Escolar Documentos
Profissional Documentos
Cultura Documentos
GOLANGCO
CONSTRUCTION
CORPORATION vs. PHILIPPINE COMMERCIAL
INTERNATIONAL BANK
William Golangco Construction Corporation (WGCC) and
the Philippine Commercial International Bank (PCIB)
entered into a contract for the construction of the
extension of PCIB Tower II (denominated as PCIB Tower
II, Extension Project [project])2 on October 20, 1989. The
project included, among others, the application of a
granitite wash-out finish3 on the exterior walls of the
building.
PCIB, with the concurrence of its consultant TCGI
Engineers (TCGI), accepted the turnover of the completed
work by WGCC in a letter dated June 1, 1992. To answer
for any defect arising within a period of one year, WGCC
submitted a guarantee bond dated July 1, 1992 issued by
Malayan Insurance Company, Inc. in compliance with the
construction contract.4
The controversy arose when portions of the granitite
wash-out finish of the exterior of the building began
peeling off and falling from the walls in 1993. WGCC
made minor repairs after PCIB requested it to rectify the
construction defects. In 1994, PCIB entered into another
contract with Brains and Brawn Construction and
Development Corporation to re-do the entire granitite
wash-out finish after WGCC manifested that it was "not in
a position to do the new finishing work," though it was
willing to share part of the cost. PCIB incurred expenses
amounting toP11,665,000 for the repair work.
PCIB filed a request for arbitration with the Construction
Industry Arbitration Commission (CIAC) for the
reimbursement of its expenses for the repairs made by
another contractor. It complained of WGCCs alleged noncompliance with their contractual terms on materials and
workmanship. WGCC interposed a counterclaim
forP5,777,157.84 for material cost adjustment.
The CIAC declared WGCC liable for the construction
defects in the project.5 WGCC filed a petition for review
with the Court of Appeals (CA) which dismissed it for
lack of merit.6 Its motion for reconsideration was
similarly denied.7
In this petition for review on certiorari, WGCC raises this
main question of law: whether or not petitioner WGCC is
liable for defects in the granitite wash-out finish that
occurred after the lapse of the one-year defects liability
period provided in Art. XI of the construction contract.8
We rule in favor of WGCC.
The controversy pivots on a provision in the construction
contract referred to as the defects liability period:
ARTICLE XI GUARANTEE
NO COSTS. SO ORDERED.15
The Facts
Alongside her husband, Felipe Castillo, respondent
Mauricia Meer Castillo was the owner of four parcels of
land with an aggregate area of 53,307 square meters,
situated in Silangan Mayao, Lucena City and registered in
their names under Transfer Certificate of Title (TCT) Nos.
T-42104, T-32227, T-31752 and T-42103. With the death
of Felipe, a deed of extrajudicial partition over his estate
was executed by his heirs, namely, Mauricia, Buenaflor
Umali and respondents Victoria Castillo, Bertilla Rada,
Marietta Cavanez, Leovina Jalbuena and Philip Castillo.
Utilized as security for the payment of a tractor purchased
by Mauricias nephew, Santiago Rivera, from Bormaheco,
Inc., it appears, however, that the subject properties were
subsequently sold at a public auction where Insurance
Corporation of the Philippines (ICP) tendered the highest
bid. Having consolidated its title, ICP likewise sold said
parcels in favor of Philippine Machinery Parts
Manufacturing Co., Inc. (PMPMCI) which, in turn, caused
the same to be titled in its name.4
On 29 September 1976, respondents and Buenaflor
instituted Civil Case No. 8085 before the then Court of
both
their
PHILIPPINE
NATIONAL
BANK, petitioner,
vs. CA, REMEDIOS JAYME-FERNANDEZ and
AMADO FERNANDEZ
Petitioner bank seeks the review of the decision, dated
October 15, 1992, of the Court of Appeals 1 in CA G.R.
CV No. 27195, the dispositive portion of which reads as
follows:
WHEREFORE, the judgment appealed from is hereby
SET ASIDE and a new one is entered ordering defendantappellee PNB to re-apply the interest rate of 12% per
annum to plaintiffs-appellants' (referring to herein private
respondents) indebtedness and to accordingly take the
appropriate charges from plaintiffs-appellants' (private
respondents') payment of P81,000.00 made on December
26, 1985. Any balance on the indebtedness should,
likewise, be charged interest at the rate of 12% per annum.
SO ORDERED.
The parties do not dispute the facts as laid down by
respondent court in its impugned decision, viz.:
On April 7, 1982, (private respondents) as owners of a
NACIDA-registered enterprise, obtained a loan under the
Cottage Industry Guaranty Loan Fund (CIGLF) from the
Philippine National Bank (PNB) in the amount of Fifty
Thousand (P50,000.00) Pesos, as evidenced by a Credit
Agreement. Under the Promissory Note covering the loan,
the loan was to be amortized over a period of three (3)
years to end on March 29, 1985, at twelve (12%) percent
interest annually.
To secure the loan, (private respondents) executed a Real
Estate Mortgage over a 1.5542-hectare parcel of
unregistered agricultural land located at Cambang-ug,
Toledo City, which was appraised by the PNB at
P1,062.52 and given a loan value of P531.26 by the Bank.
In addition, (private respondents) executed a Chattel
Mortgage over a thermo plastic-forming machine, which
had an appraisal value of P8,800 and a loan value of
P4,400.00.
The Credit Agreement provided inter alia, that
(a) The BANK reserves the right to increase the interest
rate within the limits allowed by law at any time
depending on whatever policy it may adopt in the
future; Provided, that the interest rate on this
accommodation shall be correspondingly decreased in the
event that the applicable maximum interest is reduced by
law or by the Monetary Board. In either case, the
adjustment in the interest rate agreed upon shall take effect
on the effectivity date of the increase or decrease in the
maximum interest rate.
The Promissory Note, in turn, authorized the PNB to raise
the rate of interest, at any time without notice, beyond the
But the latter asserted its sole option to renew the lease
and enclosed in its reply letter a cashier's check in the
amount of P68,400.00 representing the advance rental
payments for six (6) months taking into account the
escalation clause. Private respondents however returned
the check to ALLIED, prompting the latter to consign the
amount in court.
An action for ejectment was commenced before the
Metropolitan Trial Court of Quezon City. After trial, the
MeTC-Br. 33 declared Provision No. 1 of the lease
contract void for being violative of Art. 1308 of the Civil
Code thus
. . . but such provision [in the lease
contract], to the mind of the Court, does
not add luster to defendant's cause nor
constitutes as an unbridled or unlimited
license or sanctuary of the defendants to
perpetuate its occupancy on the subject
property. The basic intention of the law in
any contract is mutuality and equality. In
other words, the validity of a contract
cannot be left at (sic) the will of one of
the contracting parties. Otherwise, it
infringes (upon) Article 1308 of the New
Civil Code, which provides: The contract
must bind both contracting parties; its
validity or compliance cannot be left to
the will of one of them . . . Using the
principle laid down in the case of Garcia
v. Legarda as cornerstone, it is evident
that the renewal of the lease in this case
cannot be left at the sole option or will of
the defendant notwithstanding provision
no. 1 of their expired contract. For that
would amount to a situation where the
continuance and effectivity of a contract
will depend only upon the sole will or
power of the lessee, which is repugnant to
the very spirit envisioned under Article
1308 of the New Civil Code . . . . the
theory adopted by this Court in the case at
bar finds ample affirmation from the
principle echoed by the Supreme Court in
the case of Lao Lim v. CA, 191 SCRA
150, 154, 155.
On appeal to the Regional Trial Court, and later to the
Court of Appeals, the assailed decision was affirmed. 5
On 20 February 1993, while the case was pending in the
Court of Appeals ALLIED vacated the leased premises by
reason of the controversy. 6
ALLIED insists before us that Provision No. 1 of the lease
contract was mutually agreed upon hence valid and
binding on both parties, and the exercise by petitioner of
is
of
be
of
ACCOUNT
23,
2001
PN#
4,139,000.00
@
622,550.96
@
75,579.27
2000
04-Dec-2000 30 days @ 24.50%. . . . .
.............
Subtotal. . . . . . . . . . . . . . . . . . . . . . . .
........
10,770,199.23
Total. . . . . . . . . . . . . . . . . . . . . . . . . . .
........
17,772,309.96
3. Costs of suit.
SO ORDERED.20
1,745,616.06
19,201,776.63
10,300,000.00
13
noted that the parties agreed on the interest rate which was
not unilaterally imposed by the bank but was the rate
offered daily by all commercial banks as approved by the
Monetary Board. Having signed the promissory notes, the
CA ruled that petitioners are bound by the stipulations
contained therein.
Petitioners are now before this Court raising the sole issue
of whether the interest rates imposed upon them by
respondent are valid. Petitioners contend that the interest
rates imposed by respondent are not valid as they were not
by virtue of any law or Bangko Sentral ng Pilipinas (BSP)
regulation or any regulation that was passed by an
appropriate government entity. They insist that the interest
rates were unilaterally imposed by the bank and thus
violate the principle of mutuality of contracts. They argue
that the escalation clause in the promissory notes does not
give respondent the unbridled authority to increase the
interest rate unilaterally. Any change must be mutually
agreed upon.
