GR No. 201264, January 11, 2016 Florante Vitug (Petitioner) v Evangeline Abuda (Respondent) Second Division Ponente: Leonen, J. nu""iication and cance""ation o #ort$a$e. Nature of Action: An action or t!e nu""iication FACTS:
A%uda "oaned P2&0,000.00 to 'itu$ and !is (ie, Narcisa 'itu$. As security or t!e "oan, 'itu$ #ort$a$ed to A%uda !is )ro)erty. *!e )ro)erty (as t!en su%+ect o a conditiona" ontract to Se"" %et(een t!e Nationa" -ousin$ Aut!ority and 'itu$. *!at, u)on consu##ation and co#)"etion o t!e sa"e %y t!e N-A o said )ro)erty, )ro)erty, t!e tit"ea(ard t!ereo, s!a"" %e received %y t!e /ort$a$ee %y virtue o a S)ecia" Po(er o Attorney, eecuted %y /ort$a$or in !er avor. *!e )arties eecuted a restructured #ort$a$e contract on t!e )ro)erty to secure t!e a#ount o P600,000.00 re)resentin$ t!e ori$ina" P2&0,000.00 "oan, additiona" "oans, and su%seuent credit acco##odations $iven %y A%uda to 'itu$ (it! an interest o ive 3& )ercent )er #ont!. 5y t!en, t!e )ro)erty (as covered %y *ranser ertiicate o *it"e under 'itu$s na#e. S)ouses 'itu$ ai"ed to )ay t!eir "oans des)ite A%udas de#ands. A%uda i"ed a o#)"aint or 7orec"osure o Pro)erty %eore t!e Re$iona" *ria" ourt o /ani"a. 8n Dece#%er 19, 200, t!e Re$iona" *ria" ourt )ro#u"$ated a Decision in avor o A%uda. 8n a))ea", t!e R* ru"ed in avor o A%uda and ordered 'itu$ to )ay t!e )rinci)a" su# (it! interest and u)on deau"t o t!e deendant to u""y )ay t!e aoresaid su#s, t!e su%+ect #ort$a$ed )ro)erty s!a"" %e so"d at )u%"ic auction to )ay o t!e #ort$a$e de%t. *!e +ud$e#ent (as air#ed (it! t!e #odiication as to t!e )ay#ent o interest. Petitioner ar$ues t!at not a"" t!e reuisites o a va"id #ort$a$e are )resent. -e contends t!at a #ort$a$or #ust !ave ree dis)osa" o t!e #ort$a$ed )ro)erty. *!at t!e eistence o a restriction c"ause in !is tit"e #eans t!at !e does not !ave ree dis)osa" o !is )ro)erty.
SS!E:
;!et!er t!e restriction c"ause in )etitioners tit"e rendered inva"id t!e rea" estate #ort$a$e !e and res)ondent
R!"N#:
No. Petitioner #ay dis)ose or encu#%er !is )ro)erty. )ro)erty. *!e restrictions are #ere %urden or "i#itations on )etitioner=s +us dis)onendi. A"" t!e e"e#ents o a va"id #ort$a$e contract (ere )resent. 7or a #ort$a$e contract to %e va"id, t!e a%so"ute o(ner o a )ro)erty #ust !ave ree dis)osa" o t!e )ro)erty. *!at )ro)erty #ust %e used to secure t!e u"i""#ent o an o%"i$ation. Artic"e 20& o t!e ivi" ode )rovides: Art. 20&. *!e o""o(in$ reuisites are essentia" to contracts o )"ed$e and #ort$a$e: 31 31 *!at *!at t!ey t!ey %e cons consti titu tute ted d to secu secure re t!e t!e u" u"i" i""# "#en entt o a )rinc rinci) i)a" a" o%"i o%"i$a $ati tion on>> 32 *!at t!e )"ed$or or #ort$a$or %e t!e a%so"ute o(ner o t!e t!in$ )"ed$ed or #ort$a$ed> 3? *!at t!e )ersons )ersons constitut constitutin$ in$ t!e )"ed$e )"ed$e or #ort$a #ort$a$e $e !ave !ave t!e t!e ree dis)osa" dis)osa" o t!eir t!eir )ro)erty, )ro)erty, and in t!e a%sence t!ereo, t!ereo, t!at t!ey %e "e$a""y aut!ori@ed or t!e )ur)ose. )ur)ose. Petitioners undis)uted tit"e to and o(ners!i) o t!e )ro)erty is suicient to $ive !i# ree dis)osa" o it. As o(ner o t!e )ro)erty, !e !as t!e ri$!t to en+oy a"" attri%utes o o(ners!i) inc"udin$ jus disponendi or disponendi or t!e ri$!t to encu#%er, a"ienate, or dis)ose !is )ro)erty (it!out ot!er "i#itations t!an t!ose esta%"is!ed %y "a(. Petitioners c"ai# t!at !e "acs ree dis)osa" o t!e )ro)erty ste#s ro# t!e eistence o t!e restrictions i#)osed on !is tit"e %y t!e Nationa" -ousin$ Aut!ority Aut!ority.. *!ese restrictions do not divest )etitioner o !is o(ners!i) ri$!ts. *!ey are #ere %urdens or "i#itations on )etitioners jus disponendi. *!us, *!us, )etiti )etitione onerr #ay dis)os dis)osee or encu# encu#%er %er !is )ro)er )ro)erty ty.. -o(ev -o(ever er,, t!e dis)os dis)ositi ition on or encu#%rance o !is )ro)erty is su%+ect to t!e "i#itations and to t!e ri$!ts t!at #ay accrue to t!e Nationa" -ousin$ Aut!ority. ;!en annotated to t!e tit"e, t!ese restrictions serve as notice to t!e (!o"e (or"d t!at t!e Nationa" -ousin$ Aut!ority !as c"ai#s over t!e )ro)erty, (!ic! it #ay enorce a$ainst ot!ers. ontracts entered into in vio"ation o restrictions on a )ro)erty o(ners ri$!ts do not a"(ays !ave t!e eect o #ain$ t!e# void ab initio. C ontracts ontracts t!at contain )rovisions in avor o one )arty #ay %e void
a% initio or voida%"e. ontracts t!at "ac consideration, t!ose t!at are a$ainst )u%"ic order or )u%"ic )o"icy, and t!ose t!at are attended %y i""e$a"ity or i##ora"ity are void ab initio. ontracts t!at on"y su%+ect a )ro)erty o(ners )ro)erty ri$!ts to conditions or "i#itations %ut ot!er(ise contain a"" t!e e"e#ents o a va"id contract are #ere"y voida%"e %y t!e )erson in (!ose avor t!e conditions or "i#itations are #ade. *!e #ort$a$e contract entered into %y )etitioner and res)ondent contains a"" t!e e"e#ents o a va"id contract o #ort$a$e. *!e tria" court and t!e ourt o A))ea"s ound no irre$u"arity in its eecution. *!ere (as no s!o(in$ t!at it (as attended %y raud, i""e$a"ity, i##ora"ity, orce or inti#idation, and "ac o consideration. At #ost, t!ereore, t!e restrictions #ade t!e contract entered into %y t!e )arties voida%"e %y t!e )erson in (!ose avor t!ey (ere #adeBin t!is case, %y t!e Nationa" -ousin$ Aut!ority. Petitioner !as no actiona%"e ri$!t or cause o action %ased on t!ose restrictions.
