AGENCY, TRUST and Partnership

Spouses Villaluz

VS

LAND BANK OF THE Philippines

January 18, 2017

G.R NO. 192602

PONENTE: Jardeleza J.;

Nature of the Action ; Petition for review on certiorari

Agency; Agent has the power to appoint a substitute.

Facts:

Paula Agbist is the mother of petitioner May S. Villaluz and the chairperson of Milflores
Cooperative. She requested her daughter to provide her with collateral for loan because she needed
600,000 php to 650,000php for the expansion of her backyard cut flowers business. May, convinced
her husband, Jhonny to allow her mother, Paula to use their land , located in Calinan, Davao City,as a
collateral.On March 25, 1996, the Spouses Villaluz executed a Special power of Attorney in favor of Paul
authorizing her to negotiate for the sale mortgage or other forms of disposition of parcel of land and
sign in our behalf all documents relationg to the sale, loan or mortgage. The Special power of Attorney
neither specified the conditions under which the special powers may be exercised nor stated the
amounts for which the subject land may be sold or mortgaged.

On June 19, 1996, Paula executed her own Special Power of Attorney, appointing Milflores
Cooperative as attorney-in-fact in obtaining a loan from and executing a real mortgage in favor of Land
Bank of the Philippines, On June 21, 1996, executed a Real Estate Mortgage in favor of land bank in
consideration of the 3,000,000 php loan to be extended by the latter.On June 24, 1996, Milflores
Cooperative also executed a Deed of Assgnment of the Produce/Inventory as additional collateral for
the loan. Land Bank partially released 1/3 of the total loan amount of 995,500 Php to Milflores
Cooperative for the loan. Unfortionately, Milforcs Cooperative was unable to pay its obligations to Land
Bank which cause the latter to extra-judicial foreclosure. The Spouses Villaluz learned on August, 2003
that an auction sale covering their land had been set for October 2, 2003. Land Bank won the auction
sale as the sole bidder.
Issue: Was the mortgage executed by the substitute is valid and binding upon principal?

Ruling:

Article 1892 and 1893 of the Civil Code provide the rules regarding the appointment of a
substitute by an agent;

Article 1892; provides that agent may appoint a substitute if the principal has not prohibited him from
doing so; but he shall be responsible for the acts of the substitute;

a. When he was not given the power to appoint one;

b. When he was given such power,but without designating the person, and the person appointed
was notoriously incompetent or insolvent.

Article 1893,In the cases mentioned in Nos.1 and 2 of the preceding article, the principal may
furthermore bring an action against the substitute with respect to the obligations which the latter
has contracted under substitution.

There is a presumption that an agent has the power to appoint a substitute, upon a valid appointment
of a substitute by agent, there ipso jure arises an agency relationship between the principal and the
substitute, the substitute becomes the agent of the principal. As a result the principal is bound by the
acts of the substitute as if these acts had been performed by the principal’s appointed agent.In order to
make the presumption inoperative and relieve himself from its effects, it is incumbent upon the
principal to prohibit the agent from appointing a substitute.
OBLIGATION AND CONTRACTS

Spouses Ibanez

VS

James Harper as Representative of the heirs of Francisco Munoz, SR.

February 15, 2017

G.R NO.194272

Ponente: Jardeleza J;

Nature of the action; Petition for review on Certiorari under Rule 45.

Joint and Solidary Obligation; if solidary could not be inferred from the agreement, the presumption
under the law applies the obligation is joint

Facts:

The petitioner Spouses Ibanez borrowed from Francisco Munoz Sr., Consuelo Estrada and Ma.
Consuelo E. Munoz the amount of 1,300,000 Php payable in three months , with interest ratw of 3 %
per month. They executed a promisorry note binding themselves “ jointly and severally to pay
Ma.Consuelo and Consuelo the loan amount with interest. The Spouses Ibanez executed a Deed of Real
Estate Mortagage in favor of Ma. Consuelo and Consuelo over a parcel of land and its improvements,
the mortgage contains the same terms as the promissory note.

On September 23, 1997, Ma. Consuelo and Consuelo applied for foreclosure of the real estate
mortage alleging that the conditions of the mortgage have been violated since November 17, 1996 and
that all check payments were dishonored by the drawee. On the otherhand, Spouses Ibanez filed for
injuction and damages with prayers for writ of preliminary injuction and temporary restrating order
against Ma.Consuelo , Francisco and Consuelo alleging that there is no reason to proceed with the
foreclosure because the real estate mortgage was novated. On June 11, 2002 the parties filed a Joint
Motion for Approval of Amended Compromise Agreement which eventually approved by the RTC and
adopted it as its “Hatol”. CA ruled that the Amended Complaint and Hatol identified Francisco, Ma.
Consuelo and Consuelo as the creditors and parties who were supposed to receive the proceeds of the
Amended Compromise Agreement, since the deed of assignment was executed only in favor of Ma.
Consuelo and Consuelo, the loan obligation of the spouses Ibanez to Fracisco remain unsettled.
Issue: Was the deed of assignment made to Ma. Consuelo and Consuelo extinguish the obligation to
Francisco?

Ruling: No, the Deed of Assignment made to Ma. Consuelo and Consuelo does not extinguish their
obligation to Francisco. There is nothing in the Hatol and the Amended Compromise Agreement it is
bases on, which shows a declaration that the obligation created was solidary. As defined im Article 1208,
a joint obligation is on where there is a concurrence of several creditos, or of several debtors, or of
several debtors and creditors, by virtue of which each of the creditors has a right to demand and each
of the debtor is bound to render compliance with his proportionate part of the prestation which
constitutes the object of the obligation. This means that Francisco, Ma.Consuelo and Consuelo are each
entitled to equal shares in the 3,000,000 Php agreed upon in the Amended Compromise Agreement and
that payment to Consuelo and Ma. Consuelo will not have the effect of discharging the obligation with
respect to Francisco.
OBLIGATIONS AND CONTRACTS

United Coconut Planters Bank

Vs

Spouses Walter UY and Lily UY

January 10, 2018

G.R NO. 204039

Ponente: Martires J;

Nature of the action ;Petition for review on certiorari

Assginment of credits; Dacion en pago/

FACTS:

Spouses Walter and Lily entered into a contract to sell with PPGI for a unit in Kiener Hills, Prime town
Property Group and E. Gazon Inc. were the joint developer of Kiener Hills Mactan Condominium Project.
The Spouses Uy, agreed to pay according to the following terms (a) 100,000 Php as a down payment
and (b) the balance paid in 40 monthly installments at 26, 297.97 Php from January 16, 1997 to April 16,
2000. PPGI and United Coconut Planters Bank executed a Memorandum of Agreement and the sale of
Receivables and Assignment of Rights and Interests. PPGI transferred the right to collect the receivables
of the buyers, which included respondents, of the units in Kienr Hills. The spouses were constrained to
file a complaint for sum of money and damages against PPGI and UCPB. They claimed that in spite of
their full payment of the purchase price, the PPGI failed to complete the construction of their units in
Kiener Hills.

HLRUB’s decision on November 29, 2006, found that respondents were entitled to a refund in view of
PPGI’s failure to complete the construction of their units. Nonetheless it found that UCPB cannot
solidary liable with PPGI because only the accounts recievables were conveyed to UCPB and no the
entire condominium project. CA affirmed with modification the OP decision. While the appellate court
agrred that respondents are entitled to a full refund of the payments they may have made, it ruled that
UCPB is not solidary liable with PPGI and, as such cannot be held liable for the full satisfaction of
respondents’ payments.

ISSUE: Was the agreement between Primetown and UCPB, made the latter to assumed the liabilities
and obligations of Primetown under its contract to sell with Spouses UY?

RULING
 An assignment of credit has been defined as an agreement by virtue of which the owner of a
credit known as assignor, by legal cause- such as sale, dation in payment or exchange or donation and
without need of the debtor’s consent, transfer that credit and its accessory right to another , known as
the assignee, who acquires the power to enforce it to the same extent as the assignor could have
enforced it against the debtor. In every case, the obligations between assignor and assignee will
depende upon the judicial relation which is the basis of the assignment. An assignment will be construed
in accordance with the rules of construction governing contracts generally, the primary object being
always to ascertain and carry out the intention of the parties.This intention is to be derived from a
consideration of whole instrument, all parts of which should be given effect, and is to be sought in the
words and language employed. The agreement conveys the straightforward intention of Primetown to
“sell, assign, transfer , convey and set over” to UCPB the receivables, rights, titles, interests and
participation over the units covered by the contract to sell. It explicitly excluded any and all liabilities
and obligations, which Prime town assumed under contract to sell. The intention to exclude
Primetown’s liabilities and obligations is further shown by Primetown’s subsequent letters to the
buuers, which stated that “ this payment arrangement shall in no way cause any amendment of the
other terms and conditions, nor the cancellation of the contract to sell you have executed with
Primetown.

