J Plus Asia Development Corporation vs. Utility Assurance Corporation G.R # 199650 June 6! 01"
acts$ Martin Mabunay entered into a construction agreement with petitioner J Plus Corporation
to build a 72-room condominium/hotel. Respondent Utility ssurance Corporation acted as a surety by pro!iding a Per"ormance #ond e$ui!alent to 2%& down payment.
'owe!er( upon inspection( only )*.)+ & o" the pro,ect was completed "rom this( Chairman ee o" J Plus Corporation terminated the contract and "iled "or arbitration with damages. Mabunay contended howe!er that the delay was caused by the retro"itting and other wors ordered by Mr. ee.
he Constr Construct uction ion 0ndust 0ndustry ry rbit rbitrar rary y Commis Commissio sion n held held respond respondent ent and Mabunay Mabunay ,oint ,oint and se!erally se!erally liable. he C o!erturned o!erturned said decision holding that Mabunay has not at all incurred incurred delay( pointing out that the obligation to per"orm or complete the pro,ect was not yet demandable when petitioner terminated the contract on the account that the agreed completion date was still more than one month away. 1ince the parties contemplated delay in the completion o" the entire pro,ect( the C concluded that the "ailure o" the contractor to catch up with the schedule o" wor acti!ities did not constitute delay gi!ing rise to the con tractors liability liability "or damages.
%ssues$
*. 3hether 3hether or not Mabunay Mabunay was in in delay when when Mr. ee terminated terminated the the contract. contract. 2. 3het 3hethe herr or not not Resp Respond onden entt Util Utilit ity y ssur ssuranc ancee Corp Corpor orat atio ion n can be made made liab liable le "or "or Mabunays delay.
&el'$
*.4es. Mabunay was already in delay when Mr. ee terminated the contract. he Court did not sustain the Cs Cs interpretation as it is inconsistent with the terms o" the Construction greement. rticle *)75 o" the Ci!il Code re$uires that the !arious stipulations o" a contract shall be interpreted together( attributing to the doubt"ul ones that sense which may result "rom all o" them taen ,ointly ,o intly..
2.4es. Respondent Utility ssurance Corporation is liable "or the delay caused by Mabunay. s ruled( ruled( the Per"or Per"orman mance ce #ond #ond guarant guaranteed eed the "ull "ull and "aith" "aith"ul ul compli compliance ance o" Mabunay Mabunays s obligations under the Construction greement( and that nowhere in law or ,urisprudence does it state that the obligation or undertaing by a surety may be apportioned.
il()state Properties! %nc. an' il()state *et+or,! %nc. vs. -ps. Conra'o an' aria Ron/uillo G.R # 159 January 1"! 012 acts$ Petitioner 6il-state Properties( 0nc. is the owner and de!eloper o" the Central par Place
ower while co-petitioner 6il-state 8etwor( 0nc is its authori9ed mareting agent. Respondent spouses Ron$uillo purchased "rom petitioners a condominium unit at Central Par Place ower "or a preselling contract price o" about : million pesos. s agreed upon( respondents paid the "ull down downpay payme ment nt o" abou aboutt *.: *.: mill millio ion n peso pesoss and and had had been been payin paying g the the P;)() P;)();) ;).)) .)) mo mont nthl hly y amorti9ations until 1eptember *++<.
Upon learning that construction wors had stopped( respondents liewise stopped paying their monthly amorti9ation. Claiming to ha!e paid a total o" P2(*+<(+5+.+; to petitioners( respondents through two=2> successi!e letters( demanded a "ull re"und o" their payment with interest. 3hen their demands went unheeded( respondents "iled a complaint "or re"und and damages be"ore the 'ousing and and Use Regulatory #oard ='UR#>.
#oth the 'UR# and the C ruled in "a!or o" respondent spouses "or two reasons. 6irst( petitioners "ailure to de!elop the condominium pro,ect is a substantial breach o" their obligation. 1econd( 1econd( sian sian "inanc "inancial ial crisi crisiss does does not constit constitute ute a "ortui "ortuitou touss e!ent e!ent which which could could e?cuse e?cuse petitioners "rom the per"ormance o" their obligations. obligations.
constitute a "ortuitous e!ent that would e?cuse petitioners "rom %ssue$ @oes sian "inancial crisis constitute per"orming their obligationsA
&el'$ 8o. he sian "inancial crisis is not a "ortuitous e!ent that would e?cuse petitioners "rom
per"orming their contractual obligation.
he court cited the pre!ious rulings o" sian Construction and @e!elopment Corporation !. Phil. Commercial 0nternational #an and Mondragon eisure and Resorts Corp. !. C holding that the *++7 sian "inancial crisis did not constitute a ,usti"ication to renege on obligations. he Court added that a real estate enterprise engaged in the pre-selling o" condomium units is concededly a master in pro,ections on commodities and currency mo!ements and business riss. he "luctuating mo!ement o" the Philippine peso in the "oreign e?change maret is an e!eryday occurrence and "luctuations in currency e?change rates happen e!eryday( thus( not an instance o" caso "ortuito. s a result o" the breach committed by petitioners( respondents are entitled to rescind the contract and to be re"unded the amount o" amorti9ations paid including interests and damages.
)'s anu3acturin4! %nc. vs. &ealtcec, %nternational %nc.
il()state Properties! %nc. an' il()state *et+or,! %nc. vs. -ps. Conra'o an' aria Ron/uillo G.R # 159 January 1"! 012 acts$ Petitioner 6il-state Properties( 0nc. is the owner and de!eloper o" the Central par Place
ower while co-petitioner 6il-state 8etwor( 0nc is its authori9ed mareting agent. Respondent spouses Ron$uillo purchased "rom petitioners a condominium unit at Central Par Place ower "or a preselling contract price o" about : million pesos. s agreed upon( respondents paid the "ull down downpay payme ment nt o" abou aboutt *.: *.: mill millio ion n peso pesoss and and had had been been payin paying g the the P;)() P;)();) ;).)) .)) mo mont nthl hly y amorti9ations until 1eptember *++<.
Upon learning that construction wors had stopped( respondents liewise stopped paying their monthly amorti9ation. Claiming to ha!e paid a total o" P2(*+<(+5+.+; to petitioners( respondents through two=2> successi!e letters( demanded a "ull re"und o" their payment with interest. 3hen their demands went unheeded( respondents "iled a complaint "or re"und and damages be"ore the 'ousing and and Use Regulatory #oard ='UR#>.
#oth the 'UR# and the C ruled in "a!or o" respondent spouses "or two reasons. 6irst( petitioners "ailure to de!elop the condominium pro,ect is a substantial breach o" their obligation. 1econd( 1econd( sian sian "inanc "inancial ial crisi crisiss does does not constit constitute ute a "ortui "ortuitou touss e!ent e!ent which which could could e?cuse e?cuse petitioners "rom the per"ormance o" their obligations. obligations.
constitute a "ortuitous e!ent that would e?cuse petitioners "rom %ssue$ @oes sian "inancial crisis constitute per"orming their obligationsA
&el'$ 8o. he sian "inancial crisis is not a "ortuitous e!ent that would e?cuse petitioners "rom
per"orming their contractual obligation.
he court cited the pre!ious rulings o" sian Construction and @e!elopment Corporation !. Phil. Commercial 0nternational #an and Mondragon eisure and Resorts Corp. !. C holding that the *++7 sian "inancial crisis did not constitute a ,usti"ication to renege on obligations. he Court added that a real estate enterprise engaged in the pre-selling o" condomium units is concededly a master in pro,ections on commodities and currency mo!ements and business riss. he "luctuating mo!ement o" the Philippine peso in the "oreign e?change maret is an e!eryday occurrence and "luctuations in currency e?change rates happen e!eryday( thus( not an instance o" caso "ortuito. s a result o" the breach committed by petitioners( respondents are entitled to rescind the contract and to be re"unded the amount o" amorti9ations paid including interests and damages.
)'s anu3acturin4! %nc. vs. &ealtcec, %nternational %nc.
G.R # 160 cto7er 9! 01" acts$ Respondent 'ealthchec 0nternational 0nc.='C0> is engaged in the business o" pro!iding
prepaid health he alth and medical insurance co!erage to its clients through its accredited hospitals and medical clinics( which includes @e a 1alle Uni!ersal Medical Center =@1UMC>. Petitioner ds Manu"a Manu"actu cturi ring(0 ng(0nc.( nc.( =M0> =M0> entere entered d into into a contra contract ct with with 'C0 to pro!id pro!idee the "orme "ormers rs employees o" the medical insurance.
'C0 noti"ied M0 that its accreditation with @1UMC was suspended and ad!ised to M0 to a!ail o" the ser!ices o" nearby accredited institutions. M0 worers complained that @1UMC and e!en other hospitals and clinics were not honoring their medical cards. his prompted M0 to "ormally o""er the rescission o" the contract with 'C0 through a letter. 'owe!er( M0 "ailed to collect all the medical cards "rom their employees and surrender them to 'C0. Conse$uently( some o" the worers continued to utili9e the cards.
'C0 pre-empted M0s threat o" legal action by "iling a case be"ore the RC "or unlaw"ul pretermination o" contracts. M0 contended that they cannot be held liable because it already !alidly rescinded the contract.
3as there a !alid rescission o" contractA %ssue$ 3as
&el'$ 8o. here was no !alid rescission. Under the third paragraph o" rticle **+* o" the Ci!il
Code( Bhe court shall decree the rescission claimed( unless there be ,ust cause authori9ing the "i?ing o" a period. he party entitled to rescind should apply to the court "or a decree o" rescis rescissio sion. n. he right right cannot cannot be e?ercis e?ercised ed solely solely on a party partys s own ,udgme ,udgment nt that that the other other committed a breach o" the obligation. he operati!e act which produces the resolution o" the contract is the decree o" the court and not the mere act o" the !endor. 1ince a ,udicial or notarial act is re$uired by law "or a !alid rescission to tae place( the letter written by respondent declaring his intention to rescind did not operate op erate to !alidly rescind the contract.
More Mo reo!e o!err( it is e!id e!iden entt that that M M00 had had not resc rescin inde ded d the the cont contra ract ct at all. all. @esp @espit itee M M0 0ss pronouncement( it "ailed to surrender the 'MD cards o" its employees although this was re$uired by the greement( and allowed them to continue using them beyond the date o" the rescission. he continued use by them o" their pri!ileges under the contract( with the apparent consent o" M0( belies any intention to cancel or rescind it( e!en as they "elt that they ought to ha!e recei!ed more than what they got.
'ence( although a ground e?ists to !alidly rescind the contract between the parties( it appears that M0 "ailed to ,udicially rescind the same. -ps. *amael an' 8our'es onrostro vs. -ps. Juan an' Constancia 8una
G.R # 1"26 July 2! 01" acts$ Petitioners 1ps. 8amael and ourdes #onrostro were !endees in a Contract to sell with
!endor respondent Constancia una. 1ps. una "iled a complaint "or Rescission o" Contract and @amages against the spouses #onrostro praying "or the rescission o" the contract and deli!ery o" possession o" the sub,ect property but was denied. Dn appeal( C a""irmed the decision but modi"ied the amounts to be paid by petitioners. Petitioners then "iled a Partial Motion "or Reconsideration $uestioning said modi"ications but it was denied( hence( this Petition "or Re!iew on Certiorari.
#uyer respondent Constancia entered into a Contract to 1ell with #liss @e!elopment Corp. in!ol!ing a house and ot. year later( Constancia( this time as the seller( entered into another Contract to 1ell with petitioner ourdes #onrostro o" the same property with the stipulation that i" !endee "ails to pay the second installment( she will pay a 2 & interest and i" she "ails to pay the two installments( the contract shall be rescinded. ourdes "ailed to pay any o" the stipulated subse$uent amorti9ation payments( e?cept "or the downpayment. 1pouses #onrostro( on the other hand( a!erred they were willing to settle the obligation and e!en ased "or a ;%-day e?tension but Constancia did not show up at their rende9!ous.
%ssue$ 0s there a tender payment to warrant the suspension o" interestA
&el'$ 8o. ender o" payment Bis the mani"estation by the debtor o" a desire to comply with or
pay an obligation while consignation is the deposit o" the proper amount with a ,udicial authority in accordance with rules prescribed by law( a"ter the tender o" payment has been re"used or because o" circumstances which render direct payment to the creditor impossible or inad!isable. 3hen the tender o" payment is not accompanied by the means o" payment( and the debtor did not tae any immediate step to mae a consignation( then interest is not suspended "rom the time o" such tender.
Petitioner did not resort to consignation o" the payment with the proper court despite nowledge that under the contract( non-payment o" the installments on the agreed date would mae them liable "or interest thereon. hey erroneously assumed that their notice to pay would mae them liable "or interest. heir claimed tender o" payment did not produce any e""ect whatsoe!er because it was not accompanied by actual payment o" "ollowed consignation. 'ence( it did not suspend the running o" interest.
A'elai'a -oriano vs. People o3 te Pilippines
G.R # 1169 Au4ust 12! 01"
acts$ !elyn lagao( daughter o" pri!ate complainant Consolacion lagao( as borrower-
mortgagor( e?ecuted a BContract o" oan 1ecured by Real state Mortgage with 1pecial Power to 1ell Mortgage Property without Judicial Proceedings in "a!or o" petitioner( delaida 1oriano( as lender-mortgagee. he instrument pro!ides "or a P5%(%%% loan secured by a parcel o" land located in @on Carlos( #uidnon( registered in !elyns name. 0t liewise pro!ides that the loan was to be paid in two years "rom the date o" e?ecution o" the contract( or on 6ebruary *<(*++;( and that !elyn agrees to gi!e petitioner E o" e!ery har!est "rom her cornland until the "ull amount o" the loan has been paid starting "rom the "irst har!est. #ased on lagaos testimony( the "irst har!est was made only in 1eptember *++5. Petitioner( on the other hand( claims that "rom the time the loan was obtained until 1eptember *++5( there were already "our har!ests. @uring pre-trial( it was admitted by Consolacion that she recei!ed P:*(7)% instead o" only P5%(%%% as stipulated in the contract o" loan in the "orm o" "ertili9ers and cash ad!ances.
1ubse$uently( Consolacion deli!ered )+< sacs o" corn grains to petitioner. Petitioner prepared a !oucher indicating that Consolacion had recei!ed the amount o" P<:(;%7 as "ull payment. Consolacion signed said !oucher e!en i" she only recei!ed P)(%%%. ccording to Consolacion( ;5 o" the )+< sacs will ser!e as partial payment o" her P5%(%%% loan with petitioner while the remaining balance will come "rom the P<:(;%7 cash she was supposed to recei!e as payment "or the corn grains deli!ered so she can redeem her daughters land title.
Consolacion "ile a criminal case against petitioner 1oriano "or the crime o" esta"a be"ore the Regional rial Court o" Misamis Driental. he RC rendered a decision "inding petitioner guilty beyond reasonable doubt o" the crime o" esta"a. 'owe!er( the petitioners con!iction was set aside by the C. he C held in the absence o" deceit( petitioners liability is only ci!il.
0n determining petitioners ci!il liability( the C deducted "rom P<:(;%7 F the total !alue o" the )+< sacs o" corn grains deli!ered to petitioner F P)(%%% petitioner had paid lagao and the P7(<%% which the C considered as the !alue o" the ;5 sacs o" corn grains which lagao intended as partial payment "or the P5%(%%% loan( thus lea!ing
the balance o" P75(<%7.
@issatis"ied( petitioner is now be"ore this court $uestioning her ci!il liability.
%ssue$ 0s the principle o" set-o"" or compensation applicableA
&el'$ 4es. Compensation is a mode o" e?tinguishing to the concurrent amount( the debts o"
persons who in their own right are creditors and debtors o" each other. he ob,ect o" compensation is the pre!ention o" unnecessary suits and payments through the mutual e?tinction by operation o" law o" concurring debts. rticle *27+ o" the ci!il code pro!ides "or the re$uisites
"or compensation to tae e""ect. his court rules that all the abo!e re$uisites "or compensation are present in the instant case( to witG =*>petitioner and lagao are debtors and creditors o" each otherH =2> both debts consist in a sum o" moneyH =)>both debts are dueH =5> both debts are li$uidated and demandableH and =:> neither o" the debts are sub,ect o" a contro!ersy commenced by a third person. 3ith the presence o" all the re$uisites mentioned in rticle *27+( legal compensation too e""ect by operation o" law as pro!ided in rticle *2+% o" the ci!il code.