Respondent, for its part, points out that petitioners failed
to show that their case falls under any of the exceptions
wherein findings of fact of the CA may be reviewed by
this Court. It contends that an inquiry as to whether the
interest rates imposed on the loans of petitioners were
supported by appropriate regulations from a government
agency or the Central Bank requires a reevaluation of the
evidence on records. Thus, the Court would in effect, be
confronted with a factual and not a legal issue.
P10,355,000.00
Interest
at
15%
per
annum
P10,355,000 x .15 x 477 days/365 days 2,029,863.70
Penalty at 12% per annum
1,623 ,890. 96
14,008,754.66
(261,149.39)
13,692,605.27
1,369,260.53
15,061,865.79
10,300,000.00
4,761,865.79
PHILIPPINE
NATIONAL
BANK, Petitioner,
vs.
SPOUSES ENRIQUE MANALO & ROSALINDA
JACINTO, ARNOLD J. MANALO, ARNEL J.
MANALO, and ARMA J. MANALO, Respondents.
Although banks are free to determine the rate of interest
they could impose on their borrowers, they can do so only
reasonably, not arbitrarily. They may not take advantage
of the ordinary borrowers' lack of familiarity with banking
procedures and jargon. Hence, any stipulation on interest
unilaterally imposed and increased by them shall be struck
down as violative of the principle of mutuality of
contracts.
Antecedents
Respondent Spouses Enrique Manalo and Rosalinda
Jacinto (Spouses Manalo) applied for an All-Purpose
Credit Facility in the amount of P1,000,000.00 with
Philippine National Bank (PNB) to finance the
construction of their house. After PNB granted their
application, they executed a Real Estate Mortgage on
November 3, 1993 in favor of PNB over their property
covered by Transfer Certificate of Title No. S- 23191 as
security for the loan.1 The credit facility was renewed and
increased several times over the years. On September 20,
1996, the credit facility was again renewed
for P7,000,000.00. As a consequence, the parties executed
a Supplement to and Amendment of Existing Real Estate
Mortgage whereby the property covered by TCT No.
171859 was added as security for the loan.
The additional security was registered in the names of
respondents Arnold, Arnel, Anthony, and Arma, all
surnamed Manalo, who were their children.2
It was agreed upon that the Spouses Manalo would make
monthly payments on the interest. However, PNB claimed
that their last recorded payment was made on December,
1997. Thus, PNB sent a demand letter to them on their
overdue account and required them to settle the account.
PNB sent another demand letter because they failed to
heed the first demand.3
After the Spouses Manalo still failed to settle their unpaid
account despite the two demand letters, PNB foreclose the
mortgage. During the foreclosure sale, PNB was the
highest bidder for P15,127,000.00 of the mortgaged
properties of the Spouses Manalo. The sheriff issued to
PNB the Certificate of Sale dated November 13, 2000.4
After more than a year after the Certificate of Sale had
been issued to PNB, the Spouses Manalo instituted this
action for the nullification of the foreclosure proceedings
and damages. They alleged that they had obtained a loan
for P1,000,000.00 from a certain Benito Tan upon
arrangements made by Antoninus Yuvienco, then the
General Manager of PNBs Bangkal Branch where they
Ruling
Issues
1.
Procedural Issue
xxxx
ORDER
INTEGRATED PACKAGING
CORP., petitioner,
vs.
COURT OF APPEALS and FIL-ANCHOR PAPER
CO., INC., respondents.
QUISUMBING, J.:
This is a petition to review the decision of the Court of
Appeals rendered on April 20, 1994 reversing the
judgment of the Regional Trial Court of Caloocan City in
an action for recovery of sum of money filed by private
respondent against petitioner. In said decision, the
appellate court decreed:
WHEREFORE, in view of all the foregoing, the
appealed judgment is hereby REVERSED and
SET ASIDE. Appellee [petitioner herein] is
hereby ordered to pay appellant [private
respondent herein] the sum of P763,101.70, with
legal interest thereon, from the date of the filing of
the Complaint, until fully paid.
SO ORDERED.1
The RTC judgment reversed by the Court of Appeals had
disposed of the complain as follows:
WHEREFORE, judgment is hereby rendered:
Ordering plaintiff [herein private respondent] to
pay defendant [herein petitioner] the sum of
P27,222.60 as compensatory and actual damages
after deducting P763,101.70 (value of materials
received by defendant) from P790,324.30
representing
compensatory
damages
as
defendant's unrealized profits;
Ordering plaintiff to pay defendant the sum of
P100,000.00 as moral damages;
Ordering plaintiff to pay the sum of P30,000.00
for attorney's fees; and to pay the costs of suit.
SO ORDERED.2
The facts, as culled from the records, are as follows:
Petitioner and private respondent executed on May 5,
1978, an order agreement whereby private respondent
bound itself to deliver to petitioner 3,450 reams of printing
paper, coated, 2 sides basis, 80 lbs., 38" x 23", short grain,
worth P1,040,060.00 under the following schedule: May
and June 1978 450 reams at P290.00/ream; August and
September 1978 700 reams at P290/ream; January
1979 575 reams at P307.20/ream; March 1979 575
reams at P307.20/ream; July 1979 575 reams at
307.20/ream; and October 1979 575 reams at
P307.20/ream. In accordance with the standard operating
practice of the parties, the materials were to be paid within
II
III
xxxx
IV
THE HONORABLE COURT OF APPEALS
ERRED IN NOT DISMISSING C.A.-G.R. SP
NO. 81875 CONSIDERING THAT THE
VILLAREALS CLAIM OF OWNERSHIP
OVER THE PROPERTY IS STILL THE
SUBJECT OF A PENDING CASE WHICH PRO
TANTO RENDERED THE EJECTMENT SUIT
FILED BY THE VILLAREALS AGAINST THE
PETITIONER OBVIOUSLY PREMATURE.
V
THE HONORABLE COURT OF APPEALS
ERRED IN NOT OVERRULLING THE RTC OF
PARANAQUE (BR. 194) WHICH REVERSED
THE DECISION OF THE MTC OF
PARANAQUE CITY DISMISSING THE
CONSOLIDATED EJECTMENT CASES (020538; 02-0539; 02-540) FOR LACK OF
JURISDICTION CONSIDERING THAT THE
FUNDAMENTAL
ISSUE
INVOLVED
IS OWNERSHIP OF THE SUBJECT PREMISES
WHICH ISSUE REQUIRES FULL-BLOWN
TRIAL IN A DIRECT ACTION BEFORE A
COURT OF GENERAL JURISDICTION FOR
FULL DETERMINATION.21
The petition is partly meritorious.
Petitioner avers that the respondents should have filed
with the Court of Appeals an ordinary appeal instead of a
special civil action for certiorari, when it questioned the
xxxx
In all the above instances where the judgment or
final order is not appealable, the aggrieved party
may file an appropriate special civil action under
Rule 65.
It is explicit from the afore-quoted provision that no
appeal may be taken from an order of execution; instead,
such order may be challenged by the aggrieved party via a
special civil action for certiorari under Rule 65 of the
Rules of Court. Respondents filed the petition in CA-G.R.
SP No. 81875, to question the Writ of Execution dated 27
October 2003, issued by the Paraaque RTC, Branch 194,
which computed the rentals to be paid by the petitioner to
whoever is declared the owner of the subject property,
without including the 3% penalty interest stipulated in the
Lease Contract dated 22 January 2002. Contrary to the
position taken by the petitioner, respondents recourse to
an appeal would have been unavailing under Section 1,
Rule 41, of the Rules of Court. The filing of a special civil
action for certiorari under Rule 65 of the Rules of Court
was the proper remedy questioning an order of execution.
Petitioner argues that respondents are not entitled to the
3% penalty stipulated under the Lease Contract dated 22
January 1998, which becomes payable to the lessor
whenever the petitioner incurs delay in the payment of its
rentals. This argument is well-taken.
It is a well-known rule that a contractual obligation or
liability, or an action ex-contractu, must be founded upon
a contract, oral or written, either express or implied. If
there is no contract, there is no corresponding liability and
no cause of action may arise therefrom. 22 This is provided
for in Article 1311 of the Civil Code:
Article 1311. Contracts take effect only between
the parties, their assigns and heirs, except in case
where the rights and obligations arising from the
contract are not transmissible by their nature, or
by stipulation or by provision of law. The heir is
SPS.
NESTOR
AND
MA.
NONA
BORROMEO, Petitioners,
vs.
HONORABLE
COURT OF APPEALS
and
EQUITABLE SAVINGS BANK, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45
of the Rules of Court, assailing the Decision, 1 dated 29
April 2005, thereafter, upheld in a Resolution 2 dated 16
September 2005, both rendered by the Court of Appeals in
CA-G.R. SP No. 85114. The Court of Appeals, in its
assailed Decision, reversed the Order dated 3 March 2004
of Branch 215 of the Regional Trial Court (RTC) of
Quezon City in Civil Case No. Q-03-51184, and denied
the issuance of a Writ of Preliminary Injunction enjoining
respondent Equitable Savings Bank (ESB) from executing
the extra-judicial foreclosure of the mortgaged property
owned by petitioners, Spouses Nestor and Nona
Borromeo.