TORTS

COCA-COLA BOTTLERS PHILS INC.,Petitioer

Vs

ERNANI GUINGONA MENEZ, RESPONDENT

November 22, 2017

G.R NO. 209906

Ponente: Caguioa J:

Nature of the action; Petition for Review on Certiorari under Rule 45

Moral Damages

FACTS;

Research scientist Ernani Guingona Menez was frequent customer of Rosante Bar and
Restraurant of Dumaguete City, she went to the said restaurant and ordered pizza and a bottle of “
Sprite”. He noticed that the taste of the soft drink was not one of “Sprite” but of different substance
repulsive to taste, it smells like kerosene. After drinking the said soft drink he felt burning sensation in
his throat and stomach and could not control the urge to vomit. He left his table for the toilet to vomit
but unable to reach the toilet room he instead vomit on the lavatory found immediately outside the
said toilet. Upon returning to the table he picked up the bottle of sprite and brought it to the place
where the waitress can be found, he was angry and told them that he was served kerosene. All of t he
waitress confirmed that it was smelled like kerosene. He was brought to the emergency room, again
vomited before the hospital staff could examine him. He had to be confined in the hospital for three
days. The analysis identified the contents of the liquid inside the bottle as pure kerosene.

On the other hand, Rosante alleged that he heard that Menez felt nausea but did not vomit
when he went to the comfort room. He further denied that the waitress confirmed the content of the
bottle to be kerosene, as a matter of fact he refused to have the waitresses smell it. CA ruled that the
RTC erred in dismissing the case for failing to comply with administrative remedy because it is not a
condition precedent in pursuing a case for damages under Article 2187 of the Civil Code which is the
basis of Menez complaint for damages. It was also ruled that Menez was not entitled to actual
damages given the observation of his attending physician that his hospital stay was uneventful and he
had taken only small amount of kerosene.

ISSUE;

Is CA correct in awarding moral damages to Menez?

RULING;

Court of Appeals erred in awarding moral damages to Menez. Moral damages may be awarded
only to specific cases, unless the case falls under the enumeration as provided in Article 2219, which is
exclusive and Article 2220 of the Civil Code, moral damages may not be awarded.

Article 2219 provided that Moral damages may be recovered in the following and analogous cases;
 (2) Quasi-delicts causing physical injuries;

Article 2220 which provides the following additional legal grounds for awarding moral damages;

1.Willful injury to property if the court should find that , under the circumstances, such damages are
justly due; and

2. Breaches of contract where the defendant acted fraudulently or in bad faith.

Unfortunately, Menez has not presented competent, credible and preponderanct eveidence to prove
that he suffred physical injuries when he allegedly ingested kerosene from the “Sprite” bott;e in
question. The degree of poisoning on the plaintiff was mild, since the amount ingested was minimal
and did not have severe physical effects on his body. The statements of the doctors who tended to the
medical needs of Menez were equivocal. Physical effects on the body and adverse effect on his body
are not very clear and definite as to whether or not Menez suffered physical injuries and if these
statements indicate the he did, what their nature was or how extensive they were. Therefore, in the
absence of sufficient evidence on physical injuries that Menez sustained , he is not entitled to moral
damages.

OBLIGATION AND CONTRACTS

KT Construction Supply Inc,

represented by William go, Petitioner

V.S
Philippine Savings Bank, Respondent

G.R 228435

JUNE 21, 2017

PONENTE; Mendoza,J;

Nature of the action; Petition for review on certiorari

Acceleration Clause; Contract of Adhension

Facts;

Petitioner KT construction Supply, Inc obtained a loan from respondent Philippine Savings
Bank(PSBank) in the amount of 2.5 Million. The loan was evidenced by promisorry note which was
executed by William K. Go and Nancy Go- Tan as Vice President/ General Manager and Secretary/
treasury of KT Construction it was signed in their personal capacities. it was agreed that the said loan
was payable within the period of sixty (60) months from November 12, 2006 to October 12, 2011. A
demand letter was sent by PSBank to KT construction asking the latter to pay its outstanding obligation
in the amount of 725,438.81.

CA affirmed the RTC decision, it was explained that due to the acceleration clause, the
loan became due and demandable upon KT Construction’s failure to pay an installment. KT Construction
further asserts that the complaint was premature because it was not alleged that it had defaulted in
paying any of the installments due and it had received a demand letter from PSbank.

Issue;

Was the CA correct in making KT Construction liable despite the allegation that they did not
received demand letter?

Ruling;

Acceleration clause is valid and produces legal effects. In the case at bar, the promissory note
explicitly stated that default in any of the installments shall make the entire obligation due and
demandable notice even without demand. KT Construction’s entire loan obligation entire loan obligation
became due and demandable when it failed to pay an installment pursuant to the acceleration clause. It
cannot evade responsibility by claiming that it had not received any demand letter for the payment of
the loan, PSBank had sent a demand letter and asking the former to pay the remaining obligation within
5 days from receipt of the letter. Even granting that KT Construction did not receive the demand letter,
the loan still became due and demandable because the parties expressly waived the necessity of
demand. Promissory note is valid although it was a contract of adhesion. The one who adheres to the
contract is, in reality, free to reject it entirely,if he adheres, he gives his consent.
SALES

Philippine Steel Coating Corp., Petitioner,

V.s

Eduard Quinones, Respondent

G.R No. 194533

APRIL 19, 2017

Ponente; Serebi, CJ;

Nature of the action; petition for certiorari under rule 45

Facts;

In early 1994, Richard Lopez, a sales engineer of Phil steel, offered Quinones their new
product , primer-coated, long span, rolled galvanized iron sheets. Quinones showed interest but asked
Lopez if the primer-coated sheets were compatible with Guilder acrylic paint process used by Amianan
Motors in the finishing of its assembled buses. Lopez being uncertain referred the query to his
immediate superior,Angbengco, Philsteel’s sales manager, the latter assured Quinones that the quality
of their new product was superior to that of the non-primer coated G. sheets being used by Quinones in
his business.

However, sometime in 1995, Quinones, received several complaints from customers who had
bought bus units, claiming that the paint or finish used on the purchased vehicles was breaking and
peeling off. As a result Quinones sent a letter of complaint to PhilSteel invoking the warranties given by
the latter according to him the damage to the vehicles was attributable to the hidden defects of primer-
coated sheets and /or their incompatibility with the Guilder acrylic paint process used by Amianan
Motors, contrary to the prior evaluations and assurances of PhilSteel.

Appellate court ruled that PhilSteel in fact made an express warranty that the primer-coated were
compatible with the acrylic paint process used by Amianan Motors.

ISSUE;

Was the vague oral statements made by seller on the characteristics of a generic good can be
considered warranties that may be invoked by the petitioner to warrant payment of damages?

RULING;

As held in Carrasco Jr vs CA, the following requisites must be established in order that there is
an express warranty in a contract of sale; the express warranty must be an affirmation of fact or any
promise by the seller relating to the subject matter of the sale; the natural effect of the affirmation or
promise is to induce the buyer to purchase the thing and the buyer purchases the thing relying on that
affirmation or promise. A warranty is a statement or representation made by the seller of the goods –
contemporaneously and as part of the contract of sale that has reference to the character , quality or
title of the goods ; and is issued to promise or undertake to insure that certain facts are or shall be as
the seller represents them. A warranty is not necessarily written. It may be oral as long as it is not given
as a mere opinion or judgement. It is a positive affirmation of a fact that buyers rely upon and that
influences or induces them to purchase the product.

Vague oral statements were expressing affirmations not only of the costs that could be saved if
the buyer used PhilSteel but also the compatibility of thoese sheets with the acrylic painting process
customarily used in Amianan Motors. Overall, the oral statements of Angbengco created ab express
warranty. They were positive affirmations of fact that the buyer relied on and that induced him to buy
petitoner’s primer-coated G.I sheets.
Sales:Maceda Law

Analyn Delos Santos and Spouses Raphael Lopez and Analyn Santos De Los Santos-Lopez

Petitioner

Vs

Joel Lucenio And All other Persons Claiming Rights and Authority

Respondents

Nature of the action: Ejectment / Unlawful Detainer with Damages

GR NO. 2015659

March 19 ,2018

Ponente; Del Castillo J.:

FACTS:

Petitioner filed a complaint for Ejectment/ Unlawful Detainer with Damages against
Respondent Respondent and all persons claiming rights and authority under him. On December

2009, petitioner lent her name and credit standing in favor her daughter and son-in-law, petitioner
spouses as an accommodation party thru a Deed f Assignment dated August 31, 2010 to enable him to
purchase property from the list of assets of sale by GSIS; then on January 19,201 GSIS issued a Notice of
Approval granting the petitioner Teresitas application to purchase the property . Petitioner paid the
required deposit in the amount of P87,255.00 and a front end service fee in the amount of P7,852.97
then conditional sale was executed by the GSIS over the property in favor of Teresita that despite
demand by petitioners, respondent refused to vacate. Joel raised a defense lack of cause of action. He
alleged that in 1995 his sister obtained a housing loan from GSIS to purchase the subject property and
his sister acquired ownership over the subject property in 2005 his sister executed in his favor a Deed of
Transfer of Rights. According to Joel he paid the required 10 % down payment and applied for the
restructuring loan, he was not able to pay the amortization due to the failure of GSIS to recomputed the
total balance of the loan. He was deprived of due process as GSIS executed a Deed of Conditional Sale in
favor of petitioner without first acting on his offer to purchase the property and the Deed of Conditional
Sale executed by GSIS in favor of petitioner Teresita was void because the conditional sale in favor of his
sister cannot unilaterally terminated.