*arciso De4anos vs. People o3 te Pilippines G.R # 166
cto7er 12! 01"
acts$ #rigada u9 and 8arciso @eganos were charged with sta"a under rt. )*:( par.*=b> o"
the RPC. he accused allegedly recei!ed "rom 1ps. tty. Jose #ordador and ydia #ordador gold and pieces o" ,ewelry worth P5)<(7%2.%%( under e?press obligation to sell the same on commission and remit the proceeds thereo" or return the unsold gold and pieces o" ,ewelry.
Prior to the institution o" the instant case( a separate ci!il action "or the reco!ery o" sum o" money was "iled by pri!ate complainants where the RC "ound both o" the accused liable. C and 1C a""irmed the lower courts decision. 1ometime in *++5( while the said ci!il case was pending( the pri!ate complainants instituted the present case against the accused.
ydia #ordador testi"ied that she deli!ered the said ,ewelry starting sometime in *+<; as e!idenced by se!eral documents entitled BIatibayan at Iasunduan. !erytime @eganos got ,ewelry "rom her( he signed the receipts in her presence. 'owe!er( receipts nos. ;*; to 75: were no longer paid and the accused "ailed to return the ,ewelry co!ered by such receipts.
@eganos admitted that he is the only one who was indebted to pri!ate complainants and out o" his indebtedness( he already made partial payments in the amount o" P:)( )%7.%%. 'e now claims that such payments no!ated his contract with pri!ate complainants "rom agency to loan( thereby con!erting his liability "rom criminal to ci!il.
%ssue$ 3as there no!ationA
&el'$ 8o. he partial payments made by @eganos and his purported agreement to pay the
remaining obligations did not e$uate to a no!ation o" the original contractual relationship o" agency to one o" sale.
0n order that an obligation may be e?tinguished by another that substitutes the "ormer( it is imperati!e that the e?tinguishment be so declared in une$ui!ocal terms( or that the old and the new obligation be on e!ery point incompatible with each other. he changes alluded to by petitioner consists only in the manner o" payment. here was really no substitution o" debtors since pri!ate complainant merely ac$uiesced to the payment but did not gi!e her consent to enter into a new contract.
he no!ation theory may perhaps apply prior to the "iling o" the criminal in"ormation in court by the state prosecutors because up to that time the original trust relation may be con!erted by the parties into an ordinary creditor-debtor situation( thereby placing the complainant in estoppel to insist on the original trust. #ut a"ter the ,ustice authorities ha!e taen cogni9ance o" the crime and instituted action in court( the o""ended party may no longer di!est the prosecution o" its
power to e?act the criminal liability( as distinguished "rom the ci!il. he crime being an o""ense against the state( only the latter can renounce it. 'ence( the role o" no!ation may only be to either pre!ent the rise o" criminal liability or to cast doubt on the true nature o" the original basic transaction.
-.C e4a+orl' Construction an' Development Corporation vs. )n4r. 8uis U. Para'a G.R # 1"02 -eptem7er 11! 01"
acts$ 1.C Megaworld Construction and @e!elopment Corp.=Petitioner> bought electrical
lighting materials "rom the entile 0ndustries( a sole proprietorship owned by ngr. uis U. Parada=Respondent>( "or its Read-Rite pro,ect. he petitioner was unable to pay "or the abo!e purchase on dued date( but blamed it on its "ailure to collect under its sub-contract with the n!iro Ileen echnologies( 0nc.=n!iro Ileen>. 0t was howe!er able to persuade n!iro Ileen to agree to settle its abo!e purchases( but a"ter partially paying the respondent( n!iro Ileen stopped maing "urther payments. Respondent "iled a suit in the RC to collect "rom the petitioner the said balance( plus damages( costs and e?penses.
he petitioner in its answer denied liability( claiming that it was released "rom its indebtedness to the respondent by reason o" the no!ation o" their contract( which( it reasoned( too place when the latter accepted the partial payment o" n!iro Ileen in its behal"( and thereby ac$uiesced to the substitution o" n!iro Ileen as the new debtor in the petitionerHs place. he RC rendered ,udgment in "a!or o" respondent. he C concurred with the decision o" the RC.
%ssue$ 3as there a no!ation o" the contract between the parties through substitution o" the debtor(
which resulted in the release o" the petitioner "rom its obligation to pay the respondentA
&el'$ 8o. 0n order to change the person o" the debtor( the "ormer debtor must be e?pressly
released "rom the obligation( and the third person or new debtor must assume the "ormers place in the contractual relation. rticle *2+) speas o" substitution o" the debtor( which may either be in the "orm o" e?promission or delegacion( as seems to be the case here. 0n both cases( the old debtor must be released "rom the obligation( otherwise( there is n o !alid no!ation.
6rom the circumstances o" this case( no clear and une$ui!ocal consent by the respondent to the release o" the petitioner "rom the obligation to pay the cost o" the lighting materials. 0n "act( "rom the letters o" the respondent to n!iro Ileen( it can be said that he retained his option to go a"ter the petitioner i" n!iro Ileen "ailed to settle the petitioners debt.
he "act that n!iro Ileen echnologies( 0nc. made payments to the respondent and the latter accepted it does not ipso "acto result in no!ation. 8o!ation to be gi!en its legal e""ect re$uires that the creditor should consent to the substitution o" a new debtor and the old debtor be released "rom its obligation.
Pilippine Reclamation Autority vs. Roma4o! %ncorporate' G.R # 12665 -eptem7er 1! 01"
acts$ Congress enacted R.. 7227( creating the #ases Con!ersion and @e!elopment
uthority=#C@>. Pursuant to this law( portions o" 6ort #oni"acio were set aside "or the 'eritage Par Pro,ect( aimed at con!erting a *%: hectare land into a world class memorial par in order to generate "unds "or the #C@.
#C@ entered into a Memorandum o" greement=MD> with the Philippine Reclamation uthority=PR>( designating it as the Pro,ect Manager. 1ubse$uently( the #C@( PR and the Philippine 8ational #an=P8#> e?ecuted a Pool 6ormation rust greement=P6>. "ter public bidding( the PR awarded the outdoor electrical and lighting wors "or the par to respondent Romago( 0nc.=Romago> with which it entered into a Construction greement.
Meanwhile(
the
parties
to
the
P6
organi9ed
the
'eritage
Par
Management
Corporation='PMC> to tae o!er the management o" the pro,ect. he PR immediately in"ormed Romago o" the conse$uent termination o" its ser!ices because the 'PMC re"used to recogni9e the PRs contract with it( Romago "iled with the Construction 0ndustry rbitration Commission =C0C> a complaint seeing to collect its claims plus interest "rom the PR( 'PMC( and Rosehills Memorial Management 0nc.=RMM0>.
%ssue$ 0s PR liable to Romago under the Construction greement despite the subse$uent
turno!er o" the 'eritage Par Pro,ect to the 'PMCA
&el'$ 4es. PRs liability under its contract with Romago had not been e?tinguished by
no!ation. 0n no!ation( a subse$uent obligation e?tinguishes a pre!ious one through substitution either by changing the ob,ect or principal conditions( by substituting another in place o" debtor( or by subrogating a third person into the rights o" the creditor. 8o!ation re$uires =*>the e?istence o" a pre!ious !alid obligationH =2> the agreement o" all parties to the new contractH =)> the e?tinguishment o" the old contractH and =5> the !alidity o" the new one.
here is no no!ation in this case since the proposed substituted parties did not agree to the PRs supposed assignment o" its obligation under the contract "or the electrical and light wors at 'eritage Par to 'PMC. he latter de"initely and clearly re,ected the PRs assignment o" its liability under that contract to the 'PMC. Romago tried to "ollow up its claims with the 'PMC( not because o" any new contract it entered into with the latter( but simply because the PR told it that 'PMC would hence"orth assume the PRs liability under its contract with Romago.
'ence( PR is still liable to Romago under the Construction greement despite the subse$uent turno!er o" the 'eritage Par Pro,ect to the 'PMC. anlar Rice ill! %nc. vs. 8our'es 8. Deyto G.R # 19119 January 9! 012
acts$ Petitioner Manlar Rice Mills( 0nc.=Manlar>( is engaged in the business o" rice milling and
selling o" grains. Respondent ourdes . @eyto =@eyto> does business under the tradename BJ@ rains Center and is liewise engaged in the business o" milling and selling o" grains. Respondent Jennelita @eyto ng or Janet ng =ng> is @eytos daughter and( prior to her alleged absconding( operated her own rice trading business through her own store( BJanet Commercial 1tore. ng entered into a rice supply contract with Manlar( with the "ormer purchasing rice "rom the latter amounting to P)(<5)(22%.%%. he transaction was co!ered by nine postdated checs issued by ng "rom her personal ban/chacing account. ll the checs were dishonored "or ha!ing been drawn against insu""icient "unds and "or being drawn against a closed account. Manlar made oral and written demands upon both @eyto and ng( which went unheeded.
Manlar "iled a Complaint "or sum o" money against @eyto and ng be"ore the Regional rial Court =RC> o" Kue9on City. he Complaint essentially sought to hold @eyto and ng solidarily liable on the rice supply contract.
he trial court ruled that both de"endants should be held solidarily liable "or the unpaid and outstanding Manlar account. Upon appeal to the C( the C concluded that there is no legal basis to hold @eyto solidarily liable with ng "or what the latter may owe Manlar. he C conceded that i" ng indeed contracted with Manlar( she did so in her ownH the e!idence "ailed to indicate that @eyto had any participation in the supposed transactions between her daughter and Manlar. Petitioner thus "iled a Petition "or Re!iew on Certiorari to the 1upreme Court.
%ssue$ 0s the C correct in concluding that there is no legal basis to hold @eyto solidarily liable
with ng "or what the latter may owe ManlarA
&el'$4es. he C is correct in concluding that there is no legal basis to hold @eyto solidarily
liable with ng "or what the latter may owe Manlar. he e!idence does not support Manlars !iew that both @eyto and ng contracted with Manlar "or the deli!ery o" rice on creditH $uite the contrary( the preponderance o" e!idence indicates that it was ng alone who entered into the rice supply agreement with Manlar. he documentary e!idence( on the other hand( shows that the sub,ect checs were issued "rom a ban account in China ban del Monte branch belonging to ng alone.
3hat the court sees is an attempt to implicate @eyto in a transaction between Manlar and ng so that the "ormer may reco!er its losses( since it could no longer reco!er them "rom ng as a result o" her abscondingH this conclusion is indeed consistent with what the totality o" the e!idence on record appears to show. his( howe!er( may not be allowed. s a general rule( a contract a""ects only the parties to it( and cannot be en"orced by or against a person who is not a party thereto. B0t is a basic principle in law that contracts can bind only the parties who had entered into itH it
cannot "a!or or pre,udice a third person. BUnder rticle *)** o" the ci!il code( contracts tae e""ect only between the parties( their assigns and heirs. hus( Manlar may sue ng( but not @eyto( who the court "inds to be not a party to the rice supply contract.
Privati:ation an' ana4ement 33ice vs. -trate4ic Alliance Development Corporation an';or Pilippine )state Corporation G.R # 002 June 1"! 01"
acts$ sset Pri!ati9ation rust =P> announced the holding o" a public bidding in!ol!ing the
Bas is( where is basis pacage sale o" stoc( recei!ables( and securities owned by the 8ational o!ernment in the Philippine 8ational Construction Corporation =P8CC>. @ong- Consortium( which was "ormed by respondent 1trategic lliance @e!elopment Corporation=1R@C> and @ong- Pharmaceuticals( signi"ied its intention to bid.
3hen the term o" P e?pired( petitioner was organi9ed to implement the disposition o" the go!ernment-ac$uired assets( including the P8CC shares.
1R@C then "iled a Complaint "or @eclaration o" Right to a 8otice o" ward and/or @amages on behal" o" @ong- Consortium against PMD and P8CC. 0t Contested the high indicati!e price that caused it to lose the bid. 1R@C also pushed "or the reduction o" the indicati!e price and demanded that a 8otice o" ward o" the P8CC properties be issued in its "a!or.
%ssue$ 0s @ong- Consortium entitled to the 8otice o" wardA
&el'$ 8o. he submission o" the highest bid and the contract o" due diligence( among others( do
not ,usti"y an award to @ong- Consortium. Dbligations arising "rom agreements ha!e the "orce o" law between the contracting parties and ahould be complied with in good "aith. 'ere( the sset 1peci"ic #idding Rules=1#R> sets "orth the terms and conditions under which an awrd will be gi!en. @uring the pre-trial( both parties agreed that a bidder wins only a"ter satis"ying and complying with all the terms and conditions o" the 1#R( including matching the indicati!e price. 1ince @ong- Consortium "ailed to match the indicati!e price( it could not ha!e been considered a winner( and( is not entitled to a 8otice o" ward.
0n the present case( 1ection 5.) o" the 1#R e?plicitly states that P reser!es the right to re,ect any or all bids( including the highest bid. Undoubtedly( P has a legal right to re,ect the o""er o" @ong- Consortium( notwithstanding that it submitted the highest bid.
&eirs o3 austo C. %4nacio vs. &ome an,ers -avin4s an'
pay the loan( the mortgage was "oreclose and the same was awarded in "a!or the ban as the
highest bidder. @espite the lapse o" the redemption period and consolidation o" title in respondent ban( petitioner o""ered to repurchase the properties. 3hile the respondent ban considered petitioners o""er to repurchase( there was no repurchase contract e?ecuted.
compromise agreement was proposed by respondent ban to repurchase the "oreclosed property in the amount o" P+:%(%%%.%% dated March 22( *+<5. 0n a letter addressed to respondent ban( petitioner e?pressed his willingness to pay the amount o" P;%%(%%%.%% in "ull( as balance o" the repurchase price( and re$uested respondent ban to release to him the remaining parcels o" land. Respondent ban howe!er( turned down his re$uest. his prompted petitioner to "ile this instant case arguing that a per"ected contract o" sale was entered due to the acceptance o" the ban.
%ssue$ 0s there a per"ected contract o" saleA
&el'$ 8o. Contracts are per"ected by mere consent( which is mani"ested by the meeting o" the
o""er and the acceptance upon the thing and the cause which are to constitute the contract. he re$uisite acceptance o" the o""er is e?pressed in rticle *)*+ o" the ci!il code.
#y modi"ying the terms o" the o""er contained in March 22( *+<5 letter o" respondent ban( petitioner e""ecti!ely re,ected the original o""er with his counter-o""er. here was also no written con"ormity by respondent bans o""icers to the amended conditions "or repurchase which were unilaterally inserted by petitioner. Conse$uently( no contract o" repurchase was per"ected and respondent ban.
Ale=an'ro
"rom @e!elopment #an o" the Philippines=@#P> to "inance the !essel M/L 1terling ce.
Petitioner @r. le,andro aneh together with other signatories e?ecuted a promissory note binding himsel" liable to pay the said loan. 1terling 1hipping ines( 0nc. through respondent Ruperto L. aneh e?ecuted a @eed o" ssignment in "a!or o" @#P.
herea"ter( petitioner wrote a letter to respondent Ruperto aneh saying that he was se!ering all ties and terminating his in!ol!ement with 1terling 1hipping ines( 0nc.. Petitioner alleged that respondent aneh had e?ercised deceit and "raud in causing petitioner to bind himsel" ,ointly and se!erally to pay respondent @#P the amount o" the mortgage loan. lthough he had been made a stocholder and director o" the respondent corporation 1terling 1hipping ines( 0nc.( petitioner alleged that he had ne!er in!ested any amount in the corporation and that he had ne!er been an actual member o" the board o" directors. 'e alleged that all the money he head supposedly in!ested was pro!ided by respondent Ruperto aneh.
%ssue$ @id respondent aneh commit "raud in obtaining the petitioners consent to enter into the
contract as to warrant nullity o" the contractA
&el'$ 8o. here are two types o" "raud contemplated in the per"ormance o" contractsG dolo
incidente or dolo causante. @olo causante determines or is the essential cause o" the consent( while dolo incidente re"ers only to some particular or accident o" the obligation. he e""ects o" dolo causante are the nullity o" the contract and the indemni"ication o" damages( and dolo incidente also obliges the person employing it to pay damages.
here was no dolo causante or "raud used to obtain the petitioners consent to enter into the contract. Petitioner had the opportunity to become aware o" the "acts that attended the signing o" the promissory note. 'e e!en admitted that he has a lawyer-son who the petitioner had hoped would assist him in the administration o" 1terling ines( 0nc. he totality o" the "acts on record belies petitioners claim that "raud was used to obtain his consent to the contract gi!en his personal circumstances and the applicable law.
