Canullas vs.

Fortun

Fernando Canullas was married to Mercedes Calimlim-Canullas begetting 5 children. They lived in a
small house in the residential land which Fernando inherited when his father died. Sixteen years after
his marriage with Mercedes, he abandoned his family and lived with Corazon Daguines.

Fernando sold the inherited land with the house thereon to Daguines for the sum of P2, 000 and in the
document of sale; Fernando described the house as also inherited by me from my parents.

Daguines however was unable to take possession of the house and lot hence, she filed a complaint for
quieting of title and damages against Mercedes. Mercedes resisted and claimed that the house in
dispute where she and her children were residing including the coconut trees on the land, were built
and planted with conjugal funds and through her industry, that the sale of land together with the house
and improvements to Daguines was null and void because they are conjugal properties and she had not
given her consent to the sale.

In the original judgment, Court declared Daguines as the lawful owner of the land in question as well as
of the house erected on the land. Upon reconsideration prayed by Mercedes however, Court
amended the decision and declared Mercedes as the true owner of the land in question as well as the 10
coconut trees. Court also declared null and void the sale of the conjugal house between Fernando and
Daguines.

Hence, this present petition.

ISSUE: WON the sale of the lot together with the house and improvements thereon was valid under
circumstances surrounding the transaction

HELD:

No, the sale was null and void.

The sale was deemed null and void not only because of the fact that the sale was made by a husband in
favor of a concubine after he abandoned his family and left the conjugal home where his wife and
children lived and from whence they derive support but also of the fact that the law emphatically
prohibits spouses from selling property to each other subject to certain exceptions.

Article 1490 states that:

The husband and the wife cannot sell property to each other, except:
-When separation of property was agreed upon in marriage settlements; or
-When there has been judicial separation of property

This is so because if transfers or conveyances between spouses were allowed during marriage, that
would destroy the system of conjugal partnership, a basic policy in civil law. It was also designed to
prevent the exercise of undue influence by one spouse over the other as well as to protect the
institution of marriage, which is the cornerstone of family law. This prohibition applies as well to couples
living as husband and wife without the benefit of marriage, otherwise, the condition of those who
incurred guilt would turn out to better than those in legal union.

Applying in the present case at hand, the sale therefore of Fernando to Daguines of the land is null and
void considering they were living together as husband and wife after abandoning Mercedes and their
children.

Cruz v. CA

Gloria Cruz and Romeo Suzara lived together as husband and wife without the benefit of marriage. After
5 years of living together solely out of love and affection for Suzara, she executed a deed of absolute
sale over her lot in favor of Suzara without any monetary consideration and thereafter, Suzara
registered the document in his favor and used the said property as collateral for a bank loan. However,
Suzara failed to pay hence the mortgage was foreclosed, Cruz however paid the bank to restructure the
loan resulting in the extension of the redemption period for 2 years.

However, without Cruzs knowledge and before expiration of extended period, Suzara redeemed the
property. She tried to talk to him but he avoided her. Finally to protect her interests, she executed an
affidavit of adverse claim which she registered in Register of Deeds asserting that her sale in favor of
Suzara was null and void for lack of consideration and being contrary to law and public policy.

After, she filed a complaint in RTC against Suzara for quieting of title, declaration of nullity of documents
and damages with prayer for writ of preliminary injunction.

Suzara denied the claims of Cruz and said that he was already the registered owner of the property
having acquired ownership of it from Cruz through a notarized deed of absolute sale thus, Cruz has
already been estopped from impugning the validity of the sale and questioning his title over the
property.

Cruz filed an ex parte motion to admit her amended complaint impleading Vizconde as additional
defendant and praying for Register of Deeds to annotate her notice of lis pendens on Suzaras title.
Vizconde, answering the amended complaint, said that there was no privity of contract between him
and Cruz and that he was a purchaser in good faith and that the sale between him and Suzara was long
before the execution of Cruzs affidavit of adverse claim and that such action was already barred by
laches, estoppel and prescription.