Respondents argued that MTC and RTC fault in not taking judicial notice of the Maceda Law in deciding
the instant case and the conditional sale in favor of respondent Joel’s sister remains valid due to the
failure of GSIS to return the cash surrender value of the payments made by her on the subject property.
ISSUE; Whether or not the Court of Appeals is correct in applying the Maceda Law?

RULING:

No, from the foregoing, it is apparent that the issue of whether the GSIS complied with the
Maceda Law or not was never brought to the attention of the MTC and the RTC. Respondents’
contention that the MTC and RTC should have taken judicial notice of Maceda Law is untenable as the
issue of compliance with Maceda Law is a factual matter, which should have been alleged or raised as a
defense in the answer. Moreover, records show that it was only before the CA that respondent Joel
alleged that the GSIS failed to send a notarized notice of cancellation and a refund of cash surrender
value to his sister. Respondents, therefore, must vacate the premises and pay petitioner the amount of
P5,000 per month as reasonable compensation for continued use and occupation of the the subject
property and the amount of P20,00 as and for attorneys’s fee.
AGENCY; DOCTRINE OF APPARENT AUTHORITY

Citystate Savings Bank

Petitioner

Vs

Teresita Tobias and Shellidie Valdez

Respondents

GR NO.227990

March 8, 2018

Ponente; Reyes,JR,J;

Nature of the action; collection of sum of money

FACTS:

Rolando Robles, certified public accountant, has been employed with Citystate Savings Bank
since July 1998 then as accountant-trainee for its Chino Roces Branch. He was promoted as acting
manager for petitioner’s Bulacan branch and eventually as manager.Respondent Teresita Tobias, a meet
vendor at the Baliuag Public Market, was introduced her youngest son to Robies, branch manager of
petitioner’s Baliuag Bulacan Branch. Robias persuaded Tobias to open an account with the petitioner
and to place her money in some high interest rate mechanism, to which the latter yielded.Robias would
frequent Tobias’ stall at the public market to deliver the interest earned by her deposit accounts in the
amount of P2,000, in turn Tobias would hand over her passbook to Robies for updating, then the
passbook would returned the following day with typewritten entries but without the corresponding
counter signatures.Robies offered Tobias to sign-up in the petitioner’s back to bacl scheme which is
supposedly offered only to petitione’s most valued clients. Under the scheme the, depositors authorize
the bank to use their bank deposits and invest the same in different business ventures that yield high
interest. According to Tobias, Robies promised that the interest previously earned by Tobias would be
doubled and assured her that he will do all the paper work.

Robies failed to remit to respondents the interest as scheduled, he was tried to reach but he can
no longer be found. Later on it was disclosed to the respondents that Robies withdrew the money and
appropriated it for personal use.He promised that he would return the money by installments and
pleaded that they do not report the incident to the petitioner. Robies however reneged on his promise.
On January 8, 2007 respondents filed a complaint for sum of money and damages against Robles and
the petitioner. RTC ruled in favor to Tobias.
ISSUE: Was the Doctrine of Apparent Authority is applicable in this case?

RULING:

Yes, business of banking is one imbued with public interest .As such, banking institutions are
obliged to exercise the highest degree of diligence as well as high standards of integrity and
performance in all its transactions. The contract between the bank and its depositor is governed by the
provisions of the Civil Code on simple loan mutuum with bank as the debtor and depositor as the
creditor. While it is clear that the proximate cause of respondents loss is the misappropriation of Robles,
petitioner is still liable under Article 1911 of the Civil Code;

Article 1191. Even when the agent has exceeded his authority, the principal is solidarity liable
with the agent if the former allowed the latter to act as though he had full powers.

The case of Prudential bank vs Ca lends support to this conclusion. There, this court first laid down the
doctrine apparent authority , with specific reference to banks:

Principal is liable for obligations contracted by the agent. The agent’s apparent
representation yields to the principal’s true representation and the contract is considered as entered
into between the principal and the third person. Accordingly, a banking corporation is liable to innocent
third persons where the representation is made in the course of its business by an agent acting within
the general scope of his authority even though, in the particular case, the agent is secretly abusing his
authority and attempting to perpetrate a fraud upon his principal or some other persons, for his own
ultimate benefit. Application of these principles in especially necessary because banks have a fiduciary
relationship with the public and their stability depends on the confidence of the people in their honesty
and efficiency. Such faith will be eroded where banks do not exercise strict care in the selection and
supervision of its employees resulting in prejudice to their depositrs.

Im contrast, in this controversy, the evidence on the record sufficiently established that Robles as
branch manager was clothed or held out as having the power to enter into the subject agreements with
the respondents. The existence of apparent or implied authority is measured by previous acts that have
been ratified or approved or where the accruing benefits have been accepted by the principal. It may
also be established by proof of the course of business, usages and practices of the bank; or the
knowledge that the bank or its officials have, or is presumed to have its responsible officers acts
regarding bank branch affairs. Petitioner’s witnesses admitted that while the bank’s general policy
requires that transactions be completed inside the bank premises, exceptions are made in favor of
valued clients, such as the respondents. In which case, baking transactions are allowed to be done in the
residence or place of business of the depositor, since the same are verified subsequently by the bank
cashier. Consequently, petitioner is estopped from denying Robles ‘authority. As the employer Robles,
petitioner is solidary liable to the respondents for damages caused by the acts of the former, pursuant
to Article 1911 of the Civil Code.
Obligations and Contracts

Norma M. Diampoc

Petitiomer

Vs

Jessie Buenaventura and the Registry of deeds FOH the city of Taguig

Respondents

GR. NO 200383

MARCH 19, 2018

Ponente; Del Castillo,J;

Nature of the action; Validity of the Contract

FACTS:

In July 2004, Petitioner Norma and her husband filed a complaint for annulment of deed of sale
and recovery of duplicate original copy of title with damages, against respondent Jessie Buenaventura
and Registry of deeds for the Province of Rizal. The Diampocs alleged in their complaint that they
owned a 174- square meter parcel of land in Signal Village, Taguig City; that Buenaventura became their
friend ; that Buenaventura asked to borrow the owner’s copy of TCT to be used as security for a 1
million loan she wished to secure that they acceded, on the condition that Buenaventura should not sell
the subject property; that Buenaventura cause them to sign a folded document without giving them the
opportunity to read its contents that the he failed to give them a copy of the document which they
soigned, they discovered later on that Buenaventurs became the owner of one half portion of the
subject property by virtue of a supposed deed of sale in her favor; that they immediately proceeded to
the notary public who notarized the said purpoyed deed of sales and discovered that the said 87 sq
meter portion was purportedly sol ftp Buenaventura for P200,000. RTC And CA ruled that in beseeching
the annulment of the notarized deed of sale, appellants impress upon us that they were deceived by
Jessie into believing that they were signing papers for the intended bank loan. They failed to read the
contents of the documents for it was “ folded” and Jessie was in a hurry. Notarized documents like deed
in question , enjoy the presumption of regularity which can be overturned only by clear, convincing and
more than merely preponderant evidence. Miserably, appellants failed to discharge this burden.

ISSUE; Does the irregularities in the deed of sale affects the validity of contract of sale?

RULING;
 No, the absence of notarization of the deed of sale would not invalidate the transaction
evidenced therein, it merely reduces the evidentiary value of the document to that of a private
document, which requires proof of its due execution and authenticity to be admissible as evidence.
Article 1358 of the Civil Code requires that the form of a contract that transmits or extinguishes real
rights over immovable property should be in a public document, yet the failure to observe the proper
form does not render the transaction invalid. The necessity of a public document for said contracts is
only for convenience it is not essential for validity of enforceability. Even a sale of real property though
not contained in a public instrument or formal writing is nevertheless valid and binding, for even a
verbal contract of sale or real estate; produces legal effects between the parties.CA further found that
petitioner and her husband received in the full consideration of P 200,000 for the sale. The three
requirements of cause, object and consideration concurred. Courts have no power to relieve them from
obligations they voluntarily assumed, simply because their contracts turn out to be disastrous deals or
unwise investments. Neither the law nor the courts will extricate them from an unwise or undesirable
contract which they entered into with all required formalities and with full knowledge.
Flore Merce

Petitioner

Vs

GSIS

Respondent

G.R NO.192971

January 10, 2018

Ponente; Martines J;

Facts:
Lease

Victoria Racelis

Petitioner

Vs

Spouses Germil

G.R no. 189609

January 28, 2018

Ponente; Leonen,J;

Nature of the action

FACTS;

Before the death of Pedro Nacu Sr. appointed his daughter, Racelis, to administer his
properties,among which was a residential house and lot located in Marikina City. Nacu requested his
heirs to sell this property first. Acting on the request, Racelis immediately advertised it for sale.In August
2001, the spouses Javier offered to purchase the Marikina property.However, they could not afford to
pay the price of P3,500,000.00.They offered instead to lease the property while they raise enough
money.Racelis hesitated at first but she eventually agreed. The parties agreed on a month- to-month
lease rent of P10,000.00 per month. This was later increased to P11,000.00. The Spouses Javier used the
property as their residence and as the site of their tutorial school, the Nino Good Shepherd Tutorial
Center. On July 26, 2002, the Spouses Javier tendered the sum of P65,000 representing “initial payment
or goodwill money”. On several occasions, they tendered small sums of money to complete the
promised P100,000.00, but by the end of 2003, they only delivered a total of P78,000.00. They
continued to lease the property, they consistently paid rent but started to fall behind by February
2004.