Planters Development an, vs. -ps. )rnesto an' lorentina 8ope: G.R# 16"" cto7er "! 01"
acts$ 1ometime in *+<)( the spouses mesto and 6lorentina ope9 applied "or and obtained a
real estate loan in the amount o" )(%%%(%%%.%% "rom Planters #an. he loan was intended to "inance the construction o" a "our-story concrete dormitory building. Meanwhile( the Philippine economy deteriorated as the political de!elopments in the country worsened. he !alue o" the peso plunged. he price o" the materials and the cost o" labor escalated.< ager to "inish the pro,ect( the spouses ope9 obtained an additional loan in the amount o" P*(2%%(%%%.%% "rom Planters #an. Dn pril 2:( *+<5( they entered into a third amendment to the loan agreement. he amount o" the loan and the interest rate were increased to P5(2%%(%%%.%% and twenty-se!en percent =27&> p.a.( respecti!ely. 6urthermore( the term o" the loan was shortened to one year. he contract also pro!ided that the remaining loan shall only be a!ailable to the spouses ope9 until June )%( *+<5.+ Dn the same date( the spouses ope9 increased the amount secured by the mortgage to P5(2%%(%%%.%%. 0n de"ense( Planters #an argued that the spouses ope9 had no cause o" action. 0t pointed out that its re"usal to release the loan was the result o" the spouses ope9s !iolations o" the loan agreement( namelyG =*> non-submission o" the accomplishment reportsH and =2> construction o" a si?-story building. s a counterclaim( Planters #an prayed "or the payment o" the o!erdue released loan in the amount o" P)(:%%(%%%.%%( with interest and damages.*) %ssue$ 0s Planters #an liable "or a substantial breach in the loan agreement( which would lead to
its rescissionA
&el'$ 8o. Planters #an re"usal to release the remaining balance( was merely a slight or casual
breach. 0n other words( its breach was not su""iciently "undamental to de"eat the ob,ect o" the parties in entering into the loan agreement. he well-settled rule is that rescission will not be permitted "or a slight or casual breach o" the contract.
!en assuming that Planters #an substantially breached its obligation( article *)<: o" the ci!il code states that rescission cannot tae place when the things which are ob,ect o" the contract are legally in the possession o" third persons who did not act in bad "aith. 0n the present case( the mortgaged properties had already been "oreclosed. hey were already sold to the highest bidder at a public auction. 'ence( action "or rescission is improper.
8an' 7an, o3 te Pilippines vs. )'uar'o . Cacayuran G.R # 19166 April 1! 01"
acts$ 6rom 2%%: to 2%%;( the Municipalitys 1angguniang #ayan =1#> passed certain
resolutions to implement a multi-phased plan =Rede!elopment Plan> to rede!elop the goo Public Pla9a =goo Pla9a> where the 0melda arden and Jose Ri9al Monument were situated. o "inance phase * o" the said plan( the 1# initially passed Resolution 8o. ;<-2%%:5 on pril *+( 2%%:( authori9ing then Mayor u"ranio riguel =Mayor riguel> to obtain a loan "rom and #an and incidental thereto( mortgage a 2()2).7: s$uare meter lot situated at the southeastern portion o" the goo Pla9a =Pla9a ot> as collateral. Dn March 7( 2%%;( the 1# passed Resolution 8o. :<-2%%;(+ appro!ing the construction o" a commercial center on the Pla9a ot as part o" phase 00 o" the Rede!elopment Plan. o "inance the pro,ect( Mayor riguel was again authori9ed to obtain a loan "rom and #an( posting as well the same securities as that o" the 6irst oan. ll pre!ious representations and warranties o" Mayor riguel related to the negotiation and obtention o" the new loan*% were rati"ied on 1eptember :( 2%%; through Resolution 8o. *2<-2%%;.** 0n conse$uence( and #an granted a second loan in "a!or o" the Municipality on Dctober 2%( 2%%; in the principal amount o" P2<(%%%(%%%.%% =1econd oan>.*2 Unlie phase * o" the Rede!elopment Plan( the construction o" the commercial center at the goo Pla9a was !ehemently ob,ected to by some residents o" the Municipality. ed by respondent duardo Cacayuran =Cacayuran>( these residents claimed that the con!ersion o" the goo Pla9a into a commercial center( as "unded by the proceeds "rom the 6irst and 1econd oans =1ub,ect oans>( were highly irregular( !iolati!e o" the law( and detrimental to public interests( and will result to wanton desecration o" the said historical and public par.*) he "oregoing was embodied in a Mani"esto(*5 launched through a signature campaign conducted by the residents and Cacayuran. %ssue$ re the sub,ect loan agreements ultra !iresA
&el'$ 4es. enerally an ultra !ires act is one committed outside the ob,ect "or which a
corporation is created as de"ined by the law o" its organi9ation and there"ore beyond the powers con"erred upon it by law. n act which is outside o" the municipalitys ,urisdiction is considered as a !oid ultra !ires act( while an act attended only by an irregularity but remains within the municipalitys power is considered as an ultra !ires act sub,ect to rati"ication and/or !alidation.
Records disclose that the said loans were e?ecuted by the municipality "or the purpose o" "unding the con!ersion o" goo Pla9a into a commercial center. 'owe!er( the con!ersion o" the said pla9a is beyond the Municipalitys ,urisdiction considering the propertys nature as one "or public use and thereby( "orming part o" the dominion. 0t cannot be the sub,ect o" appropriation either by the 1tate or by pri!ate persons.
Domin4o Gon:alo vs. Jon
acts$ "ter the @epartment o" Public 3ors and 'ighways =@P3'> had awarded on July 22(
*++7 the contract "or the impro!ement o" the 1adsadan-Maba-ay 1ection o" the Mountain
Pro!ince-#enguet Road in the total amount o" 7 %*5 +;) )) to his company( on9alo Construction(* petitioner @omingo on9alo =on9alo> subcontracted to respondent John arnate( Jr. =arnate> on Dctober *:( *++7( the supply o" materials and labor "or the pro,ect under the latter s business nown as J8 ggregates. heir agreement stipulated( among others( that arnate would pay to on9alo eight percent and "our percent o" the contract price( respecti!ely( upon arnate s "irst and second billing in the pro,ect.2 0n "urtherance o" their agreement( on9alo e?ecuted on pril ;( *+++ a deed o" assignment whereby he( as the contractor( was assigning to arnate an amount e$ui!alent to *%& o" the total collection "rom the @P3' "or the pro,ect. his *%& retention "ee =e$ui!alent to P2))(:2;.*)> was the rent "or arnates e$uipment that had been utili9ed in the pro,ect. 0n the deed o" assignment( on9alo "urther authori9ed arnate to use the o""icial receipt o" on9alo Construction in the processing o" the documents relati!e to the collection o" the *%& retention "ee and in encashing the chec to be issued by the @P3' "or that purpose. ) he deed o" assignment was submitted to the @P3' on pril *:( *+++. @uring the processing o" the documents "or the retention "ee( howe!er( arnate learned that on9alo had unilaterally rescinded the deed o" assignment by means o" an a""ida!it o" cancellation o" deed o" assignment dated pril *+( *+++ "iled in the @P3' on pril 22( *+++H5 and that the disbursement !oucher "or the *%& retention "ee had then been issued in the name o" on9alo( and the retention "ee released to him.: arnate demanded the payment o" the retention "ee "rom on9alo( but to no a!ail. hus( he brought this suit against on9alo on 1eptember *)( *+++ in the Regional rial Court =RC> in Mountain Pro!ince to reco!er the retention "ee o" P2))(:2;.*)( moral and e?emplary damages "or breach o" contract( and attorneys "ees.; %ssue$
0s the petitioner liable "or the *% & "ee notwithstanding that both parties were pari
delictoA &el'$ 4es. Petitioner @omingo on9alo is liable "or *% & "ee notwithstanding that both parties
were in pari delicto. on9alo subcontracted the implementation o" the pro,ect to arnate in !iolation o" the statutory prohibition pro!ided in P@ *:+5. heir subcontract was illegal because it did no bear the appro!al o" the @P3' 1ecretary. 8ecessarily( the deed o" assignment was also illegal( because it sprung "rom the subcontract. he doctrine o" pari in delicto is a uni!ersal doctrine that holds that no action arises( in e$uity or at law( "rom an illegal contractH no suit can be maintained "or its speci"ic per"ormance( or to reco!er the property agreed to be sold or deli!ered( or the money agreed to be paid( or damages "or its !iolationH and where the parties are in pari delicto( no a""irmati!e relie" o" any ind will be gi!en to one against the other.
scar Constantino vs. &eirs o3 Pe'ro Constantino! Jr. G.R # 1150 cto7er ! 01"
acts$ Pedro Constantino( 1r.( =Pedro 1r.> ancestors o" the petitioners and respondents( owned
se!eral parcels o" land( one o" which is an unregistered parcel o" land declared "or ta?ation
purposes under a? @eclaration 2%<*5)consisting o" 25% s$uare meters situated at 1ta. Monica( 'agonoy( #ulacan. Pedro( 1r.( upon his death( was sur!i!ed by his si? =;> children. 0n the said complaint( respondents alleged that sometime in Dctober *++<( petitioners asserted their claim o" ownership o!er the whole parcel o" land =25% s$ m> owned by the late Pedro 1r.( to the e?clusion o" respondents who are occupying a portion thereo". Upon !eri"ication( respondents learned that a a? @eclaration 8o. %2%*%-2*7%-))2): in the name o" petitioner Dscar Constantino and his cousin Ma?ima Constantino was unlaw"ully issued( which in e""ect canceled a? @eclaration 8o. 2%<*5 in the name o" their ancestor Pedro 1r. he issuance o" the new ta? declaration was allegedly due to the e?ecution o" a simulated( "abricated and "ictitious document denominated as Pagmamana sa abas ng 'uuman( wherein the petitioners misrepresented themsel!es as the sole and only heirs o" Pedro 1r. 0t was "urther alleged that subse$uently( the sub,ect land was di!ided e$ually between petitioners Dscar and Ma?ima resulting in the issuance o" a? @eclaration 8o. +;-*%%22-%2;:)*% in the name o" Dscar( with an area o" *2%s$ m and the other hal" in the name o" Ma?ima co!ered by a? @eclaration 8o. +;*%%22-%2;:2.** he share o" Ma?ima was e!entually con!eyed to her sister( petitioner Casimira in whose name a new a? @eclaration 8o. +;-*%%22-%2;::*2 was issued. he petitioners( on the other hand( a!erred in their nswer 3ith Counterclaim *) that Pedro 1r.( upon his death( le"t se!eral parcels o" land( namelyG *> a lot with an area o" 25% s$ m co!ered by a? @eclaration 8o.2%<*5H 2> a lot with an area o" *+2 s$ m also situated at 1ta. Monica('agonoy( #ulacan( pre!iously co!ered by a? @eclaration 8o. +:)5H and )>an agricultural land with an area o" 6our =5> hectares( more or less. he petitioners claimed that the document Pagmamana sa abas ng 'uuman pertaining to the 25% s$ m lot was per"ectly !alid and legal( as it was a product o" mutual and !oluntary agreement between and among the descendants o" the deceased Pedro 1r.
%ssue$ re both parties in pari delicto "or misrepresentation in both deedsA &el'$ 8o. 0n this case( there are two @eeds o" ?tra,udicial assignments unto the signatories o"
the portions o" the estate o" an ancestor common to them and another set o" signatories liewise assigning unto themsel!es portions o" the same estate. he separate @eeds came into being out o" an identical intention o" the signatories in both to e?clude their co-heirs o" their right"ul share in the entire estate o" Pedro( 1r. 0t was( in reality( an assignment o" speci"ic portions o" the estate o" Pedro 1r.( without resorting to a law"ul partition o" estate as both sets o" heirs intended to e?clude the other heirs. he inapplicability is dictated not only by the "act that two deeds( not one contract( are in!ol!ed( but because such an application would result in the !alidation o" both deeds instead o" their
nulli"ication as necessitated by their illegality. 0t must be emphasi9ed that the underlying agreement resulting in the e?ecution o" the deeds is nothing but a !oid agreement. ccordingly( in order not to put a premium to the circum!ention or the laws as contemplated by the parties in the instant case( we must declare both contracts as !oid. 0ndeed( any circum!ention o" the law cannot be countenanced.
8an' an, o3 te Pilippines vs. &eirs o3 -pouses Jor=a Ri4or(-oriano an' a4in -oriano G.R # 1"1 January "0! 01"
acts$ he respondents are the children o" the late 1pouses Jor,a Rigor-1oriano and Magin
1oriano( the owners o" the two parcels o" land co!ered by C 8o. 8 *5;%+2 =2<)+> and C 8D. 8-;*;%<( both o" the Registry o" @eeds o" 8ue!a ci,a( containing an area o" *%.+;): hectares located in Poblacion/alabutab( en. 8ati!idad( 8ue!a ci,a and 5.*225 hectares located in Macabucod( liaga( 8ue!a ci,a( respecti!ely. he properties became sub,ect to Dperation and rans"er =D> and were !alued by the and #an and the @epartment o" grarian Re"orm =@R> at P*%(%%%.%%/hectare. Contending( howe!er( that such !aluation was too low compared to e?isting !aluations o" agricultural lands( the respondents commenced this action "or ,ust compensation( claiming that the properties were irrigated lands that usually yielded *:% ca!ans per hectare per season at a minimum o" two seasons per year. hey ased that a "inal !aluation o" the properties be pegged atP*(<%%(%%%.%%( based on dministrati!e Drder 8o. ;*( 1eries o" *++2 and Republic ct 8o. ;;:7.2 and #an disagreed( insisting that Presidential @ecree 8o. 27 and ?ecuti!e Drder 8o. 22< go!erned the "i?ing o" ,ust compensation "or the propertiesH that the o!ernment( through the @R as the lead agency in the implementation o" all agrarian laws( had taen the properties in *+72 pursuant to Presidential @ecree 8o. 27( and had since then redistributed the properties to "armer-bene"iciariesH and that in all cases under Presidential @ecree 8o. 27 and ?ecuti!e Drder 8o. 22<( its participation was only to pay the landowners accepting the !aluations "i?ed by the @R( upon the latters direction and in the amounts the @R determined. %ssue$ 0s the greement dated 8o!ember 2+( 2%*2 !alid and binding on the partiesA &el'$ 4es. here is no $uestion that the "oregoing greement was a compromise that the parties
"reely and !oluntarily entered into "or the purpose o" "inally settling their dispute in this case. Under rticle 2%2< o" the Ci!il Code( a compromise is a contract whereby the parties( by maing reciprocal concessions( a!oid litigation or put an end to one already commenced. ccordingly( a compromise is either ,udicial( i" the ob,ecti!e is to put an end to a pending litigation( or e?tra,udicial( i" the ob,ecti!e is to a!oid a litigation. s a contract( a compromise is per"ected by mutual consent. 'owe!er( a ,udicial compromise( while immediately binding between the parties upon its e?ecution( is not e?ecutory until it is appro!ed by the court and reduced to a ,udgment. he !alidity o" a compromise is dependent upon its compliance with the re$uisites and principles o" contracts dictated by law. lso( the terms and conditions o" a compromise must not be contrary to law( morals( good customs( public policy and public order. 6inding the greement to ha!e been !alidly and !oluntarily e?ecuted by the parties in compliance with the re$uirements o" law( the court hereby appro!es it.
