1

SUN LIFE OF CANADA (PHILIPPINES), INC., Petitioner, versus MA. DAISY S. SIBYA, JESUS
MANUEL S. SIBY A Ill, JAIME LUIS S. SIBYA, and The Estate of the deceased ATTY.
JESUS SIBYA, JR., Respondents.
G.R. No. 211212

June 8, 2016

REYES, J.:

FACTS:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to annul and set aside the Decision dated November 18, 2013 and Resolution dated
February 13, 2014 of the Court of Appeals (CA) in CA-G.R. CV. No. 93269.
On January 10, 2001, Atty. Jesus Sibya, Jr. applied for life insurance with Sun Life. In his
Application for Insurance, he indicated that he had sought advice for kidney problems. In his
application he indicated that he had gone lithotripsy due to kidney stone and claimed had no
recurrence.
His application was granted. The policy indicated the respondents as beneficiaries and
entitles them to a death benefit of Pl,000,000.00 should Atty. Jesus Jr. dies on or before
February 5, 2021, or a sum of money if Atty. Jesus Jr. is still living on the endowment date.
On May 11, 2001, Atty. Jesus Jr. died as a result of a gunshot wound in San Joaquin,
Iloilo. As such, Ma. Daisy filed a Claimant's Statement with Sun Life to seek the death benefits
indicated in his insurance policy. Sun Life denied the claim on the ground that the details on Atty.
Jesus Jr. 's medical history were not disclosed in his application. Simultaneously, Sun Life
tendered a check representing the refund of the premiums paid by Atty. Jesus Jr.
Sun Life alleged that Atty. Jesus Jr. did not disclose in his insurance application his
previous medical treatment at the National Kidney Transplant Institute in May and August of
1994. According to Sun Life, the undisclosed fact suggested that the insured was in "renal
failure" and at a high risk medical condition. Consequently, had it known such fact, it would not
have issued the insurance policy in favor of Atty. Jesus Jr.
For their defense, the respondents claimed that Atty. Jesus Jr. did not commit
misrepresentation in his application for insurance. They averred that Atty. Jesus Jr. was in good
faith when he signed the insurance application and even authorized Sun Life to inquire further
into his medical history for verification purposes. RTC issued its Decision dismissing the
complaint for lack of merit. The RTC held that Sun Life violated Sections 241, paragraph l(b),
(d), and (e)14 and 24215 of the Insurance Code when it refused to pay the rightful claim of the
respondents.

ISSUE:
Whether or not the CA erred when it affirmed the RTC decision finding that there was no
concealment or misrepresentation when Atty. Jesus Jr. submitted his insurance application with
Sun Life.

2
HELD:
The petition has no merit.
In Manila Bankers Life Insurance Corporation v. A ban, the Court held that if the insured
dies within the two-year contestability period, the insurer is bound to make good its obligation
under the policy, regardless of the presence or lack of concealment or misrepresentation. In the
present case, Sun Life issued Atty. Jesus Jr.'s policy on February 5, 2001. Thus, it has two
years from its issuance, to investigate and verify whether the policy was obtained by fraud,
concealment, or misrepresentation. Upon the death of Atty. Jesus Jr., however, on May 11,
2001, or a mere three months from the issuance of the policy, Sun Life loses its right to rescind
the policy. As discussed in Manila Bankers, the death of the insured within the two-year period
will render the right of the insurer to rescind the policy nugatory. As such, the incontestability
period will now set in.
As correctly observed by the CA, Atty. Jesus Jr. admitted in his application his medical
treatment for kidney ailment. Moreover, he executed an authorization in favor of Sun Life to
conduct investigation in reference with his medical history. The decision in part states:
Records show that in the Application for Insurance, [Atty. Jesus Jr.] admitted that he had
sought medical treatment for kidney ailment. With regard to allegations of misrepresentation, we
note that was not a medical doctor, and his answer "no recurrence" may be construed as an
honest opinion. Where matters of opinion or judgment are called for, answers made in good
faith and without intent to deceive will not avoid a policy even though they are untrue. In the
present case, Sun Life failed to clearly and satisfactorily establish its allegations, and is
therefore liable to pay the proceeds of the insurance.
A well-settled is the rule that this Court is not a trier of facts. Factual findings of the lower
courts are entitled to great weight and respect on appeal, and in fact accorded finality when
supported by substantial evidence on the record.
WHEREFORE, the petition for review is DENIED.

MILAGROS C. REYES, Petitioner, versus FELIX P. ASUNCION, Respondent.

G.R. No. 196083

November 15, 2015

PERALTA, J.:

FACTS:

Petitioner claimed that since the early 80s, she and her late husband were the owners, with the
right to occupy and possess a parcel of land which is also a sugarcane plantation, with an area
of more or less 3.5 hectares located at Patling, Capas, Tarlac and forms part of a U.S. JY.fil.itary
Reservation. Sometime in 1986, petitioner hired respondent as a caretaker of the subject land.
Development Authority (BCDA) launched a resettlement program for the victims, of the Mt.
Pinatubo eruption and began to look for possible resettlement sites in Tarlac and the subject lot
was among those considered.
In order to prevent the BCDA from converting her property into a resettlement site, she
and respondent executed a contract, antedated on June 15, 1993, transferring her rights over
the subject land to the respondent. Petitioner claimed to have remained the absolute owner and
possessor of the subject land and presently occupies the same as a sugarcane plantation and
even mills the sugarcane harvested at the Central Azucarera de Tarlac for her own benefit.
She also stated that the respondent continued working for her but the latter's
employment was severed when petitioner discovered that respondent sold the former's pigs and
cows. Thereafter, petitioner filed a Complaint respondent before the RTC of Capas, Tarlac for
the declaration of nullity of the subject contract. The RTC, on January 17, 2007, rendered a
Decision in favor of the respondent. It ruled that there is no legal basis to nullify the contract.
Petitioner appealed the case to the CA, and on July 9, 2010, the latter dismissed the appeal
ISSUE:
WON THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT THE
SUBJECT CONTRACT IS VALID EVEN IF IT DOES NOT REFLECT THE TRUE INTENT OF
THE PARTIES.

HELD:
This Court finds no merit in the petition. It is petitioner's contention that the subject contract is
purely
simulated, since it purports a transfer of rights over the subject land in favor of the respondent.
However, when petitioner executed the contract, it was never her intention to transfer her rights
over the subject land as the primordial consideration was to prevent the BCDA from taking over
the property. She also asserts that she and the respondent agreed to make the said false
appearance in the contract. However, the RTC and the CA found no other evidence to support

4
the said allegations and the self-serving averments of the petitioner. This Court is in agreement
with the RTC and the CA as to the insufficiency of evidence to prove that there was indeed a
simulation of contract.
In absolute simulation, there is a colorable contract but it has no substance as the parties have
no intention to be bound by it. The main characteristic of an absolute simulation is that the
apparent contract is not really desired or intended to produce legal effect or in any way alter the
juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void,
and the parties may recover from each other what they may have given under the contract.
However, if the parties state a false cause in the contract to conceal their real agreement, the
contract is relatively simulated and the parties are still bound by their real agreement. Hence,
where the essential requisites of a contract are present and the simulation refers only to the
content or terms of the contract, the agreement is absolutely binding and enforceable between
the parties and their successors-in-interest. Lacking, therefore, in an absolutely simulated
contract is consent which is essential to a valid and enforceable contract. Thus, where a person,
in order to place his property beyond the reach of his creditors, simulates a transfer of it to
another, he does not really intend to divest himself of his title and control of the property; hence,
the deed of transfer is
but a sham.
The primary consideration in determining the true nature of a contract is the intention of the
parties. If the words of a contract appear to contravene the evident intention of the parties, the
latter shall prevail.
The burden of proving the alleged simulation of a contract falls on those who impugn its
regularity and validity. A failure to discharge this duty will result in the upholding of the contract.
The primary consideration in determining whether a contract is simulated is the intention of the
parties as manifested by the express terms of the agreement itself, as well as the
contemporaneous and subsequent actions of the parties. The most striking index of simulation
is not the filial relationship between the purported seller and buyer, but the complete absence of
any attempt in any manner on the part of the latter to assert rights of dominion over the disputed
property. It must be stressed that the determination of whether one acted in bad faith is
evidentiary in nature.
Petitioner insists that the subject contract is in the nature of a simple donation, and even
assuming arguendo that the same was meant to be a remuneratory donation, it is still invalid
because the donation was not notarized.

