De Castro-Civil Law.docx

Justice Teresita Leonardo-De Castro Cases (20082015)

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EFFECT AND APPLICATION OF LAWS There is no irreconcilable conflict or repugnancy between Section 28 of R.A. No. 7279 and P.D. No. 1315 and No. 1472, rather, they can be read together and harmonized to give effect to their provision. It should be stressed that Section 28 of R.A. No. 7279 does not totally and absolutely prohibit eviction and demolition without a judicial order as in fact it provides for exceptions. Pursuant to established doctrine, the three (3) statutes should be construed in the light of the objective to be achieved and the evil or mischief to be suppressed by the said laws, and they should be given such construction as will advance the object, suppress the mischief and secure the benefits intended. It is worthy to note that the three laws (P.D. No. 1315, P.D. No. 1472 and R.A. No. 7279) have a common objective – to address the housing problems of the country by establishing a comprehensive urban development and housing program for the homeless. For this reason, the need to harmonize these laws all the more becomes imperative. - Caridad Magkalas vs. National Housing Authority, G.R. No. 138823, September 17, 2008 CONFLICT OF LAWS In an action for enforcement of foreign judgment, the Court has limited review over the decision rendered by the foreign tribunal. The Philippine courts cannot pass upon the merits of the case pursuant to the incorporation clause of the Constitution, unless there is proof of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. - Bank of the Philippine Islands Securities Corporation vs. Edgardo V. Guevara, G.R. No. 167052, March 11, 2015 HUMAN RELATIONS UNJUST ENRICHMENT Expounding on this provision in a recent case, we have held that the principle of unjust enrichment essentially contemplates payment when there is no duty to pay, and the person who receives the payment has no right to receive it. In light of the overpayment, it seems specious for petitioner to claim that it has suffered damages from respondent’s refusal to pay its Progress Billing, which had been proven to be excessive and inaccurate. Bearing in mind the law and jurisprudence on unjust enrichment, we hold that petitioner is indeed liable to return what it had received beyond the actual value of the work it had done for respondent. - R.V. Santos Company, Inc. vs. Belle Corporation, G.R. Nos. 159561-62, October 3, 2012 PERSONS PSYCHOLOGICAL INCAPACITY

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There is no requirement that the defendant/respondent spouse should be personally examined by a physician or psychologist as a condition sine qua non for the declaration of nullity of marriage based on psychological incapacity. - Marietta C. Azcueta vs. Republic of the Philippines and the Court of Appeals, G.R. No. 180668, May 26, 2009 Article 36 of the Family Code is not to be confused with a divorce law that cuts the marital bond at the time the causes therefore manifest themselves. It refers to a serious psychological illness afflicting a party even before the celebration of the marriage. It is a malady so grave and so permanent as to deprive one of awareness of the duties and responsibilities of the matrimonial bond one is about to assume. Judicial precedents regarding the evidentiary requirements in psychological incapacity cases that must be applied. Jose Reynaldo B. Ochosa vs. Bona J. Alano and Republic of the Philippines, G.R. No. 167459, January 26, 2011 PROPERTY RELATIONS OF THE SPOUSES (FAMILY CODE) When the sale is made before the effectivity of the Family Code, the applicable law is the Civil Code. Article 173 of the Civil Code provides that the disposition of conjugal property without the wife's consent is not void but merely voidable. - Heirs Of Domingo Hernandez, Sr., namely: Sergia V. Hernandez (Surviving Spouse), Domingo V. Hernandez, Jr., and Maria Leonora Wilma Hernandez vs. Plaridel Mingoa, Sr., Dolores Camisura, Melanie Mingoa, and Quezon City Register of Deeds, G.R. No. 146548, December 18 2009 PROPERTY OWNERSHIP A Torrens title cannot be attacked collaterally, and the issue on its validity can be raised only in an action expressly instituted for that purpose. A collateral attack is made when, in another action to obtain a different relief, the certificate of title is assailed as an incident in said action. Spouses Decaleng only sought the dismissal of the complaint of PEC-EDNP plus the grant of their counterclaim for the payment of moral damages, exemplary damages, litigation expenses, and attorney’s fees. They conspicuously did not pray for the annulment or cancellation of Certificate of Title No. 1. Evidently, the Spouses Decaleng’s attack on the validity, as well as the existence of Certificate of Title No. 1 is only incidental to their defense against the accion publiciana and accion reinvindicatoria instituted by PEC-EDNP, hence, merely collateral. - Sps. Ambrosio Decaleng (substituted by his heirs) and Julia "Wanay" Decaleng vs. Bishop of the Missionary District of the Philippine Islands of Protestant Episcopal Church in the United States of America,

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otherwise known as the Philippine Episcopal Church, G.R. No. 171209, June 27, 2012

ACCESSION The accessory follows the principal. The right of accession is recognized under Article 440 of the Civil Code which states that the ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially. - Maria Torbela, represented by her heirs, Eulogio Tosino, et al. vs. Spouses Andres T. Rosario, et al., G.R. No. 140528, December 7, 2011 QUIETING OF TITLE

Vidal filed an action for quieting of title with regard to the land she inherited from Francisco Cacho. However, Teofilo opposed contended that there is no title to be disturbed in the first place. The court ruled that this action indisputably an action for quieting of title, a special proceeding wherein the court is precisely tasked to determine the rights of the parties as to a particular parcel of land, so that the complainant and those claiming under him/her may be forever free from any danger of hostile claim. - Republic of the Philippines vs. Hon. Mamindiara P. Mangotara, et al., G.R. No. 170375, July 7, 2010