A/uiles Riosa vs.
acts$ Dn 6ebruary 2;( 2%%2( petitioner $uiles Riosa =$uiles> "iled his Complaint "or
nnulment/@eclaration o" 8ullity o" @eed o" bsolute 1ale and rans"er Certi"icate o" itle(
Recon!eyance and @amages against respondent abaco a 1uerte Corporation =a 1uerte> be"ore the RC. 0n his complaint( $uiles alleged that he was the owner and in actual possession o" a :2-s$uare meter commercial lot situated in #arangay Kuinale( abaco City( lbayH that he ac$uired the said property through a deed o" cession and $uitclaim e?ecuted by his parents( Pablo Riosa( 1r. and 1abiniana #ironH that he declared the property in his name and had been religiously paying the realty ta? on the said propertyH that therea"ter( his daughter( nnie yn Riosa Nampelis( reno!ated the commercial building on the lot and introduced impro!ements costing no less than P)%%(%%%.%%H that subse$uently( on three =)> occasions( he obtained loans "rom 1ia Io Pio in the total amount o" P:%(%%%.%%H that as a security "or the payment o" loans( 1ia Io Pio re$uested "rom him a photocopy o" the deed o" cession and $uitclaimH that 1ia Io Pio presented to him a document purportedly a receipt "or the P:%(%%%.%% loan with an undertaing to pay the total amount o" P:2(%%%.%% including the P2(%%%.%% attorneys "eesH that without reading the document( he a""i?ed his signature thereonH and that in 1eptember 2%%*( to his surprise( he recei!ed a letter "rom a 1uerte in"orming him that the sub,ect lot was already registered in its name. $uiles claimed that by means o" "raud( misrepresentation and deceit employed by 1ia Io Pio( he was made to sign the document which he thought was a receipt and undertaing to pay the loan( only to "ind out later that it was a document o" sale. $uiles a!erred that he did not appear be"ore the notary public to acnowledge the sale( and that the notary public( a municipal ,udge( was not authori9ed to notari9e a deed o" con!eyance. 'e "urther claimed that he could not ha!e sold the commercial building on the lot as he had no transmissible right o!er it( as it was not included in the deed o" cession and $uitclaim. 'e( thus( prayed "or the nulli"ication o" the deed o" sale and certi"icate o" title in the name o" a 1uerte and the recon!eyance o" the sub,ect property to him.5 %ssue$ 3as there a per"ected and !alid contract o" sale between petitioner and respondentA &el'$ 8o. he elements o" a contract o" sale areG =*> consent or meeting o" the minds( that is(
consent to trans"er ownership in e?change "or the priceH =2> determinate sub,ect matterH and =)> price certain in money or its e$ui!alent. he transactions were between petitioner( as borrower( and 1ia Io Pio( as lender( not a sale between petitioner and respondent. he court also too note that the element o" consent is wanting. Under rticle *57: o" the Ci!il Code( the contract o" sale is per"ected at the moment there is a meeting o" minds on the thing which is the ob,ect o" the contract and on the price. Petitioner acnowledged that he signed the receipt "or a loan. here is howe!er( no proo" that it came "rom respondent as signi"ying a consideration "or a contract o" sale. ccordingly( there is no basis "or a holding that the personal loan o" petitioner "rom the respondent was the consideration "or the sale o" his property in "a!or o" the latter. here"ore( there is no per"ected and !alid contract o" sale.
Dr. 8orna C. ormaran vs. Dr. Glen'a . n4 an' -olomon -. n4 G.R # 1662 July ! 01"
acts$ de"endant lenda insisted on her ownership o!er the land in $uestion on account o" a
@eed o" bsolute 1ale e?ecuted by the plainti"" in her "a!orH and that plainti""s claim o" ownership there"ore was !irtually re,ected by the Municipal Circuit rial Court o" 0ba,a-8abas( 0ba,ay( lan( when it decided in her "a!or the unlaw"ul detainer case she "iled against the
plainti""( doceted therein as Ci!il Case 8o. *<). @e"endants are also claiming moral damages and attorneys "ees in !iew o" the "iling o" the present case against them. Plainti""s testimony tends to show that the land in $uestion is part o" the land donated to her on June 2:( *+;7 by spouses Mel$uiades #arraca and Pra?edes Casidsid( plainti""s uncle and aunt( respecti!ely. s owner thereo"( she declared the land "or ta?ation purposes =?hibits -* to -:( inclusi!e>. 1he religiously paid its realty ta?es =?hibit -;>. 1he mortgaged the land to lan @e!elopment #an to secure payment o" a loan. 0n *+;7( de"endant lenda and her "ather( Mel$uiades #arraca came to her residence asing "or help. hey were borrowing one-hal" o" land donated to her so that de"endant lenda could obtain a loan "rom the ban to buy a dental chair. hey proposed that she signs an alleged sale o!er the said portion o" land. cceding to their re$uest( she signed on ugust *2( *+;7 a prepared @eed o" bsolute 1ale =?hibit C> which they brought along with them =18( p. 22( 0bid>( co!ering the land in $uestion without any money in!ol!ed. here was no monetary consideration in e?change "or e?ecuting ?hibit C. 1he did not also appear be"ore the 8otary Public dilberto Miralles when ?hibit C was allegedly acnowledged by her on 8o!ember +( *+;7. month therea"ter( plainti"" in$uired "rom her uncle( Mel$uiades #arracca i" they ha!e obtained the loan. he latter in"ormed her that they did not push through with the loan because the bans interest there"ore was high. 3ith her uncles answer( plainti"" in$uired about ?hibit C. 'er uncle replied that they crampled =inumos> the @eed o" bsolute 1ale =?hibit C> and threw it away. Inowing that ?hibit C was already thrown away( plainti"" did not bother anymore about the document she thought that there was no more transaction. #esides( she is also in actual possession o" the land and ha!e e!en mortgaged the same. 0n *+75( plainti"" trans"erred her residence "rom 8abas( lan( to ntipolo City where she has been residing up to the present time. 6rom the time she signed the @eed o" bsolute 1ale =?hibit C> in ugust( *+;7 up to the present time o" her change o" residence to ntipolo City( de"endant lenda ne!er demanded actual possession o" the land in $uestion( e?cept when the latter "iled on May )%( *++; a case "or unlaw"ul detainer against her. 6ollowing the "iling o" the e,ectment case( she learned "or the "irst time that the @eed o" bsolute 1ale was registered on May 2:( *++* and was not thrown away contrary to what Mel$uiades #arraca told her. Moreo!er( she and Mel$uiades #arraca did not tal anymore about ?hibit C. hat was also the "irst time she learned that the land in $uestion is now declared "or ta?ation purposes in the name o" de"endant lenda. %ssue$ 0s the sale between petitioner and respondents !alidA &el'$ 8o. he 1upreme Court ruled that the @eed o" 1ale is simulated "or it is de!oid o" any
consideration. 0t was e?ecuted less than two=2> months "rom the time the sub,ect land was
donated to petitioner by the parents o" respondent. 1e!eral years a"ter the donation( petitioner mortgaged the land to lan @e!elopment #an. lso( "rom the time o" the alleged sale( petitioner has been in actual possession o" the sub,ect land. he 1C also noted that the sale was registered twenty-"our =25> years a"ter the e?ecution o" the @eed o" 1ale. Respondents did not introduce any impro!ement on the sub,ect land( and petitioners house was erected on part o" the sub,ect land. 0" the sale was legitimate( de"endant lenda should ha!e immediately taen possession o" the land( declared it in her name "or ta?ation purposes( registered the sale( paid realty ta?es( introduced impro!ements therein and should not ha!e allowed plainti"" to mortgage the land. hese omissions properly militated against respondents submission that the sale was legitimate and the consideration was paid.
Ace oo's! %nc. vs. icro Paci3ic
acts$ Dn Dctober 2+( 2%%*( C 6oods accepted MCs proposal and accordingly issued
Purchase Drder 8o. *%%%2) =Purchase Drder> "or the sub,ect products amounting to P;5;(5;5.%%
=purchase price>. herea"ter( or on March 5( 2%%2( MC deli!ered the said products to C 6oods as re"lected in 0n!oice 8o. 77)) =0n!oice Receipt>. !entually( or on Dctober *;( 2%%2( C 6oods lodged a Complaint against MC be"ore the RC( praying that the latter pull out "rom its premises the sub,ect products since MC breached its a"ter deli!ery ser!ices obligations to it( particularly( toG = a> install and con"igure the sub,ect productsH = b> submit a cost bene"it study to ,usti"y the purchase o" the sub,ect productsH and =c> train C 6oodss technicians on how to use and maintain the sub,ect products. C 6oods liewise claimed that the sub,ect products MC deli!ered are de"ecti!e and n ot woring. 6or its part( MC( in its nswer with Counterclaim( maintained that it had duly complied with its obligations to C 6oods and that the sub,ect products were in good woring condition when they were deli!ered( installed and con"igured in C 6oodss premises. %ssue$ 0s the contract between C and MC a contract o" saleA &el'$ 4es. contract o" sale had been per"ected the precise moment C 6oods sent MC the
purchase order and accepted the latters proposal to sell the sub,ect products in consideration o" the purchase price. herea"ter( the reciprocal obligations o" the parties F i.e.( on the other hand( o" MC to deli!er the said products to C 6oods( and( on the other hand( o" C 6oods to pay the purchase price there"or within thirty =)%> days "rom deli!ery F already arose and conse$uently may be demanded. he stipulation concerning MCs reser!ation o" ownership o" the sub,ect products as re"lected in the 0n!oice receipt did not change the comple?ion o" the transaction "rom a contract o" sale into a contract to sell. hus( absent any clear indication that the title reser!ation stipulation was actually agreed upon( the same is deemed to be a mere unilateral imposition on the part o" MC and which has no e""ect on the nature o" the parties original agreement as a contract o" sale. Per"orce( the obligations arising thereto( among others( C 6oods obligation to pay the purchase price as well as to accept the deli!ery o" the goods( remain en"orceable and subsisting.
-an ernan'o Re4ala
acts$ Cargill Philippines( 0nc. =Cargill> and 1an 6ernando Regala rading( 0nc. =1an 6ernando>
were cane molasses traders that did business with each other "or sometime.
Cargill alleged that on July *:( *++; it entered into Contract :%2; co!ering its sale to 1an 6ernando o" 5(%%% metric tons =mt> o" molasses at the price o" P)(+:%.%% per mt. Cargill agreed to deli!er the molasses within the months o" pril to May *++7 at the whar" o" Union ,inomoto( 0nc.=,inomoto> along the Pasig Ri!er( Metro Manila. his was a ris-taing "orward sale in that its e?ecution was to tae place about *% months later when the parties did not yet now what the trading price o" molasses would be. 1hortly a"ter( Cargill also entered into Contract :%572 co!ering another sale to 1an 6ernando o" :(%%% mt o" molasses at P2(7:%.%% per mt. he deli!ery period under this contract was within Dctober-8o!ember-@ecember *++;( sooner than the deli!ery period under Contract :%2;. pparently( 1an 6ernando had a deal with ,inomoto "or the supply o" these molasses. Cargill "urther alleged that it o""ered to deli!er the 5(%%% mt o" molasses as re$uired by Contract :%2; within the months o" pril and May*++7 but 1an 6ernando accepted only +:* mt( re"using to accept the rest. Dn pril 2( *++7 @olman L( the barge carrying Cargills *(*75 mt o" molasses( arri!ed at the ,inomoto whar" but 1an 6ernando re"used to accept the same. he barge stayed at the whar" "or 7* days( waiting "or 1an 6ernandos unloading order. #ecause o" the delay( the owner o" the barges lapped Cargill with demurrage amounting toP+2%(%%%.%%. Cargill also su""ered P)(5<%(%%%.%% in damages by way o" unreali9ed pro"its because it had to sell the cargo to another buyer at a loss. %ssue$ @id both parties commit shortcomings in complying with their contractual ob ligationsA &el'$ 4es. he court stated that the thing sold could only be understood as deli!ered to the buyer
when it is placed in the buyers control and possession at the agreed place o" deli!ery. 0n Contract :%2;( Cargill presented no e!idence that it attempted to mae additional deli!eries to "ully comply with its obligation. Contract :%2; re$uired Cargill to deli!er 5(%%% mt. o" molasses during the period Bpril to May *++7. nything less than that $uantity constitutes breach o" the agreement. 1ince Cargill only deli!ered a total o" 2(*2: mt. o" molasses during the agreed period( Cargill should be regarded as ha!ing !iolated Contract :%2; with respect to the undeli!ered balance.
Ali A,an4 vs. unicipality o3 %sulan! -ultan >u'arat Province G.R # 16012 June 6! 01"
acts$ li ang =petitioner> is a member o" the national and cultural community belonging to
the Maguindanaon tribe o" 0sulan( Pro!ince o" 1ultan Iudarat and the registered owner o" ot :-
#-2-#-*5-6 =RC> Psd **%%*<) located at Ialawag 000( 0sulan( 1ultan Iudarat( co!ered by rans"er Certi"icate o" itle =C> 8o. -);:)( with an area o" 2%(%)% s$uare meters. he respondent immediately too possession o" the property and began construction o" the municipal building. hirty-nine =)+> years later or on Dctober 2;( 2%%*( the petitioner( together with his wi"e( Patao alipasan( "iled a ci!il action "or Reco!ery o" Possession o" 1ub,ect Property and/or Kuieting o" itle thereon and @amages against the respondent( represented by its Municipal Mayor( et al. s regards the payment o" the purchase price( the RC "ound the same to ha!e not been made by the respondent. ccording to the RC( the Municipal Loucher is not a competent documentary proo" o" payment but is merely e!idence o" admission by the respondent that on the date o" the e?ecution o" the @eed o" 1ale( the consideration stipulated therein had not yet been paid. he RC also ruled that the Municipal Louchers !alidity and e!identiary !alue is in $uestion as it su""ers in"irmities( that is( it was neither duly recorded( numbered( signed by the Municipal reasurer nor was it pre-audited. %ssue$ 0s petitioner entitled to reco!er ownership and possession o" the property in disputeA &el'$ 8o. 0n a contract o" sale( the title to the property passes to the buyer upon the deli!ery o"
the thing sold( whereas in a contract to sell( the ownership is( by agreement( retained by the seller and is not to pass to the !endee until "ull payment o" the purchase price. he @eed o" 1ale e?ecuted by the petitioner and the respondent is a per"ected contract o" sale( all its elements being present. here was mutual agreement between them to enter into the sale( as shown by their "ree and !oluntary signing o" the contract. 8on-payment o" the purchase price merely gi!es rise to a right in "a!or o" petitioner to either demand speci"ic per"ormance or rescission o" the contract. here"ore( petitioner is not entitled to reco!er ownership and possession o" the property.
-ps. Del3in an' Aurora
acts$ Dn March 2)( *++<( petitioners "iled a Complaint7 "or declaration o" nullity ab initio o"
sale( and reco!ery o" ownership and possession o" land with the RC o" Malaybalay City. he case was ra""led to #ranch + and doceted as Ci!il Case 8o. 27:+-+<.
0n their Complaint( petitioners alleged that they are the owners o" a parcel o" land located in 1umpong( Malaybalay( #uidnon co!ered by rans"er Certi"icate o" itle =C> 8o. 2:))5< =sub,ect land> in the name o" petitioner uroraH that they are natural born 6ilipino citi9ens but petitioner @el"in ac$uired merican citi9enship while his wi"e( petitioner urora( remained a 6ilipino citi9enH that petitioner urora is the sister o" Reynalda Lisitacion =Reynalda>H + that on July 2)( *++7( Reynalda sold the sub,ect land to her daughter( Rowena ay . Lisitacion ope9 =respondent Rowena>( through a deed o" sale*% "or an unconscionable amount o" P+:(%%%.%% although said property had a maret !alue o" more than P2(%%%(%%%.%%H that the sub,ect sale was done without the nowledge and consent o" petitionersH and that( "or these "raudulent acts( respondents should be held liable "or damages. Petitioners prayed that =*> the deed o" sale dated July 2)( *++7 be declared !oid ab initio( =2> the sub,ect land be recon!eyed to petitioners( and =)> respondents be ordered to pay damages. Dn May 2:( *++<( petitioners "iled an nswer to Counterclaim. Petitioners admitted the e?istence o" the 1P but claimed that Reynalda !iolated the terms thereo" when she =Reynalda> sold the sub,ect land without seeing the appro!al o" petitioners as to the selling price. Petitioners also claimed that the monthly payments "rom *++: to *++7 were mere deposits as re$uested by respondent Rowena so that she =Rowena> would not spend the same pending their agreement as to the purchase priceH and that Reynalda( acting with e!ident bad "aith( e?ecuted the deed o" sale in her "a!or but placed it in the name o" her daughter( respondent Rowena( which sale is null and !oid because an agent cannot purchase "or hersel" the property sub,ect o" the agency. %ssueG3hether or not there is breach in the contract between petitioner and respondent( 0s
petitioner entitled to rescind the contractA &el'$ 4es. rt. **+* o" the Ci!il Code pro!ides that Rescission will not be permitted "or a slight
or casual breach o" the contract but only "or a "undamental breach thereo". he courts "inds that respondents act o" trans"erring the title to the sub,ect land in her name without the nowledge and consent o" petitioners and despite non-payment o" the "ull purchase price is a substantial breach( thus rescission can be a!ailed by petitioners.