NUNELON R. MARQUEZ, Petitioner, v. ELISAN CREDIT CORPORATION, Respondents.

G.R. No. 194642, April 06, 2015
BRION, J.:

Facts:

Marquez obtained from Elisan Credit Corporation a loan payable in weekly installments
and subject to annual interest with monthly penalties and attorneys in case of nonpayment. A
chattel mortgage was also executed stipulating that the motor vehicle shall stand as a security
for all other obligations of every kind already incurred or which hereafter may be incurred. The
payment of that loan was acknowledged by both parties.

Subsequently, Marquez obtained another loan evidenced by a promissory note with the same
terms and conditions as the first loan. When the second loan matured, there still remained an
unpaid balance. Marquez requested the creditor to pay the unpaid balance by daily installments
until the loan is paid; the creditor agreed. Thus, several months after the maturity of the loan,
Marquez had already paid a total amount which is greater than the amount of the principal.

Despite such, the creditor filed a complaint for foreclosure of the CM on the ground that
Marquez allegedly failed to pay the principal of the second loan despite demand. It was also
prayed that the unpaid balance plus accrued penalties and interests be paid because, allegedly,
Marquez failure to pay upon maturity triggered the imposition of monthly penalties and
attorneys fees.

Marquez, citing Art 1176 and 1235 of the Civil Code, insists that his daily payments should be
deemed to have been credited against the principal, as the official receipts issued by the
creditor were silent with respect to the payment of interest and penalties.

ISSUES:
1. WON the creditor waived the payment of the interest
2. WON the daily payments made by the debtor be applied to the interest
3. WON an order for foreclosure is proper

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1. No. The fact that the official receipts did not indicate whether the payments were made
for the principal or the interest does not prove that the creditor waived the interest.
There is no presumption of waiver of interest without any evidence showing that the
creditor accepted the daily instruments as payments for the principal.

2. Yes. Notwithstanding the fact it was not indicated in the receipts whether the payments
were applied to the principal or the interest, such failure should not be taken against the
creditor. Under Article 1253 of the Civil Code, if the debt produces interest, payment of
the principal shall not be deemed to have been made until the interests have been
covered. Thus, the creditor in this case has a right to credit the payments to the interest
first.

3. No. Foreclosure in this case is without legal and factual basis because the chattel
mortgage was already extinguished when the obligation under the first loan was duly
paid.

A CM can only cover obligations existing at the time the mortgage is constituted. For a CM
to cover debts yet to be contracted, a fresh chattel mortgage may be executed or the old
contract be amended conformably to the form prescribed by the CM Law. Here, since there was
no showing that a new agreement was executed, the security can no longer apply to the second
loan. The chattel mortgage was already extinguished because being merely an accessory in
nature, it cannot exist independently of the principal obligation.

Although a promise expressed in a chattel mortgage to include debts that are yet to be
contracted can be a binding commitment that can be compelled upon, the security itself,
however, does not come into existence or arise until after a chattel mortgage agreement
covering the newly contracted debt is executed either by concluding a fresh chattel mortgage or
by amending the old contract conformably with the form prescribed by the Chattel Mortgage
Law.

Refusal on the part of the borrower to execute the agreement so as to cover the afterincurred obligation can constitute an act of default on the part of the borrower of the financing
agreement whereon the promise is written, but the remedy of foreclosure can only cover the
debts extant at the time of constitution and during the life of the chattel mortgage sought to be
foreclosed.

The Chattel Mortgage Law requires the parties to the contract to attach an affidavit of good
faith and execute an oath that

the mortgage is made for the purpose of securing the obligation specified in the
conditions thereof, and for no other purposes, and that the same is a just and valid obligation,
and one not entered into for the purposes of fraud.

It is obvious therefore that the debt referred in the law is a current, not an obligation that
is yet merely contemplated.

The only obligation specified in the chattel mortgage contract was the first loan which the
petitioner later fully paid. By virtue of Section 3 of the Chattel Mortgage Law, the payment of the
obligation automatically rendered the chattel mortgage terminated; the chattel mortgage had
ceased to exist upon full payment of the first loan. Being merely an accessory in nature, it
cannot exist independently of the principal obligation.

The parties did not execute a fresh chattel mortgage nor did they amend the chattel
mortgage to comply with the Chattel Mortgage Law which requires that the obligation must be
specified in the affidavit of good faith. Simply put, there no longer was any chattel mortgage
that could cover the second loan upon full payment of the first loan. The order to foreclose the
motor vehicle therefore had no legal basis.

VICENTE D. CABANTING AND LALAINE V. CABANTING, Petitioners, v. BPI FAMILY

SAVINGS BANK, INC., Respondent.
GR 201927 February 17, 2016

PERALTA, J.:

Facts:

Cabanting bought from Diamond Motors / BPI a car on installment basis for which a promissory
note with chattel mortgage was executed. One of the stipulations was that any failure to pay an
amount on schedule will make the entire outstanding sum to become due and payable without
prior notice and demand. When the two Cabantings failed to pay some monthly amortizations,
BPI sued them for replevin and damages. Decision was rendered ordering them to pay the
cars unpaid value with damages. The respondents appealed the decision claiming that there
has been no proof of prior demand and that the stipulation on its waiver must be deemed invalid
for being a contract of adhesion.

ISSUES:
1. WON a stipulation waiving the necessity of notice and demand is valid
2. WON a contract of adhesion such as in this case is valid
3. WON a prior demand is required in actions for replevin

Held:

1. Yes. Article 1169 of the Civil Code provides that one incurs in delay or is in default from
the time the obligor demands the fulfillment of the obligation from the obligee. However,
Article 1169 (1) also expressly provides that demand is not necessary under certain
circumstances, and one of these circumstances is when the parties expressly waive
demand.

9
2. Yes. A contract of adhesion is just as binding as ordinary contracts. Such are not invalid
per se and are not entirely prohibited because the one who adheres to the contract is in
reality free to reject it entirely. If the other party adheres, he gives his consent.

The court may strike down such contracts as void when the weaker party is deprived of the
opportunity to bargain at an equal footing. Here, there is no proof that petitioners were
disadvantaged, uneducated or utterly inexperienced in dealing with financial institutions; thus,
there is no reason for the court to step in and protect the interest of the supposed weaker party.

3. No. Prior demand is not a condition precedent to an action for a writ of replevin, since
there is nothing in Section 2, Rule 60 of the Rules of Court that requires the applicant to
make a demand on the possessor of the property before an action for a writ of replevin
could be filed.

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SM LAND vs BASES CONVERSION AND DEVELOPMENT AUTHORITY AND ARNEL

PACIANO CASANORA, ESQ., IN HIS CAPACITY AS PRESIDENT AND CEO OF BCDA
GR 203655 March 18, 2015
Velasco Jr., J.:

Facts:

When BCDA opened for disposition its Bonifacio South Property pursuant to RA 7227,
SMLI offered to undertake the development of said property by submitting a succession of
unsolicited proposals to BCDA. BCDA then entered into negotiations with SMLI until the BCDA
finally accepted the terms of the final unsolicited proposal. Their agreement was thereafter
reduced into writing through the issuance of the Certification of Successful Negotiations in 2010.

It was agreed that BCDA accepted SMLIs unsolicited proposal and declared SMLI
eligible to enter into the proposed Joint Venture activity. It also agreed to subject SMLIs
Original Proposal to Competitive Challenge pursuant to NEDA Joint Venture Guidelines, which
competitive challenge process shall be immediately implemented following the Terms of
Reference. Moreover, said Certification provides that the BCDA shall commence the activities
for the solicitation for comparative proposals. Years later however, the BCDA through the
issuance of Supplemental Notice No. 5 terminated the competitive challenge for the selection of
BCDAs joint venture partner for the development of a portion of Fort Bonifacio.

SMLI, through a petition for CPM, argued that BCDAs unilateral termination of the
competitive challenge is a violation of SMLIs rights as an original proponent and constitutes
abandonment of BCDAs contractual obligations. BCDA, on the other hand, responded that it is
justifiable since NEDA JV Guidelines is a mere guideline and not a law, and that the
Government has a right to terminate the competitive challenge when the terms are
disadvantageous to public interest.