Respondent is a domestic savings bank corporation with
principal office and place of business at EPCIB Tower 2,
Makati Avenue, Salcedo Village, Makati City.3 At the time
the dispute began, it was a subsidiary of Equitable PCI
Bank (EPCIB), a domestic universal banking corporation
with principal office at Makati Avenue, Salcedo Village,
Makati City. After the merger of EPCIB and Banco De
Oro (BDO), they have adopted the corporate name "Banco
De Oro."4
Petitioners were client-depositors of EPCIB for more than
12 years. Petitioners alleged that sometime in mid-1999,
the branch manager of EPCIB, J.P. Rizal Branch, offered a
loan to the petitioners under its "Own-a-Home Loan
Program." Petitioners applied for a loan of P4,000,000.00
and were informed of the approval of their loan
application sometime in October 1999. It was in the early
part of 2000 that petitioners signed blank loan documents
consisting of the Loan Agreement, Promissory Notes, a
Real Estate Mortgage (REM) and Disclosure Statements. 5
To secure the payment of the loan, petitioners executed an
REM over their land, registered under Transfer Certificate
of Title (TCT) No. N-203923, located at Loyola Grand
Villas, Quezon City, consisting of 303 square meters; and
the proposed house that was to be built
thereon.6 Petitioners asserted that even if the loan
documents were signed in blank, it was understood that
they executed the REM in favor of EPCIB.7
From April 2001 to September 2002, respondent released
a total amount of P3,600,000.00 in four installments,
while the balance of P400,000.00 was not drawn by
petitioners.8 On the other hand, petitioners started to pay
their monthly amortizations on 21 April 2001.9
Petitioners made repeated verbal requests to EPCIB to
furnish them their copies of the loan documents. 10 On 6
August 2003, they sent the president of EPCIB a
letter11 which reiterated their request for copies of the loan
documents. In addition, petitioners stated that the interest
rate of 14% to 17% that was charged against them was
AMOUNT
INTEREST
RATE
25 April 2001
P1,200,000.00 16%
18 January 2002 P 800,000.00 14.0%
29 June 2001
P 800,000.00 15%
19
September P 800,000.00 9.0%
2002
When the petitioners failed to pay for the loan in full by
30 September 2003, respondent sought to extra-judicially
foreclose the REM. Upon the respondents petition for
foreclosure, the Office of the Ex-Officio Sheriff of
Quezon City issued a Notice of Extrajudicial Sale dated
16 October 2003, wherein the mortgage debt was set
atP5,114,601.00.19 The Extrajudicial Sale was set to take
ESTATE
OF
ORLANDO
LLENADO
and
WENIFREDA T. LLENADO, in her capacity as (a)
Administratrix of the Estate of Orlando A. Llenado
and (b) Judicial Guardian of the Minor children of
Orlando A. Llenado, and (c) in her Own behalf as the
Surviving Spouse and Legal Heir of Orlando A.
Llenado, Petitioners,
vs.
EDUARDO
LLENADO,
JORGE
LLENADO,
FELIZA GALLARDO VDA. DE LLENADO and
REGISTER OF DEEDS of Valenzuela City, Metro
Manila, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the May 30,
2000 Decision1 of the Court of Appeals in CA-G.R. CV
No. 58911 which reversed the May 5, 1997 Decision 2 of
the Regional Trial Court of Valenzuela City, Branch 75 in
Civil Case No. 4248-V-93, and the October 6, 2000
Resolution3 which denied the motion for reconsideration.
The appellate court dismissed for lack of merit the
complaint for annulment of deed of conveyance, title and
damages filed by petitioner against herein respondents.
The subject of this controversy is a parcel of land
denominated as Lot 249-D-1 (subject lot) consisting of
1,554 square meters located in Barrio Malinta, Valenzuela,
Metro Manila and registered in the names of Eduardo
Llenado (Eduardo) and Jorge Llenado (Jorge) under
Transfer of Certificate of Title (TCT) No. V-1689. 4 The
subject lot once formed part of Lot 249-D owned by and
registered in the name of their father, Cornelio Llenado
(Cornelio), under TCT No. T-16810.
On December 2, 1975, Cornelio leased Lot 249-D-1 to his
nephew, Romeo Llenado (Romeo), for a period of five
years, renewable for another five years at the option of
Cornelio. On March 31, 1978, Cornelio, Romeo and the
latters cousin Orlando Llenado (Orlando) executed an
Agreement5 whereby Romeo assigned all his rights to
Orlando over the unexpired portion of the aforesaid lease
contract. The parties further agreed that Orlando shall
have the option to renew the lease contract for another
three years commencing from December 3, 1980, up to
December 2, 1983, renewable for another four years or up
to December 2, 1987, and that "during the period that [this
agreement] is enforced, the x x x property cannot be sold,
transferred, alienated or conveyed in whatever manner to
any third party."
Shortly thereafter or on June 24, 1978, Cornelio and
Orlando
entered
into
a
Supplementary
6
Agreement amending the March 31, 1978 Agreement.
Under the Supplementary Agreement, Orlando was given
an additional option to renew the lease contract for an
aggregate period of 10 years at five-year intervals, that is,
PHILIPPINE
NATIONAL
BANK, Petitioner,
vs.
TERESITA TAN DEE, ANTIPOLO PROPERTIES,
INC., (now PRIME EAST PROPERTIES, INC.) and
AFP-RSBS, INC., Respondents.
DECISION
REYES, J.:
This is a Petition for Review 1 under Rule 45 of the Rules
of Court, assailing the Decision2 dated August 13, 2007
and Resolution3 dated March 13, 2008 rendered by the
Court of Appeals (CA) in CA-G.R. SP No. 86033, which
affirmed the Decision4 dated August 4, 2004 of the Office
of the President (OP) in O.P. Case No. 04-D-182 (HLURB
Case No. REM-A-030724-0186).
Facts of the Case
Some time in July 1994, respondent Teresita Tan Dee
(Dee) bought from respondent Prime East Properties
Inc.5(PEPI) on an installment basis a residential lot located
in Binangonan, Rizal, with an area of 204 square
meters6and covered by Transfer Certificate of Title (TCT)
No. 619608. Subsequently, PEPI assigned its rights over a
213,093-sq m property on August 1996 to respondent
Armed Forces of the Philippines-Retirement and
Separation Benefits System, Inc. (AFP-RSBS), which
included the property purchased by Dee.
Thereafter, or on September 10, 1996, PEPI obtained
a P205,000,000.00 loan from petitioner Philippine
National Bank (petitioner), secured by a mortgage over
several properties, including Dees property. The mortgage
was cleared by the Housing and Land Use Regulatory
Board (HLURB) on September 18, 1996.7
After Dees full payment of the purchase price, a deed of
sale was executed by respondents PEPI and AFP-RSBS on
July 1998 in Dees favor. Consequently, Dee sought from
the petitioner the delivery of the owners duplicate title
over the property, to no avail. Thus, she filed with the
HLURB a complaint for specific performance to compel
delivery of TCT No. 619608 by the petitioner, PEPI and
AFP-RSBS, among others. In its Decision8 dated May 21,
2003, the HLURB ruled in favor of Dee and disposed as
follows:
WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. Directing [the petitioner] to cancel/release the
mortgage on Lot 12, Block 21-A, Village East
Executive Homes covered by Transfer Certificate
of Title No. -619608-(TCT No. -619608-), and
accordingly, surrender/release the title thereof to
[Dee];
2. Immediately upon receipt by [Dee] of the
owners duplicate of Transfer Certificate of Title
No. -619608- (TCT No. -619608-), respondents
PEPI and AFP-RSBS are hereby ordered to
deliver the title of the subject lot in the name of
[Dee] free from all liens and encumbrances;
of Dee over the property, which she has already fully paid
for.
As between these small lot buyers and the gigantic
financial institutions which the developers deal with, it is
obvious that the lawas an instrument of social justice
must favor the weak.46 (Emphasis omitted)
JARDINE
DAVIES
INC., petitioner,
vs.
COURT OF APPEALS and FAR EAST MILLS
SUPPLY CORPORATION, respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
Finally, the Court will not dwell on the arguments of AFPRSBS given the finding of the OP that "[b]y its nonpayment of the appeal fee, AFP-RSBS is deemed to have
abandoned its appeal and accepts the decision of the
HLURB."47 As such, the HLURB decision had long been
final and executory as regards AFP-RSBS and can no
longer be altered or modified.48
BELLOSILLO, J.:
PURE
FOODS
CORPORATION, petitioner,
vs.
COURT OF APPEALS and FAR EAST MILLS
SUPPLY CORPORATION, respondents.
JASMIN
SOLER, petitioner,
vs.
COURT OF APPEALS, COMMERCIAL BANK OF
MANILA, and NIDA LOPEZ, respondents.
PARDO, J.:
Appeal via certiorari from a decision of the Court of
Appeals,1 declaring that there was no perfected contract
between petitioner Jazmin Soler and The Commercial
Bank of Manila (COMBANK FOR BREVITY, formerly
Boston Bank of the Philippines) for the renovation of its
Ermita Branch, thereby denying her claim for payment of
professional fees for services rendered.