&eirs o3 Decease' Dolores C. ?entura vs. &eirs o3 -ps. )ustacio an' entered into a Contract to 1ell =contract to
sell> with spouses ustacio and rinidad ndaya =1ps. ndaya> "or the purchase o" two parcels o" land co!ered by rans"er Certi"icates o" itle =C> 8os. )+222:; and =)5))+2> 1;7+7:7 =sub,ect properties>( denominated as ots < and +( #loc )( situated in Marian Road 00( Marian Par < =now #arangay 1an Martin de Porres>(+ ParaOa$ue City( Metro Manila.
he contract to sell pro!ides that the purchase price o" P)57(7;%.%%shall be paid by @olores in the "ollowing mannerG =a> down payment o" P*%)(2<5.%% upon e?ecution o" the contractH and =b> the balance o" P255(57;.%% within a *:-year period =payment period>( plus *2& interest per annum =p.a.> on the outstanding balance and *2& interest p.a. on arrearages. 0t "urther pro!ides that all payments made shall be applied in the "ollowing orderG "irst( to the reimbursement o" real estate ta?es and other chargesH second( to the interest accrued to the date o" paymentH third( to the amorti9ation o" the principal obligationH and "ourth( to the payment o" any other accessory obligation subse$uently incurred by the owner in "a!or o" the buyer. 0t liewise imposed upon @olores the obligation to pay the real property ta?es o!er the sub,ect properties( or to reimburse 1ps. ndaya "or any ta? payments made by them( plus *& interest per month. Upon "ull payment o" the stipulated consideration( 1ps. ndaya undertoo to e?ecute a "inal deed o" sale and trans"er ownership o!er the same in "a!or o" @olores.*% Dn 8o!ember 2<( *++;( @olores children( 6rederic Lentura( Marites Lentura-Ro?as( and Philip Lentura =petitioners>( "iled be"ore the RC a Complaint*) and( therea"ter( an mended Complaint*5 "or speci"ic per"ormance( seeing to compel 1ps. ndaya to e?ecute a deed o" sale o!er the sub,ect properties. 0n this regard( they a!erred that due to the close "riendship between their parents and 1ps. ndaya( the latter did not re$uire the then widowed @olores to pay the down payment stated in the contract to sell and( instead( allowed her to pay amounts as her means would permit. he payments were made in cash as well as in ind( and the same were recorded by respondent rinidad hersel" in a passboo gi!en to @olores to e!idence the receipt o" said payments. s o" June *:( *++;( the total payments made by @olores and petitioners amounted to P+:2(*:2.%%( which is more than the agreed purchase price o" P)57(7;%.%%( including the *2&interest p.a. thereon computed on the outstanding balance. 'owe!er( when petitioners demanded the e?ecution o" the corresponding deed o" sale( 1ps. ndaya re"used. %ssueG 1hould the respondents be compelled to e?ecute the "inal deed o" sale o!er the two parcels
o" land in "a!or o" petitionersA &el'G 8o. contract to sell is de"ined as a bilateral contract whereby the prospecti!e seller(
while e?pressly reser!ing the ownership o" the sub,ect property despite deli!ery thereo" to the prospecti!e buyer( binds himsel" to sell the said property e?clusi!ely to the latter upon his "ul"illment o" the conditions agreed upon( i.e.( the "ull payment o" the purchase price and/or compliance with the other obligations stated in the contract to sell. he "ailure o" the prospecti!e buyer to mae "ull payment and/or abide by his commitments stated in the contract to sell pre!ents the obligation o" the prospecti!e seller to e?ecute the corresponding deed o" sale "rom arising.
riental Petroleum an' ineral Corporation vs.
acts G Dn June +( *+++ respondent uscan Realty( 0nc. =uscan Realty> "iled a complaint "or sum
o" money with application "or preliminary attachment against petitioner Driental Petroleum and Minerals Corporation =Driental Petroleum> be"ore the Maati Regional rial Court =RC>.
Driental Petroleum owned two condominium units at Corinthian Pla9a in Maati City. Dn ugust *)( *++; it ga!e uscan Realty a non-e?clusi!e authority to o""er these units "or sale. Dn ugust *5( *++; uscan Realty submitted an initial list o" its prospecti!e client-buyers that included ateway 'oldings Corporation =ateway>. uscan Realty updated this list on 1eptember *<( *++;. 1ubse$uently( Driental Petroleum ad!ised uscan Realty that it would undertae direct negotiation with a certain ene de los Reyes o" ateway "or the sale o" the units. his resulted in a contract to sell between Driental Petroleum and ateway on ugust *( *++7. Meantime( ateway apparently turned around nearly two months later on 1eptember 2+( *++7 and assigned its rights as buyer o" the units to lon9o ncheta in whose "a!or Driental Petroleum e?ecuted a deed o" absolute sale on @ecember *%( *++7 "or the price o" P;+(:+:(5%%.%%. Prompted by this de!elopment( uscan Realty demanded payment o" its broers commission o" P2(%<7(<;2.%% by Driental Petroleum. he latter re"used to pay( howe!er( claiming that uscan Realty did nothing to close its deal with ateway and ncheta. Dn ugust **( 2%*% the C granted the appeal and set aside the RC decision. he C ordered Driental Petroleum to pay uscan Realty its broers commission o" P2(%<7(<;2.%%( which is )& o" the "inal purchase price( plus ;& interest "rom the "inality o" its decision until actual payment. 'ence( the present petition. %ssue$ 3hether or not uscan Realty is entitled to a broers commission "or the sale o" Driental
Petroleums condominium units to ncheta. &el'$ 4es. he C in!oed the principle o" procuring cause in ordering the payment o"
broers commission to uscan Realty. he term procuring cause re"ers to a cause which starts a series o" e!ents and results( without brea in their continuity( in the accomplishment o" a broers prime ob,ecti!e o" producing a purchaser who is ready( willing( and able to buy on the owners terms. * his is similar to the concept o" pro?imate cause in orts( without which the in,ury would not ha!e occurred. o be regarded as the procuring cause o" a sale( a broers e""orts must ha!e been the "oundation o" the negotiations which subse$uently resulted in a sale. he e!idence shows that on ugust *5( *++; uscan Realty submitted an initial list5 o" prospecti!e buyers with contact details. 0t twice updated this list: with ateway always on top o" the lists. Clearly then( it was on account o" uscan Realtys e""ort that Driental Petroleum got connected to ateway( the prospecti!e buyer( resulting in the latter two entering into a contract to sell in!ol!ing the two condominium units. lthough ateway turned around and sold the condominium units to ncheta( the "act is that such ultimate sale could not ha!e happened without ateways indispensable inter!ention as intermediate buyer. pplying the principle o" procuring cause( there"ore( uscan Realty should be gi!en its broers commission.
&eirs o3 anuel Uy ), 8ion4 vs. auricia eer Castilio! &eirs o3 uena3lor Umali G.R # 1625 June 5! 01"
acts G longside her husband( 6elipe Castillo( respondent Mauricia Meer Castillo was the owner
o" "our parcels o" land with an aggregate area o" :)()%7 s$uare meters( situated in 1ilangan Mayao( ucena City and registered in their names under rans"er Certi"icate o" itle =C> 8os. -52*%5( -)2227( -)*7:2 and -52*%). 3ith the death o" 6elipe( a deed o" e?tra,udicial partition o!er his estate was e?ecuted by his heirs( namely( Mauricia( #uena"lor Umali and respondents Lictoria Castillo( #ertilla Rada( Marietta Ca!ane9( eo!ina Jalbuena and Philip
Castillo. Utili9ed as security "or the payment o" a tractor purchased by Mauricias nephew( 1antiago Ri!era( "rom #ormaheco( 0nc.( it appears( howe!er( that the sub,ect properties were subse$uently sold at a public auction where 0nsurance Corporation o" the Philippines =0CP> tendered the highest bid. 'a!ing consolidated its title( 0CP liewise sold said parcels in "a!or o" Philippine Machinery Parts Manu"acturing Co.( 0nc. =PMPMC0> which( in turn( caused the same to be titled in its name.5 Dn 2+ 1eptember *+7;( respondents and #uena"lor instituted Ci!il Case 8o. <%<: be"ore the then Court o" 6irst 0nstance =C60> o" Kue9on( "or the purpose o" seeing the annulment o" the transactions and/or proceedings in!ol!ing the sub,ect parcels( as well as the Cs procured by PMPMC0.: ncountering "inancial di""iculties in the prosecution o" Ci!il Case 8o. <%<:( respondents and #uena"lor entered into an greement dated 2% 1eptember *+7< whereby they procured the legal ser!ices o" tty. dmundo Nepeda and the assistance o" Manuel Uy iong who( as "inancier( agreed to underwrite the litigation e?penses entailed by the case. 0n e?change( it was stipulated in the notari9ed greement that( in the e!ent o" a "a!orable decision in Ci!il Case 8o. <%<:( tty. Nepeda and Manuel would be entitled to a share o" "orty =5%&> percent o" all the realties and/or monetary bene"its( gratuities or damages which may be ad,udicated in "a!or o" respondents. %ssueG 0s the greement entered with tty. Nepeda LalidA &el'$ 4es. rticle *5+*=:> o" the Ci!il Code prohibits lawyers "rom ac$uiring by purchase or
assignment the property or rights in!ol!ed
which are ob,ects o" litigation in which they
inter!ene by !irtue o" their pro"ession. 'owe!er( the prohibition applies only during the pendency o" a suit and generally does not co!er contracts "or contingent "ees where the trans"er taes e""ect only a"ter the "inality o" a "a!orable ,udgment. s the greement( is a contract "or contingent "ees( then such agreement does not "all within the prohibition under rticle *5+*=:> o" the code. 'ence( it is !alid.
i4na vs. )@(% Pils! %nc. G.R # 11590 e7ruary 1! 012
acts G 0n *+<5( l"onso de eon =l"onso> mortgaged in "a!or o" Union #an o" the Philippines
=Union #an> real property situated at steban bada( oyola 'eights( Kue9on City( which was registered in his and his wi"e Rosarios name and co!ered by rans"er Certi"icate o" itle =C> 8o. 2<;*)% =C 2<;*)%>. he property was "oreclosed and sold at auction to Union #an. "ter the redemption period e?pired( the ban consolidated its ownership( whereupon C );25%: was issued in its name in *+<7. 0n *+<<( Rosario "iled against l"onso and Union #an( Ci!il Case 8o. K-:27%2 "or annulment o" the *+<5 mortgage( claiming that l"onso mortgaged the property without her consent( and "or recon!eyance. Dn @ecember 27( *+<+( #ignay mortgaged the property to Union #an( presumably to secure a loan obtained "rom the latter. %ssue$ 0s #ignays e!iction !alidA &el'$ 8o. !iction shall tae place whene!er by a "inal ,udgment based on a right prior to the
sale or an act imputable to the !endor( the !endee is depri!ed o" the whole or o" a part o" the thing purchased. 0n case e!iction occurs( the !endee shall ha!e the right to demand o" the !endor( among others( the return o" the !alue which the thing sold had at the time o" the e!iction( be it greater or less than the price o" the saleH the e?penses o" the contract( i" the !endee has paid themH and the damages and interests( and ornamental e?penses( i" the sale was made in bad "aith. 0n the case at bar( #ignay purchased the property without nowledge o" the pending ci!il case concerning the sub,ect property. Union #an is there"ore answerable "or its e?press undertaing under the deed o" sale to Bde"end its title to the Parcels o" land with impro!ement thereon against the claims o" any person whatsoe!er.
G.R. *o. 16295 January 15! 012 %R-< U*%<)D C*-
acts$ Petitioner 6irst United Constructors Corporation =6UCC> and petitioner #lue 1tar
Construction Corporation =#lue 1tar> were associate construction "irms sharing "inancial resources( e$uipment and technical personnel on a case-to-case basis. 6rom May 27( *++2 to July <( *++2( they ordered si? units o" dump trucs "rom the respondent( a domestic corporation engaged in the business o" importing and reconditioning used Japan-made trucs( and o" selling the trucs to interested buyers who were mostly engaged in the construction business( to witG @ue to the re"usal to pay( the respondent commenced this action "or collection on pril 2+( *++)( seeing payment o" the unpaid balance in the amount o" P7):(%%%.%% represented by the two checs.
0t was the position o" the respondent that the petitioners were not legally ,usti"ied in withholding payment o" the unpaid balance o" the purchase price o" the 'ino Prime Mo!er and the 0su9u ransit Mi?er due the alleged de"ects in second dump truc because the purchase o" the two units was an entirely di""erent transaction "rom the sale o" the dump trucs( the warranties "or which ha!ing long e?pired. %ssueG @id petitioner !alidly e?ercised his right o" recoupment in withholding payment o" the
trucs mentionedA &el'$ 8o. rticle *:++ =*> o" the Ci!il Code states that were there is a breach o" warranty by the
seller( the buyer may( at his election accept or eep the goods and set up against the seller( the breach o" warranty by way o" recoupment in diminution or e?tinction o" the price.
G.R. *o. 19592 -eptem7er 11! 01" A*U)8 U B -*-! %*C. !s. ?A8U)C! %*CRPRA<)D
acts GPetitioner Manuel Uy 1ons( 0nc. is the registered owner o" parcels o" land located in
eresa( Ri9al co!ered by rans"er Certi"icate o" itle=C> 8o. :+:)5( co!ering an area o" about ;(**+ s$uare metersH C 8o.:+55:( co!ering an area o" about ;(<)< s$uare metersH C 8o. :+55;(co!ering an area o" about *2()<+ s$uare metersH and C 8o. :+555(co!ering an area o" about )2(%57 s$uare meters. Dn 8o!ember 2+( *+7)( two Conditional @eeds o" 1ale were e?ecuted by petitioner( as !endor( in "a!or o" respondent Lalbueco( 0ncorporated( as !endee. Respondent was able to pay petitioner the amount o" P27:(%::.::< as partial payment "or the two properties corresponding to the initial payments and the "irst installments o" the said properties.
'owe!er( respondent suspended "urther payment as it was not satis"ied with the manner petitioner complied with its obligations under the conditional deeds o" sale. Conse$uently( on March *7( *+7<( petitioner sent respondent a letter ** in"orming respondent o" its intention to rescind the conditional deeds o" sale and attaching therewith the original copy o" the respecti!e notarial rescission. 6i!e years later( or on March *;( 2%%*( respondent again "iled with the RC o" Manila( #ranch * =trial court> a Complaint *5 "or speci"ic per"ormance and damages( seeing to compel petitioner to accept the balance o" the purchase price "or the two conditional deeds o" sale and to e?ecute the corresponding deeds o" absolute sale. Respondent contended that its non-payment o" the installments was due to the "ollowing reasonsG=*> Petitioner re"used to recei!e the balance o" the purchase price as the properties were mortgaged and had to be redeemed "irst be"ore a deed o" absolute sale could be e?ecutedH =2> Petitioner assured that the e?isting mortgages on the properties would be discharged on or be"ore May 2%(*+75( or that petitioner did not in"orm it =respondent> that the mortgages on the properties were already releasedH and =)> Petitioner "ailed to "ully e,ect the unlaw"ul occupants in the area. %ssue$ 3as respondent gi!en notice o" the notarial rescissionA &el'G 8o. he Court noted that in the complaint initially "iled by the respondent( petitioner "iled
an answer with an attached copy o" the notarial acts o" rescission. Respondent recei!ed a copy o" that answer with all its attachments. #y receipt thereo"( respondent already recei!ed notices o" the notarial rescission. Moreo!er( respondent admitted the same when it attached those notices to its reply. G.R. *o. 0"5 *ovem7er ! 01" GA
acts GDn 2< @ecember *++5( Qngeles purchased a house =under Contract to 1ell 8o. 2272>
and lot =under Contract to 1ell 8o. 227*> "rom QR0 !alued at 1e!en 'undred 6i"ty housand Pesos =Php 7:%(%%%.%%> and 6our 'undred 6i"ty housand Pesos =Php 5:%(%%%.%%>( respecti!ely( with twenty-"our percent =25&> interest per annum to be paid by installment within a period o" ten years. "ter sometime( Qngeles "ailed to satis"y her monthly installments with QR0. Qngeles was only able to pay thirty-"i!e =):> installments "or Contract to 1ell 8o. 227* and "orty-eight =5<> installments "or Contract to 1ell 8o. 2272. ccording to QR0( Qngeles was gi!en at least twel!e =*2> notices "or payment in a span o" three =)> years but she still "ailed to settle her account despite receipt o" said notices and without any !alid reason. Qngeles was again gi!en more time to pay her dues and liewise "urnished with three =)> notices reminding her to pay her
outstanding balance with warning o" impending legal action and/or rescission o" the contracts( but to no a!ail. "ter gi!ing a total o" "i"ty-one =:*> months grace period "or both contracts and in consideration o" the continued disregard o" the demands o" QR0( Qngeles was ser!ed with a notice o" notarial rescission dated ** 1eptember 2%%) by registered mail which she allegedly recei!ed on *+ 1eptember 2%%) as e!idenced by a registry return receipt. Conse$uently Qngeles was "urnished by QR0 with a demand letter dated 2; 1eptember 2%%) demanding her to pay the amount o" Dne 'undred wel!e housand hree 'undred 6our Pesos and 6orty wo Centa!os =Php **2()%5.52> as outstanding reasonable rentals "or her use and occupation o" the house and lot as o" ugust 2%%) and to !acate the same. 1he was in"ormed in said letter that the "i"ty percent =:%&> re"undable amount that she is entitled to has already been deducted with the reasonable !alue "or the use o" the properties or the reasonable rentals she incurred during such period that she was not able to pay the installments due her. "ter deducting the rentals "rom the re"undable amount( she still had a balance o" Dne 'undred wel!e housand hree 'undred 6our Pesos and 6orty wo Centa!os =Php **2()%5.52> which she was re$uired to settle within "i"teen =*:> days "rom receipt o" the letter. %ssueG 3as the contract between petitioner and respondent properly cancelledA &el'$ 8o. lthough a notari9ed notice o" cancellation was gi!en to respondent( petitioner "ailed
to pay the proper cash surrender !alue in accordance with the Maceda aw. he Court stated that "or a !alid and e""ecti!e cancellation o" the contract under the Maceda aw( the mandatory twin re$uirements o" a notari9ed notice o" cancellation and re"und o" the cash surrender !alue must be complied with. 1ince petitioner "ailed to pay the proper cash surrender !alue to respondent( the contract between petitioner and respondent was not properly cancelled.