ISSUES:
1.WON the NEDA JV Guidelines has the binding effect and force of law
2. WON the BCDA is in estoppel

11

HELD:

1. Yes. Administrative issuances, such as the NEDA JV Guidelines, duly promulgated

pursuant to the rule-making power granted by statute, have the force and effect of law.
Being an issuance in compliance with an executive edict, the NEDA JV Guidelines has
the same binding effect as if it were issued by the President himself, who parenthetically
is a member of NEDA. As such, no agency or instrumentality covered by the JV
Guidelines can validly deviate from the mandatory procedures set forth therein, even if
the other party acquiesced therewith or not.

2. Yes. Although as a general rule, the government cannot be estopped by the mistakes or
errors of its officials or agents, such will not apply if injustice is perpetrated.

To allow BCDA to renege on its statutory and contractual obligations would cause grave
prejudice to petitioner, who already invested time, effort, and resources in the study and
formulation of the proposal, in the adjustment thereof, as well as in the negotiations. To permit
BCDA to suddenly cancel the procurement process and strip SMLI of its earlier-enumerated
rights as an Original Proponent at this pointafter the former has already benefited from
SMLIs proposal through the acquisition of information and ideas for the development of the
subject propertywould unjustly enrich the agency through the efforts of petitioner. What is
worse, to do so would be contrary to BCDAs representations and assurances that it will respect
SMLIs earlier acquired rights, which statements SMLI reasonably and innocently believed. All
told, the BCDAs acceptance of the unsolicited proposal and the successful in-depth negotiation
cannot be written off as mere mistake or error that respondents claim to be reversible and not
susceptible to the legal bar of estoppel. The subsequent cancellation of the Competitive
Challenge on grounds that infringe the contractual rights of SMLI and violate the NEDA JV
Guidelines cannot be shrouded with legitimacy by invoking the estoppel rule.

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First Optima Realty Corporation, Petitioner vs. Securitron Security Services, Inc.,
Respondent
G.R No. 199648
January 28, 2015
Ponente: Carpio, J

Facts:
The lot adjacent to the offices of Securitron was owned by President of First Optima
Realty Corporation (First Optima). Securitron offered to buy the property at P6,000.00 per
square meter. No direct negotiation occurred between Young or the board or directors, and
Eleazar, although a series of telephone calls were made between Elazaer and Youngs
secretary. Subsequently, Eleazer went directly to First Optimas office offering to pay the
property in cash which he brought with him, but Young refused to accept the payment, averring
that she still need to secure her sisters advice. She also informed him that prior approval of the
Board of Directors is required for the sale. Eleazar then told her he will await the approval. By
letter dated February 4, 2005, Securiton sent a letter to First Optima, enclosing therewith a
check for P100,000.00 payable to the latter. It stated that As agreed upon, we are making a
deposit of ONE HUNDRED THOUSAND PESOS (Php 100,000.00) as earnest money for your
property at the corner of Layug St., & Lim-An St., Pasay City as per TCT No. 125318 with an
area of 256 sq. m. at 6,000.00/ sq. m. for a total of ONE MILLION FIVE HUNDRED THIRTY SIX
THOUSAND PESOS (Php 1,536,000.00). Full payment upon clearing of the tenants at said
property and signing of the Deed of Sale. The letter was received by an ordinary receiving
clerk/receipt who issued a Provisional Receipt for the same with an annotation This is issued to
transactions not yet cleared but subsequently an Official Receipt will be issued. Securitron did
not course the payment directly to Young or the companys board of directors. The check was
eventually deposited in First Optimas account. Securitron then sent a letter demanding that
First Optima proceed with the sale of the property. It then proceeded to reject the offer to buy
the property. Because of the refusal of First Optima to sell the property, Securitron then filed a

13

complaint for specific performance with damages to compel First Optima to proceed with the
sale of the property. In the Answer with Compulsory Counterclaim, First Optima denied that it
agreed to sell the subject property; that its board of directors did not authorize the sale thereof
to respondent, as no corresponding board resolution to such effect was issued; that the
P100,000.00 check payment cannot be considered as earnest money for the subject property,
since said payment was merely coursed through petitioners receiving clerk, who was forced to
accept the same; and that respondent was simply motivated by a desire to acquire the subject
property at any cost. After trial, the RTC ruled in favour of Securitron and opined that there was
a perfected contract of sale between the parties with First Optimas acceptance of the
P100,00.00 check; nor was there any showing that harassment or intimidation attended the
receipt of the check by the clerk; for the sale of the property, no board resolution is required
since Young was free to represent the corporation. The Court of Appeals affirmed the RTC
decision, hence First Optima filed the instant petition for review on certiorari to assail the CA
ruling.
Issue:
Whether or not there was a perfected contract of sale between First Optima and Securitron.
Ruling:
No.
There is no denying that there were negotiations between the parties conducted after the
respondents December 9, 2004 letter-offer and prior to the February 4, 2005 letter. These
negotiations culminated in a meeting between Eleazar and Young whereby the latter declined to
enter into an agreement and accept cash payment then being tendered by the former. Instead,
Young informed Eleazar during said meeting that she still had to confer with her sister and
petitioners board of directors; in turn, Eleazar told Young that respondent shall await the
necessary approval.

14

Thus, the trial and appellate courts failed to appreciate that respondents offer to
purchase the subject property was never accepted by the petitioner at any instance, even after
negotiations were held between them. Thus, as between them, there is no sale to speak of.
When there is merely an offer by one party without acceptance of the other, there is no
contract.
The stages of a contract of sale are: (1) negotiation, starting from the time the
prospective contracting parties indicate interest in the contract to the time the contract is
perfected; (2) perfection, which takes place upon the concurrence of the essential elements of
the sale; and (3) consummation, which commences when the parties perform their respective
undertakings under the contract of sale, culminating in the extinguishment of the contract.
In the present case, the parties never got past the negotiation stage. Nothing shows that
the parties had agreed on any final arrangement containing the essential elements of a contract
of sale, namely, (1) consent or the meeting of the minds of the parties; (2) object or subject
matter of the contract; and (3) price or consideration of the sale.
Respondents subsequent sending of the February 4, 2005 letter and check to petitioner
without awaiting the approval of petitioners board of directors and Youngs decision, or
without making a new offer constitutes a mere reiteration of its original offer which was already
rejected previously; thus, petitioner was under no obligation to reply to the February 4, 2005
letter. It would be absurd to require a party to reject the very same offer each and every time it
is made; otherwise, a perfected contract of sale could simply arise from the failure to reject the
same offer made for the hundredth time. Thus, said letter cannot be considered as evidence of
a perfected sale, which does not exist in the first place; no binding obligation on the part of the
petitioner to sell its property arose as a consequence. The letter made no new offer replacing
the first which was rejected.
Since there is no perfected sale between the parties, respondent had no obligation to
make payment through the check; nor did it possess the right to deliver earnest money to
petitioner in order to bind the latter to a sale. As contemplated under Art. 1482 of the Civil Code,

15

there must first be a perfected contract of sale before we can speak of earnest money. Where
the parties merely exchanged offers and counter-offers, no contract is perfected since they did
not yet give their consent to such offers. Earnest money applies to a perfected sale.

Thus, as between respondents irregular and improper actions and petitioners failure to
timely return the P100,000.00 purported earnest money, this Court sides with petitioner. In a
manner of speaking, respondent cannot fault petitioner for not making a refund since it is
equally to blame for making such payment under false pretenses and irregular circumstances,
and with improper motives. Parties must come to court with clean hands, as it were.
In a potential sale transaction, the prior payment of earnest money even before the
property owner can agree to sell his property is irregular, and cannot be used to bind the owner
to the obligations of a seller under an otherwise perfected contract of sale; to cite a well-worn
clich, the carriage cannot be placed before the horse. The property owner-prospective seller
may not be legally obliged to enter into a sale with a prospective buyer through the latters
employment of questionable practices which prevent the owner from freely giving his consent to
the transaction; this constitutes a palpable transgression of the prospective sellers rights of
ownership over his property, an anomaly which the Court will certainly not condone. An
agreement where the prior free consent of one party thereto is withheld or suppressed will be
struck down, and the Court shall always endeavor to protect a property owners rights against
devious practices that put his property in danger of being lost or unduly disposed without his
prior knowledge or consent. As this ponente has held before, this Court cannot presume the
existence of a sale of land, absent any direct proof of it.5
Nor will respondents supposed payment be treated as a deposit or guarantee; its
actions will not be dignified and must be called for what they are: they were done irregularly and
with a view to acquiring the subject property against petitioners consent.