Realizing that the Spouse Javier had no genuine intention of purchasing the property, Racelis
wrote to inform them that her family had decided to terminate the lease agreement and offer the
property to other interested buyers. They demanded that they vacate the property by May 30, 2004 and
stated that the earnest money will be forfeited in favor of the seller if the buyer fails to consummate
the sale after the lapse of a specified period for any reason. They refused to vacate due to the ongoing
operations of their tutorial business. Spouses Javier alleged that they never agreed to purchase the
property from Racelis because they found a more affordable property at Greenheights Subdivision in
Marikina City. They claimed that the amount P78,000.00 was advanced rent.
MTC did not characterize the P78,000.00 as advanced rent but as earnest money. Racelis was ordered
to return the P78,000.00 .Petitioner asserts that the Court of Appeals erred in applying Article 1658 of
the Civil Code in favor of respondents. Respondents cannot invoke the right given to lessess under
Artcile 1658 of Civil code, she also claimed the payment of rent pursuant to Article 1658 of the Civil
Code, petitioner argues that the suspension should only be temporary or for an intervening period.

ISSUE; Whether or not the respondents Spouses Germil can invoke their right to suspend the payment
of rent under Article 1658?

RULING;

A contract of lease is a consensual, bilateral , onerous and commutative contract by which the
owner temporarily grant use of his property to another who undertakes to pay rent.

Article 1658 of the Civil Code allows a lease to postpone the payment of rent if the lessor fails to
either 1. Make the necessary repairs on the property or maintain the lessee in peaceful and adequate
enjoyment of the property leased. This provision implements the obligation imposed on lessors under
Article 1654 (3) of Civil Code. The failure to maintain the lessee in the peaceful and adequate enjoyment
of the property leased does not contemplate all acts of disturbance. Lessees may suspend the payment
of rent under Article 1658 of the Civil Code only if the legal possession is disrupted.

In Chua Tee Dee vs Court of Appeals, the lease contract stated that the lessor was obliged to
maintain the lessee in the quiet peaceful possession and enjoyment of the leased premises during the
effectivity of the lease. The lessees were harassed by claimants of the leased property. Hence, the
lessee withheld rentals payments for the lessor’s failure to comply with his contractual obligation.

However this rule will not apply in the present case because the lease had already expired when
petitioner requested for the temporary disconnection of electrical service.Petitioner demanded
respondents to vacate the premises by May 30, 2004. Instead of surrendering the premises to
petitioner, respondents unlawfully withheld possession of the property. Respondents continued to stay
in the premises until they moved their new residence on September 26y, 2004. At that point, petitioner
was no longer obliged to maintain respondents in the “ peaceful and adequate enjoyment of the lease
for the entire duration of the contract. Therefore, respondents cannot use the disconnection of
electrical service as justification to suspend the payment of rent.
Nympha Odiamar

Petitioner,

Vs

Linda Odiamar Valen Cia

Respondent

June 28, 2016

G.R No. 213582

Ponente; Perlas- Bernabe,J;

Nature of the action; Complaint for sum of money

Facts;

Respondent filed a complaint for sum money and damages against petitioner, alleging that the
latter owed her P 2,100,000.00.Petitioner purportedly issued China Bank check to guarantee the
payment of debt but upon presentment, the same was dishonored. Respondent alleged that petitioner
refused to pay despite repeated demands and that had she invested the money loaned to petitioner or
deposited the same in a bank, it would have earned interest at the rate of 36% per annum or 3% per
month. Petitioner sought the dismissal of the complaint on the ground that it was her deceased parents
who owned respondent money. Accordingly, respondent’s claim should be filed in the proceedings for
the settlement of their estates. Respondent alleged that the petitioner borrowed almost half of the
P2,100,000.00 from her as evidenced by the check which she issued after agreeing to settle the same in
installment. Respondent claims that several installment payments from December 29, 2000 until May
31, 2003 she pointed out that the latter failed to make any succeeding payments. Respondent denied
participating in settlement of the estates of the petitioner’s parents, clarifying that petitioner was the
one who prepared the certification alluded to and that she signed it on the belief that petitioner would
make good her promise to pay her.

Issue: Whether or not petitioner should be held liable to respondent for the entire debt in the amount
of P2,100,000.00?

RULING;
 Yes, it, must be emphasized that the fact of petitioner’s liability to respondent is well-
established. As correctly pointed out by the RTC and the CA, while respondent acknowledged that
petitioner’s deceased parents owned her money, petitioner also admitted obtaining loans from
respondent. Applying the judicial admission made, it is therefore incontrovertible that petitioner’s debt
to respondent amounted to only P1,400,000.00 and not P2,100,000.00. Thus, respondent only remains
liable to petitioner for such amount. Considering that the petitioner had already paid p 389,951.00 in
installment the unpaid balance of petitioner’s P 1,400,000.00 debt to respondent stands at P
1,010,049.00. On the other hand, the remaining P700,000.00 of the total P2,100,000.00 debt to
respondent is properly for the account of the estates of petitioner’s deceased parents and hence should
be claimed in the relevant proceeding therefor. At this juncture, the court finds it apt to correct the
mistaken notion that (a) novation by substitution of the debtor took place so as to release the estates of
the petitioner’s deceased parents from their obligation, which thus, rendered petitioner solely liable for
the entireP2,100,000.00 debt and (b) the P100,000.00 of the P2,100,000.00 debt was in the nature of
accrued monetary interests. While it is observed that petitioner had indeed admitted that she agreed to
settle her late parents debt which was supposedly evinced by (a) the P2,100,000.00 check she issued
therefor and (b) several installment payments she made to respondent from December 29, 2000 to May
31, 2003, there was no allegation, much less any proof to show that the estates of her deceased parents
were released from liability thereby. In Megaworld vs Parada the court held that to constitute novation
by substitution of debtor , the former debtor must be expressly released from the obligation and the
third person or new debtor must assume the former’s place in the contractual relations.Moreover, the
court ruled that the fact that the creditor accepts payments from a third person, who assumed the
obligation will result merely in the addition of debtors and not novation. At its core,novation is never
presumed , and the animus novandi, unequivocal to be mistaken. Here, the intent to novate was not
satisfactorily proven by respondent by the respondent. Petitioner only manifest her desire to shoulder
the debt of her parents, which does not amount to novation, thus the court erred in holding petitioner
liable for the debts obtained by her deceased parents on account of novation by substitution of the
debtor.
G.R NO. 205283

Abigail L. Mendoza

Petitioner

Versus

Venerando P. Sangalang

Respondent

June 7, 2017

Ponente: Tijam, J;

Nature of the action

FACTS:

Parcel of land located at Maginhawa Street Brgy. Teachers Village East, Diliman, Quezon City on
which residential house and four-door, one-storey commercial building were built. Said property was
originally registered in the name of Honorata Sangalang. Honorata has two siblings, Sinforosa had three
children , petitioner Abigail, Vilma and Azucena; while Angel begot four children, respondent Venerado,
Ma. Lourdes, Angelo and Fernando all surnamed Sangalang. Sinforosa and Angel predeceased Honorata
and on May 31, 1994, Honorata herself died intestate without any issue.

One half of the property was being used by petitioner, while Honorata was still alive and the other half
by Vilma’s son. The commercial building, on the other hand, was being leased to third persons. This set-
up continued until after Honorata’s death.

In 2003, respondent and his siblings discovered that the subject property was already registered in the
name of petitioner and Vilma. Upon verification they discovered that the title over the property had
been transferred in favor of the petitioner and Vilma by virtue of Deed of Sale dated January 29, 199,
purportedly executed by Honorata in their favor. On October 18, 2005, petitioner and Vilma
commenced their complaint for accion publiciana against respondent for the latter to return the illegally
occupied unit and to pay unreasonable rental therefor.

Issue
Sales

G.R 208450

Sps Roberto Aboitiz and Maria Cristina Cabarrus

Versus

Sps Peter L. Po and Victoria L. Po

June 5, 2017

Ponente: Leonen ,J

Nature of action; Assailing the validity of Deed Of Absolute Sale

FACTS:

This case involved a parcel of land located in Cabancalan, Mandaue City, initially registered as Original
Certificate of title no. 0-887 and title under the name of Robert Aboitiz. This parcel of land originally
belonged to the late Mariano Seno. On 1973 ,Mariano executed a Deed of Absolute Sale in favor of his
son, Ciraco Seno over 1.012 hecare land in Cebu. On May 5 ,1978, Mariano died and was survived by
five children (Mariano); Esperanza Seno Vda De . Kuizon, Ramon Seno, Beenita Seno Vda De lim, Simeon
Seno and Ciriaco. Peter Po discovered in 1990 that Ciriaco and the Spouses Po executed a Memorandum
of Agreement dated June 28, 1990 in which in Ciriaco agreed to pay Peter the difference between the
amount paid by the Spouses Po as consideration for the entire property and the value of the land the
Spouses Po were left with after the quitclaim.