The antecedent facts are as follows:
Petitioner Jazmin Soler is a Fine Arts graduate of the
University of Sto. Tomas, Manila. She is a well known
licensed professional interior designer. In November 1986,
her friend Rosario Pardo asked her to talk to Nida Lopez,
who was manager of the COMBANK Ermita Branch for
they were planning to renovate the branch offices. 2
Even prior to November 1986, petitioner and Nida Lopez
knew each other because of Rosario Pardo, the latter's
sister. During their meeting, petitioner was hesitant to
accept the job because of her many out of town
commitments, and also considering that Ms. Lopez was
asking that the designs be submitted by December 1986,
which was such a short notice. Ms. Lopez insisted,
however, because she really wanted petitioner to do the
design for renovation. Petitioner acceded to the request.
Ms. Lopez assured her that she would be compensated for
her services. Petitioner even told Ms. Lopez that her
professional fee was ten thousand pesos (P10,000.00), to
which Ms. Lopez acceded.3
During the November 1986 meeting between petitioner
and Ms. Lopez, there were discussions as to what was to
be renovated, which included a provision for a conference
room, a change in the carpeting and wall paper, provisions
for bookshelves, a clerical area in the second floor,
dressing up the kitchen, change of the ceiling and
renovation of the tellers booth. Ms. Lopez again assured
petitioner that the bank would pay her fees.4
After a few days, petitioner requested for the blueprint of
the building so that the proper design, plans and
specifications could be given to Ms. Lopez in time for the
board meeting in December 1986. Petitioner then asked
her draftsman Jackie Barcelon to go to the jobsite to make
the proper measurements using the blue print. Petitioner
also did her research on the designs and individual
drawings of what the bank wanted. Petitioner hired
Engineer Ortanez to make the electrical layout, architects
Frison Cruz and De Mesa to do the drafting. For the
services rendered by these individuals, petitioner paid the
engineer P4,000.00, architects Cruz and de Mesa
"SO ORDERED."17
"SO ORDERED."11
PROVINCE
OF
CEBU, petitioner,
vs.
HEIRS OF RUFINA MORALES, NAMELY:
FELOMINA V. PANOPIO, NENITA VILLANUEVA,
ERLINDA V. ADRIANO and CATALINA V.
QUESADA, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari of the
Decision1 of the Court of Appeals dated March 29, 2005 in
CA-G.R. CV No. 53632, which affirmed in toto the
Decision2 of the Regional Trial Court of Cebu City,
Branch 6, in Civil Case No. CEB-11140 for specific
performance and reconveyance of property. Also assailed
is the Resolution3dated August 31, 2005 denying the
motion for reconsideration.
pay the balance on the purchase price and the nonexecution of a formal agreement was sufficiently
explained by the fact that the trial court, in Civil Case No.
238-BC, issued a writ of preliminary injunction enjoining
the city from further disposing the donated lots. According
to respondents, there was confusion as to the
circumstances of payment considering that both the city
and petitioner had refused to accept payment by virtue of
the injunction.28 It appears that the parties simply mistook
Lot 646-A-3 as among those not yet sold by the city.
The City of Cebu was no longer the owner of Lot 646-A-3
when it ceded the same to petitioner under the
compromise agreement in Civil Case No. 238-BC. At that
time, the city merely retained rights as an unpaid seller but
had effectively transferred ownership of the lot to
Morales. As successor-in-interest of the city, petitioner
could only acquire rights that its predecessor had over the
lot. These rights include the right to seek rescission or
fulfillment of the terms of the contract and the right to
damages in either case.29
In this regard, the records show that respondent Quesada
wrote to then Cebu Governor Eduardo R. Gullas on March
11, 1983, asking for the formal conveyance of Lot 646-A3 pursuant to the award and sale earlier made by the City
of Cebu. On October 10, 1986, she again wrote to
Governor Osmundo G. Rama reiterating her previous
request. This means that petitioner had known, at least as
far back as 1983, that the city sold the lot to respondents
predecessor and that the latter had paid the deposit and the
required down payment. Despite this knowledge, however,
petitioner did not avail of any rightful recourse to resolve
the matter.
Article 1592 of the Civil Code pertinently provides:
Article 1592. In the sale of immovable property,
even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the
rescission of the contract shall of right take
place, the vendee may pay, even after the
expiration of the period, as long as no demand for
rescission of the contract has been made upon him
either judicially or by notarial act. After the
demand, the court may not grant him a new term.
(Underscoring supplied)
Thus, respondents could still tender payment of the full
purchase price as no demand for rescission had been made
upon them, either judicially or through notarial act. While
it is true that it took a long time for respondents to bring
suit for specific performance and consign the balance of
the purchase price, it is equally true that petitioner or its
predecessor did not take any action to have the contract of
sale rescinded. Article 1592 allows the vendee to pay as
long as no demand for rescission has been made. 30 The
consignation of the balance of the purchase price before
the trial court thus operated as full payment, which
Issue
WHETHER THE PETITIONER IS ENTITLED TO
RECOVER OWNERSHIP AND POSSESSION OF THE
PROPERTY IN DISPUTE.
Resolution of the above follows determination of these
questions: (1) whether the Deed of Sale dated July 18,
1962 is a valid and perfected contract of sale; (2) whether
there was payment of consideration by the respondent; and
(3) whether the petitioners claim is barred by laches.
The petitioner claims that the acquisition of the respondent
was null and void because: (1) he is an illiterate nonChristian who only knows how to sign his name in Arabic
and knows how to read the Quran but can neither read nor
write in both Arabic and English; (2) the respondent has
not paid the price for the property; (3) the Municipal
Voucher is not admissible in evidence as proof of
payment; (4) the Deed of Sale was not duly approved in
accordance with Sections 145 and 146 of the
Administrative Code of Mindanao and Sulu, and Section
120 of the PLA, as amended; and (4) the property is a
registered land covered by a TCT and cannot be acquired
by prescription or adverse possession. 27 The petitioner also
explained that the delayed filing of the civil action with
the RTC was due to Martial Law and the Ilaga-Blackshirt
Troubles in the then Province of Cotabato.28
The respondent, however, counters that: (1) the petitioner
is not an illiterate non-Christian and he, in fact, was able
to execute, sign in Arabic, and understand the terms and
conditions of the Special Power of Attorney dated July 23,
1996 issued in favor of Baikong Akang (Baikong); (2) the
Deed of Sale is valid as its terms and conditions were
reviewed by the Municipal Council of Isulan and the
Provincial Board of Cotabato; and (3) the Deed of Sale is
a contract of sale and not a contract to sell. 29
Ruling of the Court
The Court finds the petition devoid of merit.
Issue
Raised
for
the
on Appeal is Barred by Estoppel
First
Time
issues raised for the first time on appeal and not raised in
the proceedings in the lower court are barred by estoppel.
To consider the alleged facts and arguments raised
belatedly would amount to trampling on the basic
principles
of
fair
play,
justice,
and
due
process.30 Accordingly, thepetitioners attack on the
validity of the Deed of Sale vis--vis its compliance with
the 2004 New Notarial Law must be disregarded.31
THE PETITION
The petitioners-heirs primarily contest the finding that
there was a perfected contract executed by the parties.
They allege that other than the finding that Consuelo
received P20,000.00 from the respondents as earnest
money, no other evidence supported the conclusion that
there was a perfected contract between the parties; they
insist that Consuelo specifically informed the respondents
that the sale still required the petitioners-heirs consent as
co-owners. The refusal of the petitioners-heirs to sell the
subject properties purportedly amounted to the absence of
the requisite element of consent.
Even assuming that the agreement amounted to a
perfected contract, the petitioners-heirs posed the question
of the agreements proper characterization whether it is a
contract of sale or a contract to sell. The petitioners-heirs
posit that the agreement involves a contract to sell, and the
respondents belated payment of part of the purchase
price, i.e., one day after the June 14, 1989 due date,
amounted to the non-fulfillment of a positive suspensive
condition that prevented the contract from acquiring
obligatory force. In support of this contention, the
petitioners-heirs cite the Courts ruling in the case
of Adelfa Rivera, et al. v. Fidela del Rosario, et al.: 7
In a contract of sale, the title to the property passes to the
vendee upon the delivery of the thing sold; while in a
contract to sell, ownership is, by agreement, reserved in
the vendor and is not to pass to the vendee until full
payment of the purchase price. In a contract to sell, the
payment of the purchase price is a positive suspensive
condition, the failure of which is not a breach, casual
or serious, but a situation that prevents the obligation
of the vendor to convey title from acquiring an
obligatory force.
[Rivera], however, failed to complete payment of the
second installment. The non-fulfillment of the condition
rendered the contract to sell ineffective and without force
and effect. [Emphasis in the original.]
From these contentions, we simplify the basic issues for
resolution to three questions:
1. Was there a perfected contract between the
parties?
2. What is the nature of the contract between
them? and
3. What is the effect of the respondents belated
payment on their contract?
THE COURTS RULING
There was a perfected contract between the parties since
all the essential requisites of a contract were present
not back out from the sale. As we have pointed out, the
terms of the parties agreement are clear and explicit;
indeed, all the essential elements of a perfected contract
are present in this case. While the respondents required
that the occupants vacate the subject properties prior to the
payment of the second installment, the stipulation does not
affect the perfection of the contract, but only its execution.
