Salonga vs.

Concepcion

Spouses Salonga of Dagupan City owned numerous parcels of land. Being

businessmen, they needed money to pump their business. Thus they acquired loans
from DBP and PNB mortgaging some parcels of land.
In July 16, 1990, a devastating earthquake hit and it severely affected the spouses
Salongas business. They defaulted on their loans from the bank. The banks filed petition
in the RTc of Dagupan City for the extra-judicial foreclosure of the real estate mortgage.
Since they do not want their lands being sequestered by banks, they secured a P
500,000 loan from spouses Concepcion, who were engaged in the business of lending
money, to pay PNB. PNB was paid and thus a deed or release of Real Estate Mortgage
was executed.
The spouses Concepcion agreed to give another P 200,000 loan to spouses Salonga to
enable them to settle their obligations with Association bank.
Futhermore, the Concepcions lent the Salongas the amount of P 2, 042,377.19 which
they paid to the DBP for their outstanding balance.
The spouses Concepcion charged the spouses Salonga 3% monthly interest for the
loans and a 5% commission in case the property were sold to thir parties.
The spouses Salonga failed to pay the loans, interest and commission despite the lapse
of several months. The spouses Concepcion even knowing the spouses Salongas dire
financial situation, even pressed them to pay their obligations.
Thus, on August 31, 1993, the spouses Salonga executed a deed of sale in favour of
spouses Concepcion over their previously mortgaged property to Associated Bank. It
appears on the said instrument that the said land was sold for P 575, 000 and that the
spouses Salonga received the amount from the spouses Concepcion. On September 20,
1993, the spouses Concepcion executed a deed of absolute sale over the said property
in favour of Florencia Realty Corporation for P 600,000.
On October 18, 1993, the spouses Salonga again executed a deed of sale in favour of
spouses Salonga of their previously mortgaged property to DBP and PNB in the amount
of P 1,500,000. Receipt of which was acknowledged by the spouses Salonga on the said
deed.
In 1994, the daughter of the spouses Salonga arrived from abroad. The spouses
Salonga together with their daughter offered the Concepcions to buy back the property
last sold to them and pay the outstanding loan altogether. The Concepcions demanded a
redemption money of P 8,000,000 and further increased it to P 10,000,000.

ISSUE: WON the deeds of sale signed by plaintiffs-appellants conveying the properties
in question to defendants-appellees are actually equitable mortgage.

HELD:

A contract purporting to be a sale with right to repurchase shall be

considered as an equitable mortgage.[42] In a contract of mortgage, the
mortgagor merely subjects the property to a lien, but the ownership and
possession thereof are retained by him.[43]
For the presumption in Article 1602 of the New Civil Code to arise, two
requirements must concur: (a) that the parties entered into a contract
denominated as a contract of sale; and (b) that their intention was to secure
an existing debt by way of a mortgage. The existence of any of the
circumstances defined in Article 1602 of the New Civil Code, not the
concurrence nor an overwhelming number of such circumstances is sufficient
for a contract of sale to be presumed an equitable mortgage.[44]
SIGAYA V. MAYUGA

FACTS: ionisia

Alorsabes owned a three hectare land in Dao,

Capiz, denominated as Lot 3603. In 1934, she sold a portion of
the lot to Juanito Fuentes while the remainder was inherited by
her children Paz Dela Cruz, Rosela Dela Cruz, and Consorcia
Arroja (an adopted child), and a grandson, Francisco Abas, in
representation of his deceased mother Margarita Dela Cruz.
These four heirs executed an Extra-Judicial Settlement
with Sale dated February 4, 1964 wherein Consorcia sold her
share with an area of 6,694 square meters to spouses
Balleriano Mayuga. On April 1, 1977, Paz also sold her share to
Honorato de losSantos. Later, another document entitled
Extra-Judicial Partition with Deed of Sale dated November 2,
1972 was uncovered wherein the heirs of Dionisia purportedly
adjudicated Lot 3603 among themselves and sold their shares
to Francisco. On January 9, 1978, Francisco executed a Deed of
Sale over Lot 3603 in favor of Teodulfo Sigaya. Thus, the title
over Lot 3603 was cancelled and a new one was issued in the
name of Teodulfo, predecessor-in-interest of the petitioners
herein.[1] The petitioners, who are the widow and children of
Teodulfo, filed Civil Case or recovery of possession and
damages.

ISSUE: WHETHER A PERSON DEALING WITH A REGISTERED LAND CAN

SAFELY RELY ON THE CORRECTNESS OF THE CERTIFICATE OF TITLE
ISSUED THEREFORE.