The Court of Appeals discussed the applicability of the rules on the double sales and the doctrine of
buyer in good faith since the land was not yet registered when it was sold to the Spouses Po. However, it
ruled in favor of the Spouses Po on the premise that registred property may be reconveyed to the
rightful or legal owner or to the one with a better right if the title was wrongfully or erroneously
registered in another person’s name. The Court of Appeals had held that the Mariano heirs no longer
the owner of the lot at the time they sold it to Robert in 1990 because Mariano, during his lifetime,
already sold this to Ciriaco in 1973.

It found out that the Deed of Absolute Sale between Ciriaco and the Spouses Po was duly notarized and
was thus presumed regular on its face. Their Memorandum of Agreement did not cancel or rescind the
Deed of Absolute Sale but rather their claim that they entered into a contract of sale. It likewised ruled
that, contrary to the assertion of the Spouses Aboitiz , there was no showing that Ciriaco merely held
the property in trust for the Mariano heirs. Spouses Aboitiz further insist that estoppel and laches have
already set in.
Issue: Whether the respondents Jose Maria Moraza, Ernesto Aboitiz and Isabel Aboitiz are innocent
purchasers in good faith?

RULING:

The rationale for this rule is the public's interest in sustaining "the indefeasibility of a certificate
of title, as evidence of the lawful ownership of the land or of any encumbrance" on it. In Leong v. See:

One need not inquire beyond the four comers of the certificate of title when dealing with registered
property ...

The protection of innocent purchasers in good faith for value grounds on the social interest embedded
in the legal concept granting indefeasibility of titles.1âwphi1 Between the third party and the owner, the
latter would be more familiar with the history and status of the titled property. Consequently, an owner
would incur less costs to discover alleged invalidities relating to the property compared to a third party.
Such costs are, thus, better borne by the owner to mitigate costs for the economy, lessen delays in
transactions, and achieve a less optimal welfare level for the entire society. Thus, respondents were not
obliged to look beyond the title before they purchased the property. They may rely solely on the face of
the title.

The only exception to the rule is when the purchaser has actual knowledge of any defect or other
circumstance that would cause "a reasonably cautious man" to inquire into the title of the seller If there
is anything which arouses suspicion, the vendee is obliged to investigate beyond the face of the
title. Otherwise, the vendee cannot be deemed a purchaser in good faith entitled to protection under
the law.

In this case, there is no showing that respondents Jose, Ernesto, and Isabel had any knowledge of the
defect in the title. Considering that the annotation that the Spouses Po are invoking is found in the tax
declaration and not in the title of the property, respondents Jose, Ernesto, and Isabel cannot be deemed
purchasers in bad faith.
TORTS

G.R NO 206008

Delfin Domingo Dadis

Petitioner,

Versus

Spouses Magtanggol De Guzman and Nora De Guzman

Respondent

June 7 ,2017

Ponente: Peralta,J

Nature of the action: action for reconveyance and damages.

FACTS:

On September 8, 2003, petitioner Delfin filed a complaint for reconveyance and damages
against respondent Spouses Magtanggol De Guzman and Nora De Guzman and the Registry of Deeds of
Talavera , Nueva Ecija, he alleges that he and his deceased wife, Corazon Pajarillaga were the registered
owners of 33,494 square meters of parcel of land located at Guimba, Nueva Ecjia and covered by TCT.
On December 11, 1996, their daughter, Marissa entered into a contract of real estate mortagage over
the subject property in favor of Magtanggol to secure a loan obligation of P 1,210,000.00 that was
payable on opr before February 1997; the Spouses De Guzman made it appear that Marissa was
authorized by the Spouses Dadis by virtue of a SPA dated December 10, 1996 the SPA was forged
document because it was never issued by him or Corazon as the signature contained therein not theirs,
especially so since he was in the United States of America at the time it was only in November 1999,
when Corazon died, that Magtanggol informed him of the transaction, but he could not remedy the
situation as he had to go back to the US when he returned to the Philippines in April 2002 he executed a
SPA in favor of a friend Eduardo to look into the matter and make the necessary actions in 2003. In
2003, he was able to procure copies of the documents pertaining to the mortagage, no demand letter
as well as notices of the foreclosure proceedings and consolidation of title were send to him.

Spouses De Guzman that Delfin has no cause of action against them, stating that they have no
knowledge as regards the supposed falsify of the SPA represented by Marissa and Corazon at the time
the latter pleaded to accommodate them into entering a mortgage contract, they have no knowledge
that Delfin was not in the Philippines at the time of the execution of the SPA which as duly notarized
documents was presumed to have been done regularly. Delfin defaulted in paying the obligation
despite several repeated demand as in fact they even proceed to his house in November 1999 and were
able to talk to him in view of his admission that he could not not pay the amount involved , they were
constrained to cause property , it was only after three years from time the obligation became due that
they pursued and effected the foreclosure of the property. The RTC and CA agreed that the subject SPA
had been forged , such fact is not even contested by the parties.

ISSUE:

Whether Magtanggol is mortgagee in good faith?

RULING:

We held that Magtanggol is not a mortgagee in good faith. The doctrine of mortgagee in good
faith has been allowed in many instances but in situations dissimilar from the case at bench. Cavite
Development Bank v. Spouses Lim explained the doctrine in this wise:

There is, however, a situation where, despite the fact that the mortgagor is not the owner of the
mortgaged property, his title being fraudulent, the mortgage contract and any foreclosure sale arising
therefrom are given effect by reason of public policy. This is the doctrine of "the mortgagee in good
faith" based on the rule that all persons dealing with the property covered by a Torrens Certificate of
Title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title. The
public interest in upholding the indefeasibility of a certificate of title, as evidence of lawful ownership of
the land or of any encumbrance thereon, protects a buyer or mortgagee who, in good faith, relied upon
what appears on the face of the certificate of title.

The status of mortgagee in good faith is never presumed but must be proven by the person invoking it.
Good faith cannotes an honest intention to abstain from taking unconscientious advantage of another.
Magtanggol could not be considered as a mortgagee in good faith because he had actual notice of facts
that should have put him on deeper inquiry into Marissa’s capacity to sell. He could not feign ignorance
of Delfin’s absence or whereabouts. The subject SPA was not yet existing at the time he first met
Corazon and Marissa. It was him who required it from them. He testified that sometime in 1996,
Corazon, together with her three daughter, went to their house to talk him regarding the subject
property allegedly pitied Corazon whi was sickly at the time in order to help in her medication, he
agreed to their offer to mortgage the same property to him after he redeemed it from Greenline. He
clearly failed to observe the required degree of caution in ascertaining the genuineness of the SPA and
the supposed authority of Marissa .He could not simply relied on the face of the document submitted by
Corazon and Marissa. When the person applying for the loan is other than the registered owner of the
real property being mortgaged, it should have already raised a red flag and should have induced the
mortaggee to make inquiries into and confirm the authority of the mortgagor.
G.R NO.192391

Estate of Honorio Poblador Jr.., represented by Rafael A. Poblador

Petitioner,

Versus

Rosario L. Manzano

Respondent

June 19,2017

Ponente : Perlas –Bernabe,J;

Nature of the action;

FACTS:

Probate Court authorized petitioner’s administratix, Elsa A. Poblador, to negotiate the sale of
certain properties of petitioner, including the Wack – Wack share. Rafeal, upon Elsa’s instruction he
looked for interested buyers. Subsequently, he engaged the servive of Manzano, a broker of Metroland
Holding Incorpated who, on September 9, 1996, faxed a computation for the sale of the Wack-Wack
share to petitioner, showing a final net amount of P 15,000,000.00. The final amount to the seller was
increased to P 15,200,000.00. Later on Manzano introduced Rafael to Moreland Realty and in
September 1996, the parties entered into Deed of Absolute Sale with Else covering the Wack- Wack
Share for the gross amount of P18,000,000.00 out of the P18,000,000.00 purchase price, Moreland paid
Directly paid Elsa the amount of P 15,200,000.00 through a Metrobank check. The balance of P
2,800,000.00 was allegedly given to Manzano for the payment of the capital gains tax. However, the
Probate Court annulled the sale of the Wack-Wack share. Thus, Elsa returned to Moreland the Amount
of P 18,000,000.00 which the latter paid for the Wack- Wack share, plus interest and applied with B.I.R

Petitioner demanded Manzano to properly account for the P 2,800,000.00 allegedly given to
her for the payment of crime of Estafa under Article 315 paragraph (1) (b) of the RPC against Manzano
before the RTC.RTC found out that the element of deceit was absent, considering that both Manzano
and Rafael were equally guilty of defrauding the government of taxes actually due on the transaction. It
pointed out that Rafael knew and concurred with the plan, including the special arrangements that
had to be made with the BIR as long as the estate would receive a higher net proceed from the sale. It
was held that Manzano was entitled to her Broker’s fee in the amount of P 900,000 as she was
commissioned and successfully closed the transaction for the petitioner. Petitioner appealed the civil
aspect of the case before the CA.It found out that the prosecution’s evidence failed to show that
Manzano personally received the P2,800,000 earmarked for the payment of taxes and broker’s fees. CA
observed that this is a case of pari delicto as petitioner’s predicament would have been avoided if only
Rafael sought the permission and approval of the Probate Court prior to the sale of the Wack- Wack
Share.