G.R. *o. 11262 *ovem7er ! 01" -PU-)- )8%-) R. AU<%- parcels o" land( co!ered by
rans"er Certi"icate o" itle =C> 8os. 2%*%5<: and 2%*%5+.; he two lots were located in Muntinlupa City( each parcel o" land containing an area o" 1i? 'undred =;%%> s$uare meters( more or less( amounting to P*()2%(%%%.%% per lot. 0n May *++7( the 1pouses Jalandoni applied "or a loan with a commercial ban and( as a security thereo"( they o""ered to constitute a real estate mortgage o!er their two lots. "ter a routine credit in!estigation( it was disco!ered that their titles o!er the two lots had been cancelled and new C 8os. 2%;%+* and 2%:;25 were issued in the names o" 1pouses #austista. Upon "urther in!estigation( they "ound out that the bases "or the cancellation o" their titles were two deeds o" absolute sale(7 dated pril 5( *++; and May 5( *++;( purportedly e?ecuted and signed by them in "a!or o" 1pouses #austista. 0n their answer (< 1pouses #autista claimed that in March *++;( a certain eresita 8asino =8asino> o""ered to liseo #austista =liseo> two parcels o" land located in Muntinlupa CityH that the
parcels o" land were sold at a bargain price because the owners were in dire need o" moneyH that upon their re$uest( 8asino showed them the photocopies o" the titles co!ering the sub,ect landsH that 8asino told them that she would negotiate with the 1pouses Jalandoni( prepare the necessary documents and cause the registration o" the sale with the Register o" @eedsH and that since 8asino was a wi"e o" a "riend( 1pouses #austista trusted her and ga!e her the authority to negotiate with 1pouses Jalandoni on their behal". %ssueGre 1pouses #autista buyers in good "aithA &el'G 8o.he re$uisites o" purchasers in good "aith are as "ollowsG =a> the seller is the registered
owner o" the landH =b> the owner is in possession thereo"H and =c> at the time o" sale( the buyer was not aware o" any claim or interest o" some other person in the property( or o" any de"ect or restriction in the title o" the seller or in his capacity to con!ey title to the property. 0n the absence o" any o" these re$uisites( the buyer is obliged to e?ercised e?traordinary diligence by scrutini9ing the certi"icates o" titles and e?amining all "actual circumstances so as to ascertain the sellers title and capacity to trans"er any interest in the property. heir "ailure to determine the status o" the sub,ect lots and the e?tent o" nasinos authority negates good "aith.
G.R. *o. 192 e7ruary 6! 012 &)*)R- -A?%*G- A*D 8A* A*> !s. A-U*C%* P. )8*%A an' 8D%A C. D) GUA*
acts G 6elonia and @e u9man were the registered owners o" a parcel o" land consisting o" :)2
s$uare meters with a "i!e-bedroom house( co!ered by rans"er o" Certi"icate o" itle =C> 8o. -5%2 issued by the register o" deeds o" as PiOas City. 1ometime in June *++%( 6elonia and @e u9man mortgaged the property to @elgado to secure the loan in the amount o" P*(;::(%%%.%%. 'owe!er( instead o" a real estate mortgage( the parties e?ecuted a @eed o" bsolute 1ale with an Dption to Repurchase.5 Dn 2% @ecember *++*( 6elonia and @e u9man "iled an action "or Re"ormation o" Contract =Re"ormation case>( doceted as Ci!il Case 8o. +*-:+;:5( be"ore the RC o" Manila. Dn the "indings that it is !ery apparent that the transaction had between the parties is one o" a mortgage and not a deed o" sale with right to repurchase(: the RC( on 2* March *++: rendered a ,udgment "a!orable to 6elonia and @e u9man.
ggrie!ed( 6elonia and @e u9man ele!ated the case to the C through a Petition "or nnulment o" Judgment. Meanwhile( on 2 June *++:( @elgado mortgaged the sub,ect property to 'omeowners 1a!ings and oan #an ='1#> using her newly registered title. hree =)> days later( or on : June *++:( '1# caused the annotation o" the mortgage. %ssueG0s the carrying o!er o" the mortgage lien in "a!or o" the petititioner proper( e!en a"ter the
title has been reinstated in the name o" respondentsA &el'G 8o. '1# was initially a mortgagee in good "aith. 3hen the property was mortgaged to
'1#( the registered owner o" the sub,ect property was @elgado. hus( '1# cannot be "aulted in relying on the "ace o" @elgados title. @elgado was at the time o" the mortgage in possession o" the sub,ect property and @elgados title did not contain any annotation that would arose '1#s suspicion. '1#( as a mortgagee( had a right to rely in good "aith on @elgados title( and in the absence o" any sign that might arose suspicion( '1# had no obligation to undertae "urther in!estigation. his is consistent with the doctrine o" mortgagee in good "aith wherein persons dealing with property co!ered by the orrens 1ystem are not re$uired to in$uire beyond the title o" the property.
G.R. *o. 16"65 R)R< R. DA?%D !s. )DUARD C. DA?%D
January 15! 012
acts$ Respondent duardo C. @a!id =duardo> initiated this reple!in suit against Roberto R.
@a!id =Roberto>( his "irst cousin and "ormer business partner( to reco!er the possession o" one unit o" 0nternational CD +;7% ruc ractor and Mi-#ed railer. 0n pril *++7( Roberto and dwin e?ecuted a memorandum o" agreement =MD>: with the 1pouses Mar$ue9 and 1oledad o =1pouses o>( by which they agreed to sell the #aguio City lot to the latter "or a consideration o"P*%(%%%(%%%.%%. he MD stipulated that in order to sa!e payment o" high and multiple ta?es considering that the ? ? ? sub,ect matter o" this sale is mortgaged with @#P( #aguio City( and sold Qto Roberto( dwin will e?ecute the necessary @eed o" bsolute 1ale in "a!or o" Qthe 1pouses o( in lieu o" QRoberto.; he 1pouses o then deposited the amount o" P*%(%%%(%%%.%% to Robertos account.7 "ter the e?ecution o" the MD( Roberto ga!e duardo P2(<%%(%%%.%% and returned to him one o" the truc tractors and trailers sub,ect o" the deed o" sale. duardo demanded "or the return o" the other truc tractor and trailer( but Roberto re"used to heed the demand.
hus( duardo initiated this reple!in suit against Roberto( alleging that he was e?ercising the right to repurchase under the deed o" saleH and that he was entitled to the possession o" the other motor !ehicle and trailer. 0n his answer( Roberto denied that duardo could repurchase the properties in $uestionH and insisted that the MD had e?tinguished their deed o" sale by no!ation. %ssue$ @oes the respondent ha!e the right to repurchase the propertiesA &el'G 4es. sale with right to repurchase is go!erned by rticle *;%* o" the Ci!il Code( which
pro!ides thatG BCon!entional redemption shall tae place when the !endor reser!es the right to repurchase the thing sold( with the obligation to comply with the pro!isions o" rticle *;*; and other stipulations which may ha!e agreed upon. BCon"ormably with rticle *;*;( the seller may e?ercise his right o" redemption by paying the buyerG =*> the price o" the sale( =2> the e?penses o" the contract( =)> legitimate payments made by reason o" the sale( and =5> the necessary and use"ul e?penses made on the thing sold.
G.R. *o. 01 -eptem7er 5! 01" A*A8% ? ? ? without the nowledge and consent o" the essor( Q'@1J. *2 herea"ter( '@1J re"used to accept Ramons tender o" payment o" rentals.*) Dn ) March 2%%:( '@1J sent a letter to RamonG =*> reiterating its stand that the lease contract was terminated e""ecti!e )* March 2%%*H=2> demanding payment o" P7:;(55+.2; as unreali9ed "ruitsH and =)> gi!ing him )% days to !acate the property.*5 he sublessees were gi!en written notices to !acate within )% days.*: '@1J also posted a Patalastas stating that it is willing to wor out an amicable arrangement with the sublessees( although the latter are not considered as legal
occupants or tenants o" the property.*; #ecause o" this( some o" the sublessees re"used to pay rentals to Ramon. %ssueG re the sublease contracts e?ecuted by Ramon !alidA &el'$ 4es. lease contract is not personal in character( hence it sur!i!es the death o" the parties
and continues to bind the heirs. hus( the death o" erman did not terminate the lease contract e?ecuted with the respondent( but instead continued with Ramon as the lessee. Ramon had a right to sublease the premises since the lease contract did not contain any stipulation "orbidding subleasing.
G.R. *o. 1905 -eptem7er 2! 01" >PP)8! %*C. E3ormerly ,no+n as >P8 A%RC*! %*C.F !s. A>A<% R( a manu"acturer o" air-conditioning products( was the
registered owner o" a parcel o" land located at Im. *;( 1outh 1uperhighway( ParaOa$ue City =sub,ect land>.) 3ithin the sub,ect land are buildings and other impro!ements dedicated to the business o" 6I0.5 0n *+7:( 6I0: be$ueathed the sub,ect land =e?clusi!e o" the impro!ements thereon> in "a!or o" herein respondent Maati Rotary Club 6oundation( 0ncorporated by way o" a conditional donation.; he respondent accepted the donation with all o" its conditions.7 Dn 2; May*+7:( 6I0 and the respondent e?ecuted a @eed o" @onation years upon mutual agreement o" 6I0 and the respondent. 0n Dctober *+7;( 6I0 and the respondent e?ecuted an mended @eed o" @onation*5 that reiterated the pro!isions o" the @eed o" @onation ( including those relating to the lease o" the sub,ect land.
Lerily( by !irtue o" the lease agreement contained in the @eed o" @onation and mended @eed o" @onation ( 6I0 was able to continue in its possession and use o" the sub,ect land. ccording to petitioner( the @eed o" @onation and mended @eed o" @onation actually established not only one but two =2> lease agreements between 6I0 and respondent( i.e. ( one lease "or the "irst twenty-"i!e =2:>years or "rom *+7: to 2%%%( and another lease "or the ne?t twenty-"i!e =2:>years therea"ter or "rom 2%%% to 2%2:. 27 #oth leases are material conditions o" the donation o" the sub,ect land. %ssueG Can petitioner in!oe the arbitration clause in the 2%%: lease agreement( and at the same
time assail its !alidityA &el'G 4es. he court noted that the dispute between petitioner and respondent stemmed "rom the
application o" the 2%%: ease Contract( thereby under the arbitration clause o" the same contract. 3hile it may be conceded that in arbitration o" such disagreement( the !alidity o" the 2%%: ease Contract( or at least( o" such contracts rental stipulation would ha!e to be determined( the same would not render such disagreement non-arbitable. Petitioner may still in!oe the arbitration clause o" 2%%: ease Contract notwithstanding the "act that it assails the !alidity o" such contract. his is due to the doctrine o" separability. Under this doctrine( an arbitration agreement is considered as independent o" the main contract. #eing a separate contract in itsel"( the arbitration agreement may thus be in!oed regardless o" the possible nullity o" the main contract. #ased "rom these reasons( the arbitration clause may still be in!oed. Puri3icacion an' Ruperto )stanislao vs. -ps. *orma an' Damiano Gu'ito G.R # 1"166 arc 1"! 01"
acts G Respondents are the owners o" a residential lot being leased by petitioners on a month-to-
month basis. Petitioners had been renting and occupying the sub,ect lot since *+)5 and were the ones who built the house on the sub,ect lot in accordance with their lease agreement with one aspar Las$ue9. 3hen aspar Las$ue9 died( the portion o" the lot on which petitioners house was erected was inherited by his son Lictorino Las$ue9( married to ster Las$ue9 =Las$ue9 couple>. 0n the *+<%s( the Las$ue9 couple wanted the stanislao "amily and the other tenants to !acate the said property( but the tenants re"used because o" laws allegedly prohibiting their e,ectment there"rom. Resultantly( the Las$ue9 couple re"used to accept their rental payments. hus( petitioner Puri"icacion stanislao( with due notice to ster Las$ue9( deposited the amount o" her monthly rentals at llied #aning Corporation under a sa!ings account in the name o" ster Las$ue9 as lessor.
0n the interim( a @eed o" @onation was e?ecuted by the Las$ue9 couple in "a!or o" respondent 8orma Las$ue9 udito. 'ence( in Dctober *++5( respondents noti"ied petitioners to remo!e their house and !acate the premises within three months or up to January )*( *++:( because o" their urgent need o" the residential lot. 0n a letter dated March :( *++:( respondents reiterated the demand and ga!e petitioners another three months or up to June )%( *++:( within which to remo!e their house( !acate the sub,ect lot and pay the rental arrearages. 'owe!er( petitioners "ailed to comply. %ssueG @o petitioners ha!e a right o" "irst re"usal o!er the sub,ect property under P.@ *:*7( in
relation to P.@. 2%*;A &el'$ 8o. he right o" "irst re"usal is applied only where the owner o" the property intends to
sell it to a third party. 0" the owner o" the leased premises do not intend to sell the property in $uestion but sees to e,ect the tenant on the ground that the "ormer needs the premises "or residential purposes( the tenant cannot in!oe the land re"orm law. hus( the right o" "irst re"usal cannot be accorded to the petitioners.
Gersip Association %nc. vs. G-%G.R # 19 cto7er 16! 01"
acts G Petitioners initially "iled a ci!il suit be"ore the Regional rial Court =RC> o" Kue9on City
=Ci!il Case 8o. K-%*-5::))> but on motion o" respondent said case was dismissed on the ground that it is the 101 #oard which has ,urisdiction o!er the contro!ersy. Dn Dctober )%( 2%%2( petitioners "iled a Petition*2 with the 101 #oard alleging that they ha!e not been paid their portion o" the R6 upon their retirement( to which they are entitled as coowners o" the 6und. hey thus prayed "or a ,udgmentG =*> ordering respondent to render and/or submit a report o" accounting o" the 6und and the R6 and to "urnish copies thereo" to petitioners( pursuant to 1ection :( rticle L000 o" the P6RRH =2> directing respondent to partition( settle( release and pay to the members o" petitioner R10P their proportionate share o" the R6( or their corresponding share o" the accumulated earnings thereon( and in addition( *%%& o" respondents contributions to the 6und( plus the proportionate earnings thereon( all with interests at the legal rate computed "rom the retirement dates o" each indi!idual member until "ully paid( con"ormably with 1ection *=b>( rticle L o" the P6RRH and =)> holding respondent liable "or
reason reasonabl ablee attorn attorney eyss "ees "ees e$ui!al e$ui!alent ent to *:& o" the total total amount amount claim claimed( ed( appeara appearance nce "ee o" P)(%%% per appearance and cost o" suit. Dn Dctober 27( 2%%5( the 101 #oard denied the petition "or lac o" merit. 0t held that the e?ecution o" the rust greement*5 between respondent and the Committee is a clear indication that the parties intended to establish an e?press trust( not a co-ownership( with respondent as rustor( the Committee as rustee o" the 6und and the members as #ene"iciaries. s to the R6( the #oard said that it answers only "or the contingent claims mentioned in 1ection <( rticle 0L and there is no re$uirement in the P6RR "or the accounting and partition o" R6. R6.*: %ssue$ re petitioners co-owners o" the R6A
8o. h hee 101 101 Pro! Pro!id iden entt 6und 6und is a trus trustt "und "und esta establ blis ished hed by resp respon onden dentt "rom "rom the the &el'$ 8o. employ employees ees contrib contributi utions ons =:& o" mon monthl thly y salary salary>> and its own contrib contributi utions ons =5:& =5:& o" each each members monthly salary and all unremitted employees wel"are contributions>. he e?ecution o" the rust greement between respondent and the Committee is a clear indication that the parties intend intended ed to establ establish ish an e?press e?press trust trust(( not a co-own co-owners ership hip(( with with respon respondent dent a rust rustor or(( the Committee as trustee o" the "und and the members o" bene"iciaries. s to the R6( the #oard said that it answers only "or the contingent claims mentioned in 1ection <( rticle L0 and there is no re$uirement in the P6RR "or the accounting and partition o" R6.