RTC ruled that the sale between Cruz and Suzara was valid with love, affection and accommodation
being the consideration of the sale. It also found Vizconde as innocent purchaser because at the time he
purchased the property he was unaware of the adverse claim of Cruz. On appeal, CA affirmed the
judgment of RTC. Cruz on the other hand argues that the consideration of love, affection and
accomodation for the sale was not a valid cause for conveyance of property as there was no price paid
in money or its equivalent and since her sale to Suzara was null and void issue of its illegality cannot be
waived.

Hence, present petition.

ISSUE: WON Cruz can still seek reconveyance of her property

HELD:
No, Cruz cannot seek reconveyance of her property.

Although under Article 1490 of the Civil Code states that the husband and wife cannot sell property to
one another as a rule which, for policy considerations and dictates of morality require that prohibition
apply to common-law relationships, Cruz can no longer seek reconveyance of property to her as it has
already been acquired by Vizconde in good faith and for value from her own transferee.

The real purpose of the Torrens system of registration is to quiet title to land and put a stop to any
question of legality of the title except claims which have been recorded in the certificate of title at the
time of registration or which may arise subsequent thereto. Every registered owner and every
subsequent purchaser for value in good faith holds title to property free from all encumbrances except
those noted in the certificate. Hence, a purchaser is not required to explore further what the Torrens
title on its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat
his right thereto. Where innocent persons, relying on correctness of certificate of title issued, acquire
rights over property the Court cannot disregard such rights and order total cancellation of certificate.

A purchaser in good faith is one who buys the property of another without notice that some other
person has a right to or interest in such property and pays a full and fair price for the same at the time of
such purchase or before he has notice of claim of another person.

Both lower courts found that at the time Suzara executed the deed of absolute sale in favor of Vizconde
which was acknowledged before a notary public, Suzara was the registered owner appearing in the
certificate of title. When the sale was executed, nothing was annotated in the certificate of title to
indicate any adverse claim of a 3rd person or the fact that the property was subject of any pending
litigation. It was only after the sale to Vizconde that Cruz filed her adverse claim with the Register of
Deeds. There is no doubt therefore that Vizconde was a purchaser for value in good faith and that when
he bought the property he had no knowledge that some other person had a right to or an adverse
interest in the property.

SC therefore cannot grant Cruzs prayer to have Vizcondes certificate of title declared null and void.
Neither can they order the reconveyance of property to Cruz with Vizconde being a purchaser of
registered land for value in good faith holds an indefeasible title to the land.
Guardians, Agents and Admin Trust Co. v. Roldan

FACTS:

On August 10, 1948, petitioner Phil. Trust Co. replaced Socorro as guardian. Petitioner filed a complaint
to annul two contracts regarding the 17 parcels of land: a) sale thereof by Socorro as guardian to Fidel
Ramos; and b) sale thereof by Fidel Ramos to Socorro personally. Petitioner contends that the step-
mother in effect, sold to herself, the properties of her ward thus should be annulled as it violates Article
1459 of the Civil Code prohibiting the guardian from purchasing either in person or through the
mediation of another the property of her ward. As to the third conveyance, Socorro had acquired no
valid title to convey to Cruz.

The trial court held that Article 1459 was not controlling as there was no proof that Ramos was a mere
intermediary or that the latter agreed with Socorro to buy the parcels of land for her benefit. Court of
Appeals affirmed the judgment, adding that the minor knew the particulars of, and approved the
transactions, and that only clear and positive evidence of fraud and bad faith, and not mere insinuations
and interferences will overcome the presumptions that a sale was concluded in all good faith for value.
Hence, this petition.

ISSUE: Whether the two contracts of sale made by Socorro was valid

HELD:

No. The court held that there is doubt even without proof that she had connived with Dr. Ramos.
Remembering the general doctrine that guardianship is a trust of the highest order, and trustee cannot
be allowed to have any inducement to neglect his wards interest and in line with the Courts suspicion
whenever the guardian acquires the wards property we have no hesitation to declare that in this case,
in the eyes of law, Socorro Roldan took by purchase her wards parcels thru Dr. Ramos and that Article
1459 of the Civil Code applies.