That a thing is sold without the consent of all the coowners does not invalidate the sale or render it void.
Article 493 of the Civil Code 8 recognizes the absolute
right of a co-owner to freely dispose of his pro
indiviso share as well as the fruits and other benefits
arising from that share, independently of the other coowners. Thus, when Consuelo agreed to sell to the
respondents the subject properties, what she in fact sold
was her undivided interest that, as quantified by the RTC,
consisted of one-half interest, representing her conjugal
share, and one-sixth interest, representing her hereditary
share.
LOURDES
ONG
LIMSON, petitioner,
vs.
COURT OF APPEALS, SPOUSES LORENZO DE
VERA and ASUNCION SANTOS-DE VERA, TOMAS
CUENCA,
JR.
and
SUNVAR
REALTY
DEVELOPMENT CORPORATION, respondents.
BELLOSILLO, J.:
Filed under Rule 45 of the Rules of Court this Petition for
Review on Certiorari seeks to review, reverse and set
aside the Decision1 of the Court of Appeals dated 18 May
1998 reversing that of the Regional Trial Court dated 30
June
1993.
The
petitioner
likewise
assails
2
the Resolution of the appellate court of 19 October 1998
denying petitioners Motion for Reconsideration.
Petitioner Lourdes Ong Limson, in her 14 may
1979 Complaint filed before the trial court,3 alleged that in
July 1978 respondent spouses Lorenzo de Vera and
Asuncion Santos-de Vera, through their agent Marcosa
Sanchez, offered to sell to petitioner a parcel of land
consisting of 48, 260 square meters, more or less, situated
in Barrio San Dionisio, Paraaque, Metro Manila; that
respondent spouses informed her that they were the
owners of the subject property; that on 31 July 1978 she
agreed to buy the property at the price of P34.00 per
square meter and gave the sum of P20,000.00 to
respondent spouses as "earnest money;" that respondent
spouses signed a receipt therefor and gave her a 10-day
option period to purchase the property; that respondent
Lorenzo de Vera then informed her that the subject
property was mortgaged to Emilio Ramos and Isidro
Ramos; that respondent Lorenzo de Vera asked her to pay
the balance of the purchase price to enable him and his
wife
to
settle
their
obligation
with
the
Ramoses.1wphi1.nt
Petitioner also averred that she agreed to meet respondent
spouses and the Ramoses on 5 August 1978 at the Office
of the Registry of deeds of Makati, Metro Manila, to
consummate the transaction but due to the failure of
respondent Asuncion Santos-de Vera and the Ramoses to
appear, no transaction was formalized. In a second
meeting scheduled on 11 August 1978 she claimed that
she was willing and ready to pay the balance of the
purchase price but the transaction again did not
materialize as respondent spouses failed to pay the back
taxes of subject property. Subsequently, on 23 August
1978 petitioner allegedly gave respondent Lorenzo de
Vera three (3) checks in the total amount of P36, 170.00
for the settlement of the back taxes of the property and for
the payment of the quitclaims of the three (3) tenants of
subject land. The amount was purportedly considered part
of purchase price and respondent Lorenzo de Vera signed
the receipts therefor.
Petitioner alleged that on 5 September 1978 she was
surprised to learn from the agent of respondent spouses
HERMINIO
TAYAG, petitioner,
vs.
AMANCIA
LACSON,
ROSENDO
LACSON,
ANTONIO LACSON, JUAN LACSON, TEODISIA
LACSON-ESPINOSA and THE COURT OF
APPEALS, respondents.
DECISION
TOTAL
P
231281 P 30,621.54
10,621.54
96,000
106,000.00
16. Felino
G.
10,000
Tolentino
------
------
------
17. Rica
5,000
Gozun
------
------
------
18. Perla
10,000
Gozun
------
------
------
19.
Benigno
Tolentino
10,000
------
------
------
20.
Rodolfo
10,000
Quiambao
------
------
------
21.
Roman
10,000
Laxamana
------
------
------
22. Eddie
10,000
San Luis
------
------
------
23.
Ricardo
10,000
Hernandez
------
------
------
24.
Nicencian 10,000
a Miranda
------
------
------
25. Jose
10,000
Gozun
------
------
------
------
------
------
5. Alfonso
Flores - - - P 30,000
---
6. Norma
Quiambao P 10,000
----
7. Rosita
Tolentino P 10,000
-----
8.
Jose
Sosa - - - - P 10,000
-----
26.
Alfredo
Sosa
27. Jose
10,000
Tiamson
------
------
------
28.
Augusto
Tolentino
------
------
------
29. Sixto
10,000
Hernandez
------
------
------
30. Alex
10,000
Quiambao
------
------
------
31. Isidro
10,000
Tolentino
------
------
------
32.
Ceferino
de Leon
9.
Francisco
P 10,000
Tolentino,
Sr.
10.
Emiliano
P 10,000
Laxamana
--
------
------
11. Ruben
Torres - - [Son
of
P 10,000
Mariano
Torres
(deceased)
]
P
-----33,587.31
12.
Meliton
P 10,000
Allanigue
12,944.77 231269
------
P
43,587.31
5,000
5,000
------
33.
Alberto
10,000
Hernandez
------
------
------
P
22,944.77
34.
Orlando
Florez
10,000
------
------
------
13.
Dominga P 5,000
Laxamana
35.
Aurelio
Flores
10,000
------
------
------
14.
Felicencia 10,000
de Leon
------
15.
Emiliano
Ramos
5,000
------
------
of
the
Dismiss/Deny
a
Writ
Injunction
Grave
Amounting
Jurisdiction
13,
1997
In its February 13, 1997 Order, the trial court ruled that
the petitioner was entitled to a writ of preliminary
injunction against the respondents on the basis of the
material averments of the complaint. In its April 16, 1997
Order, the trial court denied the respondents motion for
reconsideration of the previous order, on its finding that
the petitioner was entitled to a writ of preliminary
injunction based on the material allegations of his
complaint, the evidence on record, the pleadings of the
parties, as well as the applicable laws:
For the record, the Court denied the LACSONS
COMMENT/MOTION on the basis of the facts culled
from the evidence presented, the pleadings and the law
applicable unswayed by the partisan or personal interests,
public opinion or fear of criticism (Canon 3, Rule 3.02,
Code of Judicial Ethics).30
Section 3, Rule 58 of the Rules of Court, as amended,
enumerates the grounds for the issuance of a writ of
preliminary injunction, thus:
(a) That the applicant is entitled to the relief
demanded, and the whole or part of such relief
consists in restraining the commission or
continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either
for a limited period or perpetually;
(b) That the commission, continuance or nonperformance of the act or acts complained of
during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, agency or a person is
doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts
probably in violation of the rights of the applicant
respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.
A preliminary injunction is an extraordinary event
calculated to preserve or maintain the status quo of things
ante litem and is generally availed of to prevent actual or
threatened acts, until the merits of the case can be heard.
Injunction is accepted as the strong arm of equity or a
transcendent remedy.31 While generally the grant of a writ
of preliminary injunction rests on the sound discretion of
Erred
Enjoining
Court
the
ENRICO
S.
vs.
SPOUSES
CLEMENTE
APELES, Respondents.
EULOGIO, Petitioner,
APELES1 and
LUZ
DECISION
CHICO-NAZARIO, J.:
Petitioner Enrico S. Eulogio (Enrico) filed this instant
Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court assailing the Decision 2 dated 20
December 2004 of the Court of Appeals in CA-G.R. CV
No. 76933 which reversed the Decision 3 dated 8 October
2002 of the Regional Trial Court (RTC) of Quezon City,
Branch 215, in Civil Case No. Q-99-36834. The RTC
directed respondents, spouses Clemente and Luz Apeles
(spouses Apeles) to execute a Deed of Sale over a piece of
real property in favor of Enrico after the latters payment
of full consideration therefor.
The factual and procedural antecedents of the present case
are as follows:
The real property in question consists of a house and lot
situated at No. 87 Timog Avenue, Quezon City (subject
property). The lot has an area of 360.60 square meters,
covered by Transfer Certificate of Title No. 253990 issued
by the Registry of Deeds of Quezon City in the names of
the spouses Apeles.4
In 1979, the spouses Apeles leased the subject property to
Arturo Eulogio (Arturo), Enricos father. Upon Arturos
death, his son Enrico succeeded as lessor of the subject
property. Enrico used the subject property as his residence
and place of business. Enrico was engaged in the business
of buying and selling imported cars.5
On 6 January 1987, the spouses Apeles and Enrico
allegedly entered into a Contract of Lease 6 with Option to
Purchase involving the subject property. According to the
said lease contract, Luz Apeles was authorized to enter
into the same as the attorney-in-fact of her husband,
Clemente, pursuant to a Special Power of Attorney
executed by the latter in favor of the former on 24 January
1979. The contract purportedly afforded Enrico, before the
expiration of the three-year lease period, the option to
purchase the subject property for a price not
exceedingP1.5 Million. The pertinent provisions of the
Contract of Lease are reproduced below:
3. That this Contract shall be effective
commencing from January 26, 1987 and shall
remain valid and binding for THREE (3) YEARS
from the said date. The LESSOR hereby gives the
LESSEE under this Contract of Lease the right
and option to buy the subject house and lot within
the said 3-year lease period.
