 190 of the Family Code:
Art. 190. Legal or intestate succession to the estate of the adopted shall be governed by
the following rules:

Page 88 of 92
GROUP 1 | CIVIL LAW
(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the
adopted concur with the adopter, they shall divide the entire estate, one-half tobe
inherited by the parents or ascendants and the other half, by the adopters;
(6) When only collateral blood relatives of the adopted survive, then the ordinary rules of
legal or intestate succession shall apply.
The petition is hereby GRANTED. The March 17, 2010 Decision of the Employees'
Compensation Commission, in ECC Case No. SL-18483-0218-10, is REVERSED and SET
ASIDE. The ECC is hereby directed to release the benefits due to a secondary beneficiary
of the deceased covered employee John Colcol to petitioner Bernardina P. Bartolome.
2013-2014 Civil Law Enactments

Republic Act No. 10356
Title: An Act granting Philippine citizenship to Jessie Josephine Coe Lichauco
Date Approved: January 9, 2013
Enacting Clause: Be it enacted by the Senate and House of Representatives
Republic Act No. 10572
Title: An Act establishing the liability of the absolute community or conjugal partnership
for an obligation of a spouse who practices a profession and the capability of either
spouse to dispose of an exclusive property without the consent of the other spouse,
amending for the purpose Articles 73 and 111 of Executive Order No. 209, also known as
The Family Code of the Philippines.
Date Approved: May 24, 2013
Enacting Clause: Be it enacted by the Senate and House of Representatives

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SUPREME COURT DECISIONS

January 14, 2013

January 16, 2013

January 23, 2013

March 13, 2013

March 13, 2013

March 20, 2013

March 20, 2013

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

April 10, 2013

April 10, 2013

April 15, 2013

April 17, 2013

April 17, 2013

June 26, 2013

June 28, 2013

July 17, 2013

July 31, 2013

July 31, 2013

August 12, 2013

August 14, 2013

August 28, 2013

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

August 28, 2013

January 13, 2014

January 15, 2014

January 15, 2014

January 15, 2014

March 12, 2014

March 26, 2014

April 23, 2014

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

GROUP 1 | CIVIL LAW

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

REPUBLIC OF THE PHILIPPINES, petitioner,

To constitute psychological incapacity, it must be shown that the unfaithfulness and

GROUP 1 | CIVIL LAW

SPOUSES BENJAMIN C. MAMARIL AND SONIA P. MAMARIL, petitioners,

GROUP 1 | CIVIL LAW

THE MANILA INSURANCE COMPANY, INC., petitioner,

Yes, Manila Insurance is liable as surety. A contract of suretyship is defined as an

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

On November 5, 1999, Juanita and Lailane executed a Contract of Lease wherein

GROUP 1 | CIVIL LAW

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW

GROUP 1 | CIVIL LAW

Dr. Jose Teodorico V. Molina

GROUP 1 | CIVIL LAW