The Syjucos' title, shows that it originated from OCT No. 994 registered on May 3, 1917 while Bonficacio's title shows that that it likewise originated from OCT No. 994, but registered on April 19, 1917. This case affirmed the earlier finding that “there is only one OCT No. 994, the registration date of which had already been decisively settled as 3 May 1917 and not 19 April 1917” and categorically concluded that “OCT No. 994 which reflects the date of 19 April 1917 as its registration date is null and void.” - Imelda Syjuco, et al., vs. Felisa D. Bonifacio and VSD Realty & Corporation, G.R. No. 148748, January 14, 2015 For an action to quiet title to prosper, two indispensable requisites must concur: (1) the plaintiff or complainant has a legal or equitable title or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting a cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. Herminio M. De Guzman, for himself and as Attorney-In-Fact of Nilo M. De Guzman, Angelino De Guzman, Josefino M. De Guzman, Estrella M. De Guzman, Teresita De Guzman, Elsa Margarita M. De Guzman, Evelyn M. De Page 3 of 19

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Guzman, Ma. Nimia M. De Guzman, Antolin M. De Guzman, and Ferdinand M. De Guzman vs. Tabangao Realty Incorporated, G.R. No. 154262, February 11, 2015 POSESSION It is a time-honored legal precept that after the consolidation of titles in the buyer’s name, for failure of the mortgagor to redeem, entitlement to a writ of possession becomes a matter of right. - Viola Cahilig et al., vs. Hon. Eustaquio G. Terencio et al., G.R. No. 164470, November 28, 2011

OBLIGATIONS EXTINGUISHMENT OF OBLIGATIONS Article 1391 of the Civil Code, which pertinently reads: The action for annulment shall be brought within four years. In case of mistake or fraud, this period shall begin from the time of the discovery of the same. - Spouses Renato and Florinda Dela Cruz vs. Spouses Gil and Leonila Segovia, G.R. No. 149801, June 26, 2008 In general, a payment in order to be effective to discharge an obligation, must be made to the proper person. Thus, payment must be made to the obligee himself or to an agent having authority, express or implied, to receive the particular payment. Hence, absent any showing that the respondent agreed to the payment of the contract price to another person, or that she authorized Cruz to claim the check on her behalf, the payment, to be effective must be made to her. - Republic of the Philippines, represented by the Chief of the Philippine National Police vs. Thi Thu Thuy T. De Guzman, G.R. No. 175021, June 15, 2011 It is important to note at this point that in the determination of the nullity of a contract based on the lack of consideration, the debtor has the burden to prove the same. Article 1354 of the Civil Code provides that "although the cause is not stated in the contract, it is presumed that it exists and is lawful, unless the debtor proves the contrary." - Union Bank of the Philippines vs. Spouses Rodolfo T. Tiu and Victoria N. Tiu, G.R. Nos. 173090-91, September 7, 2011 CONTRACTS ESSENTIAL REQUISISTES When there is as of yet no meeting of the minds as to the subject matter or the cause or consideration of the contract being negotiated, the same cannot be considered to have been perfected. - MCA-MBF Countdown Cards Philippines Inc., Amable R. Aguiluz V, Amable C. Aguiluz IX, Cielo C. Aguiluz, Alberto L. Buenviaje, Vicente Acsay and MCA Holdings and Management Page 4 of 19

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Corporation vs. MBf Card International Limited and MBf Discount Card Limited, G.R. No. 173586, March 14, 2012 KINDS OF CONTRACTS SALVADOR A. FERNANDEZ vs. CRISTINA D. AMAGNA G.R. No. 152614, September 30, 2009, J. Leonardo-De Castro When the contract of lease does not provide for a definite period for its duration, the lease shall be considered month to month if the rentals are paid on a monthly basis and when the lessee fails to pay the monthly rental, the contract of lease shall be considered terminated. ROLANDO T. CATUNGAL, JOSE T. CATUNGAL, JR., CAROLYN T. CATUNGAL and ERLINDA CATUNGAL-WESSEL vs. ANGEL S. RODRIGUEZ G.R. No. 146839, March 23, 2011, J. LEONARDO-DE CASTRO This Court has distinguished between a condition imposed on the perfection of a contract and a condition imposed merely on the performance of an obligation. While failure to comply with the first condition results in the failure of a contract, failure to comply with the second merely gives the other party the option to either refuse to proceed with the sale or to waive the condition. INTERPRETATION OF CONTRACTS As mandated by Article 1370 of the Civil Code, if the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. The agreement is clear, plain and simple that it leaves no room for interpretation. It explicitly provides that for the services of Zamora, as agent under the agreement, Multiwood agreed to pay her in the amount equivalent to 10% of the face value of the invoice price, covering the letter of credit or such other instrument representing the actual purchase price for the products sold or shipped by Multiwood. - Heirs of Deceased Carmen Cruz-Zamora vs. Multiwood International Inc., G.R. No. 146428, January 19, 2009 DEFECTIVE CONTRACTS The proper basis for the nullity of the forged pacto de retro sale is Article 1318 of the Civil Code, which enumerates the essential requisites of a valid contract, and not Article 1409 which enumerates examples of void contracts in relation to Article 1505 which refers to an unenforceable contract and is applicable only to goods. Vicente Manzano, Jr. vs. Marcelino Garcia, G.R. No. 179323, November 28, 2011 Article 1305 of the Civil Code allows contracting parties to establish such stipulation, clauses, terms, and conditions as they may deem convenient, provided, however, that they are not contrary to law, morals, good customs, public order, or public policy. Page 5 of 19