16

Finally, since there is nothing in legal contemplation which petitioner must perform
particularly for the respondent, it should follow that Civil Case No. 06-0492 CFM for specific
performance with damages is left with no leg to stand on; it must be dismissed.
With the foregoing view, there is no need to resolve the other specific issues and
arguments raised by the petitioner, as they do not materially affect the rights and obligations of
the parties the Court having declared that no agreement exists between them; nor do they
have the effect of altering the outcome of the case.
WHEREFORE, the Petition is GRANTED.
Petitioner First Optima Realty Corporation is ordered to REFUND the amount of
P100,000.00 to respondent Securitron Security Services, Inc. without interest, unless petitioner
has done so during the course of the proceedings.

17

Spouses

Juvy

Marano

and

Maria

Luisa

G.

Marano, Petitioners,

vs.
Pryce Gases, Incorporated, Respondent.
G.R. No. 196592

April 6, 2015

Ponente: Antonio Carpio

Facts:
Spouses Juvy and Maria Luisa Marao (petitioners) filed a free patent application for a
9,074-square meter parcel of land in Damulaan, Albuera, Leyte, denominated as Lot No. 4299
dated August 1, 1998. This was subsequently granted, and on December 17, 1998, Original
Certificate of Title No. P-43553 was issued to the petitioners over the subject lot.
Petitioners alleged the Pryce Gases Incorporated illegally entered the subject lot and
constructed a building thereon sometime in March 1998 hence on December 29, 1998, the
petitioners filed an ejectment complaint against respondent. The Municipal Trial Court (MTC) of
Albuera, Leyte granted the petitioners complaint, but the Regional Trial Court (RTC) reversed
the MTC decision on appeal. On further appeal, the CA, in a decision dated January 11, 2002
remanded the case to the MTC for trial as a reivindicatory action under the ordinary rules of civil
procedure.
On April 17, 1999, respondent filed a protest on the free patent application filed by the
petitioners in August 1998 which rendered a decision recommending the filing of reversion

18
proceedings against the petitioners, which decision became final and executory. However, no
reversion proceedings were instituted against the petitioners.
On October 28, 2002, the petitioners filed an action to quiet title against the respondent
with the RTC, 8th Judicial Region, Branch 14, Baybay City, Leyte. A month later, the respondent
filed a complaint for reconveyance against the petitioners before the same RTC. The petitioners
moved to dismiss the respondents complaint, but the RTC denied their motion.
On June 18, 2010 in the reivindicatory action at the MTC, the court rendered a decision in the
respondents favour; it declared the respondent as the owner of the subject lot and, thus,
entitled to the possession thereof. The petitioners moved to reconsider the CAs decision but
their motion was denied, hence, the filing of the present petition for review on certiorari with this
Court.
Issue:
Whether or not the complaint for cancellation of title should be dismissed because the question
of validity of the certificate of title issued in their names over the subject lot is already being
litigated in the reivindicatory action case that is pending appeal before the RTC.
Ruling:
We find merit in the present petition and resolve to reverse and set aside the assailed
decision of the CA.
In this jurisdiction, there are three kinds of actions to recover possession of real property,
namely: (1) actions for forcible entry or unlawful detainer, also denominated as accion
interdictal, which are summary in nature and seek to recover only physical possession
(possession de facto) of the property, (2) an accion publiciana, which is a plenary action to
recover the right to possess the property, without claim of title, and (3) an accion reivindicatoria
(or accion de reivindicacion) or a reivindicatory action, which is a plenary action to recover not
only possession of, but also ownership of the real property.
Considering that the validity of the petitioners certificate of title is the crucial issue in
both the reivindicatory action pending appeal before the RTC and the cancellation of certificate
of title case filed by the respondent, these two cases should be consolidated in order to avoid

19
the possibility of rendering conflicting decisions and for the orderly administration of justice. And
since the issue of validity of the petitioners certificate of title has been subjected to a full-blown
trial before the MTC and is now the subject of appeal before the RTC, allowing the cancellation
of certificate of title case to proceed independently and separately would be needlessly
circuitous and would necessarily delay the resolution of the present issue.
Also, we note that the respondents complaint for cancellation of certificate of title cannot
simply be dismissed. Well-settled is the rule that the issue of validity of a Torrens title, whether
fraudulently issued or not, may be posed only in an action brought to impugn or annul it. Section
48 of Presidential Decree No. 1529 clearly provides that a certificate of title can never be the
subject of a collateral attack; it cannot be altered, modified, or cancelled except in a direct
proceeding instituted in accordance with law. Thus, the present respondent has, in fact, resorted
to proper procedure in filing a direct action to attack or impugn the petitioners certificate of title.
But to allow the pendency of the reivindicatory action and the cancellation of certificate of title
case in two different courts would not subserve the orderly administration of justice as the
subject cases involve a common question of fact, i.e. the issue of validity of the petitioners'
certificate of title. In this situation, consolidation is the proper procedure to prevent confusion,
avoid multiplicity of suits, and save the parties, as well as the courts, time and from incurring
unnecessary cost and expense.
WHEREFORE, premises considered, we hereby REVERSE and SET ASIDE.

20

Social
vs.
Edna A. Azote, Respondent.

Security

GR 209741 April
Ponente: Antonio Carpio

Commission, Petitioner,

15,

2015

Facts:
In 1994, Edgardo submitted his SSS Form E-4 with his wife Edna and their children as
beneficiaries. When he died in 2005, Edna tried to claim the death benefits as the wife of a
deceased member but it was denied.

It appears from the SSS records that Edgardo had

another set of SSS Form E-4 in 1982 where his former wife Rosemarie and their child were
designated as beneficiaries. Edna did not know that Edgardo was previously married to another
woman. She then filed for a petition before the SSS, and notice was sent to Rosemarie but she
made no answer. The SSC dismissed Ednas petition because the SSS Form E-4 designating
Rosemarie and her child was not revoked by Edgardo, and that she was still presumed to be the
legal wife as Edna could not proved that Edgardos previous marriage was annulled or divorced.
Issue: W/N Edna is entitled to the SSS benefits as the wife of a deceased member.
Ruling:

21
No. The law in force at the time of Edgardos death was RA 8282. Applying Section 8(e)
and (k) thereof, only the legal spouse of the deceased-member is qualified to be the beneficiary
of the latters SS benefits. Here, there is a concrete proof that Edgardo contracted an earlier
marriage with another individual as evidenced by their marriage contract.
Since the second marriage of Edgardo with Edna was celebrated when the Family Code
was already in force. Edna, pursuant to Art 41 of the Family Code, failed to establish that there
was no impediment or that the impediment was already removed at the time of the celebration
of her marriage to Edgardo. Edna could not adduce evidence to prove that the earlier marriage
of Edgardo was either annulled or dissolved or whether there was a declaration of Rosemaries
presumptive death before her marriage to Edgardo. What is apparent is that Edna was the
second wife of Edgardo. Considering that Edna was not able to show that she was the legal
spouse of a deceased-member, she would not qualify under the law to be the beneficiary of the
death benefits of Edgardo.
Although the SSC is not intrinsically empowered to determine the validity of marriages, it
is required by Section 4(b) (7) of R.A. No. 828229 to examine available statistical and economic
data to ensure that the benefits fall into the rightful beneficiaries.

22

Valerio E. Kalaw, Petitioner, vs. Elena Fernandez, Respondent.

G.R. No. 166357
January 14, 2015
PONENTE: Bersamin, J.
Facts:
In the case at bar, Kalaw presented the testimonies of two supposed expert witnesses
who concluded that respondent is psychologically incapacitated. Petitioners experts heavily
relied on petitioners allegations of respondents constant mahjong sessions, visits to the beauty
parlor, going out with friends, adultery, and neglect of their children. Petitioners experts opined
that respondents alleged habits, when performed constantly to the detriment of quality and
quantity of time devoted to her duties as mother and wife, constitute a psychological incapacity
in the form of NPD.
However, the Supreme Court in its September 19, 2011 decision dismissed the
complaint for declaration of nullity of the marriage on the ground that there was no factual basis
for the conclusion of psychological incapacity.
Issue:
Whether or not the marriage was void on the ground of psychological incapacity.