JOAQUIN
VILLEGAS
and
EMMA
VILLEGAS, Petitioners,
vs.
RURAL BANK OF TANJAY, INC., Respondent.
M.
DECISION
NACHURA, J.:
This petition for review on certiorari under Rule 45 of the
Rules of Court assails the Court of Appeals (CA)
Decision1 in CA-G.R. CV No. 40613 which affirmed with
modification the Regional Trial Court (RTC) Decision in
Civil Case No. 9570.2
xxxx
5) Provided further, that in case of a delay in any
yearly installment for a period of ninety (90) days,
this sale will become null and void and no further
effect or validity; and provided further, that
payments made shall be reimbursed (returned) to
the VENDEE less interest on the account plus
additional 15% liquidated damages and charges.
Upon the signing of the agreement, [petitioners] gave
[respondent] the sum of P250,000.00 as down payment.
[Petitioners], however, failed to pay the first yearly
installment, prompting [respondent] to consolidate its
ownership over the properties. Accordingly, TCT No.
12389 was cancelled and a new one, TCT No. 19042,
(Exh. 14) was issued in [respondents] name on November
8, 1989. Thereafter, [respondent] took possession of the
properties. Hence, the action by [petitioners for
declaration of nullity of loan and mortgage contracts,
recovery of possession of real property, accounting and
damages and, in the alternative, repurchase of real estate]
commenced on January 15, 1990.
xxxx
WITNESSETH:
xxxx
PROMISE TO SELL
xxxx
SO ORDERED.
allowing Tala to collect from the Bank rent for the period
during which the latter was arbitrarily closed, both Tala
and the Bank will be left where they are, each paying the
price for its deception.13
Petitioners stubbornly insist that respondent cannot invoke
the pari delicto doctrine, ostensibly because of our obiter
in Enrique T. Yuchengco, Inc., et al. v. Velayo.14
In Yuchengco, appellant sold 70% of the subscribed and
outstanding capital stock of a Philippine corporation, duly
licensed as a tourist operator, to appellees without the
required prior notice and approval of the Department of
Tourism (DOT). Consequently, the DOT cancelled the
corporations Local Tour Operators License. In turn,
appellees asked for a rescission of the sale and demanded
the return of the purchase price.
We specifically ruled therein that the pari delicto doctrine
is not applicable, because:
The obligation to secure prior Department of Tourism
approval devolved upon the defendant (herein appellant)
for it was he as the owner vendor who had the duty to give
clear title to the properties he was conveying. It was he
alone who was charged with knowing about rules
attendant to a sale of the assets or shares of his touristoriented organization. He should have known that under
said rules and regulations, on pain of nullity, shares of
stock in his company could not be transferred without
prior approval from the Department of Tourism. The
failure to secure this approval is attributable to him
alone.15
Thus, we declared that even assuming both parties were
guilty of the violation, it does not always follow that both
parties, being in pari delicto, should be left where they are.
We recognized as an exception a situation when courts
must interfere and grant relief to one of the parties because
public policy requires their intervention, even if it will
result in a benefit derived by a plaintiff who is in equal
guilt with defendant.16
In stark contrast to Yuchengco, the factual milieu of the
present case does not compel us to grant relief to a party
who is in pari delicto. The public policy requiring rural
banks to give preference to bona fide small farmers in the
grant of loans will not be served if a party, such as
petitioners, who had equal participation and equal guilt in
the circumvention of the Rural Banks Act, will be allowed
to recover the subject property.
The following circumstances reveal the utter poverty of
petitioners arguments and militate against their bid to
recover the subject property:
1. As previously adverted to, petitioners readily
and voluntarily accepted the proceeds of the loan,
divided into small loans, without question.
The RTC ruled that the Deed of Sale dated June 19, 1996
executed by De Guzman in favor of the spouses Villaceran
covering the property located in Echague, Isabela was
valid and binding on the parties. The RTC ruled that the
said contract was a relatively simulated contract,
simulated only as to the purchase price, but nonetheless
binding upon the parties insofar as their true agreement is
concerned. The RTC ruled that De Guzman executed the
Deed of Absolute Sale dated June 19, 1996 so that the
spouses Villaceran may use the property located in
Echague, Isabela as collateral for a loan in view of De
Guzmans need for additional capital to finance her
business venture. The true consideration for the sale,
according to the RTC, was the P300,000 the spouses
Villaceran gave to De Guzman plus the P721,891.67 they
paid to PNB in order that the title to the subject property
may be released and used to secure a bigger loan in
another bank.
SO ORDERED.15
Aggrieved, the spouses Villaceran appealed to the CA
arguing that the trial court erred in declaring the June 19,
1996 Deed of Sale as a simulated contract and ordering
them to pay De Guzman P1,113,108.33 plus legal rate of
interest and attorneys fees.16
On November 26, 2004, the CA rendered its Decision, the
dispositive portion of which reads as follows:
IN VIEW OF ALL THE FOREGOING, the judgment
appealed
from
is
hereby
AFFIRMED
with
MODIFICATION, to read as follows:
WHEREFORE, judgment is hereby rendered as follows:
1. Declaring the Deed of Sale dated June 16,
1996 (Exh. "B") and September 6, 1996, as not
reflective of the true intention of the parties, as the
same were merely executed for the purpose of the
loan accommodation in favor of the plaintiffappellee by the defendants-appellants;
2. Ordering defendants-appellants Villaceran to
pay plaintiff-appellee the difference between
the FEBTCloan
of P1,485,000.00
less P721,891.67 (used to redeem the PNB loan),
plus legal interest thereon starting from the date of
the filing of this case;
3. Declaring the extrajudicial foreclosure and
certificate of sale in favor of FEBTC, as valid; and
4. For the appellants to pay the costs of the suit.
SO ORDERED.17
The CA ruled that the RTC was correct in declaring that
there was relative simulation of contract because the deeds
of sale did not reflect the true intention of the parties. It
found that the evidence established that the documents
The Court has time and again ruled that conclusions and
findings of fact of the trial court are entitled to great
weight and should not be disturbed on appeal, unless
strong and cogent reasons dictate otherwise. This is
because the trial court is in a better position to examine
the real evidence, as well as to observe the demeanor of
the witnesses while testifying in the case. 24 In sum, the
Court finds that there exists no reason to disturb the
findings of the CA.
WHEREFORE, the petition for review on certiorari is
DENIED. The Decision dated November 26, 2004 and
Resolution dated June 29, 2005 of the Court of Appeals in
CA-G.R. CV No. 71831 are AFFIRMED.
DECISION
MENDOZA, J.:
The Facts
The property subject of the controversy is a 9,000 square
meter lot situated in Mariwalo, Tarlac, which was a
portion of a property registered in the name of the late
Faustina Maslum (Faustina) under Transfer Certificate of
Title (TCT) No. 16776 with a total area of 140,211 square
meters.2
On January 15, 1999, respondent Dolores LaxamanaTabu, together with Julieta Tubilan-Laxamana, Teresita
Laxamana, Erlita Laxamana, and Gretel Laxamana, the
heirs of Domingo, filed an unlawful detainer action,
docketed as Civil Case No. 7106, against Meliton Cabalu,
Patricio Abus, Roger Talavera, Jesus Villar, Marcos Perez,
Arthur Dizon, and all persons claiming rights under them.
The heirs claimed that the defendants were merely
allowed to occupy the subject lot by their late father,
Domingo, but, when asked to vacate the property, they
refused to do so. The case was ruled in favor of
Domingos heirs and a writ of execution was subsequently
issued.6
On February 4, 2002, petitioners Milagros de Belen Vda.
De Cabalu, Meliton Cabalu, Spouses Angela Cabalu and
Rodolfo Talavera, and Patricio Abus (petitioners), filed a
case for Declaration of Nullity of Deed of Absolute Sale,
Joint Affidavit of Nullity of Transfer Certificate of Title
Nos. 291338 and 291339, Quieting of Title,
Reconveyance, Application for Restraining Order,
Injunction and Damages (Civil Case No. 9290) against
respondent spouses before the Regional Trial Court,
Branch 63, Tarlac City (RTC).7
In their complaint, petitioners claimed that they were the
lawful owners of the subject property because it was sold
to their father, Laureano Cabalu, by Domingo, through a
Deed of Absolute Sale, dated March 5, 1975. Hence, being
the rightful owners by way of succession, they could not
be ejected from the subject property.8
In their Answer, respondent spouses countered that the
deed of sale from which the petitioners anchored their
right over the 9,000 square meter property was null and
void because in 1975, Domingo was not yet the owner of
the property, as the same was still registered in the name
of Faustina. Domingo became the owner of the property
only on August 1, 1994, by virtue of the Deed of ExtraJudicial Succession with Partition executed by the forced
heirs of Faustina. In addition, they averred that Domingo
was of unsound mind having been confined in a mental
institution for a time.9
On September 30, 2003, the RTC dismissed the complaint
as it found the Deed of Absolute Sale, dated March 5,
1975, null and void for lack of capacity to sell on the part
of Domingo. Likewise, the Deed of Absolute Sale, dated
October 8, 1996, covering the remaining 4,500 square
meters of the subject property was declared ineffective
having been executed by Domingo two months after his
death on August 4, 1996. The fallo of the Decision10reads:
WHEREFORE, in view of the foregoing, the complaint is
hereby DISMISSED, and the decision is hereby rendered
by way of:
The CA Ruling
REV.