Court as well held that Socorro planned to get the parcels of land for herself from the very short time
between the sales of the land in one week. The Court then concluded that the two sales were actually
part of one scheme guardian getting the wards property through another person because two
years had elapsed between the sales. Such period of time was sufficient to dispel the natural suspicion
of the guardians motives or actions. In the case at bar, however, only one week had elapsed. And if we
were technical, we could say, only one day had elapsed from the judicial approval of the sale to the
purchase by the guardian.

Hence, from both legal and equitable standpoints these three sales should not be sustained: first two for
violation of Article 1459 fo the Civil Code and the third because Socorro Roldan could pass no title to
Emilio Cruz.
Macariola v. Asuncion

FACTS:

When the decision in Civil Case No. 3010 rendered by respondent Hon. Judge Elias B. Asuncion of Court
of First Instance of Leyte became final on June 8, 1863 for lack of an appeal, a project of partition was
submitted to him which he later approved in an Order dated October 23, 1963. Among the parties
thereto was complainant Bernardita R. Macariola.

One of the properties mentioned in the project of partition was Lot 1184. This lot according to the
decision rendered by Judge Asuncion was adjudicated to the plaintiffs Reyes in equal shares subdividing
Lot 1184 into five lots denominated as Lot 1184-A to 1184-E.

On July 31, 1964 Lot 1184-E was sold to Dr. Arcadio Galapon who later sold a portion of Lot 1184-E to
Judge Asuncion and his wife Victoria Asuncion. Thereafter spouses Asuncion and spouses Galapon
conveyed their respective shares and interests in Lot 1184-E to the Traders Manufacturing and Fishing
Industries Inc. wherein Judge Asuncion was the president.

Macariola then filed an instant complaint on August 9, 1968 docketed as Civil Case No. 4234 in the CFI of
Leyte against Judge Asuncion with "acts unbecoming a judge" alleging that Judge Asuncion in acquiring
by purchase a portion of Lot 1184-E violated Article 1491 par. 5 of the New Civil Code, Art. 14, pars. 1
and 5 of the Code of Commerce, Sec. 3 par. H of R.A. 3019, Sec. 12 Rule XVIII of the Civil Service Rules
and Canon 25 of the Canons of Judicial Ethics.

On November 2, 1970, Judge Jose Nepomuceno of the CFI of Leyte rendered a decision dismissing the
complaints against Judge Asuncion.

After the investigation, report and recommendation conducted by Justice Cecilia Munoz Palma of the
Court of Appeals, she recommended on her decision dated March 27, 1971 that Judge Asuncion be
exonerated.

Issue: Does Judge Asuncion, now Associate Justice of Court of Appeals violated any law in acquiring by
purchase a parcel of Lot 1184-E which he previously decided in a Civil Case No. 3010 and his
engagement in business by joining a private corporation during his incumbency as a judge of the CFI of
Leyte constitute an "act unbecoming of a judge"?

Ruling: No. The respondent Judge Asuncion's actuation does not constitute of an "act unbecoming of a
judge." But he is reminded to be more discreet in his private and business activities.

SC ruled that the prohibition in Article 1491 par. 5 of the New Civil Code applies only to operate, the sale
or assignment of the property during the pendency of the litigation involving the property. Respondent
judge purchased a portion of Lot 1184-E on March 6, 1965, the in Civil Case No. 3010 which he rendered
on June 8, 1963 was already final because none of the parties therein filed an appeal within the
reglementary period. Hence, the lot in question was no longer subject to litigation. Furthermore, Judge
Asuncion did not buy the lot in question directly from the plaintiffs in Civil Case No. 3010 but from Dr.
Arcadio Galapon who earlier purchased Lot1184-E from the plaintiffs Reyes after the finality of the
decision in Civil Case No. 3010.

SC stated that upon the transfer of sovereignty from Spain to the US and later on from the US to the
Republic of the Philippines, Article 14 of Code of Commerce must be deemed to have been abrogated
because where there is change of sovereignty, the political laws of the former sovereign, whether
compatible or not with those of the new sovereign, are automatically abrogated, unless they are
expressly re-enacted by affirmative act of the new sovereign. There appears no enabling or affirmative
act that continued the effectivity of the aforestated provision of the Code of Commerce, consequently,
Art. 14 of the Code of Commerce has no legal and binding effect and cannot apply to the respondent
Judge Asuncion.