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Pactum commissorium is among the contractual stipulations that are deemed contrary to law. It is defined as "a stipulation empowering the creditor to appropriate the thing given as guaranty for the fulfillment of the obligation in the event the obligor fails to live up to his undertakings, without further formality, such as foreclosure proceedings, and a public sale." It is explicitly prohibited under Article 2088 of the Civil Code. - Philnico Industrial Corporation vs. Privatization and Management Office, G.R. No. 199420, August 27, 2014 RESCISSION OF CONTRACTS The general rule is that he who alleges fraud or mistake in a transaction must substantiate his allegation as the presumption is that a person takes ordinary care for his concerns and that private dealings have been entered into fairly and regularly." One who alleges defect or lack of valid consent to a contract by reason of fraud or undue influence must establish by full, clear and convincing evidence such specific acts that vitiated a party’s consent, otherwise, the latter’s presumed consent to the contract prevails. - Fontana Resort and Country Club, Inc. and RN Development Corp. vs. Spouses Roy S. Tan and Susan C. Tan, G.R. No. 154670, January 30, 2012 SALES EXTINGUISHMENT OF SALE The alleged nullity of the deed of conditional sale because the period of redemption had expired is wrong. The right of legal redemption must be exercised within specified time limits. However, the statutory period of redemption can be extended by agreement of the parties. Allowing a redemption after the lapse of the statutory period, when the buyer at the foreclosure does not object but even consents to the redemption, will uphold the policy of the law recognized in such cases as Javellana v. Mirasol and Nuñez, and in the more recent case of Tibajia, et al. v. Honorable Court of Appeals, et al., which is to aid rather than defeat the right of redemption. Republic of the Philippines vs. Marawi-Marantao General Hospital Inc, and Atty. Macapanton K. Mangodadatu, G.R. No. 158920, November 28, 2012 PARTNERSHIP There is a co-ownership when an undivided thing or right belongs to different persons. It is a partnership when two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. A partner is entitled only to his share as agreed upon, or in the absence of any such stipulations, then to his share in proportion to his contribution to the partnership. - Federico Jarantilla, Jr. vs. Antonieta Jarantilla, Buenaventura Remotigue, substituted by Cynthia Remotigue, Doroteo Jarantilla and Tomas Jarantilla, G.R. No. 154486, December 1, 2010 Page 6 of 19

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AGENCY Our law mandates an agent to act within the scope of his authority. The scope of an agent’s authority is what appears in the written terms of the power of attorney granted upon him. Under Article 1878(11) of the Civil Code, a special power of attorney is necessary to obligate the principal as a guarantor or surety. In the case at bar, the principal could be held liable even if the agent exceeded the scope of his authority only if the agent’s act of issuing the Surety Bond is deemed to have been performed within the written terms of the power of attorney he was granted. However, the Special Power of Attorney accorded to the agent in this case clearly states the limits of his authority and particularly provides that in case of surety bonds, it can only be issued in favor of the Department of Public Works and Highways, the National Power Corporation, and other government agencies. Country Bankers Insurance Corporation vs. Keppel Cebu Shipyard, Unimarine Shipping Lines, Inc., Paul Rodriguez, Peter Rodriguez, Albert Hontanosas, and Bethoven Quinain, G.R. No. 166044, June 18, 2012 TRUST A trust may have a constructive or implied nature in the beginning, but the registered owners subsequent express acknowledgement in a public document of a previous sale of the property to another party, had the effect of imparting to the aforementioned trust the nature of an express trust. - Maria Torbela, represented by her heirs, Eulogio Tosino et al vs. Spouses Andres T. Rosario et al, G.R. No. 140528, December 7, 2011 A constructive trust is substantially an appropriate remedy against unjust enrichment. It is raised by equity in respect of property, which has been acquired by fraud, or where although acquired originally without fraud, it is against equity that it should be retained by the person holding it. Thus, the payees, who acquired the retirement benefits under the GSIS RFP, are considered as trustees of the disallowed amounts, as although they committed no fraud in obtaining these benefits, it is against equity and good conscience for them to continue holding on to them. – Government Service Insurance System (GSIS), et al. vs. Commission On Audit (COA), Amorsonia B. Escarda, Ma. Cristina D. Dimagiba, and Reynaldo P. Ventura, G.R. No. 162372, September 11, 2012 CREDIT TRANSACTIONS LOAN