ISSUE: Whether or not the CA erred in denying petitioner’s appeal on the civil liability ex delicto of
Manzano?

RULING:

The petition lacks merit.

It is a fundamental rule that "[t]he acquittal of the accused does not automatically preclude a judgment
against him on the civil aspect of the case. The extinction of the penal action does not carry with it the
extinction of the civil liability where: (a) the acquittal is based on reasonable doubt as only
preponderance of evidence is required; (b) the court declares that the liability of the accused is only
civil; and (c) the civil liability of the accused does not arise from or is not based upon the crime of which
the accused is acquitted. However, the civil action based on delict may be deemed extinguished if there
is a finding on the final judgment in the criminal action that the [prosecution absolutely failed to prove
the guilt of the accused, or the] act or omission from which the civil liability may arise did not exist, or
where the accused did not commit the acts or omission imputed to him.

In the fairly recent case of Dy v. People,43 the Court discussed the concept of civil liability ex
delicto in Esta/a cases under paragraph 1 (b ), Article 315 of the RPC (with which Manzano was likewise
charged), stating that when the element of misappropriation or conversion is absent, there can be
no Estafa and concomitantly, the civil liability ex delicto does not exist. Particularly, the Court said:

Our laws penalize criminal fraud which causes damage capable of pecuniary estimation
through estafa under Article 315 of the Revised Penal Code. In general, the elements of estafa are:

(1) That the accused defrauded another (a) by abuse of confidence, or (b) by means of deceit; and

(2) That damage or prejudice capable of pecuniary estimation is caused to the offended party or third
person.

More significantly, the CA correctly observed that petitioner's evidence utterly failed to show that
Manzano personally received the ₱2,800,000.00 from petitioner with the duty to hold it in trust for or to
make delivery to the latter In fact, Rafael categorically admitted that he did not even know who actually
paid the taxes to the BIR, and that Manzano's name did not appear in the documents pertaining to the
payment of the capital gains tax and documentary stamp tax. This admission clearly contradicts the
disputable presumption under Section 3 (q) of Rule 131 of the Rules of Court, i.e., that the ordinary
course of business has been followed, which petitioner adamantly relies on to support its claim.

A presumption is an assumption of fact resulting from a rule of law which requires such fact to be
assumed from another fact or group of facts found or otherwise established in the action. It is an
inference of the existence or non-existence of a fact which courts are permitted to draw from proof of
other facts. However, a presumption is not evidence, but merely affects the burden of offering
evidence. Under Section 3, Rule 131, disputable presumptions are satisfactory, if uncontradicted, but
may be contradicted and overcome by other evidence, as in this case. Apart from Rafael's admission,
petitioner further admitted that: (a) Moreland directly paid Metroland the P2,800,000.00 in check
although it did not actually see and was unaware to whom Moreland gave this check; (b) it did not ask
Moreland to issue the check for the payment of the taxes directly in the name of the BIR; (c) it would
not have dealt with Manzano had she not been Metroland' s employee; and (d) it has several lawyers
and an accountant at its disposal, and its representative Rafael is, in fact, in the real estate business and
is familiar with brokerage transactions.
Obligation and Contract

G.R NO. 191458

China Trust (PHILs) Commercial Bank

Petitioner

Vs

Philip Turner

July 3, 2017

Ponente:Leonen J;

Nature of the action: Action for reimbursement

FACTS:

On September 13, 2004, British national Turner via Chinatrust-Ayala Branch initiated
the telegraphic transfer U.S$430.00 to the account of Min Travel/Esmat Azmy, Account number
70946017, Citibank Heliopolis Branch in Cairo, Egypt. The amount was partial payment to Turner’s agent
for his and his wife’s 11-day tour in Egpyt. Turner paid a service fee of U.S$30.00 both amounts were
debited from his dollar savings account with Chinatrust. On the same day, Chinatrust remitted the funds
through the Union Bank of California, its paying bank to Citibank- New York, to credit them to the bank
of Min Travel. On September 17, 2004 Chinatrust received Citibank –Cairo’s telexnotice about the latter
inability to credit the funds it received because the “beneficiary name did not match their book”. The
beneficiary name given by Turner did not match the account name on file of Citibank-Cairo. Chinatrust
claimed that it relayed the discrepancy to Turner and requested him to verify from his beneficiary the
correct bank account name. Turner allegedly informed Chinatrust the he was able to contact Esmat
Azmy, who acknowledged receipt of the transferred funds. Turner, however had to cancel his travel-tour
because his wife got ill and requested from Chinatrust the refund of his money. According to Chinatrust
since the funds were already remitted to his beneficiary’s account, they could no longer be withdrawn
or retrieved without Citibank-Cairo’s consent. Turner was thus advised to seek the refund of this
payment directly from his travel agency. Turner insisted on withdrawing the funds from Chinatrust
explaining that the travel agency would forfeit fifty percent as penalty for cancellation of the booking,
as opposed to the minimal bank fees he would shoulder if her withdrew the money through Chinatrust.
On October 28, 2004 Chinatrust received Citibank-Cairo’s Swift telex reply, which confirmed receipt of
Chintrust’s telegraphic funds transfer and its credit to the bank account of Min Travel noy “Min
Travel/Esmat Azmy” as indicated by the respondent. Turner filed a complaint against Chinatrust
demanding the refund of telegraphic transfer of P24,129.88 plus damages. MTC found sufficient
evidence to prove that Chinatrust complied with its contractual obligation to transmit the funds to
Citibank-Cairo and that these funds were actually credited to the intended beneficiary’s account.

ISSUE: whether petitioner Chinatrust (Philippines) Commercial Bank was negligent in the performance
of its obligation under the telegraphic transfer agreement?

RULING:

The MeTC correctly absolved petitioner from liability and dismissed the complaint upon its
finding that the bank had duly proven that it had complied with its obligation under the telegraphic
transfer. It found that despite the earlier advice of Citibank-Cairo that the beneficiary name did not
match their files, Chinatrust and respondent Turner were subsequently informed that the amount sent
had been credited to the account of beneficiary as early as Septemebr 15 , 2004.

owever, on appeal, the Regional Trial Court reversed the dismissal of the complaint. While the Regional
Trial Court affirmed the court a quo's ruling that indeed the funds were credited to the intended
beneficiary's account, it went further and touched upon an issue that was beyond the cause of action
framed by the respondent. It adjudged petitioner liable not because it failed to perform its obligation to
remit the funds but because it purportedly did not exercise due diligence in attending to respondent's
queries and demands with regard to the telegraphic funds transfer. Specifically, it found petitioner
negligent in its failure to promptly inform respondent that the money was, in fact, credited to the
account of the beneficiary. According to the Regional Trial Court, "it is but right that the [petitioner]
bank be held liable for the monetary loss, as well as the emotional stresses and mental anguish that
[respondent] Turner had to go through as a result thereof." Hence, the Regional Trial Court awarded
respondent's claims for refund and damages.

The Regional Trial Court also faulted the petitioner for not submitting in evidence the "discrepancy
notice," which according to the trial court "puts the ... bank's position in a cloud of doubt."

Contrary to the observation of the Regional Trial Court, however, the discrepancy notice's existence and
content were not the core of the controversy. In fact, they were never put in issue. The discrepancy
notice only came up because it was the basis for Turner's claim for refund insisting that the funds were
not credited to his travel agency's account. Hence, it is understandable that both parties did not present
it in evidence.

Similarly, the purported negligence of the bank personnel in attending to his concerns was neither
raised by respondent in any of his pleadings nor asserted as an issue in the preliminary conference.
Hence, it was improper for the Regional Trial Court to consider this issue on negligence in determining
the respective claims of the parties.
Basic rules of fair play, justice, and due process require that arguments or issues not raised in the trial
court may not be raised for the first time on appeal

In Philippine Ports Authority v. City of Iloilo

As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by
the lower court will not be permitted to change theory on appeal. Points of law, theories, issues and
arguments not brought to the attention of the lower court need not be, and ordinarily will not be,
considered by a reviewing court, as these cannot be raised for the first time at such late stage. Basic
considerations of due process underlie this rule. It would be unfair to the adverse party who would have
no opportunity to present further evidence material to the new theory, which it could have done had it
been aware of it at the time of the hearing before the trial court. To permit petitioner in this case to
change its theory on appeal would thus be unfair to respondent, and offend the basic rules of fair play,
justice and due process. There is more reason for a reviewing court to refrain from resolving motu
proprio an issue that was not even raised by a party. This Court has previously declared that:

"[C]ourts of justice have no jurisdiction or power to decide a question not in issue" and that a judgment
going outside the issues and purporting to adjudicate something upon which the parties were not heard
is not merely irregular, but extrajudicial and invalid. As pointed out earlier, respondent's cause of action
was anchored on the alleged non-remittance of the funds to his travel agency's account or based on a
breach of contract.