FR.
DANTE
MARTINEZ, petitioner,
vs.
HONORABLE
COURT
OF
APPEALS, HONORABLE
JUDGE
JOHNSON
BALLUTAY, PRESIDING JUDGE, BRANCH 25,
REGIONAL TRIAL COURT OF CABANA TUAN
CITY, HONORABLE JUDGE ADRIANO TUAZON,
JR., PRESIDING JUDGE, BRANCH 28, REGIONAL
TRIAL COURT OF CABANATUAN CITY, SPOUSES
REYNALDO
VENERACION
and
SUSAN
VENERACION, SPOUSES MAXIMO HIPOLITO
and MANUELA DE LA PAZ and GODOFREDO DE
LA PAZ, respondents.
MENDOZA, J.:
This is a petition for review on certiorari of the decision,
dated 7, 1995, and resolution, dated January 31, 1996, of
the Court of Appeals, which affirmed the decisions of the
Regional Trial Court, Branches 251 and 28,2Cabanatuan
City, finding private respondents spouses Reynaldo and
Susan Veneracion owners of the land in dispute, subject to
petitioner's rights as a builder in good faith.
The facts are as follows:
Sometime in February 1981, private respondents
Godofredo De la Paz and his sister Manuela De la Paz,
married to Maximo Hipolito, entered into an oral contract
with petitioner Rev. Fr. Dante Martinez, then Assistant
parish priest of Cabanatuan City, for the sale of Lot No.
1337-A-3 at the Villa Fe Subdivision in Cabanatuan City
for the sum of P15,000.00. The lot is located along
Maharlika Road near the Municipal Hall of Cabanatuan
City. At the time of the sale, the lot was still registered in
the name of Claudia De la Paz, mother of private
respondents, although the latter had already sold it to
private respondent Manuela de la Paz by virtue of a Deed
of Absolute Sale dated May 26, 1976 (Exh. N/Exh. 2Veneracion).3 Private respondent Manuela subsequently
registered the sale in her name on October 22, 1981 and
was issued TCT No. T-40496 (Exh. 9). 4 When the land
was offered for sale to petitioner, private respondents De
la Paz were accompanied by their mother, since petitioner
dealt ' with the De la Fazes as a family and not
individually. He was assured by them that the lot belonged
to Manuela De la Paz. It was agreed that petitioner would
give a downpayment of P3,000.00 to private respondents
De la Paz and that the balance would be payable by
installment. After giving the P3,000.00 downpayment,
petitioner started the construction of a house on the lot
after securing a building permit from the City Engineer's
Office on April 23, 1981, with the written consent of the
then registered owner, Claudia de la Paz (Exh. B/Exh,
1).5 Petitioner likewise began paying the real estate taxes
on said property (Exh. D, D-l, D-2). 6 Construction on the
house was completed on October 6, 1981 (Exh. V). 7 Since
then, petitioner and his family have maintained their
residence there.8
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10
DECISION
REYES, R.T., J.:
REAL creditors are rarely unwilling to receive their debts
from any hand which will pay them. 1 Ang tunay na may
pautang ay bihirang tumanggi sa kabayaran mula
kaninuman.
This is a petition for review on certiorari seeking the
reversal of the Decision2 of the Court of Appeals (CA) in
CA-G.R. CV No. 58891 dated February 20, 2004 which
annulled and set aside the decision of the Regional Trial
Court (RTC) of Catbalogan, Samar on July 22, 1997 in
Cadastral Record No. 1378. The RTC originally dismissed
the petition for writ of possession filed by respondent
Metropolitan Bank and Trust Company (Metrobank) on
the ground that intervenors and present petitioners, the
brothers Bienvenido Teoco and Juan Teoco, Jr. (the
brothers Teoco), have redeemed the subject property. The
CA reversed this dismissal and ordered the issuance of a
writ of possession in favor of respondent Metrobank.
Culled from the records, the facts are as follows:
Lydia T. Co, married to Ramon Co, was the registered
owner of two parcels of land situated in Poblacion,
Municipality of Catbalogan, Province of Samar under
Transfer Certificate of Title (TCT) Nos. T-6220 and T6910.3Ramon Co mortgaged the said parcels of land to
Metrobank for a sum of P200,000.00.
On February 14, 1991, the properties were sold to
Metrobank in an extrajudicial foreclosure sale under Act
No. 3135. One year after the registration of the
Certificates of Sale, the titles to the properties were
consolidated in the name of Metrobank for failure of
Ramon Co to redeem the same within the one year period
provided for by law. TCT Nos. T-6220 and T-6910 were
cancelled and TCT Nos. T-8482 and T-8493 were issued in
the name of Metrobank.
On November 29, 1993, Metrobank filed a petition for the
issuance of a writ of possession against Ramon Co and
Lydia Co (the spouses Co). However, since the spouses Co
were no longer residing in the Philippines at the time the
petition was filed, the trial court ordered Metrobank, on
January 12, 1994 and again on January 26, 1994 to effect
summons by publication against the spouses Co.
On May 17, 1994, the brothers Teoco filed an answer-inintervention alleging that they are the successors-ininterest of the spouses Co, and that they had duly and
validly redeemed the subject properties within the
SO ORDERED.7
III
As regards the question of jurisdiction, the CA ruled that
since the parcels of land in question were already
registered in the name of Metrobank at the time the
petition was filed, and since the certificates of title of the
spouses Co were already cancelled, there is no more need
to issue summons to the spouses Co. The CA noted that
the best proof of ownership of the parcel of land is a
certificate of title.8
Our Ruling
Sufficiency of Amount Tendered
We find that neither petitioners, the brothers Teoco, nor
respondent, Metrobank, were able to present sufficient
evidence to prove whether the additional loans granted to
the spouses Co by Metrobank were covered by the
mortgage agreement between them. The brothers Teoco
failed to present any evidence of the supposed trust receipt
agreement between Metrobank and the spouses Co, or an
evidence of the supposed payment by the spouses Co of
the other loans extended by Metrobank. Metrobank, on the
other hand, merely relied on the stipulation on the
mortgage deed that the mortgage was intended to secure
"the payment of the same (P200,000.00 loan) and those
that may hereafter be obtained."12 However, there was no
mention whatsoever of the mortgage agreement in the
succeeding loans entered into by the spouses Co.
While we agree with Metrobank that mortgages intended
to secure future advancements are valid and legal
contracts,13 entering into such mortgage contracts does not
necessarily put within its coverage all loan agreements
that may be subsequently entered into by the parties. If
Metrobank wishes to apply the mortgage contract in order
to satisfy loan obligations not stated on the face of such
contract, Metrobank should prove by a preponderance of
evidence that such subsequent obligations are secured by
said mortgage contract and not by any other form of
security.
In order to prevent any injustice to, or unjust enrichment
of, any of the parties, this Court holds that the fairest
resolution is to allow the brothers Teoco to redeem the
foreclosed properties based on the amount for which it
was foreclosed (P255,441.14 plus interest). This is
subject, however, to the right of Metrobank to foreclose
the same property anew in order to satisfy the succeeding
loans entered into by the spouses Co, if they were, indeed,
covered by the mortgage contract. The right of Metrobank
to foreclose the mortgage would not be hampered by the
transfer of the properties to the brothers Teoco as a result
of this decision, since Article 2127 of the Civil Code
provides:
Art. 2127. The mortgage extends to the natural
accessions, to the improvements, growing fruits,
and the rents or income not yet received when the
obligation becomes due, and to the amount of the
indemnity granted or owing to the proprietor from
the insurers of the property mortgaged, or in
virtue of expropriation for public use, with the
declarations, amplifications and limitations
PROCESO
QUIROS
and
LEONARDA
VILLEGAS, petitioners,
vs.
MARCELO ARJONA, TERESITA BALARBAR,
JOSEPHINE
ARJONA,
and
CONCHITA
ARJONA, respondents.
DECISION
AGREEMENT
YNARES-SANTIAGO, J.:
Assailed in this petition for review is the decision of the
Court
of
Appeals
in
an
action
for
the
execution/enforcement of amicable settlement between
petitioners Proceso Quiros and Leonarda Villegas and
respondent Marcelo Arjona. Appellate court reversed the
decision of the Regional Trial Court of Dagupan CityBranch 44 and reinstated the decision of the Municipal
Trial Court of San Fabian-San Jacinto, Pangasinan.
On December 19, 1996, petitioners Proceso Quiros and
Leonarda Villegas filed with the office of the barangay
captain of Labney, San Jacinto, Pangasinan, a complaint
for recovery of ownership and possession of a parcel of
land located at Labney, San Jacinto, Pangasinan.
Petitioners sought to recover from their uncle Marcelo
Arjona, one of the respondents herein, their lawful share
of the inheritance from their late grandmother Rosa Arjona
Quiros alias Doza, the same to be segregated from the
following parcels of land:
a) A parcel of land (Lot 1, plan Psu-189983, L.R.