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There is no express trust made if there is no clear and manifest intention to create such. If after careful scrutiny of the document, it is clear that what was intended was the establishment of a lien over the subject properties as a form of collateral, then the underlying agreement is a loan, not a trust. - Philippine National Bank vs. Merelo B. Aznar, et al., G.R. No. 171805, May 30, 2011 REAL MORTGAGE It has been settled that there is effective registration once the registrant has fulfilled all that is needed of him for purposes of entry and annotation, so that what is left to be accomplished lies solely on the register of deeds. As such, an entry of the certificate of sale was validly registered even if the same was only annotated in the owner’s transfer certificates of titles. Particularly, the purchaser in the auction sale cannot be faulted for the impossibility of annotation on the transfer certificates of title which were supposed to be in the custody of the Registrar of Deeds, like in instances when the same were previously razed in fire. Neither could such purchaser be blamed for the fact that there were no reconstituted titles available during the time of inscription as it had taken the necessary steps in having the same reconstituted but to no avail. Hence, the one-year period of redemption commences to run from the said annotation and the failure of the mortgagors to redeem during the said period entitles the purchaser to the writ of possession as a matter of right. - National Housing Authority vs. Augusto Basa, Jr., Luz Basa and Eduardo S. Basa, G.R. No. 149121, April 20, 2010 Foreclosure proceedings enjoy the presumption of regularity and that the mortgagor who alleges absence of a requisite has the burden of proving such fact. The publication of the notice of sale in the newspaper of general circulation alone is more than sufficient compliance with the notice posting requirement of the law. By such publication, a reasonably wide publicity had been effected such that those interested might attend the public sale, and the purpose of the law had been thereby subserved. - Century Savings Bank vs. Spouses Danilo T. Samonte and Rosalinda M. Samonte, G.R. No. 176212, October 20, 2010 If the proceeds of the sale are insufficient to cover the debt in an extrajudicial foreclosure of mortgage, the mortgagee is entitled to claim the deficiency from the debtor. While Act No. 3135, as amended, does not discuss the mortgagees right to recover the deficiency, neither does it contain any provision expressly or impliedly prohibiting recovery. - BPI Family Savings Bank, Inc. vs. Ma. Arlyn T. Avenido & Pacifico A. Avenido , G.R. No. 175816, December 7, 2011 Gross inadequacy of price does not nullify an execution sale. In an ordinary sale, for reason of equity, a transaction may be invalidated on the ground of inadequacy of price, or when such inadequacy shocks one’s conscience as to justify the courts to interfere; such does not follow when the law gives the owner the right to redeem as when a sale is made at public auction, upon the theory that the lesser the price, the easier it is for the owner to effect redemption. When there is a right to redeem, Page 8 of 19

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inadequacy of price should not be material because the judgment debtor may reacquire the property or else sell his right to redeem and thus recover any loss he claims to have suffered by reason of the price obtained at the execution sale. Thus, respondent stood to gain rather than be harmed by the low sale value of the auctioned properties because it possesses the right of redemption. - Bank Of The Philippine Islands, as Successor-In-Interest of Far East Bank & Trust Company vs. Cynthia L. Reyes, G.R. No. 182769, February 1, 2012 While it is true that the annotation of the first mortgage to Villar on Galas’s TCT contained a restriction on further encumbrances without the mortgagee’s prior consent, this restriction was nowhere to be found in the Deed of Real Estate Mortgage. As this Deed became the basis for the annotation on Galas’s title, its terms and conditions take precedence over the standard, stamped annotation placed on her title. If it were the intention of the parties to impose such restriction, they would have and should have stipulated such in the Deed of Real Estate Mortgage itself. Moreover, Villar’s purchase of the mortgaged property did not violate the prohibition on pactum commissorium. The power of attorney provision in favor of Villar did not provide that the ownership over the subject property would automatically pass to Villar upon Galas’s failure to pay the loan on time. What it granted was the mere appointment of Villar as attorney-in-fact, with authority to sell or otherwise dispose of the subject property, and to apply the proceeds to the payment of the loan. Finally, Villar did not obligate herself to replace the debtor in the principal obligation upon his buying of the mortgaged property, and could not do so in law without the creditor’s consent. Therefore, the obligation to pay the mortgage indebtedness remains with the original debtors Galas and Pingol. - Pablo P. Garcia vs. Yolanda Valdez Villar, G.R. No. 158891, June 27, 2012

DRAGNET CLAUSE As a general rule, a mortgage liability is usually limited to the amount mentioned in the contract. However, the amounts named as consideration in a contract of mortgage do not limit the amount for which the mortgage may stand as security if, from the four corners of the instrument, the intent to secure future and other indebtedness can be gathered. This stipulation is valid and binding between the parties and is known as the "blanket mortgage clause" also known as the "dragnet clause. - Ramona Ramos and the Estate of Luis T. Ramos vs. Philippine National Bank, Opal Portfolio Investments (SPV-AMC), Inc. and Golden Dragon Star Equities, Inc., G.R. No. 178218, December 14, 2011 JUST COMPENSATION When the acquisition process under PD 27 remains incomplete and is overtaken by RA 6657, the process should be completed under RA 6657, with PD 27 and EO 228

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having suppletory effect only. This means that PD 27 applies only insofar as there are gaps in RA 6657; where RA 6657 is sufficient, PD 27 is superseded. Moreover, the Court has allowed the grant of interest in expropriation cases where there is delay in the payment of just compensation. In fact, the interest imposed in case of delay in payments in agrarian cases is 12% per annum and not 6% as "the imposition x x x is in the nature of damages for delay in payment which in effect makes the obligation on the part of the government one of forbearance." Finally, the constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, if fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case , the final compensation must include interest on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. - Land Bank of the Philippines vs. Emiliano R. Santiago, Jr., G.R. No. 182209, October 3, 2012 LEASE LEASE OF RURAL AND URBAN LANDS The well-entrenched principle is that a lease from month-to-month is with a definite period and expires at the end of each month upon the demand to vacate by the lessor. The subsequent acceptance by the lessor of rental payments does not, absent any circumstance that may dictate a contrary conclusion, legitimize the unlawful character of their possession. - Cebu Bionic Builders Supply, Inc. and Lydia Sia vs. Development Bank of the Philippines, Jose To Chip, Patricio Yap and Roger Balila, G.R. No. 154366, November 17, 2010 In case the lessee chooses to renew the lease but there are no specified terms and conditions for the new contract of lease, the same terms and conditions as the original contract of lease shall continue to govern. - Manila International Airport Authority vs. Ding Velayo Sports Center, Inc , G.R. No. 161718, December 14, 2011 LAND TITLES AND DEEDS JURISDICTION Page 10 of 19