On appeal, however, the Regional Trial Court motu proprio found that petitioner was negligent in
addressing respondent's concerns, which justified the award of damages against it. This was unfair to
petitioner who had no opportunity to introduce evidence to counteract this new issue. The factual bases
of this change of theory would certainly require presentation of further evidence by the bank in order to
enable it to properly meet the issue raised.
Prescription

G.R NO.227894

Jose S. Ocampo

Petitioner

Vs.

Ricardo S. Ocampo

Respondent

July 5, 2017

Ponente: Velasco , JR,.J

Nature of the action: Annulment and cancellation of the title

FACTS:

Petitioner Jose Ocampo and respondent Ricardo Ocampo are full-blooded brothers being sons
of the late Basilio Ocampo and Juliana Sunglao. The case was started when respondent filed a complaint
against petitioner for partition and annulment of the TCT No.102822. It was alleged by the respondent
that he and petitioner are co-owner of the subject property, which was a conjugal property left by their
parents, consisting of a 150 square-meter lot and the improvements thereon located at 2227 Romblon
Street, G. Tuazon, Sampaloc, Manila. It was originally registered in their parents. Respondents claimed
that petitioner and his wife, Andrea Mejia Ocampo ,conspired in falsifying his signature on a notarized
Extra-Judicial Settlement with waiver dated September 1970 and effecting the transfer of the property
in the name of petitioner. Based on the findings by NBI that respondent’s signature was forged, an
information was filed against petitioner. Based on their answer, petitioner and his wife claimed that
their parents executed an Deed of Donation Propter Nuptias of the Subject Property in their favor as
they were getting married, with a promise on their part to demolish the old house and replace it with a
new two-story house, which they did. They obtained a P10,000 loan from thw DBP, with his parents as
borrowers.

Petitioner further alleged that his parents gave respondent several properties outside Metro
Manila, which respondent eventually lost. Petitioner and his wife then allowed respondent to stay at
second floor of the house. Petitioner was able to pay DBP loan through a loan secured from the SSS
with the consent of his father. He claimed that on September 30, 1970, their father executed the ESW
and secured respondent’s signature. By virtues of the ESW, petitioner was able to have TCT NO. 36869
cancelled and have the TCT NO. 102822 issued in favor of himself and his wife. Petitioner argued also
that TCT No.102822 had prescribed since it was filed only on June 29, 1992 or 21 years and 7 months
from the issuance of the title. He further claimed that the action to annul the ESW is a collateral attarck
on the title and the rule on the non-prescription against a co-owner does not apply since his wife had
become exclusive owners of the subject property.RTC ruled in favor of the plaintiff. CA found that the
ESW is not genuine based on his and his wife testimony as well as the NBI report.

ISSUE: Whether or not the action for annulment of title and partition has already prescribed?

RULING:

Prescription is not applicable. In the recent case of Pontigon v. Sanchez, explained that:

Under the Torrens System as enshrined in P.D. No. 1529, the decree of registration and the certificate of
title issued become incontrovertible upon the expiration of one (1) year from the date of entry of the
decree of registration, without prejudice to an action for damages against the applicant or any person
responsible for the fraud. However, actions for reconveyance based on implied trusts may be allowed
beyond the one-year period. As elucidated in Walstrom v. Mapa, Jr.:

Notwithstanding the irrevocability of the Torrens title already issued in the name of another person, he
can still be compelled under the law to reconvey the subject property to the rightful owner. The
property registered is deemed to be held in trust for the real owner by the person in whose name it is
registered. After all, the Torrens system was not designed to shield and protect one who had committed
fraud or misrepresentation and thus holds title in bad faith. In an action for reconveyance, the decree of
registration is respected as incontrovertible. What is sought instead is the transfer of the property, in
this case the title thereof, which has been wrongfully or erroneously registered in another person's
name, to its rightful and legal owner, or to one with a better right. This is what reconveyance is all
about. Yet, the right to seek reconveyance based on an implied or constructive trust is not absolute nor
is it imprescriptible. An action for reconveyance based on an implied or constructive trust must perforce
prescribe in ten years from the issuance of the Torrens title over the property.

Thus, an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in
ten (10) years, the point of reference being the date of registration of the deed or the date of the
issuance of the certificate of title over the property.

By way of additional exception, the Court, in a catena of cases, has permitted the filing of an action for
reconveyance despite the lapse of more than ten (10) years from the issuance of title. The common
denominator of these cases is that the plaintiffs therein were in actual possession of the disputed land,
converting the action from reconveyance of property into one for quieting of title. lmprescriptibility is
accorded to cases for quieting of title since the plaintiff has the right to wait until his possession is
disturbed or his title is questioned before initiating an action to vindicate his right. Given the falsity of
the ESW, it becomes apparent that petitioner obtained the registration through fraud. This wrongful
registration gives occasion to the creation of an implied or constructive trust under Article 1456 of the
New Civil Code.An action for reconveyance based on an implied trust generally prescribes in ten years.
However, if the plaintiff remains in possession of the property, the prescriptive period to recover title of
possession does not run against him. In such case, his action is deemed in the nature of a quieting of
title, an action that is imprescriptible.
G.R NO 196888

Aurelia Narcise

Petitioner

Vs

Valbuenco inc.

Respondent

July 19, 2017

Ponente: Tijam J;

Nature of the action: Annulment of the Free Patent

FACTS:

On March 8 ,2005, respondent Valbueco Inc. filed an action for annulment if the Free Patents
against petitioner Narcise et al,. Department of NaturaL resources and the Registry of Deeds of Bataan.
It was alleged that it is the possessor of the subject lots in an actual , peaceful, adverse and peaceful
possession since 1970. Respondent averred that from the 1977 until 1999 Original Certificates of
Title,Free Patents and Transfer Certificates of title covering the lots in question were issued in the name
of petitioners. The RTC ruled that the instant case is an action for reversion because petitioners are not
qualified to be issued said free patents. As such, the land must revert back to the State.

ISSUE : Whether or not the instant case had already prescribed?

RULING:

Aquisitive prescription is a mode of acquiring ownership of a real or immovable property by

possessor through the requisite lapse of time. In order to ripen into ownership, possession must be in
the concept of an owner, public, peaceful and uninterrupted. The possession contemplated as
foundation for prescriptive right must be one under claim of title or adverse to or in prescription.

On this note, acquisitive prescription may either be extraordinary, which requires uninterrupted adverse
.possession for 30 years, or ordinary, which requires possession in good faith and with a just title for a
period of ten years.
Without going into the merits of the case, We hold that the allegations in the complaint sufficiently
show that respondent claims its ownership right by expounding on its uninterrupted possession of the
same for a period of at least 35 years. Also, respondent's claim of its possession in a public, peaceful and
uninterrupted manner constitutes an allegation of ownership by acquisitive prescription.

Being an action for annulment of patents and titles, it is the respondent who is the real party-in-interest
for it is the one claiming title or ownership adverse to that of the registered owner.

Moreover, We agree with the CA when it declared that petitioners' argument of failure to exhaust
administrative remedies is misguided.

It must be noted that the trial court has jurisdiction over an action of an owner of a piece of land to
recover it, if the Director of Lands, thinking that it is still disposable public land, grants a free patent to
the one who has occupancy and cultivation.The jurisdiction of the Director of Lands, contrary to
petitioners' claim, covers those issues between two or more applicants for a free patent, which is not
the case here. Here, respondent claims to be the owner of the subject properties prior to the issuance of
the patents and the corresponding certificates of title. Thus, the trial court has jurisdiction to hear the
case.

Lastly, the defense of prescription is evidentiary in nature which could not be established by mere
allegations in the pleadings and must not be resolved in a motion to dismiss. Such issue must be
resolved at the trial of the case on the merits wherein both parties will be given ample opportunity to
prove their respective claims and defenses.
G.R NO. 219649

AL Dela Cruz

Petitioner

Vs

Capt. Renato Octa Viano

July 26, 2017

Ponente: Peralta,J:

Nature of the action:

FACTS:
TORTS article 2177

G.R NO 200444

Supreme transportation liner, inc

Petitioner,

Vs

Antonio San Andres

Respondent

August 15, 2018

Ponente: Bersamin, J;

Nature of the action:

Facts:

On November 5, 2002 at around 5:00 in the morning , Ernesto Belchez was driving a
passanger bus, Mabel Tour Bus with body number 1896-C and plate number TB EBJ, owned by
respondndent San Andres. Going toward the direction of Manila, along Maharlika highway in
barangat Malabanan Norte, Mabel bus immediately swerved to the left lane but in the process it hit
head on the Supreme bus owned and registered in the name of petitioner. Because of the strong
impact of the incident the Supreme was pushed to the side of the road and the Mabel Tour Bus
continuously moved until it hit a passanger jeepney that was parked on the side of the road which
later on fell on the canal. Nobody died but all the vehicles were damaged. Respondent brought the
bus to the RMB Assembler and Body Builder to have it repaired. The cost of repair was estimated in
the amount of P144,500. On December 12, 2002, respondent instituted a complaint for damages
alleging the actual damage to Mabel Tour bus and unrealized profits for the non-use of Mabel Tout
bus.