Case No. D-614, LRC Record No. N- 22630),
situated in the Barrio of Labney, Torud,
Municipality of San Jacinto, Province of
Pangasinan x x x Containing an area of Forty Four
Thousand Five Hundred and Twenty (44,520)
square meters, more or less, covered by Tax Decl.
No. 607;
b) A parcel of Unirrig. riceland situated at Brgy.
Labney, San Jacinto, San Jacinto, Pangasinan with
an area of 6450 sq. meters, more or less declared
under Tax Decl. No. 2066 of the land records of
San Jacinto, Pangasinan assessed at P2390.00 x x
x;
c) A parcel of Unirrig. riceland situated at Brgy.
Labney, San Jacinto, Pangasinan with an area of
6450 sq. meters, more or less, declared under Tax
Declaration No. 2047 of the land records of San
Jacinto, Pangasinan assessed at P1700.00 x x x
d) A parcel of Unirrig. riceland situated at Brgy.
Labney, San Jacinto, Pangasinan assessed at
P5610.00 x x x;
e) A parcel of Cogon land situated at Brgy.
Labney, San Jacinto, Pangasinan, with an area of
14133 sq. meters, more or less declared under Tax
N.
de
la
Masa, Sr.
Captain
Brgy.
Pangasinan
Labney,
San
Jacinto
Witnesses:
1) Irene Banda
(sgd.)
2) Jose (illegible) x x x
Petitioners filed a complaint with the Municipal Circuit
Trial Court with prayer for the issuance of a writ of
execution of the compromise agreement which was denied
because the subject property cannot be determined with
certainty.
The Regional Trial Court reversed the decision of the
municipal court on appeal and ordered the issuance of the
writ of execution.
Respondents appealed to the Court of Appeals, which
reversed the decision of the Regional Trial Court and
reinstated the decision of the Municipal Circuit Trial
Court.2
Hence, this petition on the following errors:
I
THE PAKNAAN BEING A FINAL AND EXECUTORY
JUDGMENT UNDER THE LAW IS AN IMMUTABLE
JUDGMENT CAN NOT BE ALTERED, MODIFIED OR
CHANGED BY THE COURT INCLUDING THE
HIGHEST COURT; and
II
THE SECOND PAKNAAN ALLEGEDLY EXECUTED
IN CONJUNCTION WITH THE FIRST PAKNAAN
WAS NEVER ADDUCED AS EVIDENCE BY EITHER
OF THE PARTIES, SO IT IS ERROR OF
JURISDICTION TO CONSIDER THE SAME IN THE
DECISION MAKING.
The pivotal issue is the validity and enforceability of the
amicable settlement between the parties and corollary to
this, whether a writ of execution may issue on the basis
thereof.
In support of their stance, petitioners rely on Section 416
of the Local Government Code which provides that an
amicable settlement shall have the force and effect of a
final judgment upon the expiration of 10 days from the
date thereof, unless repudiated or nullified by the proper
court. They argue that since no such repudiation or action
to nullify has been initiated, the municipal court has no
discretion but to execute the agreement which has become
final and executory.
SPOUSES
LEHNER
MARTIRES, Petitioners,
vs.
MENELIA CHUA, Respondent.
and
LUDY
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari
under Rule 45 of the Rules of Court seeking to reverse and
set aside the Amended Decision, 1 as well as the
Resolutions2 of the Court of Appeals (CA), dated
September 30, 2005, July 5, 2006 and August 28, 2006,
respectively, in CA-G.R. CV No. 76388. The assailed
Decision of the CA reversed and set aside its earlier
Decision, dated April 30, 2004, in favor of petitioners. The
July 5, 2006 Resolution denied petitioners' Motion for
Reconsideration, while the August 28, 2006 Resolution
denied petitioners' Second Motion for Reconsideration.
The factual and procedural antecedents of the case are as
follows:
Subject of the instant controversy are twenty-four
memorial lots located at the Holy Cross Memorial Park in
Barangay Bagbag, Novaliches, Quezon City. The property,
more particularly described as "Lot: 24 lots, Block 213,
Section: Plaza of Heritage-Reg.," is covered by Transfer
Certificate of Title (TCT) No. 342914. Respondent,
together with her mother, Florencia R. Calagos, own the
disputed property. Their co-ownership is evidenced by a
Deed of Sale and Certificate of Perpetual Care,
denominated as Contract No. 31760, which was executed
on June 4, 1992.3
On December 18, 1995, respondent borrowed from
petitioner spouses the amount of P150,000.00. The loan
was secured by a real estate mortgage over the
abovementioned property. Respondent committed to pay a
monthly interest of 8% and an additional 10% monthly
interest in case of default.4
Respondent failed to fully settle her obligation.
Subsequently, without foreclosure of the mortgage,
ownership of the subject lots were transferred in the name
of petitioners via a Deed of Transfer.5
On June 23, 1997, respondent filed with the Regional Trial
Court (RTC) of Quezon City a Complaint against
petitioners, Manila Memorial Park Inc., the company
which owns the Holy Cross Memorial Park, and the
Register of Deeds of Quezon City, praying for the
annulment of the contract of mortgage between her and
petitioners on the ground that the interest rates imposed
are unjust and exorbitant. Respondent also sought
accounting to determine her liability under the law. She
likewise prayed that the Register of Deeds of Quezon City
for
SO ORDERED.13
The CA reconsidered its findings and concluded that the
Deed of Transfer which, on its face, transfers ownership of
the subject property to petitioners, is, in fact, an equitable
mortgage. The CA held that the true intention of
respondent was merely to provide security for her loan
and not to transfer ownership of the property to
petitioners. The CA so ruled on the basis of its findings
that: (1) the consideration, amounting to P150,000.00, for
the alleged Deed of Transfer is unusually inadequate,
considering that the subject property consists of 24
memorial lots; (2) the Deed of Transfer was executed by
reason of the same loan extended by petitioners to
respondent; (3) the Deed of Transfer is incomplete and
defective; and (4) the lots subject of the Deed of Transfer
are one and the same property used to secure
respondent's P150,000.00 loan from petitioners.
Petitioners filed a Motion for Reconsideration, 14 but the
CA denied it in its Resolution dated July 5, 2006.
On July 26, 2006, petitioners filed a Second Motion for
Reconsideration,15 but again, the CA denied it via its
Resolution dated August 28, 2006.
Hence, the present petition based on the following
grounds:
A. THE COURT OF APPEALS PATENTLY ERRED IN
NOT UPHOLDING THE DEED OF TRANSFER
EXECUTED BY THE RESPONDENT IN FAVOR OF
THE PETITIONERS BY RULING THAT:
1. The Deed of Transfer executed by respondent in
favor of petitioners over the subject property was
not entered in the Notarial Book of Atty.
Francisco Talampas and reported in the Notarial
Section of the Regional Trial Court of Makati
City.
2. The Deed of Transfer was not duly notarized by
Atty. Francisco Talampas inasmuch as there was
no convincing proof that respondent appeared
before Notary Public Atty. Talampas.
B. THE COURT OF APPEALS PATENTLY ERRED IN
RULING THAT THE DEED OF TRANSFER
EXECUTED BETWEEN THE RESPONDENT AND
THE PETITIONERS CONSTITUTED AN EQUITABLE
MORTGAGE CONSIDERING THAT:
1. Said issue was not raised in any pleading in the
appellate and trial courts.1wphi1
2. Respondent herself admitted that a separate
mortgage was executed to secure the loan. 16
The petition lacks merit.
denied
SBCs
motion
for
FORTUNE
MEDICARE,
INC., Petitioner,
vs.
DAVID ROBERT U. AMORIN, Respondent.
DECISION
REYES, J.:
IN
NON-
DECISION
BRION, J.:
THE FACTS
The petitioner, Cerila J. Calanasan Cerila), took care of
her orphan niece, respondent Evelyn C. Dolorita, since the
latter was a child. In 1982, when Evelyn was already
married to respondent Virgilio Dolorita, the petitioner
donated to Evelyn a parcel of land which had earlier been
mortgaged for Pl5,000.00. The donation was conditional:
Evelyn must redeem the land and the petitioner was
entitled to possess and enjoy the property as long as she
lived. Evelyn signified her acceptance of the donation and
its terms in the same deed. Soon thereafter, Evelyn
redeemed the property, had the title of the land transferred
to her name, and granted the petitioner usufructuary rights
over the donated land.
On August 15, 2002, the petitioner, assisted by her sister
Teodora J. Calanasan, complained with the Regional Trial
Court (RTC) that Evelyn had committed acts of
ingratitude against her. She prayed that her donation in
favor of her niece be revoked; in their answer, the
respondents denied the commission of any act of
ingratitude.
The petitioner died while the case was pending with the
RTC. Her sisters, Teodora and Dolores J. Calanasan,
substituted for her.
After the petitioner had rested her case, the respondents
filed a demurrer to evidence. According to them, the
petitioner failed to prove that it was Evelyn who
committed acts of ingratitude against the petitioner; thus,
Article 7654 of the New Civil Code found no application
in the case.