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It is well-settled that the DAR, through its adjudication arm, i.e., the DARAB and its regional and provincial adjudication boards, exercises quasi-judicial functions and jurisdiction on all matters pertaining to an agrarian dispute or controversy and the implementation of agrarian reform laws. Pertinently, it is provided in the DARAB Revised Rules of Procedure that the DARAB has primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of the CARP and related agrarian reform laws. Such jurisdiction shall extend to cases involving the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents which are registered with the Land Registration Authority. - Pedro Gabriel et. al. vs. Murmuray Jamias et. al., G.R. No. 156482, September 17, 2008 It is a basic rule that jurisdiction is determined by the allegations in the complaint. The peitioner’s complaints did not contain any allegation that would, even in the slightest, imply that the issue to be resolved in this case involved an agrarian dispute which would transfer the jurisdiction to Department of Agrarian Reform Adjudication Board (DARAB). In the action filed by the petitioner, the issue to be resolved was who between the petitioner and the private respondents and their purported predecessors-in-interest, have a valid title over the subject properties in light of the relevant facts and applicable laws. The case thus involves a controversy relating to the ownership of the subject properties, which is beyond the scope of the phrase "agrarian dispute." The jurisdiction must then belong to the Regional Trial Court. - Bases Conversion Development Authority vs. Provincial Agrarian Reform Officer of Pampanga, Register of Deeds of Angeles City, Benjamin Poy Lorenzo, Lavernie Poy Lorenzo, Diosdado De Guzman, Rosemary Eng Tay Tan, Leandro De Guzman, Benjamin G. Lorenzo, Antonio Manalo, and Socorro De Guzman, G.R. Nos. 155322-29, June 27, 2012 TORRENS SYSTEM Banks, their business being impressed with public interest, are expected to exercise more care and prudence than private individuals in their dealings, even those involving registered lands. The rule that persons dealing with registered lands can rely solely on the certificate of title does not apply to banks. - Philippine Trust Company (also known as Philtrust Bank) vs. Hon. Court of Appeals and Forfom Development Corporation, G.R. No. 150318, November 22, 2010 Banco Filipino is not an ordinary mortgagee, but is a mortgagee-bank, whose business is impressed with public interest. A banking institution is expected to exercise due diligence before entering into a mortgage contract. The ascertainment of the status or condition of a property offered to it as security for a loan must be a standard and indispensable part of its operations. - Maria Torbela, represented by her heirs, Eulogio Tosino et al vs. Spouses Andres T. Rosario et al, G.R. No. 140528, December 7, 2011 Under the Regalian doctrine embodied in our Constitution, land that has not been acquired from the government, either by purchase, grant, or any other mode Page 11 of 19

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recognized by law, belongs to the State as part of the public domain. Thus, it is indispensable for a person claiming title to a public land to show that his title was acquired through such means It is not enough for the PENRO or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts must be established to prove that the land is alienable and disposable. - Republic of the Philippines vs. Gloria Jaralve substituted Alan Jess Jaralve Documento, Jr., Edgardo Jaralve, Serafin Uy, Jr., Shella Uy, Lagnada, Say A-Ang, International Nimfa Pantaleon Starg Lad and Development Corporation, Annie Tan, Teotimo Cabarrubias, Jessica Daclan, Ma. Emma Ramas, Danilo Deen, and Eric Anthony Deen, G.R. No. 175177, October 24, 2012 The real purpose of the Torrens system is to quiet title to land and to stop forever any question as to its legality; A Torrens title is generally a conclusive evidence of the ownership of the land referred to therein. Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, explicitly provides that “[a] certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.” - Deogenes O. Rodriguez vs. Hon. Court of Appeals and Philippine Chinese Charitable Association, Inc., G.R. No. 184589, June 13, 2013 REGISTRATION Current doctrine thus seems to be that entry alone produces the effect of registration, whether the transaction entered is a voluntary or an involuntary one, so long as the registrant has complied with all that is required of him for purposes of entry and annotation, and nothing more remains to be done but a duty incumbent solely on the register of deeds. - Durawood Construction and Lumber Supply, Inc. vs. Candice S. Bona, G.R. No. 179884, January 25, 2012 The Supreme Court had allowed substantial compliance with the requirement that an applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land as alienable and disposable and was lenient with the application of the rule that a CENRO Certification, by itself does not prove that the land is alienable and disposable. However, such substantial compliance and leniency will not be allowed where the Land Registration Authority (LRA) or the DENR oppose the application on the ground that the land subject thereof is inalienable. - Republic of the Philippines vs. Lydia Capco De