23
Ruling:
YES. The Court in granting the Motion for Reconsideration held that Fernandez was
indeed psychologically incapacitated as they relaxed the previously set forth guidelines with
regard to this case.
Although the petitioner, as the plaintiff, carried the burden to prove the nullity of the
marriage, the respondent, as the defendant spouse, could establish the psychological incapacity
of her husband because she raised the matter in her answer. The courts are justified in
declaring a marriage null and void under Article 36 of the Family Code regardless of whether it
is the petitioner or the respondent who imputes the psychological incapacity to the other as long
as the imputation is fully substantiated with proof. Indeed, psychological incapacity may exist in
one party alone or in both of them, and if psychological incapacity of either or both is
established, the marriage has to be deemed null and void.
More than twenty (20) years had passed since the parties parted ways. By now, they
must have already accepted and come to terms with the awful truth that their marriage,
assuming it existed in the eyes of the law, was already beyond repair. Both parties had inflicted
so much damage not only to themselves, but also to the lives and psyche of their own children.
It would be a greater injustice should we insist on still recognizing their void marriage, and then
force them and their children to endure some more damage. This was the very same injustice
that Justice Romero decried in her erudite dissenting opinion in Santos v. Court of Appeals.
It would be great injustice, I believe, to petitioner for this Court to give a much too
restrictive interpretation of the law and compel the petitioner to continue to be married to a wife
who for purposes of fulfilling her marital duties has, for all practical purposes, ceased to exist.
Indeed, Article 36 of the Family Code, in classifying marriages contracted by a
psychologically incapacitated person as a nullity, should be deemed as an implement of this
constitutional protection of marriage. Given the avowed State interest in promoting marriage as
the foundation of the family, which in turn serves as the foundation of the nation, there is a
corresponding interest for the State to defend against marriages ill-equipped to promote family
life. Void ab initio marriages under Article 36 do not further the initiatives of the State concerning
marriage and family, as they promote wedlock among persons who, for reasons independent of
their will, are not capacitated to understand or comply with the essential obligations of marriage.

24

Robert F. Mallilin, Petitioner, vs. Luz G. Jamesolamin and the Republic of the Philippines,
Respondents
G.R. No. 192718
February 18, 2015
Ponente: Antonio Carpio
Facts:
Robert and Luz were married on September 6, 1972. They begot three (3) children.
On March 16, 1994, Robert filed a complaint for declaration of nullity of marriage. In the
complaint, Robert alleged that at the time of the celebration of their marriage, Luz was suffering
from psychological and mental incapacity and unpreparedness to enter into such marital life and
to comply with its essential obligations and responsibilities. Such incapacity became even more
apparent during their marriage when Luz exhibited clear manifestation of immaturity,
irresponsibility, deficiency of independent rational judgment, and inability to cope with the heavy
and oftentimes demanding obligation of a parent.
Luz filed her Answer with Counterclaim contesting the complaint. She averred that it was
Robert who manifested psychological incapacity in their marriage. Despite due notice, however,
she did not appear during the trial.
On May 8, 2000, while the case was pending before the trial court, Robert filed a petition
for marriage annulment with the Metropolitan Tribunal of First Instance for the Archdiocese of
Manila (Metropolitan Tribunal).
On October 10, 2002, the Metropolitan Tribunal handed down a decision declaring their
marriage invalid ab initio on the ground of grave lack of due discretion on the part of both parties

25
as contemplated by the second paragraph of Canon1095. This decision was affirmed by the
National Appellate Matrimonial Tribunal (NAMT).
Prior to that, on September 20, 2002,the RTC had rendered a decision declaring the
marriage null and void on the ground of psychological incapacity on the part of Luz as she failed
to comply with the essential marital obligations.

Issue:
Whether to consider church annulments as additional grounds for annulment under
Article 36 is proper and controlling.
Ruling:
Wherefore, premises considered, this Court of Second Instance, having invoked the
Divine Name and having considered the pertinent Law and relevant Jurisprudence to the Facts
of the Case hereby proclaims, declares and decrees the confirmation of the sentence from the
Court a quo in favor of the nullity of marriage on the ground contemplated under Canon 1095, 2
of the 1983 Code of Canon Law.
In fine, the Court holds that the CA decided correctly. Petitioner Robert failed to adduce
sufficient and convincing evidence to prove the alleged psychological incapacity of Luz.
As asserted by the OSG, the allegations of the petitioner make a case for legal
separation. Hence, this decision is without prejudice to an action for legal separation if a party
would want to pursue such proceedings. In this disposition, the Court cannot decree a legal
separation because in such proceedings, there are matters and consequences like custody and
separation of properties that need to be considered and settled.

26

Elsa

Degayo, Petitioner,

vs.

Cecilia Magbanua-Dinglasan et.al, Respondents.

G.R. Nos. 173148

April 6, 2015

Ponente: Arturo Brion

Facts:
The present case involves a property dispute, which gave rise to two civil cases for
ownership and damages between conflicting claimants over a parcel of land located on the
northeastern bank of Jalaud River. The respondents Cecilia Magbanua-Dinglasan, Johnny
Dinglasan, Pascualito Magbanua, Mariano Magbanua, Asuncion Magbanua-Porras, Amado
Magbanua Jr. (respondents) initiated the first civil case against Nicolas Jarencio, Cesar
Jarencio, Myrna Olmo, Fredercio Sumvilla, Herminio Sumvilla, Perpetuo Larano and Angelo
Larano, the tenants (tenants) of Lot No. 861. Degayo, on the other hand, initiated the second
civil case, which eventually reached this Court via the present petition.
Degayo and the tenants believed that the area was an accretion to Lot No. 861. As a
result, her tenants, commenced cultivating and tilling that disputed area with corn and tobacco.
The respondents, on the other hand, argued that the disputed property was an abandoned
riverbed, which should rightfully belong to them to compensate for the erstwhile portion of Lot
No. 7328, over which the Jalaud River presently runs.
On October 2, 1984, the respondents filed a complaint for ownership and damages
against the tenants, with the Regional Trial Court (RTC) of Iloilo, Branch 27, entitled Cecilia
Magbanua Dinglasan, et al. v. Nicolas Jarencio, et al., docketed as Civil Case No. 16047.
Degayo sought to intervene in Civil Case No. 16047 but her motion was denied. Notably,
Degayo never bothered to question the interlocutory order denying her motion for intervention

27
by filing a petition for certiorari. Instead, Degayo initiated the present suit against the
respondents for declaration of ownership with damages, also with the RTC of Iloilo, Branch 22,
docketed as Civil Case No. 18328, involving the disputed parcel of land.
In her complaint, Degayo alleged to have acquired Lot No. 861 by inheritance by virtue
of a Quitclaim Deed and that she had been in possession of that land since 1954. She likewise
stressed that the area in dispute was an accretion to Lot No. 861.
Issue:
Whether or not the CA erred in declaring the RTC Branch 27 decision in Civil Case No.
16047 conclusive upon Degayo when she was not even a party in the said Civil Case.
Ruling:
With the conclusion that Civil Case No. 16047 constitutes resjudicata on the present
case, we see no reason to engage in a discussion on the factual issues raised by the petitioner
for they have been passed upon and considered in Civil Case No. 16047.
Notably, the ownership of the disputed parcel of land has been unequivocally settled in
Civil Case No. 16047.In ruling that the subject parcels of land belong to the respondents, the
RTC Branch 27 in Civil Case No. 16047 opined that the claim of accretion has no valid
basis.34 What really happened was that the Jalaud River naturally changed its course and
moved southward. As a result, it abandoned its previous bed and encroached upon a portion of
Lot No. 7328. It further held that the claim of accretion could not be sustained because the
26,419 sqm. portion is ostensibly within the metes and bounds of Lot No. 7328, owned and
registered in the name of the respondents. On the other hand, the 26,106 sqm. portion refers to
an abandoned river bed, and is thus governed by Article 461 of the Civil Code, which states that
River beds which are abandoned through the natural change in the course of the waters ipso
facto belong to the owners whose lands are occupied by the new course in proportion to the
area lost.
WHEREFORE, premises considered, we deny the petition for lack of merit.