Respondent Judge cannot also be held liable to par. H, Section 3 of R.A. 3019 because the business of
the corporation in which respondent participated had obviously no relation or connection with his
judicial office.

Aviles v. Arcega

FACTS:

House in dispute in this case was sold by the spouses Venancio Alcantara and Vicenta Capulong to
Generosa Aviles as evidences by the document marked with letter A and acknowledged before the
notary public for the sum of P497 it having been stipulated that during 4 months from the 10th of
October 1917, vendors would continue in possession of the house the expenses for repair, ladn other
tax to be for their account, as well as payment of rent for the lot in which it is erected.

However such house was again sold by the same spouses Venancio Alcantara and Vicenta Capulong for
P500 to spouses Fortunato de Leon and Segunda Arcega who, unlike first buyer, took possession of the
property.

Because of this alleged double sale, case is submitted to the consideration of the Court for the
determination of question of law as to which of the two purchasers acquired title to the property. RTC
rendered judgment declaring Arcega to be the owner of the house and absolving them from the
complaint with costs.

Hence this present petition with Aviles appealing that RTC erred in ruling that Arcega became the owner
of the subject property.
ISSUE: WON RTC erred in ruling Arcega became the owner of the subjected property

HELD:

No, RTC correctly ruled that it was the second purchaser who became the lawful owner of the property.

It is to be noted that Aviles never had possession of the house, as stated at the end of the second
paragraph of the stipulation of facts, which says plaintiff Generosa Aviles never having taken
possession of the house either at the execution of the deed of sale, or at any other time. It thus being
admitted by the appellants that the purchases Generosa Aviles, one of the plaintiff, never had
possession of the house, it cannot therefore be presumed that she took possession at the expiration of
the 4 months following the sale, as stipulated by the parties. Such positive fact having been expressly
admitted, there can be no presumption to the contrary. It can also be noted that at the time of the
execution of the deed in favor of Aviles, the first purchaser, there was no symbolic delivery because
there was an express stipulation to the contrary. It cannot therefore be said that after the lapse of four
months following during which vendors were to continue in possession of the house, according to
stipulation, any symbolic delivery subsisted. Nothing can subsist that did not exist before. It cannot be
said that symbolic delivery spontaneously took after the lapse of the four months stipulated, for there is
no law providing that it should take place after the execution of the document where there is a
stipulation to the contrary. The law does not say that such a symbolic delivery is suspended when at the
execution of the document a stipulation to the contrary is made. What the law simply says is that no
such symbolic tradition can take place, can exist when there is a stipulation to the contrary.

As we understand the law, there is symbolic delivery when the sale is made in a public document, and
nothing appears therein to the contrary either expressly or impliedly; and no such symbolic delivery can
be held to take place when, as in the instant case, there is in the document a stipulation to the contrary.

Neither can it be said that the house must be presumed to have been delivered to the first purchaser
after the lapse of the four month aforesaid, for such a presumption is overthrown by the fact stipulated
by the parties that this first purchaser never took possession of the house.

We entertain no doubt, either under the facts or under the law of the case, as to the right of the
defendants to the house in question, with absolute exclusion of the plaintiffs.

FLORENDO v. FOZ

Facts:
Eustaquio P. Foz executed in Manila a contract, ratified before a notary, obligating himself to deliver his
house and lot for a consideration of P6,000 to Jose Florendo. The latter already paid P2,000 of the
purchase prize. In the contract, plaintiff fixed the period of the payment of the prize wherein plaintiff
has to pay the remainder of the prize when he goes to Vigan or if not to pay to the Church wherein he
has a debt and to obtain the title of the subject matter of the sale. Defendant went to Vigan, plaintiff
tendered payment of the remainder of the prize, however, the former refused, saying that the true prize
of the sale recorded in the other instrument was P10,000. As defendant refused payment, plaintiff filed
a suit to comply with the contract of absolute purchase and sale, by delivering to the plaintiff the
property sold.