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Tensuan, represented by Claudia C. Aruelo, G.R. No. 171136, October 23, 2013 A party claiming ownership over a parcel of land cannot bank on the weakness and defects of the title of the adverse party but rely on the strength of his claim. - CLT Realty Development Corporation vs. Phil-Ville Development and Housing Corporation, Republic Of The Philippines (through the OFFICE OF THE SOLICITOR GENERAL), and the Register of Deeds of Metro Manila District III, Caloocan, G .R. No. 160728, March 11, 2015 1. The buyer of the property does not automatically becomes a party to the land registration case after complying with the requirements of Sec. 22 of P.D 1529. 2. Section 108 of Presidential Decree No. 1529 authorizes a person having interest in a registered property to ask for the amendment and alteration of a certificate of title or the entry of a new certificate if "new interests not appearing upon the certificate have arisen or been created," "an omission or error was made in entering a certificate or any memorandum thereon," or "upon any other reasonable ground." - The Heirs of Eugenio Lopez, Sr. namely, Oscar M. Lopez, Manuel M. Lopez and Presentacion L. Psinakis vs. The Honorable Francisco Querubin, In His Capacity As Presiding Judge of the Regional Trial Court of Antipolo, Branch 74, The Heirs of Alfonso Sandoval and his wife Rosa Ruiz, represented by their Attorney-In-Fact, Mrs. Imelda Rivera G.R. No. 155405, March 18, 2015 The ministerial duty of the land registration court to issue a writ of possession ceases with respect to actual possessors of the property under a claim of ownership. Heirs of Eugenio Lopez vs. Alfonso Sandoval and Roman Ozaeta, Jr., G.R. No. 164092, March 18, 2015 Although the NCIP has the authority to issue temporary restraining orders and writs of injunction, it was not convinced that private respondents were entitled to the relief granted by the Commission. Proclamation No. 15 does not appear to be a definitive recognition of private respondents’ ancestral land claim, as it merely identifies the Molintas and Gumangan families as claimants of a portion of the Busol Forest Reservation, but does not acknowledge vested rights over the same. Since it is required before the issuance of a writ of preliminary injunction that claimants show the existence of a right to be protected, this Court, previously, ultimately granted the petition of the City Government of Baguio and set aside the writ of preliminary injunction issued therein applying stare decisis. - The Baguio Regreening Movement, Inc. vs. Atty. Brain Masweng G.R. No. 180882, February 27, 2013

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Justice Teresita Leonardo-De Castro Cases (20082015)

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INNOCENT PURCHASER FOR VALUE The law does not require a person dealing with the owner of registered land to go beyond the certificate of title as he may rely on the notices of the encumbrances on the property annotated on the certificate of title or absence of any annotation. Here, petitioners adverse claim is annotated at the back of the title coupled with the fact that they are in possession of the disputed property. To [the Court], these circumstances should have put respondents on guard and required them to ascertain the property being offered to them has already been sold to another to prevent injury to prior innocent buyers. A person who deliberately ignores a significant fact which would create suspicion in an otherwise reasonable man is not an innocent purchaser for value. It is a well-settled rule that a purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. - Spouses Jesus Ching and Lee Poe Tin vs. Spouses Adolfo and Arsenia Enrile, G.R. No. 156076, September 17, 2008 One can sell only what one owns or is authorized to sell, and the buyer can acquire no more right than what the seller can transfer legally. A person dealing with registered land has a right to rely on the Torrens certificate of title and to dispense with the need of inquiring further except when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. Adoracion Rosales Rufloe, Alfredo Rufloe and Rodrigo Rufloe vs. Leonarda Burgos, Anita Burgos, Angelito Burgos, Amy Burgos, Elvira Delos Reyes and Julian C. Tubig, G.R. No. 143573, January 30, 2009 It is a well-settled doctrine that one who deals with property registered under the Torrens system need not go beyond the same, but only has to rely on the certificates of title, he is charged with notice only of such burdens and claims as are annotated on the certificates. But, a buyer of real property in possession of persons other than the seller must be wary and should investigate the rights of those in possession, for without such inquiry the buyer can hardly be regarded as a buyer in good faith and cannot have any right over the property. A purchaser in good faith is one who buys property without notice that some other person has a right to or interest in such property and pays its fair price before he has notice of the adverse claims and interest of another person in the same property. Laches is defined as the failure to assert a right for an unreasonable and unexplained length of time, warranting a presumption that the party entitled to assert it has either abandoned or declined to assert it. - The Heirs of Romana