28
SAINT MARY CRUSADE TO ALLEVIATE POVERTY OF BRETHREN FOUNDATION, INC., v.
HON. TEODORO T. RIEL
G.R. No. 176508, 12 January 2015, FIRST DIVISON
Bersamin, J.
FACTS:
On October 28, 2004, Saint Mary Crusade to Alleviate Poverty of Brethren Foundation,
Inc. (Saint Mary), a foundation, applied for the judicial reconstitution of Original Certificate of
Title (OCT) No. 1609 and for the issuance of a new OCT which had been burnt and lost in the
firethat gutted the Quezon City Register of Deeds in the late 80s.
With the receipt of Report dated July 14, 2006 from Land Registration Authority (LRA)
recommending that the petition be dismissed, and considering the Opposition filed by the
Republic of the Philippines and University of the Philippines, the above-entitled petition is
hereby ordered DISMISSED.
On October 11, 2006, the petitioner moved for reconsideration of the dismissal,3 attaching the
following documents to support its petition for reconstitution, namely: (1) the copy of the original
application for registration dated January 27, 1955; (2) the notice of initial hearing dated June
23, 1955; (3) the letter of transmittal to the Court of First Instance in Quezon City; (4) the copy of
the Spanish Testimonial Title No. 3261054 dated March 25, 1977 in the name of EladioTiburcio;
(5) the copy of Tax Assessment No. 14238; and (6) the approved Plan SWD-37457.
On February 5, 2007, the RTC denied the motion for reconsideration for lack of any cogent or
justifiable ground to reconsider.
Hence, on February 22, 2007, the petitioner came directly to the Court alleging that respondent
Judge had "unfairly abused his discretion and unlawfully neglected the performance of an act
which is specifically enjoined upon him as a duly [sic] under Rule 7, Section 8, of the Revised
Rules of Court;"5 that "in finally dismissing the herein subject Petition for Reconsideration,
respondent Honorable Acting Presiding Judge has acted without and in excess of his authority
and with grave abuse of discretion to the further damage and prejudice of the herein
petitioner;"6 and that it had no other remedy in the course of law except through the present
petition for certiorari and mandamus.

ISSUE:
Whether or not the petition for reconstitution of title be granted to Saint Mary

RULING

29
No. The Saint Mary had no factual and legal bases for reconstitution due to its failure to
prove the existence and validity of the certificate of title sought to be reconstituted. The
petitioner did not present the duplicate or certified copy of OCT No. 1609. Thereby, it disobeyed
Section 2 and Section 3 of Republic Act No. 26, the provisions that expressly listed the
acceptable bases for judicial reconstitution of an existing Torrens title. With the questioned
orders of the RTC having finally disposed of the application for judicial reconstitution, nothing
more was left for the RTC to do in the case. As of then, therefore, the correct recourse for the
petitioner was to appeal to the Court of Appeals by notice of appeal within 15 days from notice
of the denial of its motion for reconsideration. By allowing the period of appeal toelapse without
taking action, it squandered its right to appeal. Its present resort to certiorari is impermissible,
for an extraordinary remedy like certiorari cannot be a substitute for a lost appeal. That the
extraordinary remedy of certiorari is not an alternative to an available remedy inthe ordinary
course of law is clear from Section 1 of Rule 65, which requires that there must be no appeal, or
any plain, speedy, and adequate remedy in the ordinary course of law. Furthermore, the land
covered by the petition for reconstitution related to the same area that formed the UP campus.
The UPs registered ownership of the land comprising its campus has long been settled under
the law. Accordingly, the dismissal of the petition for judicial reconstitution by respondent Judge
only safeguarded the UPs registered ownership. In so doing, respondent Judge actually
heeded the clear warnings to the lower courts and the Law Profession in general against
mounting or abetting any attack against such ownership.

30
YINLU BICOL MINING CORPORATION v. TRANS-ASIA OIL AND ENERGY DEVELOPMENT
CORPORATION
G.R. No. 207942, 12 January 2015, FIRST DIVISON
Bersamin, J.
FACTS:

In 1997, Trans-Asia filed an application for the approval of Mineral Production Sharing
Agreement (MPSA) over the area in that Regional Office of the DENR, through the Mines and
Geosciences Bureau (MGB), in Daraga, Albay. The application, which was amended in 1999,
was granted on July 28, 2007 under MPSA No. 252-2007-V, by which Trans-Asia was given the
exclusive right to explore, develop and utilize the mineral deposits in the portion of the mineral
lands. On August 31, 2007, Yinlu Bicol Mining Corporation (Yinlu) informed the DENR by letter
that it had acquired the mining patents of Philippine Iron Mines, Inc. (PIMI) from Manila Banking
Corporation (MBC) / Banco De Oro (BDO) by way of a deed of absolute sale from PIMI which
held mining patent over said area as early as 1930. However, Trans-asia countered this claim
by alleging that Yinlu failed to register the patent. DENR rejected this claim and stated that the
patents were validly transferred and were now owned by Yinlu. The areas covered occupied
more than half of the MPSA area of Trans-Asia. Trans-Asia sought the assistance of the MGB
Regional Office V in resolving the issues over the mine. It was at that point that Trans-Asia
learned that the registration of its MPSA had been put on hold because of Yinlus request to
register the deed of absolute sale in its favor.

ISSUE:
Whether or not the mining patents held by Yinlu valid
RULING:
Yes. Yinlus mining patents constituted vested rights that could not be disregarded. The
decision of the OP was actually unassailable in point of law and history. The lands and minerals
covered by Yinlus mining patents are private properties. The Government, whether through the
DENR or the MGB, could not alienate or dispose of the lands or mineral through the MPSA
granted to Trans-Asia or any other person or entity. Yinlu had the exclusive right to explore,
develop and utilize the minerals therein, and it could legally transfer or assign such exclusive
right. The Court uphold the rulings of the DENR Secretary and the OP to exclude
The disputed areas that had been established to belong exclusively to Yinlu as
registered owner to be taken out of the coverage of Trans-Asias MPSA. Mining rights acquired
under the Philippine Bill of 1902 and prior to the effectivity of the 1935 Constitution were vested
rights that could not be impaired even by the Government. Indeed, the mining patents of Yinlu
were issued pursuant to the Philippine Bill of 1902 and were subsisting prior to the effectivity of
the 1935 Constitution. Consequently, Yinlu and its predecessors-in-interest had acquired vested
rights in the disputed mineral lands that could not and should not be impaired even in light of
their past failure to comply with the requirement of registration and annual work obligations.

31
CHERYLL SANTOS LEUS v. ST. SCHOLASTICAS COLLEGE WESTGROVE AND/OR SR.
EDNA QUIAMBAO, OSB
G.R. No. 187226, 28 January 2015, THIRD DIVISION
Reyes, J.
FACTS:

St. Scholastica College Westgrove (SSCW), a Catholic school, hired Cheryll Santos
Leus as one of its non-teaching personnel. Leus got pregnant out of wedlock and eventually
married the father of her child. Nevertheless, Leus was dismissed of her employment by the
reason that her conduct of having pre-marital sexual relations was unbecoming of an employee
of a Catholic school.
ISSUE:
Whether or not pregnancy out of wedlock a valid ground for termination of employment

RULING:
No. Admittedly, Leusis employed in an educational institution where the teachings and
doctrines of the Catholic Church, including that on pre-marital sexual relations, is strictly upheld
and taught to the students. That her indiscretion, which resulted in her pregnancy out of
wedlock, is anathema to the doctrines of the Catholic Church. However, viewed against the
prevailing norms of conduct, the petitioners conduct cannot be considered as disgraceful or
immoral; such conduct is not denounced by public and secular morality. It may be an unusual
arrangement, but it certainly is not disgraceful or immoral within the contemplation of the law.
Accordingly, the labor tribunals erred in upholding the validity of the Leus dismissal. The labor
tribunals arbitrarily relied solely on the circumstances surrounding the petitioners pregnancy
and its supposed effect on SSCW and its students without evaluating whether Leus conduct is
indeed considered disgraceful or immoral in view of the prevailing norms of conduct. In this
regard, the labor tribunals respective haphazard evaluation of the evidence amounts to grave
abuse of discretion, which the Court will rectify.