HELD: ndeed, it is a well-settled rule that every person dealing with

registered land may safely rely on the correctness of the certificate of title
issued therefor and the law will in no way oblige him to go beyond the
certificate to determine the condition of the property. Where there is nothing in
the certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not required to explore
further than what the Torrens Title upon its face indicates in quest for any
hidden defects or inchoate right that may subsequently defeat his right thereto.
[34]

However, this rule shall not apply when the party has actual knowledge of
facts and circumstances that would impel a reasonably cautious man to make
such inquiry or when the purchaser has knowledge of a defect or the lack of title
in his vendor or of sufficient facts to induce a reasonably prudent man to inquire
into the status of the title of the property in litigation.[35]
ILAGROS ILAO-QUIANAY
and SERGIO ILAO, as Joint
Administrator of the Intestate Estate of Simplicio
Ilao, and AMBROSIA ILAO.
Petitioners,

- versus -

G.R. No. 154087

Present:
PUNO, J.,

Chairman,
AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO, JJ.

Promulgated:
RODOLFO MAPILE,
Respondent.
October 25, 2005

FACTS: Subject

of this case is a parcel of land situated in Sta.

Cruz, Manila and covered by Transfer Certificate of Title No.
48529 (TCT No. 48529) in the name of the deceased Simplicio
Ilao (Ilao). In the course of the judicial settlement of Ilaos
estate, his heirs found out that the title of the subject property
had an annotation of adverse claim filed by a certain Juanito
Ibarra (Ibarra). Respondent herein, Atty. Rodolfo Mapile
(respondent), filed a motion to exclude the property from the
inventory on the ground that the same no longer formed part
of Ilaos estate having been disposed of during the latters
lifetime in favor of Ibarra. Acting upon respondents allegation,
the heirs of Ilao, through petitioners herein, promptly filed on
December 8, 1976 a civil case for Quieting of Title and
Damages, docketed as Civil Case No. 105865 of the Regional
Trial Court (RTC) of Manila, Branch 37.
LAWYERS COOPERATIVE PUBLISHING COMPANY v. PERFECTO A. TABORA
1965 / BAUTISTA ANGELO
FACTS
Perfecto Tabora bought from the Lawyers Cooperative Publishing Company a complete
set of AmJur, plus a set of AmJur, General Index.
CONTRACT "Title to and ownership of the books shall remain with the seller until the
purchase price shall have been fully paid. Loss or damage to the books after
delivery to the buyer shall be borne by the buyer."
Tabora made a partial payment of P300.00, leaving a balance of P1,382.40. The books
were delivered and receipted for by Tabora. On the same day, a fire broke out, burning
down Taboras law office and library. Tabora immediately reported it to LCBC. The
company replied and as a token of goodwill it sent to Tabora free of charge 4 Philippine
Reports volumes.
As Tabora failed to pay the monthly installments agreed upon, LCBC filed an
action to recover of the balance.

ISSUE & HOLDING

Who bears the loss? Tabora

RATIO
GENERAL RULE The loss of the object of the contract of sale is borne by the owner or
in case offorce majeure the one under obligation to deliver the object is exempt
from liability
THIS IS NOT APPLICABLE HERE Contract provides that loss or damage after
delivery shall be borne by the buyer
FORCE MAJEURE DEFENSE FAILS
The rule only holds true when the obligation consists in the delivery of a determinate
thing and there is no stipulation holding him liable even in case of fortuitous
event.
NOT PRESENT IN THIS CASE
The obligation is pecuniary in nature, and the obligor bound himself to assume the
loss after the delivery.

G.R. No. L-17527

April 30, 1963

SUN BROTHERS APPLIANCES, INC., plaintiff-appellee,

vs.
DAMASO P. PEREZ, defendant-appellant.

FACTS: DAMASO PEREZ entered into a Conditional Sale Agreement with the plaintiff. That
pursuant to the terms and conditions provided in the said Conditional Sale Agreement the plaintiff
delivered to the defendant (1) Admiral Air Conditioner Slim Style Model 100-23-1 HP, Serial No.
2978828 with the contract price of P1,678.00 and that said Air Conditioner was received by the
defendant; Air Conditioner was burned on December 27,1958, on or about 2:00 o'clock in the
morning. After making down payment of P274.00 to the plaintiff, did not pay any of the monthly
installments of P78.00 thereafter, leaving a balance of P1,404.00 in favor of the plaintiff.

ISSUE: WON the buyer is liable for loss due to fortuitous event even if the title remains in vendor.
HELD: YES. the agreement making the buyer responsible for any loss whatsoever, fortuitous or
otherwise, even if the title to the property remains in the vendor, is neither contrary to law, nor to
morals or public policy.