Josep Goyan,o! Jr. vs. Unite' Coconut Planters an,! an4o Avenue ranc G.R # 19096 e7ruary 06! 01"
*++:( the the late late Jose Joseph ph oya oyano no(( 1r. 1r. =oy =oyan ano> o> in!e in!est sted ed wo Mill Millio ion n Peso Pesoss acts G 0n *++:( =P2(%% =P2(%%%(%% %(%%%.%% %.%%>> with with Phili Philippi ppine ne s sia ia endin ending g 0n!est 0n!estors ors(( 0nc. 0nc. "amily "amily(( repres represent ented ed by the petitioner( and his illegitimate "amily presented con"licting claims to P00 "or the release o" the in!estment. Pending the in!estigation o" the con"licting claims( P00 deposited the proceeds o" the in!estment in!estment with UCP# on Dctober 2+( *++;: under the name Phil siaG 06 =0n rust 6or> he 'eirs o" Joseph oyano( 1r. (ACCOUNT). Dn 1eptember 27( *++7( the deposit under the CCDU8 was P*(:%+()*<.7;. Dn @ecember **( *++7( UCP# allowed P00 to withdraw Dne Million 6i!e 'undred housand Pesos =P*(:%%(%%%.%%> "rom the ccount( lea!ing a balance o" only P+()*<.7;. 3hen UCP# re"used the demand to restore the amount withdrawn plus legal interest "rom @ecember **( *++7( the petitioner "iled a complaint be"ore the RC. 0n its answer to the complaint( UCP# admitted( among others( the opening o" the CCDU8 under the name 06 =0n rust 6or> he 'eirs o" Joseph oyano( 1r.( (ITF HEIRS) and the withdrawal on @ecember **( *++7.
%ssueG 0s the contract an e?press trustA &el'$ 8o.he re$uirements be"ore an e?press trust will be recogni9ed areG =*> there must be a
competent trustor and trustee( an ascertainable trust res( and su""iciently certain bene"iciaries( =2> there must be a present and complete disposition o" the trust property( notwithstanding that the en,oyment in the bene"iciary will tae place in the "uture( =)> there must be some power o" administration other than a mere duty to per"orm a contract although the contract is "or a third party bene"iciary( and =5> a declaration o" terms is essential( and these must be stated with reasonable certainty in order that the trustee may administer. 8one o" the re$uirements were present in the case.
Dario *acar vs. Gallery rames an';or elipe or'ey! Jr. G.R # 191 Au4ust 1"! 01"
acts$ Petitioner @ario 8acar "iled a complaint "or constructi!e dismissal be"ore the rbitration
#ranch #ranch o" the 8ation 8ational al abor abor Relati Relations ons Commi Commissi ssion on =8RC> =8RC> agains againstt respond respondent entss aller allery y 6rames =6> and/or 6elipe #ordey( Jr.( Jr.( doceted as 8RC 8CR Case 8o. %*-%%:*+-+7. %* -%%:*+-+7. Dn Dctober *:( *++<( the abor rbiter rendered a @ecision) in "a!or o" petitioner and "ound that he was dismissed "rom employment without a !alid or ,ust cause. hus( petitioner was awarded bacwages and separation pay in lieu o" reinstatement in the amount o" P*:<(+*+.+2. Res Respond ponden entts appe appeal aled ed to the 8RC 8RC(( but but it was was dism dismiissed sed "or "or lac lac o" meri erit in the the Resolution: dated 6ebruary 2+( 2+ ( 2%%%. ccordingly( the 8RC sustained the decision o" the abor rbiter. Respondents "iled a motion "or reconsideration( but it was denied.; @issatis"ied( respondents "iled a Petition "or Re!iew on Certiorari be"ore the C. Dn ugust 25( 2%%%( 2%% %( the C issued issued a Resolu Resolutio tion n dismi dismissi ssing ng the petiti petition. on. Respon Respondent dentss "iled "iled a Motion Motion "or Reconsideration( but it was liewise denied in a Resolution dated May <( 2%%*. 7
n ntry o" Judgment was later issued certi"ying that the resolution became "inal and e?ecutory on May 27( 2%%2.+ he case was( therea"ter( re"erred bac to the abor rbiter. pre-e?ecution con"erence was conse$uently scheduled( but respondents "ailed to appear.*% Res Respond ponden entts agai again n appe appeal aled ed be" be"ore ore the 8RC 8RC(( which hich on June June )%( )%( 2%%) 2%%) issu issued ed a Resolution*7 granting the appeal in "a!or o" the respondents and ordered the recomputation o" the ,udgment award. Dn May *%( 2%%:( the abor rbiter issued an Drder 2% granting the motion( but only up to the amount o"P**(5:+.7). he abor rbiter reasoned that it is the Dctober *:( *++< @ecision that should be en"orced considering that it was the one that became "inal and e?ecutory. 'owe!er( the abor rbiter rbiter reasoned reasoned that since the decision decision states states that the separation separation pay and bacwages are computed only up to the promulgation o" the said decision( it is the amount o" P*:<(+*+.+2 that should be e?ecuted. hus( since petitioner already recei!edP*57(:;%.*+( he is only entitled to the balance o" P**(5:+.7). %ssueG re respondents liable "or legal interestA &el'G 4es. he guidelines laid down in the case o" astern 1hipping ines are accordingly
modi"ied to embody #1P-M# Circular 8o. 7++( as "ollowsG *. 3hen the obligation is breached( and it consists in the payment o" a sum o" money( i.e.( a loan or "orbearance o" money( the interest due should be that which may ha!e been stipulated in writing. 6urthermore( the interest due shall itsel" earn legal interest "rom the time it is ,udicially demanded. 0n the absence o" stipulation( the rate o" interest shall be *2& per annum to be computed "rom de"ault( i.e.( "rom ,udicial or e?tra,udicial demand under and sub,ect to the pro!isions o" rticle rticle **;+ o" the Ci!il Code. 2. 3hen an obligation( not constituting a loan or "orbearance o" money( is breached( an interest on the amount o" damages awarded may be imposed at the discretion o" the court at the rate o" ;& per annum. 8o interest( howe!er( shall be ad,udged on unli$uidated claims or damages e?cept when or until the demand can be established with reasonable certainty. ccordingly( where the demand is established with reasonable certainty( the interest shall begin to run "rom the time the claim is made ,udicially or e?tra,udicially =rt. **;+( Ci!il Code> but when such certainty cannot be so reasonably established at the time the demand is made( the interest shall begin to run only "rom the date the ,udgment o" the court is made =at which time the $uanti"ication o" damages may be deemed to ha!e been reasonably ascertained>. he actual base "or the computation o" legal interest shall( in any case( be on the amount a mount "inally ad,udged. ). 3hen the ,udgment o" the court awarding a sum o" money becomes "inal and e?ecutory( the rate o" legal interest( whether the case "alls under paragraph * or paragraph 2( abo!e( shall be *2& per annum "rom such "inality until its satis"action( this interim period being deemed to be by then an e$ui!alent to a "orbearance o" credit
'ence( Respondents are Drdered to Pay petitioner the "ollowingG =*> bacwages computed "rom the time petitioner was illegally dismissed on January 25( *++7 up to May 27( 2%%2( when the Resolution o" this Court in .R. 8o. *:*))2 became "inal and e?ecutoryH =2> separation pay computed "rom ugust *++% up to May 27( 2%%2 at the rate o" one month pay per year o" ser!iceH and =)> interest o" twel!e percent =*2&> per annum o" the total monetary awards( computed "rom May 27( 2%%2 to June )%( 2%*) and si? percent =;&> per annum "rom July *( 2%*) until their "ull satis"action.
-ps. ayani an' Gracia An'al vs. P* an' Re4ister o3 Dee's o3 atan4as City G.R # 19201 *ovem7er ! 01"
acts G
Petitioners-spouses obtained a loan "rom Qrespondent ban in the amount
o"P2*(<%:(%%%.%%( "or which they e?ecuted twel!e =*2> promissory notes ? ? ? Qundertaing to pay Qrespondent ban the principal loan with !arying interest rates o" *7.:& to 27& per interest period. 0t was agreed upon by the parties that the rate o" interest may be increased or decreased "or the subse$uent interest periods( with prior notice to Qpetitioners-spouses( in the e!ent o" changes in interest rates prescribed by law or the Monetary #oard ? ? ?( or in the bans o!erall cost o" "unds. o secure the payment o" the said loan( Qpetitioners-spouses e?ecuted in "a!or o" Qrespondent ban a real estate mortgage using as collateral "i!e =:> parcels o" land including all impro!ements therein( all situated in #atangas City and co!ered by rans"er Certi"icate o" itle =C> 8os. -;5*( -)2%)7( -*;7)%( -)**+) and R );) =)):*> o" the Registry o" @eeds o" #atangas City( in the name o" Qpetitioners-spouses. 1ubse$uently( Qrespondent ban ad!ised Qpetitioners-spouses to pay their loan obligation( otherwise the "ormer will declare the latters loan due and demandable. Dn July *7( 2%%*( Qpetitioners-spouses paid P*5(<%%(%%%.%% to Qrespondent ban to a!oid "oreclosure o" the properties sub,ect o" the real estate mortgage. ccordingly( Qrespondent ban e?ecuted a release
o" real estate mortgage o!er the parcels o" land co!ered by C 8os. -)**+) and R-);) =)):*>. 'owe!er( despite payment ? ? ?( Qrespondent ban proceeded to "oreclose the real estate mortgage( particularly with respect to the three =)> parcels o" land co!ered by C 8os. -;5*( -)2%)7 and -*;7)% ? ? ?. 0n their amended complaint( Qpetitioners-spouses alleged that they tried to religiously pay their loan obligation to Qrespondent ban( but the e?orbitant rate o" interest unilaterally determined and imposed by the latter pre!ented the "ormer "rom paying their obligation. QPetitionersspouses also alleged that they signed the promissory notes in blan( relying on the representation o" Qrespondent ban that they were merely pro"orma Qsic ban re$uirements. 6urther( Qpetitioners-spouses alleged that the unilateral increase o" interest rates and e?orbitant penalty charges are ain to un,ust enrichment at their e?pense( gi!ing Qrespondent ban no right to "oreclose their mortgaged properties. %ssue$ re the petitioners #ayani and ndal liable "or interestA &el'G 4es. 0t is clear "rom the contract o" loan between petitioners-spouses and respondent ban
that petitioners-spouses( as borrowers( agreed to the payment o" interest on their loan obligation. hat the rate o" interest was subse$uently declared illegal and unconscionable does not entitle petitioners-spouses to stop payment o" interest.1âwphi1 0t should be emphasi9ed that only the rate o" interest was declared !oid. he stipulation re$uiring petitioners-spouses to pay interest on their loan remains !alid and binding. hey are( there"ore( liable to pay interest "rom the time they de"aulted in payment until their loan is "ully paid. 0n addition( pursuant to Circular 8o. 7++( series o" 2%*)( issued by the D""ice o" the o!ernor o" the #ango 1entral ng Pilipinas on 2* June 2%*)( and in accordance with the ruling o" the 1upreme Court in the recent case o" @ario 8acar !. allery 6rames and/or 6elipe #ordey( Jr.(2% e""ecti!e * July 2%*)( the rate o" interest "or the loan or "orbearance o" any money( goods or credits and the rate allowed in ,udgments( in the absence o" an e?press contract as to such rate o" interest( shall be si? percent =;&> per annum. ccordingly( the rate o" interest o" *2& per annum on petitioners-spouses obligation shall apply "rom 2% May 2%** F the date o" de"ault F until )% June 2%*) only. 6rom * July 2%*) until "ully paid( the legal rate o" ;& per annum shall be applied to petitioners-spouses unpaid obligation.
<e etropolitan an, an'
acts G Petitioner Metropolitan #an and rust Company is a domestic baning corporation duly
organi9ed and e?isting under the laws o" the Philippines.; Respondent na race Rosales =Rosales> is the owner o" China olden #ridge ra!el 1er!ices(7 a tra!el agency.< Respondent 4o 4u o is the mother o" respondent Rosales.+ 0n 2%%%( respondents opened a Joint Peso ccount*% with petitioners Pritil-ondo #ranch.** s o" ugust 5( 2%%5( respondents Joint Peso ccount showed a balance o" P2(:*:(;+).:2.*2 0n May 2%%2( respondent Rosales accompanied her client iu Chiu 6ang( a aiwanese 8ational applying "or a retirees !isa "rom the Philippine eisure and Retirement uthority =PR>( to petitioners branch in scolta to open a sa!ings account( as re$uired by the PR.*) 1ince iu Chiu 6ang could spea only in Mandarin( respondent Rosales acted as an interpreter "or her.*5 Dn March )( 2%%)( respondents opened with petitioners Pritil-ondo #ranch a Joint @ollar ccount*: with an initial deposit o" U1S*5(%%%.%%.*; Dn July )*( 2%%)( petitioner issued a 'old Dut order against respondents accounts.*7 Dn 1eptember )( 2%%)( petitioner( through its 1pecial udit @epartment 'ead ntonio 0!an guirre( "iled be"ore the D""ice o" the Prosecutor o" Manila a criminal case "or sta"a through 6alse Pretences( Misrepresentation( @eceit( and Use o" 6alsi"ied @ocuments( doceted as 0.1. 8o.