32
ROBERT F. MALLILIN v. LUZ G. JAMES OLAMIN & REPUBLIC OF THE PHILIPPINES
G.R. No. 192718, 18 February 2015, SECOND DIVISION,
Mendoza, J.
FACTS:
Robert and Luz were married on 1972. In 1994, Robert filed a complaint for declaration
of nullity of marriage before the Regional Trial Court (RTC). Robert disclosed that Luz was
already living in California, USA, and had married an American. He also revealed that when they
were still engaged, Luz continued seeing and dating another boyfriend, a certain Lt. Liwag. He
also claimed that from the outset, Luz had been remiss in her duties both as a wife and as a
mother as shown by the following circumstances: (1) it was he who did the cleaning of the room
because Luz did not know how to keep order; (2) it was her mother who prepared their meal
while her sister was the one who washed their clothes because she did not want her polished
nails destroyed; (3) it was also her sister who took care of their children while she spent her time
sleeping and looking at the mirror; (4) when she resumed her schooling, she dated different
men; (5) he received anonymous letters reporting her loitering with male students; (6) when he
was not home, she would receive male visitors; (7) a certain Romy Padua slept in their house
when he was away; and (6) she would contract loans without his knowledge. In addition, Robert
presented the testimony of Myrna Delos Reyes Villanueva (Villanueva), Guidance Psychologist
II of Northern Mindanao Medical Center.
While the case was pending before RTC, Robert filed a petition for marriage annulment with the
Metropolitan Tribunal of First Instance for the Archdiocese of Manila (Metropolitan Tribunal)
which was granted and, later on, affirmed by the National Appellate Matrimonial Tribunal
(NAMT).
The RTC declared the marriage null and void on the ground of psychological incapacity on the
part of Luz. The State, through the Office of the Solicitor General (OSG), interposed an appeal
with the Court of Appeals which, later on, reversed the RTC decision.

ISSUE:
Whether or not the totality of the evidence adduced by Robert prove that Luz is
psychologically incapacitated to comply with the essential obligations of marriage warranting the
annulment of their marriage under Article 36 of the Family Code

RULING:
No. The Court has repeatedly stressed that psychological incapacity contemplates
"downright incapacity or inability to take cognizance of and to assume the basic marital
obligations," not merely the refusal, neglect or difficulty, much less ill will, on the part of the
errant spouse. Indeed, to be declared clinically or medically incurable is one thing; to refuse or
be reluctant to perform one's duties is another. Other than his allegations, however, no other

33
convincing evidence was adduced to prove that these sexual indiscretions were considered as
nymphomania, and that it was grave, deeply rooted, and incurable within the term of
psychological incapacity embodied in Article 36. To stress, Roberts testimony alone is
insufficient to prove the existence of psychological incapacity. The psychological report of
Villanueva was insufficient to prove the psychological incapacity of Luz. There was nothing in
the records that would indicate that Luz had either been interviewed or was subjected to a
psychological examination. The finding as to her psychological incapacity was based entirely on
hearsay and the self-serving information provided by Robert. The decision of the Metropolitan
Tribunal is insufficient to prove the psychological incapacity of Luz. The Court stated that
interpretations given by the NAMT of the Catholic Church in the Philippines, while not controlling
or decisive, should be given great respect by our courts, still it is subject to the law on evidence.
To consider church annulments as additional grounds for annulment under Article 36 would be
legislating from the bench.

34
BENJAMIN L. VERGARA, JONA M. SARVIDA and JOSEPHINE P. SABALLA v. ATTY.
EUSEBIO I. OTADOY, JR
G.R. No. 192320, 04April 2016
Carpio, J.
FACTS:

Petitioners Benjamin L. Vergara, Jona M. Sarvida, and Josephine P. Saballa filed a civil
action for damages against respondent Atty. Eusebio I. Otadoy, Jr. and three other persons
(defendants). Atty. Otadoy served as the administratrixs counsel in G.R. No. 154037. The
petitioners alleged that they were unjustly detained as a result of Atty. Otadoys fraudulent
practices.
On March 4, 2004, the petitioners filed a motion to admit an amended complaint which the RTC
granted. When the defendants failed to file their answers, the petitioners moved to declare the
defendants in default and to allow the petitioners to present evidence ex parte. These were
granted in the RTCs order dated September 17, 2004. Atty. Otadoy, representing himself, filed
several motions for reconsideration of the RTCs order. He alleged that he did not receive the
amended complaint. Meanwhile, the petitioners presented their evidence ex parte on
September 27, 2004 and October 11, 2004. On February 8, 2005, the RTC granted Atty.
Otadoys motion to set aside the default order. It also directed the petitioners to serve a copy of
the amended complaint on Atty. Otadoy.
Atty. Otadoy filed a motion to postpone the pre-trial conference to April 20, 2007. He claimed
that on March 4, 2007, he was invited to deliver a lecture at the National Annual Lectureship of
the Church of Christ on March 11-14, 2007. As a minister and evangelist of that church, he
chose to accept the invitation rather than attend the pre-trial conference. Without waiting for a
ruling on his motion, Atty. Otadoy proceeded to attend the lecture in Zamboanga.

ISSUE
Whether or not the RTC committed grave abuse of discretion in denying Atty. Otadoys
motion to postpone the pretrial conference

RULING
No. In this petition, although Atty. Otadoy requested for postponement only once, he
failed to show a valid cause to justify his request; thus, the RTC did not legally err in denying his
motion to postpone.The Court has ruled that a motion for postponement is a privilege and not a
right. The movant should not assume that his motion would be granted.

35
In deciding whether to grant or deny a motion to postpone the pretrial, the court must
take into account two factors: (a) the reason given, and (b) the merits of the movants case.
WHEREFORE, we GRANT the petition. The June 30, 2009 decision and May 11, 2010
resolution of the Court of Appeals in CA-GR SP No. 100262 are REVERSED. The Regional Trial
Court's order dated March 12, 2007, is hereby REINSTATED.

36
MELECIO DOMINGO, and SPOUSES GENARO MOLINA and ELENA B. MOLINA,
substituted by ESTER MOLINA
G.R. No. 200274, 20 April 2016

In June 15, 1951, the spouses Anastacio and Flora Domingo bought a property. During
his lifetime, Anastacio borrowed money from the respondent spouses Genaro and Elena Molina
(spouses Molina). 10 years after Floras death , Anastacio sold his interest over the land to the
spouses Molina to answer for his debts. The sale to the spouses Molina was annotated at the
OCT of the subject property. In 1986, Anastacio died.
In May 19, 1995, the sale of Anastacios interest was registered under Transfer
Certificate of Title (TCT) No. 2729677 and transferred the entire one-half undivided portion of
the land to the spouses Molina. Melecio, one of the children of Anastacio and Flora, learned of
the transfer and filed a Complaint for Annulment of Title and Recovery of Ownership (Complaint)
against the spouses Molina on May 17, 1999. He claims that Anastacio gave the subject
property to the spouses Molina to serve as collateral for the money that Anastacio borrowed.
Anastacio could not have validly sold the interest over the subject property without Floras
consent, as Flora was already dead at the time of the sale.
Melecio also claims that Genaro Molina must have falsified the document transferring
Anastacio and Floras one-half undivided interest over the land. Finally, Melecio asserts that he
occupied the subject property from the time of Anastacios death up to the time he filed the
Complaint. 9 Melecio presented the testimonies of the Records Officer of the Register of Deeds
of Tarlac, and of Melecios nephew, George Domingo (George).
The spouses Molina asserted that Anastacio surrendered the title to the subject property
to answer for his debts and told the spouses Molina that they already own half of the land. The
spouses Molina have been in possession of the subject property before the title was registered
under their names and have religiously paid the propertys real estate taxes. They also asserted
that Melecio knew of the disputed sale since he accompanied Anastacio several times to borrow
money. The last loan was even used to pay for Melecios wedding. Finally, the spouses Molina
asserted that Melecio built his nipa hut on the subject property only in 1999, without their
knowledge and consent
Meanwhile, the spouses Molina died during the pendency of the case and were
substituted by their adopted son, Cornelio Molina

ISSUE
Whether or not the sale of a conjugal property to the spouses Molina without Floras
consent is valid and legal

RULING
Anastacio and Floras conjugal partnership was dissolved upon Floras death.