Issue: WON the plaintiff can compel the defendant to deliver his property pursuant to the notarized
contract.

Held:
Yes. The contract is valid and effective. From the validity and force of the contract is derived the
obligation on the part of the vendor to deliver the thing sold. Pursuant to the contract, it cant
be found that the payment of the prize is a precondition for the delivery of the thing. There was no need,
therefore, of assent on the part of the plaintiff to pay the P4,000, the remainder of the price, in order to
oblige the defendant unconditionally to deliver the property sold. With still more reason should the
defendant be compelled to effect the material delivery of the property, since, after the lapse of the
period for the delivery of the price, the plaintiff hastened to pay it and, on account of the defendant's
refusal to receive it, duly deposited it, in order to avoid the consequences that might issue from
delinquency in the payment of a sum entrusted to him for a fixed period. It is the material
delivery of the property sold which the defendant must make in compliance with the contract, inasmuch
as the formal delivery de jure was made, according to the provisions of article 1462, 2nd paragraph, of
the same code.

Luzon Brokerage v. Maritime Building

In Manila, Myers owned 3 parcels of land with improvements. Myers entered into a contract called
Deed of Conditional Sale with Maritime Building and sold it for P1 Million. They agreed on the manner
of payment (installment, initial payment upon execution of contract). In the contract, it was stipulated
that in case of failure of buyer to pay any of the installments contract will be annulled at the option of
seller and all payments made by buyer is forfeited.

Later on, stipulated installments of P10,000 with 5% interest was amended to P5000 with 5.5% per
annum. Maritime paid the monthly installments but failed to pay the monthly installment for March. VP
of Maritime wrote to President of Myers requesting for a moratorium on the monthly payment of
installments because the company was undergoing financial problems but Myers refused. For the
months of March, April, and May, Maritime failed to pay and did not heed the demand of Myers.

Myers wrote Maritime cancelling the Deed of Conditional Sale and demanded the return the possession
of properties and held Maritime liable for use and occupation amounting to P10,000 per month.

In the meantime, Luzon Brokerage was leasing the property from Maritime hence Myers demanded
from Luzon the payment of monthly rentals of P10,000 and also demanded surrender of property.

While actions and cross claims between Myers and Maritime were happening, the contract between
Maritime and Luzon was extended for 4 more years. Turns out, Maritimes suspension of its payments to
Myers Corp arose from a previous event: an award of backwages made by Court of Industrial Relations
in favor of Luzon Labor Union (employees employed by Luzon Brokerage). FH Myers was a major
stockholder of Luzon Brokerage. FH Myers promised to indemnify Schedler (who controlled Maritime)
when Schedler purchased FH Myers stock in Luzon Brokerage company.

RTC ruled Maritime in breach of contract hence, this petition.

ISSUE:

-Has there been a breach of contract

-Can Myers extrajudicially terminate the contract

HELD:

Yes, there is a breach of contract and Myers can extrajudicially terminate the contract.

Failure to pay monthly installments constitutes a breach of contract. Default was not made in good faith.
The letter to Myers Corp. means that the non-payment of installments was deliberately made to coerce
Myers Corp into answering for an alleged promise of the dead FH Myers. Whatever obligation FH Myers
had assumed is not an obligation of Myers Corp. No proof that board of Myers Corp. agreed to assume
responsibility to debts of FH Myers and heirs.

Schedler allowed the estate proceedings of FH Myers to close without providing liability. By the balance
of payments in the deed of Conditional Sale, Maritime was attempting to burden Myers Corp with an
uncollectible debt since enforcement against FH Myers was already barred therefore, Maritime acted in
bad faith.

Maritimes contract with Myers is not the ordinary sale contemplated in Article 1592 of the Civil Code.
The distinction between contracts of sale and contract to sell with reserved title has been recognized by
this Court in repeated decisions upholding the power of promisors under contracts to sell in case of
failure of the other party to complete payment, to extrajudicially terminate the operation of the
contract, refuse conveyance and retain the sums or installments already received, where such rights are
expressly provided for, as in this case.