%)0-2:%*5(*< against respondent Rosales.*+Petitioner accused respondent Rosales and an unidenti"ied woman as the ones responsible "or the unauthori9ed and "raudulent withdrawal o" U1S7:(%%%.%% "rom iu Chiu 6angs dollar account with petitioners scolta #ranch.2%Petitioner alleged that on 6ebruary :( 2%%)( its branch in scolta recei!ed "rom the PR a 3ithdrawal Clearance "or the dollar account o" iu Chiu 6angH2* that in the a"ternoon o" the same day( respondent Rosales went to petitioners scolta #ranch to in"orm its #ranch 'ead( Celia . utierre9 =utierre9>( that iu Chiu 6ang was going to withdraw her dollar deposits in cashH22 that utierre9 told respondent Rosales to come bac the "ollowing day because the ban did not ha!e enough dollarsH2) that on 6ebruary ;( 2%%)( respondent Rosales accompanied an unidenti"ied impostor o" iu Chiu 6ang to the banH 25 that the impostor was able to withdraw iu Chiu 6angs dollar deposit in the amount o" U1S7:(%%%.%%H2: that on March )( 2%%)( respondents opened a dollar account with petitionerH and that the ban later disco!ered that the serial numbers o" the dollar notes deposited by respondents in the amount o" U1S**(<%%.%% were the same as those withdrawn by the impostor. %ssueG @id petitioner Metroban breached its duty to respondents 4uA &el'G 4es. he 'old Dut clause applies only i" there is a !alid and e?isting obligation arising
"rom any o" the sources o" obligation enumerated in rticle **:7 7+ o" the Ci!il Code( to witG law( contracts( $uasi-contracts( delict( and $uasi-delict. 0n this case( petitioner "ailed to show that respondents ha!e an obligation to it under any law( contract( $uasi-contract( delict( or $uasidelict. nd although a criminal case was "iled by petitioner against respondent Rosales( this is not enough reason "or petitioner to issue a 'old Dut order as the case is still pending and no "inal ,udgment o" con!iction has been rendered against respondent Rosales. 0n "act( it is signi"icant to note that at the time petitioner issued the 'old Dut order( the criminal complaint had not yet been "iled. hus( considering that respondent Rosales is not liable under any o" the "i!e sources o" obligation( there was no legal basis "or petitioner to issue the 'old Dut order. ccordingly( we agree with the "indings o" the RC and the C that the 'old Dut clause does not apply in the instant case. 'a!ing breached its contract with respondents(petitioner is liable "or damages.Respondents are entitled to moral and e?emplary damages and attorneys "ees.
ariano 8im vs. -ecurity an, Corporation G.R # 15"9 arc 1! 012
acts$ Petitioner e?ecuted a Continuing 1uretyship in "a!or o" respondent to secure any and all
types o" credit accommodation that may be granted by the ban hereinto and hereina"ter in "a!or o" Raul rroyo "or the amount o" P2(%%%(%%%.%% which is co!ered by a Credit greement/Promissory 8ote.) 1aid promissory note stated that the interest on the loan shall be *+& per annum( compounded monthly( "or the "irst )% days "rom the date thereo"( and i" the note is not "ully paid when due( an additional penalty o" 2& per month o" the total outstanding principal and interest due and unpaid( shall be imposed. he debtor( Raul rroyo( de"aulted on his loan obligation. herea"ter( petitioner recei!ed a 8otice o" 6inal @emand dated ugust 2( 2%%*( in"orming him that he was liable to pay the loan obtained by Raul and dwina rroyo( including the interests and penalty "ees amounting to P7(7%)(*<:.:5( and demanding payment thereo". 6or "ailure o" petitioner to comply with said demand( respondent "iled a complaint "or collection o" sum o" money against him and the rroyo spouses. 1ince the rroyo spouses can no longer be located( summons was not ser!ed on them( hence( only petitioner acti!ely participated in the case. Petitioner appealed to the C( but the appellate court( in its @ecision dated July )%( 2%%<( a""irmed the RC ,udgment with the modi"ication that interest be computed "rom ugust *( *++7H the penalty should start only "rom ugust 2<( *++7H the award o" attorneyTs "ees is set at *%& o" the total amount dueH and the award "or litigation e?penses increased to P+2()2*.*%.+
%ssueG 0s petitioner liable "or the principal debtors loan obtained si? months a"ter the e?ecution
o" the Continuing 1uretyshipA &el'$ 4es. contract o" suretyship is an agreement whereby a party( called the surety( guarantees
the per"ormance by another party( called the principal or obligor( o" an obligation or undertaing in "a!or o" another party( called the obligee. lthough the contract o" a surety is secondary only to a !alid principal obligation( the surety becomes liable "or the debt or duty o" another although it possesses no direct or personal interest o!er the obligations nor does it recei!e any bene"it there"rom. his was e?plained in the case o" 1tronghold 0nsurance Company( 0nc. !. Republicsahi lass Corporation( where it was writtenG he suretyTs obligation is not an original and direct one "or the per"ormance o" his own act( but merely accessory or collateral to the obligation contracted by the principal. 8e!ertheless( although the contract o" a surety is in essence secondary only to a !alid principal obligation( his liability to the creditor or promisee o" the principal is said to be direct( primary and absoluteH in other words( he is directly and e$ually bound with the principal. -ps. *ilo an' )lia'ora Ramos vs. Raul 7ispo an' ar )ast an, an'
acts G Petitioner 8ilo Ramos and respondent Raul Dbispo met each other and became best
"riends while they were woring in 1audi rabia as contract worers. "ter both had returned to the Philippines( Ramos continued to !isit Dbispo who has a hardware store. 1ometime in ugust *++;( petitioners e?ecuted a Real state Mortgage =RM> in "a!or o" respondent 6ar ast #an and rust Company =6#C>-6air!iew #ranch( o!er their property co!ered by rans"er Certi"icate o" itle =C> 8o. R-;5522 =);+)7%> o" the Registry o" @eeds o" Kue9on City. he notari9ed RM secured credit accommodations e?tended to Dbispo in the amount o" P*(*:+(%+;.%%. Dn e!en date( the RM was registered and annotated on the a"oresaid title.) Dn 1eptember *7( *+++( 6#C recei!ed a letter "rom petitioners in"orming that Dbispo( to whom they entrusted their property to be used as collateral "or a P2:%(%%%.%% loan in their behal"( had instead secured a loan "orP*(*:+(%+;.%%( and had "ailed to return their title despite "ull payment by petitioners o" P2:%(%%%.%%. Petitioners liewise demanded that 6#C "urnish them with documents and papers pertinent to the mortgage "ailing which they will be constrained to re"er the matter to their lawyer "or the "iling o" appropriate legal action against Dbispo and 6#C.5 here being no action taen by 6#C( petitioners "iled on Dctober *2( *+++ a complaint "or annulment o" real estate mortgage with damages against 6#C and Dbispo. Petitioners alleged that they signed the blan RM "orm gi!en by Dbispo who "acilitated the loan with 6#C( and that they subse$uently recei!ed the loan proceeds o" P2:%(%%%.%% which they paid in "ull through Dbispo. 3ith their loan "ully settled( they demanded the release o" their title but Dbispo re"used
to tal or see them( as he is now hiding "rom them. Upon !eri"ication with the Registry o" @eeds o" Kue9on City( petitioners said they were surprised to learn that their property was in "act mortgaged "or P*(*:+(%+;.%%. Petitioners thus prayed that the RM be declared !oid and cancelledH that 6#C be ordered to deli!er to them all documents pertaining to the loan and mortgage o" DbispoH and that 6#C and Dbispo be ordered to pay moral damages and attorneys "ees.: %ssueG re petitioners Ramos !alid accommodation mortgagors o" respondent DbispoA &el'G 4es. he !alidity o" an accommodation mortgage is allowed under rticle 2%<: o" the
Ci!il Code which pro!ides that Qthird persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property. n accommodation mortgagor( ordinarily( is not himsel" a recipient o" the loan( otherwise that would be contrary to his designation as such. 0n this case( petitioners denied ha!ing e?ecuted an accommodation mortgage and claimed to ha!e e?ecuted the RM to secure only their P2:%(%%%.%% loan and not the P*(*:+(%+;.%% personal indebtedness o" Dbispo. hey claimed it was Dbispo who "illed up the RM "orm contrary to their instructions and "aulted 6#C "or being negligent in not ascertaining the authority o" Dbispo and "ailing to "urnish petitioners with copies o" mortgage documents. Dbispo initially ga!e them P*%%(%%%.%% and the balance was gi!en a "ew months later. "ter supposedly completing payment o" the amount o" P2:%(%%%.%% to Dbispo( petitioners disco!ered that the RM secured a bigger amount. #ecause o" the alleged "raud committed upon them by Dbispo who made them sign the RM "orm in blan( petitioners sought to ha!e the RM annulled and their title o!er the mortgaged property released by 6#C. 0n other words( since their consent to the RM was !itiated( ,udicial declaration o" its nullity is in order
acaria Ar4uelles an' eirs o3 Petronio Ar4uelles vs. alarayat Rural an,! %nc G.R # 0026 arc 19! 012
acts$ he late 6ermina M. uia was the registered owner o" ot )( a parcel o" agricultural land
in #arrio Pinagurusan( litagtag( #atangas( with an area o" 5(:;% s$uare meters( as e!idenced by Driginal Certi"icate o" itle =DC> 8o. P-*2+)%5 o" the Register o" @eeds o" #atangas. Dn @ecember *( *++%( 6ermina M. uia sold the south portion o" the land with an appro?imate area o" *():% s$uare meters to the spouses Petronio and Macaria rguelles. Dn ugust *<( *++7( the spouses uia obtained a loan in the amount o" P25%(%%% "rom the respondent Malarayat Rural #anlc and secured the loan with a @eed o" Real state Mortgage7 o!er ot )-C. he loan and Real state Mortgage were made pursuant to the 1pecial Power o" ttorney< purportedly e?ecuted by the registered owner o" ot )-C( 6ermina M. uia( in "a!or o" the mortgagors( spouses uia. Moreo!er( the Real state Dn July 22( *+++( the spouses rguelles "iled a complaint*% "or nnulment o" Mortgage and Cancellation o" Mortgage ien with @amages against the respondent Malarayat Rural #anlc with the RC( #ranch <;( o" aal( #atangas. 0n asserting the nullity o" the mortgage lien( the spouses rguelles alleged ownership o!er the land that had been mortgaged in "a!or o" the respondent Malarayat Rural #an. Dn ugust *;( *+++( the respondent Malarayat Rural #an "iled an nswer with Counterclaim and Cross-claim** against cross-claim-de"endant spouses ui a wherein it argued that the "ailure o" the spouses rguelles to register the @eed o" 1ale dated @ecember *( *++% was "atal to their claim o" ownership. %ssueG 0s Malarayat Rural #an a mortgagee in good "aithA
&el'G 8o. Petitioners imputed negligence on the part o" respondent Malarayat Rural #an when
it appro!ed the loan application o" the spouses uia. hey pointed out that the ban "ailed to conduct a thorough ocular inspection o" the land mortgaged and an e?tensi!e in!estigation o" the title o" the registered owner. nd since the respondent Malarayat Rural #an cannot be considered a mortgagee in good "aith( petitioners argued that the unregistered sale in their "a!or taes precedence o!er the duly registered mortgage lien. Dn the other hand( respondent Malarayat Rural #an claimed that it e?ercised the re$uired degree o" diligence be"ore granting the loan application. 0n particular( it asserted the absence o" any "acts or circumstances that can reasonably arouse suspicion in a prudent person. hus( the respondent Malarayat Rural #an argued that it is a mortgagee in good "aith with a better right to the mortgaged land as compared to the !endees to the unregistered sale.
Pilippine *ational an, vs. -ps. ernar' an' Cresencia aranon G.R # 19"16 July 1! 01"
acts G he contro!ersy at bar in!ol!es a *:2-s$uare meter parcel o" land located at Cuadra-
1mith 1treets( @owntown( #acolod =sub,ect lot> erected with a building leased by !arious tenants. he sub,ect lot was among the properties mortgaged by 1pouses Rodol"o and milie Montealegre =1pouses Montealegre> to P8# as a security "or a loan. 0n their transactions with P8#( 1pouses Montealegre used rans"er Certi"icate o" itle =C> 8o. -*:;:*2 o!er the sub,ect lot purportedly registered in the name o" milie Montealegre =milie>.; 3hen 1pouses Montealegre "ailed to pay the loan( P8# initiated "oreclosure proceedings on the mortgaged properties( including the sub,ect lot. 0n the auction sale held on ugust *;( *++*( P8# emerged as the highest bidder. 0t was issued the corresponding Certi"icate o" 1ale dated @ecember *7( *++*7 which was subse$uently registered on 6ebruary 5( *++2.< #e"ore the e?piration o" the redemption period or on July 2+( *++2( 1pouses MaraOon "iled be"ore the RC a complaint "or nnulment o" itle( Recon!eyance and @amages+ against 1pouses Montealegre( P8#( the Register o" @eeds o" #acolod City and the ?-D""icio Pro!incial 1heri"" o" 8egros Dccidental. he complaint( doceted as Ci!il Case 8o. 72*)( alleged that 1pouses MaraOon are the true registered owners o" the sub,ect lot by !irtue o" C 8o. -*2+:77 which was illegally cancelled by C 8o. -*:;:*2 under the name o" milie who used a "alsi"ied @eed o" 1ale bearing the "orged signatures o" 1pouse MaraOon *% to e""ect the trans"er o" title to the property in her name. 0n its nswer(** P8# a!erred that it is a mortgagee in good "aith and "or !alue and that its mortgage lien on the property was registered thus !alid and binding against the whole world.
%ssue$ @oes the mortgage e?tends or includes the "ruits o" the mortgaged propertyA &el'G8o. 0t is readily apparent "rom the "acts at hand that the status o" P8#s lien on the sub,ect
lot has already been settled by the RC in its @ecision dated June 2( 2%%; where it was ad,udged as a mortgagee in good "aith whose lien shall subsist and be respected. he decision lapsed into "inality when neither o" the parties mo!ed "or its reconsideration or appealed. Rent( as an accessory "ollow the principal. )7 0n "act( when the principal property is mortgaged( the mortgage shall include all natural or ci!il "ruits and impro!ements "ound thereon when the secured obligation becomes due as pro!ided in rticle 2*27 o" the Ci!il Code. 0t is beyond $uestion that P8#s mortgagors( 1pouses Montealegre( are not the true owners o" the sub,ect lot much less o" the building which produced the disputed rent. he "oreclosure proceedings on ugust *;( *++* caused by P8# could not ha!e( thus( included the building "ound on the sub,ect lot and the rent it yields. P8#s lien as a mortgagee in good "aith pertains to the sub,ect lot alone because the rule that impro!ements shall "ollow the principal in a mortgage under rticle 2*27 o" the Ci!il Code does not apply under the premises. ccordingly( since the building was not "oreclosed( it remains a property o" 1pouses MaraOonH it is not a""ected by nonredemption and is e?cluded "rom any consolidation o" title made by P8# o!er the sub,ect lot. hus( P8#s claim "or the rent paid by olete has no basis.
-ps. Pio Dato an' -onia . -ia vs. an, o3 te Pilippines G.R # 11" *ovem7er ! 01"
acts G Dn May 2)( *++%( petitioners 1pouses Pio @ato =Pio> and 1onia 4. 1ia =1pouses 1ia>
applied "or a P25%(%%%.%% loan which was granted by the #an o" the Philippine 0slands =#P0> with a term o" si? months and secured by a real estate mortgage o!er a parcel o" land owned by 1pouses 1ia denominated as ot *( situated in abangon( Cebu( co!ered by rans"er Certi"icate o" itle =C> 8o. *%25)5. 1ubse$uently( on ugust <( *++%( 1pouses 1ia a!ailed o" a P5 Million Re!ol!ing Promissory 8ote ine with a term o" one year( secured by the same real estate mortgage o!er C 8o. *%25)5.: 1pouses 1ia alleged that their loan was precipitated by the representation o" the Q#P0 that the same will be indorsed to Q0ndustrial uarantee and oan 6und =06> Qin order "or the spouses to be able to a!ail o" a much lower interest rate and longer payment terms.; #e"ore the P25%(%%%.%% and P5 Million loans matured( 1pouses 1ia approached #P0 through Mona Padilla =Padilla>( account o""icer o" #P0 "or additional loans. Dne was "or P2 Million( and another was "or P2.< Million. "ter some discussion with Padilla( 1pouses 1ia agreed to obtain a Credit 6acility o" P:.7 Million using the same collaterals o""ered in their pre!ious loans and "our additional parcels o" land( namely( C 8os. <7%*%( *%25):( *%25); and *%25)7.7 Dn 6ebruary *)( *++*( Padilla sent a written reminder to 1pouses 1ia to settle all unpaid interest be"ore 6ebruary 22( *++*. 4et the spouses "ailed to pay the same. heir principal loans o" P25%(%%%.%% and P5 Million loan also remained unsettled. #P0( through Padilla and ssistant Lice President( @anilo . Kuinto sent another demand letter to them re$uesting payment o" the outstanding loan.+
1pouses 1ia still "ailed to pay the principal amount o" P5(25%(%%%.%% e?clusi!e o" interest( penalties and other charges. #ut the amount o" P<%%(%%%.%% "rom the P:.7 Million Credit 6acility was paid through a etter o" Credit. s the P25%(%%%.%% and P5 Million loans o" 1pouses 1ia were not yet settled( #P0 cancelled the P:.7 Million Credit "acility. o "acilitate and assist 1pouses 1ia in paying o"" their loans( the "our lots which secured the P:.7 Million Credit ine 6acility were released. 1pouses 1ia agreed to sell the lots and use the proceeds thereo" to mae partial payments o" their loans. Conse$uently( #P0 issued a cancellation o" the real estate mortgage o!er the "our lots which secured the P:.7 Million Credit ine 6acility.*% %ssue$ 0s the e?tra-,udicial "oreclosure !alidA &el'$ 4es. 0t is a settled rule o" law that "oreclosure is proper when the debtors are in de"ault o"
the payment o" their obligation. he "acts show that petitioner mortgaged the sub,ect property to respondent ban. Upon maturity o" the loan( petitioner "ailed to pay the loan despite demand. he property was "oreclosed and sold in a public auction where respondent ban was the highest bidder.1âwphi1 Petitioner "ailed to redeem the property within the one-year redemption period. Respondent ban consolidated its ownership o!er the property and a new title was issued in its "a!or. 'ence( it became the ministerial duty o" the court to issue the writ o" possession applied "or by respondent ban. @espite the pending suit "or annulment o" the mortgage and 8otice o" 1heri""s 1ale( respondent ban is entitled to a writ o" possession( without pre,udice to the e!entual outcome o" the said case