37
There is no dispute that Anastacio and Flora Domingo married before the Family Codes
effectivity on August 3, 1988 and their property relation is a conjugal partnership. Conjugal
partnership of gains established before and after the effectivity of the Family Code are governed
by the rules found in Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property Relations
Between Husband and Wife) of the Family Code. This is clear from Article 105 of the Family
Code which states:
x xx The provisions of this Chapter shall also apply to conjugal partnerships of gains
already established between spouses before the effectivity of this Code, without prejudice to
vested rights already acquired in accordance with the Civil Code or other laws, as provided in
Article 256.
The conjugal partnership of Anastacio and Flora was dissolved when Flora died in 1968,
pursuant to Article 175 (1) of the Civil Code (now Article 126 (1) of the Family Code).
Article 130 of the Family Code requires the liquidation of the conjugal partnership upon
death of a spouse and prohibits any disposition or encumbrance of the conjugal property prior to
the conjugal partnership liquidation, to quote:
Article 130. Upon the termination of the marriage by death, the conjugal
partnership property shall be liquidated in the same proceeding for the settlement of
the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the
conjugal partnership property either judicially or extrajudicially within one year from the death of
the deceased spouse. If upon the lapse of the six month period no liquidation is made, any
disposition or encumbrance involving the conjugal partnership property of the terminated
marriage shall be void. x xx (emphases supplied)
While Article 130 of the Family Code provides that any disposition involving the conjugal
property without prior liquidation of the partnership shall be void, this rule does not apply since
the provisions of the Family Code shall be without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws.

The spouses Molina became co-owners of the subject property to the extent of
Anastacios interest.
The OCT annotation of the sale to the spouses Molina reads that [o]nly the rights,
interests and participation of Anastacio Domingo, married to Flora Dela Cruz, is hereby sold,
transferred, and conveyed unto the said vendees for the sum of ONE THOUSAND PESOS
(P1,000.00) which pertains to an undivided one-half (1/2) portion and subject to all other
conditions specified in the document x xx (emphases supplied). At the time of the sale,
Anastacios undivided interest in the conjugal properties consisted of: (1) one-half of the entire
conjugal properties; and (2) his share as Floras heir on the conjugal properties. Anastacio, as a
co-owner, had the right to freely sell and dispose of his undivided interest, but not the interest of
his co-owners. Consequently, Anastactiossale to the spouses Molina without the consent of the
other coowners was not totally void, for Anastacios rights or a portion thereof were thereby
effectively transferred, making the spouses Molina a co-owner of the subject property to the
extent of Anastacios interest. This result conforms with the well-established principle that the

38
binding force of a contract must be recognized as far as it is legally possible to do so (quando
res non valet ut ago, valeat quantum valerepotest)
An implied co-ownership among Floras heirs governed the conjugal properties pending
liquidation and partition.
An implied ordinary co-ownership ensued among Floras surviving heirs, including
Anastacio, with respect to Floras share of the conjugal partnership until final liquidation and
partition; Anastacio, on the other hand, owns one-half of the original conjugal partnership
properties as his share, but this is an undivided interest.
Article 493 of the Civil Code onco-ownership provides: Article 493. Each co-owner shall
have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment,
except when personal rights are involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership. (399) (emphases supplied) Thus, Anastacio,
as co-owner, cannot claim title to any specific portion of the conjugal properties without an
actual partition being first done either by agreement or by judicial decree. Nonetheless,
Anastacio had the right to freely sell and dispose of his undivided interest in the subject
property.
The spouses Molina would be a trustee for the benefit of the co-heirs of Anastacio in
respect of any portion that might belong to the co-heirs after liquidation and partition. The
observations of Justice Paras cited in the case of Heirs of Protacio Go, Sr. V. Servacio27 are
instructive: x xx [I]f it turns out that the property alienated or mortgaged really would pertain to
the share of the surviving spouse, then said transaction is valid. If it turns out that there really
would be, after liquidation, no more conjugal assets then the whole transaction is null and void.
But if it turns out that half of the property thus alienated or mortgaged belongs to the husband as
his share in the conjugal partnership, and half should go to the estate of the wife, then that
corresponding to the husband is valid, and that corresponding to the other is not. Since all these
can be determined only at the time the liquidation is over, it follows logically that a disposal
made by the surviving spouse is not void ab initio. Thus, it has been held that the sale of
conjugal properties cannot be made by the surviving spouse without the legal requirements. The
sale is void as to the share of the deceased spouse (except of course as to that portion of the
husbands share inherited by her as the surviving spouse). The buyers of the property that could
not be validly sold become trustees of said portion for the benefit of the husbands other heirs,
the cestui que trust ent. Said heirs shall not be barred by prescription or by laches. Melecios
recourse as a co-owner of the conjugal properties, including the subject property, is an action for
partition under Rule 69 of the Revised Rules of Court. As held in the case of Heirs of Protacio
Go, Sr., it is now settled that the appropriate recourse of co-owners in cases where their
consent were not secured in a sale of the entire property as well as in a sale merely of the
undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the
Revised Rules of Court.

39

ALELI C. ALMADOV AR, GENERAL MANAGER ISAWAD, ISABELA CITY, BASILAN

PROVINCE, Petitioner, vs. CHAIRPERSON MA. GRACIA M. PULIDO-TAN, COMMISSION
ON AUDIT, Respondent.
G.R. No. 213330

NOVEMBER 16, 2015

MENDOZA, J.:
FACTS:
Isabela Water District (ISA WAD) is a government owned and controlled
corporation (GOCC) created pursuant to the provisions of Presidential Decree (P.D.)
No. 198, or the "Provincial Water Utilities Act of 1973" (PWUA), as amended by
Republic Act (R.A.) No. 9286.4 Aleli G. Almadovar (petitioner) is the General
Manager (GM) of ISA WAD.
On April 26, 2007, petitioner filed an appeal with the Regional Cluster
Director, Cluster III-Public Utilities, Corporation Government Sector, which was
indorsed to the COA Regional Office. Petitioner insisted that the increase in her
salary and her RAT A was in accordance with R.A. No. 9286, or the law which
amended the PWUA. Petitioner further claimed that the engagement of a private
counsel, Atty. Quirino Esguerra Jr. (Atty. Esguerra), and the designation of OGCC
lawyer, Atty. Fortunato G. Operario Jr. (Atty. Operario), were in accordance with the
procedure set forth by law. Consequently, the payments made to them were
appropriate.
The COA Regional Office agreed that the payment of honoraria to Atty.
Operario had no basis because it constituted an unnecessary and excessive
expenditure. The disallowed amount in ND No. 2006-002(2005), was reduced from
P48,000.00 to 1240,000.00 because Atty. Esguerra's services from November to
December 2005 were covered by a retainership contract duly approved by the
OGCC and with the written concurrence of the COA.
The COA ruled that the payments to Atty. Esguerra from January to October
2005 were improper because his services were retained without the necessary
conformity and concurrence of both the OGCC and the COA. Only the retainership
contract for a period of one year effective on November 1, 2005 was with the
conformity and concurrence of both the OGCC and the COA.

ISSUE:
Whether or not the disbursements under the NDs were improper.
HELD:
In this case, the Court is of the view that the payment of the erroneous increase in
petitioner's salary was nonetheless made in good faith. The increase was computed
in accordance with the scale provided by the Office of the Philippine Association of

40
Water Districts, Inc., which also made an erroneous opinion that R.A. No. 9286
repealed the SSL. Further, at the time the disbursement was made, no categorical
pronouncement, similar to Mendoza, that the L WDs are subject to the provisions of
the SSL, had been issued.
Good faith, however, cannot be appreciated in petitioner's other disbursements.
Petitioner knowingly approved the payments to Atty. Esguerra and Atty. Operaria in
spite of the lack of the necessary approval by the government offices concerned.
Further, petitioner's failure to claim her excessive RAT A after the NDs were issued
does not evince good faith because, at that time, CBC No. 18 and NBC No. 498
already provided for the allowable RATA to be given to GMs ofLWDs.