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Saves, et al. vs. The Heirs of Escolastico Saves, et al., G.R. No. 152866, October 6, 2010 REMEDIES Since the indefeasibility of a title does not attach to titles secured by fraud and misrepresentation, it was as if no title at all was ever issued in this case to the petitioner and therefore this is hardly the occasion to talk of collateral attack against a title. - Gregorio Araneta University Foundation vs. The Regional Trial Court of Kalookan City, G.R. No. 139672, March 4, 2009 The general rule is that in the case of two certificates of title, purporting to include the same land, the earlier in date prevails. Applying the principle Primus Tempore, Portior Jure (First in Time, Stronger in Right), it was found that ALI’s title was the valid one having been derived from the earlier OCT. - Spouses Morris Carpo and Socorro Carpo vs. Ayala Land, Incorporated, G.R. No. 166577, February 3, 2010 An action for declaration of nullity of title and recovery of ownership of real property, or re-conveyance, is a real action but it is an action in personam, for it binds a particular individual only although it concerns the right to a tangible thing. Any judgment therein is binding only upon the parties properly impleaded. The effect of the said judgment cannot be extended to BPI Family and the spouses Chan by simply issuing an alias writ of execution against them. No man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not bound by any judgment rendered by the court. In the same manner, a writ of execution can be issued only against a party and not against one who did not have his day in court. - Emerita Muñoz vs. Atty. Victoriano R. Yabut, Jr. and Samuel Go Chan, G.R. No. 142676, June 6, 2011 The rights and claims vested by virtue of a decision of the Cadastral Court, adjudicating said lot to different persons which was never implemented nor executed despite the lapse of more than thirty years cannot prescribed for failure to fully execute the same. And an action for reconveyance of registered land based on implied trust prescribes in ten 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, however, the ten-year prescriptive period applies only when the person enforcing the trust is not in possession of the property. - Jose Fernando, Jr., Zoilo Fernando, Norma Fernando Banares, Rosario Fernando Tangkencgo, Heirs of Tomas Fernando, represented by Alfredo V. Fernando, Heirs of Guillermo Fernando, represented by Ronnie H. Fernando, Heirs of Iluminada Fernando, represented by Benjamin Estrella and Heirs of Germogena Fernando vs. Leon Acuna, Hermogenes Fernando, Heirs Of Spouses Antonio Fernando and Felisa Camacho, represented by Hermogenes Fernando, G.R. No. 161030, September 14, 2011 As correctly pointed out by petitioner, we had emphasized in Republic v. Holazo that the term “any other document” in paragraph (f) refers to reliable documents of the kind described in the preceding enumerations and that the documents referred Page 15 of 19

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to in Section 2(f) may be resorted to only in the absence of the preceding documents in the list. Therefore, the party praying for the reconstitution of a title must show that he had, in fact, sought to secure such documents and failed to find them before presentation of “other documents” as evidence in substitution is allowed. Thus, we stated in Holazo that When Rep. Act No. 26, Section 2(f), or 3(f) for that matter, speaks of “any other document,” it must refer to similar documents previously enumerated therein or documents ejusdem generis as the documents earlier referred to. The documents alluded to in Section 3(f) must be resorted to in the absence of those preceding in order the petitioner for reconstitution fails to show that he had, in fact, sought to secure such prior documents (except with respect to the owner’s duplicate copy of the title which it claims had been, likewise, destroyed) and failed to find them, the presentation of the succeeding documents as substitutionary evidence is proscribed. Republic of the Philippines vs. Conception Lorenzo, et al., G.R. No. 172338, November 10, 2012 NOTE: Registration of patents is Excluded from the 2015 Bar Examinations A certificate of title issued pursuant to a homestead patent becomes indefeasible after one year, is subject to the proviso that “the land covered by said certificate is a disposable public land within the contemplation of the Public Land Law.” In this case, the subject property is part of the Matchwood Forest Reserve and is inalienable and not subject to disposition. Being contrary to the Public Land Law, the Homestead Patent and OCT issued in respondent’s name are void; and the right of petitioner Republic to seek cancellation of such void patent/title and reversion of the subject property to the State is imprescriptible. - Republic of the Philippines – Bureau Of Forest Development vs. Vicente Roxas and the Register of Deeds of Oriental Mindoro, G.R. No. 157988, December 11, 2013 PRESCRIPTION When the plaintiff in such action is not in possession of the subject property, the action prescribes in ten years from the date of registration of the deed or the date of the issuance of the certificate of title over the property. When the plaintiff is in possession of the subject property, the action, being in effect that of quieting of title to the property, does not prescribe. - Heirs Of Domingo Valientes vs. Hon. Reinerio (Abraham) B. Ramas, Acting Presiding Judge, RTC, Branch 29, 9th Judicial Region, San Miguel, Zamboanga del Sur and Vilma V. Minor, G.R. No. 157852, December 15, 2010 PUBLIC LAND ACT The ultimate objective of the law is "to promote public policy, that is, to provide home and decent living for destitutes, aimed at providing a class of independent small landholders which is the bulwark of peace and order. - Barceliza P. Capistrano vs. Darryl Limcuando and Fe S. Sumiran, G.R. No. 152413, February 13, 2009

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Nowhere in Commonwealth Act No. 141 does it say that the right to repurchase under Section 119 thereof could not be extended by mutual agreement of the parties involved. Neither would extending the period in Section 119 be against public policy as the evident purpose of the Public Land Act, especially the provisions thereof in relation to homesteads, is to conserve ownership of lands acquired as homesteads in the homesteader or his heirs. - Rodolfo Morla vs. Corazon Nisperos Belmonte, et al., G.R. No. 171146, December 7, 2011 In the present case, it is settled that Homestead Patent was issued to Gerardo on January 12, 1951 and the Absolute Deed of Sale between Gerardo and Juan was executed on July 10, 1951, after a lapse of only six months. Irrefragably, the alienation of the subject properties took place within the five-year prohibitory period under Section 118 of the Public Land Act, as amended; as such, the sale by Gerardo to Juan is null and void right from the very start. As a void contract, the Absolute Deed of Sale dated July 10, 1951 produces no legal effect whatsoever in accordance with the principle “quod nullum est nullum producit effectum, thus, it could not have transferred title to the subject properties from Gerardo to Juan and there could be no basis for the issuance of TCT in Juan’s name. A void contract is also not susceptible of ratification, and the action for the declaration of the absolute nullity of such a contract is imprescriptible. To reiterate, Section 118 of the Public Land Act, as amended, reads that, except in favor of the Government or any of its branches, units, or institutions, or legally constituted banking corporations, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant. The provisions of law are clear and explicit. A contract which purports to alienate, transfer, convey, or encumber an homestead within the prohibitory period of five years from the date of the issuance of the patent is void from its execution. In a number of cases, this Court has held that such provision is mandatory. Alejandro Binayug and Ana Binayug vs. Eugenio Ugaddan, et al., G.R. No. 181623, December 5, 2012 TENANCY While a tenant is not required to be physically present in the land at all hours of the day and night, such doctrine cannot be stretched to apply to a case wherein the supposed tenant has chosen to reside in another place so far from the land to be cultivated that it would be physically impossible to be present therein with some degree of constancy as to allow the tenant to cultivate the same. - Leonardo Tarona, Eugenia Tarona, Nita Tarona, Luis Tarona, Rosalinda Tarona, Apolonia Tarona, Carlos Tarona, Lourdes Tarona and Rogelio Tarona vs. Court of Appeals (Ninth Division), Gay T. Leaño, Lemuel T. Leaño, Noel T. Leaño, Jedd Anthony Leaño Cuison and Jason Anthony Leaño Cuison, G.R. No. 170182, June 18, 2009 TORTS AND DAMAGES