The petitioner filed their answer with counterclaim. They alleged among others that plaintiff
has no cause of action against them; the proximate cause of the vehicular accident is the reckless
imprudence of the respondent’s driver, Ernesto operated the Mabel Tours and in violation of traffic
laws and regulations in negotiating the overtaking of another vehicle without regard to the rightful
vehicle occupying the right lane coming from the opposite direction resulting to head on collision on
the lane of defendant and at the time of the incident respondent operated the Mabel Tours Bus
outside his franchise and without a registered plate. the CA concluded that the petitioners' cause of
action should be limited to the recovery of civil liability ex delicto by virtue of their having initiated
against the respondent's driver the criminal complaint for criminal negligence under Article 365 of
the Revised Penal Code. The CA was seemingly of the opinion that the petitioners' recourse against
the respondent was limited to recovering from him, as the driver's employer, his subsidiary liability
under and pursuant to Article 103 of the Revised Penal Code. Moreover, the CA pointed out that the
petitioners' failure to reserve the civil aspect of the criminal case proscribed them from instituting a
separate civil action based on Article 2176 of the Civil Code, to wit:

Corollary, appellants should have reserved the civil aspect of the criminal case they have filed.
Without so doing, they were deemed to have elected to recover damages from the bus driver on the
basis of the crime. Therefore, the right of appellants to institute a separate civil case to recover
liability from appellee based under Article 2176 of the Civil Code is deemed instituted with the
criminal action. Evidently, appellant's cause of action against appellee will be limited to the recovery
of the latter's subsidiary liability under Art. 103 of the Revised Penal Code

ISSUE: Whether or not petitioner may recover damages even without reservation of the civil action ?

RULING: Yes. The requirement for the reservation of the civil action does not anymore apply to the
independent civil actions under Articles 32, 33, 34 and 2176 of the Civil Code. Such actions may be
filed at anytime, provided the plaintiff does not recover twice upon the same act or omission.

Contrary to the conclusion thereon by the CA, the petitioners' cause of action was upon a
quasi-delict. As such, their counterclaim against the respondent was based on Article 2184,21 in
relation to Article 218022and Article 2176,23 all of the Civil Code. It is relevant to state that even the
RTC itself acknowledged that the counterclaim was upon a quasi-delict, as its ratiocination bears out,
to wit:

The question is whether despite the absence of such reservation, private respondent may nonetheless
bring an action for damages against the plaintiff under the pertinent provisions of the Civil Code, to
wit:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.
 The en-or committed by the CA emanated from its failure to take into consideration that the
omission of the driver in violation of Article 365 of the Revised Penal Code could give rise not only to
the obligation ex delicto,26 but also to the obligation based on culpa aquiliana under Article 2176 of
the Civil Code. Under the factual antecedents herein, both obligations rested on the common element
of negligence. Article 217727 of the Civil Code and Section 3,28 Rule 111 of the Rules of Court allow the
injured party to prosecute both criminal and civil actions simultaneously. As clarified in Casupanan v.
Laroya:

Under Section 1 of the present Rule 111, what is "deemed instituted" with the criminal action
is only the action to recover civil liability arising from the crime or ex-delicto. All the other civil actions
under Articles 32, 33, 34 and 2176 of the Civil Code are no longer "deemed instituted," and may be
filed separately and prosecuted independently even without any reservation in the criminal action.
The failure to make a reservation in the criminal action is not a waiver of the right to file a separate
and independent civil action based on these articles of the Civil Code.The prescriptive period on the
civil actions based on these articles of the Civil Code continues to run even with the filing of the
criminal action. Verily, the civil actions based on these articles of the Civil Code are separate, distinct
and independent of the civil action "deemed instituted" in the criminal action.

The foregoing notwithstanding, the petitioners as the injured parties have to choose the remedy by
which to enforce their claim in the event of favorable decisions in both actions. This is because Article
2177 of the Civil Code bars them from recovering damages twice upon the same act or omission. As
ruled in Safeguard Security Agency, Inc. v. Tangco:30

An act or omission causing damage to another may give rise to two separate civil liabilities on the part
of the offender, i.e., (1) civil liability ex delicto, under Article 100 of the Revised Penal Code; and (2)
independent civil liabilities, such as those (a) not arising from an act or omission complained of as a
felony, e.g., culpa contractual or obligations arising from law under Article 31 of the Civil Code,
intentional torts under Articles 32 and 34, and culpa aquiliana under Article 2176 of the Civil Code; or
(b) where the injured party is granted a right to file an action independent and distinct from the
criminal action under Article 33 of the Civil Code. Either of these liabilities may be enforced against
the offender subject to the caveat under Article 2177 of the Civil Code that the offended party cannot
recover damages twice for the same act or omission or under both causes.

As can be seen, the latest iteration of Rule 111, unlike the predecessor, no longer includes the
independent civil actions under Articles 32, 33, 34, and 2176 of the Civil Code as requiring prior
reservation to be made in a previously instituted criminal action. Had it been cautious and
circumspect, the RTC could have avoided the error.
G.R NO. 196510

Sofia Tabuada et al,.

Petitioner,

Vs

Eleanor Tabuada et al,.

Respondent

September 12, 2018

Ponente: Bersamin,J

Nature of the action

FACTS:

On 2005, petitioner commeneced civil case in the RTC against respondents Spouses Bernan and
Eleanor. The complaint included a prayer for a temporary restraining order and for the issuance of
the writ of the preliminary injuction. Failure of the respondents to file their answer within the
reglementary period, the petitioners filed a motion to declare defendants in default and for
judgement based on complaint on February 28, 2005. At the ex-perte hearing held on September 9,
2005 the petitioner presented Sofia Tabuada, who testified that her husband was Simeon Tabuada the
son of Loreta Tabuada and the brother in law of defendant Eleanor Tabuada that her co-plaintiff were
her daughter , that Lorenzo Tabuada had died on April 16, 1990 while her husband had died on July
18, 1997 and she received a notice sent by the Spouses Certeza regarding their land located at
barangay Tacas,Jaro, Iloilo City that her husband had inherited from his mother, Loreta Tabuada
where they were residing , informing them that the land had been mortgaged to them . She
immediately inquired from Eleanor Tabuada and Trabuco about mortgage and both admitted that
they had mortgaged the property to the spouses Certeza, that she was puzzled to see the signature
purportedly of Loreta Tabuada on top of the name Loreta Tabuada printed on the mortagage of real
rights dated July 1, 1994 and the promissory note dated July 4, 1994 despite Loreta Tabuada having
died on April 16, 1990 that the property under mortgage was where and her daughter residing.

The Spouses Certeza contend that they were mortgagees in good faith considering that they had no
notice prior to the filing of Civil Case No. 05- 28420 that the real owner of the property had died
several years before the execution of the mortgage; and that they had believed in good faith in the
representations made by Eleanor Tabuada that she had been Loreta Tabuada, the titleholder.
Petitioner offered for admission of the death certificate of Loreta Tabuada, the TCT of the
Register of Deeds of Iloilo City, promissory note dated July 1,1994 involving Lot NO. 4272-B-2
executed by Loreta as mortgagor. RTC ruled that the Mortagage of Real Rights dated July 1, 1994 null
and void for not complying with the essential requisited of a real estate mortage.

ISSUE: Whether or not the Real estate mortgage was null and void?

RULING:

Yes, Under Article 2085 of the Civil Code, a mortgage, to be valid, must have the following
requisites, namely: (a) that it be constituted to secure the fulfillment of a principal obligation; (b) that
the mortgagor be the absolute owner of the thing mortgaged; and (c) that the person constituting the
mortgage has free disposal of the property, and in the absence of the right of free disposal, that the
person be legally authorized for the purpose.

It is uncontested that the late Loreta Tabuada had died in 1990, or four years before the
mortgage was constituted; and that Eleanor Tabuada and Trabuco admitted to petitioner Sofia
Tabuada that they had mortgaged the property to the Spouses Certezas. Accordingly, the RTC was
fully justified in declaring the nullity of the mortgage based on its finding that Eleanor Tabuada had
fraudulently represented herself to the Spouses Certeza as the late Loreta Tabuada, the
titleholder. That the titleholder had been dead when the mortgage was constituted on the property
by Eleanor Tabuada was not even contested by Eleanor Tabuada and Tabuco. In any event, Eleanor
Tabuada had not been legally authorized to mortgage the lot to the Spouses Certeza.

The Spouses Certeza admitted that the petitioners were the relatives by blood or affinity of their co-
defendants Eleanor Tabuada, et al.; and that Sofia Tabuada, et al. and the petitioners had been living
in their respective residences built on the property subject of the mortgage. Such admissions belied
the Spouses Certeza's contention of being mortgagees in good faith. At the very least, they should
have been prudent and cautious enough as to have inquired about Eleanor Tabuada's assertion of her
capacity and authority to mortgage in view of the actual presence of other persons like the petitioners
herein on the property. Such prudence and caution were demanded of persons like them who are
about to deal with realty; they should not close their eyes to facts that should put a reasonable man
on his guard and still claim he acted in good faith. Indeed, the status of a mortgagee in good faith does
not apply where the title is still in the name of the rightful owner and the mortgagor is a different
person pretending to be the owner. In such a case, the mortgagee is not an innocent mortgagee for
value and the registered owner will generally not lose his title