Midway Maritime and Technological Foundation v. Castro

FACTS:

Midway Maritime and Technological Foundation is the lessee of two parcels of land in Cabanatuan City.
The president of the company is Dr. Sabino Manglicmot who is married to Adoracion Cloma, the
registered owner of the land. Inside said property stands a residential building owned by Castro.

The two parcels of land were originally owned by Castros father Louis Castro, Sr. who was also the
president of Cabanatuan City Colleges (CCC).
On August 15, 1974, Castro mortgaged the property to Bancom Development Corporation to secure a
loan. During the subsistence of the mortgage, CCCs board of directors agreed to a 15-year lease of
portion of the property to Castros children who subsequently built the residential house now in dispute.
Lease was to expire in 1992.

When CCC failed to pay its obligation, Bancom foreclosed the mortgage and the property was sold at
public auction in 1979 with Bancom as the highest bidder. Bancom thereafter assigned the credit to
Union Bank of the Philippines, and later on, Union Bank consolidated its ownership over the properties
in 1984 due to CCCs failure to redeem the property.

When Union Bank sought the issuance of a writ of possession over the properties, which included the
residential building, Castros opposed the same. Case reached the Court and in a decision ruled that the
residential house was owned by the Castros.

In the meantime, Adoracions father, Tomas Cloma bought the two parcels of land from Union Bank in
an auction sale and leased the property to Midway Maritime and thereafter, sold the same to Adoracion.
Several suits then were brought by the Castros against Midway Maritime including the present case
which is an action for Ownership, Recovery of Possession and Damages.

In fact Castros alleged that they are the owners of the residential building which they used from 1977 to
1985 when they left for US and instituted their Uncle Josefino Castro as the caretaker. Midway Maritime
however denied Castros ownership of the building and claimed that Adoracion owns the building having
bought the same together with the land on which it stands.

RTC rendered judgment in favor of the Castros and declared them as absolute owners of the residential
building. CA however dismissed Midways appeal, hence petition.

ISSUE: WON there was a lease agreement between petitioner and respondent regarding the residential
building

HELD:

Yes, Midway Maritime therefore cannot claim ownership over the building.

Such issue is a question of fact already resolved by the RTC in the affirmative. Such lease agreement was
evidenced by a cash disbursement voucher issued by Midway Maritime to Mrs. Lourdes Castro for the
rentals for the building in the total amount of P36, 000.00.

It is settled that once a contract of lease is shown to exist between parties, lessee cannot by any proof,
however strong, overturn conclusive presumption that the lessor has a valid title or a better right of
possession to the subject premises than the lessee. Section 2(b), Rule 131 of Rules of Court prohibits a
tenant from denying the title of his landlord at the time of the commencement of relation of landlord
and tenant between them.

Further under prevailing jurisprudence, Court held that the rule on estoppel against a tenant and
clarified that what a tenant is estopped from denying is the title of his landlord at the time of the
commencement of the landlord-tenant relation. If the title asserted is one that is alleged to have been
acquired subsequent to the commencement of that relation, the presumption will not apply. In this case,
Adoracions ownership dates back to her purchase of two parcels of land from her father, Tomas. It was
Tomas who bought the property in an auction sale by Union Bank in 1993 and leased it to petitioner in
the same year. Note must be made that the petitioners president, Manglicmot, is the husband of
Adoracion and son-in-law of Tomas. It is not improbable that at the time the petitioner leased the
residential building from the respondents mother in 1993, it was aware of the circumstances
surrounding the sale of the two parcels of land and the nature of the respondents claim over the
residential house. Yet, the petitioner still chose to lease the building. Consequently, the petitioner is
now estopped from denying the respondents title over the residential building.

What Tomas bought from Union Bank in the auction sale were the two parcels of land originally
owned and mortgaged by CCC to Bancom, and which mortgage was later assigned by Bancom to
Union Bank. Contrary to the petitioners assertion, the property subject of the mortgage and
consequently the auction sale pertains only to these two parcels of land and did not include
the residential house.