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TORTFEASOR When the proximate cause of the accident is the lack of the due care and prudence of the deceased, the doctrine of vicarious liability will not apply. Absent any showing that the employer failed to exercise due care and diligence in the selection and supervision of its employees, liability will not attach to it. - Vallacar Transit vs. Jocelyn Catubig, G.R. No. 175512, May 30, 2011 MORAL DAMAGES Moral damages are awarded to rape victims without need of proof other than the fact of rape under the assumption that the victim suffered moral injuries from the experience she underwent. On the other hand, when a crime is committed with an aggravating circumstance either as qualifying or generic, an award of exemplary damages is justified under Article 2230 of the New Civil Code. - People of the Philippines vs. Roger Tejero, G.R. No. 187744, June 20, 2012 EXEMPLARY OR CORRECTIVE DAMAGES The award of exemplary damages is justified if an aggravating circumstance, either qualifying or generic, accompanies the crime. In the case at bar, the qualifying circumstance of evident premeditation was duly alleged in the Information and proved during the trial. Therefore, the trial court's award of the amount of P30,000.00 as exemplary damages to heirs of the victim, must be reinstated. People of the Philippines vs. Gary Alinao, G.R. No. 191256, September 18, 2013 ATTORNEY’S FEES The stipulation on attorney’s fees contained in the said Promissory Note constitutes what is known as a penal clause. A penalty clause, expressly recognized by law, is an accessory undertaking to assume greater liability on the part of the obligor in case of breach of an obligation. The obligor would then be bound to pay the stipulated indemnity without the necessity of proof on the existence and on the measure of damages caused by the breach. It is well-settled that so long as such stipulation does not contravene law, morals, or public order, it is strictly binding upon the obligor. The attorney’s fees so provided are awarded in favor of the litigant, not his counsel. It is improper for both the RTC and the CA to increase the award of attorney’s fees despite the express stipulation contained in the said Promissory Note since it is not intended to be compensation for respondents counsel but was rather in the nature of a penalty or liquidated damages. Soledad Leonor Pea Suatengco and Antonio Esteban Suatengco vs. Carmencita O. Reyes, G.R. No. 162729, December 17, 2008 While the body of the Decision quoted the agreement of the parties stating the compensation as 20% contingent fee computed on the value to be recovered by favorable judgment on the cases. It is basic that when there is a conflict between the dispositive portion or fallo of a Decision and the opinion of the court contained Page 18 of 19

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in the text or body of the judgment, the former prevails over the latter. This rule rests on the theory that the fallo is the final order while the opinion in the body is merely a statement ordering nothing. - The Law Firm of Raymundo A. Armovit vs. Court of Appeals and Bengson Commercial Building, Inc., G.R. No. 154559, October 5, 2011 Both the RTC and the Court of Appeals held DBP liable for attorney’s fees and costs of suit because said courts believed that DBP should have been more aggressive in pursuing its claim against Central. In the absence of stipulation, attorney’s fees may be recovered as actual or compensatory damages under any of the circumstances provided for in Article 2208 of the Civil Code. Even if it were true that DBP had a hand in the transfer of Traverses insurance coverage to Central, such act is not sufficient to hold it solidarily liable with Central for the payment of attorney’s fees and cost of litigation under the above provision of the Civil Code. - Development Bank of the Philippines vs. Traverse Development Corporation and Central Surety and Insurance Company, G.R. No. 169293, October 5, 2011 GRADUATION OF DAMAGES The increase in the award of damages is predicated on the qualifying circumstances present in the case and not on the penalty imposed. In case of moral damages, it need not be alleged and proved as the emotional suffering of the heirs from the vicious killing of the victim cannot be denied. As to the loss of earning capacity, the same need not be proved, as an exception, when the victim is self-employed and earning less than the minimum wage under current labor laws or when employed as a daily wage worker earning less than the minimum wage under current labor laws. - People of the Philippines vs. Arnold Garchitorena Y Camba A.K.A. Junior; Joey Pamplona A.K.A. Nato and Jessie Garcia Y Adorino, G. R. No. 175605, August 28, 2009 In criminal cases, the basis of the increase in the award of damages is the heinousness of the offense and does not depend on the penalty that the convict shall suffer, therefore, the existence of the mitigating circumstance of minority shall not produce the effect of reduction of damages. - People of the Philippines vs. Richard O. Sarcia, G.R. No. 169641, September 10, 2009

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